IDEAS home Printed from https://ideas.repec.org/a/ris/isecst/0066.html
   My bibliography  Save this article

Ethical Investment: Empirical Evidence From Ftse Islamic Index

Author

Listed:
  • HUSSEIN, KHALED A.

    (Islamic Research & Training Institute)

Abstract

This paper examines the hypothesis that ethical investment has inferior performance compared with their unscreened benchmarks. We empirically test whether returns earned by investors who purchase shares in the FTSE Global Islamic Index are significantly different from their index counterpart (FTSE AllWorld Index). The sample period is divided into two sub-periods, bull period (July 1996 – March 2000) and bear period (April 2000 - August 2003). A comparison of the raw and risk-adjusted performance show that the Islamic index performs as well as the FTSE All-World index over the entire period. On the other hand, the Islamic index yields statistically significant positive abnormal returns in the bull market period, although it underperforms the counterpart index in the bear market period. In general, our findings show that the application of ethical screening does not have an adverse effect on the FTSE Global Islamic Index performance.

Suggested Citation

  • Hussein, Khaled A., 2004. "Ethical Investment: Empirical Evidence From Ftse Islamic Index," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 12, pages 22-40.
  • Handle: RePEc:ris:isecst:0066
    as

    Download full text from publisher

    File URL: http://www.irti.org/English/Research/Documents/IES/096.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Michael C. Jensen, 1968. "The Performance Of Mutual Funds In The Period 1945–1964," Journal of Finance, American Finance Association, vol. 23(2), pages 389-416, May.
    2. Hassan, M. Kabir & Girard, Eric, 2010. "Faith-Based Ethical Investing: The Case Of Dow Jones Islamic Indexes," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 17, pages 1-31.
    3. Brav, Alon & Gompers, Paul A, 1997. " Myth or Reality? The Long-Run Underperformance of Initial Public Offerings: Evidence from Venture and Nonventure Capital-Backed Companies," Journal of Finance, American Finance Association, vol. 52(5), pages 1791-1821, December.
    4. John D. Lyon & Brad M. Barber & Chih-Ling Tsai, 1999. "Improved Methods for Tests of Long-Run Abnormal Stock Returns," Journal of Finance, American Finance Association, vol. 54(1), pages 165-201, February.
    5. Eugene F. Fama & Kenneth R. French, 1998. "Taxes, Financing Decisions, and Firm Value," Journal of Finance, American Finance Association, vol. 53(3), pages 819-843, June.
    6. Stewart C. Myers, 1993. "Still Searching For Optimal Capital Structure," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(1), pages 4-14.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:isecst:0066. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (IRTI Staff) or (). General contact details of provider: http://edirc.repec.org/data/irisbsa.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.