Comparative Analysis of Islamic Mutual Fund Performance in Saudi Arabia, Malaysia, and Indonesia in 2018–2020

Islamic mutual funds are one of the most popular types of investment instruments in the Islamic capital market today. Islamic mutual funds have a market share of 5% or equivalent to USD 178 billion with a total of 1.698 institutions. Saudi Arabia is in the first position with a total Islamic mutual fund assets of USD 53 billion. Malaysia is in the third position with a total Islamic mutual fund assets of USD 38 billion. Meanwhile, Indonesia is in the sixth position with total Islamic mutual fund assets of USD 3 billion. The purpose of this study was to compare performance of Islamic mutual funds in Saudi Arabia, Malaysia, and Indonesia in 2018–2020. The method used in this research was comparative descriptive method with quantitative approach. This study used the purposive sampling technique with a total sample of 69 Islamic mutual fund products, including 15 money market Islamic mutual fund products, 15 fixed income Islamic mutual fund products, 21 Islamic stock mutual fund products, and 18 mixed Islamic mutual fund products. In addition, the performance of Islamic mutual funds was measured using the Sharpe ratio model. The results of the study showed that the Islamic money market and fixed income mutual funds in Indonesia were superior to those of Malaysia and Saudi Arabia. Those of meanwhile, share and mixed Islamic mutual funds in Saudi Arabia were superior to Indonesia and Malaysia. Thus the performance of the Islamic mutual funds may serve one of the considerations aspects to consider by investors in select the type of Islamic mutual funds taking into consideration the economic conditions of a country. In addition, investors can choose Islamic mutual fund products managed by investment managers based on the levels of return and risk the product have.