The Investment Performance of U.S. Islamic Mutual Funds

Islamic investment funds have become increasingly important because of high demand from many investors, including those outside the Muslim investment community. This article compares the performance and risk sensitivity of Islamic mutual funds in the United States with that of their conventional pee...

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Bibliographic Details
Published inSustainability Vol. 12; no. 9; p. 3530
Main Authors Climent, Francisco, Mollá, Paula, Soriano, Pilar
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 01.05.2020
Subjects
Asset allocation
Asset pricing
Banking
Compliance
Economic crisis
Equity funds
Funds
Income distribution
International finance
Investment
Investment advisors
Investments
Islamic countries
Islamic financing
Money markets
Portfolio management
Principles
Product development
Researchers
Studies
United States > US
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Summary:Islamic investment funds have become increasingly important because of high demand from many investors, including those outside the Muslim investment community. This article compares the performance and risk sensitivity of Islamic mutual funds in the United States with that of their conventional peers. This article also analyzes the performance of Islamic funds, and compares this performance with that of socially responsible investment (SRI) mutual funds. Capital Asset Pricing Model (CAPM)-based methodology was used for the analysis. The results suggest that over the entire study period (1987–2018), Islamic funds outperformed conventional funds with comparable characteristics. However, over the most recent period (2000–2018), there were no significant differences in performance. Moreover, Islamic funds achieved levels of adjusted performance that did not significantly differ from those of SRI funds. Conversely, for the earlier period (1987–2000), Islamic funds performed worse than SRI and conventional funds with similar characteristics.
ISSN:2071-1050
2071-1050
DOI:10.3390/su12093530