The Investment Performance of U.S. Islamic Mutual Funds

Francisco Climent, Paula Mollá and Pilar Soriano
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Francisco Climent: Dep. Economia Financera i Actuarial, Facultat d’Economia, Universitat de València, 46022 València, Spain
Paula Mollá: Dep. Economia Financera i Actuarial, Facultat d’Economia, Universitat de València, 46022 València, Spain
Pilar Soriano: Dep. Economia Financera i Actuarial, Facultat d’Economia, Universitat de València, 46022 València, Spain

Sustainability, 2020, vol. 12, issue 9, 1-18

Abstract: 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.

Keywords: Islamic mutual funds; socially responsible investments; ethical investing; performance evaluation; risk-adjusted performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:9:p:3530-:d:350530

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