The Investment Performance of Ethical Equity Funds in Malaysia

Fadillah Mansor, Muhammad Bhatti, Shafiqur Rahman and Hung Quang Do
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Fadillah Mansor: Department of Shariah and Management, University of Malaya, Kuala Lumpur 50603, Malaysia
Shafiqur Rahman: Rubicon Global Advisors, Portland, OR 97223, USA
Hung Quang Do: Department of Economics, Finance and Marketing, La Trobe Business School, La Trobe University, Victoria 3086, Australia

JRFM, 2020, vol. 13, issue 9, 1-14

Abstract: This paper investigates the investment performance of Malaysian Islamic equity funds and a matching sample of conventional equity funds relative to their market benchmark. An integrated model is used to simultaneously capture the market timing and selectivity skills of fund managers. Our findings indicate that the Islamic funds do not match the performance of the conventional funds in terms of selectivity skill. However, Islamic funds perform no worse than their conventional counterparts in market timing, although neither outperform the market. These findings have crucial implications not only for fund managers’ investment decisions, but also for sensitive shariah-compliant investors and risk-seeking investors of Islamic equity funds in their investment portfolio preference.

Keywords: Islamic finance; Islamic equity funds; market timing; portfolio investment; selectivity skill; investment performance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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