The Impact of Islamic Portfolio on Risk and Return

Wajid Alim, Amjad Ali and Maryiam Farid

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of this study is to investigate the comparative impact of conventional and Islamic bonds over returns. It provides useful insights to investors to diversify investment by lowering the risk to the optimum level. This study examines the impact of the conventional and Islamic portfolios on returns through simple OLS regression, suggesting that Sukuk returns are positive and significant. Simultaneously, conventional bonds show a negative trend, but in the long run, the returns are significant. It indicates that the market is volatile due to macroeconomic factors that can reduce risks through portfolio diversification. Thus, this research suggests that investment can be secured by taking a rational portfolio decision that confirms robustness. Therefore, it is a good opportunity for the investors to get high margins over the investment tenure.

Keywords: Financial Instruments; Portfolio Diversification; Islamic Finance; Sukuk; Conventional Bonds (search for similar items in EconPapers)
JEL-codes: M0 M4 (search for similar items in EconPapers)
Date: 2021-11-10
New Economics Papers: this item is included in nep-fmk, nep-isf and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Working Paper: The Impact of Islamic Portfolio on Risk and Return (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:111211

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