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Performance of Islamic and conventional exchange traded funds in Malaysia

Abdou Diaw, Salwana Hassan and Adam Ng ()

MPRA Paper from University Library of Munich, Germany

Abstract: ETFs have attracted many investors as one of the most innovative products of financial engineering. By virtue of the nascent nature of MyETF-DJIM Titan 25 and FBM 30ETF in Malaysia, comparative performance studies are essential during a financial crisis. MyETF is different from FBM 30ETF in terms of investment scope and ShariÑah governance structure. While MyETF has achieved its objective in tracking its index, FBM 30ETF has failed in this respect. Despite its higher total risk, MyETF performed better than its index. The same applies in the case of FBM 30ETF. Although MyETF has bigger net assets, economies of scale, and better diversification, the performances of the two funds are lacklustre and similar, with FBM 30ETF performing somewhat better. Notwithstanding their success to outperform their respective benchmarks, both ETFs had comparable negative performance, with decline in prices and NAV. The negative returns have caused abnormality in their measurements.

Keywords: Islamic Capital market; Islamic ETF; MyETF; FBM 30ETF; Trading; Performance (search for similar items in EconPapers)
JEL-codes: C25 G1 (search for similar items in EconPapers)
Date: 2010-06
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Published in The ISRA International Journal of Islamic Finance 1.2(2010): pp. 131-149

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