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Examining Islamic Funds Underperformance: The Case Of Malaysia

Despite operating in a niche market, Islamic funds continue to face considerable challenge from conventional funds. Past studies have shown that the return of Islamic funds is generally lower whilst their risk is higher as compared to conventional funds and market index. This study attempts to inve...

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Main Authors: Mohd Rahimie Abd Karim, Mehmet Asutay, Zurina Shafii, Masmurniwati Mohd Aris
Format: Article
Language:English
Published: Universiti Sains Islam Malaysia 2015
Subjects:
Islamic funds
Shariah
Malaysia
Unit trust
Online Access:http://ddms.usim.edu.my/handle/123456789/9065
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spelling my.usim-90652015-08-13T07:33:21Z Examining Islamic Funds Underperformance: The Case Of Malaysia Mohd Rahimie Abd Karim Mehmet Asutay Zurina Shafii Masmurniwati Mohd Aris Islamic funds Shariah Malaysia Unit trust Despite operating in a niche market, Islamic funds continue to face considerable challenge from conventional funds. Past studies have shown that the return of Islamic funds is generally lower whilst their risk is higher as compared to conventional funds and market index. This study attempts to investigate the reasons for the Islamic funds’ underperformance in Malaysia. The study found that the poor performance relative to conventional funds and benchmark index is arguably caused by the inability of Islamic funds to achieve optimal diversification. The major contributing factor is the Shariah-compliance restrictions, a feature unique to Islamic funds, which limit the Islamic funds access to those more stable and profitable industries and largecapitalised stocks. 2015-08-13T07:33:21Z 2015-08-13T07:33:21Z 2013 Article 1823075X http://ddms.usim.edu.my/handle/123456789/9065 en JMIFR-Vol.10, No.1, 2013; Universiti Sains Islam Malaysia
institution Universiti Sains Islam Malaysia
building USIM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universit Sains Islam i Malaysia
content_source USIM Institutional Repository
url_provider http://ddms.usim.edu.my/
language English
topic Islamic funds
Shariah
Malaysia
Unit trust
spellingShingle Islamic funds
Shariah
Malaysia
Unit trust
Mohd Rahimie Abd Karim
Mehmet Asutay
Zurina Shafii
Masmurniwati Mohd Aris
Examining Islamic Funds Underperformance: The Case Of Malaysia
description Despite operating in a niche market, Islamic funds continue to face considerable challenge from conventional funds. Past studies have shown that the return of Islamic funds is generally lower whilst their risk is higher as compared to conventional funds and market index. This study attempts to investigate the reasons for the Islamic funds’ underperformance in Malaysia. The study found that the poor performance relative to conventional funds and benchmark index is arguably caused by the inability of Islamic funds to achieve optimal diversification. The major contributing factor is the Shariah-compliance restrictions, a feature unique to Islamic funds, which limit the Islamic funds access to those more stable and profitable industries and largecapitalised stocks.
format Article
author Mohd Rahimie Abd Karim
Mehmet Asutay
Zurina Shafii
Masmurniwati Mohd Aris
author_facet Mohd Rahimie Abd Karim
Mehmet Asutay
Zurina Shafii
Masmurniwati Mohd Aris
author_sort Mohd Rahimie Abd Karim
title Examining Islamic Funds Underperformance: The Case Of Malaysia
title_short Examining Islamic Funds Underperformance: The Case Of Malaysia
title_full Examining Islamic Funds Underperformance: The Case Of Malaysia
title_fullStr Examining Islamic Funds Underperformance: The Case Of Malaysia
title_full_unstemmed Examining Islamic Funds Underperformance: The Case Of Malaysia
title_sort examining islamic funds underperformance: the case of malaysia
publisher Universiti Sains Islam Malaysia
publishDate 2015
url http://ddms.usim.edu.my/handle/123456789/9065
_version_ 1645152532063846400
score 13.222552

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