Performance of Islamic mutual fund from Saudi Arabia

What is it about?

This article reviews the performance of Islamic mutual funds (IMFs) by evaluating the relative performance of IMFs and conventional funds during the global economic crisis from April 2007 to June 2011 in the context of the Saudi Arabian capital market. The empirical results provide evidence of better performance of IMFs relative to conventional funds during the economic crisis.

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Why is it important?

All investors, regardless of ethical or religious orientation, can enjoy the benefit of hedging by holding a proportion of investment portfolio in IMFs. Similarly, managers of conventional funds can improve the risk adjusted performance by following similar screening criteria as IMFs during economic slowdowns.