Does Faith Matter in Mutual Funds Investing? Evidence from Saudi Arabia

  • Hesham Merdad
  • , M. Kabir Hassan*
  • , Mohsin Khawaja
  • *Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

Abstract

This article investigates one of the most vital issues in the Islamic mutual fund literature: Are there any costs associated with investing in Islamic mutual funds? We used a unique sample of 143 Saudi mutual funds and grouped them into portfolios based on their geographical focus, Shariah compliance, and the Saudi market trend (overall, bull, bear, and the crisis period). Findings suggest there is a benefit from adhering to Shariah law in locally-focused Saudi mutual funds. However, there is a cost of this adherence in internationally-focused Saudi mutual funds. Finally, in Arab-focused Saudi mutual funds, there is neither a cost nor a benefit.

Original languageEnglish
Pages (from-to)938-960
Number of pages23
JournalEmerging Markets Finance and Trade
Volume52
Issue number4
DOIs
StatePublished - 2 Apr 2016

Bibliographical note

Publisher Copyright:
Copyright © Taylor & Francis Group, LLC.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 10 - Reduced Inequalities
    SDG 10 Reduced Inequalities

Keywords

  • Islamic finance
  • Islamic mutual funds
  • Saudi Arabia
  • Shariah law
  • risk-return profile

ASJC Scopus subject areas

  • Finance
  • General Economics, Econometrics and Finance

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