A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia

The investment management of the Islamic funds is based on the syariah principles, meanwhile the conventional funds are not restricted to any principles. Hence, the performance of the Islamic funds and conventional funds may have a significance difference. Moreover, the economic condition may inf...

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Main Author:	Abdullah, Fikriyah
Format:	Thesis
Language:	English English
Published:	2003
Subjects:	Mutual funds - Malaysia
Online Access:	http://psasir.upm.edu.my/id/eprint/8176/1/GSM_2003_6_%20ir.pdf
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id	my-upm-ir.8176
record_format	uketd_dc
spelling	my-upm-ir.81762023-12-18T02:16:33Z A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia 2003-11 Abdullah, Fikriyah The investment management of the Islamic funds is based on the syariah principles, meanwhile the conventional funds are not restricted to any principles. Hence, the performance of the Islamic funds and conventional funds may have a significance difference. Moreover, the economic condition may influence or have some implications on the performance of both funds. The study analyzed 65 unit trust funds as the sample of the study. Monthly data were collected over the ten-year period starting from January 1992 up to December 2001 . The measure of performance applied in this study includes the non risk-adjusted performance measures, risk-adjusted performance measures and the measurement of risks. Apart from that, Treynor and Mazuy model was also used to measure the funds managers' selection and market timing ability. The findings revealed that over the ten-year period, the performance of the Islamic funds and the conventional funds are equally well. However, both funds underperformed the market but it is not statistically significant (which have not been tested in previous studies). The performance of the funds was influenced by the economic condition. During the economic crisis, the market was badly affected as compared to unit trust funds, hence the funds outperformed the market (however, statistically it is not significant). Islamic funds performed better during bearish economic trend, while the conventional funds showed better performance during bullish economic period. The findings indicate that the Islamic funds have lower risks as compared to the risk associated with the conventional funds. However, the differences are not statistically significant. Besides that, conventional funds have a marginally better diversification level than the Islamic funds, although both funds were unable to achieve at least 50% market diversification level. The findings also summarized that both funds managers have poor selection and market timing ability as the values of a and y are negative. The result implies that funds managers are unable to correctly identify good bargain stocks and also to forecast the price movements of the general market. Mutual funds - Malaysia 2003-11 Thesis http://psasir.upm.edu.my/id/eprint/8176/ http://psasir.upm.edu.my/id/eprint/8176/1/GSM_2003_6_%20ir.pdf text en public masters Universiti Putra Malaysia Mutual funds - Malaysia Grduate School of Management Mohamad Ramadili, Shamsher English
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English English
advisor	Mohamad Ramadili, Shamsher
topic	Mutual funds - Malaysia
spellingShingle	Mutual funds - Malaysia Abdullah, Fikriyah A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia
description	The investment management of the Islamic funds is based on the syariah principles, meanwhile the conventional funds are not restricted to any principles. Hence, the performance of the Islamic funds and conventional funds may have a significance difference. Moreover, the economic condition may influence or have some implications on the performance of both funds. The study analyzed 65 unit trust funds as the sample of the study. Monthly data were collected over the ten-year period starting from January 1992 up to December 2001 . The measure of performance applied in this study includes the non risk-adjusted performance measures, risk-adjusted performance measures and the measurement of risks. Apart from that, Treynor and Mazuy model was also used to measure the funds managers' selection and market timing ability. The findings revealed that over the ten-year period, the performance of the Islamic funds and the conventional funds are equally well. However, both funds underperformed the market but it is not statistically significant (which have not been tested in previous studies). The performance of the funds was influenced by the economic condition. During the economic crisis, the market was badly affected as compared to unit trust funds, hence the funds outperformed the market (however, statistically it is not significant). Islamic funds performed better during bearish economic trend, while the conventional funds showed better performance during bullish economic period. The findings indicate that the Islamic funds have lower risks as compared to the risk associated with the conventional funds. However, the differences are not statistically significant. Besides that, conventional funds have a marginally better diversification level than the Islamic funds, although both funds were unable to achieve at least 50% market diversification level. The findings also summarized that both funds managers have poor selection and market timing ability as the values of a and y are negative. The result implies that funds managers are unable to correctly identify good bargain stocks and also to forecast the price movements of the general market.
format	Thesis
qualification_level	Master's degree
author	Abdullah, Fikriyah
author_facet	Abdullah, Fikriyah
author_sort	Abdullah, Fikriyah
title	A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia
title_short	A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia
title_full	A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia
title_fullStr	A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia
title_full_unstemmed	A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia
title_sort	comparative analysis of performance of islamic and conventional unit trusts in malaysia
granting_institution	Universiti Putra Malaysia
granting_department	Grduate School of Management
publishDate	2003
url	http://psasir.upm.edu.my/id/eprint/8176/1/GSM_2003_6_%20ir.pdf
_version_	1794018724649369600

A Comparative Analysis of Performance of Islamic and Conventional Unit Trusts in Malaysia

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