Abstract
This paper examines the performance of Islamic mutual funds (IMFs hereafter) in the context of the Pakistan capital market. The study uses the data of Islamic mutual funds between 2009-2014 to examine the relationship between risk and return of the IMFs in Pakistan. The Sharpe ratio and Treynor ratio techniques have been employed by the study, and findings reveal that Islamic mutual funds are positively associated with its attributes. Despite the Islamic mutual fund's growth, it can be said that these funds had hedging characteristics during the crisis. Therefore, their inclusion in the portfolio in time of crisis can be a plausible strategy to absorb the shocks of the crisis. Our findings suggest that IMFs performance had significant influence by lagged return, liquidity and load attributes. This paper contributes to extend the frontiers of knowledge regarding IMFs performance.
Keyword(s)
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