you can go through

Performance evaluation of Islamic mutual funds relative to conventional funds: Empirical evidence from Saudi Arabia

Performance Persistence of Islamic

Equity Mutual Funds

Islamic Versus Conventional Mutual

Funds Performance in Saudi Arabia: A Case Study

Dear Mousumi Bhattacharya  thank you so much for sharing the links. However, i would love to know your expert opinion regarding such an out performance. We all know that Islamic mutual funds are restricted. So what in your opinion drag the performance to the positive side

I perform extensive research on islamic funds. I found that it is not always the case that Shariah funds will out perform in the period of crises. In fact it depends on the nature of crises. If the crises are related to the use of extensive financial leverage then it is most probable that Shariah funds will out perform. It is due to the less exposure of Shariah funds to the financial sector. 

I agree with charbel chedrawi.. I also conducted a study on Shariah equity portfolios. The performance of Shariah equity portfolio depends on the sector allocation. In the recent global financial crises the Islamic funds showed superior performance because of the absence of financial sector in a shariah portfolio. We cannot generalize this out performance to all type of crises. Like in the dot com crises the shariah portfolio well performed lower than the market . it is because the shariah portfolio has strong exposure to IT sector . you can read my paper I.e. The shariah equity portfolio. Weighting method matters 

I think the out performance could be due to that Sharia equities avoid all highly leveraged sectors like financial services and place more weights on certain industries including technology, oil and gas as well as healthcare. Sharia compliant tends to favor investments with a conservative nature and after the IT bubble  it tends to put more exposure to the defensive industries like utilities and healthcare. There are a diverse literature review in this argument and many studies were conducted in particular on the out performance in periods of crisis however most of these studies claimed that in normal periods where there is no financial crisis they proved to be more or less equal performance.

Dear Maha Radwan,

Yes I agree with your observations regarding sectoral bets of Shariah portfolios. My paper is forth coming in International review of financial analysis on the same issue.  

Dear Muhammad, 

I am  interested in this topic and I have done couple of papers that spoken about the Sharia screening and tending complaint companies.

I will look forward to read your paper.

السلام عليكم

very good question:

https://www.sabinet.co.za/abstracts/cilsa/cilsa_v44_n2_a6.html 

this article will not answer your question. however, it highlights the prohibition of speculative contracts. this guarantees the required stability of the financial sector in islamic banking in general. that is to say, the required assets that guarantees the loans will always function as stabilizing factor. therefore, the projections will fundamentally meet the targets, while minimizing risks according to the comprehensive screening which the bank conducts in selecting "companies that meet its qualitative and

quantitative criteria according to Shari’ah guidelines.

https://www.ipag.fr/wp-content/uploads/recherche/WP/IPAG_WP_2014_115.pdf

i think you will find further answers in the above link. 

taking in consideration, the involvement of the bank in the operations of the Mudarib or Murabeh, etc. fundamentally ensures that the Mudarib will make sustainable profit which will be shared by the bank.

Dear Maha Radwan,

Thank you so much for interest in my paper, you can read it here

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2812587 

My paper is not based on the crises. We have tried to focus more on weighting methods in Shariah. However, in the robustness section you can read some statistics regarding performance in crises and bullish markets. Infact all the three major crises since 1980's. I am also looking forward to read your research work on the topic.

Dear Muhammad,

Thank you for sending me the link of your paper. I will read it for sure! The intersting new thing is that you have studied it not in the crises but in normal periods.

Thanks for being interested in my papers as well, you can find the published ones on my page ( speaking about opportunities of the European companies and Italian companies taking into consideration the Sharia screening requirements) while the others are still in process. Then if another that is realted to operational risk but it is different from your research area I think

Article EUROPEAN COMPANIES: EVALUATION FOR SHARIA COMPLIANCE " OPPOR...

Article Sharia Compliant " Possibility for Italian SMEs "

Thank you so much Maha Radwan. The papers seem interesting. many congrats for the good work. 

Good question Wajid. There is another way of looking into it. How Islamic Mutual funds perform in normal times? My conjecture is they perform above average during crisis and just average or below average during normal times. I wish i have more time to undertake a separate study on that. Wishing of best of luck

Mohsin

Because the processes of improving credit, investment, liquidity, etc. risk management are conducted more reliably and the standards of business ethics are at a high level.

Best regards,

Dariusz Prokopowicz