Comparison between Islamic and Conventional Mutual Funds in Pakistan

Hummaira Jabeen
Teaching Assistant Department of Management Sciences, ISRA University Hyderabad, Pakistan mai!" h#mmaira$%abeen&isra$ed#$pk

Javaid Dars
Assistant Professor Department of Management Sciences, ISRA University Hyderabad, Pakistan mai!" Dars$%aviad&isra$ed#$pk

Abstract: Profitable employments of spare funds generate income not for the saver but also have a positive impact on countrys economy, thus having two fold benefits. Despite the vast research on mutual funds, little is known is about mutual funds in Pakistan. The overall image that emerges from literature is that Islamic mutual funds are not flourishing in Pakistan. This is a comparative study that aims to study risk and return of mutual funds in Pakistan for the period of F !""# to F !"$!. This research investigated the performance of mutual funds on the basis of net asset values of conventional and Islamic funds with the help of %harpe ratio, &ensen alpha and Treynor ratio. 'esults showed that in year !""(, !"$", !"$$ and !"$! )onventional funds pay more return than Islamic funds and in period under analysis conventional funds are paying more returns in Pakistan than Islamic. *lthough growth of Islamic funds is not as high as conventional but one of their behaviors was seen in study that they are having hedging in time of crisis. %o their inclusion in portfolio in time of crisis can be a good strategy. Key words: conventional fund, +et asset value, Islamic funds.

2 Introduction: 'rom the da(n of civi!i)ation saving has different modes and kept on changing from time to time$ Different Peop!e define investment in different (ays$ *enera!!y investment is save emp!oyment of f#nds that t#rn in higher va!#e as in the (ords of S$S$ +aptan investment is

employment of funds with the aim of achieving additional or growth in value$, -+aptan, .//01$

2orma!!y investment has t(o meanings economic and financia!$ In economic terms investment refers to s#ch activity that prod#ces capita! goods !ike b#i!ding and in finance investment to activity that invo!ve b#ying and se!!ing of assets -+aptan, .//01$ Initia!!y m#t#a! f#nds (ere introd#ced in #rope by a D#tch Merchant in 0334 -Ro#(enhorst,

.//41$ In 5ondon (as introd#ced in 0676 by 'oreign 8 9o!onia! *overnment Tr#st no( a day:s kno(n as foreign 8 9o!onia! Investment Tr#st -Ro#(enhorst, .//41$ In United States (as introd#ced in 06;/s -Ro#(enhorst, .//41$ '#nds gain fame d#ring 0;./s$ In the start most of f#nds (ere c!ose ended -a type of f#nd that initia!!y offered to p#b!ic and then traded in secondary market bet(een different traders1 (ith fi<ed n#mber of shares -'ink, .//61$ 'irst open ended -a sort of f#nd (hose s#bscription and redemption is done on contin#a! basis1 m#t#a! f#nd (as introd#ced in 0;.4 by Massach#setts investor Tr#st= c#rrent!y part of M'S 'ami!y of '#nd -'ink, .//61$ Ho(ever, initia!!y, c!ose ended (as preferred mean of investment$ 'or safeg#arding investors after the crash of stock market in 0;.; congress passed fe( acts !ike sec#rities act of 0;>> that bo#nd a!! f#nd offering companies to register (ith sec#rities and e<change commission and iss#e prospect#s for investors for g#iding them -'ink, .//61$ These efforts bring back confidence of investors on stock market and this sector begins to f!o#rish$ ?eing a safe and re!iab!e so#rce of investment its e@#ity keeps on increasing (ith the passage of time$ Is!amic f#nds 8 investments report ./00 indicates the gro(th in m#t#a! f#nd ind#stry g!oba!!y d#ring cha!!enging times$

'ig#re I" *!oba! M#t#a! '#nd Ind#stry M#t#a! f#nds in Pakistan (ere introd#ced in 0;7., #nder the #mbre!!a of 2ationa! Investment Unit Tr#st -2IT1$ In !ine of it Investment 9orporation of Pakistan (as estab!ished in 0;77 -shah 8 Hi%a)i, .//A1$ This offers a n#mber of c!ose ended m#t#a! f#nds$ Initia!!y f#nds (ere offered by both p#b!ic and private sector b#t in 3/:s (ith the nationa!i)ation government ro!e becomes more dominant in the management of f#nds -shah 8 Hi%a)i, .//A1$ 2o( pict#re has been changed comp!ete!y$ Private p!ayers are more in n#mber than p#b!ic and the m#t#a! f#nd market is reg#!ated (ith the s#pport of reg#!atory body name!y Sec#rities e<change commission of Pakistan -S 9P1 and trade body name!y m#t#a! f#nd association of Pakistan -MU'AP1, -*ohar, ./001$ The presence of these t(o has increased investor:s confidence a !ot$ Bith the increase in confidence n#mber of investors is increasing$ Cn the basis of str#ct#re M#t#a! f#nds in Pakistan are fo#nd in form of open ended and c!ose ended$

'ig#re IIDInd#stry *ro(th So#rce" MU'AP

4 Demand of m#t#a! f#nds is increasing g!oba!!y as other nations have increase the #se of debt and e@#ity sec#rities rather than bank !oans for financia! #se$ ?eing s#ch a strong market g!oba!!y it does not have strong market in Pakistan$ Saving ratio in Pakistan in ./0/D00 (as 0>$6 E,- Pakistan conomic S#rvey, ./0/D001 this ratio can be increase and the economy of Pakistan can a!so prosper by #sing ne( aven#es of investments -M#t#a! '#nd Pakistan, .//A1$ An estimated 3. percent of peop!e !iving in M#s!imDma%ority co#ntries do not #se forma! financia! services -Honohon, .//31$ So this gap can be fi!!ed by offering Is!amic financing$ The market of Is!amic finance is gaining (ider acceptance in internationa! arena especia!!y in Is!amic (or!d d#e to shariah comp!iance services$ Is!amic financing (as started to attract g#!f investors b#t it sooner spread in other region of the (or!d as (e!!$ The factors that make is!amic m#t#a! f#nd different from conventiona! f#nds is the presence of shariah board for iss#ing fat(a re!ated to permissibi!ity of f#nd str#ct#re and investment, shariah comp!iant investment m#st adhere princip!es of acco#nting and a#diting organi)ation for is!amic finance -AACI'I1 that at first stage remove ind#stries that invo!ve non shariah comp!iance ind#stries and at second !eve! remove companies (ith financia! ratios e<ceeding acceptab!e !eve!, shariah a#dit, c#stody of assets according to shariah princip!es, p#rification of income thro#gh donations and in case of fai!ed trade interest is not charged - 8F, I'IR, .//61$ 'rom inception its acceptance rate is higher as can be seen from fig$ID7

'ig#re III" *!oba! Is!amic '#nd Ind#stry

5 Is!amic m#t#a! f#nds do not have strong market in Pakistan in comparison of other Is!amic co#ntries$ Is!amic m#t#a! f#nds (ere introd#ced in Pakistan in 0;;A by a! Mee)an investment management !imited$ 'inancia! system based on Is!amic !a(s is spreading (ith a very high rate aro#nd the (or!d$ *!oba!!y in ./0/, Is!amic f#nds ind#stry reaches to USGA6 bi!!ion$ This ind#stry contin#e to gro( as its #niverse of Is!amic f#nd managers is in e<cess of USGA// bi!!ion and keeps on gro(ing at the rate of 0/D0AE ann#a!!y$ stimated Is!amic 'inance is USG 0,/>> bi!!ion in that Is!amic assets managed is USG>.0 bi!!ion (ith >0E gro(th rate from that Is!amic f#nd represent on!y A$7E of the tota! Is!amic financia! services ind#stry -Fo#ng, ./001$ In case of Pakistan:s Is!amic m#t#a! f#nd:s Tota! net asset (ere appro<$ >; mi!!ion -./001 -MU'AP1 and its net assets in second @#arter of fisca! year ./0. (ere Rs$ 43$60.bi!!ion -M#gha!, ./0.1, this is too !o( in comparison of other Is!amic co#ntries$ St#dy of m#t#a! f#nds is very important for the investors and research scho!ars$ Most of the deve!oped nations has strong base of e@#ity financing$ Some researchers direct!y !ink its gro(th (ith deve!opment of co#ntry$ So in this sit#ation it becomes necessary to (ork on this sector and meas#re its performance$ There is (ide !iterat#re avai!ab!e from other co#ntries b#t #nfort#nate!y very !itt!e is kno(n abo#t Pakistani m#t#a! f#nds$ So I aim to address different dimensions of m#t#a! f#nds in Pakistan$ Cb%ective" To meas#re the performance of m#t#a! f#nds in Pakistan on the basis of 2AHs$ Hypothesis" 9onventiona! f#nds pay more ret#rn than Is!amic f#nds

LITE !T" E E#IE$

Investors a!(ays p#rs#e the mean of investment that t#rn o#t to be better ret#rn$ 'rom the commencement of f#nds it has been an area of research for decision makers, researchers and investors$ In the !ight of my research prob!em I have revie(ed research %o#rna!s, ann#a! reports, periodica!s, thesis reports, economic s#rveys, and ne(spapers$ The revie(ed !iterat#re revea! mi< trend of m#t#a! f#nds aro#nd the (or!d b#t one thing (as c!ear from researcher at different times that m#t#a! f#nd ind#stry f!o#rish (ith the gro(th of economy$ The more co#ntry (i!! be deve!oped the more (i!! be strong base of m#t#a! f#nd in that ind#stry$ Iafar et$a! -./0.1 meas#re the performance of Indian m#t#a! f#nd ind#stry d#ring .//3D/6 by emp!oying performance meas#re tests name!y Sharpe, Treynor and %enson a!pha

6 ratios$ He fo#nd that this sector is having gro(ing trend in India$ Po!icies and reg#!ations by government can strengthen this sector a !ot$ Jank -./001 (ork to find o#t that macroeconomic ne(s has effect on market ret#rns and f!o( of e@#ity f#nds$ He fo#nd that m#t#a! f#nds f!o(s predict rea! economy and e@#ity f#nd and these f!o(s can be e<p!ained (ith the he!p of defa#!t spread, re!ative TD?i!! rate and cons#mptionD (ea!th ratio$ Iafar et$a!, -./001 in their empirica! st#dy on Indian m#t#a! f#nds e@#ity diversified gro(th schemes and in their performance eva!#ation find o#t that private financia! p!ayer:s in Indian economy has gain gro(th d#e to str#ct#ra! !ibera!i)ed po!icies and ba!anced freedom and e<pected to go ahead$ Indian economy is a rising economy (ith massive pop#!ation that had a great potentia! in saving sector$ 'or becoming g!oba! market it need to advance their ski!!s, techno!ogy and broaden their hori)on$ Prince et$a!, -./0/1 ana!y)e sma!! cap gro(th stock sector of m#t#a! f#nd ind#stry against risk free and market ret#rn for the year 0;;3D.//7$ <pected and act#a! ret#rns (ere compared that sho(ed that some f#nds had more ret#rn than e<pected and diversification is a good strategy for risk minimi)ing$ ?ishop et$a!, -.//31 in their st#dy of The Str#ct#re and Performance of @#ity M#t#a! '#nds in

Trinidad 8 Tobago compared commercia! bank f#nds and nonDbank e@#ity f#nds$ Bith the he!p of Sharpe ratio for the period J#ne .//0 to May .//A they find o#t that ret#rns on both sorts of e@#ities have not any significant difference$ Ba!ter et$a!, -.//71 inspect the asset management ind#stry of china, Indonesia, +orea Ma!aysia Singapore, Phi!ippines and Thai!and$ They fo#nd that f#nd management ind#stry is very sma!! in these co#ntries b#t it have higher gro(th rate and this can more increase by #sing professiona! management of financia! (ea!th$ 'or the period of 0;;;D.//A, 'erreira et$a!, -.//71 aims to st#dy the behavior of m#t#a! f#nd aro#nd the (or!d, for this p#rpose they took samp!e of 0/,A/6 open ended e@#ities from 0; co#ntries$ 'or ana!ysis p#rpose different mode!s (ere emp!oyed name!y domestic market mode!, internationa! market mode!, carhart domestic fo#r factor mode! and carhart internationa! fo#r factor mode!$ In first t(o mode!s Jensen a!pha on month!y ret#rns (as ca!c#!ated and in other t(o mode!s m#t#a! f#nd performance, f#nd attrib#tes -si)e, age, fees, management str#ct#re, and management ten#re1 and co#ntry characteristics -economic, financia! deve!opment, fami!iarity 1 and investor protection1 (ere tested$ Res#!ts revea! that in domestic and internationa! markets f#nd si)e is positive!y re!ated (ith performance$ '#nd age is

7 negative!y re!ated (ith performance, yo#nger f#nds, in abroad give better ret#rns$ 'ee has positive !ink (ith performance$ Sing!e manager:s (ork is better than in team management$ Management ten#re id is positive!y !inked$ 9o#ntry and financia! deve!opment, fami!iarity and strong !ega! system a!so has positive !ink (ith performance$ +horana et$a!, -.//71 st#died the m#t#a! f#nd in 06 co#ntries those make 67E of (or!d sa!e$ ?y st#dying management fees, tota! e<pense ratio and estimated tota! shareho!ding costs revea!ed that fee changes cross co#ntry by considering f#nds, sponsor and nationa! variab!es$ They a!so find o#t that !arger f#nds have minima! cost and those are having higher cost that are being so!d in more than one co#ntry and deve!oped co#ntries have !o(er cost as compared to deve!oping co#ntries$ +horana et$a!, -.//A1 tried to e<p!ain si)e of m#t#a! f#nds of A7 co#ntries$ Their st#dy revea! that m#t#a! f#nds ind#stry is !arger in co#ntries those are having stronger !a( and reg#!ation, ed#cated pop#!ation and trading cost is minima!$ In other (ords it can be said that these are s#ccessf#! in deve!oped co#ntries rather in deve!oping co#ntries$ +!apper et$a!, -.//41 in their st#dy fo#nd that m#t#a! f#nds sho(ed tremendo#s gro(th in most of the co#ntries, chief!y in Asia, d#ring 0;;/:s$ In Ang!oDAmerican co#ntries e@#ity f#nds sho(ed gro(th (hi!e bonds f#nds in continenta! #rope and midd!e income co#ntries$ Main determinants of m#t#a! f#nd deve!opment (ere fo#nd to be capita! market deve!opment and financia! system orientation$ 9hen et$a!, -.//41 investigated the conse@#ence of sca!e of f#nd on the performance in money management ind#stry$ They fo#nd that si)e of f#nd does not effect on ret#rn of f#nds b#t !i@#idity and diseconomies of organi)ations$ Under Bor!d ?ank deve!opment (orking series, 'ernando et$a!, and -.//>1 st#dy sho( that d#ring 0;;/:s crisis (ith fe( e<ceptions in Asia, m#t#a! f#nds gro( aro#nd the (or!d$ This st#dy f#rther revea! that in Ang!oDAmerican co#ntries e@#ity f#nds dominate, in continenta! #rope and midd!e income co#ntries bond e@#ities are more$ ?a#er et$a!, -.//.1 by #sing internationa! database took data of *ermany, U+, and USA:s ethica! f#nds$ They compared performance of ethica! and conventiona! f#nds for the period of 0;;/ to .//0$ After ana!y)ing (ith m#!ti factor carhart -0;;31 mode! they conc!#ded that there is !itt!e difference bet(een ret#rns of these t(o f#nd c!asses$ 5at)ko -.//.1 in his st#dy M#t#a! '#nd <penses" An conometric Investigation took samp!e of

7// m#t#a! f#nds and find o#t that the average m#t#a! f#nd has cost economies of sca!e (hi!e !arger f#nds e<perience diseconomies of sca!e$ 'rom a!! cost specifica!!y distrib#tion cost sho(ed diseconomies of sca!e$

8 +aminsky et$a!, -.//01 ana!y)ed behavior of m#t#a! f#nds d#ring crisis of 0;;/:s$ ?y (orking on emerging markets they conc!#ded that f!o(s are not consistent d#ring crisis and (ithdra(a! (as high$ +#h!e et$a!, -.///1 took samp!e of 60// f#nds and compared on the basis of !oad and noD!oad and ana!y)ed by #sing descriptive statistics$ 0. months, A and 0/ year ret#rns (ere eva!#ated for the period of 0;;>D;3$ Res#!ts sho(ed that in short r#n noD!oad #nderperformed and in !ong r#n both f#nd c!ass has e@#a! ret#rn$ +aminsky et$a!, -.///1 in the st#dy of conomic 'ragi!ity, 5i@#idity, and Risk" The ?ehavior of

M#t#a! '#nds d#ring 9rises st#died the effect of economic condition on the decision of investment$ They fo#nd that main factor that effect on investment decision is not economic condition b#t !i@#idity$ 5at)ko -0;;;1 said as many m#t#a! f#nd e<penses are fi<ed costs, asset gro(th sho#!d decrease the ratio of f#nd e<penses to average net assets$ A Tran:s !og cost f#nction estimated a samp!e of .,70/ f#nds and fo#nd that the e!asticity of f#nd e<penses (ith respect to f#nd assets is !ess than one, indicating there are sca!e economies in m#t#a! f#nd administration$ Tripathy -0;;71 in his st#dy of m#t#a! f#nd in India" a financia! service in capita! market after st#dying the (orking of m#t#a! f#nds in India at that time s#ggest that str#ct#ra! !ibera!i)ation po!icies can make India a high gro(th economy$ 'or this they need to #pgrade ski!!s and techno!ogy$ Jayadev -0;;71 ana!y)ed capita! gro(th #nit scheme of India or kno(n as master gain f#nd of UTI and magn#m e<press of S?I m#t#a! f#nd for the period of J#ne 0;;.Dmarch ;4 on month!y basis$ Ret#rns (ere ana!y)ed by emp!oying Sharpe, Treynor and %enson a!pha$ He fo#nd that master gain has good Treynor and Jensen:s ratio b#t not Sharpe ratio (hi!e the other one did not perform (e!! on any inde<$ So he conc!#ded that these t(o f#nds are not performing so (e!!$ *rinb!att et$a!, -0;661 took samp!e of (or!d:s m#t#a! f#nds and ana!y)ed them on the basis of @#arter!y portfo!io ho!dings$ They cond#cted this st#dy for finding (hether those f#nds that are managed by professiona!s t#rn into greater ret#rn or not and there is presence of abnorma! performance of f#nds or not$ 'or this p#rpose they checked gross ret#rns of portfo!ios for the period of 0;3AD0;64$ 'or comparison data (as f#rther ana!y)ed (ith and (itho#t transaction cost and other e<penses$ They fo#nd that s#rvivorship bias (as sma!! for !arge f#nds and !arge for sma!!er f#nds$ 'or most of the f#nds transaction costs (ere high and it (as opposite to f#nd si)e$ *ross ret#rn (as positive in period #nder st#dy (hi!e act#a! ret#rns (ere not positive for any f#nd that means if investors (ant higher ret#rns, they have to pay high cost$

9 In 0;7., *overnment of Pakistan estab!ished 2IT5 (hich !a#nched first Cpen nd @#ity '#nd in Pakistan$ In contin#ation, 0;77 *overnment of Pakistan estab!ished I9P (hich !a#nched series of 9!osed nd '#nds$ Despite of being in market, f#nds on!y in the Mid ;/s, the deve!opment of m#t#a! f#nds is (itnessed$ So that:s (hy in 0;;4D;A more f#nds (ere !a#nched in private sector -shah et$a!, .//A1$ ?eing an Is!amic co#ntry #nfort#nate!y Is!amic m#t#a! f#nds in Pakistan are !o( in n#mbers compared to conventiona! f#nds in Pakistan$ The researcher:s (ork on m#t#a! f#nds in Pakistan is too narro($ They main!y foc#s #pon performance ana!ysis and in many cases time frame is very !o( or samp!e is taken$ A!i et$a!, -./0.1 st#died the fifteen m#t#a! f#nds for the period of .//A to .//; to meas#re their performance by emp!oying Sharpe and Treynor meas#res and statistica!!y ana!y)ed by means of standard deviation$ The findings of the st#dy sho( that the performance of m#t#a! f#nds is not #p to the mark in Pakistan$ Iaheer et$a!, -./001 ana!y)ed the performance of m#t#a! f#nds in Pakistan$ In it they find o#t the difference in ret#rns of Is!amic and 2onDIs!amic m#t#a! f#nds as (e!! as the difference bet(een open ended and c!ose ended firms$ This research proceeds f#rther (ith the aim of finding any consistency in the performance of the t(o f#nds over the past three years by emp!oying pane! regression mode!s #sing *rete!$ 9onsidering Pakistan as an #nderDdeve!oped economy, the set of variab!es se!ected for ana!ysis are those, (hich affect the f#nd performance significant!y -positive!y or negative!y1 in economic conditions of Pakistan$ The ana!yses sho(ed that persistence e<ists in conventiona! f#nds and not in Is!amic f#nds$ It is revea!ed that !i@#idity and !agged ret#rn are the significant variab!es in fi<ed and random affects mode!s$ Aamir et$a!, -./001 for the period of .//0D/6 %#dge the hea!th of m#t#a! f#nds on +S compared m#t#a! f#nd sector (ith +S 0// inde<$ by

emp!oying inde<, market capita!i)ation, trades and paid #p capita!$ In their (ork they nd res#!ts signify that sector of m#t#a! f#nd is f!o#rishing on +S b#t sti!! there is room for deve!opment$ *ohar et$a!, -./001 ana!y)ed different c!asses of m#t#a! f#nds in Pakistan$ Their (ork revea!s that e@#ity f#nds performed (e!! than income f#nds$ In the same st#dy a!so fo#nd that (ithin e@#ity f#nds broker backed sec#rities o#tperform than instit#tiona! f#nds and from income f#nds instit#tiona! f#nds (ork better than broker backed sec#rities$ 2a)ir et$a!, -./0/1 (orked for the period of .//AD/; on 0> e@#ity f#nd fami!y and find o#t that asset t#rnover, fami!y proportion, and e<pense ratio are direct!y !inked (ith the gro(th of m#t#a! f#nds and management fee and risk ad%#sted ret#rns inverse!y$ Af)a et$a!, -.//;1 eva!#ated the performance of Pakistani m#t#a! f#nds for the period of 0;;;D .//7 (hi!e #sing Sharpe ratio (ith the he!p of poo!ed timeDseries and crossDsectiona!

10 data and foc#sing on different f#nd attrib#tes$ The res#!ts indicate that among vario#s f#nds attrib#tes !agged ret#rn, and !i@#idity had significant impact on f#nd performance$ 9heema et$a!, -.//71 in their (orking paper on The Ro!e of M#t#a! '#nds and 2onD ?anking 'inancia! 9ompanies in 9orporate *overnance in Pakistan advanced the arg#ment that reg#!atory frame(ork is needed for governance c#!t#re$ Shah et$a!, -.//A1 ana!y)ed m#t#a! f#nd ind#stry in Pakistan (ith the he!p of performance meas#ring indices$ They fo#nd that this ind#stry is having very !itt!e share in tota! market b#t is in gro(ing state, some f#nds (ere #nderDperformance d#e to !ack of diversification b#t overa!! this sector:s position (as satisfactory$ There is a rich data avai!ab!e on m#t#a! f#nds$ Aro#nd the (or!d a great interest is seen in m#t#a! f#nds$ St#dy of nonDis!amic and Is!amic (or!d indicates the difference in ob%ectives of investors$ The motive of investors from nonDis!amic (or!d is to gain more ret#rns (hi!e investors from Is!amic co#ntries are more interested in shariah comp!iant investment and p#rs#ing the means for betterment of Is!amic m#t#a! f#nd market$ !iterat#re fo!!o(ing points are derived" M#t#a! f#nds and economy have a !ink$ Strong reg#!atory po!icies from the a#thorities have positive impact on m#t#a! f#nd gro(th$ Ret#rns of bank and nonDbank f#nds have not any significant difference$ 5i@#idity has a direct impact on the investment of m#t#a! f#nds$ Is!amic f#nd ind#stry is f!o#rishing$ Market of m#t#a! f#nd is stronger in deve!oped co#ntries$ The gap that I fo#nd in !iterat#re on Pakistan that !itt!e (ork is done from researchers if (e compare it (ith other co#ntries$ Bork done is !imited to !imited time frame or is done on samp!e$ So there is a dying need for a (ork that (i!! cover pop#!ation instead of samp!e for having tr#e pict#re of Pakistani m#t#a! f#nd ind#stry and compare it (ith other markets for finding its standing and areas for improvement$ Cvera!! from disc#ssed the deve!opment of an appropriate corporate

Met%odolo&'
This st#dy ana!y)ed a!! avai!ab!e m#t#a! f#nds in Pakistan on the basis of net asset va!#es -2AHs1 that are offered by asset management companies$ These (ere divided then into Is!amic and conventiona! c!ass$ '#rthermore +arachi stock e<change -+S 1 served as market

11 and 0. month Treas#ry bi!! rates as risk free rate$ This st#dy covered period of si< years, starting from 'F .//3 to 'F ./0.$ The fo!!o(ing tab!e sho(s n#mber of m#t#a! f#nds #sed in ana!ysis$ Table()(*umber o+ Mutual Funds in !nal'sis Period
,0 . Fund Class .//0 9!oseDIs!amic 0 9!oseD conventiona! 00 .//1 0 0. .//2 0 0> ./)/ 0 0> ./)) 0 0> 0; 66 .7 ./ ). 0 0> .6 >> 0 / 4 . 7 >A

3
4 Cpen conventiona! Asset Management 9ompanies >7 .; 46 .7

Cpen Is!amic 6 0A 7. 33 .3 .6

Data (as co!!ected #sing secondary and tertiary so#rces$ 2et asset va!#es -2AHs1 of a!! m#t#a! f#nds (ere gathered from officia! (ebsite of m#t#a! f#nd association of Pakistan -MU'AP1$ 9!osing prices of +S 0// inde< from finance$Fahoo and tDbi!! rates from officia! (ebsite of state bank$ 'or ana!ysis p#rpose fo!!o(ing inferentia! tests (as emp!oyed" Sharpe Ratio Treynor Ratio Jenson A!pha$ ,%arpe measure: A ratio deve!oped by 2obe! !a#reate Bi!!iam '$ Sharpe in 0;77 to meas#re the riskDad%#sted performance$ It is Meas#rement of the performance of an investment, comp#ted by dividing the e<cess ret#rn by the amo#nt of risk taken to generate the e<cess -the standard deviation of the rate of ret#rn1$ It foc#ses on the #se of the ratio for making decisions -Sharpe, 'a!! 0;;41$ The Sharpe ratio form#!a is"

h Bhere, ,

- @$ IIID01

12

Tre'nor Measure: A!so kno(n as re(ard to vo!ati!ity ratio$ Jack 5$ Treynor introd#ces a composite meas#re of portfo!io performance that inc!#des risk as (e!! -'rench, .//.1$

/
Bhere, , ,

- @$ IIID.1

$ Jenson di++erential measure or Jensen !lp%a: Jensen -0;731 derived a riskD ad%#sted meas#re of portfo!io performance that estimates ho( m#ch a managerLs forecasting abi!ity contrib#tes to the f#ndLs ret#rns$ This is based on capita! asset pricing theory and sec#rity market !ine$ This ratio he!ps in eva!#ating performance of sec#rity -Jensen, 0;731$ Its form#!a is as fo!!o(s" [ Bher e, , , , ] - @$ IIID>1

Sharpe ratio is #sed to find o#t the e<cess ret#rn over risk free investment$ If its va!#e is positive or in other (ords more than )ero that means investment is good, higher the va!#e more feasib!e investment (i!! be$ In the same (ay, Treynor and %enson a!pha is #sed to meas#re the systematic risk$ Treynor ratio gives act#a! va!#e of ret#rn (hi!e %enson a!pha gives the va!#e of e<pected ret#rn$ If treynor:s va!#e is higher than %enson a!pha then the state of sec#rity is good and for both ratios positive va!#e is favorab!e -A5PT +I2, .//;1$ After comp#ting ratios on year basis aggregate va!#e is taken for a!! f#nd c!asses as per division in !ight of ob%ective$ The on(ard section disc#ss the performance of m#t#a! f#nds on year!y basis, as this st#dy covers span of si< years so res#!ts of each year is ana!y)ed separate!y than in the !ast aggregate performance is ana!y)ed$

'or the period of J#!y .//7D J#ne .//3condition of Is!amic f#nds (as not good$ A!! ratios of Is!amic c!ose ended f#nds sho(ed negative trend$ A!tho#gh act#a! ret#rn (as !ess than

13 e<pected b#t (as in negative trend$ Same behavior (as seen in Is!amic open ended f#nds, some of the f#nds (ere having more risk than e<pected, fe( sho(ed positive attit#de b#t (ere very fe($ Same attit#de (as seen in conventiona! f#nds, on!y t(o f#nds had positive ret#rn (hi!e e<pected one (as negative b#t overa!! ret#rn of conventiona! open and c!ose (as not good$

2007
20 0 -2 0 -4 0 -6 0 Islamic Fund Islamic Fund Close Ended !en Ended "#a$!e %atio

-80

Conventi on -0&64954 -8&04042

Conve ntion -73&3992 -6&00819

'$e(no$ %atio -0&00105 )ensen *l!#a -0&00647

0&01 'ig#re IH" M#t#a! '#nd Ana!ysis in 'F /3

0&032535 5 -0&02146

1&250455 -0&12365

0&036 -

In this year none of the firm o#tperformed$ 2#mbers of Is!amic f#nds (ere very !o( in comparison of conventiona! f#nds$ Aggregate tota! risk of conventiona! f#nds are more than is!amic and act#a! risk of conventiona! f#nds (as more than e<pected (hi!e in case of is!amic act#a! ret#rn (as more than e<pected This sho(s that is!amic f#nds are at better position than conventiona! ones in year .//3$

In 'F .//6 year f#nds ret#rn position is not better than !ast year, they do not have o#tstanding ret#rns b#t its position overa!! is enco#raging$ There (as increase n#mber of f#nds offered by asset management companies$ There (as not any s#bstantia! increase in their ret#rns b#t Increase in n#mber of f#nds sho(s increase in confidence of peop!e #pon f#nds that sho(s positive sign for the e@#ity market of Pakistan$ In this year 2?P '#!!erton Asset Management 5imited (as in better position than other asset management companies overa!!$ Its Is!amic and conventiona! f#nds both (ere in good position in this year$ A!ong (ith that if (e compare is!amic f#nds (ith conventiona! than from is!amic f#nds +AS? income opport#nity f#nd, 2A'A aggressive fi<ed income f#nd sho(ed positive attit#de in their ret#rn and from conventiona! f#nds Askari high yie!d scheme, at!as income f#nd, sho(ed positive trend in their ret#rn, and if (e ta!k abo#t asset management companies a!ong (ith 2?P '#!!erton Asset Management 5imited, 'aysa!, H?5, and JS sec#rities perform (e!! than other f#nds$ MSee anne< ?DA for detai!ed f#nd ana!ysisN$

14

2008
50 0 -50 -10 0 -15 0 -20 0 -25 0 -30 0

Islamic Fund Close Ended

Islamic Convent Conve Fund ion ntion !en al al Ended Fund Fund -267&503 s#a$!e $atio -1&49555 -88&2698 t$e(no$ $atio -0&03632 -0&500789 42&289206 -0&234102 +enson al!#a -0&03506 -0&32494 -0&89596

-29&6685 -0&45131

'ig#re H" M#t#a! '#nd Ana!ysis in 'F /6 'or many f#nds e<pected ret#rn (as negative b#t they t#rn o#t (ith positive ret#rns$ Aggregate tota! risk for is!amic f#nds is !ess than conventiona! b#t is in negative (hi!e e<pected ret#rns for is!amic f#nds is !ess than act#a! and conventiona! f#nds (ere having positive ret#rns of f#nds$ So, overa!! position of conventiona! f#nds is better than Is!amic in this year$

In 'F .//; condition of f#nds (as (orse than !ast t(o years none of the f#nd sho(ed positive gro(th$ Is!amic f#nds overa!! sho(ed negative trend, on!y fe( conventiona! f#nds sho(ed good Treynor ratio, means they stand good in comparison of market$ ?#t there ret#rn overa!! (ere not good$

2009
0 100 -20 0 -30 0 -40 0 -50 0

-600

Islamic Fund Close Ended

Islamic Fund !en Ended

Convention al Fund !en Ended

Convention al Fund Close Ended

s#a$!e $atio -0&32075 t$e(no$ $atio -0&00608 +enson al!#a -0&01251

0&17 'ig#re HID M#t#a! '#nd Ana!ysis in 'F /;

-23&9304 1&143084 -0&18598

-83&1904 -527&9104 -0&08047

4&05 0&15 -

15 9o!!ective risk for conventiona! is high then Is!amic and act#a! risk (as more than e<pected so overa!! this market sho(ed negative attit#de$ 2one had better performance than other$ So both f#nd c!asses do not perform (e!!$

This year condition of f#nds (as better than !ast year$ In year ./0/ Is!amic f#nds sho(ed negative ret#rn (hi!e act#a! risk (as !ess than e<pected, on!y one f#nd sho(ed positive ret#rn$ Same (as seen in conventiona! f#nds act#a! risk more than e<pected b#t fe( t#rn o#t to be pretty good in terms of its ret#rn especia!!y +AS? 9ash f#nd that (as having greatest ret#rn then other f#nds$ ?#t overa!! negative trend (as observed$ @#ity market of Pakistan sho(ed !ess negativity in re!ation to previo#s years$ 2one of the firm o#tperformed$

2010
20 10 0 -1 0 -2 0 -3 0 -4 0 -5 0 -60 Islamic Fund Close Ended "#a$!e %atio '$e(no$ %atio )ensen *l!#a Islamic Fund !en Ended -0&26757 -0&00182 -0&00272 -29&5789 0&1692665 -0&05412 Convention al -52&6918 10&12379 -0&15992 Convent ional 2&52 0&70 0&02

'ig#re HII" M#t#a! '#nd Ana!ysis in 'F 0/

Cvera!! conventiona! market (as more risky than Is!amic in ./0/$ *reatest vo!ati!e (as seen in money market f#nds$ In this year condition of Is!amic (as good overa!! b#t fe( of conventiona! t#rn o#t to be pretty (e!!$ So, c#m#!ative condition of Is!amic (as stab!e and !ess risky than conventiona! this year$

In year ./00 condition of Is!amic m#t#a! f#nds (as better than previo#s years$ There (as !ess risks in comparison of !ast years$ Many of f#nds i!!#strate positive ret#rns (hi!e act#a! risk (as !ess than e<pected so it sho(s gro(th in market in year ./00$ In case of conventiona! f#nds open ended sho(ed mi< trend, fe( of them t#rn o#t to be pretty (e!! b#t fe( of them had more risk than e<pected and conventiona! c!ose ended had good position this year, especia!!y 'irst 9apita!

M#t#a! '#nd and Pak Cman advantage f#nd had pretty (e!! ret#rn$

16

2011
50 0 -50 -10 0 -15 0 -200

Islamic Islamic Fund Fund Close !en Ended Ended s#a$!e $atio -1&65989 -101&229 -166&709 -12&0261 t$e(no$ 15&04974 $atio -0&00793 al!#a -15&85986 -0&01894 -32&70751 -0&35353 +enson

Conventio nal Fund !en Ended

Conventio nal Fund Close Ended

-0&92521 -0&16714

'ig#re HIII" M#t#a! '#nd Ana!ysis in 'F 00 Cn c#m#!ative!y none of the firm o#tperformed b#t over a!! their ret#rn in comparison of market is good that means f#nds perform better in market$ Is!amic f#nds a!so sho(ed sign of gro(th that sho(s they are having strong bases$ 2#mber of offered f#nd increase as (e!! that is good for e@#ity market:s f#t#re$ 'e( f#nds of Mee)an perform better and from conventiona! side 2?P '#!!erton Asset Management 5imited:s performance (as better than other asset management companies$

In year ./0. f#nd:s performance (as good then other years #nder ana!ysis$ This (as the on!y year in (hich most of the f#nds had positive ret#rn and (ere at good standing positions both Is!amic and conventiona!$ 'rom side fe( sho(ed negative behavior and from conventiona! f#nds fe( t#rn o#t (ith negative ret#rn b#t tota! ret#rn of a!! the f#nds (as positive sho(ing a sign of hope for the market of m#t#a! f#nd$ If (e !ook at partic#!ar asset Management 9ompany than A+D Investment 9ompany sho(ed highest ret#rn and other:s ret#rn (ere fair!y good as (e!!$

17

2012
100 8 0 6 0 4 0 2 0 0 s#a$!e $atio

Islamic Fund Islamic Fund Convention al Ended Close Ended !en Ended Fund !en 1&194528 79&32243 58&99109 14&65946

t$e(no$ $atio 0&024545 +enson al!#a 0&01821

0&133535 5 0&480386

99&16094 0&301698

'ig#re IO" M#t#a! '#nd Ana!ysis in 'F 0.

3&01 3158 0&24 196

Cn aggregate !eve! ret#rns of conventiona! (as higher than Is!amic this year$ Act#a! ret#rn of Is!amic (as !ess than e<pected and act#a! ret#rn of conventiona! (as more than e<pectations$ So, overa!! conventiona! f#nds sho(ed more gro(th than Is!amic in ./00$

Period from .//3 to ./0. is not s#fficient period for providing any conc!#sive evidence abo#t the performance of m#t#a! f#nds in Pakistan$ Ho(ever in this period #nder st#dy, it is c!ear that m#t#a! f#nd:s performance is not good in comparison of market$ 2o signa! firm o#tperformed, both Is!amic and conventiona! do not perform #p to the mark$ Fear to year ana!ysis revea! that ret#rn in .//3 (as more than .//6 on!y act#a! ret#rn of conventiona! f#nds (as good in .//6 than .//3$ 9ondition of tota! market (as bad in year .//6 and .//;= (orse cases (ere observed in .//;$ Then in ./0/, condition start to stabi!i)e$ If (e compare ./0/ and .//; than (e come to kno( that condition of Is!amic f#nds is better in ./0/ than .//; b#t tota! risk (as more in .//; b#t act#a! (as more in ./0/$ 9omparison of ./00 and ./0/ revea! that ret#rns in ./00 (ere higher than ./0/$ In year ./0. condition of m#t#a! f#nd ind#stry (as pretty (e!! than other years sho(ing sign of gro(th$ The comparison revea!s that (orse condition of f#nd market (as seen in year .//6 and .//; and good (as seen in ./0.$ Many of the finds (ere having negative ret#rn b#t this negative trend tends to minimi)e after .//; (ith the passage of time and in ./0. there (as positive ret#rn in m#t#a! f#nds$ 5arge n#mber of f#nds (as !a#nch d#ring period #nder st#dy that is sho(ing sign of hope for investors$ If (e compare Is!amic ret#rns (ith conventiona! ret#rns than (e came to kno( that more vo!ati!ity in ret#rns come from conventiona! than Is!amic$ This brings more ret#rn than Is!amic$ Is!amic f#nds (ere

18 having stab!e ret#rn$ So for having more ret#rn conventiona! is s#itab!e$ This can be so ca#se in ana!ysis period gro(th (as seen in money market f#nds$ Their ret#rns tend to increase (ith passage of time and conventiona! f#nds are having many money market f#nds$ hypothesis approved$ Conclusion and ecommendations: The prob!ematic state that (hich f#nd c!ass has more net asset va!#e -2AH1 Is!amic or conventiona!P 'or addressing this @#estion, on the basis of dai!y 2AHs comparison of performance of Is!amic and 9onventiona! f#nds has been made (ith the he!p of performance meas#ring ratio i$e$ Sharpe, Treynor and %enson a!pha ratios$ The app!ications of these ratios sho(ed that conventiona! f#nds have t#rned o#t to be better performing in terms of their ret#rns$ So in Pakistani m#t#a! f#nd market conventiona! f#nds are better performing$ The reason behind this observab!e fact is that conventiona! f#nds are more in n#mbers then Is!amic$ Ana!ysis revea!s that n#mber of f#nds increase from .//3 to ./0. b#t their gro(th did not$ Borse condition (as observed in year .//6 and .//; then risk tends to minimi)e and in year ./0. higher ret#rn than previo#s years (as detected$ In other (ords it can be said that in year .//3 ret#rns (ere higher than .//6, .//; (as having more !ess ret#rn than .//6, after ./0/ gro(th (as observed and this trend (as contin#ed in year ./00 and ./0.$ The st#dy is consistent in res#!ts (ith the year!y ana!ysis of m#t#a! f#nd association of Pakistan$ Its statistics provide same res#!ts -MU'AP Q#arter!y 2e(s 5etter, ./0.1$ The ret#rns of Is!amic f#nds (as fo#nd stab!e than conventiona!$ This can be beca#se there are fe( b#sinesses that f#!fi!! Is!amic criteria so these f#nds cannot be invested in a!! b#sinesses, having !ess diversification !ead stab!e ret#rns in Is!amic f#nds$ The (ise a!!ocation of spare financia! reso#rces is direct!y !ink (ith the deve!opment of economy$ To mobi!i)e savings norma!!y t(o means e<ists in any financia! system one credit based second capita! market$ ?oth means p!ay cr#cia! r#!e in deve!opment of co#ntry$ ?#t the shift from credit based economy to capita! market give dynamic means of channe!i)ing id!e reso#rces and better ret#rn than banks$ The scope of capita! market especia!!y m#t#a! f#nds depends #pon basic economic str#ct#re and reg#!ation str#ct#re of the co#ntry$ In Pakistan d#e to re!igio#s reasons many peop!e prefer Is!amic financia! prod#cts as Honohon -.//31 has proved in his (ork that abo#t So, n#!!

72.

peop!e in Is!amic co#ntries do not #se conventiona! prod#cts d#e to re!igio#s reasons,

they prefer to stay poor b#t do not #se conventiona! prod#cts$ *overnment and other reg#!atory bodies need to take corrective meas#res for the strengthening this sector$ 9apita! market in

19 Pakistan is not so estab!ish !ike other co#ntries$ The reason behind this practice is !ack of proper kno(!edge on investor:s side$ They c!ear!y do not kno( the difference in ret#rns gained from banks and from capita! market$ So, reg#!atory bodies need to ed#cate investors proper!y$ A!tho#gh many f#nd c!asses are (orking in Pakistan b#t these are !o( in comparison to other co#ntries$ So there is room for increasing investment options$ Red#ction in overa!! managing cost can increase attractiveness of this sector$ 5ast!y most important right po!icies, transparency, protection of investor:s right can bring a boom in this sector$ In m#t#a! f#nd ind#stry there is a chain of organi)ations those need to bring c!earness in their (orking for gaining investor:s tr#st$ So it can be conc!#ded that Pakistan:s m#t#a! f#nd has potentia! to gro( and it can be a so#rce of increment in *DP$ J#st it needs strong po!icies !ike imp!emented in other co#ntries$

20

EFE E*CE,
AAMIR M$, QAFFUM A$, 2ASIR A$, HUSSAI2, S$ A2D ?UTT, S$ -./001 9!osedD nded M#t#a! '#nd and Stock Market *ro(th"A 9ase of +S Pakistan$ ,uropean &ournal of %ocial %ciences, Ho!#me .4, 2#mber 0, pp$ 74D3/$ A??ASI, M$, +A5A2TARI, $ and A??ASI, H$ -./0.1 ffect of '#nd Si)e on the Performance of M#t#a! '#nds vidence from IRA2$ &ournal of -asic and *pplied %cientific 'esearch, .-31766;D7;/., Te<t Road P#b!ication, ISS2 ./;/D4>/4, pp$ 766;D7;/. . A??ASI, M$ and DADASHI2ASA? M$ -./0.1 M#t#a! '#nd Managers: 9haracteristics and Performance, vidence from Iran$ *ustralian &ournal of -asic and *pplied %ciences, 7-71, ISS2 0;;0D6036, pp$047D0A/$ A?D RR IA+ '$ -.//61 The Performance of Islamic ,.uity Funds/ * )omparison to )onventional, Islamic and ,thical -enchmarks , Master:s Thesis, University of Maastricht, Maastricht$ A?D RAIA+, S$ '$ '$ ?$, MA2IAM, +$, and A?D RAIA+, S$S$?$ -./001 Ana!y)ing Performances of Different conomic 9yc!es To(ards Unit Tr#st '#nds" A 9ase Cf P#b!ic M#t#a! ?erhad$ Proceedings of the International )onference on 0anagement, Penang, Ma!aysia, pp$ 0A40D0AA3$ A?DU55AH, '$, HASSA2, T$, and MCHAMAD, S$ -.//31 Investigation of Performance of Ma!aysian Is!amic Unit Tr#st '#nds 9omparison (ith 9onventiona! Unit Tr#st '#nds, 0anagerial Finance, Ho!$ >> 2o$ ., pp$ 04.D0A>$ A?DU55AH 2$ A$ and A?DU55AH 2$ A$ H$ -.//;1 The Performance Cf Ma!aysian Unit Tr#sts Investing In Domestic Hers#s Internationa! Markets$ *sian *cademy of 0anagement &ournal of *ccounting and Finance , Ho!$ A, 2o$ ., pp$ 33R0//$ A?DU5 MAJID, M$ S$ and MAU5A2A, H$ -./0/1 Assessing Performance of M#t#a! '#nds in Indonesia$ &ournal of ,conomic )ooperation and Development , pp$4;D 37$ A'IA,T$ and RAU', A -.//;1 Performance va!#ation of Pakistani M#t#a! '#nds, Pakistan ,conomic and %ocial 'eview, Ho!#me 43, 2o$ ., pp$ 0;;D.04$ A5I, R$ and A?DU5 QUDCUS, R$ -./0.1 Performance va!#ation of M#t#a! '#nds in Pakistan$ Interdisciplinary &ournal of )ontemporary 'esearch in -usiness , V OL 3, 2C ;, pp$ 0/37D0/6>$

21

A5PT +I2, 2$ -.//;1 Performance va!#ation of T#rkish Type -A1 M#t#a! '#nds and Pension Stock '#nds by #sing TCPSIS Method . International &ournal of ,conomics and Finance, Ho!$ 0, 2o ., ISS2" 0>/;D6/AA, pp$00D..$ ?A2+ SARASI2 -./001 rnst 8 Fo#ng$ Is!amic Bea!th Management Report, D#bai$

?ASHIR M$ S$ and 2ABA2* B$ R$ B$ -./001 Is!amic and 9onventiona! Unit Tr#sts in Ma!aysia" A Performance 9omparison$ &ournal of Islamic ,conomics, -anking and Finance, Ho!$ 3 2o$ 0/ 4, pp$;D.4$ ?AU R, R$ and CTT 2, R$ -.//.1 Internationa! vidence on thica! M#t#a! '#nd Performance and Investment Sty!e, &ournal of -anking 1 Finance, !23#4 , pp$03A0D0373$ ?ISHCP M$, S RATTA2 D$, and BATSC29 P$ +$ -.//31 The Str#ct#re and Performance of @#ity M#t#a! '#nds in an merging conomy" The 9ase of Trinidad 8 Tobago" #nit tr#st corporation, pp$0D>0$ 9H MA M$, and SHAH S$ A$ -.//71 The Ro!e of M#t#a! '#nds and 2onD?anking 'inancia! 9ompanies in 9orporate *overnance in Pakistan$ )0,' 5orking Paper 2o$ /7D43, 5ahore University of Management Sciences, 5ahore, P#n%ab$

9H 2, JCS PH S$, HC2*, HARRISC2 *$, HUA2*, MI2* and +U?I+, J ''R F D$ -.//41 Does '#nd Si)e rode M#t#a! '#nd PerformanceP The Ro!e of 5i@#idity and Crgani)ation $ *merican ,conomic 'eview, HC5$ ;4 2C$ A, pp$0.37D0>/.$ D BI M$+$, ' RDIA2 I, R$ -./0.1 va!#ating Performance of Is!amic M#t#a! '#nds in Ma!aysia and Indonesia, &ournal of *pplied ,conomics and -usiness 'esearch , 2 -01" pp$00D>>. 5'A+HA2I, S$, HASSA2, M$ +$ and SIDA2I, F$ -.//A1 9omparative Performance of Is!amic Hers#s Sec#!ar M#t#a! '#nds$ St#dy Paper, S#!iman S$ C!ayan Schoo! of ?#sinessAmerican University of ?eir#t?eir#t, 5ebanon, pp$ 0D4>$ 'AMA $ '$, and 'R 29H +$ R$ -.//41 )apital *sset Pricing 0odel/ Theory and ,vidence.9hicago"9enter for Research in Sec#rity Prices, *rad#ate Schoo! of ?#siness, University of 9hicago$ *nnual 'eport, *nnual 'eport,

' D RATIC2 C' MA5AFSIA2 U2IT TRUST MA2A* RS -.//31 !#!6##7P, ( pp$ ' D RATIC2 C' MA5AFSIA2 U2IT TRUST MA2A* RS -.//61 !#!6##7P, $! pp$

' D RATIC2 C' I2H STM 2T MA2A* RS -.//;1 *nnual 'eport, # pp$

22

' D RATIC2 C' I2H STM 2T MA2A* RS -./0/1 *nnual 'eport, $$ pp$ ' D RATIC2 C' I2H STM 2T MA2A* RS -./001 *nnual 'eport, # pp$ ' R2A2DC, D$, +5APP R, 5$, SU55A H$ A2D HITTAS D$ -.//>1 The *!oba! *ro(th of M#t#a! '#nds, 5orld -ank Policy 'esearch 5orking Paper >/AA$ ' RR IRA, M$ A$, MI*U 5, A$ '$, RAMCS, and S$ -.//71 The Determinants of M#t#a! '#nd Performance" A 9rossD9o#ntry St#dy, S(iss 'inance Instit#te Research Paper Series /7D>0$ 'I2+, M$ P$ -.//61 The Rise of M#t#a! '#nds, 89ford :niversity Press, p$ ;, 0A, 7>$ 'CRT , *$ and MI*5I TTA, '$ -./001 A 9omparison of Socia!!y Responsib!e and Is!amic @#ity Investments, &ournal of 0oney, Investment and -anking, ISS2 04A/D.66O Iss#e .0, pp 007D0>.$ 'R 29H, 9RAI* B$ -.//>1 The Treynor 9apita! Asset Pricing Mode!$ Investment 0anagement, Ho!#me 0, 2#mber ., pp$ 7/D3.$ &ournal of

*CHAR R$, AHM D S$ and 2IAII U$ -./001 Performance 9omparison of M#t#a! '#nds in Pakistan, *frican &ournal of -usiness 0anagement Ho!$ A-041, pp$ AA6>DAA;>$ *overnment of Pakistan -./001 Pakistan ,conomic %urvey !"$"7$$, Is!amabad" conomic Adviser:s Bing, 'inance Division$ *RI2?5ATT, M$, and TITMA2, S$, -0;661 M#t#a! '#nd Performance" An Ana!ysis of Month!y Ho!dings, 'odney ;. 5hite )enter for Financial 'esearch, The Bharton schoo!, University of Pennsy!vania, Pennsy!vania$ HC P2 R, A$ *$ '$, RAMMA5, H$ *$ and R I 9, M$ -./00 1 Is!amic M#t#a! '#nds: 'inancia! Performance and Internationa! Investment Sty!e" vidence from ./ 9o#ntries$ ,uropean &ournal of Finance, 03 -;D0/1, pp$ 6.6D6A/$ HC2CHC2, P$ -.//31 9rossD9o#ntry Hariations in Ho#seho!d Access to 'inancia! Services$ Presented at the 5orld -ank )onference on *ccess to Finance, 5ashington D.). $6 0arch. I?RAHIM ? J$ -.//61 :nit Trust Investment/ The 0alaysian )ase , Thesis, Cpen University Ma!aysia$ JAMA5UDI2, 2$ -./0.1 Individual 'etirement %avings -ehavior/ ,vidence from 0alaysia, Ph$ D$ Thesis, Schoo! of Acco#nting, 'inance and conomics, dith 9o(an University, Perth Bestern A#stra!ia$ JA2+, S$ -./001 0utual fund flows, e9pected returns, and the real economy. TSbingen, *ermany"University of TSbingen and 9entre for 'inancia! Research, 9o!ogne$

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JAFAD H, M$ -0;;71 M#t#a! '#nd Performance" An Ana!ysis of Month!y Ret#rns, Finance India, Ho!$ O 2o$ 0, pp$ 3>R64$ J 2S 2, M$ 9$,-0;731 The Performance of M#t#a! '#nds in the Period 0;4AD0;74 &ournal of Finance, Ho!$ .>, 2o$ ., pp$ >6;D407$ +AMI2S+F *$, 5FC2S R$ and S9HMU+5 R S$ -.///1 conomic 'ragi!ity, 5i@#idity, and Risk"The ?ehavior of M#t#a! '#nds d#ring 9rises, The Bor!d ?ank Deve!opment Research *ro#p, Po!icy Research Borking Paper T .A.;$ +AMI2S+F, *$ 5$, 5FC2S R$+$, S9HMU+5 R S$5$ -.//01 M#t#a! '#nd Investment in merging Markets" An Cvervie($ The 5orld -ank ,conomic 'eview , Ho!#me 0A, pp$ >0AD>4/$ +APTA2, S$S$ -.//01 Investment Management, 0st edition, Syr#p 8 Sons, 2e( De!hi, 0 D . pp$ +ARA9HI STC9+ O9HA2* -./001 Ann#a! Report, 03 pp$ +ARAT P , F$ A2D *U+*UI, '$ -.//71 Sty!e Ana!ysis of T#rkish @#ity M#t#a! '#nds, International 'esearch &ournal of Finance and ,conomics , ISS2 04A/D 2887. Iss#e ., #ro Jo#rna!s P#b!ishing, Inc, pp 66D0/A$ +AHI2, S$ -.//71 Portfo!io Management, .nd ed$, Prentice Ha!! of India Private 5imited, 2e( De!hi, pp$ 7/D70$ +HCRA2A A$, S RHA S H$ and TU'A2C P$ -.//61 M#t#a! '#nds 'ees Aro#nd the Bor!d$ The 'eview of Financial %tudies, The Society for 'inancia! St#dies, o<ford #niversity press, pp$ 0.3;D0>0/$ +HCRA2A A$, S RHA S H$ and TU'A2C P$ -.//A1 <p!aining the si)e of the m#t#a! f#nd ind#stry aro#nd the (or!d$ &ournal of Financial ,conomics, Ho!#me 36, pp$04AR06A$ +5APP R, 5 CRA 8 SU55A, HI9TCR 8 HITTAS, DIMITRI -.//41 The Deve!opment of m#t#a! f#nds aro#nd the (or!d, $ ,merging 0arkets 'eview, ,lsevier, vol. 63$4, pp$ 0D>6$ +UH5 , J$5$ and PCP , R$A$ -.///1 A 9omprehensive 5ongDTerm Performance Ana!ysis of 5oad vs$ 2oD5oad M#t#a! '#nds, &ournal of Financial and %trategic Decisions, Ho!#me 0> 2#mber . s#mmer, pp$0D00$ 5AI, M$, and 5AU S$, -./0/1 the Performance Persistence and Sim#!ated Ret#rns of Ma!aysian M#t#a! '#nds, International 'esearch &ournal of Finance and ,conomics ISS2 04A/D.663 Iss#e 44 pp$ 0;3D.0/$

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2AIIR M$ S$, and 2ABAI M$ M$ -./0/1 The Determinants of M#t#a! '#nd *ro(th in Pakistan$ International 'esearch &ournal of Finance and ,conomics , iss#e A4, pp$ 3AD64$ PRI29 , T$, and ?A9C2, '$ -./0/1 Ana!y)ing M#t#a! '#nd Performance against stab!ished Performance ?enchmarks" A Test of Market fficiency, Research in -usiness and ,conomics &ournal pp$0D04$ RAS5A2, D$J$ -.//61 0alaysia, *sias Islamic Finance =ub , Price Bater Ho#se 9oopers, Ma!aysia$ RAU' A$, and TA5AT A$ -.//;1 Performance va!#ation of Pakistani M#t#a! '#nds$ Pakistan ,conomic and %ocial 'eview, Ho!#me 43, 2o$ ., pp$ 0;;D.04$ RCUB 2HCRST, +$ *$ -.//41 The Crigins of M#t#a! '#nds, +o. "?7?(, p$ A, 07, 03$ ale I)F 5orking Paper

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