Islamic Investor: Islamic Investor: - Islamic Finance News

FEATURE
In 2011 and 2010 Islamic funds investing in North America
delivered the best returns. However it should be noted that
there are very few Islamic funds that employ a North America
mandate, and all of these are invested in equities. The
performance of these funds was helped by positive movements
in the equity markets in 2010, and also by high commodity
prices, as almost half of the North America — investing Islamic
funds are focused on the basic materials sector.
Source: Eurekahedge
mapped out against the Dow Jones Sustainability Index
and the MSCI World Index since December 1999, clearly
showing that Islamic funds have not only outperformed,
but have also delivered the returns with signifi cantly less
volatility and better downturn protection. For example, in
2008 the MSCI World Index declined by 41.12% and the DJ
Sustainability Index was down 42.98%, while Islamic funds
lost just 28.53%.
Islamic funds investing in the Asia Pacifi c region have
delivered the strongest performance over the past three years.
A large proportion of Asia Pacifi c Islamic funds are invested
in the Malaysian and Indonesian markets, which underwent
remarkable growth in 2009 and 2010. The FTSE Bursa
Malaysia Stock index jumped 42.31% in 2009 and 19.34% in
2010 while the Jakarta Composite Index has gained nearly
70% in the last three years.
Equity-investing Islamic funds witnessed the strongest returns
in 2010, primarily through the excellent returns posted by
underlying equity markets. In the three-year annualized returns
measure, Islamic fund managers who were partially or fully
invested in fi xed income instruments registered healthy gains,
as they did not suffer as much during the fi nancial crisis as
equity-investing funds – the Eurekahedge Islamic Fixed Income
Fund Index lost only 0.85% in 2008.
September 2011 15