Financial performance persistence in islamic and conventional fund family: Developing market evidence

Abstract

The paper investigates performance persistence in both Islamic focused (IFFs) and conventional focused fund families (CFFs) in four emerging markets (Saudi Arabia, Malaysia, Indonesia, and Pakistan) from 2007 to 2021 using contingency tables. In the overall sample, we find that positive (negative) persistence in IFFs (CFFs) exists only in the short-run (one-month). At the country level, IFFs demonstrate positive persistence up to one month in Saudi Arabia and Indonesia and six months in Malaysia. For CFFs, negative persistence appears up to one month in Malaysia and six months in Indonesia. Surprisingly, the positive persistence of Indonesian IFFs changes to negative persistence in six months, before disappearing completely later. This result confirms the existence of short-run persistence for both IFFs and CFFs. This study presents new evidence for the persistent performance of fund families in emerging markets.