Incorporating Socially Responsible Principles in Islamic Investments: An Empirical Analysis

MALIK, RIZWAN and NURULLAH, MOHAMED and DAR, HUMAYON,(2015), Incorporating Socially Responsible Principles in Islamic Investments: An Empirical Analysis. , İSLAM EKONOMİSİ VE FİNANSI DERGİSİ, UNSPECIFIED

[thumbnail of Sosyal Sorumluluk İlkelerinin İslami Yatırımlarla....pdf] Text
Restricted to Repository staff only

Download (1MB)


The paper examines the compatibility of United Nations (UN) Global Compact’s principles with Islam and proposes a new “social screen” to be added in addition to existing Shari’a complaint equity screening methodologies. The paper then empirically analyzes the performance of SRI portfolios with portfolios that are both socially responsible and Shari’a compliant using risk adjusted return tools and Carhart 4 factor model. The paper further investigates the performance of seven Islamic indices with equivalent socially responsible indices. It was found that the Islamic principles not only endorse the principles of UN Global Compact but also enforce them and make an individual accountable. The empirical results show that SRI and Shari’a compliant combined portfolio performs better than the SRI portfolio, and hence Sharia compliant investments bring value to the SRI portfolio. The paper also found that Shari’a compliant portfolio generates better returns than the SRI portfolio in a bearish market while the latter performs better in a bullish market. It is concluded that during market downturn Shari’a compliant portfolios can be used to limit risk.
Keywords : Shari’a Compliant, Socially Responsible, Ethics, Islamic Finance and Investment, UNSPECIFIED
Volume: 1
Item Type: Article
Subjects: Ekonomi Islam
Depositing User: Users 15 not found.
Date Deposited: 27 Dec 2019 07:06
Last Modified: 27 Dec 2019 07:06

Actions (login required)

View Item
View Item