International Islamic funds

Internationally-investing Islamic equity funds from developed Islamic and non-Islamic markets perform in general similar to the market. However, analyzing different market conditions, we provide evidence that funds domiciled in Islamic markets outperformtheir peers and funds fromnon-Islamic markets duringmarket turmoil, irrespective of the applied performance measurement model. We suggest that this outperformance is owed to the expertise of fund managers from developed Islamic markets who operate in a financial environment that is driven by Islamic principles. Our results are robust with respect to the standard Fama-French three-factor and four-factor models as well as to the novel five-factor model.