Open AccessThe Effect of Fund and Family Characteristics on Islamic Mutual Fund Flows: Evidence from Saudi Arabia
Author(s) -
Anas Ahmad Bani Atta,
Ainulashikin Marzuki
Publication year - 2020
Publication title -
ulum islamiyyah
Language(s) - English
Resource type - Journals
eISSN - 2289-4799
pISSN - 1675-5936
DOI - 10.33102/uij.vol30no.255
Subject(s) - mutual fund , closed end fund , income fund , open end fund , net asset value , fund of funds , business , sovereign wealth fund , finance , investment fund , target date fund , fund administration , investment (military) , manager of managers fund , financial system , economics , institutional investor , market liquidity , foreign direct investment , corporate governance , politics , political science , law , macroeconomics
Islamic mutual funds (IMF) are growing as a substitutional investment vehicle for investors who want to combine value and financial objectives in their investment. A group of the funds is managed by one Investment Company called the family of funds. This study investigates the flow-performance relationship in IMF, in addition to the extent to which family and fund characteristics contribute to explaining fund flows in Saudi Arabia for the period from 2007 to 2017. The study uses raw returns to calculate the fund performance and use the percentage money flow (FLOW), defined as money flow scaled by the total net asset of the fund. The results show there is a positive relationship between past performance and fund flow that mean IMF investors make rational financial decisions by directing fund flows to better performing funds. In addition, the results show family characteristics have an impact on IMF inflow.