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Comparing the determinants of fund flows in domestically managed Malaysian Islamic and conventional equity funds.

Othman, J. and Asutay, M. and Jamailan, N. (2018) 'Comparing the determinants of fund flows in domestically managed Malaysian Islamic and conventional equity funds.', Journal of Islamic accounting and business research., 9 (3). pp. 401-414.


Purpose: This paper aims to provide an empirical evidence on the fund flows-past return performance relationship by also considering the management expense ratio, the portfolio turnover, the fund size and the fund age of Islamic equity funds (IEF) investors in comparison with conventional equity funds (CEF) investors. Design/methodology/approach: By using panel data, the sample of Malaysian domestic managed equity funds are considered comprised of 20 individual funds from IEF and CEF respectively from 2011 to 2013. Findings: The results provide evidence that IEF investors have different factors when choosing funds in comparison with CEF investors. The study finds that the key factor influencing the fund flows of IEF is the management expense ratio, compared to the CEF which is fund size. This study also shows that all the fund characteristics of IEF and CEF are positively or negatively related to the fund flows. Research limitations/implications: The present study may be extended by considering other fund categories such as the money market fund, the balanced fund, the bond fund and the fixed income fund. Practical implication: The empirical findings of this paper clearly call for fund managers and investors to review their investment policy. The results could also provide better information and guidance for investors as well policy-makers on the factors that affect the fund flow for Malaysian Islamic and conventional equity funds. Originality/value: This paper is among the earliest empirical evidence studies on the fund flows-past return performance relationship by focusing in a comparative manner on IEF investors and CEF investors in Malaysia.

Item Type:Article
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Publisher statement:This article is © Emerald Group Publishing and permission has been granted for this version to appear here Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited
Date accepted:01 November 2016
Date deposited:18 November 2016
Date of first online publication:21 March 2018
Date first made open access:21 March 2018

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