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Efficiency and Dynamics of Islamic Investment: Evidence of Geopolitical Effects on Dow Jones Islamic Market Indexes

Alexis Guyot 1, *
* Corresponding author
Abstract : This paper analyzes both the market quality and price dynamics of a sample group of Islamic indexes. Our results highlight that efficient investment allocation is not compromised by the application of Shariah criteria. However, although few indexes impose an additional liquidity cost on investors, a vast majority of indexes present degrees of liquidity that are similar to conventional indexes. Ultimately, investors whose investment decisions are guided by religious principles do not bear significant additional costs of inefficiency but may have to accept that their portfolios are more sensitive to geopolitical events. However, Islamic indexes may contribute to the international diversification of investors' portfolios.
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https://hal-audencia.archives-ouvertes.fr/hal-00841074
Contributor : Alexis Guyot <>
Submitted on : Wednesday, July 3, 2013 - 5:16:18 PM
Last modification on : Thursday, April 9, 2015 - 10:07:01 AM

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Alexis Guyot. Efficiency and Dynamics of Islamic Investment: Evidence of Geopolitical Effects on Dow Jones Islamic Market Indexes. Emerging Markets Finance and Trade, Taylor & Francis (Routledge), 2011, 47 (6), pp.24-45. ⟨10.2753/REE1540-496X470602⟩. ⟨hal-00841074⟩

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