Comparing performance: socially responsible versus sharia-compliant

As the mutual fund industry has developed, in more recent years it has witnessed the growth of sharia-compliant funds (SCFs) and socially responsible funds (SRFs). Although both classes of funds employ certain screening criteria, there exists a distinction between them. The International Centre for Education in Islamic Finance examined the performance of socially responsible funds against shariah-compliant peers. The results suggest significant underperformance of both types of funds against the market, suggesting that the screening has a negative impact on them. However, SCFs managed to do slightly better than SRFs.