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Abstract
There is no overriding reason why restrictions on investment choice imposed by religious or social interest must necessarily disadvantage those who adhere to them provided that there is sufficient diversity in the choices that remain. We examine this issue empirically with a sample of over 1,000 risk-matched Secular and Islamic-compliant portfolios comprised of S&P 500 stocks and find that the expected cost of observing Islamic investment principles is positive. And while returns shift sharply in favor of Islamic portfolios out-of-sample, a considerably larger fraction of the Secular portfolios that had been identified as dominant in the estimation period continue to outperform.
- © 2011 Pageant Media Ltd
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Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600