Performance of Mutual Fund During the Global Financial Crisis: Evidence from Saudi Arabia
Date
2024
Journal Title
Journal ISSN
Volume Title
Publisher
SpringerLink
Abstract
Purpose – This paper is an attempt to analyze the performance of the Saudi equity diversified fund on the basis of return and risk evaluation before, during and after the global financial crisis (GFC).
Methodology – The study uses secondary data of 12 Saudi mutual funds from Jan 2000 until Dec 2018. The analysis is conducted by assessing various performance and statistical measures including average return, standard deviation, Sharpe ratio, Treynor ratio, and Information ratio (IR), and M2 measure. The outcomes of these measures are compared with a benchmark, i.e. the stock market index Tadawul.
Findings – The results show that funds managers showed good decisions attempts during the crisis to minimize investors losses as the majority of the funds had positive IR during the crisis. Although the crisis had negative effect on MFs in Saudi Arabia, they outperformed the market.
Riyad Saudi Equity Fund and Saudi Fransi Saudi Istithmar Equity Fund outperformed all other fund in the sample during the crisis,
Research Implications – This study would be useful for new investors who want to start investing in funds with good history of investment and portfolio management during the financial crises. For decision makers of Riyad Saudi Equity Fund and Saudi Fransi Saudi Istithmar Equity Fund, to find out the reasons for their superiority during the crisis period, and the relapse they experienced after the end of the crisis at a time when the rest of the mutual funds in the sample recovered.
Originality/Value – The study is valuable to investors as it increases their knowledge about Saudi Arabia funds, which are attractive source of investing, since they still can offer a good return and perform better than the market, especially during crisis.
Description
This open access book presents contributions on a wide range of scientific areas originating from the BUiD Doctoral Research Conference (BDRC 2023)
Keywords
Saudi mutual funds, risk-adjusted measures, global financial crisis
Citation
Hamdan, R.S., Al-Malkawi, HA.N. (2024). Performance of Mutual Fund During the Global Financial Crisis: Evidence from Saudi Arabia. In: Al Marri, K., Mir, F.A., David, S.A., Al-Emran, M. (eds) BUiD Doctoral Research Conference 2023. Lecture Notes in Civil Engineering, vol 473. Springer, Cham. https://doi.org/10.1007/978-3-031-56121-4_43