DETERMINANT ANALYSIS OF ISLAMIC MUTUAL FUNDS PERFORMANCE IN INDONESIA (A STUDY ON ISLAMIC EQUITY FUNDS IN 2015-2020)

Alif Khuwarazmi Maulana Julendra, NIM.: 17108040089 (2021) DETERMINANT ANALYSIS OF ISLAMIC MUTUAL FUNDS PERFORMANCE IN INDONESIA (A STUDY ON ISLAMIC EQUITY FUNDS IN 2015-2020). Skripsi thesis, SUNAN KALIJAGA YOGYAKARTA.

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Abstract

Investment in mutual funds related to environmental application, social responsibility restrictions, good corporate governance, and adherence to religious beliefs (Islamic, Christian, etc.) has increased extraordinarily around the world. Islamic Mutual Funds is one of nowadays kind in mutual fund investment which follows sharia guidelines, predicated on the profit-loss sharing principle (Musharakah) depending upon every investor's equity participation in the contract. Indonesia is home to the world biggest Muslim population, about 219,960,000 people, or 82% of the total population. This fact is equitable that the presence of Islamic Mutual Funds is a necessity for Indonesian people and should be the choice for investment by the public. However, until the end of 2020 fiscal year, the number of investors in Islamic Mutual Funds reached 376 thousand investors or only 0.1% from total population. This fact is contrast to other country, such as Malaysia an investor of Islamic Mutual Funds reached 40% from total population. One of the issues that affects directly the growth of Islamic Mutual Funds is the intention to do investment in Islamic Mutual Funds. Specifically, financial risk tolerance is the problem that affects the intention of investor to do investment in Islamic Mutual Funds in Indonesia. While, it is a fundamental issue of financial decisions which are directly related to Islamic Mutual Fund’s manager performance. This research aims to determine and provide information about Islamic Mutual Funds performance in Indonesia. It used quantitative statistical analysis to investigate the influence of stock selection skills, market timing ability, fund size, fund age, expense ratio and turnover ratio towards the Islamic Mutual Funds performance. This study used annual data over the periods 2015-2020 which obtained from prospectus of each Islamic Mutual Funds, Central Bank Indonesia (BI), Statistics Indonesia (BPS), Pasar Dana, and data published annually by Financial Service Authority (OJK). The result shows that stock selection skill and expense ratio have a positive significant impact on the performance of Islamic Mutual Funds, while market timing ability, fund age and fund size have not a significant impact but the result revealed positive values. Otherwise, turnover ratio has a negative significant impact on Islamic Mutual Funds performance. Hence, it can be inferred that the higher investment managers ability to select its portfolio stock, the better the return obtained and it can be inferred that the expense ratio of a mutual fund reflects how much it pays for portfolio management, administration, marketing, and distribution, among other things.

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