Comparación respecto al campo del deporte considerado en el archivo

The next section opens up a comparison between conventional fixed income securities and Shariah compliant ones. The Barclays Global Aggregate Bond Index was compared to the Dow Jones Sukuk Index. This was the most appropriate comparison as these are broad indices that comprehensively represent the global market for conventional bonds and Islamic Sukuk. A meaningful analysis could therefore be drawn in order to determine relative performance.

Performance 1YR CAGR 3YR CAGR 5YR CAGR 10YR CAGR Barclays Global Aggregate Bond Index -1.20% 2.70% 1.08% 2.49% Dow Jones Sukuk Index -3.41% -0.59% -0.29% 2.65%

Investors seeking Shariah compliant investments are not only limited to equities as there is an alternative asset class, fixed income, in which they can invest, especially those who are more risk averse. This prospering field of Sukuk offer investors an attractive and steady income stream. This section will therefore look at the performance of the conventional Barclays Aggregate Bond Index in comparison to the Dow Jones Sukuk Index.

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This field is still in its infancy and as a result there is not much information available. Performance is therefore measured as the compound annual growth rate in price of the indices over a one year, three year, five year and ten year time horizon. The data sample is from 31 December 2008 until 31 December 2018. What was found was that on a one year, three year and five year time period the Barclays Global Aggregate Bond Index outperformed that of the Dow Jones Sukuk Index, however over a ten year time period the Dow Jones Sukuk Index outperformed with a growth rate of 2.65% in comparison to the Barclays Global Aggregate Bond Index of 2.49%, a 16 basis point difference. Over a one year period the Dow Jones Sukuk Index declined by 221 basis points more than the Barclays Global Aggregate Bond Index while over a three year and five year period the Dow Jones Sukuk Index had negative growth while the Barclays Global Aggregate Bond Index posted positive growth. The data sample is very limited however and figures such as duration may be a better reflection of the relative performance, however this is not available.

Annual Performance 2008 2009 2010 2011 2012 2013 Barclays Global Aggregate Bond Index 4.79% 6.93% 5.54% 5.64% 4,32% -2.60% Dow Jones Sukuk Index -22.58% 22.49% 5.85% 1.50% 3,69% -3.40%

Annual Performance 2014 2015 2016 2017 2018

Barclays Global Aggregate Bond Index 0.59% -3.15% 2.09% 7.39% -1.20% Dow Jones Sukuk Index 2.64% -2.27% 0.81% 0.90% -3.41%

In order to gain a deeper insight into the comparative performance, the annual growth rates in the price of the indices were calculated from 31 December 2008 until 31 December 2018. The Barclays Global Aggregate Bond Index outperformed the Dow Jones Sukuk Index in 2008, 2011, 2012, 2013, 2016, 2017 and 2018 while in 2009, 2010, 2014 and 2015 the Dow Jones Sukuk Index outperforms. More information other than price and a longer time frame will need to be acquired before any conclusive opinions can be formed.

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In order to conclude the investigation into the performance of a Shariah compliant fixed income index in comparison to a conventional one the indices were rebased to $100 on 30 September 2005. What was found was that if $100 were invested in 2005 into the Barclays Global Aggregate Bond Index it would be worth more at $154.47 on 31 December 2018 in comparison to $99 in the Dow Jones Sukuk Index. This indicates that an investment of $100 would have declined over the period at 1% if invested in the Dow Jones Sukuk Index. This also reflects that an investment made in the Barclays Global Aggregate Bond Index on 30 September 2005 would be worth 56.03% more on 31 December 2018 than an investment made in the Dow Jones Sukuk Index. In terms of index price the Barclays Global Aggregate Bond Index therefore appears to have been the

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outperformer over the time period analysed, however as previously mentioned a better measure of relative fixed income performance could be used as more information becomes available.

Standard Deviation (%) 2006 2007 2008 2009 2010 2011 2012 Barclays Global Aggregate Bond Index 1.15 1.26 2.68 2.31 1.82 1.42 0.83 Dow Jones Sukuk Index 0.12 0.40 3.96 4.56 0.70 0.85 0.31

Standard Deviation (%) 2013 2014 2015 2016 2017 2018 Barclays Global Aggregate Bond Index 1.34 1.11 0.85 2.03 0.76 1.03 Dow Jones Sukuk Index 1.01 0.65 0.65 0.85 0.36 0.54

Standard Deviation (%) 3YR AVE 5YR AVE 10YR AVE Barclays Global Aggregate Bond Index 1.28 1.16 1.35 Dow Jones Sukuk Index 0.58 0.61 1.05

The standard deviation of the Barclays Global Aggregate Bond Index as well as the Dow Jones Sukuk Index was calculated over the period 2006 until 2018 due to availability of data. In all years except 2008 and 2009 the Barclays Global Aggregate Bond Index had a higher standard deviation than the Dow Jones Sukuk Index. The Barclays Global Aggregate Bond Index therefore also had higher three year, five year and ten year average standard deviation figures than the Dow Jones Sukuk Index. The Barclays Global Aggregate Bond Index which represents conventional fixed income securities therefore demonstrated greater risk over the period reviewed compared to the Dow Jones Sukuk Index, the Shariah compliant alternative therefore offers a less volatile option. This is especially true as high risk bonds are not in compliance with Shariah Law, which protected Islamic Banks during the 2008 Financial Crisis and as results spurred global demand for these banks, making their growth rates faster than conventional banks.

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The Sharpe ratios of the Barclays Global Aggregate Bond Index and the Dow Jones Sukuk Index were calculated over a fifteen year time period but with negative average figures the data will not be used in this study.