An empirical evaluation of PARTICIPATION–30 and BIST–30 index performances (2011–2020)

Participation banking is a banking model that performs its activities according to Islamic standards. Although participation indicators have existed at the global level for many years, they have been in the process of expansion in Turkey since 2011. In the financial system, where capital market instruments are increasing day by day, participation indices are important in terms of providing investors with an alternative investment opportunity. Therefore, in recent years, there has been a significant increase in the interest in participation banking instruments. In this context, the risk and profit characteristics of the KATLM-30 Index, which consists of stocks conforming to Islamic standards, and the BIST-30 Index, between January 7, 2011 and July 22, 2020, were analyzed comparatively. The study period is divided into 12 sub-periods as 6 bear markets and 6 bull markets. Studies show that there is a long-run relationship. In addition, statistically significant causality was found between the indices. Since the level of uncertainty is low in the KATLM-30, risk-averse investors may be more willing to choose this index. Key Words: Exchange, Borsa Istanbul, Participation30, Bist30, index.