Performance analysis of traditional investment funds and participation funds in Turkiye

The variety of investment instruments in global financial markets offers savers a wide range of options to evaluate their savings. Among these options, investment funds have an important place, especially because they offer professional management, portfolio diversification and access to large-scale investments even with small savings. In this study, investment funds are examined under two main categories: traditional investment funds and participation investment funds. While both types of funds aim to meet the risk and return expectations of investors in capital markets, the fundamental differences between them emerge both in their philosophical approaches and in the determination of the asset classes they invest in. In our study, first, the conceptual framework of Islamic investment funds and their emergence on the historical stage are discussed, and then information is provided about their status in the world. The instruments used by Islamic investment funds and their principles are tried to be explained. After this, information is given about investment funds and the question of why investment funds should be preferred is sought. Since TEFAS (Turkey Electronic Fund Trading Platform) started to publish the closing data of participation funds on November 17, 2021, in order to make a fair and comprehensive comparison between traditional investment funds and participation funds, a total of 20 investment funds were examined using the closing data of 788 trading days between November 16, 2021 and December 31, 2024. The funds included in the examination consist of 10 traditional investment funds registered with TEFAS and having the highest average number of investors, and 10 participation funds with data from the same period and in accordance with Islamic sensitivities. The daily returns of each investment fund were calculated based on the closing prices of the relevant day. The average daily returns obtained are historical data reflecting the past performance of the funds, and this data was considered as an indicator of the expected return of the relevant investment fund. Relevant analyzes were made on the subject and the analyzes were performed through the Excel program and presented in tables. The volatility of the returns of the funds in question, in other words, the risk, was measured with standard deviation, the sensitivity of the funds to market shocks was assessed with the beta coefficient, the assumed volatility was determined compared to the expected return amount by finding the coefficients of variation of the funds, and it was tried to understand how much more return the fund provided in return for the risk it took with the Sharpe Ratio. Finally, when a portfolio formed from the funds examined on a type basis was distributed equally, the returns, risk and sharpe ratios were calculated. The fund distribution that should be for maximum return and the most ideal fund distribution that should be for minimum risk were calculated and interpreted.