Comparing The Return of Conventional and Syariah Investment
In this article, we are studying and comparing the risk and annualised return for conventional scheme and Syariah scheme. As the EPF is introducing the new Syariah Saving Scheme for its members this year, this study is important to gauge the long term performance and comparison of both.
Tables below shows the analysis of unit trust that is established for more than 10 years.
|
Conventional |
3 years |
5 years |
10 years |
Deviation |
|
4.14% |
4.25% |
5.33% |
60 |
|
|
3.71% |
4.58% |
8.40% |
156 |
|
|
4.29% |
4.55% |
5.26% |
43 |
|
|
3.28% |
3.14% |
2.94% |
24 |
|
|
5.12% |
6.59% |
5.76% |
45 |
|
|
3.82% |
3.61% |
4.22% |
35 |
|
|
9.54% |
7.64% |
6.69% |
70 |
|
|
3.24% |
3.10% |
2.73% |
41 |
|
|
Pb Cash Plus Fund |
3.30% |
3.16% |
2.28% |
98 |
|
1.04% |
4.86% |
6.96% |
146 |
|
|
13.7% |
14.83% |
17.04% |
44 |
|
|
3.32% |
3.27% |
5.18% |
112 |
|
|
5.41% |
7.01% |
4.09% |
108 |
|
|
AVERAGE |
4.92% |
5.43% |
5.91% |
75.5 |
|
Syariah compliance |
3 years |
5 years |
10 years |
Deviation |
|
4.67% |
4.58% |
5.66% |
53 |
|
|
3.82% |
6.97% |
8.80% |
99 |
|
|
4.46% |
4.47% |
4.17% |
18 |
|
|
3.20% |
3.10% |
2.61% |
52 |
|
|
2.04% |
5.54% |
4.94% |
95 |
|
|
3.84% |
3.87% |
3.78% |
5 |
|
|
9.46% |
9.04% |
4.55% |
202 |
|
|
3.10% |
3.01% |
2.25% |
85 |
|
|
3.19% |
3.08% |
2.73% |
38 |
|
|
4.82% |
6.77% |
7.83% |
66 |
|
|
4.48% |
8.70% |
13.02% |
135 |
|
|
4.23% |
3.95% |
5.24% |
66 |
|
|
6.52% |
7.72% |
7.02% |
31 |
|
|
AVERAGE |
4.45% |
5.45% |
5.58% |
72.6 |
With both of tables, we can see clearly the comparison of return and risk between conventional and syariah compliance. The long term (10 years) annualised return of conventional is 5.91%, which is higher than 5.58% of the Syariah scheme. Both of them have similar return in 5 years period. As for short term, 3 years period, the annualised return for conventional is 4.92%, slightly higher than 4.45% of Syariah based unit trust.
On other hand, the Syariah compliance appears to have more stable return compared to conventional as the deviation factor of 72.6 is lower than conventional. The main reason is the Syariah is invested in those listed companies or bond with lower risk and avoid conventional banking stock. There are pros and cons in selecting either the syariah or conventional. Make your decision wisely.
