Abstract
This paper is primarily intended to find out the effect of the lunar calendar
with the special focus of the holy month of Rama╔ān on the performance
of mutual funds in Pakistan. Economic activity in Pakistan takes a
different turn due to observation of ╗iyām (fasting) and shorter working
hours in the country in the month of Rama╔ān. People are generally more
tilted towards the religious and spiritual activities in this month. The paper
uses the logit model to study the impact of lunar calendar generally and
the holy month of Rama╔ān specifically, on the net asset values of the
mutual funds – an important category of Islamic capital market. The study
confirms the low expected growth of net asset value in the month of
Rama╔ān and the other periods of the religious sentiment like Dhū al-
╓ajjah in the case of Islamic mutual funds. In case of conventional
(interest based) mutual funds, however, net asset value of the Funds
depicted phenomenal growth. Economic activity regains its pace after
Rama╔ān and Dhū al-╓ajjah as this is evident from the likelihood
increase of net asset value of the Islamic mutual funds in the month of
Shawwāl & Mu╒arram, the months following Rama╔ān and Dhū al-
╓ajjah respectively. In contrast, growth in conventional mutual funds is
not much influenced by the periods of religious sentiment.
Muhammad Ashraf, Muhammad Ismail Ramay. (2016) Lunar Calendar and Rama╔ān Effect on Performance of Mutual Funds in Pakistan, Journal of Islamic Business and Management, Volume 6, Issue 1.
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