Comparison of the Performances of Islamic Mutual Funds and Debt Funds in Turkey.

The aim of this study is to compare the performance of debt instruments funds, which predominantly invest in interest-bearing financial assets such as bonds and bills, with that of lease certificate funds, which generally prefer interest-free financial products. Within this scope, fund performances were compared based on total risk using the Sharpe ratio, M2 performance measure, and Sortino ratio. In terms of systematic risk, fund performances were evaluated using the Treynor ratio, T2 performance measure, and Jensen's Alpha. Lease certificate funds traded on the Turkish Electronic Fund Trading Platform (TEFAS) were considered as interest-free products, while debt instruments funds were treated as interest-bearing products. The study examined their five-year performances between 2018 and 2023. As a result of the study, it was found that the portfolio composed of debt instruments funds provided a higher return compared to the portfolio formed from lease certificate funds; however, it also exhibited a higher level of risk. Furthermore, it was concluded that Islamic funds demonstrated higher performance values than debt instruments funds both in terms of total risk and systematic risk.