The Influence of Market Timing Ability, Stock Selection Skill, and Unsystematic Risk on the Performance of Sharia Stock Mutual Funds

ABSTRACT : This study aims to analyze the influence of market timing ability, stock selection skill, and unsystematic risk on the performance of Sharia stock mutual funds. A quantitative approach with purposive sampling was used to select ten Sharia stock mutual fund companies. The data interval for the Sharia stock mutual funds spans from 2018 to 2022. The data analysis method employed panel data regression with a common effect model approach. The research results indicate that market timing ability and stock selection skill positively affect Sharia stock mutual funds, meaning that an improvement in stock selection skill will lead to better performance of the Sharia stock mutual fund. Similarly, an improvement in market timing ability will enhance the performance of the Sharia stock mutual fund. In contrast, unsystematic risk negatively affects the performance of Sharia stock mutual funds, meaning that an increase in unsystematic risk can lead to a decrease in performance. This condition should be a particular concern for investment managers in managing Sharia stock mutual funds, to improve their stock selection skills and market timing ability to maintain the quality of the mutual funds they manage. Additionally, unsystematic risk should be closely monitored to avoid potential losses by diversifying the Sharia stock portfolio appropriately.