Are Islamic indexes, Bitcoin and gold, still “safe-haven” assets during the COVID-19 pandemic crisis?

Abstract

Purpose

This paper aims to investigate whether Islamic indexes, Bitcoin and gold still act as hedges or/and “safe-haven” assets during the COVID-19 pandemic crisis. This paper examines the role of the Morgan Stanley Capital International all-country world index, Islamic index, gold and Bitcoin as a hedge or safe-haven asset for the world conventional stock market over the period from April 30, 2015 to March 27, 2020.

Design/methodology/approach

In this paper, the authors re-evaluate the hedge and safe haven properties of Islamic indexes, gold and Bitcoin following Baur and Lucey’s (2010) and Baur and McDermott’s (2010) methodology.

Findings

Empirical results show that the Islamic index is not a hedge or a safe haven asset for the world conventional stock market during the recent coronavirus crisis period. Different from the whole period, the authors find that gold is a strong hedge but only a weak safe or is not a safe haven during the coronavirus sub-period. Bitcoin reports distinctive properties, as it acts as a weak hedge and not a safe-haven asset.

Originality/value

This paper is the first study that investigates whether the global Islamic index still acts as hedges or “safe-haven” assets during the new COVID-19 crisis period. The results can help investors make informed decisions when adding cryptocurrencies and Islamic indexes to their portfolios during the coronavirus crisis.

Citation

Bahloul, S., Mroua, M., Naifar, N. and naifar, n. (2022), "Are Islamic indexes, Bitcoin and gold, still “safe-haven” assets during the COVID-19 pandemic crisis?", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 15 No. 2, pp. 372-385. https://doi.org/10.1108/IMEFM-06-2020-0295