Islamic mutual funds (IMFs) continue to grow as an alternative investment vehicle for investors wishing to integrate Islamic values and secular financial objectives in their investments. The most distinctive feature of IMFs lies in screening strategies based on the application of Shariah (Islamic law). Conventionally, this mainly involves the application of exclusionary screening, whereby fund managers screen out companies involved in certain activities, including riba (interest), gharar (uncertainty), and maysir (gambling), and prohibited products from their portfolios as prescribed by the Quran, Sunnah and related Islamic texts. The central outcome is that the managers of IMFs, unlike those of conventional mutual funds (CMFs), necessarily access only a subset of the population of investments available. This has dramatic implications for many conventional dimensions of mutual fund behaviour, including performance, the flow of funds, and the fund selection behaviour of investors. The purpose of this thesis is to examine three separate yet complementary dimensions of IMFs that are crucial to current and future investors, industry practitioners and regulators, and academic researchers alike. These are the performance, screening, and fund flows of IMFs in Malaysia, one of the world’s most important and rapidly growing IMF markets. Given the nature of these objectives, we focus on equity funds. In the first part of the thesis, we discuss the general development, sources, and principles of Islamic finance. We then address the rapidly growing mutual fund sector in Malaysia and describe the nature of this market, the screening methods applied, and other key institutional, economic, and social dimensions of both the Malaysian IMF and CMF sectors. Lastly, we survey the empirical literature on mutual funds, with particular attention to screened funds of all types, including socially responsible investments (SRIs) and the existing small body of research on IMFs.