Unit Trust Research Articles

T Risk Tolerance, Perceived Usefulness, and Intention to Subscribe to Digital Unit Trust

T Risk Tolerance, Perceived Usefulness, and Intention to Subscribe to Digital Unit Trust

Value Relevance of Fair Value Measurement on Investment Property: Malaysian Evidence

Objective - This research investigates the disclosure practices for fair value measurement of investment property and examines the value relevance of fair value information reported by Malaysian public listed companies. Methodology/Technique - The study focuses on annual reports from 2018 of companies listed on the Main Market of Bursa Malaysia, excluding firms in the financial and unit trust sectors. The sample includes 71 companies that reported fair value gains on investment property. Findings - Findings reveal that none of the companies used Level 1 inputs, 51% used Level 2 inputs, 39% used Level 3 inputs, and 10% used a combination of Level 2 and 3 inputs. The regression analysis indicates that fair value gains are not significantly related to stock returns, suggesting that Malaysian investors do not find this information useful. However, net income before fair value gains is significantly related to share returns, highlighting the importance of traditional earnings metrics. Novelty - This study contributes to the literature by providing empirical evidence from Malaysia, revealing a gap in the perceived usefulness of fair value disclosures and underscoring the continued relevance of traditional financial metrics for investors. Type of Paper: Empirical JEL Classification: M41, M49. Keywords: Fair Value Gain, Investment Property, Value Relevance, Disclosure Reference to this paper should be referred to as follows: Shaari, H. (2024). Value Relevance of Fair Value Measurement on Investment Property: Malaysian Evidence, Acc. Fin. Review, 9(1), 42 – 53. https://doi.org/10.35609/afr.2024.9.1(2)

The factors influencing the selection of fund management companies by Malaysian retail investors in the context of islamic unit trust funds

The purpose of this study is to analyze the impact of fund management companies' past performance, fees, perceived religiosity, and perceived risk on Malaysian Muslim investors' attitude toward them. The moderating effects of investor risk aversion, price sensitivity, religiosity, and Islamic financial literacy are considered. A model based on the unified theory of acceptance and use of technology is built to analyze the impact of the variables considered. The study data were collected using a survey of 550 Malaysian retail investors. Our findings show that Muslim investor attitudes are negatively affected by the perceived risk of a fund management company and positively affected by a fund management company's perceived religiosity and past performance. Moreover, the perceived religiosity impact is positively moderated by an investor's Islamic financial literacy and negatively moderated by the investor's price sensitivity. Practical implications of the results and avenues for further investigation in future research are discussed.

Contrasting the Performance of Active and Passive Unit Trusts under Normal Market Conditions: Is the Experience of Emerging Markets Different?

The predominant tradition in the literature is to scrutinise the competitive performance of passive and active investment strategies with less regard to the prevailing market climate. The thesis of this paper is that volatile market conditions may necessitate investment strategy adjustments. Such readjustments may confound empirical comparison of passive and active investing if econometric models do not adapt accordingly. Currently, the literature cannot give a stylised fact of whether the historical claims of passive–active relationships relate to normal market conditions or not, which is a flaw. The present study reduces the flagged knowledge gap by answering the question whether passive investment outperforms active investing under normal market conditions. The study applies the parametric and non-parametric risk-adjusted models of the Jensen alpha and Sharpe index. The empirical analysis is based on the weekly returns of 16 unit trusts listed on South Africa’s Johannesburg Stock Exchange for ten years (between 2009 and 2019). Consistent with the hypothesis of inefficient capital markets in developing economies, the study finds that active investing significantly outperforms passive investment strategy under normal market conditions. The results should benefit investors and policymakers in the era of increasing competitiveness, digitalisation, and globalisation.

Risk-Return Analysis of Select Tax Saving Mutual Funds

The Indian stock market has been in existence since 1875 bestowing lesser range of instruments from companies to invest their money through general public. Since then, the awareness of investment has gained momentum amongst the general public and investors have become curious and intuitive to park their funds in some instrument to attain or gain profit or handsome returns from companies and the market. With the advent of Unit Trust of India (UTI) being formed during 1964 by a special legislature to function under the regulatory and administrative control of Reserve Bank of India (RBI) , it brought an innovative financial thought to the mechanism of investment by investors. Mutual Fund industry boosted the investors’ confidence that upheld capital appreciation, protection, tax burden and promoted financial stability. The researcher attempted to analyse the risk and returns of select tax savings scheme of mutual funds and point out the best tax saving mutual fund amidst the 11 selected funds using parameters like standard deviation, beta, sharpe ratio and treynor ratios for a period of 90 months from 2016 to 2023 taking Net Asset Values published by AMFI and the closing values of Bombay Stock Exchange Standard & Poor (BSE S & P) Sensex and also by using MS Excel for computing all the parameters manually rather than the already published data by many other sources. It was examined that Quant Tax Direct Plan (Growth Option) has good indicators to prove its performance. The research findings can aide investors’ decision with numerous benefits ranging from savings, returns, gains and risk management.

Philanthropic Impact of Investing Via Waqf-Featured Unit Trust Funds: Determinant Factors Influencing the Participation in Waqf Unit Trust Funds in Malaysia

Purpose — Waqf unit trust funds are a form of value-based impact investing that combines financial investment with philanthropic goals through waqf (Islamic endowment). This study uses the theory of planned behaviour (TPB) to investigate the factors that influence people’s intentions to participate in waqf unit trust funds in Malaysia. Furthermore, the study investigates the function of religion as a moderator in predicting an individual’s intention to engage in waqf unit trust funds. Design/Methodology/Approach — Four hundred and four completed survey questionnaires have been obtained. Descriptive analysis and Partial Least Square–Structural Equation Modelling (PLS-SEM) are performed to analyse the data. Findings — The findings show that an individual’s intention to engage in waqf unit trust funds is influenced by attitude, subjective norms, perceived behaviour control, and moral norms. Furthermore, religiosity influences the relationship between moral norms and the intention to join in waqf unit trust funds. Research Implications and Limitations — Findings from this study which focuses on Muslims’ involvement in recently established waqf unit trust funds can be used by the waqf unit trust managers in Malaysia to develop appropriate marketing strategies in encouraging Muslim participation in waqf unit trust funds. Participation in waqf unit trusts is not limited to Muslims; hence, future studies can be conducted to cover a wider base of respondents among non-Muslims.

Influence of Investor Behavior on Investment Choices among Equity Fund Managers of Listed Firms at Nairobi Securities Exchange-Kenya

Purpose: This study sought to determine how market factors influence investment decisions in Nairobi Securities Exchange-Kenya. The study would offer valuable contributions from both a theoretical and practical standpoint where it contributes to the general understanding of the drivers of investment in the Nairobi Securities Exchange in Kenya.
 Methodology: The study adopted positivism philosophy because the study variables were based on facts derived from the empirical literature review and the theoretical premises discussed in chapter two. Its results are quantitative and explain the relationship between the variables quantitatively. This research used a descriptive research design that allows a researcher to get adequate data from a small population cost-effectively and easily by use of a questionnaire as the research instrument. It is the structure, or the blueprint of research that directs the process of research from the formulation of the research questions and hypotheses to reporting on the research findings Krishnan, (2015). Primary data was collected using standard questionnaires with both closed and open-ended questions. Cronbach’s Alpha Test was used to test the internal consistency reliability of measurements. Data was obtained from the unit trusts and pension funds in Nairobi County. The study was conducted during the 2010- 2019 period. This study adopted a census of all fund managers the Nairobi Securities Exchange that have been actively trading for the period starting 2010-2019. The target population for this study was 129 fund managers hence a census of all equity fund managers at the NSE. Quantitative data was coded to facilitate analysis using Statistical Package for Social Scientists (SPSS 23). The study performed tests on statistical assumptions such as test of regression assumptions and statistics used. This included tests of reliability, normality, autocorrelation, panel root test, cointegration, linearity, independence, heteroscedasticity, and multicollinearity. Data was extracted from the financial statements and NSE handbooks, Excel program was used to calculate ratios relevant to the study variables. Descriptive statistics were used to summarize the study variables; group behavior, accounting information, firm characteristics, and market factors of fund managers at NSE.
 Findings: The study concluded that more attention should be focused on firm characteristics to achieve the best investment choices.
 Unique Contribution to Theory, Practice and Policy: The study was guided by finance theories that acted as its base that supported the empirical literature review which included Resource Based Theory (RBT), agency theory, herding theory and prospect theory. More attention should be paid to the predictors in the order of the magnitude of their effect on investment decision-making.

Exploring the Co-movement Between Return and Risk of Mutual Funds

The goal of this study is to review the significance of the mutual fund market’s return and volatility and which type of mutual fund has a vital impact which contributes to the understanding of the investor's indicates their investment decisions and identify the past related studies upon the performance of the mutual fund towards aligning to the latest short and long-term strategies for the responsible authority to reorient their policies to ensure the terms of exposure of current managerial actions is heading upon the evolution of innovation. The author has analysed and evaluated a broad range of literature on mutual funds, examining a range of factors and features that contribute to their short and long-term viability and diversification. As a result of their thorough review, the study has identified diverse types of mutual funds indicating that it plays a vital role in the survival and success of these investment vehicles. Furthermore, the current studies delving into a wide range of recognition of the Unit Trust Funds roles for the responsible institutions at domestic and international organisations directed towards establishing a better ailing with better-shaped strategies which are been explored. Yet, the past research has been a gap being explicated due to lack of innovation and this study would like to address the gap and is proposed along with the list of resources for future research with a similar aim. The originality of this study is to ensure that the validity of the research has been well assured by reference to highly indexed articles from various platforms such as Scopus, Web of Science etc. Thus, the purpose of the study is supported with solid justification.

Impact of Behavioural Biasness on Investment Decision Making Process

Behavioral finance attempts to investigate the psychological and sociological issues that Influence investment decision making process of individual and institutions. It also considers how various psychological traits affect how individuals or groups act as investors, analysts, and portfolio manager. The study investigated the effects of behavioral factors on investment decisions making by unit trust companies in Kenya. Literature has documented that individual and even institutional investors have embraced heuristics in their investment decision making. The study therefore sought to establish whether heuristics (overconfidence behavior, herd behavior, and anchoring behavior) affect investment decisions in unit trusts. Descriptive design study was used through questionnaire survey of two hundred and eleven individuals. Semi structured questionnaire was used for data collection with 100% response rate being registered. Analysis was done using Statistical Packages for Social Scientists. Descriptive statistics and correlation analysis were used to summarize the research findings. The study established that unit trusts' investment decisions are affected by overconfidence, availability, and anchoring behaviors. Unit trust managers tend to be overconfident while making investment decisions. Their decisions are also affected by experience of their past performance suggesting the effect of anchoring. According to the findings, managers who are overconfident are also likely to follow the masses in decision making. Behavioral finance models are not empirically supported and therefore should not be used in isolation for investment analysis by unit trusts. Investors on the other hand should be aware of the fact that fund managers are not immune from behavioral biases while making investment decisions. They should therefore closely monitor their investments' performance and actions of fund manager to ensure that these biases are eliminated.

A Correlation Analysis of Knowledge, Experience, Religious Belief, and Behavior of Malaysian EPF Investors Towards Investing in Islamic and Conventional Unit Trusts

The objective of the study is to examine the relationship between knowledge, religiosity and experience, and the behavior of employee provident fund (EPF) investors investing in Islamic and conventional unit trusts. The variables are extracted from the literature to achieve the objective. Additionally, 125 valid responses were composed through surveys of Malaysian government and private employees. The Statistical Package for Social Sciences has been applied to analyze the collected data, using correlation analysis techniques. This research found that knowledge about Islamic unit trusts and religious beliefs have a positive significant relationship with the EPF investors’ behavior of investing in Islamic unit trusts. Moreover, the experience of investing in Islamic and conventional unit trusts is also positively and significantly associated with the EPF investors’ behavior of investing in Islamic and conventional unit trusts, respectively. As research in this area is insufficient, this study will play a vital role for the unit trust industry in exploiting the financial strategies that are highly and positively observed by Malaysian EPF investors.

Mutual fund investments and the factors determining it

Ever since the incorporation of Unit Trust of India in 1964, the mutual fund industry has developed quickly and gained a lot of recognition. In all of the world’s capital markets, mutual funds have developed as a significant avenue of investment. Mutual funds have played, and therefore will continue to play, a critical part in India’s capital market development. A few of the grounds for mutual funds’ rapid popularity is that they combine low risk with income security, making them perfect for median and smaller investors who would otherwise be unable to participate in the stock market. The investors are finding it as a proper field to invest and earn, amidst the risk involved in it. Thereby, the determinants for an investor that influences him to make investment will vary between them and further, investing in mutual funds over other financial products may appeal to investors for a variety of reasons. This research may look into the elements that influence investors’ decisions to invest in mutual funds.

What factors affecting investment decision? The moderating role of fintech self-efficacy.

This study aims to determine, from the perspective of investors, the factors that predict Islamic unit trust (IUT) investment intentions. Additionally, this paper examines the moderating effect of fintech self-efficacy (FSE) on the relationship between attitude and investment intention. A total of 392 data were collected from IUT investors in Malaysia and analyzed using partial least squares structural equation modeling. The findings reveal that subjective norms have the highest impact on investment intention, followed by attitude and FSE, while religiosity is not significantly associated with investment intention in Islamic unit trust funds. Attitude significantly mediates religiosity-intention and Islamic financial literacy-intention relationships. FSE significantly moderates the attitude-intention relationship. The results shed light on the key factors that increase investing behavior and have direct managerial implications with regard to marketing strategies and target markets. These findings suggest that IUT service providers should take the lead in attracting customers through effective and targeted marketing initiatives, particularly by enhancing customers' FSE and capabilities. This study provides empirical evidence on the interrelationships between Islamic financial literacy, religiosity, and FSE in examining investors' behavior using the Theory of Planned Behavior framework. The study explores the moderating role of FSE on the relationship between attitude and investment intention.

Voluntary Corporate Disclosures and Tangible Brand Elements in Financial Advertisements for Consumer Buy-in: A Study on Malaysian Unit Trusts

This study aims to explore the appeal of voluntary corporate disclosures in advertisements for unit trust schemes (UTS). Purposive sampling was used to recruit 25 Malaysian working adults aged between 20 to 70 years old as respondents. In-depth interviews were conducted via Zoom for an average duration of 60 to 90 minutes. Interviews were audio recorded and transcribed for thematic analysis. Findings showed that tangible brand components, namely logo, color schemes, typeface, and names which appear in financial advertisements, create brand awareness through key themes such as easy recognition, credibility, association, confidence, and familiarity. Financial advertisements in the media are important to create brand recognition, recall and familiarity. Brand awareness and attitude are vital in advertising financial products for eventual buy-in, especially among consumers. Brands should be recognized, remembered, and viewed positively in any type of unit trust advertising. The major deciding factor for brand awareness, attitude and purchasing decision is corporate voluntary disclosure. Financial products are pre-conceived as risky and require careful examination of trustworthy corporate tangible brand elements contained in an advertisement. Negative internal motivation among potential investors requires more reliable corporate information, including celebrity endorsements and fees charges. In fact, positive motivation for trust can be enhanced when celebrities and testimonials are involved, whereas fees charged is not crucial. This study intends to provide policy makers insights into persuading consumers to buy-in and invest in unit trust via appropriate corporate advertising strategies to target audience for effective advertising. Keywords: Trust, motivation, voluntary corporate disclosure, advertising, unit trusts.

Overview Of Digital Asset and Its Process Under the Inheritance Management

Generally, after the deceased died, there is a process of inheritance management where both movable and immovable assets are distributed to the respective heirs. This process has been practiced by all levels of society despite their race and religion. However, recently, assets in Malaysia began to experience modernization where people started to invest in digital asset. Although Malaysia’s digital asset laws are still in their infancy, it indirectly raises issues for the inheritance management about the status of the digital asset if it is left by the deceased especially for the Muslims. In addition, with cash in banks, investments in unit trusts, Amanah Saham Berhad (ASB), Tabung Haji and automobiles, digital assets are currently a prominent topic in the inheritance management debate. Many people are unsure whether digital assets qualify as deceased person's assets or not and its status in Islam. Hence, the purpose of this study is to examine the development of digital asset and its status in inheritance management. In this study, the researcher employs a qualitative approach, by conducting library-based research on the relevant materials including, but not limited to statutory provisions, case laws, textbooks, journal articles, newspapers, conference proceedings, and seminar papers. Based on the findings, it is permissible to conduct inheritance management using digital asset but subject to certain conditions.

Selection ability and market timing skills of mutual fund and unit trust managers in a developing economy: evidence from Ghana

PurposeThe study assess the selection ability and market timing skills of mutual fund and unit trust managers in Ghana.Design/methodology/approachThe study uses an improved survivorship bias-free dataset of yearly after-fee returns of all mutual funds and unit trusts operating in Ghana from January 2011 to December 2019, cumulating in nine years of quantitative fund data. The authors assess Mutual funds and Unit trusts that ever existed, “alive” or “dead,” over the sample period in the study. The authors construct factor loadings to enable the application of multifactor models in the analysis. The authors apply the unconditional versions of the Jensen alpha, Fama-French three-factor, and Carhart four-factor models to determine the selection ability and market timing skills of 32 mutual funds and 17 unit trusts. The authors deploy HAC-consistent robust standard errors to the OLS estimations to subdue the effect of heterogeneity and autocorrelation.FindingsThe results indicate that, on average, mutual funds and unit trust managers possess market timing skills but no selection ability. When the results are decomposed into fund types, fixed-income and balanced mutual fund managers possess selection ability and market timing skills.Originality/valueTo the authors' best knowledge, this study is the earliest to examine the selection ability and market timing skills of both mutual fund and unit trust managers in Sub-Saharan Africa (SSA). It is also the earliest to construct factor loadings for the Ghana stock market.

Nomination and Its Legal Status Concerning Moveable Estates for Muslims and Non-Muslims in Malaysia

This paper delves into the nomination overview and its status concerning movable estate only for Muslims and non-Muslims in Malaysia from both Islamic and Civil Law perspectives. Discussions focused on issues revolving around movable property such as the Pilgrimage Fund, Employee Provident Fund (EPF), unit trust and share, takaful and insurance, and pension. The pertinent legal provisions were also analyzed to ascertain legal application in its administration. It concludes that Muslims are subject to Faraid besides civil law while civil law applies to non-Muslims. Thus, the findings indicate that for Muslims, legal frameworks and guidelines are indeed necessary for uniformity.

A STUDY ON INVESTORS PERCEPTION TOWARDS MUTUAL FUND WITH REFERENCE TO DK DISTRICT, KARNATAKA

Mutual fund represents a vehicle for collective investment. When we are participate in a mutual fund scheme Till 1986, the Unit Trust of India was the only mutual fund in India. Since then, public sector banks and insurance companies have been allowed to set up subsidiaries to undertake mutual fund business. In 1992, the mutual hand industry was opened to the private sector, and a number of private sector mutual funds have been set up. Investment risks such as trading volume, settlement risk, liquidity risk, default risk, and principal loss risk are present when purchasing mutual fund units. The goal of investing is to generate a steady, risk-free return. There are several investment options available in our nation, ranging from shares and debentures to insurance coverage. Mutual funds are a new kind of investing that has a lot of potential because they offer diverse investing options, regular returns, and low risk. It is, however, incredibly ignorant of the people who live in our nation. Many have been compelled to refrain from such forms of investing or even choose not to because of their lack of understanding of the subject. The purpose of this study is to examine the degree of knowledge that Indian investors have regarding mutual funds and to suggest more effective ways to increase that knowledge. KEYWORDS: Mutual fund, satisfaction, investment, investment schemes, investor awareness and factors influencing choice of investment

An Exploration of the Assessment of Risk and Return within SBI's Equity Mutual Funds

The mutual fund industry in India originated in 1963 with the establishment of the Unit Trust of India, a collaborative effort between the Indian government and the Reserve Bank of India. In recent times, mutual funds have gained substantial prominence, not only on a global scale but notably within India as well. Mutual fund companies are consistently introducing innovative strategies to appeal to a broader customer base. This research paper seeks to offer a comprehensive understanding of mutual funds, their diverse array of investment options, and an in-depth analysis of the associated risk and return factors like mean return, standard deviation and Sharpe ratio. Additionally, it focuses on the performance evaluation of specific SBI Equity Mutual Fund schemes, which play a significant role in the Indian economy. In summary, this paper explores the historical evolution of the mutual fund sector in India, the contemporary trends in the industry, and the specific focus on SBI Equity Mutual Fund schemes in terms of their performance and impact on the Indian financial landscape. Keywords: Risk, Return, SBI equity mutual fund, financial landscape, Standard deviation, Sharpe ratio.

THE INFLUENCE OF FINTECH SELF-EFFICACY AND ATTITUDE ON INVESTMENT DECISIONS OF MUSLIM INVESTORS IN MALAYSIA

This study aims to identify the predictors of Islamic unit trust funds (IUT) investment intention from the investors' perspective. Additionally, this paper examines the moderating effect of fintech self-efficacy (FSE) on the relationship between attitude and investment intention. A total of 392 data were collected from IUT investors in Malaysia and analyzed using partial least squares structural equation modeling (PLS-SEM). The findings reveal that subjective norms have the highest impact on investment intention, followed by attitude and FSE, while religiosity is not significantly associated with investment intention in Islamic unit trust funds. Attitude significantly mediates religiosity-intention and Islamic financial literacy-intention relationships. Additionally, FSE significantly moderates the relationship between attitude and investment intention. The results shed light on the key factors that increase investing behavior and have direct managerial implications with regard to marketing strategies and target markets. These findings suggest that IUT service providers should take the lead in attracting customers through effective and targeted marketing initiatives, particularly by enhancing customers' FSE and capabilities. This study provides empirical evidence on the interrelationships between IFL, religiosity, and FSE in examining investors' behavior using the Theory of Planned Behavior (TPB) framework. The role of perceived behavioral control was substituted with FSE. The study explores the moderating role of FSE on the relationship between attitude and investment intention.

Applications of Waqf-Featured Fund in the Malaysian Islamic Fund Management Industry: A Comparative Study

Historical evidence demonstrates the enormous role waqf institutions have played in the development and advancement of Muslims throughout the Muslim history. With the proper structure and strategy, waqf contributes to numerous spheres of life, including mainstream economic development. Contemporary development of Islamic finance has enabled the waqf concept to be linked to various financial products, including Shariah-compliant investment instruments, such as, Islamic unit trust funds and Islamic wholesale funds. This paper aims to highlight the current applications of the Waqf-Featured Fund (WFF) in the Malaysia Islamic Fund Management Industry. This is in relation to the launch of a new WFF framework to facilitate the offering of Islamic funds with waqf characteristics. The study took both qualitative via in-depth semi-structured interviews with eleven (11) WFF stakeholders, as well as, analyzing of policy documents, journal articles, books, and online resources. The findings shed light on the current issues and challenges confronting waqf projects in Malaysia, as well as the current guidelines and essential requirements for the WFF, the current application of the WFF in the Malaysian Islamic Fund Management (IFM) industry, and a proposal for the future application model, which includes fund collection, investment structure, distribution process, and fund reporting.