Public perception of Islamic unit trust fund in Malaysia : a quantitative inquiry

Abstract

This research sought to identify the public perception of Islamic unit trust fund in Malaysia which inclusive of investors and non-investors’ perspective based on three aspects i.e. general knowledge on Islamic unit trust fund, knowledge on fund manager and knowledge on the regulatory body and stock screening. The motivations of investing in this scheme were also studied. A total of 200 questionnaires were distributed through a simple random sampling. The methods adopted in analysing the data are descriptive, reliability test and cross tabulation. The value of Pearson’s chi-square was calculated to analyse the influence of demographic profile of respondents namely gender, age, religion, education level, occupation and income towards respondents’ investment in Islamic unit trust fund. The findings indicated that the respondents were aware of the existence of Islamic unit trust fund, knowing there was a contrast between conventional and Islamic fund, though the familiarity with the investment in unit trust, in particular, was only on average level. The knowledge on fund manager was considered good as the awareness in selecting a skilful fund manager was high. The knowledge on the regulatory body and stock screening basically were satisfactory, with a slight misconception on the benchmark of stock screening adopted by the SC. According to the results, people inclined to invest in the Islamic unit trust fund primarily for the retirement, education and other planning, secondly as an investment diversification, thirdly due to the investment return which is higher than fixed deposit rate and lastly for the purpose of maintaining current lifestyles. Moreover, the chi-square value revealed out of all the respondents’ demographic factors, income was significantly related to the status of their investment in the Islamic unit trust fund. It was perceived the higher the income, the more likely they will invest in the unit trust fund. This study contributed towards a better understanding of the public perception hence aiding the relevant authorities to draw effective measures to attract people into investing in the Islamic unit trust fund.