Perceptions Of Malaysians Towards Unit Trust Investments: A Case Study In Klang Valley

• Main Authors: Wan Rasyidah Binti Wan Nawang, Nor Haziah Binti Hashim, Ainulashikin Binti Marzuki
• Format: Research Report
• Language: English
• Published: Universiti Sains Islam Malaysia 2015
• Online Access: http://ddms.usim.edu.my/handle/123456789/7867

Consumer behavior from the marketing perspective has brought the surface of an exciting area for study and research. The way consumer behaves, acts and decides on certain matters have been the focal interest among the researchers. The reason is in order to produce products and services according to the customer needs and preferences. With regards to this study, the main objective is to examine the consumers' perceptions on financial decision-making particularly on unit trust investments. Unit trust investment in Malaysia is start to booming after the success of ASN and ASB introduced by PNB as early as in 1980s. Since then, the growth of unit trust industry in Malaysia is very encouraging. The statistical figure of the industry has shown a positive and rapid growth over the year. The NAV recorded as of December 2007 grew by 39 percent to RM169.41 billion from RM 12 1.76 billion in 2006. Of this, RM152.55 billion represented conventional unit trust funds whilst RM 16.86 billion was Shariah based funds. The increase in the NAV could be attributed to the increase in the net sales of unit trust funds. The total NAV of unit trust funds as of end December 2007 represented 15.32 percent of the market capitalization of Bursa Malaysia as compared to 14.35 percent for 2006. Notwithstanding that the growth of the industry, the number of unit holders are still below par. Apart from that as reported by the SC, in December 2007, the Malaysian unit trust boasted 15.32 percent equity penetration rate. However, in comparison to the same period, United Kingdom's equity penetration rate was 41.62 percent (London Stock Exchange and Investment Management Association, UK). In addition as reported in Malaysian Business in 2002, out of 24 million of Malaysian populations only two to three million are the unit trust holders and they are the inactive investors. Apart from that, the statistical figure as at December 2007 showed that the total fund approved was 473 billion yet the total unit in circulation was only 208 billion units. This scenario shows that Malaysians' penetration rate in unit trust industry is still small in comparison with more developed countries like the UK for instance. The objective of this paper is to investigate the factors that contribute to the above said scenario. The main finding of the study concluded that Malaysians still have a limited knowledge on unit trust investments (both Islamic and conventional investments). Due to this limitation in knowledge, they would not bother to invest in unit trust investments. Another area that is being investigated is on the factors influencing unit trust holders in choosing the fund to invest. The result showed that past performance was the main attribute that they consider followed by marketing activities and fund qualities. In addition, the study also found that those who opposed to unit trust investments claimed that despite having zero knowledge on unit trust investments, they are confused because of variety of fund choices, invested in other investment instruments and they were not approached by any unit trust' agents. Thus, it is hope that this research could add knowledge and provide some implications to the investing publics to make a better investment choice, the fund managers to take necessary measures to further improve the marketing strategies of fund management and the regulators to enable them to foresee the future prospect of the industry and further develop the industry to become more efficient and effective investment channel.