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

Abstract

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.