Factors affecting unit trust performance in Malaysia : A cross-sectional study
Malaysian unit trust industry has been growing tremendously since its introduction through Amanah Saham Nasional and Amanah Saham Bumiputra in early 1980s and early 1990s respectively. The objective of the study is to analyze the overall performance of Conventional and Islamic-based unit trust funds...
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| Format: | Thesis |
| Language: | English English |
| Published: |
2016
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| Subjects: | |
| Online Access: | https://eprints.ums.edu.my/id/eprint/37596/1/24%20PAGES.pdf https://eprints.ums.edu.my/id/eprint/37596/2/FULLTEXT.pdf |
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| Summary: | Malaysian unit trust industry has been growing tremendously since its introduction through Amanah Saham Nasional and Amanah Saham Bumiputra in early 1980s and early 1990s respectively. The objective of the study is to analyze the overall performance of Conventional and Islamic-based unit trust funds in Malaysia in terms of the funds age, management expense ratio, total risk, market timing, selectivity and return of selected 23 funds for the 5 year evaluation period from 2011 to 2015. The hypotheses were tested using several regression to see whether all the fund characteristics of Fund Age, Management Expense Ratio, Total Risk, Market Timing and Selectivity ability have relationships with Unit Trust Fund Performance. Apart from that, in evaluating the overall performance of the unit trust funds, this study applies the most popular measures of performance such as Sharpe ratio, Adjusted Sharpe ratio, Treynor ratio, Jensen Alpha ratio. Treynor-Mazuy method of performance measure is used for regression to derived market timing and selectivity parameters. The overall findings suggest that unit trust funds in Malaysia are able to add value pertaining to the return for both Conventional and Islamic-based funds result. The findings show that Conventional funds gives out more return than Islamic-based funds and the higher the risk fund provides higher return. The findings also show that young funds performed better than the old ones. It is also found that unit trust fund managers have poor timing ability and unable to correctly bargain funds and to forecast price movements of the general market. Even so, Islamic- based unit trust funds have better fund managers compared to Conventional unit trust funds. Overall, the results indicate that investors should focus on young funds and select based on their own preferred risk level. Fund managers should understand the characteristics that will affect fund performance and develop strategies on how to increase their fund performance. This study could be further investigated in a bigger sample and characteristics. The findings could also be interesting if the domestic fund and international Malaysian fund performance included as a sample for comparison. |
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