Comparative Analysis on EPF Investors’ Knowledge, Experience and Behaviour Towards Investing in Islamic and Conventional Unit Trusts : The Case of Malaysia

Abstract

The study explores EPF investors' knowledge, experience and behavior towards investing in Islamic and conventional unit trusts in Malaysia. 110 valid responses were collected through surveys among government and private employees residing in Klang Valley area. Based on Statistical Package for Social Sciences (SPSS), it is found that majority of the respondents have enough knowledge about Islamic and conventional unit trusts while they have more experiences with the Islamic unit trust compared to the conventional. With regards to the EPF investors' behaviour, most of them are heavily relied on various source of information to make decision on investing in the Islamic unit trust. Results of this research is very significant to proof that besides other sources of information, knowledge on both Islamic and conventional unit trust is relevant to make decision for future financial planning.

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

“…According to the research, there is a positive correlation between the conduct of EPF investors and their experience of investing in Islamic and conventional unit trusts, respectively (r = 0.545; r = 0.384). Additionally, at a statistical significance level of 0.01, the experience of investing in conventional unit trusts correlates to investors' behavior, which is consistent with Lam's (2008) finding, as well as between experience of investing in Islamic unit trusts and investors' behavior, which is consistent with Hasnat and Salleh's (2018) finding. The association between the experience of investing in Islamic Unit Trusts and the behavior of EPF investors is highly positive compared to conventional unit trusts, which is the only difference between investing in Islamic and conventional unit trusts (r-value of the experience of investing in Islamic unit trusts is close to 1).…”

“…According to the results of the Pearson correlation analysis, there is a positive correlation between Malaysian EPF investors' behavior in Islamic unit trusts and their knowledge of them, religious convictions regarding investing in them, and experiences in investing in Islamic and conventional unit trusts. This finding is consistent with the results of Ibrahim et al (2012), Nathie (2009), and Hasnat and Salleh (2018). Investors believe that picking Islamic unit trust funds is wise, practical, and advantageous for them.…”

“…Due to their positive conduct and satisfaction with their investment, EPF investors in Malaysia show positive behavior while investing in Islamic unit trusts. Therefore, this finding supports H5, which is consistent with the result of Hasnat and Salleh (2018).…”