Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia

Purpose – This study aims to investigate the role of selected macroeconomic variables in influencing the movement of Net Asset Value (NAV) of the Islamic Unit Trust Funds (UTFs) in Malaysia. In efforts to arrive at more enriching findings, the UTFs are further categorised into equity, bond, balan...

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Main Authors:	Othman, Anwar Hasan Abdullah, Abdul Aziz, Hassanuddeen, Kassim, Salina
Format:	Article
Language:	English English English
Published:	Emerald Publisher 2018
Subjects:	HG Finance HG3368 Islamic Banking and Finance HG4501 Stocks, investment, speculation
Online Access:	http://irep.iium.edu.my/65320/ http://irep.iium.edu.my/65320/ http://irep.iium.edu.my/65320/ http://irep.iium.edu.my/65320/1/65320_Identification%20of%20macroeconomic.pdf http://irep.iium.edu.my/65320/7/65320_Identification%20of%20macroeconomic%20determinants_scopus.pdf http://irep.iium.edu.my/65320/12/65320%20Identification%20of%20macroeconomic%20determinants%20for%20diversification%20and%20investment%20strategy%20for%20Islamic%20unit%20trust%20funds%20in%20Malaysia_wos.pdf

id	iium-65320
recordtype	eprints
spelling	iium-653202019-01-24T04:20:57Z http://irep.iium.edu.my/65320/ Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia Othman, Anwar Hasan Abdullah Abdul Aziz, Hassanuddeen Kassim, Salina HG Finance HG3368 Islamic Banking and Finance HG4501 Stocks, investment, speculation Purpose – This study aims to investigate the role of selected macroeconomic variables in influencing the movement of Net Asset Value (NAV) of the Islamic Unit Trust Funds (UTFs) in Malaysia. In efforts to arrive at more enriching findings, the UTFs are further categorised into equity, bond, balanced, fixed, mixed, money market and feeder funds. Design/methodology/approach – The study adopts the Vector Autoregression framework (Johansen-Juselius (1990), cointegration test and Vector Error Correction Model to analyse the relationship between the macroeconomic variables and the NAVs of the various type of funds. Findings – The study shows that there is a significant long-run equilibrium relationship between the macroeconomic variables and the NAV of all Islamic UTFs in Malaysia. Despite of this, the findings show that different funds have different responses to the movements of the macroeconomic variables. Practical implications – The results of the study are of significant importance to the various stakeholders in the Islamic UTF industry. Investors benefit in terms of getting the inputs on their investment decisions as to whether to buy, hold or sell fund units within their investment portfolio in the long-run, along with building their optimal portfolio diversification investment strategy, especially in reallocating their assets distribution between the various types of funds in the UTFs industry. For the policy-makers, the findings of the study may assist them in evaluating the suitability of the existing economic policies as to whether they positively or negatively contribute to the development of the Islamic UTFs. Originality/value – This paper fulfils the need to understand how unit-holders can strategise and diversify their portfolio investments in the Malaysian Islamic UTFs industry based on detailed understanding and knowledge derived from rational and scientific inputs. Emerald Publisher 2018 Article PeerReviewed application/pdf en http://irep.iium.edu.my/65320/1/65320_Identification%20of%20macroeconomic.pdf application/pdf en http://irep.iium.edu.my/65320/7/65320_Identification%20of%20macroeconomic%20determinants_scopus.pdf application/pdf en http://irep.iium.edu.my/65320/12/65320%20Identification%20of%20macroeconomic%20determinants%20for%20diversification%20and%20investment%20strategy%20for%20Islamic%20unit%20trust%20funds%20in%20Malaysia_wos.pdf Othman, Anwar Hasan Abdullah and Abdul Aziz, Hassanuddeen and Kassim, Salina (2018) Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia. International Journal of Emerging Markets, 13 (4). pp. 653-675. ISSN 1746-8809 https://www.emeraldinsight.com/doi/full/10.1108/IJoEM-03-2017-0074 10.1108/IJoEM-03-2017-0074
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English English
topic	HG Finance HG3368 Islamic Banking and Finance HG4501 Stocks, investment, speculation
spellingShingle	HG Finance HG3368 Islamic Banking and Finance HG4501 Stocks, investment, speculation Othman, Anwar Hasan Abdullah Abdul Aziz, Hassanuddeen Kassim, Salina Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia
description	Purpose – This study aims to investigate the role of selected macroeconomic variables in influencing the movement of Net Asset Value (NAV) of the Islamic Unit Trust Funds (UTFs) in Malaysia. In efforts to arrive at more enriching findings, the UTFs are further categorised into equity, bond, balanced, fixed, mixed, money market and feeder funds. Design/methodology/approach – The study adopts the Vector Autoregression framework (Johansen-Juselius (1990), cointegration test and Vector Error Correction Model to analyse the relationship between the macroeconomic variables and the NAVs of the various type of funds. Findings – The study shows that there is a significant long-run equilibrium relationship between the macroeconomic variables and the NAV of all Islamic UTFs in Malaysia. Despite of this, the findings show that different funds have different responses to the movements of the macroeconomic variables. Practical implications – The results of the study are of significant importance to the various stakeholders in the Islamic UTF industry. Investors benefit in terms of getting the inputs on their investment decisions as to whether to buy, hold or sell fund units within their investment portfolio in the long-run, along with building their optimal portfolio diversification investment strategy, especially in reallocating their assets distribution between the various types of funds in the UTFs industry. For the policy-makers, the findings of the study may assist them in evaluating the suitability of the existing economic policies as to whether they positively or negatively contribute to the development of the Islamic UTFs. Originality/value – This paper fulfils the need to understand how unit-holders can strategise and diversify their portfolio investments in the Malaysian Islamic UTFs industry based on detailed understanding and knowledge derived from rational and scientific inputs.
format	Article
author	Othman, Anwar Hasan Abdullah Abdul Aziz, Hassanuddeen Kassim, Salina
author_facet	Othman, Anwar Hasan Abdullah Abdul Aziz, Hassanuddeen Kassim, Salina
author_sort	Othman, Anwar Hasan Abdullah
title	Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia
title_short	Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia
title_full	Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia
title_fullStr	Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia
title_full_unstemmed	Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia
title_sort	identification of macroeconomic determinants for diversification and investment strategy for islamic unit trust funds in malaysia
publisher	Emerald Publisher
publishDate	2018
url	http://irep.iium.edu.my/65320/ http://irep.iium.edu.my/65320/ http://irep.iium.edu.my/65320/ http://irep.iium.edu.my/65320/1/65320_Identification%20of%20macroeconomic.pdf http://irep.iium.edu.my/65320/7/65320_Identification%20of%20macroeconomic%20determinants_scopus.pdf http://irep.iium.edu.my/65320/12/65320%20Identification%20of%20macroeconomic%20determinants%20for%20diversification%20and%20investment%20strategy%20for%20Islamic%20unit%20trust%20funds%20in%20Malaysia_wos.pdf
first_indexed	2023-09-18T21:32:42Z
last_indexed	2023-09-18T21:32:42Z
_version_	1777412617345695744

Identification of macroeconomic determinants for diversification and investment strategy for Islamic unit trust funds in Malaysia

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