Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach

The increasing importance of the Islamic unit trust industry requires a more detailed and efficient analysis on the various aspects of the industry. The purpose of this study, therefore, is to investigate the relationship between the NAV of the Islamic equity unit trust funds and microecono...

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Main Authors:	Othman, Anwar Hasan Abdullah, Mydin Meera, Ahamed Kameel, Abd. Aziz, Hassanuddeen
Format:	Article
Language:	English
Published:	Macrothink Institute, Inc. 2015
Subjects:	HB Economic Theory
Online Access:	http://irep.iium.edu.my/49439/ http://irep.iium.edu.my/49439/ http://irep.iium.edu.my/49439/1/49439_Micro-Economic%20Determinants.pdf

id	iium-49439
recordtype	eprints
spelling	iium-494392018-11-15T03:43:02Z http://irep.iium.edu.my/49439/ Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach Othman, Anwar Hasan Abdullah Mydin Meera, Ahamed Kameel Abd. Aziz, Hassanuddeen HB Economic Theory The increasing importance of the Islamic unit trust industry requires a more detailed and efficient analysis on the various aspects of the industry. The purpose of this study, therefore, is to investigate the relationship between the NAV of the Islamic equity unit trust funds and microeconomic variables, namely fund dividends, fund Risk, fund historical performance, fund size, fund management experience and hedge fund investment in Malaysian unit trust industry. The analysis based on monthly closing price for a sample of 30 Islamic equity unit trust funds over a period of 7 years, from January 2006 to December 2012, by applying ARDL – bounds testing approach. The results indicate that the NAV of Islamic equity unit trust funds and its microeconomic determinants share long run relationship, but with two variables exception, which are the fund risk and fund management experience. This indicated that fund’s managers in the Malaysian unit trust industry performed poorly in security analyses (stock selection ability) and market entry timing. Hence, the study proposes that the fund’s managers have to focus on and sharpen their abilities of timing skills and stock selecting ability in order to achieve a better performance of their activities in prudently managing their portfolio investments. However, fund managers performed fairly well in risk-adjusted returns and typically maintained well-diversified portfolios. Therefore, the empirical result of this study may present the investors (unit-holders) with new prospective of making right decision investment when they come to select their fund as a part of their portfolio investment. This could be done through considering the microeconomic factors that found to be significantly influence the funds unit prices to either enhance their portfolio return or to mitigate their portfolio risks when they make decisions to invest in the Malaysian unit trust industry. Macrothink Institute, Inc. 2015 Article PeerReviewed application/pdf en http://irep.iium.edu.my/49439/1/49439_Micro-Economic%20Determinants.pdf Othman, Anwar Hasan Abdullah and Mydin Meera, Ahamed Kameel and Abd. Aziz, Hassanuddeen (2015) Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach. Journal of Management Research, 7 (2). pp. 574-594. http://www.macrothink.org/journal/index.php/jmr/article/view/7051
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HB Economic Theory
spellingShingle	HB Economic Theory Othman, Anwar Hasan Abdullah Mydin Meera, Ahamed Kameel Abd. Aziz, Hassanuddeen Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach
description	The increasing importance of the Islamic unit trust industry requires a more detailed and efficient analysis on the various aspects of the industry. The purpose of this study, therefore, is to investigate the relationship between the NAV of the Islamic equity unit trust funds and microeconomic variables, namely fund dividends, fund Risk, fund historical performance, fund size, fund management experience and hedge fund investment in Malaysian unit trust industry. The analysis based on monthly closing price for a sample of 30 Islamic equity unit trust funds over a period of 7 years, from January 2006 to December 2012, by applying ARDL – bounds testing approach. The results indicate that the NAV of Islamic equity unit trust funds and its microeconomic determinants share long run relationship, but with two variables exception, which are the fund risk and fund management experience. This indicated that fund’s managers in the Malaysian unit trust industry performed poorly in security analyses (stock selection ability) and market entry timing. Hence, the study proposes that the fund’s managers have to focus on and sharpen their abilities of timing skills and stock selecting ability in order to achieve a better performance of their activities in prudently managing their portfolio investments. However, fund managers performed fairly well in risk-adjusted returns and typically maintained well-diversified portfolios. Therefore, the empirical result of this study may present the investors (unit-holders) with new prospective of making right decision investment when they come to select their fund as a part of their portfolio investment. This could be done through considering the microeconomic factors that found to be significantly influence the funds unit prices to either enhance their portfolio return or to mitigate their portfolio risks when they make decisions to invest in the Malaysian unit trust industry.
format	Article
author	Othman, Anwar Hasan Abdullah Mydin Meera, Ahamed Kameel Abd. Aziz, Hassanuddeen
author_facet	Othman, Anwar Hasan Abdullah Mydin Meera, Ahamed Kameel Abd. Aziz, Hassanuddeen
author_sort	Othman, Anwar Hasan Abdullah
title	Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach
title_short	Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach
title_full	Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach
title_fullStr	Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach
title_full_unstemmed	Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach
title_sort	micro-economic determinants of nav of islamic equity unit trust funds in malaysia: an ardl-bounds testing approach
publisher	Macrothink Institute, Inc.
publishDate	2015
url	http://irep.iium.edu.my/49439/ http://irep.iium.edu.my/49439/ http://irep.iium.edu.my/49439/1/49439_Micro-Economic%20Determinants.pdf
first_indexed	2023-09-18T21:09:54Z
last_indexed	2023-09-18T21:09:54Z
_version_	1777411182885339136

Micro-economic determinants of NAV of Islamic equity unit trust funds in Malaysia: an ARDL-Bounds testing approach

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