Risks and the Co-Movement of the Malaysian Unit Trust Funds with Shariah Index

Purpose -This study aims to empirically analyze Unit Trust Funds in Malaysia, specifically focusing on Equity Funds and Fixed-Income Funds.The objective is to examine the comovement of these funds with the Shariah market index and understand its implications for fund performance.Design/Methodology/Approach -The study employs a quantitative research design, using time-series data of Unit Trust Funds and market indices.Statistical methods, including correlation analysis, are used to examine the co-movement and its impact on fund performance.The study conducted a detailed analysis of the mutual funds market, evaluating various types, factors, risks, and features that contribute to strategies and innovation.Findings -The findings of this study are expected to reveal the nature and extent of co-movement between Unit Trust Funds and the market index.The results will provide insights into how this co-movement influences the performance of Equity Funds and Fixed-Income Funds.The study also aims to identify any significant differences in the co-movement and performance implications between these funds and the respective market indexes.Originality -This study is one of the first to provide an empirical analysis of the co-movement between Unit Trust Funds and the market index in the Malaysian context, considering both Equity Funds and Fixed-Income Funds.The findings will contribute to the existing literature on Unit Trust Funds and provide valuable insights for investors, fund managers, and policymakers.Practical Implication -The research findings have various real-world applications for different stakeholders.By adjusting the allocation of Equity Funds and Fixed-Income Funds based on their co-movement with the Shariah market index, investors can develop diversified investment strategies.During periods of strong co-movement, risk-averse investors may shift towards more stable Fixed-Income Funds.