Factors Influencing Saudis Investors’ Attitude to Invest in Islamic Mutual Funds

Abstract

Islamic financial services are currently among the internationally growing trends in the world financial market. An attempt is made in this study to investigate factors that influence Saudi investors’ attitudes towards Islamic mutual fund investments. Three factors have been identified by the study namely, religious obligation, awareness, and the social media. Furthermore, a quantitative research design is adopted in this study for data collection and analysis. A total of 166 questionnaires were distributed to investors of five leading mutual funds firms in Saudi Arabia which include Al-Rajhi Capital, Al-Bilad Capital, Al-Inma Investment, Samba Capital and National Commercial Bank (NCB) Capital. Data elicited from the respondents based on a 5-point Likert scale are subjected to multivariate data analysis using the SmartPLS software. The study found that the higher the investors’ sense of religious obligation the higher their attitudes towards investing in IMF. Likewise, both awareness and social media significantly influence the investors’ attitudes towards Islamic mutual funds. The findings are likely to have some profound academic and practical implications.

Keywords: Islamic Mutual Funds, Mutual Funds, Islamic Financial Services, Saudi Arabia

DOI: 10.7176/RJFA/10-6-15

Publication date: March 31^st 2019