A Research Study On Mutual Fund Essay

2317 WordsJul 23, 201610 Pages
1.0 CHAPTER ONE 1.1 Introduction A mutual fund and also known as unit trust can be defined as a form of collective investments that allows the investors which have similar investment objectives to pool their funds to be invested in a portfolio of securities or other assets. The fund managers will invest the pooled funds in the portfolio fund, particularly include some assets like cash, bonds, deposits, stocks, commodities and also properties parallel to the fund’s objectives. Each investor owns shares, which represent a portion of the holdings of the fund. The mutual fund industry in Malaysia started as far back as 1959 with the advent of the Malayan Unit Trust Limited, which was launched by a group of Australian investors. The development of the industry did not take-off until the 1980s after the launch of Amanah Saham Nasional (Barom, 2004). The Amanah Saham Nasional was initiated by the Malaysian Government to promote equity ownership by the indigenous population. Aided by high and consistent economic growth since the 1990s, the mutual fund industry had grown exponentially until 1997, in which the East Asian financial crisis (EAF) of 1997 brought a sudden halt to such a rapid development. After the EAF, the Malaysian mutual fund trust industry has experienced a solid recovery. This can be reflected in the number of management companies that steadily increased from 13 in the mid-1990s to 37 in the early 2000s (Saad et al., 2010). In line with the rapid growth of the

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