Investment Literacy, Risk Tolerance and Mutual Fund Investments: An Exploratory Study of Working Adults in Kuala Lumpur

  • Nurul Shahnaz Mahdzan University of Malaya
  • Rozaimah Zainudin University of Malaya
  • Siew-Chan Yoong University of Malaya
Keywords: Investment literacy, Mutual fund investment, Unit trust, Risk tolerance, Stock market


Financial literacy empowers consumers to make more informedfinancial decisions,including investing in mutual funds. In thisstudy,thesociodemographic profile of working adultswith low investment literacyvis-à-vis high investment literacyare examined first. Next, the impact of investment literacyand risk toleranceon the likelihood of investing in mutual fundsare explored. Among a sample of 260 working adults comprising mainly of Masters of Business Administration(MBA) studentsfrom a leading public higher institution in Kuala Lumpur, Malaysia, the study showsthat those withBusiness/Economics education backgroundshave the highest investment literacyand are more likely to invest in mutual funds compared to individuals from the Arts and other miscellaneous backgrounds. Although Muslims are the least literatein investment matters, they are more likely to hold mutual fundinvestments relative to those who profess Christianity and Hinduism. Individuals with relatively high income and occupational levels have relatively higher investment literacy. Risk tolerance does not influence the likelihood of investing in mutual fund investments.Policymakers should focus on females, those with Arts education background, Muslims, and those from the lower income/employment ranks to increase their investment literacythrough financial education workshops. Mutual fund companies may consider embarking an aggressive knowledge sharing videos related to mutual funds via non-mainstream mediasuch as social mediato increase the penetration of mutual fund investments, among the untapped markets.


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How to Cite
Nurul Shahnaz Mahdzan, Rozaimah Zainudin, & Siew-Chan Yoong. (2020). Investment Literacy, Risk Tolerance and Mutual Fund Investments: An Exploratory Study of Working Adults in Kuala Lumpur. International Journal of Business and Society, 21(1), 111-133.