THE MEASUREMENT OF BEHAVIORAL FACTORS ON CHOICE OF FUND IN UNIT TRUST FUND INVESTMENT: AN EXPLORATORY FACTOR ANALYSIS

The objective of this study is to develop items for the choice of the fund in unit trust fund investment in Malaysia by looking at the behavioural factors influencing the retail investors. The validity and reliability test have been applied to all the constructs. The respondents were from Kelantan, Terengganu, Penang and Kuala Lumpur. The data were analyzed using SPSS. Exploratory factor analysis was used to group the items in the process of measuring the following dimensions: (i) Snake Bite Effect; (ii) Past Success; (iii) Advice and information; (iv) Illusion of Knowledge and (vi) Judgment of fund. The results of the analysis highlighted the development of three primary underlying variables, namely considering the past, financial knowledge and miscalibration. These instruments can be used by unit trust companies, the authorities of unit trust and other banking's product to understand the behaviour of their clients and later, can implement it to the expected new customers, and it will provide a glimpse on how behavioural factors influence the choice of fund.