The Influence of Religiosity on Muslim Women’s Selection of Fund Providers in Malaysia

Abstract

The purpose of this study is to analyze the factors influencing the attitudes of women investors in the context of Islamic unit trust funds in Malaysia, with a focus on women’s religiosity and on the perceived religiosity of fund providers. Using the UTAUT model, the study examines data from a survey of 263 Muslim women in Malaysia and considers seven key factors: risk aversion, religiosity, price sensitivity, and Islamic financial literacy on the side of the investing women and past performance, perceived religiosity, and perceived risk on the side of the fund providers. The findings indicate that the perceived religiosity of a fund provider has a significant and positive impact on attitude, with positive moderating effects on the women’s own religiosity and Islamic financial literacy, and a negative moderating effect on the women’s price sensitivity. The study also discusses the practical implications of these findings and offers recommendations for fund providers.

1. Introduction

A unit trust (UT) can be defined as a collective investment scheme that groups funds from different investors into a single portfolio of financial securities. This one is managed by a professional fund provider (FP) (Billah, 2019). This structure allows investors to share the same risks and returns. A Shariah-compliant unit trust fund, also referred to as an Islamic Unit Trust (IUT) fund, is a collective investment vehicle that enables investors to participate in a diversified portfolio of Shariah-compliant equities, fixed-income securities, and other Shariah-compliant money market instruments (Securities Commission, 2014).

IUT funds have emerged as a prominent Islamic financial product in Malaysia (Ali et al., 2014) and their net assets value exceeded RM 122.48 billion (approximately $27.7 billion) in 2025 from just RM 9.76 billion in 2004 (Securities Commission, 2025). This growth is closely linked to the Malaysian government’s goal of establishing the country as an international hub for the Islamic fund industry and to have the Islamic finance sector reaching a 50 percent market share by 2030. In this regard, the government implemented several incentives, including an “Islamic First” strategy, where FPs and banks offer new customers Islamic products before considering conventional ones. Additionally, the Malaysian government allowed IUT funds to invest up to 100 per cent of their assets aboard, relaxed the shareholding structure (Islamic FPs are allowed to have 100 per cent foreign ownership), and provided Islamic FPs with greater access to institutional funds such as start-up funding from the Employees Provident Fund (EPF) (Hasnat et al., 2024).

Alongside the growth of IUT funds, the evolution of Malaysian society has enabled Muslim women to significantly increase their income through higher education and greater participation in the labor market. The proportion of women in the workforce has consistently risen from 45.2 percent in 1984 to 55.6 percent in 2019, leading to a notable reduction in the income gap (Jaapar et al., 2022). However, statistics indicate that women’s participation in investment remains relatively low, at only 30 percent compared to men (Aziz & Kassim, 2021). This highlights a significant market opportunity for FPs, particularly given the government’s efforts to promote and support women in adopting an active investment mindset. For example, in 2019, the Deputy Minister of Women, Family, and Community Development, YB Hannah Yeoh, emphasized the importance of women pursuing stock investments to build their financial wealth and achieve greater financial freedom (Zainal, 2019).

Several studies were carried out to identify the variables that play a role in women’s adoption of IUT funds. These variables include risk aversion, product knowledge and awareness, performance expectations, fund Shariah-compliance, management fees, etc. These variables can generally be categorized into two groups: those related to the investing women and those related to funds and FPs. In this study, we examine how three variables related to FPs—perceived religiosity, past performance, and perceived risk—affect Muslim women’s attitudes toward these providers. On the women side, we examine four variables—religiosity, Islamic financial literacy, risk aversion, and price sensitivity—for their moderating effects on the primary effects of FPs characteristics. These variables were chosen because Muslim women often cite them as the most important factors when selecting an FP (Aziz & Kassim, 2021). They are also seen as significant and important by FPs as these ones must address questions related to the fund’s target customers, risk profile, Shariah compliance, fees, and underlying securities when designing and launching new funds. Other FP’s and investor’s variables were excluded due to practical constraints, such as those related to data collection.

Our objective is to identify the key variables that influence the adoption of IUT funds and the selection of FPs by Muslim women in Malaysia, with a particular emphasis on the perceived religiosity of the FP. Indeed, by understanding how Muslim women value factors such as an FP’s perceived religiosity, past net performance, and perceived risk, FPs can better tailor their fund offerings, marketing strategies, communication efforts, and branding to boost their assets under management (AUM) and attract new women. This is particularly important as FPs often face difficult trade-offs in how they position themselves within the market and how they communicate their offerings—whether emphasizing authentic religiosity, past performance, or low risk, and low fees. In a highly competitive market with 39 FPs (Securities Commission, 2025), selecting the right market positioning is a critical factor for success. Moreover, working Muslim women in Malaysia represent a growing demographic with significant increases in income and savings, yet they have unique requirements when it comes to adherence to Shariah principles, risk tolerance, and fees expectations. By understanding how the characteristics of Muslim women shape their investment attitudes, FPs can effectively segment this market based on specific attributes (e.g., “fees-sensitive”, “highly literate”, “strongly religious”). This would enable them to offer the most relevant funds tailored to each segment, tapping into this emerging market with targeted and personalized offerings. More generally, the findings from this study aim to provide financial and investment advisors, researchers (both academic and non-academic), as well as policymakers and regulators a deeper understanding of the investment behavior of Muslim women in Malaysia. Finally, the study contributes to the broader body of knowledge in this field, enriching the understanding of factors that influence investment decisions.

2. Literature Review

2.1. Previous Studies

Over the past two decades, several studies have examined IUT funds in Malaysia. These studies can be broadly classified into three main areas: the design of the funds, their performance, and the factors influencing their adoption.

In terms of design, IUT funds differ from conventional funds as they employ negative screening to exclude assets that do not adhere to Shariah principles. The Shariah screening limits the range of securities available, making Islamic funds’ investment strategies more similar to one another (Uddin et al., 2019). While this restriction can limit returns, as stocks and bonds in some prohibited sectors such as tobacco and gambling have historically exhibited high returns (Han et al., 2022; Blitz & Swinkels, 2023), IUT funds are seen as more resilient particularly during financial crises (Lesser & Walkshäusl, 2018) and less correlated with the general market (Arif et al., 2022). This is particularly attributed to the outperformance of sukuk and Islamic stocks over conventional bonds and stocks during periods of financial stress (Hasan et al., 2022; Chowdhury et al., 2022).

In terms of performance, the comparison between IUT funds and conventional UT funds remains a highly debated topic. While some studies found superior performance of IUT funds during extreme events such as the 1998 Asian financial crisis, the 2008 global financial crisis, and the 2020 COVID-19 pandemic (Mansor et al., 2019; Mirza et al., 2022; Ishak et al., 2022; Elfakhani, 2024), other studies found a significant underperformance of IUT funds when compared with conventional funds (Hassan et al., 2020; Mansor et al., 2020; Elfakhani, 2024). Some other studies have found no significant performance difference between the two types of funds (Boo et al., 2017; Reddy et al., 2017).

In terms of adoption, multiple studies examined the key factors influencing potential investors’ attitudes toward IUT funds. These factors can be categorized into two main groups: those related to investors themselves and those related to the funds and FPs. Investors’ related factors include investors’ religiosity which is defined as individuals’ level of commitment to their beliefs and practices (Stolz & Usunier, 2019), and is found to significantly influence their behavior towards products, services, and service providers (Ali et al., 2019). Religious individuals tend to prefer products and services that align with their values and beliefs, and they are more likely to engage with providers who uphold similar principles. Researchers have attempted to measure indicators of religiosity by examining individuals’ commitment to religion, the strength of their religious beliefs, and their participation in religious activities (Mahdzan et al., 2017). This variable has been added in various adoption models when considering Muslims attitude toward Islamic financial products and services. For example, Sumiati et al. (2021) integrated this variable in the Theory of Reason Action (TRA) framework within the context of millennials intentions to invest in Islamic mutual funds and found this variable to be significant. Yusuff et al. (2020) also integrated religiosity in the Engel, Blackwell, and Miniard (EBM) model when investigating the effect of product knowledge and information sources on IUT investments and found this variable to be significant. Finally, Che Hassan et al. (2024) added religiosity in the Theory of Planned Behavior (TPB) framework when studying the factors that affect investment decisions in IUT funds and found this variable to be significant. This variable was also found to be significant in other studies (Mahdzan et al., 2017; Hasnat et al., 2024).

Islamic financial literacy is another variable that has been considered for its influence on adoption. Islamic financial literacy can be defined as the knowledge, skills, awareness, and familiarity with financial concepts, products, and services, which has an impact on the individual’s attitude while taking an appropriate financial decision through following the rules and principles of Islamic law (Sari et al., 2022). Islamic financial literacy plays a crucial role in shaping Muslims’ financial attitudes as it allows them to understand risk and return and assess the Shariah-compliance of services and products. In the context of IUTs investment, Islamic financial literacy was found to be a significant factor in multiple studies (Yusuff et al., 2017; Aziz & Kassim, 2021; Amin et al., 2022).

Risk aversion, which can be defined as an investor’s preference for certainty over uncertainty, especially when facing potential losses, is a variable that is found to be significant in multiple studies (Yusuff et al., 2017; Mahdzan et al., 2017; Annamalah et al., 2019; Aziz & Kassim, 2021).

On the side of funds and FPs, several significant factors influence investor attitudes. These include past performance (Mohammed Kamil et al., 2018; Nurul ’Izzati, 2019; Atta & Marzuki, 2019; Aziz & Kassim, 2021), Shariah-compliance (Mohammed Kamil et al., 2018), and the funds’ risk profile (Yusuff et al., 2017; Atta & Marzuki, 2019).

On the gender side, several studies have investigated the investment behavior of Malaysian women and the factors that influence their decisions. Aziz and Kassim (2021) found that women tend to prefer lower-risk investment products, including IUT funds, over higher-risk options such as investment accounts offered by Islamic banks or stocks. Similarly, Karim et al. (2016) found that, compared to male working adults in Kuala Lumpur, women exhibit lower risk tolerance when selecting riskier assets. Bakar et al. (2015) observed that Malaysian women prefer low-risk, fixed-price unit trust investments like Skim Amanah Saham Bumiputera (ASB). In addition, some studies have examined how gender influences asset managers’ behavior within FPs. Stoker et al. (2012) found that gender plays a significant role in investment decisions, with investors often considering the gender of the asset manager, particularly in relation to self-confidence and risk-taking. Beckman and Menkhoff (2008) found that female asset managers tend to be more risk-averse than their male counterparts. However, they also noted that while there is no significant difference in terms of overconfidence between male and female managers, financial expertise helps reduce gender differences, though it does not eliminate them entirely.

2.2. Gap in Previous Studies

Past research has predominantly concentrated on risk and performance variables, leaving a gap in the literature regarding other factors that may influence investors’ attitudes, particularly in contexts where Shariah-compliant products are offered alongside conventional alternatives. These additional factors include the perceived religiosity of the FP, the religiosity of investors, and their Islamic financial literacy. As a result, there is limited research that combines both risk- and performance-related variables with religiosity-related ones—on both the FP and investor sides—within the same study and model.

Moreover, while past studies have typically included both genders, few have specifically examined women and their unique characteristics in terms of risk aversion and religiosity. This is despite the significant increase in women’s savings and available capital for investment, driven by greater participation in the labor market. Our study addresses these gaps by focusing on women investors and integrating variables related to religiosity and Islamic financial literacy, alongside risk and performance factors, with a particular emphasis on the former.

3. Theoretical Framework

To examine how various explanatory variables affect women’s decisions in selecting an FP for their IUT investments, we utilize the Unified Theory of Acceptance and Use of Technology (UTAUT). This theory is a comprehensive model designed to explain user intentions to adopt technology or services and their subsequent usage behavior. It identifies four key constructs: performance expectancy, effort expectancy, social influence, and facilitating conditions. These constructs are further influenced by factors such as gender, age, experience, and the voluntariness of use.

Although different frameworks such as the TPB and the TRA have been used to study the adoption of IUT funds in Malaysia in the past (e.g., Ali et al., 2014; Amin et al., 2015), we have chosen the UTAUT framework because it is particularly well-suited for studying the adoption of new technologies or services within a group of individuals. Additionally, it has been widely applied to the study of emerging technologies and services in the financial sector, including Islamic finance. Maniam (2024) reviewed the models used in the study of Islamic fintech adoption and found that the Technology Acceptance Model (TAM) and UTAUT 2 (an extension of UTAUT) have gained prominence as the most frequently applied frameworks in examining fintech adoption. These models are widely used due to their ability to effectively explain how individuals adopt and use new technologies, particularly in the context of emerging financial technologies. For example, Nashwan (2022) used the UTAUT to analyze online zakat adoption in Yemen. Rahim et al. (2023) used this framework to study the adoption of Islamic fintech in Malaysia, and Azman and Zabri (2022) used this framework to study the adoption of Islamic fintech among micro-entrepreneurs in Malaysia. Despite the significance of the UTAUT in understanding and predicting adoption, its primary focus on employees and organizations has sparked debate regarding its unified purpose (Maniam, 2024). Additionally, while this model has been widely used in Islamic finance, several studies have incorporated self-developed constructs to explore other key factors influencing adoption. These factors include trust (Yaseen et al., 2022), consumer innovativeness (Khan et al., 2022), and Islamic financial literacy (Firdausa, 2023), highlighting the importance of context-specific variables in shaping adoption behavior.

In our study, IUT funds should be considered as a new service being adopted by women who are viewed as new users of this service, and the UTAUT framework is used to explore how various characteristics of FPs, including their perceived religiosity, impact the behavior of Muslim women. As discussed above, these characteristics can largely be controlled by FP’s management, which can strategically leverage them to influence women’s investment decisions.

3.1. Dependent Variable

The intention to purchase IUT funds from a specific FP is used as the dependent variable in our model. Indeed, the UTAUT identifies two dependent variables (the intention to use the service, and the actual use of the service); however, there is a strong correlation between these two variables in settings where individuals are free to act on their intentions without significant constraints. As this is the case with IUT funds and women are free to choose their investments, we consider only intention to purchase IUT funds as the dependent variable.

3.2. Direct Determinants

The expected performance construct of the UTAUT is mapped to the funds’ net performance which is equivalent to their gross returns once all the FP fees are deducted. If the net performance of an FP funds when compared to competitors is relatively lower, investor women would most likely select another FP for their IUT investments. Thus, a main determinant in our model is the FP’s net performance.

The effort expectancy construct, defined as the complexity—or conversely, the ease—of using a new service or technology, corresponds to the effort needed to gather knowledge about an FP and its funds before purchasing IUT units. Indeed, before investing, a Muslim woman must conduct thorough research to ensure that her savings are invested in respect of Shariah principles and risk controls. This requires significant energy to stay up to date in terms of knowledge about FPs, especially since more complex fund structures are being introduced by FPs (such as mixed assets funds which invest in both Sukuks and Islamic stocks and which have no clear benchmark indices). Our model incorporates two corresponding determinants: the perceived religiosity of the FP and its perceived risk. These two characteristics were chosen because effectively managing them can reduce the complexity associated with the FP selection process. Indeed, when an FP is highly religious and low risk, it reduces the efforts expected from a woman to ensure her IUT investments are Shariah compliant and safe.

Social influence from peers is also considered as a direct determinant of the intention to adopt a technology or service in the UTAUT. The inclusion of this construct is open to debate in the previous literature and while some studies support its inclusion in adoption models (Thompson et al., 1991; Taylor & Todd, 1995), others do not (Davis, 1989). Research has generally shown that social influence plays a significant role primarily in mandatory settings while in voluntary settings, the effect of social influence on behavioral intention is often diminished (Hartwick & Barki, 1994; Venkatesh et al., 2003). This construct has not been considered in the model as women are mostly in a voluntary setting when investing in IUT funds and are free to consider other competing investment venues for their savings including Islamic stocks, Shariah-compliant exchange-traded funds (ETFs), and Islamic real estate investment trusts (REITs).

Facilitating conditions is a fourth construct that is included in the UTAUT and that influences that actual use but does not predict behavioral intention. This construct refers to an individual’s perception of the availability of necessary infrastructure, such as access to FPs’ advisers, availability of an online channel, and ease of transactions. This variable has been excluded from our model, as our primary focus is the factors influencing women’s investment intentions.

3.3. Moderating Factors

The UTAUT model includes four moderating constructs—age, gender, experience, and voluntariness of use—which influence the strength and direction of the relationships between the primary constructs and user behavior. Although our study focuses exclusively on women, we also incorporate age, income, and education level. The UTAUT framework identifies experience as a moderating variable, primarily influencing effort expectancy. In our model, experience is represented by Islamic financial literacy which primarily influences perceived religiosity. Additionally, UTAUT considers voluntary use as a moderating factor, defined as “the degree to which the use of the service is perceived as being voluntary or through one’s free will” (Moore & Benbasat, 1991). However, this variable is excluded from the analysis, as all participants in our study are assumed to share the same level of voluntariness. Additionally, we include three key moderating variables—religiosity, risk aversion, and price sensitivity—due to their potential influence on women’s attitudes toward FPs.

Building on the above analysis,

Table 1. Research model mapping.

Type	UTAUT	Research Model
Dependent variable	Intention to use	Intention to purchase IUT funds
	actual use	Not considered
Direct determinants	Expected performance	Past performance
	Effort expectancy	Perceived religiosity, perceived risk
	Social influence	Not considered
	Facilitating conditions	Not considered
Moderating factors	Age	Age
	Gender	Not considered
	Experience	Islamic financial literacy
	Voluntariness of use	Not considered

presents the mapping between the constructs considered in the UTAUT and the variables considered in our research model:

4. Hypotheses Formulation

4.1. Direct Effects

4.1.1. Religiosity Perception

Previous research indicates that Muslim investors favor Shariah-compliant funds and Islamic FPs over their conventional counterparts (Mohammed Kamil et al., 2018; Kabir et al., 2019). Moreover, investors in Islamic funds appear to be less sensitive to the performance of these funds, even when performance declines in terms of both returns and risk (Rao et al., 2015). This could be attributed to the unique ethical and religious motivations that guide investment decisions in Islamic finance, where investors might prioritize alignment with their values and principles over short-term financial performance.

In general, the perceived religiosity of FPs can be conveyed to potential investors through various management policies. These include avoiding excessive debt and refraining from involvement in unethical activities, such as those related to alcohol, tobacco, and gambling. Additional measures include implementing a “purification” process, which involves cleansing investors’ returns of income derived from questionable sources under Shariah law, and establishing a Shariah committee to ensure the FP’s adherence to Shariah compliance standards (Al Thnaibat et al., 2024; Ab Ghani et al., 2024). Finally, another practice that can increase religiosity perception consists of conducting Shariah research to assess and identify Shariah-compliant financial instruments. Indeed, low religiosity FPs minimize costs by foregoing extensive research and choosing securities for investment from predefined lists of Shariah-compliant options.

When a Muslim woman evaluates FPs for her IUT investments, it is assumed that she will prefer those with strong levels of religiosity. This preference stems from the desire to align her investments with her religious values and principles. An FP that demonstrates a strong commitment to adhering to Islamic principles would likely resonate more with her as it ensures her investment choices are in harmony with her faith. Based on this assumption, we propose the following hypothesis:

Hypothesis 1.

Women investors are more likely to purchase IUT funds from FPs having higher perceived religiosity.

4.1.2. Past Performance

The past net performance of a fund, defined as its performance after the deduction of costs such as taxes and management fees, plays a significant role in shaping investors’ decisions. Ben-David et al. (2022) found that mutual fund investors typically rely on simple performance indicators when making investment choices rather than engaging in a detailed analysis of the asset managers’ skills and capabilities. This suggests that investors often prioritize straightforward metrics, such as returns, over more comprehensive evaluations of the managers’ strategies or expertise. Gupta and Jithendranathan (2012) showed that investors consider the FP performance—specifically its returns, market-timing ability, and asset selection—when choosing where to invest their savings. Similarly, Nurul ’Izzati (2019) found that past performance significantly influences investors’ decisions when selecting IUT funds. Roussanov et al. (2021) also identified a direct relationship between a fund’s performance and its size, suggesting that investment flows tend to favor funds with higher performance. Furthermore, the net performance of a fund is often impacted by the fees charged by the FP. Fikri and Yahya (2019) highlighted that Islamic mutual funds frequently have high fees, while Mansor et al. (2015) discovered that, for Malaysian Islamic mutual funds, the substantial returns publicly reported to investors diminish significantly after accounting for the various fees charged by the funds. Based on these findings, we anticipate that an FP net performance will positively affect the intention to invest in its funds. Higher net performance levels make FPs more attractive to investing women, increasing the likelihood of selecting them for IUT investments. Therefore, we formulate the following hypothesis:

Hypothesis 2.

Women investors are more likely to purchase IUT funds from FPs that have higher past net performance.

4.1.3. Perceived Risk

Dealing with an FP for IUT investment carries several risks such as bankruptcy, malpractice, fraud, cybersecurity breaches, and regulatory non-compliance. Past research (Bucciol et al., 2019) found that FPs that are not perceived as trustworthy may struggle to attract investors to their risk-based financial products. Almansour et al. (2023) found that risk perception plays a significant role in investment decisions, as it can significantly impact investors’ willingness to take risks and ultimately affect the performance of their investment portfolio. Several factors contribute to an FP’s ability to boost the confidence of investors and build trust with them. These include external elements such as third-party certifications and regulatory approvals, alongside internal factors like the FP’s size, the presence of an anchor shareholder or client, and whether the FP operates physically or online. Previous studies show that investors are more inclined to choose FPs that honor their commitments, possess a strong brand, demonstrate financial stability with a solid balance sheet, have a large market presence, and have not faced sanctions. Additionally, recommendations from family members or acquaintances can play a significant role in shaping investor preferences. Collectively, these elements influence the perceived risk associated with an FP. We expect that investing women will be more attracted to FPs with low perceived risk as these ones are seen as more trustworthy and capable of preserving their investments. Based on this, we propose the following hypothesis:

Hypothesis 3.

Women investors are more likely to purchase IUT funds from FPs having a lower perceived risk.

4.2. Moderating Effects of Woman Variables

In addition to the potential direct effects discussed earlier, we also explore the moderating role of variables related to women, specifically focusing on demographic and psychological attributes. Particular attention was given to religiosity, Islamic financial literacy, risk aversion, and price sensitivity. For instance, it is expected that the likelihood of a woman choosing a high-religiosity FP would be influenced by her own levels of religiosity and Islamic financial literacy.

4.2.1. Religiosity

Religiosity, which encompasses various dimensions of religious belief, practice, and experience, significantly influences investor behavior, especially when decisions involve risk and ethical considerations. Past studies found that religiosity is negatively correlated with risk-taking (Yusuff et al., 2017; Blau, 2017). Lestari et al. (2021) found that religiosity has a moderating role on investment attitude and that significant differences exist between moderate and devout religious individuals in terms of risk propensity and investment decisions. Imad (2018) found that religiosity is a significant variable in IUT investment decisions in Malaysia. We posit that the intention to purchase from a high-religiosity FP increases when a woman investor is highly religious. Indeed, an FP that follows Shariah principles (e.g., avoiding investment in companies with excessive debt or companies involved in the use of alcohol, gambling, tobacco, weapons, and defense, etc.) is more attractive to highly religious women. Thus, we propose the following hypothesis:

Hypothesis 4.

A woman’s own religiosity positively moderates the religiosity perception effect on Muslim women’s attitude.

4.2.2. Islamic Financial Literacy

Islamic financial literacy is defined an individual’s ability to manage financial resources in accordance with Islamic principles, encompassing knowledge, skills, attitudes, and behaviors that adhere Shariah law (Zaman et al., 2017). Several past studies have found this variable to be significant when a Muslim investor considers IUT funds (Yusuff et al., 2017; Aziz et al., 2019; Aziz & Kassim, 2021; Yusfiarto et al., 2023). Additionally, Mahdzan et al. (2017) found that financial literary influences risk perception and that investors exhibiting higher financial literacy tend to hold higher risk assets in their portfolios as they are able to understand the risks associated with these assets. We assume that a woman with strong Islamic financial knowledge will be better equipped to understand both the investment risks and the Shariah compliance of the available investment products. As a result, she will adopt a more holistic investment approach, balancing financial returns with religious, ethical, and social considerations. Since highly religious FPs are more likely to meet these needs, we hypothesize that a woman’s Islamic financial literacy positively influences her perception of an FP’s religiosity. Thus, we propose the following hypothesis:

Hypothesis 5.

A woman’s Islamic financial literacy positively moderates the FP’s religiosity perception effect on Muslim women’s attitude.

4.2.3. Risk Aversion

Dickason and Ferreira (2018) define investor risk aversion—or its inverse, financial risk tolerance—as the amount of risk an individual is unwilling to take when making a financial decision or investing money. In the case of IUT funds, these risks can be in the form of capital loss, performance below the general market, and even the potential bankruptcy of the FP. Previous studies show that investor risk aversion plays an important role in investor behavior and negatively impacts investment in securities, funds, and FPs that are perceived as risky. This variable is found to be significant in multiple studies (Yusuff et al., 2017; Mahdzan et al., 2017; Annamalah et al., 2019; Aziz & Kassim, 2021). We posit that Muslim women who are risk averse will place greater importance on the perceived religiosity of an FP and are more likely to trust religious FPs, which tend to avoid excessive investment risks—such as favoring low-risk, asset-backed securities over high-risk derivatives like options and avoiding investment in stocks of companies having a high leverage. These FPs are also perceived as acting with benevolence and integrity, thereby reducing risks related to fraud and misuse of assets. Thus, we can formulate the following hypothesis:

Hypothesis 6.

A woman’s risk aversion positively moderates religiosity perception effect on Muslim women’s attitude.

4.2.4. Price Sensitivity

This variable measures how the price of a product or a service influences consumers’ purchase intentions. Roussanov et al. (2021) and Døskeland et al. (2021) found that there is a relationship between the fees charged by funds and the size of these ones, showing that higher fees turn off potential investors. Choi and Gupta-Mukherjee (2022) found that, in the case of mutual funds, fees are a significant consideration for investors facing financial constraints in other areas of household decision-making. This is likely also true for Muslim women, who, as consumers, may face monthly budgeting constraints, especially that the fees charged by FPs can vary significantly. Moreover, as previously mentioned, past research (Fikri & Yahya, 2019) suggests that FPs perceived as highly religious tend to charge higher fees, making them less likely to be considered by price-sensitive Muslim women. Based on the above, we posit that the primary effect of the FP’s perceived religiosity is less pronounced for women with high price sensitivity, and we formulate the following hypothesis:

Hypothesis 7.

A woman’s price sensitivity negatively moderates the religiosity perception effect on Muslim women’s attitude.

The above seven hypotheses are shown in the research framework in Figure 1.

The proposed research model can be formulated in the following equation (Equation (1)):

Likelihood of selecting an FP = C₀ + C₁ (FP perceived religiosity) + C₂ (FP past net performance) + C₃ (Perceived risk) + C₄ (FP perceived religiosity) × (Religiosity) + C₅ (FP perceived religiosity) × (Woman Islamic financial literacy) + C₆ (FP perceived religiosity) × (Woman risk aversion) + C₇ (FP perceived religiosity) × (Woman price sensitivity) + ϵ

(1)

where C₀, C₁, C₂, C₃, C₄, C₅, C₆, and C₇, are constant coefficients, and ϵ represents noise or any other factors that affect behavior, beyond the identified variables.

5. Methodology and Methods

5.1. Research Instruments

Direct questions were used to measure the demographic variables regarding women (age, education, and income), while the psychological variables were measured using a set of questions where the responses were recorded according to a 5-point Likert scale in which 1 represented the lowest level of agreement and 5 represented the highest level of the agreement. To measure a woman’s religiosity, 7 questions have been used. These ones were adopted from Wan Ahmad et al. (2008). Similarly, to measure a woman’s Islamic financial literacy, 7 questions have been used and were adopted from Rahim et al. (2016). Questions related to risk aversion (3 questions) and price sensitivity (3 questions) were adopted from Bruner et al. (2005). To derive a single unidimensional measure for each variable, a factor analysis was conducted on the responses corresponding to each variable. The first factor from this analysis was considered as the measure of the variable, provided it captured the majority of the variance in the responses. This is achieved after successful internal consistency testing. Appendix A details the questions used for the measure of each variable.

To measure the association between attitude and the characteristics of FPs, a conjoint analysis was used. Participants were presented with 12 hypothetical FPs having different perceived religiosity, past net performance, and perceived risk (Appendix B) and were requested to rate them in terms of investment likelihood. The AUM value was used as a proxy to measure the perceived risk of the FP—the higher is the AUM of the FP, the lower is its perceived risk, while the perceived religiosity was measured based on whether the FP exclusively manages IUT funds or is a conventional one marketing both IUT and UT funds to its customers.

As for a woman’s likelihood of selecting an FP with specific characteristics for her IUT purchases, this variable is measured on a scale of 0 to 10. A score of 0 indicates “I would definitely not invest with this FP”, while a score of 10 indicates “I would definitely invest with this FP”.

In addition to the above variables, the survey was used as an opportunity to measure variables that are related to the topic of the study but are not included in the model. These additional questions include: (1) preference for low-risk Islamic capital guaranteed investment products from banks, and (2) preference for cheaper alternatives such as listed Islamic ETFs.

5.2. Data Collection and Sample

The data used in the study have been collected from a survey conducted with 263 women in Malaysia. These women are familiar with IUT funds as they have either invested in IUT funds or have the necessary savings to consider IUT funds among available investment options (such as Islamic fixed deposits, Islamic stocks, Islamic ETFs, Islamic real estate investment trusts). Participation in the survey was voluntary. Participating women were selected from a social network (LinkedIn) and were assured confidentiality and anonymity before filling the self-administered questionnaire. Due to this approach, the sample is slightly skewed toward women aged between 20 and 30 years old and holding a bachelor’s degree.

5.3. Common Method Bias Testing

To assess the potential for common method bias, which can arise when both independent and dependent variables are measured within the same context, we conducted Harman’s single-factor test. The results indicate that common method variance is not a significant concern in our study, as the highest factor accounted for only 25.1% of the total variance, well below the recommended threshold of 50%. This suggests that common method bias is unlikely to significantly affect the findings. Additionally, the study dataset was tested for multivariate normality, and the results showed that the data were not normally distributed, as the p-value associated with the Doornik-Hansen test was less than 0.05. To address this issue, the study variables were normalized using quantile transformation before conducting the statistical analysis. This adjustment ensures that the analysis is based on data that meets the assumptions required for accurate interpretation.

5.4. Reliability Analysis

To analyze the sample data, a reliability test is conducted on women’s variables measured using multiple questions to ensure consistency. This reliability, also known as internal consistency, assesses the degree of interrelatedness among the questions used to measure the underlying variable. Evaluating internal consistency is essential before employing a variable for research purposes to ensure its validity (Tavakol & Dennick, 2011). Cronbach’s alpha is a widely used coefficient for this purpose; it measures the average covariance between item pairs relative to the total score variance. This coefficient ranges from 0 to 1, with higher values indicating greater internal consistency among the items, suggesting they effectively measure the same underlying construct. For the variables regarding women, Cronbach’s alpha values, provided in

Table 2. Scale reliability and factor analysis for women variables.

Women-Related Variables	Questions within the Construct	Cronbach’s Alpha	Variance Explained by 1st Factor
Religiosity	7	0.76	49%
Islamic financial literacy	7	0.87	57%
Risk aversion	3	0.73	66%
Price sensitivity	3	0.85	77%

, were relatively high (all exceeding 0.7), indicating minimal variance among individual questions. This underscores the reliability and consistency of the questions in measuring the intended constructs effectively.

6. Analysis Results

6.1. Demographic Statistics

An analysis of the sample demographic statistics (

Table 3. Sample demographic statistics.

Variable	Number of Individuals	Distribution
Age	263	Between 20 and 30 years: 77.6%
		Between 31 and 40 years: 16.7%
		Between 41 and 50 years: 3%
		Between 51 and 60 years: 2.7%
		Above 61 years: 0%
Education level	263	Doctorate (1.5%)
		Master (14.8%)
		Bachelor’s (80.6%)
		High school (3%)
Marital Status	263	Single: 24.7%
		Married: 75.3%
Number of dependents in the household including husband	363	0 dependent: 24.7%
		1 dependent: 19.4%
		2 dependents: 9.9%
		3 dependents: 14.4%
		4 dependents: 11.4%
		5 dependents and more: 20.2%
Income (per month in Ringgits)	263	<5000: 64.3%
		5000 to 10,000: 19.4%
		10,000 to 20,000:9.5%
		20,000 to 30,000: 1.1%
		30,000 to 50,000: 2.7%
		>50,000: 3%

) reveals that the majority of respondents are relatively young, with 77.6% aged between 20 and 30 years. Furthermore, the sample is highly educated, as 96.9% hold a bachelor’s degree or higher. A significant proportion of participants are married (75.3%). Moreover, most participants (54%) indicated having two dependents or fewer. This combination of youthful age, higher education levels, and relatively small family sizes suggests a significant potential for savings and investment, highlighting a promising demographic for FPs.

6.2. Descriptive Statistics

A descriptive analysis was conducted on the variables measured in the survey. The findings (

Table 4. Descriptive statistics.

Variable	Mean	Standard Deviation	Scale	Data Source
Religiosity 1	4.04	0.81	1–5	Survey
Religiosity 2	4.69	0.76	1–5	Survey
Religiosity 3	4.13	0.86	1–5	Survey
Religiosity 4	4.60	0.73	1–5	Survey
Religiosity 5	4.44	0.885	1–5	Survey
Religiosity 6 *	2.50	1.25	1–5	Survey
Religiosity 7	4.47	0.95	1–5	Survey
Islamic financial literacy 1	4.41	0.85	1–5	Survey
Islamic financial literacy 2	4.28	0.84	1–5	Survey
Islamic financial literacy 3	4.09	0.89	1–5	Survey
Islamic financial literacy 4	4.32	0.82	1–5	Survey
Islamic financial literacy 5	3.89	0.87	1–5	Survey
Islamic financial literacy 6	4.08	0.86	1–5	Survey
Islamic financial literacy 7	4.06	0.94	1–5	Survey
Risk aversion 1	4.12	0.85	1–5	Survey
Risk aversion 2	4.60	0.73	1–5	Survey
Risk aversion 3	3.89	0.96	1–5	Survey
Price sensitivity 1	3.86	0.96	1–5	Survey
Price sensitivity 2	3.77	0.94	1–5	Survey
Price sensitivity 3	3.93	0.92	1–5	Survey
Preference for Islamic guaranteed products	4.08	0.84	1–5	Survey
Preference for lower fees Islamic ETFs	3.48	0.76	1–5	Survey

* As this question is negative, the response is to be inverted in the analysis.

) reveal that the surveyed women exhibited high levels of religiosity, Islamic financial literacy, and risk aversion. Additionally, a significant majority (76.8%) expressed a preference for lower-risk investment options, such as low-risk guaranteed Islamic deposits offered by banks, and 43.3% indicated preference for lower-fees Islamic ETFs. These findings suggest that women’s risk aversion could be a key factor negatively influencing their investment in IUT funds, as they may prioritize safer investment alternatives that align with their risk comfort levels.

6.3. Regression Analysis Using Women Variables

To assess the impact of women-related variables (religiosity, Islamic financial literacy, risk aversion, and price sensitivity) on their attitudes toward FPs, a linear regression is conducted. Its results are summarized in

Table 5. Regression analysis results (women’s characteristics).

Term	Coeff.	SE Coeff.	T-Value	p-Value	[95% Conf. Interval]
Religiosity	0.2177	0.0602	3.62	0.000	0.997	0.336
Islamic financial literacy	0.2348	0.0578	0.41	0685	−0.089	0.137
Risk aversion	−0.2433	0.0531	−4.51	0.000	−0.349	−0.137
Price sensitivity	0.0775	0.0523	1.46	0.141	−0.026	0.181

.

The results indicate that a woman’s religiosity positively influences her likelihood of investing in IUT funds (coeff. = 0.2177, p = 0). This suggests that women who prioritize religious principles are more inclined to invest in IUT funds, which are perceived as Shariah-compliant investment options. On the other hand, a woman’s risk aversion is a significant factor that negatively affects her likelihood of investing in IUT funds (coeff. = −0.2433, p = 0). This aligns with the expectation that IUT funds, despite being Shariah-compliant, are perceived to carry a certain level of risk, which may deter women who are more risk-averse. These findings also correspond with the preference for lower-risk Islamic fixed deposits offered by banks.

6.4. Regression Analysis Using FP Characteristics

A generalized regression analysis is conducted to examine the influence of an FP perceived religiosity, net performance, and perceived risk on women’s attitudes toward FPs, as well as the moderating roles of a woman variables. The results of this analysis are presented in

Table 6. Regression analysis results (FP’s characteristics and moderating effects).

Term	Coeff.	SE Coeff.	T-Value	p-Value	[95% Conf. Interval]
FP perceived religiosity	0.5997	0.0438	13.69	0.000	0.513	0.685
FP perceived risk	0.0156	0.0438	0.36	0.721	−0.070	0.101
FP past net performance	0.0427	0.0436	0.98	0.326	−0.043	0.128
(FP perceived religiosity) × (Religiosity)	0.1681	0.0570	2.95	0.003	0.056	0.280
(FP perceived religiosity) × (woman Islamic financial literacy)	0.1130	0.0556	2.03	0.042	0.004	0.222
(FP perceived religiosity) × (woman risk aversion)	−0.0304	0.0557	−0.55	0.585	−0.140	0.079
(FP perceived religiosity) × (woman price sensitivity)	−0.2301	0.0533	−4.32	0.000	−0.334	−0.125

.

The results indicate that an FP’s perceived religiosity positively influences women’s attitudes toward it (coefficient = 0.5997, p = 0). Thus, hypothesis H1 is confirmed.

The results show that the interactions between perceived religiosity and religiosity, as well as perceived religiosity and Islamic financial literacy, are significant with positive coefficients (coeff. = 0.1681, p = 0.003; coeff. = 0.1130, p = 0.042). This confirms hypotheses H4 and H5.

Additionally, the analysis results show that the interaction between perceived religiosity and price sensitivity is significant, with a negative coefficient (coeff. = −0.2301, p = 0.000). This confirms hypothesis H7.

Considering the significant factors and their associated coefficients calculated in the regression, Equation (1) is revised to incorporate these variables and interactions, resulting in Equation (2) for the model:

Probability of selecting an FP = 4.681 + 0.6 FP perceived religiosity + 0.168 (FP perceived religiosity) × (Woman’s religiosity) + 0.113 (FP perceived religiosity) × (Woman’s Islamic financial literacy) − −0.230 (FP perceived religiosity) × (Woman price sensitivity) + ϵ

(2)

From the results above, the hypotheses testing outcomes can be summarized in

Table 7. Results from the testing of the hypotheses.

Hypothesis	Description	Result
H1	Women investors are more likely to purchase IUT funds from FPs having higher perceived religiosity.	Confirmed
H2	Women investors are more likely to purchase IUT funds from FPs that have higher past net performance.	NA
H3	Women investors are more likely to purchase IUT funds from FPs having a lower perceived risk.	NA
H4	A woman’s own religiosity positively moderates the religiosity perception effect on Muslim women’s attitude.	Confirmed
H5	A woman’s Islamic financial literacy positively moderates the FP’s religiosity perception effect on Muslim women’s attitude.	Confirmed
H6	A woman’s risk aversion positively moderates religiosity perception effect on Muslim women’s attitude.	NA
H7	A woman’s price sensitivity negatively moderates the religiosity perception effect on Muslim women’s attitude.	Confirmed

, as follows:

7. Findings and Discussion

First, we find that there is a significant and positive relationship between the religiosity of a woman and the probability of selecting an FP for her IUT investments. Thus, the more a Muslim woman is religious, the more likely she will invest in IUTs through one of the FP offering these products. This result is expected and adheres to the conclusions of Zainudin et al. (2019) who found that devout Muslims are more inclined to hold a greater proportion of Islamic financial assets compared to casual Muslims, and Alzadjal et al. (2022) and Gunardi et al. (2022), who found that customers with high Islamic values have a higher preference towards Islamic banking products and services. It is also consistent with the findings from other studies about investors religiosity in the context of IUT funds (Yusuff et al., 2020; Sumiati et al., 2021; Che Hassan et al., 2024).

Second, we observe a significant negative relationship between a woman’s risk aversion and the likelihood of selecting an FP for her IUT investments. In other words, the more a Muslim woman is risk-averse, the less likely she will invest in IUTs through one of the FP offering these products. This result is expected and adheres to the conclusions of Wulandari and Andraeny (2023) who found that risk tolerance has a direct impact on investment decisions in the context of Islamic financial products, and Aziz and Kassim (2021), who found risk aversion of Malaysian women impact their IUT investments.

Third, our findings reveal a strong positive relationship between the perceived religiosity of an FP and the likelihood of it being selected by Muslim women. In other words, FPs perceived as more religious are significantly more likely to attract Muslim women seeking to invest in IUTs. This aligns with the understanding that Muslim women may prioritize Shariah-compliance over financial returns, often willing to forgo higher returns in favor of avoiding non-compliant funds or FPs that do not adhere to Islamic principles. This result is coherent with these of Hoque et al. (2022) who found a financial institution commitment to Islamic values was an important criterion considered by Muslim customers.

Another finding from the above analysis is that a woman’s variables (religiosity, Islamic financial literacy, and price sensitivity) act as moderators on the primary effect of the FP’s perceived religiosity. In particular, a woman’s own religiosity positively moderates the perception of a fund provider’s religiosity. This moderating effect is both logical and anticipated. Specifically, when a woman exhibits high levels of religiosity, the influence of the religiosity perception of the FP on her investment decisions becomes more pronounced. This observation is consistent with the findings of Junaidi (2021) who found that religiosity influence consumers awareness, attitude, and preferences in the context of Islamic financial services and products. This observation aligns with behaviors observed in other domains, where devout Muslims prefer goods and services that adhere to Shariah principles and tend to engage with providers who follow to these principles.

The study also indicates that the level of Islamic financial literacy positively moderates the perception of a fund provider’s religiosity. This moderating effect is also anticipated. Specifically, when a woman possesses a strong understanding of Islamic finance, she is able to evaluate the religiosity of the FP and the impact of this characteristic on her investment decisions becomes more pronounced. This observation is consistent with the findings of Yusfiarto et al. (2023) who found that Islamic financial literacy has a significant positive effect, either directly or indirectly, on investment intentions in the Islamic capital market and that sufficient knowledge of Islamic principles, values, and financial systems, strongly influences Muslims’ investment decisions.

Our findings also indicate that a woman’s price sensitivity negatively moderates the influence of an FP’s perceived religiosity. Specifically, the impact of perceived religiosity is less pronounced among Muslim women with high price sensitivity. This can be attributed to the tendency of exclusively Islamic FPs to charge higher fees compared to conventional FPs, which simultaneously offer both conventional and Islamic funds. The difference in fees is partly due to the economies of scale enjoyed by conventional FPs despite the additional cost resulting from managing IUT funds (e.g., Shariah audits and Shariah committees). As a result, women with high price sensitivity are more likely to choose conventional FPs over Islamic ones. This finding aligns with the observations of Ireland (2018), who found that while Muslim customers generally preferred Islamic products, a portion of them was willing to switch to conventional products if they offered better prices.

8. Theoretical and Practical Contributions

The research carried out as part of this study highlights the relevance of the UTAUT adoption model in understanding the factors influencing women’s attitudes toward IUT funds in Malaysia. While the UTAUT model has been extensively applied in the context of fintech adoption, it is equally applicable to new and innovative financial products, such as IUT funds. The UTAUT framework offers valuable insights into the barriers and drivers of adoption among women in this specific investment segment. Furthermore, unlike several study models which consider funds and FPs characteristics or separately investors’ characteristics, our research model demonstrates that it is possible to combine a woman’s psychological traits with the characteristics of an FP to examine their combined effects. Our findings reveal significant main effects as well as moderating effects, providing valuable insights into the complex interactions influencing investment decisions.

First, as shown in several past studies, our research confirms that a woman investor’s religiosity plays a significant and positive role in the adoption of IUT funds, making it a key factor in driving the growth of associated FPs’ customer base, AUM, and revenues. Consequently, FPs marketing IUTs—particularly Islamic FPs—should direct their marketing efforts toward women with high levels of religiosity. Additionally, the research indicates that Malaysian Muslim women tend to be risk-averse, and this trait negatively impacts their IUT investment intentions. FPs should evaluate whether their offerings cater to the specific segment of low-risk IUT funds and address any potential gaps. This is especially relevant for foreign-owned FPs, which typically offer a more limited range of funds.

Second, the study reveals that Muslim women tend to prefer FPs with higher perceived religiosity. As a result, FPs should focus on marketing their Islamic credentials. They can emphasize the religiosity of their owners and shareholders, highlight their Shariah audits, and showcase any Shariah-compliance research they conduct. Most importantly, if an FP is Islamic and exclusively offers IUT funds, it should prominently feature this aspect as a key differentiator in its marketing strategy.

Third, our findings reveal a significant positive moderating effect of a woman’s personal religiosity and Islamic finance literacy on her perception of an FP’s religiosity. Conversely, we observe a significant negative moderating effect of a woman’s price sensitivity on the same FP’s religiosity primary effect. These competing effects suggest that the Muslim women segment is likely divided into two sub-segments based on the predominant characteristic—religiosity or price sensitivity. One sub-segment consists of highly religious women with advanced Islamic finance literacy who are less price sensitive and prefer to engage with FPs that align with their religious values. However, this sub-segment is relatively small, representing a niche market. In contrast, women who are less religious but more price sensitive can be served by FPs offering a broader range of products (Islamic and conventional funds). This sub-segment represents a larger, albeit more competitive, market.

These findings lead to two key implications. First, FPs should tailor their business strategies and marketing campaigns to target these different sub-segments. This could be performed by creating distinct channels or branding approaches for each sub-segment. Second, FPs with high perceived religiosity, such as Islamic FPs, should consider offering Islamic financial education to Muslim women. This would enhance the effect of perceived religiosity, making these women more likely to choose highly religious FPs for their IUT purchases. Additionally, these educational programs could provide FPs with an opportunity to market their funds.

9. Limitations and Future Direction

The study has several limitations that should be considered when interpreting the findings and their practical implications. The first limitation is related to the size of the sample and the way data were collected. Indeed, although the sample size (263 women) is sufficient from a statistical point of view, a larger sample would have been more representative of the Malaysian society, including education and urbanization levels. Moreover, data were collected online using a convenience sampling approach. A probability sampling approach with a combination of online and offline data collection would increase sample representativeness by including women who are not particularly active online. Furthermore, as indicated by the statistical analysis, the variables included in the proposed model account for only part of the variation in the dependent variables. This suggests the existence of other factors that could help explain women’s adoption of IUT funds. Potential factors include the fund management fees, fund focus, and transaction ease from the perspective of the funds and FPs, as well as variables related to the women investors, such as wealth, innovativeness, social influence, and openness to experience. A possible direction for future research could be to include these additional variables and assess their potential effect.

Furthermore, this study relied on quantitative data, which, while valuable, often overlooks important qualitative insights and limits the breadth of respondents’ perspectives. To address this, future investigations could adopt a mixed-methods approach, integrating qualitative data to provide a deeper understanding of the factors influencing attitudes. Additionally, the study used the UTAUT framework to analysis adoption; however, newer models such as UTAUT 2 with higher predictive ability could be considered.

Finally, this study focused exclusively on Malaysia; therefore, future research could extend the scope to include other Muslim-majority countries such as Saudi Arabia, Pakistan, Turkey, and Kazakhstan. A cross-country comparison could shed light on how variations in women’s religiosity, personal traits, and cultural and socio-economic factors shape their attitudes toward Islamic mutual funds. In this context, it would also be valuable to explore the role of economic factors such as women’s participation in the labor market, inflation-driven household budgeting constraints, and the influence of disposable income and GDP growth on women’s investment decisions. Such research would provide a more nuanced understanding of how cultural, economic, and social differences impact women’s investment behaviors in the Islamic finance sector.