INTENTION TO INVEST IN SAUDI ARABIA’S ISLAMIC MUTUAL FUNDS AND THE MODERATING EFFECTS OF RELIGIOSITY, AWARENESS AND SOCIAL MEDIA

Abstract

Despite the recent increase in the mutual fund shares in the Kingdom of Saudi Arabia, the number of investors dealing in these securities has been on the decline. Several researchers have attributed this development to lack of awareness, reduced attractiveness of mutual funds, and ineffective marketing activities. However, extant studies seldom investigate the influence of the socio-cultural and religious milieu of Saudi Arabia and their consequences on the behaviours of investors from the Kingdom. This study investigates the moderating effects of religious obligations, awareness, and social media in the relationships between the attitudes of Saudi investors, their subjective norms and perceived behavioural control, and their intention to invest in Islamic mutual funds. The quantitative research design was used. Data were collected from a sample of 200 Saudi investors using a 40-item survey questionnaire. The data gathered were used in testing six hypotheses advanced in the study using partial least squares structural equation modelling (PLS-SEM). The results revealed that subjective norm, perceived behavioural control and attitude toward investing in Islamic mutual fund have a significant influence on the intention to invest in Islamic mutual funds among Saudi investors. Also, religious obligations, awareness and social media were found to moderate hypothesised relationships between attitude and intention to invest in Saudi Islamic mutual funds. The results of this study provide valuable insights to the Islamic mutual fund managers on how to enhance the efficacy of their marketing mix elements towards achieving operational efficiency and increased patronage by both potential and existing investors in Saudi Arabia. The results are also envisaged to assist in improving the market share of Islamic mutual funds in Saudi Arabia towards ensuring its soundness, attractiveness and resilience as an essential segment of the burgeoning Saudi Islamic financial services industry.