The study aims to test the effect of Islamic banks’ fund management organizations (FMOs) performance (IBP), consumers’ charities (CC), religious perceptions (RP) and risk perception (RP) on consumer preferences for Islamic unit-trust funds (IUTFs) in Pakistan. It also examines moderating variables such as consumer risk resistance (CRR), price volatility (PV), religious belief (RB) and Islamic financial resilience (IFR).
The data were analyzed using Smart PLS 4 (SEM) software. The research investigates how FMOs’ Islamic banks, CCs, RP and RP affect consumers’ perceptions of IUTFs using the unified theory of acceptance and use of technology. Meanwhile, factors including RR, PV, RB and IFR are treated as moderators for consumer preference. The raw data was culled from a survey of 210 Pakistani retail investors.
The study finds that CC has a positive impact on FMO and IUTF choice, while risk resistance and Islamic bank performance are both positive. RP has a negative impact on FMO and IUTF choices, but PV and charitable donations both have a positive effect. However, some hypotheses did not meet the significant criteria. The authors tested the reliability and validity of constructs using Cronbach’s alpha, Cronbach’s alpha (the comprehensive reliability) and AVE. The R-square of 0.619 represents a strong relationship, while the adjusted R-square of 0.591 suggests that the variance is because of predictors.
Limitations are that the survey excluded unreliable responses and is a cross-sectional study. Future research might consider these items over time or under different market conditions.
Perceived religiosity is a significant factor in attracting investors, but the research should better integrate this finding with relevant performance measures.
Knowing these factors will help Pakistani investors make better financial decisions, potentially contributing to enhanced economic growth and stability.
This research provides new depth and breadth to the understanding of why people in Pakistan choose one Islamic financial product over another option.
