CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter presents the conclusions that are drawn from the results of the study. It also discusses some recommendations, as deemed fit, to be used as references for future studies that would be conducted on the same issue.
5.2 Conclusions
This study was conducted to investigate whether investors are able to maximize their returns by investing overseas as compared to investing in the domestic market via unit trusts. For Malaysia, a total of 21 funds that are invested locally were compared to 19 funds that invested internationally and as for Singapore, a total of 13 locally invested funds are compared to 17 internationally invested funds. The KLCI and STI wer used as the local …show more content…
The risk-adjusted returns of the local and international funds were calculated without taking into consideration the costs included in investing in the funds, the risks to be borne and the diversification benefits of each type of fund. Exchange rate risk, which is an important factor to be considered when investing abroad, was not included, as studies done in other countries on the same topic do not include it. The time period studied by the funds was also limited, as unit trust companies in Malaysia were only allowed to invest globally in the year 2005. Due to this, there were limited numbers of samples included in the study. Furthermore, different asset sizes of the funds might produce different results. Therefore, future studies could concentrate on the effects of load fees and the costs of the local and international funds when comparing the performance of both types of funds. In addition, diversification benefits, as computed by R², could be considered to guide investors on whether or not they are able to diversify effectively. Similarly, uniformed asset sizes and a longer study period could also be taken into consideration to produce more accurate and reliable …show more content…
As for Singapore, the local funds outperformed international funds before and after the global financial crisis, however, it shows no difference in returns during the crisis. Singapore 's economy has been ranked as the most open in the world and as the major Foreign Direct Investment (FDI) outflow financier in the world. The mean of portfolio returns for local funds is higher than the mean of portfolio returns of international funds except for Singapore funds during the crisis. Other than that, the result also shows that the longer holding period constitutes for higher portfolio return. Therefore, there is no benefit of international diversification exist in any financial market condition in KLSE as well as in
CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter presents the conclusions that are drawn from the results of the study. It also discusses some recommendations, as deemed fit, to be used as references for future studies that would be conducted on the same issue.
5.2 Conclusions
This study was conducted to investigate whether investors are able to maximize their returns by investing overseas as compared to investing in the domestic market via unit trusts. For Malaysia, a total of 21 funds that are invested locally were compared to 19 funds that invested internationally and as for Singapore, a total of 13 locally invested funds are compared to 17 internationally invested funds. The KLCI and STI wer used as the local …show more content…
The risk-adjusted returns of the local and international funds were calculated without taking into consideration the costs included in investing in the funds, the risks to be borne and the diversification benefits of each type of fund. Exchange rate risk, which is an important factor to be considered when investing abroad, was not included, as studies done in other countries on the same topic do not include it. The time period studied by the funds was also limited, as unit trust companies in Malaysia were only allowed to invest globally in the year 2005. Due to this, there were limited numbers of samples included in the study. Furthermore, different asset sizes of the funds might produce different results. Therefore, future studies could concentrate on the effects of load fees and the costs of the local and international funds when comparing the performance of both types of funds. In addition, diversification benefits, as computed by R², could be considered to guide investors on whether or not they are able to diversify effectively. Similarly, uniformed asset sizes and a longer study period could also be taken into consideration to produce more accurate and reliable …show more content…
As for Singapore, the local funds outperformed international funds before and after the global financial crisis, however, it shows no difference in returns during the crisis. Singapore 's economy has been ranked as the most open in the world and as the major Foreign Direct Investment (FDI) outflow financier in the world. The mean of portfolio returns for local funds is higher than the mean of portfolio returns of international funds except for Singapore funds during the crisis. Other than that, the result also shows that the longer holding period constitutes for higher portfolio return. Therefore, there is no benefit of international diversification exist in any financial market condition in KLSE as well as in