| Summary: | One of the main differences between Islamic and conventional unit trust is Islamic unit
trust funds must follow the Shariah guidelines. Therefore, there are two processes that
they are need to undergo which are screening process and purification process. The
screening process is under responsibility of Shariah Advisory Council (SAC) of the
Securities Commission (SC). However, the purification process in Malaysia is under
responsibility of investors themselves. The final profit distribution does not include the
payment of zakat. Hence, to fill in the gap discovered where the final profit distribution
does not include the payment of zakat, this study proposes a new mathematical
formulation ofIslamic unit trust model which include the payment zakat for purification
process and additional benefit in Takaful for investors. The first objective of this study
is to compare the existing various unit trust models in Malaysia. The second objective
is to construct a new mathematical formulation of Islamic unit trust models. The third
objective is to examine the acceptance of the new mathematical formulation ofIslamic
unit trust model among investors. Firstly, a comparison of information needed from
various unit trust product brochures and official websites is made and studied. Then, a
new mathematical formulation of Islamic unit trust model is constructed. This new
formula constructed based on the existing formulation of the unit trusts which are a
simple interest and the gaps discovered are the payment of zakat/tax and benefit for
investors. A total of200 questionnaires were distributed among unit trust holders whom
are having at least one unit of any unit trust fund in Malaysia to examine the investors'
acceptance on the new mathematical formulation ofIslamic unit trust model. This study
was done in eight districts of Terengganu which are Kuala Terengganu, Kuala Nerus,
Setiu, Besut, Marang, Hulu Terengganu, Dungun and Kemaman. Structural Equation
Modelling (SEM) was used in order to test the hypothesis of this study by using
Statistical Package for Social Science (SPSS) AMOS software. Research analysis
showed that the independent variables which are investors' knowledge, profits and
benefits had a significant direct effect towards dependent variable which is investors'
acceptance on new mathematical formulation of Islamic unit trust model. The
regression weight for investors' acceptance towards investors' knowledge is 0.235 (p
value < 0.05), which means that there is a significant effect of investors' acceptance
towards investors' knowledge. The regression weight for investors' acceptance towards
investors' profit is 0.127 (p-value < 0.05) which means that there is a significant effect
of investors' acceptance towards investors' profit. The regression weight for investors'
acceptance towards investors' benefit is 0.522 (p-value < 0.05) which means there is a
significant effect of investors' acceptance towards investors' benefit. This conveys that
the investors agreed with the new mathematical formulation ofIslamic unit trust model
which provides additional benefit for the investors while fo llowing the Shariah
guidelines. Thus, they accepted the new mathematical formulation ofIslamic unit trust
model to be available in the unit trust market. In conclusion, this study provides a new
mathematical formulation for Islamic unit trust which includes the payment for zakat
and additional benefit in Takaful for investors. Hence, the investors can gain purified
final profit distribution with additional benefit in Takaful.
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