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 Presented to the Financial Management Department
De La Salle University-Manila
Term 1, A.Y. 2022-2023

In partial fulfillment
of the course
THSFIN2 - K32

A Study on Filipino Investors and their Intention to Invest in Mutual Funds in the

Philippines

Submitted by:
Gana, Jaan Alexander
Lacson, Mauro Ramon
Motiani, Dheeraj
Nam, Yu-Jin

December 19, 2022

 ACKNOWLEDGEMENTS

The group would like to express our deepest gratitude to our professor and advisor, Mr. Santoyo, for his

invaluable insights, without which this research would not be possible. The research would not have been

possible without our panelists, Mr. Edralin Lim, whose patience and expertise guided our research, and

Mr. Benedict Bismark, whose fairness and honesty unfailingly motivated the group to surpass mediocrity.

We would also like to thank Ms. Michelle Tan and Mr. Reinnite Madrid for their expertise and

unwavering commitment to support our research. The group is also deeply indebted to Mr. Dominic

Dayta, whose expertise and wisdom in the field of statistics rooted our research in its data while also

flourishing our understanding of it.

We are thankful for the institution of De La Salle University for providing us with the resources we need

to accomplish this research and allowing us the opportunity to explore the field. The group is also grateful

for our family members' support during this endeavor.

Lastly, it would be remiss not to mention the fellow researchers of this study, Mr. Jaan Gana, Mr. Mauro

Lacson, Mr. Dheeraj Motiani, and Mr. Yu-jin Nam, who put blood, sweat, and tears to accomplish this

research.
 ABSTRACT

The Philippine mutual funds industry has been around since the 1950s. However, its history has

tainted the perception of Philippine investors towards it. Poor management of these funds in its early

years led to bankruptcy of companies, collapse of the Philippine stock market, and the like. Some studies

about mutual funds industries in neighboring Asian countries have suggested that fund managers are not

implementing enough strategic investment plans to satisfy investors. Specifically, a study in India

concluded that investors prefer to invest in gold and real estate markets (Kale & Panchapagesan, 2012).

Recently, it has not been fully understood as to how Filipino investors view mutual funds as an

investment opportunity and whether certain factors affect their decision to invest into it. The lack of

knowledge on this type of investment vehicle is evident within a lot of areas in the country, and even

about the general idea of investing. The research was conducted for the benefit of current and future

Philippine investors, mutual funds companies in the country, as well as the researchers themselves. The

study made use of a quantitative approach and was conducted using descriptive and explanatory research

designs. Data was collected through a survey questionnaire to 90 active mutual fund investors and 90

non-active mutual fund investors, giving the study a total of 180 respondents using the convenience

sampling method. The study was conducted during July-September 2022. Several statistical tests and

models were utilized in order to analyze the gathered data. These include the Cronbach’s Alpha,

Kruskal-Wallis Test, Ordinal Regression Equation, Pearson’s Goodness of Fit, and the Chi-square

distribution. Major findings show that 62.4% of respondents are moderately familiar to very familiar with

mutual funds, the majority of respondents are considered to be moderately aggressive and that growing

their capital is their top reason for investing. Data also shows that the respondents are not exactly very

unsatisfied with the returns they are getting, but they are also not very satisfied with the outcome and that

the majority of respondents intend to continue or start investing in mutual funds. With this, it is concluded

that investors are more likely to continue or start

 investing in mutual funds the more they are comfortable with risk. They are also more likely to

continue or start investing in mutual funds if they are satisfied with the portfolio returns. Based on the

Kruskal Wallis testing, there is an impact of familiarity on an investor’s intention to invest in mutual

funds (contradicts Sashikala & Chitramani’s study (2018)), although it is unclear whether it would

strengthen or weaken their intention. The researchers recommend that there be more education about

mutual funds so as to let people know more about this investment vehicle. It is also recommended that,

for future research, make use of ANOVA Testing to determine relationships between some variables. It is

also recommended for future research to analyze more the relationship between portfolio satisfaction and

the intention to invest in mutual funds.

 TABLE OF CONTENTS

Chapter 1: INTRODUCTION 1

1.1 Background of the Study 1

1.2 Research Problem 2

1.3 Research Questions 3

1.4 Research Objectives 3

1.5 Research Hypothesis 4

1.6 Significance of the Study 5

1.7 Definition of Terms 6

1.8 Scope and Limitations 7

Chapter 2: REVIEW OF RELATED LITERATURE 8

2.1 Age, Sex, and Civil Status 8

2.2 Familiarity 9

2.3 Occupation and Education 10

2.4 Income 11

2.5 Risk appetite and Returns/yield 12

2.6 Time Horizon 12

2.7 Research Gap 13

2.8 Literary Map 14

Chapter 3: RESEARCH FRAMEWORK 15

3.1 Theoretical Framework 15

3.1.1 Theory of Planned Behavior 15

3.1.2 Prospect Theory 17

3.2 Conceptual Framework 19

3.3 Operational Framework 20

 3.3.1A-Priori Expectations 22

Chapter 4: RESEARCH METHODOLOGY 27

4.1 Research Design 27

4.2 Method of Data Collection 27

4.2.1 Data Gathering Procedure 27

4.2.2 Sources of Data 28

4.2.3 Data Description 28

4.3 Method of Analysis and Treatment of Data 28

4.3.1 Survey Questionnaire Sequence and Reliability Test 28

4.3.2 Measurement of Investor Characteristics 30

4.3.3 Kruskal-Wallis Test 32

4.3.4 Regression Equation 33

4.4 Methodological Limitations 36

Chapter 5: RESULTS AND ANALYSIS 37

5.1 Cronbach’s Alpha 37

5.2 Demographic Profile of Respondents 38

5.3 Investor Characteristics 41

5.4 Kruskal-Wallis Test 44

5.5 Regression Model (Full Model) 46

5.6 Regression Model (Final Model) 48

5.7 R Square, Heteroskedasticity, Autocorrelation 49

5.8 Multicollinearity 50

5.9 Chi-Square Goodness of Fit Test 52

Chapter 6: CONCLUSION AND RECOMMENDATIONS 53

REFERENCES 56

APPENDIX 62
 LIST OF FIGURES

Figure 1 Literature Map: Investors and their Intention to Invest in 14

Mutual Funds in the Philippines

Figure 2 The Prospect Theory 17

Figure 3 Conceptual Framework of the Study 19

Figure 4 Operation Framework of the Study 20

Figure 5 Relationship Diagram 34

Figure 6 Respondents overall Risk Profile 41

 LIST OF TABLES

Table 1 Definition of Terms 6

Table 2 A-Priori Expectations of Investors’ Intention to Invest in Mutual 22

Funds

Table 3 Cronbach Alpha Interpretation 29

Table 4 Verbal interpretation of Familiarity of Mutual Funds 30

Table 5 Verbal interpretation of Satisfaction of Portfolio Performance 30

Table 6 Verbal interpretation of Investors’ Intention to Reinvest/Invest in 31

Mutual Funds

Table 7 Risk Profile 31

Table 8 Risk Profile of Respondents 32

Table 9 Most Important Investment Goals of Respondents 32

Table 10 Demographic indicators of survey respondents 38

Table 11 Respondents’ familiarity and financial situation 39

Table 12 Respondents’ financial goals 42

Table 13 Respondents’ level of satisfaction, and plans to continue/begin 42

investing

Table 14 Selected cross-tabulations against plan to invest 44

Table 15 Estimates of the ordinal regression model, all regressors 46

Table 16 Estimates of the ordinal regression model, significant regressors 48

Table 17 Variance inflation factors for both the full model and final model 50
 CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Based on their management, many investors expressed their disapproval of this kind of

investment. As a result of poorly managed funds, a collapse of the Philippine stock market occurred in the

late 1950s which resulted in 3 out of 4 major Mutual Funds to be shut down. The Aftermath of this was

that the government decided to enact RA 2629 also known as the “Investment Company Act” to these

kinds of companies and enforced protection for investor rights and further decided to integrate the SEC to

make sure Mutual Funds are properly regulated. Following the financial crash of 1950, some mutual

funds were able to arise by complying with the new set regulations namely Trinity Shares, Pacific and

Malayan Funds. After having a successful run as a mutual fund, both companies were able to give

investors a decent return however the equity markets were thinning out at this point as well as given the

political and economical instability of the country at this time, as a result causing another 30% dive in the

Manila stock exchange along with it mutual funds. This forced the SEC to ban the sales of mutual funds

in 1973.

The idea is whether or not Mutual Funds are considered to be an attractive investment to investors

with different incomes given its past performance. This study aims to understand how Filipino investors

view Mutual Funds in the Philippines and what factors have a significant impact on their intention to

invest into this type of investment vehicle. According to PIFA Chairman Ignacio Gimenez (2017), “ the

idea of long term investing is very unpopular because of the fear brought about by the bankruptcy of

leading pre-need companies in the 1990s and early 2000s.” It was also mentioned that Filipinos lack the

knowledge and information on these investment schemes. Many investors around the world perceive

mutual funds differently. A study conducted by Kale and Panchapagesan (2012) showed how Indian retail

1
investors understood and perceived the mutual funds sector in India. They were able to conclude that

Indian investors would opt to invest in gold and real estate markets rather than in mutual funds. They

found that most Indian households don’t value mutual funds as an investment. Another study conducted

by Premaratne and Mensah (2014) evaluated the investors of mutual funds in various Asian countries

which included Hong Kong SAR, Singapore, Malaysia, and the Philippines. It mentioned that Singapore,

Hong Kong SAR, and Malaysia funds heavily allocate their investments into equity funds; on the other

hand, Philippines mutual funds heavily focus on the bond market and have 41.7% in bond funds. The

study also mentioned that Asian funds normally never exceed their benchmarks and that Fund managers

aren’t implementing enough strategic investment plans to satisfy investors.

The Mutual Funds vary per country and can depend on the mentality and risk tolerance of each

investor. Each country may have different regulations as well as different market funds which makes

mutual funds all the more ambiguous. Mutual funds offer a variety of basketed funds whether it is equity

funds, money market, or fixed income. However, it is still unclear how Filipino investors view the idea of

Mutual Funds and how they classify this financial vehicle as an investment on whether they have an

intention to invest into it or not.

1.2 Research Problem

The mutual fund industry's performance is determined by investor knowledge. Low investor

knowledge and financial literacy have posed the greatest challenge to the mutual fund industry's ability to

transfer money into mutual funds. In semi-urban and rural locations, a lack of knowledge of mutual fund

products is more prevalent. The majority of people who live in these locations have trouble distinguishing

between mutual funds and direct stock market investments. One of the most serious consequences of a

lack of mutual fund knowledge or comprehension is that investors are uninformed of what mutual funds

are doing with their money.

2
 Recently, it has not been fully understood as to how Filipino investors view Mutual Funds as an

investment opportunity and whether certain factors affect their decision to invest into it. The negative

outcomes experienced by investors in the past, such as scams and bankruptcy of companies, play a big

role in how these investors view the safeness and profitability of Mutual Funds in the Philippine market.

It would be interesting to find out what Filipino investors think about this type of investment based on

their demographic factors and investment profile. Financial literacy is key to good investment decisions

and getting into Mutual Funds is one of the available options in the country. Many Filipino investors in

the Philippines do not have enough knowledge of this type of investment which is also a factor as to how

they understand its quality (Gimenez, 2017).

1.3 Research Questions

The study will mainly focus on answering the following questions.

1. What are the key determinants that affect the investors’ intention to invest in Mutual Funds?

2. What are the most important investment goals of the investors?

3. What is the risk profile of the investors?

1.4 Research Objectives

The objectives of this research is mainly to gain a better understanding of the Mutual Fund industry in the

Philippines, specifically to:

1. Determine the key determinants of investors’ intention to invest in mutual funds.

2. Determine the most important investment goals of the investors.

3. Determine the risk profile of the investors.

1.5 Hypothesis

The study looks to evaluate the following statements:

3
Ho1: Investors’ familiarity on mutual funds does not have a significant impact on the intention to

invest into mutual funds

Ha1: Investors’ familiarity on mutual funds has a significant impact on the intention to invest into

mutual funds

Ho2: Investors’ age does not have a significant impact on the intention to invest in mutual funds

Ha2: Investors’ age has a significant impact on the intention to invest in mutual funds

Ho3: Investors’ gender does not have a significant impact on the intention to invest in mutual

funds

Ha3: Investors’ gender has a significant impact on the intention to invest in mutual funds

Ho4: Investors’ civil status does not have a significant impact on the intention to invest in mutual

funds

Ha4: Investors’ civil status has a significant impact on the intention to invest in mutual funds

Ho5: Investors’ education qualification does not have a significant impact on the intention to

invest in mutual funds

Ha5: Investors’ education qualification has a significant impact on the intention to invest in

mutual funds

Ho6: Investors’ income does not have a significant impact on the intention to invest in mutual

funds

Ha6: Investors’ income has a significant impact on the intention to invest in mutual funds

Ho7: Investors’ risk profile does not have a significant impact on the intention to invest in mutual

funds

4
 Ha7: Investors’ risk profile has a significant impact on the intention to invest in mutual funds

Ho8: Investors’ time horizon does not have a significant impact on the intention to invest in

mutual funds

Ha8: Investors’ time horizon has a significant impact on the intention to invest in mutual funds

1.6 Significance of the Study

The findings of the study will benefit both current and future investors in the Philippines. The

outcome of this study will provide them with a picture of the mutual funds industry in the country and

how current investors are familiar with it and consider it as an investment, together with the factors that

affect their intention to invest. Mutual funds generally produce high returns over the long run and the

researchers believe that analyzing the idea of mutual funds in the Philippines will help investors in the

country understand the effectiveness of investing in these.

The outcome of the study will benefit the researchers. As students taking up finance, conducting

the study will aid them in understanding further the idea of mutual funds, especially in the country. It also

gives them an opportunity to deduct ideas that past studies may not have done, thus providing more

information for future investors who look into investing in mutual funds.

The results produced by the study will provide mutual fund companies in the Philippines with

essential information. These companies will have a clearer idea of how investors in the country view

mutual funds to be. The findings of the study may be used by the companies in order to adjust or better

manage their products and services in response to the intention of Filipino investors to invest in mutual

funds in the Philippines.

5
1.7 Definition of Terms

Provided below is a table of important terms and their respective definitions:

Table 1

Definition of Terms of the Study

Term Definition

1. Mutual Funds A mutual fund is a company that pools together money from a number of
individuals and invests that capital in other asset classes such as stocks,
bonds, etc (SEC, 2005).

2. Equity Funds An equity fund is a mutual fund that primarily invests in stocks (Chen,
2021).

3. Bond Funds A bond fund, sometimes known as a debt fund, is a diversified investment
option that primarily invests in bonds and other debt instruments like
mortgage-backed securities. A bond fund's principal purpose is frequently to
provide monthly income for investors (Hayes, 2022).

4. Investor’s Refers to the reason to invest for an investor. As investor’s behavior can be
Intention affected by a variety of determinants.

5. Familiarity Having an understanding or decent knowledge of something such as a fact,

skill, or subject. (Cambridge dictionary, n.d.)

6. Education Refers to the degrees, diplomas, certificates, professional titles, and other
Qualification credentials that an individual has earned, whether through full-time,
part-time, or private study, in the home country or abroad, from educational
authorities, special examining bodies, or professional organizations (OECD
Statistics Directorate, 2022).

7. Risk Profile Refers to the willingness and capacity of an investor to take risks (L&T
Financial Services, n.d.).

8. Investment Refer to the plan or program of an entity in an investment.

Schemes

9. Civil Status Refers to the legal status of a party with reference to the marriage laws or
customs of his/her country.

10. Financial Financial literacy refers to the capacity to comprehend and use various
Literacy financial abilities, such as personal financial management, budgeting, and
investing (Fernando, 2022).

11. Capital Capital preservation is a conservative investing technique that aims to

Preservation safeguard your money and keep it safe and avoid loss inside your portfolio
(Chen, 2021)

6
 12. Capital A growth in the market price of an investment is referred to as capital
Appreciation appreciation (Chen, 2021).

1.8 Scope and Limitations

The study discusses the Prospects of Mutual Funds as well as the level of public understanding of

Mutual Funds. This Mutual Funds research project also provides management with a view of how the

mutual funds are functioning in the present market environment and, as a result, what the future of this

sector may be. This paper about mutual funds is useful for students who wish to learn about the sector and

accomplish things in it. This study also assists the public at large in understanding the significance of

Mutual Funds and exploring the new investment choice. Different financial organizations offer services

that are both complementary to and distinct from one another. A well-constructed financial system

directly adds to the country's economy. The researchers of the study will create a questionnaire

accommodating 180 people wherein 90 respondents are actively investing in mutual funds and 90 are not

investing into mutual funds. Convenience sampling will be conducted only having a pre-qualification of

their familiarity with mutual funds and whether they currently invest or not into mutual funds. The study

will only include mutual funds as its main asset class and will not include other asset classes. The study

will be conducted between the months of July - September of 2022.

7
 CHAPTER 2

REVIEW OF RELATED LITERATURE

Mutual Funds, given the historical background of their performance in the Philippines, are still

considered to be a big sector of the financial sector and provide a decent amount of diversified products

and services to their investors. There have been multiple studies conducted in order to gain a better

understanding of different demographics and their view of mutual funds and whether they consider it a

good enough investment to invest into. According to a study conducted by Sekar and Srilakshmi (2016),

their study concluded that many investors have a negative view towards mutual funds even though they

are aware about it as their main concern is the risk associated with mutual funds. Another research

conducted by Singh (2011) found that many people are still unfamiliar with Mutual Funds as they are still

very confused about the investment schemes offered by Mutual Funds. In contrast to this, a study

performed by Saini et al. (2015) found that numerous investors have a positive perception towards mutual

funds as long as data about changing trends in mutual funds is delivered in a punctual manner to maintain

investor trust.

2.1 Age, Gender, and Civil Status

Certain factors could also influence the intention of some investors to invest into Mutual Funds.

Given that numerous countries have different gender classes and social statuses, it is important to note the

intentions they may bring when it comes to investing decisions based on certain factors. According to

Mishra (2019), gender is not necessarily a factor that influences the intention of investing in mutual funds

and found that people aged between 25-50 are more likely to invest into Mutual Funds. He was able to

conclude that a decent number of investors were satisfied with the performance of their Mutual Funds

however a large majority were dissatisfied still. Another study conducted by Rajan (1998) concluded that

mutual fund perceptions were definitely influenced by certain demographic factors such as gender, age,

8
income, etc. The study also found that over time in the life cycle, the risky asset percentage in terms of

total financial investments made will decrease. Another study performed by Vasuvedan and

Peermohaideen (2012) found that more than half (56%) of the investors, who were married, considered

mutual funds to be a medium-level risk while the rest, who were unmarried, considered mutual funds to

be of low risk. However, most of the investors were pleased with their returns from the funds. Asides

from this. Desigan et al. (2006) conducted a study focusing on women and their view of mutual funds.

The study was able to conclude that women did not prefer to invest into mutual funds as much due to their

lack of knowledge about the investment vehicle. In addition to this, a study conducted by Manimurugan

(2015) actually found that male respondents actually preferred investing into mutual funds.

2.2 Familiarity

Familiarity with an investment vehicle is very important, especially when considering investing in

a certain asset class. Many Filipino investors in the Philippines do not have enough knowledge of this

type of investment which is also a factor as to how they understand its quality (Gimenez, 2017).

According to Sashikala & Chitramani (2018), two factors that heavily influenced an investor’s intention

to invest into mutual funds were awareness and attitude towards mutual funds and two factors that did not

have any significant impact on the intention to invest were financial literacy and fondness. Similarly the

study conducted by Desigan et al. (2006) also highlights that women who chose not to invest into mutual

funds due to their lack of knowledge about this financial instrument.

9
 2.3 Occupation and Education

Based on Singh’s study (2011), The researcher found that some demographic variables that

affected the attitude of investors towards mutual funds were gender, income, and level of education;

however some factors had no specific impact on the attitude towards mutual funds such as occupation and

age. This could also be the effect of proper financial literacy and adequate accessibility to formal finance.

As for a study conducted by Vanipriya (2015), the researcher found that, in the city of Chennai, the

majority of the respondents’ investments consisted of mutual funds and it showed that education

qualification, income, and occupation along with age and gender played a significant role in their

intention to invest in mutual funds. It was also found in the study of Murugan (2015), that the selection of

mutual funds and their products were affected by an individual’s status of occupation. A study made by

Chowdhury and Rosario (2018) shows that The productivity of a mutual fund is determined by the

amount of investor understanding and confidence—investment patterns vary depending on education, age,

employment, and gender. In the current market context, income structures and open systems are more

important than development programs and closed systems. In order of importance, investors prioritize

capital preservation, profitability, then capital appreciation. The primary point is that investment

programs are informed by and in the service of an investor. According to Bajaj (2016) In order to boost

mutual fund investments from smaller cities, SEBI (Securities and Exchange Board of India) issued a

mandate in 2012 requiring a certain amount of investment from places. On this basis, a survey was done

to ascertain citizens of the Jabalpur district's awareness and understanding about mutual funds. A

questionnaire was distributed to 200 educated persons in order to analyze mutual fund penetration and

identify investor attitudes in the Jabalpur region. The one-way ANOVA test was used to analyze the effect

of demographic characteristics such as gender, age, educational degree, and career on the level of

knowledge about mutual funds.It was observed that age and occupation were important variables in

mutual fund selection. According to the research, asset management firms should educate investors about

mutual funds through frequent awareness activities. The study of Bora S. (2012) showed that occupation

does play a factor in determining investment. A pattern cannot be precisely established, although the

10
risk-taking ability of occupation and risk and benefits can be widely associated. There is plenty of room to

delve into micro analysis of investors based on occupation and investing habits.

2.4 Income

Another relevant demographic factor would be the Income and the way this impacts the intention

of investors to invest in mutual funds. The advantage of mutual funds is to give those with a lack of

capital the opportunity to be able to invest into securities that can be profitable with the right capital.

Based on the base journal used, Kaur and Kaushik’s (2016) findings, mutual fund awareness was

influenced by demographic factors such as age, sex, education, occupation, and income of investors.

Another study conducted by Kumar et al. (2019) concluded that most middle-class investors found that a

steady and highly liquid source of income contributes a significant impact on the flexibility and positive

performance of funds. According to Kotsihwar and Khan (2013), Income has always been a key

component in differentiating investment categories. Investors with higher earnings can only consider

investing in securities and can only take on higher risks. As a result, income is the most crucial factor

determining investing preference and intention. It is well known that wealthy individuals are excited

about investing and seek higher profits. According to their yearly income, respondents are classified into

four income categories. Income is the most crucial aspect for all investors to assign a distinct amount for

investment that will be used for their future purposes. Velmurugan et al. (2015) investigated investors'

perceptions of various investment outlets in India's Vellore region and discovered that high-income

investors chose to invest exclusively in secure investment alternatives such as post office and bank

accounts rather than mutual funds.

11
 2.5 Risk Appetite and Return - Risk Profile

Given the main reason for investing is gaining a decent return whilst at the same time minimizing

the risk, these factors are relevant when choosing what investment vehicle to use including the concept of

mutual funds. According to Bindal et al. (2019), the majority of investors have an investment preference

in mutual fund companies that are part of the private sector and those that offer schemes that are

open-ended. Aside from this, they also prefer the idea of high risk and high reward in which they

purchase their units of mutual funds from brokers. In contrast to this, another study conducted by

Anandan and Savaraj (2020), showed that numerous investors chose not to invest in mutual funds as it

proved to be unsafe and did not guarantee returns as opposed to their preference of bank deposits which

had both. According to Bajracharya & Mathema (2017), investors are hesitant to invest in mutual funds

because they believe they are riskier than other types of investments. Bank deposits are the most popular

among investors because they feel they are secure and provide a predictable return. Mutual funds are

linked to the stock market, and investors are not receiving advice to invest in mutual funds from expected

advisors, making it harder to choose the fund that is favorable to them. There are a number of issues that

investors face when choosing mutual funds as an investment choice because of the share market

uncertainty and risk linked with it, therefore people avoid investing in mutual funds. The study reveals

how appealing mutual funds are to an investor and the reasons behind their intention to invest in mutual

funds. Based on the researcher's own observations, the following recommendations have been made to

influence people's attitudes about mutual funds as an investment channel.

2.6 Time Horizon

An investor’s preferred time horizon goes to show how risky or conservative they are. Evaluating

the preferred time horizon is part of understanding what their risk profile is like. Amadi & Amadi (2019)

stated that growth and income funds, two subtypes of mutual funds, produce the best results when the

respective time horizon is less than three years. In a different study by Berman & Berman (2017), it was

explained that younger investors should be willing to take more risks as compared to older investors

12
because their time horizon is much longer. Additionally, the same proponents suggested that under the

study’s model and conditions of portfolio and return and volatility, shifting to less risky investments as the

time horizon expands is a more reasonable choice to make.

2.7 Research Gap

There have been past studies about mutual funds, their essence, and how profitable they are for

investors. Studies regarding mutual funds and whether investors intend to invest in them are limited.

Mutual funds have been proven to be a good source of long-term income. However, studies about whether

investors find mutual funds to be a good investment or not are limited, specifically understanding what

factors could affect how investors view the importance of mutual funds and how these factors affect their

intention in investing into this vehicle. .

Many studies about mutual funds have been conducted around the world. There are a limited

number of studies that have taken place in the Philippines, as opposed to some of its neighboring

Southeast Asian countries. This gives the researchers an opportunity to deduce local information

regarding how investors see the importance of mutual funds and see if factors such as age, gender, risk

appetite, and others do have significant impacts on their intention to invest into this type of fund.

13
 2.8 Literature Map

Presented below is the literature map of the study:

Figure 1

Literature Map: Investors and their Intention to Invest in Mutual Funds in the Philippines

14
 CHAPTER 3

RESEARCH FRAMEWORK

3.1 Theoretical Framework

There are some theories that can be used to support the analysis of how investors in the

Philippines perceive mutual funds. These theories are: Theory of Planned Behavior and Prospect Theory.

3.1.1 Theory of Planned Behavior

The Theory of Planned Behavior (TPB), which originally started out as the theory of reasoned

action, is a theory used to predict an individual’s behavioral intention at a specific time and place of action

(Boston University School of Public Health, 2019). This theory dictates the idea of how much self-control

people are able to exert and the behaviors linked towards it. This theory has proven to be successful in

being able to predict certain health behaviors such as the mannerisms of smoking, eating, and even

breastfeeding. There are six elements to consider in this theory:

1. Attitude - is the way people evaluate how to treat a certain situation and the outcomes they would

expect from the given situation

2. Behavioral intention - refers to the motivating factor that influences the choice that a person

would make and the stronger the intention, the higher the chance the act would be performed

3. Subjective Norms - talks about the personal beliefs of an individual and whether or not they

would approve or disapprove of certain behavior. This factor is influenced heavily by the peers

and people closest to the person performing the action.

4. Social Norms - refers to the customary codes of a group’s behavior. These are considered to be

normative or standard

5. Perceived power - refers to things that could initiate behavior performance. Perceived power

plays a role in a person’s perceived behavioral control

15
 6. Perceived behavioral control - talks about one’s perception of the difficulty level of performing

the behavior of interest. This is understood to be different throughout situations and actions,

which means that each person has varying perceptions of behavioral control

Although these terms and concepts are present and applicable, there are certain limitations to the Theory

of Planned Behavior:

1. It initially considers that a person has the capability to perform the desired behavior, no matter

what the motive is.

2. Fear, threat, emotion, and past experience, among other factors that influence behavioral intention

and motivation, are not taken into account.

3. It does not consider environmental and economic factors that may affect the person’s motive in

performing a specific behavior, however, it acknowledges normative influences.

4. It presumes that the outcome of a linear decision-making process is behavior and it also presumes

behavior varies.

5. The added construct of perceived behavioral control does not imply anything about actual control

over behavior.

6. The duration between intent and behavioral action is not specified by the theory.

16
Figure 2

The Prospect Theory

3.1.2 Prospect Theory

As discussed by McDermott (2016), the Prospect Theory explains one’s decision-making when

risk is involved. The theory is also known as the Loss-Aversion Theory. There are two phases that occur

as explained by the Prospect Theory:

1. Editing phase - refers to how a person characterizes the outcomes of each option presented to

him/her. The chosen option may be influenced by how it was explained to the person, thus basing

their decision on their own understanding of the situation at hand, otherwise known as framing

effects.

2. Evaluation phase - refers to when people make the decision and tend to opt for the option with

higher utility. Quantitative analysis is used to compare the outcomes of each option, having two

indices namely: value function and weighting function.

17
3.1.2.1 Characteristics of the Prospect Theory

According to the Corporate Finance Institute (n.d.), there are four characteristics that are implied

by the Prospect Theory:

1. Certainty - people tend to choose options the more predictable they are even if it means letting go

of gaining higher possible value that is not guaranteed.

2. Small probabilities - people may choose to discredit small probabilities even though it is possible

for them to lose their wealth, thus choosing higher-risk options with higher probabilities as a

result.

3. Relative positioning - people tend to compare themselves to others as a basis for their financial

progress instead of comparing their present situation to their past selves and how they have grown

financially. The value of self-financial well-being is disregarded as a result.

4. Loss aversion - people give more weight to how much they lose rather than how much they

gained, no matter how much more they made.

3.1.2.2 Criticism of Prospect Theory

There is not much evidence of psychological explanations for the process involved in the theory.

Human emotional and affective responses are missing from the theory’s process, two factors that are

deemed crucial by psychologists (Corporate Finance Institute, n.d.).

18
3.2 Conceptual Framework

Figure 3

Conceptual Framework of the Study

As depicted in the study’s conceptual framework, the dependent variable is the investors’

perception of mutual funds, while the independent variable is the demographic factors of the investors.

This framework serves as the guide throughout the conduction of the study because the goal of this

research is to understand how demographic factors of investors affect their perception of mutual funds.

19
3.3 Operational Framework

Figure 4

Operational Framework of the Study

20
 Figure 4 shows the operational framework of the conduct of the study. The first phase consists of

the problem identification and objective setting, which also includes the generation of hypotheses and

building the theoretical framework. This part of the study will be done through literature review.

Following this is the second phase wherein the quantitative part of the study will take place. In this phase,

the survey itself will be developed and be made ready for distribution. A pilot study shall be conducted

before the official collection of data, followed by data analysis and interpretation. The last phase of the

study mainly involves the generation of reports and documentation. The researchers will be providing

explanations and conclusions regarding the gathered data.

21
 3.3.1 A-Priori Expectations

Presented below is a table of the A-priori expectations of the study:

Table 2

A-Priori Expectations of Investors’ Intention to Invest in Mutual Funds

Independent Variable A-Priori Expectations Explanation/Supporting Studies

(Anticipated Relationship with
the Dependent Variable
Perception of Mutual Funds)

Age +/- (+) Investors between the age of

20-35 who were part of the
salary earning category showed
an increase in interest towards
equity-focused schemes
provided by mutual funds.
(Singh & Chander, 2004).

(+) A study also found that

investors the age of 40-50 had a
higher percentage of preference
in investing in mutual funds
followed by a lower percentage
of investors aged 25-40,
meaning those under 25 don’t
consider investing seriously
(Mishra, 2019).

(-) It is also mentioned that

occupation and age seem to be
insignificant when determining
the choice of scheme to invest
into. (Singh & Chander, 2003)

(-) Occupation and age are also

known to not impact and affect
the attitude of an investor
(Singh, 2012).

Gender +/- (-) Even though there were a

higher number of male investors
compared to female investors,
there is no significant difference
that implies that gender
influences mutual funds
investment choices (Mishra,
2019).

22
 (+) Male respondents actually
preferred the idea of investing in
mutual funds. (Manimurugan,
2015).

(+) There were some studies that

found that compared to the male
gender, females are known to be
better at investments (Cannivet,
2018).

Education Qualification + (+) Certain Demographic

factors, including education, had
a significant impact on the
perception of investors towards
Mutual Funds (Singh, 2011).

(+) It was also found and

concluded that there is a
relationship between level of
education and and the preference
on investing into mutual funds
(Mishra, 2019).

(+) Another study concluded

that women do not prefer
investing into mutual funds as
they have a lack of knowledge
about this investing instrument
(Desigan, 2016).

Civil Status +/- (+) Married investors find it

riskier to invest into mutual
funds in comparison to
unmarried investors (Vasuvedan
& Peermohaideen, 2012).

(+) Marital status was concluded

to have an effect on the
perception of investors towards
Mutual Funds in the setting of
Karnal (PBR, 2020).

(-) Marital Status along with age

seems to have no effect or
significant impact on the
perception of investors when
investing in mutual funds
(Bailey et al. 2011 & Murhadi,

23
 2017).

(-) Marital Status also does not

affect the comfortability in
investing as well as the security
when making investment
choices (Kristanti, 2012).

Income + (+) Income has always been an

important factor in determining
investment categories. Investors
with larger incomes can only
contemplate investing in assets
and can only accept higher risks.
As a conclusion, income is the
most important factor
influencing investor choices and
behavior. (Kotsihwar & Khan,
2013).

(+) There is a link between

demographic characteristics
such as gender and income and
factors such as tax incentives
and liquidity impacting mutual
fund investment (Kumar et al.,
2019).

(+) High-income investors

decided to invest exclusively in
safe investment options such as
post office and bank accounts
(Velmurugan et al., 2015).

Familiarity + (+) Investors are more likely to

invest in firms with familiar
corporate brands than in
companies with unfamiliar
corporate brands. It also
revealed that investors are more
likely to invest in companies
with familiar brands than in
companies with unfamiliar
brands, and that they would
rather invest in a company they
know than a company they are
unfamiliar with, even if the
familiar company is a subsidiary
of the unfamiliar company (De
Vries, et al., 2017).

24
 (+) Familiarity of platform
mutual fund investing, and
entrepreneurial spirit all
influence student investment
interest and awareness. Student
investing willingness is
influenced by familiarity
(Hasanah & Kurnia, 2019).

Risk Profile + (+) Risk is a fundamental notion

in the investment decision and
understanding its influence on
determining investors' risk
perceptions may be critical for
all stakeholders, including the
government, financial
institutions, banks, businesses,
educational institutions, and so
on (Hassan & Fazili, 2019).

(+) Mutual funds are unpopular

among investors because they
are seen to be riskier than other
forms of investing (Bajracharya
& Mathema, 2017).

(+) The majority of investors

choose to participate in mutual
fund firms that are part of the
private sector and those that
provide open-ended plans. Aside
from that, they favor the concept
of high risk and great reward,
and they buy mutual fund units
through brokers (Bindal et al.,
2019).

Time Horizon + (+) It may be more rational for

investors to prefer a short-term
time horizon over a longer time
horizon that yields uncertain
payoffs due to the factors linked
to rising uncertainty and
compressed cycles of investment
and production in the market;
resulting from increased firm
exposure to globalization, rapid
technological change, and
market-wide financial shocks

25
 (Sampson & Shi, 2019).

(+) Investors face market and

legal pressures that structure
their time horizons in a way that
compels them to insist liquidity
at specific points in time such as
a mutual fund manager requiring
to offer redemption to any
investor on a few hours’ notice
(Verstein, 2018).

(+) When a firm's investment

horizon closely aligns with
investors who demonstrate
capital patience by holding the
firm's stock for long periods of
time, it creates a scenario that
indicates an implicit agreement
between management and
investors about the value of
long-term horizon investments,
which results in the firm's best
performance (Souder et al.,
2016).

26
 CHAPTER 4

RESEARCH METHODOLOGY

4.1 Research Design

This study will make use of a quantitative approach and will be conducted using descriptive and

explanatory research designs. The researchers will describe the risk profile and the investment goal of the

investors. The independent variables namely Age, Gender, Civil Status, Income, Education Qualification,

Time Horizon, Familiarity, and Risk Profile, and how these factors affect the investors intention to invest

in Mutual Funds in the Philippines. The researchers aim to explain the relationship between the

independent variables age, gender, civil status, income, education qualification, time horizon, familiarity,

and risk profile and the dependent variable intention of investors to invest in mutual funds. To support the

analysis of the relationship between the independent and dependent variables, this study will be

quantifying the data gathered from the survey in order to utilize a regression equation. The regression

analysis will strengthen the understanding of the relationship between the independent and dependent

variables of this study.

4.2 Method of Data Collection

4.2.1 Data Gathering Procedure

In order to collect the data to be used for the study, the researchers will create and make

use of the questionnaire method which will be spread out and be distributed to 180 respondents

who are familiar with the Mutual Funds sector in the Philippines, wherein 90 respondents are

actively investing and 90 respondents are not, and will be selected using the convenience

sampling method. The survey will be conducted between July-September of 2022.

27
 4.2.2 Sources of Data

The Data will be collected from respondents who are investors that have some form of

familiarity with mutual funds wherein 90 respondents will be investors who are actively investing

into Mutual Funds in the Philippines and 90 respondents who are not. These respondents will be

the source of the primary data and will be distributed and collected through a google survey link.

4.2.3 Data Description

The Data collected, which was preempted for only investors with knowledge about

mutual funds, contains demographic information about the respondents and how these factors

affect their intention to invest in mutual funds. Income was also considered as a factor as it would

determine whether a higher or lower income would affect their investment standings and as well

as how each investor’s risk profile is when it comes to Mutual Funds.

4.3 Method of Analysis and Treatment of Data

4.3.1 Survey Questionnaire Sequence and Reliability Test

The survey questionnaire that the researchers provided to the sample size consists of a total

number of fourteen (14) questions. Prior to deployment in the data collection proper, reliability of the

instrument will first be evaluated to ensure that constructs are being measured properly through the

sample responses. The study will use Cronbach’s Alpha to test the reliability of the questions with a

Likert Scale. Cronbach’s Alpha is a measure of construct reliability, with high values generally indicating

that items are internally consistent.

The equation for Cronbach’s Alpha is as follows:

28
Equation 1.

Cronbach’s Alpha

2
κ ⎡ Σ𝑠 𝑦 ⎤
α= ⎢1 − ⎥
κ−1 ⎢ 𝑠
2
⎥
⎣ 𝑥 ⎦
Where:

α = Cronbach’s Alpha

κ = the number of test items

2
Σ𝑠 𝑦
= the sum of item variance

2
𝑠 𝑥
= the variance of total score

The interpretation of results from the Cronbach’s Alpha will be guided by this table:

Table 3

Cronbach Alpha Interpretation

Cronbach’s Alpha ( α) Internal Consistency

≥ 0. 90 Excellent

0.80 - 0.89 Good

0.70 - 0.79 Acceptable

0.60 - 0.69 Questionable

0.50 - 0.59 Poor

≤ 0. 49 Unacceptable
Results can only be admissible with an internal consistency of Excellent - Acceptable or

having a value ≥ 0. 70.

29
 4.3.2. Measurement of Investor Characteristics

Analysis of the data collected from the sample proceeds with understanding aggregate

characteristics of the sample along four primary variables: familiarity with mutual funds, satisfaction with

present portfolio performance, risk profile, and overall intention to invest in mutual funds.

For questions 1 (familiarity), 13 (satisfaction), and 14 (overall intention), the researchers will

compute the average of responses to questions per variable. To describe the means of the variables, they

will compute the interval of responses per variable and make a table of verbal interpretation (see Tables 4,

5, and 6). Questions 2-9 will follow a series of questions that establishes the demographic data of each

respondent. Questions 10-12 will question the Time Horizon and Risk Profile of the respondents.

Interval (I) = (Hi – Lo)/# of categories = (5-1) / 5 = 0.80

Table 4

Verbal interpretation of Familiarity of Mutual Funds

Range Familiarity

4.20 – 5.00 Extremely familiar

3.39 – 4.19 Very familiar

2.58 – 3.38 Familiar

1.77 – 2.57 slightly familiar

.96 – 1.76 not familiar

Table 5

Verbal interpretation of Satisfaction of Portfolio Performance

Range Satisfaction of Portfolio Performance

4.20 – 5.00 Extremely satisfied

3.39 – 4.19 Very satisfied

2.58 – 3.38 Satisfied

30
 1.77 – 2.57 Slightly satisfied

.96 – 1.76 Not satisfied

Table 6

Verbal interpretation of Investors’ Intention to Reinvest/Invest in Mutual Funds

Range Intention to Reinvest/Invest

4.20 – 5.00 Highly intend to For reinvest/invest

3.39 – 4.19 Intend to reinvest/invest

2.58 – 3.38 Moderately intend to reinvest/invest

1.77 – 2.57 Slightly intend to reinvest/invest

.96 – 1.76 Not intend to reinvest/invest

As for determining the risk profile of the investor, questions 10-12 each have a numerical rating

for the choices that the respondent selects and then the points are added together to compute for a total

which will then determine the type of risk profile the investor is. The researchers also provided a scoring

table and what type of investor the respondent is based on the total score.

Table 7

Risk Profile

Score Risk Profile

3-6 Conservative

7-9 Moderately Aggressive

10-12 Aggressive

31
 The researchers will present a table of frequency and percentage to describe the risk profile of the

respondents.

Table 8

Risk Profile of Respondents

Risk Profile Frequency Percentage

Conservative

Moderately Aggressive

Aggressive

The researchers will present a table of frequency and percentage to describe the most important

investment goals of the respondents. These goals will be sorted in descending percentages.

Table 9

Most Important Investment Goals of Respondents

Most Important Investment Goals Frequency Percentage

Preparation for retirement

Grow your money

Purchase a property

Open a business

Provide for education

Others: please specify____

4.3.3 Kruskal-Wallis Test

Testing for the differences in median through cross-tabulations between the ordinal level variables

in the study requires some form of nonparametric test. For this, the Kruskall-Wallis test is conducted. The

32
Kruskal-Wallis test is a nonparametric equivalent of the ANOVA. When testing, for instance, the

difference between intention to invest and a respondent’s age group, the null hypothesis of the

Kruskal-Wallis test is that the median intention to invest is the same across all levels of age.

Assuming a general group of 𝑚 levels, a sum of ranks 𝑇1, 𝑇2,..., 𝑇𝑚 will be computed. These rank

sums are combined into the Kruskal-Wallis H statistic (also referred to as the Kruskal-Wallis chi-square

statistic), given the following form:

( )
2 2 2
12 𝑇1 𝑇2 𝑇𝑚
𝐻= 𝑛(𝑛+1) 𝑛1
+ 𝑛2
+... + 𝑛𝑚
− 3(𝑛 + 1)

This statistic is known to follow the chi-square distribution with 𝑚 − 1 degrees of freedom.

Association is concluded when the null hypothesis of independence (or equality of medians) is rejected at

a set level of significance α when the right-tailed chi-square probabilities falls below α.

4.3.4 Regression Equation

In order to generate a proper analysis of the strength of each variable to the dependent variable, it

is always a good idea to visualize the relationships of all the variables before creating any analysis of the

data. The relationship of the variables is shown below.

33
Figure 5

Relationship Diagram

As depicted in Figure 5, the independent variables are used to determine the dependent variable.

The straight line represents the independent variable’s relationship to the dependent variable while the

dashed lines represent the relationship of the independent variable to one another.

The relationship diagram corresponds to performing a multiple linear regression analysis with

intention to invest as the dependent variable. However, it is noted that ordinary least squares regression

requires a dependent variable that is measured on a scale (i.e., ratio or interval level) whereas intention to

invest in mutual funds in the present thesis is measured along a five-level Likert scale, with the lowest

level 1 indicating a strong disagreement, and a highest level 5 indicating strong agreement.

34
 The present thesis therefore uses the following ordinal regression model:

Equation 2

Ordinal Regression Model

𝑃(𝐼𝑁𝑇𝐸𝑁𝑇𝐼𝑂𝑁 ≤𝑗)
𝑙𝑜𝑔⎡⎢ 𝑃(𝐼𝑁𝑇𝐸𝑁𝑇𝐼𝑂𝑁𝑖>𝑗) ⎤⎥ = β0 + β1𝐴𝐺𝐸𝑖 + β2𝐺𝐸𝑁𝐷𝐸𝑅𝑖 + β3𝑆𝑇𝐴𝑇𝑈𝑆𝑖 + β4𝐼𝑁𝐶𝑂𝑀𝐸𝑖
⎣ 𝑖 ⎦

+ β5𝐸𝐷𝑈𝐶𝐴𝑇𝐼𝑂𝑁𝑖 + β6𝑅𝐼𝑆𝐾𝑖 + β7𝑇𝐼𝑀𝐸𝑖 + β8 𝐹𝐴𝑀𝐼𝐿𝐼𝐴𝑅𝐼𝑇𝑌𝑖

where 𝑗 = 2, 3, 4, 5

The above model is also known as a proportional odds model in Agresti (2013). The ordinal

𝑃(𝑋≤𝑗)
regression model makes use of the log-odds, 𝑙𝑜𝑔⎡ 𝑃(𝑋>𝑗) ⎤, indicating the odds that a respondent will have
⎣ ⎦

at most 𝑗 level of intention to investing in mutual funds (𝑗 = 5 means that a respondent has strong

intention, or strongly agrees).

Each β coefficient represents the proportional odds increase associated with their corresponding

independent variable. A significance test can be conducted on these coefficients, against the null

hypothesis that a given variable has no significant association to the log-odds of investing intention (

β𝑗 = 0). The test will be based on the t-statistic,

^
β𝑗
𝑡𝑗 =
()
𝑠.𝑒. β𝑗
^

Meanwhile, model accuracy can be assessed using Pearson’s Goodness of Fit test, where for each

level of intention 𝑗 will have an observed (𝑂𝑗) count based on the sample respondents, and an expected

count (𝐸𝑗) based on the model fit. Pearson’s goodness of fit test is based on the chi-square statistic

4
(𝑂𝑗−𝐸𝑗)2 2
𝑋= ∑ 𝐸𝑗
, 𝑋 ∼ χ𝑑𝑓=3
𝑗=1

35
 2
The chi-square distribution χ𝑑𝑓=3 will be used to identify the corresponding critical value for

rejecting the null hypothesis (of adequate fit) at a set level of significance.

Another form of testing used to measure the accuracy of the regression model is the

Multicollinearity Test which helps to diagnose whether there is a presence of multicollinearity in a model

which implicates inter-association between variables.

4.4 Methodological Limitations

The limitations of this study with regards to its methodology is how the model was used to

analyze the intention of investors towards mutual funds. The data and findings of this study, which were

gathered by a survey and analyzed by regression, is limited to the Philippines. The results of this study do

not reflect the intention of investors toward mutual funds in other countries. The conduct of this study is

from July-September of 2022 which means that data gathered may only reflect the intention of investors

towards mutual funds within this timeframe, which may also be affected by how mutual funds will have

been performing during the specified timeframe.

36
 CHAPTER 5

RESULTS AND ANALYSIS

5.1 Cronbach’s Alpha

Cronbach’s Alpha computed from the questionnaire is 0.18. It is recommended that Cronbach’s

Alpha values be 0.80 or higher in order for a questionnaire’s constructs to be confirmed as reliable.

However, it should be noted that there is no higher order construct that exists in the questionnaire. A

higher order construct is one wherein a latent or hidden variable is measured through a set of “observed”

variables. There are no such latent variables in the questionnaire design, and therefore the low Cronbach’s

Alpha is due to there being no construct consistency existing in the questionnaire.

When no such latent variables exist, construct reliability scores such as Cronbach’s Alpha is not

sensible and returns uninterpretable results. A full in-depth discussion can be found in John and Soto

(2007). Apart from this, the Survey was constructed from the base journal of Kaur and Kaushak (2016) as

well as from a Instrument Collected from a SunLife Insurance agent which is used when assessing the risk

of a newly onboarded client hence, face validity is also appropriately used.

Results

Moving on to the discussion of the results obtained from analysis of the data which begins with

an overview of the demographic profile of the respondents. This is summarized in Table 10 below.

Majority of the respondents are younger than 30 years in age, counting 106 respondents, or about

57.9% of the sample. This is followed by 55 respondents aged 46 to 60 years, representing 30.05% of the

entire sample. The remaining percentages are split between those aged 30 to 45 years (16 respondents)

and those that are older than 60 years (6 respondents).

37
 In terms of gender, there is a near even split between male and female respondents. The total

cohort included 100 female members, representing 54.64% of the entire sample. On the other hand, only

83 members of the sample were male. The study isn’t dominated by the female gender as both are close to

the 50% range however there are more females than males.

5.2 Demographic Profile of Respondents

Table 10. Demographic indicators of survey respondents

N %

Age Younger than 30 old 106 57.9

30 to 45 years 16 8.74

46 to 60 years 55 30.05

Older than 60 6 3.28

Gender Female 100 54.64

Male 83 45.36

Civil Status Single 114 62.30

Married 61 33.33

Annulled 5 2.73

Widowed 3 1.64

Occupation Business Owner 32 17.49

Employed 48 26.23

Retired 10 5.46

Self-Employed 23 12.57

Student 67 36.61

Unemployed 3 1.64

Education High School 53 28.96

Bachelor’s Degree 106 57.92

38
 Master’s / Ph. D. 24 13.11

Annual Income Less than PHP 300,000 79 43.17

PHP 300,000 - 500,000 34 18.58

PHP 500,001 - 800,000 30 16.39

More than PHP 800,000 40 21.86

Table 11. Respondents’ familiarity and financial situation

N %

Familiarity with Not Familiar 12 6.56

mutual funds
Slightly Familiar 34 18.58

Moderately Familiar 61 33.33

Very Familiar 54 29.51

Extremely Familiar 22 12.02

With standing Yes 90 49.18

investment
No 93 50.82

Time Horizon 1 to 5 years 50 27.32

6 to 10 years 86 46.99

11 to 15 years 22 12.02

More than 15 years 25 13.66

Risk/Return Profile Seeks capital preservation. 44 24.04

Ready to accept fluctuations affecting less than half 61 33.33

of my investments

Ready to accept fluctuations affecting more than half 43 23.50

of my investments

Fully accepts volatility to ensure higher returns 35 12.13

Financial Situation Mutual Funds will supplement current income 18 9.84

Mutual Funds are not needed to supplement income 46 25.14

There may be a need to access 61 33.33

39
 Can meet emergency without withdrawing 58 31.69

Respondents do not appear to have a very high level of familiarity surrounding mutual funds.

Only 22 respondents, representing 12.02% of the sample, indicated that they were extremely familiar with

mutual funds. Meanwhile, 54 respondents indicated that they were very familiar. A total of 61

respondents, or about 33.3% of the sample, indicated that they were only moderately familiar with mutual

funds, overall implicating that the majority of the respondents had decent knowledge of mutual funds.

Nevertheless, half of the respondents already have standing investments into mutual funds.

Among those responding to the survey, 90 respondents indicated that they did so, accounting for 49.18%

of the sample.

Questions were also asked regarding the investors' time horizon considered when investing. Here

it is found that 50 respondents plan for only 1 to 5 years. A larger group of 86 respondents indicated that

they considered 6 to 10 years in their investing plan. Meanwhile, their risk/return assessment is highly

varied among the four choices provided. About 24.04% of the respondents indicated that they invested for

capital appreciation. Another 23.50% indicated that they were prepared to accept fluctuations in the value

of their investments by more than half.

A considerably larger group of 33.3% indicated that they were ready to take on some fluctuations

in the value of their investments so long as it affects less than half of their investments. Only 12.13% of

the respondents reported that they were fully accepting of volatility as long as it is paired with higher

returns.

40
 Based on the questions regarding time horizon, risk, and return the researchers were also able to

extract what type of investor risk profile they would fall under, either [1-4] Conservative, [5-8]

Moderately Aggressive, or [9-12] Aggressive.

5.3 Investor Characteristics

Figure 6. Respondents overall Risk Profile

The figure above shows that the majority of the respondents totaling 113 (62%) were categorized

to be Moderately Aggressive investors, followed by 56 respondents (30%) being Aggressive investors,

and lastly 14 respondents (8%) were Conservative in their risk profile. This finding shows that, given the

majority of the respondents (57%) are younger than 30, they have more capacity to take on more risk

hence they fell under Moderately Aggressive to Aggressive Risk Profile and only 8% resulted in having a

conservative risk profile.

41
 Table 12. Respondents’ financial goals

N %

Grow their capital 102 55.74

Prepare for retirement / be financially free 49 26.78

Open a business 15 8.20

Purchase property 13 7.10

Provide for education 2 1.09

Migrate to another country 1 0.55

Most of the respondents indicated their financial goal was concerning the growth of their capital.

This reason was reported by 102 respondents, representing 55.74% of the entire cohort. Next to this in

size is a group of 49 respondents, or 26.78% of the entire sample, that reported that they invested either to

prepare for retirement, or to achieve financial independence at a young age. The remaining respondents

reported much rarer mentioned goals, such as starting a business, purchasing property, or migrating to

another country.

Table 13. Respondents’ level of satisfaction, and plans to continue/begin investing

N %

Level of satisfaction Very Unsatisfied 9 4.92

Unsatisfied 26 14.21

Neutral 28 15.30

Satisfied 24 13.11

Very satisfied 3 1.64

N/A (Not Invested) 93 50.82

Plans to continue/begin Strongly disagree 7 3.83

investing into mutual funds
Disagree 17 9.29

42
 Neutral 43 23.50

Agree 91 49.73

Strongly agree 25 13.66

First, it is noted that half of the respondents are not yet invested in mutual funds and therefore

cannot provide a useful assessment of their satisfaction regarding their existing returns. However, out of

the active investing respondents, very few appear to be very satisfied with their returns: only 3 of the

invested respondents indicated that they felt so, representing only 1.64% of the entire sample. Aside from

these, 24 other respondents representing 13.11% of the entire sample reported that they were satisfied

with their returns. Much larger are the group that indicated they were very unsatisfied (9 respondents,

equal to 4.92%) and unsatisfied (26 respondents, equal to 4.92%) with their returns.

It may make sense therefore, if the two are associated, why only 25 respondents, or about 13.66%

of the entire sample, reported having a strong intention to begin investing (or continue doing so). Another

91 respondents, representing 49.73% of the entire cohort, indicated having some level of intention

towards investing. Only 7 respondents reported having a strong lack of intention towards investing,

representing 3.83% of the sample.

43
5.4 Kruskal Wallis Model

Table 14. Selected cross-tabulations against plan to invest

Plan to invest

1 2 3 4 5

Familiarity Not Familiar 0 1 4 6 1

KW = 14.709
DF = 4 Slightly Familiar 2 1 11 18 2
P = 0.005
Moderately Familiar 0 6 19 30 6

Very Familiar 3 8 6 28 9

Extremely Familiar 2 1 3 9 7

Standing No 3 6 30 45 9
Investment
KW = 10.203
DF = 4 Yes 4 11 13 46 16
P = 0.038

Satisfaction Very Unsatisfied 2 2 0 2 3

KW = 14.440
DF = 4 Unsatisfied 1 8 4 10 3
P = 0.006
Neutral 0 1 7 16 4

Satisfied 1 0 1 17 5

Very satisfied 0 0 1 1 1

N/A (Not Invested) 3 6 30 45 9

The median level between the demographic indicators, familiarity, and other financial indicators

were tested against investment intent using the Kruskal-Wallis test. Reported in Table 14 are the

cross-tabulations of the variables that were found to have significant differences for this test at a 5% level.

First, familiarity with mutual funds is found to be significantly associated with investment plans.

The differences yielded a Kruskal-Wallis chi-square statistic of 14.709 against 4 degrees of freedom (p =

0.005). It can be observed in the cross-tabulation presented in Table 14 that among respondents that are

44
not familiar, slightly familiar, or even very familiar with mutual funds, respondents tend to concentrate

mostly within the second highest level of intention (4). However, it is at the extremely familiar level that

the percentage between a response of 4 and a response of 5 start to close with each other. It is also noted

that moving downwards into higher levels of familiarity in mutual funds, the frequencies of respondents

that have a neutral intention to invest (3) tend to diminish.

Having a standing investment in mutual funds also showed a difference in the median with the

respondents' intention to invest. The Kruskal-Wallis test returned a statistic of 10.203 against 4 degrees of

freedom (p = 0.038). Among respondents that reported not having any standing investment into mutual

funds, only 9 reported having a high level of intention. However, among those that already have standing

investments, this number increases to 16. While those that indicated the second to highest level of

intention stay mostly the same (45 for no, versus 46 for yes), the number of respondents with neutral

intentions decreases by more than half. Beginning with 30 neutral respondents, among those with

standing investments, only 13 remain.

Finally, respondents that are very satisfied with the performance of their portfolios so far also

appear to have much higher intention of investing into mutual funds. This can be seen in the decrease in

respondents that indicated a strong lack of intention and somewhat lack of intention to invest going down

into higher levels of satisfaction. This difference is shown to be significant using the Kruskal-Wallis test,

with a chi-square statistic of 14.440 against 4 degrees of freedom (p = 0.006).

Two regression models are estimated for this analysis. The first, which will henceforth be referred

to as the full model, contains all regressors as hypothesized in the study's framework. The results of this

full model are summarized in Table 15. On the other hand, a second, final model is estimated, removing

all variables with insignificant partial effects, until only significant regressors remain. The estimates for

this model are given in Table 16.

45
5.5 Regression Model (Full Model)

Table 15. Estimates of the ordinal regression model, all regressors

Estimate S. Err P Value

Familiarity 0.190 0.158 0.229

Standing Investment (Yes) 0.432 0.355 0.225

Time Horizon -0.076 0.165 0.644

Risk/Return Profile 0.128 0.153 0.406

Financial Situation 0.021 0.160 0.896

Portfolio Satisfaction 0.717 0.231 0.002 *

Investment Goal (Capital Appreciation/Retire) 0.177 0.375 0.637

Age: 46-60 -0.875 0.590 0.140

Age: Older than 60 -0.217 0.923 0.814

Age: Younger than 30 -0.024 0.632 0.970

Gender: Male -0.543 0.306 0.078

Civil Status: Married 0.276 0.443 0.533

Occupation: Business Owner 0.612 0.519 0.240

Occupation: Employed 0.820 0.521 0.118

Education: High School Graduate 0.457 0.434 0.294

Education: Masters/PhD 0.133 0.503 0.791

Annual Income: More than PHP 800,000 -0.727 0.579 0.211

Annual Income: PHP 300,000 - 500,000 -0.710 0.491 0.150

Annual Income: PHP 500,001 - 800,000 -0.607 0.553 0.275

Intercepts

46
 1|2 -0.505 1.194

2|3 0.905 1.158

3|4 2.389 1.159

4|5 5.057 1.218

Legend: * p< 0.05; ** p<0.01; ***p<0.001

In the full model, only portfolio satisfaction is found to have a significant impact on the log-odds

of respondents to invest in mutual funds. Portfolio satisfaction, treated as a level variable, carries an

estimate of 0.717 with standard error 0.231 in the ordinal regression model (p = 0.002). Another effect,

conclusive only at a 10% level of significance, is that of gender. It appears at least in this model that men

have lower log-odds of investing into mutual funds by an average of -0.543 (SE = 0.306; p = 0.078). In

other words, the Male gender among Filipino investors has a lower probability of investing in Mutual

Funds, which contradicts the findings of the study of Manimurugan (2015) that actually found that male

respondents actually preferred investing into mutual funds. Asides from this, no other effects are found to

be significant in this model. This finding aligns with the Theory of Planned behavior which does not

consider environmental and economic factors that may affect a person’s motive in performing a specific

behavior however acknowledges normative influences such as education qualification, income class,

(including risk profile) which makes Theory of planned behavior validated as our findings suggested that

those factors had no significant influence on the intention of investors to invest in mutual funds.

Log-odds is one-to-one with probability, which means that a variable with a lower log-odds

would indicate a lower probability of it affecting and a higher log-odds would imply a higher probability

of it affecting the independent variable.

47
 The full model, though involving many different regressors, fails to identify any other significant

association that may be coming from other variables. Thus, the model is improved into producing the

final model tabulated in Table 16 by successive removal of insignificant effects until only significant ones

remain.

5.6 Regression Model (Final Model)

Table 16. Estimates of the ordinal regression model, significant regressors

Estimate S. Err P Value

Risk/Return 0.255 0.134 0.059 *

Portfolio Satisfaction 0.647 0.218 0.003 *

Intercepts

1|2 -0.846 0.778

2|3 0.543 0.733

3|4 1.955 0.743

4|5 4.454 0.807

Legend: * p< 0.05; ** p<0.01; ***p<0.001

In the final model in Table 16, portfolio satisfaction is paired only with one’s risk-return profile.

Both are treated as interval, level variables rather than as stepwise categorical variables. Both effects may

be concluded as significant in the 5% level. Though the p-value for the risk-return is slightly higher than

0.05, literature support and a close enough value to the threshold allows us to conclude this as a

significant effect in the model.

48
 In this model, higher levels of risk profile (higher acceptance for volatility in pursuit of higher

returns) associates with higher odds that a respondent will have stronger intentions of investing into

mutual funds. This is estimated to have a coefficient of 0.255 in the ordinal logistic regression model (SE

= 0.134; p = 0.059). Contrary to the base journal of Kaur & Kaushak, (2016) which stated risk perception

had no impact on investment decisions for mutual funds, this finding shows that with a higher risk

appetite, Mutual funds seem to be an attractive investment to Filipino Investors. This finding is also

supported by two studies (Anandan & Savaraj (2020); Bajracharya & Mathema (2017)) which showed

that investors are hesitant to invest in mutual funds because they believe they are riskier than other types

of investments. The Prospect Theory also correlates with this finding as it was uncovered that Risk is a

factor that positively correlates to the intention of an investor to invest in mutual funds and given that one

of the characteristics of Prospect Theory is that people tend to disregard smaller probabilities, it is

commonly known for investments with “high risk” to deem “high reward” and thus risk become a factor

that aligned with the Prospect Theory. At the same time, respondents that are invested already in the

market and are satisfied with their returns are, on average, with higher odds that they’ll have a stronger

intention of continuing their investing in mutual funds. This is estimated to have a coefficient of 0.647 in

the ordinal logistic regression model (SE = 0.218; p = 0.003).

Using the coefficients of this final model, alongside the estimates for the intercepts, the following

ordinal logistic regression models are then produced.

5.7 R Square, Heteroskedasticity, Autocorrelation

R square measures do not exist for ordinal regression models. This is because the coefficient of

multiple determination, or , is based on a construction of continuous variables in an ordinary least squares

linear regression model. Because the variables are ordinal in nature, a better form of model fit is found in

the goodness-of-fit test as shown in Agresti (1996). This same limitation introduced by the ordinal nature

49
of the data means that other measures designed for continuous variables, such as autocorrelation

measures, cannot be performed for the model applied for the study.

Agresti (1996) is also a useful reference for identifying how the assumption of homoskedasticity

and heteroskedasticity no longer applies in ordinal regression models. First, the least squares regression

model assumes a continuous error term. Homoskedasticity refers to all error terms having a fixed variance

2
of σ ,

However, the error term does not exist in ordinal regression. Rather than modeling on the expected value,

the regression model is instead modeling on the log-odds:

Modeling directly on the probabilities removes the necessity for the error term, and is a feature of general

linear models (Agresti, 1996).

5.8 Multicollinearity

Table 17. Variance inflation factors for both the full model and final model

VIF DF GVIF Adj.

Full Model

familiar 1.331389 1 1.153858

standing_invest 1.443766 1 1.201568

time_horizon 1.280632 1 1.131650

risk_return 1.329395 1 1.152994

financial_situation 1.234290 1 1.110986

50
 satiisfied_portfolio 1.131410 1 1.063677

invest_goal 1.092951 1 1.045443

age 3.531449 3 1.234029

gender 1.163381 1 1.078601

civil_status 2.224470 1 1.491466

occupation 3.586696 2 1.376175

education 2.595462 2 1.269269

annual_income 3.616247 3 1.238919

Final Model

risk_return 1.000711 1 1.000355

satiisfied_portfolio 1.000711 1 1.000355

Variance inflation factors are used to test for multicollinearity in regression models. The adjustment given

in the third column represented the VIFs raised to as recommended by Fox and Monette (1992) to allow

for comparability in VIF in the case of differing degrees of freedom. Because variance inflation is a

known consequence of multicollinearity, these variance inflation factors are used in practice to assess for

the possibility of such a problem.

Variance inflation factors above 10 are diagnosed as symptoms of serious multicollinearity in regression

models (see Vittinghoff, et. al., 2011) while factors above 5 warrant further investigation. No such cause

of concern can be found in the above results for both models. The adjusted GVIF values, meanwhile,

must stay within the boundary of 2.0 before any further investigation is required (Fox and Monette, 1992).

Once again, no such problems can be assessed in both models. This also verifies the backward elimination

process used to arrive at the final regression model from the full model, and that by conducting backward

elimination, no impact was created among other variables which risked the findings of the study.

51
5.9 Chi-Square Goodness of Fit Test

Chi-square goodness of fit test conducted on the fitted values from the full model (all regressors)

returns a statistic of 15 against 12 degrees of freedom (p < 0.241). On the other hand, the goodness-of-fit

test on the final model returns a statistic of 10 on 8 degrees of freedom (p = 0.265). This implies that the

predictions made were matched to the results found and that the results were deemed a good fit.

52
 CHAPTER 6

CONCLUSION AND RECOMMENDATIONS

Based on the findings of the study and the tests conducted by the researchers, the study fails to

reject all null hypotheses except for Investor’s Risk Profile. The researchers reject the null hypothesis that

Investors’ risk profile has a significant impact on the intention to invest in mutual funds in the Philippines

which is supported by the regression analysis of this study. Another factor that was found to have a

positive correlation to an investor’s intention to invest into mutual funds is their portfolio satisfaction. The

higher the satisfaction of an investor is in their portfolio, the stronger the chances are that they will invest

in mutual funds, as the same for their risk profile, if the investor has a high risk profile, it results in a

stronger chance of them investing in mutual funds in the Philippines.

The findings of this study contradicts the findings from the base literature of Kaur and Kaushik

(2016) that proved certain demographic factors such as age, gender, education, occupation, and income of

investors had an impact as determinants for investing in mutual funds in India which could be explained

by the different cultural norms that India has that are not present in the Philippines with regards to age and

gender. Most respondents were also moderately or very familiar with mutual funds meaning that many are

familiar with the idea of mutual funds but are not confident enough to say they are extremely familiar

with it. However, based on the Kruskal Wallis testing, it would be appropriate to say that there is an

impact of familiarity on an investor’s intention to invest in mutual funds, although it is unclear whether it

would strengthen or weaken their intention. In terms of the Kruskal Wallis Test, the findings contradict

the related literature of Sashikala & Chitramani (2018) which found that financial literacy did not have

any significant impact on the intention to invest, however in terms of the full regression model, the

findings match this literature.

53
Recommendations:

Based on the different findings of this study, the researchers would recommend that the Mutual

Funds Industry should implement university and work seminars that educate the public even more on

Mutual Funds and how they operate in order to increase familiarity with the investment vehicle. The

researchers learned that many non-investors, due to their moderate familiarity, think that it is possible to

earn twice or thrice as much as their initial investment in just a short period of time without much risk.

This is a misconception that has to be corrected and then taught to the public. Aside from this, given that

investors would more likely invest into a mutual fund if they were satisfied with the portfolio, Mutual

Funds could promote and advertise their track record and portfolio performance better for the public to be

exposed to which, as a result, can increase the investor awareness of the investment. Additionally,

investors, especially future investors, must understand the idea of risk in investing. As deduced from the

study, investors are more likely to continue investing in mutual funds, the more comfortable they are with

risk. The researchers understood that risk as well as satisfaction, however more focused on the concept of

risk, make investors go for this investment even more.

As for further research, the students would also recommend that the study could be conducted

with a bigger sample size as well as with different investment types or vehicles such as stocks or life

insurance policies for comparison to mutual funds to understand how investors would possibly rank

mutual funds as an investment compared to other investment schemes. Another thing that future

researchers can explore is the relationship between portfolio satisfaction and the intention to invest in

mutual funds. This relationship was uncovered, however it was not particularly the point of focus for the

study as the study was aiming to understand how Filipino Investors in general view Mutual Funds as an

investment, whether they are or aren’t an active investor. With this, future researchers can also make use

of ANOVA Testing to determine relationships between some variables such as Education Qualification to

Familiarity with Mutual Funds, as well as Age, Civil Status, and Income Qualification to Risk Profile, to

54
understand what factors may affect a person’s risk appetite wherein the dependent variable would have a

continuous and normal distribution.

55
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 APPENDIX

Survey Questionnaire:

Survey Draft:

Good day!

We are Jaan Alexander L. Gana, Mauro Lacson, Dheeraj Motiani, and Yu-Jin Nam, a group of students

from the De La Salle University BS Management in Financial Institutions Program. We are currently

conducting a research study about “A Study on Filipino Investors and their Intention to Invest in Mutual

Funds in the Philippines”.

We would like to request for your input and assistance by answering and submitting this form which will

take about 3-5 minutes and with this you allow the group to record your responses and use your data for

research purposes.

In compliance with the Data Privacy Act of 2012, your personal information will be kept with

confidentiality and will only be used for academic purposes only.

I give consent for the group to record the data from my survey response and this is to signify that I am

voluntarily providing my information. With this, I clearly understand my rights as a participant. *

- [ ] Yes, I give my consent.

62
Pre-emptive questionnaire:

1. Are you familiar with the concept of Mutual Funds?

A. Extremely Familiar B. Very Familiar C. Moderately Familiar D. Slightly Familiar E. Not at all

Familiar

2. Do you have any standing investments in any Mutual Funds?

A. Yes B. No

3. What is your most important investment goal?

A. Prep for retirement B. Grow your money C. Purchase a Property D. Open a Business

E. Provide for Education F. Others: please specify _________________

4. How old are you?

A. Less than 30 B. 30-45 C. 45-60 D. Above 60

5. Gender:

A. Male B. Female

6. What is your current civil status

A. Married B. Single C. Annulled D. Widowed

7. What is your current occupation qualification

A. Business Owner B. Self-Employed C. Employed D. Others (Student/Retired)

8. What is the highest education qualification that you have accomplished?

A.Grade School Graduate B. High School Graduate C. Bachelor's Graduate D. Masters/PHD

9. What is your current annual income qualification?

A. Less than 300,000 pesos B. 300,000-500,000 C. 500,000-800,000 D. Above 800,000

Respondent’s Risk Profile

10. Time Horizon: How long can you keep your money invested?

63
 1. 1-5 years 2. 6-10 years 3. 11-15 years 4. More than 15 years

11. Risk and Return: How would you best describe your attitude towards investing and the level of risk

you can take?

1. Seeks Capital Preservation. Stable returns are preferred as opposed to funds that fluctuate widely

2. Comfortable with volatility and ready to accept fluctuations affecting less than half of my

investments

3. Comfortable with volatility, and ready to accept fluctuations affecting more than half of my

investments

4. Seeks Capital appreciation. Fully accepts volatility to ensure higher returns over the long term

12. Financial Situation

1. This investment will supplement current income

2. This investment is not needed to supplement current income, however this could be changed

3. Should an unexpected situation arise, there may be a need to access these funds

4. Can meet emergency requirements without withdrawing these funds.

Investor Risk Profile: 1-4 Conservative 5-8 Moderately Aggressive 9-12 Aggressive

For Investors:

13. Are you satisfied with your portfolio performance?

A. Very Satisfied B. Satisfied C. Neutral D. Dissatisfied E. Very Dissatisfied

14. Do you intend/continue to invest in mutual funds in the future?

5 Strongly agree

4 Agree

3 Neutral

2 Disagree

1 Strongly Disagree

Reasons: _______________

(Can be open-ended or provide choices)

64
 Open Ended Questions Response (Segregated in General Idea) Part A

Grow Money Convenience Diversification Passive Satisfied Recovering Security of Retirement Recommended by
Income with Portfolio Future others
Returns/P
erforman
ce
Mutual fund can grow It's Investments it is a The The fund Im Financial A source I heard from
with me as I age since convenient could be the way to results invested in stability and of others that mutual
time is essential to foundation of keep are has been capital retirement funds is a nice and
grow investments. my future passive positive performing growth. funds safe way to invest
income so might poorly Savings for
as well future
continue cirumstance
s or
emergency
needs.
I want to make my Guided help would like to I think Will I know that Yes, it For First time to invest
money grow in Mutual in investing diversify my that the continue the market might help retirement in mutual funds, if
Funds. This is a long rather than investment mutual as long as is down, but just incase funds ever
term investment, so self investing portfolio more funds its still hoping the money
investing in Mutual without and having that I prospects we can is needed.
Funds is perfect to fund necessary mutual funds have is bright recover
your Retirementz knowledge would be an will soon.
or tools excellent idea continu
e to
increase
in the
future.
to grow money It is a safe To diversify More I believe Market can beat Yes, it may
way to invest portfolio sources that always inflation help me
since I don't of cash mutual recovers. for my
have time to inflow funds are Just takes retirement
actively do a time and
so relatively patience
safer
form of
investme
nt
compared
to others.
I
primarily
use
mutual

65
 funds to
continuo
usly grow
funds
without
managing
it
everyday.
For more growth Spread risks I feel like Passive It is a Current I believe I would
/ access to investing in money good portfolio is having a like to
experts mutual funds investme at a loss so I contingency hold onto
can be nt have to wait financial my
beneficial strategy for it to plan is investment
since it allows recover important s for
your potential
investments to retirement
be diversified purposes
without the
hassle of going
through
extensive
research. I also
think its more
risk-friendly :)
to have extra income Yes, because To keep my Passive It is safe I plan to Security Mutual
I won't be money moving income and less shift Funds
stress for is risk to investments provide
trading essentia invest in once my plenty of
l for mutual portfolio benefits
generati funds. recovers and I think
onal You can it is
wealth expect beneficial
secured for when I
return in am at my
your retirement
investme age
nts.
to grow my money Might be the To diversify Would Mutual Every Need funds
best option my income love to funds investment in the future
to invest earn have takes its for family
without extra been time, It is needs and
trading income beneficial hard to see children,
to me and but I know and
I consider it will go up education
it a again
logical

66
 choice
for
someone
who has
extra
money
and
looking
for a way
to invest.
To grow money This requires Investments more A little The entire Security
less of my are important passive bit more world faced incase of
time to focus to have income research a difficult emergencies
on for me but so far situation
would satisfied and over
be great time
markets will
recover
To make more money To diversify Always From Not sure with current
my investment good to what I since this economy
portfolio invest know, It's will depend fluctuating
not a on current and
very liquidity of property
aggressiv asset market
e way of rising, as a
investing young
person
trying to
secure a
sustainable
and
comfortable
life,
investing in
mutual
funds may
help with
that
I believe that it will given the passive The gains Preservation
help me grow my opportunity, it income have of capital
money which I can use is good to diversifi been and for
in the future. invest any way cation useful for savings for
possible me the future
generation

67
I hope to be able to I genuinely can be Investme More
invest in mutual funds feel like it is my nt is security
if it is still an effective not enough to passive steadily
avenue for me to grow just have one income growing,
my money. stable income, in the slowly
it is very future but surely
important to
invest or have
mutual funds.
Extra funds Instead of To have Better It's always
putting my another returns best to be
money in a source than prepared for
savings of regular any
account, I’d income bank financial
wish for it to products. situation
grow by that may
getting into arise in the
different types future
of investments
such as mutual
funds that can
hopefully
benefit me in
the long run.
My aim is to grow my It is a good have Higher I want to
money and MF investment more interest secure my
provides me a platform strategy and passive yield than future and
to do so. offers the best income putting my family
diversification your
of investments, money in
markets take the bank.
time and it will
also recover
For stable income its relatively I would The For future
safe to invest like to mutual aspirations
and i like to have fund can
keep my passive be
portfolio income replicated
diversified without .
me
stressin
g over it
Willing to explore ways I'm open to To have Since Investments
to grow money using more options passive market is are for the
money that I can waste of investing income low, now long term
in the future for would be

68
 future a good
wants time to
invest
more
I would like my money I like to invest Helps to
to grow and to also in different increase
diversify my things to my
investments spread money financia
around l
income
To make my money I am open to
grow investing in
mutual fund
I plan to invest in Diversification
mutual funds in the /Investment
future in order to grow
my money and so that I
have funds to enjoy/use
in the future
Better to have my To learn more
money invested than ways of
stagnant investing my
money
Better to multiply to expand my
income to leave 9-5 portfolio
Continue to grow better than
money having my
money
stagnant
Savings and fund I would like to
growth continue
expanding my
portfolio for
the long term
Hopefully the
investment will grow
Stable returns with
long term investments
I have no job so will
rely on this.
To grow my
investments.

69
To have more funds to
expand my business
I see mutual funds as a
long term investment
It is not the best but I
believe it will grow my
funds
Long term investment

Open Ended Questions Response (Segregated in General Idea) Part B

Financial Constraint Lack of Knowledge Risky Investment Alternative Investments Prefer

Controlling
Investment
depends if I have If i learn more abt it, ill I suffered a loss in my I prefer to invest in a I prefer having
money invest in it more investment when I more stable and control of my
needed it the most tangible investment money

70
When I have the I am still not very Too much risk The equity market does I prefer to have
financial capability familiar with mutual not seem attractive, I control of my
funds, although if it would rather invest own funds rather
would help me grow more money into my than letting a
my money in the businesses third party use it
future, then I would put in various
time into learning it investment
and investing into it for instruments.
better financial
security.
Depends on stability of Need to research more Depends on how market There are better Not sure If I want
my business on the field trends would react investments than other person to
mutual funds I could handle my
put my money into investment.
Not sure depends in the I have yet to do enough Depends on the I believe that there are Not sure if the
situation research regarding economy better investment market will
mutual funds options given my recover
current capital.
Not sure yet for now I aim to know more Market risks Mutual funds are not a I would like to
about mutual funds priority of mine when it handle my own
before investing. comes to investment money
options.
May need to use money Not really that familiar Management of the it is not that risky and I I'd rather invest
for other needs with it, but I'm open funds are not am trusting the in my own
minded and willing to satisfactory in terms of expertise of the business
learn about it. return even under less investment bankers,
volatile conditions. however it still too
conservative for me.
Additionally, the interest This is why I am
is not compounded over neutral about it and will
time. Effectively, at the require more research
point you decide to for this decision
withdraw your
investment, you only
earn whatever is the
prevailing rate. Equities
and corporate and retail
treasury bonds have
yielded more returns
over a fixed period of
time (e.g. 3-6 months
for equities and 1-10
years for corporate
bonds) with greater
control over the equity
portfolio and a steady

71
 credited yield on Corp
bonds and RTBs while
keeping the principal
intact.
Havent thought about Mutual funds have not profits are not worth the I would rather
that aspect yet. been performing well time I invested handle my own
even after more than investments
6-10 years
I am still unsure about I am not so familiar with I would rather invest in
investments in mutual MF. I'm also not a risk something else
funds and would want taker when it comes to
to be more money.
knowledgeable to
strongly agree to
continue investing.
I would like to do my Depends on the global Alternative investments
research more and financial trends, could perform better
learn about this topic conflicts, Pandemics etc
before investing this in
the future
Need to learn more Will vary on the I prefer other
about them economic status investments
Need a better grasp of So far I am not liking Need something more
how its run within the the results aggressive
context of the
Philippines
not well versed in this It is a very volatile Real estate seems to be
area market now the safest now

Because this type of it would depend on how

invetstment is all new my other investments
to me and will need are doing. if they are
further study. Many stable enough then i
thanks. may just continue with
them rather than
change.
Interested to learn more I would prioritize
about mutual funds. investing in health
Not currently into insurance. If there are
mutual funds extra funds then I will
consider mutual funds.

72
I still would have to do I might want to switch
more research but I my investment
wouldn't mind learning
more about this
investment

Not sure if this is the

best possible way to
have passive income

I prefer private
investments
I would rather put my
money in other
investments
I could've invested my
money in newer
investments
Would like to explore
other ways of investing
with a better ROI.

73
Turnitin Similarity Index

74
Research Ethics Clearance

75
General Research Ethics Checklist

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Checklist A - Human Participants

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