Influence Of Stock Market And Political Stability Towards The Unit Trust Fund Performance In Two Developed Countries: Us And Australia

Chow, Bridney Yi Ying (2023) Influence Of Stock Market And Political Stability Towards The Unit Trust Fund Performance In Two Developed Countries: Us And Australia. [Final Year Project Report] (Unpublished)

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Abstract

This study's objective is to identify whether the stock market and political stability have an influence towards the unit trust fund performance in two developed countries: US and Australia. The sample collected for this empirical study covered 20 years of data from 2002 to 2021. US and Australia are the countries chosen for this study. This study also considered gross domestic product (GDP), interest rate and inflation as the control variables. In this study, the Arbitrage Pricing Theory (APT), Capital Asset Pricing Model (CAPM), Modern Portfolio Theory, and Random Walk Theory is employed while descriptive analysis, Pearson correlation coefficient, panel unit root test, panel cointegration test, panel fully modified OLS (FMOLS), and granger causality test are utilised. The findings of this study from the perspective of Pearson correlation coefficient shows that the stock market and unit trust fund performance are positively correlated while the correlation between political stability and unit trust fund performance was shown to be negative. Then, in the panel cointegration test, it is shown that the stock market and political stability have no cointegration in the panel setting for the sample period. Moreover, panel fully modified OLS (FMOLS) found that both stock market and political stability have a positive correlation with the unit trust fund performance

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