Investors can incorporate many assets into their investment portfolio, including stocks, bonds,

fixed deposits, derivatives, and gold real estate. Each of these investments has common

characteristics, such as potential returns and risks that must be assumed. Since the future is

uncertain and higher returns are associated with taking more risks, it is necessary to decide

how much risk to take (Arora & Marwaha, 2014). There is growing evidence that bond and

stock returns are predictable. To some people, predictability means that the market is

inefficient. Others believe it is the result of a reasonable change in expected return. Expected

returns for common stock and long-term debt include fixed term or maturity premiums with

well-defined business cycle patterns. Expected returns also include the risk premium

associated with the long-term aspects of the business terms. Stocks are larger than bonds,

while long-term low-bond premiums are higher than high-grade bonds. The general message

is that when the economy is good, the expected return is low, and when the situation is weak,

the expected return is high (Fama & French, 1998).

In addition to direct equity investment, risk averse individuals consider mutual funds a more
acceptable investment method. Despite the huge financial resources and lack of expertise in
running the stock market, it has become an increasingly popular investment tool for
Malaysians as it opens up opportunities for private investors to enter the capital markets
(Mahdzan, Zainudin, & Yoong, 2020). Nurasyikin Jamaludin (2013) mentioned that in
Malaysia, mutual fund is known as unit trust and it is an investment tool that allows investors
to concentrate resources on investment portfolios. The portfolio includes asset classes such as
cash, real estate, deposits, commodities, stocks and bonds. Zahariah Sahudin (2015) states
that the performance