A STUDY ON MUTUAL FUND PERFORMANCE AND ITS INFLUENCE ON RETAIL INVESTORS’ INVESTMENT DECISIONS

Abstract

Mutual funds have emerged as one of the most popular investment avenues for retail investors due to their ability to provide diversification, professional management, and relatively lower risk compared to direct equity investments. This study presents an analytical examination of mutual fund performance and its influence on retail investors' investment decisions. The primary objective of the research is to evaluate the performance of selected mutual funds using key financial indicators such as returns, risk levels, and consistency, while also assessing how these performance factors affect the investment preferences of retail investors. The study utilizes both primary and secondary data to analyze investor behavior and fund performance. Primary data is collected through structured questionnaires distributed among retail investors to understand their perceptions, expectations, and decision-making patterns. Secondary data is obtained from financial reports, fund fact sheets, and relevant financial databases to assess the historical performance of selected mutual fund schemes. The findings indicate that factors such as past returns, fund manager reputation, risk diversification, expense ratio, and market conditions play a significant role in influencing retail investment decisions. Additionally, awareness, financial literacy, and investment goals significantly impact investor choices. The study highlights that consistent fund performance and transparent information disclosure enhance investor confidence and participation in mutual fund investments. Overall, the research emphasizes the importance of performance evaluation and investor awareness in strengthening retail participation in the mutual fund industry. The results provide valuable insights for investors, financial advisors, and policymakers to improve investment strategies and promote informed decision-making in the financial market.