A Study on Factors Responsible for Investors' Preferences in Mutual Fund Schemes"

Abstract

In recent years, mutual funds have gained significant traction as a preferred investment avenue among retail investors in India, owing to their accessibility, diversification, and potential for long-term wealth creation. Despite the rapid growth of the mutual fund industry, individual investment behavior remains complex and varies based on multiple interrelated factors. This study aims to examine the key elements that influence the investment preferences of retail investors toward mutual fund schemes. The research explores the role of financial literacy, risk tolerance, demographic variables, fund performance, and the accessibility of digital platforms in shaping investor decisions. It also considers the influence of marketing strategies and financial advisors on investor behavior. A structured questionnaire was used to collect primary data from a sample of retail investors, and the findings were analyzed using statistical tools, including the chi-square test, to validate the hypotheses. The results highlight that investors with higher financial awareness and digital familiarity tend to make more independent and informed investment choices. Risk appetite and personal financial goals also play a crucial role in selecting mutual fund schemes. Based on the findings, the study offers practical suggestions for mutual fund companies, financial advisors, and policymakers to enhance investor engagement and improve financial inclusion. This research contributes to a better understanding of retail investor behavior and provides valuable insights that can help align mutual fund products and services with the actual needs and expectations of the retail investor segment.