An Empirical Study of Retail Investor’s Attitude Towards Investment in Mutual Funds

Abstract

In the financial industry, Mutual Funds have become a hot favourite of millions of people all over the world. A mutual fund is a special type of institution, a trust or an investment company which acts as an investment intermediary and invests the savings of large number of people to the corporate securities in such a way that investors get steady returns, capital appreciation and a low risk. It is essentially a mechanism of pooling together the savings of a large number of investor for collecting investment with an avowed objective of attractive yields and appreciation in their values. The concept of 'Mutual Fund' is a new feature in Indian capital market but not to international capital markets. A mutual fund in the most suitable investment for the retail investors as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost. At the retail level, investors are unique and are a highly heterogeneous group. A large number of investment options are available to investors. Currently there are large numbers of schemes available and asset management companies (AMCs) compete against one another by launching new products or repositioning old ones. Unless mutual fund schemes are tailored to the changing needs, and the AMCs understand the fund selection behaviour of the investors, survival of funds will be difficult in future. With this significance an attempt is made to study the attitude of mutual fund investors.