Mutual fund investment decisions of investors in Coimbatore city, Tamil Nadu

Abstract

Financial investment opportunities for investors include bank deposits, corporate bonds, gold, real estate, stocks and mutual funds. It is sensible to assume that a typical investor wants not only good return on investment but also to minimize risk. Mutual funds offer an opening to an investor with feasibly an optimal investment opportunity to invest in diversified and professionally managed basket of securities relatively at a low cost. In this context the present study was proposed with an objective of finding the investment decision making among mutual fund investors. Coimbatore city was purposively selected due to the presence of large number of asset management companies (AMCs) with different financial instruments and huge investors. Among 25 AMCs in Coimbatore city six were selected based on business potential. Ten samples were drawn from each AMC that made a total sample size of 60. Primary data were collected using well-structured interview schedule. Percentage analysis was used to analyze the socio-economic profile of respondents and chi-square test to analyze the investment decision making behavior of mutual fund investors. Results of the study indicated that majority of the investors were males in the age group of 26 to 40 years, graduates, married, doing private job and in the income group of Rs 2.5 to 5 lakh per annum. Chi-square analysis revealed that there was a significant relationship between occupation and type of mutual fund scheme opted by the investors. There was a significant association between occupation and objective of investment decision made. It was inferred that investors had been expecting their return from mutual fund investments according to their level of risk observed.