Mutual Fund Investment Strategies for Retail Investors: An Empirical Study in the Light of Market Movements

Abstract

Mutual fund investment strategies provide retail investors with diversified and professionally managed portfolios, making them an attractive option for wealth accumulation. One popular approach is index investing, where funds track a market index, aiming to replicate its returns. This strategy offers low costs and broad exposure. On the other hand, active management involves fund managers making investment decisions to outperform the market. While potentially yielding higher returns, it comes with higher fees. Asset allocation is another key strategy, where investors diversify their holdings across various asset classes like stocks, bonds, and commodities. This helps manage risk and optimize returns based on individual risk tolerance and financial goals. For those seeking stability, income funds focus on generating regular dividends, suited for conservative investors. In contrast, growth funds target capital appreciation by investing in companies with high growth potential. Careful consideration of these strategies, aligned with one's financial objectives and risk appetite, is essential for retail investors to make informed mutual fund choices.