Perceived Significance of Scheme Attributes in Mutual Fund Purchase: A Comparative Study of Retail and Non-retail Investors

Abstract

Several research evidences have found the relative importance of various attributes within the mutual fund scheme construct while deciding on purchases of mutual fund, especially by retail investors. Literature is scanty with respect to non-retail investors. This study presents a comparative analysis of retail and non-retail mutual fund investors with respect to attributes related to mutual fund schemes, in the context of their selection of various mutual funds. Primary data collected from 400 retail and 50 non-retail investors, randomly selected from cities under survey, were used to assess the components of mutual fund schemes. The factor analytic technique resulted in four components, namely, managerial and intrinsic attributes, performance and asset profile, third-party assessment and extrinsic attributes. Inferential statistics on the Anderson–Rubin (AR) factor scores depict the difference between retail and non-retail mutual fund investors with respect to performance and asset profile and extrinsic attributes. This study therefore is an addition to the existing literature and may help in improving strategies of asset management companies.