Retail Investors’ Investment Patterns in Mutual Funds

Abstract

The impact of socio-economic factors on the Mutual Funds’ investment pattern in India with reference to the frequency and time period of investments of retail investors is attempted. The paper also recognizes the financial objectives and, proposes a model facilitating the investment behavior of the retail investors. The Principal Component Analysis (PCA) and Chi-square test were conducted to evaluate both the significant demographic impact on investment patterns as well as the pertinent perception of the investors towards particular mutual fund/s selection. The study reveals that mutual fund is now being considered as one of the important investment options among the investors irrespective of their gender and age. The findings further support the impact of educational and income levels on the preference of investment in mutual funds. The study also reveals that the investors are inclined more towards this investment avenue mainly due to its ease of investing, higher returns and the minimum risk associated with investing in mutual funds.