Factors Influencing the Mutual Fund Scheme Selection by Retail Investor’s in Assam: An Empirical Analysis

Abstract

The mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The plethora of schemes provides variety of options to suit the individual objectives whatever their age, financial position, risk tolerance and return expectations. In the past few years, we had seen a dramatic growth of the Indian Mutual Fund industry with many private players bringing global expertise to the Indian Mutual Fund industry. Investment in mutual funds is effected by the perception of the institutional or individual investors. The objectives of the study are to identify the retail investor’s perceptions on mutual fund investment and to enquire the factors influencing selection of mutual fund schemes.  The present investigation outlined that mostly the retail investors have positive approach towards investing in mutual funds. At the retail level, investors are unique and are a highly heterogeneous group. Hence, their fund/scheme selection is also widely differs. This necessitates the Asset Management Companies (AMCs) to understand the fund/scheme selection/switching behaviour of the investors to design suitable products to meet the changing financial needs of the investors. By   adopting convenience sampling, 250 respondents were selected for this study from five selected commercial towns of Assam. Simple statistical tools are used for analysis of this study. It is observed that the retail investors are now turning more to mutual funds because of safety, liquidity, capital gains and transparency. It is hoped that the study will have some useful managerial implication for the AMCs in their product designing and marketing.