A Study on Factors Affecting Selection of Mutual Fund Schemes Pertaining to Retail Investors of Himmatnagar

Abstract

A 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 low cost. The risk in mutual fund investment is relatively less as compared to directly investing in stocks and therefore it is safe and secure option for risk-averse investors. The objectives of the study are to enquire or identify the factors affecting selection of mutual fund schemes. Investors are unique and are a highly variant group at the retail levels. Hence, their scheme selection also differs. This necessitates the Asset Management Companies (AMCs) to understand the scheme selection behavior of the investors to design suitable products to meet the changing financial needs of the investors. By adopting convenience sampling, 50 Mutual Fund Investors were selected for this study from Himmatnagar town of North Gujarat. 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. This paper discusses the survey findings and is useful for managerial implication for the AMC’s in their product designing and development.