Investors’ perception towards mutual fund: A study of Shimla city

Abstract

The mutual fund sector offers various investment structures with varying levels of risk, and it was anticipated to be the most profitable market for Indian investors. Although household investors (retail investors) contribute much of the investments in mutual funds around the world, the retail investors’ contribution to mutual funds is rather limited in India. In India, there are more than 50 crore permanent account numbers for income taxes, but only 2.2 crore people participate in mutual funds. As a result, the Indian mutual fund industry has the potential to rise rapidly. This paper tried to evaluate the perception of mutual fund investors and examine the factors affecting their investment decisions. For this purpose, data has been collected from 110 respondents residing in Shimla city of Himachal Pradesh. The sample size was selected based on the convenience sampling technique method. The collected data has been analyzed using various statistical and mathematical tools. Based on the empirical investigation it is evident that investors considered higher returns as the most important factor while making an investment and they perceived mutual funds as a moderately risky investment option. Overall it is observed from the study that investors want to invest in mutual funds, especially in open-ended equity mutual funds and most of the respondents prefer to take moderate risk in the market. It is also inferred that most investors prefer to invest in SIPs. Evaluating the mutual funds' schemes based on SEBI classification 2017 could be a great topic for future research.