Investor Perception about investing in Mutual Funds and the role of Mutual Funds in development of Indian Stock Markets

Abstract

Purpose: The Study would analyse sentiment of individuals towards investing in equities through Mutual Funds, while attempting to establish a correlation between growth of MF industry and Indian stock markets.

Methodology:Primary data collection - questionnaire floated to individuals of different sex, age, gender, education, etc., to assess their financial literacy and the factors that have contributed to increased investment in MFs. Secondary research - data from AMFI / MFs websites, analysing theincrease in AUM of Equity MFs over the last two decades’ vis-a-vis Market Capitalisation, using correlation. On the primary set of data,a t-test was conducted and Pearson’s correlation was applied on the secondary data. A percentage analysis was done for sentiment analysis.

TheImplications: The Study would help in gauging financial literacy of individuals, and also deepen our understanding of investment in stock markets through MFs.

Originality: There have been a few studies on financially literate investor’s preference for direct investment over investing through Mutual Funds, but not many on investor sentiment towards stock markets in general and Mutual Funds in particular