Retail Investors Participation in Indian Mutual Fund Industry -- A Matter of Concern

The Indian mutual fund industry is playing a significant role in the development of capital market and in the growth of the Indian economy. It is considered to be a better opportunity where savings are collected from investors and diverted to the capital market to generate better returns for them with lower risk and volatility. Hence, it is of utmost significance to understand the mutual fund industry in India. As such, this chapter makes an attempt to review the various literatures available in regard to mutual funds to evaluate the performance of various mutual fund schemes and to study the investor's perception in selection of a mutual fund. The study shows that mutual funds have failed to offer advantages of diversification and professionalism to the investors and hence could not fulfil their scheme's objectives. It is also found that retail investors are still confused about the mutual funds as an investment avenue. In order to attain sustained profitable growth, the industry should focus on developing distribution networks, increasing retail participation and expanding the reach of mutual funds by conducting awareness programs and extending financial literacy.

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Mutual Fund Performance and Investor's Perception

Banking, Finance, and Accounting ◽

10.4018/978-1-4666-6268-1.ch032 ◽

2014 ◽

pp. 614-624

Author(s):

Anindita Adhikary ◽

Bedanta Bora ◽

Jitendra Kumar

Keyword(s):

Mutual Funds ◽

Capital Market ◽

Mutual Fund ◽

Financial Literacy ◽

Lower Risk ◽

Distribution Networks ◽

Retail Investors ◽

Awareness Programs ◽

Fund Industry ◽

Mutual Fund Industry

The Indian mutual fund industry is playing a significant role in the development of capital market and in the growth of the Indian economy. It is considered to be a better opportunity where savings are collected from investors and diverted to the capital market to generate better returns for them with lower risk and volatility. Hence, it is of utmost significance to understand the mutual fund industry in India. As such, this chapter makes an attempt to review the various literatures available in regard to mutual funds to evaluate the performance of various mutual fund schemes and to study the investor's perception in selection of a mutual fund. The study shows that mutual funds have failed to offer advantages of diversification and professionalism to the investors and hence could not fulfil their scheme's objectives. It is also found that retail investors are still confused about the mutual funds as an investment avenue. In order to attain sustained profitable growth, the industry should focus on developing distribution networks, increasing retail participation and expanding the reach of mutual funds by conducting awareness programs and extending financial literacy.

Download Full-text