A Study of Investors Perception towards Mutual Funds in the City of

Kathmandu

Submitted By

Bhuwan Rana

Roll No. 103

T.U. Reg.no.7-2-538-51-2009

A Graduate Research Report submitted in partial fulfillment of the requirements for the
degree of

MASTER OF FINANCE AND CONTROL

at the

School of Management

Faculty of Management

Tribhuvan University

Kirtipur

May, 2017
 CERTIFICATION

We, the undersigned, certify that we have read and hereby recommend for acceptance by
the SOMTU, Tribhuvan University, a Graduate Research Project (GRP) report submitted
by Mr. Bhuwan Rana entitled A Study of Investors Perception towards Mutual
Funds in the City of Kathmandu, in partial fulfillment of the requirements for the
award of the degree of Master of Finance and Control of Tribhuvan University.

_________________________

Mr. Sanjay Ghimire

GRP Supervisor

External Examiner

Signature

GRP Chairman

Signature

Prof. Dr. Mahananda Chalise

Director, SOMTU

Date....................................................

i
 Declaration of Authenticity
I Bhuwan Rana hereby declare that the thesis entitled “A Study of Investors
Perception towards Mutual Funds in the City of Kathmandu” is a bonfide record of
the work done by me under the supervision of Mr. Sanjaya Ghimire, Sclool of
Management at Tribhuvan University, for MFC. I also declare that this research work is
the result of my own effort and has not received any previous academic credit at this or
any other institution.

………………………

Signature

Bhuwan Rana

Date:

ii
 Acknowledgments
It is my pleasure to present this Graduate Research Project (GRP) on “A Study of
Investors Perception towards Mutual Funds in the City of Kathmandu” prepared in
partial fulfillment of the requirement for the Master of Finance and Control (MFC
4th semester) program of SOMTU (School of Management Tribhuvan University)

First of all, I gratefully acknowledge to my Graduate Research Project (GRP)

supervising guides Mr. Sanjay Ghimire, School of Management at Tribhuvan
University; (SOMTU) for his invaluable and untiring guidance, constructive
suggestions and continuous encouragement all through the tenure of my research
work. He always gave me his suggestions in making this study as flawless as
possible and helping me in preparing this Graduate Research Project (GRP) work
successfully. Without his intellectual inputs and constant support, this work would
not have been complete, in any respect.

I would also like to express my sincere gratitude to Prof. Dr. Mahananda Chalise
director, and Dr. Jeetendra Dangol deputy director as well as coordinator, School of
Management, Tribhuvan Unversity, for their valuable suggestion and
encouragement in this regard. Similarly Special thanks to GRP committee member,
for encouraging, positive and supportive attitude through the process. I express my
sincere thanks to the office staff and library staff of SOMTU, who were always
available and lend a helping hand.

Finally, my heartfelt thanks are due to all the respondents of various mutual funds
investors who took time away from their busy schedules to answer and return the
questionnaire. The successful completion of this research report would not have
been possible without their support and cooperation. And I am grateful to all
intimate friends and family, who help me directly or indirectly in completing this
internship report.

iii
 Table of Contents

Declaration of Authenticity.................................................................................................ii
Acknowledgments...............................................................................................................iii
Table of Contents................................................................................................................iv
List of Tables.......................................................................................................................vi
List of Figures....................................................................................................................vii
Abbreviations Used...........................................................................................................viii
Executive Summary.............................................................................................................ix
Chapter 1: Introduction........................................................................................................1
1.1 Background of study..............................................................................................1
1.2 Statement of the problem.......................................................................................2
1.3 Objectives of study................................................................................................3
1.4 Significance of study.............................................................................................4
1.5 Hypotheses............................................................................................................4
1.6 Limitations of the study.........................................................................................5
1.7 Organization of the study......................................................................................5
Chapter 2: Literature Review and Theoretical Framework.................................................7
2.1 Meaning of mutual fund........................................................................................7
2.2 Review of empirical evidences..............................................................................8
2.4 Research gap.................................................................................. 22
2.3 Theoretical framework........................................................................................23
Chapter 3: Research Methods............................................................................................25
3.1 Research design...................................................................................................25
3.2 Population and sample.........................................................................................25
3.3 Nature and source of data....................................................................................26
3.4 Instruments..........................................................................................................26
3.5 Methods of analysis.............................................................................................26
3.6 Software used......................................................................................................27
3.7 Test of validity and reliability.............................................................................27
Chapter 4: Analysis and Results........................................................................................28
4.1 Respondent's demographic profile......................................................................28

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 4.1.1 Respondents' gender.....................................................................................28
4.1.2 Respondents' age..........................................................................................29
4.1.3 Respondents' educational background.........................................................29
4.1.4 Respondents' education level.......................................................................30
4.1.5 Respondents' occupation..............................................................................31
4.1.6 Respondents' income level...........................................................................31
4.1.7 Respondents' annual saving..........................................................................32
4.2 Exploring the dimensions of investors perception..............................................33
4.3 Demographic variables and perception of mutual fund investors.......................40
4.4 Major finding.......................................................................................................50
Chapter 5: Discussions, Conclusion and Implications......................................................52
5.1 Discussions..........................................................................................................52
5.2 Conclusion...........................................................................................................53
5.3 Implications.........................................................................................................54
Bibliography.......................................................................................................................56
Appendix I: Communalities...............................................................................................61
Appendix II: Total Variance Explained............................................................................63
Appendix III: Questionnaire..............................................................................................64

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 List of Tables

Table 1: Review of literatures 18

Table 2: Reliability statistics 34

Table 3:KMO and Bartltl’s test 35

Table 4: Investor’s perception towards mutual fund investment –

Factor loadings after varimax rotation 39

Table 5: Perception of mutual fund investors with regard to gender 41

Table 6: Perception of mutual fund investors with regard to age 42

Table7: Perception of mutual fund investors with regard to education

background 43

Table8: Perception of mutual fund investors with regard to education level 44

Table 9: Perception of mutual fund investors with regard to occupation 45

Table 10: perception of mutual fund investors with regard to income level 46

Table 11: Post Hoc analysis of flexibility and convenience 47

Table 12: Perception of mutual fund investors with regard to annual saving 48

Table 13: Post Hoc analysis of transparency and efficiency 49

Table 14: Correlation between factors and control variables 50

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 List of Figures

Fig 1: Theoretical framework 24

Fig 4.1: Respondents' gender 28

Fig 4.2: Respondents' age 29

Fig 4.3: Respondents' educational background 30

Fig 4.4: Respondents' education level 30

Fig 4.5: Respondents' occupation 31

Fig 4.6: Respondents' income level 32

Fig 4.7: Respondents' annual saving 33

Fig 4.8: Scree plot 37

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 Abbreviations Used

ASM : Asset Management Company

Df : Degree of Freedom

EFA : Exploratory Factor Analysis

GRP : Graduate Research Project

KMO : Kaiser Meyer Olkin

MC : Mutual Company

MF : Mutual Funds

N : Number

NAV : Net Assets Value

SEBON : Security Board of Nepal

Sig : Significance

viii
 Executive Summary

The financial system plays a central role in the economic development of a country by
facilitating the allocation of scarce resources. It intermediates between the flow of funds
belonging to those who save a part of their income and those who invest in productive
assets. With the beginning of the Nepalese economy and the subsequent reforms in the
financial sector, the Nepalese financial market has been growing immensely over these
years. Mutual Fund (MF) is one such financial intermediary which has played a
significant role in the development and growth of capital market in Nepal. Mutual funds
are today a very important savings vehicle for most people in the developing countries
and they provide an excellent opportunity to obtain a more diversified portfolio through
investments in new markets and asset classes. Now days small investors have been
becoming a major source of investment for a developing country like Nepal. Moreover
mutual funds have added new dimensions in fund raising capacity of corporate sectors. It
acts like a mediator between small investors and corporate sector. Considering these
points this study examines the investor’s perception towards of mutual funds in the city of
Kathmandu.

The main objective of the study is to examine of investor's perception towards mutual
funds. The study was based on primary data. Primary data was collected using structured
questionnaire with the help of five points Likert scale questionnaire from the respondents
and interview with mutual fund’s brokers and experts were also carried out to gain more
insight to the issue. The questionnaire was distributed to the 385 investors out of them
357 questionnaire were returned. While screening of the fill questionnaire, 27 of these
were rejected because of incomplete information. Statistical evaluation of the
questionnaire was used by analyzing the factors analysis. After identifying the variables
and classifying the statements under each variable using exploratory factor analysis
(EFA).

The buying intent of a mutual fund product by a small investor can be due to multiple
reasons depending upon transparency, efficiency, knowledge, suitability, regulation,
service, flexibility, convenience, risk and return, service provided by fund, flexibility of
the funds, diversification, past performance of the found and prompt settlement.
According to factor analysis the identified perceptual factors were classified under six
heads as transparency and efficiency, knowledge and awareness, suitability and

ix
regulation, service and return, flexibility and convenience, and diversification and safety
with respect to perception of investors towards mutual fund investment. The study
assesses that the investors' perception toward mutual fund is different according to their
gender, income level and annual saving which stated that theses demographic variables
have influence on the investors’ perception towards the mutual fund. But other variables
like age, education level, occupation and educational background have similar perception
towards mutual fund. And it also found that there were positive correlations among the
MF investors' perceptual factors.

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 Chapter 1

Introduction
1.1Background of study

The history of mutual fund dates back to 19th century when it was introduced in Europe,
in particular, Great Britain. Robert Fleming was set up in 1968 the first investment trust
called Foreign and Colonial Investment Trust which promised to manage the finances of
the moneyed classes of Scotland by spreading the investment over a number of different
stocks. This investment trust and other investments trusts which were subsequently set up
in Britain and the US, resembled today’s close – ended mutual funds. The first mutual in
the U.S., Massachustsettes investor’s Trust, was set up in March 1924. This was the open
– ended mutual fund. The stock market crash in 1929, the Great Depression, and the
outbreak of the Second World War slackened the pace of mutual fund industry,
innovations in products and services increased the popularity of mutual funds in the
1990s and 1960s[ CITATION DrK13 \l 1033 ]. The history of mutual fund in Nepal is
not long. It was started with the establishment of NCM mutual fund -2050 established by
NIDC capital market. The fund was initially open-end type with Rs 10 par value. It was
converted into close end fund in the name of NCM mutual fund 2059. The fund has 10
million units outstanding with Rs 10 par value, and 10 year maturity period. The fund has
guaranteed at least 5 percent return to its investors. It listed in Nepal Stock Exchange
(NEPSE) (Pudel, et. al. 2016).

In this era of globalization and competition, the success of an industry is determined by

the market performance of its stock. The investors too like to invest only in the stock of
those companies from which they can get maximum gains. In early years of growth of
mutual fund industry, investors were available only with few investment avenues to
invest their money. But with the passage of time a lot of opportunities are available to the
investors for investing their money in different investment channels. One such channel is
to invest in mutual fund along with effective financial management. Mutual funds have
seen a tremendous growth in the last few years. This is the result of combined efforts of
the brokerage houses and the fund managers who come to one’s rescue by educating the
investors and making them aware of the mutual fund schemes by different modes of
1
promotion [ CITATION Sai11 \l 1033 ]. Especially in a country like Nepal, investment
from financial organizations or even an individual has a great impacted on the overall
economy of the country. For the past few decades, the major investment opportunities
have emerged to give us proper financial results (i.e, collection of the investment and
generation of profit from the invested capital) are Hydro-electricity generation, Tourism
and Agriculture. Even though there are other sectors and opportunities to invest time,
capital and labor in these three are the most effective and productive in the long run.
There are very few people in Nepal who solely invested in high amounts. So for country
like Nepal, one of the major sources of investment is mutual fund.

Mutual Funds are a retail product which is designed for those who do not directly invest
in the share market because of its unpredictable and volatile nature. Mutual funds are
recognized as a mechanism of pooling together the investment of unsophisticated
investors which are professionally managed by fund managers for consistent return
along-with capital appreciation and has come as a much needed help for retail investors
[ CITATION 15AS \l 1033 ]. All investments whether in shares, debentures or deposits
involve risk. Share value may go down depending upon the performance of the company,
the industry, state of capital markets and the economy. While risk cannot be eliminated,
but skillful management can minimize the risk. Mutual Funds help to reduce risk through
diversification and professional management. The experience and expertise of Mutual
Fund managers in selecting fundamentally sound securities and timing their purchases
and sales help them to build a diversified portfolio that minimizes risk and maximizes
returns.

1.2 Statement of the problem

In conventional financial theory, investors are assumed to be rational wealth maximizes,

following basic financial rules and basing their investment strategies purely on the risk-
return consideration as the factors expected to influence investment decisions (Baker et
al, 1977). Traditional economic theory assumes that people are rational agents who make
decisions objectively to take advantage of the opportunities available to them. Investors
think of themselves as rational and logical. But when it comes to investing, their
demographic factor, emotional inclinations, ingrained thought patterns and psychological
biases, color how they perceive the world and how they make decisions. The controversy
of this area of study was the different findings that researchers came up with. For
2
instance, Sing (2012) stated that there is no association between age, occupation and
attitude towards mutual funds. But there is an association between sex, income,
educational qualifications and attitude towards mutual funds. As far as the benefits of the
mutual funds are concerned, return potential and liquidity have been perceived to be most
attractive by investors, followed by flexibility, transparency and affordability. Kumaret
al. (2014) study concludes that as far as the demographic factors are concerned,
geography, age, occupation and income have significant influence on choice of
investment decisions in mutual fund. Joseph & Joseph (2015) study reveals that the
investors’ perception is dependent on the demographic profile and assesses that the
investor’s age and annual savings have direct impacted on the investors’ choice of
investment but not other demographic factors like gender, occupation, educational level
and educational background. Subramanya (2015) concluded that the socio economic
factors like age, gender, education, income and savings of investors’ perception towards
mutual fund is not encouraging but the age of investors’ and saving habit of respondents
is correlated. Hence, the mutual funds investor's perception are different according to
their demographic variables like age, gender, income, saving and educational
background. Therefore, the study deals with following issues.

 What are the investor’s perceptual factors towards the mutual fund in Kathmandu
City?
 What are the most important factors that investor perceive towards mutual fund
investment?
 Is there any significant difference between demographic factors and perception
towards mutual fund investment? (Demographic factors are age, gender, income
level, educational background, education level, annual saving and occupation).

1.3Objectives of study

The overall purpose of this study is to examine investor’s perception towards mutual
funds. The specific objectives of the study as follows:

a) To explore the investors perceptual factors towards mutual fund.

b) To identify the most important factors that investor perceive towards mutual fund
investment.
c) To explore whether there is any significant difference between demographic
factors and perceptual factors towards mutual fund investment.
3
1.4Significance of study

Mutual fund is a retail product design to target small investors. It is evident that mutual
funds have at the top of the agenda over the last decade thus, constituted the majority of
many organizations’ portfolios. They have become worldwide phenomena and attached
great importance to global financial markets. Nowadays, an increasing number of
investors are relying on mutual fund as investment and retirement vehicles. Hence,
designing a mutual fund product and expecting a good response will be futile.

The better understanding of investors’ perception and outcomes is important for financial
planners because an understanding of how investors generally respond to market
movements. It helps investment advisors devise appropriate asset allocations strategies
for their clients. Companies would identify the most influencing factors on their
investors’ perception which affect their future policies and strategies eventually would
affect their future plans. Similarly Government would identify the most influencing
factors on investors’ perception would affect the required legislations and additional
procedures needed in order to satisfy investors’ desires and also to give more support to
market efficiency. In this context, the present study is very useful and relevant to
examine the factors influencing the perception of investors, while making decisions
related to mutual fund investments and the features that investors look for in mutual fund
products.

1.5Hypotheses

Joseph and Joseph (2015) stated that there is significance difference between perceptual
factors (knowledge and awareness, regulation and transparency, convenience and
flexibility and return and affordability) and age and annual saving towards mutual fund
investment. Among the gender, with regard to the perceptual factor – knowledge and
awareness is high among the males followed by convenience and flexibility. Similarly the
study tested the same hypotheses in the context of Nepal in the city of Kathmandu.

H01 - There is no significant difference between gender and perceptual factors towards
mutual fund investment.

H02 - There is no significant difference in perceptual factors with respect to different age
groups.
4
H03 - There is no significant difference between educational background and the
perception towards mutual funds

H04 - There is no significant difference between educational level and the perception
towards mutual funds

H05 - There is no significant difference among occupation and perceptual factors towards
mutual fund investment.

H06 - There is no significant difference between income level and the perception towards
mutual funds

H07 - There is no significant difference among annual saving and perceptual factors
towards mutual fund investment.

1.6Limitations of the study

The study has following limitations:

 The study has not been conducted over an extended period of time considering
both market ups and downs. The market state has a significant influence on
the investor's perception. The study cannot capture such situations.
 All the responses for the study were collected inside Kathmandu Valley.
Therefore, the study is limited to respondents residing in Kathmandu Valley
only.
 The present study focused on individual investors but not institutional
investors. So the data were collected from the individual investor alone.
 Seven demographic variables are considered. Investor perception is also
affected by other variables besides the ones which are chosen for this study.

1.7Organization of the study

This study was organized into five chapters. The first chapter deals with introduction
part. This chapter contains various aspects of the study such as background of study,
introduction of mutual fund, statement of problem, objective of the study, significance of
the study limitation and organization of the study. Similarly, the second chapter deals
with review the available literature, theoretical framework and identifies the research gap
5
in the field of mutual fund, it includes study of related books, research works, journal and
articles which are already published and conducted different experts and researchers in
the related fields. Likewise, the third chapter deals with the researcher methodology
which is defined the research design, nature and source of data, population and sampling
of the study, methods and tools of data collection and analysis. Chapter forth deals with
data presentation and analysis. Under this chapter researcher tested the reliability of data,
identified major perceptual factors of mutual funds investor, discussed about the finding
from the study and analysis the relevant data where it is significant or not. The last
chapter deals with the discussion of the finding, conclusions and implications of the
study.

Similarly, a bibliography and annexure have been appended at the end of the study. The
annex includes communalities, total variance explained, scare plot and questionnaire.

6
 Chapter 2

Literature Review and Theoretical Framework

This chapter deals with the evidence and findings from past related studies from various
researchers. The studies and evidences were relevant for the future investigation
regarding the perception of investors towards the mutual funds in the Kathmandu valley.
In this study there reviewed some research papers, articles, books and GRP related to
study, which contributed some ideas and help in presenting of this study.

2.1Meaning of mutual fund

A mutual fund is a financial intermediary that pools the savings of large number of
investors for collective investment in a diversification portfolio of securities with the
objectives yields and appreciation in their value. A fund is referred as ‘mutual’ as all its
returns minus its expenses are shared by the unit holders in proposition to the number of
units owned by them. Retail investors are steadily banishing the stock market and
diverting savings into mutual funds sector. They acquire stocks or bonds through mutual
funds at lower trading costs and get the benefit of diversification and risk minimization
Khare (2007), Mutual fund companies continually introduce new type of funds in an
effort to attract investor capital and maximize assets under management. The decision to
introduce a new type of fund is affected by a number of variables, including investor
demand for the fund’s attributes. As argued by Khorana and Servaes (1999), new fund
types in high demand generate capital inflows and incremental revenue for the fund
company.

A Mutual fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money collection from investors’ is invested in capital
market instrument such as shares, debentures and other securities. The income earned
through these investments and the capital appreciations realized are shared by its unit’s
holder in proportion to the number of units owned by them. Thus a Mutual Fund is the
most suitable investment to the common man as it offers an opportunity, to invest in a
diversified, professionally managed basket of securities at relatively low cost.

7
2.2Review of empirical evidences

Jambodekar (1996) conducted a study to assess the awareness of MFs among investors,
to identify the information sources influencing the buying decision and the factors
influencing the choice of a particular fund. The study reveals among other things that
Income Schemes and Open Ended Schemes are more preferred than Growth Schemes
and Close Ended Schemes during the then prevalent market conditions. Investors look for
safety of principal, liquidity and capital appreciation in the order of importance;
newspapers and magazines are the first source of information through which investors get
to know about MFs/ schemes and investor service is a major differentiating factor in the
selection of MF Schemes.

Shanmugham (2000) conducted a survey of individual investors with the objective to

study on what information source does investor depends. The results explained that
factors are an economical, sociological and psychological factor which controls
investment decisions. Mutual funds have attracted the attention of global practitioners
and academicians in India and abroad to draw sound conclusions on the factors
responsible for the selection of mutual funds as an investment option.

Gilkar (2002) examined that empirical evidence with regard to the perceptions of mutual
fund investors and revealed that, the growth products were rated highest by the
respondents, where as income products had the least preference.

Singh and Chander (2003) pointed out that occupational status and age have immaterial
influence on the choice of scheme. However, the important factors in the selection of
schemes for retail investors were attributed to the past track record, safety and future
growth prospects. Investors also expected prompt service, reliable information and also
repurchase facility from the companies.

Mehru (2004) study covers the problem and perspectives of Mutual Funds related to
structure, investment, policies, performance and investors. Study suggested for greater
transparency, increased innovation, and better service to investors, liquidity and higher
return to make Mutual Fund scheme more popular and investor friendly. Singh (2004)
study was undertaken to know the perceptions of small investors, who are exploited in
Indian capital market. The major perception factors were; age of investors do not have
impact on a decision to invest in mutual funds; salaried and retired investors gave
8
maximum weight-age to past performance of the organization; professionals assigned
maximum importance to availability of adequate information.

Ramamurthy and Reddy (2005) carried out a study to analyze recent trends in the mutual
fund industry and concluded that the major benefits delivered to the small investors by
mutual funds are professional management, diversification of investment, convenient
administration, return potential, liquidity, transparency, flexibility, affordability, wide
choice and proper regulation. They also analyzed certain recent trends in the mutual fund
industry such as, entry and exit of mutual fund companies, compulsory certification of
mutual fund sales/ marketing personnel, mutual fund schemes related to real estate,
commodity, bullion and precious metals, etc., shift from income funds to money market
funds, shift from banks to mutual funds and buying and selling of mutual fund online.

Desigan, Kalaiselvi and Anusuya (2006) conducted a study on women investors’

perception towards investment in general and found that women investor’s generally
hesitate in investing in mutual funds due to their lack of knowledge regarding investment
protection, procedure of making investment, market fluctuations, risk associated with
investment, valuation of investment and redressal of grievances regarding their
investment related problems.

Julie (2006) examined the individual characteristics on behavioral biases 401 (K) plan
allocation decisions and found that higher salaried employees tend to make significantly
better choices in investment in company stock. As a result, he suggested that a sample of
higher-income market percipients is more likely to meet the diversification conditions.

Mittal and Gupta (2008) examined the awareness of the investors about mutual funds and
various factors affecting the investment decision in the mutual funds. The study revealed
that mutual funds had comparative advantage over other options due to high return, high
safety, high liquidity and high convenience with moderate volatility. When compared to
other investment options, it ranked third most preferred option, Insurance and
government bonds having first and second positions. The overwhelming majority (85%)
of the respondents were aware of the mutual fund product and risk associated with it and
most of them were satisfied with the service provided by mutual fund.

Parihar, Shrama and Parihar (2009) analyzed the association between demographic
factors and investment in mutual funds and also examined the factors responsible for
9
investment in mutual funds. Primary data has been used in this study. 200 investors have
been taken from Agra region by using judgmental sampling. The analysis of the data has
been done with Chi square test. The findings of the study have revealed that out of 200
investors, 57 investors have positive attitude towards mutual funds, 95 investors have
neutral attitude and remaining have negative attitude. On the basis of Chi- square values
the study concluded that there is significant relationship between mutual funds with age,
gender, income, education and occupation. As far as factors responsible for investment in
mutual fund are concerned they have ranked at number one high return potential followed
by liquidity and flexibility of investment.

Nidhi and Ravi (2009) identified critical gaps in existing framework for mutual fund and
further extent it to redesign existing mutual fund services. Study analyze investors
perception, expectations and unveils some extremely valuable information to support
financial decision making of mutual funds. 66.7% investors with working knowledge
agree that actual returns from mutual fund are not found to be satisfied.

Jalandhar, Gobindgarh, & Mohali (2011) stated that the Indian mutual fund has gained a
lot of popularity from the past few years. It is very important to know the investors’
perception about this industry. The study analyses the mutual fund investments in relation
to investor’s behavior. Investors’ opinion and perception has been studied relating to
various issues like type of mutual fund scheme, main objective behind investing in
mutual fund scheme, role of financial advisors and brokers, investors’ opinion relating to
factors that attract them to invest in mutual funds, sources of information, deficiencies in
the services provided by the mutual fund managers, challenges before the Indian mutual
fund industry etc.

Kandavel (2011) investigated the factors which influenced the retail investors regarding
preference for investment in the mutual funds. He identified that investment behavior of
retail investors do not have a high level of consistency due to the influence of different
purchase factors. He further opined that negative perceptions about mutual funds can be
overcome through proper induction of investor awareness program. It was also
recommended that proper segmentation and positioning of products by mutual fund
companies are of utmost importance.

10
Simran, Bimal and Ramandeep (2011) analyzed that the mutual fund investment in
relation to investor’s behaviour. Investor’s opinion and perception has been studied
relating to various issues like type of mutual funds scheme, objective behind investing in
mutual fund, role of financial advisers and brokers, sources of information, deficiencies
in the services etc.

Saha and Dey (2011) examined the saving objectives of the investors, preferred
investment option, features preferably by investors and conceptual understanding of
mutual funds. Beside these objectives the study has analyzed the schemes preferred by
investors, qualities of the scheme which affect the investors, information source and fund
related attributes. The study is based on primary data. 100 investors have taken and the
enumerator has been appointed to fill the questionnaire from the investors by personal
interview. Those investors have taken who has the knowledge of conceptual terminology
of mutual funds. Pie charts, Chi Square test and factor analysis has been used to analysis
the data. They find that investors save their money for purchase of assets and want to
invest their money in bank. Among the financial instruments mutual funds are preferred
by investors. Investors prefer to invest tin growth plans and open ended schemes. They
prefer mutual funds for safety and liquidity. Chi Square values have shown that there is
significant relation between age and income and conceptual awareness levels of
individual investors but occupation has shown insignificant relation. Among the fund
related attributes investor want Intrinsic fund qualities, Flexibility investment facility and
credibility of Image. They concluded that success of the mutual funds is dependent on the
psychology of the investors. So there is need to study the financial behavior of investors.

Sharma (2012) analyzed the investor’s perspectives towards investment in mutual funds.
She has also examined the factors that may affect the selection of mutual funds schemes.
She has conducted a survey on 250 investors. She has analyzed the data through mean,
SD, correlation and factor analysis. The study has found the benefits which emerge out
from investment and it has grouped into three categories on the basis of factor analysis.
The first category has related to fund related attributes. Second has related to monetary
benefits provided by the funds and the last category has related to sponsor related
attributes.

11
Vyas and Moonat (2012) studied the perception of mutual fund investors and revealed
that most of the respondents invested in equity options and they were aware of the risk
associated with mutual funds.

Rekha (2012) observed that even though there were encouraging factors contributing to
the expansion of the mutual fund industry, there were a few factors inhibiting its growth.
The factors have been endorsed to low levels of customer awareness and lack of
knowledge about mutual funds, limited innovation in product offerings, unwillingness to
undertake even minimum risk, inaccessibility in smaller towns and cities due to lack of
efficient distribution network and abysmal financial literacy.

Singh (2012) conducted a study to analyze the impact of various demographic factors on
investor’s attitude towards mutual funds and to find out the factors which leads for
selection of mutual funds by using Chi Square test. He has conducted this study on 250
investors. He has found that there is no association between age, occupation and attitude
towards mutual funds. But there is an association between sex, income, educational
qualifications and attitude towards mutual funds. As far as the benefits of the mutual
funds are concerned, return potential and liquidity have been perceived to be most
attractive by investors, followed by flexibility, transparency and affordability.

Das (2012) identified the small investor’s perceptions on mutual funds and to analyze the
factors affecting small investors’ perception towards mutual fund. Small investors are
now turning more to mutual funds because of safety, liquidity, capital gains and
transparency. The present investigation outlined that mostly the small investors have
positive approach towards investing in mutual funds.

Vyas (2012) evaluated the forms of investment, mode of investment preferred by

investors. He has also examined the investor’s knowledge of risk and preference over
switching of funds by using Chi-Square test, Pearson’s correlation, mean and median. He
has taken 363 investors for the analysis of the data. He found that investors preferred
investment in gold followed by bank deposits, Life insurance schemes and post office
schemes. Investors preferred lump sum investment as compare to that of SIP. There has a
significant relationship between occupation of investors and mode of investment.
Majority of the investors have the knowledge of risk factors in mutual funds. Investors

12
switched the investment only for the sake of profitability and investors preferred existing
schemes for investment and they preferred to invest in equity schemes.

Rao and Daita (2013) attempted to analyze the influence of fundamental factors such as
economy, industry, and company on the performance of mutual funds. Efforts was made
to carry out an in-depth analysis of the economy through a collection of monthly data
pertaining to key macro-economic variables covering a period of 228 months spread over
19 years. The casual relationship between real economic variables and their impact on
statistics, correlation matrix, and Granger’s causality test. To appraise the mutual fund
industry various aspects such as assets under management, investor type, and product
classification were studied with the help of percentage analysis.

Kumar and Arora (2013) attempt to study the perception of mutual fund investors
regarding respondents know how, advertisement media, attributes of successful fund
manager, risk tolerance, etc. Majority of respondents expressed their agreement with
regard to mutual fund as an investor friendly vehicle for small investors.

Rajaseker (2013) carried out to know about the investor’s perception with regard to their
profile, income, savings pattern, investment patterns and their personality traits. In order
to the SIJ Transactions on Industrial, Financial and business management understand the
level of investor’s preference, a survey was conducted taking in to consideration various
parameters involved in investors decision making. For the purpose of evaluation, a
questionnaire survey method was selected keeping in mind objectives of the study. The
data was collected from primary and secondary sources. The primary sources were
collected from the investors who invested in various avenues. The secondary sources are
from books, journals and internet. Since the investor population is vast a sample size of
150 was taken for the project. The data was analyzed using the statistical tools like
percentage analysis, chi square, weighted average. From the findings, it was inferred
overall that the investor are highly concerned about safety and growth and liquidity of
investments. Most of the respondents are highly satisfied with the benefits and the service
rendered by the reliance mutual funds.

Shraddha (2013) examined the impacts of various demographic fact ors on investors’
attitude towards mutual fund. Outcome of the study revealed that the mutual funds are
dynamic investment avenues for all age groups. He further remarked that mutual fund

13
companies should focus on effective marketing of their products and schemes and must
also emphasis on portfolio management.

Kaushik, Kamboj, Kakkar (2013) studied the impact of investor’s age, income,
education, risk and return perception on the choice of investment between various
financial avenues. The data were collected from 250 respondents using a structured
questionnaire. Chi square statistic was used to establish the factors that were significantly
affected by the selected dimensions. The study disclosed the existence of critical gaps
regarding the discrepancies in the risk, returns, and service quality perceptions of the
investors.

Kaur (2013) shown that investors prefer mutual funds rather than stock market. They
consider mutual funds as flexible mode for investment. Moreover they think that Asset
Management Companies (AMCs) acts very efficient to track the market. Investment in
stock market is complex and risky. As far as suggestions to investors are concerned
investors should, consider not only the returns but also the risks associated with these
returns. Investors should consider size of the fund, charges charged by funds, change in
the corpus of funds and comparison with peer schemes as well as with benchmark.
Investors can make the investment decision by using Sharpe measure, Treynor Measure
and Jensen Alpha and Fama’s Measure. So the study concluded that investors under the
study prefer mutual funds over the stock market. To maintain these preferences mutual
fund companies should offer innovative schemes in the market to lure the investors.

Kumar & Goel (2014) stated that mutual fund in Indian context is a challengeable
phenomenon. In a short span of less than one decade it has changed the investment
pattern of medium and small investors in India. Consequently study of mutual fund has
become an essential ingredient of any business and finance program. Besides, the
investors should know how a mutual fund operates and what should they expect from
them, if they really want to benefit from this new vehicle of investment. Mutual fund
helps small investors to participate in the securities market indirectly and thus help in
spreading and reducing risk. The mutual fund is a vehicle that enables millions of small
and large savers spread across the country to participate in and derive the benefits of the
capital market growth. It is an alternative vehicle of intermediation between the suppliers
and the users of investible resources. This vehicle is becoming increasingly popular in

14
India due to higher investors’ return, relatively lesser risk and cost. In fact it is a more
efficient vehicle for creation of wealth.

Sehdev & Ranjan (2014) deals with preference and perception of investors towards
mutual fund. Its main objective is to study the factors responsible for the preference for
mutual funds as an investment option. The study also examines the investment objectives
undertaken by investors while investing in Financial Instruments and finds out the highly
used/preferred source of information for various investments options to invest in their
most preferred Financial Instrument. The data is collected from 160 respondents residing
at Delhi through a structured questionnaire. Descriptive statistics namely rank order,
frequency tables, cross tabs, bar charts and factor analysis are used for the purpose of
data analysis. It is found that “Benefits & Transparency” is the major factor that is
responsible for the investor’s preference for mutual funds. It is also observed from the
study that most of the investors studied under study are moderate risk taker and are
interested in Balanced Fund, through which they can earn higher returns at low risk.
People in India still think with the perspective of savings rather than taking risk and
investing in high ended equity markets. Even investors who invest in mutual funds are
unclear about how they function and how to manage them. So, proper information must
be provided to the investors in order to increase the loyalty among the investors towards
Mutual Funds.

Kumar (2014) stated that Indian mutual fund industry is playing an important role to
provide an alternative avenue to an array of small active investors in a scientific and
professional manner. Investment objectives of investors vary due to various demographic
factors. It is the need of the hour to identify and measure certain demographic factors
affecting investment objectives of small active investors investing in mutual fund. The
study focuses on small active investors of Gangtok (Sikkim) and Siliguri (West Bengal)
to fulfill this need. The study concludes that as far as the demographic factors are
concerned, geography, age, occupation and income have significant influence on choice
of investment decisions in mutual fund.

Sundar and Prakash (2014) examined the awareness among the investor community in
choosing the best mutual fund scheme as it conducted a comparative analysis of the
mutual funds of three AMCs. This study also showed that much information about

15
mutual funds is not available publicly. There is no information on fund styles or
comprehensive league tables to allow the comparison of mutual funds in the market.

Sehdev & Ranjan (2014) deals with preference and perception of investors towards
mutual fund. Its main objective is to study the factors responsible for the preference for
mutual funds as an investment option. The study also examines the investment objectives
undertaken by investors while investing in Financial Instruments and finds out the highly
used/preferred source of information for various investments options to invest in their
most preferred Financial Instrument. It is found that “Benefits & Transparency” is the
major factor that is responsible for the investor's preference for mutual funds. It is also
observed from the study that most of the investors studied under present study are
moderate risk taker and are interested in Balanced Fund, through which they can earn
higher returns at low risk. People in India still think with the perspective of savings rather
than taking risk and investing in high ended equity markets. Even investors who invest in
mutual funds are unclear about how they function and how to manage them. So, proper
information must be provided to the investors in order to increase the loyalty among the
investors towards mutual funds.

Subramanya (2015) conducted that investor’s perception towards mutual fund, with
consideration of socio economic variables. To achieve objectives the primary data has
been collected through structured questionnaires. Secondary data has been collected from
reports, books, journals, magazines and other published data’s. For collecting the primary
information judgment sampling technique is used. The socio economic factors like age,
gender, education, income and savings of investors’ perception towards mutual fund is
not encouraging but the age of investors’ and saving habit of respondents is correlated.

Doditya (2015) reveals that the financial literacy among the new investors is vital to
promote mutual fund industry. Hence, the fund manager should create awareness among
the investors regarding mutual fund so that they can diversify saving of the household to
their industry.

Joseph & Joseph (2015) reveals that the investors’ perception is dependent on the
demographic profile and assesses that the investor’s age and annual savings has direct
impact on the investors’ choice of investment. The mutual fund industry today needs to
develop products to fulfill customer needs and help customers understand how its

16
products cater to their needs. Retail investors are now turning more to mutual funds
because of convenience and transparency. The study summarize that mostly the small
investors have positive approach towards investing in mutual funds.

Ganapathi (2015) shows that there is a significant association between educational

qualification of the investors and the risk tolerance level and occupation of the investors
and the risk tolerance level. The results further indicate that there is no significant
association between occupation of the investors and the level of knowledge of mutual
fund and monthly savings of the investors and the level of knowledge of mutual fund.
Therefore, the investors have to consider the prevailing rate of risk free returns and to
compare the fund returns with it. Based on this the selection of schemes and the choice of
investment avenues can be decided. Due to the fund manager’s poor risk bearing
capacity, timing skill, stock selection ability, and imperfect diversification the schemes
had suffered with low return. Hence to increase the fund return the concerned fund
managers have to improve all these skills.

Arathy et. al. (2015) stated that mutual funds provide a platform for a common investor
to participate in the Indian capital market with professional fund management
irrespective of the amount invested. The Indian mutual fund industry is growing rapidly
and this is reflected in the increase in assets under management of various fund houses.
Mutual fund investment is less risky than directly investing in stocks and is therefore a
safer option for risk adverse investors. This project aims at finding out the factors
affecting investment decision on mutual funds and its preference over retail investors.
This project also aims at finding about the factors that prevent the people to invest in
mutual funds. The findings will help mutual fund companies to identify the areas
required for improvement and can also improve their marketing strategies. It will help the
MF companies to create new and innovative product according to the orientation of
investors.

Mane (2016) concluded that mutual fund has emerged as a tool for ensuring one’s
financial well being. As information and awareness is rising more and more people are
enjoying the benefits of investing in mutual funds. This research will introduce the
customer perception with regard to mutual funds that is the schemes they prefer, the plans
they are opting, the reasons behind such selections and also this research dealt with
different investment options, which people prefer along with and apart from mutual
17
funds. Like postal saving schemes, recurring deposits, bonds, and shares. The findings
from this project is that most of the people are hesitant in going for new age investments
like mutual funds and prefer to avert risks by investing in less riskier investment options
like recurring deposits and so.

Table 1

Review of literatures

Authors Research Methodology Finding

(time period)
Data Research
analysis variables
tools
Agrawal, G., Descriptive Investment Investors are aware.
& Jain, M. statistics avenues and
(2013, Investment More than 50% of the investors prefer Banks, LIC

October- objectives & MIS for Safety than the Real Estate, Equity

December) Shares, Commodity Market, Funds for Return,

NSC, LIC, and Mutual Funds for Tax Planning.
Arathy, B., Descriptive perception and Liquidity, diversification, risk and brand image
Aswathy, A. statistics preference, also have influence on the final mutual fund
N., & Prevention purchase decision of the investor but not as much
Pravitha, N. factors of as the former. Lack of knowledge that prevents
R. (2015, investment , them from investing in mutual fund.
August) motivating
factors mutual The mutual fund plan which is considered the best

fund schemes is equity plan followed by income plan, balanced

plan and other sector specific or special plans.
Equity based schemes are preferred over debt
schemes
Batra, G. s., Factors Tax, risk , Investors consider mutual funds as safe and
& Kaur, S. Analysis transaction cost , secured investment and vehicle to enter into blue
(2014) liquidity and chip companies and assure monetary benefits
transparency of
mutual fund
Das, S. Simple Gender, age , Significant relationship between the satisfaction
(2011). tactical income level, level male and female respondents with the
Tools influence investment in MFs
(percentage investment
method, factors, The test proves that there is no significant

cross investment relationship between the satisfaction levels of

tabulation objective and investors belonging to different occupations

and Chi- level of risk income level, influence investment factors,

18
 Square investment objective and level of risk with the
analysis) investment in MFs.
Dodiya, B. Chi square Aage, income, It is observed that there is a significant relation
M. (2015, test, and gender, education between the gender, age, income and occupation of
May ) factor level and respondents and their attitude about FMs
analysis occupation Investment.

It is found that there is no significant relation

between the respondent’s education level and their
attitude towards MFs.‘return’ has got 1st rank,
‘liquidity’ was ranked second, and ‘transparency’,
‘affordability ’and ‘flexibility’ have been ranked
third, fourth and fifth, respectively. As per Factor
analysis reduces the number of variables to such a
small number which could be capable of explaining
the observed variance in the large number of
variables.
Ganapathi, Chi square risk tolerance The results show that there is a significant
R. (2015, test level, expected association between educational qualification of
January ) return, level of the investors and the risk tolerance level and
knowledge of occupation of the investors and the risk tolerance
mutual fund, level.
confidence level
in mutual fund The results further indicate that there is no

investment, significant association between occupation of the

period of investors and the level of knowledge of mutual

investment in fund and monthly savings of the investors and the

mutual fund and level of knowledge of mutual fund.

downside risk
Jalandhar, P., Chi Square qualification, age, The demographic factors have no significant
Gobindgarh, occupation and relation with the factors that win back the
M., & annual family investors’ confidence at 5% level of significance
Mohali, L. income but age of the respondents have significant relation
(2011, May) with the factors that win back the investors’
confidence.

No significant differences were found among the

demographic factors of investors with regard to
criteria for evaluating, service of the mutual fund,
their opinion about financial advisors/brokers as
true decision makers behind their mutual fund
investments and their preference about financial

19
 advisors/brokers. Similarly with the respondent’s
main objective behind investing in SIP.
Joseph Factor Knowledge & There is significant difference among perceptual
S.K.& Analysis Awareness, factors (Knowledge & Awareness, Regulation &
Joseph M.A Regulation & Transparency, Convenience & Flexibility and
(2015) Transparency, Return & Affordability) towards mutual fund
Convenience & investment with respect to age and annual saving.
Flexibility and Among the gender, with regard to the perceptual
Return & factor – knowledge and awareness is high among
Affordability the males followed by convenience and flexibility.
Kalaiselvi, Descriptive functions of Majority of the respondents are male (90%), age
M. (2016, statistics service group of 20-30 years (54.8%), Undergraduates
Jan-Feb ) and marketing, (40%), Business people (44.8%), invest in bank
Friedman product deposits, open-ended mutual fund schemes (70%) ,
test awareness, brand aware of the mutual funds’ investments through
preferences, and new paper and magazines (60%), purchase the
investor`s mutual fund unit through brokers (60%), aware of
satisfaction the risk in mutual fund investment (80%) , aware of
the market value of units through Newspaper
(54.8%) and majority of the sample investors say
yes to make future investment in mutual funds
(80%)
Kaur, S., Dr. factor Size of the fund, Investors prefer mutual funds rather than stock
Batra, G. S., analysis charges charged market. They consider mutual funds as flexible
& Dr. by funds, change investment option, efficient Asset Management
Anjum, B. in the corpus of companies and they think investment in stock
funds and market is risky and complex.
comparison with
peer schemes as
well as with
benchmark.
Kesavaraj, Simple Age, Gender, About 76% of respondent are aware of the level of
G. (2013, Percentage Annual risk they take and 73% of respondents are aware of
October) analysis, Household their expected return. Similarly 51% of respondents
Chi-Square income, are aware of duration of investment they make.
test, Karl Qualification,
Pearson's customers’ About 42% of respondents have high preference

Correlation interest towards for investment and 64% respondents are satisfied in

and One the types and mutual fund investment.

way Anova. Benefits of

mutual fund,
purpose,

20
 category, level of
risk, expected
return.
Kumar, J., Descriptive Demographic Demographic factors are concerned; geography,
Dr. statistics factors age, occupation and income have significant
Adhikary, and Chi – (geography, age, influence on choice of investment decisions in
A., & Dr. Square test gender, income mutual fund.
Jha, A. and occupation)
(2014, June)
Kumar, R., statistical Regular income, Growth has been considered as the most important
& Goel, N. tools like Growth, objectives while making investment in mutual
(2014, Oct. - tabulation, Liquidity, Tax funds followed by regular income and liquidity at
Dec.) Descriptive saving and second and third place. Speculation has been
statistics Speculation considered least by them. Most of the investors
,Kendall’s relied on past performance of the mutual funds
coefficient while making investment in that mutual fund.
of Prospectus/Newsletters have been the most
concordanc important source used by the investors while
e etc. making investment followed by brokers and sub-
brokers.
Mane, P. Chi-square Investment There is significant different in preference for
(2016, option, AMC investment option
February ) Selection,
Awareness level There is no significance level of difference in
selecting the AMC

There is no significance level of difference in

awareness among mutual fund investors
Rajaseker, Percentage profile, income, 45.3%, 45.3%, 30% , 28.7% and 48% respondents
D. (2013, analysis, chi savings pattern, are considering risk preferring mutual fund
September ) square, investment investment , private bank as a sector for
weighted patterns and their investment, equity for scheme selection, gained
average personality traits knowledge through newspaper and preferring
premium for factor influencing mutual funds
respectively.
Sehdev, R., Descriptive Age, gender, The major factors which are responsible for the
& Ranjan, P. statistics qualification, preference of mutual funds as an investment option
(2014) namely rank income, risk are due to Benefits & Transparency, Returns on
order, taking ability, Investments, Information and Redemption Period,
frequency purpose of Liquidity & Intuitional Investor‟s Activity.
tables, cross investment , and
tabs, bar investment Majority of the people prefer this investment

charts and avenues option just because to diversify their risk and also

21
 factor to obtain the benefits within the schemes. Next
analysis major concern is of returns on the investment that
they have made, followed by the Information that
they are receiving from different sources. .
Singh, B. K. Chi-square Age, sex, Income, There is no association between age and the
(2012, test, Rank, and educational attitude towards mutual funds.
March) Weighted Qualification
score and There is a highest positive attitude towards the

Scaling. mutual funds in male against the female. And

among the graduate respondents against the others.

There is a highest positive attitude towards the

mutual funds among the respondents whose
occupation is service against the others.
Subramanya, Chi square Age, Gender, The perception of investors’ is not depending on
P. R. (2015, statistical Education , the socio economic factors.
January) technique Income, Savings
The perception towards income is independent,
may be the income habit is created on the basis of
their capacity and willingness but the saving habit
created due to the age factor.
Vyas, R. Statistical Income, age, Mutual funds were not that much known to
(2012, July) tools as occupation investors, still investor rely upon bank and post
Chi-square gender, marital office deposits, most of the investor used to invest
test, status, family in mutual fund for not more than 3 years and they
Pearson size, religion, used to quit from the fund which were not giving
Correlation, academic desired results. Equity option and SIP mode of
mean and qualification and investment were on top priority in investors’ list. It
median annual saving. was also found that maximum number of investors
did not analyse risk in their investment and they
were depend upon their broker and agent for this
work.

2.3Research gap

The study observed that many researchers have studied different dimensions of investors’
demographic profiles of investment to mutual fund schemes. They are found out some
important factors influences their risk perception, investment decisions and savings
patron of investors’ investment transparency, efficiency, knowledge, suitability,
regulation, service, flexibility, convenience. Above the literature, there are taken factors
are age, gender, marital status, income and educational qualifications to study the
investors perceptions in MF investment decisions. Hence, this study is needed to identify
22
the impact of demographic factors on the investment objectives of small active investors.
In this study, an attempt is made mainly to study the investment mode preferred by the
investors in Kathmandu and to check the preference given to investment in mutual funds
amidst availability of other traditional investment avenues.

2.4Theoretical framework

Mutual funds investors have different perception towards the mutual funds according to
their demographic factors as well as purpose of investment and responsible factors of
investment decision on mutual funds. Moreover in recent years, mutual funds have taken
initiative to improve investor's services. While seeing the mobilization of resources by the
mutual fund industry in the recent years, it appears that the investors have gained
confidence in the industry. Hence an attempt was made to evaluate the growth and
performance of mutual fund industry in Nepal along with the behavior of their returns and
the risk associated with the funds. In fact, mutual funds have designed an extensive range
of mutual fund schemes to meet the diverse needs of a multitude of investors.

During the past two decades, the Nepalese mutual fund industry has witnessed major
transformation. It has grown several folds in terms of resource mobilization, number of
mutual fund schemes, assets under management, number of investors and the range of
products and services offered to the investors. With the entry of different private sector
mutual funds the industry has become far more competitive. The range of financial assets
available to the house hold sector competes with each other for the attraction of small
investors. They entice them to invest their funds by providing incentives and facilities in
terms of flexible investment options and withdrawal plan. Each instrument has its own
return, risk, liquidity and safety profile. Mutual Funds come into this category. Small
investors cannot afford to own scripts of top companies to maximize their returns. It is a
vague situation that develops a question in the minds of investors upon whom an average
investor should rely or else, what should be the criteria to distinguish better mutual funds
from the others from the investment point of view. Hence, this study is needed to identify
the impact of demographic factors on the investment objectives of small active investors.

Joseph and Joseph (2015) identified 22 variables were classified under four heads as
knowledge awareness, regulation & transparency, convenience & flexibility and return &
affordability based on the facto loading. Kaur (2014) extracted overall 11 factors into the
3 significantly loaded on factors which are first Mutual funds are transparent, second
23
Mutual funds are transparent, beneficial and provide entry into blue chip companies and
last one is Utilization of Idle resources to beat the uncertain future monetary benefits.
Likewise Jambodekar (1996), Shanmugham (2000), Gilkar (2002), Singh and Chander
(2003, Mehru (2004), Ramamurthy and Reddy (2005), Desigan, Kalaiselvi and Anusuya
(200), Julie (2006), Mittal and Gupta (2008), Parihar, Shrama and Parihar (2009), Nidhi
and Ravi (2009), Jalandhar, Gobindgarh, & Mohali (2011), Kandavel (2011), Simran,
Bimal and Ramandeep (2011), Saha and Dey (2011), Sharma (2012), Vyas and Moonat
(2012), Rekha (2012), Singh (2012), Das (2012), Vyas (2012), Rao and Daita (2013),
Kumar and Arora (2013), Rajaseker (2013), Shraddha (2013), Kaushik, Kamboj, Kakkar
(2013), Kaur (2013), Kumar & Goel (2014), Sehdev & Ranjan (2014), Sundar and
Prakash (2014), Sehdev & Ranjan (2014), Subramanya (2015), Doditya (2015),
Ganapathi (2015), Arathy et. al. (2015) and Mane (2016) conducted the study on
investors perception of mutual funds with the respect to the demographic factors. The
studies reveal that the buying intent of a mutual fund product by a small investor can be
due to multiple reasons depending upon customer’s knowledge and awareness, regulation
and transparency, convenience and flexibility and return and affordability and investors’
perception is dependent on the demographic profile. So, the present study derive
theoretical framework as follows.

Demographic Factors
Age
Gender
Education Background
Investors’ Perception toward
Education Level
Mutual Funds
Income level
Annual saving
Occupation

Fig 1: Theoretical framework

24
 Chapter 3

Research Methods

This chapter consists of research strategies, methodology, and designs used in this study
are described in this chapter. Discussions begin with the research design, population and
sample, nature and source of data and model, and this is followed by the research
purpose. Furthermore, the validity and reliability of the study is involved in this chapter.

3.1Research design

The study design for the study is basically descriptive and analytical. Descriptive
research design is describing the state of affair, phenomena and situation as it exists at
present. As per Sekaran and Bougie (2012) a descriptive study is undertaken in other to
ascertain and be able to describe the characteristics of variable of interest. And the
analytical research design is used to test one or more specific hypotheses, typically
whether a significant between investors' perceptual factor and demographic variables. Of
course, data obtained in an analytic study can also be explored in a descriptive mode, and
data obtained in a descriptive study can be analyzed to test hypotheses. The basic
methodology used in the study was questionnaire survey.

3.2Population and sample

The population of the study was comprised of all MF investors residing in Kathmandu
valley. Investors were identified as an individual who had currently invested in mutual
funds. This study aimed to collect data from MF investors and the data were collected
from the respondents who were present at stock brokerages houses.

According to Watanabe & Prokhorov (1986) the minimum sample size necessary for

unknown population at 95% confidence level is 385. So the study distributed 385
questionnaires to the MF investors who were present at stock brokerages houses. In total
385 individuals were distributed the questionnaire out of which 357 individuals returned
the questionnaire. While screening of the fill of questionnaire, 27 of these were rejected
because of incomplete information. Thus the final sample size is of 330 individual FM
investors.
25
3.3Nature and source of data

In this study primary data are used. The primary data were obtained through
questionnaire survey of the individual investors of the Primo Securities P. ltd during Oct
17th to Nov 30th at the office time period 10 am to 3 pm.

3.4Instruments

In order to collect the primary data required for the study, a structured questionnaire
(shown in Appendix-III) had been used which was developed by combining the question
used by Joseph and Joseph (2015) and Ganapathi (2015). Studies the questionnaires were
divided into two sections. The first section include demographic variables like age,
gender, income level, education qualification, annual saving, and occupation of the
respondents out of them educational background and income variable were added from
the Ganapathi (2015). And the second section of the questionnaire comprised of 22
questions related to perceptual factors of mutual fund investors for the study which were
developed by Joseph and Joseph (2015). All the perceptual factors were measured by
responses on a 5-point rating likert scale, where rating 1 would mean Strongly Disagree
and rating 5 would mean Strongly Agree. The questionnaire was prepared in both Nepali
and English language for the simplicity of the investors.

3.5Methods of analysis

The collected data was classified, sorted, tabulated, and analyzed using statistical tools
like mean, standard deviation and correlation analysis, etc. to make the study meaningful.
The following techniques were used.

 Pie charts: in other to present the demographic profile of respondent.

 Cronbach Alpha: to measure internal consistency (reliability) of the data
Cronbach Alpha test has been employed.
 Factor analysis: in order to identify the key product attributes perceive by the
mutual fund investors, factor analysis has been used.
 T test and oneway ANOVA test at 95% confidence interval: to test whether
there is significance different or not between the variables.
 Correlations: to know the correlation between two variables whether there is
positive or negative correlation.

26
3.6Software used

The data obtained from the questionnaire response were analyzed using SPSS 20
software and result thus obtained was analyzed, interpreted and written by using MS
word.

3.7Test of validity and reliability

Content validity was established by under the study using pre testing of questionnaire as
a tool among the 33 Master level student of finance background.Reliability of the
measures was assessed with the use of Cronbach’s alpha. Cronbach’s alpha allows us to
measure the reliability of the different categories. It consists of estimates of how much
variation in scores of different variables is attributable to chance or random errors
(Selltzm, et. al. 1976). As a general rule, a coefficient greater than or equal to 0.5 is
considered acceptable and a good indication of construct reliability (Nunnally, 1978).

27
 Chapter 4

Analysis and Results

This chapter presents the analysis of the collected data.

4.1Respondent's demographic profile

This section explains the demographic characteristics of the respondents. In this section,
the respondents profile has been analyzed in terms of gender, age, education background,
education level, occupation, income level and annual saving.

4.1.1 Respondents' gender

Figure 4.1 shows the distribution of respondents on the basis of the gender. Out of 330
respondents, majority (54.4%) of the respondents were male while remaining (45.5%)
were female. This data stated that participation of female MF investors in the Nepalese
financial market are closely equal to male in terms of participation number.

45%

55%

Fig 4.1: Respondents' gender

28
4.1.2 Respondents' age

The figure 4.2 shows that out of 330 respondents, 81 respondents were age of less than
25. Similarly 145, 40 and 64 respondents were age between the 25-35, 35-45, and 45
above respectively. The figure clearly shows that the number of respondents on age group
25-35 was higher than the other age groups. Therefore the result shows that there is high
participation of young investors in MF markets.

160
145
140

120
No. of Respontents

100
81
80
64
60
40
40

20

0
under 25 25-35 35-45 above 45
Age

Fig 4.2: Respondents' age

4.1.3 Respondents' educational background

The figure 4.3 shows t the educational background of respondents. The study has taken
330 sample sizes out of those majority of respondents were belong to the management
background (45.2%) which means that most of the investors were from the management
background, similarly 24.2% were from the humanities, 14.5% were from the education,
9.4% were from the science and 6.7% were from the law background.

29
 7%

15%

45%

24%

9%

Fig 4.3: Respondents' education background

4.1.4 Respondents' education level

The figure 4.4 presents the fact of the sample respondents of mutual funds investor's
education level in the Kathmandu city. In the study, data from 330 respondents has been
collected. Out of 330 respondents, majority (46.7%) of the respondents have up to
bachelor degree while remaining 25.8%, 19.4% and 8.2% master degree, +2 and up to
SLC respectively. This pie chart concluded that in the Nepalese MF market around 50%
investors ware graduated bachelor degree.

SLC; 27

Master; 85
+2; 64

Bachelor; 154

Fig 4.4: Respondents' education level

30
4.1.5 Respondents' occupation

In the study, data from 330 respondents have been collected. Figure 4.5 shows the
distribution of respondents on the basis of the occupation. Out of 330 respondents,
majority (63%) of the respondents were salaried employee while remaining (37%) were
self employed. It means that salaried employee investors are majority in the Nepalese
financial market.

Non salary
37%

Salary
63%

Fig 4.5: Respondents' occupation

4.1.6 Respondents' income level

The figure 4.6 shows that the 330 sample respondents of mutual fund investors' annual
income level. On the figure y axis represents the number of respondents and x axis
represent the group of income level of mutual fund investors. According to the figure 4.6
89 respondents were belong to the income group of Rs. 1 lakh to 2 lakh which is higher
than the other income group. Similarly, 72, 70, 60, 39 respondents were earning Rs. 2 to 3
lakh, above Rs. 3 lakh, Rs 50 thousand to 1 lakh and under Rs. 50 thousand respectively.
It shows that more than one forth of MF investors are earned in the class of one lakh to
two lakh annually.

31
 100

89
90

80
72
70
70
60
60
Respondents

50

39
40

30

20

10

0
under 50000 50000-100000 100000-200000 200000- 300000 above 300000
Income Level

Fig 4.6: Respondents' income level

4.1.7 Respondents' annual saving

The respondents were asked to fill up their average annual saving. 124 respondents of the
mutual fund investors said they saved below Rs 50000 annually. It means that 40 percent
MF investors are only able to save less than Rs 50000 annually. Respondents' annual
saving between Rs 50 thousand to 1 lakh were 51 where the respondents of within the Rs
1 to 2 lakh annually saving were 96, likewise, Rs 2 to 3 lakh were 19 respondents.
Remaining 40 respondents were said that they save above Rs 3 lakh annually.

32
 140

124
120

100 96

80
Respondents

60
51

40
40

19
20

0
under 50000 50000-100000 100000-200000200000- 300000 above 300000
Annual Saving

Fig 4.7: Respondents' annual saving

4.2Exploring the dimensions of investors' perception

The study categorizes the retail investors' perception towards mutual fund investments by
identifying various perceptual factors and further analysis was conducted based on
demographic factors so as to unveil some extremely valuable information to support
financial decision making of mutual funds.

In most of the survey-based studies, study often uses summated scales to probe
underlying constructs being measured. These survey instruments may consist of indexed
responses to dichotomous or multi point questionnaires, which are later summed to arrive
at a resultant score associated with a particular respondent in the study. Usually,
developments of such scales are used to gather predictor variables for use in objective
models in further researches. Santos (1999) argued that in most such studies, the question
is raised on reliability. As the function of scales is to encompass the realm of prediction
stretches, the reliability of data consistency becomes an issue. One of the most popular
reliability statistics in use in such studies is Cronbach's alpha (Cronbach, 1951).
Cronbach's alpha is a measure of internal consistency (i.e. how closely related a set of
items are as a group). As a rule of thumb, a high value of alpha (of 0.70 or more) is often
33
used as evidence that the items measure an underlying (or latent) construct, meaning a
high degree of consistency. In the present study, Cronbach’s Alpha is found to be 0.827,
which sufficiently meets the minimum requirement to move ahead in the study (for other
tests such as KMO, Barlett’s and Factor Analysis)

Table 2

Reliability statistics
Cronbach's Cronbach's Alpha Based on N of Items
Alpha Standardized Items

.827 .853 22

Cronbach’s alpha was calculated to measure the reliability of the questionnaire and the
results have obtained. The value of cronbach’s alpha is 0.827 which is very high, thus
showing the higher reliability of the instrument used in the study. This value is an evident
to shows the data are collected is satisfactory because they meet the minimum acceptable
level of 0.7.

In a questionnaire based survey research, the responses to each question (the variable or
attribute) represent an outcome. But sometimes many questions in the survey are often
related, this might tend to influence subject responses. Factor analysis explains
correlations among multiple outcomes as the result of one or more underlying
explanations, or factors. The process involves data reduction, as it attempts to represent a
set of variables by a smaller number. Factor analysis takes qualitative observations
against each of the variables and resolves them into distinct patterns of occurrence. In
other words, factor analysis reduces the large number of variables in the study to a
smaller number that is capable of explaining the same variance observed in the large
number of variables. The first condition to apply factor analysis is that there should be
significant correlation between the variables. In this study all the variables had showed a
significant correlation. This provides an adequate basis for proceeding to next level. The
next step is to assess the overall significance of correlation matrix with Bartlett’s test.

34
Table 3

KMO and Bartltl’s Test

Kaiser-Meyer-Olkin Measure of Bartlett's Test of Sphericity

Sampling Adequacy.
Appro. Chi-Square Df Sig
.895 1731.901 231 .000

Bartlett’s test is used to examine that population correlation is an identity matrix.

Diagonals are ones and Off-diagonals are zeros. A significant result (Sig. < 0.05)
indicates matrix is not an identity matrix; i.e., the variables do relate to one another
enough to run a meaningful EFA. In this study overall Chi-Square is significant at 0.000
levels which are 1731.901. The other is overall test is measure of sampling adequacy.
Kaiser-Meyer-Olkin Measure of Sampling Adequacy: it is an index, used to examine the
appropriateness of factor analysis. If it is between 0.5 to 1 than it is appropriate. If it is
below 0.5 it may not be appropriate. In this study it is .856>0.5.

As shown on the Appendix I measure the extent to which a variable correlates with all
other variables and higher values of communalities are considered better. If
communalities for a particular variable are low (say, between 0.0 and 0.5), then that
variable will struggle to load significantly on any factor. Once the extraction of factors
has been completed, the table of communalities is examined for how much of the
variance in each of the original variables is explained by the extracted factors. Appendix I
represents the results on communalities of variables (the amount of variation extracted
from each variable). In the present study, the extraction of factors is done using the
principal component analysis method. In the Appendix I four statements have shown
value less than 0.4 this variable has failed to load on any factor. Those items having their
communalities below 0.4 and Cronbach’s alpha below 0.6 were removed from the final
questionnaire resulting in 18 statements for perceptual factors of mutual fund investors
out of 22 statements. The screen test was used for selecting the accurate number of
factors. The data were analyzed using principal component analysis, with the vaimax with
Kaisan normalization rotation method. Then the 18 identify statements were classified
under six heads based on the factor loading. To assess the importance of each component,
Eigen values have used in selecting the number of factors.

35
The Eigenvalue for a given factor measures the variance in all the variables which is
accounted for by that factor. In other words, the Eigenvalue is the total variance explained
by each factor. Any factor that has an Eigenvalue less than one would be disregarded
because this factor does not have enough total variance explained to represent a unique
factor. The un-rotated output in factor analysis tends to maximize the variance accounted
for by the first and subsequent factors, thus forcing the factors to be orthogonal in factor
matrix. During this stage of data compression, most variables tend to load on the early
factors and then substantially on more than one factor. Here, rotation serves a better
option by making output more understandable by generating a pattern of loadings where
variables load strongly on one factor while loading weakly on the other subsequent
factors. Rotations of loading can be either orthogonal or oblique rotation, allowing the
factors to correlate. The most commonly used method of orthogonal rotation is Varimax
Rotation, which rotates the factor axes to maximize the variance of the loadings of a
factor in column on all the variables in rows of a factor matrix (representing the results of
differentiating the original variables by extracted factors). However, often unrealistic
assumption of orthogonality causes the Varimax Rotation to be a less preferred method.
The other option of factor rotation, Oblique method, which is inclusive of orthogonal
rotation, is rather more preferred method in factor analysis. But in this study, the Varimax
Rotation method is used.

Appendix II represents the results in total variance explained by different variables in the
study. The extraction is conducted through the principal component analysis and
orthogonal (varimax) rotation method of rotation for factor loading. From the results in
Appendix II, it evident that there are six variables which have Eigenvalues more than 1.0
and the cumulative total variance explained by these factors is 53.119%. The sorted
Eigenvalue against the factor number is graphed in the Cattell Scree Plot in the Figure
4.8. The plot reckons like the side of a mountain and Scree refers to the debris falling
from that mountain and settling at the mountain's base. The graph below exhibits that
there are six factors which are more important to perception of mutual funds investors
(with Eigenvalues either equal or more than 1). The rest of the factors, though also
influenced the investors in some ways or the other, are on limited scale.

36
Figure 4.8: Scree plot

The graph (Figure 4.8) demonstrates that there are six components which are more crucial
for the investors. The remaining variables have also exerted influence on the users but
that is on a limited scale. Table 4 represents the rotated component matrix which is a
matrix of the factor loading for different variables into each factor. In the present study
the loading has value less than 0.40 are being suppressed so as to identify substantive
loading. The matrix has constructed on the basis of varimax criterion with Kaiser
Normalization method. The entire rotation process has converged in seven iterations. In
the above given scree plot is used to extract the number of factors. Screen plot is basically
pictorial presentation of Eigen values. Six components are having more than one Eigen
value.

The factor pattern matrix for orthogonal rotations reports the factor loadings for each
variable on the factors after rotation. Table 4 represents the results in rotated component
matrix. This matrix basically represents how both the variables are weighted for each
factor, and the correlation between the variables and the factor. Because there are
correlations for which possible values range from -1 to +1, the SPSS was asked to

37
suppress (not to print) any of the correlations that are less than 0.3 values, allowing the
output to be easier to read by removing the clutter of low correlations that, probably, are
not meaningful in the present study. The result of the final solution is exhibited with 18
statements to identify the various issues related to mutual fund investments. The result of
the final solution is exhibited with 18 statements out of 22 statements to identify the
various issues related to mutual fund investments. From Table 4, six factors have
extracted from the 18 statements. Three variables significantly loaded on first factor.
Second factor included three statements. Similarly, four statements loaded on third
factor, likewise, two, three, two statements loaded on fourth, fifth and sixth factors
respectively. On the basis of these variables six factors have extracted and grouped which
are shown as;

Factor 1

It includes the three attributes (statements) of perception of mutual funds investors'

"disclosure norms prescribed by SEBON is significant factors in investor services",
"reputation of MC, is the important quality I look forward before investing in a fund" and
"past performance of the scheme does not guarantee future performance of scheme". The
first two statements are weighing heavily on the “Transparency and Efficiency” side and
hence can be grouped (named) as “Transparency and Efficiency”.

Factor 2

This factor includes the three statements i.e. "mutual funds (MFs) provide the service of
experienced and skilled professionals in fund management", "good structural
requirements of mutual fund ensure the investors protection" and MF involves less
transaction cost". Since these statements can be grouped together into knowledge and
awareness, this factor can be renamed as “Knowledge and Awareness”.

Factor 3

This factor was weighed heavily by the statements “mutual fund is an ideal option for
individual investors who do not have the time, knowledge & expertise in the stock
market.”, “the mutual funds are quite wrongly promoted as an alternative to equity
investing and create very high expectations in the minds of the investors.”, “day to day
disclosure of NAV by the funds is really beneficial for me”, " investment in mutual funds

38
by MC’s are based on adequate research and after ensuring prudent process" and
“SEBON and other controlling bodies are effective in regulating the mutual fund
market.”. Since these statements are product specific, this factor can be named as
“Suitability and Regulation”.

Table 4

Investor’s perception towards mutual fund investment - factor loadings after varimax
rotation

Variables Statements Factor Loading

F1 F2 F3 F4 F5 F6
Transparency Q8 .
and 526
Q12 .
Efficiency
629
Q14 .
540
Knowledge Q1 .
and 646
Q5 .
Awareness
649
Q7 .
704
Suitability Q11 .
and 522
Q13 .
Regulation
674
Q17 .
557
Q18 .
457
Q22 .
576
Service and Q16 .
Return 875
Q20 .
900
Flexibility Q15 .
and 606
39
Convenience Q19 .
491
Q21 .
702
Diversificatio Q2 .
n and Safety 691
Q4 .
731

Factor 4

This factor consists of the two statements, e.g. "the private sector mutual funds have
benefitted the investors by providing them more options and better services" and "MFs
have failed to provide adequate return in investments to me". Since these variables can be
clubbed together in a group of additional benefits, the factor can be renamed as “Service
and Return”.

Factor 5

This factor represents the three statements, "flexibility in investment pattern attracts me",
"one can invest or withdraw funds according to its necessity and convenience" and "MFs
are suitable for small investors". Since all of these statements are investment and return
benefits specific variables, this factor can be named as “Flexibility and Convenience”.

Factor 6

This is the last factor which represents the two statements, "mutual fund investment helps
diversification and reduction of risk." and " MFs provide a shield against risk loss than to
direct investment in shares". Since all of these statements are investment and return
benefits specific variables, this factor can be named as “Diversification and safety”. From
the above discussion name of six loaded factors summarized as follows.

1. Transparency & efficiency

2. Knowledge & awareness
3. Suitability & regulation

40
 4. Service & return
5. Flexibility & convenience and
6. Diversification & safety

4.3Demographic variables and perception of mutual fund investors

Under this part, data analysis is tasted using T test and one way ANOVA test at 95%
confidence interval i.e at 5% significant level. The rule for acceptance or rejection of null
hypothesis is based on tabulated p - value of ANOVA. If the tabulated p - value is less
than the 0.05, the null hypothesis will reject and p - value is more than the 0.05, the null
hypothesis will accept.

H0 1- There is no significant difference between gender and perceptual factors towards

mutual fund investment.

H1 1- There is significant difference between gender and perceptual factors towards

mutual fund investment.

Table 5

Perception of mutual fund investors with regard to gender

Gender N Mean Std. Deviation

Perceptual Factors
t Sig.

Male 180 2.807 1.043

Transparency & Efficiency
Female 150 2.971 1.048 .109 .742

Male 180 2.811 1.060

Knowledge & Awareness
Female 150 2.895 1.187 4.131 .043

Suitability & Regulation Male 180 2.992 .876

Female 150 3.066 .947 1.375 .242

Male 180 2.875 1.052

Service & Return
Female 150 3.040 1.070 .007 .935

Male 180 2.837 1.032

Flexibility & Convenience
Female 150 3.020 .981 .604 .438

Male 180 2.811 1.041

Diversification & Safety
Female 150 3.070 1.058 .071 .791

41
Table 5 shows that p - values of transparency and efficiency, suitability and regulation,
service and return, flexibility and convenience and diversification and safety were found
to be greater than 0.05 but the p value of knowledge and awareness was less than the 0.5
with respect to gender, hence H1 is accepted which stating that there is significant
difference between gender and perceptual factors towards mutual fund investment.
Therefore male investor's perception toward the mutual funds is different from the
female.

H0 2- There is no significant difference in perceptual factors with respect to different age

groups.

H1 2- There is significant difference in perceptual factors with respect to different age

groups.

Table 6

Perception of mutual fund investors with regard to age

Perceptual factors Age N Mean Standard F Sig.

deviation
Transparency & under 25 81 2.819 1.093
Efficiency 25-35 145 2.908 1.074
35-45 40 2.883 0.882 0.134 0.94
above 45 64 2.901 1.042

Knowledge & under 25 81 2.918 1.140

Awareness 25-35 145 2.860 1.158
35-45 40 2.742 1.031 0.257 0.856
above 45 64 2.807 1.070

Suitability & under 25 81 3.064 0.888

Regulation 25-35 145 2.988 0.934
35-45 40 3.135 0.967 0.346 0.792
above 45 64 2.997 0.853

Service & Return under 25 81 2.901 1.116

25-35 145 2.969 1.076
35-45 40 3.063 1.039 0.27 0.847
above 45 64 2.898 0.993

Flexibility & under 25 81 2.811 1.046

Convenience 25-35 145 2.940 1.032
35-45 40 3.100 0.916 0.762 0.516
above 45 64 2.901 0.984

42
Diversification & under 25 81 2.864 1.081
Safety 25-35 145 2.990 1.023
35-45 40 2.863 1.080 0.317 0.813
above 45 64 2.914 1.097

Table 6 shows that p - values were found to be greater than 0.05 for age in the case of
perceptual factors of mutual fund investors, hence H0 is accepted which stating that there
is no significance different between age and perceptual factors of mutual fund investors.
It means that Nepalese investor's perception toward the mutual fund is similar among
their different age group.

H0 3- There is no significant difference between educational background and the

perception towards mutual funds.

H1 3- There is significant difference between educational background and the perception

towards mutual funds.

Table 7

Perception of mutual fund investors with regard to education background

Perceptual Educational N Mean Standard F Sig.

factors Background deviation
Transparency & Management 149 2.962 1.064
Efficiency Science 31 2.849 0.930
Humanities 80 2.767 1.090
0.57 0.684
Education 48 2.910 0.991
Law 22 2.742 1.088

Knowledge & Management 149 2.946 1.099

Awareness Science 31 2.591 1.213
Humanities 80 2.838 1.139 0.78
0.537
Education 48 2.785 1.106 2
Law 22 2.742 1.088

Suitability & Management 149 3.097 0.879

Regulation Science 31 2.903 0.981
Humanities 80 3.033 0.910 0.59
0.669
Education 48 2.929 0.871 2
Law 22 2.909 1.100

Service & Management 149 3.003 1.101

Return Science 31 2.581 1.073
Humanities 80 3.031 1.109 1.36
0.245
Education 48 2.833 0.907 6
Law 22 3.068 0.863

43
Flexibility & Management 149 2.951 1.085
Convenience Science 31 2.559 1.052
Humanities 80 3.038 0.903 1.38
0.24
Education 48 2.840 0.894 3
Law 22 2.970 1.028

Diversification Management 149 2.943 1.041

& Safety Science 31 2.758 1.189
Humanities 80 2.994 1.081 0.32
0.864
Education 48 2.927 1.062 1
Law 22 2.841 0.905

Table 7 shows that p - values were found to be greater than 0.05, for educational
background with respect to perceptual factors of mutual fund investors, hence H 0 is
accepted stating that there is no significant difference between educational background
and the perceptual factors towards mutual funds. In another words, educational
background of investors do not affect on their perception toward mutual funds.

H0 4- There is no significant difference between educational level and the perception

towards mutual funds

H1 4- There is significant difference between educational level and the perception

towards mutual funds

Table 8

Perception of mutual fund investors with regard to education level

Perceptual Education Level N Mean Standard deviation F Sig.

Factors
Transparency & up to SLC 27 2.975 0.896
Efficiency +2 64 2.844 1.062
Bachelor 154 2.879 1.056 0.1 0.96
Master 85 2.886 1.080

Knowledge & up to SLC 27 2.790 1.271

Awareness +2 64 2.901 1.186
Bachelor 154 2.788 1.061 0.414 0.743
Master 85 2.941 1.131

Suitability & up to SLC 27 2.674 0.781

Regulation +2 64 3.025 1.022
Bachelor 154 3.114 0.874 1.927 0.125
Master 85 2.979 0.903

up to SLC 27 2.722 1.050 1.699 0.167

Service & Return +2 64 3.195 1.014
Bachelor 154 2.896 1.032
Master 85 2.935 1.141

44
Flexibility & up to SLC 27 2.642 1.194
Convenience +2 64 3.047 0.999
Bachelor 154 2.911 0.959 1.021 0.384
Master 85 2.929 1.054

Diversification & up to SLC 27 3.000 1.127

Safety +2 64 3.109 0.998
Bachelor 154 2.844 1.050 0.996 0.395
Master 85 2.924 1.084

Table 8 shows that p - values were found to be greater than 0.05, for educational level
with respect to perceptual factors (transparency and efficiency, knowledge and
awareness, suitability and regulation, service & return, diversification and safety) of
mutual fund investors, hence H0 accepted, stating that there is no significant difference
between educational level and the those perception factors toward mutual funds.
Therefore this hypothesis stated that Nepalese investors have similar perception toward
the mutual funds even they have different educational level (up to SLC, +2, bachelor or
master degree).

H0 5- There is no significant difference among occupation and perceptual factors toward

mutual fund investment.

H1 5- There is significant difference among occupation and perceptual factors towards

mutual fund investment.

Table 9

Perception of mutual fund investors with regard to occupation

Perceptual Occupation N Mean Std. Deviation

Factors t Sig.
Salaried
208 2.852 1.084
Transparency & Efficiency employee
3.218 .074
Self employed 122 2.931 .982
Salaried
208 2.923 1.118
Knowledge & Awareness employee
.009 .923
Self employed 122 2.724 1.112
Salaried
Suitability & Regulation 208 3.056 .887
employee
.679 .410
Self employed 122 2.973 .945
Service & Return
Salaried 208 2.995 1.080
employee

45
 .002 .962
Self employed 122 2.872 1.031
Salaried
208 2.942 .996
Flexibility & Convenience employee
.142 .707
Self employed 122 2.882 1.041
Salaried
208 2.903 1.047
Diversification & Safety employee
.043 .836
Self employed 122 2.971 1.072

Table 9 shows that p - values were found to be greater than 0.05, for occupation with
respect to perceptual factors (transparency and efficiency, knowledge and awareness,
suitability and regulation, flexibility and convenience, service and return, diversification
and safety) of mutual fund investors, it means that there is not significant at 95% level
hence alternative hypothesis would be rejected and null hypothesis would accepted that
there is no significant different between investors' perception factors and occupation.
Occupation of investor either salaried employee or self employed it does not affect on
their perception toward the mutual fund.

H0 6- There is no significant difference between income level and the perception towards
mutual funds

H1 6- There is significant difference among Income level and perceptual factors towards
mutual fund investment.

Table 10

Perception of mutual fund investors with regard to income level

Perceptual annual Income N Mean standard T Sig.

Factors deviation
Transparency & under 50000 39 2.786 1.151
Efficiency 50000-100000 60 2.733 1.092
100000-200000 89 2.888 1.063
200000-300000 72 3.037 0.979 0.784 0.536
above 300000 70 2.904 0.999

Knowledge & under 50000 39 2.735 1.180

Awareness 50000-100000 60 2.683 1.049
100000-200000 89 2.958 1.142
200000-300000 72 2.912 1.149 0.699 0.593
above 300000 70 2.852 1.088

Suitability & under 50000 39 2.656 0.804 1.951 0.102

Regulation 50000-100000 60 3.013 0.891
100000-200000 89 3.089 0.910

46
 200000-300000 72 3.108 0.882
above 300000 70 3.077 0.978

Service & Return under 50000 39 2.641 1.141

50000-100000 60 2.858 1.062
100000-200000 89 2.966 1.110
200000-300000 72 3.111 0.972 1.427 0.225
above 300000 70 3.014 1.032

Flexibility & under 50000 39 2.435 1.063

Convenience 50000-100000 60 2.817 1.040
100000-200000 89 3.071 1.039
200000-300000 72 2.986 0.942 3.211 0.013
above 300000 70 3.019 0.929

Diversification & under 50000 39 2.538 1.047

Safety 50000-100000 60 2.833 1.064
100000-200000 89 3.107 0.987
200000-300000 72 3.049 1.091 2.4 0.05
above 300000 70 2.879 1.058

Table 10 show that p - values were found to be greater than 0.05, for income level with
respect to perceptual factors of mutual fund investors in terms of transparency and
efficiency, knowledge and awareness, suitability and regulation, service and return,
diversification and safety, but the p values were found to be lesser than 0.05, for annual
saving in the case of perceptual factor (flexibility and convenience) of mutual fund
investors and hence Ho is rejected stating that there is relationship between income level
and perceptual factors of mutual fund investors. In another words investor's perception
toward mutual fund is different according to their annual income level. Since the oneway
ANOVA is found to be significant Tukeys multiple comparison test was conducted to
identify which group of investors have significant difference.

Table 11

Post Hoc Analysis of flexibility and convenience

Dependent (I) Income (J) Income Level Mean Difference Sig.

Variable Level (I-J)

under 50000 50000-100000 -.3807692 .345

47
 Flexibility and 100000-200000 -.6352636* .009
Convenience
200000- 300000 -.5502137* .046

above 300000 -.5831502* .030

The Post Hoc analysis reveals the details regarding the significance of means difference
between income level with respect to perceptual factors of investors. Table 11 only shows
that which has a significant different between income level and investor’s perceptual
factor toward the mutual funds. According to Table 10 perceptual factors flexibility and
convenience is significant different with the income level but remaining factors were not
different in respect to the income level. The result shows that in the case of Flexibility
and Convenience, the respondents in the income group of less than Rs. 50000
significantly differ with Rs 1,00,001 - Rs.2,00,000, Rs 2,00,001 - Rs3,00,000 and above
the Rs. 3,00,000.

H0 7- There is no significant difference among annual saving and perceptual factors

towards mutual fund investment.

H1 7- There is significant difference among annual saving and perceptual factors towards
mutual fund investment.

Table 12

Perception of mutual fund investors with regard to annual saving

standard
Perceptual Factors annual Saving N Mean T Sig.
deviation
Transparency & under 50000 124 2.726 1.160
Efficiency 50000-100000 51 3.203 0.962
100000-200000 96 2.924 0.975
200000-300000 19 2.561 0.896 2.561 0.039
above 300000 40 3.008 0.923

Knowledge & under 50000 124 2.879 1.137

Awareness 50000-100000 51 2.889 1.053
100000-200000 96 2.865 1.082
200000-300000 19 2.456 1.198 0.627 0.644
above 300000 40 2.858 1.210

48
Suitability & under 50000 124 3.053 0.882
Regulation 50000-100000 51 3.082 0.872
100000-200000 96 3.031 0.874
200000-300000 19 2.642 1.043 0.927 0.449
above 300000 40 3.040 1.047

Service & Return under 50000 124 2.964 1.135

50000-100000 51 2.882 1.107
100000-200000 96 3.005 1.001
200000-300000 19 2.684 0.885 0.428 0.788
above 300000 40 2.988 1.016

Flexibility & under 50000 124 2.901 1.034

Convenience 50000-100000 51 3.098 1.128
100000-200000 96 2.951 0.901
200000-300000 19 2.263 1.010 2.525 0.041
above 300000 40 2.992 0.965

Diversification & under 50000 124 2.948 1.032

Safety 50000-100000 51 3.000 1.015
100000-200000 96 2.969 1.107
200000-300000 19 2.368 1.116 1.453 0.216
above 300000 40 2.950 0.999

Table 12 show that p - values were found to be lesser than 0.05 for annual saving in the
case of transparency and efficiency and flexibility and convenience perceptual factors of
mutual fund investors, hence h0 is rejected stating that there is significant difference
among annual saving and perceptual factors towards mutual fund investment. It means
that investor's perception toward mutual fund is not similar according to different annual
saving group. Since the oneway ANOVA is found to be significant, Tukeys multiple
comparison test was used to identify which group of investors have significant difference.
The Post Hoc analysis reveals the details regarding the significance of means difference
between each pair of annual saving group with respect to perceptual factors of mutual
fund investors. The result shows that in the case of transparency and efficiency, the
respondents in the annual saving group up to Rs. 50000 significantly differ with the
respondents in the annual saving group Rs.50000- Rs.100000. Similarly the result shows
that in the case of flexibility and convenience, the respondents in the annual saving group
up to Rs. 50000- Rs100000 significantly differ with the respondents in the annual saving
group Rs.200000- Rs.300000. But the remaining p - values of transparency and
efficiency, knowledge and awareness, suitability and regulation, service and return and,
diversification and safety were found to be greater than 0.05, for annual saving so for
those no needed to Tukeys multiple comparison test was used to identify which group of
investors have significant difference.
49
Table 13

Post Hoc Analysis of transparency & efficiency and flexibility & convenience

Dependent (I) Annual Mean Difference

Variable Saving (J) Annual Saving (I-J) Sig.
Transparency & Up to Rs. 50000 50000-100000 .4768079* .047
Efficiency 100000-200000 .2790033 .529
200000- 300000 .6412109 .148
above 300000 .1942810 .902
Flexibility & 50000-100000 under 50000 .1975016 .761
Convenience 100000-200000 .1466503 .917
200000- 300000 .8348813* .018
above 300000 .1063725 .987

Table 14 shows that there are significant positive correlation among the MF investors'
perceptual factors transparency and efficiency, knowledge and awareness, suitability and
regulation, service and return, flexibility and convenience and diversification and safety.
The Table 14, further despites that there is a highest significant positive correlation
between the investors' perceptual factors transparency and efficiency and Suitability &
regulation. This is evident with a correlation coefficient of above (r) .505 and it is
significant at 0.01 level.

Table 14

Correlation among factors

Trans Know Suitab Servic Flexibi Divers

parenc ledge ility & e & lity & ificatio
y& & Regul Return Conve n &
efficie Aware ation nience safety
ncy ness
Transparency &
.454** .505** .356** .396** .358**
efficiency
Knowledge &
.499** .366** .366** .327**
Awareness
Suitability &
.377** .460** .336**
Regulation
Service & Return .338** .306**

50
Flexibility &
.306**
Convenience
Diversification &
safety

4.4Major finding

 The study identified the investors perceptual factors towards the MF which are
transparency, efficiency, knowledge, suitability, regulation, service, flexibility,
convenience, risk and return, service provided by fund, flexibility of the funds,
diversification, past performance of the found and prompt settlement.
 The indentified perceptual factors were classified under six heads as transparency
and efficiency, knowledge and awareness, suitability and regulation, service and
return, flexibility and convenience, and diversification and safety with respect to
perception of investors towards mutual fund investment.
 Transparency and efficiency is the most important factor that investor perceive
with extraction sums of squared loading 25.222%, 7.280% followed by
knowledge and awareness, suitability and regulation, service and return, flexibility
and convenience, and diversification and safety with sums of squared loading
5.535%, 5.360% and 4.991% respectively.
 The study were found that investor's perception towards the mutual fund had
significant different according to the demographic variables like gender, income
level and annual saving but variables like age, education level, occupation and
educational background did not differently perceive.
 The Post Hoc analysis reveals that in the case of flexibility and convenience, the
respondents in the annual income group of less than Rs. 50000 significantly differ
with Rs.1,00,001- 2,00,000, Rs 2,00,001-3,00,000 and above Rs 3,00,000 but not
with income level group of Rs. 50001-100000 and in the annual saving group of
Rs. 50001-1,00,000 significantly differ with Rs.2,00,001-3,00,000. In the case of
perceptual transparency and efficiency, the respondents in the saving group of less
than Rs. 50000 significantly differ with the respondents in the saving group of Rs.
50,001 - 1, 00,000.
 There were significant positive correlation among the MF investors' perceptual
factors transparency and efficiency, knowledge and awareness, suitability and

51
 regulation, service and return, flexibility and convenience and diversification and
safety.

Chapter 5

Discussions, Conclusion and Implications

5.1Discussions

This study found six perceptual factors of mutual funds investors these factors are names
as transparency & efficiency, knowledge and awareness, suitability and regulation,
service and return, flexibility and convenience, and diversification and safety. And there
were significant positive correlation among the MF investors' perceptual factors,
transparency and efficiency, knowledge and awareness, suitability and regulation, service
and return, flexibility and convenience and diversification and safety. Mutual fund
investor's perception towards the mutual fund is significantly different according to the
demographic variables like gender, income level and annual saving but it is not
significantly different according other variables like age, education level, occupation and
educational background. According to Joseph and Joseph (2015) found that the buying

52
intent of a mutual fund product by a small investor can be due to multiple reasons
depending upon customer’s knowledge and awareness, regulation and transparency,
Convenience and flexibility and return and affordability. The study reveals that the
investors’ perception is dependent on the demographic profile and assesses that the
investor’s age and annual savings has direct impact on the investors’ choice of
investment. Kumar (2014) stated that the study concludes that as far as the demographic
factors are concerned, geography, age, occupation and income have significant influence
on choice of investment decisions in mutual fund. Subramanya (2015) conducted that the
socio economic factors like age, gender, education, income and savings of investors’
perception towards mutual fund is not encouraging but the age of investors’ and saving
habit of respondents is correlated. Singh (2014) has found that there is no association
between age, occupation and attitude towards mutual funds. But there is an association
between sex, income, educational qualifications and attitude towards mutual funds. As far
as the benefits of the mutual funds are concerned, return potential and liquidity have been
perceived to be most attractive by investors, followed by flexibility, transparency and
affordability.

Mutual fund investors consider various factors like, transparency, efficiency, fund size,
types of schemes, scheme portfolio, expected return and risk etc. This study mainly
examines the various demographic factors influencing mutual fund investment decision
making. Using of rotated factor matrix analysis of several variables has been influenced
investment decision. The most influencing factors are transparency and efficiency of the
funds. Similarly some other factors are also influence investment decision of the investor
they are type of fund, scheme portfolio, risk and return, service provided by fund,
flexibility of the funds, diversification, past performance of the found, dividend history of
the funds and prompt settlement.

5.2Conclusion

The study was undertaken with the primary objective to know about the perception of the
retail investors towards mutual fund in the city of Kathmandu. A mutual fund is a
financial intermediary that pools the savings of large number of investors for collective
investment in a diversified portfolio of securities with the objectives yields and
appreciation in their value. The buying intent of a mutual fund product by a small
investor can be due to multiple reasons depending upon transparency, efficiency,

53
knowledge, suitability, regulation, service, flexibility, convenience, risk and return,
service provided by fund, flexibility of the funds, diversification, past performance of the
found and prompt settlement. The perceptual factors identified were classified under six
heads as transparency and efficiency, knowledge and awareness, suitability and
regulation, service and return, flexibility and convenience, and diversification and safety
with respect to perception of investors towards mutual fund investment. The study stated
that mutual fund investors were more consider on these six perceptual factors while
purchasing the mutual fund.

The study reveals that the investors’ perception is dependent on the demographic profile
gender, age, educational background, education level, occupation, income level and
annual saving. The study assesses that the investor’s gender, income level and annual
saving has significant different perception toward mutual fund which stated that theses
demographic variables has direct impact on the investors’ perception of the mutual fund
investment. The significant difference due to demographic could be because of
differences in awareness levels, transparency and efficiency. The differences in gender
groups could result due to their varying financial and socio-psychological risks and
approaches. The differences in saving groups could be attributed to the different financial
needs of people at different stages of life and earning level. The differences in income
groups may be the outcome of life-style and unequal investment capabilities.

5.3Implications

This study concluded that perception of Nepalese investors towards mutual fund
investment was largely influence by demographic variables and characteristics of mutual
fund. Thus, mutual funds managers should consider the demographic factors of investors
while designing portfolios for them. This study is very important to the MF companies in
order to judge the investors’ perception, similarly to the government in order to formulate
the rules and regulation about investment and investors can use to allocate their
investment.

The better understanding of investors’ perception and outcomes is important for financial
planners because an understanding of how investors generally respond to market
movements. It helps investment advisors devise appropriate asset allocations strategies
for their clients. Companies would identify the most influencing factors of their investors’
perception which affect their future policies and strategies eventually would affect their
54
future plans. Similarly Government would identify the most influencing factors on
investors’ perception would affect the required legislations and additional procedures
needed in order to satisfy investors’ desires and also to give more support to market
efficiency.

Mutual fund companies should come forward with full support for the investors in terms
of advisory services, participation of investor in portfolio design, ensure full disclosure of
related information to investor. Proper consultancy should be given by mutual fund
companies to the investors in understanding terms and conditions of different mutual fund
schemes. Such type of fund designing should be promoted that will ensure to satisfy
needs of investors, mutual fund information should be published in investor friendly
language and style, proper system to educate investors should be developed by mutual
fund companies to analyze risk in investments made by them. On the other it is required
from government and regulatory bodies point of view that more laws should be there to
secure the funds of investors to be exploited, more tax rebate should be given on mutual
fund investment, proper and effective grievance system, right of investor education.

Authorities of NEPSE and mutual funds companies could help investors to make the best
investment decision with increasing the awareness among investors through publication
of similar research work and conduction of seminars. Similarly other perceptual factors
also play the significant role in selection of mutual funds therefore mutual fund
companies should also equally focus on these factors knowledge and awareness,
suitability and regulation, service and return, flexibility and convenience, and
diversification and safety. The study further reveals that female segment is not fully
tapped and even there is low target on higher income group people. Hence, fund
managers should take steps to tap the female segment and higher income group segment
to enhance more investment in MF Investment Avenue which would really help the
industry to flourish.

This study reduces the gap on previous literature relating to this topic. The finding of this
study do open up various research opportunities where the number of parameters related
to mutual funds studied could be reduced and the attempts can be made to study the
subjects under detailed experimental settings. The future scope of the study may consider
other demographic like as geographical location, economic condition, family size and
psychographic factors (like trend of market up and down) of small active investors for
mutual fund investment decision purpose. The present study focused only individual
55
investors but not institutional investors. Further study can be considering both individual
and institutional investors.

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 Appendix I

Communalities

Communalities
Statements Initial Extrac
tion
Mutual funds (MFs) provide the service of experienced and skilled 1.000 .589
professionals in fund management.
Mutual fund investment helps diversification and reduction of risk. 1.000 .543
Fund managers keep track of investments and changes in market 1.000 .397
conditions.
MFs provide a shield against risk loss than to direct investment in 1.000 .601
shares.
Good structural requirements of mutual fund ensure the investors 1.000 .516
protection.
MF units involve investment risk including the possible loss of 1.000 .377
principal amount
61
MF involves less transaction cost. 1.000 .609
Past performance of the scheme does not guarantee future 1.000 .472
performance of scheme.
Public sector mutual fund players are more secure than private sector 1.000 .325
players.
Loads and taxes reduce the investor’s return that is earned by the 1.000 .353
scheme.
Investment in mutual funds by MC’s are based on adequate research 1.000 .514
and after ensuring prudent process.
Disclosure norms prescribed by SEBON is significant factors in 1.000 .455
investor services.
Mutual fund is an ideal option for individual investors who do not 1.000 .548
have the time, knowledge & expertise in the stock market.
Reputation of MC, is the important quality I look forward before 1.000 .571
investing in a fund.
Flexibility in investment pattern attracts me. 1.000 .602
The private sector mutual funds have benefitted the investors by 1.000 .814
providing them more options and better services.
Day to day disclosure of NAV by the funds is really beneficial for 1.000 .577
me.
SEBON and other controlling bodies are effective in regulating the 1.000 .419
mutual fund market.
One can invest or withdraw funds according to its necessity and 1.000 .548
convenience.
MFs have failed to provide adequate return in investments to me. 1.000 .825
MFs are suitable for small investors. 1.000 .566
The mutual funds are quite wrongly promoted as an alternative to 1.000 .465
equity investing and create very high expectations in the minds of the
investors.
Extraction Method: Principal Component Analysis.

62
 Appendix II

Total Variance Explained

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared

Loadings Loadings

Total % of Cumulative Total % of Cumulative Total % of Cumulative

Variance % Variance % Variance %

1 5.549 25.222 25.222 5.549 25.222 25.222 2.536 11.528 11.528

2 1.602 7.280 32.502 1.602 7.280 32.502 2.382 10.827 22.355
3 1.218 5.535 38.037 1.218 5.535 38.037 2.202 10.010 32.364
4 1.179 5.360 43.397 1.179 5.360 43.397 1.737 7.897 40.262
5 1.098 4.991 48.388 1.098 4.991 48.388 1.506 6.846 47.107
6 1.041 4.731 53.119 1.041 4.731 53.119 1.323 6.012 53.119
7 .952 4.325 57.445
8 .922 4.193 61.638
9 .854 3.884 65.521
10 .821 3.733 69.255
11 .802 3.646 72.901
12 .790 3.593 76.493
13 .718 3.263 79.756
14 .646 2.935 82.691
15 .620 2.816 85.507
16 .565 2.566 88.073
17 .528 2.399 90.472
18 .518 2.356 92.828
19 .479 2.177 95.005
20 .422 1.917 96.922
63
21 .397 1.803 98.725
22 .281 1.275 100.000
Extraction Method: Principal Component Analysis.

Appendix III

Questionnaire

Dear Sir/ Madam,

I am student graduating from School Of Management, Tribhuvan University (SOMTU)

Kirtipur. As per the partial fulfillment of the requirement of Master of Finance and
Control (MFC) degree, I am conducting research on the topic entitled “A Study of
Investors Perception towards Mutual Funds in the City of Kathmandu”. So, I
humbly request you to provide precious time to fill the questionnaire and help me in
completing my research project. I assure you that the information provided by you will be
kept confidentially and will be used only for the academic purpose.

Section 1st

Under this first section have questions to collect demographic information (Name, Age,
Gender, Income level, Education Qualification, Annual saving, and Occupation)

Name:-_______________________________ Date: - __________

Educational background: - _________________ Age:-____________

Education Level: - ______________________ Occupation:-______________

Gender:-________ Income Level:-____________

Annual Saving:-___________

64
 Section 2nd

Under this section of the questionnaire comprised of 22 questions related to perceptual

factors of mutual fund investors for the study. Please indicate the extent to which the
following perceptual factors of mutual fund how would you rate.

Please choose your response on a scale of 1 to 5, where 1 Strongly Disagree, 2

Disagree, 3 Neutral, 4 Agree and 5 Strongly Agree

Perceptual factors of mutual fund investors

Statement 1 2 3 4 5
Mutual funds (MFs) provide the service of experienced
and skilled professionals in fund management. 109 49 64 47 61
Mutual fund investment helps diversification and
reduction of risk. 73 83 56 77 41
Fund managers keep track of investments and changes in
market conditions. 73 84 74 77 42
MFs provide a shield against risk loss than to direct
investment in shares. 41 52 118 81 38
Good structural requirements of mutual fund ensure the
investors protection. 81 60 75 70 44
MF units involve investment risk including the possible
loss of principal amount. 66 64 64 67 69
MF involves less transaction cost. 73 54 59 75 69
Past performance of the scheme does not guarantee future
performance of scheme. 84 59 65 67 55
Public sector mutual fund players are more secure than
private sector players. 59 69 61 83 60
Loads and taxes reduce the investor’s return that is earned
by the scheme. 67 50 84 86 43
Investment in mutual funds by MC’s are based on
adequate research and after ensuring prudent process. 53 57 93 78 49
Disclosure norms prescribed by SEBON is significant 66 63 74 63 64

65
factors in investor services.
Mutual fund is an ideal option for individual investors
who do not have the time, knowledge & expertise in the
stock market. 72 52 69 74 63
Reputation of MC, is the important quality I look forward
before investing in a fund. 78 71 63 67 51
Flexibility in investment pattern attracts me. 84 59 67 67 53
The private sector mutual funds have benefitted the
investors by providing them more options and better
services. 48 65 87 81 49
Day to day disclosure of NAV by the funds is really
beneficial for me. 93 54 55 67 61
SEBON and other controlling bodies are effective in
regulating the mutual fund market. 55 62 81 72 60
One can invest or withdraw funds according to its
necessity and convenience. 76 50 70 88 53
MFs have failed to provide adequate return in
investments to me. 79 56 79 69 47
MFs are suitable for small investors. 60 69 74 75 52
The mutual funds are quite wrongly promoted as an
alternative to equity investing and create very high
expectations in the minds of the investors. 56 39 91 80 64

Thank you for your time.

66