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A STUDY ON BEHAVIOUR OF MUTUAL

FUND INVESTORS’ IN KARUR DISTRICT
* M.Jayalakshmi, Assistan Professor of Commerce, Jairams Arts & Science College, Karur.
** Dr.V. Palanichamy, Research Advisor, Jairams Arts & Science College, Karur.

Abstract:
Investment in mutual funds is affect by the behaviour of the investors. The objectives of the study are
to identify the behaviour of mutual funds investors in Karur district and to analyze the factors affecting
investor’s behaviour towards mutual fund. By adopting random sampling for 110 mutual fund investors,
simple statistical tools is used for analyzing the data whatsoever collected in this study. The present
investigation outlined that the investors have positive approach towards investing in mutual funds. The
investors mainly considered the safety factor is motivated to invest in mutual funds and most of the investors
are aware about mutual funds. Further, this study revealed that most of the investors select the balanced for
their investment in mutual fund.

Keywords: Investor Behaviour, Mutual Fund, Demographic Profile, Karur district, Tamilnadu.

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1. INTRODUCTION:
Mutual fund investment are mostly preferred by the individuals. Particularly middle income
individuals investing in mutual funds with the aim of higher interest and good principal amount at the end of
the maturity period. In adddition to that, mutual funds are safe, with close to zero risk, optimised return on
earnings and protecting the interest of investors. It is essential to get goos understanding of investment in
mutual funds, companies in the field and mutual fund experts, as customers are easily misguided by offers
promoted by various financial institutions and advertisements. Therefore, mutual fund companies should
support to the investors in terms of advisory services, ensure full disclosure of related information,
participation of investor in portfolio design and proper consultancy services. In addition to that, government
and regulatory bodies should frame more laws to secure the investors funds to exploited, proper and
effective grievance system, more tax rebate given to mutual fund investment, right of ivestor education and
more control on asset management companies should be there. Therefore, a mutual fund investment is the
most suitable for the common man as it offers an opportunity to invest in a diversified and professionally
managed basket of securities with low cost. The main purpose of this paper is to know about behaviour of
mutual fund investors’ in Karur district.

2. REVIEW OF LITERATURE:
Nishi Sharma (2012) attempted to study the investors’ satisfaction in terms of different benefits offered by
mutual fund companies. His study focused on the benefits which emerging out from investment in mutual
funds may be grouped into three categories, such as scheme or fund related attributes, monetary benefits
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provided by the scheme and sponsor related attributes. His results revealed that the investors are expected to
ensure full disclosure and regular updates of the relevant information along with the assurance of safety and
monetary benefits.
Palanisamy, Sengottaiyan and Palaniappan (2012) identified the investor’s attitude about mutual fund in
Coimbatore City. Their study concluded that debt scheme are more suitable for genuine investors based on
their needs depending on expectations, objective and risk taking abilities. They also suggested that fund
managers have to focus more of proper pricing, offer handsome returns as well as better investor servicing
and to understand the psychology of investors.
Sanjay Kanti Das (2012) examined the attitude of investors towards mutual fund investment in Nagaon
district of Assam. He adopted convenience sampling method and 250 respondents were selected. His results
outlined that most of the investors have positive attitude towards mutual funds because of liquidity, safety,
transparency and capital gains.
Rajiv.G. Sharma (2013) analysed the investor’s perception towards mutual funds. His study mainly
focused on the relationship between demographic profile of investors and selection of public sector and
private sector mutual funds. He found out the performance of top 10 index funds and top 5 growth funds
with perfect positive correlation in many of the cases. He also stated that, mutual funds have yielded higher
returns than market indices. Therefore, his study clearly indicated that, mutual funds performance is better
stock market.
Rajesh Kumar and Nitin Goel (2014) analysed the investor’s perception towards mutual funds. They
found that the investors considered most in growth followed by regular income and liquidity at second and
third place, while speculation has been considered least. Their results also showed that most of the investors
lied on past performance of mutual funds while making investment in mutual fund. They also found that
major deficiency are identified by the investor in public sector mutual funds which would implies
dissatisfaction regarding services offered, whereas, lack of awareness was the major deficiency in case of
private sector mutual funds.
Rekha Rathore, Shelly and Jaya (2014) studied the attitude of retail investor towards Mutual Fund in
Yamuna Nagar District, Haryana (India). Their study found that majority of investors prefers to invest in
mutual fund to get high return with low risk which indicates that investors have positive attitude towards
mutual fund investment.
Vikram K. Joshi (2016) tried to understand the perception of investors those investing in equity and equity
linked saving schemes of mutual fund in Nagpur City. His findings revealed that, among the various
motivation factors, the returns on investment and lock-in-period are the two important and significant
factors, among the sources of information, internet and friends & relatives are the two significant factors,
among the factors in hindering investment in mutual funds, high risk and inefficient investment advisors are
the significant factors that influencing the investors decision making.

3. OBJECTIVE OF THE STUDY:

The objective of this paper are as follows:-
1. To study the extent of awareness about mutual funds by the investors.

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2. To find the preference of investors about different investment avenues other than mutual
funds.
3. To study the extent of awareness about mutual funds.
4. To identify the various factors affecting the behaviour of investors towards mutual funds.

4. METHODOLOGY:
4.1. Sample Size: The sample size consists of 110 mutual fund investors from Karur district in TamilNadu.
The investors are segregated on the basis of different variables such as gender, age, educational
qualification, occupation, monthly income and annual saving.
4.1.2. Tool for Data Collection: The data are collected through questionnaire to all required information
from mutual fund investors based on their awareness about mutual fund investment, reasons to invest in
mutual funds and factors considered while investing in mutual fund.
4.1.3. Tools for Data Analysis The data and information collected will be classified, tabulated and
processed and its findings presented in a systematic manner.

5. RESULTS AND DISCUSSION:

In order to achieve above objectives, we analysis the data and presents the results are as follows:
Table.1 - Personal Profile of the Mutual Fund Investors
Variable Classification Frequency %
Male 78 70.90
Gender
Female 32 29.10
Below 30 years 10 9.10
31-40 years 53 48.20
Age 41-50 years 21 19.10
51-60 years 17 15.50
Above 60 years 9 8.20
Upto +2 6 5.50
Educational Under Graduate 52 47.30
Qualification Post Graduate 27 24.50
Professional 25 22.70
Business 35 31.80
Farmers 12 10.90
Occupation
Salaried 35 31.80
Professionals 28 25.50
Below Rs.10,000 10 9.10
Rs.10,001-20,000 21 19.10
Monthly Income
Rs.20,001-30,000 42 38.20
Above Rs.30,000 37 33.60
Monthly Savings Below Rs.5,000 15 13.64
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Rs.5,001-10,000 50 45.45
Above Rs.10,000 45 40.91

From the table.1 indicates the personal profile of mutual fund investors and it described as follows:
Gender wise classification of the Mutual Fund Investors: Out of 110 mutual fund investors 78 (70.90%)
of them are male and 32 (29.10%) of them are female.
Age wise classification of the Mutual Fund Investors: Out of 110 mutual fund investors, 10 (9.10%) of
them are having the age group of below 30 years, 53 (48.20%) of them are having the age group between 31
to 40 years, 21 (19.10%) of them are having the age group between 41 to 50 years, 17 (15.50%) of them are
having the age group between 51 to 60 years and the remaining 9 (8.20%) of them are having the age of
above 60 years.
Educational qualification wise classification of the Mutual Fund Investors: Out of 110 mutual fund
investors, 6 (5.50%) of them are having upto +2, 52 (47.30%) of them are under graduates, 27 (24.50%) of
them are post-graduates and the remaining 25 (22.70%) of them are professionals.
Occupation wise classification of the Mutual Fund Investors: Out of 110 mutual fund investors, 35
(31.80%) of them are having business, 12 (10.90%) of them are farmers, 35 (31.80%) of them are salaried
and 28 (25.50%) of them are professionals.
Monthly Income wise classification of the Mutual Fund Investors: Out of 110 mutual fund investors, 10
(9.10%) of them are having below Rs.10,000, 21 (19.10%) of them are having the income between
Rs.10,001 to 20,000, 42 (38.20%) of them are having the income between Rs.20,001 to 30,000 and 37
(33.60%) of them are having the income of above Rs.30,000.
Monthly Savings wise classification of the Mutual Fund Investors: Out of 110 mutual fund investors, 15
(13.64%) of them are having the savings of below Rs.5,000, 50 (45.45%) of them are having the saving
between Rs.5,001 to 10,000 and the remaining 45 (40.91%) of them are having the saving of above
Rs.10,000.

Table.2 - Investment Avenues of Other than Mutual Funds by the Mutual Fund Investors
S.No Investment Avenues Frequency %
1 Bank savings 12 10.90
2 Equity/Debentures/Bonds 30 27.30
3 Life Insurance 18 16.40
4 Land/other physical assets 19 17.30
5 Gold and silver 19 17.30
6 NSC/Post office savings 12 10.90
Total 110 100.0
From the table.2 indicates the investment avenues of other than mutual fund investments by
investors. Out of 110 mutual fund investors, 12 (10.90%) of them are invested in bank savings, 30 (27.30%)
of them are invested in equity or debentures or bonds, 18 (16.40%) of them are invested in life insurance, 19
(17.30%) of them are invested in land or other physical assets, 19 (17.30%) of them are invested in gold and
silver and the remaining 12 (10.90%) of them are invested in NSC or post office savings.
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Table.3 – Willingness to Take Risk by the Mutual Fund Investors

S.No Risk Taken Frequency %

1 High risk 18 16.40
2 Moderate Risk 63 57.30
3 Risk Averse 29 26.40
Total 110 100.0

From the table.3 shows that risk taken by the mutual fund investors. Among 110 mutual fund
investors, 18 (16.40%) of them are willingness to take high risk, 63 (57.30%) of them are willingness to take
moderatre risk and the remaining 29 (26.40%) of them are willingness to risk averse.

Table.4 – Level of Awareness about Mutual Funds by the Mutual Fund Investors
S.No Level of Awareness Frequency %
1 Fully Aware 15 13.60
2 Aware 60 54.50
3 Just I Know 26 23.60
4 Not Aware 9 8.20
Total 110 100.0

From the table.4 clears that level of awareness about mutual funds by the mutual fund investors.
Among 110 mutual fund investors, 15 (13.60%) of them are fully awared, 60 (54.50%) of them are awared,
26 (23.60%) of them are just know and 9 (8.20%) of them are not aware about mutual funds.

Table.5 – Purpose to Invest In Mutual Funds by the Mutual Fund Investors

S.No Purpose Frequency %

1 Financial needs 22 20.0
2 Investment objectives 51 46.40
3 Willingness to take risk 13 11.80
4 Volatility in investment value 24 21.80
Total 110 100.0

From the table.5 shows that purpose to invest in mutual funds by the mutual fund investors. Among
110 mutual fund investors, 22 (20.0%) of them are investing for financial needs, 51 (46.40%) of them are
investing for investment opportunities, 13 (11.80%) of them are investing for willingness to take risk and 24
(21.80%) of them are investing for volatility in investment value.
Table.6 – Sources to Known about Mutual Funds by the Mutual Fund Investors
S. No Sources Frequency %
1 Brokers/Agents 10 9.10
2 Advertisements 22 20.0
3 Information from AMFI Fact Sheets 11 10.0
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4 Newspapers/ Magazines 21 19.10
5 Own information 28 25.50
6 Friends and Relatives 18 16.40
Total 110 100.0
From the table 6 indicates the sources of information about mutual funds by the mutual fund
investors. Out of 110 mutual fund investors, 10 (9.10%) of them information percolates by brokers or
agents, 22 (20.0%) of them get information from advertisements, 11 (10.0%) of them get information from
AMFI fact sheets, 21 (19.10%) of them get information from newspaper or magazines, 28 (25.50%) of them
get information from own information and the remaining 18 (16.40%) of them get information from friends
and relatives.
Table.7 – Amount of Investment by the Mutual Fund Investors
S. No Amount of Investment Frequency %
1 Less than Rs.50,000 11 10.0
2 Rs.50,001-1,00,000 46 41.80
3 Rs.1,00,001-3,00,000 26 23.60
4 Rs.3,00,000 & above 27 24.50
Total 110 100.0
From the table.7 clears that amount of investments by the mutual fund investors. Among 110 mutual
fund investors, 11 (10.0%) of them are invested less than Rs.50,000, 46 (41.80%) of them are invested for
Rs.50,001 to 1,00,000, 26 (23.60%) of them are invested for Rs.1,00,001-3,00,000 and the remaining 27
(24.50%) of them are invested for Rs.3,00,000 and above.
Table.8 – Factors Considered While Investing In Mutual Funds by the Mutual Fund Investors
S. No Factors Frequency %
1 Liquidity 7 6.40
2 Low Risk 13 11.80
3 High Return 18 16.40
4 Company Reputation 12 10.90
5 Safety 30 27.30
6 Tax savings 19 17.30
7 Performance of past schemes 3 2.70
8 Rating of mutual funds by agencies 4 3.60
9 Variety of products 4 3.60
Total 110 100.0
From the table.8 shows that factors considered while investing in mutual funds by the mutual fund
investors. Among 110 mutual fund investors, 7 (6.40%) of them are considered for liquidity, 13 (11.80%) of
them are considered for low risk, 18 (16.40%) of them are considered for high return, 12 (10.90%) of them
are considered for company reputation, 30 (27.30%) of them are considered for safety, 19 (17.30%) of them
are considered for tax savings, 3 (2.70%) of them are considered for performance of past schemes, 4
(3.60%) of them are considered for rating of mutual funds by agencies and the remaining 4 (3.60%) of them
are considered for variety of products.
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Table.9 – Reasons to Investing In Mutual Funds by the Mutual Fund Investors

S. No Reasons Frequency %
1 Safety 7 6.40
2 Capital appreciation 21 19.10
3 High return 15 13.60
4 Growth 20 18.20
5 Liquidity 27 24.50
6 Less transaction cost 13 11.80
7 Tax benefits 7 6.40
Total 110 100.0

From the table.9 indicates the reasons to investing in mutual funds by the mutual fund investors.
Among 110 mutual fund investors, 7 (6.40%) of them are reasoned that safety, 21 (19.10%) of them are
investing for capital appreciation, 15 (13.60%) of them are reasoned that high return, 20 (18.20%) of them
are reasoned that growth, 27 (24.50%) of them are reasoned that liquidity, 13 (11.80%) of them are reasoned
that less transaction cost and the remaining 7 (6.40%) of them reasoned that tax benefits.

Table.10 – Type of Mutual Funds Scheme Invested By the Mutual Fund Investors
S. No Type of Mutual Funds Frequency %
1 Equity funds 14 12.70
2 Balanced funds 33 30.0
3 Growth funds 24 21.80
4 Income funds 21 19.10
5 Index funds 18 16.40
Total 110 100.0
From the table.10 indicates the type of mutual fund schemes invested by the mutual fund investors.
Among 110 mutual fund investors, 14 (12.70%) of them invested in equity funds, 33 (30.0%) of them
invested in balanced funds, 24 (21.80%) of them invested in growth funds, 21 (19.10%) of them invested in
income funds and the remaining 18 (16.40%) of them invested in index funds.

6. FINDINGS OF THE STUDY:

The present study reflects the following:
1. Most of the investors are male.
2. Majority of the investors are having the age group between 31 to 40 years.
3. Majority of the investors are under graduates.
4. Most of the investors are having business.
5. Majority of the investors are having the monthly income between Rs.20,001 to Rs.30,000.
6. Most of the investors are having the monthly savings of Rs.5,001 to Rs.10,000.

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7. Most of the investors are invested in equity or debentures or bonds.
8. Majority of the investors are willingness to take moderatre risk.
9. Most of the investors are aware about mutal funds.
10. Majority of the investors are investing for the purpose of investment opportunities.
11. Most of the investors are get information from own information.
12. Majority of the investors are invested for Rs.50,001 to 1,00,000.
13. Most of the investors are considered for the factors of safety.
14. Majority of the investors are reasoned that liquidity.
15. Most of the investors are invested in balanced funds.

7. SUGGESTIONS:
1. There are some suggestions for better investing for investors that they should keep their investment
for long time keeping in mind the level of risk involve and saving pattern.
2. Mutual fund investors should take help of private financial consultants’ to have investment portfolio
so as to reduce risk in investment.
3. Investors should not invest in high volatile funds.
4. Investors should collect all possible information before investment.
5. Investors periodical review should be done for investment and risk analysis should be done regularly
and properly.

8. CONCLUSION:
This paper has attempted to understand the behavior of mutual fund investors in connection with the
types of mutual fund schemes preference by selected mutual fund investors. The results presented that the
main objective behind to invest in mutual fund is liquidity, safety and tax benefit. The research also
identified that balanced schemes are most preferred in comparison to other schemes. Most of the investors
are investing for the purpose of investment opportunities. Further, those investors having upto +2 are less
experienced as compare to other academic qualified investors. This paper also cleared that majority of the
investors are aware about mutual fund. Most of the investors are investing in balanced funds scheme of
mutual funds.

References:
1. Nishi Sharma (2012), “Indian Investor’s Perception towards Mutual Funds”, Business Management
Dynamics, Vol. 2, pp. 01-09.
2. Palanisamy, Sengottaiyan and Palaniappan (2012), “Investment Pattern in Debt Scheme of Mutual
Funds – An Analytical Study”, International Journal of Management, IT and Engineering, Vol. 2, pp.
285- 301.
3. Sanjay Kanti Das (2012), “Semi Urban Investors Attitude and Preferences in Mutual Funds
Investment: A Case Study of Nagaon Districts of Assam”, International Journal of Marketing,
Financial Services & Management Research, Vol.1, pp. 70-90.
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4. Palani and Chilar Mohamed (2013), “Public and Private Sector Mutual Fund in India”, Tactful
Management Research Journal, Vol. 2, pp. 1-5.
5. Rajesh Kumar and Nitin Goel (2014), “An Empirical Study On Investors’ Perception Towards
Mutual Funds”, International Journal of Research in Management & Business Studies, Vol. 1, pp.
46-57.
6. Rekha Rathore, Shelly and Jaya (2014), “Attitude of Investor towards Mutual Fund: A Case Study of
Retail Investors in District Yamuna Nagar, Haryana (India)”, International Journal of Management
and Social Sciences Research, Vol. 3, pp. 48-54.
7. Vikram K. Joshi (2016), “Perception Towards Investing in Mutual Funds in India – An Empirical
Analysis of Investors in Nagpur City”, International Journal in Management and Social Science,
Vol.04, pp. 98-111.

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