Factors influcencing investment decisions in mutual funds in Nepal

Abstract

Mutual funds have been an emerging financial investment alternative among the investors over the past few years. As the proverb says "Do not put all the eggs in the same basket", investors have been diversifying their investment by investing in mutual funds that utilize the investment of the investors in various sectors like shares and debentures, fixed assets, bank savings and deposits and various other areas. Hence, this study aims to study the factors that influence investment decisions in mutual funds. Modern Portfolio Theory and Prospect Theory have been used in this study. The independent variables under this study are financial status, risk taking behavior, investment revenue, past performance of the fund and sources of investment revenue. Investment decisions in mutual fund is taken as dependent variable. The primary data for the research has been collected through a structured questionnaire survey which was distributed among 384 samples which represents the sample size of the study. The study used descriptive, correlational and causal research design for the study. Various statistical tools like mean, median, mode, standard deviation, variance, correlation, regression analysis was used in the study. The findings revealed that financial status, risk taking behavior, investment revenue, past performance and sources of investment revenue had a positive relationship with investment decisions in mutual funds and financial status, risk taking behavior, past performance of fund and sources of investment revenue had a significant effect on investment decisions in mutual funds. Keywords: Mutual funds, financial status, risk taking behavior, investment revenue, past performance, sources of investment revenue, investment decisions