Public perception towards mutual fund investment in Nepal

Abstract

This research has focused on evaluating the public's outlook on mutual fund investments in Nepal. A combination of descriptive and causal-comparative research designs was applied to the study to describe and compare the causes of mutual fund investment behavior. Investors in the Kathmandu Valley made up the population, and purposive sampling was utilized to pick 385 respondents. The study was quantitative by nature and collected primary data using a structured survey questionnaire that the researcher designed, which included a five-point Likert scale to ensure systematic measurement of perceptions and attitudes of investors. Through the use of statistical tools such as descriptive statistics, correlation analysis, and multivariate regression models, the analysis of data was conducted. The research has defined mutual fund investment as the dependent variable and the factors of risk, return, fund characteristics, fund family, fund manager, and mutual fund flows as independent variables to be studied together for their joint impact on investment decisions. The findings have revealed that the entire set of independent variables has a direct and significant effect on the investment in mutual funds in Nepal. The risk and return factor has shown very strong positive influence, while the fund characteristics and mutual fund flows have had moderate positive impacts. Fund family and fund manager have been the ones showing strong positive influence across the board and that points to the fact that trust, credibility, and managerial expertise are the major determinants of investors' mutual fund decisions. This study has given both practical and theoretical insights, it has pointed out that the knowledge of these factors can lead the investors to have the right choices and also help the fund managers in their investment strategy development. It has brought out the role of risk perception, expected returns, fund credibility, and management expertise as the driving forces of investment behavior. The policymakers and the financial institutions are suggested to put their efforts in the area of building investor awareness, transparency, and trust in mutual fund businesses.