Effectiveness Of Mutual Fund Investments Among Retail Investors

Abstract

Abstract Mutual Funds have emerged as one of the most sought-after modes of investments among retail investors owing to their features of offering diversification, professional management, liquidity and accessibility. Over the past few decades, there has been unprecedented growth in the mutual fund industry globally as well as in the developing nations such as India. The rising involvement of retail investors in the mutual funds is an outcome of rising financial awareness as well as the need for efficient means of wealth creation. There are various means for the retail investors who have limited money as well as limited understanding of the market in participating in the capital market through mutual funds. This paper focuses on analyzing the efficiency of mutual funds as an investment option among retail investors through analyzing their performance, strengths, weaknesses, investor perception and use in financial planning. The research is based on secondary data which has been sourced from the academic literature, industry reports as well as financial publications. It has been found that mutual funds effectively facilitate long term wealth creation, diversification and risk management. However, investor education, financial literacy and market knowledge is very essential in making a successful investment through mutual funds.