Abstract

                        Household savings play an important role in domestic capital formation.  Only  a  small part  of  the  household  savings  in  India  is  channelized  to  the  capital  market.  Attracting more household savings to the capital market requires efficient intermediation.  Mutual  funds  have emerged  as  one  of  the  important  class  of  financial  intermediaries  which  cater  to  the  needs  of retail  investors.  Mutual  funds  have  become  an  important  vehicle  for  mobilization  of  savings particularly from the household sector. Mutual funds are one of the most favoured investment routes for the small and medium investors across the world.  Ideally,  Mutual  funds  provide  opportunities  for  small  investors  to participate  in  the  capital  market  without  assuming  a  very  high  degree  of  risk.  An  important principle  of  investment  in  capital  market  is  that  do  not  put  all the  eggs  in  one  basket  i.e. diversification. A small investor is not able to have a diversified portfolio mainly due to paucity of resources.  However,  a  mutual  fund  pools  together  the  savings  of  such  small  investors  and invests the same in the capital market and passes the benefits to the investors. Thus, investors can indirectly participate in the capital market by subscribing to the units of mutual funds. Mutual funds employ professional fund managers to manage the investment activities. Therefore, investors also get benefits of professional expertise of these managers.

Keywords: Behavior, Investors’ Perception, Mutual Fund, Performance and Preferences