A STRUCTURAL EMPIRICAL ANALYSIS OF INVESTOR PERCEPTIONS AND DECISION DETERMINANTS INFLUENCING MUTUAL FUND SELECTION IN MANIPUR
DOI:
https://doi.org/10.69980/0nfv8j87Keywords:
Mutual Fund Making decisions, Behavioural Finance, Socio-Economic Factors, tructural Equation ModellingAbstract
The paper explored to understand the variables that impact the behaviour of mutual funds investment in Manipur, an emerging financial market in the north east region of India. The study incorporates behavioural, informational, and socioeconomic constructs to analyse how the cumulative impact of financial literacy, risk perception, intermediary influence, fund and sponsor attributes, and demographic attributes impact the decision-making process of investors. A total of 365 investors of the SBI Mutual Fund, Imphal City were chosen for the study, collected using Google Forms, personal interview, and telephone survey as a result of low access to the investors' records. Based on the investigation results, the investor demographic is mainly young and educated; almost 70 per cent of them are below the age of 30 and about 80 per cent of them have a graduate or even a postgraduate degree. The sample in the survey is diverse with the majority of respondents in the low and middle-income bracket. Such socio-economic trends have a significant impact on the level of risk that the investors are ready to take. The structural model has shown that the most major factors that influence the choice of mutual fund investments are socio-economic and demographic (SEDF) followed by Fund & Sponsor Attributes (FSA), which indicates the degree to which income, education, occupation, and brand trust are responsible for the formation of the behaviours of investors. The positive influence of Intermediaries and Distribution Channels (IDC) also play a great part and demonstrates the importance of advisory services in the markets with very different degrees of financial literacy. Financial Literacy and Information Competency (FLIC) and Risk Perception (FRP) on the other hand, have less direct impact. It implies that the investors are more dependent on the social and economic environment and reputation of the institutions than on their technical competence and skills of analyzing the risk. The research can be considered as contribution in understanding mutual fund decision-making in Manipur as it proves that investment decision making is affected mostly by the trust and socio-economic determinants.
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