Micro and Macro Economic Factors and their Association with Mutual Fund Selection by the Investors

Abstract

Mutual fund industry in India has revealed a significant growth since its inception in the year 1963 even then it is far behind the developed as well as most of the emerging markets operating globally. One of the most important functions of the mutual fund industry is to mobilize the savings of the households and park their small savings in capital assets with the aim to provide them better risk adjusted return. The present study has tried to find out the association between micro and macro economic factors and the investor’s decision regarding mutual fund investment. The empirical study is based on both primary data. To collect primary data a questionnaire was developed and administered on the investors. Outcomes of the study revealed that with the exception of tax savings, there is a substantial correlation between an investor's choice of fund and all other microeconomic characteristics considered . The findings also indicate a strong correlation between the investor's choice of investment fund and every macroeconomic element considered. It was determined that there is a substantial relationship between fund selection and each scale item.