Investors Preference in Mutual Funds

A mutual fund pools money from individual and household investors and invests in stocks, bonds, and short-term debt. The combined holding is portfolio of mutual fund. Investors buy units in mutual fund and each unit represents his part ownership and income it generates. Professional management, Diversification, Affordability and Liquidity are the main features of a mutual fund. They fall in to money market funds, bond funds, stock funds, and mix funds and each type has different features, risks, and rewards. They offer three ways to earn money Dividend Payments, Capital Gains Distributions and Increased NAV. Instead of purchasing mutual fund shares from other investors, investors purchase them directly from the fund or via a fund broker. The price that investors pay for the mutual fund is the funds per share net asset value plus any costs payable at the time of purchase, such as sales loads. In this research we made an attempt to investigate the factors that influence individuals' choices of Investment particularly in mutual funds, aspects such as risk tolerance, financial goals, knowledge about different types of investment options and external influences like economic condition.