Mutual Fund Investor’s Behaviour with Application Theory of Planned Behaviour

Abstract

In this paper, the factors that influence the behavioural intentions related to mutual fund investments have been discussed using the Theory of Planned Behaviour framework. In this case, some key factors such as awareness/financial literacy, attitude towards mutual funds, subjective norms, perceived barriers, and perceived risk have been taken into consideration. The primary data collection process was done by means of a structured questionnaire, and the relationships between the variables were analysed using Structural Equation Modelling (SEM).The results showed that both perceived barriers and perceived risk have a strong positive relationship with behavioural intentions towards mutual funds, which implies that people who are aware of the problems will still invest in mutual funds, and this may be because of their greater involvement and risk-taking nature. Awareness/financial literacy was found to have a weak relationship with behavioural intentions but did not influence the attitude significantly. Surprisingly, contrary to expectations, attitude and subjective norms did not show any significant relationship with behavioural intentions. Perceived risk did not influence attitude towards mutual funds as well. In summary, practical and risk-related factors have a stronger role to play in making investments than psychological and social factors.