THE DETERMINANTS OF INVESTMENT BEHAVIOUR OF MUTUAL FUND INVESTORS WITH REFERENCE TO TRICHY DISTRICT

International Journal of Multidisciplinary Research and Modern Education (IJMRME) International Peer Reviewed - Refereed Research Journal, Website: www.crystalpen.in Impact Factor: 7.315, ISSN (Online): 2454 - 6119, Volume 11, Issue 2, July - December, 2025 100 THE DETERMINANTS OF INVESTMENT BEHAVIOUR OF MUTUAL FUND INVESTORS WITH REFERENCE TO TRICHY DISTRICT K. Rajarajan* & M. Vasantha** * Ph.D Research Scholar, Department of Commerce, Urumu Dhanalakshmi College (Affiliated to Bharathidasan University), Triuchirappalli, Tamil Nadu, India ** Associate Professor & Research Advisor, Department of Commerce, Urumu Dhanalakshmi College (Affiliated to Bharathidasan University), Triuchirappalli, Tamil Nadu, India Cite This Article: K. Rajarajan & M. Vasantha, “The Determinants of Investment Behaviour of Mutual Fund Investors With Reference to Trichy District”, International Journal of Multidisciplinary Research and Modern Education, Volume 11, Issue 2, July - December, Page Number 100-104, 2025. Copy Right: © Crystal Pen Publication, 2025 (All Rights Reserved). This is an Open Access Article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. DOI: Abstract: Investment is the sacrifice of certain present value of money in anticipation of a reward. Factors such as healthy climate, varying interest rates, varied investment avenues, larger income, burdensome tax rates, longer life expectancy etc., are responsible for the growing popularity of investments. The several investment opportunities are available to an investor in many kinds and in many combinations within each type. However, the returns obtainable by them vary depending upon their nature and qualitative features. Even though we are having some laws like Efficient Market Hypothesis, some investor did not track such laws and rules instead they follow some other norms. Behavioral finance is one of the field of study to reveal the behaviour of the investors towards investment decisions. This research examines the Investment Behaviour of individual investors who invest their amount in Mutual Fund of Trichy District. The researcher looks into the determinants of investment behaviour of Mutual Fund investors and how demographic factors affect fund selection behaviour of the individual investors. The researcher collected data by obtaining direct response from 138 individual investors of Mutual Funds. The researcher unruffled data by getting direct response from the investors with structured questionnaire and it was analyzed quantitatively. Statistical tools like ANOVA and Chi-square were used to get the results of the study. Key Words: Investment, Investment Avenues, Behavioral Finance, Investor Behaviour Introduction: Investment is the employment of funds on assets with the aim of earning income or capital appreciation. Investment has two attributes namely time and risk. Present consumption is sacrificed to get a return in the future. The sacrifice that has to be borne of certain but the return in the future may be uncertain. Several investment opportunities are available to an investor in many types and in many combinations within each type. However, the returns offered by them vary depending upon their nature and qualitative features. The objective of any investment of investors are liquidity, cash return, capital appreciation and safety. Mutual Funds are the intermediaries in the investment business which indirectly connect the public and the corporate sector. The public invest their saving in the Mutual Funds and the Mutual Funds use the money collected in diversified portfolio of securities in various companies. A Mutual Funds are conceived as institutions for providing small investor with avenues of investment in the capital market. Behavioral finance concentrates on irrational behavior that can affect investment decisions and market prices. It attempts to better understand and explain how emotions and cognitive errors influence investors and the decision-making process. Statement of the Problem: The research problem in hand is that what are the determinants of investment behavior of Mutual Fund investors? What is their relative importance in shaping investment behavior of individual investor? Answering to these questions is where the role of behavioral finance comes in as the modern finance theory fail to explain the phenomenon. This research is an attempt to understand the investment behavior of individual investor by identifying the determinants of investment behavior. Objectives:  To identify the determinants of investment behavior and their relative importance in shaping the behavior of individual investors  To offer valid suggestion to understand the determents of investment behaviour of mutual fund investors. Review of Literature: Chakrabarti and Rungta (2000) carried out a survey of mutual fund investors. The study concluded that the brand image factor is basically influencing the investors for investing in mutual fund schemes. This brand image cannot be easily captured by computable performance measures. It influences the investor‟s perception and hence his fund/scheme selection behaviour. Syriopoulos (2002) gave its review on an analysis of investor‟s risk perception towards mutual funds services. Financial markets are constantly becoming more efficient by providing more promising solutions to the investors. Being a part of financial markets although mutual funds industry is responding very fast by analyze investor‟s perception and expectations. Singh and Vanita (2002) have examined the investors' preferences and perception towards MF investments by conducted a survey of 150 respondents in the city of Delhi. The findings of the study were that the investors' preferred to invest in public sector MFs with an investment objective of getting tax exemptions and stayed invested for a period of 3-5 years and the investors evaluated past performance. The study further concludes by stating that majority of the investors were dissatisfied with the performance of their MFs and belonged to the category who held growth schemes. International Journal of Multidisciplinary Research and Modern Education (IJMRME) International Peer Reviewed - Refereed Research Journal, Website: www.crystalpen.in Impact Factor: 7.315, ISSN (Online): 2454 - 6119, Volume 11, Issue 2, July - December, 2025 101 Rao (2003) studied the performance evaluation of Indian mutual funds in bear market through relative performance index. He found that most of the mutual fund schemes were able to satisfy investor‟s expectations by giving excess returns over expected returns. Lenard et al. (2003) empirically investigated investor‟s attitudes toward mutual funds. The results indicated that the decision to switch funds within a fund family was affected by investor‟s attitude towards risk, current asset allocation, investment losses, investment mix, capital base of the fund age, initial fund performance, investment mix, fund and portfolio diversification. The study reported that these factors were crucial to be considered before switching funds regardless of whether they invest in non-employer plans or in both employer and non-employer plans. Methodology: The Thanjavur District has Eight Sub Districts namely Trichy, Languidi, Manachanallur, Manapparai, Marungapuri, Musiri, Srirangam, Thiruverumbur, Thottiyam, Thottiyam, Tiruchirappalli East, and Tiruchirappalli West. We treat as clusters. Then we selected respondents randomly from each cluster on the basis of convenience. Quantitative research was used in this research. In our study quantitative method refers to the survey we implemented in the form of questionnaires, which are directed at individual investor. Data Collection: Data for our study is primarily collected through secondary researches, preliminary interviews with the investors and brokers and a survey in form of structured questionnaires. We have obtained 138 complete survey responses from individual investors. The questionnaires were distributed among individual Mutual Fund investors in eight sub district of Trichy District. 175 surveys were distributed to individual Mutual fund investors. However; several questionnaires were incomplete as many questions had been left unanswered. It happened mostly in self-administered surveys. We used 138 questionnaires for analysis purpose. Data Analysis: The collected data were analyzed and inferences were drawn. To analyse the collected data the researcher used Simple percentage analysis, ANOVA and Chi-Square. Reliability Test - Cronbach's Alpha: A Reliability test was carried out with a questionnaire to analyze the determinants of investment behaviour of Mutual Fund investors with reference to Trichy District The data collected on this process has been tested using Cronbach‟s Alpha for its reliability. The result of the testing and validation revealed that the questionnaire possessed the reliability with the value of 0.746. The questionnaire was best fitted in a normal distribution. So, it was inferred that the questionnaire used for pilot study was highly suitable in ascertaining the responses from the respondents of Mutual Fund Investors. Reliability Statistics - SPSS Output for Cronbach's Alpha: Table Cronbach's Alpha No of Items 0.746 111 Analysis and Interpretation: It is observed that maximum number of respondents falls in the 30-40 categories. The highest number of respondents fall in the 21-30 categories. Thus around 70% of the respondents are below 40 years of age and are relatively young. Table Showing the Respondents Classification Based on their Personal Details Gender No. of Respondents Percentage Male 90 65.22 Female 48 34.78 Total 138 100 Marital Status No. of Respondents Percentage Single 38 28 Married 75 54 Separated 7 5 Widowed 18 13 Total 138 100 Qualification No. of Respondents Percentage SSLC 6 4 HSC 17 12 Graduation 68 49 Post Graduation 32 23 Others 15 11 Total 138 100 Income No. of Respondents Percentage Lessthan10000 30 20 10000-15000 31 22 15000-20000 30 23 20000-25000 13 9 Above25000 34 25 Total 138 100 Occupation No. of Respondents Percentage International Journal of Multidisciplinary Research and Modern Education (IJMRME) International Peer Reviewed - Refereed Research Journal, Website: www.crystalpen.in Impact Factor: 7.315, ISSN (Online): 2454 - 6119, Volume 11, Issue 2, July - December, 2025 102 Self-Employed 20 14 Government Employee 30 22 Quasi Government Employee 19 14 Private Employee 13 9 Professionals 38 28 Others 18 13 Total 138 100 The above table reveals that, 65.22% of the respondents are Male and 34.78% of the respondents are Female. 28% of the respondents are single, 54% of the respondents are Married,5% are separated and 13% of the respondents are Widowed. 4% of the respondents belong to SSLC level, 12% of the respondents belong to HSC level, 49% of the respondents belong to Graduation Level, 23% of the respondents belong to the PG Level, and 11% of the respondents belong to the Other Qualification. 20% of the respondents belong to the Income level of less than10000, 22% of the respondents belong to the Income level of 10000-15000, 23% of the respondents belong to the Income level of 15000-20000, 9% of the respondents belong to the income level of 2000025000 and 25% of the respondents the Income level is above 25000. 28% of the respondents are professionals 22% of the respondents are working in Government sector and Quasi Government employee and self-employed employees occupy 14% and other employees and Private employee occupy 13% and 9% respectively. Table Showing Chi-Square Overall Summary of Gender Vs Determinants of Investor Mutual Fund Investor Behaviour S.No Dimension Ho D.f P Value Level of Significance Remarks 1 Gender Vs Over Confidence There is no significant association between the variables Gender vs Over confidence 4 0.154 0.05 Ho Accepted 2 Gender Vs Investors Optimism There is no significant association between the variables Gender vs Investor Optimism 4 0.013 0.05 Ho Rejected 3 Gender Vs Involvement There is no significant association between the variables Gender Vs Involvement 4 0.252 0.05 Ho Accepted 4 Gender Vs Risk Attitude There is no significant association between the variables Gender Vs Risk Attitude 4 0.868 0.05 Ho Accepted Hypothesis: There is no relationship between personal factorsgender and determinants of investor mutual fund investor behaviour. It is clear that the p-value is more than 0.05 for 4 factor so (p<0.05), the null hypothesis is accepted at 5 percent level of significance. But, there is relationship between gender and investors optimism. Table Showing One Way Anova Overall Summary of Income Vs Determinants of Investor Mutual Fund Investor Behaviour S.No Dimensions Ho: Hypothesis Category Sum of Square df Mean Square F Sig. Result 1 Income Vs Over Confidence There is no significant association between the variables Income vs overconfidence Between Groups 5.124 4 1.281 0.55 0.699 Ho Accepted With In Groups 267.676 134 2.328 Total 272.8 138 2 Income Vs Invest Optimism There is no significant association between the variables Income and invest optimism Between Groups 3.449 4 0.862 0.368 0.831 Ho Accepted Within Groups 269.351 134 2.342 Total 272.8 138 3 Income Vs Involvement There is no significant association between the variables Income vs involvement Between Groups 10.243 4 2.561 1.122 0.35 Ho Accepted With In Groups 262.557 134 2.283 Total 272.8 138 4 Income Vs Risk Attitude There is no significant association between the variables Income vs risk attitude Between Groups 15.289 4 3.822 1.707 0.153 Ho Accepted With In Groups 257.511 134 2.239 Total 272.8 138 International Journal of Multidisciplinary Research and Modern Education (IJMRME) International Peer Reviewed - Refereed Research Journal, Website: www.crystalpen.in Impact Factor: 7.315, ISSN (Online): 2454 - 6119, Volume 11, Issue 2, July - December, 2025 103 Hypothesis: There is no relationship between income vs determinants of investor mutual fund investor behaviour. It is clear that the pvalue is more than 0.05 for the above factor so (p<0.05), the null hypothesis is accepted at 5 percent level of significance. Findings:  65.22% of the respondents are Male and 34.78% of the respondents are Female .  28% of the respondents are single 54% of the respondents are Married 5% of the respondents are separated and 13% of the respondents are widowed.  4% of the respondents belong to SSLC level, 12% of the respondents belong to HSC level, 49% of the respondents belong to Graduation Level, 23% of the respondents belong to the PG Level, and 11% of the respondents belong to the Other Qualification.  14% of the respondents are self employed 22% of the respondents are working in the government organization, 14% of the respondents are working in Quasi Government, 9% of the respondents are working in private sectors ,25% of the respondents are professionals and 13% of the respondents are working in other sectors.  20% of the respondents belong to the Income level of 10000, 22% of the respondents belong to the Income level of 10000-15000, 23% of the respondents belongs to the Income level of 15000-20000, 9% of the respondents belongs to the income level of 20000-25000 and 25% of the respondents the Income level is above 25001.  There is no significant association between the variables Gender and Overconfidence  There is significant association between the variables Gender and Investor Optimism.  There is no significant association between the variables Gender and Investors involvement.  There is no significant association between the variables Gender and Risk Attitude of the respondent.  There is no significant association between the variables Age and Overconfidence  There is no significant association between the variables Age and Investor Optimism.  There is no significant association between the variables Age and Investors involvement.  There is no significant association between the variables Age and Risk Attitude of the respondent.  There is no significant association between the Income and Overconfidence  There is no significant association between the variables Income and Investor Optimism.  There is no significant association between the variables Income and Investors involvement.  There is no significant association between the variables Income and Risk Attitude of the respondent. Conclusion: Market participants have for a long time relied on the notion of efficient markets and rational investment behavior when making financial decisions. However, the Idea of fully rational investors always maximizing their utility and demonstrating perfect self-control is becoming inadequate as examples of market inefficiency in the form of anomalies and irrational investor behavior have been observed more frequently during the past decades. The results obtained from the questionnaires carried our in our research suggest that the behavior of individual Mutual Fund Investors is indeed to some extent irrational when considered from a standard finance point of view. We found that individual Mutual Fund investors have high level of involvement and overconfidence while they are not much optimistic about the future outlook of market moreover they have been found to have an aversion to risk. References: 1. 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