AN ANALYSIS OF INVESTORS' LONG-TERM ATTITUDE TOWARDS MUTUAL FUNDS BASED ON THOSE FUNDS' PERFORMANCE ON THE NSE (INDIA)

Abstract

Mutual funds enjoy great appeal among Indian investors since the Indian market is constantly eager to make money with shared interests. Different mutual funds exist in order to maximize profits and cater to varying levels of risk tolerance. (8 Mutual Fund Types, n.d.). A multitude of factors, including higher interest rates, more financial literacy, and a consistent increase in income, are encouraging investors to join mutual fund lobbying. Still, choosing the best mutual funds is a difficult task.(How to Choose the Best Mutual Fund | Mutual Fund Selection, n.d.). Financial gain is the ultimate goal of any investor. One of the primary concerns that investors have is the duration of their investment. How much can they consistently invest? Will the mutual fund provide capital preservation and wealth creation? Does the mutual fund provide any tax advantages? With little initial inputs and the advantage of extensive diversification, mutual funds enable investors to generate healthy returns. Mutual funds are crucial to the financial and economic development of the nation. They transform the savings from individuals into useful industrial capital. Essentially, the household sector pools mutual funds. One key feature of mutual funds is that their returns might vary as they are not fixed and are dependent on fluctuations in the market. On the other hand, data from 1995 to 2020 indicates that equities mutual funds outperformed other funds in terms of returns. This study examines the performance of fifteen mutual funds and, with the use of Jenson's alpha and Sharpe ratios, provides information to help investors decide which fund to invest in.