Analyzing the Investors Perception, Knowledge and Factors on Equity Fund in Stock Market Investment

Abstract

Equity funds have gained popularity as an investment option for investors looking for greater diversification and professional management of their investments in the stock market. However, investors’ perceptions, levels of knowledge and behavioral aspects are major determinants of the decision-making process. Therefore, this study investigates the key factors that might shape investors’ decisions on equity funds, which include risk perception, return expectations, financial literacy and socio-demographic factors. The research used a survey method to gather data from retail investors and conduct data analysis to recognize trends and relationships. This study aims to investigate the factors that influence equity fund investments, including financial literacy, risk perception, return expectations and demographic factors. A structured survey was used to collect data from 589 retail investors in Kerala through purposive sampling method. Descriptive statistics, factor analysis, correlation analysis and analysis of variance were employed to explore trends and relationships. The study shows that gender is a significant influence on investors’ awareness whereby female investors are more sensitive to fund performance (p=0.038), corporate services (p=0.018) and macroeconomic issues (p=0.005) than male investors. Age also plays a significant role as investors between the ages of 30 to 45 years demonstrated more awareness of fund performance than those aged 60 years and above (p = 0.011), while younger (<30) investors paid more attention to brand reputation (p=0.000) than older investors. Additionally, income influences the investment behaviours of investors as high-income earners (Income >8L) exhibit more awareness (p=0.033) of fund performance than lower-income earners. If the occupation of an investor does affects their decision, self-employed investors have invested more than salaried professionals (p=0.017) and married investors have valued quality of fund more than unmarried investors (p=0.012). Overall, this study rejects all null hypotheses and confirms that gender, age, income, occupation and marital status significantly impacts investors’ investment choices. These insights highlight the need for tailored financial advisory services, with gender-specific communication, age-appropriate product recommendations and occupation-based investment strategies. The findings suggest that financial literacy,past performance of funds and recommendations from financial advisors play crucial roles in shaping investment decisions. These findings helps to enhance investor education, refine product offerings and develop targeted marketing approaches, ultimately fostering confident investment decisions in the equity fund market.