Factors Influencing Investor Behaviour in Mutual Fund Investmnts: A Systematic Literature Review

Abstract

Choosing among a vast diversity of financial products with inherent rewards and risks, to fulfil set financial goals is a complex task. This is what experienced by millions of investors while making their investment decisions. Resources are always scare, while the choices innumerable. Complexity further deepens, considering the technical and structural nuances of modern-day financial markets and products. Compared to earlier times, when information was scarce but standardized, current times have seen overflow of information- often unfiltered and unsolicited. However, this has rather made the situation more perplexing for the investors (Bernales et al., 2021). Considering the investor needs in a complex investment environment, where a large section lacks the required capital as well as professional expertise to make prudent investment decisions, mutual funds have emerged as a collective investment avenue managed by experienced professionals. These funds have gained considerable amount of popularity over the years as they provided the investors with much needed professional guidance and management coupled with the benefits of diversification (Alp, 2009). Over the years, with its promising trats, the mutual fund industry has strongly established itself globally and have attained a considerable growth around the world. Especially, during 1990s the industry has achieved an explosive growth around the world with US at the top, although with a few exceptions in Asia (Fernando et al., 2003). According to EFAMA/ICA (Investment Company Institute, 2025) international Quality Statistical Release, worldwide regulated open-ended fund asset size (a proxy for the global mutual fund industry) were around 73.9 trillion USD by the end of the year 2024. The industry is expected to grow further to the extent of 84 trillion USD during 2023 up to 2028 at a CAGR of 10.43% as per another report by Research & Markets (2025).