Drivers Of Mutual Fund Investment Behavior: A Structured Survey From Kathmandu Valley

Abstract

Purpose: The purpose of this study is to examine the factors influencing mutual fund investment behavior in Nepal, focusing on the roles of risk perception, return perception, investment criteria, mutual fund awareness, and financial literacy.

Design/methodology/approach: The study employs a structured quantitative research design using primary data collected from 395 respondents within the Kathmandu Valley. Statistical tools including correlation and multiple regression analysis were applied to identify the significance and strength of relationships among variables influencing investment behavior.

Findings: The results reveal that investment criteria and mutual fund awareness have a statistically significant positive impact on mutual fund investment behavior. Return perception showed a marginally significant positive effect, while financial literacy and risk perception did not exhibit any significant influence.

Conclusions: The study concludes that enhancing awareness and simplifying investment criteria can improve mutual fund participation in Nepal. The non-significant impact of financial literacy and risk perception points toward deeper behavioral and contextual factors affecting investor decisions.

Implications: These findings offer valuable insights for policymakers, fund managers, and financial educators aiming to promote inclusive investment behavior. Focused awareness campaigns and personalized investment tools may help bridge the gap between financial knowledge and actionable investment behavior.

Originality/Value: This study provides a country-specific behavioral analysis using primary data to assess mutual fund investment behavior in a developing market context. Unlike general or cross-country studies, it highlights localized determinants and offers actionable recommendations tailored to Nepal’s financial ecosystem.