Authors: Sonali Gangadhar Pholane, Prof. CS. Jayamala Katkar
Abstract: In recent years, mutual funds have become an important instrument for encouraging retail investment in India, particularly among small and new investors. Traditionally, Indian households relied on safer investment options such as fixed deposits, gold, and real estate due to limited financial knowledge and risk concerns. However, the growing impact of financial education initiatives, digital investment platforms, and Systematic Investment Plans (SIPs) has gradually reshaped investment behaviour. This study examines how mutual funds promote retail participation by offering diversified portfolios, professional management, and cost-effective investment opportunities. They simplify stock market participation, making it easier for individuals with limited financial expertise to invest. The research also highlights the role of regulatory support, rising internet usage, and mobile-based investment platforms in expanding the investor base in India. Additionally, the study evaluates key advantages of mutual funds, including diversification, liquidity, and disciplined savings habits, while also identifying challenges such as market uncertainty, low trust in financial markets, and lack of awareness in rural regions. The findings indicate that mutual funds have significantly contributed to shifting investor preferences from traditional savings methods to market-linked financial instruments.
DOI: https://doi.org/10.5281/zenodo.20176756
