Exploring the Factors Affecting investors Perception towards Mutual fund with reference to Financial Literacy and Awareness

Abstract

Background:
The mutual fund industry in India has seen significant growth, with increased participation from tier-2 cities like Lucknow. Despite regulatory initiatives by SEBI and the availability of digital advisory platforms, a wide gap persists in investor awareness and access to credible information. Many semi-urban investors still rely on informal sources, highlighting the need to examine what drives financial literacy and awareness.
Aim:
This study aimed to identify the determinants influencing financial literacy and awareness among mutual fund investors in Lucknow. It also explored how awareness and use of information sources varied across demographic segments and assessed their impact on investor knowledge.
Methodology:
Adopting a descriptive, exploratory, and cross-sectional design, the study employed a quantitative approach. Data were gathered from 467 mutual fund investors in Lucknow using a structured 5-point Likert scale questionnaire. Analysis was conducted using SPSS 25, applying reliability tests, exploratory factor analysis (EFA), t-tests, ANOVA, and regression analysis.
Results:
EFA revealed a single dominant factor each for awareness and information sources, explaining 56.5% and 48.6% of the variance, respectively. Significant differences were observed across gender, age, education, occupation, and income (p < 0.05). Regression analysis showed a strong positive relationship between access to information sources and financial literacy (r = 0.83, R² = 0.69, β = 0.83).
Conclusion:
Demographic factors and access to credible information significantly influenced awareness and literacy. Core mutual fund knowledge and diverse information channels were critical to informed investment behavior.
Implications:
The findings support targeted financial education, increased digital engagement, and inclusive policy initiatives for semi-urban investors.