An Empirical Analysis on Risk Perception towards Mutual Funds –

A study on women investors in Bengaluru

(with reference to Share Khan)

Chandrakala DP
Assistant Professor
Dr Suresh N
Professor
Faculty of Management and Commerce
M.S. Ramaiah University of Applied Sciences
Bangalore
Contact Author E-mail: chandrakaladp@msrchm.edu

Abstract
The research attempts to study the analysis of risk perception towards mutual fund women investors in present
market. A survey has been used to collect primary data 250 questionnaires were used to interpret the results.
The study is based on survey conducted in share khan in Bangalore in the month of January to June 2016.
Questionnaires were developed through a stage process involving a review of literature and brief study on
women investors’ perception on mutual fund investment in Sharekhan. For the purpose of analysis we used
Microsoft excel and SPSS 16. After analysing the data, the problem which has been identified that most of the
women investors are ready to bear risk in expectation of higher returns. There is a strong relationship in risk
bearing capacity of investors while doing investment.

Keywords: Mutual fund, AMCs, Risk Perception, Demographic Factor

Introduction: meaningful. Traditionally, women have great propensity to save and

A Mutual Fund is a trust that pools the savings of a number of investors
who share a common financial goal. The money thus collected is then
invested in capital market instruments such as shares, debentures and
other securities. The income earned through these investments and the
capital appreciation realized is shared by its unit holders in proportion to
the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a
relatively low cost.
Investment – Concept:
Investment refers to purchase of financial assets. While investment goods
are those goods which are used for further production. Investment is a
conscious act of an individual or any entity that involves development of
money in securities or properties issued by any financial institutions with
the objective of high returns with in a definite period of time (Mahendra
Kumar Ikkar, 2014).
invest in shares, bonds, jewellery, post office, banks and insurance. The
perception and tendency is increasing over the decades on account of
women’s dynamic role in very economic activity. Today, a great number
of women are career oriented, are employed in jobs, and are earning their
livelihood. Women’s attitude towards investment avenues has also been
changing, and they are open to make financial investments that have
greater risk (Paramashivaiah, 2014).
Introduction to Sharekhan:
Sharekhan is one of the leading retail broking House of SSKI Group which
was running successfully since 1922 in the country. It is the retail broking
arm of the Mumbai-based SSKI Group, which has over eight decades of
experience in the stock broking business. Sharekhan offers its customers a
wide range of equity related services including trade execution on BSE,
NSE, Derivatives, depository services, online trading, investment advisory,
Mutual Fund Advisory etc.
Literature Review:

Perception of Women Investors towards Investment Predictions in India:
In the words of Pandit Jawaharlal Nehru, former Prime Minister of India,
“When women move forward, the family moves, the village moves and the
nation movies”, is the central theme in the socioeconomic paradigm of the
nation as it is an accepted fact that only when women are in the
mainstream of progress can any economic and social development be
Mutual funds have already attracted the attention of global practitioners
and academicians but most of the existing research available is on either
accelerating the return on funds or comparing it with benchmark fund
schemes. Few studies are available that focus on investor’s objective and
considering risk orientation of investors that has been categorized as:

Electronic copy available at: https://ssrn.com/abstract=3068642

Vyas and Moonat (2012) suggested that the mutual fund companies Primary Data: Structured questionnaire is formulated to cover the women
should come forward with full support for the investors in terms of investors around the Share khan in Bangalore.
advisory services, participation of investors in portfolio design, ensure full
disclosure of related information to investors, and ensure that proper Sampling: Simple random sampling will be used in the proposed study.
consultancy is offered to the investors in understanding the terms and Surveys are usually carried through questionnaires.
conditions of different mutual fund schemes. They also proposed that
more laws should be implemented. Sampling Design: The sample was designed by the systematic sampling
was taken for consideration.
Kaushik, Kamboj, Kakkar (2013) studied the impact of investor’s age,
income, education, risk and return perception on the choice of investment Number of Respondents: Total 250 respondents filled the questionnaire.
between various financial avenues. The data were collected from 250
Data analysis: chi – square test, factor analysis, ANOVA, MS excel is used
respondents using a structured questionnaire. Chi square statistic was
used to establish the factors that were significantly affected by the for Graph.
selected dimensions.
Validity and Reliability of data and questionnaire: Reliability test is being
Walia and Kiran (2009) studied investor’s risk and return perception carried out for the variables in order to analyse Cronbach's Alpha value
towards mutual funds. The study examined investor's perception towards
Period of study: 6 months
risk involved in mutual funds, return from mutual funds in comparison to
other financial avenues, transparency and disclosure practices. The study
Scope of Present Investigation:
investigated problems of investors encountered with due to
unprofessional services of mutual funds. The study found that majority of  The scope of the study is limited to women investors in share
individual investors doesn’t consider mutual funds as highly risky
khan at Bangalore.
investment. In fact on a ranking scale it is considered to be on higher side
 This study will help the women investors in financial planning of
when compared with other financial avenues. The study also reported that mutual fund and
significant relationship of interdependence exists between income level of
 It will be helpful for women investors to get more information
investors and their perception for investment returns from mutual funds and knowledge related to risk perception.
investment.
Research Design:
Muttapan (2006) used the Garret’s ranking technique to rank the factors
influencing the selection of mutual fund. The primary rankings were given Place of Research Sharekhan at Bangalore
for tax exemption; investment in private sector funds; past returns and
Sample size 250
degree of transparency.
Test applied (SPSS) Reliability test (Cronbach's Alpha) ,
Mehta and Aggarwal (2011) observed that there is association of
Factor analysis, Chi Square test,
demographic profiles and personality type of investor with investment
choice. The differences among genders were found to be significant for ANOVA Test,
provident funds, fixed deposits, and real estate. Females were found more
conservative than males. The investors in the higher age groups preferred DATA ANALYSIS:
post office as an investment option compared to the investors in the lower
age groups. Most of the investors preferred to consult their family Following are the tools used for Data Analysis:
members for making investment.
1. Cronbach’s Alpha Test
Aim and objectives: 2. Factor analysis
3. Chi Square Test
4. ANOVA Test
Aim: Analysis of risk perception towards women investors on mutual fund
in Share Khan at Bengaluru.
CRONBACH’s ALPHA TEST:

Objectives: Cronbach’s Alpha test is used to measure the internal consistency of

reliability.
1. To study the women investors’ risk perception on Mutual Fund
2. To study and analyze the impact of various demographic Reliability Statistics
variables on women investors' risk perception
Cronbach's Alpha N of Items
3. Evaluating women investor’s attitude towards risk perception
involved in mutual funds
.965 17
4. To suggest the women investors to overcome risk in investment
on mutual fund
The complete set of 17 items was tested for reliability using Cronbach
Research Methodology: Alpha. The Cronbach Alpha was .965 for the 250 sets of responses. This
shows a fair degree of internal consistency amongst the items.
An exploratory research will be undertaken, by conducting survey to get
the information on the current status of women investors risk perception
on mutual fund investment in Bangalore. This will be done by collecting
Factors Analysis:
data from share khan single branch only.
An Empirical Analysis for risk perception towards women investors. We
Source of data: literature survey would be carried out using online E-
journal data base EBSCO and SSRN working papers as published by various used the method of factor analysis to determine which factors influence
institutions in India. For the purpose of secondary data, the investor’s perception towards Mutual Fund and how demographic
documents/reports provided by Sharekhan and e-information from variables also affects to women investors. Here we have taken 11 variables
available company web pages.
to analyse the risk perception towards women investors.

Electronic copy available at: https://ssrn.com/abstract=3068642

 Component Matrixa

Component
To examine the appropriateness of factor analysis, we used Bartlett’s test
1 2 3
of sphericity and Kaiser- Meyer Olkin (KMO) measure of sampling
Factors Preventing to Mutual Fund .952 -.188 .061
adequacy. The approximate chi- square statistic is 4.074E3 with 55 degrees
of freedom, which is significant 0.000 levels (table no). The KMO statistic Purpose of Investment .959 -.172 -.002
(0.869) is also considerable (>0.5). Hence factor analysis is considered an Holding Period of MF .938 -.214 -.091

KMO and Bartlett's Test Rate of risk associated with MF .795 .367 .218

Principles considering while .952 -.027 -.131

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .869
selecting MF
Bartlett's Test of Sphericity Approx. Chi-Square 4.734E3
Which end scheme feels Good .837 .269 -.395
Df 55
Which Risk Affects MF .659 -.610 .336
Sig. .000
MF are destination for investment .596 .630 .414
appropriate technique for further analysis of data.
Primary source of knowledge of MF .970 -.052 -.007
Total Variance Explained
While investing your money, how .961 -.028 .060
C Initial Eigenvalues Extraction Sums of Rotation Sums of
these factors affect your decision
o Squared Loadings Squared Loadings
Which among the following is the .911 .175 -.228
m Tot % of Cumu Tota % of Cumu Tota % of Cum safest Investment option
p al Varia lative l Vari lative l Vari ulati
Extraction Method: Principal Component Analysis.
o nce % anc % anc ve
a. 3 components extracted.
e e %
1 8.4 76.6 76.62 8.42 76.6 76.62 4.38 39.8 39.8
29 29 9 9 29 9 2 36 36 Varimax rotation method has been used. It redistributes the variance so
2 1.1 10.1 86.82 1.12 10.1 86.82 3.51 31.9 71.7 that the factor loading pattern and percentage of variance of the factors
22 96 5 2 96 5 6 60 96 are different. Eigen values are used to select the number of factors. In the
3 .57 5.21 92.03 .573 5.21 92.03 2.22 20.2 92.0 above table three components have shown Eigen value more than one
3 0 5 0 5 6 39 35 and Cumulative % of variance. Factor extracted should account for at least
4 .30 2.78 94.82 60% of variance. We can see there is significant difference in the
6 4 0 percentage of variance between rotated components.
5 .25 2.29 97.11
3 6 5
6 .08 .790 97.90
7 6
7 .08 .739 98.64
1 5
8 .06 .576 99.22
3 1
9 .03 .345 99.56 Screen plot is used to extract the number of factors. Scree plot is basically

8 5 pictorial presentation of Eigen values. Three components are having more

1 .02 .262 99.82 than one Eigen value.

0 9 7
1 .01 .173 100.0
1 9 00
Extraction Method: Principal Component Analysis.

Retaining only the variable with Eigen value greater than one ( Kaiser’s
criterion), we can infer that 76.629% of variance is explained by factor 1,
10.196% of variance is explained by factor 2, and 5.210% of variance is
explained by factor 3. Together, all the factors contributed to 92.035% of
variance.
 Rotated Component Matrixa Chi-Square Tests
Value df Asymp. Sig. (2-
Component sided)
Pearson Chi-Square 1.818E2a 6 .000
1 2 3

A1 Factors Preventing to .587 .713 .305 Hₒ: There is no significant relationship between Monthly income and risk
Mutual Fund associated with mutual fund.

A2 Purpose of Investment .639 .679 .282 Hₐ: There is a significant relationship between Monthly income and risk
associated with mutual fund.
A3 Holding Period of MF .680 .659 .192
Since the P-value (0.000) is lesser than the significance level (0.05), we
A4 Rate of risk associated .461 .297 .716 reject the null hypothesis and accept the alternate hypothesis
with MF
According to Second objective ANOVA is used to study and analyze the
A5 Principles considering .749 .520 .305 impact of demographic variables on women investors' risk perception.
while selecting MF
A6 Which end scheme .903 .137 .308 ANOVA
Education Profile
feels Good
Sum of Df Mean F Sig.
A7 Which Risk Affects MF .121 .950 .049 Squares Square
Between 183.850 4 45.962 246.138 .000
A8 MF are destination for .229 .078 .930 Groups
Within 45.750 245 .187
investment
Groups
A9 Primary source of .670 .600 .367 Total 229.600 249
knowledge of MF
A10 While investing your .621 .605 .419 Hₒ: There is no significant relationship between Education and Principles
money, how these considering while selecting MF.

factors affect your Hₐ: There is a significant relationship between Education and Principles
decision considering while selecting MF.
A11 Which among the .822 .315 .371
Since the P-value (0.000) is lesser than the significance level (0.05), we
following is the safest reject the null hypothesis, thus we conclude that there is a significant
Investment option relationship between education and principles while selecting the mutual
fund.
Extraction Method: Principal Component Analysis. Rotation Method:
Varimax with Kaiser Normalization. A. Rotation converged in 5 iterations.
ANOVA
A8 and A4 constituted the third factor and are conceptualized as
Employment Profile
perception of women investors on Mutual fund. A1, A2, A3 and A7
constituted the second factor and this is conceptualised as flexible Sum of Df Mean F Sig.
Investment facilities.
Squares Square
Hypothesis Testing:
Between 192.183 6 32.031 306.233 .000
1. The age of the investors and their perception of risk are independent:
Groups
Chi-Square Tests
Value df Asymp. Sig. (2- Within Groups 25.417 243 .105
sided)
Pearson Chi-Square 2.031E2a 4 .000 Total 217.600 249

Hₒ: There is no significant relationship between age and risk perception of

the women investors
Hₐ: There is a significant relationship between age and risk perception of
the women investors
Since the P-value (0.000) is lesser than the significance level (0.05), we
reject the null hypothesis and accept the alternate hypothesis
2. The monthly income of the investors and their opinion on risk
associated Mutual Funds are independent.
Hₒ: There is no significant relationship between Employment and Purpose
of Investment.
Hₐ: There is a significant relationship between Employment and Purpose of
Investment.
Since the P-value (0.000) is lesser than the significance level (0.05), we
reject the null hypothesis, thus we conclude that there is a significant
relationship between Employment and Purpose of Investment.
Findings and Conclusions:-
 Most of the respondents are ready to take either no risk or
nominal risk while doing the investment.
 Most of the respondents are generally go for longer time
horizon.
 Most of the respondents are agree to take limited losses in
expectation of higher returns.
 Most of the respondents are agreeing with this there main
concern is safety.
 The chi-square analysis carried out on age and monthly income
shows significant relationship between risk perceptions on
women investors. Whereas that carried on monthly income
also is significant.
 We see that 64% of the investors belong to the marital status
of Unmarried only 36% of the investors are married. So
Sharekhan must able to concentrate on unmarried women
investors.
 Most of the investors belong to the private sector followed by
businessmen and others
 Most of the Mutual fund investors feel good at open end
scheme because of Open end type of mutual fund are those
that does not have restrictions on the amount of shares the
fund will issue
 Most of the Mutual fund investor’s primary source of
knowledge is internet, friends/ relatives and also newspaper/
Journals.
 Brand Image and professional Management are the main
factors of mutual fund that allure the investors
 Most of the mutual fund investors opinion is the mutual fund
success depends on knowledge of the stock market. The factor
knowledge is prevents.
Limitations:
The present study is aimed to achieve the above-mentioned objective in
full earnest and accuracy, there are certain limitations. The time factor
was the main limitation for completion of the research, and the study was
conducted targeting the women investors in Single Branch of Sharekhan in
Bangalore. The primary data has been collected through a structured
questionnaire from a sample of only 250 women investors in Bangalore
city, which may not reflect the opinion of the entire population. The study
period is restricted to six months only i.e., from Jan 2016 to june2016.
Suggestions for future directions:
The research is just a small step in understanding the risk perception
towards mutual fund women investors. Even than there is some scope to
extend the present research. Due to constraint of time and resources, the
study about women investor’s risk perception on mutual funds 250 sample
sizes of questionnaires has been taken for conducting survey in Sharekhan
Bangalore city only. Future researcher could make several extensions of
the current study by studying risk perception of women investors towards
mutual funds. Future research could examine a wider respondent base
across the cities of Karnataka state with more diversified sample and can
increase the number of respondents in the research. Such study might be
conducted in other parts of the country as well.
Conclusions:
The present study endeavored to give a look on risk perception towards
mutual fund women investors in Sharekhan at Bangalore. In the
demographic profile most of the investors are willing to invest 38% in their
monthly personal income; around 32% of investors belong to age range of
31 to 40 years. In this study investors are willing to take moderate and low
level risk; most of the investors belong to moderate investment style. In
order to have more women investors to invest in mutual funds, Sharekhan
must have to bring some awareness program.
References:
1. B.B.S.Parihar, Rajeev Sharma and Deepika Singh Parihar
"Analyzing Investors' Attitude Towards Mutual Funds as an
Investment Option", The Icfaian Journal of Management
2. LakshmanaRao, K. (2011),”Analysis of Consumers perception
towards mutual fund schemes”, Zenith
3. International Journal of Multidisciplinary Research, Vol. 1 Issue
8, pp. 175-192.
4. Walia, N., &Kiran, R. (2009). An analysis of investor's risk
perception towards mutual funds services. International
Journal of business and Management,4(5), p106.
5. Agrawal, D. (2011). Measuring performance of Indian mutual
funds. Finance India, June.
6. Ravi Vyas and Suresh Chandra Moonat, “Perception and
behavior of mutual funds investors in Indore, Madhya Pradesh”
Indian Journal of Finance, Vol.6, No.8, August 2012, pp 36-42
7. NaliniPravaTripathy (2006), “Market Timing Abilities and
Mutual Fund Performance- An Empirical Investigation into
Equity Linked Saving Schemes”, Vilakshan, XIMB Journal of
Management, August 21, pp.127-138.
8. Sudalaimuthu and P. Senthil Kumar (2008), “A study on
Investors perception towards Mutual Fund Investments”,
Journal of Management Trends, Vol. 5, No. 1, September 2007
– March 2008, pp. 106-117.
9. Palanivelu,V.R., and Chandrakumar, K., (2013), “ A study on
Preferred Investment Avenue Among the Salaried People with
Reference to NamakkalTaluk, Tamilnadu India”, a paper
presented in the IBEA, International Conference on Business,
Economics, and Accounting, 2023 March 2013, Bangkok,
Thailand
10. Vyas, Ravi (2012) “Mutual fund Investor’s Behavior and
perception in Indore city” Journals of Arts, Science and
Commerce, Vol. III, Issue 3(1), pp 67-75, available at www.
Researchersworld.com.
11. Das, Sanjay (2011) “Small investor’s perceptions on mutual
funds in Assam: an Empirical Analysis” ABHINAV National
Monthly Refereed Journal of Research in Commerce &
Management, Vol. No. 1, issue 8, pp 11-27. Available at
www.Abhinavjournal.Com.
12. Panda, T.K., and N.P. Tripathy, 2001. Customer Orientation in
Designing Mutual Fund Products- An Analytical Approach to
Indian Market Preferences. Retrieved from
http://dspace.iimk.ac.in/bitstream/2259/198/1/customer
+orientation.pdf on 20th April 2009
13. Rajeswari, T.R., and V.E. RamaMoorthy, 2001. An Empirical
Study on Factors Influencing the Mutual Fund/Scheme
Selection by Retail Investors. Retrieved on May 2008 from
http://www.utiicm.com/Cmc/PDFs/2001/rajeswari.pdf.
14. Muttapan, P. K. 2006. Factors influencing Mutual Fund
Investment Decision Making. Southern Economist, September:
7-10.
15. Ranganathan, K. 2006. A Study of Fund Selection Behavior of
Individual Investors towards Mutual Funds: With Reference To
Mumbai City. The ICFAI Journal of Behavioral Finance, Vol.
3(2):63:88.
16. Saini, Simran, Anjum, Bimal and Saini, Ramandeep (2011),
“Investors Awareness and Perception about Mutual Funds”
Zenith International Journal of Multidisciplinary Research, Vol.
1, Issue 1, pp 14-29
17. Sharma, Nishi (2012), “Indian Investors’ Perceptions towards
Mutual Funds” Business Management Dynamics, Vol. 2, No. 2,
pp 01-09.
18. Bollen, N.P.B., (2006). “Mutual Fund Attributes and Investor
Behaviour”, forthcoming, Journal of Financial and Quantitative
Analysis, pp 1-40, accessed as on July 12, 2012,
http://www2.owen.vanderbilt.edu/nick.bollen/research/sri.pdf
.
 19. Lenard, M. J., Akhter, S.H., and Alamc, P. (2003). “Mapping
Mutual Fund Investor Characteristics And Modelling
Switching Behaviour”, Financial Services Review, Vol. 12, No.
1, pp. 39-59 , accessed on 10, August, 2012,
http://epublications.marquette.edu/cgi/viewcontent.cgi?article
=1003&context=market_fac
20. Padmaja R; A study of Consumer Behavior towards Mutual
Funds with special reference to ICICI Prudential Mutual Funds,
Vijayawada. International Journal of Management Research
and Business Strategy, 2013; 2 (2):1-14.
21. Ferris S P and Chance D M (1987), “The Effect of 12b-1 Fees on
Mutual Fund Expense Ratio: A Note”, The Journal of Finance,
Vol. 42, pp. 1077-1082.
22. Bogle J C (1992), “Selecting Equity Mutual Funds”, The Journal
of Portfolio Management, Vol. 18, No. 2, pp. 94-100.
23. Malhotra D and McLeod R (1997), “An Empirical Analysis of
Mutual Fund Expenses”, Journal of Financial Research, Vol. XX,
No. 2 (Summer), pp. 175-190
24. Lee, J., & Marlowe, J. (2003). How consumers choose a financial
institution: Decision making criteria and heuristics.
International Journal of Bank Marketing, 24(2), 53–71.
25. Animesh kumar shukla and satishkumar.c-: 2009)-: “Factors
affecting investors preference for mutual fund in India.”
26. Panwar, S. and Madhumathi, R. (2006), “Characteristics and
Performance Evaluation of Selected Mutual Funds in India”,
DOI:http://dx.doi.org/10.2139/ssrn.876402.
27. Mishra KS, Kumar M; The impact of perceived purchase risk on
investment behaviour of mutual fund investors. Decision,
2012;39 (2):3-20
28. Awan HM, Arshad S; Factors valued by Investors while investing
in Mutual Funds- A behavioral context. Interdisciplinary Journal
of Contemporary Research Business, 2012; 4(1): 503-514. 11.
29. Thyagarajan G;Performance Evaluation of Indian Mutual Fund
Industry from 2002-2007 with Special Reference to Franklin
Templeton, HDFC and ICICI Prudential Mutual Funds. Ninth
AIMS International Conference on Management, 2012; 336-
347. 12.
30. Saini S, Anjum B, Saini R; Investors‟ awareness and perception
about Mutual Funds. ZenithInternational Journal of
Multidisciplinary Research, 2011;1(1):14-29.
31. Singh, B.K., (2012). “A study on investors’ attitude towards
mutual funds as an investment option”, International Journal of
Research in Management, Vol. 2, No. 2, pp. 61-70, accessed as
on 12 August 12, 2012,
http://rspublication.com/ijrm/march%2012/6.pdf
32. Kaushik, S., Kamboj, G. &Kakkar, D. (2013), “Trade-offs
between investors’ perception of risk, return, service quality
and mutual fund investments”, Indian Journal of Finance, Issue
December 2013, Volume (12) no. 7, pp. 27 – 37,
33. Capon N, Fitzsimons GJ, Prince RA; An Individual Level Analysis
of the Mutual Fund Investment Decision. Journal of Financial
Services Research, 1996; 59-83.
34. Kumar M; A Study of Customers‟ Preference towards
Investment in Equity Shares and Mutual Funds. International
Journal of Education and Psychological Research, 2013; 2(2):95-
100.

Links:

1. www.google.com
2. www.wikipedia.com
3. www.ebscohost.com
4. www.sharekhan.com
5. Financial derivatives and risk management by L.C.GUPTA