Role of Financial Literacy in Shaping Investment Behaviour towards MutualFund Adoption

Abstract

Financial-literacy plays a vital-role in influencing investment-decisions, particularly in the adoption of mutual-funds. This study examines the relationship b/w financial-literacy, investment-behaviour & mutual fund-adoption among investors in Bengaluru-Urban. By a descriptive-research-design, primary-data were collected from 150 respondents through a structured questionnaire; the study also looked at how risk tolerance & trust in financial institutions affect investment decisions, descriptive-statistics & multiple regression analysis were used to study the data; the results showed that people with good financial knowledge have better awareness of different investment options, understand risk-return more clearly, & feel more confident while making investment decisions, financial literacy was found to positively affect investment behaviour & encourage more people to invest in mutual funds, risk tolerance & trust in financial-institutions too played an imperative-role in increasing investment participation; the study highlights the importance of financial education & investor awareness programs, as they help people make better investment choices & increase participation in mutual fund-schemes, the findings provide useful information for policymakers, financial-institutions, & asset-management-companies that want to improve financial-inclusion & promote responsible investing.