Unveiling the Truth for Indian Investors: Dispelling Misconceptions about Mutual Funds

Authors

  • Das S Associate Professor, Dept. of Commerce, New Alipore College, Kolkata & Guest Faculty, Dept. of Commerce, University of Calcutta, India
  • Ghosh A Associate Professor, Dept. of Commerce, New Alipore College, Kolkata, India

Keywords:

AMFI, Investor Awareness, Mutual Funds, Myth, Realities

Abstract

Over time, mutual funds are an excellent means of accumulating money. Nevertheless, people continue to have misconceptions about mutual funds. A myth is a widely believed but inaccurate idea or concept. Mutual funds have given rise to countless myths. These misunderstandings often cause unnecessary concern and worry among investors, preventing them from reaping the numerous benefits of mutual funds.
The main objective of the study is to inform and aware regular Indian investors about the myths and realities of the mutual fund industry. The study gathers secondary data from a range of sources, including books, journals, periodicals and online sites. To make things simpler for readers, the myths and realities have been expressed in plain terms. Simple illustrations have been used as well.
From December 2022 to December 2023, the mutual fund companies in India witnessed an increase in assets of Rs. 40.76 trillion to Rs. 51.09 trillion. Additionally, according to AMFI data, 'direct' investment is also on the rise and roughly 22% of retail investors made direct investments in December 2023 (as against 20% in December 2022).
There exist myths about "Systematic Investment Plan" (SIP), "Know Your Client" (KYC), age of investment, DEMAT account, fund rating, NAV, holding period, diversification, fund types, tax implications, fund house insolvency, historical performance, and so on in mutual funds. The study exposes the truth and dispels myths. Each of these mutual fund misconceptions exists only to deter individuals from investing in mutual funds.
Mutual fund investing, when done correctly, may be a very effective way to put funds to constructive use. Investor awareness is a gradual process. Investors need to bust myths about mutual funds if they intend to increase the size of their holdings. Acquiring knowledge about the truths underlying these misconceptions empowers investors to make better decisions and confidently navigate the mutual fund industry.

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Published

2024-07-25

How to Cite

Das, S., & Ghosh, A. (2024). Unveiling the Truth for Indian Investors: Dispelling Misconceptions about Mutual Funds . Journal of Academic Advancement, 3(01), 33–42. Retrieved from https://jaa.kbsaa.org/index.php/j/article/view/41

Issue

Vol. 3 No. 01 (2024): Jan-Jun

Section

Research Articles

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