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Does any behavioural bias prevail while making investment decisions in mutual fund?

Author

Listed:
  • Farana Kureshi
  • Viral Bhatt
  • Priyanka Bhatt

Abstract

This study tries to classify the investors with respect to various types of behavioural biases that subconsciously create internal hindrances amongst the investors regarding mutual fund investments. For this, the researchers collected opinions of the 426 investors who hesitate in investing in mutual funds and cluster analysis was performed to understand the classification of behavioural biases through SPSS software 25.0. The findings show that the respondents were divided into three clusters, each with respondents who held similar viewpoints. Further, it has been found that out of all the selected biases, overconfidence bias and mental accounting bias (MAB) dominate the respondents. Thus, this study will help understand various biases regarding investment in mutual funds, throwing light on the behavioural finance concept. It would be easy for strategy formulators to frame the strategies that further enhance mutual fund investment among investors.

Suggested Citation

  • Farana Kureshi & Viral Bhatt & Priyanka Bhatt, 2023. "Does any behavioural bias prevail while making investment decisions in mutual fund?," International Journal of Behavioural Accounting and Finance, Inderscience Enterprises Ltd, vol. 7(1), pages 1-23.
    • Handle: RePEc:ids:ijbeaf:v:7:y:2023:i:1:p:1-23
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