Mutual Fund has evolved as a tool of investment for the retail investors interested in stock market investments. The retail investors find the mutual fund investment simpler and cost effective as compared to direct investment in stock markets. Benefits of mutual funds include diversification in investment, professional management, cost effectiveness and liquidity. It is a powerful and convenient wealth creation vehicle for small investors. Mutual Funds act as a gateway to enter into big companies’ stocks to an ordinary investor with his small investment. More than 40 mutual fund companies (Asset Management Companies) are working in India managing more 1000 mutual fund schemes. The approximate value of AUM (Assets Under Management) is Rs. 7,00,000 crores. However, if retail investors are surveyed to find out how many of them have received handsome returns from mutual fund investments, the answer will not be very impressive. In other words, not all retail inevestors are getting good returns from mutual fund investments. In fact, the percentage of the invetors getting good returns is very low. As a result many of the investors either discontinue their mutual fund investments after some period or straightly book the loss by redeeming the mutual fund units. Thus the small investors are still far from the real benefits of this powerful instrument of investment. The reasons are many.The basic reason is that the investors ignore the basic rules of mutual fund investments which are highly required for every investors. This paper is an attempt to find out the how many retail investors follow these basic rules of investment.
Small Investors Loss from Mutual Fund investments
