Investment Decision Behaviour and Mutual Fund Retail Investors: A Qualitative Inquiry into the Investment Decision Behaviour of Mutual Fund Retail Investors

Abstract

This qualitative study investigates the investment decision behaviour of mutual fund retail investors, with a particular focus on the Zambian context. The primary objectives encompass scrutinizing the factors influencing investment decisions, comprehensively evaluating present-day perceptions, and exploring the myriad factors contributing to the augmentation or reduction of investments in mutual funds by retail investors. Structured questionnaires were administered to both fund managers and retail investors of 14-unit trusts and mutual funds operating in Zambia, ensuring a diverse and comprehensive representation of perspectives. The targeted population included both experienced fund managers and retail investors with varying backgrounds, contributing to the richness of the data. A qualitative phenomenological research design guided the study, allowing for an in-depth exploration of participants' lived experiences and perceptions. Thematic analysis was employed to uncover recurring patterns and themes, providing a comprehensive understanding of the intricate decision-making processes. The study revealed that investor education, risk tolerance, and trust in fund management were pivotal factors influencing retail investors' decision-making. Macroeconomic conditions played a significant role in shaping investors' perceptions, showcasing a dynamic interplay between external factors and individual perspectives. The findings also underscored the influence of expert advice on investment decisions, highlighting the delicate balance between individual judgment and external guidance. The Study's insights carry profound implications for both academia and the financial industry. Policymakers can leverage the findings to design targeted educational initiatives aimed at enhancing investor literacy. Financial institutions may consider strategies to bolster trust and transparency, addressing the identified concerns. Moreover, the study recommends fostering a supportive environment for retail investors, acknowledging the dynamic nature of risk perceptions and providing tailored guidance.