Consideration of Sources of Information as Selection Criteria in Mutual Fund Purchase: A Comparative Study of Retail and Non-Retail Investors

Empirical evidence has found sources of information as an important determinant for mutual fund purchase or selection. Several researchers have found relative importance of sources of information for the retail investors. However, the literature is scanty with respect to non-retail investors. This study presents a comparative analysis of retail and non-retail mutual fund investors with respect to sources of information in the context of their selection of various mutual funds for their investments. Primary data collected from 400 retail and 50 non-retail investors, randomly selected from the cities under survey, was used to assess the components of sources of information. Factor analytic technique resulted in four components: advertisement and shows, data and information, advice and recommendations, and published returns. Inferential statistics on Anderson Rubin (AR) factor scores depicts the significant difference between retail and non-retail mutual fund investors with respect to `advertisement and shows' and `published returns'. The study is an addition to the existing literature and may help in improving the strategies of asset management companies.