Analyzing the Dynamics of Mutual Fund Investment Decisions in Nepal (Shanti Journal)

Summary

• Primary data were collected from 264 valid respondents using convenience sampling to analyze mutual fund investment decisions in Nepal.p.1
• The pioneer mutual fund in Nepal, NCM Mutual Fund 2050, was launched in 1993 by NIDC Capital Markets.p.2
• Government regulations in Nepal mandate that 5% of IPOs must be allocated to mutual funds.p.3
• The multiple regression model yielded an R-squared value of 0.591, indicating that 59.1% of the variation in investment decisions is explained by the independent variables.p.12
• Portfolio diversification showed the highest unstandardized beta coefficient of 0.44 among all tested independent variables.p.13

Key insights

1. Risk preference, fund manager quality, expectations of return, and portfolio diversification have positive and statistically significant effects on mutual fund investment decisions in Nepal.p.1
2. Awareness level has a negative and statistically insignificant impact on investment decisions in the empirical model.p.1
3. Regulations under the Mutual Funds Regulation of 2067 define the structural framework of Nepalese mutual funds comprising a sponsor, fund supervisor, fund manager, and depository.p.2
4. Portfolio diversification exhibits the highest positive correlation with mutual fund investment decisions, recorded at a Pearson coefficient of 0.702.p.12
5. Multicollinearity was ruled out in the regression model as all Variance Inflation Factor (VIF) values were below 10.p.14