Effect of Trust on Benchmark Outperformance of Asset Management Companies: A Study About Mutual Fund Investment

Abstract

When it comes to the process of decision-making in financial aspects, the element of trust plays a very crucial role. This proves to be exact in case of investments made in mutual funds. As regarding the investments in mutual funds, the investors mostly depend on the integrity and expertise of the AMCs (asset management companies). The study presented here has been undertaken to examine the manner in which trust on benchmark outperformance of AMCs. The respondents of the study are the investors from Chidambaram having made investments in mutual funds. The method adopted to select the respondents is convenience sampling method and the tool used to collect data from them is Questionnaire. Sample size of the study is 100. Analysis of the collected data has been done by performing Regression analysis. Results of the study showed that increased level of trust on benchmark outperformance of AMCs improves the confidence towards investment, enhances the commitment for a long period of time, decreases the perceived risk and also has got a positive effect over the volume of investment. It has been concluded by the study that increasing the practices of establishing trust is important to sustain the growth of mutual funds in India.