Financial literacy for Mutual Fund Investment: An extensive study on investors of Bangladesh

Abstract

Peoples are always intending to invest their savings for several security purposes, but the crucial matter of concern is that where they are investing. Thinking of such investment options, capital market is a superior alternative all the time. Panic due to lack of financial knowledge about that market acts as crucial parameter in becoming the people’s choice of investment. After went over a myriad of investment choices, mutual fund would be a secure platform to invest. The main purpose of this study is to get an overview about the financial literacy level of Bangladeshi investors who invest in mutual fund and trying to assess the implication of financial literacy on investment intension. Data were collected with the help of online survey method from primary sources on the basis of a well-structured questionnaire where convenient sampling is applicable due to focus on mutual fund investors. Respondents’ financial knowledge level is evaluated by asking eleven specific questions on varied financial concepts following the G20 survey of OECD and investment intention is measured by Ajzen’s conceptual and methodological framework. Based on the descriptive statistics, Correlation is used to analyze the collected primary data. Some significant findings are uncovered like Bangladeshi investors belong to low literacy level. Study also indicates a negligible inverse relationship between financial literacy level and investment intention of investors which in turn stimulate existing investors to recommend others to invest in mutual fund due to low literacy level. So it is profound that low literate investors can be a vital key to promote mutual fund and enrich financial market of Bangladesh.