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Comparative Study of Mutual Fund Returns & Insurance Returns

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International Journal of Business and Management

October, 2008

Mutual Fund vs. Life Insurance: Behavioral Analysis of Retail Investors
Dr. Bhagaban Das Senior Reader, P.G. Department of Business Management Fakir Mohan University, Vyasa Vihar-756019, Balasore, Orissa, India Tel: 91-94371-31429 E-mail: bhagaban_fm@yahoo.co.in

Ms. Sangeeta Mohanty Associate Professor, Academy of Business Administration Industrial Estate (S1/25), Angaragadia, Balasore – 756001, Orissa, India E-mail: sangeeta_mohanty@rediffmail.com Nikhil Chandra Shil (Corresponding Author) Senior Lecturer & Assistant Proctor, Department of Business Administration East West University, 43, Mohakhali Commercial Area, Dhaka – 1212, Bangladesh Tel: 88 02 9882308 Abstract During …show more content…

limited resources, lack of professional advice, lack of information and so on. 2. Background of the Study The pre-liberalized India had a very poor rate of savings and most of the money earned was spent on consumption rather than accumulation. But in the post-liberalization period, India saw an upsurge in volume of savings as depicted in Table-1. Insert Table 1 Here So, investment companies should continually introduce new types of funds in an effort to attract investor’s capital and maximize assets under management (Khorana and Servaes 1999). However investment is increasingly considered as a subject falling under behavioral science rather than finance or economics. It is governed more by trends and group behavior rather than rationality and cold calculations. Investors like consumers are also immensely influenced by fashions and what is “in-thing”. Moreover, investors are unique and are a highly heterogeneous group at the retail level. Hence, designing a general product and expecting a good response will be futile (Odean 1999). It is widely believed that Mutual funds (MFs) and Life Insurances (LIs) are designed to target small investors, salaried people and others who are intimidated by the stock market; but on the other hand, like to reap the benefits of stock market investing. In spite of this, the future of mutual fund and life insurance industry in India will be undeniably competitive not only from within the industry but also

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