Understanding Mutual Fund Investors’ Behaviour Using an Extended Model of Goal-directed Behaviour

Abstract

The study explores and understands the behavioural process followed by individual investors who choose or do not choose to invest in mutual funds (MFs) employing the extended model of goal-directed behaviour (MGB). The study design comprises building and testing a theoretically integrated MGB in the context of MFs investing decisions by incorporating a moderating variable, Regret Averse Bias in MGB. Partial least squares structural equation modelling (PLS-SEM) was utilized for the present study. The study’s outcomes revealed that the attitude of investors positively affected their desire to invest in MFs. The findings about emotions indicated the regulatory-focused approach of investors. They revealed the positive influence of negative emotions and no impact of positive emotions on an individual’s desire to invest in MFs. This confirmed the positive influence of financial self-efficacy (FSE) on the desire to invest and actual behaviour. Finally, the study established the moderating effect of regret aversion bias of investors on the association between the desire to invest and behavioural intention (BI). The study addresses the need to probe the relationship between anticipated emotions (AEs), regulatory focuses and behaviour strategies, as pointed out in earlier related literature.