The Influence of Financial Literacy on Mutual Fund Investments

Abstract

v ABSTRACT The study analyzed the influences of financial literacy on mutual fund investments. This study adopted descriptive research design. A total sample of 100 UTT employees, Small traders, UTT’s Investment Management Section, UTT’s Customers and Individual investors were used in this study. Quantitative techniques was used. Questionnaires and secondary data were used in this study. The data were analyzed quantitatively. The study concluded that respondents had different opinion about how financial awareness affects mutual fund investments in retail investors of mutual funds in Dar es salaam. Specifically, respondents agreed that knowledge base, information source and eeducation and experience (Mean= 3.00 and S.D= O.114, Mean= 3.53 and S.D= 0.432 and M= 3.47 and S.D= 0.479).In the second research objective, the study concluded respondents agreed on all three items that investment horizon, diversification and portfolio monitoring were the effects of financial behavior on mutual fund investments in retail investors of mutual funds in Dar es salaam with the means core (M=3.50 and S. D= 0.656, M=3.77 and S. D= 0.382) and (M=3.47 and S. D=0.525). other respondents were neutral on whether investment decision affects financial behavior on mutual fund investments in retail investors of mutual funds in Dar es salaam with the mean score (M=3.50 and S. D=0.408). In the last objective, the study concluded that Perception and behaviour (M=3.80 and S. D= 0.495) was the financial attitude affects on mutual fund investments in retail investors of mutual funds in Dar es salaam, other respondents who filled the questionnaires were neutral on whether Risk Tolerance and Investment affects on mutual fund investments in retail investors of mutual funds in Dar es salaam with the mean score (M=3.13 and S. D= 0.570) and (M=2.83 and S. D= 0.663). it is recommended that there is a need for the investors to develop their knowledge and behavior to increase their operational and future decision on investment to achieve the higher return, the government, policymakers and financial institutions should develop financial education programs in a lucid manner (e.g. seminars and workshops) to enhance financial knowledge of investors and encourage investing their money efficiently and effectively, which will increase the demand of complex financial products. The study also recommends that, financial institutions should enhance their promotional strategies; a range of financial products available on the market, making investment decisions has become increasingly complex for individual investors. Hence the awareness about financial products is essential to make an effective investment decision