80% investors rely on social networks, fin-fluencers for investment info: Navi Mutual Fund’s study

Delhi: A recent research study conducted by Navi Mutual Fund among mutual fund investors and non-investors (Millenial and Gen Z) revealed some insights into their decision-making and potential knowledge gaps. 

Some key findings from the study are highlighted below.

1. Over-reliance on social networks and “fin-fluencers”

80% of investors rely on their social networks and "fin-fluencers" for investment information.

2. Low Understanding of Index Funds

1 out of 3 index fund investors do not fully understand the concept of index funds. As per the study, index funds are preferred owing to lower fees and positive experiences from friends and family.

3. Top Priority = Returns

Returns are the top priority for 1 out of 2 investors in selecting a fund. This is applicable for both active and index funds.

Some key misconceptions from the study are highlighted below.

1. Misconception 1: MF Investing Requires Extensive Financial Knowledge

Over 60% of respondents believe that mutual fund investment requires extensive financial knowledge.

2. Misconception 2: Large Lump Sum Needed to Start Investing

The myth that a large lump sum is required to start investing discourages 1 out of every 3 potential investors even though many mutual funds allow investments with limited initial capital.

3. Misconception 3: Investment Not Secure if Investment App Shuts Down

Nearly 50% of non-users fear their investments are not secure if the investment app shuts down.