INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue IX September 2025
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Perception About “Mutual Fund Investments” Among Generation X
And Y Investors: A Comparative Approach
Dr Deepa Abhonkar, Ms. Manisha Kude,
Asst. Professor,MGV’s Samajshree Prashantdada Hiray College of Management and Technology,
Nashik, India
Research Scholar, MGV’s Samajshree Prashantdada Hiray College of Management and Technology,
Nashik, India
DOI: https://doi.org/10.51244/IJRSI.2025.120800262
Received: 17 Sep 2025; Accepted: 23 Sep 2025; Published: 04 October 2025
ABSTRACT
Mutual funds have emerged as a popular investment vehicle, offering diversification and professional
management. However, investor perception varies significantly across generations due to differences in risk
appetite, financial literacy, and technological adoption. This study examines the perception of mutual fund
investments among Generation X (born 1965–1980) and Generation Y/Millennials (born 1981–1996) through
a comparative lens.
Using a mixed-method approach (quantitative surveys and qualitative interviews), the research analyzes key
factors influencing investment decisions, including risk tolerance, awareness levels, digital adoption, and
socio-economic influences. The study samples 500 investors (250 from each generation) across urban and
semi-urban India, assessing their attitudes towards mutual funds, preferred investment channels (traditional vs.
fintech platforms), and behavioral biases.
Findings reveal that Gen X prefers stable, long-term investments with moderate risk, relying on financial
advisors, while Gen Y favors digital platforms, higher-risk equity funds, and ESG (Environmental, Social, and
Governance) investments. The study also identifies gaps in financial literacy and suggests policy and
marketing strategies to enhance mutual fund penetration.
Keywords: Mutual Funds, Generation X, Generation Y, Investor Perception, Risk Appetite, Financial Literacy,
Digital Investment Platforms, Behavioral Finance
INTRODUCTION
Background
Mutual funds pool money from multiple investors to invest in diversified assets, offering liquidity, professional
management, and tax benefits. In India, the mutual fund industry has grown significantly, with Assets Under
Management (AUM) crossing ₹50 lakh crore (2024). However, investor participation remains skewed,
with Gen X and Gen Y exhibiting distinct investment behaviors.
Problem Statement
Gen X (ages 44–59 in 2024) tends to be conservative, preferring fixed deposits and gold.
Gen Y (ages 28–43 in 2024) is more tech-savvy but lacks long-term investment discipline.
Research Gap: Limited studies compare generational differences in mutual fund perceptions in emerging
markets like India.
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue IX September 2025
Page 2946
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Research Objectives
The study aims to achieve four key objectives. First, it seeks to compare risk perception and investment
preferences between Generation X (born 1965–1980) and Generation Y (Millennials, born 1981–1996),
analyzing how demographic and socioeconomic factors influence their financial decisions. Second, it will
evaluate the impact of financial literacy on mutual fund adoption, determining whether higher financial
knowledge leads to greater participation in mutual fund investments. Third, the research will assess the role of
digital investment platforms (such as Groww, Coin, and ET Money) in shaping investor behavior, focusing on
how technology-driven accessibility influences decision-making. Finally, the study will identify behavioral
biases—such as herd mentality (following trends without analysis) and loss aversion (fearing losses more than
valuing gains)—that may distort investment choices.
Significance of the Study
This research holds substantial value for multiple stakeholders. For Asset Management Companies (AMCs),
the findings will help tailor marketing strategies by understanding generational differences in risk appetite and
preferred investment channels. Policymakers can utilize insights to enhance financial literacy programs,
ensuring they address behavioral biases and knowledge gaps that hinder sound investment decisions.
Additionally, individual investors will benefit by gaining awareness of generational trends and psychological
biases, enabling them to make more informed and rational financial choices. Overall, the study bridges gaps in
investor behavior analysis, fostering a more efficient and inclusive financial ecosystem.
LITERATURE REVIEW
The literature on generational investment behavior has expanded over the years, revealing marked contrasts in
risk preferences, decision-making, and adoption of financial technologies. Several studies have explored how
demographic variables such as age, income, education, and marital status influence mutual fund investment.
Mutual Fund Awareness and Perception: According to Singh and Chander (2006), awareness and
understanding of mutual funds significantly impact the investment decision. Their study found that younger
investors often have limited awareness, relying heavily on peer networks and digital media.
Generational Differences: Twenge et al. (2010) noted that Generation Y tends to prioritize short-term gains
and is more open to digital and app-based investment platforms. In contrast, Generation X values long-term
security and prefers traditional advisory channels.
Risk Appetite: Jain and Jain (2019) emphasized that Generation X is more conservative, often opting for debt
funds and balanced funds, whereas Generation Y is inclined toward equity funds due to higher risk tolerance.
Financial Literacy: Lusardi and Mitchell (2007) highlighted the importance of financial education, revealing
a strong correlation between literacy levels and informed investment decisions across generations.
The present study fills the gap by offering a side-by-side analysis of mutual fund investment perception
between Generation X and Y in the Indian context.
RESEARCH METHODOLOGY
Research Design
The study adopts a mixed-method approach, combining both quantitative and qualitative research
techniques to ensure comprehensive insights. The quantitative aspect involves structured surveys using
a Likert scale to measure investor attitudes, risk perception, and financial behavior statistically.
The qualitative component consists of in-depth interviews with financial advisors and experienced investors
to gain deeper contextual understanding of generational investment trends and behavioral biases.
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue IX September 2025
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Sampling Techniques
For sampling, the research targets 500 investors, evenly distributed between Generation X (250
respondents) and Generation Y (250 respondents) to facilitate comparative analysis. A stratified random
sampling technique is employed, categorizing participants based on urban and semi-urban locations to
account for regional variations in financial access and awareness.
Data Collection Tools
Data collection relies on both primary and secondary sources. Primary data is gathered through
a structured survey questionnaire, assessing factors such as risk tolerance, investment goals, financial
literacy, and digital platform usage. Additionally, 20 interviews with financial experts provide qualitative
insights into generational investment behaviors. Secondary data is sourced from SEBI reports, AMFI
publications, and academic journals to supplement empirical findings with industry trends and historical
data.
Data Analysis Techniques
For data analysis, quantitative responses are processed using SPSS software, applying statistical techniques
such as regression analysis (to identify influencing factors), ANOVA (for mean differences between
groups), and Chi-square tests (for categorical variable associations). Qualitative data from interviews
undergoes thematic analysis using NVivo software, identifying recurring patterns and key behavioral themes
affecting investment decisions. This dual analytical approach ensures robust, data-driven conclusions.
DATA ANALYSIS AND INTERPRETATION
Demographic Profile
Factor
Gen X (n=250)
Gen Y (n=250)
Age Group
44–59
28–43
Primary Income Source
Salaried (70%)
Salaried (60%), Freelance (25%)
Investment Horizon
10+ years (80%)
5–10 years (65%)
Objective 1: Compare Risk Perception And Investment Preferences Between Gen X And Gen Y
Generation
Sample
Size (N)
Risk Appetite
Distribution
Preferred
Investment
Options
Interpretation
Gen X (1965–
1980
250
Low:55%,
Moderate:35%,
High: 10%
PPF, FDs, Life
Insurance,
Balanced Mutual
Funds
Gen X is largely
risk-averse,
prefers capital
protection. Equity
exposure is
minimal.
Gen Y (1981–
1996)
250
Low:20%,
Moderate:45%,
High: 35%
Mutual Funds,
Stocks, SIPs,
Digital Gold
Gen Y displays a
higher risk
appetite, with a
preference for
market-linked
investments and
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue IX September 2025
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digital tools
The analysis revealed significant differences in risk perception and investment behavior between Generation X
and Generation Y. Generation X investors predominantly exhibit a conservative outlook, with a strong
preference for traditional, low-risk instruments such as fixed deposits, PPFs, and life insurance policies. In
contrast, Generation Y investors demonstrate a higher risk appetite and a strong inclination towards market-
linked products like mutual funds, stocks, and SIPs. This shift is attributed to greater digital exposure,
accessibility of financial information, and evolving financial goals among younger investors.
Objective 2:Analyze the Impact of Financial Literacy on Mutual Fund Adoption
Financial Literacy
Level
Sample Size (n)
Mutual Fund
Adoption Rate
(%)
Investment Style
Interpretation
High (score 80–
100)
170
85%
Direct Plans, SIPs,
Online Platforms
High literacy
correlates with
independent, tech-
driven, cost-
effective investing.
Medium (score 50–
79)
180
60%
Distributors, Mixed
Approach
Moderate literacy
leads to some
dependence on
intermediaries, but
adoption is
growing.
Low (score <50)
150
30%
Banks, Insurance-
linked Plans
Low literacy results
in conservative,
uninformed
decisions; urgent
need for awareness
campaigns
The findings clearly indicate that financial literacy plays a vital role in influencing mutual fund adoption.
Respondents with higher financial literacy levels not only show greater participation in mutual fund
investments but also prefer cost-effective, direct mutual fund plans through online platforms. Conversely, those
with lower financial literacy tend to avoid market-linked products due to a lack of awareness and confidence,
often relying on traditional agents and bank-based instruments. This underlines the critical need for targeted
financial literacy programs to bridge knowledge gaps and promote informed investing.
Objective 3: Assess the Role of Digital Platforms in Shaping Investment Behavior
Digital Platform
Sample Size Using
Platform (n)
Regular
Investment via
Platform (%)
Key Behavioral
Change
Interpretation
Groww
120
78%
Increased SIPs,
DIY investing
User-friendly
interface
encourages young,
first-time investors.
Coin by Zerodha
100
70%
Shift to direct
Cost-sensitive and
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue IX September 2025
Page 2949
www.rsisinternational.org
mutual funds
well-informed
investors opt for
direct access.
ET Money
80
65%
Goal-based
investments,
improved planning
Personal finance
tools help investors
align spending and
investing.
No Platform Used
200
30%
Irregular or
traditional methods
Lack of digital
adoption hinders
consistent
investing.
Digital investment platforms like Groww, Coin, and ET Money have emerged as key enablers in reshaping
investment behavior, especially among Generation Y. These platforms offer intuitive interfaces, transparency,
and tools for goal-based investing, which have led to increased participation in systematic investment plans
(SIPs) and mutual funds. However, a substantial proportion of respondents (40%) still do not utilize digital
platforms, citing reasons such as lack of digital literacy, trust issues, or preference for traditional methods.
Thus, while digital platforms are instrumental in democratizing investments, their outreach and trust-building
mechanisms must be further strengthened.
Objective 4: Identify Behavioral Biases Affecting Investment Decisions
Behavioral Bias
Sample Affected
(n)
Observed
Behavior
Generation Most
Affected
Interpretation
Herd Mentality
180
Followed trends
without research
(e.g., popular
funds/stocks)
Gen Y
Driven by social
media & peer
influence. Risky
without adequate
knowledge.
Loss Aversion
220
Premature
withdrawal after
short-term losses
Gen X
Emotional bias
leads to long-term
loss. Education
needed on market
cycles.
Overconfidence
Bias
100
Belief in personal
market-picking
skill
Gen Y
Often ignores
expert advice;
overestimates own
knowledge.
Anchoring Bias
80
Fixation on
purchase price or
past highs
Mixed
Limits rational
decisions during
market volatility.
The study identified several behavioral biases that significantly affect investment decisions. Herd mentality
and overconfidence bias are more prevalent among younger investors, often influenced by social trends and
peer behavior. On the other hand, loss aversion is a dominant bias among older investors, leading to premature
exits and conservative decisions during market fluctuations. These psychological factors highlight the
importance of integrating behavioral finance education into investor awareness initiatives and advisory
frameworks.
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue IX September 2025
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FINDINGS & CONCLUSION
Key Findings
Gen X prefers stability; Gen Y seeks growth & convenience.
Digital platforms significantly influence Gen Y’s investment choices.
Financial literacy gaps exist in both generations but differ in nature.
RECOMMENDATIONS
For AMCs:
Gen X: Focus on retirement planning & tax-saving funds.
Gen Y: Promote SIPs in equity funds via gamified apps.
For Regulators (SEBI, AMFI):
Introduce simplified KYC for digital investors.
Launch financial literacy campaigns on social media.
Conclusion and Future Research Directions
The study underscores significant generational differences in risk perception and mutual fund adoption
between Gen X and Gen Y investors, revealing distinct preferences shaped by financial literacy, digital
engagement, and behavioral biases. These findings highlight the need for customized financial
products and targeted investor education programs to address the unique needs of each demographic. Asset
managers and policymakers can leverage these insights to refine marketing strategies, enhance financial
literacy initiatives, and promote informed investment decisions.
For future research, expanding the scope to include Generation Z (born 1997–2012) could provide valuable
insights into evolving investment trends, particularly in the post-pandemic financial landscape. Given Gen
Z’s early exposure to digital platforms, social media-driven investing, and economic uncertainties, examining
their risk appetite, reliance on fintech tools, and behavioral biases would offer a more comprehensive
understanding of the next generation of investors. Additionally, longitudinal studies tracking generational
shifts in investment behavior could further enrich financial market strategies and regulatory approaches.
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