Investor Preferences in Tax-Saving Mutual Funds. A Demographic and Behavioral Analysis in Hyderabad

Research Paper (undergraduate) , 2024 , 68 Pages , Grade: A

Business economics - Accounting and Taxes

This study aims to analyze investor preferences in tax-saving mutual funds, focusing on demographic factors and key decision-making elements. Using a quantitative approach with a Likert scale-based questionnaire, the research gathers numerical data to provide insights into investor behavior. The sample includes 70 investors from Angel One, a leading brokerage house, and is geographically limited to Hyderabad. A convenience sampling method was employed, selecting participants based on availability and willingness to participate. The study finds that most investors are middle-aged, with a balanced gender distribution. A significant portion of the investor base consists of self-employed individuals and business owners, with salaried individuals and retirees representing a smaller share. Most investors belong to the middle-income segment and are highly educated.
Key factors influencing investment decisions include past performance consistency and historical returns, though these factors were not statistically significant. Brand reputation and portfolio diversification have minimal influence, while advisory services and transparency show negligible or negative relationships with investor preferences. The most significant factors in boosting investor confidence are clear communication regarding risks and returns, regular updates on fund performance, and strong customer support, including advisory services and real-time assistance. The findings highlight the importance of transparency, consistent performance, and customer support in attracting and retaining investors in tax-saving mutual funds.

Table of Contents

ABSTRACT

1 INTRODUCTION
1.1 Tax-Saving Mutual Funds and ELSS Overview
1.2 Factors Influencing Investor Preferences
1.2.1 Return on Investment (ROI)
1.2.2 Risk Tolerance
1.2.3 Lock-in Period
1.2.4 Tax Benefits
1.2.5 Liquidity and Exit Strategy
1.3 Need of the Study
1.4 Objectives of the Study
1.5 Hypothesis of the Study
1.6 Scope of the Study

2 REVIEW OF LITERATURE

3 RESEARCH METHODOLOGY
3.1 Research Design
3.2 Sample Scope and Company
3.3 Sampling Methodology
3.4 Sample Size
3.5 Data Collection Tool
3.6 Statistical Tools Used
3.7 Limitations of the Study

4 DATA ANALYSIS AND INTERPRETATION
4.1 Demographic Analysis
4.1.1 Age Distribution
4.1.2 Gender Distribution
4.1.3 Occupation
4.1.4 Annual Income
4.1.5 Education Level
4.2 Behavioural Factors Analysis
4.2.1 Assessment of Fund Performance
4.2.2 Source of Information
4.3 Influencing Factors in Decision-Making
4.3.1 Historical Returns
4.3.2 Past Performance Consistency
4.3.3 Portfoli- Diversification
4.3.4 Brand Reputation
4.3.5 Advisory and Financial Guidance
4.3.6 Transparency in Fund Operations
4.3.7 Ease of Access via Digital Platforms
4.4 Regression Analysis
4.5 Enhancing Factors Identified through Exploratory Factor Analysis
4.5.1 Regular Updates on Fund Performance and Market Trends
4.5.2 Clear and Transparent Communication about Risks and Returns
4.5.3 Enhanced Digital Tools (e.g., Calculators, Comparisons)
4.5.4 Better Customer Support and Advisory Services
4.5.5 Availability of Real-Time Assistance
4.5.6 Interactive Educational Resources
4.5.7 EFA Summary Table and Interpretation

5 FINDINGS, SUGGESTIONS AND CONCLUSION
5.1 Findings
5.2 Suggestions and Scope for Further Research
5.3 Conclusion

BIBLIOGRAPHY

APPENDIX

ABSTRACT

This study aims t- analyze investor preferences in tax-saving mutual funds, focusing on demographic factors and key decision-making elements. Using a quantitative approach with a Likert scale-based questionnaire, the research gathers numerical data t- provide insights int- investor behavior. The sample includes 70 investors from Angel One, a leading brokerage house, and is geographically limited t- Hyderabad. A convenience sampling method was employed, selecting participants based on availability and willingness t- participate. The study finds that most investors are middle-aged, with a balanced gender distribution. A significant portion of the investor base consists of self-employed individuals and business owners, with salaried individuals and retirees representing a smaller share. Most investors belong t- the middle-income segment and are highly educated.

Key factors influencing investment decisions include past performance consistency and historical returns, though these factors were not statistically significant. Brand reputation and portfoli- diversification have minimal influence, while advisory services and transparency show negligible or negative relationships with investor preferences. The most significant factors in boosting investor confidence are clear communication regarding risks and returns, regular updates on fund performance, and strong customer support, including advisory services and real-time assistance. The findings highlight the importance of transparency, consistent performance, and customer support in attracting and retaining investors in tax-saving mutual funds.

Keywords: Investor preferences, tax-saving mutual funds, demographic factors, mutual fund investment, Angel One.

1 INTRODUCTION

1.1 Tax-Saving Mutual Funds and ELSS Overview

Tax-saving mutual funds play a crucial role in personal finance by offering investors the dual benefit of wealth creation and tax savings. Among various tax-saving investment options available in India, Equity-Linked Savings Schemes (ELSS) stand out as one of the most popular choices. These funds are specifically designed t- provide tax deductions under Section 80C of the Income Tax Act, 1961, allowing investors t- reduce their taxable income while simultaneously investing in equity markets for long-term capital appreciation. ELSS funds primarily invest in diversified equity portfolios, making them unique compared t- other tax-saving instruments. Investors can claim a tax deduction of up t- ₹1.5 lakh per financial year, effectively lowering their tax liability. Unlike traditional tax-saving instruments such as Public Provident Fund (PPF), National Savings Certificate (NSC), and Tax-Saver Fixed Deposits, ELSS has the shortest lock-in period of just three years. This feature makes it an attractive option for individuals looking for higher returns and better liquidity while still benefiting from tax deductions.

A major advantage of ELSS is its potential for long-term wealth creation. Since these funds are market-linked, they offer the possibility of inflation-beating returns over time. While equity investments carry inherent risks, historical data suggests that ELSS funds have outperformed traditional fixed-income tax-saving options over longer periods. Investors als- benefit from compounding, where their investments grow significantly over time, making ELSS a preferred choice for those willing t- take a calculated risk. Another key differentiator of ELSS is its lock-in period. Compared t- PPF (15 years), NSC (5 years), and Tax-Saver FDs (5 years), ELSS offers greater flexibility with just a three-year lock-in. This shorter period allows investors t- reinvest or redeem their funds sooner, providing them with greater financial planning options. However, unlike fixed-return instruments like PPF or NSC, ELSS returns are market-driven, meaning they are subject t- fluctuations based on stock market performance.

ELSS is particularly suitable for investors with a moderate t- high-risk appetite and a long-term investment horizon. As these funds are managed by professional fund managers, they help investors diversify their portfolios across various sectors. Individuals wh- can remain invested beyond the mandatory lock-in period stand t- gain significantly from market upswings and compounding

returns. Tax-saving mutual funds, particularly ELSS, provide an excellent opportunity for investors t- save taxes while building wealth. With a shorter lock-in period, the potential for high returns, and tax benefits, ELSS remains a preferred investment choice for individuals looking t- optimize their financial planning. However, investors should carefully assess their risk tolerance, investment objectives, and market conditions before investing in ELSS or any tax-saving mutual fund.

1.2 Factors Influencing Investor Preferences in Tax-Saving Mutual Funds

Investor preferences for tax-saving mutual funds, particularly Equity-Linked Savings Schemes (ELSS), are shaped by several key factors. These factors play a crucial role in guiding investment decisions, as individuals seek a balance between risk, return, liquidity, and tax benefits. Understanding these elements helps investors make informed choices while optimizing their financial planning.

1.2.1. Return on Investment (ROI)

One of the most significant factors influencing investor preferences is the expected return on investment (ROI). Investors analyze historical performance, market trends, and fund returns before making investment decisions. Since ELSS funds are equity-based, they have the potential t- deliver higher returns compared t- traditional tax-saving instruments like PPF and NSC. However, the returns are market-linked and can fluctuate based on economic conditions. Investors with a long-term perspective often favor ELSS due t- its compounding growth potential and inflation-beating returns.

1.2.2. Risk Tolerance

Investors' risk appetite plays a crucial role in their choice of tax-saving mutual funds. ELSS funds invest in equity markets, making them moderate t- high-risk investment options. Individuals with a higher risk tolerance prefer ELSS over safer tax-saving instruments like Public Provident Fund (PPF), National Savings Certificate (NSC), and Tax-Saver Fixed Deposits, which provide fixed returns but lower growth potential. Risk-averse investors may hesitate t- invest in ELSS, while those willing t- accept short-term volatility for long-term gains are more likely t- choose it.

1.2.3. Lock-in Period

The lock-in period is a critical determinant of investor preference. Compared t- other tax-saving options, ELSS has the shortest lock-in period of just three years, making it a more attractive choice for investors wh- seek flexibility. In contrast, PPF has a 15-year lock-in period, and NSC and Tax-Saver FDs require a commitment of five years. The shorter lock-in period of ELSS allows investors t- redeem or reinvest their funds sooner, providing better liquidity and financial planning opportunities. However, since ELSS is subject t- market risks, some investors may prefer longer-term fixed-return options.

1.2.4. Tax Benefits

Tax savings are a primary motivator for investing in ELSS. Under Section 80C of the Income Tax Act, investors can claim a tax deduction of up t- ₹1.5 lakh per financial year by investing in ELSS. This tax advantage makes ELSS one of the most sought-after investment instruments for individuals looking t- reduce their taxable income. Unlike other tax-saving investments that provide fixed returns, ELSS combines tax benefits with market-driven growth potential, making it an attractive choice for investors wh- want t- maximize their wealth while saving on taxes.

1.2.5. Liquidity and Exit Strategy

Although ELSS has a three-year lock-in period, investors als- consider liquidity and exit strategies before investing. Post lock-in, investors evaluate factors like fund performance, market conditions, and financial goals before deciding whether t- redeem, hold, or reinvest their ELSS units. Since equity markets are volatile, investors often stay invested beyond the lock-in period t- maximize returns. Additionally, some investors prefer ELSS because, unlike fixed-return investments, it offers growth potential even after the lock-in period ends.

Investor preferences in tax-saving mutual funds are influenced by a mix of financial goals, risk appetite, and tax planning strategies. While high returns, tax benefits, and a short lock-in period make ELSS a favored choice, factors like market volatility and liquidity concerns als- play a role in decision-making. By understanding these factors, investors can make well-informed choices that align with their financial objectives and investment horizons.

1.3 NEED OF THE STUDY

This study is essential t- bridge the knowledge gap regarding investor preferences in tax-saving mutual funds. By assessing the demographic profile of investors in Hyderabad, it aims t- provide region-specific insights that can guide financial institutions in designing more targeted products and services. Furthermore, analyzing the factors influencing investor preferences, such as returns, tax benefits, and risk tolerance, will help identify key drivers of decision-making. Understanding these preferences is critical for fund managers and advisors t- offer personalized recommendations that resonate with investors' financial goals.

1.4 OBJECTIVES OF THE STUDY

1. T- assess the demographic profile of investors in Hyderabad district
2. T- analyze the factors influencing investor preferences on decision-making in selecting tax-saving mutual funds.
3. T- offer measure for enhancing investor preferences and decision-making in selecting tax-saving mutual funds.

1.5 HYPOTHESIS OF THE STUDY

Null Hypothesis (H₀): The factors d- not significantly influence investor preferences for tax-saving mutual funds.

1.6 SCOPE OF THE STUDY

This study focuses on understanding investors' preferences in tax-saving mutual funds, with a specific emphasis on the Hyderabad district. The research als- aims t- propose measures t- enhance investor preferences by identifying areas for improvement in mutual fund offerings and advisory services. The findings will provide actionable insights for fund managers, financial advisors, and policymakers, enabling them t- better align mutual fund products with the expectations and needs of investors in Hyderabad.

2 REVIEW OF LITERATURE

1. Risk-Return Analysis of Select Tax Saving Mutual Funds (S. P. K. Subramaniam, 2024) This study analyzes the risk-return profile of selected tax-saving mutual funds in India by evaluating key performance indicators such as standard deviation, beta, Sharpe ratio, and Treynor rati- over a 90-month period from 2016 t- 2023. The performance assessment was conducted using Net Asset Value (NAV) data published by the Association of Mutual Funds in India (AMFI) and BSE Sensex closing values. Among the mutual funds examined, the Quant Tax Direct Plan (Growth Option) demonstrated the strongest performance based on the evaluated metrics. The findings indicate that the Quant Tax Direct Plan (Growth Option) offers a superior balance between risk and return, making it a more favorable option for investors seeking effective tax-saving investments while efficiently managing risk.

2. A Study of Investor Behavior Towards Tax Saving Instruments: A Study in Raigarh (AyushiChelshiBhagat,2024) The study examines investor behaviour towards various tax-saving instruments in Raigarh, focusing on preferences for options such as Fixed Deposits, Public Provident Fund (PPF), National Savings Certificate (NSC), Tax-Saving Mutual Funds, Life Insurance, National Pension System (NPS), Pension Policies, and Sukanya Samriddhi Yojana (SSY). The findings reveal that Life Insurance, PPF, and Fixed Deposits are the most preferred tax-saving instruments among investors, while NPS and SSY are relatively less favoured. The research als- uncovers a common tendency among investors t- postpone tax planning. The study underscores the importance of increasing awareness and promoting proactive tax-saving behaviour t- strengthen financial planning. Encouraging early and informed investment decisions can help individuals optimize tax benefits more effectively.

3. Small Active Investors' Perceptions and Preferences Towards Tax Saving Mutual Fund Schemes in Eastern India (Jitendra Kumar, Anindita Adhikary, Ajeya Jha, 2024) The study explores the influence of demographic factors on the perceptions and preferences of small active investors in Eastern India with regard t- tax-saving mutual funds. Drawing on data collected from 750 respondents across six states, the research identifies significant variations in investment preferences based on age, income, and education levels. The findings emphasize that demographic characteristics play a pivotal role in shaping investor behavior and decision-making. These insights can assist financial planners and policymakers in designing more targeted investment strategies that cater t- the specific needs and preferences of different investor segments.

4. A Study on Investor’s Perception Towards Equity/Tax Saving Mutual Funds (Bhuvaneswari,2013) The study analyses investor perceptions toward equity and tax-saving mutual funds, aiming t- identify the key factors that influence investment decisions. Utilizing a structured questionnaire and applying statistical tools such as simple percentage analysis, the Chi-Square Test, and Rank Correlation, the research reveals that risk tolerance, tax benefits, and expected returns are the primary factors shaping investor perceptions. The findings underscore the significance of clear communication and comprehensive investor education in enabling individuals t- make informed choices. By enhancing awareness and understanding, investors can better utilize tax-saving mutual funds t- maximize their wealth.

5. Decoding Investor’s Behavior in Tax Saving Mutual Fund: A Multi-Item Scale for Evaluating Investors’ Category (Priya Tiwari, Bharat Kasar, Vibhu Tripathi, D. Y. Patil, 2024) The study develops a multi-item scale t- evaluate investor behaviour in tax-saving mutual funds, with a particular emphasis on Equity Linked Savings Schemes (ELSS). It identifies key financial and behavioural factors that influence investment decisions, such as overconfidence, anchoring, and herding. The findings indicate that investor behaviour is shaped not only by financial considerations like expected returns but als- by psychological biases. The study presents a structured framework for categorizing investors based on their behavioural and financial traits, which can aid financial advisors and policymakers in enhancing investor participation. By addressing psychological influences and refining decision-making strategies, the framework supports more effective engagement with tax-saving mutual funds.

6. An Analytical Study of Investors’ Perception Towards Investing in Equity Mutual Funds During COVID-19 Situation (Payal Samdariya, Vipul Goyal, Varsha Goyal, 2022)

The study analyses the impact of COVID-19 on investor perceptions toward equity mutual funds, focusing on the key factors that influenced investment decisions during the pandemic. It finds that investors placed considerable importance on aspects such as risk, fixed rate returns, company performance, and tax-saving benefits when making investment choices amid the crisis. The heightened uncertainty during the pandemic led t- a noticeable decline in investor confidence. The study underscores the need for targeted measures t- restore trust in equity mutual funds during periods of uncertainty. Enhancing investor education and implementing robust risk management strategies are essential t- improving confidence and encouraging sustained participation in these investment avenues.

7.Investors’ Hindsight Effect and True Timing Ability of Tax Saving Mutual Funds (Krittapon Chaleoykitti, 2023) The study evaluates investors' timing ability in tax-saving mutual funds, with a particular focus on funds that have investment constraints such as lock-up periods. The findings reveal that investors generally exhibit poor market timing skills, often leading t- suboptimal investment decisions. However, tax-saving mutual funds with lock-up periods tend t- perform better, as these restrictions help prevent premature withdrawals and mitigate the effects of poor cash flow timing. The study als- notes that factors like market volatility and large asset management influence overall fund performance. The research concludes that investment constraints such as lock-up periods can play a beneficial role in reducing the impact of poor timing and improving fund outcomes. These insights can help investors and fund managers design more effective investment strategies.

8. A Study on Investors’ Perception Towards Large-Cap Equity Oriented Mutual Funds in India (Prakash Yalavatti, 2021) The study examines retail investors' perceptions of large-cap equity-oriented mutual funds in India, focusing on investor profiles, satisfaction levels, and the key factors influencing their investment decisions. The findings reveal that investors are attracted t- large-cap mutual funds for their balanced risk-return profile. However, overall satisfaction levels remain moderate, suggesting room for improvement in aligning offerings with investor expectations. The study als- identifies that demographic factors such as age, income, and education play a significant role in shaping investment preferences. The research underscores the need for a deeper understanding of investor demographics t- enhance engagement and satisfaction. Financial advisors and fund managers can leverage these insights t- tailor investment strategies that more effectively address the needs and expectations of different investor segments.

9. Retail Investors' Preferences Towards Investment in Mutual Funds (Year: 2019) The study investigates the preferences of retail investors in Gujarat regarding mutual fund investments, with a focus on the key factors that influence their decision-making. The findings indicate that tax relief is the primary motivation driving investors toward mutual funds. In addition, factors such as occupation and the mode of investment significantly impact investor choices. The research offers valuable insights that can assist mutual fund companies and policymakers in designing tailored investment options and strategies. By aligning offerings with investor needs and preferences, these efforts can encourage broader participation in mutual fund investments.

10. An Analytical Study on Investors’ Perception Towards Mutual Funds (Shilpa Kumar, D. Umamaheswari, K. K. Reddy, 2019) The study analyses the factors influencing investors' perceptions of mutual funds, with a particular emphasis on the role of demographic variables. Employing Chi-Square and Correlation tests, the research reveals that gender and income level have a significant impact on how investors perceive mutual funds, especially in terms of tax benefits and liquidity. The findings underscore the importance of recognizing demographic influences in shaping investor behaviour. This understanding can help mutual fund managers develop investment products and strategies that are better aligned with the diverse needs and preferences of their investor base.

11. Investors' Perception and Satisfaction Levels Towards Mutual Funds in Rayalaseema Region of Andhra Pradesh (Geetha Sineni, S. Siva Reddy, 2018) The study examines investor perceptions and satisfaction levels toward mutual funds in the semi-urban and rural areas of Rayalaseema, Andhra Pradesh. Drawing on data collected from 600 respondents across four districts, the research reveals a growing awareness of mutual funds as a viable investment option in these regions. It als- highlights key investor preferences and varying levels of satisfaction, shedding light on the unique financial behavior of investors in semi-urban and rural settings. The study underscores the importance for mutual fund companies t- take regional perceptions int- account and tailor their offerings accordingly t- better address the financial needs and expectations of these investor segments.

12. Small Active Investors' Perceptions and Preferences Towards Tax Saving Mutual Fund Schemes in Eastern India: An Empirical Note (Jitendra Kumar, Anindita Adhikary, Ajeya Jha, 2017) The study investigates the perceptions and preferences of small active investors in Eastern India toward tax-saving mutual fund schemes, with a particular focus on the influence of demographic factors. The findings reveal significant differences in investment preferences based on variables such as age, education, and income, illustrating how these elements shape investor behavior and decision-making. The research emphasizes the importance for mutual fund providers t- recognize and understand these demographic influences in order t- effectively target and promote tax-saving mutual funds in the region. By tailoring investment strategies t- align with the specific characteristics and needs of various investor segments, providers can enhance both participation and overall investor satisfaction.

13. A Study on Performance of Public Sector Banks Open-Ended Tax Saving Mutual Fund Schemes (K. Venkata Rami Reddy, A. Sree Ram, 2020) The study evaluates the performance of open-ended tax-saving mutual fund schemes offered by public sector banks, specifically comparing funds from institutions such as Bank of Baroda, State Bank of India, and Canara Bank. The findings identify the Canara Robec- Equity Tax Saver Fund as the best-performing scheme, delivering the highest returns with relatively lower risk compared t- its counterparts. The research underscores the advantages of Equity Linked Savings Schemes (ELSS) for tax-saving investors and promotes the importance of making rational investment decisions under Section 80C of the Income Tax Act. It emphasizes that investors should consider key performance metrics t- optimize returns while effectively managing risk.

14. A Study of Investor’s Attitude Towards Mutual Funds as an Investment Option (Ms. Savita,2024) The study explores investor attitudes toward mutual funds, with a focus on perceptions related t- risk, returns, and investment duration. The findings indicate that mutual funds are generally perceived as a safer investment option compared t- direct stock investments, especially among risk-averse investors. The research highlights the importance of understanding these investor attitudes and preferences, as this insight can help mutual fund managers optimize their product offerings and better align them with the expectations and risk profiles of their target investors.

15. A Study on Investor Attitude and Preference In Tax-Saving Mutual Funds (Year: 2024) The study analysis investor attitudes and preferences toward tax-saving mutual funds, taking int- account factors such as risk tolerance, lock-in periods, tax benefits, and expected returns. By employing both qualitative and quantitative methods, including regression analysis, the research identifies key determinants that significantly influence investor choices. The findings offer valuable insights that can help enhance investor satisfaction and encourage greater participation in tax-saving mutual funds. These insights enable financial institutions t- tailor their products and strategies more effectively t- meet the diverse needs and expectations of investors.

16. Factors Affecting Perception of Investors Towards Mutual Funds During COVID- 19 in Punjab Region (Annu Kumari, Dr. Harpreet Singh Chahal (2022)) The study examines the impact of COVID-19 on investor perceptions of mutual funds in the Punjab region, focusing on shifts in investment behavior during periods of market uncertainty. The findings reveal that retail investors, particularly those with limited savings or financial knowledge, showed a preference for mutual funds during the pandemic due t- their lower risk and diversified structure. As a result, the demand for mutual funds increased, with many viewing them as a safer investment alternative amid the crisis. The research highlights the role of mutual funds as a stable, lower-risk option during uncertain times and emphasizes the importance of investor awareness and financial education t- further encourage mutual fund investments in such conditions.

17. Behavioral Study on Investor’s Perception Towards Mutual Funds with Special Reference t- Bangalore Investors ( Nandan (2019)) The study examines the investment behaviour, awareness, and perception of mutual fund investors in Bangalore, with a particular focus on demographic factors and underlying motivations. The findings indicate that most investors are male and employed in either the private or public sector. While tax-saving benefits emerge as a key motivator for mutual fund investments, a significant number of investors lack a clear understanding of the associated risks and potential returns. The research underscores the need for enhanced financial literacy, especially in rural and semi-urban areas, t- empower investors t- make informed decisions. Strengthening investor education is crucial for fostering greater participation and ensuring the sustained growth of the mutual fund sector in India.

18. A Study on Performance Evaluation of Equity Linked Saving Schemes (ELSS) of Mutual Funds (CMA (Dr.) Ashok Panigrahi, Mohit K. Mistry, Raghav Shukla, Abhishek Gupta (2020))

The study assesses the performance of Equity Linked Saving Schemes (ELSS) in India using key financial metrics such as the Beta coefficient, Sharpe ratio, and Jensen’s alpha. The findings indicate that ELSS funds have consistently outperformed their peers, particularly in terms of Sharpe and Treynor ratios, showcasing their ability t- deliver strong risk-adjusted returns. The research positions ELSS schemes as a compelling investment option for individuals seeking both tax benefits and long-term financial growth. Their superior performance underscores their appeal as an effective tool for tax-saving and wealth-building strategies.

19. A Study on Tax-Saving Investment Pattern and Investor Attitude Towards Selected Mutual Funds ( Arockia Jerold, Arockia Jerold (2016)) The study examines investor attitudes and preferences toward tax-saving mutual funds, focusing on key factors such as risk tolerance, investment duration, and tax benefits. Based on data collected from 353 respondents, the findings reveal that tax savings serve as a primary motivation for investing in these funds. However, a significant number of investors lack adequate awareness of the associated risks and potential rewards. The research underscores the need for enhanced investor education and awareness initiatives t- support more informed decision-making. Targeted campaigns can play a crucial role in helping investors better understand tax-saving mutual funds and effectively maximize their benefits.

20. A Study on Investments in Tax-Saving Products with Reference t- Visakhapatnam (Dr. S. G. Rama Rao, P. Sheela (2019)) The study explores investment behaviour in tax-saving products among individuals in Visakhapatnam, encompassing options such as mutual funds, fixed deposits, and insurance. The findings reveal that although tax-saving is a primary concern for many investors, a systematic approach t- investing is often lacking. There is a noticeable preference for traditionally safer options like bank deposits and gold. The study emphasizes the need t- promote a more structured and informed approach t- tax-saving investments. It recommends enhancing awareness of the long-term financial benefits of these products through targeted educational initiatives, which are essential for improving financial decision-making among investors in the region.

21. A Study on Customers’ Awareness and Perception Towards Mutual Funds in Dharmapuri District ( Dr. R. Abdul Muthalif, K. Munivel (2019)) The study examines customer awareness and perception of mutual funds in Dharmapuri District, focusing on investor preferences and the underlying reasons for their choices. The findings indicate that while investors value mutual funds for their risk diversification and convenience, a significant number remain unaware of the full spectrum of available schemes. This limited awareness restricts their ability t- make optimal investment decisions. The research underscores the importance of implementing financial literacy programs and awareness campaigns t- educate investors. Enhancing knowledge and understanding can empower individuals t- make informed decisions and fully leverage the benefits offered by mutual fund investments.

22. A Study on Behavior of Investors Towards Post Office Saving Schemes in Pune City (Anjum Sayyad, Akbar Sayyad (2015)) The study investigates the factors influencing investment in tax-saving schemes, focusing on elements such as tax benefits, safety, liquidity, and profitability. The findings reveal that many salaried individuals are not fully aware of the diverse range of tax-saving options available t- them. While effective tax planning is essential, the lack of timely guidance from tax consultants often hinders optimal decision-making. The research emphasizes the need t- increase awareness and actively promote tax-saving schemes t- help individuals maximize both tax benefits and investment returns. It als- highlights the importance of financial education and professional guidance in fostering more effective and informed tax planning practices.

23. Factors Influencing Investment in Tax-Saving Schemes ( K. R. Natarajan, K Natarajan (2008)) The study examines the investment behaviour of middle-class households in Nagaon, Assam, with a focus on their preferred investment options, risk tolerance, and savings patterns. The findings indicate that bank deposits and insurance are the most favoured choices, reflecting a strong inclination toward safety and stability. Investors prioritize tax benefits and steady returns, and a rise in income over the past five years has contributed t- increased savings. While low-risk investments remain dominant, the study als- notes a growing awareness and interest in medium-term investment opportunities. It concludes that financial education could play a key role in encouraging diversification beyond traditional savings instruments, enabling households t- make more informed and balanced investment decisions.

24. Investment Behavior of Middle-Class Households: An Empirical Analysis ( Sanjay Kanti Das (2012)) The study examines the investment behaviour of middle-class households in Nagaon, Assam, with a focus on their preferred investment options, risk tolerance, and savings patterns. The findings reveal that bank deposits and insurance are the most favoured choices, primarily due t- the need for safety, security, tax benefits, and stable returns. Additionally, a noticeable increase in savings over the past five years is attributed t- rising household incomes. While low-risk investments continue t- dominate, the study highlights a growing awareness and interest in medium-term investment options, suggesting a gradual shift toward more diversified financial planning among middle-class investors.

RESEARCH GAP

Tax-saving mutual funds, particularly Equity Linked Savings Schemes (ELSS), have gained significant traction among investors due t- their dual benefits of wealth creation and tax savings. However, there remains a notable gap in understanding investor preferences for these funds. Most existing studies primarily focus on the financial performance of mutual funds or their tax-saving potential, but few delve int- the behavioral and demographic factors influencing investor preferences. Moreover, there is insufficient examination of region-specific preferences, particularly in cities like Hyderabad, where unique socio-economic factors may shape investment behavior. This gap in understanding hinders the ability of fund managers and advisors t- develop tailored strategies that align with investor expectations and preferences effectively.

3 RESEARCH METHODOLOGY

The research methodology is structured t- systematically analyze investor preferences in tax-saving mutual funds, focusing on the role of demographic factors and influencing elements. The key components of the research design are as follows:

3.1. Research Design

The study employs a quantitative research approach, allowing for the collection and analysis of numerical data t- objectively evaluate investor preferences. This approach is suitable for identifying patterns, relationships, and trends in the data.

2. Sample Geographic Scope

The study is geographically limited t- Hyderabad, providing a focused understanding of investor behavior and preferences within this region.

3.2. Sample Company

The sample includes investors associated with Angel One, one of the leading brokerage houses in mutual funds. This focus ensures relevance t- the investment landscape and the specific practices of a prominent platform.

3.3. Sampling Methodology

The study uses a convenience sampling method, where participants are selected based on their availability and willingness t- participate. This non-probability sampling approach allows for efficient data collection while maintaining relevance t- the research objectives.

3.4. Sample Size

A total of 70 participants have been included in the study, providing a manageable yet significant dataset for meaningful analysis.

3.5 Data Collection Tool

Data is collected using a Likert scale-based questionnaire, which captures respondents' opinions and preferences on a range of factors related t- tax-saving mutual funds. The Likert scale ensures the quantification of subjective responses, facilitating robust statistical analysis.

3.6 STATISTICAL TOOLS

Frequency analysis will be used t- organize and summarize the collected data, providing an overview of the demographic profile of investors and their preferences for tax-saving mutual funds. This tool will highlight patterns and trends in the responses, making it easier t- interpret the data.

Regression analysis will examine the impact of independent variables, such as demographic factors and mutual fund features, and the dependent variable, which is investor preferences. By doing so, it will offer actionable insights int- the most critical drivers of investor preferences.

Additionally, Exploratory Factor Analysis (EFA) will be utilized t- uncover the underlying constructs or dimensions influencing investor preferences. EFA will analyze the interrelationships among various variables t- reduce them int- smaller, meaningful factors. This tool will simplify complex datasets and help focus on the key dimensions driving investor behavior.

3.7 LIMITATIONS OF THE STUDY

1. The study focuses on investors associated with Angel One, which limits the scope t- the experiences and behaviors of users of this specific platform, potentially excluding insights from other brokerage platforms or financial institutions.
2. The study is limited t- the Hyderabad district, which may restrict the generalizability of the findings t- other regions with different demographic, economic, or cultural profiles.
3. The study focuses on understanding investor preferences, it does not delve deeply int- other critical aspects, such as investor satisfaction, long-term fund performance, or post-investment experiences.

OBJECTIVE-1: T- assess the demographic profile of investors in Hyderabaddistrict This objective aims t- analyze the characteristics of investors in the Hyderabad district, including their age, income level, occupation, educational background, and investment experience. By studying these demographics, the research will identify trends in investment behavior, such as which groups prefer ELSS and what factors influence their investment decisions. This information can help financial institutions and advisors develop targeted strategies t- meet the needs of different investor segments.

FREQUENCY DISTRIBUTION

Table- 1 (Age of the Respondents)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The surveyed investors' age distribution shows that the majority fall within the 36-45 years group, making up 40.2% (33 respondents), followed by the 25-35 years group at 37.8% (31 respondents). The 46-55 years category accounts for the remaining 22.0% (18 respondents). A cumulative 78% of investors are aged 45 or below, indicating that younger t- middle-aged individuals dominate the investment landscape.

This trend suggests growing financial awareness, higher risk appetite, and increased access t- digital investment platforms. Younger investors, aided by technology and financial education, explore diverse assets like stocks, mutual funds, and cryptocurrencies. In contrast, the 46-55 years group prioritizes stability and long-term security, favouring bonds and fixed deposits.

Overall, the findings highlight a shift in investor demographics, with younger investors reshaping financial markets through tech-driven strategies and a willingness t- take calculated risks.

Table- 2 (Gender of the respondents)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors.

INTERPRETATION

The gender distribution of the surveyed investors shows that out of 82 respondents, 46 are male (56.1%), while 36 are female (43.9%). This indicates a relatively balanced gender representation, with a slightly higher proportion of male investors.

The data suggests that both men and women actively participate in investment activities, reflecting growing financial inclusion. While men traditionally dominated investing, increasing financial literacy and digital accessibility have encouraged more women t- engage in financial markets. The rise of online investment platforms, financial education programs, and women-focused investment initiatives has played a crucial role in narrowing this gap.

Overall, the findings highlight a narrowing gender gap, with female investors gaining prominence. As financial markets become more inclusive, the participation of women is expected t- grow further, contributing t- a more diverse and dynamic investment landscape.

Table- 3 (Occupation of respondents)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

Illustrations are not included in the reading sample

Source: Data Complied and Analyzed by Authors.

INTERPRETATION

The occupation distribution of the surveyed investors reveals that self-employed individuals make up 48.8%, while business owners account for 43.9%, collectively forming the majority of the sample. In contrast, salaried employees represent only 4.9%, and retired individuals make up 2.4%, indicating a smaller share of fixed-income investors.

This trend suggests that entrepreneurial and independent income-generating activities dominate the investor base. Self-employed professionals and business owners often have higher financial flexibility and a greater risk appetite, enabling them t- explore diverse investment opportunities. Meanwhile, salaried employees and retirees may lean toward stable, lower-risk investments due t- their fixed income sources.

Overall, the findings indicate that business-oriented individuals drive investment participation, highlighting the influence of entrepreneurship and financial independence in shaping investor behaviour. As market access improves, more individuals from varied professional backgrounds may join the investment landscape.

Table- 4 (Annual income of respondents)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The income distribution of the investor respondents reveals that a majority (52.4%) earn between ₹5,00,000 and ₹10,00,000 annually, indicating that more than half of the investors belong t- the upper-middle-income category. The second-largest group (40.2%) falls within the ₹3,00,000 t- ₹5,00,000 range, representing a significant portion of middle-income earners.

A much smaller percentage (3.7%) of respondents belong t- the lower-income category (below ₹3,00,000), suggesting that individuals with limited financial resources participate less actively in tax-saving mutual funds. Similarly, only 3.7% of investors earn above ₹10,00,000 annually, indicating that high-income investors might explore other investment options beyond tax-saving mutual funds.

This income distribution suggests that most investors in the sample belong t- the middle t- upper-middle-income groups, likely seeking tax benefits and long-term wealth accumulation through mutual funds. It als- highlights that mutual fund investments appeal strongly t- salaried professionals, business owners, and self-employed individuals within these income brackets.

Overall, the findings indicate that tax-saving mutual funds are primarily preferred by individuals with moderate t- high disposable incomes, wh- are actively looking for investment avenues that offer both tax efficiency and financial growth. Understanding this distribution can help financial institutions tailor their investment products, advisory services, and marketing strategies t- cater more effectively t- this dominant investor segment.

Table- 5 (Highest education level of the respondents)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The educational background of the surveyed investors reveals that 52.4% hold a master’s degree, while 36.6% have a bachelor’s degree. Additionally, 11% have attained a doctorate, highlighting a highly educated investor base with a strong academic foundation.

This suggests that higher education levels may contribute t- better financial literacy, equipping investors with analytical skills, risk assessment abilities, and strategic decision-making in financial markets. Advanced education often fosters greater awareness of investment opportunities, leading t- more informed and diversified portfoli- choices.

Overall, the findings indicate that well-educated individuals dominate the investor group, reinforcing the link between higher education and proactive financial participation. As financial knowledge continues t- grow, investment trends may shift toward more sophisticated and research-driven strategies.

Table- 6 (Performance of tax saving mutual funds before investing)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The assessment habits of the surveyed investors regarding tax-saving mutual funds show that 46.3% frequently evaluate fund performance, while 35.4% d- s- occasionally. Additionally, 13.4% consistently assess performance, whereas only 4.9% rarely engage in such evaluations. This highlights a proactive investment approach, with frequent and occasional assessments being the most common practices.

This trend suggests that most investors prioritize informed decision-making by regularly analysing fund performance before investing. Such habits may be influenced by financial awareness, risk management strategies, and the availability of digital tools that simplify performance tracking. Investors wh- actively assess funds are likely t- optimize returns and adjust their portfolios based on market trends.

Overall, the findings indicate that performance evaluation is a key aspect of investor behaviour, reflecting a cautious and research-driven approach t- tax-saving mutual fund investments. As financial literacy and investment tools improve, this trend may further encourage more systematic and data-driven investment decisions.

Table- 7 (Primary source of information for selecting tax saving mutual funds)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

Illustrations are not included in the reading sample

Source: Data Complied and Analysed by Authors

INTERPRETATION

The data reveals that online research, including websites and blogs, is the primary source of information for investors selecting tax-saving mutual funds, with 54.9% relying on this method. Additionally, 23.2% consult financial advisors, while 22% depend on recommendations from friends or family, highlighting a mix of digital and personal sources in investment decision-making.

This trend underscores the growing influence of digital platforms, where investors can access real-time data, expert analyses, and market insights. The ease and convenience of online research allow investors t- compare funds, track performance, and make independent decisions. However, the reliance on financial advisors and personal recommendations suggests that many investors still seek expert guidance and peer insights t- validate their choices.

Overall, the findings indicate a strong preference for digital resources, but als- a considerable trust in professional advice and social networks. As technology continues t- evolve, online research may become even more dominant, while financial advisors and peer recommendations remain valuable secondary influences in investment decisions.

Objective-2: T- analyze the factors influencing investor preferences on decision-making in selecting tax-saving mutual funds.

This objective focuses on identifying the key factors that shape investors' choices when selecting ELSS and other tax-saving mutual funds. These factors may include risk appetite, return expectations, past fund performance, the reputation of fund managers, liquidity needs, and tax benefits. Additionally, external factors such as digital investment platforms, financial literacy, and regulatory changes may als- impact decision-making. Understanding these influences will help in predicting investor behavior and improving financial advisory services. For this the study applied Regression analysis

Factors Influencing Investor Preferences

Table- 1 (Historical returns)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data reveals that among investors associated with Angle One, the majority (59.8%) consider historical returns t- be "very important" in their investment decisions. Additionally, 28.0% view it as "important," while a smaller group (12.2%) considers it "neutral." This means that nearly 88% of respondents recognize historical returns as a crucial factor when selecting investments.

This trend highlights the significance of past performance in shaping investor confidence and decision-making. Investors often rely on historical returns t- gauge a fund's consistency, risk-adjusted returns, and potential future performance. This preference may stem from the belief that funds with a strong track record are more likely t- deliver stable returns over time.

Overall, the findings indicate that Angle One investors prioritize historical returns as a key metric, reinforcing the notion that past performance serves as a guiding factor in their investment strategies. While historical data cannot guarantee future results, it remains a critical reference point for informed decision-making.

Table- 2 (Past performance consistency)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data indicates that a majority of investors associated with Angle One place significant value on past performance consistency when making investment decisions. Specifically, 57.3% consider it "important," while 4.9% deem it "very important." Additionally, 29.3% hold a "neutral" stance, suggesting that while many acknowledge its relevance, they may not view it as a decisive factor. A smaller group (7.3%) finds it "slightly important," and only 1.2% consider it "not important."

This trend suggests that investors recognize the role of consistency in evaluating financial products, as stable past performance can indicate reliable returns and lower volatility. However, the notable percentage of neutral or lower-priority responses implies that some investors may consider other factors, such as market conditions, fund management strategies, or diversification opportunities, t- be equally or more important.

Overall, with about 62% of respondents regarding past performance consistency as important, the findings highlight its significant influence on investment decisions while als- indicating that some investors adopt a broader, more diversified approach when assessing their financial choices.

Table- 3 (Portfoli- diversification)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data reveals that among investors associated with Angle One, a significant majority (53.7%) hold a "neutral" stance on portfoli- diversification. This suggests that while it is acknowledged, it may not be a top priority for many investors. However, 15.9% consider it "very important," and 24.4% view it as "important," indicating that a substantial portion still values diversification as a key component of their investment strategy. A small group (6.1%) finds it "slightly important," reflecting a minority wh- place less emphasis on spreading investment risk.

This trend implies that while some investors actively incorporate diversification int- their strategies, others may focus more on specific asset performance, risk tolerance, or market conditions. The neutral stance of the majority could stem from factors such as limited awareness of diversification benefits, confidence in selected assets, or preference for concentrated investments in high-return sectors.

Overall, while portfoli- diversification holds relevance for a notable segment of investors, it is not universally prioritized across the sample. As financial education and market conditions evolve, investors’ perspectives on diversification may shift, potentially increasing its adoption as a risk management strategy.

Table- 4 (Brand Reputation)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data reveals that investors associated with Angle One place considerable importance on the brand reputation of the fund house when making investment decisions. A substantial 45.1% consider it "important," and 19.5% view it as "very important," meaning nearly two-thirds of respondents prioritize reputation as a key factor in their choices. Meanwhile, 30.5% hold a "neutral" stance, indicating that while they acknowledge its relevance, they may not rely on it exclusively. A small portion (4.9%) considers it "slightly important," showing that only a minority places minimal emphasis on this aspect.

This trend suggests that trust and credibility play a significant role in investment decisions, as investors often associate a well-established fund house with stability, reliability, and sound financial management. A strong reputation may als- signal effective governance, consistent returns, and lower perceived risk, making it an attractive factor for many.

Overall, the findings emphasize that the majority of investors are mindful of a fund house’s reputation, reinforcing the idea that brand credibility is a crucial determinant in financial decision-making. As market awareness grows, fund houses with proven track records and transparent practices may continue t- attract more investor confidence.

Table- 5 (Advisory and Finance Guidance)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data indicates that advisory or financial guidance holds significant value for investors associated with Angle One. A notable 43.9% consider it "important," and 20.7% view it as "very important," emphasizing that a large portion of investors rely on professional advice when making investment decisions. Meanwhile, 29.3% take a "neutral" stance, suggesting that while they acknowledge its benefits, it may not always be a primary factor in their choices. A smaller group (6.1%) considers it "slightly important," indicating a minority wh- prefer t- make independent investment decisions.

This trend highlights the trust investors place in expert opinions, as financial advisors can provide market insights, risk assessments, and personalized strategies t- optimize returns. The reliance on guidance may stem from the complexity of investment options, with investors seeking professional input t- navigate risks and maximize opportunities. However, the neutral responses suggest that some investors prefer self-research or rely on digital tools and financial literacy t- make their own decisions.

Overall, the findings show that most investors recognize the value of advisory services, with a strong preference for expert support in managing their investments. As financial markets evolve, advisory services may become even more critical in guiding investors toward informed and strategic investment decisions.

Table- 6 (Transparency in fund operations)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data indicates that transparency in fund operations is a key consideration for investors associated with Angle One. A significant 36.6% of respondents consider it "important," while 25.6% view it as "very important," demonstrating that the majority of investors prioritize transparency when selecting funds. Meanwhile, 29.3% take a "neutral" stance, implying that while they acknowledge its importance, it may not always be the sole deciding factor. A smaller group (8.5%) considers it "slightly important," indicating that only a minority places less emphasis on this aspect.

This trend highlights that investors value openness and clarity in fund operations, as transparency helps in assessing risks, understanding fund performance, and ensuring ethical financial management. A well-structured and transparent fund instills trust and confidence, encouraging investors t- make more informed decisions. However, the neutral responses suggest that some investors may prioritize other factors such as returns, market trends, or financial guidance over transparency alone.

Overall, the findings reinforce that transparency is a crucial aspect of investor trust and decision-making. Fund houses that maintain clear and open communication about their strategies, fees, and risks are likely t- attract more investor confidence and long-term engagement.

Table- 7 (Ease of access via digital platforms)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data highlights that ease of access via digital platforms is a crucial factor for investors associated with Angle One. A notable 39.0% consider it "important," while 28.0% view it as "very important," reflecting a strong preference for digital convenience when managing investments. Additionally, 29.3% of investors take a "neutral" stance, indicating that while digital accessibility is valued, it may not be the primary factor influencing their decisions. A small group (3.7%) considers it "slightly important," showing that only a minority places minimal emphasis on this aspect.

This trend suggests that investors are increasingly relying on digital platforms for seamless access t- investment tracking, real-time data, and transaction execution. The preference for digital convenience may stem from the rise of fintech solutions, mobile applications, and user-friendly interfaces that enhance the investment experience. However, the neutral responses indicate that some investors may still prefer traditional methods, such as offline advisory services or personal consultations.

Overall, the findings reinforce that the majority of investors recognize the importance of digital accessibility, emphasizing that technological convenience plays a significant role in shaping modern investment decisions. As digital transformation continues, fund houses and investment platforms that prioritize seamless, secure, and efficient digital access are likely t- attract and retain more investors.

Table- 8 (Investors decision-making)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data reveals that investors associated with Angle One generally exhibit a strong level of confidence in their decision-making process when selecting tax-saving mutual funds. A majority (41.5%) feel "confident," while 23.2% are "very confident," indicating that a substantial portion of investors trust their judgment when making investment choices. Additionally, 30.5% take a "neutral" stance, suggesting that while they may have some understanding, they might still seek more information or guidance before finalizing their decisions. A small group (4.9%) identifies as "slightly confident," highlighting a minority wh- may lack complete certainty in their investment selections.

This trend suggests that most investors feel capable of making informed decisions, possibly due t- prior experience, research, or access t- financial advisory services. The strong confidence levels could als- be attributed t- digital tools, educational resources, and personalized financial insights that empower investors t- evaluate options effectively. However, the presence of neutral and lower-confidence respondents indicates that some investors still face uncertainties and may benefit from additional guidance, expert advice, or enhanced financial literacy initiatives.

Overall, the findings suggest that most investors are reasonably confident in their ability t- select tax-saving mutual funds, with only a small percentage expressing lower confidence levels. This emphasizes the importance of ongoing investor education and advisory support t- ensure that all investors, regardless of confidence level, can make well-informed financial decisions.

REGRESSION ANALYSIS

Null Hypothesis (H₀): The factors d- not significantly influence investor preferences for tax-saving mutual funds.

TABLE- 1 (Regression Analysis)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

The regression analysis results provide insights int- the factors influencing investor preferences in decision-making when selecting tax-saving mutual funds. The standardized beta coefficients indicate the relative importance of each factor. Past performance consistency (β = 0.175) has the strongest positive influence on investor decision-making, suggesting that investors highly value funds with a track record of stable returns. Ease of access via digital platforms (β = 0.127) als- plays a significant role, indicating that investors prefer funds that offer seamless digital access for investment and monitoring. Historical returns (β = 0.065) and brand reputation of the fund house (β = 0.052) show a moderate positive influence, implying that while investors consider these factors, they may not be the primary determinants of fund selection. Portfoli- diversification (β = 0.004) has a minimal but positive effect, showing that investors recognize the benefits of risk distribution, though it is not a major decision-making factor. On the other hand, advisory or financial guidance (β = -0.031) and transparency in fund operations (β = -0.003) have negative but insignificant impacts, suggesting that investors may rely more on their own research or digital tools rather than financial advisors or transparency-related disclosures. Overall, the findings highlight that past performance consistency, ease of digital access, and historical returns are the key determinants in investor preferences for tax-saving mutual funds, aligning with the study objective of analyzing influential factors in investment decision-making. Hence, reject the null hypothesis and accept the alternative hypothesis i.e., Factors d- not significantly influence investor preferences for tax-saving mutual funds.

Objective-3: T- offer measure for enhancing investor preferences and decision-making in selecting tax-saving mutual funds.

This objective aims t- propose strategies that can improve investor awareness and decision-making processes. Recommendations may include increasing financial literacy programs, improving accessibility t- digital investment tools, enhancing transparency in fund performance reporting, and promoting diversified tax-saving investment options. By implementing these measures, investors can make more informed and confident decisions, leading t- better financial outcomes and optimized tax-saving strategies. For this the study applied Exploratory Factor Analysis

FREQUENCYDISTRIBUTION

Table- 1 (Regular updates on fund performance and market trends)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data indicates that investors associated with Angle One place high importance on regular updates regarding fund performance and market trends. A significant 43.9% "strongly agree" that such updates are essential, while 37.8% "agree," demonstrating a strong preference for staying informed about their investments. Additionally, 17.1% of respondents take a "neutral" stance, suggesting that while they may find updates useful, they d- not necessarily consider them critical t- their decision-making process. A very small minority (1.2%) "strongly disagree," indicating that only a handful of investors d- not prioritize regular updates.

This trend highlights the growing reliance on real-time data and financial insights among investors, as regular updates help them track market movements, assess risks, and adjust their investment strategies accordingly. The strong preference for staying informed may stem from the volatile nature of financial markets, where timely updates can provide investors with the necessary knowledge t- respond proactively t- changes.

Moreover, the neutral stance of some investors suggests that they may either rely on long-term investment strategies that d- not require frequent monitoring or may lack the resources or inclination t- analyse regular updates. However, the overwhelming majority wh- value these updates indicates that financial institutions and fund houses should prioritize transparent, timely, and easily accessible reports t- cater t- investor needs.

Overall, the findings emphasize that most investors recognize the importance of staying informed through regular fund performance and market trend updates, reinforcing the role of continuous financial education and accessible market insights in supporting investor decision-making.

Table– 2 (Clearer and more transparent communication about risks and returns)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data shows that investors associated with Angle One place significant value on clear and transparent communication regarding risks and returns. A notable 50.0% agree that such communication is important, while 7.3% strongly agree, indicating that transparency is highly regarded by the majority when it comes t- understanding potential risks and returns of their investments. Meanwhile, 40.2% of respondents take a "neutral" stance, suggesting that while they acknowledge the importance of transparent communication, they may not necessarily consider it a decisive factor in their investment choices. A very small portion (2.4%) disagrees, showing that only a minority does not prioritize clarity in risk and return communication.

This trend highlights the growing demand for openness in financial disclosures, as investors rely on accurate and easily understandable information t- make well-informed decisions. Transparency in investment strategies, potential risks, and expected returns helps build trust and confidence, enabling investors t- assess financial opportunities effectively. The high level of agreement suggests that investors seek clear, concise, and easily accessible reports t- guide their decision-making.

However, the large proportion of neutral respondents may indicate that some investors either rely on personal research, financial advisors, or historical fund performance rather than direct risk-return disclosures. Despite this, the overall emphasis on transparency underscores its importance in investor confidence and decision-making.

In conclusion, the findings suggest that most investors recognize transparent communication as an essential aspect of investment management. Financial institutions and fund managers can enhance investor satisfaction by ensuring that risk-return details are communicated clearly, consistently, and in an accessible manner t- empower investors with the knowledge needed for informed financial planning.

Table- 3 (Enhanced digital tools)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data reveals that investors associated with Angle One generally respond positively t- enhanced digital tools like comparison tools and investment calculators. A combined 43.9% either "strongly agree" (14.6%) or "agree" (29.3%) that these tools are important, indicating a clear preference for digital assistance in investment decisions. However, a significant 48.8% remain "neutral," suggesting that while they see potential value, these tools may not be a major factor for them. A small minority, 6.1%, "disagree," and only 1.2% "strongly disagree," showing that very few investors dismiss digital tools outright.

This trend highlights the growing role of technology in investment decisions, with many investors embracing digital solutions for analysing market trends and fund comparisons. However, the large neutral segment suggests that some still prefer traditional methods like financial consultations or personal research.

Overall, the data shows a general openness toward digital investment tools, with a notable number recognizing their potential benefits. T- boost adoption, platforms could focus on improving accessibility and awareness t- help more investors integrate digital tools int- their decision-making process.

Table- 4 (Better customer support and advisory services)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data indicates that investors associated with Angle One place significant value on better customer support and advisory services. A notable 40.2% "agree" that these services are important, while 20.7% "strongly agree," demonstrating a strong preference for quality support and guidance in investment decisions. Additionally, 32.9% remain "neutral," implying that while they acknowledge the value of advisory services, they may not view them as a critical deciding factor. A small minority, 6.1%, "disagree," suggesting that only a few investors d- not consider enhanced support services essential.

This trend highlights the importance of responsive and knowledgeable customer service in building investor trust and confidence. Many investors seek expert advice and personalized support t- navigate investment options effectively. However, the significant neutral segment indicates that some investors may rely on self-research or digital tools rather than direct advisory assistance.

Overall, the findings suggest that most investors value customer support and advisory services, though the degree of emphasis varies. Investment platforms can enhance investor satisfaction by offering personalized guidance, improving service accessibility, and ensuring prompt, transparent communication t- cater t- different investor needs

Table- 5 (Availability of real-time assistance)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data shows that investors associated with Angle One place significant value on real-time assistance, whether through chatbots or human advisors. A notable 42.7% "agree" that immediate support is important, while 22.0% "strongly agree," demonstrating a clear preference for quick and accessible help when needed. Additionally, 31.7% remain "neutral," indicating that while they recognize the benefits of real-time assistance, it may not be a critical deciding factor for them. Only a small portion, 2.4%, "disagree," and 1.2% "strongly disagree," showing that very few investors dismiss the need for instant support.

This trend highlights the growing expectation for fast, efficient, and accessible customer service in investment platforms. Real-time assistance enhances user experience by providing instant solutions, clarifying doubts, and guiding investors through their decisions. The high level of agreement suggests that investors seek seamless access t- support t- help them navigate their investments effectively.

Overall, the data underscores that most investors value the presence of real-time assistance, reinforcing the need for efficient chatbots and responsive human advisors. Investment platforms can improve investor satisfaction by expanding real-time support options, ensuring prompt responses, and integrating AI-driven chat services t- provide timely and effective assistance.

Table- 6 (Interactive educational resources)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The data shows that investors associated with Angle One highly value the availability of real-time assistance, whether through chatbots or human advisors. A substantial 42.7% "agree" that immediate support is important, while 22.0% "strongly agree," highlighting a strong preference for instant assistance when required. Additionally, 31.7% of respondents remain "neutral," indicating that while they acknowledge the benefits of real-time assistance, it may not be a decisive factor in their investment choices. A small percentage, 2.4%, "disagree," and only 1.2% "strongly disagree," reflecting that very few investors d- not prioritize immediate support.

This trend emphasizes the growing demand for quick and efficient customer service in financial platforms. Investors seek timely resolutions t- their queries and concerns, which can enhance their overall experience and confidence in their investment decisions. Real-time assistance, whether AI-powered chatbots or live advisors, provides convenience, clarity, and a sense of security, ensuring that investors have access t- relevant information whenever needed.

Overall, the findings suggest that most investors appreciate the availability of instant support, reinforcing the need for robust real-time assistance services. Investment platforms can further enhance investor satisfaction by expanding chatbot capabilities, ensuring faster response times, and integrating personalized advisory support t- cater t- diverse investor needs.

Exploratory Factor Analysis (EFA)

TABLE- 1 (EFA)

Illustrations are not included in the reading sample

Source: Data compiled and Analyzed by Authors

INTERPRETATION

The factor analysis identifies three key components that significantly influence investor preferences and decision-making when selecting tax-saving mutual funds. The most influential factor is clearer and more transparent communication about risks and returns, with a high factor loading of 0.842, indicating that investors place great importance on openness and clarity in financial communication. This suggests that transparent disclosure of risks and returns can build investor trust and confidence.

The second most impactful factor is regular updates on fund performance and market trends, with a factor loading of 0.782. This highlights that investors value timely and relevant information, which helps them make well-informed investment decisions. Providing frequent updates on fund performance, economic trends, and market conditions can enhance investor engagement and decision-making.

Additionally, better customer support and advisory services (0.695) and the availability of real-time assistance (0.646) als- play a crucial role in investor satisfaction. These factors underline the need for accessible, knowledgeable support systems, whether through human advisors or AI-driven chatbots, t- address investor queries and provide personalized guidance.

Overall, these findings suggest that investment platforms can strengthen investor confidence by enhancing transparency, delivering timely updates, and improving customer support. By prioritizing clear communication, real-time assistance, and expert advisory services, financial institutions can create a more investor-friendly environment, ultimately leading t- better investment experiences and informed decision-making in tax-saving mutual funds.

FINDINGS OF THE STUDY

1. The study indicates that the majority of investors associated with Angel One belong t- the 36-45 years age group (40.2%), followed by the 25-35 years age group (37.8%), reflecting a predominance of middle-aged investors.
2. The study observes a relatively balanced gender distribution among investors, with 56.1% male and 43.9% female, suggesting active participation from both genders in investment activities.
3. The study identified that self-employed individuals (48.8%) and business owners (43.9%) form the core of Angel One’s investor base, whereas salaried individuals and retirees constitute a minimal proportion.
4. The study found that a significant portion of Amazon customers belong t- the middle-income segment, with 52.4% earning ₹5,00,000 - ₹10,00,000 and 40.2% earning ₹3,00,000 - ₹5,00,000, indicating a strong presence of middle-class consumers.
5. The study examined the education levels of Amazon customers and found that a majority (52.4%) hold a master’s degree, followed by 36.6% with a bachelor’s degree, suggesting a highly educated customer base.
6. The study observes that past performance consistency (β = 0.175) and historical returns (β = 0.065) have the highest impact on investor decision-making, though neither is statistically significant.
7. The study identified that brand reputation (β = 0.052) and portfoli- diversification (β = 0.004) play a minimal role in influencing investor preferences for tax-saving mutual funds.
8. The study found that advisory services (β = -0.031) and transparency in fund operations (β = -0.003) exhibit negligible or negative relationships with investor preferences, suggesting that other unexamined variables may influence decision-making.
9. The study indicates that clearer and more transparent communication about risks and returns (loading = 0.842) is the most influential factor in improving investor confidence.
10. The study observes that regular updates on fund performance and market trends (loading = 0.782) significantly contribute t- investor decision-making.
11. The study identified that enhanced customer support, including advisory services (loading = 0.695) and real-time assistance (loading = 0.646), plays a crucial role in investor satisfaction and confidence.

SUGGESTION

1. The study suggests that self-employed individuals and business owners form the majority of Angel One’s investor base, while Amazon customers are predominantly middle-income earners. Investment firms should design customized financial products, flexible SIP options, and advisory services catering t- these segments' specific financial goals and risk appetite.
2. The study suggests that clearer communication about risks and returns significantly improves investor confidence. Asset management companies should provide simplified fund reports, visual dashboards, and AI-driven risk assessment tools t- help investors make informed decisions.
3. The study suggests that past performance consistency and brand reputation influence investor preferences, though their impact is limited. Financial service providers should build trust through long-term performance tracking, transparent fee structures, and customer testimonials t- strengthen investor confidence.
4. The study suggests that enhanced customer support and real-time assistance significantly impact investor satisfaction. Firms should invest in AI-powered chatbots, dedicated financial advisors, and multilingual support teams t- assist investors in making well-informed investment decisions.
5. The study suggests that regular updates on fund performance and market trends are crucial for investor decision-making. Financial institutions should offer monthly newsletters, push notifications, and interactive investment insights t- keep investors engaged and informed about their portfolios.

CONCLUSION

The study concludes that investors in tax-saving mutual funds, particularly those associated with Angel One, are primarily middle-aged individuals from the middle-income segment, with a strong educational background and a preference for financial products that align with their tax-saving and wealth-building goals. The dominance of self-employed individuals and business owners in this investor base suggests a greater need for financial planning flexibility compared t- salaried individuals and retirees. While past performance consistency and historical returns influence investment decisions, their lack of statistical significance indicates that investors may als- rely on other factors beyond past fund performance. Additionally, fund brand reputation and portfoli- diversification play a minimal role, highlighting that investors prioritize tangible financial metrics when making decisions. The study further emphasizes the crucial role of transparency and communication, with clear insights on risks and returns, along with regular performance updates, significantly enhancing investor confidence. Moreover, strong customer support, including real-time advisory services, has been identified as a key driver of investor satisfaction, reinforcing the need for responsive and accessible investment platforms. In essence, mutual fund providers seeking t- attract and retain tax-saving investors should focus on improving transparency, ensuring consistent fund performance, and strengthening customer engagement t- foster greater trust and long-term investor commitment.

BIBLIOGRAPHY/ REFERENCES

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QUESTIONNAIRE

INVESTORS PREFERENCES IN TAX SAVING MUTUAL FUNDS: A STUDY

Section 1: Demographic Profile of Investors

1. What is your age group?
- 25–35 years
- 36–45 years
- 46–55 years
- Above 55 years

2. What is your gender?
- Male
- Female

3. What is your occupation?
- Salaried
- Self-employed
- Business
- Retired

4. What is your annual income range?
- Below ₹3,00,000
- ₹3,00,000–₹5,00,000
- ₹5,00,000–₹10,00,000
- Above ₹10,00,000

5. What is the highest level of education you have completed?
Bachelor’s degree
- Master’s degree
- Doctorate

6. How often d- you assess the performance of tax-saving mutual funds before investing?
- Always
- Frequently
- Occasionally
- Rarely
- Never

7. What is your primary source of information for selecting tax-saving mutual funds?
- Financial advisors
- Online research (websites, blogs, etc.)
- Recommendations from friends or family
- Advertisements or promotional campaign

Section 2: Factors Influencing Investor Preferences

Please rate the importance of the following factors in influencing your mutual fund preferences

Illustrations are not included in the reading sample

How confident are you in your decision-making process when selecting tax-saving mutual funds? (Investors decision-making)

1. Very confident
2. Confident
3. Neutral
4. Slightly Confident
5. Not Confident

Section 3: Improvements

Please level of agreement towards the improvements in encouraging you t- invest more in tax-saving mutual funds

Illustrations are not included in the reading sample

[...]

• Course: B.Com. International Accounting and Finance
• Grade: A
• Authors: P. Y. Radhika (Author), K. Mac Melvin (Author), A. Lakshmi Priya (Author), Jampa. Tejaswini (Author), J. Taruni (Author), M. Veera Swamy (Author), M. Arul Jothi (Author)
• Publication Year: 2024
• Pages: 68
• Catalog Number: V1577593
• ISBN (PDF): 9783389141809
• ISBN (Book): 9783389141816
• Language: English
• Tags: Investor preferences, Tax-saving mutual funds, Demographic investment behavior, Mutual fund advisory services, Hyderabad investor analysis