Impact of Sustainability-Oriented Mutual Funds on Investor Decision-Making: An Empirical Study

Abstract

The growing emphasis on sustainable finance has led to increased interest in sustainability-oriented mutual funds that integrate Environmental, Social, and Governance (ESG) principles into investment decisions. This empirical study examines the impact of sustainability-oriented mutual funds on retail investors' decision-making, focusing on awareness levels, influencing factors, and investment intentions. The study adopts a descriptive and analytical research design, using primary data collected through a structured questionnaire administered to retail investors. Statistical tools such as percentage analysis, mean and standard deviation, and regression analysis are employed to analyse the data. The results indicate that sustainability awareness, ethical considerations, perceived long-term returns, and trust in fund management significantly shape investors’ decisions to invest in sustainability-oriented mutual funds. The findings further reveal that investors who demonstrate greater concern for environmental and social issues show a stronger preference for sustainable investment options. The study highlights the increasing relevance of sustainability-oriented mutual funds in promoting responsible investing. It provides valuable insights for asset management companies to align their product offerings with evolving investor preferences.