THE IMPACT OF FINANCIAL LITERACY ON FINANCIAL WELLBEING IN MUTUAL FUND INVESTMENT

Abstract

The concept of financial literacy refers to the ability to
comprehend and navigate the functional benefits of money.
Strong financial literacy enhances an individual's drives,
approaches and perception of different savings schemes,
choices, opportunities, avenues, competencies, and investment
preferences. Investment is functionalized with the objective of
enriching return outcomes, whether in the limited period or the
extended period. This research seeks to examine the financial
literacy of mutual fund investors and the influence of financial
literacy on their financial well-being in relation to mutual fund
investments. A total of 136 respondents who invested in mutual
funds in Chennai were selected for this study. The convenience
sampling technique, which is a non-probability sampling
method, was utilised to select the samples. The questionnaire
serves as a tool for the study. The statistical tools employed to
achieve the objectives include descriptive statistics and multiple
regression analysis. Cronbach’s alpha serves as a metric for
assessing reliability and it is found as 83.7%. The data has been
analysed using SPSS v25. The results show that mutual fund
investors have a satisfactory level of financial literacy. It can be
concluded that investors consistently prioritise the security of
their capital when engaging in mutual fund investments.
However, the investors acknowledged that they typically do not
analyze and evaluate the tendencies of all financial products
before investing in mutual funds, and they do not redeem their
capital gain and component once they achieve their financial
goals. The findings indicate that financial knowledge, behavior,
and attitude positively influence the financial well-being of
mutual fund investors. It is observed that the financial attitude,
along with financial knowledge regarding mutual fund
investments, has a greater predictive value for financial wellbeing.