The Impact of Level of Purchase Decision Involvement on the Investment Behavior of Mutual Fund Investors

This study investigates the impact of level of Purchase Decision Involvement (PDI) of Mutual Fund (MF) investors on their investment behavior through a survey of 268 MF investors. Overall the results suggest that the level of PDI significantly impacts the investment behavior of MF investors. Further, the results suggest significant difference in the width and depth of information search and information processing by low PDI MF investors and high PDI MF investors. Specifically, it is found that (a) during information search low PDI MF investors are likely to use fewer number of information sources to collect information, rely less on sources providing detailed information related to MFs (e.g., financial portal) and rely more on banks as a source of investment advice in comparison to high PDI MF investors; and (b) during information processing low PDI MF investors are likely to use information on a fewer number of attributes to compare MFs, and do not process MF-related attribute information in details in comparison to high PDI MF investors. The implications of the findings that are relevant to the marketing of MFs are also discussed