Determinants of Retail Investor Behavior in Mutual Funds: A Systematic Literature Review

Abstract

This study examines the empirical literature to identify the key factors influencing investor behavior in mutual funds. Evidence from institutional reports and peer-reviewed research published between 2000 and 2025 is gathered through a PRISMA-based systematic review. The results show that financial education, risk tolerance, behavioral biases, socio-demographic traits, service quality, and fintech adoption significantly influence investor behavior and investment intention. Instead of relying solely on rational risk-return analyses, investors often rely on heuristics, trust, and digital convenience. The study makes a substantial contribution by providing asset management firms and policymakers with important insights into how to improve investor engagement and informed participation by combining behavioral finance and digital investment views.