Empirical evidence has found sources of information as an important determinant for mutual fund purchase or selection. Several researchers have found relative importance of sources of information for the retail investors. However, the literature is scanty with respect to non-retail investors. This study presents a comparative analysis of retail and non-retail mutual fund investors with respect to sources of information in the context of their selection of various mutual funds for their investments. Primary data collected from 400 retail and 50 non-retail investors, randomly selected from the cities under survey, was used to assess the components of sources of information. Factor analytic technique resulted in four components: advertisement and shows, data and information, advice and recommendations, and published returns. Inferential statistics on Anderson Rubin (AR) factor scores depicts the significant difference between retail and non-retail mutual fund investors with respect to 'advertisement and shows' and `published returns'. The study is an addition to the existing literature and may help in improving the strategies of asset management companies.

Economic theories consider man as a positive utility acquiring and rational being (in fact, the concept of Homo sapiens has been replaced with Homo economicus by some economists). Innumerable financial innovations provide an avenue for fulfilling the ever growing investing and wealth creating appetite of this Homo economicus. The financial innovations range from simple to complex, from serving common man on the street to serving mega rich and elite. One of the very important financial innovations which has really helped the common man on the street to enjoy the same privileges as rich and elite is the concept and design of mutual fund.

As of year-end 2008, mutual fund industry was managing $18,974,521 mn under 69,032 mutual fund schemes and was growing at CAGR of 7.2% from year-end 2000 to year-end 2008 (Investment Company Institute, 2009). Indian mutual fund industry originated with the establishment of Unit Trust of India in 1963 and later expanded to include public sector banks and private sector mutual funds (Anjaria and Anjaria, 2001). A significant increase has been observed in the growth with respect to percentage of mutual fund investments in household financial savings from 1.2% in 1993-94 to 7.7% in 2007-08 (Reserve Bank of India, 2008). From FY 1997-98 to FY 2009, the assets under management grew at the rate of 14.08%, and as of March 31, 2009, total assets under management were 417,300 cr, managed by 35 asset management companies (Association of Mutual Funds of India (AMFI), 2009). Further, as of March 31, 2009, non-retail investments constituted 73% (including corporate or institutional investments and investments by high net worth investors) of assets under management in terms of value and 97% by retail investors in terms of number of investors (KPMG, 2009).

Unfortunately, the growth in the mutual fund industry has not been equally matched by the growth in its research on its purchase and selection. In fact, most of the research is focused on mutual fund performance and its two determinants, viz., return and risk; and their role in fund flows and persistence of performance (Capon et al., 1996). Although studies have indicated a positive relationship between performance and flow (Sirri and Tufano, 1992) and between flow and performance (Gruber, 1996), yet purchase or selection of mutual funds (and hence flows) has been considered a multi-framework decision by many researchers, of which mutual fund performance is an important part (Cook and Hebner, 1993; Capon et al., 1996; and Campenhout, 2007). Since most of the studies focus on return and risk, value and contribution of other attributes in mutual fund selection behavior demand attention.

Applied Finance Journal, Non-Retail Investors, Retail Investors, Asset Management Companies, Economic Theories, Mutual Fund Industry, Mass Communication, Decision Making Process, Mutual Fund Schemes, Principal Component Analysis, Varimax Rotation Procedure.