A Study of Investors' Awareness, Perception, and Investment Behavior Regarding ETFs: With Special Reference to Mahabubnagar, Telangana

Abstract

In the current Indian financial market, the importance of modern investment instruments like ETFs is steadily rising alongside traditional investment avenues. ETFs offer investors the benefits of a diversified portfolio, relatively low costs, and the convenience of trading via stock exchanges. This research paper aims to study the awareness, perception, and investment behavior regarding Exchange Traded Funds (ETFs) among investors in Mahabubnagar, Telangana. The study covers 59 investors from the Mahabubnagar region. Primary data were collected using a structured questionnaire, examining investors' demographic characteristics alongside their awareness of ETFs, perceptions, investment types, investment duration, frequency, behavior, and the factors influencing ETF selection. Statistical methods such as frequency analysis, percentages, and the Chi-square test were employed to analyze the data. The study concludes that while general awareness regarding ETFs is growing among investors, there is a need for improved understanding of technical features, risks, costs, liquidity, and the distinctions between various ETF types. Key aspects emerging from investor perceptions include the benefits of diversification, transparency, cost-efficiency, and the utility of long-term investment. The study also highlights a link between investors' financial awareness and their investment behavior; therefore, there is a need to expand investor education, financial literacy, and practical knowledge regarding ETFs. These findings can prove useful in understanding investor financial behavior and enhancing ETF awareness in emerging urban areas like Mahabubnagar.