1 What Drives Investments into Mutual Funds? Applying the Theory of Planned Behaviour to Individuals’ Willingness and Intention to Purchase Mutual Funds

With decreasing generosity of public pension schemes, private retirement savings and participation in capital markets becomes more important. However, only parts of the population engage in financial markets. This effect is known as “participation puzzle ” and widely researched. This paper adds to literature on household finance and portfolio choice. It improves the understanding of factors influencing the decision to participate in capital markets through mutual funds. To examine the predictors, we employ the Theory of Planned Behaviour (TPB), a largely elaborated and widely used framework to measure behavioural intentions. For analysis we use unique survey data with 1.673 participants from Germany. The results indicate that TPB components account for 67 % of variance of willingness and 71 % of variance of the intention to invest in mutual funds. We find that social pressure, attitude and perceived behavioural control show significant and positive influence on both dependent variables. Results support our model and associated hypotheses based on TPB, making it useful to assist in further research. Our findings are also in line with existing results within household finance. We conclude with implications for mutual fund companies and industry associations and give suggestions for future avenues of research