The purpose of the current study is to investigate the various factors influencing on people to invest in mutual funds and examine the mediating role of investor's perception. By using quantitative research approach and cross-sectional research design, 300 questionnaires are distributed among the individual investors and Smart PLS 3 is used to analyze the data. The results reveal that risk and return, liquidity of assets, demographic factors (gender, age, and material status), convenience, reduction in transection cost, tax benefits and transparency were the key factors and maintained significant relationships with investment in mutual funds. Moreover, investor's perception maintains mediating role between all these factors and investment in mutual funds. The study contributes in literature by investigating the various factors, which influence on investors to invest in mutual funds. Moreover, it also contributes by investigating the mediating role of investor's perception. .