Mutual funds are a big deal in the financial world, managing retirement savings for many people. This study looks at why mutual funds behave the way they do. The researchers used a framework called structure‐conduct‐performance to understand how fund managers make decisions. They found that fund managers are influenced by market unpredictability, industry competition, and client disengagement. Fund managers make money from managing assets, which may not always benefit clients. Fund managers also interact with competitors and companies they invest in, affecting their decisions. While fund managers aim to build investment portfolios, their main goal may not always be to outperform. This study provides insights for fund managers, investors, regulators, and company executives based on real-world data.