“Study of Investors perception and awareness
towards Mutual Funds”
CONTEXT AND SIGNIFICANCE OF THE STUDY
Mutual funds were first started by the Unit Trust of India (UTI) in 1964 and since then, this
sector has grown manifold. Thus, it is imperative to study the future scope of mutual funds in
India. According to Association of Mutual Funds of India (AMFI), the Assets Under
Management (AUM) of the mutual fund industry has now reached 19.47 lakh crores.
The study which has been undertaken will enable the company to understand the investor
psyche and their perception towards mutual funds. ICICI Prudential AMC has the highest
Assets Under Management (AUM) among all the AMCs. On the basis of the findings, the
company will be able to strategize accordingly to improve the penetration of its mutual fund
products across India.
This study will also provide an insight into the investor behaviour. Thus, the financial products
will be made and remodelled on the basis of the findings of the study so that the investor
requirements are met in a better way.
PURPOSE OF THE STUDY
The study is conducted with the purpose of analysing the following:
Investor Preferences
The study aimed to analyse the various modes of investment which the investor
prefers. The study also aimed to see that what is the purpose with which the investors
invest. We also studied the risk appetite of the investors and the time duration for
which the investors prefer to invest.
Investor Perception
The research work included analysing the perception of investors towards mutual
funds, what is their opinion towards mutual funds as a mode of investment, what is
their viewpoint regarding the risk, perceived advantages and disadvantages of mutual
funds and what are their preferred asset management companies.
Investor Awareness
We studied the level of awareness the investors have towards mutual funds and see
whether there is a relation between the awareness level and sources of information.
Future Scope of Mutual Funds in India
The study has also attempted to analyse the future scope of mutual funds as an
industry in India on the basis of the data collected through the primary research.
OBJECTIVE OF THE STUDY
To study and analyse the various modes of Investment which the Investor prefers.
To analyse the perception of Investors towards Mutual Funds.
To study the level of awareness the Investors have towards Mutual Funds and see
whether there is a relation between the awareness level and source of information.
To analyse the future scope of Mutual Fund as Industry in India.
REVIEW OF LITERATURE
Mutual fund is a now a growing in India and the researchers and academicians have sensed the
potential of mutual funds as an investment. Thus, there have been researches conducted to
analyse the investor perception towards mutual funds; the findings of the researches can have
a significant utility for asset management companies, distributors, brokers, investors and
financial advisors. The researches which have been carried out earlier have come up with the
following results and conclusions:
Priti Mane in her research paper, 'A Study of Investor Perception towards Mutual Funds in the
city of Aurangabad' has concluded that investors are not preferring to invest in mutual funds
because they find the mutual funds to be risky as compared to other investment options. The
awareness levels among the investors is low. They prefer fixed deposits over other vehicles
due to safety of principal.
On the contrary, Vipin Kumar and Preeti Bansal in their research paper, 'A Study on Investor's
Behaviour towards Mutual Funds in Rohtak, Haryana' have concluded that mutual fund is the
most preferred investment instrument. They also concluded from their findings that mutual
funds were considered to be safe, a completely opposite conclusion from that of the study
conducted in Aurangabad.
Rajesh Kumar and Nitin Goel in their paper, 'An Empirical Study on the Investor's Perception
Towards Mutual Funds' stated that most of the investors were dissatisfied with the service being
provided by the AMCs. They have concluded that investors invest in mutual funds for growth,
corpus building and tax saving. Investors expected a bright future ahead for the mutual funds.
Priyanka Sharma and Payal Agrawal in their research paper, 'Investor's Perception and Attitude
Towards Mutual Funds as an Investment Option' have concluded that mutual funds are in
nascent stage in Udaipur. They said that the process of investing in mutual funds should be
easier and convenient for the people. They have also observed that demographic factors like
age, gender and profession have an impact on the perception of the investors towards mutual
funds.
All the researches have followed a similar research methodology. The researchers have relied
on primary data, which was collected by administering a questionnaire. They have used pie
charts and bar graphs to show the descriptive data. They have relied on the chi-square test
statistic to test the relationship between the variables.
From the researches, it can be inferred that mutual funds have a tremendous potential in India.
RESEARCH METHODS
The study follows a descriptive research design since the objective of the study is to describe
the existing investor perception and selection behaviour towards mutual funds.
Tools used- Questionnaire
Data collection- Primary & Secondary
