CHAPTER NO.

1
 INTRODUCTION

The first introduction of a mutual fund in India occurred in 1963, when the
Government of India launched Unit Trust of India (UTI). Until 1987, UTI
enjoyed a monopoly in the Indian mutual fund market. Then a host of other
government-controlled Indian financial companies came up with their own funds.
These included State Bank of India, Canara Bank, and Punjab National Bank.
This market was made open to private players in 1993, as a result of the historic
constitutional amendments brought forward by the then Congress-led
government under the existing regime of Liberalization, Privatization and
Globalization (LPG). The first private sector fund to operate in India was Kothari
Pioneer, which later merged with Franklin Templeton. The main aim of the UTI
was to enable the common investors to participate in the prosperity of capital
market through portfolio management aimed at reasonable return, liquidity and
safety and to contribute to India’s industrial development by channelizing
household savings into corporate investment. By the year 1993, UTI occupied
nearly 80 per cent of the market share and developed manifold in terms of number
of investors, investable funds, reserves with wide marketing network and efficient
leadership. The Chartered Financial Analyst had commented that Mutual Funds
today form 1/10th of the banking industry’s size. If we compare this an indication
in the current interest rate scenario, Mutual Fund has ample shelf-space to grow
into an industry like the banking industry in India.

CONCEPT OF MUTUAL FUND:

A mutual fund is a common pool of money into which investors place their
contributions that are to be invested in accordance with a stated objective. The
ownership of the fund is thus joint or "mutual"; the fund belongs to all investors.
2
A single investor's ownership of the fund is in the same proportion as the
amount of the contribution made by him or her bears to the total amount of the
fund.

Mutual Funds are trusts, which accept savings from investors and invest the
same in diversified financial instruments in terms of objectives set out in the
trusts deed with the view to reduce the risk and maximize the income and
capital appreciation for distribution for theembers. A Mutual Fund is a
corporation and the fund manager's interest is to professionally manage the
funds provided by the investors and provide a return on them after deducting
reasonable management fees.

DEFINITION:
"A mutual fund is an investment that pools your money with the money of an
unlimited number of other investors. In return, you and the other investors each
own shares of the fund. The fund's assets are invested according to an
investment objective into the fund's portfolio of investments. Aggressive growth
funds seek long-term capital growth by investing primarily in stocks of fast-
growing smaller companies or market segments. Aggressive growth funds are
also called capital appreciation funds".

TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. thus mutual funds
has Variety of flavors, being a collection of many stocks, an investor can go for
picking a mutual fund might be easy. There are over hundreds of mutual funds
scheme to choose from. It is easier to think of mutual funds in categories,
mentioned below.

3
i. BY STRUCTURE

 Open - Ended Schemes:

An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity. Investors can conveniently buy and sell
units at Net Asset Value ("NAV") related prices. The key feature of open-end
schemes is liquidity.

 Close - Ended Schemes:

A closed-end fund has a stipulated maturity period which generally ranging
from 3 to 15 years. The fund is open for subscription only during a specified
period. Investors can invest in the scheme at the time of the initial public issue
and thereafter they can buy or sell the units of the scheme on the stock
exchanges where they are listed. In order to provide an exit route to the
investors, some close-ended funds give an option of selling back the units to the
Mutual Fund through periodic repurchase at NAV related prices. SEBI
Regulations stipulate that at least one of the two exit routes is provided to the
investor.

 Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-ended
and close-ended schemes. The units may be traded on the stock exchange or
may be open for sale or redemption during pre-determined intervals at NAV
related prices.

ii. BY NATURE

4
 Equity Fund:

These funds invest a maximum part of their corpus into equities holdings. The
structure of the fund may vary different for different schemes and the fund
manager's outlook on different stocks. The Equity Funds are sub-classified
depending upon their investment objective, as follows:

 Diversified Equity Funds

 Mid-Cap Funds

 Sector Specific Funds

 Tax Savings Funds (ELSS)

 Debt Funds:

The objective of these Funds is to invest in debt papers. Government authorities,

private companies, banks and financial institutions are some of the major issuers
of debt papers. By investing in debt instruments, these funds ensure low risk
and provide stable income to the investors. Debt funds are further classified as:

 Gilt Funds: Invest their corpus in securities issued by Government,

popularly known as Government of India debt papers. These Funds carry
zero Default risk but are associated with Interest Rate risk. These schemes
are safer as they invest in papers backed by Government.

 Income Funds: Invest a major portion into various debt instruments such as
bonds, corporate debentures and Government securities.

 Short Term Plans (STPs): Meant for investment horizon for three to six
months. These funds primarily invest in short term papers like Certificate of
Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus
is also invested in corporate debentures.

5
  Balanced Funds:

As the name suggest they are a mix of both equity and debt funds. They invest
in both equities and fixed income securities, which are in line with pre-defined
investment objective of the scheme. These schemes aim to provide investors
with the best of both the worlds. Equity part provides growth and the debt part
provides stability in returns.

iii. BY INVESTMENT OBJECTIVE:

 Growth Schemes:
Growth Schemes are also known as equity schemes. The aim of these
schemes is to provide capital appreciation over medium to long term. These
schemes normally invest a major part of their fund in equities and are willing
to bear short-term decline in value for possible future appreciation.
 Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes
is to provide regular and steady income to investors. These schemes
generally invest in fixed income securities such as bonds and corporate
debentures. Capital appreciation in such schemes may be limited
 Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gains they earn. These schemes
invest in both shares and fixed income securities, in the proportion indicated
in their offer documents.

iv. OTHER SCHEMES

6
 Tax Saving Schemes:
Tax-saving schemes offer tax rebates to the investors under tax laws
prescribed from time to time. Under Sec.88 of the Income Tax Act,
contributions made to any Equity Linked Savings Scheme (ELSS) are
eligible for rebate.
 Index Schemes:
Index schemes attempt to replicate the performance of a particular index
such as the BSE Sensex or the NSE 50. The portfolio of these schemes will
consist of only those stocks that constitute the index. The percentage of each
stock to the total holding will be identical to the stocks index weightage. And
hence, the returns from such schemes would be more or less equivalent to
those of the Index.

ADVANTAGES OF MUTUAL FUNDS:

If mutual funds are emerging as the favorite investment vehicle, it is because of

the many advantages they have over other forms and the avenues of investing,
particularly for the investor who has limited resources available in terms of
capital and the ability to carry out detailed research and market monitoring. The
following are the major advantages offered by mutual funds to all investors:

1. Portfolio Diversification:

Each investor in the fund is a part owner of all the fund's assets, thus enabling
him to hold a diversified investment portfolio even with a small amount of
investment that would otherwise require big capital.

2. Professional Management:

Even if an investor has a big amount of capital available to him, he benefits

from the professional management skills brought in by the fund in the
management of the investor's portfolio. The investment management skills,

7
along with the needed research into available investment options, ensure a much
better return than what an investor can manage on his own. Few investors have
the skill and resources of their own to succeed in today's fast moving, global
and sophisticated markets.

3. Liquidity:

Often, investors hold shares or bonds they cannot directly, casily and quickly
sell. When they invest in the units of a fund, they can generally cash their
investments any time, by selling their units to the fund if open-ended, or selling
them in the market if the fund is close-end. Liquidity of investment is clearly a
big benefit.

4. Tax Benefits:

Any income distributed after March 31, 2002 will be subject to tax in the
assessment of all Unit holders. However, as a measure of concession to Unit
holders of open-ended equity oriented funds, income distributions for the year
ending March 31, 2003, will be taxed at a concessional rate of 10.5%.

In case of individuals and Hindu Undivided Families a deduction up to Rs.9,000

from the Total Income will be admissible in respect of income from investments
specified in Section 80L, including income from Units of the Mutual Fund.
Units of the schemes are not subject to Wealth-Tax and Gift-Tax.

DISADVANTAGES OF INVESTING THROUGH MUTUAL FUNDS:

1. No Control Over Costs:

An investor in a mutual fund has no control of the overall costs of investing.

The investor pays investment management fees as long as he remains with the

8
fur for the professional management and research. Fees are payable even if the
value of his investments is declining. A mutual fund investor also pays fund
distribution costs, which he would not incur in direct investing. However, this
shortcoming only means that there is a cost to obtain the mutual fund services.

2. No Control:

Unlike picking your own individual stocks, a mutual fund puts you in the
passenger seat of somebody else's car

3. Dilution:

Mutual funds generally have such small holdings of so many different stocks
that insanely great performance by a fund's top holdings still doesn't make much
of a difference in a mutual fund's total performance.

PROCESS OF A MUTUAL FUND:

The mutual fund collects money directly or through brokers from investors. The
money is invested in various instruments depending on the objective of the
scheme. The income

ics or capital appreciation of these securities is passed on to the investors in

proportion to their investment in the scheme. The investments are divided into
units and the value of the units will be reflected in Net Asset Value or NAV of
the unit. NAV

of the scheme minus its liabilities. The per unit NAV is the net asset value of
the scheme divided by the number of units outstanding on the valuation date.
Mutual fund companies provide daily net asset value of their schemes to their
investors. NAV is important, as it will determine the price at which you buy or

9
redeem the units of a scheme. Depending on the load structure of the scheme,
you have to pay entry or exit load

WHY SELECT MUTUAL FUND?

The risk return trade-off indicates that if investor is willing to take higher risk
then correspondingly he can expect higher returns and vice versa if he pertains
to lower risk instruments, which would be satisfied by lower returns. For
example, if an investors opt for bank FD, which provide moderate return with
minimal risk. But as he moves ahead to invest in capital protected funds and the
profit-bonds that give out more return which is slightly higher as compared to
the bank deposits but the risk involved also increases in the same proportion.

Thus investors choose mutual funds as their primary means of investing, as

Mutual funds provide professional management, diversification, convenience
and liquidity. That doesn't mean mutual fund investments risk free.

This is because the money that is pooled in are not invested only in debts funds
which are less risky but are also invested in the stock markets which involves a
higher risk but can expect higher returns. Hedge fund involves a very high risk
since it is mostly traded in the derivatives market which is considered very
volatile.

MUTUAL FUNDS IN INDIA

In 1963, the day the concept of Mutual Fund took birth in India. Unit Trust of
India invited investors or rather to those who believed in savings, to park their
money in UTI Mutual Fund. For 30 years it goaled without a single second
player. Though the 1988 year saw some new mutual fund companies, but UTI
remained in a monopoly position.

10
The performance of mutual funds in India in the initial phase was not even
closer to satisfactory level. People rarely understood, and of course investing
was out of question. But

yes, some 24 million shareholders were accustomed with guaranteed high

returns by the beginning of liberalization of the industry in 1992. This good
record of UTI became marketing tool for new entrants. The expectations of
investors touched the sky in profitability factor. However, people were miles
away from the preparedness of risks factor after the liberalization.

The net asset value (NAV) of mutual funds in India declined when stock prices
started falling in the year 1992. Those days, the market regulations did not
allow portfolio shifts into alternative investments. There was rather no choice
apart from holding the cash or to further

in shares. One more thing to be noted, since only closed-end funds were floated
in the market, the investors disinvested by selling at a loss in the secondary
market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock
market scandal, the losses by disinvestments and of course the lack of
transparent rules in the whereabouts rocked confidence among the investors.
Partly owing to a relatively weak stock market performance, mutual funds have
not yet recovered, with funds trading at an average discount of 1020 percent of
their net asset value.

The securities and Exchange Board of India (SEBI) came out with
comprehensive regulation in 1993 which defined the structure of Mutual Fund
Companies for the first time.

The supervisory authority adopted a set of measures to create a transparent and

competitive environment in mutual funds. Some of them were like relaxing

11
investment restrictions into the market, introduction of open-ended funds, and
paving the gateway for mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term
saving. The more the variety offered, the quantitative will be investors.

Several private sectors Mutual Funds were launched in 1993 and 1994. The
share of the private players has risen rapidly since then. Currently there are 34
Mutual Fund organizations in India managing 1,02,000 crores.

At last to mention, as long as mutual fund companies are performing with lower
risks and higher profitability within a short span of time, more and more people
will be inclined to invest until and unless they are fully educated with the dos
and don'ts of mutual funds.

Mutual fund industry has seen a lot of changes in past few years with
multinational companies coming into the country, bringing in their professional
expertise in managing funds worldwide. In the past few months there has been a
consolidation phase going on in the mutual fund industry in India. Now
investors have a wide range of Schemes to choose from depending on their
individual profiles.

INVESTMENT STRATEGIES

I. Systematic Investment Plan: under this a fixed sum is invested each

month on a fixed date of a month. Payment is made through

postdated cheques or direct debit facilities. The investor gets fewer

units when the NAV is high and more units when the NAV is low.

This is called as the benefit of Rupee Cost Averaging (RCA)

12
 II. Systematic Transfer Plan: under this an investor invest in debt

oriented fund and give instructions to transfer a fixed sum, at a fixed

interval, to an equity scheme of the same mutual fund.

III. Systematic Withdrawal Plan: if someone wishes to withdraw from

a mutual fund then he can withdraw a fixed amount each month.

MUTUAL FUND COMPANIES IN INDIA:

The concept of mutual funds in India dates back to the year 1963. The between
1963 and 1987 marked the existence of only one mutual fund company in India
with Rs.67bn assets under management (AUM), by the end of its monopoly, the
Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund
companies in India took their position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund,
Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank
Mutual Fund, Bank of India Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund industry.
By the end of 1993, the total AUM of the industry was Rs.470.04 bn. The
private sector funds started penetrating the fund families. In the same year the
first Mutual Fund Regulations came into existence with re-registering all mutual
funds Except UTI. The regulations were further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India which
has now merged with Franklin Templeton. Just after ten years with private
sector player’s penetration, the total assets rose up to Rs.1218.05 bn. Today
there are 33 mutual fund companies in India.

13
MAJOR COMPANIES IN MUTUAL FUND

 Reliance Mutual Fund

 HDFC Mutual Fund
 Birla Sun Life Mutual Fund
 ICICI Prudential Mutual Fund
 Kotak Mahindra Mutual Fund
 UTI Mutual Fund
 LIC Mutual Fund
 SBI Mutual Fund
 IDFC Mutual Fund
 TATA Mutual Fund
 Franklin Templeton Mutual Fund
 DSP Black Mutual Fund
 23 others players

FUTURE PROSPECT OF MUTUAL FUNDS IN INDIA

Financial experts believe that the future of Mutual Funds in India will be very
bright. It has been estimated that by March-end of 2010, the mutual fund
industry of India will reach Rs,40,90,000 crores, taking into account the total
assets of the Indian commercial banks. In the coming 10 years the annual
composite growth rate is expected to go up by 13.4%.

 100% growth in the last 6 years.

 Number of foreign AMC's are in the queue to enter the Indian markets like
Fidelity Investments, US based, with over US$1 trillion assets under
management worldwide.

14
 Our saving rate is over 23%, highest in the world. Only channelizing these
savings in mutual funds sector is required.

 We have approximately 29 mutual funds which is much less than US having

more than 800. There is a big scope for expansion.

 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds
are concentrating on the 'A' class cities. Soon they will find scope in the
growing cities.

 Mutual fund can penetrate rural like the Indian insurance industry with
simple and limited products.

 SEBI allowing the MF's to launch commodity mutual funds. Emphasis on

better corporate governance.

 Trying to curb the late trading practices.

 Introduction of Financial Planners who can provide need based advice.

15
CHAPTER NO.2

16
 LITERATURE REVIEW

This report is based on primary as well secondary data. however primary

data collection was given more importance since it is overhearing factor in
attitude studies. One of the most important users of research methodology is
that it helps in identifying the problem, collecting, analyzing the required
information data and providing an alternative solution to the problem. It also
helps in collecting the vital information that is required by the top
management to assist them for the better decision making both day to day
decision and critical ones.

Mutual Funds are essentially investment vehicles where people with similar
investment objective come together to pool their money and then invest
accordingly. With emphasis on increase in domestic savings and improvement in
deployment of investment through markets, the need and scope for mutual fund
operation has increased tremendously. But about 75% people are still investing
in Post office, MIS and bank deposit. One major reason behind it is lack of
awareness in rural areas. There is, therefore, a strong need for improving the
awareness in a big way. It is important to study about the returns given by AMC
Mutual Funds and perform a comparative analysis.

17
CHAPTER NO.3

18
 RESEARCH METHODOLOGY

For the comparative analysis of mutual funds 4 companies have been randomly
selected from each sector and from each of these sectors 5 schemes of similar in
nature has been considered. The study is done for a period of 5 years starting from
2014 to 2018. To calculate Average Returns Daily Net Asset Value of the mutual
fund companies and Annual Average of these mutual fund companies was
calculated. Then, using Average Returns, Standard Deviation was further
calculated for the Average Returns. Standard Deviation and Average Returns are
the two variables used for analysis. Generally, calculation of returns of funds is
done after adjusting the Net Asset Values to dividends, capital gains, right and
bonus issue. In the current study the schemes that are selected for both private
and public sector are growth based, hence they do not have any of the above
factors. Risk refers to the amount of variations in the returns of mutual funds
during the given period. To investigate the performance of mutual funds in India
total 16 schemes have been selected as sample as under:

A. OBJECTIVE OF RESEARCH

 To know why one has invested or not invested in Mutual fund

 To find out the most preferred channel.

 To know people behavior regarding risk factor involved in mutual

fund

 To know how many people aware about Mutual Funds

19
B. RESEARCH DESIGN

The research is qualitative & descriptive in nature. Qualitative research is

that talk about the quality of the subject to be researched and Descriptive
research is one that describes things as exists in present.

C. SAMPLING PLAN

Sample size: The sample size of my project is limited to 200 people only.
Out of which only 120 people had invested in Mutual Fund. Other 80 people
did not have invested in Mutual Fund.

Sample design: Data has been presented with the help of bar graph, pie
charts, line graphs etc.

D. DATA COLLECTION

Research is totally based on primary data. and Secondary data can

be used only for the reference. Research has been done by primary
data collection, and primary data has been collected by interacting
with various people. The secondary data has been collected through
various journals and websites.

E. LIMITATIONS OF STUDY

 Some of the persons were not so responsive.

 Possibility of error in data collection because many of investors may

have not given actual answers of my questionnaire.

20
 Some of respondents of the survey were unwilling to share
information.

 The information given by the respondents might be biased because

some of them might not be interested to give correct information.

 Sample size is limited to 200 persons around the world through

goggle survey forms out of these only 120 had invested in Mutual
Fund. Other 80 people did not have invested in Mutual Fund. The
sample. size may not adequately represent the whole market.

21
CHAPTER NO.4

22
 DATA COLLECTION & ANALYSIS OF DATA

I. AGE DISTRIBUTION OF THE MUTUAL FUND INVESTORS

Age Group <= 30 31-35 36-40 41-45 46-50 >50

No. of Investors 12 18 30 24 20 16
Investors invested in Mutual Fund

35

30

25

20

15 30

24
10 20
18
16
12
5

0
<=30 31-35 36-40 41-45 46-50 >50

Age group of the Investors

According to this chart out of 120 Mutual Fund investors. the most
are in the age group of 36-40 yrs. i.e. 25%, the second most investors
are in the age group of 41-45yrs i.e. 20% and the least investors are
in the age group of below 30 yrs.

23
II. EDUCATIONAL QUALIFICATION OF INVESTORS OF MUTUAL

FUND

Educational Qualification Number of Investors

Graduate/ Post Graduate 88

Under Graduate 25

Others 7

Total 120

6%
23%

71%

Graduate/Post Graduate Under Graduate Others

Out of 120 Mutual Fund investors 71% of the investors Graduate/Post

Graduate, 23% are Under Graduate and 6% are others

24
III. MONTHLY FAMILY INCOME OF THE INVESTORS

Income Group No. of Investors

< 10,000 5
10,001-15,000 12
15,001-20,000 28
20,001-30,000 43
>30,000 32

50
45
40
No. of Investors

35
30
25
43
20
15 32
28
10
5 12
5
0
<=10 10-15 15-20 20-30 >30

Income Group of the Investorsn

In the Income Group of the investors out of 120 investors, 36%

investors that is the maximum investors are in the monthly income
group Rs. 20,001 to Rs. 30,000, Second one i.e. 27% investors are
in the monthly income group of more than Rs. 30,000 and the
minimum investors i.e. 4% are in the monthly income group of
below Rs. 10,000

25
IV. INVESTORS INVESTED IN MUTUAL FUND

Response No. of Respondents

YES 120
NO 80

Total 200

No
40%

Yes
60%

Out of 200 People, 60% have invested in Mutual Fund and 40% do
not have invested in Mutual Fund.

26
V. REASON FOR INVESTED IN MUTUAL FUND

Reason No. of Respondents

Not Aware 65

Higher Risk 5

Not any Specific Reason 10

6%
13%

81%

Not Aware Higher Risk Not Any

Out of 80 people, who have not invested in Mutual Fund, 81% are not aware
of Mutual Fund, 13% said there is likely to be higher risk and 6% do not
have any specific reason.

27
VI. INVESTORS INVESTED IN DIFFERENT ASSETS
MANAGEMENT CO. (AMC)

Name of AMC No. of Investors

SBIMF 55
UTI 75
HDFC 30
Reliance 75
ICICI Prudential 56
Kotak 45
Others 70

Others Chart Title

70

HDFC
30
Name of AMC

Kotak
45

SBIMF
55

ICICI
56

Reliance
75

UTI
75
0 20 40 60 80

No. of Investors

In mutual fund most of the Investors preferred UTI and Reliance Mutual Fund.
Out of 120 Investors 62.5% have invested in each of them, only 46% have
invested in SBIMF, 47% in ICICI Prudential, 37.5% in Kotak and 25% in
HDFC.

28
VII. ANALYZING DATA ACCORDING TO AWARNESS ABOUT
MUTUAL FUND

40%

60%

1st Qtr 2nd Qtr

Out of 200 People, 60% people are actually aware of the fact of Mutual fund
and are regular investors of Mutual Funds.

40% People were there who have just heard the name or rather are just aware
of the fact of existence of the word called Mutual Fund, but doesn’t know
anything else about Mutual Funds.

29
VIII. MODE OF INVESTMENT PREFERRED BY THE INVESTORS

Mode of Investment One time Investment Systematic Investment Plan (SIP)

No. of Respondents 78 42

0%

35%

65%

One time Investment SIP

Out of 120 Investors 65% preferred One Time Investment and 35 %

Preferred through Systematic Investment Plan.

30
IX. OCCUPATION OF THE INVESTORS IN MUTUAL FUND

Occupation No. of Investors

Govt. Service 30
Pvt. Service 45
Business 35
Agriculture 4
Others 6

50
45
No. of Investors

40
35
30
25
20 45
15 35
30
10
5 6
0 4
Govt. Service Pvt. Service Business Agriculture Others

Occupation of the mutual fund

In Occupation group out of 120 investors, 38% are Pvt. Employees,

25% are Businessman, 29% are Govt. Employees, 3% are in

Agriculture and 5% are in others.

31
X. PREFERENCE OF FACTORS WHILE INVESTING

Factors Liquidity Low Risk High Return Trust

No. of Respondents 40 60 64 36

Trust Liquidity
18% 20%

High Return
Low Risk
32%
30%

Out of 200 People, 32% People prefer to invest where there is High

Return, 30% prefer to invest where there is Low Risk, 20% prefer

easy Liquidity and 18% prefer Trust

32
CHAPTER NO.5

33
 FINDING OF STUDY

 In Mutual Fund in the Age Group of 36-40 years were more in numbers.

The second most Investors were in the age group of 41-45 years and the

least were in the age group of below 30 years.

 In Mutual Fund most of the Investors Were Graduate or Post Graduate

and below HSC there were very few in numbers.

 In Occupation group most of the Investors Were Govt. employees, the

second most Investors Were Private employees and the least were

associated with Agriculture.

 In family Income group, between Rs. 20,001- 30,000 were more in

numbers, the second most were in the Income group of more than Rs.

30,000 and the least were in the group of below Rs. 10,000.

 About all the Respondents had a Saving A/c in Bank, 76% Invested in

Fixed Deposits, only 60% Respondents invested in Mutual fund.

 Mostly Respondents preferred High Return while investment, the

second most preferred Low Risk then liquidity and the least preferred

Trust.

 Only 67% Respondents were aware about Mutual fund and its

operations and 33% were not.

34
 Among 200 Respondents only 60% had invested in Mutual Fund and

40% did not have invested in Mutual fund.

 Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told

there is not any specific reason for not invested in Mutual Fund and 6%

told there is likely to be higher risk in Mutual Fund.

 60% Investors preferred to Invest through Financial Advisors, 25%

through AMC (means Direct Investment) and 15% through Bank.

 65% preferred One Time Investment and 35% preferred SIP out of

both type of Mode of Investment.

 For Future investment the maximum Respondents preferred Reliance

Mutual Fund, the second most preferred ICICI Prudential, SBIMF has

been preferred after them.

 Maximum Number of Investors Preferred Growth Option for returns,

35
CHAPTER NO.6

36
 CONCLUSION OF RESEARCH

Running a successful Mutual Fund requires complete understanding of the

peculiarities of the Indian Stock Market and also the psyche of the small

investors. This study has made an attempt to understand the financial

behavior of Mutual Fund investors in connection with the preferences of

Brand (AMC), Products, Channels etc. I observed that many of people have

fear of Mutual Fund. They think their money will not be secure in Mutual

Fund. They need the knowledge of Mutual Fund and its related terms. Many

of people do not have invested in mutual fund due to lack of awareness

although they have money to invest. As the awareness and income is

growing the number of mutual fund investors are also growing.

“Brand” plays important role for the investment. People invest in those

Companies where they have faith or they are well known with them. There

are many AMCs but only some are performing well due to Brand awareness.

Some AMCs are not performing well although some of the schemes of them

are giving good return because of not awareness about Brand. Reliance, UTI,

SBIMF, ICICI Prudential etc. they are well known Brand, they are

performing well and their Assets Under Management is larger than others

whose Brand name are not well known like Principle etc.

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Distribution channels are also important for the investment in mutual fund.

Financial Advisors are the most preferred channel for the investment in

mutual fund. They can change investors’ mind from one investment option

to others. Many of investors directly invest their money through AMC

because they do not have to pay entry load. Only those people invest directly

who know well about mutual fund and its operations and those have time.

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CHAPTER NO.7

39
 SUGGESTIONS

 The most vital problem spotted is of ignorance. Investors should be

made aware of the benefits. Nobody will invest until and unless he is

fully convinced. Investors should be made to realize that ignorance is

no longer bliss and what they are losing by not investing.

 Mutual funds offer a lot of benefit which no other single option could

offer. But most of the people are not even aware of what actually a

mutual fund is? They only see it as just another investment option. So

the advisors should try to change their mindsets. The advisors should

target for more and more young investors. Young investors as well as

persons at the height of their career would like to go for advisors due

to lack of expertise and time.

 Mutual Fund Company needs to give the training of the Individual

Financial Advisors about the Fund/Scheme and its objective, because

they are the main source to influence the investors.

 Before making any investment Financial Advisors should first enquire

about the risk tolerance of the investors/customers, their need and

time (how long they want to invest). By considering these three things

they can take the customers into consideration.

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 Younger people aged under 35 will be a key new customer group into

the future, so making greater efforts with younger customers who

show some interest in investing should pay off.

 Customers with graduate level education are easier to sell to and there

is a large untapped market there. To succeed however, advisors must

provide sound advice and high quality.

 Systematic Investment Plan (SIP) is one the innovative products

launched by Assets Management companies very recently in the

industry. SIP is easy for monthly salaried person as it provides the

facility of do the investment in EMI.

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CHAPTER NO.8

42
 REFERENCES

 NEWS PAPERS

 OUTLOOK MONEY

 MUTUAL FUND HAND BOOK

 FACT SHEET AND STATEMENT

 WWW.SBIMF.COM

 WWW.MONEYCONTROL.COM

 WWW.ONLINERESEARCHONLINE.COM

 WWW. MUTUALFUNDSINDIA.COM

 WWW.MUTUALFUNDINDIA,COM

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CHAPTER NO.9

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 ANNEXURE

 Questionnaire

1. Age: _______

2. What is your monthly family income approximately?

A. Below 10,000
B. 10,000 to 20,000
C. 20,000 to 50,000
D. 50,000 and above

3. Qualification
A. Graduation/PG
B. Under Graduate
C. Others

4. If yes, how did you know about Mutual Fund?

A. Advertisement
B. Financial Advisors
C. Banks

5. Are you aware about Mutual Funds and their operations?

A. Yes
B. No

6. While investing your money, which factor will you prefer?

A. Liquidity
B. Low Risk
C. High Return
D. Trust

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7. Have you ever invested in Mutual Fund?
A. Yes
B. No

8. If not invested in Mutual Fund, then why?

A. Not aware of MF
B. Higher risk
C. Not any specific reason

9. If yes, in which Mutual Fund you have invested? All applicable.

A. SBIMF
B. UTI HDFC
C. Reliance.
D. Kotak Other.
E. Other Specify

10. If NOT invested in SBIMF, you do so because.

A. You are not aware of SBIMF.
B. SBIMF gives less return compared to the others
C. Agent’ Advice

11.Which Channel will you prefer while investing in Mutual Fund?

A. Financial Advisor
B. Bank
C. AMC

12.When you invest in Mutual Funds which mode of investment will you
prefer?
A. One Time Investment
B. Systematic Investment Plan (SIP)

13. What kind of Occupation?

A. Govt. Ser
B. Pvt. Ser
C. Business
D. Agriculture
E. Others

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