37874920 Mutual Fund as Investment Avnue

A
SUMMER PROJECT REPORT
ON
MUTUAL FUND AS AN INVESTMENT- AVENUE

PRESENTED TO:

PRESENTED BY :

Mrs. NARINDER KAUR

ANKUSH MAHAJAN
CLASS MBA-2ND

(LECT.)

ROLL-NO.- 2105

UNIVERSITY SCHOOL OF BUSINESS STUDIES
TALWANDI SABO

1

ACKNOWLEDGMENT
“Knowledge is an experience gained in life, it is the choicest possession, which should not
be shelved but should be happily shared with others”.
I express my gratitude to my esteemed guide, SENIOR SALE EXECUTIVE for their valuable critiques,
assistance and encouragement, which enabled me to carry on the project MUTUAL FUND AS
INVESTMENT – AVENUE AT NJ INVEST INDIA successfully. He gave me a wonderful opportunity
to work on this project. Their time-to-time guidance and incessant support helped me to broaden my
outlook on the project .I am highly obliged for their support throughout the Training.

I would like to thanks faculty members and valuable works of publishers and authors whose work helped
me during the project.

ANKUSH MAHAJAN
MBA -2ND ROLL-NO. 2105

ABSTRACT
The project contains the brief description of the mutual fund industry in general. It also includes mutual
fund as an investment- avenue. A survey was conducted to get the primary data to judge the factors that
the investors kept in their mind before they invest in any of the investment tools and thus the first part of
the paper scrutinizes the objectives of the investors for investing in a mutual fund. Second part related to
the investment patterns of investors .that is related to the way or the factors which he takes under
consideration while investing in mutual funds. Third part considers which scheme is better according to
investors. For this the investor concerns the advisors/ friend and consult the various resources from where
he get the help for investing in the various schemes. The last part contains the investors’ perceptions
about level of satisfaction while investing in mutual funds.. Currently there are more than 2500 schemes
with varied objectives and AMCs are competing against each other by launching new products or
repositioning old ones. MF industry today is facing competition not only from within the industry but also
from other financial products like insurance policies product that provide many of the same economic
functions as mutual funds but are not strictly MFs. Thus paper attempts to study the mutual fund as an
investment -avenue selection behavior of Retail Investors who invest in Mutual funds. Schemes. Analysis
and conclusion based on the actual research of the topic.

(A) MUTUAL FUND
1. INTRODUCTION
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial
goal. The money thus collected is invested by the fund manager in different types of securities
depending upon the objective of the scheme. These could range from shares to debentures to money
market instruments. The income earned through these investments and the capital appreciations
realized by the scheme are shared by its unit holders in proportion to the number of units owned by
them (pro rata). Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost.
Anybody with an inventible surplus of as little as a few thousand rupees can invest in Mutual Funds.
Each Mutual Fund scheme has a defined investment objective and strategy
A Mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real estate, derivatives
and other assets have become mature and information driven. Price changes in these assets are driven
by global events occurring in faraway places. A typical individual is unlikely to have the knowledge,
skills, inclination and time to keep track of events, understand their implications and act speedily. An
individual also finds it difficult to keep track of ownership of his assets, investments, brokerage dues
and bank transactions etc.
A draft offer document is to be prepared at the time of launching the fund. Typically, it pre
specifies the investment objectives of the fund, the risk associated, the costs involved in the process
and the broad rules for entry into and exit from the fund and other areas of operation. In India, as in
most countries, these sponsors need approval from a regulator, SEBI (Securities exchange Board of
India) in our case. SEBI looks at track records of the sponsor and its financial strength in granting
approval to the fund for commencing operations.
A sponsor then hires an asset management company to invest the funds according to the
investment objective. It also hires another entity to be the custodian of the assets of the fund and
perhaps a third one to handle registry work for the unit holders (subscribers) of the fund.
In the Indian context, the sponsors promote the Asset Management Company also, in which it
holds a majority stake. In many cases a sponsor can hold a 100% stake in the Asset Management
Company (AMC). E.g. Birla Global Finance is the sponsor of the Birla Sun Life Asset Management

Company Ltd., which has floated different mutual funds schemes and also acts as an asset manager for
the funds collected under the schemes.
Characteristics:


A mutual fund actually belongs to the investors who have pooled their funds.



A mutual fund is managed by investment professionals and other service providers, who earn a fee for their
services, from the fund.



The pool of funds is invested in a portfolio of marketable investments. The value of the portfolio is updated
every day.
The investor’s share in the fund is denominated by ‘units’. The value of the units changes with change in the
portfolio’s value, every day. The value of one unit of investment is called the Net Asset Value or NAV.

3. MUTUAL FUND STRUCTURE

5

The Structure Consists:

The structure of mutual funds in India is governed by the SEBI Regulations, 1996. These regulations
make it mandatory for mutual funds to have a 3-tier structure of Sponsors-Trustee-AMC (Asset
Management Company). The Sponsor is the promoter of mutual fund, and appoints the Trustee. The
Trustees are responsible to the investors in the mutual funds, and appoint the AMC for managing the

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investment portfolio. The AMC is the business face of the mutual funds, as it manages all the affairs
of mutual funds. The mutual funds and AMC have to be registered by the SEBI.
Sponsor
Sponsor is the person who acting alone or in combination with another body corporate establishes a
mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment Managed and meet
the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from the
operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund
Trust
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882
by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.
Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main
responsibility of the Trustee is to safeguard the interest of the unit holders and inter-alia ensure that the
AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of
India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents of the
respective Schemes. At least 2/3rd directors of the Trustee are independent directors who are not
associated with the Sponsor in any manner.
Asset Management Company (AMC)
The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is
required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset
management company of the Mutual Fund. At least 50% of the directors of the AMC are independent
directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of at
least 10 crores at all times.

Registrar and Transfer Agent

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The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual
Fund. The Registrar processes the application form, redemption requests and dispatches account
statements to the unit holders.
Custodian
A custodian handles the investment back office of a mutual fund. Its responsibilities include receipt and
delivery of securities, collection of income, distribution of dividends, and segregation of assets between
schemes. The sponsor of a mutual fund cannot act as a custodian to the fund. For example, Deutsche Bank
is a custodian, but it cannot service Deutsche Mutual Fund, its mutual fund arm.
Depository
Indian capital markets are moving away from having physical certificates for securities, to ownership of
these securities in ‘dematerialized’ form with a Depository.
4. MUTUAL FUND OPERATION

(Mutual Fund Operation Flow Chart)

INVESTOR

MANAGE

PASS TO INVESTO RS

FUND

MUTUAL
FUND OPERATION

GENERATE

INVEST

STOCKES AND SECURIT

5.TYPES OF MUTUAL FUND
Diagram

8

A Mutual Fund may float several schemes, which may be classified on the basis of its structure, its
investment objectives and other objectives.
Open – Ended Schemes
As the name implies the size of the scheme (fund) is open – i.e. not specified or pre-determined. Entry to
the fund is always open, the investor who can subscribe at anytime. Such fund stands ready to buy or sell
its securities at anytime. The key feature of Open-ended schemes is Liquidity. It implies that the
capitalization of the fund is constantly changing as investors sell or buy their shares. Further, the shares
or units are normally not traded on the stock exchange but are repurchased by the funds at announced
rates. Open-ended schemes have comparatively better liquidity despite the fact that these are not listed.
The reason is that investors can any time approach mutual fund for sale of such units. No intermediaries
are required. Moreover, the realizable amount is certain since repurchase is at a price based on declared
net asset value (NAV). The portfolio mix of such schemes has to be investments, which are actively
traded in the market. Otherwise it will not be possible to calculate NAV. This is the reason that generally
open-ended schemes are equity based. In Open-ended schemes, the option of dividend reinvestment is
available.

9

Close-Ended Schemes
A Close – ended schemes have a definite period after which their shares/units are redeemed. The scheme
is open for subscription only during a specified period at the time of launch of a scheme. 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 the units 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. In these types of schemes, the size of the fund kept to be
constant. SEBI regulations stipulate that at least one of the two exit routes is provided to the investor i.e.
either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose
NAV generally on weekly basis.
Interval schemes
Interval Schemes combine the features of both open-ended and close-ended schemes. They are open for
sale or redemption during pre-determined intervals at NAV based prices.
Mutual Fund schemes by Investment Objectives:
EQUITY FUNDS
These funds invest a major part of their corpus in equities. The composition of the fund may vary from
scheme to scheme and the fund manager’s outlook on various scrip’s.The Equity Funds are sub-classified
depending upon their investment objective, as follows:
1.Growth Fund: Aim to provide capital appreciations over the medium to long term. These schemes
normally invest a majority of their funds in equities and are willing to bear short term decline in value
for possible future appreciation. These schemes are not for investors seeking regular income or needing
their money back in the short-term
2.Diversified Equity Fund: Diversified equity funds are the most popular among investors. They invest
in many stocks across many sectors, and because they have the freedom to chop and churn their
portfolios as they like, diversified equity funds are a good proxy to the stock market. If a general
exposure to equities is what you want, they are a good option. They can invest in all listed stocks, and
even in unlisted stocks. They can invest in which ever sector they like, in what ever ratio they like.
1.Equity – Linked Savings Schemes (ELSS): Equity – linked savings schemes (ELSS) are diversified
equity funds that additionally offer income tax benefits to individuals. ELSS is one of the

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many section 80c instruments, along with the more popular debt options like the PPF, NSC and
infrastructure bonds. In this Section 80c grouping. ELSS is unique. Being the only instrument to offer a
total equity exposure.
1. 1.Index Fund: An index fund is a diversified equity fund; with a difference- a fund manager has

absolutely no say in stock selection. At all times, the portfolio of an index fund mirrors an index, both
in its choice of stocks and their percentage holding. As of March 2004, equity index funds tracked
either the Sensex or the Nifty. So, an index fund that mirrors the Sensex will invest only in the 30
Sensex stocks, which too in the same proportion as their weight age in the index.
2.Sector Fund: Sector funds invest in stocks from only one sector, or a handful of sectors. The
objective is to capitalize on the story in the sectors, and offer investors a window to profit from such
opportunities. It’s a very narrow focus, because of which sector funds are considered the riskiest
among all equity funds.
2. Mid – Cap Fund: These are diversified funds that target companies on the fast – growth trajectory.

In the long run, share prices are driven by growth in a company’s turnover and profits. Market players
refer to them as ‘mid-sized companies’ and ‘mid-cap stocks’ with size in this context being
benchmarked to a company’s market value. So, while a typical large cap stock would have a market
capitalization of over Rs 1,000 crores, a mid-cap stock would have a market value of Rs 250-2,000
crores.
DEBT FUNDS
These Funds invest a major portion of their corpus 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:
1.Gilt Funds: Invest their corpus in securities issued by Government, popularly known as GOI 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.

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2.Income Funds: Income funds aim to maximize debt returns for the medium to longer term.
Invest a major portion into various debt instruments such as bonds, corporate debentures and
Government securities.
2.MIPs: Invests around 80% of their total corpus in debt instruments while the rest of the portion
is invested in equities. It gets benefit of both equity and debt market. These scheme ranks slightly
high on the risk-return matrix when compared with other debt schemes.
1. Short Term Plans (STPs): Meant for investors with an investment horizon of 3-6 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.
2. Liquid Funds: Also known as Money Market Schemes, These funds are meant to provide
easy liquidity and preservation of capital. These schemes invest in short-term instruments like
Treasury Bills, inter-bank call money market etc. These funds are meant for short-term cash
management of corporate houses and are meant for an investment horizon of 1day to 3
months. These schemes rank low on risk-return matrix and are considered to be the safest
amongst all categories of mutual funds.
3. Floating Rate Funds: These income funds are more insulated from interest rate than their
conventional peers. In other words, interest rate changes, which cause the NAV of a
conventional debt fund to go up or down, have little, or no, impact on NAVs of floating rate
funds.
BALANCED FUNDS
These funds, as the name suggests, 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. Each category of fund is backed by an
investment philosophy, which is predefined in the in the objective of the fund. The investor can align
his own investment need with the fund objectives and invest accordingly.
HYBRID FUNDS:-

Growth and Income Fund: Strike a balance capital appreciation and income for the investors. In these funds
portfolio is a mix between companies with good dividend paying record and those with potential capital
appreciation. These funds are less risky than growth funds bit more than income funds.
1
2

1) Asset Allocation Fund: These funds follow variable asset allocation policy. These move in an out

of an asset class (equity, debt, money market or even non-financial assets). Asset allocation funds
are those, which follow more stable allocation policies like balanced funds. Those, which flexible
allocation policies, are like aggressive speculative funds.
7.ADVANTAGES OF MUTUAL FUND

Affordabil
it y

Regulatio
n

Diversificati

Variety

Profession
al

Tax

Mutual Funds offer several benefits to an investor that are unmatched by the other investment options.
Last six years have been the most turbulent as well as exiting ones for the industry. New players have
come in, while others have decided to close shop by either selling off or merging with others. Product
innovation is now passé with the game shifting to performance delivery in fund management as well as
service. Those directly associated with the fund management industry like distributors, registrars and
transfer agents, and even the regulators have become more mature and responsible.
1. Affordability : Small investors with low investment fund are unable to invest in high-grade or
blue chip stocks. An investor through Mutual Funds can be benefited from a portfolio
including of high priced stock.
2. Diversification : Investors investment is spread across different securities (stocks, bonds,
money market, real estate, fixed deposits etc.) and different sectors (auto, textile, IT etc.). This
kind of a diversification add to the stability of returns, reduces the risk for example during one

13

period of time equities might under perform but bonds and money market instruments might
do well do well and may protect principal investment as well as help to meet return objectives.
3. Variety : Mutual funds offer a tremendous variety of schemes. This variety is beneficial in
two ways: first, it offers different types of schemes to investors
4. Professional Management: Mutual Funds employ the services of experienced and skilled professionals
and dedicated investment research team. The whole team analyses the performance and balance sheet of
companies and selects them to achieve the objectives of the scheme.
5. Tax Benefits: Depending on the scheme of mutual funds, tax shelter is also available. As per
the Union Budget-99, income earned through dividends from mutual funds is 100% tax free.
Under ELSS of open-ended equity-oriented funds an exemption is provided up to Rs.
100,000/- under section 80C.
6. Regulation: All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors. The operations of
Mutual Funds are regularly monitored by SEBI.

8. DISADVANTAGES OF MUTUAL FUND:
The following are the disadvantages of investing through mutual fund:


No control over cost: Since investors do not directly monitor the fund’s operations, they cannot
control the costs effectively. Regulators therefore usually limit the expenses of mutual funds.



No tailor-made portfolio: Mutual fund portfolios are created and marketed by AMCs, into which
investors invest. They cannot made tailor made portfolio.



Managing a portfolio of funds: As the number of funds increase, in order to tailor a portfolio for
himself, an investor may be holding portfolio funds, with the costs of monitoring them and using
hem, being incurred by him.



Delay in Redemption: The redemption of the funds though has liquidity in 24-hours to 3 days
takes formal application as well as needs time for redemption. This becomes cumbersome for the
investors.

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

Non-availability of loans: Mutual funds are not accepted as security against loan. The investor cannot
deposit the mutual funds against taking any kind of bank loans though they may be his assets.

9. RISK

INVOLVED IN MUTUAL FUND :

THE RISK-RETURN TRADE-OFF
The most important relationship to understand is the risk-return trade-off. Higher the risk greater the
returns/loss and lower the risk lesser the returns/loss. Hence it is up to you, the investor to decide how
much risk you are willing to take. In order to do this you must first be aware of the different types of risks
involved with your investment decision.
MARKET RISK:
Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting the market in
general lead to this. This is true, may it be big corporations or smaller mid-sized companies. This is
known as Market Risk. A Systematic Investment Plan (“SIP”) that works on the concept of Rupee Cost
Averaging (“RCA”) might help mitigate this risk.
CREDIT RISK:
The debt servicing ability (may it be interest payments or repayment of principal) of a company through
its cash flows determines the Credit Risk faced by you. This credit risk is measured by independent rating
agencies like CRISIL who rate companies and their paper. An ‘AAA’ rating is considered the safest

15

whereas a ‘D’ rating is considered poor credit quality. A well-diversified portfolio might help mitigate
this risk.
INFLATION RISK:
Things you hear people talk about: “Rs. 100 today is worth more than Rs. 100 tomorrow.” “Remember
the time when a bus ride cost 50 paisa?”

“Mehangai Ka Jamana Hai.”

The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times people make
conservative investment decisions to protect their capital but end up with a sum of money that can buy
less than what the principal could at the time of the investment. This happens when inflation grows faster
than the return on your investment. A well-diversified portfolio with some investment in equities might
help mitigate this risk.
INTEREST RATE RISK:
In a free market economy interest rates are difficult if not impossible to predict. Changes in interest rates
affect the prices of bonds as well as equities. If interest rates raise the prices of bonds fall and vice versa.
Equity might be negatively affected as well in a rising interest rate environment. A well-diversified
portfolio might help mitigate this risk.

POLITICAL/GOVERNMENT POLICY RISK:
Changes in government policy and political decision can change the investment environment. They can
create a favorable environment for investment or vice versa.
LIQUIDITY RISK:
Liquidity risk arises when it becomes difficult to sell the securities that one has purchased. Liquidity Risk
can be partly mitigated by diversification, staggering of maturities as well as internal risk controls that
lean towards purchase of liquid securities.
10.NET ASSET VALUE
Net Asset Value (NAV)

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The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. In
other words, if the fund is dissolved or liquidated, by selling off all the assets in the fund, this is the
amount that the shareholders would collectively own. This gives rise to the concept of net asset value
per unit, which is the value, represented by the ownership of one unit in the fund. It is calculated simply
by dividing the net asset value of the fund by the number of units. However, most people refer loosely
to the NAV per unit as NAV, ignoring the "per unit". We also abide by the same convention.
Definition of NAV
Net Asset Value, or NAV, is the sum total of the market value of all the shares held in the portfolio
including cash, less the liabilities, divided by the total number of units outstanding. Thus, NAV of a
mutual fund unit is nothing but the 'book value.'
11. BASIC CONCEPTS OF LOADS :
1. Entry Load: The load charged at the time of investment is known as entry load. It’s meant to
cover the cost that the AMC spends in the process of acquiring subscriber’s commission payable
to brokers, advertisements, register expenses etc. The load is recovered by way of charging a sale
price higher than the prevailing NAV.
2. Exist Load: Some AMC do not charge an entry load but they charged an exist load i.e., they
deduct a load before paying out the redemption proceeds. Psychologically, investors are much
more willing to pay exist loads as compared to entry loads.
3. Unit: Units mean the investment of the unit holders in a scheme. Each unit represents one
undivided share in the assets of a scheme. The value of each unit changes, depending on the
performance of the fund.
MUTUAL FUND( PLAYERS)SOLD BY OUR COMPANY:
The Indian mutual fund industry is mainly divided into three kinds of categories. These categories include
public sector players, nationalized banks and private sector and foreign players.UTI Mutual Fund
was one of the leading Mutual Fund companies in India till May 2006 with a corpus of more than
Rs.31, 000 Crore and it is the public sector mutual fund. Bank of Baroda, Punjab National Bank,
Can Bank and SBI are the major nationalized banks mutual fund. At present mutual fund
industry is mainly dominated by private and foreign sector players which include major players
17

like Prudential ICICI Mutual Fund, HDFC Mutual Fund, Reliance Mutual Fund etc. are private
sector mutual funds players while Franklin Templeton etc. are major foreign mutual fund players.
At present there are more than 33 players operating in Indian. The brief introduction of major
players is given as follows.


ABN AMRO Bank Mutual Fund

Birla Sun Life Mutual Fund



HSBC Mutual Fund

HDFC Mutual Fund



ING Vysya Mutual Fund

Prudential ICICI Mutual Fund



Sahara Mutual Fund

State Bank of India Mutual Fund



Tata Mutual Fund

Kotak Mahindra Mutual Fund



Reliance Mutual Fund

Standard Chartered Mutual Fund



Franklin Templeton India Mutual Fund

Morgan Stanley Mutual Fund



Escorts Mutual Fund

Benchmark Mutual Fund



Can bank Mutual Fund

Chola Mutual Fund



LIC Mutual Fund

GIC Mutual Fund

(C) RESEARCH METHODOLOGY

1. RESEARCH PROBLEM:
To know investor’s behavior regarding mutual fund as an investment avenue.
2. RESEARCH OBJECTIVES (PRIMARY) :
To know investor’s behavior regarding mutual fund as an investment avenue.
RESEARCH OBJECTIVES (SECONDARY)
o To identify the objectives of the investors for investing in a mutual fund.
o To identify the investment patterns of investors.
o To find out which scheme is better according to investors.
o

To study investors’ perceptions about level of satisfaction while investing in mutual funds.

3. RESEARCH PLAN :
· DATA SOURCE
We have used primary data source to collect the data regarding investors’ behavior for mutual fund as
an investment avenue. The survey was conducted across PANCHKULA CITY(HARYANA).
· RESEARCH APPROACH
Survey approach was under taken to know the behavior of investor regarding mutual fund as an
investment avenue.
· RESEARCH INSTRUMENT
Questionnaire was the instrument of collecting data

SAMPLING PLAN
Sample unit:
All the investors who are occasionally or regularly investing in financial assets and non-financial assets
Sample size:
Survey population comprises of the total reputed businessman, Professionals, and individual investor was
approx 70.
Sampling method:
In this study as suggested by the company a sample of reputed Businessman, Professionals, and individual
investor’s was selected and it was selected through non-probability, convenience sampling method.
Because all the Businessman, Professionals, and individual investor’s could not be interviewed as per our
requirement but according to their availability and accessibility we meet them.
Contact method
The total sample size for survey was 70 investors by personal interview

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4. SURVEY ANALYSIS AND INTERPRETATION :
GENDER
There are 19 females and 51males as respondents
Male

51

Female

19

Survey shows only 27 % of the female are interested in investments due to their working backgrounds or
high incomes from other resources etc.

Q1. what is your age?
21

AGE
PARTICULARS

NO.

20-30

39

30-40

10

40-50

7

50-60

9

60-ABOVE

5

TOTAL

70

From the above table we can say that awareness for investment in youngster has been increased &
that’s why out of 100, 46% are youngster who do investment and they come in the age group of
20-30, then comes age group of 30-40 from which 16% people do investment and other age group
are 40-50 where they do investment of 13%, 14%belongs to age group of 50-60 they do the
investment, and 11%belongs to the age group of60-above they do their investment. We can say
that youngsters are more careful for their investment.

Q2 .what is your profession?
PROFESSION
PARTICULARS
BUSINESS

NO.
5

JOB IN PRIVATE SECTOR

45

JOB IN PUBLIC SECTOR

17

OTHERS

18

TOTAL

70

Now 70 people doing investment out of which 51% people are from private sector, 21% are from public
sector, 9% are having their business and 19% are others which include retired people, housewives and
student. Reason for investment by all people was to secure the future and reason given by people doing
the job in private was their higher salary and unsecured job.

Q3 Do you invest in mutual fund ?
PARTICULARS
YES

65

NO

5

TOTAL

70

From70people62% of them are doing investment in mutual fund and 38% of them are not investing in
mutual fund but they do investment in other sectors for which information is given in the next question.

People who were not investing in mutual fund they do invest in sectors like insurance, equity
market, government schemes (includes banks, bonds &other scheme ), real estate, commodities
even people those who do invest in mutual fund they also invest in different sectors. Out of 70%,
44% people do invest in equity market, 37% invest in insurance, 8% in government scheme, 7%
do invest in real estate and 4% do invest in commodities. People do invest in equity market due to
higher returns available in it.
Q5. Rank the company according to your preference from top (1) to bottom (11)?
RANK THE MF FROM TOP 1 TO BOTTOM 11?
PARTICULARS
RELIANCE

NO
30

BIRLA

3

TATA

5

LOTUS

2

SBI

5

HDFC

5

ICICI

2

FRANKLIN TEMP.

3

SUNDARAM

2

UTI

2

BENCHMARK

1

NOT INVESTED

10

TOTAL

70

People who were investing in mutual fund had given the rank to different mutual fund companies on the
basis of what they think about that particular company and had given ranks to different companies. Here
in this data 38% people had given reliance as 1st rank and the second highest is HDFC where 10% people
has given it as 1st rank and the reasons behind giving 1st rank were their return, good credit in market and
tax saving benefit.
Q7. If you are investing in mutual fund then you invest in?
INVEST IN MF SCHEME WISE
PARTICULARS

NO.

OPEN ENDED SCHEME

30

CLOSE ENDED SCHEME

20

BOTH

5

NOT INVESTED

15

TOTAL

70

There are two scheme in mutual fund 1 is open ended and another is close ended scheme, in open ended
scheme after some time an investor can withdraw money at any time, while in close ended scheme the

investor can withdraw after a fixed period of time. Here 42% people invest in open ended scheme while
28% people invest in close ended scheme and 7% do invest in both open ended and close ended scheme.
Q8 .Do you take any reference while investing in mutual fund schemes if yes then from whom?
1.FINANCIAL ADVISOR
PARTICULARS
EXT. IMPORTANT

30

IMPORTANT

20

NEUTRAL

1

UNIMPORTANT

0

EXT.UNIMPORTANT

1

NOT. RESPONDED

18

TOTAL

70

In this question it was asked that do you take any reference before investing or during make any changes
in your investment, then 1st option was that how important is for you to take reference from financial
advisor then 43% says that it is ext important to take reference from financial advisor, 29% says

it’s

important to take advice from the financial advisor. People take reference from the financial advisor
because he had studied different schemes and he knows where to invest and not to invest.
2) BROKER
PARTICULARS
EXT. IMPORTANT

15

IMPORTANT

15

NEUTRAL

3

UNIMPORTANT

0

EXT.UNIMPORTANT

2

NOT. RESPONDED

35

TOTAL

70

11% people says its ext important to take advice from a broker because he knows about all the scheme
which are there in the market,11% says that it’s important to take advice from the broker, 2% are neutral
about it.
3) RELATIVES OR FRIEND

PARTICULARS
EXT. IMPORTANT

25

IMPORTANT

15

NEUTRAL

6

UNIMPORTANT

1

EXT.UNIMPORTANT

3

NOT. RESPONDED

20

TOTAL

70

Some people do take reference from their friends and relatives there are 50% people who say its ext
important to take reference from your friends and relatives, 18% thinks it’s important to take reference
and 6% are neutral and 1% says unimportant and 5% says ext unimportant to take any reference.

4) NEWSPAPER & MAGAZINE
PARTICULARS
EXT. IMPORTANT

20

IMPORTANT

10

NEUTRAL

4

UNIMPORTANT

1

EXT.UNIMPORTANT

10

NOT. RESPONDED

25

TOTAL

70

30

There are many people who take reference from news paper and magazines while investing in mutual
fund 26% people who take reference from newspaper and magazines and consider it ext important, while
26% says it’s important to take reference, while 21% are neutral and 11% and 11% are people who says
its unimportant and ext unimportant respectively to take reference.
5) CO. WEBSITE
PARTICULARS
EXT. IMPORTANT
IMPORTANT

3
10

NEUTRAL

2

UNIMPORTANT

5

EXT.UNIMPORTANT

10

NOT. RESPONDED

40

TOTAL

70

31

Here 7% people says they take the reference of respective co’s website while investing in mutual fund and
consider it as ext important and 7% say it’s important to take reference from co’ website and 50% people
are not responding to it.
6) AMFI WEBSITE
PARTICULARS
EXT. IMPORTANT

1

IMPORTANT

3

NEUTRAL

3

UNIMPORTANT

3

EXT.UNIMPORTANT

10

NOT. RESPONDED

50

TOTAL

70

1% people says that its ext important to take reference of AMFI website before investing in mutual fund,
2% say it’s important to take reference, 7% people says it’s ext unimportant and 50% people are not
responding.
Q9. Do you compare the returns or other benefits of mf schemes before investing?
ANNUAL REPORT CHECKING
PARTICULARS
YES

45

NO

5

NOT RESPONDED

20

TOTAL

70

It is necessary to compare the returns and other benefits because people do invest in for higher returns so
they compare with other companies also. Here 75% people compare the returns and other benefits of
mutual fund scheme before as well as after investing to see how their investment is spread over in
different segments.
Q10. which factors do you consider while investing in mutual fund?
1. SAFETY
PARTICULARS

NO

EXT. IMP.

36

IMPORTANT

10

NEUTRAL

3

UNIMPORTANT

1

EXT. UNIMP

0

NOT RESPONDED

20

TOTAL

70

Investors consider different factors before investment and for many reasons they invest in different
scheme of mutual fund. Here reason for investment is safety of their money and safety of their
future so 50% people consider it ext important, while 26% people says it’s important for their
investment.

Many people consider very important to invest in mutual fund to save tax or to take tax benefit.
Therefore 25% people consider it as ext important to invest in tax saving scheme while 23%
people consider it as important for investment,4% people are neutral about it, 0% and 1% consider
it as unimportant and ext unimportant. While 37% people are not responding to it. Most probably
every companies who are in mutual fund business have schemes for saving tax in these schemes
generally companies do invest in govt bonds and other govt. schemes.

2. RETURN EARNINGS
PARTICULARS
EXT. IMP.

NO
40

IMPORTANT

9

NEUTRAL

1

UNIMPORTANT

0

EXT. UNIMP

0

NOT RESPONDED

20

TOTAL

70

Generally people invest in mutual fund companies for higher returns with less risk as compare equity
market and could able to earn good returns.57% people agree that they do invest in mutual fund for higher
returns and consider it as ext important, 13% investors are considering it as important while 29% people
are not responding to it.
3. LIQUIDITY
PARTICULARS

NO

EXT. IMP.

40

IMPORTANT

10

NEUTRAL

3

UNIMPORTANT

0

EXT. UNIMP

0

NOT RESPONDED

17

TOTAL

70

Above graph reveals that majority of the investors means 57% are giving liquidity more emphasis because
by the way of open ended scheme they can any time liquid their position, 24% investors had given no
response about it while 15% of the investors are giving them least importance as compare to 57%
investors.
Q11. How do you monitor the following.
1. NAV
PARTICULARS

NO

MONTHLY

29

QUARTELY

3

HALF YEARLY

6

YEARLY

5

NEVER

2

NOT RESPONDED

25

TOTAL

70

NAV is the net asset value of your investment in units that comes of every week by this you can come to
know how much of your investment has been increased so it becomes necessary to monitor but period of
monitoring depends on investor. Here 41% of investor do monitor monthly, 3% of investors monitors
quarterly, 7% monitor half yearly, 9% monitor yearly,3% never monitor.

2. RISK FACTOR

PARTICULARS

NO

MONTHLY

13

QUARTELY

5

HALF YEARLY

8

YEARLY

26

NEVER

0

NOT RESPONDED

18

TOTAL

70

Risk factor is necessary to be monitor at certain time period though there is not much risk in investing in
mutual fund as compare to equity investment but monitoring is necessary to check the returns and see
that the managed properly. Here 13% of investors monitor it monthly, 6% of investors monitor it
quarterly, 9% do half early yearly and 50% do monitor yearly. Risk factor is monitored before investment
also to check the scheme and to see its performance.
3. PORTFOLIO OF
40

SECURITIES
PARTICULARS

NO

MONTHLY

5

QUARTELY

2

HALF YEARLY

5

YEARLY
NEVER

35
5

NOT RESPONDED

18

TOTAL

70

Portfolio for securities means where the co invest in different sectors as it is decided in advance so after
making decision the AMC invest accordingly and it is been monitored proper time period as required, 3%
of investor do monitor monthly, 2% of investor monitor quarterly, 4% do half yearly, most probably 50%
of investors monitor it yearly and 4% never monitor. Investor check out portfolio to see where their
money is being invested.

4. PROFILE OF FUND
MANAGER
PARTICULARS

NO.

MONTHLY

3

QUARTELY

0

HALF YEARLY

5

YEARLY

12

NEVER

20

NOT RESPONDED

30

TOTAL

70

Fund manager is the person who manage the fund of investor who had invested their money in their
company it is necessary that the fund manager should be qualified enough to manager the fund of the
investor because if he fails to manage the fund the investors money is not secure. So 2% investors monitor
profile,14% do yearly and 21% never monitor the profile. Generally investors monitor’s the profile before
investing.
Q12. Are the following information relevant to analyze the performance of your investment.
1.MONTHLY RESULT
PARTICULARS
EXT. RELEVANT

NO
10

RELEVANT

5

NEUTRAL

8

IRREVENT

11

EXT.IRRELEVANT

6

NOT RESPONDED

30

TOTAL

70

Results are showing the performance of that particular scheme and it is necessary to monitor the
performance of the scheme by this we can analyze the position of our investment. For that investor do the
monitoring 8% of investor consider monthly result ext relevant to monitor the performance of scheme,
6% consider it relevant, 6% are neutral, 4% consider it as irrelevant and 4% consider it as ext irrelevant.
2.QUARTELY RESULT
PARTICULARS

NO.

EXT. RELEVANT

8

RELEVANT

8

NEUTRAL

10

IRREVENT

9

EXT.IRRELEVANT

8

NOT RESPONDED

27

TOTAL

70

For that investor do the monitoring 6% of investor consider quarterly result ext relevant to monitor the
performance of scheme, 6% consider it relevant, 19% are neutral, 7% consider it as irrelevant and 6%
consider it as ext irrelevant.
3.HALF YEARLY
PARTICULARS

NO.

EXT. RELEVANT

7

RELEVANT

9

NEUTRAL

21

IRREVENT

3

EXT.IRRELEVANT

3

NOT RESPONDED

27

TOTAL

70

For that investor do the monitoring 7% of investor consider half yearly result ext relevant to monitor the
performance of scheme,15% consider it relevant, 19% are neutral, 2% consider it as irrelevant and 2%
consider it as ext irrelevant.
4.ANNUALY
PARTICULARS
EXT. RELEVANT

NO
40

RELEVANT

3

NEUTRAL

4

IRREVENT

3

EXT.IRRELEVANT

0

NOT RESPONDED

20

TOTAL

70

For that investor do the monitoring 50% of investor consider annually result ext relevant to monitor the
performance of scheme, 2% consider it relevant, 3% are neutral, 2% consider it as irrelevant and 0%
consider it as ext irrelevant. Because annual result contains each and every information regarding the
performance of the AMC the investments and the portfolio of where the co has invested so all the
investors monitors the annual report.

5.NEWSPAPER
PARTICULARS

NO.

EXT. RELEVANT

33

RELEVANT

7

NEUTRAL

6

IRREVENT

0

EXT.IRRELEVANT

2

NOT RESPONDED

22

TOTAL

70

NEWSPAPER
EXT. RELEVANT

RELEVANT

NEUTRAL

IRREVENT

EXT.IRRELEVANT

NOTRESPONDED

For

that

investor

do

the
monitoring

24%

50%
50%

5%
4%
16%

1% 0%

of

investor
consider
newspaper
ext relevant to
monitor

the

performance of scheme,16% consider it relevant, 5% are neutral, 0% considers it as irrelevant and 4%
consider it as ext irrelevant. Some investors consider newspaper more relevant to get the information of
several reports.
6.AMFI WEBSITE
PARTICULARS
EXT. RELEVANT

NO
4

RELEVANT

20

NEUTRAL

6

IRREVENT

2

EXT.IRRELEVANT

9

NOT RESPONDED

30

TOTAL

70

For that investor do the monitoring 4% of investor consider AMFI website ext relevant to monitor the
performance of scheme, 21% consider it relevant, 6% are neutral, 14% considers it as irrelevant and 2%
consider it as ext irrelevant. Some investors consider AMFI website relevant to get the information of
several reports and the position of that particular AMC and that particular scheme.
7.CO. WEBSITE
PARTICULARS
EXT. RELEVANT

NO.
4

RELEVANT

25

NEUTRAL

5

IRREVENT

2

EXT.IRRELEVANT

4

NOT RESPONDED

30

TOTAL

70

For that investor do the monitoring 3% of investor consider co. website ext relevant to monitor the
performance of scheme, 21% consider it relevant, 18% are neutral, 1% considers it as irrelevant and 3%
consider it as ext irrelevant. Some investors consider co. website relevant to get the information of several
reports and the position of that particular AMC and that particular scheme.
Q13. Do you check out the annual reports of your scheme to evaluate the performance of your
scheme?
ANNUAL REPORT CHECKING
PARTICULARS
YES

45

NO

10
50

NOT RESPONDED

15

TOTAL

70

In the annual report of the scheme all the information of that particular scheme are given information
about the performance of the scheme, position of the scheme in the market, portfolio of the scheme that
where the investment has been done under this scheme, profile of the fund manager is also given by this
the investors can come to know the position and qualification of the fund manager. So most of the
investors are monitoring the annual report.64% of the investor do monitor the annual report of the
scheme, 22% do not monitor the annual report.

51

Q14. Objectives for investment in mutual fund schemes (rank them from 1most preferred to 4 least
preferred).
OBJECTIVE FOR INVESTMENT
PARTICUL

RANK 1

RANK 2

RANK 3

RANK 5

TOTAL

ARS
RETURN

40

20

15

5

80

/DIVIDEND
APRICIATI

34

32

8

6

80

ON
TAX

5

16

34

25

80

LIQUIDITY

1

12

23

44

80

TOTAL

80

80

80

80

Here in this question the investors have ranked the factors on the basis of their objectives that for what
reason they had invested in that particular scheme. 44% of investors had given return/dividend 1st rank
because every investor want benefits for the risk they had taken by investing in that scheme, 30% of
investors had given appreciation 1st rank because they want something more including their invested

amount.5% of investor has given tax saving as 1st rank because while investing in some particular scheme
their amount invested is appreciated as well as they get the tax benefit,1% has given 1 st rank to liquidity
because they can withdraw their investment at any time in open ended scheme.
Q15 .In which MF schemes are you interested to invest or investing?
SCHEME INTEREST TO INVEST
PARTICULARS
LARGE CAP

39

MID CAP

26

SMALL CAP

21

SECTORIAL FUND

16

BALANCE FUND

35

BOND FUND

2

INCOME FUND

12

GILT SCHEME

8

ELSS

23

ETF (GOLD)

12

ASIAN EQUITY FUND
TOTAL

5
199

These are few schemes where the investors invest the schemes in which more no of investors invest are
large cap where the return is tremendous but risk is also more, balance fund in which investment is done
in equity and debt where risk is somewhat less then large cap and return is also less, then comes mid cap
and small cap where risk is there but can get good return, then investment is done in equity linked saving
scheme.
5. LIMITATION OF THE STUDY:
Every research has its own limitation and present research work is no exception to this general rule the
inherent limitation of the study are as under:
Interview method, which was followed in the present research work, is relatively more time consuming.
In addition to this it is very expensive method, especially when spread geographic sample is taken. ·
Questionnaire method can be used only when respondents are literate and co-operative. · Sample size
was 100 that are not enough to study the awareness of Independent individuals. · As sampling
techniques is convenient sampling so it may result in personal bias. Even respondent give bias answers.
Time is main constraint of the research as we have been given project as well as study simultaneously.
6. FINDINGS AND RECOMMENDATIONS :





From the above analysis, I found that even though certainly not the best or deepest of markets in the
world, it has ignited the growth rate in mutual fund industry to provide reasonable options for an
ordinary man to invest his savings.
With the help of –


Give more importance to safety and return attributes because Independent Financial Advisors are
more concern about safety and of giving more benefit of the investments to their clients.



Independent Financial Advisors who are not suggesting their clients to invest in mutual funds due to
their lack of knowledge of mutual funds. So, NJ India Invest should arrange mutual fund awareness
Program of their and other independent Financial Advisors on regular basis.



By providing better service NJ India Invest should try to attract the Independent Financial
Advisors to join with them.



NJ India Invest should arrange special mutual fund awareness program for general public. So
they can directly work with NJ India Invest as direct client.



Majority of the Government employees take into consideration tax benefits before making
any investment. So NJ India Invest should highlight tax benefits in mutual funds.



NJ India Invest should launch its brand awareness campaign to be successful in Mutual fund
advisory service provider
o

NJ India invest should also concentrate on youngster who are interested in savings so make
them aware about different schemes for investment and arrange seminars for college going
students, by this company gets more customers connected for long period.

o

Put hoardings outside the colleges making NJ INDIA known to them and try to attract them.

Key Findings: Around 50% of the investors invest to maximize their returns and they are ready to take moderate risks in
their investment portfolio.
Most of the investors give importance to the fact that their investment should grow in value over a
period of time.

55

Growth scheme is the most preferred for investment
Knowledge about mutual funds and their various schemes is moderate among investors.
It is necessary to make Mutual Fund more popular in the eyes of investors as well as distributors and also
cater trust which has been lost due to US-64.


Most of the investors give importance to return, tax saving etc.

Objectives of the investor are to get something in return for their investment and the risk they are taking.
Here the objective of the investor between the age of 20-30 is to earn the higher return.
While the age group above 30years concentrates on safety and tax saving and they even take care of the
liquidity.

ANNEXURE

QUESTIONNAIRE
Q1 .what is your age?

1)

20-30

(

)

2)

30-40

(

)

3)

40-50

(

)

4)

50-60

(

)

5)

60-above

(

)

Q2. what is your profession?
1)

Business

(

)

2)

Job in private sector

(

)

3)

Job in public sector

(

)

4)

others

(

)

(

)

Q3. Do you invest in mutual fund?

1)

Yes

(

)

(2)

No

Q4 .If you are not investing in mutual fund then where do you invest (in proportion)?
1)

Insurance

(

)

2)

Equity market

(

)

3)

Government schemes

(

)

4)

Real

estate

(

)

5)

Commodities

(

)

Q5 .Rank the company according to your preference from top (1) to bottom (11)?
1)

Reliance

(

)

2)

11)

Birla

(

)

3)

Tata

(

)

4)

Lotus

(

)

5)

SBI

(

)

6)

HDFC

(

)

7)

ICICI

(

)

8)

Franklin Templeton

(

)

9)

Sundaram

(

)

10)

UTI

(

)

Benchmark (

) Q6. If

you give 1st rank to the company then why?

Q7. If you are investing in mutual fund then you invest in
1)

Open ended scheme

(

)

2)

Close ended scheme

(

)

Q8. Do you take any reference while investing in mutual fund schemes if yes then from whom?

SCALE
1. FINANCIAL
ADVISOR
2.BROKER
3.RELATIVES
&FRIENDS
4.NEWSPAPERS&
MAGAZINES
5.COMPANY’S
WEBSITE

EXTREMELY
IMPORTANT

IMPORTANT

NEUTRAL

UNIMPORTANT

EXTREMELY
UNIMPORTANT

6.AMFI WEBSITE
Q9. Do you compare the returns or other benefits of MF schemes before investing?

1)

Yes

(

)

(2)

NO

(

)

Q10. which factors do you consider while investing in mutual fund?

SCALE

EXTREMELY

IMPORTANT

IMPORTANT

NEUTRAL

UNIMPORTANT

EXTREMELY
UNIMPORTANT

1.SAFETY
2.TAX SAVING
3.RETURN
EARNING
4.LIQUIDITY
Q11. Objectives for investment in mutual fund schemes (rank them from 1most preferred to 4 least preferred),
Rank
1) Return/Dividend
2) Appreciation
3) Tax
4) Liquidity
Q12. Do you check out the annual reports of your scheme to evaluate the performance of your scheme?
1)

Yes

(

)

2)

No

(

)

Q13. How do you monitor the following,

SCALE

MONTHLY

QUARTERLY

HALF YEARLY

YEARLY

NEVER

1. NAV

2. RISK
FACTOR
3 .PORTFOLIO
OF SECURITIES
4. PROFILE OF
FUND
MANAGER

Q13. Are the following information relevant to analyze the performance of your investment.

SCALE

EXTREMELY

RELEVANT

NEUTRAL

RELEVANT

IRRELEVANT

EXTREMELY
IRRELEVANT

1.MONTHLY
RESULT
2.QUARTERLY
RESULT
3.HALF YEARLY

4.ANNUAL
RESULT
5.NEWSPAPER

6.AMFI WEBSITE

7.WEBSITE OF
RESPECTIVE
MF

Q13. Do you check out the annual reports of your scheme to evaluate the performance of your scheme?
3)

Yes

(

)

4)

No

(

)

60

Q14 .Objectives for investment in mutual fund schemes (rank them from 1most preferred to 4 least preferred),
Rank
Return/Dividend
Appreciation
Tax
Liquidity

-

Q15. In which mf scheme are you interested to invest?
1) large cap shares

(

)

(2) Mid cap shares

(

)

3) Small cap share

(

)

(4) Sectorial funds scheme

(

)

5) Balance fund

(

)

(6) Bond funds scheme

(

)

7) Income fund scheme

(

)

(8) Gilt scheme

(

)

9) ELSS

(

)

(10) ETF (gold)

(

)

(

)

11) Asian equity funds

Name: -

Mobile No:-

61

Address:-

BIBLIOGRAPHY
WEBSITES
www.wikepidia.org
www.wikipedia.com
www.amfi.com
www.sbimutualfund.com
www.mutualfund.org
www.nse.com
www.bse.com
62

www.moneycontrol.com
www.amfiindia.com
websites of various banks

BOOKS & REFERENCES
1.Preparatory Books For AMFI Exam ;NJ Investment India Pvt. Ltd. Edition JUNE09
2.Anjan Chakrabarti and Harsh Rungta, 2000, “Mutual Funds Industry in India :An in-depth look into
the problems of credibility, Risk and Brand” ,The ICFAI Journal of Applied Finance, Vol.6, No.2, April,
27-45.
3.Customer Orientation in Designing Mutual Fund Products, -An Analytical Approach to Indian Market
Preferences, Dr Tapan K Panda, Faculty Member, Indian Institute of Management, Lucknow.

4. Review Of Marketing Research, Volume 5: K. Naresh Malhotra: