A Summer Internship Project On

“An analysis of Overall satisfaction of mutual fund investors in Mumbai.”

Submitted for the partial fulfillment of the requirement of the degree of

MASTER’S OF MANAGEMENT STUDIES OF

(UNIVERSITY OF MUMBAI)

SUBMITTED BY
AKSHAY MAHADEV KEER
Roll No. – 54

UNDER THE GUIDANCE OF

PROFESSOR
AGNES JOSEPH

2022 - 2023

Specialization:
FINANCE

Submitted to

SASMIRA’S INSTITUTE OF MANAGEMENT STUDIES AND

RESEARCH, SASMIRA MARG, WORLI, MUMBAI. JULY 2022

1
 DECLARATION BY THE CANDIDATE

I hereby certify that the work which is being presented in this Summer Internship Project
entitled “An analysis of Overall satisfaction of mutual fund investors in Mumbai.” in
partial fulfilment of the requirement for the award of the Degree of Master of Management
Studies, University of Mumbai and submitted to the Sasmira’s Institute of Management
Studies and Research, Worli, Mumbai, is an authentic record of my own work carried out
during a period from May, 2022 till July, 2022 under the guidance of Prof. Agnes Joseph.

The matter presented in this project report has not been submitted by me for the award of
any other degree of this or any other Institute.

Wherever references have been made to intellectual properties of any individual /Institution
/Government /Private /Public Bodies /Universities, research paper, textbooks, reference
books, research monographs, archives of newspapers, corporate, individuals, business
/Government and any other source of intellectual properties viz., speeches, quotations,
conference proceedings, extracts from the website, working paper, seminal work, they have
been clearly indicated, duly acknowledged and included in the Bibliography.

Name of the student: AKSHAY MAHADEV KEER

Signature of the student:

This is to certify that the above statement made by the candidates is correct to the best of
our knowledge.

Signature of Guide: __________________

Name of Guide: Prof. Agnes Joseph

2
 CERTIFICATE BY THE GUIDE

This is to certify that Mr. Akshay Mahadev Keer of the two-year full-time Master's Degree
Programme in Management Studies (MMS), (Finance), Roll No. 54 has carried out the
work on the Summer Internship Project titled “An analysis of Overall satisfaction of
mutual fund investors in Mumbai.” under my guidance in partial fulfilment of
requirement for the completion of MMS as prescribed by the University of Mumbai.

This Summer Internship Project Report is the record of authentic work carried out by her
during the period from May 2022 to July 2022.

Place: MUMBAI

Date:

Signature of Guide: _____________________

Name of Guide: Prof. Agnes Joseph

3
 ACKNOWLEDGEMENT

Firstly, I would like to express our immense gratitude towards our institution Sasmira’s
Institute of Management Studies and Research, Worli, Mumbai, which provided a great
platform to attain profound technical skills in the field of MBA, thereby fulfilling our goal.
I would thank Prof. Agnes Joseph Madam, to guide me in my internal Project whose
guidance and suggestion made this project possible. I am extremely thankful to her for her
support. She has encouraged me and channelized my enthusiasm effectively.
I sincerely express my gratitude to our Institute Director Dr. TANDON KAMAL Sir
Education and Dean Dr. RUPALI MORE Madam and for their inspiration and timely
support in successful completion of my project work.
I would like to thank all the professors and the staff of Sasmira Institute Especially Library
Staff who were very helpful in proving books and articles I needed for my projects.
I convey my thanks to my beloved parents, friends and my faculty who helped me directly
or indirectly in bringing this project successfully.

AKSHAY MAHADEV KEER

4
 EXECUTIVE SUMMARY

Mutual funds have become a tool to ensure a person's financial situation.

Mutual funds not only help India's development, but also help families bring
success of Indian industry. As awareness increase, more people benefit from
investing in mutual funds.
It is a trust that collects money from a number of investors who share a common
investment objective and invests the same in equities, bonds, money market
instruments and/or other securities. And the income / gains generated from this
collective investment is distributed proportionately amongst the investors after
deducting applicable expenses and levies, by calculating a scheme’s “Net Asset
Value” or NAV. Simply put, the money pooled in by a large number of
investors is what makes up a Mutual Fund.
A mutual fund is a professionally managed investment fund that pools money
from many investors to purchase securities. The term is typically used in
the United States, Canada, and India, while similar structures across the globe
include the SICAV in Europe (investment company with variable capital')
and open-ended investment company (OEIC) in the UK.

5
 CONTENTS
CHAPTER DETAILS PAGE
NO. NO.
Candidate’s Declaration 2
Certificate by the Guide 3
Acknowledgement 4
Executive summary 5
List of Table
List of Chart

1 Chapter 1 : Introduction 7-28

1.1 Background 7-14
1.2 Importance of Mutual Funds 15
1.3 Problems of the Statements 15-26
1.4 Needs of the Study 27
1.5 Scope of the Study 27
1.6 Significance of the Study 28
1.7 Objectives of the Study 28

2 Chapter 2
2.1 Review of Literature 29-33

3 Chapter 3 : Research Methodology 34-36

3.1 Research Design 34
3.2 Sampling Design 35
3.3 Sources of Data Collection 35-36

4 Chapter 4
Data Analysis & Interpretation 37-56

5 Chapter 5 57-58
5.1 Conclusion 57
5.2 Suggestions 57
5.3 Limitations of the Study 58
Bibliography 59-60
Annexure - Questionnaire 61-64
Annexure – Certificate by the company 65

6
 CHAPTER I
INTRODUCTION
1.1 BACKGROUND
There are a lot of investment avenues available today in the financial market for an investor
with an investable surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds
where there is low risk but low return. He may invest in Stock of companies where the risk is
high and the returns are also proportionately high. The recent trends in the Stock Market have
shown that an average retail investor always lost with periodic bearish tends. People began
opting for portfolio managers with expertise in stock markets who would invest on their
behalf. Thus we had wealth management services provided by many institutions. However
they proved too costly for a small investor. These investors have found a good shelter with
the mutual funds.

➢ 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. 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 the
members. 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.

The objective sought to be achieved by Mutual Fund is to provide an opportunity for lower
income groups to acquire without much difficulty financial assets. They cater mainly to the
needs of the individual investor whose means are small and to manage investors portfolio in a
manner that provides a regular income, growth, safety, liquidity and diversification
opportunities.

➢ DEFINITION:

“Mutual funds are collective savings and investment vehicles where savings of small
(or sometimes big) investors are pooled together to invest for their mutual benefit and returns
distributed proportionately”.

“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”.

7
 ➢ HISTORY OF MUTUAL FUNDS IN INDIA
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at
the initiative of the Government of India and Reserve Bank. The history of mutual funds in
India can be broadly divided into four distinct phases

• FIRST PHASE – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set
up by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end
of 1988 UTI hadRs.6,700 crores of assets under management.

• SECOND PHASE – 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of
India(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug89),
Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund
(Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund
inDecember1990. At the end of 1993, the mutual fund industry had assets under management
of Rs.47, 004crores.

• THIRD PHASE – 1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS)

With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now
merged with Franklin Templeton) was the first private sector mutual fund registered in July
1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions
under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on
increasing, with many foreign mutual funds setting up funds in India and also the industry has
witnessed several mergers and acquisitions. As at the end of January 2003, there were 33
mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541
crores of assets under management was way ahead of other mutual funds.

8
• FOURTH PHASE – SINCE FEBRUARY 2003:
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29,835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other schemes.
The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of the
Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation
of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under
management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector funds,
the mutual fund industry has entered its current phase of consolidation and growth. As at the
end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores
under 421 schemes.

➢ 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.
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
continue investing 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 where
about 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.

9
The securities and Exchange Board of India (SEBI) came out with comprehensive regulation
in 1993 which defined the structure of Mutual Fund and Asset Management 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 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.
➢ REGULATORY BODY FOR MUTUAL FUNDS
Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual funds
mentioned above. All the mutual funds must get registered with SEBI. The only exception is
the UTI, since it is a corporation formed under a separate Act of Parliament.
Broad Guidelines Issued by SEBI for a MF:-
SEBI is the regulatory authority of Mutual Funds. SEBI has the following broad guidelines
pertaining to mutual funds:
✓ Mutual Funds should be formed as a Trust under Indian Trust Act and should be operated
by Asset Management Companies (AMCs).

✓ Mutual Funds need to set up a Board of Trustees and Trustee Companies. They should
also have their Board of Directors.

✓ The net worth of the AMCs should be at least Rs.5 crore.

✓ AMCs and Trustees of a Mutual Fund should be two separate and distinct legal entities.

✓ The AMC or any of its companies cannot act as managers for any other fund.

✓ AMCs have to get the approval of SEBI for its Articles and Memorandum of Association.
10
✓ All Mutual Funds schemes should be registered with SEBI.

✓ Mutual Funds should distribute minimum of 90% of their profits among the investors.

ACCORDING TO AMFI
The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian
Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain
standards in all areas with a view to protecting and promoting the interests of mutual funds
and their unit holders.
AMFI, the association of all the Asset Management Companies of SEBI registered mutual
funds in India, was incorporated on August 22, 1995, as a non-profit organisation. As of now,
42 Asset Management Companies that are registered with SEBI, are its members.
The apex regulatory body for registered mutual fund companies, it is the money pooled in by
a large number of investors what makes up a Mutual Fund. This money is then managed by a
professionally skilled manager, who uses his investment management skills to invest it in
various financial instruments. An investor owns units, which basically represent the portion
of the fund he/she holds, based on the amount invested by him/her. Therefore, an investor can
also be known as a unit holder. The increase in value of the investments along with other
incomes earned from it is then passed on to the investors / unit holders in proportion with the
number of units owned after deducting applicable expenses, load and taxes.

➢ ROLE OF A FUND MANAGER

Fund managers are responsible for implementing a consistent investment strategy that reflects
the goals and objectives of the fund. Normally, fund managers monitor market and economic
trends and analyse securities in order to make informed investment decisions. Thus the role
of fund manager is very crucial.

ACCOUNT STATEMENT

When the units are bought or get allotted a statement will be issued mentioning the number of
units allotted/bought and redeemed by you. The recording of entries would be similar to the
passbook entries in the bank. In mutual fund terminology it is called Account Statement.

After investing in a mutual fund investor gets an account statement, which shows his holding
and the price at which bought units. The account statement is computer generated and cannot
be traded or transferred. The account statement shows the: -⚫S holding details

✓ holding details

✓ the number of units outstanding

✓ value of the holdings

All transactions relating to purchase units, redemption of units, dividend, reinvestment, etc.
are shown in the account statement.

11
 ➢ INTRODUCTION OF THE COMPANY

Figure 1.1 - Company Logo

A HEALTHY WAY TO FAMILY WEALTH

Monetonic Financial Services Pvt. Ltd. is an investment distribution firm established with an
objective of helping investors reach their destination and aspirations by leveraging on
financial technology. With our experience of serving clients for over 20 years, we have
acquired the goodwill of an ever growing number of investors.

Mission
Our primary mission is to help investors with the best customer experience by providing
latest technology based services.

Vision
Monetonic’s vision is to be acknowledged as a leading distribution firm that is a “Single
Window” provider that caters all the financial needs of individuals and corporates. Employee
Tagline “We at MONETONIC Protect, Explore & Inspire everyone associated with us”

Employee’s Tagline
“We at MONETONIC Protect, Explore & Inspire everyone associated with us”

12
 ➢ INTRODUCTION OF THE TOPIC
A mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that
collects money from a number of investors who share a common investment objective and
invests the same in equities, bonds, money market instruments and/or other securities. And
the income / gains generated from this collective investment is distributed proportionately
amongst the investors after deducting applicable expenses and levies, by calculating a
scheme’s “Net Asset Value” or NAV. Simply put, the money pooled in by a large number of
investors is what makes up a Mutual Fund.
Mutual fund is a collective investment vehicle that collects & pools money from a
number of investors and invests the same in equities, bonds, government securities, money
market instruments.
• HOW A MUTUAL FUND WORKS?
One should avoid the temptation to review the fund's performance each time the market falls
or jumps up significantly. For an actively-managed equity scheme, one must have patience
and allow reasonable time - between 18 and 24 months - for the fund to generate returns in
the portfolio.
When you invest in a mutual fund, you are pooling your money with many other investors.
Mutual fund issues “Units” against the amount invested at the prevailing NAV. Returns from
a mutual fund may include income distributions to investors out of dividends, interest, capital
gains or other income earned by the mutual fund. You can also have capital gains (or losses)
if you sell the mutual fund units for more (or less) than the amount you invested.
• WHY INVEST IN MUTUAL FUNDS?
As investment goals vary from person to person – post-retirement expenses, money for
children’s education or marriage, house purchase, etc. – the investment products required to
achieve these goals too vary. Mutual funds provide certain distinct advantages over investing
in individual securities. Mutual funds offer multiple choices for investment across equity
shares, corporate bonds, government securities, and money market instruments, providing an
excellent avenue for retail investors to participate and benefit from the uptrends in capital
markets. The main advantages are that you can invest in a variety of securities for a relatively
low cost and leave the investment decisions to a professional managers.

13
 Figure 1.2 - How a mutual fund works?
The Systematic Methods of Mutual Funds

Systematic investment plan (SIP), systematic transfer plan (STP) and systematic withdrawal
plan (SWP) are methods of systematic investing and withdrawal, each serving a different
purpose.

• Systematic investment plan (SIP)

An SIP allows you to invest small amounts of money over time to build a corpus. By
spreading out investments over a period of time, they help investors average their
purchase cost. This prevents you from committing all your money at a market peak, and
hence maximises returns. SIPs also bring discipline to investing and make investing a
habit.

The frequency of SIPs can vary - you can do a monthly, weekly or daily SIP. Also, there
are various types of SIPs. For instance, a value SIP changes your SIP amount based on
the expensiveness of the market. Though having this option sounds good, tinkering with
the basic idea of an SIP only makes it unnecessarily complex. You are better off sticking
to an ordinary SIP, preferably on a monthly basis.

SIPs have limited use in debt schemes as they are not as volatile or risky as equity
schemes.

• Systematic transfer plan (STP)

Generally, one opts for an STP when there is a lump sum to invest. Like a SIP, an STP
helps spread out investments over a period of time to average the purchase cost and rule
out the risk of getting into the market at its peak. However, with an STP, you invest a
lump sum in one scheme (mostly a debt scheme) and transfer a fixed amount from this
scheme regularly to another scheme (mostly an equity scheme).

The basic idea behind an STP is to earn a little extra on the lump sum while it is being
deployed in equity, since debt funds provide better returns than a normal savings bank
account.

Depending on the lump-sum amount, the investor can decide the period over which he
wants to deploy the money in the market. Typically, the larger the amount, the longer the
time period.
An STP can be done from an equity fund to a debt fund as well. If you are saving for an
important goal like your child's education, buying a home or retirement and you are
nearing your goal, don't wait till the target date. Begin moving your money from equity to
debt well before the time when you will need the money.

• Systematic withdrawal plan (SWP)

An SWP allows you to withdraw a specific sum of money from a fund at regular
intervals. Such a system is particularly suited to retirees, who are typically looking for a
fixed flow of income. SWPs provide the investor with a certain level of protection from
market instability and help avoid timing the market.

14
1.2 IMPORTANCE OF MUTUAL FUNDS

Mutual Funds are creating a different type of securities and investment under one umbrella.
With the one pool of money banks, you can enjoy by investing in hundreds of various
securities like equities, bonds, securities, commodities, etc. The price of every unit of mutual
funds will be adjustable according to the market fluctuation. Every people want to save an
income and tries to double up the amount. Mutual funds and their schemes fulfil an investor's
demand. It is more convenient for investors.
Every individual thinks to save their money and double their money. Mutual Fund Company
will guide an investor to attain their objectives. It provides various financial sectors,
strategies, instruments for investors as well as organizations to invest in a stock, bonds, or
any other assets to reduce the risk or increase the return. Imagine with one simple purchase
you can gain by investing in different securities which will reduce the risk as well as save
your investment. The price of mutual funds will reflect market prices and adjust with the
expenses and management fees. There are several investors with different mentality some
people need the highest return and ready to bear any risk and contradictory some investors
prefer to be safe and steady and want to save their money for future needs. Funds like equity
funds and growth funds are appropriate to aggressive investors while a conservative investor
can move for balanced funds seeking both income and capital gain. According to investors'
income, a mutual fund manager will help to find out a great plan with a maturity period
schemes date of deposit for a better outcome.
Another importance of mutual funds it is easy to buy and sell the securities. When an investor
knows that the investment sector is falling, he can immediately execute his strategy. There is
no restriction or obligation for buying and selling an instrument.

1.3 PROBLEMS OF THE STATEMENTS

Mutual funds industry in India has emerged jointly of the most important constituents of Indian
economic system. It’s completed over 45 years of its presence. During this short period, it grew fast
and also suffered from equally fast decline. It became sick in its early life. It’s witnessed noticeable
structural transformation, quantitative growth, qualitative and quantitative decline and maybe the
revival, which can put the industry back on the right track.

The foremost weaknesses and problems of the Indian mutual funds industry are examined below:
o Low Level of Awareness: the notice of investors determines the success of mutual funds
industry. In India, low investors awareness/ information level and financial literacy are causing
biggest threats to mutual funds industry in channelizing the household savings into mutual
funds. The bulk of recent investors don't understand the concept, operations and advantages of
investment in mutual funds. The shortage of understanding about open-end fund products is
more pervasive in semi-urban and rural areas. Majority of individuals in these areas find it
difficult to differentiate between mutual funds and direct exchange investments.

o Regulatory Problems: a powerful regulatory framework is that the key to success for any
business environment and then is that the case for Indian mutual funds industry. The extent of
competition in the industry has continuously been mounting. So, it has to perform a more
dynamic and vibrant role to satisfy the tests of time. We've observed some areas in investment
firm regulations which are to be addressed soon so to make it more competitive and transparent.

o Improper Investment Policy Disclosure: Mutual funds are stipulated to possess investment
policy in written form. Investment policy links the investment objective of a fund, to a fund
manager’s daily working strategy. The efficacy of the investment policy depends on the clarity

15
 of visions with which it's executed or achieved. Investment company schemes have followed
tough and vague language in writing their investment policies. These are written during a
manner that the investor may get confused. Also, the investment objectives of schemes are
found descriptive in nature and it's difficult to draw the generalizations out of them. The
portfolio turnover rates of last five years of the schemes also are not mentioned in the offer
documents.

o Low Participation and Penetration: Low retail participation is the biggest challenge posed
before the Indian mutual funds industry regardless the provision of favourable retail
environment and ample growth opportunities in the Indian economy. This is often due to the
mind-set of current investment managers who think institutional money because the easiest
route of getting a giant slice of cake in one goes. The supply of tax arbitrage and enormous
ticket volume to corporates on investing in securities industry mutual funds and therefore the
easy accessibility of institutional investors in Tier I cities appear to be important factors
accountable for this phenomenon. The main focus on retail segment requires significant
distribution capabilities, wide network and intense foot prints. It’s noteworthy that Asset
Management Companies (AMCs) have recently begun to target these aspects

➢ TYPES OF MUTUAL FUND SCHEMES IN INIDA

Mutual funds are a collective investment scheme. There are different types of mutual funds
from every major business fund house.

Types of mutual fund schemes based on the maturity period are as follows
1) Open- Ended Schemes
2) Close-Ended Schemes
3) Interval Fund

Figure 1.3 – Types of Mutual Funds

16
1) Open Ended Funds
Mutual Funds can be categorized based on their structure into three types open-ended, closed-
ended, and interval funds. Of these, open ended mutual funds are the most common and
popular among investors. Here, we will explore Open Ended Mutual Funds and talk about the
different types of open ended funds in India along with their benefits and a lot more.
It is safe to say that when people say mutual funds, they mean open ended mutual funds.
Unlike their closed ended counterparts, the units of open ended funds are not traded on the
stock exchange. Further, there is no limit on the number of units that the fund can issue.
Investors can purchase or redeem units from the fund house on any working day at the
existing Net Asset Value or NAV of the scheme. The NAV is determined by the performance
of the underlying securities of the fund. These schemes do not have a maturity period.

Advantages of Open Ended Mutual Funds

• Highly Liquid
• Performance over different market cycles
• Availability of SIP
Disadvantages of Open Ended Mutual Funds

• High volatility
• Gets affected
• No scope to share opinion

1. Equity mutual funds: Equity mutual funds are funds which collect funds from investors
and make long term investments in equity/stocks. While in short term they can be risky,
equity mutual funds give the best possible returns in long term. Most of the funds known
to Indian investor community belong to equity mutual funds. They can be further
classified based on their operation/benefits:

a. Diversified equity – They predominantly invest in stocks from different size of

companies from different sectors. They are good because they give diversification of
underlying assets held by the fund. They invest in wide range of stocks -from small
market-cap stocks like Nucleus Software to ultra-large companies like Reliance, ITC
etc., HDFC Top200 fund, IDFC Premier Equity fund all belong to this category of
Diversified Equity funds.

b. Index mutual funds – Index mutual funds are for the conservative investors. They
have the risk of stock markets alone. As the name indicates, they invest in the entire
capitalization of the index. Most of the time, Index funds are passively managed i.e.,
there is no constant buying and selling. This translates to low fund management
charges and peace of mind for investor. If you’re sceptical about abilities of all fund
managers, then get yourself an Index fund.

c. Sectoral/Thematic funds– Sectoral funds typically invest in one sector. There are
variety of sectoral funds like Banking, IT, Infrastructure, Commodities etc., Sectoral
17
 funds carry higher risk-reward ratio compared to Index or diversified funds. They
become popular during boom periods. Remember the boom of 2006-07 when every
fund house was selling Infrastructure funds as the next big thing? Try to stay away
from sector funds if you’re a low risk investor.

2. Income or Debt oriented Schemes: The aim of income funds is to provide regular and
steady income to investors. These schemes generally invest in fixed-income securities
such as bonds, corporate debentures, Government Securities and money-market
instruments and are less risky compared to equity schemes. However, opportunities of
capital appreciation are limited in such funds. The NAVs of such funds are impacted
because of change in interest rates in the economy. If the interest rates fall, NAVs of
such funds are likely to increase in the short run and vice versa. However, long-term
investors do not bother about these fluctuations.

3. Money Market or Liquid Funds: These funds are also income funds and their aim is to
provide easy liquidity, preservation of capital and moderate income. These schemes
invest exclusively in safer short-term instruments such as Treasury Bills, Certificates of
Deposits, Commercial Paper and inter-bank call money, Government Securities, etc.
Returns of these schemes fluctuate much less than other funds. These are appropriate for
investors as a means of short-term investments.

4. Balanced Schemes: The aim of the balanced funds is to provide both growth and regular
income as such schemes invest both in equities and fixed income instruments in the
proportion indicated in their offer documents. These are appropriate for investors
looking for moderate growth. They generally invest between 65% and 75% in equity and
the rest in debt instruments. They are impacted because of fluctuation in stock markets
but NAVs of such funds are less volatile compared to pure equity funds.

2) Close – Ended Funds

Mutual Fund can be categorized based on their structure into three types open-ended,
closed-ended, and interval funds. This categorization takes into consideration the
frequency with which you can buy or sell units of the scheme. While open-ended funds
are more common and popular among investors since they can be traded without
restrictions, closed-ended funds are gaining traction too. Here, we will explore Closed
Ended Mutual Funds and talk about the different types of closed ended funds in India
along with their benefits and a lot more.
A closed ended fund is an equity or debt fund in which the fund house issues a fixed
number of units at launch. Once the NFO (New Fund Offer) period ends, investors cannot
purchase or redeem units of a closed ended fund. These funds are launched via an NFO
and subsequently traded in the market like stock and have a fixed maturity period. While
the Net Asset Value of the fund determines its actual price, the traded price can be above
or below this value depending on the demand and supply of the units. In simple words, a
closed ended fund ‘closes’ after the launch period until maturity. This allows the fund
manager a greater degree of freedom to pursue the investment objectives of the fund.

18
Advantages of Closed Ended Mutual Funds

• Stability for the Fund Managers

• Market Price based on Demand and Supply
• They are not illiquid
Disadvantages of Closed Ended Mutual Funds
• Not a great performance in the past
• Only Lump Sum Investment option available
• Highly fund manager-driven

1. Fixed Maturity Plans (FMPs) – These are close ended debt schemes that invest in debt
and money market instruments. They are much like fixed deposits except that return may
vary little. They are called fixed maturity because just like bonds, the asset is held for a
certain period till maturity. They have low expense ratio.
2. Capital Protection Funds – A capital protection fund is a hybrid fund. They typically
invest 70-80%in debt and the rest in equities. As name indicates the main goal is capital
protection and not returns. Ideal for the low risk investor. Over the last 3 years, these
funds on an average have managed 6.2% returns per annum.

3) Interval Funds
There are several types of mutual funds available in the market. The Securities and
Exchange Board of India (SEBI), has categorized the different types of schemes to help
investors make informed decisions. These categorizations are based on the type of assets
the scheme invests in, investment horizon, etc. One such way of categorization is open-
ended funds, closed-ended funds, and interval funds. Here, we will explore the interval
schemes of mutual funds and talk about the different types of interval funds in India along
with their benefits and a lot more.
Interval Funds can invest in equity or debt instruments or both. The units of these
funds can be purchased and/or redeemed only during specific time intervals. The fund
house declares these intervals wherein the investors can sell/buy units. They are similar to
closed-ended funds where you cannot purchase/redeem units frequently.

19
 Figure 1.4 – Mutual Fund Companies

4) Hybrid funds
Invest in a mix of equities and debt securities. They seek to find a ‘balance’ between growth
and income by investing in both equity and debt.

➢ RISK FACTORS OF MUTUAL FUNDS:

1. 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.

2. 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.

3. 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.
A‘AAA’ rating is considered the safest whereas a ‘D’ rating is considered poor credit
quality. A well-diversified portfolio might help mitigate this risk.

4. Inflation Risk:
Things you hear people talk about:
"Rs. 100 today is worth more than Rs. 100 tomorrow."

20
"Remember the time when a bus ride costed 50 paise?"
"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.

5. 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 rise 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.

6. 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.

7. 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

➢ STRUCTURE OF MUTUAL FUNDS

Figure 1.5 – Structure of Mutual Fund

The Mutual Funds in India are regulated by SEBI MF Regulations, 1996 under which a
mutual fund is formed as a Public Trust having three tier structure of mutual funds as follows:

21
 • Sponsor - For creation of a mutual fund
• Trustees -To look after interest of investors
• Asset Management Company -To invest and manage the funds

1. Sponsor
The Fund Sponsor is the first layer in the three-tier structure of Mutual Funds in India.
SEBI regulations say that a fund sponsor is any person or any entity that can set up a
Mutual Fund to earn money by fund management. This fund management is done
through an associate company which manages the investment of the fund. A sponsor can
be seen as the promoter of the associate company. A sponsor has to approach SEBI to
seek permission for a setting up a Mutual Fund. However, a sponsor is not allowed to
work alone. Once SEBI agrees to the inception, a Public Trust is formed under the
Indian Trust Act, 1882 and is registered with SEBI. After the successful creation of the
trust, trustees are registered with SEBI and appointed to manage the trust, protect the
unit holder’s interest and to comply by the mutual fund regulations of SEBI.
Subsequently, an asset management company is created by the sponsor that should be
complying with the Companies Act, 1956 to regulate the management of funds.

Considering that sponsor is the primary entity that promotes the mutual fund company
and that the mutual funds are going to regulate public money, there are eligibility criteria
given by SEBI for the fund sponsor:
- The sponsor must have experience in financial services for a minimum of five years
with a positive Net worth for all the previous five years.
- The net worth of the sponsor in the immediate last year has to be greater than the
Capital contribution of the AMC.
- The sponsor must show profits in at least three out of five years which includes the
last year as well.
- The sponsor must have at least 40% share in the net worth of the asset management
company.

2. Trust and Trustees

Trust and trustees form the second layer of the structure of Mutual Funds in India. Also
known as the protectors of the fund, trustees are generally employed by the fund
sponsor. Just as can be comprehended with the name, they have a critical role to play as
far as maintaining the investors’ trust and tracking the fund’s growth are concerned.

A trust is created by the fund sponsor in favour of the trustees, through a document
called a trust Deed. The trust is managed by the trustees and they are answerable to
investors. They can be seen as primary guardians of fund and assets. Trustees can be
formed by two ways – a Trustee Company or a Board of Trustees. The trustees work to
monitor the activities of the Mutual Fund and check its compliance with SEBI (Mutual
Fund) regulations. They also monitor the systems, procedures, and overall working of
the asset management company. Without the trustees’ approval, AMC cannot float any
scheme in the Market. The trustees have to report to SEBI every six months about the
activities of the AMC. Also, SEBI has established tightened transparency rules to avert
any type of conflict of interest between the AMC and the sponsor. Therefore, it is critical
for trustees to behave independently and take satisfactory measures to keep the hard-
earned money of investors protected. Even trustees have to get registered under SEBI.

22
 And furthermore, SEBI regulates their registration by revoking or suspending the
registry if any condition is found to be breached.

3. Asset Management Companies

Asset Management Companies are the third layer in the structure of Mutual Funds.
Registered under SEBI, it is a type of company that is created under the Companies Act.
An AMC is meant to float a variety of mutual fund schemes that are in compliance with
the requirements of investors and the nature of a market. The asset management
company acts as the fund manager or as an investment manager for the trust. A small fee
is paid to the AMC for managing the fund. The AMC is responsible for all the fund-
related activities. It initiates various schemes and launches the same. Furthermore, it also
creates mutual funds with the sponsor and the trustee and regulate its development. The
AMC is bound to manage funds and provide services to the investor. It solicits these
services with other elements like brokers, auditors, bankers, registrars, lawyers, etc. and
works with them by getting into an agreement together. To ensure that there is no
conflict between the AMCs, there are certain restrictions imposed on the business
activities of the companies.

4. Custodian
A custodian is one such entity that is responsible for the safekeeping of the securities of
the Mutual Fund. Registered under SEBI, they manage the investment account of the
Mutual Fund, ensure the delivery and transfer of the securities. Also, custodians allow
investors to upgrade their holdings at a specific point of time and assist them in
monitoring their investments. They also collect and track the bonus issue, dividends &
interests received on the Mutual Fund investment.

5. Registrar and Transfer Agents (RTAS)

RTAs act as an essential link between investors and fund managers. To the fund
managers, they serve by keeping them updated with the details of investors. And, to the
investors, they serve by delivering the advantages of the fund. Even they are registered
under SEBI and execute a variety of tasks and responsibilities. These are the entities who
provide services to Mutual Funds. RTAs are more like the operational arm of Mutual
Funds. Since the operations of all Mutual Fund companies are similar, it is economical in
scale and cost effective for all the 44 AMCs to seek the services of RTAs. CAMS,
Karvy, Sundaram, Principal, Templeton, etc. are some of the well-known RTAs in India.
Their services include:-
- Processing investors’ application
- Keeping a record of investors’ details
- Sending out account statements to the investors
- Sending out periodic reports
- Processing the payouts of the dividends
- Updating the investor details i.e. adding new members and removing those who have
withdrawn from the fund

23
 ➢ ADVANTAGES & DISADVANTAGES OF MUTUAL FUNDS

Advantages of Mutual Fund

If mutual funds are emerging as the favourite 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, 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. Reduction/Diversification Of Risk:

When an investor invests directly, all the risk of potential loss is his own, whether he
places a deposit with a company or a bank, or he buys a share or debenture on his own or
in any other from. While investing in the pool of funds with investors. The potential
losses are also shared with other investors. The risk reduction is one of the most important
benefits of a collective investment vehicle like the mutual fund.

4. Reduction of Transaction Costs:

What is true of risk as also true of the transaction costs? The investor bears all the costs of
investing such as brokerage or custody of securities. When going through a fund, he has
the benefit of economies of scale; the funds pay lesser costs because of larger volumes, a
benefit passed on to its investors.

5. Liquidity:

Often, investors hold shares or bonds they cannot directly, easily 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.

24
 6. Convenience And Flexibility:

Mutual fund management companies offer many investor services that a direct market
investor cannot get. Investors can easily transfer their holding from one scheme to the
other; get updated market information and so on.

7. 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 upto 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 subject and Gift-Tax.

8. Expert Management

A mutual fund is good for investors who don’t have the time or skills to do the research
and asset allocation. A fund manager takes care of it all and makes decisions on what to
do with your investment.
The fund manager and the team of researchers decide on the appropriate securities such as
equity, debt or a mix of both depending on the investment objectives of the fund.
Moreover, the fund manager also decides on how long to hold the securities.
Your fund manager’s reputation and track record in fund management should be an
essential criterion for you to choose a mutual fund. The expense ratio (which cannot be
more than 2.25% annualised of the daily net assets as per SEBI) includes the fees of the
fund manager.

Disadvantages of 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 fund, albeit in return 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. Market Uncertainties
Where more investor’s money comes into the loan portfolio of mutual funds managers,
the manager buys more stock for the portfolio. The buying causes the stock price to
increase, which causes the price of funs to rise. But market ineffectiveness can catch up &
turn the situation around and make it worse. Similarly a bearish market can bring down
the price of the stock.

25
3. Decisions
Mutual funds are professionally managed, you do not have any control in how the money
inmutual fund is invested so you can’t take decision to buy or sell the securities.

4. Fluctuating returns:

Mutual funds do not offer fixed guaranteed returns in that you should always be
prepared for any eventuality including depreciation in the value of your mutual
fund. In other words, mutual funds entail a wide range of price fluctuations.
Professional management of a fund by a team of experts does not insulate you from
bad performance of your fund.

5. Past performance:

Ratings and advertisements issued by companies are only an indicator of the past
performance of a fund. It is important to note that robust past performance of a fund
is not a guarantee of a similar performance in the future. As an investor, you should
analyses the investment philosophy, transparency, ethics, compliance and overall
performance of a fund house across different phases in the market over a period of
time. Ratings can be taken as a reference point.

6. Dilution

While diversification averages your risks of loss, it can also dilute your profits.
Hence, you should not invest in many mutual funds at a time. As you have just read
above, the benefits of mutual funds can undoubtedly override the disadvantages, if
you make informed choices. However, investors may not have the time, knowledge
or patience to research and analyses different mutual funds. Investing with Clear
Tax could solve this problem as we have already done the homework for you by
handpicking the top-rated funds from the best fund houses in the country.

26
1.4 NEED OF THE SYUDY

The need of study has been aroused in order to see the preference, awareness and the
investor’s perception regarding the mutual funds in the Mumbai City. Mutual Fund is one of
the most preferred investment alternatives for the small investors as it offers an opportunity to
invest in a diversified and professionally managed portfolio at a relatively low cost. A Mutual
Fund is a trust that pools the savings of a number of investors who share a common financial
goal. Over the past decade, mutual funds have increasingly become the investor’s vehicle of
choice for long-term investing. In recent times, the emerging trend in the mutual fund
industry is the aggressive expansion of the foreign owned mutual fund companies and the
decline of the companies floated by nationalized banks and small private sector players.
Growth and developments of various mutual funds products in the Indian capital market has
proved to be one of the most catalytic instruments in generating momentous investment
growth in the capital market. In this context, close monitoring and evaluation of mutual funds
has become essential. 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. Thus, the involvement of mutual funds in the transformation of
Indian economy has made it urgent to view their services not only as a financial intermediary
but also as a pace-setter as they are playing a significant role in spreading equity culture. In
this context, it becomes pertinent to study the performance of the Indian mutual fund
industry. The relation between risk-return determines the performance of a mutual fund
scheme. As risk is commensurate with return, therefore, providing maximum return on the
investment made within the acceptable associated risk level helps in demarcating the better
performers from the laggards.

1.5 SCOPE OF THE MUTUAL FUNDS

The scope of the study is the part which defines the area to which the study is extended and
the key areas to focus on. This study is mainly focused on investors from Mumbai.

This study is based on individual investor’s preference toward various investment decisions
and services offered by the mutual fund companies.

The scope has grown enormously over the years. In the first age of mutual funds, when the
investment management companies started to offer mutual funds, choices were few. Even
though people invested their money in mutual funds as these funds offered them diversified
investment option for the first time.

By investing in these funds they were able to diversify their investment in common stocks,
preferred stocks, bonds and other financial securities. At the same time they also enjoyed the
advantage of liquidity. With Mutual Funds, they got the scope of easy access to their invested
funds on requirement.

The study provides information about the impact of investor’s opinion towards mutual fund
investment decision making and gives direction to the Government, Financial regulatory
bodies and other authorities to take a better decision.

27
1.6 SIGNIFICANCE OF THE STUDY
In this research, researcher found that the various types of mutual funds, structure of mutual
fund and awareness of the mutual fund among individuals living in Mumbai city. Mutual
fund is a financial instrument which pools the money of different people and invests them in
different financial securities like stocks, bonds etc. Each investor in a mutual fund scheme
owns a units of the fund, which represents the portion of the holdings of the scheme. Mutual
funds are now among the most popular investment options for retail investors. This research
helps to understand the investment pattern of individual and to study the investor’s
preferences towards Mutual Fund as compare to other investments avenue.

1.7 OBJECTIVES OF THE STUDY

o To understand the concept of Mutual Funds

o To study the investors preferences towards Mutual Fund as compare to other

investments avenue.

o To find out the awareness of the mutual fund among individuals of all age groups.

o To understand the investment pattern of individual.

o To come up with recommendations for investments.

28
 CHAPTER 2
REVIEW OF LITERATURE
A literature review is a comprehensive summary of previous research on a topic. The
literature review surveys scholarly articles, books, and other sources relevant to a particular
area of research.
1. Pooja Chaturvedi Sharma (2022) mutual fund flow scale: a multi-item scale for
measuring perception of mutual fund investors. With an ever-increasing amount of
information related to the stock market or various investment avenues, misperception
or no perception regarding mutual funds is becoming a norm for investors and
marketers. To date no perception measuring scale has been developed for mutual fund
investors, to assist investors, marketers, and promoters to focus on the most crucial
factors for mutual fund market application. This paper discovers the dimensions of
investor perception and its relevance for investment practitioners.

2. Kaur (2021) mentioned that investment in experienced or non-experienced mutual

fund schemes seems promising.

3. Sharma (2021) found that while making a final choice about mutual funds
investment, returns is one of the major incentives to invest. Women have started
actively participating in investing their surplus money, although it all depends upon
various parameters such as degree of their risk-taking capability, influence of family
members and friends and the challenge to get exposed to modern and innovative
investment avenues.

4. Kappal, J. M., & Rastogi, S. (2020). Investment behavior of women entrepreneurs.

The purpose of this paper is to understand the new kind of investors – women
entrepreneurs – and to find out the factors that drive their investment behavior and
investment decisions.

5. Sridevi (2019) in Investor’s Behaviour towards Mutual Fund Investment studied the
investment pattern, behaviours, and factors influencing choice of investment among
the investor (Mutual Fund) in Kerala. Data from sample of 150 investors in Mutual
Fund are analysed using Percentage method, Chi square Test and Garrett Ranking
technique. Various attributes are analysed, out of which no relationship between Age,
gender of the Investor and their behaviour towards Investment is found.

6. Gangwar and Singh (2017) “A study on Investor Behaviour for Investment in

Mutual Funds in Allahabad.” The study was undertaken to know the information
altitude, Investors’ attitude, reasons and preference for investment in Mutual Funds.
The study is descriptive in nature where the sampling unit is Individual investor. A
sample of 1440 respondent is selected using Judgmental sampling. Data has been
analysed using percentage, classifying and tabular method. The study found that most
of investor invests for tax reduction and some of the investor invests without being
aware about the Mutual Funds.

29
7. Hane (2016). “A Study of Investors Perception toward Mutual Funds In the City Of
Aurangabad.” The study tries to know investors view toward Mutual Funds and its
preference for investment. A sample of 30 investor of Aurangabad city has been
selected. Three hypothesis has been made and was tested using Chi Square for
association. The study concluded by accepting the null Hypothesis that there is no
significant difference in preference for investment given by investors. Apart from
these, it has been found that the investors find problem in selecting Mutual Funds
because of short market uncertainties and risk involved

8. Dr. G.S. Batra and Ms. Sukhwinder Kaur (2015), concluded that the mutual fund
industry in India had succeeded to attract the investors towards mutual funds, the
findings of the study were of investors noticing mutual fund as a safe and secured
investment option with monetary benefits. The study also observed investors
considered mutual funds as a safe investment option, but was a need for education
that mutual fund involves a market risk.

9. Joseph and Prakash (2014) have revealed in their paper ‘A Study on Preferred
Investment Avenues among the People and the Factors Considered for Investment’,
that to have an insight into different investment avenues available and to understand
the preferred investment avenue among the people of Bangalore City. In the present
day world, new financial products are available. It has become difficult and confusing
to choose the best options due to lack of proper financial knowledge to the common
man to decide the factors which are considered for making sound investment
decisions. It is further analyzed that investors are not much aware about investment in
stock exchange and equity and are more inclined towards traditional investments like
bank deposits, insurance, post office savings etc. Awareness programs should be
introduced by the government and stock broking firms to make people aware about
investment options with their merits n demerits so right decisions are taken for their
personal finance.

10. Dr. K. Veeraiah and Dr. A. Kishore Kumar (Jan 2014), conducted a research on
Comparative Performance Analysis of Select Indian Mutual Fund Schemes. This
study analyzes the performance of Indian owned mutual funds and compares their
performance. The performance of these funds was analysed using a five year NAVs
and portfolio allocation. Findings of the study reveals that, mutual funds out perform
naïve investment. Mutual funds as a medium-to-long term investment option are
preferred as a suitable investment option by investors.

11. Ms. Shalini Goyal and Ms. Dauly Bansal (2013) have done A Study on Mutual
Funds in India. This paper focuses on the entire journey of mutual fund industry in
India. Its origin, its fall and rise throughout all these years and tried to predict what
the future may hold for the Mutual Fund Investors in the long run. This study was
conducted to analyze and compare the performance of different types of mutual funds
in India and concluded that equity funds outperform income funds.

12. Rashmi Sharma and N. K. Pandya (2013), have done an overview of Investing in
Mutual Fund. In this paper, structure of mutual fund, comparison between
investments in mutual fund and other investment options and calculation of NAV etc.
have been considered. In this paper, the impacts of various demographic factors on

30
 investors’ attitude towards mutual fund have been studied. For measuring various
phenomena and analysing the collected data effectively and efficiently for drawing
sound conclusions, drawing pie charts has been used and for analysing the various
factors responsible for investment in mutual funds.

13. Aparna Samudra and Bhurghate (2012) carried out a study to understand the
investment behaviour among the middle class investors from Nagpur. The study was
carried out to examine the preference of the investment instruments and investment
pattern of the middle class households along with the objective of 52 investment. The
investment options considered for the study were Bank deposits, shares, mutual funds,
real estate, Kisan Vikas Patrika and post office deposits. A sample size of 300
households was used for the study. Statistical tools like percentage and mean were
used for carrying out the analysis. The study found that bank deposit was the most
preferred investment option followed by life insurance Investment in provident fund
and post office deposit were at the third and fourth place. This is similar to the
findings of Nupur Gupta and Vijay Agarwal (2013).Real estate was found to be the
least preferred investment avenue. Investment in equity was not figuring in the
preferred investment avenue across all age categories.

14. Singh B K (2012) in an article “A study on investors’ attitude towards mutual funds
as an investment option” from International Journal of Research in Management has
reiterated the need for spreading the awareness about Mutual Funds among common
masses. There is a strong need to make people understand the unique features of
investment in Mutual Funds. From the existing investors point of view the benefits
provided by mutual funds like return potential and liquidity have been perceived to be
most attractive by the invertors’ followed by flexibility, transparency and
affordability.

15. Dr. Shantanu Mehta, Charmi Shah (2012), provided an understanding of Investor
can plan of diversified equity plan, balanced type fund, and third one is debt fund etc.
observing past returns, dividends, etc. The mutual fund was declared if the investor
were to choose equity or stock market related mutual fund, then they would have gone
for the SIP (Systematic Investment Plan) method.

16. Dr. Binod Kumar Singh, (Mar 2012) has done A Study on Investors’ Attitude
towards Mutual Funds as an Investment Option. In this paper, structure of mutual
fund, operations of mutual fund, comparison between investment in mutual fund and
bank and calculation of NAV etc. have been considered. In this paper the impacts of
various demographic factors on investors’ attitude towards mutual fund have been
studied. For measuring various phenomena and analyzing the collected data
effectively and efficiently for drawing sound conclusions.
17. According to K. Lashmana Rao (2011) made analysis of investor’s Awareness
towards mutual fund schemes, he made conclusion SEBI, AMFI, and IRDA should
take appropriate steps to enhance Consumers knowledge for making more prudent
decisions.

18. Jasmeen (2009) has found in her study, ‘Investment Choice of Individual Investors’
that majority investors preferred low risk investment but considerable number have
gone for high risk investments. This could be possible because of awareness created

31
 among Indian individual investors regarding investment climate and infused
confidence among investors by being ethical and transparent. The study also indicated
that the association between profile of respondents’ age, gender, religion,
qualification, income and profession and the risk taken while making investment is
not significant.

19. Gupta and Jain (2008) on the basis of an all-India survey of 1463 households found
the preferences of investors among the major categories of financial assets, such as
investment in shares, indirect investment through various types of mutual fund
schemes, other investment types such as exchange-traded gold fund, bank fixed
deposits and government savings schemes. The study provides interesting information
about how the investors’ attitude towards various investment types are related to their
income and age, their portfolio diversification practices, and the over-all quality of
market regulation as viewed by the investors themselves.

20. Mr. Vikash Kumar (2008), the topic was a study of preferences of investors for
investment in mutual funds for the SBI mutual funds. Mr. Vikash Kumar concluded
that most of the investors don’t invest in SBI mutual fund due to non-awareness. And
he adds that most of the investors of Patna had invested in reliance or UTI mutual
funds and ICICI mutual funds also has good brand position among them. And SBI mf
places after ICICI mutual fund according to respondents. The most portfolio are
equity second most is balance and least prefer portfolio was debts portfolio. Most of
the investors doesn’t want to invest in sectored fund. And he observed that many
people have the fear of mf. They need information brand place and important role and
SBI mf UTI mf ICICI mf etc. are well non brand so they are doing well.

21. Kavitha Ranganathan (2006), her study concluded that Salaried person’s savings are
most often deposited in mutual funds, the theory was analyzed was that by pooling
together of individual savings and investing them, using the professional fund
manager, one can diversify risk, and accessing the volume buying and scientific data
analysis. Therefore, it was observed as it was the ideal option for an individual who
does not have the time, knowledge, or experience to make a succession of judgments
involving his hard-earned savings. Mutual Fund industry in India has a large untapped
market in urban areas besides the virgin markets in semi-urban and rural areas.

22. Black et al. (2006) examined customer‘s choice of financial services distribution
channels. They showed that customer confidence, lifestyle factors, motivations &
emotional responses influence the customer‘s choice, while product, Channel &
organizational factors such as image and reputation are also significant.
23. Kavita Ranganathan’s (2004) conducted a survey in Mumbai revealed that
investors prefers performance records, brand name, expense ratio, portfolio of
investment, reputation portfolio manager, withdrawal/exit facility, products with tax
benefits and load charges for taking decision on investment.

24. Singh and Chander (2004) study reveals that salaried investors prefer daily
disclosure of NAV by funds and also wished for higher tax rebates on investment in
Mutual Funds.

32
25. Sharpe (1966) introduced the measure to evaluate the mutual funds risk-adjusted
performance. The measure was known as reward-to-variability ratio (Currently
Sharpe Ratio). With the help of this ratio he evaluated the return of 34 open-end
mutual funds in the period 1945-1963. The results showed the capital market was
extremely efficient due to which majority of the sample had lower performance as
compared to the Dow Jones Index.

26. Jack Treynor and Kay K. Mazay (1966), their study was about the success of the
mutual fund to check if there has been volatility of fund higher in years when it did
good and when it did badly. The research came to a solution as through their findings
and the study the investors in mutual funds were completely dependent on
fluctuations in the general market. The result was not to determine that a fund
manager cannot provide better returns in both good and bad times than the return
provided by market averages, but the improvement in the rate of return will be due to
the fund manager’s ability to identify under-priced companies, rather than comparing
it with the ability to outguess in the whole market scenario.

27. Madhusudhan (1996) conducted a study and revealed that income schemes
and open-ended schemes are preferred over growth schemes and close-ended
schemes during the prevalent market conditions. Investors look for Safety of
Principal, Liquidity and Capital Appreciation in order of importance in the selection
of mutual funds.

33
 CHAPTER 3
RESEARCH METHODOLOGY

A questionnaire was created shared with various individuals living in Mumbai city. Students,
businessmen, professionals, service people, retired people etc. participated in the survey and
gave their honest and true views regarding all the important expects of the Indian mutual fund
industry. They answered question regarding their investment preferences, attractive features
of mutual fund, returns, risks, etc. The responses are shown with the help of graphs and
statistics along with interpretation.
The questionnaire was forwarded to different individuals through whatsapp, messages and
emails. The title, purpose, use of this survey was clearly mentioned to all the respondents
before taking this survey. The purpose of this survey is only for educational purpose and
research based. Understanding the mind-set of people regarding mutual fund investment was
the goal of this survey. The respondents were given confidence that their surveys would be
most confidential and secret. Their answers will be used only for project work and not for any
other purpose. All the personal information collected will be stored until the purpose of this
project is done and won’t be used for any foul purpose.

3.1 Research Design

The purpose of the survey will be to understand the behavioural aspects of individual
investors, mainly their investment mode selection behaviour; Research design is the
framework of research methods and techniques chosen by a researcher to conduct a study.
The design allows researchers to sharpen the research methods suitable for the subject matter
and set up their studies for success.
Descriptive research
Descriptive research is a research method describing the characteristics of the population or
phenomenon studied. This descriptive methodology focuses more on the “what” of the
research subject than the “why” of the research subject. The method primarily focuses on
describing the nature of a demographic segment without focusing on “why” a particular
phenomenon occurs. In other words, it “describes” the research subject without covering
“why” it happens. The characteristics used to describe the situation or population are usually
some kind of categorical scheme also known as descriptive categories. The description is
used for frequencies, averages, and other statistical calculations. Often the best approach,
prior to writing descriptive research, is to conduct a survey investigation. In this research
Descriptive Research has been used.

• Survey research
In survey research, respondents answer through surveys or questionnaires or polls. They
are a popular market research tool to collect feedback from respondents. A study to
gather useful data should have the right survey questions. It should be a balanced mix of
open-ended questions and close ended-questions. The survey method can be conducted
online or offline, making it the go-to option for descriptive research where the sample
size is enormous.

34
3.2 Sampling Design
Sampling design consists of all this points given below :-
• Universe
All individuals who are invested their money in Mutual Fund
• Selection of the area of study

Research area for the research project is Limited to Mumbai City of Maharashtra.

• Target population of the study

Target population is the group of people selected by Researcher depends upon need to
get relevant information from them for research purpose. The Target population of the
study includes all the people from various streams. These investors are of different age
group, different occupation, different income level and different qualification. This
research is conducted only among individual investors who are living in Mumbai City.

• Sample size
Sampling size plays important role for getting relevant and accurate information. 100
Respondents is selected for the survey with respect to Mumbai city.

• Sampling Methods
When you conduct research about a group of people, it’s rarely possible to collect data
from every person in that group. Instead, you select a sample. The sample is the group of
individuals who will actually participate in the research.
To draw valid conclusions from your results, you have to carefully decide how you will
select a sample that is representative of the group as a whole. This is called a sampling
method. There are two primary types of sampling methods that you can use in your
research:
- Probability sampling involves random selection, allowing you to make strong
statistical inferences about the whole group.
- Non-probability sampling involves non-random selection based on convenience or
other criteria, allowing you to easily collect data.

➢ Convenience sampling
Convenience sampling is a non-probability sampling method where units are selected for
inclusion in the sample because they are the easiest for the researcher to access. This can
be due to geographical proximity, availability at a given time, or willingness to
participate in the research. Sometimes called accidental sampling, convenience sampling
is a type of non-random sampling. In this research convenience sampling has been used.

3.3 Sources Data Collection

In this research primary Sources of data and secondary sources of data has been used to
collect the information required in research paper.

• PRIMARY DATA

In this research the data has been collected with the help of questionnaire method. The
data will be filled by the people through Google survey forms and through email. The

35
 responses collected will help to know further analysis carried thereafter. Primary data is
generally up to date since it gathers data in real-time and does not acquire data from
outdated sources.

• SECONDARY DATA

Secondary data refers to information that has already been acquired and recorded by
someone other than the user for a purpose unrelated to the current research challenge.
This type of data is collected from various sources, the secondary data will be collected
with the help of Journal, books, newspapers, articles, research papers, thesis of
dissertation of research, scholars and Internet source.
The data is collected by using the following means.
d. Research papers, Magazines, Books, Journals
e. Data available on internet through various website. So the study has been primarily
based on the data derived from the survey that has been conducted. And the results
derived thereby have been used to find out that what is the Perceptions, Preferences
that people have.

• RESEARCH INSTRUMENT:

The research instruments used in this research to analyzed data is structured

questionnaire. A questionnaire was prepared to understand individual investors answer
pertaining to research questions framed. The questionnaire is gives more accurate
response from people.

• SCALE DEVELOPMENT

Dichotomous scale
In this research, researcher used dichotomous scale. A dichotomous scale is a two-point
scale that presents options that are absolutely opposite to each other. This type of
response option does not give the respondent an opportunity to be neutral on his answer
to a question. Examples: Yes - No. True - False.

36
 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
INTRODUCTION
Data analysis is a process of inspecting, cleansing, transforming, and modelling data with the
goal of discovering useful information, informing conclusions, and supporting decision-
making. Data interpretation is the process of reviewing data and arriving at relevant
conclusions using various analytical methods. Data analysis assists researchers in
categorizing, manipulating, and summarizing data to answer critical questions.
DISCRIPTIVE ANALYSIS
Also known as descriptive analytics or descriptive statistics, is the process of using statistical
techniques to describe or summarize a set of data. As one of the major types of data analysis,
descriptive analysis is popular for its ability to generate accessible insights from otherwise
not yet interpreted data. Unlike other types of data analysis, the descriptive analysis does not
attempt to make predictions about the future. Instead, it draws insights solely from past data,
by manipulating in ways that make it more meaningful. Descriptive Statistics are used to
present quantitative descriptions in a manageable form. In a research study we may have lots
of measures. Or we may measure a large number of people on any measure. Descriptive
statistics help us to simplify large amounts of data in a sensible way

37
1. Gender

Table no. 1

Particular Number of Respondents

Male 52
Female 49

From Table No.1, it is evident that the respondents were predominantly male, with 52 out of
101 respondents identifying as male. The remaining 49 respondents identified as female.It
provides information on the gender distribution of a specific sample of respondents. The
interpretation and analysis of this data depend on the assumptions made about the
representativeness of the sample and the potential biases or factors that could influence the
gender distribution observed in the data.

38
2. Age

Table no.2

AGE (in years) Number of Respondents

Below 30 43
31-40 37
41-50 17
Above 50 4

The table presents the age distribution of respondents in a particular survey or study, with the
number of respondents in each age group provided. The age groups are divided into four
categories: below 30 years, 31-40 years, 41-50 years, and above 50 years.

According to the table, the largest age group is below 30 years, with 43 respondents falling
into this category. The second largest group is 31-40 years, with 37 respondents. The age
group 41-50 years is the third largest, with 17 respondents, and the smallest group is above 50
years, with only 4 respondents

39
3) Occupation

Table no.3
Profession Number of Respondents
Service 54
Business 23
Professional 19
Retired 4

Based on the provided data in Table No.3, there were a total of 100 respondents who
participated in the survey, and their occupations were categorized into four groups, namely
Service, Business, Professional, and Retired. Out of the 100 respondents, the highest number
of respondents (54) belonged to the Service sector, followed by Business (23) and
Professional (19) sectors. Only 4 respondents were reported to be Retired

40
4)Do you invest / have you invested in mutual fund?

Table no.4
Particular Number of Respondents
Yes 90
No 11

Based on the given table, out of the total respondents, 90 individuals have invested in mutual
funds, while only 11 individuals have not. This indicates that a majority of the respondents
have invested in mutual funds. Mutual funds are a popular investment option that allows
individuals to invest their money in a diversified portfolio of stocks, bonds, and other assets.
This diversification helps reduce risk and potentially earn higher returns

41
5) Select your preference while investing in MF

Table 5
Particular Number of Respondents
Systematic Investment Plan (SIP) 70
Systematic Withdrawal Plan (SWP) 18
Systematic Transfer Plan (STP) 8
Lumpsum 5

Based on the responses of the respondents, it appears that the majority of them (70 out of
101) prefer investing in mutual funds through Systematic Investment Plans (SIPs). SIPs allow
investors to invest small amounts regularly, which can help them avoid market timing risks
and achieve long-term financial goals through disciplined investing. A smaller proportion of
respondents (18 out of 101) prefer investing in mutual funds through Systematic Withdrawal
Plans (SWPs). SWPs allow investors to withdraw a fixed amount regularly from their mutual
fund investments, which can provide a regular income stream. Only a few respondents (8 out
of 101) prefer investing in mutual funds through Systematic Transfer Plans (STPs), which
allow investors to transfer a fixed amount regularly from one mutual fund scheme to another.
Finally, a very small proportion of respondents (5 out of 101) prefer investing in mutual
funds through Lumpsum investments, which involve investing a large amount of money in
one go. Overall, it can be inferred that the majority of the respondents prefer disciplined
investing through SIPs, which can help them achieve long-term financial goals. The lower
preference for SWPs, STPs, and Lumpsum investments may be due to the associated risks
and complexities involved in these investment strategies

42
6) According to you, select your source of information about mutual funds

Table 6
Particulars No. of respondents
Brokers 48
Relatives 21
Advertisement 19
News papers 12
Magazines 1

based on the given data, it seems that the majority of respondents (48) rely on brokers for
information about mutual funds, while a smaller number of respondents rely on relatives (21),
advertisements (19), newspapers (12), and magazines (1).This suggests that brokers are
considered a primary source of information for mutual funds by most respondents, which is
not surprising as brokers are financial professionals who can provide personalized advice
based on the individual needs and goals of the investors. On the other hand, only a small
number of respondents rely on advertisements, newspapers, and magazines for information,
which suggests that these sources may not be as effective in educating investors about mutual
funds.
Overall, investors should consider using a variety of sources to gather information about
mutual funds, including not only brokers but also reputable publications, industry experts,
and online resources. By doing so, they can make informed decisions that align with their
financial goals and risk tolerance.

43
7) How did you purchase mutual funds

Table 7

Particulars No. of respondents

Online 58
Through brokers 29
Through banks 13
Post office 1

Based on the data, it appears that the majority of respondents (58 out of 101) purchased
mutual funds online. This suggests that online platforms are becoming increasingly popular
for buying mutual funds due to their convenience and ease of use. 29 respondents purchased
mutual funds through brokers, indicating that there is still a significant role for human
intermediaries in the mutual fund market. Brokers may offer personalized advice and
guidance to help investors make informed investment decisions.13 respondents purchased
mutual funds through banks, indicating that banks remain a popular choice for investing in
mutual funds. Banks may offer various investment options and provide convenient access to
investment products for their customers. Only 1 respondent purchased mutual funds through
the post office, which suggests that this method of investing in mutual funds is not commonly
used. Overall, the data suggests that online platforms are the most popular method for
purchasing mutual funds, followed by brokers and banks. This trend is likely to continue as
more investors seek out the convenience and accessibility of online investment platforms.

44
8) What % of your income do you invest in MF
Table 8
Particulars No. of respondents
10% 50
20% 33
25% 16
30% and above 2

Based on the responses of the survey, we can analyze the investment pattern of the
respondents in mutual funds. Out of the total respondents, 50% of them invest 10% of their
income in mutual funds, 33% invest 20%, 16% invest 25%, and only 2% invest 30% or more.
From this data, we can infer that most respondents prefer to invest a smaller portion of their
income in mutual funds, with 50% of the respondents investing only 10% of their income.
Only a small percentage of respondents invest a larger portion of their income, with only 2%
investing 30% or more. It is also interesting to note that a significant portion of respondents
(33%) invest 20% of their income, which is a considerable amount when compared to the
other percentages. Overall, it is crucial to note that the percentage of income one chooses to
invest in mutual funds may vary depending on individual financial goals, risk tolerance, and
investment horizon. It is always recommended to consult a financial advisor before making
any investment decisions.

45
9) What % of returns from MF will satisfy your expectations.
Table 9
Particulars No. of respondents
5% to 8% 19
8% to 10 % 27
10% to 12% 35
12% and above 20

Based on the given table, it appears that respondents were asked to indicate their expected
percentage returns from mutual funds. The table shows the number of respondents who
selected various percentage ranges. Out of the total respondents, 19 (or approximately
15.83%) indicated that they expected returns between 5% and 8%, while 27 (or
approximately 22.5%) expected returns between 8% and 10%. The largest group of
respondents, 35 (or approximately 29.17%), expected returns between 10% and 12%. Finally,
20 (or approximately 16.67%) respondents expected returns of 12% and above. It's important
to note that the table doesn't provide any information about the actual returns that mutual
funds have historically delivered in the given percentage ranges. Therefore, it's difficult to
assess whether respondents' expectations are realistic or not. Additionally, we don't know the
context of the survey and whether the respondents are experienced or novice investors, which
may affect their expectations. Overall, the table indicates that the majority of respondents
expected returns between 8% and 12%, with a significant proportion expecting returns above
12%.

46
10) In which type of fund or scheme you have invested in mutual fund

Table no. 10
Particulars No. of respondents
Equity fund 40
Balance fund 22
Index fund 19
Tax saving fund 15
Money market fund 5

Based on the data provided in Table no. 10, it can be seen that out of the total respondents, 40
have invested in equity funds, 22 in balance funds, 19 in index funds, 15 in tax saving funds,
and only 5 in money market funds. Equity funds are a type of mutual fund that primarily
invests in stocks, and it seems to be the most popular choice among the respondents, with 40
investors opting for it. This could be due to the potential for high returns in the long run, as
well as the diversification it offers to the investor's portfolio. Balance funds, which typically
invest in both stocks and bonds, were chosen by 22 respondents, indicating a preference for a
more balanced investment approach. Index funds, which track the performance of a particular
stock market index, were selected by 19 respondents, indicating a preference for a more
passive investment strategy. Tax-saving funds, also known as ELSS (Equity-Linked Savings
Scheme), were chosen by 15 respondents, likely due to the tax benefits they offer to investors
under Section 80C of the Income Tax Act, 1961.Finally, only 5 respondents opted for money
market funds, which invest in short-term debt securities and are typically considered a low-
risk, low-return investment option. In conclusion, the data shows that equity funds are the
most popular choice among the respondents, followed by balance funds, index funds, tax-
saving funds, and money market funds. The data also suggests that the respondents have a
diverse range of investment preferences, with some favoring high-risk, high-reward options
like equity funds, while others prefer more conservative options like money market funds.

47
11) How much money in a month do you usually invest in mutual fund

Table no 11
Particulars No. of respondents
Less than 5000 41
5001 – 10000 35
10001 - 20000 19
More than 20000 6

Out of the total respondents, 15 have held their mutual fund schemes for less than 3 years, 35
have held for 3-5 years, 38 have held for 5-10 years, and 13 have held for above 10 years.
From the data, it is clear that the majority of the respondents have held their mutual fund
schemes for a longer duration of time. 38 respondents have held their mutual funds for 5-10
years, indicating a long-term investment strategy. Furthermore, 13 respondents have held
their mutual funds for more than 10 years, indicating a strong commitment to long-term
investment goals. On the other hand, only 15 respondents have held their mutual fund
schemes for less than 3 years, indicating that a small percentage of investors have a short-
term investment strategy. Overall, the data suggests that most investors in mutual fund
schemes have a long-term investment horizon, which is a good strategy for building wealth
over time through compounding returns.

48
12) What is your duration of investments holding in mutual funds schemes
Table no 12
Particulars No. of respondents
Less than 3 years 15
3 – 5 years 35
5 – 10 years 38
Above 10 years 13

Out of the total respondents, 15 have held their mutual fund schemes for less than 3 years, 35
have held for 3-5 years, 38 have held for 5-10 years, and 13 have held for above 10 years.
From the data, it is clear that the majority of the respondents have held their mutual fund
schemes for a longer duration of time. 38 respondents have held their mutual funds for 5-10
years, indicating a long-term investment strategy. Furthermore, 13 respondents have held
their mutual funds for more than 10 years, indicating a strong commitment to long-term
investment goals. On the other hand, only 15 respondents have held their mutual fund
schemes for less than 3 years, indicating that a small percentage of investors have a short-
term investment strategy. Overall, the data suggests that most investors in mutual fund
schemes have a long-term investment horizon, which is a good strategy for building wealth
over time through compounding returns.

49
13) How frequently do you track your Investment
Table no. 13
Particulars No. of respondents
Every 15 days 42
Once a month 30
Once in 6 months 23
Once a year 6

Based on the responses of the respondents, the majority of them track their investments quite
frequently. About 42 respondents out of the total respondents track their investments every 15
days, which indicates that they are actively monitoring their portfolio and making necessary
changes as and when required. About 30 respondents track their investments once a month,
which is still a good frequency to keep a check on the performance of their investments. 23
respondents track their investments once in six months, which could be due to a long-term
investment approach or lack of time or resources to track more frequently. Only 6
respondents track their investments once a year, which could indicate a less active approach
towards their investments or the investments being less significant in their overall financial
planning.

50
14) ) What are objectives of savings in MF investment
Table no. 14
Particulars No. of respondents
For purchase of assets 26
Wealth creation 23
For tax deduction 21
To provide for retirement 17
For children education 14

Based on the responses of the survey respondents, the objectives of savings in MF investment
can be categorized into five main areas: Purchase of assets: 26 respondents indicated that
their objective for saving in MF investment is to purchase assets such as a house, car, or any
other long-term investment. This suggests that they see MF investment as a means of
accumulating funds that can be used to acquire assets in the future. Wealth creation: 23
respondents mentioned that their objective for saving in MF investment is to create wealth
over the long term. This suggests that they are looking for opportunities to grow their
investments over time and are willing to take on some level of risk to achieve this objective.
Tax deduction: 21 respondents indicated that their objective for saving in MF investment is to
obtain tax deductions. This suggests that they are using MF investment as a means of
reducing their tax liability and maximizing their tax savings. Retirement planning: 17
respondents mentioned that their objective for saving in MF investment is to provide for their
retirement. This suggests that they see MF investment as a way to build a retirement nest egg
that will provide them with financial security in their later years. Children’s education: 14
respondents indicated that their objective for saving in MF investment is to provide for their
children's education. This suggests that they are using MF investment as a means of building
a fund that can be used to finance their children's education expenses in the future. Overall,
these results suggest that the objectives of savings in MF investment are varied and depend
on the specific needs and goals of the individual investors. Some investors may be looking to
build long-term wealth, while others may be focused on specific financial goals such as
purchasing assets, providing for retirement or financing their children's education.

51
15) How much returns you have expected while investing in mutual funds

Table no. 15
Particulars No. of respondents
Low return 2
High return 57
Moderate return 35
Very high return 7

Based on the responses received, it appears that a majority of respondents, 57 out of 101 (or
approximately 56%), have expected high returns while investing in mutual funds. This
suggests that individuals may have set relatively ambitious return expectations, potentially in
pursuit of higher wealth accumulation or achieving specific financial goals. Another
significant group of respondents, 35 out of 101 (or approximately 35%), have expected
moderate returns. This suggests that some individuals may have taken a more conservative
approach and set more realistic return expectations that align with their risk tolerance and
investment goals. A small number of respondents, 7 out of 101 (or approximately 7%), have
expected very high returns, potentially indicating a high risk tolerance or a focus on short-
term gains. Only 2 respondents (or approximately 2%) have expected low returns, which may
suggest that most individuals believe mutual fund investments have the potential to deliver
higher returns than other low-risk investments. Overall, the most commonly expected return
level while investing in mutual funds is high, indicating a preference for potentially higher
returns over a longer investment horizon. It is important to note that return expectations
should be realistic and in line with individual risk tolerance and investment goals, and
investors should avoid taking unnecessary risks in pursuit of higher returns.

52
16) Do you face any problems while investing in mutual funds

Table no. 16
Particulars No. of respondents
Lack of information in advertisements 29
Lack of initiatives by the industry 7
No clear idea about public issue 15
Insufficient agent and brokers 11
No problem faced 39

Based on the responses received, it appears that a significant number of respondents, 29 out
of 101 (or approximately 29%), reported a lack of information in advertisements as a problem
while investing in mutual funds. This suggests that individuals may find it difficult to obtain
clear and accurate information about mutual fund products from advertising materials, and
may require additional sources of information before making investment decisions. A smaller
number of respondents, 15 out of 101 (or approximately 15%), reported having no clear idea
about public issue as a problem. This suggests that some individuals may not understand the
process of investing in mutual funds through initial public offerings (IPOs), and may require
more education and guidance in this area. Another group of respondents, 11 out of 101 (or
approximately 11%), reported insufficient agent and brokers as a problem. This suggests that
individuals may have difficulty finding reliable and trustworthy professionals to guide them
through the investment process. A minority of respondents, 7 out of 101 (or approximately
7%), reported a lack of initiatives by the industry as a problem. It would be interesting to
investigate further the reasons behind this view and identify potential solutions or
improvements to address these concerns. Finally, 39 respondents (or approximately 39%)
reported no problems faced while investing in mutual funds. This suggests that a significant
portion of respondents have had positive experiences with mutual fund investments and have
not encountered any major issues. Overall, the most commonly reported problem while
investing in mutual funds is a lack of information in advertisements. It is important for the
industry to address this issue and provide investors with clear and accurate information about
mutual fund products to help them make informed investment decisions.

53
17) Have you ever redeemed your SIPs

Table no. 17
particulars No. of respondents
Yes 8
no 93

Based on the responses received, it appears that a large majority of respondents, 93 out of 101
(or approximately 92%), have not redeemed their SIPs (Systematic Investment Plans). This
suggests that these individuals have likely adopted a long-term investment strategy and are
continuing to invest regularly through SIPs without interrupting the process. On the other
hand, only 8 respondents (or approximately 8%) indicated that they have redeemed their
SIPs. It would be interesting to investigate further the reasons behind these redemptions, such
as changes in personal circumstances, sudden financial needs, or dissatisfaction with
investment performance. Overall, the overwhelming majority of respondents have not
redeemed their SIPs, indicating a commitment to long-term investing and potentially reaping
the benefits of compounding returns over time. It is important to note that investing through
SIPs requires discipline, patience, and a long-term outlook, and investors should carefully
consider their goals and risk tolerance before adopting this investment strategy.

54
18) Are you satisfied with your current mutual funds holding

Table no. 18
particulars No. of respondents
Yes 85
No 12
maybe 4

Based on the responses received, it appears that a majority of respondents, 85 out of 101 (or
approximately 84%), are satisfied with their current mutual fund holdings. This suggests that
these individuals have chosen mutual funds that align with their investment goals and risk
tolerance and are seeing satisfactory returns. On the other hand, 12 respondents (or
approximately 12%) expressed dissatisfaction with their mutual fund holdings. It would be
interesting to investigate further the reasons behind this minority view, such as poor
performance, high fees, or lack of diversification. Finally, 4 respondents (or approximately
4%) expressed uncertainty or neutrality by selecting "maybe." This suggests that they may
not have enough information or experience with mutual funds to make a definitive judgment.
Further education and research on the topic may be necessary to help these individuals make
informed decisions about their investments. Overall, the majority opinion seems to be
positive, indicating that mutual funds are generally meeting the expectations of investors who
have chosen them as part of their investment strategy. However, it is important to regularly
review and adjust investment holdings as needed to ensure they continue to align with
individual goals and risk tolerance.

55
19) Do you think that mutual fund investment is good investment vehicle for small
investors to participate in capital market
Table no. 19
Particulars No. of respondents
Yes 88
No 9
maybe 4

Based on the responses received, it appears that a majority of respondents, 88 out of 101 (or
approximately 87%), believe that mutual fund investment is a good investment vehicle for
small investors to participate in the capital market. This suggests that mutual funds are
viewed favorably as a means for small investors to access the stock market and potentially
benefit from its returns. On the other hand, only 9 respondents (or approximately 9%)
expressed a negative opinion, indicating that they do not believe mutual funds are a good
investment option for small investors. It would be interesting to investigate further the
reasons behind this minority view. Finally, 4 respondents (or approximately 4%) expressed
uncertainty or neutrality by selecting "maybe." This suggests that they may not have enough
information or experience with mutual funds to make a definitive judgment. Further
education and research on the topic may be necessary to help these individuals form a clearer
opinion. Overall, the majority opinion seems to be in favor of mutual funds as a viable
investment option for small investors in the capital market. However, it is important to note
that individual circumstances and risk tolerance vary, and investors should carefully consider
their options before making any investment decisions.

56
 CHAPTER 5
CONCLUSION
On the basis of this study, researcher can conclude that the mutual fund is best investment
option for individual. But in India there are people who still not preferred mutual as an
investment option. The awareness of mutual fund is very less than other investment. Mutual
funds are a popular investment avenue among investors, as they are easy to invest in and give
higher returns as compared to other traditional asset classes such as FDs or saving bank
deposits. This study is mainly concentrate on the perceptions, satisfaction and choice of
individual investors towards Mutual Fund
From this study it is observed that few people like to invest in the Mutual Funds because of
ignorance, lack of knowledge or due to loss in faith. About half of the people invest more
than 10% of their income in various investments avenues.
Running a successful Mutual Funds 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 behaviour of Mutual Fund investors in connection with
the preferences of Brand (AMC), Products, and 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.
Distribution channels are also important for the investment in mutual fund. Financial advisors
are the most preferred channel for investment in mutual funds. They can change investors
mind from one investment option to others. Many of the investors directly invest their money
through AMC’s because they don’t have to pay the entry load. Only those people invest
directly those who know well about mutual fund and its operations and those have time.

5.2 SUGGESTIONS

Financial goals vary, based on Investors age, lifestyle, financial independence, family
commitment and level of Income and expenses among many other factors. Therefore, it
is necessary for Mutual Funds Companies to assess the consumer’s need. They should
begin by defining their investment objectives and needs which could be regular income,
buying a home or finance a wedding or education of children or a combination of all
these needs, the quantum of risk, they are willing to take and their cash flow
requirements.

Mutual Investors should choose the right Mutual Fund Scheme which suits their
requirements. The offer document of the Mutual Fund Scheme should be thoroughly
read and scrutinized. Some factors to evaluate before choosing a particular Mutual Fund
are the track record of the performance of the fund over the last few years in relation to
the appropriate yard stick and similar funds in the same category. Other factors could be
the portfolio allocation, the dividend yield and the degree of transparency as reflected in
the frequency and quality of their communications

57
5.3 LIMITATIONS OF THE STUDY

1. Research can provide number of facts but it does not provide actionable results as
this result is limited by geographical areas of Mumbai.

2. The study is conducted in Mumbai only so the scope of the study is limited.

3. Sample size is 100

4. Since time was a big constrain, area of research was restricted to the city of Mumbai
and selectedarea of Mumbai.

5. It was difficult to find whether respondents actually participate in their financial

planning as some investors who were investing didn’t knew more about financial
planning.

6. Bias behaviour of respondents cannot be ignored.

58
BIBLIOGRAPHY AND ANNEXURE
- BIBLOGRAPHY
- Research paper

Books:
“Mutual funds in India” by H. Sadhak
“Indian mutual funds handbook” by Sundar Sankaran

Research paper

Ashly Lynn Joseph, Dr. M. Prakash (2014), “A Study on Preferred Investment Avenues
among the People and Factors Considered for Investment” International Journal of
Management and Commerce Innovations, ISSN: 2348- 7585 (online), Vol. 2, Issue 1
Black, P. & Wiliam, D. (2006) Developing a theory of formative assessment, in: J. Gardner
(Ed.) Assessment and learning.(London, Sage).

Dr. Shantanu Mehta and Charm Shah (2012), Preference of Investors for Indian Mutual
Funds and its Performance Evaluation, Pacific Business Review International Volume 5 Issue
3 (September 2012)

Dr. K. Lakshmana Rao (2011),”Analysis of Consumers awareness towards mutual fund

schemes”, Zenith International Journal of Multidisciplinary Research, Vol. 1 Issue 8, pp. 175-
192

Dr. G.S. Batra and Ms. Sukhwinder Kaur (2015), Investors Perception Regarding Mutual
Funds in India

Gupta, L. C., & Jain, N. (2008). Indian Households’ Investment Preferences: The Third All
India inves-tors’ Survey. Society for Capital Market Research and Development.
Gangwar, M., & Singh, S. (2017). A Study on Investor Behaviour for Investment in Mutual
Funds in Allahabad.International Advanced Research Journal in Science, Engineering
andTechnology, 266-271.
Hane. (2016). The Perception of Individual Investo towards the Performance ofMutual
Funds. IOSR Journal of Business and Management, 09-14.
Jack L. Treynor and Kay K. Mazay (1966), Can Mutual Fund Outguess the Market?
Jambodekar M. V. (1996), "Marketing Strategies of Mutual Funds – Current Practices and
Future Directions", Working Paper, UTI – IIMB Centre for Capital Markets Education and
Research, Bangalore, 1996.
Kaur, K. (2021). Evaluation of mutual fund schemes in India – Does prolonged existence
rewards performance. Journal of Commerce & Accounting Research, 10(2), 23-29.
Kappal, J. M., & Rastogi, S. (2020). Investment behavior of women entrepreneurs.
Qualitative Research in Financial Markets, 12(4), 485-504.

59
Kavitha Ranganathan (2006), A Study of Fund Selection Behavior of Individual Investors
Towards Mutual Funds – with Reference to Mumbai City, Indian Institute of Capital Markets
9th Capital Markets Conference Paper, Kavitha Ranganathan, T. A. Pai Management Institute
(TAPMI), Date Written: 2006.

Ms. Shalini Goyal and Ms. Dauly Bansal, (2013), A Study on Mutual Funds in India,
International Journal of Scientific and Engineering Research,Volume-4, Issue-5, PP- 1481-
1486.
Mr. Vikash Kumar (April 2008) a study of preferences of investors for investment in
mutual funds for the SBI mutual funds volume 7 issue 11.
Pooja Chaturvedi Sharma (2022) mutual fund flow scale: a multi-item scale for measuring
perception of mutual fund investors. Journal of Commerce & Accounting Research,
11(2)2022, 82-93
Sharma, C. P. (2021). Factors affecting investment decision of working women of emerging
nations: Special reference to Indian metro cities. Journal of Commerce & Accounting
Research, 10(1), 58-66.
Singh B K, A study on investors’ attitude towards mutual funds as an investment option,
International Journal of Research in Management, ISSN 2249-5908 Issue2, Vol. 2 (March-
2012)

Sharpe (1966), Mutual Fund Performance, The Journal of Business, 39, 1, 119-138.
Sridevi, V. (2019). Investor's Behviour towards Mutual Fund Investments. EPRA
International Journal of Research and Development (IJRD), 83-88.
Veeraiah, K. and Kishore Kumar, A., “A Comparative Performance Analysis of Select
Indian Mutual Fund Schemes”, Asia Pacific Journal of Applied Finance, Vol. III Issue I,
January 2014.

Websites:

https://www.amfiindia.com/investor-corner/knowledge-center/SEBI-categorization-of-mutual-fund-
schemes.html

https://www.amfiindia.com/

https://www.sebi.gov.in/

www.moneycontrol.com

www.investopedia.com

www.smartmoneygoal.in

www.personalfn.com

www.equitymaster.com

60
 ANNEXURE I
QUESTIONNAIRE

1. Name
2.Gender
• Male
• Female

3.Age
• Below 30
• 31 - 40
• 41 - 50
• Above 50

4. Occupation
• Business
• Service
• Professional
• Retired

5. Do you invest / have you invested in mutual fund ?

• Yes
• No

6. Select your preference while investing in MF

• Systematic Investment Plan (SIP)
• Systematic Withdrawal Plan (SWP)
• Systematic Transfer Plan (STP)
• Lumpsum

7. According to you, select your source of information about mutual funds*

• Brokers
• Relatives
• Advertisement

61
 • Newspapers
• Magazines
• Other:

8.How did you purchase mutual funds ?

• Online
• Through Brokers
• Through Banks
• Post Office

9.What % of your income do you invest in MF?

• 10%
• 20%
• 25%
• 30% and above

10.What % of returns from MF will satisfy your expectations?

• 5% - 8%
• 8% -10%
• 10% - 12%
• 12% and more

11.In which type of fund or scheme you have invested in mutual fund?
• Equity fund
• Index Fund
• Balance Fund
• Tax Saving Fund
• Money Market Fund
12.How much money in a month do you usually invest in mutual fund?
• less than 5000
• 5001 - 10000
• 10001 - 20000
• More than 20000

13.What is your duration of investments holding in mutual funds schemes ?

• Less than 3 years

62
 • 3 - 5 years
• 5 - 10 years
• Above 10 years

14.How frequently do you track your Investment?

• Once a month
• Every 15 days
• Once in six months
• Once a year
• Other
15. That are objectives of savings in MF investment ?
• To provide for retirement
• for Tax deduction
• For Children Education
• For Purchase of Assets
• Wealth creation

16.What are the reasons for investing in mutual funds

• Professional Management
• Diversification of risk
• High Return
• Tax exemption
• Well Regulated
• Convenient
17. How much returns you have expected while investing in mutual funds
• Low return
• High return
• Moderate return
• Very high return

18.Do you face any problems while investing in mutual funds

• Lack of information in advertisements
• Lack of initiatives by the industry
• No clear idea about public issue
• Insufficient agent and brokers
• No problem faced

63
19.Have you ever redeemed your SIPs?
• Yes
• No

20. If Yes , Reason ________

21. Are you satisfied with your current mutual funds holding
• Yes
• No
• Maybe
22. Do you think that mutual fund investment is good investment vehicle for small investors
to participate in capital market?
• Yes
• No
• Maybe

64
 ANNEXURE II
CERTIFICATE BY THE COMPANY:

65