A STUDY OF PREFERENCES OF THE INVESTORS FOR INVESTMENT IN MUTUAL FUND FOR SBI MUTUAL FUND

Submitted in partial fulfillment of the requirements for Master of Business Administration

By SHRICHA TRIPATHI Roll No. of the Student Batch of 2010-12

ARMY INSTITUTE OF MANAGEMENT & TECHNOLOGY, PLOT NO M-l, POCKET P-5, GREATER NOIDA-201306 (UP) Aug 2011

ACKOWLEDGEMENT It is not necessary to knowledge member of staff unless you wish to do so. However Assistance from individual and organization outside the institute should be Acknowledged.

Student Name----------------------------------------------------- signature-----------------------

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CERTIFICATE OF ORIGINALITY

I_____________________________________ Roll No __________________of 2010, a full time bonafide student of first year of Master of Business Administration (MBA) Programme of Army Institute of Management & Technology, Greater Noida. I hereby certify that this project work carried out by me at _________________________________________________ the report submitted in partial fulfillment of the requirements of the programme is an original work of mine under the guidance of the industry mentor ____________________________________ and faculty mentor_______________________________________________________and i not based or reproduced from any existing work of any other person or on any earlier work undertaken at any other time or for any other purpose, and has not been submitted anywhere else at any time. (Student's Signature) Date: July, 2011 Faculty Mentor's Signature)

CONTENTS SL NO CONTENTS
Acknowledgement Certificate of Originality 1 2 3 4 5 6 7 8 9 Executive Summary Introduction Objective Research methodology Data Analysis and Interpretations Findings & Conclusion Limitations Recommendations Bibliography Annexure

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EXECUTIVE SUMMARY

In few years Mutual Fund has emerged as a tool for ensuring ones financial well being. Mutual Funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of investing in mutual funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds exist. But once people are aware of mutual fund investment opportunities, the number who decide to invest in mutual funds increases to as many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision. This Project gave me a great learning experience and at the same time it gave me enough scope to implement my analytical ability. The analysis and advice presented in this Project Report is based on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. This Report will help to know about the investors Preferences in Mutual Fund means Are they prefer any particular Asset Management Company (AMC), Which type of Product they prefer, Which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan). This Project as a whole can be divided into two parts. The first part gives an insight about Mutual Fund and its various aspects, the Company Profile, Objectives of the study, Research Methodology. One can have a brief knowledge about Mutual Fund and its basics through the Project. The second part of the Project consists of data and its analysis collected through survey done on 300 people. For the collection of Primary data I made a questionnaire and surveyed of 300 people. I also taken interview of many People those who were coming at the SBI Branch where I done my Project. I studied about the products and strategies of other AMCs in Delhi to know why people prefer to invest in those AMCs. This Project covers the topic A STUDY OF PREFERENCES OF THE INVESTERS FOR THE INVESTMENT IN MUTUAL FUND. The data collected has been well organized and presented. I hope the research findings and conclusion will be of use.

Introduction
HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY
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. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the Industry. In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the fund family raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it reached the height if Rs. 1540 billion. The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under. First Phase 1964-87(Monopoly of UTI) Unit Trust of India (UTI) was established on 1963 by an Act of Parliament 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 had Rs.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 Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), 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 in December 1990.At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores. Third Phase 1993-2003 (Entry of Private Sector Funds) 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. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. 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 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. consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS

Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. This pool of money is invested in accordance with a stated objective. The joint ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned

through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The funds Net Asset value (NAV) is determined each day. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as
shares,

debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors. ORGANISATION OF A MUTUAL FUND There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:

Mutual funds have a unique structure not shared with other entities such as companies of firms. It is important for employees & agents to be aware of the special nature of this structure, because it determines the rights & responsibilities of the funds constituents viz., sponsors, trustees, custodians, transfer agents & of course, the fund & the Asset Management Company(AMC) the legal structure also drives the inter-relationships between these constituents. The structure of the mutual fund India is governed by the SEBI (Mutual Funds) regulations, 1996. These regulations make it mandatory for mutual funds to have a structure of sponsor, trustee, AMC, custodian. The sponsor is the promoter of the mutual fund,& appoints the trustees. The trustees are responsible to the investors in the mutual fund, & appoint the AMC for managing the investment portfolio. The AMC is the business face of the mutual fund, as it manages all affairs of the mutual fund. The mutual fund & the AMC have to be

registered with SEBI. Custodian, who is also registered with SEBI, holds the securities of various schemes of the fund in its custody.

Sponsor:
The sponsor is the promoter of the mutual fund. The sponsor establishes the Mutual fund & registers the same with SEBI. He appoints the trustees, Custodians & the AMC with prior approval of SEBI, & in accordance with SEBI regulations. He must have at least five year track record of business interest in the financial markets. Sponsor must have been profit making in at least three of the above five years. He must contribute at least 40% of the capital of the AMC.

Trustees:
The Mutual Fund may be managed by a Board of trustees a of individuals, or a trust company a corporate body. Most of the funds in India are managed by board of trustees. While the board of trustees is governed by the provisions of the Indian trust act, where the trustee is the corporate body, it would also be required to comply with the provisions of the companies act, 1956. the board of trustee company, as an independent body, act as protector of the unit-holders interest. The trustees dont directly manage the portfolio of securities. For this specialist function, they appoint an AMC. They ensure that the fund is managed by AMC as per the defined objectives & in accordance with the trust deed & SEBI regulations. The trust is created through a document called the trust deed i.e., executed by the fund sponsor in favor of the trustees. The trust deed is required to be stamped as registered under the provision of the Indian registration act & registered with SEBI. The trustees begin the primary guardians of the unitholders funds & assets, a trustee has to be a person of high repute & integrity.

Asset Management Company(AMC):

The role of an Asset management companies is to act as the investment manager of the trust. They are the ones who manage money of investors. An AMC takes decisions, compensates investors through dividends, maintains proper accounting & information for pricing of units, calculates the NAV, & provides information on listed schemes. It also exercises due diligence on investments & submits

quarterly reports to the trustees. AMCs have been set up in various countries internationally as an answer to the global problem of bad loans. Bad loans are essentially of two types: bad loans generated out of the usual banking operations or bad lending, and bad loans which emanate out of a systematic banking crisis. It is in the latter case that banking regulators or governments try to bail out the banking system of a systematic accumulation of bad loans which acts as a drag on their liquidity, balance sheets and generally the health of banking. So, the idea of AMCs or ARCs is not to bail out banks, but to bail out the banking system itself.

Types of AMCs in Indian Context:

The following are the various types of AMCs we have in India: 1. AMCs owned by banks. 2. AMCs owned by financial institutions. 3. AMCs owned by Indian private sector companies. 4. AMCs owned by foreign institutional investors. 5. AMCs owned by Indian & foreign sponsors.

Custodian:
Often an independent organization, it takes custody all securities & other assets of mutual fund. Its responsibilities include receipt & delivery of securities collecting income-distributing dividends, safekeeping of the unit & segregating assets & settlements between schemes. Mutual fund is managed either trust company board of trustees. Board of trustees & trust are governed by provisions of Indian trust act. If trustee is a company, it is also subject Indian Company Act. Trustees appoint AMC in consultation with the sponsors & according to SEBI regulation. All mutual

fund schemes floated by AMC have to be approved by trustees. Trustees review & ensure that net worth of the company is according to stipulated norms, every quarter. Though the trust is the mutual fund, the AMC is its operational face. The AMC is the first functionary to be appointed, & is involved in appointment of all other functionaries. The AMC structures the mutual fund products, markets them & mobilizes fund, manages the funds & services to the investors. A draft offer document is to be prepared at the time of launching the fund. Typically, it pre-specifies investment objectives of the fund, the risk associated, the cost involved in the process & the broad rules to enter & to exit from the fund & other areas of operation. In India as in most countries, these sponsors need approval from a regulator, SEBI in our case. SEBI looks at track records of the sponsor & its financial strength granting approval to the fund for commencing operations. A sponsor then hires an asset management company to invest the funds according to the investment objective. It also hires another entity to be the custodian of the assets of the fund & perhaps the third one to handle registry work for the unit holder of the fund.

Registrars & Transfer Agent(R & T Agent):

The Registrars & Transfer Agents(R & T Agents) are responsible for the investor servicing function, as they maintain the records of investors in mutual funds. They process investor applications; record details provide by the investors on application forms; send out to investors details regarding their investment in the mutual fund; send out periodical information on the performance of the mutual fund; process dividend payout to investor; incorporate changes in information as communicated by investors; & keep the investor record up-to-date, by recording new investors & removing investors who have withdrawn their funds.

ADVANTAGES OF MUTUAL FUND

Professional Management The primary advantage of funds (at least theoretically) is the professional management of your money. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio Diversification By owning shares in a mutual fund instead of owning individual stocks or bonds, your risk is spread out. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others. In other words, the more stocks and bonds you own, the less any one of them can hurt you (think about Enron). Large mutual funds typically own hundreds of different stocks in many different industries. It wouldn't be possible for an investor to build this kind of a portfolio with a small amount Economies of scale- Because a mutual fund buys and sells large amounts of securities at a time, its transaction costs are lower than you as an individual would pay. Convenient Administration-Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient. Return Potential: Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. Transparency- You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook. Flexibility- Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. Affordability-Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.

Choices of Schemes- Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.

Well-Regulated-All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

Financial Planning: Investors in the mutual fund industry today have a choice of 39 mutual funds, offering nearly 500 products. Though the categories of products offered can be classified under about a dozen generic heads. It is also possible for investors to decide the manner in which their returns would be distributed and choose from the product itself.

Reduces Transaction costs: Mutual funds provide the investor the benefits of economies of scale, by virtue of their size. Though the investors individual contribution is small the mutual fund itself is large enough to be able to reduce costs in transactions. These benefits are passed on to the investors.

Provides liquidity: Most of the funds being sold today are open ended. That is investors can sell existing units or buy new units at any point if time, at prices that are related to the NAV of the fund on the date of the transaction. This enables investors to enjoy a high level of liquidity on their investments. Since investors continuously enter and exit funds, funds are actually able to provide liquidity to the investors, even if the underlying markets, in which the portfolio is invested, may not have the liquidity that the investors seek.

Regular periodic Savings: Mutual funds units in modern times are not issued in the form of certificates, with a minimum denomination. They are instead issued as account statements, with the facility to hold units in fractions up to 4 decimal points. It is also simpler for investors to make additional investments, to repurchase a part of their, to reinvest dividends, to convert their holdings in one fund into a holding in another, and to alter the investment options regarding their periodical dividends.

Provides Information: Mutual Funds inform investors periodically about the performance of the fund .They disclose the NAVS daily and in most cases this information is available on phone and on internet. The complete portfolio of the fund is available to investors. They also provide

additional information on the maturity profile of their investments, credit quality of their portfolios, and the behavior of NAV, over the period since the inception of the fund.

Simplicity Buying a mutual fund is easy! Pretty well any bank has its own line of mutual funds, and the minimum investment is small. Most companies also have automatic purchase plans whereby as little as $100 can be invested on a monthly basis.

Professional Management- Did you notice how we qualified the advantage of professional management with the word "theoretically"? Many investors debate over whether or not the socalled professionals are any better than you or I at picking stocks. Management is by no means infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll talk about this in detail in a later section.

Costs Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The mutual fund industry is masterful at burying costs under layers of jargon. These costs are so complicated that in this tutorial we have devoted an entire section to the subject.

Taxes-When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.

FREQUENTLY USED TERMS Net Asset Value (NAV) Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. The net asset value (NAV) is the market value of the fund's underlying securities. It is calculated at the end of the trading day. Any open-end funds buy or sell order received on that day is traded based on the net asset value calculated at the end of the day. The NAV per units is such Net Asset Value divided by the number of outstanding units NAV = Market Value of Assets - Liabilities ----------------------------Units Outstanding For eg., if the market value of the securities of a mutual fund scheme is Rs. 200 lakhs & the mutual fund has issued 10 lakhs units at Rs. 10 to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis- daily or weekly- depending Sale Price Is the price you pay when you invest in a scheme or NAV a unit holder is charged while investing in an open-ended scheme is sale price. Also called Offer Price. It may include a sales load if applicable. Repurchase Price Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price. Redemption Price Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related.

Sales Load Is a charge collected by a scheme when it sells the units. Also called, Front-end load. A load is one that charges a percentage of NAV for entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing & distribution expenses. Suppose the NAV per unit is Rs.10. if the entry as well as exit load charged were 1%, then the investors who buy would be required to pay Rs.10.10 & those who offer their units for repurchase to the mutual fund will get only Rs.9.9 per unit. The investors should take the loads into consideration while making investment as these affect their yields/returns.

No Load Schemes that do not charge a load are called No Load schemes. A no-load fund is one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.

CATEGORIES OF MUTUAL FUNDS

Mutual funds can be classified as follow :

Based on their structure:
Open-ended Fund / Scheme An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.

Close-ended Fund / Scheme A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis. Interval scheme Interval funds combine the features of open-ended & closed ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.

Schemes according to Investment Objective:

A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows: Growth / Equity Oriented Schemes The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the

options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Income / Debt Oriented Scheme The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. Balanced Fund The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds. Money Market or Liquid Fund 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 deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.

Other Schemes

Tax Saving Schemes These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme. Gilt Fund These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes. Index Funds Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc these schemes invest in the securities in the same weight age comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

Sector specific funds / schemes These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky

compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.

INVESTMENT STRATEGIES
Dividend Payout Option: Dividends are paid-out to investors under the Dividend Payout Option. However, the NAV of the mutual fund scheme falls to the extent of the dividend payout. Dividend Re-investment Option: Here the dividend accrued on mutual funds is automatically reinvested in purchasing additional units in open-ended funds. In most cases mutual funds offer the investor an option of collecting dividends or re-investing the same. Retirement Pension Option: Some schemes are linked with retirement pension. Individuals participate in these options for themselves, and corporates participate for their employees. Insurance Option: Certain Mutual Funds offer schemes that provide insurance cover to investors as an added benefit. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA) Systematic Transfer Plan: fund. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each Month. Long Terms investments- Typically, such funds invest a major portion of the portfolio in longterm debt papers. under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual

MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%30% to equity. FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.

RISKS

Ma x ris k

High risk
Aggressive growth Aggressive income

Average risk Growth and income

Low risk
Conservative income and reasonable stability

Lowest risk Maximum safety and stability

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 upto you, the investor to decide how much risk you are willing to take. In order to do this you must first be aware of the different types of risks involved with your investment decision.

Market Risk: Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting the market in general lead to this. This is true, may it be big corporations or smaller mid-sized companies. This is known as Market Risk. A Systematic Investment Plan (SIP) that works on the concept of Rupee Cost Averaging (RCA) might help mitigate this risk.

Credit Risk: The debt servicing ability (may it be interest payments or repayment of principal) of a company through its cashflows 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.

Inflation Risk: Things you hear people talk about:"Rs. 100 today is worth more than Rs. 100 tomorrow.""Remember the time when a bus ride costed 50 paise?" 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

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.

Political/Government Policy Risk: Changes in government policy and political decision can change the investment environment. They can create a favorable environment for investment 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.

Company Profile
INTRODUCTION TO SBI MUTUAL FUND
SBI Funds Management Pvt. Ltd. is one of the leading fund houses in the country with an investor base of over 4.6 million and over 20 years of rich experience in fund management consistently delivering value to its investors. SBI Funds Management Pvt. Ltd. is a joint venture between 'The State Bank of India' one of India's largest banking enterprises, and Socit Gnrale Asset Management (France), one of the world's leading fund management companies that manages over US$ 500 Billion worldwide. Today the fund house manages over Rs 28500 crores of assets and has a diverse profile of investors actively parking their investments across 36 active schemes. In 20 years of operation, the fund has launched 38 schemes and successfully redeemed 15 of them, and in the process, has rewarded our investors with consistent returns. Schemes of the Mutual Fund have time after time outperformed benchmark indices, honored us with 15 awards of performance and have emerged as the preferred investment for millions of investors. The trust reposed on us by over 4.6 million investors is a genuine tribute to our expertise in fund management. SBI Funds Management Pvt. Ltd. serves its vast family of investors through a network of over 130 points of acceptance, 28 Investor Service Centres, 46 Investor Service Desks and 56 District Organizers.SBI Mutual is the first bank-sponsored fund to launch an offshore fund Resurgent India Opportunities Fund.

Proven Skills in wealth generation:

SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable track record in judicious investments and consistent wealth creation. The fund traces its lineage to SBI - Indias largest banking enterprise. The institution has grown immensely since its inception and today it is India's largest bank, patronized by over 80% of the top corporate houses of the country. SBI Mutual Fund is a joint venture between the State Bank of India and Socit General Asset Management, one of the worlds leading fund management companies that manages over US$ 500 Billion worldwide. Exploiting expertise, compounding growth: In twenty years of operation, the fund has launched 38 schemes and successfully redeemed fifteen of them. In the process it has rewarded its investors handsomely with consistently high returns. . Schemes of the Mutual fund have consistently outperformed benchmark indices and have emerged as the preferred investment for millions of investors and HNIs. Today, the fund manages over Rs. 51,461 crores of assets and has a diverse profile of investors actively parking their investments across 36 active schemes. The fund serves this vast family of investors by reaching out to them through network of over 130 points of acceptance, 28 investor service centers, 46 investor service desks and 56 district organizers. SBI Mutual is the first bank-sponsored fund to launch an offshore fund Resurgent India Opportunities Fund. Growth through innovation and stable investment policies is the SBI MF credo. Fund house expertise: The investment environment is becoming increasingly complex. Innumerable parameters need to be factored in to generate a clear understanding of market movement and performance in the near future along , we devote considerable resources to gain, maintain and sustain our profitable insights into market movements. We consistently push the envelope to ensure our investors get the maximum benefits year after year.

Research Our expert team of experienced and market savvy researchers prepare comprehensive analytical and informative reports on diverse sectors and identify stocks that promise high performance in the future. This team works in tandem with a compliance and risk-monitoring department, which ensures minimization of operational risks while protecting the interests of the investors.

Quite naturally many of our equity funds have delivered consistent returns to investors and have repeatedly out performed benchmark indices by wide margins

PRODUCTS OF SBI MUTUAL FUND Equity schemes

The investments of these schemes will predominantly be in the stock markets and endeavor will be to provide investors the opportunity to benefit from the higher returns which stock markets can provide. However they are also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such investors who have high risk taking capacities and are willing to think long term. Equity Funds include diversified Equity Funds, Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks across different sectors while sectoral funds which are specialized Equity Funds restrict their investments only to shares of a particular sector and hence, are riskier than Diversified Equity Funds. Index Funds invest passively only in the stocks of a particular index and the performance of such funds move with the movements of the index. Magnum COMMA Fund Magnum Equity Fund Magnum Global Fund Magnum Index Fund

Magnum Midcap Fund Magnum Multicap Fund Magnum Multiplier plus 1993

Magnum Sectoral Funds Umbrella

MSFU- IT Fund MSFU- Pharma Fund MSFU- Contra Fund MSFU- FMCG Fund SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI Infrastructure Fund - Series I SBI Magnum Taxgain Scheme 1993 SBI ONE India Fund SBI TAX ADVANTAGE FUND - SERIES I

Debt schemes
Debt Funds invest only in debt instruments such as Corporate Bonds, Government Securities and Money Market instruments either completely avoiding any investments in the stock markets as in Income Funds or Gilt Funds or having a small exposure to equities as in Monthly Income Plans or Children's Plan. Hence they are safer than equity funds. At the same time the expected returns from debt funds would be lower. Such investments are advisable for the risk-averse investor and as a part of the investment portfolio for other investors.

Magnum Childrens benefit Plan Magnum Gilt Fund Magnum Income Fund Magnum Insta Cash Fund Magnum Income Fund- Floating Rate Plan Magnum Income Plus Fund Magnum Insta Cash Fund -Liquid Floater Plan Magnum Monthly Income Plan Magnum Monthly Income Plan - Floater Magnum NRI Investment Fund SBI Premier Liquid Fund

BALANCED SCHEMES
Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they are less risky than equity funds, but at the same time provide commensurately lower returns. They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets, but is looking for higher returns than those provided by debt funds. Magnum Balanced Fund

COMPETITORS OF SBI MUTUAL FUND

Some of the main competitors of SBI Mutual Fund in Patna are as Follows: 1. ICICI Mutual Fund 2. Reliance Mutual Fund 3. UTI Mutual Fund 4. Birla Sun Life Mutual Fund 5. Kotak Mutual Fund

6. HDFC Mutual Fund 7. Sundaram Mutual Fund 8. LIC Mutual Fund 9. Principal

AWARDS AND ACHIEVEMENTS

At SBI Funds Management, we devote considerable resources to gain, maintain and sustain our profitable insights into market movements. The trust reposed on us by millions of investors is a genuine tribute to our expertise in Fund Management and dedication to our singular focus. And this has resulted in various awards and accolades for us from the fund industry, motivating us to do better. Some of the awards won by us are listed below. 2011 Readers Digest Awards 2011 For Trusted Brand in Fund Management Category ICRA Mutual Fund Awards 2011 For Magnum Income Fund - Floating Rate Plan - Long Term Plan 2010 ICRA Mutual Fund Awards 2010 For Magnum Global Fund 2009 ICRA Mutual Funds Awards 2009 For Magnum Tax Gain Scheme 1993 The Lipper India Fund Awards 2009 For Various Schemes 2008 Outlook Money NDTV Profit Awards 2008 The Lipper India Fund Awards 2008 For Magnum Balanced Fund Dividend ICRA Mutual Fund Awards 2008 For Various Schemes 2007

Outlook Money NDTV Profit Awards 2007 CNBC Awaaz Consumer Awards 2007 The Lipper India Fund Awards 2007 For Various Schemes ICRA Mutual Funds Awards 2007 For Various Schemes CNBC TV18 - CRISIL Mutual Fund of the Year Award 2007 For Various Schemes

KEY PERSONNELS
Mr. Deepak Kumar chatterjee Managing Director & Chief Executive Office

Mr.C.A Santosh Chief Manager - Customer Service.

Ms. Aparna Nirgude Chief Risk Officer

Mr.K.T.Ravindran Company Secretary & Compliance Officer

Mr.Navneet Munot Chief Investment Officer

Mr. V.V.Anand Executive Vice-President

Mr.R.S.Srinivas Jain Chief Marketing Officer

Scope & Objectives

Scope of the study
A big boom has been witnessed in Mutual Fund Industry in resent times. A large number of new players have entered the market and trying to gain market share in this rapidly improving market. The research was carried on in New Delhi. I had been sent at two branches of State Bank of India New Delhi where I completed my Project work. I surveyed on my Project Topic A study of preferences of the Investors for investment in Mutual Fund on the visiting customers of the SBI Greater Kailash-II Branch and SBI CGO Complex Lodhi Road. The study will help to know the preferences of the customers, which company, portfolio, mode of investment, and option for getting return and so on they prefer. This project report may help the company to make further planning and strategy.

OBJECTIVES OF THE STUDY 1. To find out the Preferences of the investors for Asset Management Company. 2. To know the Preferences for the portfolios. 3. To know why one has invested or not invested in SBI Mutual fund 4. To find out the most preferred channel.

5. To find out what should do to boost Mutual Fund Industry

Research Methodology

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

Data sources:
Research is totally based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various journals and websites.

Duration of Study:
The study was carried out for a period of two months, from 14 June to 30th July 2011.

Sampling:

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

The sample size of my project is limited to 500 people only. Out of which only people 300 had invested in Mutual Fund. Other 200 people did not have invested in Mutual Fund.

Sampling procedure: The sample was selected of them who are the customers/visitors of State Bank if India, Greater Kailash-II and SBI CGO Complex New Delhi, irrespective of them being investors or not or availing the services or not. It was also collected through personal visits to persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.

Data Interpretation and Analysis

ANALYSIS & INTERPRETATION OF THE DATA

(a)Age distribution of the Investors

Age Group No. Investors

<= 30 of 60

31-35 40

36-40 50

41-45 80

46-50 50

>50 20

Investors invested in Mutual Fund

80 70 60 50 40 30 20 10 0

80 60 40 50 50 20 <=30 31-35 36-40 41-45 46-50 >50

Age group of the Investors

Interpretation:
According to this chart out of 300 Mutual Fund investors of New Delhi the most are in the age group of 41-45 yrs. i.e. roughly 28% the second most investors are in the age group of below 30 yrs i.e. 20% and the least investors are in the age group of 50 yrs and above.

(b). Educational Qualification of investors of Delhi

Educational Qualification Post Graduate Graduate Others Total

Number of Investors 100 92 108 300

36%

33%

31%

post graduate

Graduate

Others

Interpretation:
Out of 300 Mutual Fund investors 36% of the investors in New Delhi are Post Graduate, 33% are Graduate and 31% are others .

c). Occupation of the investors of Delhi Occupation

Govt. Service Pvt. Service Business Others

No. of Investors
90 70 114 6 .

No. of Investors

120 100 80 60 40 20 0 Govt. Service Pvt. Service Business 114 70 6 Others

90

Occupation of the customers

Interpretation:
In Occupation group out of 300 investors, 30% are Govt. Employees, 23% are Businessman, 38% are Govt. Employees, and 2% are in others.

(d). Monthly Family Income of the Investors of Delhi Income Group

<=20,000 20,001-40,000

No. of Investors
30

65

40,001-60,000 60,001-80,000 >85,000

80 70 No. of Investors 60 50 40 30 20 10 0 <=20 20-40 40-60 60-80 30 65 60

70 60 75

75

>80

Income Group of the Investorsn (Rs. in Th.)

Interpretation:
In the Income Group of the investors of Delhi, out of 300 investors, 25% investors that is the maximum investors are in the monthly income group of above Rs. 80,000 , Second one i.e. 23% investors are in the monthly income group of 40,000-60,001 and the minimum investors i.e. 10% are in the monthly income group of below Rs. 20,000

(2) Investors invested in different kind of investments. Kind of Investments

Saving A/C

Fixed deposits Insurance Mutual Fund Post office (NSC) Shares/Debentures Gold/Silver

No. of Respondents 255 148 120 152 25 75 35

Real Estate

65

K indsof Inves ent tm

65 35
Po st Of Go Sa In fic ld vi su e( /S ng ra NS ilv nc A/ C) er e c

75 25 152 120 148 255 0 50 100 150 200 2 50 300

No.of R pondents es

Interpretation: From the above graph it can be inferred that out of 300 people, 85 % people have
invested in Saving A/c, 40% in Insurance, 49% in Fixed Deposits, 51% in Mutual Fund, 8% in Post Office, 25% in Shares or Debentures, 12% in Gold/Silver and 22% in Real Estate.

3. Preference of factors while investing

Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. Respondents

of 40

60

75

125

13% 4 2% 20%

2 5% L iquidity L R ow isk Hig R h eturn Trus t

Interpretation:
Out of 300 People, 42% People prefer to invest where there is Trust, 25% prefer to invest where there is high return, 20% prefer low risk and 13% prefer Liquidity.

4. Awareness about Mutual Fund and its Operations

Response No. of Respondents

Yes 135

No 65

33%

67%

Y es

No

Interpretation:
From the above chart it is inferred that 67% People are aware of Mutual Fund and its operations and 33% are not aware of Mutual Fund and its operations.

5. Source of information for customers about Mutual Fund

Source of information Advertisement Peer Group Bank Financial Advisors No. of Respondents 18 40 72 20

8 0 7 0 6 0 5 0 4 0 3 0 4 0 2 0 1 0 1 8 0 Advertis ent P Group em eer

No. of R espondents

7 2 2 0 B nk a F ncia ina l Advis ors

S ource of Inform tion a

Interpretation:
From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. Out of 150 Respondents, 49% know about Mutual fund Through Bank, 26% through Peer Group, 13% through Financial Advisors and 12% through Advertisement.

6. Investors invested in Mutual Fund

Response YES NO Total No. of Respondents 120 80 200

No 40%

Yes 60%

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

7. Reason for not invested in Mutual Fund

Reason Not Aware Higher Risk Not any Specific Reason No. of Respondents

25 10 75

23%

9% 68%
Not Aware H her R k ig is Not Any

Interpretation:
Out of 110 people, who have not invested in Mutual Fund, 68% do not have any particular reason, 23% said that they are not aware of mutual funds and 9% do not invested due to higher risk.

8. Investors invested in different Assets Management Co. (AMC) Name of AMC

SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others

No. of Investors 175 50 30 100 75 45 70

Others HDFC Name of AMC Kotak SBIMF ICICI Reliance UTI 0 50 50 30 45

70

175 75 100

100

150

200

No. of Investors

Interpretation:
In Delhi most of the Investors preferred SBIMF. Out of 200 respondents Investors 87% have invested in SBIMF, only 50% have invested in Reliance Mutual Fund, 37% in ICICI Prudential, 25% in UTI,22.5% in Kotak,15% in HDFC and 35% in Others

9. Reason for invested in SBIMF Reason

Associated with SBI Better Return Agents Advice

No. of Respondents
75 10 25

23%

9% 68%

As ociated with SB s I

Better R eturn

Ag entsAdvice

Interpretation:
Out of 110 investors of SBIMF 68% have invested because of its association with Brand SBI, 23% invested on Agents Advice, 9% invested because of better return.

10. Reason for not invested in SBIMF Reason

Not Aware Less Return Agents Advice

No. of Respondents
35 20 20

27% 46%

27%
Not A are w Less Return A ent's A g dvice

Interpretation:
Out of 75 people who have not invested in SBIMF, 46% were not aware with SBIMF, 27% do not have invested due to less return and 27% due to Agents Advice.

11. Preference of Investors for future investment in Mutual Fund Name of AMC
SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others

No. of Investors 108 20 35 82 65 70 75

Others K otak Nam of AMC e IC I Prudential IC R eliance H F DC UTI S BIMF 0 20 35 20

75 70 65 82

108 40 60 80 100 120

No. of Inves tors

Interpretation:
Out of 300 investors, 27% prefer to invest in Reliance, 22% in ICICI Prudential, 36% in SBIMF, 25% in others, 23% in Kotak, 7% in UTI and 12% in HDFC Mutual Fund.

12. Channel Preferred by the Investors for Mutual Fund Investment

Channel No. of Respondents Financial Advisor 72 Bank 125 AMC 93

32%

25%

43%
F ncia Advisor ina l B nk a AMC

Interpretation:
Out of 300 Investors 32% preferred to invest through Financial Advisors, 32% through AMC and 43% through Bank.

13. Mode of Investment Preferred by the Investors

Mode of Investment No. of Respondents One time Investment 15 Systematic Investment Plan (SIP) 285

5%

95%

One tim Inves ent e tm

S IP

Interpretation:
Out of 300 Investors 5% preferred One time Investment and 95 % Preferred through Systematic Investment Plan.

14. Preferred Portfolios by the Investors Portfolio

Equity Debt Balanced

No. of Investors
126 54 120

40 %

42%

18%

Equity

D ebt

B alance

Interpretation:
From the above graph 42% preferred Equity Portfolio, 40% preferred Balance and 18% preferred Debt portfolio

15. Option for getting Return Preferred by the Investors

Option Dividend Payout Dividend Reinvestment No. of Respondents 25 30 245 Growth

8%

10%

82%
Dividend Payout Dividend R einves ent tm Growth

Interpretation:
From the above graph 82% preferred Growth Option, 8% preferred Dividend Payout and 10% preferred Dividend Reinvestment Option.

16. Preference of Investors whether to invest in Sectoral Funds Response Yes No No. of Respondents 65 235

22%

78%

Y es

No

Interpretation:
Out of 300 investors, 78% investors do not prefer to invest in Sectoral Fund because there is maximum risk and 22% prefer to invest in Sectoral Fund.

Findings and Conclusion

Findings

In Delhi in the Age Group of 41-45 years were more in numbers. The second most Investors were in the age group of below 30 years and the least were in the age group of above 50 years.

In Delhi most of the Investors were Graduate or Post Graduate. In Occupation group most of the Investors were Businessman, the second most Investors were govt employees and the least were associated with Pvt. Investors. In family Income group, above 80,000 were more in numbers, the second most were in the Income group of more than Rs.60,000-80,000 and 40,000-60,000 and the least were in the group of below Rs. 20,000.

About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits, Only 50% Respondents invested in Mutual fund. Mostly Respondents preferred Trust while investment, the second most preferred High Risk then liquidity and the least preferred Liquidity. Only 67% Respondents were aware about Mutual fund and its operations and 33% were not.

Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not have invested in Mutual fund. Out of Respondents 81% were not aware of Mutual Fund, 13% told there is not any specific reason for not invested in Mutual Fund and 6% told there is likely to be higher risk in Mutual Fund.

Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI Prudential has also good Brand Position among investors, SBIMF places after ICICI Prudential according to the Respondents.

Out of 55 investors of SBIMF 64% have invested due to its association with the Brand SBI, 27% Invested because of Advisors Advice and 9% due to better return.

Most of the investors who did not invested in SBIMF due to not Aware of SBIMF, the second most due to Agents advice and rest due to Less Return.

43% Investors preferred to Invest through bank, 32% through AMC and 25% through Financial Advisors. 95% preferred SIP and 5% preferred One Time Investment out of both type of Mode of Investment.

The most preferred Portfolio was Equity, the second most was Balance (mixture of both equity and debt), and the least preferred Portfolio was Debt portfolio.

Maximum Number of Investors Preferred Growth Option for returns, the second most preferred Dividend Reinvestment and then Dividend Payout. Most of the Investors did not want to invest in Sectoral Fund, only 22% wanted to invest in Sectoral Fund.

Conclusion
Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, and Channels etc. I observed that in Delhi peoples are very much aware about mutual funds and they have invested there amount in many mutual fund also. But there are many peoples who have fear of Mutual Fund; they think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of mutual fund investors are also growing. Brand plays important role for the investment. People invest in those Companies where they have faith or they are well known with them. There are many AMCs in Delhi but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. Reliance, UTI, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle, Sunderam, etc. Distribution channels are also important for the investment in mutual fund. Financial Advisors are the most preferred channel for the investment in mutual fund. They can change investors mind from one investment option to others.

Recommendations & Suggestions

Recommendations
The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors.

Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration. Because there are different schemes available for the peoples of different age group so financial advisors should be enough aware to advice them.

Younger people aged fewer than 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off.

Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality.

Limitation
Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not given actual answers of my questionnaire. Sample size is limited to 500 visitors of SBI , Greater kailash-II and SBI CGO Complex Branch, New Delhi out of these only 300 had invested in Mutual Fund. The sample size may not adequately represent the whole market. Some respondents were reluctant to divulge personal information which can validity of all responses. The research is confined to a certain part of New Delhi. I was given a time period of four months only, which may not suffice the required tenure to study the MF industry. affect the

BIBLIOGRAPHY

NEWS PAPERS OUTLOOK MONEY TELEVISION CHANNEL (CNBC AAWAJ) MUTUAL FUND HAND BOOK FACT SHEET AND STATEMENT WWW.SBIMF.COM WWW.MONEYCONTROL.COM WWW.AMFIINDIA.COM WWW.ONLINERESEARCHONLINE.COM WWW. MUTUALFUNDSINDIA.COM

Annexure

QUESTIONNAIRE
A study of preferences of the investors for investment in mutual funds.
1. Personal Details: (a). Name:(b). Add: (c). Age:(d). Qualification:PG (e). Occupation. Pl tick () Govt. Ser Pvt. Ser Business Agriculture Others Graduate Others Phone:-

(g). What is your monthly family income approximately? Pl tick (). Up Rs.20,000 to Rs. 20,001 to Rs. 40,001 to Rs. 60,001 to Rs. 80,001 and above

40000

60,000

80,000

2. What kind of investments you have made so far? Pl tick (). All applicable. a. Saving account e. Post Office-NSC, etc b. Fixed deposits f. Shares/Debentures c. Insurance g. Gold/ Silver d. Mutual Fund h. Real Estate

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

(a) Liquidity

(b) Low Risk

(c) High Return

(d) Trust

4. Are you aware about Mutual Funds and their operations? Pl tick (). 5. If yes, how did you know about Mutual Fund? a. Advertisement b. Peer Group c. Banks

Yes

No

d. Financial Advisors Yes No

6. Have you ever invested in Mutual Fund? Pl tick ().

7. If not invested in Mutual Fund then why? (a) Not aware of MF (b) Higher risk (c) Not any specific reason

8. If yes, in which Mutual Fund you have invested? Pl. tick (). All applicable. a. SBIMF b. UTI c. HDFC d. Reliance e. Kotak f. Other. specify

9. If invested in SBIMF, you do so because (Pl. tick (), all applicable). a. SBIMF is associated with State Bank of India. b. They have a record of giving good returns year after year. c. Agent Advice 10. If NOT invested in SBIMF, you do so because (Pl. tick () all applicable).

a. You are not aware of SBIMF. b. SBIMF gives less return compared to the others. c. Agent Advice 11. When you plan to invest your money in asset management co. which AMC will you prefer?

Assets Management Co. a. SBIMF b. UTI c. Reliance d. HDFC e. Kotak f. ICICI 12. Which Channel will you prefer while investing in Mutual Fund? (a) Financial Advisor (b) Bank (c) AMC

13. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick (). a. One Time Investment b. Systematic Investment Plan (SIP)

14. When you want to invest which type of funds would you choose? a. Having only debt b. Having debt & equity c. Only equity portfolio. portfolio.

portfolio

15. How would you like to receive the returns every year? Pl. tick (). a. Dividend payout b. Dividend re-investment c. Growth in NAV

16. Instead of general Mutual Funds, would you like to invest in sectorial funds? Please tick (). Yes No