A

PROJECT REPORT

ON

A STUDY ON CONSUMER “PERCEPTION ON MUTUAL FUND’’

SUBMITTED IN THE PARTIAL FULFILMENT OF THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

AFFILIATED TO HIMACHAL PARDESH UNIVERSITY

SHIMLA (HP)

(SESSION 2021-2024)

SUBMITED TO: SUBMITTED BY:

MR. GOVIND GOPAL ABHISHEK SHARMA

DEPARTMENT OF BBA UNIVERSITY ROLL NO-5210360004

BBA 6TH SEMESTER

Netaji Subhash Chandra Bose Memorial

College in Hamirpur, Himachal Pradesh
 PREFACE
I had to undergone for the project work after completing the fifth semester. The
attractive feature of the B.B.A. course is that along with theory we also get to
have the exposure of the practical environment. Report is based on
CONSUMER PERCEPTION ON MUTUAL FUND. The Research
Report revolves around investors perception on mutual fund tried to
explore the various aspects. The certain objectives were predefined and the task
was to accomplish them. I have made my project with the help of primary and
secondary data. After the whole process I have observe my all data and
analysis.

Signature

ABHISHEK SHARMA
 ACKNOWLEDGEMENT
The project work I pursued as a part of school of Business
Management Government Post Graduate College, Dharamshala
gives me an immense pleasure and privilege to acknowledge my
deepest sense of gratitude towards all those who helped me in the
successful execution of this project. There able guidance and
support have been constant source of knowledge and motivation
for me and I am very grateful to them.

I am highly indebted to my project guide Mrs. Meenakshi Mam

whose constructive counselling and able guidance helped me
immensely in bringing out this project in the present form. And
lastly the entire faculty member and the entire Lab staff for
providing me this opportunity and expose me to industrial culture.
I am short of words to express my respect and honour to my
parents, family members and my friends who showered their
blessings, affection, encouragement and inspiration without
which this report would not have been finalized.

ABHISHEK SHARMA

BBA 6th semester

University Roll no. – 5210360004

 CERTIFICATE FROM

GUIDE
This is to certify that MR. ABHISHEK SHARMA of
Department of BBA Government Post Graduate College
Dharamshala has successfully completed the project work title
CONSUMER PERCEPTION ON MUTUAL FUND in
partial fulfilment of requirement for the completion of BBA
course as prescribed by the Himachal Pradesh University.
This project report is the record of authentic work carried out
by him. He has worked under my guidance.

Signature

MR.GOVIND GOPAL
(Project guide)
DECLARATION

I, ABHISHEK SHARMA under signed hereby declare that

this project report on “CONSUMER PERCEPTION ON
MUTUAL FUND” is record of authentic work carried out by
me during the period from May to July and has not submitted
to any other university or institution for the award of any
degree/diploma etc.

Signature
ABHISHEK SHARMA

STABLE OF CONTENTS
Chapter Title Page No.
no.
 PREFACE
ACKNOWLEDGEMENT
CERTIFICATE FROM GUIDE
DECLERATION
LIST OF CONTENTS
LIST OF TABLES AND CHARTS

1. INTRODUCTION 1
INDUSTRY INTRODUCTION 2–4

2. COMPANY PROFILE 5

INTRODUCTION TO MUTUAL FUND 6

MUTUAL FUND CONCEPT 6-11

TYPES OF MUTUAL FUND SCHEMES 11-15
COMPARISON BETWEEN MUTUAL FUND 15-17
& OTHERINVESTMENTS
AN OVERVIEW ON MUTUAL FUND 18-20
COMPANIES IN INDIA

3. RESEARCH 21
METHODOLOGY
3.1 OBJECTIVE OF THE STUDY 23
3.2 SCOPE OF THE STUDY 23

3.3 TOOLS USED IN THE STUDY 24

3.4 MEANING OF RESEARCH 24-25

3.5 RESEARCH DESIGN 25

3.6 TYPES OF RESEARCH 25-26

3.7 DATA COLLECTION METHOD 26

3.8 TYPE OF DATA USED IN THE STUDY 26-27

3.9 LIMITATION OF THE STUDY 27

4. DATA ANALYSIS 28
AND INTERPRETATION

4.1 COMPARATIVE ANALYSIS 29-38

4.2 DATA ANALYSIS 39-49

5. FINDINGS, CONCLUSIONS AND 50

SUGGESTIONS
5.1 FINDINGS 51-52
5.2 CONCLUSIONS 52-53
5.3 SUGGESTIONS 54-56
BIBLIOGRAPHY
CHAPTER - 1

INTRODUCTION

1
INDUSTRY INTRODUCTION
More than 40 Asset Management Companies [AMC] have set up their
operations since the liberalization of the Indian economy in 1993. Currently, 44
AMCs are operating in India and these comprise private sector companies, joint
ventures (including those with foreign entities), bank-sponsored, etc. The
industry has a tiered structure with the top 7 AMCs having 70% of the industry
Asset under Management [AUM].

India is one of the top five economies in the world in terms of market potential
and is placed above countries like France, Italy, Russia and the United
Kingdom. India is also ranked as the third biggest economy in Asia in terms of
gross domestic product (GDP). All these make investment in India a lucrative
option for the world. The investment market in India offers many possibilities
for the investors as the level of purchasing power is improving over time. The
investors stand to gain in each and every areas of business in India. The present
study provides a detail analysis along with the current and future outlook of the
Indian mutual fund industry and explores the market developments and
potential. Forecasts and estimations presented here are not based on a complex
economic model, but are intended as a rough guide to the direction, in which,
the industry is likely to move in future. Indian mutual funds industry is
witnessing a rapid growth on the back of infrastructural development, increase
in personal financial assets, and rise in foreign participation. With the growing
risk appetite, rising income, and increasing awareness, mutual funds in India are
becoming a preferred investment option compared to other investment vehicles.
The industry is expected to secure growth by catering to the needs of retail
customers. The industry has been largely product-led and not customer focused
as the players are not concentrating on new product development as per the
needs of the consumers. The industry seeks to target an increased share of the

2
customer pocket through the expansion of innovative products combined with
deeper retail penetration by expanding its presence in urban and rural locations.

A HISTORY OF THE DEVELOPMENT OF INDIA’S MUTUAL

FUNDS INDUSTRY
Prime, Futures and Securities Services
10 Most commentators, when reviewing the history of the Indian mutual funds
industry, refer to there being six distinct phases, each defined by a specific time
period.
Phase 1: 1963-1987 - The UTI was established in 1963 by the Reserve Bank of
India (RBI) and for 24 years had market exclusivity. It launched the first fund in
1964. In 1978, control over the UTI changed from RBI to the Industrial
Development Bank of India (IDBI), which had both regulatory and
administrative responsibility.
Phase 2: 1987-1993 - In 1987, public sector banks and insurance companies
were allowed to also set up mutual funds in competition with the UTI for the
first time. A number of mutual funds companies were established and as a result
this commenced a period of strong industry growth.
Phase 3: 1993-1996 - Private sector businesses were allowed to set up funds
from 1993, significantly widening the choice of funds available to the public.
Banks and insurance companies led the way here, providing more competition
and further enlarging the market.
Phase 4: 1996-2003 - Regulations were brought under the control of the
Securities and Exchange Board of India (SEBI) from 1996.
Phase 5: 2003-2006 - The UTI was split into two separate entities. The larger,
more public part became regulated by SEBI and began to compete more directly
with the rest of the market. This has also led to further strong industry growth.
Phase 6: 2006 to date - Foreign-owned fund managers began entering the
market, setting up as joint ventures or standalone businesses. In 2014, the AUM
passed INR10 trillion (US$143 billion) for the first time. Together with
widespread economic reforms, these last 10+ years have seen significant growth

3
across all parts of the financial services markets, and especially in the growth of
mutual funds. In late-2016, demonetisation provided a significant boost, and
substantially increased the number of retail investors.

4
 CHAPTER –II
COMPANY PROFILE

5
INTRODUCTION TO MUTUAL FUND
Mutual funds are financial intermediaries, which collect the savings of investors
& invest them in a large & well diversified portfolio of securities such as money
market instruments, corporate & government bonds & equity shares of joint
stock companies. A Mutual fund is a pool of common funds invested by
different investors, who have no contact with each other. Mutual funds are
conceived as institutions for providing small investors with avenues of
investments in the capital market. Since small investors generally do not have
adequate time knowledge, experience & resources for directly accessing the
capital market, they have to rely on an intermediary which undertakes informed
investment decisions & provides consequential benefits of professional
expertise. The advantages for the investors are reduction in risk, expert
professional management, diversified portfolios, & liquidity of investment &
tax benefits. By pooling their assets through mutual funds, investors achieve
economies of scale. The interests of the investors are protected by the SEBI,
which acts as a watchdog. Mutual funds are governed by the SEBI (Mutual
funds) regulations, 1993. From its inception the growth of mutual funds is very
slow and it took really long years to evolve the modern-day mutual funds.
Mutual Funds emerged for the first time in Netherlands in the18th century and
then got introduced to Switzerland, Scotland and then to United States in the
19th century. The main motive behind mutual fund investments is to deliver a
form of diversified investment solution. Over the years the idea developed and
people received more and more choices of diversified investment portfolio
through the mutual funds. In India, the mutual fund concept emerged in 1960.
The credit goes to UTI for introducing the first mutual fund in India. Monetary
Funds benefited a lot from the mutual funds. Earlier investors used to invest
directly in the stock market and many times suffered from loss due to wrong
speculation. But with the coming up of mutual funds, which were handled by
efficient fund managers, the investment risks were lowered by a great extent.

MUTUAL FUND CONCEPT: - A Mutual Fund is a trust that pools the

savings of a number of investors who share a common financial goal. The
money thus collected is then invested in capital market instruments such as
equities, debentures and other securities. The income earned through these
investments and the capital appreciation realized (after deducting the expenses
and profits of mutual fund managers) is shared by its unit holders in proportion
to the number of units owned by them. Thus, a Mutual Fund strives to meet the
investment needs of the common man by offering him or her opportunity to

6
invest in a diversified, professionally managed basket of securities at a
relatively low cost. The small savings of all the investors are put together to
increase the buying power and hire a professional manager to invest and
monitor the money. Anybody with a surplus of as little as a few thousand rupees
can invest in Mutual Funds. Mutual funds play vital role in resource
mobilization and their efficient allocation in a transitional economy like India.
Economic transition is usually marked by changes in the financial mechanism,
institutional integration, market regulation, re-allocation of savings and
investments, and changes in the inter-sector relationships. These changes often
imply negativity which shakes investor ‘s confidence in the capital market.
Mutual funds perform a crucial task as efficient alligators of resources in such a
transitional period. Throughout the world, mutual funds have worked as reliable
instruments of change in financial intermediation, development of the capital
market, and growth of the corporate sector. The active 23 5 involvement of
mutual funds in promoting economic development can also be seen in their
dominant presence in the money and capital markets. Mutual funds make a
significant contribution in vibrating both the markets. The spread of equity cult
has further increased reliance of the corporate sector on equity financing. The
role of mutual funds in the financing of corporate has substantially increased
after the SEBI allowed the corporate sector to reserve 20% of their public issues
for Indian mutual funds. The percentage share of corporate equity and
debentures in the household investors, together with UTI units, have increased
from 3.7% in 1980-81 to 17.2% in 1992-93, while the share of less liquid assets
like LIC, PF, and pension have shown a marginal increase from 25.1% to 27.2%
during the same period. Mutual funds have been the fastest growing institution
during this period in the household savings sector. Growing market
complications and investment risk in the stock market with high inflation have
pushed households further towards mutual funds.
WORKING OF MUTUAL FUND: - A Mutual Fund is a collection of stocks,
bonds, or other securities owned by a group of investors and managed by a
professional investment company. For an individual investor to have a
diversified portfolio is difficult. But he can approach to such company and can
invest into shares. Mutual funds have become very popular since they make
individual investors to invest in equity and debt securities easy. When investors
invest a particular amount in mutual funds, he becomes the unit holder of
corresponding units. In turn, mutual funds invest unit holder ‘s money in stocks,
bonds or other securities that earn interest or dividend. This money is
distributed to unit holders. If the fund gets money by selling some stocks at
higher price the unit holders also are liable to get capital gains.

7
HISTORY OF MUTUAL FUNDS: Prof K Geert Rouwenhorst in ‘The Origin
of Mutual Funds’, states that the origin of pooled investing concept dates back
to the late 1700s in Europe, when’’ a Dutch merchant and broker invited
subscription from investors to form a trust to provide an opportunity to diversify
for small investors with limited means”.
The emergence of investment pooling in England in the 1800s brought the
concept closer to the US shores. The enactment of two British laws, the Joint
Stock Companies Acts of 1862 and 1867, permitted investors to share in the
profits of an investment enterprise and limited investor liability to the amount of
investment capital devoted to the enterprise. Shortly thereafter, in 1868, the
foreign and Colonial Government Trust was formed in London.
It resembled the US fund model in basic structure, providing the investors of
moderate means the same advantages as the large capitalist by spreading the
investment over a number of different stocks. More importantly, the British
fund model established a direct link with the US security markets, helping the
finance the development of the post-Civil War US economy. The Scottish
American investment trust, formed in February 1873, by fund pioneer Robert
Fleming, invested in the economic potential of US, chiefly through American
railroad bonds. Many other trusts followed them, who not only targeted
investment in America, but led to the introduction of fund investing concept on
the US shores in the late 1800s and the early 1900s. The first mutual or open-
ended fund was introduced in Boston in arch 1924. The 3 Massachusetts
investor trust, which was formed as a common law trust, introduced important
innovations to the investment company concept by establishing a simplified
capital structure, continuous offering of shares, and the ability to redeem shares
rather than holding them until dissolution of the fund and a set of clear
investment restrictions as well as policies.

ADVANTAGES OF MUTUAL FUNDS:-

Mutual fund investments in stocks, bonds and other instrument require
considerable expertise and constant supervision, to allow an investor to take the
right decision. Small investors usually do not have the necessary expertise and
time to undertake any study that can facilitate informed decisions. While this is
the predominant reason for the popularity of mutual funds, there are many other
benefits that make mutual funds appealing.
A) Diversification Benefits: Diversified investment improves the risk
return profile of the portfolio. Optimal diversification has limitations due to low

8
liquidity among small investors. The large corpus of mutual fund as compared
to individual investment makes optimal diversification possible. Due to the
pooling of capital, individual investors can derive benefits of diversification.
B) Low transaction cost: Mutual fund transactions are generally very large.
These large volumes attract lower brokerage commissions and other cost of
compared to smaller volumes of the transaction that individual investors enter
into. The brokerage quote a lower rate of commission due to two reasons. The
first is competition for the institutional investors business. The second reason is
that the overhead cost of executing a trade does not differ much for large and
small orders. Hence for the large order these cost spread over a large volume
enabling the broker to quote a lower commission rate.
C) Availability of various schemes: There are four basic type of mutual
funds: equity, bond, hybrid and money market. Similarly bond fund primarily
invest in bonds and other securities. Equity, bonds and hybrid funds are called
as long - term funds. Money market funds are referred as short-term funds
because they invest in securities that mature generally about one year or less.
D) Professional management: Management of portfolio involves
continuous monitoring of various securities and innumerable economies
variable that effect the portfolio’s performance .This requires a lot of time and
effort on part of the investors along with in depth knowledge of functioning of
the financial market
E) Liquidity: Liquidating the portfolio is not always easy. There may not be
liquid market for all securities held. In case only a part of portfolio is required to
be 5 liquidated, it may not be possible to see all the securities forming a part of
the portfolio in the same proportion as they are represented in the portfolio.

MUTUAL FUND OPERATIONAL FLOW CHART:-

9
 FUND
INVESTORS
MANAGER

SECURITIES
RETURNS

CHART NO.1

 WORKING OF MUTUAL FUND:-

A mutual fund is collection of stocks, bonds or other securities owned by a
group of investors and managed by a professional investment companies for an
individual investor to have a diversified portfolio is difficult. But he can
approach FUND MANAGER RETURNS SECURITIES INVESTORS to such
companies and can invest into shares. Mutual funds become very popular since
they make individual investors to invest in equity and debt securities easy.
When investor invest particular amount in mutual funds he becomes the unit
holder of corresponding unit. In turn, mutual funds invest unit holder’s money
in stock, bonds or other securities. That earns interest and dividend.

HOW A MUTUAL FUND WORKS

10
Your money……

Joins a huge pool of

money invested by
other shareholders

Fund earnings and

gains are distributed Is managed by
to shareholders or
professionals
reivested

They purchase a
diversified portfolio
of securities for the
fund

CHART NO.2

 TYPES OF MUTUAL FUND SCHEMES:-

Joins a huge pool of money invested by other shareholders Is managed by
professionals They purchase a diversified portfolio of securities for the fund
earnings and gains are distributed to shareholders or reinvested Mutual funds
can be done depending upon various factors and variables, such as maturity
period, investment objectives etc. Funds schemes again can be classified into
three categories.

 Schemes according to Maturity Period: A mutual fund can be

classified into close-ended or open- ended scheme depending upon its
maturity period:

a) Open-ended fund/scheme: An open ended fund is that one is available

for subscription or repurchase on continuous basis. These schemes do not have
a fixed maturity period. Investors can conveniently buy and sell units at Net

11
Asset Value (NAV) related prices which are declared on a daily basis. The key
feature of open-ended scheme is liquidity.
b) Close –ended fund/scheme: A close –ended scheme has a stipulated
maturity period e.g. 5-7 years. The fund is open for subscription only a specified
period at time launch of the scheme .Investors can invest in the scheme at the
time of initial public issue and thereafter they can buy or sell the unit of the on
the stock exchange where the units are listed.
 Schemes according to investment objectives: A scheme can 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 as follows:

a) Growth or equity oriented scheme: The aim of growth fund 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 risk. These schemes provide different options to investors like dividend
option, capital appreciation etc…
b) Income/debt oriented schemes: The aim of income fund to provide regular
and steady income to investors. Such schemes generally invest in fixed income
securities such as bonds, corporate debentures, govt. securities and money
market instruments.
c) Balanced fund: The aim of balanced fund is to provide both growth and
regular income as such schemes invest in both equity and fixed income in the
proportion indicate in their offer document. These are appropriate for the
investors looking for moderate growth.
 Equity linked saving scheme: Equity linked saving scheme are
equity fund floated by mutual funds. This scheme is suited for young
people as they have the ability to take on higher risk. The ELESS funds
should be invest more than 80 percent of their money in equity and
related instruments.

 ETFS AND OTHER FUND PRODUCTS

ETFs Exchange-traded funds (ETFs) have been available and listed on the
Indian Stock Exchange since 2001. During the initial years, by far the most
popular choices were Gold Funds. These represented as much as 90% of the
ETF market in India at one stage. However, in recent years, as equity markets

12
have improved (and gold has declined in value), equity ETFs have gained
popularity. As elsewhere in the Asian region, the use of ETFs remains very
patchy. On the one hand, banks and financial advisory businesses have yet to
embrace the use of ETFs. On the other hand, there remains very positive
potential usage by pension, insurance and institutional funds, that has yet to
materialise
Due to foreign exchange restrictions, the number of ETFs that invest outside
India is relatively small. There would need to be changes to these restrictions to
enable this aspect of the ETF market to develop further. However, retirement
funds (the Employees Provident Fund Organisation or EPFO) and related funds,
have started to invest in ETFs and this has led to a significant rise in ETF assets
(specifically at fund houses like SBI & UTI). The government has also used
ETFs as a tool for divestment of its holdings (CPSE ETF and Bharat 22 ETF),
which has also seen investments from retirement funds like EPFO.

 Systematic Investment Plans

In recent years, Systematic Investment Plans (SIPs) have become a very popular
and successful option for mutual fund houses in India. Typically, a SIP is
simply a regular savings plan that buys directly into unit trusts or mutual funds,
as selected by the investor. In India, the usual minimum investment for monthly
contributions is INR500 (US$7.1). In keeping with the flexibility offered by
SIPs, many of the fund houses that offer these products also provide “bolt-on”
extras, such as:
• The ability to increase monthly contributions annually or from time to time.
• “Alert SIP”, whereby the fund house issues alerts to the subscriber to buy
more when markets are down.
• “Perpetual SIP”, where no end date is selected for the term of contributions
allowing subscribers to maintain their SIP for as long or as short as they wish.
The success of SIPs has been achieved following widespread marketing and
support for these products by the mutual funds industry. They have stressed the
usual benefits such as rupee cost-averaging, convenience and compounding. All
fund houses offer these products and bank distributors are strongly encouraged
to use them with customers also.

 Portfolio management services (PMSs)

13
 In recent years, the development of PMSs has been rapid. Many new firms —
over 280 are registered — have started offering such services to HNWIs, either
directly or via third-party distributors. In India, a PMS is usually operated as an
investment portfolio that can comprise equities, debt securities, mutual funds
and structured products in any combination. Typically the minimum initial
investment required is INR2.5 million (US$35,000), although to make them
more exclusive, many offering such products have raised their minimum to
INR5 million (US$70,000). Not only are these products offered by private
banks but also by so-called wealth managers, which have become a fast-
growing sector of the personal financial services market.42 The scale of the
market is now estimated to have reached AUM of INR130 billion (US$1.85
billion), with client numbers exceeding 130,000. Typically PMSs establish one
or more investment objectives from outset, which could be for capital growth,
short- or long-term returns, retirement, etc. Fees are charged to the portfolio and
can range from around 1% per annum to as much as 3%. Some managers also
include profit-sharing fees, which can range between 15% and 20% of excess
returns over agreed benchmarks. Unlike the mutual funds industry, PMS
operators often pay an introductory commission to third-party providers, which
can range between 1% and 3% of assets sourced.
PMSs offer an alternative to traditional mutual funds and so compete in the
market for assets. To date there has been little published about the performance
track record of PMS providers, which, when it happens more regularly, may
provide more meaningful comparisons with the traditional mutual funds sector.

 Taxation issues

Any discussion of the Indian investment markets also needs to include the
impact of taxation. Generally, tax in India is applicable to all forms of income
and capital gains. There are, however, a number of areas where there are tax
benefits or savings that have often been used to stimulate greater investor
participation as a result.

 The fund

Generally, a mutual fund is allowed to invest and accumulate assets tax free.
Thus it is in the hands of the end-investor, where tax is applicable. Nevertheless,
there is a Securities Transaction Tax (STT) of 0.001%, which is levied by the

14
fund company itself, when an investor sells units of an equity or balanced fund.
There is no STT on the sale of debt fund units.

 The investor

Investors are deemed to earn income on investments in the form of interest,

dividends or capital gains. Where there is income, there is income tax. The tax
paid on capital gains largely depends on the time for which an investment is
held in the respective schemes. This is the holding period for mutual funds,
which can be deemed short-term or long-term. For equity mutual funds and
balanced mutual funds, a holding period of 12 months or more is regarded as
long-term. Long-term capital gains tax or LTCG applies to those investments. A
holding period of 36 months or more is regarded as long term for debt funds. A
holding period of less than 36 months for debt funds and less than 12 months
for equity and balanced funds is defined as short term. Therefore, short-term
capital gains tax may apply to gains made from any scheme held for less than
36 months.

1.2.1 COMPARISON BETWEEN MUTUAL FUND &

OTHER
INVESTMENTS:-

Mutual funds offer several advantages over investing in individual stocks. For
example, the transaction costs are divided among all the mutual fund
shareholders, which allows for cost- effective diversification. Investors may
also benefit by having a third party (professional fund managers) apply
expertise and dedicate time to manage and research investment options,
although there is dispute over whether professional fund managers can, on
average, outperform simple index funds that mimic public indexes.
Whether actively managed or passively indexed, mutual funds are not immune
to risks. They share the same risks associated with the investments made. If the
fund invests primarily in stocks, it is usually subject to the same ups and downs
and risks as the stock market.

 SHARE CLASSES:-

15
Many mutual funds offer more than one class of shares. For example, you may
have seen a fund that offers "Class A" and "Class B" shares. Each class will
invest in the same pool (or investment portfolio) of securities and will have the
same investment objectives and policies. But each class will have different
shareholder services and/or distribution arrangements with different fees and
expenses. 9 These differences are supposed to reflect different costs involved in
servicing investors in various classes; for example, one class may be sold
through brokers with a front-end load, and another class may be sold.
 INDEX FUNDS VS. ACTIVE MANAGEMENT:-
An index fund maintains investments in companies that are part of major stock
(or bond) indices, such as the S&P 500, while an actively managed fund
attempts to outperform a relevant index through superior stock-picking
techniques. The assets of an index fund are managed to closely approximate the
performance of a particular published index. Since the composition of an index
changes infrequently, an index fund manager makes fewer trades, on average,
than does an active fund manager. For this reason, index funds generally have
lower trading expenses than actively managed funds, and typically incur fewer
short-term capital gains which must be passed on to shareholders.
 BONDS FUNDS:-
Bond funds account for 18% of mutual fund assets. Types of bond funds
include term funds, which have a fixed set of time (short-, medium-, or long-
term) before they mature. Municipal bond funds generally have lower returns,
but have tax advantages and lower risk. High-yield bond funds invest in
corporate bonds, including high-yield or junk bonds. With the potential for high
yield, these bonds also come with greater risk.
 MONEY MARKET FUNDS:-
Money market funds hold 26% of mutual fund assets in the United States.
Money market funds entail the least risk, as well as lower rates of return. Unlike
certificates of deposit (CDs), money market shares are liquid and redeemable at
any time. The interest rate quoted by money market funds is known as the 7
Day SEC Yield.
 FUNDS OF FUNDS;-
10 Funds of funds (FoF) are mutual funds which invest in other underlying
mutual funds (i.e., they are funds comprised of other funds). The funds at the
underlying level are typically funds which an investor can invest in individually.
A fund of funds will typically charge a management fee which is smaller than

16
that of a normal fund because it is considered a fee charged for asset allocation
services. The fees charged at the underlying fund level do not pass through the
statement of operations, but are usually disclosed in the fund's annual report,
prospectus, or statement of additional information. The fund should be
evaluated on the combination of the fund-level expenses and underlying fund.
 EQUITY FUNDS:-
Equity funds, which consist mainly of stock investments, are the most common
type of mutual fund. Equity funds hold 50 percent of all amounts invested in
mutual funds in the United States. Often equity funds focus investments on
particular strategies and certain types of issuers.
 Growth vs. Value:
Another distinction is made between growth funds, which invest in stocks of
companies that have the potential for large capital gains, and value funds, which
concentrate on stocks that are undervalued. Value stocks have historically
produced higher returns; however, financial theory states this is compensation
for their greater risk. Growth funds tend not to pay regular dividends. Income
funds tend to be more conservative investments, with a focus on stocks that pay
dividends. A balanced fund may use a combination of strategies, typically
including some level of investment in bonds, to stay more conservative when it
comes to risk, yet aim for some growth direct to the public with no load but a
"12b-1 fee" included in the class's expenses (sometimes referred to as "Class
shares). Still a third class might have a minimum investment of $10,000,000
and be available only to financial institutions (a so-called "institutional" share
class).

 Load and expenses:

11 A front-end load or sales charge is a commission paid to a broker by a
mutual fund when shares are purchased, taken as a percentage of funds invested.
The value of the investment is reduced by the amount of the load. Some funds
have a deferred sales charge or back-end load. In this type of fund an investor
pays no sales charge when purchasing shares, but will pay a commission out of
the proceeds when shares are redeemed depending on how long they are held.

17
1.3. AN OVERVIEW ON MUTUAL FUND COMPANIES IN
INDIA:-

 HDFC MUTUAL FUNDS:

HDFC Mutual fund has been one of the best performing mutual funds from the
few last years. HDFC Asset Management India Private Limited (AMC)
functions as the asset management company for the HDFC mutual fund.
 HSBC Mutual Funds:

HSBC is one of the world leading banking giants and boasts of a 140 year
history in banking services. HSBC operates in more than 70 countries across the
globe and has asset of over $1.2 trillion on the consolidated group balance
sheet.
 ICICI Prudential Mutual Funds:

Prudential Mutual fund is largest mutual fund sector in India with asset of over
Rs.34, 119 crore under management as Aug 2006. The asset management
company, Prudential ICICI Asset Management Company Limited, is a joint
venture between Prudential, Europe’s leading insurance company and ICICI
bank, India’s premier institution
 STATE BANK OF INDIA MUTUAL FUND:

SBI Mutual Fund India’s largest bank sponsored mutual fund, is a joint venture
between the State Bank of India and Society General Asset Management, one of
the world’s top –notch funds management companies. Over the years, SBI 12
Mutual Fund has carved a niche for itself through prudent investment decisions
and consistent wealth creation. A vast network of 82 collection branches, 26
investor service centers, 21 investor service desk and 21 district organizers help
the SBI Mutual Fund to reach out to their investors.
 ING Vysya Mutual Fund:

ING Vysya mutual fund benefits from vast international experience and
professional expertise of its promoters the ING Group, Dutch insurance and
banking giant. ING, one of the largest financial services groups globally, took
over the former Vysya Bank in India to form ING Vysya Bank.

18
  Sahara Mutual Fund:

Limited (SIFCL), the flag ship company of Sahara Group. Incorporation in

1987, SIFCL is the first Residuary Non-Banking (RNBC) in India that has been
granted certificate of registration by RBI and its leading public mobilizing
corporation in private sector.
 Tata Mutual Fund :

Tata Mutual Fund, set up in 1995, is one of the leading public sectors funds in
country and promoted by the Tata Group. The sponsors of the fund are Tata
sons Limited and Tata Investment Corporation Limited.
 KOTAK Mahindra Mutual Fund:

KOTAK Mahindra fund is one of the leading mutual fund in the country with
asset of over Rs. 12530 crore under management as of Aug 2006. The fund is
promoted by KOTAK Mahindra Bank, one of the India’s leading financial
institutions that offer financial solution ranging from commercial banking, stock
broking, life insurance and investment banking
 Unit Trust of India Mutual Fund:

The setting up of the Unit Trust of India(UTI) in 1963 heralded the birth of the
India mutual fund industry. In 1964, UTI mutual fund launched it flag ship
scheme US-64 and went on to become a generic term for the mutual fund sector
till the government allowed sector bank to start mutual funds in 1987.
 Standard charted of mutual fund:

Standard charted fund is promoted by banking giant standard charted and

exclusively focuses in debt schemes. The fund started as ANZ Grind lays
mutual fund and was later renamed as Standard Charted mutual fund after the
takeover Of Grind lays Bank by Standard Charted.
 Franklin Templeton India Mutual Fund:

Franklin Templeton investments, global investment management major, started

their India operations in 1966 as Templeton investment management India Pvt.
Limited. It flagged off the mutual fund business with the launch of Templeton
India growth fund in 1996.

 Escorts Mutual Fund:

19
 Escorts mutual fund is promoted by the business conglomerate Escorts group.
Escorts Asset Management Limited act as the AMC to the mutual fund. Escorts
mutual fund usually offers open ended schemes and fund category is Equity
balanced fund.
 Alliance Capital Mutual Fund:

Alliance capital mutual fund was setup on December 30, 1994 with Alliance
capital management corp. of Delaware (USA) as sponsored. The Trustee is
ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asses
Management India.
 Benchmark Mutual Fund:

Benchmark mutual fund offer low cost innovative products which can bring
good returns at acceptable levels of risk. Quantitative techniques of investing
are employed finding appropriate places for parking the funds. The techniques
involve gathering large amounts of financial information analyzing and
transforming it to set a model of investing. With these quantitative techniques,
best can hoped out of investment.
 CANARA bank mutual fund:

CANARA bank made its foray into the mutual fund sector by establishing the
mutual fund arm CANBANK mutual fund in December, 1987. CANARA bank,
one of the largest public sector bank in the country, is also the sponsor of the
fund.

20
 CHAPTER 3

RESEARCH METHODOLOGY

21
The procedure adopted for conducting the research requires a lot of attention as
it has direct bearing on accuracy, reliability and adequacy of results obtained. It
is due to this reason that research methodology, which we used at the time of
conducting the research, needs to be elaborated upon. It may be understood as a
science of studying how research is done scientifically. So, the research
methodology not only talks about the research methods but also considers the
logic behind the method used in the context of the research study. Research
Methodology is a way to systematically study and solve the research problems.
If a researcher wants to claim his study as a good study, he must clearly state
the methodology adapted in conducting the research the research so that it way
be judged by the reader whether the methodology of work done is sound or not.
The Research Methodology here includes: -
3.1 Objective of study
3.2 Scope of the study
3.3 Tools used in the study
3.4 Meaning of Research.
3.5 Research Design.
3.6 Types of Research
3.7 Data Collection method.
3.8 Type of data used in the study
3.9 Limitations of study

22
3.1 OBJECTIVES OF THE STUDY –

Objectives are the ends that states specifically how goal be achieved. Every
study must have an objective for which all the efforts have been done. Without
objective no research can be conducted and no result can be obtained. On the
basis of objective all the research process is followed. Objectives are the main
aspect of every study. The objective of the study gives direction to go through
the research problem. It guides the researcher and keeps him on track.
These are my objectives regarding my project work –
a) To know about the consumers perception towards the mutual fund.

b) To identify the consumer/investors needs from mutual fund.

c) To make comparison between various mutual fund schemes.

d) To know about the consumer expectation from mutual fund.

e) Awareness of mutual fund in India.

f) To identify the investor behaviour while selecting a fund

3.2 SCOPE OF THE STUDY

From the various mutual funds operated in India Three mutual funds
organizations has been identified based on convenient sampling. Selected
equity funds of these organizations are taken up for research .The
financial details reflecting performance of mutual funds for the financial
year 2020-21 is considered as an academic project. It is executed during a
period of one Month, conclusions arrived at are influenced by economic
and business environment of the year 2020- 21.
The research is based on different investment & saving schemes so there
is lots of opportunities to choose an investment schemes which is
beneficial to investor as well as the companies in the market. Choosing a
right research technique lead to better profits & investment decision.

23
3.3 Tools used in the study

Data collection tool – Questionnaire

Data analysis tool – percentage
Data presentation tool – pie chart, column bar, bar graph

Sampling Design

A sample design is a definite plan for obtaining a sample from the sampling
frame, it refers to the technique or procedure the researcher would adopt in
selecting some sampling units from which interferences about the population is
drawn. Sampling type used is simple random sampling technique.

Population and sample size

A decision has to be taken concerning sampling unit before selecting sample.
And the sample size is 50 investors

3.4 MEANING OF RESEARCH

Research is defined as a systematic, gathering recording and analysis of

data about problem relating to any particular field.
Research is defined as “a scientific and systematic search for pertinent
information on a specific topic”. Research is an art of scientific
investigation. Research is a systematized effort to gain new knowledge. It
is a careful investigation or inquiry especially through search for new
facts in any branch of knowledge. Research comprises defining and
redefining problem, formulating, hypothesis or suggested solutions.
Making deductions and research conclusion to determine whether they if
the formulating hypothesis.
24
 Research is thus, an original contribution to the existing stock of
knowledge making for its advancement. The search for
knowledge through objective and systematic method of finding
solutions to a problem is research.

3.5 Research Design:

A research design is the arrangement of conditions for collection and analysis
data in a manner that aims to combine relevance to the research purpose with
economy in procedure. Research design is the roadmap for carrying out the
research activity in the project. In the project of Investor’s perception of mutual
fund. Research part includes that investor make among the funds selected for
arriving at investment decision.
The design is such studies must be rigid and not flexible and most focus
attention on the following.
1. What is the study / research about?

2. Why is the study being made?

3. Where will the study be carried out?

4. What type of data is required?

5. Where can be required data be found?

6. What period of time will the study include?
7. What will be sample design?
8. What techniques of data collection will be used?
9. How will the data be analysed?
10. In what style will the report be prepared?

3.6 Type of Research:

 EXPERIMENTAL RESEARCH DESIGN

 EXPLORATORY RESEARCH DESIGN
 DESCRIPTIVE & DIAGNOSTIC RESEARCH

25
Design used in the study –
Descriptive research design is used in this study because it will ensure the
minimization of bias and maximization of reliability of data collected.
The survey attempts to find out the perception of investors while investing in
mutual funds. Descriptive research design because time & cost constraints
permitted the drawing of only one sample from the population & information
could be obtained from the sample only once.

3.7 Data Collection Method –

The process of data collection begins after a research problem has been defined
and research design has been chalked out. There are two types of data –
PRIMARY DATA - It is first hand data, which is collected by researcher
itself. Primary data is collected by various approaches so as to get a precise,
accurate, realistic and relevant data. The main tool in gathering primary data
was investigation and observation. It was achieved by a direct approach and
observation from the officials of the company.
“Primary data consists of raw material of enquiry”

SECONDARY DATA - It is the data which is already collected by someone

else. Researcher has to analyse the data and interprets the results. It has always
been important for the completion of any report. It provides reliable, suitable,
adequate and specific knowledge.
Following technique would be used for collecting Secondary Data-
 Newspaper, Journals and Text books

 Magazines

 Search Engines

3.8 Type of the date used in the study -

This report is based on primary data that has been collected through
conversation with mutual fund investors:-
Primary sources:
26
  Direct conversation with mutual fund investors
 Questionnaires

3.9 Limitation of the study :

Apart from Details about mutual funds it has some limitations due to that all the
details could not be published & displayed. It has been done on the basis of
secondary sources like Journals, Websites & like resources. Limitations of the
study can be pointed out as follows:-
 Time constraints: - Due to shortage or less availability of time it
may be possible that all the related & concerned aspects may not
be covered in the project.
 Analysis done is limited to the availability of data.
 It is very difficult to evaluate the accuracy of secondary data.
Before using secondary data.
 The quality of internal secondary data may be exaggerated or
biased
 Mismatch between purpose collected and purpose used.
 Desired information may be unavailable or out-of-date

27
 CHAPTER 4

DATA ANALYSIS
AND INTERPRETATION

Data analysis is a body of methods that help to describe facts, detect patterns,
develop explanations, and test hypotheses. It is used in business, in
administration, and in policy.

28
The numerical results provided by a data analysis are usually simple: It finds the
number that describes a typical value and it finds differences among numbers.
Data analysis finds averages, like the average income or the average
temperature, and it find differences like the difference in income from group to
group or the differences in average temperature from year to year.
Fundamentally, the numerical answers provided by data analysis are that simple

COMPARITIVE ANALYSIS OF MUTUAL FUND SCHEMES:-

4.1 COMPARATIVE ANALYSIS:-

Comparative analysis used to measure the financial relationships between

variables over two or more reporting period. Comparative analysis used as a
way to identify their competitive positions and operating results over a period.

4.1.1comparison of mutual fund with other investments:-

 Mutual funds vs. other investments –

From investor‘s viewpoint mutual funds have several advantages such as

professional management & research to select quality securities. Spreading risk
over a larger quantity of stock whereas the investor has limited to but only a
hand full of stocks. The investor is not putting all his eegs in one basket. Ability
to add funds at set amounts & smaller quantities such as Dollar 100 per month.

Ability to take advantage of the stock market which has generally outperformed
other investment in the long run. Fund manager are able to but securities in
large quantities thus reducing brokerage fees.

 Company fixed deposits versus Mutual funds -

29
Fixed deposits are unsecured borrowings by the company accepting the deposit.
Credit rating of the fixed deposit program is an indication of the inherent default
risk in the investment.

The moneys of the investors in a mutual fund scheme are invested by the amc
in specific investments under that scheme. These investments are held &
management in trust for the benefit of scheme‘s investors. On the other hand,
there is no such direct correlation between a company‘s deposit mobilization,
and the avenues where these sources are deployed

. A corollary of such linkage between mobilization & investment is that the

gains & losses from the mutual fund scheme entirely flow through to the
investors. Therefore, there can be no certainty of yield, Unless a named
guarantor assures a return or, to a lesser extent, If the investment is in a serial
gilt scheme. On the other hand, the return under a fixed deposit is certain only
to the default risk of the borrower.

 Bank fixed deposits Vs. Mutual fund

Bank fixed deposits are similar to company fixed deposits. The major
difference is that banks are generally more stringently regulated than
companies. They even operate under stricter requirements regarding statutory
liquidity ratio (SLR) & cash reserve ratio(CRR). While the above are causes for
comfort, bank deposits too are subject to default risk .

However, Given the political & economic impact of the bank defaults, The
government as well as reserve bank of India (RBI) tries to ensure that banks do
not fail. 21 Further, Bank deposits up to Rs 100000 are protected by the deposit
insurance & credit guarantee corporation (DICGC), So long as the bank has
paid the required insurance premium of 5 paisa per annum for every Rs 100 of
deposits. The monetary ceiling of 100000 is for all the deposits in all the
branches of a bank, held by the depositor in the same capacity & right.

30
 Comparison basis Banks Mutual funds
Returns Low Better
Administrative Exp. High Now
Risk Low Moderate
Investment options Less More

Network High Penetration Low But Improving

Liquidity At a cost Better
Quality of assets Not transparent Transparent
Interest calculation Quarterly Every month
Guarantor Guarantor is needed Guarantor is not needed
Account Needed Not Needed

Table NO. 1

 Bonds & debentures Vs. Mutual funds

As in the case of fixed deposits, credit rating of the bond/ Debenture is an

indication of the inherent default risk in the investment. However unlike FD,
Bonds & debentures are transferable securities.

While an investor may have an early encashment option from the issuer (for an
instance through a ―put‖ option) Generally liquidity is through a listing in the
market.

 Equity vs. Mutual funds

Investment in both equity & mutual funds are subject to market risk. An
investor holding equity an equity security that is not traded in the market place

31
has a problem in realizing value from it. But investment in an open end mutual
fund.

Eliminates this direct risk of not being able to sell the investments to pay
investors. The AMC is however in a better position to handle the situation.
Another benefit of equity mutual fund schemes is that they give investors the
benefit of portfolio diversification through a small investment, For instance, an
investor can take an exposure to the index by investing a mere Rs 5000 in an
index fund.

 Life insurance vs. Mutual fund

Life insurance is a hedge against risk- And not really an investment option. So,
it would be wrong to compare life insurance against product.

Occasionally on account of market inefficiencies or mis-pricing of products in

India, Life insurance products have offered a return that is higher than a
comparable ―safe‖ fixed return security – thus, you are effectively paid for
getting insured! Such opportunities are not sustainable in the long run.

Relative to other comparable financial products :

Schemes Return Safety Volatility Liquidity

convenience
Equity High Low High High
moderate
Fi bonds Moderate High Moderate Moderate
high

Corporate Moderate Moderate Moderate Low

debentures high
Bank deposits Low High Low Low
High

32
PPF Moderate High Low Moderate
high
Life Low High Low Low
insurance moderate
Gold Moderate low High Moderate Moderate
Real estate High Moderate High Low
Mutual funds High High Moderate High

Schemes Investment Risk tolerance Investment

objective horizon
Equity term Capital High Long
association
Fi bonds Income Low Medium to long
term
Corporate Outcome High moderate Medium to long
debenture term
Company Income Moderate low Medium
deposits
Bank deposits Income Generally Flexible all terms
Pdf Income Low Long
Life insurance Risk cover Low Long
Gold Inflation hedge Low Long
Real estate Inflation hedge Low Long

TABLE NO. 2

33
4.1.2 COMPARISON BETWEEN HDFC MID CAP FUND SCHEME AND
SBI BLUECHIP FUND:-

SCHEMES 1Y 3Y 5Y
HDFC SMALL 26.15% 60.07% 23.00%
CAP FUND
GROWTH
SBI BLUE CHIP 27.23% 14.10% 18.15%

TABLE NO.3

COMPARISON OF HDFC AND SBI MUTUAL FUND SCHEMES

120.00%

100.00%

80.00%

5 YEAR
60.00% 3 YEAR
1 YEAR

40.00%

20.00%

0.00%
HDFC SMALL MID SBI BLUE CHIP
CAP FUND FUND

CHART NO.3

34
4.1.3 COMPARISON BETWEEN CANARA ROBECO BLUECHIP
EQUITY FUND(D)AND ICICI PRUDENTIAL BLUECHIP FUND :-

SCHEME CANARA RUBECO ICICI PRUDENTAL

BLUECHIP EQUITY BLUECHIP FUND-
FUND(D) INST-1(G)
AMC CANARA RUBECO ICICI PRUDENTAL
MUTUAL FUND MUTUAL FUND
CATEGORY EQUITY EQUITY
DIVERSIFIED DIVERSIFIED
SHEME ASSETS(IN 160.56 20100.00
CR)
LAUNCH DATE 20 AUG 2010 23 MAY 2008
LAST NAV(RS) 16.54 46.88
LAST DIVIDENT (%) 11.51 NA
MINIMUM 5000.00 10000000.00
INVESTMENT(RS)
ENTRY LOAD NIL NIL
FUND MANAGER SHRIDATTA ANISH TAWAKLAY
BHANDWALDA
ABSOLUTE RETURNS
1 MONTH (%) 6.85 6.52
3 MONTH (%) 6.37 6.21
6 MONTH (%) 5.05 4.71
1 YEAR (%) 10.82 10.38
3 YEAR (%) 14.27 16.75

SINCE INCEPTION 11.02 15.28

35
 TABLE NO.4

ABSOLUTE RETURNS OF CANARA MF

SCHEME
1
MONTH
3 YEAR
16%
33% 3
MONTH
15%
6 MONTH
11%
1 YEAR
25%

CHART NO.4

ABSOLUTE RETURNS FROM ICICI MF

SCHEMES

1 MONTH
24%
1 YEAR
37%

3 MONTH
22%
6
MONTH
17%

CHART NO. 5

36
4.1.4 COMPARISON BEYWEEN AXIS MIDCAP FUND(D) AND HSBC
MULTICAP EQUITY FUND(G):-

SCHEME AXIS MIDCAP FUND HSBC MULTICAP

(D) EQUITY FUND(G)
AMC AXIS MUTUAL FUND HSBC MUTUAL
FUND
CATEGORY EQUITY EQUITY
DIVERSIFIED DIVERSIFIED
SCHEMES ASSET(IN 1890.65 516.00
CR)
LAUNCH DATE 18 FEB 2011 24 FEB 2004
LAST NAV (RS) 23.16 89.76
LAST DIVIDEND (%) 21.25 NA
MINIMUM 5000.00 5000.00
INVESTMENT (RS)
FUND MANAGER SHREYASH NEETOTPAL SAHAI
DEVALKAR
ABSOLUTE
RETURNS 3.76 10.25
1 MONTH (%) 1.47 10.09
3 MONTH (%) 4.77 8.71
6 MONTH (%) 5.99 4.79
1 YEAR (%) 15.80 13.79
3 YEAR (%) 18.59 14.61
5 YEAR (%)
17.03 15.63
SINCE INCEPTION
(%)

37
 TABLE NO. 5

ABSOLUTE RETURNS FROM ACIS MF SCHEME

1 MONTH 3 MONTH
12% 4%

3 YEAR
50% 6 MONTH
15%

1 YEAR
19%

CHART NO. 6

ABSOLUTE RETURN FROM HSBC MF

SCHEMES

1 MONTH
3 YEAR 22%
29%

3 MONTH
1 YEAR 21%
10%
6 MONTH
18%

CHART NO.7

38
4.2DATA ANALYSIS

Que.1 Age of investors?

 18-24
 24-30
 30 & above

Age Respondents
18-24 10
24-30 26
30 & above 14
TABLE NO. 6

AGE OF INVESTORS
18-24 24-30 30 & ABOVE
28% 20%

52%

CHART NO.8

Interpretation: Out of 50 respondents 26 belong to age of 24-30 while 14

belong to 30 & above & 10 respondents belong to 18-24.

39
Que.2 Mention your annual income?

Income level Respondents

Below 100000 5
100000-300000 26
300000-500000 11
500000 & above 8
TABLE NO. 7

INCOME LEVEL

26

11

5 8

BELOW 100000 100000-300000 300000-500000 500000 & ABOVE

CHART NO. 9

Interpretation: Income of the 50 respondents is below 100000 & for 26

respondents it is 100000-300000, for 11 respondents it is 300000-50000, & for
8 respondents it is 500000 & above

40
Que.3Do you invest in mutual funds?
 Yes
 No

Investment in mutual fund Respondents

Yes 36
No 14

TABLE NO.8

YES
NO

CHART NO. 10

41
Interpretation: Out of 50 investors 36 investors invest in Mutual funds rest 14
investors don‘t invest in mutual funds.

Que.4Most preferred asset Management Company?

 Axis mutual fund
 HDFC mutual fund
 Birla Sun Life mutual fund
 ICICI mutual fund
 UTI mutual fund
 Do not invest
Company name Respondents
Axis mutual fund 8
HDFC Mutual fund 5
Birla sun life Mutual fund 6
ICICI Mutual fund 4
UTI Mutual fund 5
Others 8

TABLE NO. 9

AXIS MUTUAL FUND HDFC MUTUAL FUND

BIRLA SUN LIFE MUTUAL FUND ICICI MUTUAL FUND
UTI MUTUAL FUND OTHERS

22% 22%

14% 14%

11%
17%

42
 CHART NO. 11

Interpretation: Out of 36 investors 8 prefer Axis mutual fund, 5 prefer HDFC

mutual fund, 6 prefer Birla sun life mutual fund, 4prefer ICICI Mutual fund, and
5 prefer UTI mutual fund & 8 do not invest in any of these.

Que.5 Which factors prevent you from investing you in Mutual funds?
 Bitter past experience
 Lack of knowledge
 Inefficient investment advisors
 Others

Factors Respondents
Bitter past experience 12
Lack of knowledge 24
Inefficient investment advisor 6
Others 3

TABLE NO. 10

BITTER PAST EXPERIENCE LACK KNOWLEDGE

INEFFICIENT INVESTMENT ADVISOR OTHERS

13% 7% 27%

53%

43
 CHART NO. 12

Interpretation: - Out of 36 respondents 30% investors have bitter past

experience in Mutual funds, 40% of them have lack of knowledge, 16%
investors feel like inefficient investment advisors & 14% investors have other
reason for the same.

Que. 6 While investing your money, how these factors affect your decision?
 Liquidity
 High returns
 Professional management
 Brand management
 Others
Factors affecting Respondents
Liquidity 9
High return 16
Professional management 5
Brand management 2
Others 4

TABLE NO. 11

44
 OTHERS

BRAND MANAGEMENT

PROFESSIONAL MANAGEMENT

HIGH RETURN

LIQUIDITY

0 2 4 6 8 10 12 14 16 18

CHART NO. 13

Interpretation: - Out of 36 respondents 9 investors says liquidity affects the

decision, 15 says high returns are the reasons for their investment, 5 investors
says Professional management of their money is required, 5 says brand
management as an important factor & 4 says other factors .

Que.7 Which scheme do you feel is acceptable?

 Open ended scheme
 Close ended scheme
Type of scheme Respondents
Open ended scheme 23
Close ended scheme 13

TABLE NO. 12

45
 23 13

OPEN ENDED SCHEME CLOSED ENDED SCHEME

CHART NO. 14

Interpretation: Out of 36 investors 23says open ended scheme is better as

entry and exit is easy, while 13 says close ended scheme is better.

Que.8 what do you look before investing in a particular mutual fund scheme?

46
 Count of what do you look before investing in a particular
mutual fnd scheme ?

EXPERT ADVISE
13.6%
RATING BY CRISIL
25.4%

PAST PERFOR-
MANCE(NAV)
ASSET MANAGEMENT 35.6%
25.4%

CHARTNO. 15

INTERPRETATION: So maximum number of investors (35.6%) looked the

Past performance of that company before investing whereas least of them
(13.6%) were the amateur investors who took advices from the Investment
experts before investing. People who considered CRISIL Ratings and Asset
management before investing was in equal number of contributions of 25.4%
each.

Que.9 where do you gather information about the performance of different

mutual fund schemes?

47
 count of where do you gather information about the per-
formance of different mutual fund schemes?

INTERNET
3.4%%
FINANCIAL CON-
TV CHANNELS SULTANTS
6.8%% 27.1%
BROKERS
10.2%

MAGAZINES
15.3%

FINANCIAL INSTITUTIONS
37.3%

CHART NO. 16

INTERPRETATION: 37.3% investors gather information from financial

institutions, 27% respondents gather information from financial consultant and
3.4% investors gather information from internet, 6.8% investors gather
information from TV Channels, 10.2 % investors gather information from
Brokers and 15.3%% investors gather information from Magazines.

Que.10 Since how many years you are investing in Mutual Fund Schemes

48
 count of since how many years you are investing in mutual
fund schemes?

FOUR YEAR
10.2%
THREE YEAR
25.4%
TWO YEAR
11.9%

MORE THAN FIVE

YEAR
8.5%

ONE YEAR
FIVE YEAR 23.7%
20.3%%

CHART NO. 17

INTERPRETATION: 25% respondents are investing in mutual funds from3

years, 23% investors are new investors and 8.5% respondents manage to survive
in market for more than five years.

49
CHAPTER – 5
FINDINGS,
CONCLUSIONS AND
SUGGESTIONS

50
5.1FINDINGS

• Many of the investors are aware of mutual funds but most of their perception
is not positive due to lack of information about the mutual fund schemes.

• Investors are mainly concerned with the risk factors of mutual funds.

• The investors who have invested in mutual funds mainly go for it because of
liquidity & tax exemption.

• There are numerous schemes of mutual funds about which common man is not
aware of.

• Most of the respondents don‘t have proper knowledge about the mutual funds
and that is why probably they don‘t invest in mutual fund.

• Average savings of the people vary between 35% & 40%. This no doubt a
good figure to take in account.

• Most of the respondents consider bank deposit as investment vehicle. As it is

the safest option for them and they don‘t have clear cut idea about the difference
between the savings and investment.

51
• Most of the respondents are not aware of the various mutual funds scheme.
When it comes to recall the names of some of the mutual funds they recall the
names like--- SBI mutual fund, UTI mutual fund, ICICI mutual funds.

5.2 CONCLUSION

We can infer from the analysis that the concept of mutual fund in India is still in
its growing phase. With the growing importance of mutual fund in other areas in
the country, this place is witnessing the same rate of growth in mutual funds.
Apart from these facts the following are some other important facts which can
easily be inferred from the paper.

 Huge opportunities of Mutual funds exist in the India. In short the

market in this city is a growing market

 As because many companies exist in this market, competition is cut to

throat.

 Mindsets of the investors are not towards mutual funds. They still think
of investing in traditional investment alternatives. Customers are not
properly educated about the mutual funds.

 Few private sectors banks like ICICI, HDFC, UTI, ING VYSYA etc.
sell mutual funds through their branches only.

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  Specialized agents of mutual funds are rarely seen. Financial advisors
are not seen there who can educate the investors.

 Posters, banners or other promotional activities are rarely seen in this

market.

 Mutual fund companies do not have aggressive strategies.

 Insurance products are and can be the main competitors of mutual

funds.

 Mutual fund investors are confined to the upper-middle and upper social
class in this market. Upper-lower class and lower-upper class people are
still untouched.

 More than half of the respondents have wrong perception about the
mutual funds. They feel mutual funds are very risky investment
alternative

 Most of the respondents are satisfied with their current return from their
investment. Most of the respondents neither do not want to take risk in
investing their money in mutual funds.

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5.3 SUGGESTIONS

After a thorough study and analysis of the data and information, the following
are the few recommendations and suggestions, if implemented , would
definitely benefit the financial market in India, which is in its booming stage, in
the short run and in the long run as well. Recommendations and suggestions are
normally given when there are some problems or difficulties lying in the
market. Here in this research report recommendations and suggestations’ are
totally based on the facts, reactions, attitudes, perceptions, and many other
things of the respondents which were received from them during research work.
The recommendation part of this research work has three parts only, which can
push the mutual fund market in India to a higher level.

Awareness:

Awareness of mutual fund products must be increased in the Bangalore city.

The awareness can be enhanced in the following ways------

 Conference or seminars on ―mutual funds‖ can be conducted on regular

basis. This will no doubt increase the awareness of mutual fund in the
minds of the investors.
 All the companies must join hands and work together for this.

Customer education:

As the awareness of mutual funds is still lacking in this market, companies

should give focus on ―customer education‖. For this purpose again the
conference and 40 seminars can be the best way towards educating the
customers. Again free training programed to the agents can be fruitful.

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Government intermediation:

Government must also work together with the mutual fund companies in
promoting the concept of mutual fund in India.

Confidence building activities:

People in this city are not confident in investing their money in mutual funds.
Hence there is a need to do something which will build the confidence in the
minds of the investors.

Hence the confidence building activities must be carried out by the mutual fund
companies. Because most of the people in India think that investing in mutual
funds is a very risky affair. In the following ways the confidence can be
increased in the minds of the people in India.

 The present performance of the mutual funds is very good compared with

other investment. And the companies should cash in on this opportunity.

The performance of the mutual funds can be published widely.

 Other newspapers and magazines, journals. This will no doubt induce the

investors towards investing in mutual funds.

 Case study of the investors who have been benefited in investing in

mutual funds can be published in the newspapers, magazines and

journals.

 As selling of financial products requires well trained people, the

companies must provide proper training to the agents and financial

planners. For this training institute must be opened in this township.

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 Continuous brand building activities must be carried out by the

companies. For this purpose companies should initiate some sort of

promotional activities like, ads in newspapers, magazines, journals.

 Educational institutes must start some professional courses on mutual

funds and other finance specialized courses. This will create some sort of

awareness about the mutual funds.

 Mutual fund companies must tie up with other financial institute like

banks, post office for reaching to the mass people. Because these

financial institutes have tremendous reach to the mass people in our

country. As a result mutual fund companies can have easy access to the

common people. The companies must go in for this kind of strategic

alliance with other companies as well. Because strategic alliance not only

benefit the companies but help in developing the market also.

 For opening of new savings bank account, certain units of mutual funds

of a company (strategic alliance company) can be given at free of cost to

the account holder. This will no doubt make the people more familiar

with the concept of mutual funds.

 On buying of one or some life insurance policies, again certain units of

mutual fund can be given at free of cost

 Again each car loan or other kind loan of a certain amount will get the

loan taker certain units of mutual funds absolutely free of cost.

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BIBLIOGRAPHY
 Indian financial system by pritpal singh bhullar and dhyal bhatnagar
 Agarwal Rastogi & S. Malhotra ‘customer’s prespective regarding
banking and e commerce in an emerging economy

QUESTIONNAIRE

Name:

Address:

Contact no.

Que. 1 Age of the investors

 18-24

 24-30

 30 & Above

Que.2 Mention your annual income?

 Below 100000

 100000-300000

 300000-500000

 500000& above

Que.3 Do you invest in mutual funds?

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 Yes

 No

Que.4 If yes your most preferred asset Management Company ?

 Axis Mutual fund

 HDFC Mutual fund

 Birla sun life Mutual fund

 ICICI Mutual fund

 UTI Mutual fund

Que.5 Which of the factors given below prevent you from investing your funds
in Mutual funds?

 Bitter past experience

 Lack of knowledge

 Inefficient investment advisors

 Others

Que.6 While investing your money, how these factors affect your decision?

 Liquidity

 High return

 Professional management

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 Brand management

 Others

Que.7 Which scheme do you feel is acceptable?

 Open ended scheme

 Close ended scheme

Que.8 What do you look before investing in a particular mutual fund scheme?

 Past Performance (NAV)

 Ratings (by CRISIL, ICRA, Etc.)
 Asset Management Companies (AMC)
 Expert Advise

QUE.9 Where do you gather information about the performance of different

mutual fund schemes?

 Financial Institutions
 Brokers
 Financial Consultants TV
 Channels
 Magazines
 Internet

Que.10 Since how many years you are investing in Mutual Fund Schemes
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 One year
 Two Years
 Three Years
 Four Years
 Five Years
 More than five years

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