ANSHITA STR

8/6/2019 ANSHITA STR

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A PROJECT REPORT

ON

ANALYSIS OF INDIA MUTUAL FUND INDUSTRY AS

AGAINST THE INVESTMENTS PLAN.

Submitted in partial fulfillment for

BACHELORS OF BUSINESS ADMINISTRATION

(BANKING AND INSURANCE)

PROGRAMME OF

TRINITY INSTITUTE OF PROFESSIONAL STUDIES

DWARKA (SEC-9)

BATCH 2009-12

Submitted by :- Under Guidance :-

ANSHITA GARG

ENROLLMENT NO.

06124001809


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DECLERATION

I hereby declare that this Project Report entitled THE MUTUAL FUND IS BETTER

INVESTMENT PLAN in SBI Mutual Fund submitted in the partial fulfillment of the

requirement of BACHELOR OF BUSINESS ADMINISTRATION (BBA-B&I) of is

based on primary & secondary data found by me in various departments, books,

magazines and websites & Collected by me in under guidance of ms.deepti raheja.

DATE: ANSHITA GARG

BBA(B&I)

EnrollmentNo.06124001809

EXECUTIVE SUMMARY


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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 meenough 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.


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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 200 people. For the collection of Primary data I made a questionnaire and

surveyed of 200 people. I also taken interview of many People those who were coming

at the SBI Branch where I done my Project. I visited other AMCs in Dehradoon to get

some knowledge related to my topic. I studied about the products and strategies of other

AMCs in Dehradoon to know why people prefer to invest in those AMCs. This Project

covers the topic ANALYSIS OF INDIA MUTUAL FUND INDUSTRY AS AGAINST THE

INVESTMENTS PLAN. . The data collected has been well organized and presented. I

hope the research findings and conclusion will be of use.


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Chapter-1

Introduction


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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


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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

asshares, 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.
http://www.appuonline.com/mf/knowledge/concept.htmlhttp://www.appuonline.com/mf/knowledge/concept.htmlhttp://www.appuonline.com/mf/knowledge/concept.html


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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.

ADVANTAGES OF MUTUAL FUND

Portfolio Diversification

Professional management

Reduction / Diversification of Risk

Liquidity

Flexibility & Convenience

Reduction in Transaction cost

Safety of regulated environment

Choice of schemes

Transparency

DISADVANTAGE OF MUTUAL FUND

No control over Cost in the Hands of an Investor

No tailor-made Portfolios

Managing a Portfolio Funds

Difficulty in selecting a Suitable Fund Scheme


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All About Mutual Funds

Before we understand what is mutual fund, its very important to know the area in which

mutual funds works, the basic understanding of stocks and bonds.

Stocks : Stocks represent shares of ownership in a public company. Examples of public companies

include Reliance, ONGC and Infosys. Stocks are considered to be the most common owned investment

traded on the market.

Bonds : Bonds are basically the money which you lend to the government or a company, and in return

you can receive interest on your invested amount, which is back over predetermined amounts of time.

Bonds are considered to be the most common lending investment traded on the market. There are many

other types of investments other than stocks and bonds (including annuities, real estate, and precious

metals), but the majority of mutual funds invest in stocks and/or bonds.

What Is Mutual Fund

A mutual fund is just the connecting bridge or a financial intermediary that allows a group ofinvestors to pool their money together with a predetermined investment objective. The mutual fund

will have a fund manager who is responsible for investing the gathered money into specific securities

(stocks or bonds). When you invest in a mutual fund, you are buying units or portions of the mutual

fund and thus on investing becomes a shareholder or unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to others they

are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund,

investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their

own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing

returns.

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. The flow chart below describes broadly the working of a mutual fund


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Unit Trust of India is the first Mutual Fund set up under a separate act,

UTI Act in 1963, and started its operations in 1964 with the issue ofunits under the scheme US-64.

Overview of existing schemes existed in mutual fund category

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position,

risk tolerance and return expectations etc. The table below gives an overview into the existing types of

schemes in the Industry.

Type of Mutual Fund Schemes

BY STRUCTURE

Open Ended Schemes

An open-end fund is one that is available for subscription all through the year. These do not

have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV")

related prices. The key feature of open-end schemes is liquidity.

Close Ended Schemes

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years.The fund is open for subscription only during a specified period. Investors can invest in the scheme at

the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the

stock exchanges where they are listed. In order to provide an exit route to the investors, some close-

ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at

NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to

the investor.

Interval Schemes

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


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BY NATURE

1. Equity fund:

These funds invest a maximum part of their corpus into equities holdings. The structure of the fund

may vary different for different schemes and the fund managers outlook on different stocks. The

Equity Funds are sub-classified depending upon their investment objective, as follows:

Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-

return matrix.

2. Debt funds:

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

banks and financial institutions are some of the major issuers of debt papers. By investing in debt

instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are

further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly known as

Government of India debt papers. These Funds carry zero Default risk but are associated with

Interest Rate risk. These schemes are safer as they invest in papers backed by Government.

Income Funds: Invest a major portion into various debt instruments such as bonds, corporate

debentures and Government securities.

MIPs: Invests maximum of their total corpus in debt instruments while they take minimum

exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly

high on the risk-return matrix when compared with other debt schemes.

Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds

primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers

(CPs). Some portion of the corpus is also invested in corporate debentures.


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Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity

and preservation of capital. These schemes invest in short-term instruments like Treasury Bills,

inter-bank call money market, CPs and CDs. These funds are meant for short-term cashmanagement of corporate houses and are meant for an investment horizon of 1day to 3 months.

These schemes rank low on risk-return matrix and are considered to be the safest amongst all

categories of mutual funds.

3. Balanced funds: As the name suggest they, are a mix of both equity and debt funds. They invest in

both equities and fixed income securities, which are in line with pre-defined investment objective of

the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part

provide growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment parameter viz,

Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives

of the fund. The investor can align his own investment needs with the funds objective and invest

accordingly.

BY INVESTMENT OBJECTIVE


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Growth Schemes: Growth Schemes are also known as equity schemes. The aim of these

schemes is to provide capital appreciation over medium to long term. These schemes normally

invest a major part of their fund in equities and are willing to bear short-term decline in valuefor possible future appreciation.

Income Schemes: Income Schemes are also known as debt schemes. The aim of these schemes

is to provide regular and steady income to investors. These schemes generally invest in fixed

income securities such as bonds and corporate debentures. Capital appreciation in such schemes

may be limited.

Balanced Schemes: Balanced Schemes aim to provide both growth and income by periodicallydistributing a part of the income and capital gains they earn. These schemes invest in both

shares and fixed income securities, in the proportion indicated in their offer documents

(normally 50:50).

Money Market Schemes: Money Market Schemes aim to provide easy liquidity, preservation

of capital and moderate income. These schemes generally invest in safer, short-term

instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call

money.

OTHER SCHEMES

Tax Saving Schemes: Tax-saving schemes offer tax rebates to the investors under tax laws

prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any

Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes: Index schemes attempt to replicate the performance of a particular index such

as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those

stocks that constitute the index. The percentage of each stock to the total holding will be

identical to the stocks index weightage. And hence, the returns from such schemes would be

more or less equivalent to those of the Index.

Sector Specific 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,


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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 awatch on the performance of those sectors/industries and must exit at an appropriate time.

Types of returns

There are three ways, where the total returns provided by mutual funds can be enjoyed by investors:

Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all

income it receives over the year to fund owners in the form of a distribution.

If the fund sells securities that have increased in price, the fund has a capital gain. Most funds

also pass on these gains to investors in a distribution.

If fund holdings increase in price but are not sold by the fund manager, the fund's shares

increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually

give you a choice either to receive a check for distributions or to reinvest the earnings and get

more shares.

Pros & cons of investing in mutual funds:


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For investments in mutual fund, one must keep in mind about the Pros and cons of investmentsin mutual fund.

Advantages of Investing Mutual Funds:

1. Professional Management - The basic advantage of funds is that, they are professional managed,

by well qualified professional. Investors purchase funds because they do not have the time or the

expertise to manage their own portfolio. A mutual fund is considered to be relatively less expensive

way to make and monitor their investments.

2. Diversification - Purchasing units in a mutual fund instead of buying individual stocks or bonds, theinvestors risk is spread out and minimized up to certain extent. 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.

3. Economies of Scale - Mutual fund buy and sell large amounts of securities at a time, thus help to

reducing transaction costs, and help to bring down the average cost of the unit for their investors.

4. Liquidity - Just like an individual stock, mutual fund also allows investors to liquidate their

holdings as and when they want.

5. Simplicity - Investments in mutual fund is considered to be easy, compare to other available

instruments in the market, and the minimum investment is small. Most AMC also have automatic

purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis.

Disadvantages of Investing Mutual Funds:


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1. Professional Management- Some funds doesnt perform in neither the market, as their management

is not dynamic enough to explore the available opportunity in the market, thus many investors debateover whether or not the so-called professionals are any better than mutual fund or investor himself, for

picking up stocks.

2. Costs The biggest source of AMC income, is generally from the entry & exit load which they

charge from an investors, at the time of purchase. The mutual fund industries are thus charging extra

cost under layers of jargon.

3. Dilution - Because funds have small holdings across different companies, high returns from a few

investments often don't make much difference on the overall return. Dilution is also the result of a

successful fund getting too big. When money pours into funds that have had strong success, the

manager often has trouble finding a good investment for all the new money.

4. 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 theindividual to defer the capital gains liability.


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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

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)


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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


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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.

Mutual funds can be classified as follow :

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at any

point of time.

Close-ended funds: These funds raise money from investors only once. Therefore,

after the offer period, fresh investments can not be made into the fund. If the fund is listed on a

stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund).

Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a

periodic basis such as monthly or weekly. Redemption of units can be made during specified

intervals. Therefore, such funds have relatively low

liquidity.

Based on their investment objective:


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Equity funds: These funds invest in equities and equity related instruments. With

fluctuating share prices, such funds show volatile performance, even losses. However,

short term fluctuations in the market, generally smoothens out in the long term, thereby

offering higher returns at relatively lower volatility. At the same time, such funds can

yield great capital appreciation as, historically, equities have outperformed all asset

classes in the long term. Hence, investment in equity funds should be considered for a

period of at least 3-5 years. It can be further classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is

tracked. Their portfolio mirrors the benchmark index both in terms of composition and

individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading

across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that they

invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related through

some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector

fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.


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Balanced fund:Their investment portfolio includes both debt and equity. As a result, on

the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal

mutual funds vehicle for investors who prefer spreading their risk across various instruments.

Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund:They invest only in debt instruments, and are a good option for investors

averse to idea of taking risk associated with equities. Therefore, they invest exclusively

in fixed-income instruments like bonds, debentures, Government of India securities; and

money market instruments such as certificates of deposit (CD), commercial paper (CP)

and call money. Put your money into any of these debt funds depending on your

investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large portion

being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and

T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt

instruments which have variable coupon rate.


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iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-

pricing between cash market and derivatives market. Funds are allocated to equities,

derivatives and money markets. Higher proportion (around 75%) is put in money

markets, in the absence of arbitrage opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in long-term government

securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio inlong-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an

exposure of 10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that

of the fund.

INVESTMENT STRATEGIES


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1. 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)

2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and

give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the

same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund

then he can withdraw a fixed amount each month.

RISK V/S. RETURN:


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Chapter

Objectives and scope

OBJECTIVES OF THE STUDY


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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.


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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 Dehradoon. I had been sent at one of the branch of State

Bank of India Dehradoon 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 Boring Canal Road Branch.

The study will help to know the preferences of the customers, which company,

portfolio, mode of investment, option for getting return and so on they prefer. This

project report may help the company to make further planning and strategy.


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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, Channels etc. I observed that many of people

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

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

terms. Many of people do not have invested in mutual fund due to lack of

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

income is growing the number of mutual fund investors are also growing.

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

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

are many AMCs in Dehradoon but only some are performing well due to

Brand awareness. Some AMCs are not performing well although some of

the schemes of them are giving good return because of not awareness about

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

Brand, they are performing well and their Assets Under Management is


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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. Many of investors directly invest their money through AMC

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

directly who know well about mutual fund and its operations and those

have time.


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Chapter

Suggestions

And

Recommendations

Suggestions and Recommendations


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

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

Investors should be made to realize that ignorance is no longer bliss and what they

are losing by not investing.

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

But most of the people are not even aware of what actually a mutual fund is? They

only see it as just another investment option. So the advisors should try to change

their mindsets. The advisors should target for more and more young investors.

Young investors as well as persons at the height of their career would like to go for

advisors due to lack of expertise and time.

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

Advisors about the Fund/Scheme and its objective, because they are the main

source to influence the investors.

Before making any investment Financial Advisors should first enquire

about the risk tolerance of the investors/customers, their need and time (how long

they want to invest). By considering these three things they can take the customers

into consideration.


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

future, so making greater efforts with younger customers who show some interest

in investing should pay off.

Customers with graduate level education are easier to sell to and there is a

large untapped market there. To succeed however, advisors must provide sound

advice and high quality.

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

by Assets Management companies very recently in the industry. SIP is easy for

monthly salaried person as it provides the facility of do the investment in EMI.

Though most of the prospects and potential investors are not aware about the SIP.

There is a large scope for the companies to tap the salaried persons.

BIBLIOGRAPHY

NEWS PAPERS

OUTLOOK MONEY

TELEVISION CHANNEL (CNBC AAWAJ)


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MUTUAL FUND HAND BOOK

FACT SHEET AND STATEMENT

WWW.MONEYCONTROL.COM

WWW.AMFIINDIA.COM

WWW.ONLINERESEARCH ONLINE.COM

WWW. MUTUALFUNDSINDIA.COM

QUESTIONNAIRE

A study of preferences of the investors for investment in mutual funds.

1. Personal Details:

(a). Name:-

(b). Add: - Phone:-

(c). Age:-
http://www.moneycontrol.com/http://www.amfiindia.com/http://www.onlineresearch.com/http://www.moneycontrol.com/http://www.amfiindia.com/http://www.onlineresearch.com/


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(d). Qualification:-

(e). Occupation. Pl tick ()

Govt. Ser Pvt. Ser Business Agriculture Others

(g). What is your monthly family income approximately? Pl tick ().

Up toRs.10,000

Rs. 10,001 to15000

Rs. 15,001 to20,000

Rs. 20,001 to30,000

Rs. 30,001 andabove

2. What kind of investments you have made so far? Pl tick (). All applicable.

a. Saving account b. Fixed deposits c. Insurance d. Mutual Funde. Post Office-NSC, etc f. Shares/Debentures g. Gold/ Silver 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 (). Yes No

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

a. Advertisement b. Peer Group c. Banks d. Financial Advisors

6. Have you ever invested in Mutual Fund? Pl tick (). Yes No

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, inwhich Mutual Fund you have invested? Pl. tick (). All applicable.

a. SBIMF b. UTI c. HDFC d. Reliance e. Kotak f. Other. specify

Graduation/PG Under Graduate Others


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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. UTIc. Relianced. HDFCe. Kotakf. 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 debtportfolio

b. Having debt & equityportfolio.

c. Only equity portfolio.

15. How wouldyou like to receive the returns every year? Pl. tick ().

a. Dividend payout b. Dividend re-investment c. Growth in NAV


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16. Instead of general Mutual Funds, would you like to invest in sectorial funds?

Please tick (). Yes No

ANSHITA STR

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