Chapter V Mutual Funds Perceptions, Involvement & Policies of Mutual...

149

Chapter – V

Mutual Funds – Perceptions,

Involvement & Policies of Mutual Fund

Investors In Hubli-Dharwad –

An Analysis

150

CLASSSIFICATION OF SAMPLES FOR SURVEY :

The samples survey was conducted among the citizens of Hubli-Dharwad to find out the

inclination of the investors towards Mutual Funds. The survey covered 300 respondents. The

method of purposive sampling was used to select the samples from all the category of investors

so as to get accurate results. The samples belong to different occupations, age group and gender.

The database of different category of investors was selected from different sources and the

samples were selected for survey. Out of 300 samples surveyed 20 are from Primary/High

School Teachers, 20 are from Pensioners/Retired people, 20 are Engineers, 20 are Industrialists,

20 are from Transport business, 20 are Students , 20 are University / College teaching staff, 20

are Doctors, 20 are Advocates, 20 are Banking/ Finance Professionals, 20 are Self employed, 40

are Government Employees and 40 are Businessmen/Traders. So almost all category of

respondents were surveyed to get the opinion and experience about Mutual Funds.

The survey samples selected were from different genders and age groups i.e, 83.67% are

Males and 16.33 % are Females. Then 14% of the respondents are in the age group of 25-34

years, 40.33% of the respondents are in the age group of 35-44 years, 37.33% of the respondents

are in the age group of 45-54 years and 8.33% of the respondents are in the age group of 55 years

and above.

The details are given in the table no.5.1.

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Table No.5.1 : Distribution of study subjects according to groups, gender and age groups

Factors No of respondents % of respondents

Group

Primary/High school teachers 20 6.67

Pensioners/retired people 20 6.67

Engineers 20 6.67

Industrialists 20 6.67

Transporters 20 6.67

Students 20 6.67

University/college teaching staff 20 6.67

Doctors 20 6.67

Advocates 20 6.67

Bank/finance professionals 20 6.67

Self employed 20 6.67

Government employed 40 13.33

Business/traders 40 13.33

Total 300 100.00

Gender

Male 251 83.67

Female 49 16.33

Total 300 100.00

Age groups

25-34yrs 42 14.00

35-44yrs 121 40.33

45-54yrs 112 37.33

55+yrs 25 8.33

Total 300 100.00

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OCCUPATIONAL DISTRIBUTION OF STUDY SUBJECTS

The sample survey conducted to collect the primary data consisted of purposive samples

from different segments of investors. Of the 300 respondents from different segments 71 were

Government employees (23%), 61 professionals (20.33%) like engineers, doctors, advocates,

bankers , etc, 4 Private sector (1.33%) employees, 64 self employees (21.33%), 40 businessmen

(13.33%) , 02 Agriculturists (0.67%) and 58 (19.33%) respondents were from other segments

like students, pensioners, self employed , etc. The respondents were selected from different

segments so as to cover all the types of investors and study their investment behavior and their

perception towards Mutual Funds.

The details are given below in table No.5.2.

Table No 5.2 : Distribution of study subjects according to Working Catagory

Category of Respondents No of respondents % of respondents

Government employee 71 23.67

Professionals 61 20.33

Private 4 1.33

Self employed 64 21.33

Business 40 13.33

Agriculturists 2 0.67

Others 58 19.33

Total 300 100.00

Source: Sample survey results.

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0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

No

of

resp

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den

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Go

ver

nm

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emp

loy

ee

Pro

fess

ion

als

Pri

vat

e

Sel

f

emp

loy

ed

Bu

sin

ess

Ag

ricu

ltu

rist

s

Oth

ers

Figure No.5.1: Distribution of study subjects according to working

category

Figure No: 5.1 Source : Sample survey results

KNOWLEDGE OF MUTUAL FUNDS AMONG THE INVESTORS

Understanding the knowledge of Mutual Funds among the investor is very important in

this research . With respect to that, table no. 5.3 gives the information about the knowledge of

Mutual Funds among the respondents. Out of 300 respondents, 70.67% of the respondents said

that they know about Mutual Funds and 29.33% of the respondents said that they don’t have any

knowledge about Mutual Funds. From the above information we can say that majority of the

investors are having knowledge about an investment instrument called Mutual Funds.

The details are given below in table No.5.3

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Table No. 5.3: Distribution of study subjects according to Knowledge of Mutual Funds among

the investors.

Knowledge About

Mutual Funds

No of respondents % of respondents

Yes 212 70.66

No 88 29.33

Total 300 100.00

Source : Sample survey results.

Figure No. 5.2: Distribution of study subjects according to know about

mutual funds

Yes

70.67%

No

29.33%


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INVESTMENT IN MUTUAL FUNDS :

We find that out of 212 respondents, who have the knowledge of Mutual Funds, only 123

respondents are investing in Mutual Funds and 89 respondents are not investing in Mutual

Funds. In other words only 58% of the respondents are investing in Mutual Funds and rest of

41.98% of the respondents are not investing in Mutual Funds even though they have the

knowledge of mutual funds. All together out of 300 respondents only 41% of the respondents are

investing in Mutual Funds and rest are not investing because either they are not having

awareness / knowledge or they have knowledge but they don’t want to invest because of some

reasons.


Table No. 5.4 : Distribution of study subjects according to Investment in Mutual Funds

Investors in Mutual Funds No of respondents % of respondents

Yes 123 58.02

No 89 41.98

Total 212 100.00

Source : sample survey results

156

Figure No. 5.3 : Distribution of study subjects according to investors in mutual funds

No

41.98%

Yes

58.02%


FREQUENCY OF INVESTMENT IN MUTUAL FUNDS ;

There are many types of Mutual Fund schemes which help the investors to invest in

different frequencies i.e, one time investment schemes, once in a year, once in six months, once

on quarter and monthly schemes (SIP-Simple Investment Plan). Investors choose the schemes

according to their requirement i.e. based on their annual income and level of savings. Some

investors invest in Mutual Fund Schemes as long term investment and some invest for short

term. The sample survey results in table no.5.5 show that 96.75 % of the respondents who invest

in Mutual Funds are doing monthly investment in different schemes and rest are investing in

other schemes. It is very clear that majority of the respondents are interested to invest in short

term plans i.e, monthly SIP.


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Table No.5.5 : Distribution of study subjects according to Frequency of Investment

Frequency of Investment. No of respondents % of respondents

Monthly 119 96.75

Once in 6 months 4 3.25

Total 123 100.00


Figure No.5.4 : Distribution of study subjects according to pattern of investment

Monthly

96.75%

Once in 6 months

3.25%


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TYPES OF INVESTMENT SCHEMES:

The Mutual Fund companies invest the investors money in different types of shares i.e,

Equity shares, Preference shares (Debt) and a mixture of both Equity & Debt (Hybrid). Thus

based on the above features the mutual funds are classified in to Equity Funds, Debt Funds and

Hybrid funds. The survey results in table no. 5.6 show that 91.6% of the respondents are

investing in Equity Funds , 7.32 % of the respondents are investing in Debt Funds and 1.63% are

investing in Hybrid Funds.

The details are given below in table No. 5.6

Table No.5.6 : Distribution of study subjects according to types of Mutual Fund Schemes

Type of Mutual Fund No of respondents % of respondents

Equity fund 112 91.06

Debt fund 9 7.32

Hybrid fund 2 1.63

Total 123 100.00


159

0.0

15.0

30.0

45.0

60.0

75.0

90.0

105.0

120.0

No

of

resp

on

den

ts

Equity fund Debt fund Hybrid fund

Figure No.5.5: Distribution of study subjects according to type of mutual

fund scheme


CLASSIFICATION OF INVESTMENT IN EQUITY FUNDS:

The Equity funds are further classified into four main types i.e, Diversified Equity

Funds, Mid Cap Funds, Sector Specific Funds & Tax Saving Funds. The survey results in table

no.5.7 show that 52.67% of the respondents are investing in Diversified Equity Funds , 36.60%

of the respondents are investing in Sector Specific Funds and only 10.71% of the respondents are

investing in Tax Saving Funds. None of the respondents are investing in Mid-Cap funds.


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Table No. 5.7: Distribution of study subjects according to investment in different types of equity

funds

Types of Equity Funds No of respondents % of respondents

Diversified 59 52.67

Mid-cap funds 0 0.00

Sector specific fund 41 36.60

Tax saving fund 12 10.71

Total 112 100.00

Source : Sample survey results

59

0

41

12

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

No

of

resp

on

den

ts

Diversified Mid-cap funds Sector specific fund Tax saving fund

Figure No.5.6: Distribution of study subjects according to type of equity

mutual fund


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CLASSIFICATION OF INVESTMENT IN DEBT FUNDS :

The Debt Funds are further classified into 5 main types i.e, Gilt Funds, Income Funds,

Medium Income Plans (MIPs), Short Term Plans and Liquid funds. The survey results in table

no. 5.8 show that 88.89% of the respondents invest in Income Funds, 11.11% of the respondents

invest in MIPs and none of the respondents invest in Liquid Funds or Gilt Funds or short Term

Plans.


Table 5.8 : Distribution of study subjects according to investment in different types of debt funds

Type of Debt Funds No of respondents % of respondents

Gift funds 0 0.00

Income funds 8 88.89

MIPS 1 11.11

Short term plans 0 0.00

Liquid funds 0 0.00

Total 09 100.00


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Figure No. 5.7: Distribution of study subjects according to type of debt

mutual funds

Liquid funds

0.00%Short term plans

0.00%

Gift funds

0.00%MIPS

11.11%

Income funds

88.89%


KNOWLEDGE OF SHARE MARKET AMONG THE INVESTORS :

Table No.5.9 gives the information about the knowledge of the share market and its

functioning among the investors. We can see that 82.11% of the respondents who are investing

in Mutual Funds have the knowledge of share market and its functioning and the rest don’t have

the knowledge about the same. The knowledge about the functioning of the share market will

help the investors to monitor their NAV (Net Asset Value) related details on a regular basis and

know the value of their investments. It also helps to understand how the fund managers /

portfolio managers / investment managers etc., invest the investors money in different types of

shares of different companies and what could be their return potential.


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Table No. 5.9: Distribution of study subjects according to knowledge of functioning of share

markets among the investors.

Awareness among the respondents about the

Functioning of the share market


Yes 101 82.11

No 22 17.89

Total 123 100.00


101

22

0.0

20.0

40.0

60.0

80.0

100.0

120.0

No

of

resp

on

den

ts

Yes No

Figure No 5.8: Distribution of study subjects according to knowledge about

the share market and its functioning


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KNOWLEDGE OF INVESTMENT METHODOLOGY OF MUTUAL FUNDS :

Mutual fund companies invest the investor funds into shares and stocks of different

companies. The investment is done by professional fund managers or portfolio managers of the

Mutual Fund companies. The performances of the stocks are monitored regularly and

accordingly funds are invested in well performing stocks and disinvesting is done in

non-performing stocks. Thus from table no. 5.10 , we can see that all the respondents (100%)

who are investing in Mutual Funds are aware that their fund are being invested by mutual fund

companies in the stocks of different companies in a very systematic portfolio where in maximum

returns are expected and risk is being reduced by diversification of investment in different

portfolios.


Table No. 5.10: Distribution of study subjects according to knowledge of investment

methodology of Mutual funds.

Knowledge among respondents about the

investment methodology of mutual fund companies


Yes 123 100.00

No 0 0.00

Total 123 100.00


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123

0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

No

of

resp

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den

ts

Yes No

Figure No. 5.9 Distribution of study subjects according to aware of mutual

fund companies


METHODS OF TRACKING PERFORMANCE OF MUTUAL FUNDS:

There are different ways to monitor & analyze the performance of the mutual fund

schemes after investing or before investing in them. Thus the present / potential investors can

analyze the performance of Mutual Fund schemes based on the past performance results i.e,

looking at the NAV of the Funds in the internet, financial magazines, financial daily news papers

etc…, by looking at the ratings given by the Credit Rating agencies like CRISIL, ICRA etc…,

based on the expert advise of the Mutual Fund advisors / consultants, investment managers,

portfolio managers, etc.., based on the reputation or goodwill of the Asset Management

Companies (AMC) who are managing the funds of the investors. From table no.5.11 we can see

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that the 71.54% of the respondents monitor and analyze the performance of a particular scheme

based on its NAV i.e, past performance, 15.45% of the respondents rely on expert advise and

monitor the performance of the scheme, 12.20% of the respondents rely on the Asset

Management Company’s report to monitor the performance of the schemes and only 0.81% of

the respondents rely on the ratings given by the Credit Rating agencies to monitor and analyze

the performance of their Mutual Fund Scheme..


Table No. 5.11 : Distribution of study subjects according to methods of tracking performance of

Mutual Funds.

Basis for analyzing past performance

of Mutual Funds


Past performance 88 71.54

Ratings 1 0.81

AMC 15 12.20

Expert advice 19 15.45

Total 123 100.00

Source: Sample survey results

167

Figure No 5.10: Distribution of study subjects according basis of analysing

the performance of of Mutual Funds

Past performance

71.54%Ratings

0.81%

AMC

12.20%

Expert advice

15.45%


SOURCES OF GATHERING THE PERFORMANCE DETAILS OF MUTUAL

FUNDS :

There are different sources of gathering the details of the day to day performance or

periodic performance of a particular Mutual Fund Scheme in which the investor has invested.

The various sources are Internet, Financial Magazines / News Papers, TV Channels, Brokers,

Financial Institutions, Financial Consultants, etc…. From table no. 5.12 , we can see that 65.85%

of the respondents are sourcing the information related to the performance of the Mutual Fund

Schemes from the internet by visiting the web site of the particular Mutual Fund company,

10.57% of the respondents are sourcing the information through financial magazines / daily news

papers, 8.94% of the respondents source the information through financial consultants / advisors

and 7.32% of the respondents source the information from both financial institutions or brokers.

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The details are given below in table No. 5.12

Table 5.12: Distribution of study subjects according to sources of gathering performance details

of Mutual Funds.

Source of information about past performance

of Mutual Funds


Financial institutions 9 7.32

Brokers 9 7.32

Financial consultants 11 8.94

TV channels 0 0.00

Magazines/News Papers 13 10.57

Internet 81 65.85

Total 123 100.00

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Figure No. 5.11. Distribution of study subjects according to information

about the performance of different mutual fund schemes

13

81

0

1199

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Financial

institutions

Brokers Financial

consultants

TV channels Magazines Internet

No o

f re

sponden

ts


DURATION OF RESPONDENTS’ INVESTMENT IN MUTUAL FUNDS ;

In the sample survey, information related to the duration of investment in mutual funds

done by the investors was gathered. Table no.5.13 shows the details about the investment

duration among the respondents. We can see that 9.76% of the respondents are investing in

Mutual Funds since past 1 year, 69.92% of the respondents are investing since past 2 years,

17.89% of the respondents are investing since past 3 years and 2.44% of the respondents are

investing since past 4 years. Thus we can say that majority of the investors are investing in

Mutual Funds since past two years.


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Table No. 5.13 : Distribution of study subjects according to duration of respondents investment

in Mutual Funds.

Years of investing in Mutual Funds No of respondents % of respondents

Since 1 year 12 9.76

Since 2 years 86 69.92



Since 5years 0 0.00

Since 6+ years 0 0.00

Total 123 100.00

Source : Sample survey

results.

Figure No.5.12: Distribution of study subjects according to years of

investing in mutual funds

0.00 0.00

2.44

17.89

69.92

9.76

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

1 year 2 years 3 years 4 years 5years 6+ years

% o

f re

spo

nd

ents


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RESPONDENTS PRIORITIES FOR INVESTING IN MUTUAL FUNDS :

There are different reasons why investors invest in Mutual Funds. The investors prioritize

their needs and desires when they do investment. Like wise in table no.5.14 we can see that

22.76% of the respondents give first priority to invest in Mutual Funds because of the reason that

they give high return with low risk, 21.95% of the respondents give second priority because it is

very simple to invest and monitor fund performance, 19.5% of the respondents give third priority

because its better to invest in Mutual Funds rather than investing directly in to Shares, 18.69% of

the respondents give fourth priority for Mutual Funds because it is professionally managed by

fund managers or portfolio managers, 7.31% of the respondents give fifth priority for the reason

that Mutual Funds provide cheap access to expensive stocks, 6.50% of the respondents give sixth

priority for investing in Mutual Funds because they involve very less analysis & calculation as

compared to shares, 2.43% of the respondents give seventh priority because of the reason that

Mutual Funds provide assured and consistent returns and 0.81% of the investors give last priority

( Eighth ) for the reason that Mutual Funds are good investment instruments


Table No.5.14 : Distribution of study subjects according to respondents priorities for investing in

Mutual Funds .

Mean priority of the reasons for investing in

Mutual Funds


1. Good Investment Instrument 1 0.81

2. Better than directly investing in shares 24 19.5

3. Assured and consistent return 03 2.43

4. Provides high return with low risk 28 22.76

5. Less analysis is required as compared to shares 08 6.50

6. Very simple to invest and monitor fund performance 27 21.95

7. Provides cheap access to expensive stocks 9 7.31

8. Diversification of risk 0 0

9. Professional management by investment managers 23 18.69

Total 123 100

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Figure No. 5.13 : Distribution of study subjects according to reasons for

investment in Mutual Funds

23.0

0.0

9.0

27.0

8.0

28.0

3.0

24.0

1.0

0.00

10.00

20.00

30.00

40.00

50.00

1 2 3 4 5 6 7 8 9

% o

f re

spo

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ents


RISK INVOLVED IN INVESTMENT IN MUTUAL FUNDS :

As the Mutual Fund Companies invest in the funds in the shares and stocks of different

companies there will be wide fluctuations in the returns because the share market is very volatile

and the returns are not guaranteed. Table no.5.15 shows the respondents’ opinion about the risk

involved in the Mutual Fund investments. 28.46% of the respondents say that that the

investments in Mutual Funds are very risky and 71.54% of the respondents say that investment in

Mutual Funds are not risky because of the reason that the investments are done in the share

market by professionals like portfolio managers or fund managers who are experts in this field

and also because the Mutual Fund companies are well regulated & controlled by the Central

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Government through its regulatory body i.e, AMFI ( Association of Mutual Funds of India ) .

Thus they say that the funds of the investors are safe in the hands of the Mutual Fund companies


Table No.5.15 : Distribution of study subjects according to risk involve in investment in Mutual

Funds

Mutual Fund as a Risky Instrument No of respondents % of respondents

Yes 35 28.46

No 88 71.54

Total 123 100.00


Figure No. 5.14: Distribution of study subjects according to risk involved in

investing in mutual funds.

Yes

28.46%

No

71.54%


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IMPORTANCE OF CREATING AWARENESS AMONG PUBLIC :

From table no.5.16 we can see that out of 300 respondents only 212 respondents are

aware about & have the knowledge of Mutual Funds . From the table no.8 we can see that out of

212 respondents who have the knowledge of Mutual Funds only 123 ( 58.2% ) of the

respondents are investing in Mutual Funds. So we can see that on an average out of 300

respondents only 41% are investing in Mutual Funds.

Table no. 5.15 shows the respondents opinion about creating awareness among the

general public of Hubli-Dharwad city about the Mutual Funds. 98.37% of the investors are of the

opinion that the Mutual Fund companies as well as the AMFI should create awareness among the

public about Mutual Funds, its features and its benefits. Only 1.63 % of the respondents say that

there is no necessity of creating awareness among the public about Mutual Funds.


Table No.5.16 : Distribution of study subjects according to importance of creating awareness

about Mutual Funds.

Need for creating awareness among the public

about the Mutual Funds.


Yes 121 98.37

No 2 1.63

Total 123 100.00


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98.37

1.63

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

% o

f re

spo

nd

ents

Yes No

Figure No. 5.15: Distribution of study subjects according to the need for

creating awareness about Mutual Funds.


NEED FOR MUTUAL FUND INVESTORS’ SERVICE CENTRES :

Table no. 5.17 shows the respondents opinion about the need for more no of Mutual Fund

Investors Education and Service Centres in Hubli-Dharwad. 81.3% of the respondents say that

there are very less Mutual Fund Investors Education and Service Centres in Hubli-Dharwad and

there is a need to establish more such centres to create awareness as well as provide investment

advise & service to the potential investors of Hubli-Dharwad cities and only 18.7% of the

respondents say that there are sufficient Mutual Fund Investors Education and Service Centres in

Hubli-Dharwad.


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Table No.5.17: Distribution of study subjects according to need for mutual fund investors’

service centres.

Availability of Mutual Fund Investors Education

& Service Centres.


Yes 23 18.70

No 100 81.30

Total 123 100.00


18.7

81.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

% o

f re

spo

nd

ents

Yes No

Figure No.5.16: Distribution of study subjects according to availability of

Mutual Fund investors education and service centres.


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INVESTORS OPINION ON ECONOMIC DEVELOPMENT OF THE

COUNTRY THROUGH INVESTMENT IN MUTUAL FUNDS :

The Economic development of the country is possible when there is a huge amount of

capital formation. The capital thus formed can be used for various developmental activities in the

country. Thus it will raise the standard of living as well as per-capita income of the people in the

country. Capital formations takes place only if people of the country make savings out of their

income and invest in different financial instruments like bank savings account, shares,

debentures, bonds, insurance schemes, mutual fund schemes, etc... Table no.5.18 shows the

respondents opinion about the economic development of the country by investing in Mutual

Funds. 100 % of the respondents are of the opinion that the investment in Mutual funds will lead

to the economic development of the country.


Table No.5.18: Distribution of study subjects according to development of economy

Investment in Mutual Funds can develop the

Economy of the country.


Yes 123 100

No 0 0.00

Total 123 100.00


178

Figure No.5.17 : Distribution of study subjects according to acceptance of


Yes

100.00%

No

0.00%


REASONS FOR REDUMPTION OF INVESTMENT IN MUTUAL FUNDS :

There are various reasons why some of the investors redeem ( disinvest ) their

investments in Mutual Funds . The sample survey results in table no.5.19 give details about why

some of the respondents have redeemed their Mutual Funds. 72.36% of the respondents have

redeemed their investments in some mutual fund schemes because of the reason that they are not

performing or the funds are not giving expected returns. 21.14% of the respondents have

redeemed because of the reason that the Mutual Fund companies are not giving good service to

their investors. 4.07 % of the respondents have redeemed because of the reason that they are not

getting good investment support and service in Hubli-Dharwad city. 1.63% of the respondents

have redeemed because of the reason that they are finding it difficult to monitor the fund

performance and 0.81% of the respondents have redeemed because of the reason that they are not

getting any information about the fund performance.

179


Table No 5.19 : Distribution of study subjects according to reasons for redemption of investment

in Mutual Funds.

Reasons for redemption of Mutual Funds No of respondents % of respondents

Non performance 89 72.36

Non availability of good service from MF Company 26 21.14

Non availability of investment support and service 5 4.07

Lack of information about fund performance 1 0.81

Difficulty in monitoring fund performances 2 1.63

Total 123 100.00

Source : Sample survey

results.

Figure No.5.18 : Distribution of study subjects according to reasons for

redumption of Mutual Funds

Non performance

72%

Non availability

21%

Lack of

information

1%

Non availability

of support and

service

4%

Difficulty in

monitoring fund

performances

2%


180

RESPONDENTS’ REASONS FOR NOT INVESTING IN MUTUAL FUNDS :

There are different reasons why some investors have not invested in Mutual Funds or not

interested to invest in mutual funds. The sample survey results in table no 5.20 show the reasons

why some respondents have not invested in Mutual Funds. 23.22% of the respondents have not

invested in Mutual Fund because of the reason that they don’t provide satisfactory returns,

20.66% of the respondents have not invested because they don’t have any knowledge about how

to invest and where to invest, 16.33% of the respondents have not invested because they think

that it is not a lucrative instrument to invest and there are other better investment options which

give better return that what Mutual Funds give, 16.66% of the respondents have not invested

because it is related to share market and the returns are not guaranteed and consistent, 12.66% of

the respondents have not invested because they don’t have the information about the Mutual

Fund investment centre, 6.00% of the respondents have not invested because Mutual Fund is a

risky investment instrument and 2.00 % of the respondents have not invested because there are

no Mutual Fund Education and Service centre.


Table no 5.20 : Distribution of study subjects according reasons for not investing in Mutual

Funds.

Reasons for not investing in Mutual Funds No of respondents % of respondents

1. Not a lucrative instrument 49 16.33

2. No satisfactory returns 70 23.22

3. No safety of funds invested 7 2.33

4. Risky investment instrument 18 6.00

5. No or Less liquidity 0 0.00

6. No investment knowledge 62 20.66

7. No knowledge about investment centre. 38 12.66

8. No MF investor education and service centre 6 2.00

9. It is related to share market so returns are not guaranteed 50 16.66

Total 300 100


181

Figure No 5.19 : Distribution of study subjects according to reasons of not


3

2.33%

9

16.66%

6

20.66%

7

12.66%

2

23.22%

1

16.33%8

2.00%

4

6.00 %


RESPONDENTS’ REASONS FOR NOT INVESTING IN MUTUAL FUNDS:

(OPENIONS EXPRESSED IN OPEN ENDED QUESTION) :

An open ended question was put in the questionnaire to get the other reasons if any for

not investing in mutual funds. The results of the open ended question are shown in table no 5.21

which show the other reasons quoted by respondents for not investing in Mutual Funds. 23% of

the respondents have not invested because there are too many schemes which are confusing them

while investing, 20% of the respondents are not investing because of the reason that different

mutual fund schemes carry very complicated features which are hard to understand, 17% of the

investors are not investing because there are other attractive avenues to invest which give better

return than the mutual funds, 17% of the respondents are not investing because the mutual fund

companies demand many KYC (Know your customers) documents which may not be available

will the investors, 10% of the respondents are not investing in mutual funds because of the

182

reason that the mutual fund investment application forms are very complicated to fill, 7% of the

respondents are not investing because of the reason that the mutual funds carry high risk as they

are associated with the share market, 3% of the investors are not investing in mutual funds

because of the reason that there are insufficient funds especially with respect to schemes of top

performing companies and 3% of the respondents are not investing in the mutual funds because

their financial advisors have not suggested them to invest.



Funds.(Open ended question)

Reasons for not investing in Mutual Funds No of respondents % of respondents

1. Too many schemes 69 23

2. Complicated product features 60 20

3. Other attractive investment avenues 51 17

4. Too many KYC documents required while investing 51 17

5. Complicated application forms 30 10

6. High associated risk 21 7

7. Insufficient funds for investment. 9 3

8. Not advised be financial advisors. 9 3

Total 300 100

183


RATING OF THE BEST INVESTMENT INSTRUMENTS BY RESPONDENTS:

Different investors prioritize the investment instruments in their own way according to

their income level & investment pattern. Table no 5.22. Shows how the respondents prioritize the

investment instruments based on the risk & returns and also the liquidity offered by them. The

First priority is given by the respondents to the Real Estate as the best investment instrument,

Second priority is been given to investment in Gold and Silver, Third priority is given for

investment in shares , Fourth priority is given for investment in Postal Savings, Fifth priority is

given for investment in Fix Deposits / Term Deposits, Sixth priority is given to investment in

Insurance and last priority is being given for investment in Savings bank accounts.


184

Table 5.22: Mean priority about best investment instruments

Rating of best investment instrument Mean priority

Savings bank 1.56

Fixed deposit 2.45

Shares 2.90

Gold/silver 3.30

Postal savings 2.80

Real estate 3.50

Insurance 2.40


Figure 5.21: Mean priority about best investment instruments

2.4

3.5

2.8

3.3

2.9

2.5

1.6

0.00

0.30

0.60

0.90

1.20

1.50

1.80

2.10

2.40

2.70

3.00

3.30

3.60

Sav

ing

s b

ank

Fix

ed d

epo

sit

Sh

ares

Go

ld/s

ilv

er

Po

stal

sav

ing

s

Rea

l es

tate

Insu

ran

ce

Mea

n v

alu

e


185

RATING OF THE BEST PERFORMING MUTUAL FUND :

An open ended question was asked to the respondents to know the Mutual Funds in

which they are investing and also to know the most popular and best performing mutual fund.

The results obtained from the survey are shown in the table no 5.23. 43% of the respondents

are investing in different schemes of Reliance Mutual Fund, 22% of the respondents are

investing in the different schemes of Sundaram Mutual Fund, 18% of the respondents are

investing in the different schemes of ICICI Mutual Fund, 10% of the respondents are

investing in the different schemes of HDFC Mutual Fund and rest others i.e, 7% of the

respondents are investing in the different schemes other than the companies mentioned

above.



Funds.

Name of the Fund No of respondents % of Investors

Reliance Mutual Fund Schemes 53 42

Sundaram Mutual Fund Schemes 28 23

ICICI Mutual Fund Schemes 22 18

HDFC Mutual Fund schemes 13 11

Other Mutual Fund Schemes 7 6

123 100

186

Figure No 5.22 : Distribution of study subjects according to the most

popular Mutual Fund company

0%0%0%0%

ICICI

HDFC

Reliance

Sundaram

Others


187

TESTING OF HYPOTHESIS

Hypothesis 1.: There is no significant association between awareness of mutual fund and

Savings bank as an investment instrument.

To achieve this hypothesis, the chi-square test for association was applied and the

results are presented in the following table:

Table No.5.24 : Association between awareness of mutual fund and Savings bank as an

investment instrument:-

Investments Awareness of mutual fund Chi –square

p-value

Yes % No % Total %

No 247 85.76 41 14.24 288 96.00 1.9788 0.1595

Yes 12 100.00 0 0.00 12 4.00

Total 259 86.33 41 13.67 300 100.00

p > 0.05 So H1 is accepted

From the results of the above table, it can be seen that, out of a total 300 samples, 259

samples are aware and 41 samples are not aware about mutual fund. Further, out of 259

samples having awareness, only 12 samples have given first priority to savings bank as a best

investment instrument followed by 288 samples who have not given priority to savings bank

as a best investment instrument. By chi-square test of significance, no association was

observed between awareness of mutual fund and Savings bank as an investment instrument

(chi-square=1.9788, p>0.05) at 5% level of significance. Hence, the null hypothesis is

accepted.

188

Hypothesis 2.: There is no significant association between awareness of mutual fund and

Fixed deposit as an investment instrument


results are presented in the following table.

Table No.5.25 : Association between awareness of mutual fund and Fixed deposit as an

investment instrument


p-value

Yes % No % Total %

No 175 90.21 19 9.79 194 64.67 6.9797 0.0083*

Yes 84 79.25 22 20.75 106 35.33

Total 259 86.33 41 13.67 300 100.00

*p < 0.05 So H2 is rejected



samples having awareness, only 106 samples have given first priority to fixed deposit as a

best investment instrument followed by 194 samples who have not given priority to fixed

deposit as a best investment instrument. By chi-square test, significant association was

observed between awareness of mutual fund and fixed deposit as an investment instrument

(chi-square=6.9797, p<0.05) at 5% level of significance. Hence, the null hypothesis is

rejected.

189

Hypothesis 3: There is no significant association between awareness of mutual fund and

Shares as an investment instrument



Table No.5.26 : Association between awareness of mutual fund and Shares as an investment

instrument


p-value

Yes % No % Total %

No 244 86.22 39 13.78 283 94.33 0.0553 0.8142

Yes 15 88.24 2 11.76 17 5.67

Total 259 86.33 41 13.67 300 100.00




samples having awareness, only 17 samples have given first priority to shares as a best

investment instrument followed by 283 samples who have not given priority to shares as a

best investment instrument. By chi-square test of significance, no association was observed

between awareness of mutual fund and shares as an investment instrument (chi-

square=0.0553, p>0.05) at 5% level of significance. Hence, the null hypothesis is accepted.

190


Gold/silver as an investment instrument



Table No. 5.27 : Association between awareness of mutual fund and Gold/silver as an



p-value

Yes % No % Total %

No 69 83.13 14 16.87 83 27.67 0.9964 0.3182

Yes 190 87.56 27 12.44 217 72.33

Total

259 86.33 41 13.67 300 100.00

p >0.05 So H4 is accepted



samples having awareness, 217 samples have given first priority to Gold/Silver as a best

investment instrument followed by only 83 samples who have not given priority to

Gold/Silver as a best investment instrument. By chi-square test of significance, no

association was observed between awareness of mutual fund and Gold/Silver as an

investment instrument (chi-square=0.9964, p>0.05) at 5% level of significance. Hence, the

null hypothesis is accepted.

191


Postal savings as an investment instrument



Table No. 5.28 : Association between awareness of mutual fund and Postal savings as an



p-value

Yes % No % Total %

No 51 92.73 4 7.27 55 18.33 2.3335 0.1266

Yes 208 84.90 37 15.10 245 81.67

Total 259 86.33 41 13.67 300 100.00




samples having awareness, 245 samples have given first priority to postal savings as a best

investment instrument followed by 55 samples who have not given priority to postal savings

as a best investment instrument. By chi-square test of significance, no association was

observed between awareness of mutual fund and postal savings as an investment instrument

(chi-square=2.3335, p>0.05) at 5% level of significance. Hence, the null hypothesis is

accepted.

192


Real estate as an investment instrument



Table No.5.29 : Association between awareness of mutual fund and Real estate as an



p-value

Yes % No % Total %

No 26 74.29 9 25.71 35 11.67 4.8742 0.0273*

Yes 233 87.92 32 12.08 265 88.33

Total 259 86.33 41 13.67 300 100.00

*p < 0.05 So H6 is rejected.



samples having awareness, 265 samples have given first priority to real estate as a best

investment instrument followed by only 35 samples who have not given priority to real estate

as a best investment instrument. By chi-square test of significance, high level of association

is observed between awareness of mutual fund and real estate as an investment instrument

(chi-square=4.8742, p<0.05) at 5% level of significance. Hence, the null hypothesis is

rejected.

193


Insurance as an investment instrument



Table No.5.30 : Association between awareness of mutual fund and Insurance as an



p-value

Yes % No % Total %

No 223 85.44 38 14.56 261 87.00 1.3561 0.2442

Yes 36 92.31 3 7.69 39 13.00

Total 259 86.33 41 13.67 300 100.00




samples having awareness, 39 samples have given first priority to insurance as a best

investment instrument followed by 261 samples who have not given priority to insurance as a

best investment instrument. By chi-square test of significance, no association was observed

between awareness of mutual fund and insurance as an investment instrument (chi-

square=1.3561, p>0.05) at 5% level of significance. Hence, the null hypothesis is accepted.

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