Investor perception towards selection of a mutual fund

A SURVEY ON INVESTOR’S PERCEPTION TOWARDS SELECTION OF A MUTUAL FUND

S.Muralie Manohar,M.B.A(Banking Technology),

Pondicherry Univesity.

OBJECTIVES OF THE STUDY

• To identify the investment pattern among investors.

• To identify how the age factor effect in selection of mutual funds.

• To identify the features the investors look for in Mutual fund product.

• To identify the scheme preference of investors.

METHODOLOGY ADOPTED

• Primary source1. Observation method2. Questionnaire survey3. Unstructured interview

• Secondary source1. Internet2. Newspaper3. Magazines4. Others

SAMPLE DESIGN

• A sample of 150 respondents has taken randomly from the various areas of Madurai.

• The total numbers of respondents have divided into different groups as per their Age and Life cyclei. Group A - Students and Unmarried (18 yrs. To 25 yrs.)ii. Group B - Young Married Stage (25 yrs. To 35 yrs.)iii. Group C - Working People with Younger Children (35

yrs. to 45 yrs.)iv. Group D - Working People with Older Children (45

yrs. to 55 yrs.)v. Group E - Retired People (more than 55 yrs.)

SAVING IN FINANCIAL INSTRUMENTS

GROUP YES NO TOTAL

A: STUDENT AND UNMARRIED 8 10 18

B: YOUNG MARRIED STAGE 22 8 30

C: WORKING PEOPLE WITH YOUNGER CHILDREN 35 9 44

D: WORKING PEOPLE WITH OLDER CHILDREN 41 5 46

E: RETIRED PEOPLE 10 2 12

TOTAL 116 34 150

PREFERENCE OF INVESTMENTGROUP BANK POS MF SHARE B & D INSUR-

ANCE TOTAL

A.STUDENT ANDUNMARRIED 10 0 6 2 0 0 18

B.YOUNG MARRIEDSTAGE 20 0 6 4 0 0 30

C.WORKING PEOPLE (W.P)WITH YOUNGERCHILDREN

15 0 20 0 4 5 44

D. W.P. WITH OLDERCHILDREN

12 2 10 9 6 7 46

E.RETIRED PEOPLE 8 2 2 0 0 0 12

TOTAL 65 4 44 15 10 12 150

INVESTMENTS IN MUTUAL FUNDGROUP YES NO TOTAL

A.STUDENT ANDUNMARRIED

6 12 18

B.YOUNG MARRIEDSTAGE

20 10 30

C.WORKING PEOPLE (W.P)WITH YOUNGERCHILDREN

30 14 44

D. W.P. WITH OLDERCHILDREN 35 11 46

E.RETIRED PEOPLE 4 8 12

TOTAL 95 55 150

REASONS BEHIND NOT INVESTING IN MUTUAL FUND

GROUP LACK OFKNOWLEDGE

RISKYINVESTME

-NTLACK OF

GUIDANCELOWERRETURN

TOTAL

A.STUDENT ANDUNMARRIED 7 3 2 0 12

B.YOUNGMARRIEDSTAGE

4 1 5 0 10

C.WORKINGPEOPLE WITHYOUNGERCHILDEREN

0 4 8 2 14

D.WORKINGPEOPLE WITHOLDERCHILDEREN

0 2 4 5 11

E.RETIRED 0 5 2 1 8

TOTAL 11 15 21 8 55

REASONS BEHIND INVESTING IN MUTUAL FUND

A--Mutual Fund is safer comparing others investments.

B--Investment generates regular income.C--Investment generates both current income

and growing over a period of time.D--Creation of wealth, not current income.

GROUP A B C D TOTAL


0 0 5 1 6

B.YOUNG MARRIEDSTAGE 2 5

103 20

C.WORKING PEOPLEWITH YOUNGERCHILDEREN

8 2 10 10 30

D.WORKING PEOPLEWITH OLDERCHILDEREN

5 5 15 10 35

E.RETIRED 1 2 1 1 4

TOTAL 16 14 41 25 95

OBJECTIVES BEHIND MUTUAL FUND INVESTMENT

GROUPGROWTH

OFINVESTM-

ENT

REGULARDIVIDEND

TAXSAVING

ASSUREDRETURN

TOTAL

A.STUDENT ANDUNMARRIED 15 0 0 3 18

B.YOUNG MARRIEDSTAGE 20 0 5 5 30

C.WORKING PEOPLEWITH YOUNGERCHILDREN

20 10 7 3 44

D.WORKING PEOPLEWITH OLDERCHILDREN

4 10 11 25 46

E.RETIRED PEOPLE 1 5 2 2 12

TOTAL 65 25 25 40 150

PART OF SAVINGS IN MUTUAL FUND

GROUP 50% 40% 30% 20% TOTAL


0 0 5 1 6

B.YOUNG MARRIEDSTAGE 2 5 10 3 20


8 2 10 10 30


5 5 15 10 35

E.RETIRED 1 2 1 1 4

TOTAL 16 14 41 25 95

GROUP EXCELLENTVERY

GOOD GOOD POOR TOTAL

STUDENT ANDUNMARRIED 0 0 6 0 6

YOUNG MARRIED STAGE 0 8 11 1 20


4 5 19 2 30


6 4 24 1 35


0 2 0 2 4

TOTAL 10 19 60 6 95

SUGGESTIONS• Study shows that people from Group A show

low interest in MF investment so AMC’s are required are required to pay more attention to this segment.

• AMC’s have to develop variety of product so that investors from all groups (age, income, occupation etc) can invest in a MF products.

• The AMC should maintain relationship with the banks at a regular basis, as it is one of most potential source for getting investment.

• Investors are influenced by the extent and quality of disclosure of Information subsequent to their investment regarding disclosure of NAV, Portfolio of investment and disclosure of deviation of investment from the stated objectives and the attached fringe benefits to the scheme in their selection of the scheme.

• The AMC should provide the little bit fixed returns on investment so that the investors can rely on that.

• Before development of any mutual fund product AMC’s should consider what the expectations of investors are so that MF product fulfill the financial needs of investor.

• Mutual fund schemes should give added benefits like “Insurance coverage” to attract more number of investors.

• The AMC should maintain relationship with the banks at a regular basis, as it is one of most potential source for getting investment.

Investor perception towards selection of a mutual fund

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