consumer prefer on reliance mutual fund
TRANSCRIPT
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
1/65
PROJECT REPORT
ON
CONSUMER PREFERENCESUndertaken At
Submitted in partial fulfilment of the requirementsFor the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF: SUBMITTED BY:MS. PREETI SEHGAL KARNI MAAN SINGH
LECTURER Roll No.: 81005320087
CHANDIGARH BUSINESS SCHOOLAffiliated to
PUNJAB TECHNICAL UNIVERSITY
2008-2011
DECLARATION
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
2/65
I hereby declare that this Project Report entitled
CONSUMER PREFERENCES FOR RELIANCE MUTUAL FUND
submitted by me to the PTU, is a bonafide work undertaken and it is not
submitted to any other University or Institution for the award of any
degree certificate or published any time before.
Name : Signature of the
Student :
Date :
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
3/65
ACKNOWLEDGEMENT
First of all, I express my profound gratitude to the management of
CONSUMER PREFERENCES FOR RELIANCE MUTUAL FUND for
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
4/65
giving me the opportunity to do my project training at their esteemed
organization. I am highly obliged to Mr. MUNISH SABARWAL (H.O.D.)
CHANDIGARH, who provided me such a training, which made me able to
gain knowledge about the field of paints and without his encouraging and
helping attitude this project could not have attained its present shape. It
was only due to his support & guidance that I am able to gain maximum
knowledge that helps me to deliver the best.
Lastly I would like to thank all the respondents who offered their opinions
and suggestions through the survey that was conducted by me. Finally
the support and encouragement to accomplish a major piece of work
comes from friends and family. To them I am indebted beyond words.
KARNI MAAN SINGH
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
5/65
CONTENTS
CERTIFICATE
ACKNOWLEGEMENTS
DECLARATION
PREFACE
LIST OF TABLES
CHAPTER -1: INTRODUCTION
What is Mutual Fund
Advantages and Disadvantages
Why to invest in Mutual Fund
Other Investment Options
CHAPTER -2: COMPANY PROFILE
Profile Of RELIANCE Mutual Fund
Products Of RELIANCE Mutual Fund
Main Schemes Of RELIANCE Mutual Fund
Competitors Of RELIANCE Mutual Fund
CHAPTER 3: OBJECTIVES AND RESEARCH METHODOLGY
Objectives Of Study
Research Methodology
Limitations Of Study Respondents Profile
CHAPTER -4: DATA ANALYSIS AND INTERPRETATION
CHAPTER-5: FINDINGS AND CONCLUSIONS
CHAPTER-6: SUGGESTIONS
BIBILIOGRAPHY
ANNEXURE
QUESTIONNARIE
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
6/65
CHAPTER 1
INTRODUCTION
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
7/65
INTRODUCTION TO MUTUAL FUND
Mutual funds, as the name indicates is the fund where in numerous investors come together to
invest in various schemes of mutual fund.
Mutual funds are dynamic institution, which plays a crucial role in an economy by mobilizing
savings and investing them in the capital market, thus establishing a link between savings and
the capital market.
A mutual fund is an institution that invests the pooled funds of public to create a diversified
portfolio of securities. Pooling is the key to mutual fund investing. Each mutual fund has aspecific investment objective and tries to meet that objective through active portfolio
management.
Mutual fund as an investment company combines or collects money of its shareholders and
invests those funds in variety of stocks, bonds, and money market instruments. The latter
include securities, commercial papers, certificates of deposits, etc. Mutual funds provide the
investor with professional management of funds and diversification of investment.
Investors who invest in mutual funds are provided with units to participate in stock markets.
These units are investment vehicle that provide a means of participation in the stock market
for people who have neither the time, nor the money, nor perhaps the expertise to undertake
the direct investment in equities. On the other hand they also provide a route into specialist
markets where direct investment often demands both more time and more knowledge than an
investor may possess.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
8/65
Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of money is invested in accordance with a stated objective. The joint
ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus
collected is then invested in capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital appreciations
realized are shared by its unit holders in proportion the number of units owned by them. Thus
a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. A Mutual Fund is an investment tool that allows small investors access to
a well- diversified portfolio of equities, bonds and other securities. Each shareholder
participates in the gain or loss of the fund. Units are issued and can be redeemed as needed.
The funds Net Asset value (NAV) is determined each day.
Investments in securities are spread across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not move
in the same direction in the same proportion at the same time. Mutual fund issues units to the
investors in accordance with quantum of money invested by them. Investors of mutual funds
are known as unit holders.
When an investor subscribes for the units of a mutual fund, he becomes part owner of
the assets of the fund in the same proportion as his contribution amount put up with the
Preference of customer in different mutal fund
PASSED
BACK TO
POOL THEIR
MONEY WITH
GENERATES INVEST IN
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
9/65
corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual
fund shareholder or a unit holder. Any change in the value of the investments made into
capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value
(NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's
assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of
scheme's assets by the total number of units issued to the investors.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
10/65
ADVANTAGES OF MUTUAL FUND
The advantages of investing in mutual fund are:
Professional Management-
The primary advantage of funds (at least theoretically) is the professional
management of your money.
Investors purchase funds because they do not have the time or the expertise to manage
their own portfolio. A mutual fund is a relatively inexpensive way for a small investor
to get a full time manager to make and monitor investments.
Diversification-
Diversification is an investing strategy that can be neatly summed up as "Don't put all
your eggs in one basket." Spreading your investments across a wide range of
companies and industry sectors can help lower your risk if a company or sector fails.
Some investors find it easier to achieve diversification through ownership of mutualfunds rather than through ownership of individual stocks or bonds.
Affordability
Some mutual funds accommodate investors who don't have a lot of money to invest
by setting relatively low dollar amounts for initial purchases, subsequent monthly
purchases, or both.
Economies of scale-Because a mutual fund buys and sells large amount of securities at a time, its
transaction costs are lower than you as an individual would pay.
Convenient Administration-
Investing in mutual fund reduces paperwork and helps you avoid many problems such
as bad deliveries, delayed payments and follow up with the brokers and companies.
Mutual funds save your time and make investing easy and convenient.
Return Potential-
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
11/65
Over a medium to long term, Mutual funds have the potential to provide a higher
return as they invest in a diversified basket of selected securities.
Liquidity -
Mutual fund investors can readily redeem their shares at
the current NAV plus any fees and charges assessed on redemption at any
time.
Choice of Schemes -
Mutual funds offer a family of schemes to suit your varying needs over a lifetime.
Flexibility -
Mutual Funds offering multiple schemes allow investors to switch easily between
various schemes. This flexibility gives the investor a convenient way to change the
mix of his portfolio over time.
Transparency -
Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the
entire portfolio monthly. This level of transparency, where the investor himself sees
the underlying assets bought with his money, is unmatched by any other financial
instrument. Thus the investor is in the know of the quality of the portfolio and can
invest further or redeem depending on the kind of the portfolio that has been
constructed by the investment manager.
Well Regulated
Unlike the company fixed deposits, where there is little control with the investment
being considered as unsecured debt from the legal point of view, the Mutual Fundindustry is very well regulated. All investments have to be accounted for, decisions
judiciously taken. SEBI acts as a true watchdog in this case and can impose penalties
on the AMCs at fault. The regulations, designed to protect the investors interests are
also implemented effectively.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
12/65
DISADVANTAGES OF MUTUAL FUNDS:
The disadvantages of investing in a Mutual Fund are:
Professional Management-
Did you notice how we qualified the advantage of professional management with the word
"theoretically"? Many investors debate over whether or not the so-called professionals are
any better than you or I at picking stocks. Management is by no means infallible, and, even if
the fund loses money, the manager still takes his/her cut.
Costs
Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The
mutual fund industry is masterful at burying costs under layers of jargon.
Dilution
It's possible to have too much diversification. Because funds have small holdings in so many
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 had strong success, the manager often has trouble finding a good
investment for all the new money.
Taxes
When making decisions about your money, fund managers don't consider your personal tax
situation. For example, when a fund manager sells a security, a capital-gain tax is triggered,
which affects how profitable the individual is from the sale. It might have been more
advantageous for the individual to defer the capital gains liability.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
13/65
WHY TO INVEST IN MUTUAL FUNDS:
A proven principle of sound investment is do not put all eggs in one basket. Investment in
mutual funds is beneficial due to following reasons.
They help in pooling of funds and investing in large basket of shares of different
companies. Thus by investing in diverse companies, mutual funds can protect againstunexpected fall in value of investment.
An average investor does not have enough time and resources to develop professional
attitude towards their investment. Here professional fund managers engaged by mutual funds
take desirable investment decision on behalf of investors so as to make better utilization of
resources.
Investment in mutual funds is comparatively more liquid because investor can sell theunits in open market or can approach mutual fund to repurchase the units at net asset value
depending upon the type of scheme.
Investors can avail tax rebates by investing in different tax saving schemes floated by
these funds, approved by the government.
Operating cost is minimized per head because of large size of investible funds, there by
realizing more net income of investors.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
14/65
OTHER INVESTMENT OPTIONS
Bank Fixed Deposits (FD)
Fixed Deposit or FD is the most preferred investment option today. It yields up to 8.5%
annual return depends on the Bank and period. Minimum period is 15 days and maximum is
5 years and above. Senior citizens get special interest rates for Fixed Deposits. This is
considered to be a safe investment because all banks operated under the guidelines of Reserve
Bank of India.
National Saving Certificate (NSC)
NSC is backed by Govt. of India so it is a safe investment method. Lock in period is 6 years.
Minimum amount is Rs100 and no upper limit. You get 8% interest calculated twice a year.
NSC comes under Section 80C so you will get an income tax deduction up to Rs 1, 00,000.
From FY 2005-'06 onwards interest accrued on NSC is taxable.
Public Provident Fund (PPF)
PPF is another form of investment backed by Govt. of India. Minimum amount is Rs500 and
maximum is Rs70, 000 in a financial year. A PPF account can be opened in a head post
office, GPO and selected branches of nationalized banks. PPF also comes under Section 80C
so individuals could avail income tax deduction up to Rs 1, 00,000. Lock in period for PPF is
15 years and interest rate is 8%. Unlike NSC, PPF interest rate is calculated annually. Both
PPF and NSC considered being best investment option as it is backed by Government of
India.
Stock Market
Investing in share market is another investment option to get more returns. But share market
investment is volatile to market conditions. Before investing you should have a thorough
knowledge about its operation.
There are many investment options available like investing in Gold, Real Estate etc.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
15/65
CHAPTER 2
COMPANY PROFILE
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
16/65
About company
Reliance Capital Limited (RCL)
RCL is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of
India under section 45-IA of the Reserve Bank of India Act, 1934. RCL was incorporated as a
public limited company in 1986 and is now listed on the Bombay Stock Exchange and the
National Stock Exchange (India)
With a net worth of Rs 4,123 croreand over 165,000 shareholders, RCL has established its
presence as a leading player in the financial services sector in the country. On conversion of
outstanding equity instruments, the net worth of the company will increase to over Rs 4,568
crore.
RCL ranks among the top 3 companies in the private financial services and banking sector inthe country, in terms of net worth.
Reliance Capital Asset Management Limited (RCAM), a company registered under the
Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual
Fund.
Reliance Capital Asset Management Limited is a wholly owned subsidiary of Reliance
Capital Limited, the sponsor. The entire paid-up capital (100%) of Reliance Capital Asset
Management Limited is held by Reliance Capital Limited. Reliance Mutual Fund (RMF) has
been sponsored by Reliance Capital Ltd (RCL). RCL has been promoted by Reliance
Industries Ltd., one of India's largest private sector enterprises. Reliance Industries Ltd. has a
net worth of Rs.40, 483 crores as on March 31, 2005 and currently has a large family of
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
17/65
shareholders. Reliance Capital Limited is a Non Banking Finance Company engaged in
leasing, investment and other fund based activities. The net worth of Reliance Capital Ltd. is
Rs. 1,437.92 crores as on March 31, 2005.
Reliance mutual fund
Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act,
1882 with Reliance Capital Limited (RCL), as the Settler/Sponsor and Reliance Capital
Trustee Co. Limited (RCTCL), as the Trustee. Reliance Mutual Fund was formed to launch
various schemes under which units are issued to the Public with a view to contribute to the
capital market and to provide investors the opportunities to make investments in diversified
securities.
The new leader Reliance Mutual Fund has come into its own after years of
trailing the likes of Franklin Templeton, HDFC and Prudential ICICI.
According to AMFI's March-end figures, Reliance MF is the leading privateMF player in terms of corpus, and second only to UTI MF overall.
RMF is RCLs asset management company, which is amongst the top five private sector
mutual funds in the country in terms of Assets under Management. (Rs. 10,129 Crores as on
May 31, 2005). It is one of the fastest growing mutual funds in India, offering a well rounded
portfolio of products to meet varying investor requirements.
RMF was the first mutual fund in the country to launch sector specific schemes for the
banking, power, media & entertainment sectors. RMF has pioneered retail investing in the
country by reaching out to investors and distributors in more than 60 cities in the country.
They have a strong investor base which stands at more than 5, 00,000.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
18/65
Launched in 1995, Reliance MF had a tough time in the early years. Its two flagship equity
funds, Reliance Growth and Reliance Vision, showed uninspired performance till 2001. It
was only in 2002 when, after a change in fund management, the schemes started to turn
around. And so did the fund house's fortunes.
WORKING
Most of our mutual fund sales are through channel sales. The channels
being, individual distributors, banks and national distributors like BajajCapital, Anand Rathi etc. In Dehradun there are a total of about 55 active
distributors. Apart from this a few customers invest directly with us.
The individual distributors have to first pass an Association of Mutual Funds in
India AMFI test to get them registered as brokers. Thereafter they have to
get themselves empanelled with us to be entitled to get the brokerage of
the business that they give us.
The individual distributors come and hand in the applications filled in by
their investors. At the same time the applications for various schemes
from bank and national distributors have to be collected by someone in
office. This also helps us to maintain good relations with our distributors
as we constantly stay in touch with them.
The applications thus received are time stamped in the office and then
sent to Karvy for further processing. The stamping has to be done before
3 o clock every day and the same days NAV is applicable.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
19/65
The distributors are a link between us and our customers. It is thus very
crucial for us to maintain cordial relations and keep in regular touch with
them. For this we have to meet them on a daily basis and keep egging
them to increase our business, as out of sight can be out of mind.
Special features of various schemes
Dehradun branch of Reliance Mutual fund saw the inception of four New Fund Offers
(NFOs), namely Reliance Equity Opportunity, Reliance Regular Savings, RelianceTax Saver and Reliance Equity Fund. Some special features of these schemes have
been stated below
Reliance Equity Opportunity Fund
This open-ended diversified equity scheme was incepted in March 2005. This was the firstscheme ever to start the concept of flexi cap fund. That is to say that the fund
manager had the flexibility to invest in all kinds of companies ranging from large cap
companies to mid cap companies to small cap. Other mutual fund then followed the
same strategy with Franklin Templeton coming out with Franklin Templeton Flexi-
cap, HDFC with HDFC premium multi cap and RELIANCE with magnum multi cap.
Reliance Regular Savings Fund
This fund was incepted in Jan, 2005with its primary objective being to
seek capital appreciation and/or to generate consistent returns by actively
investing in equity and equity related securities. This fund was an
experiment meant for Reliance employees only. There was a facility of an
ATM card with the scheme. Thus investors had an immediate access to
the money they had invested and they no longer had to wait for T+3
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
20/65
days (transaction +3 days). Another important feature of this scheme
was that one could make an investment of only Rs.500 as against Rs.5000
for any other scheme. This feature help mobilize the small investors.
This scheme was finally opened for the public on 9th June 9, 2005. Though the concept of
ATM card was a novel idea yet it had various shortcomings. Many of the investors
did not receive the cards on time, or if they did they did not get the PIN no. They also
had problems in using the ATM cards. Thus the scheme was not as big a success as it
was expected to be.
Reliance Tax Saver (ELSS) Fund
This scheme was incepted on September 22, 2005 with its primary objective being generation
of long term capital appreciation from a portfolio that is invested predominantly in
equity and equity related instruments. This scheme was the biggest AUM wise
compared to any other ELSS scheme with its AUM being 1269.56 crores. The next
biggest AUM being 824 crores for Tax Gain from RELIANCE .
Reliance Mutual Fund Makes History
With the NFO of Reliance Equity Fund, Reliance Capital AMC was set to
become the largest private sector fund house with AUM of more than
Rs.300bn
Reliance Equity Fund collected a whopping Rs57bn or $1.3bn through a New Fund Offering
(NFO).
The diversified equity fund, which also seeks to hedge its investment portfolio through
Futures & Options, eclipsed the 14-year-old record held by UTI Master Gain, which had
mopped up Rs47.83bn in 1992. RELIANCE Blue-chip fund had raised nearly Rs29bn earlier
this year.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
21/65
The Reliance Equity Fund opened for subscription on February 6 and closed on March 7.
More than 9.25 lakh applications came from 400 cities, which is also a record for a new fund
offer. The average application size was Rs60, 000.
With this NFO, Reliance Capital Asset Management Company (AMC), the Mutual Fund arm
of Reliance Capital Ltd., is all set to become the largest private sector fund house in the
country with Assets Under Management of more than Rs220bn. UTI Mutual Fund is the top
fund manager in the country with assets worth Rs276.19bn. Prudential ICICI was earlier the
top private sector Mutual Fund house, followed by HDFC Mutual Fund and Franklin
Templeton Mutual Fund.
While foreign institutional investors have pumped in over $6 billion so far into the Indianmarkets, mutual funds have been net sellers in the equity markets during the period April to
November 2004, to the tune of Rs 669 crore (Rs 6.69 billion) or $145 million (according to
the latest available official figures).
Market sources said that with Rs 1.5 lakh crore (Rs 1,500 billion) in assets,
the mutual fund industry should be playing a larger role. However the
problem is that nearly 80 per cent of the assets are in liquid and debt
assets while only a minuscule portion is in equity assets.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
22/65
Other Reliance Mutual Fund Schemes
Reliance Mutual Fund has launched twenty five Schemes till date, namely:
Reliance Vision Fund (September 1995),
Reliance Growth Fund (September 1995),
Reliance Income Fund (December 1997),
Reliance Liquid Fund (March 1998),
Reliance Medium Term Fund (August 2000),
Reliance Short Term Fund (December 2002),
Reliance Fixed Term Scheme (March 2003),
Reliance Banking Fund (May 2003),
Reliance Gilt Securities Fund (July 2003),
Reliance Monthly Income Plan (December 2003),
Reliance Diversified Power Sector Fund (March 2004),
Reliance Pharma Fund ( May 2004),
Reliance Floating Rate Fund (August 2004), Reliance Media & Entertainment Fund (September 2004),
Reliance NRI Equity Fund (October 2004),
Reliance NRI Income Fund (October 2004),
Reliance Index Fund (January 2005),
Reliance Equity Opportunities Fund (February 2005),
Reliance Fixed Maturity Fund - Series I (March 2005),
Reliance Fixed Maturity Fund - Series II (April 2005),
Reliance Regular Saving Fund (May 2005),
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
23/65
Reliance Liquidity Fund (June 2005),
Reliance Tax Saver (ELSS) Fund (July 2005),
Reliance Fixed Tenor Fund (November 2005),
Reliance Equity Fund (Feb2006).
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
24/65
CHAPTER 3:
OBJECTIVES OF
STUDY
&RESEARCH
METHODOLOGY
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
25/65
OBJECTIVES OF THE STUDY
The objective of this report is to gain an in-depth knowledge about the components of a
Portfolio in Mutual Fund schemes and the gap that exists between the perceived concept andthe actuality of it, in order to market these products successfully.
1. To find out the Preferences of the customers or investors for Asset Management Company.
2. To know the Preferences for the portfolios.
3. To know why one has invested or not invested in RELIANCE Mutual fund.
4. To find out the most preferred channel.
5. To find out what should be done to boost Mutual Fund Industry.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
26/65
RESEARCH METHODOLOGY
The first stage included gathering information about the RELIANCE Mutual Fund in
India and getting acquainted with the working of the various Mutual Fund Schemes. The next
stage involved determining the objective of the study, knowing the target audience and
drafting a questionnaire. The questionnaire was designed keeping in mind the target audience
and objectives of the study. It was non-disguised in nature and will include a few open-ended
questions.
Research Plan
The research was exploratory in nature and the goal was to gather preliminary data to
shed light on the real nature of problems and to suggest possible solutions or new ideas. It
involved getting a feel of the situation and lays emphasis on the discovery of ideas and
possible insights.
Sample Size
The sample size of my project is limited to 200 people only. Out of which only 120 people
have invested in mutual fund. Other 80 people did not have invested in mutual fund.
Sampling Plan
The sampling unit comprised of the customers/visitors present in the office of State
Bank of India, Attawa Chandigarh Branch, irrespective of them being investors or not or
availing the services or not. The samples were chosen on the basis of convenience sampling
and these respondents belonged to middle and upper class salaried and self-employed people,
students, professionals and housewives who have invested in Mutual Funds.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
27/65
Data Sources
The research calls for gathering secondary data, primary data or both. Secondary data
is the data that is collected for another purpose and already exists somewhere. Primary data isgathered for a specific purpose and is collected by the researcher himself.
Primary Data
Primary data was collected from the existing customers of the MFs. The primary information
was collected through Questionnaire and interviews presented to the investors. It was
collected through personal visit to persons, by formal and informal talks and through fillingup the questionnaire prepared. The data has been analyzed by using Averages and
Percentages Methods.
Secondary data
Secondary Data was collected from:
a) Print articles on Mutual Funds.
b) From the websites and books.
c) Product and Service Brochures of the Mutual Funds.
Data Collection
For the purpose of this project, a questionnaire was designed to collect data. The
questionnaire was non-disguised because the objective and purpose was conveyed to the
respondents before asking for their responses. The questions were structured open for generalinformation and closed for collecting specific information.
Data Analysis Tools
Simple averages
Tabulation
Data has been presented with the help of bar graphs, pie charts, line graphs etc.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
28/65
LIMITATIONS OF STUDY
Time and resource constraints: The survey was conducted in selective areas because of
constraints of time and resources. Therefore, the findings cannot be generalized or
claimed until further research has been carried out.
Dynamic industries: As this is one of the dynamic industries today in India and many
changes are taking place in quick times. It is very important to keep an eye on this
industry very regularly. There are a lot of schemes with various objectives, so the basic
objective is used in making this report.
Sample size: The sample size taken was 200, which may not reflect a true picture of the
consumers mind. Because of these constraints, the analysis may not be accurate and may
vary, when tested in different places and time.
Some of the persons were not so responsive.
Possibility of error in data collection because many of investors may have not given
actual answers of my questionnaire.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
29/65
(3).Respondents Profile:
3(a) Age distribution of the investors of Chandigarh.
Agegroup
50
No. ofinvestors
18 30 24 20 16
Interpretation:
According to this chart out of 120 Mutual Fund investors the most are in the age group of 36-
40 yrs. i.e. 25%, the second most investors are in the age group of 41-45yrs i.e. 20% and the
least investors are in the age group of below 30 yrs.
3(b) Educational Qualification of investors.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
30/65
Interpretation:
Preference of customer in different mutal fund
Educational
Qualification
No. of investors
Graduate/PG 88
Under Graduate 25
Others 7
Total 120
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
31/65
Out of 120 Mutual Fund investors 73% of the investors are Graduate/Post Graduate, 21% are
Under Graduate and 6% are others (under HSC).
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
32/65
3(c).Occupation of the investors
Preference of customer in different mutal fund
Occupation No. of
investors
Government Service 30
Private Service 45
Business 35
Agriculture 4
Others 6
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
33/65
Interpretation:
In occupation group out of 120 investors, 38% are private employees, 25% are Businessman,
29% are Government employees, 3% agriculture and 5% are in others.
3(d.) Monthly family income of the investors
Preference of customer in different mutal fund
Income Group No. of
investors
Upto10000 5
10001-15000 12
15001-20000 28
20001-30000 43
30000 and
above
32
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
34/65
Interpretation:
In the income group of the investors, out of 120 investors, 36% investors that is the maximum
investors are in the monthly income group Rs.20, 001 to Rs.30, 000, Second one i.e. 27%investors are in the monthly income group of more than Rs.30, 000 and the minimum
investors i.e. 4% are in the monthly income group of below Rs.10, 000.
CHAPTER 4:
DATA ANALYSIS
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
35/65
&
INTERPRETATION
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
36/65
ANAYLSIS AND INTERPRETAION OF DATA
(4.1) Investors invested in different kind of investments.
Kinds of
Investments
No. of
Respondents
Saving A/C 195
Fixed Deposits 148
Insurance 152
Mutual Fund 120
Post office-NSC 75
Shares/Debentures 50
Gold/Silver 30
Real Estate 65
Interpretation:
From the above graph it can be inferred that out of 200 people, 97.5% people have invested
in Saving A/c, 76% in insurance, 74% in Fixed Deposits, 60% in Mutual Fund, 37.5% in post
office-NSC, 25% in Shares and Debentures, 15% in Gold/Silver and 32.5% in Real Estate.
(4.2)Preference of factors while investing.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
37/65
Factors a)Liquidity b) Low Risk c) Higher Return d) Trust
No. of
Respondents
40 60 64 36
Interpretation:
Out of 200 people, 32% prefer to invest where there is higher return, 30% prefer to invest
where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Trust.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
38/65
(4.3)Awareness about Mutual Fund and its Operations.
Response Yes No
No. of Respondents 135 65
Interpretation:
From the above chart it can be inferred that 67% people are aware of Mutual Fund and its
operations and 33% are not aware of Mutual Fund and its operations.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
39/65
(4.4) Source of Information for customers about Mutual
Fund.
Preference of customer in different mutal fund
Source of Information No. of
Respondents
Advertisement 18
Peer Group 25
Banks 30
Financial Advisors 62
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
40/65
Interpretation:
From the above chart it can be inferred that Financial Advisors is the most important source
of information of Mutual Fund. Out of 135 Respondents, 46% know about Mutual Fund
through Financial Advisor, 22% through Bank, 19% through Peer Group and 13% through
Advertisement.
(4.5) Investors invested in Mutual Fund.
Response No. of Respondents
Yes 120
No 80Total 200
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
41/65
Interpretation:
Out of 200 people, 60% have invested in Mutual Fund and 40% do not have invested in
Mutual Fund.
(4.6)Reasons for not invested in Mutual Fund.
Preference of customer in different mutal fund
Reason No. of Respondents
Not Aware 65
Higher Risk 5
Not any specific reason 10
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
42/65
Interpretation:
Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund,
13% said there is likely to be higher risk and 6% do not have any specific reason.
(4.7) Investors invested in different Asset Management
Company (AMC).
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
43/65
Interpretation:
In Chandigarh most of the investors preferred UTI and RELIANCE Mutual Fund. Out of 120
investors 62.5% have invested in each of them, only 46% have invested in REMF, 47% have
invested in ICICI PRU, 37.5% in Kotak and 25% in HDFC.
(4.8) Reason for invested in REMF.
Reason No. of Respondents
Preference of customer in different mutal fund
Name of AMC No. of Investors
RELIANCE MF 55
UTI 75
HDFC 30
RELIANCE 75
ICICI PRU 56
KOTAK 45
OTHERS 70
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
44/65
Associated with RE 35
Better Return 5
Agents Advice 15
Interpretation:
Out of 55 investors of REMF, 64% have invested because of its association with the brand
name of State Bank of India, 27% have invested on agents advice, and 9% have invested
because of better return.
(4.9) Reason for not invested in REMF.
Reason No. of Respondents
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
45/65
Not Aware 25
Less Return 18
Agents Advice 22
Interpretation:
Out of 65 people who have not invested in REMF, 38% were not aware with REMF, 28% do
not invested due to less return, and 34% due to agents advice.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
46/65
(4.10)Preference of investors for future investment in
Mutual Fund.
Name of AMC No. of Investors
REMF 76
UTI 45
HDFC 35
RELIANCE 82
ICICI PRUDENTIAL 80
KOTAK 60
OTHERS 75
Interpretation:
Out of 120 investors, 68% prefer to invest in Reliance, 67% prefer to invest in ICICI PRU,
63% in REMF, 62.5% in others, 50% in kotak, 37.5% in UTI and 29% in HDFC Mutual
Fund.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
47/65
(4.11)Channel preferred by the investors for Mutual
Fund.
Channel Financial Advisor Bank AMC
No. of Respondents 72 18 30
Interpretation:
Out of 120 investors, 60% investors prefer to invest through Financial Advisors, 25% through
Bank, and 15% investors through AMC.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
48/65
(4.12)Mode of investment preferred by the Investor.
Interpretation:
Out of 120 investors, 65% preferred One Time Investment and 35% preferred through
Systematic Investment Plan.
Preference of customer in different mutal fund
Mode of Investment One Time Investment Systematic Investment Plan
No. of Respondents 78 42
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
49/65
(4.13) Preferred Portfolio by the Investors.
Portfolio No. of Investors
Equity 56
Debt 20
Balanced 44
Interpretation:
From the above graph 46% preferred Equity portfolio, 37% preferred Balanced and 17%
preferred Debt portfolio.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
50/65
(4.14) Option for Getting Return Preferred by the
Investors.
Option Dividend Payout Dividend Re-invest Growth
No. of Respondents 25 10 85
Interpretation:
From the above graph 71% preferred Growth option, 21% preferred Dividend Payout and 8%
preferred Dividend Reinvestment Option.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
51/65
(4.15)Preference of Investors whether to invest in
Sectorial Funds.
Response No. of Respondents
Yes 25
No 95
Interpretation:
Out of 120 investors, 79% investors do not prefer to invest in Sectorial Fund because there is
maximum risk and 21% prefer to invest in Sectorial Fund.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
52/65
Basis for analyzing the performance of
Mutual Fund
Net Asset Value (NAV) is the best parameter on which the performance of a mutual fund can
be studied. We have studied the performance of the NAV based on the compounded annual
return of the Scheme in terms of appreciation of NAV, dividend and bonus issues. WE have
compared the Annual returns of various schemes to get an idea about their relative standings.
VALUATION OF MUTUAL FUND
The net asset value of the Fund is the cumulative market value of the assets Fund net of its
liabilities. In other words, if the Fund is dissolved or liquidated, by selling off all the assets in
the Fund, this is the amount that the shareholders would collectively own. This gives rise to
the concept of net asset value per unit, which is the value, represented by the ownership of
one unit in the Fund. It is calculated simply by dividing the net asset value of the Fund by the
number of units. However, most people refer loosely to the NAV per unit as NAV, ignoring
the per unit. We also abide by the same convention.
Calculation of NAV
The most important part of the calculation is the valuation of the assets owned by the Fund.
Once it is calculated, the NAV is simply the net value of assets divided by the number of
units outstanding. The detailed methodology for the calculation of the net asset value is given
below.
The net asset value is the actual value of a unit on any business day. NAV is the barometer of
the performance of the scheme.
The net asset value is the market value of the assets of the scheme minus its liabilities and
expenses. The per unit NAV is the net asset value of the scheme divided by the number of the
units outstanding on the valuation date.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
53/65
NAV= Assets (stock held)-Liabilities (Expenses incurred)
Number of outstanding units
For e.g. if the market value of the securities of a mutual fund scheme is Rs.200 lakhs and the
mutual fund has issued 10 lakhs units at Rs.10 to the investors, then the NAV per unit of the
fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis daily or
weekly.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
54/65
CHAPTER- 5FINDINGS
AND
CONCLUSION
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
55/65
Findings In Chandigarh Investors in the age group of 36-40 years were more in numbers. The
second most Investors were in the age group of 41-45 years and the least were in the
age group of below 30 years.
In Chandigarh most of the Investors were Graduate or Post Graduate and below HSC
there were very few in numbers.
In Occupation group most of the Investors were Govt. employees, the second most
Investors were Private employees and the least were associated with Agriculture.
In family Income group, between Rs.20,001- 30,000 were more in numbers, the
second most were in the Income group of more than Rs.30,000 and the least were in
the group of below Rs.10,000.
Mostly all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed
Deposits, Only 60% Respondents invested in Mutual fund.
Mostly Respondents preferred High Return while investment, the second most
preferred Low Risk then liquidity and the least preferred Trust.
Only 67% Respondents were aware about Mutual fund and its operations and 33%
were not.
Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not
have invested in Mutual fund.
Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not
any specific reason for not invested in Mutual Fund and 6% told there is likely to be
higher risk in Mutual Fund.
Most of the Investors had invested in Reliance or UTI Mutual Fund ICICI Prudential
has also good Brand Position among investors, REMF places after ICICI Prudential
according to the Respondents.
Out of 55 investors of REMF 64% have invested due to its association with the Brand
RE, 27% Invested because of Advisors Advice and 9% due to better return.
Most of the investors who did not invested in REMF due to not aware of REMF, the
second most due to Agents advice and rest due to Less Return.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
56/65
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
57/65
CONCLUSION
Running a successful Mutual Fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the psyche of the small investors. This study has made an
attempt to understand the financial behavior of Mutual Fund investors in connection with the
preferences of Brand (AMC), Products, and Channels etc. I observed that 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 Chandigarh 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 awarenessabout Brand. Reliance, UTI, REMF, ICICI Prudential etc. they are well known Brand, they
are performing well and their Assets Under Management is larger than others whose Brand
name are not well known like Principle, Sunderam, etc.
Distribution channels are also important for the investment in mutual fund. Financial
Advisors are the most preferred channel for the investment in mutual fund. They can change
investors mind from one investment option to others. Many of investors directly invest their
money through AMC because they do not have to pay entry load. Only those people investdirectly who know well about mutual fund and its operations and those have time 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.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
58/65
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
59/65
CHAPTER 6
SUGGESTIONS
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
60/65
Suggestions
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 Fund offers a lot of benefits 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. Younginvestors 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 objectives, 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 toinvest). By considering these three things they can take the customers into
consideration.
Younger people aged fewer than 35 will be a key new customer group into the future,
so making greater efforts with younger customers who show some interest in
investing should pay off.
Customers with graduate level education are easier to sell to and there is a large
untapped market there. To succeed however, advisors must provide sound advice andhigh 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.
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
61/65
BIBLIOGRAPHY
During the research process, several books and various
websites were referred for the collection of relevant
information.
Books Referred:
Kothari, C.R., Research Methodology, 2007
Websites and Links
www.amfiindia.com
www.remu.com
www.nseindia.com
www.moneycontrol.com
www.mutualfundsindia.com
Other handbooks and reports used:
Mutual Fund Handbook
Factsheet and Statement
Preference of customer in different mutal fund
http://www.moneycontrol.com/http://www.moneycontrol.com/ -
7/30/2019 Consumer Prefer on Reliance Mutual Fund
62/65
ANNEXURE
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
63/65
QUESTIONNARIE
A study of preferences of the investors for investment inmutual funds.
1. Personal Details:
(a) .Name:-
(b) .Add:- Phone:-
(c) Age:-(d) Qualification:-
Graduation/PG Under Graduate Others
(e) Occupation.Pl tick()
Govt. Service Pvt.Job Business Agriculture Others
(f) What is your monthly family income approximately? Pl tick ().
Up to Rs.10,
000
Rs.10, 001 to
15000
Rs.15, 001 to
20000
Rs.20, 001 to
30000
Rs.30, 001 and
above
2. What kind of investment you have made so far? Pl tick ().All applicable.
a. Saving account b. Fixed deposits c. Insurance d. Mutual
Fund
e. PostOffice.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. Higher Return d. Trust
4. Are you aware about Mutual Funds and their operations? Pl tick (). Yes No
Preference of customer in different mutal fund
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
64/65
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, in which Mutual Fund you have invested? Pl tick ().All applicable.
9. If invested in REMF, you do so because (Pl tick (),all applicable)
a.REMF is associated with RE
b.They have a record of giving good returns year after year.
c.Agents Advice
10. If NOT invested in REMF, you do so because (Pl tick (), all applicable).
a.You are not aware of REMF
b.REMF gives less return compared to the others
c.Agents Advice
11. When you plan to invest your money in asset management co. which AMCwill you prefer?
Preference of customer in different mutal fund
a.REMF b.UTI c.HDFC d.Reliance e.Kotak f.Other.specify
-
7/30/2019 Consumer Prefer on Reliance Mutual Fund
65/65
a.REMF
b.UTI
c.RELIANCE
d.HDFC
e.KOTAK
f.ICICI
12. Which channel will you prefer while investing in Mutual Fund?
a.Financial Advisor b.Bank c.AMC
13. When you invest in Mutual Funds which mode of investment will you prefer?Pl tick ().
a.One Time Investment b.Systematic Investment Plan(SIP)
14. When you want to invest which type of funds would you choose?
a. Having only debt portfolio b.Having debt & equityportfolio
c.Only equity portfolio
15. How would you like to receive the returns every year? Pl tick ().
a.Dividend payout b.Dividend Re-investment c.Growth in NAV
16. Instead of general Mutual Funds, would you like to invest in sectorial funds?Pl tick (). Yes No.