introduction to mutual fund and its various aspects

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CHAPTER 1

1.1 INTRODUCTION

1.1.1 MEANING OF MUTUAL FUND

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.

The SEBI Regulation act 1993 defines Mutual Fund as a fund established in the form of a

trust by a sponsor to raise monies by the trustees through the sale of units to the public under one

or more schemes for investing in securities

The Mutual Fund was the Massachusetts Investors Trust introduced in 1924. At the end

of it's first year, the fund had 200 investors with $63,600 in assets. At the end of 1995, the fund

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grew to73, 500 investors with assets totaling $1.8 billion! Now there are over 7000 different

mutual funds available.

In Simple Words, Mutual fund is a mechanism for pooling the resources

by issuing units to the investors and investing funds in securities in accordance with objectives asdisclosed in offer document. 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.

The profits or losses are shared by the investors in proportion to their investments. The

Mutual funds normally come out with a number of schemes with different investment objectives

which are launched from time to time. In India, A Mutual fund is required to be registered with

Securities and Exchange Board of India (SEBI) which regulates securities markets before it

can collect funds from the public.

In Short, a Mutual fund is a common pool of money in to which investors with common

investment objective place their contributions that are to be invested in accordance with the stated

investment objective of the scheme. The investment manager would invest the money collected

from the investor in to assets that are defined/ permitted by the stated objective of

the scheme. For example, an equity fund would invest equity and equity related instruments and a

debt fund would invest in bonds, debentures, gilts etc. Mutual fund is a 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.

1.1.2 History/ Origin

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The mutual fund industry in India started in 1963 with the formation of Unit Trust of India,

at the initiative of the Government of India and Reserve Bank. Though the growth was slow, but it

accelerated from the year 1987 when non-UTI players entered the Industry.

In the past decade, Indian mutual fund industry had seen a dramatic improvement, both

qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending

phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the

fund family raised the AUM to Rs. 470 billion in March 1993 and till April 2004; it reached the

height if Rs. 1540 billion.

The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund

industry can be broadly put into four phases according to the development of the sector. Each

phase is briefly described as under.

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the

Reserve Bank of India and functioned under the Regulatory and administrative control of the

Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial DevelopmentBank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first

scheme launched by UTI was UnitScheme 1964. At the end of 1988 UTI had Rs.6,700 crores of

assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks andLife Insurance Corporation of India (LIC) and General InsuranceCorporation of India (GIC). SBI

Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank

Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund

(Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its

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mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.At the end of

1993, the mutual fund industry had assets under management of Rs.47,004 crores.

Third Phase 1993-2003 (Entry of Private Sector Funds)

1993 was the year in which the first Mutual Fund Regulations came into being, under which all

mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now

merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and

revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual

Fund) Regulations 1996. As at the end of January 2003, there were 33 mutual funds with totalassets of Rs. 1,21,805 crores.

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into

two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under

management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of

US 64 scheme, assured return and certain other schemes .

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. Consolidation and growth.

As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores

under 421 schemes.

1.1.3 CONCEPT

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 upwith the corpus (thetotal

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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.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the

assets of the fund in the same proportion as his contribution amount put up with the corpus (the

total amount of the fund). Mutual Fund investor is also knownas 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.

A mutual fund is a professionally-managed firm of collective investments that pools money

from many investors and invests it in stocks, bonds, short-term money market instruments, and/or

other securities. In other words we can say that A Mutual Fund is a trust registered with the

Securities and Exchange Board of India (SEBI), which pools up the money from individual /

corporate investors and invests the same on behalf of the investors /unit holders, in equity shares,

Government securities, Bonds, Call money markets etc., and distributes the profits.

The value of each unit of the mutual fund, known as the net asset value (NAV), is mostly

calculated daily based on the total value of the fund divided by the number of shares currently

issued and outstanding. The value of all the securities in the portfolio in calculated daily. From

this, all expenses are deducted and the resultant value divided by the number of units in the fund is

the funds NAV.

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Total value of the fund.

NAV=

No. of shares currently issued and outstanding

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MANY INVESTORS WITH COMMON FINANCIALOBJECTIVE POOL THEIR MONEY

INVESTORS ON PROPORTIONATE BASIS GET MUTUAL FUND

UNITS FOR THE SUM CONTRIBUTED TO THE POOL

THE MONEY COLLECTED FROM INVESTORS IS INVESTEDINTO SHARE, DEBENTURE AND OTHER SECURITIES BY THE

FUND MANAGER

THE FUND MANAGER REALISES GAINS OR LOSSES, ANDCOLLECTS DIVIDEND OR INTEREST INCOME

ANY GAIN OR LOSS FOR SUCH INVESTMENT ARE PASSED ONTO THE INVESTORS IN THE PROPORTION OF THE NUMBER OF

UNITS HELD BY THEM

Concept of mutual fund


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1.1.4 GUIDELINES OF SEBI FOR MUTUAL FUND COMPANIES

To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It

notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time.

SEBI approved Asset Management Company (AMC) manages the funds by making

investments in various types of securities. Custodian, registered with SEBI, holds the securities of

various schemes of the fund in its custody.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board of

trustees must be independent.

The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual

funds that the mutual funds function within the strict regulatory framework. Its objective is to

increase public awareness of the mutual fund industry. AMFI also is engaged in upgradingprofessional standards and in promoting best industry practices in diverse areas such as valuation,

disclosure, transparency etc.

Documents required (PAN mandatory):

Proof of identity:

1. Photo PAN Card.

2.In case of non-photo PAN card in addition to copy of PAN card any one of the following:

Driving license/passport copy/ voter id/ bank photo pass book.

Proof of address (any of the following):latest telephone bill, latest electricity bill, Passport, latest

bank passbook/bank account statement, latest Demat account statement, voter id, driving license,

ration card, rent agreement.

1.1.5 CLASSICAFICATION OF MUTUAL FUND

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Based on their structure:

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

time.

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MUTUAL FUNDS

BASED ON THEIRSTRUCTURE

BASED ON INVESTMENTOBJECTIVE

Open EndedFunds

Closed EndedFunds

EQUITY FUND

BALANCEDFUND

DEBT FUND

TAX SAVINGSCHEME

SPECIAL SCHEME


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

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

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

Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity

window on a periodic basis such as monthly or weekly. Redemption of units can be made

during specified intervals. Therefore, such funds have relatively low liquidity.

Based on their investment objective:

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

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

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

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

great capital appreciation as, historically, equities have outperformed all asset classes in the

long term. Hence, investment in equity funds should be considered for a period of at least

3-5 years. It can be further classified as:

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

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

and individual stock weightage.

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

across different sectors and stocks.

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

companies offering high dividend yields.

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

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

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

invest in banking stocks.

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

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

that of the fund.

Tax Saving Schemes

Investors are being encouraged to invest in equity markets through Equity Linked Savings Scheme

(ELSS) by offering them a tax rebate. Units purchased cannot be assigned / transferred/

pledged / redeemed / switched out until completion of 3 years from the date of allotment of the

respective Units.

The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations,

1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs),

Government of India regarding ELSS.

Subject to such conditions and limitations, as prescribed under Section 88 of the Income-tax

Act, 1961.

1.1.6 ADVANTAGES OF MUTUAL FUNDS

Liquidity.

You can liquidate your investments within 3 to 5 working days (mutual funds dispatch redemptioncheques speedily and also offer direct credit facility into your bank account i.e. Electronic Clearing

Services).

Transparency.

Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on a

regular basis. They also send quarterly newsletters, which give details of the portfolio,

performance of schemes against various benchmarks, etc. They are also well regulated and SEBI

monitors their actions closely.

Tax benefits.

You do not have to pay any taxes on dividends issued by mutual funds. You also have the

advantage of capital gains taxation. Tax-saving schemes and pension schemes give you the added

advantage of benefits under section 88.

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were to seek a financial advisor's help directly, he will end up paying significantly more for

investment advice. Also, he will need to have a sizeable corpus to offer for investment

management to be eligible for an investment advisers services.

1.1.7 DISADVANTAGES OF MUTUAL FUNDS

Professional Management- 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. We'll talk

about this in detail in a later section.

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.

These costs are so complicated that in this tutorial we have devoted an entire section to the

subject.

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 have 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.

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1.1.8 HOW TO INVEST IN MUTUAL FUNDS:

Step One - Identify the Investment needs: Our financial goals will vary, based on the age,

lifestyle, financial independence, family commitments, and level of income and expenses

among many other factors. Therefore, the first step is to assess the needs. We can begin by

defining the investment objectives and needs, which could be regular income, buying a

home or finance a wedding or educate children etc.

Step Two - Choose the right mutual Fund: The important thing is to choose the right

mutual fund scheme, which suits our requirements. The offer document of the scheme tells

us its objectives and provides supplementary details like the track record of other schemes

managed by the same Fund Manager. Some factors to evaluate before choosing a particular

mutual Fund are the track record of the performance of the fund over the last few years.

Other factors could be the portfolio allocation, the dividend yield and the degree of

transparency etc.

Step Three - Select the ideal mix of Schemes: Investing in just one Mutual Fund scheme

may not meet all the investment needs. We may consider investing in a combination of

schemes to achieve our specific goals.

Step Four - Invest regularly: The best approach is to invest a fixed amount at specific

intervals, say every month. By investing a fixed sum each month, we buy fewer units when

the price is higher and more units when the price is low, thus bringing down the average

cost per unit. This is called rupee cost averaging and is a disciplined investment strategy

followed by investors all over the world. We can also avail the systematic investment plan

facility offered by many openend fund .

Step Five- Start early: It is desirable to start investing early and stick to a regular

investment plan. If we start now, we will make more than if we wait and 37 invest later.

The power of compounding lets us earn income on income and our money multiplies at a

compounded rate of return.

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Step Six - The final step: Finally we need to fill in the application forms of various fund

schemes and start investing. We may reap the rewards in the years to come. Mutual fund

are suitable for every kind of investor - whether starting a career or retiring, conservative

or risk taking, growth oriented or income seeking.

1.1.9 INVESTMENT STRATEGIES

1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date

of a month. Payment is made through post dated cheques or direct debit facilities. The investor gets

fewer units when the NAV is high and more units when the NAV is low. This is called as the

benefit of Rupee Cost Averaging (RCA)

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

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

fund.

3. Systematic Withdrawal Plan:If someone wishes to withdraw from a mutual fund then he

can withdraw a fixed amount each month.

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1.2 COMPANIES PROFILE

SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable track record in

judicious investments and consistent wealth creation.

The fund traces its lineage to SBI - Indias largest banking enterprise. The institution has grown

immensely since its inception and today it is India's largest bank, patronized by over 80% of the

top corporate houses of the country.

SBI Funds Management Pvt. Ltd. is one of the leading fund houses in the country with an investor

base of over 5.8 million and over 20 years of rich experience in fund management consistently

delivering value to its investors. SBI Funds Management Pvt. Ltd. is a joint venture between 'The

State Bank of India' one of India's largest banking enterprises, and Socit Gnrale Asset

Management (France), one of the world's leading fund management companies

that manages over US$ 500 Billion worldwide.

A total of over 5.8 million investors have reposed their faith in the wealth generation expertise of

the Mutual Fund. Schemes of the Mutual fund have consistently outperformed benchmark indices

and have emerged as the preferred investment for millions of investors and HNIs.

Today, the fund manages over Rs. 42,100 crores of assets and has a diverse profile of investors

actively parking their investments across 38 active schemes. The fund serves this vast family of

investors by reaching out to them through network of over 130 points of acceptance, 29 investor

service centers, 59 investor service desks and 6 Investor Service Points.

SBI Mutual is the first bank-sponsored fund to launch an offshore fund Resurgent India

Opportunities Fund. Growth through innovation and stable investment policies is the SBI MF

credo.

1.2.1 PRODUCTS OF SBI MUTUAL FUND

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Equity schemes

The investments of these schemes will predominantly be in the stock markets

and endeavor will be to provide investors the opportunity to benefit from the

higher returns which stock markets can provide. However they are also exposed

to the volatility and attendant risks of stock markets and hence should be

chosen only by such investors who have high risk taking capacities and are

willing to think long term. Equity Funds include diversified Equity Funds,

Sectoral Funds and Index Funds. Diversified Equity Funds invest in various

stocks across different sectors while sectoral funds which are specialized Equity

Funds restrict their investments only to shares of a particular sector and hence,

are riskier than Diversified Equity Funds. Index Funds invest passively only in

the stocks of a particular index and the performance of such funds move with

the movements of the index.

Magnum COMMA Fund

Magnum Equity Fund

Magnum Global Fund

Magnum Index Fund

Magnum Midcap Fund

Magnum Multicap Fund

Magnum Multiplier plus 1993

Magnum Sectoral Funds Umbrella

MSFU- Emerging Business Fund

MSFU- IT Fund

MSFU- Parma Fund

MSFU- Contra Fund

MSFU- FMCG Fund

SBI Arbitrage Opportunities Fund

SBI Blue chip Fund

SBI Infrastructure Fund - Series I

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SBI Magnum Tax gain Scheme 1993

SBI ONE India Fund

SBI TAX ADVANTAGE FUND SERIES

Debt schemes

Debt Funds invest only in debt instruments such as Corporate Bonds,

Government Securities and Money Market instruments either completely

avoiding any investments in the stock markets as in Income Funds or Gilt Funds

or having a small exposure to equities as in Monthly Income Plans or Children's

Plan. Hence they are safer than equity funds. At the same time the expected

returns from debt funds would be lower. Such investments are advisable for the

risk-averse investor and as a part of the investment portfolio for other investors.

Magnum Childrens benefit Plan

Magnum Gilt Fund

Magnum Income Fund

Magnum Insta Cash Fund

Magnum Income Fund- Floating Rate Plan

Magnum Income Plus Fund

Magnum Insta Cash Fund -Liquid Floater Plan

Magnum Monthly Income Plan

Magnum Monthly Income Plan - Floater

Magnum NRI Investment Fund

SBI Premier Liquid Fund

BALANCED SCHEMES

Magnum Balanced Fund invests in a mix of equity and debt investments. Hence

they are less risky than equity funds, but at the same time provide

Commensurately lower returns. They provide a good investment opportunity to

investors who do not wish to be completely exposed to equity markets, but is

looking for higher returns than those provided by debt funds.

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Magnum Balanced Fund

1.2.2 COMPETITORS OF SBI MUTUAL FUND

Some of the main competitors of SBI Mutual Fund are as follows :

ICICI Mutual Fund

Reliance Mutual Fund

UTI Mutual Fund

Birla Sun Life Mutual Fund

Kotak Mutual Fund

HDFC Mutual Fund

Sundaram Mutual Fund

LIC Mutual Fund

Principal

Franklin Templeton

1.2.3 AWARDS AND ACHIEVEMENTS

YEAR 2006 CNBC-

AWAAZ CONSUMER AWARD 2006

LIPPER AWARD-

The Lipper India fund award 2006

CNBC TV18- CRISIL

Mutual Fund of the year award 2006

YEAR 2007

OUTLOOK MONEY-

NDTV Profit Award 2007

CNBC-

AWAAZ CONSUMER AWARD 2007

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LIPPER AWARD-


ICRA

Mutual Fund Award 2007

CNBC TV18- CRISIL

Mutual Fund of the year award 2007

YEAR 2008

OUTLOOK MONEY-

NDTV Profit Award 2008

LIPPER AWARD-


ICRA


YEAR 2009

ICRA


LIPPER AWARD-


YEAR 2010

ICRA


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CHAPTER 2

2.1 OBJECTIVE OF THE STUDY

Main objective:

To measure the level of awareness of the people of Tinsukia regarding Mutual Funds.

To get the insight knowledge about mutual funds.

To get the general view of SBI Mutual Fund.

To check the preference of SBI Mutual Fund as compared to other private players in the

mutual Fund market.

Sub Objective:

To check which mutual fund company the people of Tinsukia are mostly aware of.

The customer of the company falls under which age.

To know why one has invested or not invested in SBI Mutual fund.

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CHAPTER 3

3.1 RESEARCH AND METHODOLOGY

This report is based on primary as well secondary data, however primary data

collection was given more importance since it is overhearing factor in attitude studies.

One of the most important users of research methodology is that it helps in identifying

the problem, collecting, analyzing the required information data and providing an

alternative solution to the problem .It also helps in collecting the vital information that

is required by the top management to assist them for the better decision making both

day to day decision and critical ones.

Data sources:

Research is totally based on primary data. Secondary data can be used only for the

reference. Research has been done by primary data collection, and primary data has

been collected by interacting with various people. The secondary data has been

collected through various journals and websites.

Sampling:

Sampling procedure:

The sample was selected of them who are the customers/visitors of State Bank if India,

irrespective of them being investors or not or availing the

services or not. It was also collected through personal visits to persons, by formal and

informal talks and through filling up the questionnaire prepared. The data has been

analyzed by using mathematical/Statistical tool.

Sample size:

The sample size of my project is limited to 30 people only. Out of which only 120

people had invested in Mutual Fund. Other 80 people did not have invested in Mutual

Fund.

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Sample design:

Data has been presented with the help of bar graph, pie charts, line graphs etc.

CHAPTER 4

4.1 ANALYSIS AND INTERPRETATION OF THE DATA

A total of 30 correspondent were asked different questions related only to the study , through the

questionnaire . there were 5 personal question and 13 general questions provided.

The following analysis is done according to the responses of the respondent.

ANALYSIS 1:

Q) Age: a) 20- 30 yrs

b) 31- 40 yrs

c) 41-50 yrs

d) 51-60 yrs

e) 61 and above

Respondents age was asked in this question. The total percentage is shown below out of these 5

groups of the 30 respondents.

AGE GROUP TOTAL RESPONDENT PERCENTAGE %

20-30 YEARS 7 23.3

31-40 YEARS 10 33.3

41-50 YEARS 9 30

51-60 YEARS 3 1061 AND ABOVE 1 3.33

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The highest number of respondents were from the age group 31- 40 and least number of respondent were from age 60

yrs and above .

ANALYSIS 2

Q) Sex:

M F

The proportion of the male and the female in the sample size was determined by this equation.

SEX TOTAL PERCENTAGE%

Male 25 83.3

Female 5 16.6

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Most of the respondents were male.

ANALYSIS 3:

Q) Marital status : Married Single

The marital status of the respondents was determined by this question.

MARITAL STATUS TOTAL PERCENTAGE%MARRIED 12 40

SINGLE 18 60

Majority of the respondents were single.

ANALYSIS 4:

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Q) Do you invest ?

Yes No

The respondents were asked whether they invested.

INVESTED TOTAL PERCENTAGE

Yes 28 93.3

No 2 6.66

96% of the respondent invested their money .

ANALYSIS 5:

Q) What kind of investment do you prefer ?

a. Savings account b. Fixed Deposits c. Insurance d. Gold/ silver

e. Mutual Funds f. Post Office /NSC g. Shares/ debentures h. Real state

In this question the respondent were asked what kind of investment did they prefer.

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INVESTMENT PREFERENCE TOTAL PERCENTAGE%

Savings account 7 25

Fixed Deposits 6 21.42

Insurance 4 14.28

Gold/ silver 0 0Mutual Funds 8 28.57

Post Office /NSC 1 3.57

Shares/ debentures 1 3.57

Real state 1 3.57

28.57% of the respondent invest in mutual fund , while 25% in savings account and 21.42% invest in fixed deposits

and none of the respondent invested in gold/silver.

ANALYSIS 6:

Q) While investing your money , which factor will you prefer ?

a. Liquidity b. Low Risk c. High Return d. Companies Reputation

In this questin the respondents were asked which factor they prefered whne they invested their

money .

FACTOR TOTAL PERCENTAGE%

Liquidity 8 28.57

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Low Risk 10 35.71

High Return 7 25

Companies Reputation 3 10.7

Most of the respondent invest in those securities where there is low risk.

ANALYSIS 7:

Q) Are you aware about Mutaul Funds?

Yes No

AWARNESS TOTAL PERCENTAGE%

YES 30 100%

NO

All the respondents are aware about mutual funds.

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ANALYSIS 8:

Q) How did you come to know about Mutual Funds?

a. Advertisment b. Banks c. Financial Advisors

Sources Total Percentage%

Adverstisment 20 66.6

Banks 3 10

Financial Advisor 7 23.3

66.66% of the respondent are aware about mutual funds through advertisment.

ANALYSIS 9:

Q) Have you ever invested in Mutual Funds?

a. Yes b. No

Invested Total Percentage%

Yes 8 26.66

No 22 73.33

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8 out of 30 people invests in mutual funds .

ANALYSIS 10:

Q) If you have not invested in mutal fuds , then why ?

a. High Risk b. Not Aware c. No specific reason

Reason Total Percentage

High Risk 12 54.54

Not Aware 0

No specific Reason 10 45.45

12 people donot invest in mutual fund because of high risk and 9 of them do not have any specific reason for not

investing.

ANALYSIS 11:

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Q) Where do you find yourself as a mutual fund investor ?

a. Long time investor b. short time investor

Reason Total percentageLong term investor 4 50

Short term investor 4 50

Some respondent are long term investors and some are short term investors.

ANALYSIS 12:

Q) In which type of mutual fund you like to invest ?

a. Private b. Public C. Both

Total percentagePrivate 3 37.5

Public 2 25

Both 3 37.5

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The respondents were intersted in investing in all kind of muatual funds.

ANALYSIS 13:

Q) In which mutual fund have you invested ?

a. SBI b. ICICI c. KOTAK d. UTI e. HDFC f. RELAINCE

g. OTHERS

Mutual fund co.s Total percentageSBI 3 37.5

ICICI 1 12.5

KOTAK 1 12.5

UTI 0

HDFC 0

RELIANCE 2 25

OTHERS 1 12.5

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37.5% of the respondent invested in SBI mutual funds,25% invested in reliance mutual fund.

ANALYSIS 14:

Q) If you have invested in SBI then-

i. Why did you invest in SBI mutual fund?

a. Because it is related to state bank

b. High Return

c. Brokers advice

REASON Total percentage

Related to state bank 1 33.3

High return 0

Brokers advice 2 66.66

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66.66% of the respondent invested in SBI mutual fund because of their brokers advice.

ii. If you have not invested in SBI then why ?

a. Not aware b. Already invested c. less return

d. No specific reason

Reason Total percentage

Not aware 0

Already Invested 2 40Less return 0

No specific reason 3 60

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60% of the respondent who did not invest in SBI mutal funds had no specific reason for not investing.

ANALYSIS 15

Q) How would you like to receive the return every year?a. Dividend Payout b. Dividend re-investment c. Growth in NAV

Ways total percentage

Dividend payout 2 25

Dividend reinvested 2 25

Growth in NAV 4 50

Most of the respondent prefered growth in NAV

4.2 FINDING AT A GLANCE

The largest numbers of respondents were from Age Group of 31-40 years .The second most

respondents were in the age group of 40-50 years and the least were in the age group of

above 60 years.

Most of the respondents were male.

60% of the respondents were single

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93.33% of the respondents invest in securities, while the rest dont invest in any kind of

securities.

28.57% invest in mutual fund, 25% invest in savings account , 21.42% invest in fixed

deposits, 14.28% invest in securities and the rest invest in shares/debentures, real estate, postoffice and NCS.

35.71% invest in those securities were the risk is low , 28.57 % invest in those securities

which has easy liquidity, 25% in those having high return, and 10.7% in those securities

whose company name is reliable.

All the investors were aware about mutual funds.

66.6% of the respondents were aware about mutual funds through advertisement, 10%

through banks and 23.3% through financial advisors.

26.6% invest in mutual fund , and the rest 73.3% invest in some other securities.

54.54% dont invest in securities because of high risk , 45.45 % did not have a specific

reason for not investing in mutual fund.

50% of the respondents are long term investors while 50% are short term investors.

37.5% of the respondent prefer private , 25% prefer public and 37.5% prefer both kind of

securities.

37.5% invest in SBI mutual fund, 12.5 % invest in ICICI , 12.5 % invest in KOTAK, 25%

invest in Reliance, 12.5 % invest in other mutual fund companies.

66.6% invest in SBI Mutual fund because of their brokers advice and the rest 33.3%

invested in SBI Mutual fund because it was related to State bank of india.

60% had no specific reason for not investing in SBI Mutual fund. 40 % did not invest in SBI

mutual fund because they have already invested in some other AMC.

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50% of the respondent need growth in NAV as a return every year. And the rest require

dividend payout and dividend reinvested as a return every year .

CHAPTER 5

RECOMMENDATION AND 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.

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CHAPTER 6

CONCLUSION

Running a successful Mutual Fund requires complete understanding of the peculiarities of the

Indian Stock Market and also the psyche of the small investors. This study has made an attempt to

understand the financial behavior of Mutual Fund investors in connection with the preferences of

Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund.

They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual

Fund and its related terms. Many of people do not have invested in mutual fund due to lack of

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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 but only some are performing

well due to Brand awareness. Some AMCs are not performing well although some of the schemes

of them are giving good return because of not awareness about Brand. Reliance, UTI, SBIMF,

ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under

Management is larger than others whose Brand name are not well known

like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. Financial Advisors are

the most preferred channel for the investment in mutual fund. They can change investors mind

from one investment option to others. Many of investors directly invest their money through AMC

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

directly who know well about mutual fund and its operations and those have time.

QUESTIONNAIRE

Respected sir/ madam,I am a student of B.com Part III. As per the requirement and partial

fulfillment of the curriculum I am going through a project study on ANALYSIS

OF MUTUAL FUND ". The questionnaire has been designed to find out the factsand figures relating to this topic. Your response will be kept strictly confidentialand be used only for academic purpose.

Your few minutes of time will help me in a great way.

Naazla Fatima

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Personal details :

(a).Name:-

(b). Age:- 20-30 [ ] 31-40 [ ] 41-50 [ ] 51-60 [ ] 60 above [ ]

Please tick ()

(c). Gender : Male [ ] Female [ ]

(d). Marital Status : Married [ ] single [ ]

1. Do you invest ?

Yes [ ] No [ ]

2. what kind of investment do you prefer ?

a. Saving account [ ] b. Fixed deposits [ ] c. Insurance [ ] d. Gold/ Silver [ ]

e. Mutual Fund [ ] f. Post Office-NSC, etc [ ] g. Shares/Debentures [ ] h. Real state [ ]

3. While investing your money, which factor will you prefer?

a. Liquidity [ ] b. Low Risk [ ] c. High Return [ ] d. Companies reputation [ ]

4. Are you aware about Mutual Funds and their operations?

a. Yes [ ] b. No [ ]

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

a. Advertisement [ ] b. Banks [ ] c. Financial Advisors [ ]

6. Have you ever invested in Mutual Fund?

a. Yes [ ] b.No [ ]

7. If not invested in Mutual Fund then why?

a. High risk [ ] b. Not aware [ ] c. Not any specific reason [ ]

8. where do you find yourself as a mutual fund investor ?

a. Long time investor[ ] b. Short time investor [ ]

9. In which time of mutual fund you like to invest?

a. Private [ ] b. Public [ ] c. both [ ]

10. In which mutual fund have you invested ?

a. SBI [ ] b. ICICI [ ] c. Kotak [ ] d. UTI [ ] e. HDFC [ ] f. RELIANCE [ ]

g. OTHERS [ ]

12. IF YOU HAVE INVESTED IN SBI THEN

i. why did you invest in SBI mutual fund ?

a. Because it is related to state bank [ ]

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b. High return [ ]

F c. Brokers advice [ ]

13. If you have not invested in SBI then why ?

a. not aware [ ] b. Already invested [ ] c. Less return [ ]

d. No specific reason [ ]

14. How would you like to receive the returns every year?

a. Dividend payout [ ] b. Dividend re-investment [ ]

c. Growth in NAV [ ]

THANK YOU

BIBLIOGRAPHY

WWW.SBIMF.COM

WWW.GOOGLE.COM

WWW. WIKIPEDIA.COM

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http://www.sbimf.com/http://www.google.com/http://www.sbimf.com/http://www.google.com/


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WWW.SHAREMARKET.COM

WWW.MUTUALFUNDSINDIA.COM
http://www.sharemarket.com/http://www.mutualfundsindia.com/http://www.sharemarket.com/http://www.mutualfundsindia.com/