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Students Colloquium Report
On
Consumer Perception
For
MUTUAL FUND (REAL ESTATE FUND)
Submitted to: Submitted By: -Dr. Himani Joshi Group 5: -(Academic coordinator) Shruti Garg
Stevens Business School Jimmy ThakkarBhumika Patel
Ankit Dave
Chetan Chhabhaiya
Deepak Singh
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Contents
Sr. no Particulars Pageno
1 Acknowledgement 3
2 Preface 4
3 Executivesummary 54 Introduction 6
4.1 Meaning ofMutual Fund
4.2 History ofMutual Fund
4.3 TypesofMutual Fund
5 Objectiveof research 12
6 Researchofmethodology 13
7 Real Estate Mutual Fund 14
8 Major PlayersofReal Estate Mutual Fund 15
9 Performance analysis 16
9.1 NAV
9.2 Total Investment9.3 RiskAssociated
9.4 Beta
9.5 Alpha
9.6 Standard Deviation
9.7 Sharpe Ratio
9.8 Relationship between Sensex and Mutual Fund
10 Data Analysis 23
10.1 InvestmentCriteria
10.2 Investment Patten
10.3 Awareness LevelofMutual Fund10.4 Whether an Investoror Not
10.5 Likenesstowards Mutual Fund
10.6 Reasonfor Investment
10.7 Most Preferred TypeofMutual Fund
10.8 Future Perspective
10.9 AwarenesslevelofReal Estate Mutual Fund
10.10 Investoror Not
10.11 Betteroptionfor ROI
11 Limitations 30
12 Recommendation 31
13 Conclusion 3214 Appendices 33
14.1 Questionnaire
15 Reference 35
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1) ACKNOWLEDGEMENTDuring our Project Report Assignment, we realized that Success is not
destination, but a journey. This may not have been so accurate and successful
without the help, guidance and support of certain people who acted as guides,friends andtorch bearers along theway.
Wewould like to thankSTEVENS Business School for introducing the practical
projectincoursecurriculum.
Weexpressourdeepest andmostsincerethankstoour project guide Dr.HIMANI
JOSHI (Academic coordinator).The Project could not be completed without her
support and guidance.
Further, we are thankful to all the respondents of our questionnairewho spared
theretimefromtheir busy schedule andobligedus by giving theirco-operation and
theinformationweneeded.
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2) PREFACEGive a man a fish, he will eat it
Train a man to fish, he will feed his family
The above saying highlights the importance of Practical knowledge. Practical
training is an important part of the theoretical studies. It is of an immense
importanceinthefieldofmanagement. Itoffersthestudenttoexplorethevaluable
treasure of experience and an exposure to real work culture followed by the
industries and thereby helping the students to bridge gap between the theories
explainedinthe books andtheir practicalimplementations.
Research Project plays animportant roleinfuture building ofanindividualsothat
he/shecan betterunderstandthe realworldinwhichhe/shehastoworkinfuture.
The theory greatly enhancesour knowledge and providesopportunities to blend
theoreticalwiththe practicalknowledge.
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3) EXECUTIVE SUMMARYInfew years Mutual Fundhasemerged as a toolforensuring onesfinancialwell
being. Mutual Fundshavenotonly contributedtothe India growthstory buthave
also helped families tap into the successof Indian Industry. As information and
awarenessis rising more andmore people areenjoying the benefitsofinvesting in
mutualfunds.
Themain reason thenumberof retailmutual fund investors remainssmall is that
nineinten peoplewithincomesin India donotknowthatmutualfundsexist. But
once people are awareofmutual fund investmentopportunities, thenumberwho
decide to invest inmutual funds increases to asmany asone in five people. The
trickforconverting a personwithnoknowledgeofmutualfundsto a new Mutual
Fundcustomeristounderstandwhichofthe potentialinvestors aremorelikely to
buy mutualfunds andtousethe right argumentsinthesales processthatcustomers
will accept asimportant and relevanttotheirdecision.
This Project gave us a great learning experience and at the same time it gave
enough scope to implement my analytical ability. The analysis and advice
presented in this Project Report is based on market research on the saving and
investment practices of the investors and preferences of the investors for
investment in Mutual Funds. This report will help to know about the investorsPreferencesin Mutual Fund.
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4) INTRODUCTION4.1 Mutual Fund:
A mutual fund is a group of investors operating through a fund manager to
purchase a diverse portfolio of stocks or bonds. Mutual funds are highly cost
efficient andvery easy to invest in. By pooling money together in a mutualfund,
investorscan purchasestocksor bondswithmuchlowertrading coststhanifthey
tried todo iton theirown. Also,onedoesn'thave to figureoutwhich stocksor
bonds to buy. But the biggest advantage of mutual funds is diversification.
Diversification means spreading out money across many different types ofinvestments. Whenoneinvestmentisdown anothermight beup. Diversificationof
investment holdings reduces the risk tremendously.
4.2 History ofMutual Fund:
Themutualfundindustry in India startedin 1963 withtheformationofUnit Trust
of India, at the initiativeof the Governmentof India and Reserve Bankof India.
The history of mutual funds in India can be broadly divided into four distinct
phases.
y First Phase 1964-87Unit Trustof India (UTI) wasestablishedon 1963 by an ActofParliament. Itwas
set u p by the Reserve Bank of India and functioned under the Regulatory and
administrativecontrolof the Reserve Bankof India. In 1978 UTI wasde-linked
fromthe RBI andthe Industrial Development Bankof India (IDBI) tookoverthe
regulatory and administrativecontrol in placeofRBI. The firstscheme launched
by UTI was Unit Scheme 1964. At the endof 1988 UTI had Rs.6700 croreso assetsundermanagement.
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y Second Phase 1987-1993 (Entry of Public Sector Funds)1987 marked theentry ofnon- UTI, publicsectormutual funds setup by public
sector banks and Life InsuranceCorporationof India (LIC) and General Insurance
Corpo
ration
of
Indi
a (GIC
). SBI Mutu
al
Fund
w
asthe
fi
rst
non-
UTI Mutu
al
Fund
established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab
National BankMutual Fund (Aug 89), Indian BankMutual Fund (Nov 89), Bank
of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its
mutualfundin June 1989 while GIChadsetup itsmutualfundin December 1990.
At the end of 1993, the mutual fund industry had assets under management o
Rs.47,004 crores.
y Third Phase 1993-2003 (Entry of Private Sector Funds)With the entry of private sector funds in 1993, a new era started in the Indianmutualfund industry, giving the Indian investors a widerchoiceoffundfamilies.
Also, 1993 was the year inwhich the first Mutual Fund Regulations came into
being, under which all mutual funds, except UTI were to be registered and
governed. Theerstwhile Kothari Pioneer (nowmergedwith Franklin Templeton)
wasthefirst privatesectormutualfund registeredin July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functionsunderthe SEBI (Mutual Fund) Regulations 1996.
Thenumberofmutualfundhouseswentonincreasing,withmany foreignmutual
fundssetting up fundsin India and alsotheindustry haswitnessedseveralmergers
and acquisitions. As attheendof January 2003,therewere 33 mutualfundswith
total assetsofRs. 1,21,805 crores. The Unit TrustofIndia with Rs.44,541 croreso
assetsundermanagementwasway aheadofothermutualfunds.
y Fourth Phase since February 2003In February 2003, following the repealof the Unit Trustof India Act 1963 UTIwas bifurcated intotwoseparateentities. One isthe Specified Undertaking of the
Unit TrustofIndia with assetsundermanagementofRs.29,835 crores as attheend
of January 2003, representing broadly,the assetsofUS 64 scheme, assured return
and certain other schemes. The Specified Undertaking of Unit Trust of India,
functioning under an administrator andunder the rules framed by Governmento
India anddoesnotcomeunderthe purviewofthe Mutual Fund Regulations.
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Thesecondisthe UTI Mutual Fund,sponsored by SBI, PNB, BOB and LIC. Itis
registeredwith SEBI and functionsunder the Mutual Fund Regulations. With the
bifurcationof theerstwhile UTI whichhad in March 2000 more than Rs.76,000
croresofassetsundermanagement andwiththesetting up ofa UTI Mutual Fund,
conforming tothe SEBI Mutual Fund Regulations, andwith recentmergerstaking
place among different privatesectorfunds,themutualfundindustry hasenteredits
current phaseofconsolidation and growth.
The graphindicatesthe growthofassetsoverthe years.
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4.3 TypesofMutual Fund:
On the basisof their structure andobjective,mutual fundscan beclassified into
following majortypes:
y Closed-end fundsA closed-endmutualfundhas a setnumberofsharesissuedtothe publicthrough
aninitial publicoffering.
y Open-end fundsOpenendfunds areoperated by a mutualfundhousewhich raisesmoney from
shareholders andinvestsin a group ofassets.
y Large cap fundsLargecap funds arethosemutualfunds,whichseekcapital appreciation by
investing primarily instocksoflarge bluechip companies.
y Mid-cap fundsMidcap funds arethosemutualfunds,whichinvestinsmall/mediumsized
companies. Asthereisnostandarddefinitionclassifying companies.
y Equity fundsEquity mutualfunds are alsoknown asstockmutualfunds. Equity mutualfunds
invest pooled amountsofmoney inthestocksofpubliccompanies.
y Balanced fundsBalancedfundis alsoknown ashybridfund. Itis a typeofmutualfundthat buys acombinationofcommonstock, preferredstock, bonds, andshort-term bonds.
y Growth fundsGrowthfunds arethosemutualfundsthat aimto achievecapital appreciation by
investing in growthstocks.
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y No load fundsMutualfundscan beclassifiedintotwotypes- Loadmutualfunds and No-Load
mutualfunds.
y Exchange traded fundsExchange Traded Funds (ETFs) represent a basketofsecuritiesthatistradedon an
exchange,similarto a stock. Hence,unlikeconventionalmutualfunds.
y Value fundsValuefunds arethosemutualfundsthattendtofocusonsafety ratherthan growth,
andoftenchooseinvestments providing dividends aswell ascapital appreciation.
y Money market fundsA money market fund is a mutual fund that invests solely in money market
instruments. Money market instruments areformsofdebtthatmature in lessthan
one year and arevery liquid.
y International mutual fundsInternationalmutualfunds arethosefundsthatinvestinnon-domesticsecurities
marketsthroughouttheworld.
y Regional mutual fundsRegional mutual fund is a mutual fund that confines itself to investments in
securitiesfrom a specified geographical area,usually,thefund'slocal region.
y Sector fundsSector mutual funds are those mutual funds that restrict their investments to a
particularsegmentorsectoroftheeconomy.
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y Index fundsAnindex fundis a mutualfundorexchange-tradedfundthat aimsto replicatethe
movementsofanindex ofa specificfinancialmarket.
y Fund of fundsA fund of funds (FoF) is an investment fund that holds a portfolio of other
investmentfunds ratherthaninvesting directly inshares, bondsorothersecurities.
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5) OBJECTIVE OF STUDY1. Tofindoutthe Preferencesoftheinvestorsfor Asset ManagementCompany.
2. Toknowthe Preferencesforthe portfolios.
3. Toknowwhy onehasinvestedornotinvestedin Mutualfund.
4. Tofindoutthemost preferredchannel.
5. Tofindoutwhatshoulddoto boost Mutual Fund Industry.
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6) Research methodologyThis reportis basedon primary aswellsecondary data,however primary data
Collection was given more importance since it is overhearing factor in attitude
studies. Oneofthemostimportantusersofresearchmethodology isthatithelpsinidentifying the problem, collecting, analyzing the required information data and
providing an alternativesolutiontothe problem .It alsohelpsincollecting thevital
information that is required by the top management to assist them for the better
decisionmaking bothday today decision andcriticalones.
y Data sources:Researchistotally basedon primary data. Secondary data can beusedonly forthe
reference. Research has beendone by primary data collection, and primary datahas beencollected by interacting withvarious people. Thesecondary data has beenCollectedfromvarious journals andwebsites.
Sampling:
y Sampling procedure:Thesamplewasselectedofthemwho arethecustomers/investorsofMutual Fund.
Itwas also collected through personal visits to persons, by formal and informal
talks andthroughfilling up the questionnaire prepared. Thedata has been analyzedby using mathematical/Statisticaltool.
y Sample size:Thesamplesizeofour projectislimitedto 41 peopleonly.
y Sample design:Data has been presentedwiththehelp ofbar graph, piecharts,line graphsetc.
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7) REAL ESTATE MUTUAL FUNDSReal Estate Mutual Fund or the REMF acts as a conduit or a link between an
investor and real estate and helps manage the funds of the investors and invest
theminthe realestatesector.
Investments: REMF can invest in a developed property, and as the value
appreciates over a period of time, it can offload its investment to make capital
gains. It alsohas anoptionofdeveloping the property onitsown andthenselling it
at an appropriatetimeensure adequate returns. Furthermore,itcan realize regular
streamof returns through leasing, financing todevelopers and mortgage backed
financin
g. The
investment
avenues
arethe
use
rsof
funds
in
the
whole
framewo
rk
.
y Structure:The Regulationsdefine REMF as a schemeofa mutualfundestablishedinthe
formofa trust,whichinvestsdirectly orindirectly in realestate assetsorother
permissible assets. Every REMF schemeshall becloseended anditsunitsshall be
listedon a recognisedstockexchange.
SEBI and various committees formed for the purpose of studying REMFs
considered similar regimesof real estate investments inother countries. Finally,
SEBI chose the existing mutual fund structure. Firstly, this was because the
existing MF Regulationsincorporatevariouschecks and balanceswhichfurtherthe
cause of investor protection. In addition, they provide various investment
restrictions so as todiversify the investment andminimise the risk. Last, butnot
least, tax benefits available to themutual funds is another important incentive to
structurethem asschemesofmutualfunds.
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y Eligibility:All existing mutual funds are allowed to launch REMF schemes if they have
adequate numbers of key personnel or directors with experience in real estate.
Specific
all
y,the
Regul
ation
presc
ribes
aminimum
track
reco
rd
of
five
yearsin
the
real estate business for the fund houses wanting to establish mutual funds
exclusively forlaunching REMF schemes,in additionto allothereligibility criteria
applicableforsponsoring a mutualfundunderthe MF Regulations.
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8) Major Players of Real Estate MutualFunds
Among the abovestated playersonly
ING haslaunched Real Estate Mutual Funds and restother providestheserviceof
Portfolio Management Service (PMS). Under Portfolio Management Service the
institution fixesup the totalcollection tocertain amount and than breaksup that
amountinto 4 or 5 equal parts.
Forexample if HDFC plans to invest in realestate and fixes the totalcollection
upto Rs 1 crore. Itmay than breakup this 1 crore into 20 lakheachor 25 lakh.
Basically the investment in PMS is made by high networth Investment (HNI).
However in Real Estate Mutual funds are initial investmentsmay starts from Rs5000 asisdeclared by ING in Retail auto Rs 1,00,00,000 in Institutional .
MajorPlayers
Private
HDFC
ICICI
ING
IL & FSDHFL
Kshitij
KotakMahindra
Anand Rathi
Public
SBI
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In Publicsectorthereisexisting only one playeri.e. SBI andthattooithasnot yet
launchedits REMF. The processisstill group on.
So, theconclusiondream isonly ING in privatesector is playing for Real Estate
Mutu
al
Funds
.
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9) Performance analysis9.1 Net Asset Value (NAV):
ING waslaunchedon 31st
December; 2007.PerformanceofING REMF forthelasttwo yearsis given below,
2007 2008 2009
Retail growth
option
9.37 9.37 8.85
Retaildividend
option
9.38 9.38 8.85
Institutional
growthoption
8.18 8.18 7.73
Institutional
dividendoption
8.37 8.37 7.90
9.2 Total Investment:
The only private playerin Real Estate Mutual Fundis ING Investment. ING
Investment. ING launched its REMF on 31st
Dec. 2007. The benchmarkindex
which ING thought to reach upto S&P BMI (USA). The Net Assets under
Management or the total corpusthat have been collected by the company isRs 141.37crores.
Through this theconclusioncan bedrawn there is little awarenessof Real Estate
Mutual Funds. Thisisthe analysisthatisdrawnfromthesamplescollected.
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9.3 RiskAssociated:
y Inhigh risk, 75% isinequity and remaining isindebt.y I nmedium risk, 50% isinequity and 50% indebt.y Inlow risk, 25% isinequity and remaining isindebt.
9.4 Beta:
This common measure compares a mutual fund's volatility with that of a
benchmarkandissupposedto givesomesenseofhowfar youcanexpect a fundtofallwhenthemarkettakes a dive,orhowhighitmightclimb ifthe bullis running
hard. A fundwith a beta greaterthan 1 isconsideredmorevolatilethanthemarket;
less than 1 means lessvolatile. So say your fund gets a beta of 1.15 -- it has a
history offluctuating 15% more thanthe benchmark if themarket isup,thefund
shouldoutperform by 15%. Ifthemarketheadslower,thefundshouldfall by 15%
more.
But beta, though a useful guide, is far from perfect, especially when used as a
proxy for "risk." The problemhere, aswithmany riskmeasures,isthe benchmark.
The benchmarkhasto be a correctmeasureofcomparisononly thenwillthe betahold any indicativevalue.
Risk
HighRiskMedium
RiskLowRisk
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9.5 Alpha:
Alpha was designed to take beta one step further. It looks at the relationship
between a fund's historical beta and its current performance, or the difference
between the return betaswould lead you toexpect and the return a fund actually
gets. An alpha of0 simply meansthatthefunddid aswell asexpected,considering
the risksittook. So ifthatfundwiththe beta of1.15 beatthemarket by 15% (or
underperformedit by 15% whenthemarketwasdown),itwouldhave a 0 alpha. If
yourfundhas a positive alpha thatmeansit returnedmorethanits beta predicted.
A negative alpha meansit returnedless. Thetroublewith alpha isthatit'sonly as
good as its beta. If the benchmark isn't appropriate to a fund inderiving its beta,
then alpha, too, will be imprecise.
9.6 Standard Deviation:
Meet themost popularof the riskmeasures--onewith a distinct advantageover
beta. While beta compares a fund's returnswith a benchmark,standarddeviation
measureshow far a fund's recentnumbers stray from its long-term average. For
example, if Fund X has a 10% average rateof return and a standarddeviationof
5%, most of the time, its return will range from 5% to 15%. A large standard
deviationsupposedly shows a more risky fundthan a smallerone. Buthere, again,
what's problematic is your reference point. The number alone doesn't tell you
much. Youhavetocompareonestandarddeviationwiththeothers among a fund'speers. But a more glaring problem is that the standarddeviation system rewards
consistency above allelse. A fundisconsideredstable basedontheuniformity of
itsownmonthly returns. So if it losesmoney butdoessovery consistently itcan
have a very low standard deviation -- down 3% each and every month wins a
standarddeviationof zero. And likewise, a fund that gains 10% onemonth and
15% thenextwould be penalized by a highstandarddeviation -- a reminder that
volatility, although perhaps a cousinto risk,itselfisn'tnecessarily a badthing.
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9.7 Sharpe Ratio:
Thisformula,worked by Nobel Laureate Bill Sharpe,triesto quantify how a fund
performs relativetothe riskittakes. Take a fund's returnsinexcessofa guaranteed
investment (a 90-day T-bill) anddivide by thestandarddeviationofthose returns.
The biggerthe Sharpe ratio,the better a fund performedconsidering its riskiness.
Here, again, youhave the problemof relativity -- the ratio itselfdoesn't tell you
anything, youhavetocompareitwiththe Sharpeofotherfunds. Butthis ratiohas
an advantageover alpha because itusesstandarddeviation insteadof beta as the
volatility variable, andtherefore youdon'thavetoworry that a funddoesn't relate
well to the chosen index.
Overseas,onehasmutualfund rating companies-like Morning Starwhich provide
viewsof risk. Morningstarsays thatwhatwe investors really care about iswhenourfunds LOSE money,notwhenthey'redoing betterthanthe benchmarkorthan
theirlong-term averages. Itmeasureshowoften and by howmuch a fundtrailsthe
monthly T-bill rate, and then compares that average loss with that for the
investmentclass. The average for a class is 1.00,sonumbers above thatmean a
fund is riskier than its peers, and below is considered less risky.
In India we still have to introduce this kind of a risk rating. However till then
rememberone needs to be consciousof risk, but not push it to the lastdecimal
point. It's about awareness, ratherthanmathematics.
9.8 Relationship between Sensex and Mutual Fund:
Sensex and mutual funds share a very strong relationshi p. Both of them work
simultaneously. Thereis a big timesensitive andwild relationship in betweenthe
Sensex andmutualfunds. The generalcriteria are,wheneverthe Sensex increases
the net asset value of mutual fund also increases. But this may not be the case
every time. Itmay alsohappenthatthe Sensex isincreasing andthenet assetvalue
ofthemutualfundsisdecreasing oritis remaining constant.
This happens because the mutual fund institutions invest in the equities of the
otherscompanies. Nowiftheshareofthecompany risesthenet assetvalueofthe
fundincreases andvice versa.
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Forexample: There arethirty scripsin Sensex 30 andoutofthese 30, 5 scrips are
relatedtomutualfunds. Itmay happen thatthe rest 25 scripshave a rise intheir
prices while the rest 5 scrips , related to mutual funds, may have fall in the
NAVs. Than in thatcase the NAVs,of themutual fundswhohave invested in
those 5 scripswill godown though the Sensex is rising. Itmay alsohappen that
the Sensex shows a rise by 20% andthemutualfunds NAV risesoroutperformsit
by 50%.Thusthe relationship between Sensex andmutualfundisvery strong.
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10)Data analysis10.1 Investmentcriteria
According tooursurvey 37 respondentssaidthatthey make aninvestmentwhile 4
outof41 repliedthatthey arenotinvestors.
0
510
15
20
25
30
35
40
Yes No
Series1
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10.2 Investment pattern:
Particulars No.ofrespondents
Post Office 3
equities 17
Govt. Securities 11
Insurance 41
Real Estate 0
Mutual Funds 18
0
5
10
15
20
25
30
35
40
45
Postoffice Equities Govt.
securities
Insurance Realestate Mutulfund
Series1
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10.3 Awareness LevelofMutual Funds:
Awarenessofmutual funds: 39 respondentswere awareofmutual fundswhile 3
wereunawareofit.
10.4 likenesses Towards Mutual Fund:
Outof39 respondents 28 haveinvestedinmutualfunds and 13 dont preferit.
0
5
10
15
20
25
30
35
40
Yes No
Series1
0
5
10
15
20
25
30
Yes No
Series1
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10.6 Reasonfor Investment:
Low Risk 26
Tax Benefits 14
Low Involvement 04
Busy Schedule 02
10.7 Most Preferred TypeofMutual Funds
0
5
10
15
20
25
30
LowRisk Tax Benefits LowInvolvement BusySchedule
Series1
0
2
4
6
8
10
12
14
16
Open
Ended
Close
Ended
Balanced
Fund
Income
Fund
Growth
Fund
Taxation
Fund
Series1
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Openended 14
Closeended 08Balancedfund 0
Incomefund 16
Growthfund 05
Taxationfund 05
10.8 Awarenesslevel Real Estate Mutual Funds:
Awareness regarding realestatemutual funds: Outof 41 respondents 25 wereof
thesefundswhilethe rest 16 wereunaware.
10.9 Currentinvestorin realestatemutualfunds:
0
5
10
15
20
25
Yes No
Series1
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Noneof the respondent, according tooursurvey, is the investor in the realestate
mutualfunds.
10.10 Betteroptionfor ROI:
36 ofthe respondentswereoftheviewthat realestatemutualfundsdonot provide
better rateofreturnwhile restsays yesforit.
0
5
10
15
20
25
3035
40
45
Yes No
Series1
0
5
10
15
20
25
30
35
40
Yes No
Series1
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10.11 Goodoptionincurrentmarketsituation:
According tooursurvey 11 respondentssaidthatthey holdthe positiveviewwhile
the rest 36 werenotinitsfavour.
0
5
10
15
20
25
30
Yes No
Series1
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11)Limitations:y Someofthe personswerenotso responsive.y Possibility oferrorindata collection becausemany ofinvestorsmay have
not given actual answersofmy questionnaire. Sizemay not adequately
representthewholemarket.
y Some respondentswere reluctanttodivulge personalinformationwhichcanaffectthevalidity ofall responses.
y The researchwasconfinedto a certain partofAhmedabad.
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12) Recommendationsy There is a very less awareness amongstthe people about realestatemutual
funds. Eventhosewho arecurrentinvestors arenot aware abouttheexistingNAVs.
y To increase investment in this sector various other benefits should beprovidedsothattheinvestorscan betemptedtomake aninvestment.
y Publicsectorsshould alsocomeup inthisfield.y More privatesectorcompaniesshouldstep in.
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13) ConclusionThe success of REMF is going to depend to a great extent on addressing
complexities associatedwiththe Indian realestatesector. Forexample,stamp duty
isvery highin India. Theexisting stamp duty structureneedsto be rationalisedforschemes to operate efficiently. This is a responsibility of states and unless the
Central Governmentdecides tomake ituniform, itwill bedifficult toexpect any
changes in the stamp duty regime. Poor maintenance of land records is another
important stumbling block. India doesnotoffer title certification, and properties
areoftenthesubject-matteroflitigationfor protracted periodsoftime. In addition,
time-consuming legal processesis anotherimportant area ofconcern.
The Regulation also lacks a stringent disclosure schedule with respect to the
launching of REMF schemes. The Regulationsdonot specify disclosuresof theproperties held by REMFs periodically. It is imperative that SEBI announce a
detailedsetofdisclosuresfor REMFs that take into account the risks involved in
real estate investments. A uniform set of disclosures would enable investors to
comparevarious REMF investmentoptions.
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14)Appendices14.1 Questionnaire:
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15) REFERENCE
y Www. Indiahousing.comy Www. Moneycontrol.comy www.amfi.comy
Business
.m
psofindi
a.com
y www.economywatch.comy www.iloveindia.comy Pratikshahy Tirlochandshah
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