Investors Perception Abt Mf by Abhinav

8/2/2019 Investors Perception Abt Mf by Abhinav

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INVESTORS PERCEPTION

ABOUT MUTUAL FUNDS

Presented by- Abhinav srivastava


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Introduction of Mutual Funds

AMutual Fund is a trust that pools the savings of anumber of investors who share a common financial goal.The money thus collected is then invested in capitalmarket instruments such as shares, debentures and other

securities. The income earned through these investmentsand the capital appreciation realized are shared by itsunit holders in proportion to 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 adiversified, professionally managed basket of securitiesat a relatively low cost.


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MUTUAL FUNDS OFFERS

Portfolio Diversification Professional Management

Reduction/Diversification of Risk Reduction of Transaction costs Liquidity

Convenience & Flexibility Safety


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Concept of Mutual Fund

In a mutual fund many investors contribute to forma common pool of money. This pool of money isinvested in accordance with a stated objective.

. The ownership of the fund is thus joint or mutuali.e. the fund belongs to all investors.

A mutual fund uses the money collected frominvestors to buy those assets which are specifically

permitted by its stated investment objective.


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In India a mutual fund is constituted as a trust & theinvestor subscribes to the unit of a scheme launched bythe fund. In an open-ended mutual fund, investors can

buy units from the fund & sell units to the fund

continuously. Each share or unit that an investor holds needs to be

assigned a value. Since the units held by an investorevidence the ownership of the funds assets, the value ofthe total assets of the fund when divided by the total

number of units issued by the mutual fund gives us thevalue of one unit. This is generally called the Net AssetValue of one unit or one share.


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OPERATIONS FLOW CHART


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History of Mutual Fund in India

The formation of Unit Trust of India marked theevolution of the Indian mutual fund industry in the

year 1963.

The primary objective at that time was to attract thesmall investors and it was made possible through thecollective efforts of the Government of India and the

Reserve Bank of India. The history of mutual fundindustry in India can be better understood dividedinto following phases:


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Growth and SEBI Regulation - 1996-2004


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Inventors interests were safeguarded by SEBI and theGovernment offered tax benefits to the investors in orderto encourage them. SEBI (Mutual Funds) Regulations,1996 was introduced by SEBI that set uniform standards

for all mutual funds in India.

The Union Budget in 1999 exempted all dividendincomes in the hands of investors from income tax.

Various Investor Awareness Items were launched duringthis phase, both by SEBI and AMFI, with an objective toeducate investors and make them informed about


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MUTUAL FUND A GLOBALLY PROVENINVESTMENT AVENUE

In India, the mutual fund industry started with thesetting up of the erstwhile Unit Trust of India in1963. Public sector banks and financial institutions

were allowed to establish mutual funds in 1987.Since 1993, private sector and foreign institutions

were permitted to set up mutual funds.

Assets owned by mutual funds in India have crossedthe 100 billion dollar mark


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In may SBI Mutual fund saw a growth of 21% of itsassets and is currently the biggest mutual fund inIndia. It is followed by ICICI Prudential, UTI MutualFund. HDFC MF and Franklin Templeton in 2nd,

3rd, 4th and 5th positions respectively.

According to Association of Mutual Funds in India(AMFI), the total AUM of Indian Mutual funds grew

from 350279.39 crore to 402035.88 crore in May.


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The top five mutual funds in India have 50% of thetotal AUM.

SBI Mutual Fund - 59143 crore

Prudential ICICI - 50703 croreUTI Mutual Funds - 40070.16HDFC Mutual Fund - 36146.66Franklin Templeton - 26276.35


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Types Of Mutual Funds


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Schemes according to Maturity Period

Open-ended Fund/ Scheme

Close-ended Fund/ Scheme

2. Schemes according to InvestmentObjective

Growth / Equity Oriented Scheme

Income / Debt Oriented Scheme


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Balanced Fund

Money Market or Liquid Fund

Gilt Fund

Index Funds

3. Sector Specific Funds/Schemes

4. Tax Saving Schemes


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5. Fund OF Funds (Fof) Scheme

6. Load Or No-Load Fund


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ADVANTAGES OF MUTUAL FUND


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S. No. Advantage Particulars

1.Portfolio DiversificationMutual Funds invest in a well-diversifiedportfolio of securities which enables investor tohold a diversified investment portfolio (whetherthe amount of investment is big or small).

2.Professional Management

Fund manager undergoes through variousresearch works and has better investmentmanagement skills which ensure higher returnsto the investor than what he can manage on his own.

3.Less RiskInvestors acquire a diversified portfolio of securitieseven with a small investment in a Mutual Fund. Therisk in a diversified portfolio is lesser than investing inmerely 2 or 3 securities.

4.Low Transaction CostsDue to the economies of scale (benefits of larger

volumes), mutual funds pay lesser transaction costs.These benefits are passed on to the investors.

5.LiquidityAn investor may not be able to sell some of the sharesheld by him very easily and quickly, whereas units of a

mutual fund are far more liquid.


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6. Choice of Schemes Mutual funds provide investors with various schemes with different investment objectives.

Investors have the option of investing in a scheme having a correlation between its investmentobjectives and their own financial goals. These schemes further have different plans/options

7. Transparency

Funds provide investors with updated information pertaining to the markets and the schemes.All material facts are disclosed to investors as required by the regulator.

8. Flexibility Investors also benefit from the convenience and flexibility offered by Mutual Funds. Investors

can switch their holdings from a debt scheme to an equity scheme and vice-versa. Option ofsystematic (at regular intervals) investment and withdrawal is also offered to the investors in

most open-end schemes. 9. Safety Mutual Fund industry is part of a well-regulated investment environment where the interests of

the investors are protected by the regulator. All funds are registered with SEBI and completetransparency is forced.


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DISADVANTAGE


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DISADVANTAGE

S. No. Disadvantage Particulars 1. Costs Control Not in the Hands of an Investor Investor has to pay investment management fees and fund distribution costs as a percentage of

the value of his investments (as long as he holds the units), irrespective of the performance of

the fund. 2. No Customized Portfolios The portfolio of securities in which a fund invests is a decision taken by the fund manager.

Investors have no right to interfere in the decision making process of a fund manager, whichsome investors find as a constraint in achieving their financial objectives.

3. Difficulty in Selecting a Suitable Fund Scheme Many investors find it difficult to select one option from the plethora of funds/schemes/plans

available. For this, they may have to take advice from financial planners in order to invest in theright fund to achieve their objectives.


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Mutual Fund Investment Strategies

Systematic Investment Plan (SIPs):These are best suited for young people who have started

their careers and need to build their wealth. SIPs entailan investor to invest a fixed sum of money at regular

intervals in mutual fund scheme the investor has chosen

Systematic Withdrawal Plan (SWPs):

These plans are best suited for people nearing retirement.

In these plans an investor invests in a mutual fundscheme and is allowed to withdraw a fixed sum of moneyat regular intervals to take care of expenses.


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Systematic Transfer Plan (STPs) :

They allow the investors to transfer on a periodic basis

a specified amount from one scheme to anotherwithin the same fund family meaning two schemesbelonging to the same mutual fund. A transfer will betreated as redemption of units from the scheme from

which the transfer is made


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Performance Evaluation


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PARAMETERS OF MUTUAL FUNDEVALUATION

Risk

ReturnsLiquidity

Expense Ratio

Composition of Portfolio


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Measurement of risk

Beta Coefficient Measure Of Risk :

Beta relates a funds return with a market index. Itbasically measures the sensitivity of funds return to

changes in market index.

If Beta = 1

Fund moves with the market i.e. Passive fund


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If Beta < 1

Fund is less volatile than the market i. e Defensive Fund

If Beta > 1

Funds will give higher returns when market rises &higher losses when market falls i.e. Aggressive Fund

If, for example, a fund has a beta of 1.03 in relation to the

BSE Sensex, the fund has been moving 3% more than theindex. Therefore, if the BSE Sensex is increased 10%, thefund would be expected to increase 10.3%.


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Ex Marks or R-squared Measure Of Risk :Ex Marks represents co relation with markets. Higherthe Ex-marks lower the risk of the fund because a fund

with higher Ex-marks is better diversified than a fund

with lower Ex-marks. R-Squared values range between 0and 1, where 0 represents no correlation and 1 representsfull correlation.

On the other hand, an R-squared value that is less than0.5 indicates that the beta is not particularly usefulbecause the fund is being compared against aninappropriate benchmark.


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Standard Deviation Measure Of Risk

It is a statistical concept, which measures volatility.

It measures the fluctuations of funds returns arounda mean level. Basically it gives you an idea of how

volatile your earnings are. It is broader concept thanBETA. It also helps in measuring total risk and not

just the market risk of the portfolio.

H t C l l t th V l f


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How to Calculate the Value of aMutual Fund


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The investors funds are deployed in a portfolio of securities by thefund manager. The value of these investments keeps changing as themarket price of the securities change. Since investors are free toenter and exit the fund at any time, it is essential that the market

value of their investments is used to determine the price at whichsuch entry and exit will take place. The net assets represent the

market value of assets, which belong to the investors, on a givendate. Net Asset Value or NAV of a mutual fund is the value of one unit of

investment in the fund, in net asset terms. NAV = Net Assets of the scheme / Number of Units

Outstanding Where Net Assets are calculated as:- (Market value of investments + current assets and other assets +

Accrued income current liabilities and other liabilities lessaccrued expenses) / No. of Units Outstanding as at the NAV date


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NAV of all schemes must be calculated andpublished at least weekly for closed-end schemes anddaily for open-end schemes. The major factorsaffecting the NAV of a fund are:

Sale and purchase of securities

Sale and repurchase of units

Valuation of assets

Accrual of income and expenses


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RETURNS

Returns have to be studied along with the risk. A fund could haveearned higher return than the benchmark. But such higher returnmay be accompanied by high risk. Therefore, we have to comparefunds with the benchmarks, on a risk adjusted basis. WilliamSharpe created a metric for fund performance, which enables theranking of funds on a risk adjusted basis.

Risk Premium = Difference between the Funds Average returnand Risk free return on government security or treasury bill over agiven period .


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TAX TREATMENT


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To The Unit Holders

(a.) Tax on Income

In accordance with the provisions of section

10(35)(a) of the Act, income received by allcategories of unit holders in respect of units of theFund will be exempt from income-tax in their hands.

Exemption from income tax under section 10(35) of

the Act would, however, not apply to any incomearising from the transfer of these units.


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MUTUAL FUND SET UP


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HOW IS A MUTUAL FUND SET UP?

A mutual fund is set up in the form of a trust, which hassponsor, trustees, asset management company (AMC) andcustodian. The trust is established by a sponsor or more thanone sponsor who is like promoter of a company. The trusteesof the mutual fund hold its property for the benefit of the unitholders. Asset Management Company (AMC) approved bySEBI manages the funds by making investments in varioustypes of securities. Custodian, who is registered with SEBI,holds the securities of various schemes of the fund in itscustody.

SEBI Regulations require that at least two thirds of the

directors of trustee company or board of trustees must beindependent i.e. they should not be associated with thesponsors


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Association of Mutual Funds in India(AMFI)


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Association of Mutual Funds in India (AMFI) wasincorporated on 22nd August, 1995.AMFI is an apex

body of all Asset Management Companies (AMC) whichhas been registered with SEBI. Till date all the AMCs arethat have launched mutual fund schemes are its

members. It functions under the supervision andguidelines of its Board of Directors.

Association of Mutual Funds India has brought down theIndian Mutual Fund Industry to a professional and

healthy market with ethical lines enhancing andmaintaining standards. It follows the principle of bothprotecting and promoting the interests of mutual fundsas well as their unit holders.


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TIPS ON BUYING

i b i l f d


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Tips on buying mutual funds

1. Determine your financial objectives and howmuch money you have to invest. Make sure thefunds objectives coincide with your own. Dont change

your objectives or exceed the amount set aside forinvestment unless you have good reason.

2.Always obtain all available information beforeyou invest. Request the prospectus, the Statement ofAdditional Information and the latest shareholder reportfrom each fund you are considering.

3. Never invest in periodic payment plans unless

you are virtually certain that you will not have toredeem early. If you redeem early or do not completethe plan, you may have to pay sales charges of up to 51%of your investment.


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4. Be on the alert for incorporation by reference. You will have "no excuse" for notknowing this information, if a problem arises. You may be legally presumed to know materialsincorporated by reference in a prospectus or other documents.

5.Always determine all sales charges, fees and expenses before you invest. Feessuch as 12b-1 fees can cost you dearly and charges for reinvestment of dividends and capitalgains distributions can substantially add to your costs. Shop around among the many fundsoffered and compare the various fees and costs connected with funds that appeal to you.

6. Learn the costs of redemption. Sometimes investors are surprised to learn that theyhave to pay to get out of funds through back-end loads or redemption fees. Find out theredemption costs before you invest so you wont be unpleasantly surprised when you redeem

your shares.

7. Never treat the risks of investment in a fund lightly. Weigh the risks of the funds youwant to buy against your ability to tolerate the ups and downs of the market and yourinvestment goals. Be extra cautious when considering investing in funds with high yield/highrisk portfolios. Junk bond problems, for example, invariably affect the funds performance.

8. Dont be misled by the name of a fund. Some funds have been given names denotingsafety, stability and low risk, despite the fact that the underlying investments in the portfolioare volatile and highly risky.


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WORKING OF MUTUAL FUND- Purchase flow


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WORKING OF MUTUAL FUND-Redemption


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COMPANY PROFILE


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SBI MUTUAL FUNDS

With over 24 years of rich experience in fundmanagement, we at SBI Funds Management Pvt.Ltd. bring forward our expertise by consistentlydelivering value to our investors. We have a strong

and proud lineage that traces back to the State Bankof India (SBI) - India's largest bank. We are a Joint

Venture between SBI and AMUNDI (France), one ofthe world's leading fund management companies,

with approximately Euro 688 billion of assets undermanagement.


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With our network of over 200 points of acceptanceacross India, we deliver value and nurture the trustof our vast and varied family of investors.

Excellence has no substitute. And to ensureexcellence right from the first stage of productdevelopment to the post-investment stage, we areably guided by our philosophy of growth through

innovation and our stable investment policies. Thisdedication is what helps our customers achieve theirfinancial objectives.


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OUR SERVICES

Mutual Funds Investors are our priority. Our mission has been to establish

Mutual Funds as a viable investment option to the masses inthe country. Working towards it, we developed innovative,need-specific products and educated the investors about the

added benefits of investing in capital markets via MutualFunds. Today, we have been actively managing our investor's assets

not only through our investment expertise in domestic mutualfunds, but also offshore funds and portfolio managementadvisory services for institutional investors.

This makes us one of the largest investment managementfirms in India, managing investment mandates of over 5.5million investors.


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Portfolio Management and Advisory Services SBI Funds Management has emerged as one of the

largest player in India advising various financialinstitutions, pension funds, and local and international

asset management companies. We have excelled by understanding our investor's

requirements and terms of risk / return expectations,based on which we suggest customized asset portfoliorecommendations. We also provide an integrated end-to-

end customized asset management solution forinstitutions in terms of advisory service, discretionaryand non-discretionary portfolio management services.


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Offshore Funds SBI Funds Management has been successfully

managing and advising India's dedicated offshorefunds since 1988. SBI Funds Management was the

1st bank sponsored asset management companyfund to launch an offshore fund called 'SBIResurgent India Opportunities Fund' with anobjective to provide our investors with opportunities

for long-term growth in capital, through well-researched investments in a diversified basket ofstocks of Indian Companies.


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PRODUCTS

EQUITY SCHEMES The primary objective of the equity asset class is to provide

capital growth / appreciation by investing in the equity andequity related instruments of companies over medium to longterm.

Equity/ Growth Funds Magnum Multicap Fund Magnum Equity Fund Magnum Multiplier Plus 1993 SBI Blue Chip Fund Magnum Global Fund SBI One India Fund Magnum Midcap Fund
http://www.sbimf.com/Products/EquitySchemes/Magnum_Multicap_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Equity_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Multiplier_Plus_1993.aspxhttp://www.sbimf.com/Products/EquitySchemes/SBI_Blue_Chip_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Global_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/SBI_One_India_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Midcap_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Midcap_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/SBI_One_India_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Global_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/SBI_Blue_Chip_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Multiplier_Plus_1993.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Equity_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Multicap_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Multicap_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Multicap_Fund.aspxhttp://www.sbimf.com/Products/EquitySchemes/Magnum_Multicap_Fund.aspx


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DEBT / INCOME SCHEMES The schemes in this asset class generally invest in fixed

income securities such as bonds, corporate debentures,government securities (gilts), money market

instruments, etc. and provide regular and steady incometo investors.

Magnum Children's Benefit Plan

Magnum Income Plus Fund - Saving Plan

Magnum Income Fund Floating Rate Plan - Savings PlusBond Plan

Magnum Income Fund Floating Rate Plan - Long Term
http://www.sbimf.com/Products/DebtSchemes/Magnum_Childrens_Benefit_Plan.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Plus_Fund_Saving_Plan.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Plan_Long_Term.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Plan_Long_Term.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Plan_Long_Term.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Plan_Long_Term.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Plan_Long_Term.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Plus_Fund_Saving_Plan.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Plus_Fund_Saving_Plan.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Plus_Fund_Saving_Plan.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Plus_Fund_Saving_Plan.aspxhttp://www.sbimf.com/Products/DebtSchemes/Magnum_Childrens_Benefit_Plan.aspx


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LIQUID SCHEMES

The strategy for liquid funds include investments inshort investment horizon, which includes 'cash'assets such as treasury bills, certificates of depositand commercial paper.

Magnum InstaCash Fund

Magnum InstaCash Fund-Liquid Floater

SBI Premier Liquid Fund
http://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspxhttp://www.sbimf.com/Products/LiquidSchemes/SBI_Premier_Liquid_Fund.aspxhttp://www.sbimf.com/Products/LiquidSchemes/SBI_Premier_Liquid_Fund.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund.aspxhttp://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund.aspx


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FIXED MATURITY PLANS These are closed ended debt schemes with a fixed maturity

date and they invest in debt & money market instrumentsmaturing on or before the date of the maturity of the scheme.

EXCHANGE TRADED SCHEMES ETFs are nothing but a basket of securities that are traded on

the stock exchange. SBI Mutual fund launched its first ETF product SBI Gold

Exchange Traded Fund in March 2009 SBI Gold Exchange Traded Scheme
http://www.sbimf.com/Products/ExchangedTradedSchemes/SBI_Gold_Exchange_Traded_Scheme.aspxhttp://www.sbimf.com/Products/ExchangedTradedSchemes/SBI_Gold_Exchange_Traded_Scheme.aspx


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RESEARCH METHODOLOGY

REASONS FOR CHOOSING A PARTICULAR RESEARCH DESIGN

EXPLORATORY RESEARCH: Since this research helps to assist thedecision maker in determining, evaluating and selecting the factors whichprompt dealers and consumers to buy paint in the decorative paintsegment, from external sources and reports.

DESCRIPTIVE RESEARCH: This method is used by analyzing thequestionnaire that had been filled by the dealers and consumers to find themain factors among the factors that had been spotted by exploratoryresearch.

SINGLE CROSS SECTIONAL DESIGN: Since the data collected inprimary research through administration of questionnaire will be done forone sample of respondents drawn from the target population of consumersand Dealers and this survey will be conducted once.


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DATA PRIMARY DATA

The Primary Data was collected from the survey whichinvolved meeting with the persons who regularly invest

in various Mutual Fund & getting the Questionnairefilled.

SECONDARY DATA

Secondary data was collected mainly through theInternet, companys websites


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SCOPE OF THE STUDY Area concept: Kanpur Time scope: 2 monthsSAMPLE DESIGN Defining the target population: Customers of Kanpur form the Target Population.

SAMPLING FRAME Customers were selected on the basis ofConvenient Judgmental sampling.

SAMPLE SIZE The Sample Size for Dealers was 60

MEASUREMENT AND SCALING Mostly comparative scaling techniques will be used for the questionnaire. Rank-

order rating scales have been used to determine the preferences of both dealer aswell as customer


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DATA ANALYSIS & INTERPRETATION

1. On an average how much do you invest in a month

in Mutual Fund? Below Rs 5000 Rs 5000 Rs 25000

Rs 25000 Rs 50000

Rs 50000 Rs 75000 Rs 75000 Rs 100000

Above Rs 100000


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Result out of 60 Below Rs 5000 46

Rs 5000 Rs 25000 14

Rs 25000 Rs 50000 0 Rs 50000 Rs 75000 0

Rs 75000 Rs 100000 0

Above Rs 100000 0


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2. Rate various criteria (1 - 5) that makes you choosea particular Mutual Fund (5 for most preferred & 1for least preferred)

Return

Tax

Company Name

Growth and Income

Current Income


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18

23

78

4

9

78

16

20

14

12

22

3

9

6

1211

16

1513

7

12

1513

0

5

10

15

20

25

5 4 3 2 1

Return

Tax

Growth and Income

Current Income

Company Name


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Following pattern is observed: Investors give more preference to return while

investing in Mutual Fund.

Growth and income is 2nd

most favorite amonginvestors after return.

Investors give least preference to tax..


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Which of the following best describes your view aboutinvesting, with particular attention to inflation? I prefer very stable returns that avoid loss, realizing that I may

only keep pace with or slightly exceed inflation. It shows ingraph as optionA.

I prefer stable returns, but it is still important that I exceedinflation. It shows in graph as option B I prefer a rate of return that exceeds inflation by a substantial

amount, but I am not comfortable with extreme fluctuationsin value or chance of loss. It shows in graph as option C

I want to maximize the rate of return on my investments andam willing to accept potentially large fluctuations in the valueof my investments which are likely to experience periodicdeclines. It shows in graph as option D

Result out of 60


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Result out of 60

18%

27%

30%

25%

A B C D


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Following pattern is observed: Investors prefer a rate of return that exceeds inflation by a

substantial amount, but they are not comfortable with extremefluctuations in value or chance of loss.

4. Assume that over the past year the value of your well-diversified

portfolio declined by 20%, despite 10 years of strong performance.How would you react?I would not change my portfolio. It shows in graph as optionA Iwould wait at least a year longer before changing to moreconservative options. It shows in graph as option BI would wait at least 3 months before changing to more conservative

options. It shows in graph as option C I would immediately change to more conservative options. It

shows in graph as option D

R l O Of 6


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Result Out Of 60

13%

37%

40%

10%

A

B

C

D


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Following pattern is observed: When fund performs below average in comparison to

its peers, then most of the investors are in theposition to hold that particular fund for at least threemonths


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5. How you view following factors / source of information while investing in mutual fund?(Please tick appropriate column as per the degree of importance)

Highly Unimportant Un important Neutral Important Important Extremely Ease of withdrawing Returns Earned

Tax Saving Performance of

past schemes Rating of mutual fund

by rating agencies

Cost Involved Portfolio Management

(Diversification of Money) Risk Involved Percentage Allocation


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0

5

10

15

20

25

3035

HighlyUn

impo

rtant

Unimp

orta

nt

N

eutra

l

Imp

orta

nt

Extre

mely

Importa

nt

Ease of withdrawing

Returns Earned

Tax Saving

Performance of Past Schemes

Rating of mutual fund By

Rating Agencies

Cost Invovled

Portfolio Management

Risk Involved


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Following pattern is observed:

Return earned on the fund is the most important aspectfor the investors.

Cost involved in the fund is important for the investors. Investors are neutral on the past performance of the

scheme.

Investors dont take into consideration rating of the fund

by the Mutual agencies. Investors dont consider the way their fund is being

managed


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6. Which portfolio's behavior are you mostcomfortable in accepting?

Low potential return and low return fluctuations

Moderate potential return and moderate returnfluctuations

High potential return and high return fluctuations

R lt t f 60


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Result out of 60

13%

60%

27%

Low potential return and lowreturn fluctuations

Moderate potential return and

moderate return fluctuations

High potential return and high

return fluctuations


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Following pattern is observed: Investors prefer moderate return with moderate fluctuation in their

fund

7. Where would you like to Invest in?

SBI Mutual Fund HDFCOthers Result out of 60 SBI Mutual Fund 27 HDFC 11 Others 22


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Following pattern is observed:

Most of the investors have invested their fund in SBI

mutual fund

LIMITATION


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LIMITATION

Though the study is based on the data collected fromvarious direct sources and direct personal interviews,still it is not free from limitations like:

Limited information access because of lack ofinformed investors..

Unwillingness on the part of investors to spare timefor the survey.

Reluctance to share information regarding income,investments and future plans etc.

CONCLUSION AND RECOMMENDATION


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CONCLUSION AND RECOMMENDATION

After going through a two months summer training andsurvey, I have come to know about different aspects of mutualfunds and mutual funds industry. India is an emergingmarket. Consumption level is rising with rising earning level.Economic indicators micro and macro both show a sky facingarrows. Data shows that there will be more number of

billionaires from India than any of other country We know that Indians are earning more therefore spending

more, but how much they save/invest in order to securefuture. There are numbers of traditional ways of saving. Theygive guaranteed return with low risk. High risk associated

investment options was not considered a right decision. Indiais a young country having a considerably big part of youngpeople. They are more risk taker. They need a right directionfor investment options.


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This study and survey on mutual funds is a small eye holeto see the picture of mutual funds industry in India. Thisprovides almost clear view to the readers. Mutual fundsindustry is enlarging its size in India. JVs, foreign JVsand acquisitions are in trend. AUM has gone to

402035.88 crore , number of investors is rising, andnumber of AMCs is going up. Indian market potential is high investors are willing to

pour money in mutual funds, despite some temporaryrestraints other economic factors are in favorable mode.

Thus we need proper management of advisory services,more schemes, financial advisors and institutions tocater untouched markets.


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BIBLIOGRAPHY


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BIBLIOGRAPHY

Investment Management- U.A. Avadhani, HimalayaPublishing House, Second Edition, pg 567-591. Financial Institutions and Markets- Structure,

Growth and Innovations- Second Edition, L.M. Bhole,Tata McGraw Hill, pg. 180-200.

The Investment Game- How to Win, PrasannaChandra, 7th edition, Tata McGraw Hill, pg. 121-145. Websites: http://www.sbimf.com/pruicicin/htdocs/index.html http://youtube.com/mf/index.php

http://valueresearchonline.com http://www.sebi.gov.in/Index.jsp?contentDisp=Mutu

alFunds

QUESTIONS


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QUESTIONS

Documents

Investors Perception Abt Mf by Abhinav