INVESTOR’S PERCEPTION TOWARDS THE RELIANCE MUTUAL FUNDS

ABSTRACT

A mutual fund is a type of professionally managed collective investment

vehicle that pools money from many investors to purchase securities. As the mutual

fund sector has developed, there's been a growing acceptance by most policy holders

that the assured return era is a thing of the past. The mutual fund companies are

focusing on the Market Linked Plans. This study would help in explaining the

investor’s perception of risk & return & their preference for different schemes of

mutual fund.

The Primary objective of the study is to assess the investor’s perception

towards the RELIANCE Mutual funds. The secondary objectives include identifying

the advantages of RELIANCE Mutual funds over other forms of investments and

compare RELIANCE Mutual funds with other types of investments and mutual funds

of other companies. This study also aims to understanding the investor’s perception of

risk & return & their preference for different schemes of mutual fund.

This study constitute a sample of 250 different kinds of investors they

diversification of investment plans, opinion of the investors has been collected

through structured questionnaire and study confined to the area of different areas in

Chennai. Most of the investors have very good knowledge about RELIANCE Mutual

funds investment and other investment plan. Based on the findings and analysis it can

be concluded that the investors are satisfied with the returns and performance of

RELIANCE Mutual funds superiority and over other investments plan of other mutual

fund companies.

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TABLE OF CONTENTS

CHAPTER

NO.

CONTENTS PAGE NO.

I INTRODUCTION

II 2.1 INDUSTRY PROFILE

2.2 COMPANY PROFILE

III REVIEW OF LITERATURE

IV RESEARCH METHODOLOGY

4.1 Statement of the problem

4.2 Need for the study

4.3 Objectives of the study

4.4 Scope of the study

4.5 Research Design

4.6 Limitations of the study

4.7 Expected contribution of the study

V DATA ANALYSIS AND INTERPRETATION

VI FINDINGS

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VII SUGGESTIONS

VIII CONCLUSION

IX BIBLIOGRAPHY

X ANNEXURE

3

TABLE CONTENTS

SLNO CONTENTS PAGE NO.

1 Distribution of the respondents based on the age

2 Distribution of the respondents based on the gender

3Distribution of the respondents based on the

Educational Qualification

4Distribution of the respondents based on the

Occupation

5Distribution of the respondents based on the Place of

living

6Distribution of the respondents based on the monthly

income

7Distribution of the respondents based on the

awareness about fund

8Distribution of the respondents based on the

investment in RELIANCE Mutual funds so far

9

Distribution of the respondents based on the

RELIANCE Mutual funds are a great way to let

money grow

10 Distribution of the respondents based on the choose

the best types of investments based on the

4

satisfaction available from their return

11Distribution of the respondents based on the risk

perception about mutual fund

12

Distribution of the respondents based on the

following schemes/ funds would like to invest in

mutual fund

13Distribution of the respondents based on the

following gives better return

14Distribution of the respondents based on the

influenced to invest in mutual fund

15

Distribution of the respondents based on the mutual

fund schemes fulfill objective of maximizing the

return from the investment

16

Distribution of the respondents based on the choose

the best income fund based on the satisfaction

available from their return

5

LIST OF CHARTS

SLNO CONTENTS PAGE NO.

1 Distribution of the respondents based on the age

2 Distribution of the respondents based on the gender

3 Distribution of the respondents based on the

Educational Qualification

4 Distribution of the respondents based on the

Occupation

5 Distribution of the respondents based on the Place of

living

6 Distribution of the respondents based on the monthly

income

7 Distribution of the respondents based on the

awareness about fund

8 Distribution of the respondents based on the

investment in RELIANCE Mutual funds so far

9 Distribution of the respondents based on the

RELIANCE Mutual funds are a great way to let

money grow

10 Distribution of the respondents based on the choose

the best types of investments based on the

6

satisfaction available from their return

11 Distribution of the respondents based on the risk

perception about mutual fund

12 Distribution of the respondents based on the

following schemes/ funds would like to invest in

mutual fund

13 Distribution of the respondents based on the

following gives better return

14 Distribution of the respondents based on the

influenced to invest in mutual fund

15 Distribution of the respondents based on the mutual

fund schemes fulfill objective of maximizing the

return from the investment

16 Distribution of the respondents based on the choose

the best income fund based on the satisfaction

available from their return

7

CHAPTER - I

INTRODUCTION:

Mutual fund:-

A Mutual Fund is a pool of money collected from investors & is invested

according to certain investment objectives. A Mutual Fund is created when investors

put their money together. It is therefore a pool of the investor’s funds. The most

important characteristic of a Mutual Fund is that the contributors & the beneficiaries

of the fund are the same class of people, namely the investors. The term Mutual

means that investor’s contributed to the pool & also benefit from the pool. There are

no other claimants to the funds. The pool of funds held mutually by investors is the

Mutual Fund.

A Mutual Fund’s business is to invest the funds thus collected, according to

the wishes of the investor’s who create the pool. In many markets the wishes are

articulated as “Investment Mandates” Usually, the investor’s appoint professional

investment managers, to manage their funds. The main objective is achieved when

professional investment managers create a “Product” & offer it for investment to the

investor. This product represents a share in the pool, & pre-states investment

objectives.

For example: A Mutual Fund, which sells a “money market mutual fund”, is actually

seeking investor’s willing to invest in a pool that would invest pre-dominantly in

money market instruments.

Characteristics of a Mutual Fund:

1. A Mutual Fund actually belongs to the investors who have pooled their funds. The

ownership of the Mutual Fund is in the hands of the investors.

2. A Mutual Fund is managed by investment professionals & other service providers,

who earn a fee to their services from the fund.

3. The pool of funds is invested in a portfolio of marketable investments. The value

of the portfolio is updated every day.

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4. The investor’s share in the fund is denominated by “Units”. The value of the units

changes with change in the portfolio’s value, every day. The value of the unit of

the investment is called as Net Asset Value or NAV.

5. The investment portfolio of the Mutual Fund is created according to the stated

investment objectives of the fund.

Emergence of Mutual Fund:

Mutual Funds now represent perhaps the most appropriate investment

opportunity for most investors; as financial markets became more sophisticated and

complex, investors need a financial intermediary who provides the required

knowledge and professional expertise on successful investing.

It is no wonder then that in the birth place of Mutual Funds – U.S.A. – the

fund industry has already overtaken the banking industry, more funds being under

Mutual Fund management than deposited with banks.

The Indian Mutual Fund industry has already started opening up many of the

existing investment opportunities to Indian Investors. We have started witnessing the

phenomenon of more saving now being entrusted to the funds than to the banks.

Despite the expected continuing growth in the industry, Mutual Funds are still

a new financial intermediary in India.

Hence, it is important that the investors, the Mutual Fund agents / distributors,

the investment advisors and even the fund employees acquire better knowledge of

what Mutual Funds are, what they can do for investors and what they cannot, and how

they function differently from other intermediary such as the banks.

The Association of Mutual Fund in India has commissioned this workbook as

the basic compilation of the minimum knowledge required by both the fund

distributors and the employees. The Workbook will also serve as a guide to the AMFI

Testing Programme for distributors and employees.

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CHAPTER 2

2.1 INDUSTRY PROFILE

HISTORY OF MUTUAL FUNDS IN INDIA:

The Mutual Fund industry started in 1963 with the formation of Unit Trust of

India. At the initiative of the Reserve Bank and the Government of India, the

objective then was to attract the small investors and introduce them to market

investments. Since then, the history of Mutual Funds in India can be broadly divided

into three distinct phases.

Phase 1 – 1964 – 1987 [Unit Trust of India]

This phase spans from 1964 to 1987. In 1963, UTI was established by an Art

of Parliament and given a monopoly. Operationally, UTI was set up by the Reserve

Bank India, but was later de-linked from RBI. The first and still one of the largest

schemes, launched by UTI was Unit Scheme 1964. Over the years, US-64 attached,

and probably still has, the largest number of investors in any single investment

scheme. It was also at least partially the first open-end scheme in the country, now

moving towards becoming fully open-end.

Later in 1970s and 80s, UTI started innovating and offering different schemes

to suit the needs of different classes of investors. Unit Linked Insurance Plan [ULIP]

was launched in 1971. Six new schemes were introduced between 1981 and 1984.

During 1984 – 1987, new schemes like children’s Gilt Growth Fund [1986] and

Master share [1987] were launched. Master share could be termed at the first

diversified equity investment scheme in India. The first Indian offshore fund, India

Fund, was launched in August 1986. During 1990s, UTI catered to the demand for

income-oriented schemes by launching Monthly Income Schemes, a somewhat

unusual fund product offering “assured returns”.

The Mutual Fund industry in India not only started with UTI, but still counts

UTI as its largest player with the largest corpus of investible funds among all Mutual

Funds currently operating in India. Until 1980s, UTI operations in the stock market

often determined the direction of market movements. Now, many Indian investors

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have taken to direct investing on the stock markets. Foreign and other institutional

players have been brought in. so direct influence of UTI on the markets may be less

than before, through it remains the largest player in the fund industry. In absolute

terms, the investible funds corpus of even UTI was still relatively small at about

Rs.600 crores in 1984. But, at the end of this phase one, UTI has grown large as

evidenced by the following statistics:

1987 – 1988

Amount Mobilized

[Rs. Crores]

Assets Under Management

[Rs. Crores]

Mobilization as % of

Gross Domestic

Savings

UTI 2,175 6,700 3.1%

Total 2,175 6,700 3.1%

Phase 2 – 1987 – 1993 [Entry of Public Sector Funds]

1987 marketed the entry of non-UTI, Public Sector Mutual Funds,

bringing in competition. With the opening up of the economy, many public

sector banks and financial institutions were allowed to establish Mutual Funds.

The State Bank of India established the first non-UTI Mutual Fund –

RELIANCE Mutual Fund – in November 1987. This was followed by Canbank

Mutual Fund [launched in December 1987], LIC Mutual Fund [launched in

1989], GIC Mutual Fund and PNB Mutual Fund. These Mutual Funds helped

enlarge the investor community and the investible funds. From 1987 to 1992 –

1993, the fund industry expanded nearly seven times in terms of Assets Under

Management, as seen in the following figures:

1992 – 1993Amount Mobilized [Rs. Crores]

Assets Under Management [Rs. Crores]

Mobilization as % of Gross Domestic Savings

UTI 11,057 38,247 5.2%Public sector

1,964 8,757 0.9%

Total 13,021 47,004 6.1%

During this period, investors were shifting away from bank deposits to Mutual

Funds, as they started allocating larger part of their financial assets and savings [5.2%

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in 1992, 3.1% in 1988] to fund investments. UTI was still the largest segment of the

industry, although with nearly 20% market share ceded to the Public Sector Funds.

Phase 3 – 1993 – 1996 [Emergence of Private Funds]

A new era the Mutual Fund industry began with the permission granted for the

entry of private sector funds in 1993, giving the Indian investors a broader choice of

‘fund families’ and increasing competition for the existing public sector funds. Quite

significantly, foreign fund management companies were also allowed to operate

Mutual Funds, most of them coming into India through their joint ventures with

Indian promoters. These private funds have brought in with them the latest product

innovations, investment management techniques and investor serving technology that

makes the Indian Mutual Fund industry today a vibrant and growing financial

intermediary.

During the year 1993 – 1994, five private sector Mutual Funds launched their

schemes followed by six others in 1994 – 1995. Initially, the mobilization of funds by

the private Mutual Funds was slow. But this segment of the fund industry now has

been witnessing much greater investor confidence in them. One influencing factor has

been the development of a SEBI driven regulatory framework for Mutual Funds.

But another important factor has been the steadily improving performance of several

funds themselves. Investors in India now clearly see the benefits of investing through

Mutual Funds and have started becoming selective.

Phase 4 – 1996 [SEBI Regulation for Mutual Funds]

The entire Mutual Fund industry in India, despite initial hiccups, has since

scaled new heights in terms of mobilization of funds and number of players.

Deregulation and liberalization of the Indian economy has introduced competition and

provided impetus to the growth of the industry. Finally most investors – small or large

– have started shifting towards Mutual Funds as opposed to banks or direct market

investments.

More investor friendly regulatory measures have been taken both by SEBI to

promote the investor and by the government to enhance investors’ returns through tax

12

benefits. A comprehensive set of regulations for all Mutual Funds operating in India

has been accomplished with SEBI [Mutual Fund] Regulations, 1996. These

regulations set uniform standards for all funds and will eventually be applied in full to

Unit Trust of India as well, even through UTI is governed by its own UTI Act. In fact,

UTI has been voluntarily adopting SEBI guidelines for most of its schemes. Similarly

the 1999 Union Government Budget took a big step in exempting all Mutual Fund

dividends from income tax in the hands of investors. Both the 1996 regulation and the

1999 Budget must be considered of historic importance, given their far – reaching

impact on the fund industry and investors.

The Mutual Fund industry 1999 seems to mark the beginning of a new phase

in its history, a phase of significant growth in terms of assets under management.

Consider the growth in assets as seen in the figures below:

1998 – 1999Amount Mobilized [Rs. Crores]

Assets Under Management [Rs. Crores]

Mobilization as % of Gross Domestic Savings

UTI 11,679 53,320 2.79%Public sector

1,732 8,292 0.08%

Public sector

7,966* 6,860* 1.14%

Total 21,377 68,472 5.1%1998 – 1999

Amount Mobilized [Rs. Crores]

Assets Under Management [Rs. Crores]

UTI 8,312 64,276Public sector

1,222 8,656

Public sector

13,789* 14,017*

Total 23,323 86,949

* Figures of Assets under management are after taking account of Redemptions.

Amounts Mobilized are Grass.

The size of the industry is growing rapidly, as seen by the figure of assets

under management, which have gone from over 68,000 crores to nearly 87,000 crores

in just one year. Within the growing industry, by March 1999, UTI’s share of

mobilizations’ had decreased to 55% [from 85% in 1992 – 1993], while the share of

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the private sector stood at 37%. During April to October 1999, the private sector

accounted for 59% of mobilisations. Mobilisations during this period of 7 months in

fact exceeded the same for the whole of 1998 – 1999.

It is also clear that the enhanced share of the private sector is explained not

only by the growing appetite for Mutual Funds, but also by the growing acceptance of

the private sector funds.

The following chart portrays the growth of the Mutual Fund industry in

India across the development phases discussed above

Place of Mutual Funds in Financial Markets:

Indian household started allocating more of their savings to the capital markets

in 1980s, with investments flowing into equity and debt instruments. Besides the

conventional mode of bank deposits.

Until 1992, primary market investors were assured good returns as the price of

new equity issues was controlled. After introduction of free pricing of shares lost

money and withdrew from the markets altogether. Even those investors who

continued as direct investors in the stock markets realized that the key to successful

investing in the capital markets lay in building a diversified portfolio, potential from

the capital market involved careful research and monitoring of the market, which was

not possible for all investors. Under similar circumstances in other countries, Mutual

Funds had emerged as professional intermediaries.

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Besides providing the expertise in stock market investing, these funds allow

investing in small amounts and yet holding a diversifies portfolio to limit risk, while

providing the potential for income and growth associated with the debt and equity

instruments. In India Unit Trust of India occupied this place as the only capital

markets intermediary from 1964 until 1988, when the Government started other

sponsors also set up Mutual Funds. With some ups and downs, this new class of

intermediary institutions is emerging, in India as elsewhere, as a good alternative to

direct investing in capital markets.

Mutual Funds serve as a link between the saving public and the capital

markets in that they mobilize savings from investors and borrowers in the capital

markets. By the nature of their activities, and by virtue of being knowledgeable and

informed investors, they influence the stock markets and play an active role in

promoting good corporate governance, investor protection and the health of capital

markets.

Mutual Funds have imparted much needed liquidity into the financial system

and challenged the hitherto dominant role of banking and financial institutions in the

capital markets.

Understanding of mutual fund

Using Mutual Fund:

A small man – anyone with a portfolio of, Say, under $100,000 – is unlikely to do as

well investing his own money as he can do in a [Mutual Fund]

- Paul Samuelson,

- MIT Economist

- Nobel Laureate.

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Advantages of Mutual Fund:

1. Portfolio diversification:

By offering diversified portfolios Mutual Fund enable investors to hold

diversified portfolios. Through investors can create their own diversified portfolios.

The cost of creating & unconditioning such portfolios can be high apart from fact that

investors may lack professional expertise to manage such a portfolio.

2. Professional management:

Mutual Funds are managed by investment managers who are appointed by

trustees & bannered by the investment management agreement & the AMC’S are

closely regulated by the SEBI.

3. Reduction in risk:

Mutual Fund invests in a portfolio of securities. This means that all funds are

not invested in the same investment avenue. Therefore, holding a portfolio that is

diversified across investment avenues in a wise way to manage risk.

4. Reduction of transaction costs:

Mutual Funds provide the benefit of economics of scale by virtue of their size.

Through the individual investors contribution may be small; the Mutual Fund itself is

large enough to be able to reduce cost in its transactions.

5. Liquidity:

Most of the funds being sold today are open ended. That is investors can sell

their existing units or buy new units, at any point of time at prices that are related to

the NAV of the fund on the date of transaction.

16

6. Helps in financial planning:

Investors in the Mutual Fund industry today have a choice of 39 Mutual

Funds, offering nearly 500 products. They provide different categories of products. It

is also possible for the investors to choose the manner in which the returns would be

distributed. The most important benefit of product choice is that it enables investors to

choose options that suit their return requirements.

7. Enables regular periodic saving:

It enables regular periodic savings through systematic investment plan [SIP].

Why Buy Mutual Fund?

Reason 1 – Tax superior

Dividend received is exempt

Capital gains-long term

With indexation – 20%

Without indexation – 10%

Short-term – applicable tax bracket.

Reason 2 – deposit rates are reducing.

PLUS

Very few companies accepting FD investments.

Most of them going to debt market for fresh money - & this gives Mutual Funds

an opportunity to buy them for your customers.

Mutual Funds – lock in period is low & liquidity is very high.

And give higher returns generally.

Minimum amount of investment is lower than FDs generally – thus everyone can

sfford it.

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Reason 3 –stock markets remain good… but long term only.

If your holding period was… The number of negative returns / loss periods would be

6 days 51% of the time – losses.15 days 49% of the time – losses.30 days 57% of the time – losses.180 days 48% of the time – losses.365 days 43% of the time – losses.5 years 24% of the time – losses.10 years 5% of the time – losses.15 years O% of the time – losses.Daily rolling returns for relevant period from 2000 onwards [ short term , 365days] & from 1980 [for long term]

Average return over 10 year period is > 15%

Direct equity in short term is very volatile – thousands have suffered losses

Not everyone can afford to spend time & money in monitoring – thus equity

Mutual Funds are a good option – one can invest REGULARLY & even with

LOW INVESTMENTS.

Equity Mutual Funds can select the right shares at the right time & can often buy

at lower prices.

Types of Mutual Fund:

I. Types available with respect to investment:

Depending on the investment portfolio that is created, the following are the

types of products offered by Mutual Fund:

1) Equity funds / Growth schemes.

2) Debt funds / Income schemes.

3) Balanced funds.

1) Equity funds / Growth schemes:

Equity funds are those that invest predominantly in equity shares of companies.

Following are the various types of equity funds:

a) Growth funds:

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Growth funds invest in companies whose earnings are expected to rise at an

above average rate. The primary objective of growth funds is capital appreciation

over 3 to 5 years span.

b) Specialty funds:

These funds have a narrow portfolio orientation & invest in only companies

that meet pre defined criteria. For example: - at the height of the South African

apartheid region many funds in the U.S. offered plans that promised not to invest

in South African companies.

c) Sectoral funds:

Sector funds portfolio consists of investment in only one industry or sector of

the market such as information technology etc.

d) Index funds:

An index fund tracks the performance of a specific stock market index. The

objective is to match the performance of the stock market by tracking an index

that represents the overall market. The fund invests in shares that constitute the

index & in the same proportion as the index.

e) Value funds:

Value funds try to seek out fundamentally sound companies whose shares are

currently under priced in the market. Value funds will add only those shares to

their portfolios that are selling at low price-earning ratios & are undervalued by

other yardsticks.

f) Diversified equity funds:

A fund that seeks to invest only in equities, except for a very small portion

in liquid money market securities, but is not focused on any one or few sectors

or shares may be remedy as diversified equity fund.

g) Equity Linked Saving Schemes [ELSS]:

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In India the investors have been given tax concessions to encourage them to

invest in equity market through these special schemes. Investment in these

schemes entitles the investors to claim an income tax rebate, but usually has a lock

in period before the end of which funds cannot be with drawn.

2) Debt funds / Income schemes:

Debt funds are those that predominantly invest in debt securities. Since

most debt securities pay periodic interest to investors. These funds are also known

as income funds. What is important in that portfolio is pre-dominantly made up of

debt securities. Debt securities companies of long term instruments such as bond

issued by Central & State Governments, public sector organizations, corporate

debentures & money market instruments like Treasury bills, Commercial papers,

Certificate of deposit etc. following are the various types of debt funds:

a) Liquid or money market funds:

These funds provide easy liquidity, preservation of capital & moderate

income. These schemes invest exclusively in safer short-term instruments such as

Treasury bills, Commercial papers, Certificate of deposit etc. return on these schemes

fluctuate much less compound to other schemes.

b) Gilt funds:

These funds invest exclusively in government securities. Government

securities have no default risk.

c) Diversifies debt funds:

A debt fund that invests in all available types of debt securities issued by

entities across all industries & sector is a diversified debt fund.

d) Focused debt fund:

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Some debt funds have a narrow focus, with less diversification in its

investments. Example: includes sector, specialized & off share debt funds.

e) High yield debt funds:

A high yield debt fund seeks to obtain higher interest returns by investing in

debt instruments that are considered “Below investment grade”.

f) Assured return funds:

Assured return schemes are those schemes that assure a specific return to the

unit holders irrespective of performance of the scheme. A scheme cannot promise

return unless such returns are fully guaranteed by the sponsor or AMC.

3) Balanced fund:

The aim of balanced funds is to provide both growth & regular income as such

schemes invest both in equities & fixed income securities in the proportion indicated

in their offer document. These are appropriate for investors looking for moderate

growth. They generally invest 40 – 60% in equities & debt instrument.

Types according to maturity period:

1) Open-ended schemes:

An Open-ended fund or scheme is one that is available for subscription &

repurchase of, on a continuous basis. These schemes do not conveniently buy & sell

units at Net Asset Value [NAV] related prices, which are declared on a daily basis.

The key features if an open-end scheme is liquidity.

2) Close-ended scheme:

A Close-ended scheme or fund has a stipulated maturity period. Example: 5 to

7 years. The fund is open for subscription only during a specified period at the time of

launch of the scheme.

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Investors can invest in the scheme at the time of the initial public images &

therefore they can buy or sell the units of the schemes on the stock exchanges where

the units are listed. In order to provide an exit route to the investors, some close-ended

funds give an option of selling back the units to the Mutual Fund through periodic

repurchase at NAV related prices. SEBI regulations stipulate that at least one of the

two exit routes is provided to the through listing on stock exchanges. These Mutual

Funds schemes disclose NAV generally on weekly basis.

Load funds & No load funds:

A load fund is one that charges a percentage of NAV for entry or exit. That is

each time one buys or sells units in the fund, a charge will be payable. This charge is

used by the Mutual Fund for marketing & distribution expenses. Suppose the NAV

per unit is Rs.10, if the entry as well as exit load is 1% then the investor who buy

would be required to pay Rs.10.10 & those who offer their units for repurchase to the

Mutual Fund will get only Rs.9.90 per unit.

A No Load fund is one that does not charge for entry or exit. It means that

investor can enter the scheme at NAV & no additional charges are payable on

purchase or sale of units.

Options for structuring returns to investors:

Mutual Funds offer a variety of opinions to investors in which the returns from

their investments in structured. Investor has two options:

1) Dividend opinion:

Under this option the dividends will be declared by the Mutual Fund. Again this

option is divided into two. They are:

a) Dividend payout:

Under this option the investor will receive dividends from the Mutual

Fund as & when such dividends are declared or are directly credited to the

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investors bank A/C. dividends may be declared weekly, monthly, quarterly,

half yearly or annually.

b) Dividend re-investment:

Under this option the investor re-invest the dividends that are declared

by Mutual Fund back into the fund itself, at NAV that is prevalent at the time

of re-investment. In this option the number of units held by the investor will

charge with every re-investment.

2) Growth option:

Investors who do not require periodic income distributions can choose the

growth option. Where the incomes earned are retained in the investment portfolio

& allowed to grow, rather than being distributed to the investors.

Net Asset Value [NAV]:

The performance of a particular scheme of a Mutual Fund is denoted by Net

Asset Value [NAV]. NAV of Mutual Fund is the value of one unit of investment in

the fund, in the Net Asset terms. It is computed by dividing the Net Asset of the fund

by the number of units that are outstanding in the books of the funds. NAV is

calculated as follows: -

NAV = Total assets – Total liabilities

No. Of units outstanding

Total Assets = Market value of investment + Current assets

+ Accrued income.

Total Liabilities = Current Liabilities + Accrued expenses.

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Role of SEBI:

As far as Mutual Funds are concerned SEBI formulated policies & interest of

the investor. SEBI notified regulations for the Mutual Funds in 1993. Thereafter

Mutual Funds sponsored by private sector entities were allowed to enter the capital

market.

The regulations were revised in 1996 & have been amended thereafter from time to

time. SEBI has also issued guidelines to the Mutual Funds from time to time to

protect the interest of investors.

All Mutual Funds in India are required to be mandatory registered with the

SEBI. The structured & formation of Mutual Funds, appointment of key functionaries,

investment restrictions etc. are all defined under SEBI regulations. Mutual Funds have

to send half-yearly compliance reports to SEBI & also provide all other information

about their operations as SEBI may require.

Advantages of Income Funds over Bank Fixed Deposits:

1. Portfolio diversification:

By offering ready-made diversified portfolios Mutual Funds enable investors to

hold diversified portfolios. But Bank Deposits does not enjoy this advantage of

Income Fund & other schemes of Mutual Fund.

2. Liquidity:

Since the Income funds are open-ended that investors sell their existing units or

buy new units at any point of time. This enables investors to enjoy a high level of

liquidity on their investments on the other hand in Bank FD’s the money invested will

be locked up for the period of deposits hence does not enjoy liquidity.

3. Higher Returns:

An income fund gives much better return when compared to Bank Fixed Deposits.

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4. Professional management:

Mutual Funds provide professional management of funds where the funds are

managed by investment managers appointed by trustees & the AMC’s are closely

regulated by SEBI.

Comparison:

Return:

Where we compare income funds table & Bank Deposits rates table, it is

implicated that the returns available from income funds are much higher when

compared to Bank Deposits. Income Funds give better returns than the Bank deposits

for an investor.

Risk:

Bank Deposits are safer when compared to Income funds. But in Income

Funds the investment will be made in debt instruments like money market

instruments, government bonds & securities etc, which are safe. That is why Income

funds are considered as safe may be not much as Bank Deposits.

Liquidity:

Income Funds, Liquid Funds enjoy liquidity. The investors can redeem their

investment when they want to do so. But Bank Fixed Deposits does not enjoy

liquidity features. The amount invested will be locked for the period of deposit.

LIQUID FUNDS:

Making the banks run for their money:

Liquid funds in India, and across the world, form a major chunk of total assets

under management in the Mutual Funds industry. In India itself, 22% of assets go into

liquid funds.

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How it started?

The first money market fund – the Reserve Fund – was established in the US

in the early 1970’s. Its masterstroke was to take the privileges that institutions

enjoyed, & make them available to average investors.

Bruce Bent, who was the genius behind the fund, summarized it this way: ‘I

wanted to put money where people could forget about it – dollar back, plus a

competitive rate of return. We broke the stranglehold by banks for savers, and it

leveled the playing field.’

His idea was to package high-yielding money market debt instruments and

commercial paper, into a Mutual Fund. Investors could safely take advantage of high

yields, while paying only a small fee to the manager of the fund. The concept was an

overnight sensation. Today, there are around 1,500 such funds in the US, and a further

1,300 in Europe.

However, the success didn’t come without growing pains. Following some

high-profile fund failure in the early years, the US Securities and Exchange

Commission decided to closely regulate their workings. One of its main stipulations

for these funds was the high quality of the underlying securities. This was to minimize

the potential for any losses.

Today, in Europe, money market funds tend to be more aggressive, focusing

more on better performance, whereas US-style money funds focus on preserving

capital. Dubbed ‘money market plus’ funds, these souped-up versions invest beyond

the most conservative range of short-term securities.

FMP’S competing with bank deposit

Next target of Mutual Fund!

After giving s stiff competition to the banks for cash management needs of

corporate and large investors through liquid funds, mutual funds are now eyeing the

deposit base of the banks through Fixed Maturity Plans – debt funds that invest your

money for a fixed period and earn [almost] fixed returns. The FMPs as they are

26

popularly known as, are an excellent substitute of short-term bank deposits where the

investor is certain about his investment horizon and wants to take minimum risk.

FMPs are Mutual Fund schemes where the fund manager invests your money

for the tenure of your choice in fixed income securities. For example, if you wish to

invest Rs.1,00,000 for three months, then you select a quarterly fixed maturity plan

and invest at par when the scheme opens for investments. The scheme matures after 3

months and you get your money back based on the prevailing NAV.

Fixed returns through fixed Maturity:

FMPs are typically close-ended schemes [or exit is restricted by charging high

exit loads]. This allows the fund manager to buy debt securities that have a maturity

equal to the tenure of the scheme and then these securities are held on till the scheme

matures.

Since trading in the portfolio is minimal and securities are held till maturity,

the portfolio is free from interest rate risk and thus its ability to assure ‘indicative

returns’.

The Mutual Funds do not assure ‘fixed’ returns as it may not always be

possible to buy securities whose maturity exactly matches the tenure of the scheme

and hence there may be a small reinvestment risk as some of the debt papers in the

portfolio mature before the scheme matures.

SESTEMATIC INVESTMENT PLAN (SIP) VERSUS CHIT FUND

Systematic investment plan (SIP):

Whether investors are ready to take their first step towards their long-term

investment goals or have already started their journey, investors may be concerned

about the possibility of market volatility or high prices. There are ways the investor

can benefit from the market and still not suffer stocks.

What is known in the US as Dollar cost averaging is a systematic approach to

long term investing. Basically, under SIP option an investor commits making a

27

regular [monthly, quarterly] investment in a particular Mutual Fund and there by

accumulate more units when the market prices are low and lower number of units

when prices are high in effect.

This has the effect of keeping an investors average cost of units lower than if

investor were to go into the market with the lump sum investment on any given day or

if the investor were to buy similar amount of units in the market irrespective of price.

Repeated studies have shown that the best way to benefit from markets is to invest

long term and invest systematically.

SIP is an application of the principals of Dollar cost averaging in the Indian

context.

What is systematic investment plan [SIP]

An investment strategy based on the concept of rupees-cost averaging, which

automatically ensure that the average purchase price of securities over a series of

periodic transactions is always lower than the security’s highest prices at any point of

time. SIP’s which are based on the concept of rupee cost averaging which is a very

common investment strategy in the stock market. Under this, an investor purchases

units worth a fixed amount regularly, in effect buying fewer units when the NAV is

high and more when the NAV is low. A SIP automatically disciplines investors to

invest regardless of market movements.

Systematic investments are an easy way to accumulate assets and take

advantage of Rupee cost averaging [buying more shares when prices are low] by

allocating pre-determined periodic investment into Mutual Funds.

SIP is an investment option that is presently available only with Mutual Funds.

The other investment option comparable to SIP’s is the recurring deposit schemes for

Post office and banks. Basically, under an SIP option an investor commits making a

regular [monthly] investment in a particular Mutual Fund / deposit.

28

Systematic investments do not assure a profit and do not protect against a loss

in declining markets. Since systematic investing involves continuous involvement in

the market regardless of functioning price levels of securities, you should consider

your financial ability to continue your purchases through periods of low price levels.

How to invest in Sips?

The SIP option is available with all types of funds like equity, income or gilt.

An investor can avail the SIP option by giving post-dated cheques of Rs.500 or

Rs.1000 according to the funds’ policy.

If an investor wants to put more than Rs.500 or Rs.1000 in any given month he

will have to fill in a new form for SIP intimating the fund that he is changing his

SIP structure. Also he will be allowed to change the SIP structure only in the

multiples of the SIP amount.

If an investor is investing in two different schemes of the same fund he can fill in

a common SIP form for all the schemes. However if the first holders in those

schemes are different than they will have to fill different SIP forms, as the first

holder has to sign on the form.

The investor can get out of the fund i.e. redeem his units any time irrespective of

whether he completed his minimum investment in that scheme. In such a case his

post-dated cheques will be returned back to him.

Benefits of SIP buil wealth over the long term:

The key to building wealth is to start investing early and regularly. These

regular amounts of savings, however small they may be, can possibly grow into a

substantial amount of wealth over the long term. Most of us tend to procrastinate

investment decisions for there is always some expense, which is a top priority.

Therefore, if you have to save regularly. It makes sense to pay yourself first and that

is the only way to increase your savings.

SIP makes sense to an investor if and only it the investor considers the following:

1. Investor is unsure about which to invest.

2. Investor doesn’t want to commit too much at a time.

29

3. A disciplined approach to long term investing appeals to investor.

4. Investor wants to use potential market volatility to his advent

Chit fund:

Chit fund is an investment where person invests his money on monthly basis.

The gain or the dividend, which an investor gets after certain period of time, depends

entirely on the bid amount.

The following are the 8 different schemes from SRI RAM CHITS [K] LTD

having different chit values & investment period. These are the data related to the

schemes from 1999 – April 2003.

SIP:

The following table shows the returns available from investment in systematic

investment plan. The table gives the Absolute return from SIP of different income

funds if at all the investor had invested through a SIP instead of putting the money in

a chit fund.

Advantages of SIP over chit fund:

1. Safety:

Mutual Fund schemes are much safer when compared to chit fund. This is because

Mutual Funds are regulated by SEBI. On the other hand chit fund involves higher

risk. They are not regulated hence there is no surety for the investor’s money.

2. Better returns:

SIP’s gives a better return than a chit fund. In a chit fund the dividend or the

return entirely depends on the Bid amount apart from this the amount collected from

the investors anywhere. It is a kind of rotating the money among the investors.

30

3. Diversified portfolio: -

A Mutual Fund scheme gives different portfolios to the investor. But a chit fund

does not involve any such term.

SIP versus Bank Recurring Deposits:

Both SIP & Bank Recurring Deposits are similar in nature. Both involve

monthly or periodic investment. The people who want to invest their monthly savings

usually go for Bank Recurring Deposits but Mutual Fund schemes gives a similar

kind of investment option that is Systematic investment plan. Following gives the

comparison between the to:

Advantages of SIP over recurring deposits:

1. Diversified portfolio:

Mutual Fund schemes invest in different securities or instruments & there by

enable the investor to get the advantages of diversified returns.

2. Higher Returns:

Systematic investment plan gives a better return when compared to the Bank

Recurring Deposits.

3. Professional management:

Investment managers manage Mutual Funds & therefore they bring in

significant professional expertise & are bound by regulatory & trustee

supervision.

RBI bonds:

There are two types of RBI bonds. They are:

31

1. 8% savings bonds [taxable]:

These bonds will bear interest at the rate of 8% p.a. interest ion non-cumulative

bonds will be payable at half yearly intervals & interest on the cumulative bonds will

be compounded with half yearly rests & will the principal as the subscriber may

choose. Interest, as these bonds will be taxable under the income tax act 1961 as

applicable. According to the relevant tax status of the bondholder. These bonds are

exempt from wealth tax. The tenure of the bond is 6 years.

2. 6.50% savings bonds [non-taxable]:

The tenure of these bonds is 5 years. The Interest on bonds will be exempt from

income tax under the income tax act of 1961.

Post office savings:

Post office savings involve following forms of investment: -

1. National saving certificate [NSC]:

The tenure of these certificates is 6 years. This certificate bears interest at the rate

of 8%.

2. Kisan vikas patra:

Under savings the principal amount doubles in 8 years 7 months.

3. Public provident fund:

This bears an interest rate of 8%.

4. Recurring deposit [RD]:

The tenure is 5 years & it bears an interest rate of 8%.

32

5. Time deposit:

Years Interest rate.

1 year 6.25%

2 years 6.50%

5 years 7%

6. Monthly income schemes:

This bears an interest rate of 8% & after maturity a bonus of 10% is given to the

investor.

Advantages of Mutual funds over RBI bonds & post office savings:

1. Liquidity:

Even though the RBI bonds & post office certificates are very safe for the

investor, they do not have liquidity. The principal amounts & the interest are paid

only after the tenure of the bond or certificate on the other hand Mutual Funds

provides liquidity features to the investor where he can redeem his units at any

point of time.

2. Diversified port folio:

Mutual Funds provide ready-made portfolio to the investor which involves

different shares, money market instruments, government bonds, debentures etc.

Co-operative society deposits:

There are various co-operative societies & banks, which accepts deposits from

the customers.

Apart from income funds, there are equity-oriented schemes & balanced funds

provided by the mutual funds. Investor can earn a good returns if the chooses the right

fund at a right time. He can earn a good return if he knows when to invest & when to

come out of it.

33

2.2 COMPANY PROFILE

Reliance Capital Ltd is a part of the Reliance - Anil Dhirubhai Ambani Group,

and is ranked among the 25 most valuable private companies in India.

Reliance Capital is one of India's leading and fastest growing private sector

financial services companies, and ranks among the top 3 private sector financial

services and banking groups, in terms of net worth.

Reliance Capital has interests in asset management and mutual funds, life

and general insurance, private equity and proprietary investments, stock broking,

depository services, distribution of financial products, consumer finance and other

activities in financial services.

The Reliance Anil Dhirubhai Ambani Group is one of India's top 2 business

houses, and has a market capitalization of over Rs.2,90,000 crore (US$ 75 billion),

net worth in excess of Rs.55,000 crore (US$ 14 billion), cash flows of Rs. 11,000

crore (US$ 2.8 billion) and net profit of Rs. 7,700 crore (US$ 1.9 billion).

Reliance Capital Ltd. is a Non-Banking Financial Company (NBFC)

registered with the Reserve Bank of India under section 45-IA of the Reserve Bank

of India Act, 1934. RCL was incorporated as a public limited company in 1986 and is

now listed on the Bombay Stock Exchange and the National Stock Exchange (India).

With a net worth of over Rs 3,300 crore and over 165,000 shareholders, Reliance

Capital has established its presence as a leading player in the financial services

sector in the country.

On conversion of outstanding equity instruments, the net worth of the

company will increase to about Rs 4,100 crore.

Reliance Capital sees immense potential in the rapidly growing financial services

sector in India and aims to become a dominant player in this industry and offer fully

integrated financial services. It is headed by Anil Ambani.

Reliance Capital is one of India’s leading and fastest growing private sector

financial services companies, and ranks among the top 3 private sector financial services

and banking companies, in terms of net worth.Reliance Capital has interests in asset

management and mutual funds, life and general insurance, private equity and proprietary

investments, stock broking and other activities in financial services.I have done my project in Reliance Money and the study of mutual funds of Reliance

products or schemes.

34

About Reliance Money:

Reliance Money is a group company of Reliance Capital; one of India's leading

and fastest growing private sector financial services companies, ranking among the top 3

private sector financial services and banking companies, in terms of net worth. Reliance

Capital is a part of the Reliance Anil Dhirubhai Ambani Group.

Reliance Money which commenced commercial operations in April 2007 has over

300,000 customers and 4,300 outlets in more than 3,500 locations across India.

Reliance Money is a comprehensive electronic transaction platform offering a wide range

of asset classes. Its Endeavour is to change the way India transacts in financial markets

and avails financial services. Reliance Money is a single window, enabling you to access,

amongst others in Equities, Equity & Commodities Derivatives, Mutual Funds, IPO’s,

Life & General Insurance products, Off share Investments, Money Transfer, Money

Changing and Credit Cards.

Reliance Capital Ltd. has interests in asset management, life and general

insurance,

private equity and proprietary investments, stock broking and other financial services.

ABOUT RELIANCE MUTUAL FUND:

Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Average

Assets Under Management (AAUM) of Rs. 84563.92 Crs (AAUM for June 30th 08 ) and an

investor base of over 68.38 Lakhs.

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one

of the fastest growing mutual funds in the country. RMF offers investors a well-rounded

portfolio of products to meet varying investor requirements and has presence in 118 cities

across the country.

Reliance Mutual Fund constantly endeavors to launch innovative products and

customer service initiatives to increase value to investors.

"Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management

Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up

capital of RCAM, the balance paid up capital being held by minority shareholders."

Reliance Capital Ltd. is one of India’s leading and fastest growing private sector

financial services companies, and ranks among the top 3 private sector financial services and

35

banking companies, in terms of net worth.

Reliance Capital Ltd. has interests in asset management, life and general insurance,

private equity and proprietary investments, stock broking and other financial services.

36

CHAPTER 3

3. REVIEW OF LITERATURE

Using Mutual Fund:

A small man – anyone with a portfolio of, Say, under $100,000 – is unlikely to do as well investing his own money as he can do in a [Mutual Fund]

- Paul Samuelson,- MIT Economist- Nobel Laureate.

A mutual fund is financial service organization that receives money from shareholder, invests it, attempts to make it grow and agrees to pay the share holder cash on demand for the current value of his investment”

AUTHOR:

BURTON G. MALKIEL

PUBLISHED BY THE INVESTMENT COMPANY OF THE U.S.

A trust that pools the savings of investors who share a common financial goal is known as a ‘mutual fund’.

The money thus collected is then invested in financial market instruments such as shares debentures and other securities like government paper, etc.

AUTHOR:

DONALD R. LICHTENSTEIN [PROFESSOR OF FINANCE]

UNIVERSITY OF COLORADO.

The income earned through these investments, and the capital appreciation realized, are shared by its unit holders in proportion to the number of units owned by them.

Investments in securities are spread over wide cross-section of industries and sectors, thus allowing risk reduction to take place. Diversification reduces the risk because all stocks and/or debt instruments may not move in the same time.

AUTHOR:

MA.SANJAI BHAGAT

37

PROFESSOR OF FINAANCE

UNIVERSITY OF COLORADO.

The investment of mutual fund it is essentially a mechanism of pooling together the savings of a large number of investors for collective investment with the objective of attractive yields and appreciation in their value.

Mutual funds are an important segment of the financial system. It is a non-depository financial intermediary. Mutual funds are mobilizes of saving particularly of the small and household sectors, for investment in the stock and money market.

Features, role, benefits of mutual funds superiority over other investments:

Mutual funds mobilize funds by sell in their own shares, know as unit. To an investor, a unit in mutual funds means ownership of proportional share of securities in the portfolio of a mutual fund.

This gives the benefit of convenience and the satisfaction of owning shares in many industries.

Thus, mutual funds are primarily investment intermediaries to acquire individual investments and pass on the returns to small fund investors.

AUTHOR:

DR. S GURUSAMY

FINANCIAL SERCICES READER

DG VAISHNAV COLLEGE

BOOK:

FINANCIAL SERVICES

PAGE NO: 267 TO 283

The mutual fund investment gives the benefit of convenience and the satisfaction of owning shares in many investors and industries.

A mutual fund is that it provides an ideal avenue for investment for persons of small means, and enables them to earn a reasonable return with the advantages of relatively better liquidity.

It offers investors a proportionate claim on the portfolio of assets that fluctuate in value in comparison to the value of the assets that comprise the portfolio.

It is possible for the small investors to have the benefit of professional and expert management of their funds. Mutual funds employ professional experts who manage the investment portfolios efficiently and profitably.

38

Diversified investment: mutual funds have the advantage of diversified investment of

funds in various industry segments spread across the country. This is advantageous to

small investors who cannot afford having the shares of highly established corporate

because of high market price.

Mutual funds have the distinct advantage of offering to its investors the benefit of

better liquidity of investment. There is always a ready market available for the mutual

funds units.

There is only a minimum risk attached to the principal amount and return f or the

investments made in mutual fund schemes. This is usually made possible by expert

supervision, diversification and liquidity of units.

An attractive benefit of mutual funds is that the various schemes offered by them

provide tax shelter to the investor. This benefit is available under the provisions, all at

will.

Website:

www.amfiindia.com www.msn.com www.mutualfund.com

CHAPTER 4

4.1 STATEMENT OF THE PROBLEM:

39

There is very low awareness among people about the RELIANCE Mutual

funds. This prevents them from obtaining a fair return for their investment.

A very few educated people who do not want to invest in mutual fund just

because they are completely unaware of functioning of a mutual fund & they

perceive a very high degree of risk.

There are over 500 different types of products offered by different mutual

funds both private & public. These discount products will have different

portfolios according to the investment period involved.

For e.g.: short-term, medium-term etc. these products meet the expectations of

investors. But awareness among investors about the RELIANCE Mutual funds

is limited in this regard.

4. 2 NEED FOR THE STUDY

A mutual fund is a type of professionally managed collective investment

vehicle that pools money from many investors to purchase securities. As the

mutual fund sector has developed, there's been a growing acceptance by most

policy holders that the assured return era is a thing of the past. The mutual fund

companies are focusing on the Market Linked Plans.

This study would help in explaining the investor’s perception of risk &

return & their preference for different schemes of mutual fund. All this would help

in giving suggestions to strengthen the marketing efforts of insurance companies’

and expand their business.

4.3 OBJECTIVES:

PRIMARY OBJECTIVES:

40

The Primary objective of the study is to assess the investor’s perception towards the

mutual funds of RELIANCE

SECONDARY OBJECTIVES:

To understand how a mutual fund works.

To identify the advantages of RELIANCE mutual funds over other forms of

investments.

To compare the RELIANCE mutual funds with other types of investments.

To know investors perception of risk & return & their preference for different

schemes of mutual fund.

4.4 SCOPE OF THE STUDY

The scope of the study is to analyze and interpret the investor’s

perception towards the RELIANCE Mutual Funds and over other

investments.

The research records around a general awareness on then mutual fund

and other investment level and precaution towards RELIANCE Mutual

Funds.

Analyze and interpret the factors affecting the choice of Mutual Fund

and investors preference on the RELIANCE Mutual Fund and over other

investment Schemes.

4.5. RESEARCH DESIGN

41

The research design indicates the types of research methodology undertaken to

collect the information for the study. The research design selected for this study for

this project is both descriptive research design and hypothesis testing research design.

The purpose of descriptive research is to get the characteristic of an individual toward

an objectives or the variable of interest in a situation. A descriptive research design is

the one that simply describes something such as demographic characteristic of group

(or) customers of the product.

Descriptive research study provides clear specification of who, what, when, why,

where and how aspects of the research. It involves more specific hypothesis and

testing of them through statistical inference techniques. However the descriptive does

not find the cause and effect relationship among variables.

SAMPLING DESIGN

The selected samples based on the stratified random sampling.

A sample design is a definite plan for obtaining a sample from a given population. It

refers to the technique or the procedure the research would adopt in selecting items

for the sample. Sample design may as well lay down the number of items to be

included in the sample that is the size of the sample. Sample design is determined

before data are collected.

Stratified Random sampling:

Under stratified random sampling the population is divided in to several. Sub-

population that are individually more homogeneous than the population, (the different

sub – population are called strata) and then we select items from each stratum to

constitute a sample.

Since each stratum is homogenous than the population, we are able to get

more precise, estimate for each stratum and by estimating more accurately each of the

42

component part, we get a better estimates of the whole. In brief stratified sampling

results in more reliable and detailed information.

HYPOTHESIS

Hypothesis may be defined as a proposition or a set forth as an explanation for

the occurrence of some specified group of phenomena either asserted merely as a

provisional conjecture to guide some investigation or accepted as highly probable in

the light of established facts .

HYPOTHESIS: I

Chi Square

NULL HYPOTHESIS:

Ho = There is no significant difference exists between the monthly income and investment in RELIANCE Mutual funds.

ALTERNATIVE HYPOTHESIS:-

H 1= There is significant difference exists between the monthly income and investment in RELIANCE Mutual funds.

HYPOTHESIS: II

Chi Square

NULL HYPOTHESIS:-

Ho =There is no significant difference exists between the place of living and awareness about RELIANCE Mutual funds.

ALTERNATIVE HYPOTHESIS:

H1 = There is no significant difference exists between the place of living and awareness about RELIANCE Mutual funds.

HYPOTHESIS: III

43

Correlation

NULL HYPOTHESIS:

Ho=There is no significant difference exists between the monthly income and awareness about RELIANCE Mutual funds

ALTERNATIVE HYPOTHESIS:-

H1 =There is significant difference exists between the monthly income and awareness about RELIANCE Mutual funds.

HYPOTHESIS: IV

Regression

NULL HYPOTHESIS:

Ho =There is no significant difference exists between the Occupation and the

Preference for a specific scheme.

ALTERNATIVE HYPOTHESIS:

H1 = There is significant difference exists between the Occupation and the

Preference for a specific scheme.

HYPOTHESIS: V

NULL HYPOTHESIS:

Ho =There is no significant difference exists between the age and the mutual fund schemes

ALTERNATIVE HYPOTHESIS:

H1 = There is no significant difference exists between the age and the mutual fund schemes

DATA COLLECTION METHOD

44

PRIMARY DATA:

For this study, this questionnaire type survey is used to collect the primary data because of its extreme flexibility. This primary data pertain demographic and socio-economic characteristics of the investors, attitudes and opinion of investors, their awareness and knowledge.

SECONDARY DATA:

Secondary data has been collected from magazines and journals like “TAKE STOCK”, from the books of “AMFI” and “HDFC”, and “SEBI INVESTORS GUIDE”

Secondary data need for conducting this research work was collected both internally and externally. The required internal data was collected from company brochures, etc…, and the external source was magazines, other business forms, websites, investors, bank, mutual fund industry, post office, statistical and management books and so on. The research did here is desk research, that is collection and analysis were made in secondary data.

I. POPULATION

The universe or population is the specified group of people, firms, conditions,

activities, etc.., which form the pivotal point of the research project. For developing

and using a sample, it becomes a primary duty to define the population from which

draw the sample.

II.SAMPLING FRAME

A sampling frame may be defined as the listing of the general components of

the individual units that comprise the defined population.

III.SAMPLING METHOD AND SAMPLE SIZE

45

Non-probability sampling method was used for this research study in non-

probability sampling, the method adopted is convenience-sampling method. The

investigator has selected the sample according to this convenience. He has included

those items in the sample, which he thought were most typical of population.

NON-PROBABILITY SAMPLING

Non –probability sampling method is one, which does not provide every item in the universe with a known chance of being include in the sample. The selection process is partially subjective.

CONVENIENCE SMAPLING

A convenience sample is obtained by selecting ’’convenient’’ population units. Convenience samples are prove to bias by their very nature selecting population elements which are convenient to choose almost always make them special or different from the best of the elements in the population in same way.

IV. SAMPLE SIZE DETERMINANTS

The sample size is usually determined by the sampling method selected and

nature of the research. Hence considering this, the sample size is determined. The

sampling here is non-probability and convenience sapling for that more number of

sample sizes is preferred.

v. SAMPLE SIZE:

The method of sampling used here was Convenience sampling. The survey

was conducted in Chennai with sample size of 250 customers of State of India.

Secondary data

Secondary data has been collected from magazines and journals like “TAKE

STOCK”, from the books of “AMFI” and “HDFC”, and “SEBI INVESTORS

GUIDE”.

The task here depends on whether probability or non-probability sampling. As it was

taken as non-probability sampling, large number of sampling is preferred to precise

46

the sampling error estimate. The sample size here includes existing and potential

investors, which is 250.

QUESTIONNAIRE DESIGN

The researcher used a questionnaire method to collect the data from the mutual

fund investors and other investors for the research work.

The questionnaire framed for the research study is a structured questionnaire

in which all the questions are predetermined before conducting the survey. The form

of questionnaire is of both closed and open type

A pilot survey was administrated to revise and complement survey questions

before preparing the final questionnaire. All the variable were to be

Part I to be demographic details on age, sex, occupation, income, education.

Part II Six point scale of one to Two, with 1 representing HDFC income fund and 6

representing Templeton India Income Builder.

Part III Five point scale of one to five, with 1 representing Mutual fund and 5

representing Co-operative society.

Part IV Four point scale of one to four, with 1 representing Equity and 4 representing

balanced fund.

Part V Three point scale of one to three, 1 representing Recurring Deposits and 3

representing Chit fund.

QUESTIONNAIRE

47

A questionnaire is simply a formalized set of questions for eliciting

information.

TYPES OF QUESTIONS

The different types of questions used for the study are:

Open- ended questions.

Closed- ended questions.

Multiple choice questions.

TOOLS FOR ANALYSIS

PERCENTAGE ANALYSIS

FORMULA:

Percentage= (number of responses/total number of respondents)*100.

CHI SQUARE TEST:

(O-E)2/E

O=Observed frequency

E=Expected frequency.

Chi-square is used to test whether difference between observed and expected frequency are frequent.

CORRELATION:

Its studies the joint variation of two or more variables for determining the amount of correlation between two or more variables

REGRESSION:

48

Regression is the determination of a statistical relationship between two or more variables. In simple regression, we have only two variables, one variable (defined as independent) is the cause of the behavior of another one (defined as dependent variable). The basic relationship between X and Y.

ANOVA:

Analysis of Variance (abbreviated as ANOVA) It is the essentially a procedure for testing the deference among different groups of data for homogeneity. The essence of ANOVA is that the total amount of variation in a set of data is broken down into two types, that amount which can be attributed to chance and that amount which can be attributed to specified causes. ANOVA consists in splitting the variance for analytical purposes.

4.6 LIMITATIONS OF THE STUDY

Only 250 customers of RELIANCE from Chennai were selected for the study

because only the investors in mutual fund with sufficient knowledge about

various forms of investment will be able to make a comparison between them.

Lack of time because of which some of the information could not be collected.

Unwillingness & Bias from the part of respondents limits the coverage of the

Study.

4.7 EXPECTED CONTRIBUTION OF THE STUDY

The project was a great learning experience. Each moment spent during the

project brought new experiences and practical learning which is not confined within

the text book but gave exposure to the real world constraints in applying all that we

have read in books. Following are some learning attained during the project.

The training very usefully to understand about the mutual fund investment

functioning, mutual fund superiority and over other investment position.

The study gave ample opportunity to learn about preparation of mutual fund

investors and other investor’s analysis and collect they are primary repots and

overall investment industrial report identified.

The project usefully to understand about the RELIANCE Mutual funds, bank

deposit, chit fund, bond, post office savings.

49

Thus the project was a great learning experience and will be so helpful for my

future.

CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

50

Table1. Shows Distribution of the respondents based on the age.

Age

0102030405060708090

100

Respondents

Percent

Source: Data gathered from the primary source

Interpretation:

Table1. Shows that distribution of the respondents based on the age group.

The highest 34.4% of the respondents were 20-30 years age group followed by 12% of the respondents were below 20 years age group and 27.6% of the respondents were 30-40 years age group and 16.8% of the respondents were 40-50 years and 9.2% of the respondents were above 50 years age.

51

S.No AgeRespondents Percent

1 BELOW 20 30 122 20 -30 86 34.43 30 - 40 69 27.64 40 - 50 42 16.85 ABOVE 50 23 9.2

Total 250 100

Table2. Shows

Distribution of the respondents based on the gender:

Source: Data gathered from the primary source

Interpretation:

Table2. Shows that distribution of the respondents based on the gender.

The highest 74.4% of the respondents were male followed by 25.6% of the respondents were female

52

S.No GenderRespondents Percent

1 MALE 186 74.4

2 FEMALE 64 25.6

  Total 250 100

0

50

100

150

200

Respondentes Percent

Gender

MALE

FEMALE

Table3. Shows distribution of the respondents based on the Educational Qualification:

S.No Education Respondents Percent

1 UG 72 28.8

2 PG 113 45.2

3 PROFESSIONAL 46 18.4

4 HSC/SSLC 19 7.6

  Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table3. Shows that distribution of the respondents based on the educational qualification.

53

The highest 45.2% of the respondents were PG and 28.8% of the respondents were UG and 18.4% of the respondents were Professional and 7.6% of the respondents were HSC/SSLC.

Education Qualification

020406080

100120

Respondentes

Percent

Table4. Shows distribution of the respondents based on the Occupation:

S.No OccupationRespondents Percent

1 PROFESSIONAL 19 7.62 OWN BUSINESS 112 44.83 PRIVATE EMPLOYEE 61 24.44 GOVT EMPLOYEE 42 16.85 OTHERS 16 6.4  Total 250 100

Table4. Shows that distribution of the respondents based on the occupation.

The highest 44.8% of the respondents were own business and 7.6% of the respondents were professional and 24.4% of the respondents were private employee and 16.8% of the respondents were Govt employee and 6.4% of the respondents were others.

54

Occupation

8%

45%24%

17%6%

PROFESSIONAL

OWN BUSINESS

PRIVATEEMPLOYEE

GOVTEMPLOYEE

OTHERS

Table5. Shows distribution of the respondents based on the Place of living:

S.No Place Of LivingRespondents Percent

1 URBAN 58 23.22 SEMI URBAN 92 36.83 RURAL 41 16.4

4 CITY 59 23.6

  Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table5. Shows that distribution of the respondents based on the place of living:

55

The highest 36.8% of the respondents are SEMI-URBAN and 23.2% of the respondents are URBAN and 16.4% of the respondents are RURAL and 23.6% of the respondents are CITY.

Place of living

0102030405060708090

100

URBAN SEMIURBAN

RURAL CITY

Respondentes

Percent

Table6. Shows distribution of the respondents based on the monthly income:

S.N0 Monthly IncomeRespondents Percent

1 LESS THAN 10000 11 4.42 10000 -15000 90 363 15000 -20000 69 27.64 20000 -25000 59 23.65 ABOVE 25000 21 8.4  Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table6. Shows that distribution of the respondents based on the monthly income:

56

The highest 36% of the respondents were 10000-15000 and 4.4% of the respondents were below 10000 and 27.6% of the respondents were15000-20000 and 23.6% of the respondents were 20000-25000 and 8.4% of the respondents were above 25000.

Table7. Shows distribution of the respondents based on the awareness about fund is:

S.NoAwareness about fund

Respondents Percent

1 HIGH 101 40.42 MEDIUM 90 363 LOW 45 184 NOT AWARE 14 5.6

  Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table7. Shows that distribution of the respondents based on the awareness about mutual fund is:

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The highest 40.4% of the respondents were High awareness and 36% of the respondents were Medium awareness and 18% of the respondents were Low awareness and 5.6% of the respondents were Not awareness.

Table8. Shows distribution of the respondents based on the investment in RELIANCE Mutual funds so far is:

S.No Investment Respondents Percent1 LESS THAN 10000 23 9.22 10000 -25000 135 543 25000 - 50000 41 16.44 ABOVE 50000 47 18.85 NOT INVESTED 4 1.6

  Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table8. Shows that distribution of the respondents based on the investment in RELIANCE Mutual funds so far is:

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The highest 54% of the respondents were invest 10000-25000 and 9.2% of the respondents were invest less than 10000 and 16.4% of the respondents were invest 25000 - 50000 and 18.8% of the respondents were invest above 50000 and 1.6% of the respondents not invested.

Table 9. Shows distribution of the respondents based on the RELIANCE Mutual funds are a great way to let money grow:

Source: Data gathered from the primary source

Interpretation:

Table9. Shows that distribution of the respondents based on the RELIANCE Mutual funds are a great way to let money grow:

The highest 42.4% of the respondents were agree to let money grow and 20.8% of the respondents were strongly agree to let money grow and 16% of the respondents

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S.No Money grow Respondents Percent

1 STRONGLY AGREE 52 20.82 AGREE 106 42.43 STRONGLY DISAGREE 40 164 DISAGREE 52 20.8  Total 250 100

were strongly disagree to let money grow and 20.8% of the respondents were disagree to let money grow.

Table10. Shows Distribution of the respondents based on the choose the best types of investments based on the satisfaction available from their return:

S.No Satisfaction investment Respondent Percent1 RELIANCE Mutual funds 80 322 Bank FD 50 203 Chit funds 40 164 Bonds 35 145 Co-Operative Society 30 126 Post office Savings 15 6

Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table10. Shows that distribution of the respondents based on the choose the best types of investments based on the satisfaction available from their return.

The highest 32% of the respondents were choose on mutual fund and 20% of the respondents were choose bank Fd and 16% of the respondents were choose Chit funds

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and 14% of the respondents were choose bonds and 12% of the respondent were choose co- operative society and 6%of the respondent were choose post office savings.

Table11. Shows distribution of the respondents based on the risk perception about mutual fund:

S.Nos Risk perception

Respondents Percent

1 HIGH RISK 60 242 RISK 113 45.23 SAFE 31 12.44 VERY SAFE 46 18.4  Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table11. Shows that distribution of the respondents based on the risk perception about mutual fund:

The highest 45.2% of the respondents were Risk and 24% of the respondents were High-risk 12.4% of the respondents were Safe and 18.4% of the respondents were Very safe.

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Table12. Shows distribution of the respondents based on the following schemes/ funds would like to invest in mutual fund:

S.No SCHEMES/FUNDS

Respondents Percent

1 EQUITY ORIENTED 96 38.42 DEBT ORIENTED 108 43.23 BALANCED ORIENTED 46 18.4

  Total250 100

Source: Data gathered from the primary source

Interpretation:

Table12. Shows that distribution of the respondents based on the following schemes/funds would like to invest in:

The highest 45.2% of the respondents were Risk and 24% of the respondents were High-risk 12.4% of the respondents were Safe and 18.4% of the respondents were Very safe.

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Table13. Shows distribution of the respondents based on the following gives better return:

S.no Better returnRespondents Percent

1 EQUITY 51 20.42 INCOME FUND 113 45.23 GILT FUND 69 27.64 BALANCED FUND 17 6.8  Total 250 100

Source: Data gathered from the primary source

Interpretation:

Table13. Shows that distribution of the respondents based on the following gives better return:

The highest 45.2% of the respondents were Income fund gives better return and 20.4% of the respondents were Equity gives better return 27.6% of the respondents were Gilt fund and 6.8% of the respondents were Balanced fund.

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Better Return

20%

45%

28%

7%

EQUITY

INCOME FUND

GILT FUND

BALANCED FUND

Table14. Shows distribution of the respondents based on the influenced to invest in mutual fund:

S.No InfluencedRespondents Percent

1 FRIENDS 59 23.62 RELATIVES 77 30.83 MEDIA 68 27.24 BROKERS 39 15.65 OTHERS 7 2.8

Total 250 100

Interpretation:

Table14. Shows that distribution of the respondents based on the influenced to invest in mutual fund:

The highest 30.8% of the respondents were influenced Relatives and 23.6% of the respondents were influenced Friends 27.2% of the respondents were influenced Media and 15.6% of the respondents were influenced Brokers and 15.6% of the respondents were others.

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Invest In Mutual Fund

0102030405060708090

Respondents

Percent

Table15. Shows distribution of the respondents based on the mutual fund schemes fulfill objective of maximizing the return from the investment:

S.No Return from

Respondents Percent

1 TO A GREAT EXTENT 83 33.2

2 TO SOME EXTENT 133 53.2

3 DOES NOT FULFILL 34 13.6

  Total 250 100

Interpretation:

Table15. Shows that distribution of the respondents based on the mutual fund schemes fulfill objective of maximizing the return from the investment:

The highest 53.2% of the respondents were and 23.6% of the respondents were influenced Friends 27.2% of the respondents were influenced Media and 15.6% of the respondents were influenced Brokers and 15.6% of the respondents were others.

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Table16. Shows distribution of the respondents based on the investors want to invest on monthly savings:

S.no Monthly invest

Respondents Percent

1 RECURRING DEPOSITS 106 42.4

2 SIP 85 34

3 CHIT FUND 59 23.6

  Total 250 100

Interpretation:

Table16. Shows that distribution of the respondents based on the investors want to invest on monthly savings:

The highest 42.4% of the respondents were invest in recurring deposits saving scheme and 34% of the respondents were invest in Sip saving scheme 23.6% of the respondents were invest in chit fund saving scheme.

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Table17. Shows Distribution of the respondents based on the choose the best income fund based on the satisfaction available from their return:S.No Income fund Returns Respondents Percent1 Reliance 80 322 Grinlays super saver 30 123 Chole Triple ace 15 64 IDBI prim income fund 35 145 Prudential ICICI flexible income plan 40 166 Templeton India Income builder 50 20

Total 250 250

Source: Data gathered from the primary source

Interpretation:

Table17ss. Shows that distribution of the respondents based on the choose the best income fund based on the satisfaction available from their return.

The highest 32% of the respondents were choose HDFC income fund and 12% of the respondents were choose Grindlays super saver fund and 6% of the respondents were choose Chola Triple ace and 16% of the respondents were choose ICICI Pru income fund and 14% of the respondent were choose IDBI income fund and 6%of the respondent were choose TEMPLETON income fund.

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ANALYSIS USING CHI-SQUARE WITH SPSS

EXAMPLE - 1

DEPENDENT ATTRIBUTE: Investment in mutual fund so far isINDEPENDENT ATTRIBUTE: Monthly income

FIXING OF HYPOTHESIS

H0: There is a significant relationship between the attributesH1: There is no significant relationship between the attributes

N-Par Tests

Chi-Square Test

Frequencies

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MONTHLY INCOME

 Observed N Expected N Residual

LESS THAN 10000 11 50 -39

10000 -15000 90 50 4015000 -20000 69 50 1920000 -25000 59 50 9ABOVE 25000 21 50 -29Total 250    

YOUR INVESTMENT IN RELIANCE MUTUAL FUNDS SO FAR IS  Observed N Expected N ResidualLESS THAN 10000 23 50 -27

10000 -25000 135 50 8525000 - 50000 41 50 -9ABOVE 50000 47 50 -3NOT INVESTED 4 50 -46Total 250    

Test StatisticsMONTHLY INCOME

YOUR INVESTMENT IN RELIANCE MUTUAL FUNDS SO FAR IS

Chi-Square 88.08 203.2df 4 4Asymp. Sig. 3.367E-18 7.70598E-43

a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is 50.0.

Interpretation:

Since, the calculated value is less than the table value, H0 (null hypothesis) is accepted.

Conclusion:

Thus, it is concluded that there is no significant difference between the monthly income and investors investment in RELIANCE Mutual funds so far is finding.EXAMPLE - 2

DEPENDENT ATTRIBUTE: Awareness about the mutual fund

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INDEPENDENT ATTRIBUTE: Place of living

FIXING OF HYPOTHESIS

H0: There is a significant relationship between the attributesH1: There is no significant relationship between the attributes

N-Par Tests

Chi-Square Test

Frequencies

Test StatisticsPLACE OF LIVING YOUR AWARENESS ABOUT

RELIANCE MUTUAL FUNDS ISChi-Square 21.84 78.352Df 3 3Asymp. Sig. 7.043E-05 6.92604E-17

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PLACE OF LIVINGObserved N

Expected N Residual

URBAN 58 62.5 -4.5SEMI URBAN 92 62.5 29.5RURAL 41 62.5 -21.5CITY 59 62.5 -3.5Total 250

YOUR AWARENESS ABOUT RELIANCE MUTUAL FUNDS ISObserved N

Expected N Residual

HIGH 101 62.5 38.5MEDIUM 90 62.5 27.5LOW 45 62.5 -17.5NOT AWARE 14 62.5 -48.5Total 250

a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell

frequency is 62.5.

Interpretation:

Since, the calculated value is less than the table value, H0 (null hypothesis) is accepted.

Conclusion:

Thus, it is concluded that there is no significant difference between the place of living and investors awareness of the mutual fund.

2.Correlations

   

MONTHLY INCOME

YOUR INVESTMENT IN RELIANCE MUTUAL FUNDS SO FAR IS

MONTHLY INCOMEPearson Correlation

1 0.213602365

  Sig. (2-tailed) 0.000674486

  N 250 250YOUR INVESTMENT IN RELIANCE MUTUAL FUNDS SO FAR IS

Pearson Correlation

0.213602365 1

  Sig. (2-tailed) 0.000674486    N 250 250

**. Correlation is significant at the 0.01 level (2-tailed).

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Nonparametric Correlations MONTHLY INCOME

YOUR INVESTMENT IN RELIANCE MUTUAL FUNDS SO FAR IS

Kendall's tau_b

MONTHLY INCOME

Correlation Coefficient

1 0.181507

Sig. (2-tailed) 3.4848E+308 0.000798

N 250 250YOUR INVESTMENT IN RELIANCE MUTUAL FUNDS SO FAR IS

Correlation Coefficient

0.181507019 1

Sig. (2-tailed) 0.000797563 3.5E+308

N 250 250Spearman's rho

MONTHLY INCOME

Correlation Coefficient

1 0.203805

Sig. (2-tailed) 3.4848E+308 0.001194

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N 250 250YOUR INVESTMENT IN RELIANCE MUTUAL FUNDS SO FAR IS

Correlation Coefficient

0.203805159 1

Sig. (2-tailed) 0.001193747 3.5E+308N 250 250

**. Correlation is significant at the 0.01 level (2-tailed).

3.Regression

Variables Entere/Removedb

Model Variables Entered

Variables Removed

Method

1 Occupational 3.4848E+308 Enter

a. All requested variables entered.

b. Dependent Variable: WHICH THE FOLLOWING SCHEMES/FUNDS YOU

WOULD LIKE TO INVEST IN

Model Summary:

Model R R Square Adjusted R Square

Std. Error of the Estimate

1 0.2316252

0.053650244

0.049834317 0.70972

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Interpretation:

Since, the calculated value is less than the table value, H0 (null hypothesis) is accepted.

Conclusion:

Thus, it is concluded that there is no significant difference between the occupation and investors like to invest schemes in RELIANCE Mutual funds.

4.ANOVA

Oneway

Relationship between the experience and material issues method.

Ho: There is no significant difference between the occupation and the following schemes/funds would like to invest in. H1: There is significant difference between the occupation and the following schemes/funds would like to invest in.

Model

Sum of Squares

df Mean Square

F Sig.

1 Regression

7.081832142 1 7.081832 14.05956 0.00022

Residual 124.9181679 248 0.503702

Total 132 249a. Predictors: (Constant), OCCUPATIONb. Dependent Variable: WHICH THE FOLLOWING SCHEMES/FUNDS YOU

WOULD LIKE TO INVEST IN

Coefficients

74

Model

 

Unstandardized Coefficients  

Standardized Coefficients

t Sig.

   Std. Error Beta

   

1 (Constant)1.364095446 0.124618038

 10.94621 5.22E-

23

  OCCUPATION0.161685665 0.043120686 0.231625 3.749608 0.00022

Interpretation:

Since, the calculated value is less than the table value, H0 (null hypothesis) is accepted.Conclusion:

Thus, it is concluded that there is no significant difference between the occupation and investors like to invest schemes in RELIANCE Mutual funds.

5. Kolmogorov-Smirnov

NPar TestsRelationship between the respondent age and objective of maximizing the return from the investment.

Ho: There is no significant difference between the respondent age and objective of maximizing the return from the investment. H1: There is significant difference between the respondent age and objective of maximizing the return from the investment.

AGE OBJECTIVE OF MAXIMIZING THE RETURN FROM THE INVESTMENT

N 250 250Normal Parametersa

Mean 2.768 1.804

Std. Deviation 1.145173213 0.656741378Most Extreme Differences

Absolute 0.212775341 0.28531754

Positive 0.212775341 0.24668246Negative -0.131224659 -0.28531754

Kolmogorov-Smirnov Z

3.364273543 4.511266417

Asymp. Sig. (2- 0 0

75

tailed)

a. Test distribution is Normal.

Interpretation: Since, the calculated value is less than the table value, H0 (null hypothesis) is accepted.Conclusion:Thus, it is concluded that there is no significant difference between the respondent age and objective of maximizing the return from the investment.

CHAPTER 6

6. FINDINGS OF THE STUDY:

1. The comparison made between mutual fund & other forms of investment shows those mutual fund products gives a higher, stable return than others. The rate of return available from mutual fund is quite higher than other forms of investment. Apart from this mutual fund gives different or diversified portfolios to the investor.

2. From the Analysis it is inferred that 34.4% of the respondents were 20-30 years age group followed by 12% of the respondents were below 20 years age group and 27.6% of the respondents were 30-40 years age group and 16.8% of the respondents were 40-50 years and 9.2% of the respondents were above 50 years age.

3. From the Analysis it is inferred that 74.4% of the respondents were male followed by 25.6% of the respondents were female

4. From the Analysis it is inferred that 45.2% of the respondents were PG and 28.8% of the respondents were UG and 18.4% of the respondents were Professional and 7.6% of the respondents were HSC/SSLC.

5. From the Analysis it is inferred that 44.8% of the respondents were own business and 7.6% of the respondents were professional and 24.4% of the respondents were

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private employee and 16.8% of the respondents were Govt employee and 6.4% of the respondents were others.

6. From the Analysis it is inferred that 36.8% of the respondents are SEMI-URBAN and 23.2% of the respondents are URBAN and 16.4% of the respondents are RURAL and 23.6% of the respondents are CITY.

7. From the Analysis it is inferred that 36% of the respondents were 10000-15000 and 4.4% of the respondents were below 10000 and 27.6% of the respondents were15000-20000 and 23.6% of the respondents were 20000-25000 and 8.4% of the respondents were above 25000.

8. From the Analysis it is inferred that 40.4% of the respondents were High awareness and 36% of the respondents were Medium awareness and 18% of the respondents were Low awareness and 5.6% of the respondents were not awareness.

9. From the Analysis it is inferred that 54% of the respondents were invest 10000-25000 and 9.2% of the respondents were invest less than 10000 and 16.4% of the respondents were invest 25000 - 50000 and 18.8% of the respondents were invest above 50000 and 1.6% of the respondents not invested.

10. From the Analysis it is inferred that 42.4% of the respondents were agree to let money grow and 20.8% of the respondents were strongly agree to let money grow and 16% of the respondents were strongly disagree to let money grow and 20.8% of the respondents were disagree to let money grow.

11. From the Analysis it is inferred that 45.2% of the respondents were Risk and 24% of the respondents were High-risk 12.4% of the respondents were Safe and 18.4% of the respondents were Very safe.

12. From the Analysis it is inferred that Risk and 45.2% of the respondents were 24% of the respondents were High-risk 12.4% of the respondents were Safe and 18.4% of the respondents were Very safe.

13. From the Analysis it is inferred that 45.2% of the respondents were Income fund gives better return and 20.4% of the respondents were Equity gives better return 27.6% of the respondents were Gilt fund and 6.8% of the respondents were Balanced fund.

14. From the Analysis it is inferred that 30.8% of the respondents were influenced Relatives and 23.6% of the respondents were influenced Friends 27.2% of the respondents were influenced Media and 15.6% of the respondents were influenced Brokers and 15.6% of the respondents were others.

15. From the Analysis it is inferred that 53.2% of the respondents were and 23.6% of the respondents were influenced Friends 27.2% of the respondents were influenced Media and 15.6% of the respondents were influenced Brokers and 15.6% of the respondents were others.

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16. From the Analysis it is inferred that 42.4% of the respondents were invest in recurring deposits saving scheme and 34% of the respondents were invest in Sip saving scheme 23.6% of the respondents were invest in chit fund saving scheme.

CHAPTER 7

SUGGESTIONS

Investment in real estate:

Mutual fund is allowed to invest in real estates. Real estates gives higher profit & there by enables the investors in RELIANCE Mutual funds to get higher returns for their investment. SEBI must allow RELIANCE Mutual funds to invest either directly in real estate business or invest in companies shares that do real estate business.

Higher awareness among investors:

Mutual fund companies should bring greater awareness in the investors mind about their different schemes. Since the bank interest rates are falling, the mutual fund companies must bring awareness among investors about their products & enable the investors to get a better return for their investments.

Tax rebate for investing in mutual fund:

Tax rebate should be provided to the investor for investing in mutual fund so as to encourage them to invest in RELIANCE Mutual funds apart from ELSS.

Innovative products or funds:

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Mutual fund companies must create innovative funds for the investor keeping in mind the investment period of the investor. For e.g.: Standard charted mutual fund offered medium term plan for the investor which gives a better return when the investor looks for a investment period of 6 months – 1years.

CHAPTER 8CONCLUSION

The study on investor’s perception towards the RELIANCE Mutual funds

enables us to find over other investments plans, level, structure, benefits and

superiority of RELIANCE Mutual funds level compare with other investments and

mutual funds. This study constitute a sample of 250 different kinds of investors they

diversification of investment plans, opinion of the investors has been collected

through structured questionnaire and study confined to the area of different areas in

Chennai. Most of the investors have very good knowledge about RELIANCE Mutual

funds investment and other investment plan and they are satisfied with the returns and

with the performance of the investments scheme. Very easily long term and short term

wealth can be created and investors are aware of that and this is a scheme which is

disciplined and it gives good return and it protects the investors when the market falls.

Conclusion is that almost all the investors are satisfied with the returns and with the

performance of the schemes. Based on the findings and analysis it can be concluded

that the investors are satisfied with the returns and performance of RELIANCE

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Mutual funds superiority and over other investments plan from other mutual fund

companies.

CHAPTER 9

BIBLIOGRAPHY

1. A.N ARORA & S.ARORA “Statistical For Management”

UNIVERSITY OF COLORADO.THE U.S PUBLISHED….

2. UMA SEKARAN “Research Methods for Business”

3. AUTHOR: DR. S GURUSAMY FINANCIAL SERCICES READER, “MUTUAL FUNDS AND OTHER INVESTMENT “ DG VAISHNAV COLLEGE PUBLISHED BY MARGHAM…

4. AUTHOR: “INVESTMEN ANALYZIS AND PLANNING” BURTON G. MALKIEL PUBLISHED BY THE INVESTMENT COMPANY OF THE U.S.

AUTHOR:

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C R KOTHARI SECOND EDITION “RESEARCH METHODOLOGY” PUBLISHE BY WISHWA PRAKASHAN

WEBSITES:

www.amfifndia.com

www.iepindia.com

www.mutualfundsindia.com

CHAPTER 10ANNEXURE

QUESTIONNAIRE

DEMOGRAPHIC DETAILS:1. Name__________________________________

2. Address________________________________

3. Age □ Below 20 □ 22 to 30 □ 30 to 40 □ 40 to 50 □ Above 50

4. Gender □ Male □ Female

5. Education qualification □ Under graduate □ post graduate □ professional □ HSC/SSLC

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6. Occupation □ Professional

□ Own Business □ Private employee □ Govt employee □ Others, please specify_________

7. Place of living □ urban □ Semi urban □ Rural □ city

8. Monthly Income □ Less than 10000 □ 10000 to 15000 □ 15000 to 20000 □ 20000 to 25000 □ Above 25000

9. Your awareness about RELIANCE mutual funds is □ High □ Medium □ Low □ Not aware

10. Your Investment in RELIANCE Mutual funds so far is □ Less than 10,000 □ 10, 000 to 25,000 □ 25,000 to 50,000 □ Above 50,000 □ Not Invested

11. RELIANCE Mutual funds are a great way to let your money grow□ Strongly agree □ Agree □ Strongly Disagree □ Disagree □ Neither Agree nor Disagree

12. Choose the best types of investments based on the satisfaction available from their return.□Mutual fund□Bank Fund□Chit funds□Bonds□Co-operative society

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□Post office savings 13. What is your risk perception about RELIANCE mutual fund

□ High risky □ Risky □ Safe □ Very Safe

14. Which the following schemes / funds of RELIANCE you would like to invest in□ Equity oriented □ Debt oriented □ Balanced fund

15. Which of the following gives you better return from RELIANCE□ Equity

□ Income fund □ Gilt fund □ Balanced fund

16. Who influenced you to invest in RELIANCE mutual funds? □ Friends □ Relatives □ Media □ Brokers □ Others

17.Does the RELIANCE mutual fund schemes fulfill your objective of maximizing the return from the investment □ To a great extent

□ To some extent □ Does not fulfill

18. Where do you want to invest you’re your monthly savings□ Recurring deposits □ SIP □ Chit fund

19.Rank the following Income funds based on the satisfaction available from their Returns. □ RELIANCE Income fund □ Grindlays Super saver □ Chola Triple ace □ IDBI prim income fund □ ICICI pru

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□ Templeton India income builder 20. Give your suggestion to improve the RELIANCE mutual funds?_____________________________________________________________

84