MUTUAL%20FUNDS%20IS%20THE%20BETTER%20INVESTMENTS%20PLAN.pptx

7/29/2019 MUTUAL%20FUNDS%20IS%20THE%20BETTER%20INVESTMENTS%20PLAN.pptx

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MUTUAL FUNDS IS THE

BETTER

INVESTMENTS PLAN

By : Sakshi arora

Roll no: 1273455

MBA


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A Mutual Fund is a trust that pools the savings of a

number of investors who share a common financialgoal. The money thus collected is then invested incapital market instruments such as shares,

debentures and other securities. The income earnedthrough these investments and the capitalappreciation realized are shared by its unit holders inproportion to the number of units owned by them.Thus a Mutual Fund is the most suitable investmentfor the common man as it offers an opportunity toinvest in a diversified, professionally managedbasket of securities at a relatively low cost.


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CATEGORIES OF MUTUAL FUND

:


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Investors can buy and sell the unitsfrom the fund, at any point of time.

These funds raise money from

investors only once. Therefore, after the offer period,fresh investments can not be made into the fund. If thefund is listed on a stocks exchange the units can betraded like stocks (E.g., Morgan Stanley Growth Fund).Recently, most of the New Fund Offers of close-endedfunds provided liquidity window on a periodic basis such

as monthly or weekly. Redemption of units can be madeduring specified intervals. Therefore, such funds haverelatively low liquidity.


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Equity funds:

These funds invest in equities and equity relatedinstruments. With fluctuating share prices, suchfunds show volatile performance, even losses.However, short term fluctuations in the market,

generally smoothens out in the long term, therebyoffering higher returns at relatively lower volatility. Atthe same time, such funds can yield great capitalappreciation as, historically, equities haveoutperformed all asset classes in the long term.Hence, investment in equity funds should be

considered for a period of at least 3-5 years. It canbe further classified as:


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100% of the capital is invested in

equities spreading across different sectors and stocks.

it is similar to the equity diversifiedfunds except that they invest in companies offering highdividend yields.

Invest 100% of the assets in sectors which

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

Invest 100% of the capital in a specific sector.e.g. - A banking sector fund will invest in banking stocks.

Equity Linked Saving Scheme provides tax benefit tothe investors.


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Their investment portfolioincludes both debt and equity. As a result, onthe risk-return ladder, they fall between equityand debt funds. Balanced funds are the idealmutual funds vehicle for investors who preferspreading their risk across variousinstruments. Following are balanced fundsclasses:

Investment below 65%

in equities.

Invest at least 65% inequities, remaining in debt.


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They invest only in debtinstruments, and are a good option for

investors averse to idea of taking riskassociated with equities. Therefore, theyinvest exclusively in fixed-incomeinstruments like bonds, debentures,

Government of India securities; andmoney market instruments such ascertificates of deposit (CD), commercialpaper (CP) and call money. Put your

money into any of these debt fundsdepending on your investment horizonand needs.


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These funds invest 100% in money marketinstruments, a large portion being invested in call money market.

They invest 100% of their portfolio in governmentsecurities .

They invest 100% of their portfolio in long-term

government securities.

Typically, such funds invest a major portion of theportfolio in long-term debt papers.

Monthly Income Plans have an exposure of 70%-90% to debtand an exposure of 10%-30% to equities.

fixed monthly plans invest in debt papers whose maturity is inline with that of the fund.


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Company Profile


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SBI Funds Management Pvt. Ltd. is one of theleading fund houses in the country with aninvestor base of over 4.6 million and over 20years of rich experience in fund management

consistently delivering value to its investors.SBI Funds Management Pvt. Ltd. is a jointventure between 'The State Bank of India' oneof India's largest banking enterprises, and

Socit Gnrale Asset Management(France), one of the world's leading fundmanagement companies that manages overUS$ 500 Billion worldwide.


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ICICI Mutual Fund

Reliance Mutual Fund

UTI Mutual Fund

Birla Sun Life Mutual Fund

Kotak Mutual Fund

HDFC Mutual Fund

Sundaram Mutual Fund

LIC Mutual Fund Principal

Franklin Templeton


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: Research is totally based on primary data. . Secondary data

can be used only for the reference.

: The study was carried out for a period of 6 weeks, from1th june to 15th July 2013.

: The sample was selected of them who are thecustomers/visitors of State Bank 0f India, Laurance Road Branch,irrespective of them being investors or not or availing the services or not. Itwas also collected through personal visits to persons, by formal andinformal talks.

: The sample size of my project is limited to 200 people only. Outof which only 120 people had invested in Mutual Fund. Other 80 people did nothave invested in Mutual Fund.

: Data has been presented with the help of bar graph, piecharts, line graphs etc.


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To find out the Preferences of the investorsfor Asset Management Company.

To know the Preferences for the portfolios.

To know why one has invested or notinvested in SBI Mutual fund

To find out the most preferred channel.

To find out what should do to boost MutualFund Industry.


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Age Group 50 Total

No. of Investors 12 18 30 24 20 16 120

Percentage % 10% 15% 25% 20% 16% 14% 100%

12

18

30

2420

16

0

5

10

15

20

25

30

35

50

Age group of the Investors

InvestorsinvestedinMutualFund


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Educational Qualification Number of Investors Percentage %

Graduate/ Post Graduate 88 71%

Under Graduate 25 23%

Others 7 6%

Total 120 100%

71%

23%

6%

Graduate/Post Graduate Under Graduate Others


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Occupation No. of Investors Percentage %

Govt. Service 30 25%

Pvt. Service 45 37.5%

Business 35 29%

Agriculture 4 3.5%

Others 6 5%

Total 120 100%

3545

30

4 60

10

20

30

40

50

Govt.

Service

Pvt. Service Business Agriculture Others

Occupation of the customers

No.ofInvestors


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.Income Group No. of Investors Percentage %

30,000 32 26%

Total 120 100%

512

28

4332

0

5

10

1520

25

30

35

40

45

50

30

Income Group of the Investorsn (Rs. in Th.)

No.ofInvestors


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Kind of

Investments

No. of

RespondentsSaving A/C 195

Fixed

deposits

148

Insurance 152Mutual

Fund

120

Post office

(NSC)

75

Shares/Deb

entures

50

Gold/Silver 30

Real Estate 65

195

148152

120

75

50

30

65

0 50 100 150 200 250

S

avin

gA/cIn

suranc

e

Post

Office(

NSC)Go

ld/Silv

er

Kinds

ofInvestment

No.of Respondents


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Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust Total

No. of

Respondents

40 60 64 36 200

Percentage% 20% 30% 32% 18% 100%

20%

30%32%

18%

Liquidity Low Risk High Return Trust


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Response Yes No Total

No. of Respondents 135 65 200

Percentage% 67% 33% 100%

67%

33%

Yes No


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Response No. of Respondents Percentage%

YES 120 60%

NO 80 40%

Total 200 100%

Yes

60%

No40%


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Reason No. of Respondents Percentage%

Not Aware 65 81%

Higher Risk 5 13%

Not any Specific

Reason

10 6%

Total 80 100%

81%

13%6%

Not Aware Higher Risk Not Any


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75

75

56

55

45

30

70

0 20 40 60 80

UTI

Reliance

ICICI

SBIMF

Kotak

HDFC

Others

NameofA

MC

No. of Investors


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Associated with SBI 35 64%

Better Return 5 9%

Agents Advice 15 27%

Total 55 100%

64%9%

27%

Associated with SBI Better Return Agents Advice


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Not Aware 25 38%

Less Return 18 28%

Agents Advice 22 34%

Total 65 100%

38%

28%

34%

Not Aware Less Return Agent's Advice


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Channel Financial Advisor Bank AMC Total

No. of Respondents 72 18 30 120

Percentage% 60% 15% 25% 100%

60%15%

25%

Financial Advisor Bank AMC


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Mode of Investment One time Investment Systematic Investment

Plan (SIP)

Total

No. of Respondents 78 42 120

Percentage% 65% 35% 100%

65%

35%

One time Investment SIP


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Portfolio Equity Debt Balanced Total

No. of

Investors56 20 44 120

Percentage% 46% 37% 17% 100%

46%

17%

37%

Equity Debt Balance


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Option Dividend Payout Dividend Reinvestment Growth Total

No. of Respondents 25 10 85 120

Percentage% 21% 8% 71% 100%

21%

8%

71%

Dividend Payout Dividend Reinvestment Growth


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In Amritsar in the Age Group of 30-60 years were more in numbers. The second mostInvestors were in Amritsar most of the Investors were Graduate or Post Graduate &

uneducated. In Occupation group most of the Investors were Govt. employees, the second most

Investors Private employees and the least were were associated with Agriculture.

In family Income group, between Rs. 20,001- 30,000 were more in numbers, the secondmost were in the Income group of more than Rs.30,000 and the least were in the group ofbelow Rs. 10,000.

About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits,Only 20-25% Respondents invested in Mutual fund.

Mostly Respondents preferred High Return while investment, the second most preferredLow Risk then liquidity and the least preferred Trust.

Only 67% Respondents were aware about Mutual fund and its operations and 33% werenot.

Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not haveinvested in Mutual fund.

Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not anyspecific reason for not invested in Mutual Fund and 6% told there is likely to be higher riskin Mutual Fund.


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Out of 55 investors of SBIMF 64% have invested due to its association with theBrand SBI, 27% Invested because ofAdvisors Advice and 9% due to betterreturn.

Most of the investors who did not invested in SBIMF due to not Aware of

SBIMF, the second most due toAgents advice and rest due to Less Return.

For Future investment the maximum Respondents preferred Reliance MutualFund, the second most preferred ICICI Prudential, SBIMF has been preferredafter them.

60% Investors preferred to Invest through Financial Advisors, 25% throughAMC (means Direct Investment) and 15% through Bank.

65% preferred One Time Investment and 35% preferred SIP out of both typeof Mode of Investment.

The most preferred Portfolio was Equity, the second most was Balance (mixtureof both equity and debt), and the least preferred Portfolio was Debt portfolio.

Maximum Number of Investors Preferred Growth Option for returns, the secondmost preferred Dividend Payout and then Dividend Reinvestment.


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Some of the persons were not so responsive.

Possibility of error in data collection because many ofinvestors may have not given actual answers of myquestionnaire.

Sample size is limited to 200 visitors of State Bank ofIndia , Amritsar.

Branch , Amritsar out of these only 120 had invested inMutual Fund. The sample size may not adequatelyrepresent the whole market.

The research is confined to a certain part of Amritsar.


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The most vital problem spotted is of ignorance. Investors should be made aware of the benefits.

The advisors should try to change their mindsets. The advisors should target for more and moreyoung investors. Young investors as well as persons at the height of their career would like to go foradvisors due to lack of expertise and time.

Mutual Fund Company needs to give the training of the Individual Financial Advisors about theFund/Scheme and its objective, because they are the main source to influence the investors.

Before making any investment Financial Advisors should first enquire about the risk tolerance of theinvestors/customers, their need and time (how long they want to invest). By considering these threethings they can take the customers into consideration.

Younger people aged under 35 will be a key new customer group into the future, so making greaterefforts with younger customers who show some interest in investing should pay off.

Customers with graduate level education are easier to sell to and there is a large untapped marketthere. To succeed however, advisors must provide sound advice and high quality.

Systematic Investment Plan (SIP) is one the innovative products launched by Assets Managementcompanies very recently in the industry. SIP is easy for monthly salaried person as it provides thefacility of do the investment in EMI. Though most of the prospects and potential investors are notaware about the SIP. There is a large scope for the companies to tap the salaried persons.


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Running a successful Mutual Fund requires complete understandingof the peculiarities of the Indian Stock Market and also the psyche of

the small investors. This study has made an attempt to understandthe financial behavior of Mutual Fund investors in connection with thepreferences of Brand (AMC), Products, Channels etc. I observed thatmany of people have fear of Mutual Fund. They think their money willnot be secure in Mutual Fund. They need the knowledge of MutualFund and its related terms. Many of people do not have invested inmutual fund due to lack of awareness although they have money to

invest. As the awareness and income is growing the number ofmutual fund investors are also growing.

Brand plays important role for the investment. People invest inthose Companies where they have faith or they are well known withthem.

Distribution channels are also important for the investment in mutualfund. Financial Advisors are the most preferred channel for theinvestment in mutual fund. They can change investors mind from oneinvestment option to others.


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MUTUAL%20FUNDS%20IS%20THE%20BETTER%20INVESTMENTS%20PLAN.pptx