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FINAL RESEARCH PROJECT

FACTORS INFLUENCING THE INVESTMENT

CHOICE OF MUTUAL FUNDS

Submitted in partial fulfillment of PGDM program

2011-13

Submitted by

Name: Shalini Sharma

19/073

Apeejay School of Management

New Delhi

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Certificate by Guide

This is to certify that Final Research Project work done on Factors

influencing the investment choice of Mutual Funds submitted to Apeejay

School of Management, Dwarka by Shalini Sharma in partial fulfillment of

the requirement for the award of Post Graduate Diploma in Management, is

a work carried out by her under my supervision and guidance. This work has

not been submitted anywhere else for any other degree/diploma. The original

work was carried out in Apeejay School of Management.

Date: Guide Name: Prof. Divya Jindal

Apeejay School of Management Designation: Asst. Professor

Dwarka, New Delhi

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DECLARATION

I hereby declare that the research project work entitled Factors

influencing the investment choice of Mutual Funds is submitted to

Apeejay School of Management, Dwarka is a record of original work

done by me under the guidance of Prof. Divya Jindal, faculty member

Apeejay School of Management, Dwarka and this research project work

has not been performed on the basis for the award of any degree or

diploma and similar project if any.

Name: Shalini Sharma

Roll number: 19/073

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ACKNOWLEDGEMENT

This comprehensive work owes credit to multitude of people. Certainly I

acknowledge the contribution of the pioneers in the finance field, especially those

whose teachings has become a part of my thinking. I thank Prof. Divya Jindal my

Faculty Mentor for her variety of inputs in the completion of the project also I

thank those hundred individual investors who has helped me in carrying out the

survey successfully. Finally, on my respective home front I thank my family and

friends who have provided love and inspiration over the years. Without the support

of all these dear people this project would not exist.

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INDEX

S.NO. CHAPTER PAGE NO.

Executive summary 118

CH.1 Introduction 212

1.1 Mutual fund 3

1.2 Other different modes of investment 4

1.3 Regulatory authority 5

1.4 Association of Mutual Funds in India 8

1.5 Asset Management Company 8

1.6 Diversification in mutual funds 9

1.7 Disclosure in mutual fund investment 10

1.8 Types of Mutual Funds Schemes in India 11

1.9 Overview of existing schemes in mutual fund

category

14

1.10 Advantages of Investing in Mutual Funds 15

1.11 Disadvantages of Investing in Mutual Funds 16

1.12 Entry and Exit load 17

1.13 ULIPS 18

1.14 Expense ratio 18

CH.2 Indian Mutual fund industry 1922

CH.3 Literature review 23- 28

Objective of the study 29

CH.4 Research design and methodology 3035

4.1 Research design 31

4.2 Framework of analysis 31

4.3 Description of factors 31

CH.5 Data analysis and findings 36-33

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Table 5.1.1 Profile of participants in the survey on

the basis of demographic factors

37

Pie diagram 1distribution of male and female in the

survey

38

5.1 Attitude of investors towards investment 38

5.2 Investors Opinion on Objective of Selecting Mutual

Fund Schemes

38

Table 5.2.1 Features of mutual fund 39

5.3 Importance of Rating of the Asset Management

Company

39

Table 5.3.1 39

5.4 Sources of Information gathered about a mutual fund

are different for the investor

40

Table 5.4.1 40

Pie chart 2 Sources of information of a mutual fund 40

5.5 Disclosure of mutual fund 42

Table 5.5.1 42

5.6 Past performance of the scheme 43

Table 5.6.1 43

Pie chart 3 Preference for the Past performance of

the scheme

43

5.7 Behavior of investors towards Withdrawal/Exit

Facility of Mutual Fund

44

Table 5.7.1 44

5.8 Importance of infrastructure like agency network,

research wing, expertise in money management to

the investors

44

Table 5.8.1 44

5.9 Relationship between income of the investor and 45

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number of mutual fund purchased by them.

Table 5.9.1 Pearsons coefficient correlation 45

5.10 Relationship between income of investor and the

feature of mutual fund selected

46

Table 5.10.1 codes for annual income 46

Table 5.10.2 46

5.11 Relationship between gender of the investor and tax

benefit

47

Table 5.11.1 47

Table 5.11.2 T-test for gender and number of mutual

fund purchased by the investor.

47

CH.6 Conclusion and suggestions 48-51

6.1 Conclusion 49

6.2 Suggestions 51

CH.7 Limitations 52

Bibliography 54-57

Appendix 5864

Data of the survey 59

Sample questionnaire 60

The list of mutual fund name and asset under

management by the AMCs

61