THESIS - FINAL REPORT

THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

Chennai

“EFFECTIVE INVESTOR’S’s STRATEGIES TO IMPROVE POSITIVE PERCEPTION TOWARDS MUTUAL FUND SCHEMES”

In partial fulfillment of the requirement for the award of the degree inMasters in Business Administration

Submitted by

V.SINDUJAPGP/SS/08-10/Finance

Thesis ID: SS810/01382/MKTUnder the esteemed guidance of

Mr. BOOVARAGAN MAMANDUR KIDAMBI(Senior Executive - Finance, Wipro Technologies)

Abstract

1

The marketing tactics has its own plays wherever it is implemented and on whatsoever situations.

The word Tactics has its distinguished meaning in it, which works on all the fields upon its right usage

patterns by the marketers. The formation of a brand has an elaborate processes integral with it. Creating

a brand is easy but making it in the top of the mind of the consumer is the real task to get achieved. Once

a brand has formed and acquired its position it is very important to hold the same position till the end of

the saturation stage where it is succeeded by a new generation brand or an extension, gradually killing

the older brand. This is a general concept of brand cycle.

The project is done in “Effective Investor’s Strategies to Improve Positive Perception towards

Mutual Fund Schemes”. The study is also known as the future market of mutual fund. The research

design used was descriptive research since it is helpful in knowing the proportion of the people in the

given population behaved in a particular manner.

The tool used for the collection of the data was through questionnaire. The researcher chose

150 samples with the help of the area sampling method in order to present the information in an

understandable way the researcher has used various statistical tools like percentage analysis, chi –

square and weighted average.

This study shows how the Investor’s are investing their income in the different avenues with

risk appetite. The major findings the researcher found is that Investor’s expect the financial advisor

for making investments. The company should create awareness about the mutual funds to other

people too.

To Whom It May Concern

2

This is to certify that Ms. V.Sinduja of The Indian Institute of Planning and Management,

Chennai had successfully completed her thesis work under my guidance for the topic “Effective

Investor’s Strategies to Improve Positive Perception towards Mutual Fund Schemes”. I’m also certifying

that the thesis is complete and its objective accomplished. I wish her all the best for her career and her

life.

Yours truly, Boovaragan Mamandur KidambiChennai28/03/2011

Thesis Approval Letter

3

THESIS TOPIC APPROVAL (Marketing)

PGP/SS/08-10

Dear SINDUJA,

I have received your synopsis as well as the confirmation that Mr.Boovaragan Mamandur Kidambi, Senior Executive - Finance, Wipro Technologies, would guide you through the thesis. This letter is a formal approval of the topic proposed by you “EFFECTIVE INVESTOR’s STRATEGIES TO IMPROVE POSITIVE PERCEPTION TOWARDS MUTUAL FUND SCHEMES"

Please go ahead with the thesis. However, remember to focus on primary research based on an elaborate research methodology taking into account an overall sample size of approximately 100 + samples, spanning various sample segment groups, using appropriate sampling techniques.

Your Thesis Id is SS810/01382/MKT, since this is your unique identification number you are advised to quote this id for any future correspondence.

Remember that all theses need to be submitted, within 3 months after the completion of 5th trimester, as per the guidelines. I would like to inform you that for any late submission of the thesis beyond the last date, the institute reserves the right to impose a fine, as applicable for the batch. As per the last notification, late thesis submission fines are as follows:- The penalty for all ex-students up to 06-08 batch is Rs. 5000. For 07-09 batch it is Rs.1000.

Furthermore, you are required to send me at least 6 Thesis Guidance Response Sheets in all. Please ensure to send one response sheet for each interaction that you would have with your External Guide during the course of the Thesis, say, once a week / 10 days. The format of Response sheet is attached herewith.

Kindly also go through the attached guidelines for Thesis Viva Voce.

Kindly revert for any further clarifications.

Regards,

Bharath Kumar S P

Head Team Manager -Events & Academics

IIPM

Level 4, IIPM Tower, 145, Marshall's Road

Egmore, Chennai - 600 008, T.N. (India)

4

Ph: 91-44-30276827(Direct)

Mobile: +919884260757

Fax: 91-44-28416226

E-mail:[email protected]

Website: www.iipm.edu

-----------------------------------------------------

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Thesis Guide Approval

5

mailto:E-mail:[email protected]

http://www.iipm.edu/

Subject: confirming project guidanceWednesday, 5 January, 2011 5:45:44 AM

From: Boovaragan MK <[email protected]>To: sindhu du <[email protected]>Sent: Wed, 5 January, 2011 5:45:44 AMSubject: Thesis Synopsis & Approval Letter.

Dear Sindhuja,

With reference to your mail I hereby accord my approval for assisting you as an external guide in your thesis work titled " Effective Investor’s Strategies to Improve Positive Perception towards Mutual Fund Schemes " Wishing you all the best. RegardsM.K.BoovaraganSenior Executive - Finance, Wipro Technologies

Acknowledgement

6

mailto:[email protected]

mailto:[email protected]

First of all, I thank God the Almighty, who has been guiding me and being with me all through

these days. Along with Him I like to thank my parents and my friends, without their encouragement and

support, I would not have accomplished this Research project.

The thesis has given me an opportunity to understand and exercise the marketing dynamics in

Investor’s Perception towards Mutual Fund Schemes. The research conducted is part of Thesis at the

Indian Institute of Planning and Management, Chennai.

I take this as an opportunity to thank my guide Mr.Boovaragan Mamandur Kidambi, Senior

Executive - Finance, Wipro Technologies. For his timely help in both knowledge and the guidance to

complete this work. My sincere thanks to you Sir.

I also thank through my heart our respected Professor R. Krishnan- Dean and our professors for

their advice and assistance. My thanks are also due to my Investor’s without whom my research would

have not taken the present shape..

Table of Contents

CHAPTER TITLE PAGE NO:

7

IAbstract

To Whom It May Concern

Thesis Approval Letter

Thesis Guide Approval

Acknowledgement

02

03

05

06

07

II INTRODUCTION

1.1 Out Line of the Project

1.2 Need / Importance

1.3 Scope of the Study

12

15

16

III 2.1 Research Methodology

2.2 Limitation of the Study

2.3 Chapterisation

18

23

24

IV 3.1 Literature Review 25

V 4.1 Industry Profile/ Company Profile

4.2 Product Profile

30

32

VI 5.1 DATA ANALYSIS AND INTERPRETATION

5.1.1 Table Percentage Analysis

5.1.2 Figure

5.2 STATISTICAL TOOLS

35

36

68

69

VII 6.1 SUMMARY AND CONCLUSION

6.1.1 Findings 6.1.2 Suggestions 6.1.3 Conclusion

ANNEXURE

6.1.4 Bibliography

74 78

79

80

8

VIII

7.2 Questionnaire for quantitative research 81

IX

7.3 Response sheets

7.3.1 Thesis Response sheet: 1





7.3.6 Thesis Response sheet: 6 81

8485

86

87

88

89

LIST OF TABLES

TABLE NO: PARTICULARS PAGE NO:

9

5.1. 1 Nature of the Investor’s 35

5.1. 2 Age of the Investor’s 365.1. 3 Nature of the Employment 375.1. 4 Income level of the Investor’s 385.1. 5 Choice of Investment Avenues 395.1. 6 Investments in Mutual Funds 405.1. 6a1 Mode of Investment 415.1. 6a2 Risk Level 425.1. 6a3 Allocation of Annual Income 435.1. 6a4 Factors for Investments 445.1. 6a5 Types of Investments 455.1. 6a6 Preference for investments 475.1. 6a7 Types of Schemes 495.1. 6a8 Factors for Selecting open ended scheme 505.1. 6a9 Factors for Selecting Close ended scheme 515.1. 6a10 Schemes of option to invest 52

5.1. 6a11 Rate of Expected return 545.1. 6a12 Time Frame 585.1. 6a13 Types of Risks 595.1. 6a14 Opinion to Invest in mutual funds 605.1. 6a15 Choice of Plans 615.1. 6a16 Source of information 625.1. 6a17 Intermediaries in investments 635.1. 6a18 Post purchase view 645.1. 6a19 Finance knowledge level 655.1. 6a20 Satisfaction level 665.1. 6b1 Opinion about to investment 675.1. 6b2 Awareness about mutual funds 685.1. 6b3 Post purchase view 695.1. 6b4 Reaction after investments 705.1. 6b5 Preference to join 715.1. 7 Weighted Average for Objectives of Investment 72

5.1. 8 Weighted Average for Ranking the Funds 735.1. 9 Relationship between annual income and savings 745.1. 10 Correlation between annual income and risk level 755.1. 11 Correlation between risk level and expected returns 76

LIST OF FIGURES

TABLE NO: PARTICULARS PAGE NO:5.1. 1 Nature of the Investor’s 35

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5.1. 2 Age of the Investor’s 365.1. 3 Nature of the Employment 375.1. 4 Income level of the Investor’s 385.1. 5 Choice of Investment Avenues 395.1. 6 Investments in Mutual Funds 405.1. 6a1 Mode of Investment 415.1. 6a2 Risk Level 425.1. 6a3 Allocation of Annual Income 435.1. 6a4 Factors for Investments 445.1. 6a5 Types of Investments 455.1. 6a6 Preference for investments 465.1. 6a7A Equity Investor’s Preference 47 5.1. 6a7B Debt Investor’s Preference 485.1. 6a7C Balanced Investor’s Preference 495.1. 6a8 Factors for Selecting open ended scheme 505.1. 6a9 Factors for Selecting Close ended scheme 515.1. 6a10A Equity Investor’s Option 525.1. 6a10B Debt Investor’s Option 535.1. 6a10C Balanced Investor’s Option 545.1. 6a11A Equity Investor’s Expected Returns 555.1. 6a11B Debt Investor’s Expected Returns 565.1. 6a11C Balanced Investor’s Expected Returns 575.1. 6a12 Time Frame 585.1. 6a13 Types of Risks 595.1. 6a14 Opinion to Invest in mutual funds 605.1. 6a15 Choice of Plans 615.1. 6a16 Source of information 625.1. 6a17 Intermediaries in investments 635.1. 6a18 Post purchase view 615.1. 6a19 Finance knowledge level 655.1. 6a20 Satisfaction level 665.1. 6b1 Opinion about to investment 675.1. 6b2 Awareness about mutual funds 685.1. 6b3 Post purchase view 695.1. 6b4 Reaction after investments 705.1. 6b5 Preference to join 71

CHAPTER – I

INTRODUCTION

OUT LINE OF THE PROJECT:

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Mutual fund industry has made their road in the financial market with more schemes for the

benefit of the Investor’s to invest their savings. A trust that pools the amount from the different

Investor’s, that huge amount in invested in different securities like shares, debentures etc. Trusts

agree to distribute the profit earned through that fund, in an Investor’s investments ratio basis.

A mutual fund is a professionally managed investment company that combines the money of

many people, who have no contact with each other. Mutual funds are conceived as institution for

providing small Investor’s with the avenues of investments in the capital market. They generate

returns from them and pass it back to the Investor’s in the form of dividends, capital appreciation or

a combination of both.

In mutual fund two type of scheme is available open – ended and close – ended, in open

ended Investor’s can easily buy and sell their funds at any time but in closed ended Investor’s can

buy only at the time of new fund offer or sell after the lock – in period of the funds.

In mutual fund there are three options for Investor’s are growth, dividend and dividend

reinvestment for their investments. This study was conducted to know about the Investor’s

perception toward mutual fund.

With the help of risk level one can determine we can determine the returns.

Here, this study helps to give an idea as to how to reach the new Investor’s without losing

existing Investor’s .

Statistical tools like chi – square is used too calculate the relationship between the Investor’s

annual income and the allocation of amount from the income or saving for investments.

MUTUAL FUND

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Payment of Return Collection of Small / Income Savings

Deposits/Savings Deployment of Savings

IMPORTANCE OF THE STUDY

DEPOSITING PUBLIC

MUTUAL FUND COMPANY

OpenEnded

CloseEnded

IncomeFund

GrowthFund

BondFund

SectoralFund

GlittFund

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INCOME AND CAPITAL GAINS GENERATION

This study was conducted on the “INVESTOR’S PERCEPTION ON MUTUAL FUND

SCHEMES” With special reference to Stock Broking Ltd, Chennai. In order to know about the

Investor’s perception towards mutual Fund schemes.

Stock Broking Ltd.., is one of the leading service agency, has been successfully

operating in all over India, providing a wide range of services to its Investor’s in respect of

investments in different avenues.

This study helps to know the Investor’s choice of investments in the mutual fund

schemes from their income level.

This study is also helps to know about how the Investor’s taking risks in their

investments – mutual funds.

This study was undertaken with the objective of helping the company to design new

approach to suit the retail Investor’s.

2.2 SCOPE OF THE STUDY

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. The study covers the mutual fund Investor’s of Chennai.

The research gives an understanding of the Investor’s perception on mutual fund schemes.

The study will help the Stock Broking Ltd to reach Investor’s in better way by their services.

The study helps to know about the objectives of investments.

The study helps to make awareness about the mutual funds for Investor’s.

OBJECTIVES OF THE STUDY

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PRIMARY OBJECTIVES:

To study the Investor’s perception in mutual fund schemes

To study the factors that influences the Investor’s choice of mutual fund schemes.

SECONDARY OBJECTIVES:

To study the mutual fund investments objective among Investor’s.

To study the risk appetite of the Investor’s.

To study the returns expected from the investments.

To study either Investor’s needs regular information about mutual funds for investments from

the stock broking Ltd.

RESEARCH METHODOLOGY

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Research in common parlance refers to a search for knowledge. One can also define research

as a scientific and systematic search for pertinent information on a specific topic. In fact, research is

an art of scientific investigation.

Research is a process of systematic study

Research is in depth study about the particular problem.

Research is for any particular topic.

Research is the search of knowledge

Research is a movement from known to unknown.

Research can be called as voyage of discovery.

Research has to proceed systematically in the already planned direction with the help of a number

of step in sequence. To make the research systemized the researcher has to adopt certain methods.

The method adopted by the researcher for completing the project is called Research Methodology.

Data becomes information only when a proper methodology is adopted. Thus we say

methodology is a tool, which process the data to reliable information. The present chapter attempt to

highlight the Research Methodology adopted by this project.

DEFINITION

According to D. Slesinger and M.Stephenson in the encyclopedia of social sciences defines

research as “ The manipulation of things, concepts or symbols for the purpose of generalizing to

extent, correct or verify knowledge aids construction of theory or in the practice of an art.

RESEARCH DESIGN:

The formidable problem that follows the task of defining the research problem is the

preparation of the design of the research project, popularly known as the Research Design. A

research design is the arrangement of conditions for collection for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in procedure.

A research is purely and simply the framework and plan for the study that guides the

collection and analysis of data. It is a blue print that is followed in completing a study.

TYPES OF RESEARCH DESIGN

1. Exploratory research design

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2. Descriptive research design

3. Experimental research design

DESCRIPTIVE AND DIAGNOSTIC RESEARCH DESIGN

The researcher has to decide which type of data is useful for the study and accordingly has to

select any one or both the method for data collection.

Descriptive research design is concerned with the research studies with a focus on the

characteristics of a particular individual, or group whereas diagnostic research design determine the

frequency with which something occurs or it is associated are examples of diagnostic.

DATA COLLECTION METHOD

Data refers to information or facts. It is not only refers numerical figures but also includes

descriptive facts.

The method of data collection includes two types for the study, such as primary data and

secondary data.

PRIMARY DATA COLLECTION METHOD

Primary data is the data that is collected for the first time by the researcher. The primary data

are collected with specific set of objective to assess the current status of any variable studied.

Primary data is useful only particular period.

METHODS OF PRIMARY DATA COLLECTION

The main four methods used in primary data collection are:

a. Questionnaire

b. Schedule

c. Interview

d. Observation

QUESTIONNAIRE

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In this method, pre-printed list of questions arranged in a sequence which is used by the

researcher for collecting data. The questionnaire is filled by the Investor’s. The questionnaire is

considered as the heart of the survey.

SAMPLE DESIGN

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

the technique or the procedure that the researcher would adopt in selecting items for the sample.

Sample design may as well lay down the number of items to be including in the sample, i.e., the size

of the sample. Sample design is determined before data are collected. There are many sample designs

from which a researcher can choose.

Some designs are relatively more precise and easier too apply than others. Researcher must

select/prepare a sample design that should be reliable and appropriate for his research study.

UNIVERSE

All the items under consideration in any field of enquiry constitute a ‘universe’ or

‘population’ the term universe refers to the total items through which information can be gathered

from the population. In this population is infinity. It is pivotal point of research.

SAMPLE FRAME

The sample frame is the list of all sample units. It is the study of the researcher to frame the

samples for easy and best data collection. In this sample is 150, sizes are mainly decided on the basis

of the selection of the statistical tools. The selection of the appropriate sample size can be done by

statistical tool.

SAMPLE PROCEDURE

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Sampling is a procedure by which the Investor’s are selected. There are basically two types of

sampling methods are:

1. Probability sampling methods

2. Non- Probability sampling methods.

In this study area sampling method was adopted (probability sampling) the required number of

sample (sample size 150) was selected.

SAMPLING TECHNIQUE

In this we have used probability sampling. The term probability refers to the samples having

an equal chance of being selected. In this we have used area sampling.

The area sampling refers to the population being divided into various areas and samples are

collected from STATISTICAL TOOLS “By statistics we mean aggregates of facts to a marked

extend by multiplicity of causes, numerically expressed, and enumerated according to reasonable

standard of accuracy, collected in a systematic manner for a predetermined purpose and place in

relation to each other.”In this study the researcher is going to apply with percentage analysis, chi –

square, bar diagram and pie charts.

LIMITATIONS OF THE STUDY

The study has been conducted in a short span of three months, which was a limitation to the

project.

The sample size was restricted to 150 keeping in account the various constraints such as time,

cost and availability of Investor’s.

The Investor’s were reluctant to disclose their personal decisions on investments.

This study is conduct only with stock brokering clients so it is main limitation.

CHAPTERISATION

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The Report contains six chapter, which are arranged in a systematically order.

Chapter I

Includes the outline of the project both about the Topic and Company details, Need

of the study and Scope of the study.

Chapter II

Includes the Research Methodology and Limitation of the study.

Chapter III

Includes Literature Review.

Chapter IV

Includes the Company Profile and Product Profile.

Chapter V

Includes the Data analysis and Interpretation that is shown is the form of

Percentage Analysis and Figures.

Chapter VI

This is the final chapter of the project which contains Summary and Conclusions.

This summary and conclusion gives Findings of the study, suggestions are given and also

enclosed with the Conclusion.

Bibliography, Appendices and References are also attached.

CHAPTER - III

LITERATURE REVIEW

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PERCEPTION

“Perception is the process of selecting, organizing and interpreting attaining to events

happening in environment”

Perception is a mental process, whereby an individual selects data from the environment,

organizes it and then draws significances.

Perception is basically a cognitive or thinking process and an individual emotion, feelings

etc.., are based on his or her perception of their environment.

Perception is the process of seeing something selecting the necessary inputs organizing the

selected inputs and interpreting them.

STIMULI

PERCEPTION

INPUT

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MAJOR INFLUENCES ON THE PERCEPTION PROCESS

1. The characteristics of the Perceiver.

2. The characteristics of the Perceived.

3. The characteristics of the Situation.

Characteristics of the Perceiver

PERCEPTUAL THOUGHT INPUT

RECEIVING, SELECTING, ORGANISING,

INTERPRETING PERPCEPTUAL PROCESS

DECISION

ACTION

BEHAVIOUR

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The characteristics of the perceiver include such factors such as needs, values, experience and

attitudes. A persons needs, habits, impacts of past experience ethics and personality all influences the

perceptual process.

Characteristics of the Perceived

It may defy logic and objectivity but perception about others are influenced by their physical

characteristics such as appearance, facial expression, age, gender, manner of communication as well

as personality traits and other forms of behavior.

Characteristics of the Situation

Physical, social and organizational settings or event can also influences perception.

PERCEPTUAL ORGANISATION

Perceptual organization is a process by which we group outside stimuli into recognizable or

identifiable patterns and whole objects. Once the stimulus is received from the outside, the mental

process begins organizing the stimulus into meaningful and identifiable whole.

FIGURE GROUND

The figure ground principle simply means that we tend to be attentive to such perceived

objects that stand out as background.

PERCEPTUAL GROUPING

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Perceptual grouping identifies our tendency to group several individuals’ stimuli into a

meaningful and recognizable pattern. This tendency is very basic in nature and largely seems to be

inborn.

Factors:

Continuity

Closure

Proximity

Similarity

PERCEPTUAL SELECTIVITY

Perceptual selectivity refers to the tendency to select certain objects from the environment for

attention that these objects are consistent with our existing beliefs, values and needs.

EXTERNAL FACTORS

a. Size: The larger the size of the object, the more likely that it will be noticed. We are most

likely to notice things that stand out because of their size relative to other things in that area.

b. Intensity: Intensity refers to the brighter, louder and more colorful objects as compared to other

object around. If all the objects are very bright, then the intensity of brightness does not necessarily

activate our senses.

c. Contrast: If an object in some way contrasts with surroundings, it is more noticeable.

d. Repetition: A repeated message is more likely to be perceived than a single message. Work

instructions that are repeated tend to be received better.

e. Movement: Moving objects are more likely to be perceived than stationary object. Movement

increases our awareness of the object before we become aware of the stationary surrounding.

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f. Novelty & Familiarity: This principle states that either the familiar or the novel factor can serve

as the attention getter. Now objects in a familiar setting or familiar objects in a new setting will draw

attention.

g. Order: The order in which objects or stimuli are presented is an important factor in

influencing selective attention.

INTERNAL FACTORS

a. Learning: Learning is an important factor in developing perceptual sets. A perceptual set is

basically what a person expects from the stimuli on the basis of his learning and experience relative

to same or similar stimuli.

b. Motivation: Motivation also plays an important role in influencing the process of perception.

Similarly people who are motivated by a need for power will be more attentive to such relative

environment variables, which enhance power.

CHAPTER – IV

INDUSTRY PROFILE

The main components of capital market are securities market and financial intermediaries.

A formal capital market was present in our country from early 1900’s.But remained very inactive at

that time. The inactiveness of capital market has continued even after independence. The growth of

26

capital market has acquired momentum only from mid eighties. Till then debt instruments were more

popular and the Investor’s have not shown much interest in direct investment. Besides the

Government’s policy towards promotion of capital market was also not much encouraging.

Concentration was given to the growth of agricultural sector. The plan for industry-centered growth

had been mainly encouraged only for eighties. During mid eighties the foreign collaboration policy

of the Government has inspired the industries towards the channel of growth and development. It has

been further strengthened by the liberation and privatization measures instituted by the Government

as a part of new economic policy. This coupled with the excellent performance of the private sector

has made the capital market more active.

The radical changes in the policies of the Government and the development of industrial

sector have attracted many Investor’s into the capital market. Investor’s satisfaction, motivation and

the promotion of investment cult among the Investor’s are given more emphasis. SEBI guidelines of

Investor’s protection, foreign equity participation and the permission of global issues etc. have given

further contributed towards the growth of our capital market. The growth of Indian economy, at

present is virtually depends upon the growth of the capital market.

The Indian capital market has made substantial progress during the post-independence

period. However, the amount of capital raised in the form of equity and preference shares and

debentures by the corporate sector has not been large over a number of years. There has been a

raising trend since 1975 but the increase was not all that large. The Indian capital market has grown

so sharply in the 80’s that the decade itself has been christened as a decade of the capital market.

More particularly, during the later part of the eighties, the primary and the secondary markets have

grown by leaps and bounds. It is evident from the fact that against an annual average amount of just

Rs.90 crores raised from the new issues market in the 70’s about Rs.27, 344 crores are being raised

during 1992-93.

The total capital issues of both the private and public sectors during the years ended 31st

March 1991, 1992 and 1993 were Rs.9,683 crores Rs.13,450 crores and Rs.Rs.27,344 crores

respectively. The number of public issues has also increased year by year and the total number of

public issues of securities for the years ending as on 31st March 1991, 1992 and 1993 aggregate to

335,572 and 1,036 respectively. All these issues were subscribed to by the individual and

institutional Investor’s, non-resident Indians, foreign institutional Investor’s and mutual funds, and

27

the public participation was overwhelming and the issues were always over subscribed a number of

times.

In tune with the growth in the new issues market during the eighties, the secondary

market also expanded fast during this period. The number of stock exchanges has increased from 8 in

1980 to total of 21 in 1993. The membership of the stock exchanges has also increased substantially

to around 3,000in 1993 from about 1,200 a decade ago. The listed companies of all stock exchanges

stood to above 6,500 in 1993, which were only 2,733 in 1980. The market capitalization has also

shown a substantial increase in the eighties. The volume of daily turnover of trade has also increased

more than ten-fold over the decade to Rs.250 crores in 1992.

On Bombay stock Exchange, the number of dealings per hour put through was as high as

40,000. The paid-up share capital of listed companies in 1980 was Rs.3, 143 crores, while in 1990;

the figure was more than Rs.12, 000 crores. The market value of the capital of these limited

companies stood at around Rs.3 lack crores in 1992.Besides, the number of joint stock companies at

work has increased significantly to 2, 75, 664 with the paid-up capital of Rs.90, 962.2 crores as on

31st March 1993, which was only 56, 493 with the paid-up capital of Rs.14, 607 crores up to 31st

March 1980.

Investor’s population has increased from 2 millions in 1980’s and reached beyond 10,000

and the number of stock exchanges are 21.In addition to these stock exchanges the NSEIL and

OTCEI have been set-up for solving the problem arising in out of the structural weaknesses of our

market and provide more transparency in deals and a nationwide network of trade.

PRODUCT PROFILE

MUTUAL FUNDS

Mutual fund is a Financial Service Organization that receives money from the share holders,

invests it, earns on it, attempts to make it grow and agrees to pay the shareholder cash on demand for

the current value of his investment.

28

A trust that pools the savings of Investor’s, 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.

The income earned through these investments, and the capital appreciation realized by its unit

holders in proportion to the number of units owned by them.

SCHEMES

Operational Classification:

1. Open – ended Scheme:

When a fund is accepted and liquidated on a continuous basis by a mutual fund manager,

it is called a ‘Open – ended Scheme’. The fund manager buys and sells units constantly on demand

by the Investor’s. Under this scheme, the capitalization of the fund will constantly change, since it is

always open for the Investor’s to sell or buy their units.

2. Close – ended Scheme:

When units of a scheme are liquidated only after the expiry of a specified period, it is

known as a ‘Close – ended Scheme’. Such funds have fixed capitalization and remain as a corpus

with the mutual fund manager. Units of close – ended scheme are to be quoted, and therefore traded,

on the floors of a stock exchange in the secondary market.

3. Interval Scheme:

It is the kind of close – ended scheme with a peculiar feature that it remains open during a

particular part of the year for the benefits of Investor’s, either to off – load their holdings or to

undertake purchase of units at the NAV.

Return – based Classification:

Income Fund Scheme

Growth Fund Scheme

Conservative Fund Scheme

Investment – based Classification

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Equity Fund Scheme

Bond Fund Scheme

Balanced Fund Scheme

Sectoral Fund Scheme

Fund – of – fund Scheme

Leverage – Fund Scheme

Gilt Funds

Index – funds

Tax – Savings Schemes

Other Funds

Load Funds

No Load Funds

Offshore Mutual Funds

MMMF

TYPES OF MUTUAL FUND ASSET MANAGEMENT COMPANIES IN INDIA.

Alliance Capital AMC

BOB Mutual AMC

Benchmark AMC

Birla Sunlife AMC

Canbank AMC

Chola AMC

DSP Merrill Lynch AMC

Duetsche AMC

Escorts AMC

Fidelity AMC

Franklin Templeton AMC

GIC AMC

HDFC AMC

HSBC AMC

ING Vysya AMC

JM Financial AMC

Kotak Mahindra AMC

30

LIC AMC

Lotus India AMC

Morgan Stanley AMC

PRINCIPAL AMC

Prudential ICICI AMC

Reliance AMC

SBI AMC

Sahara AMC

Standard Chartered AMC

Sundaram AMC

Tata AMC

UTI AMC.

CHAPTER V

DATA ANALYSIS AND INTERPRETATION

TABLE: 5.1.1

NATURE OF INVESTOR’S

31

Gender No: of Investor’s

Male 113

Female 37

Total 150

FIGURE: 5.1.1

No: of Repondent

Male, 113

Female, 37

Male Female

INTERPRETATION:

From the above table 75.33% of the Investor’s were male and 24.67% of the

Investor’s were female of the sample size.

TABLE: 5.1.2

AGE OF INVESTOR’S

Age No: of Investor’s

<25 57

32

25-35 60

35-45 20

>45 13

Total 150

FIGURE: 5.1.2

5760

20

13

0

10

20

30

40

50

60

70

No: of Repondent

<25

25-35

35-45

>45

INTERPRETATION:

From the above table 38% of the Investor’s were below 25 years, 40% were between 25 -35 years,

13.33% were between 35 -45 years and 8.67% were above 45 years.

TABLE: 5.1.3

NATURE OF THE EMPLOYMENT

Profession No: of Investor’s

Business 6

Retired 1

33

Salaried 128

Others 15

Total 150

FIGURE: 5.1.3

61

128

15

0

20

40

60

80

100

120

140

No: of Repondent

Business

Retired

Salaried

others

INTERPRETATION:

From the above table 4% of the Investor’s were doing business, 0.06% were Retired ones,

85.34% were paid Salary peoples and 10% were others category like self employed.

TABLE: 5.1.4

INCOME LEVEL OF THE INVESTOR’S

Income level No: of Investor’s

<60000 12

60000-150000 80

34

150000-300000 41

>300000 17

Total 150

FIGURE: 5.1.4

12

80

41

17

0

10

20

30

40

50

60

70

80

90

No: of Repondent

<60000

60000-150000

150000-300000

>300000

INTERPRETATION:

From the above table, the Investor’s who’s Annual Income below 60000 is only 8%, most of

the people are between 60000 – 150000, 27.33% are between150000 – 300000, and 11.34% were

above 300000.

TABLE: 5.1.5

CHOICE OF INVESTMENT AVENUES OF THE INVESTOR’S

Investment Choices No: of Investor’s

Bank Deposits 97

Mutual Funds 47

35

Equity Markets 5

Fixed Deposits 1

Total 150

FIGURE: 5.1.5

97

47

51

0

20

40

60

80

100

120

No: of Repondent

Bank Deposits

Mutual Funds

Equity Markets

Fixed Deposits

INTERPRETATION:

From the above table, 64.67% of the Investor’s were prefers to invest in the Bank Deposits

which is low risk and returns when compared to other mode of investments, 31.33% in Mutual

Funds, 3.33% in Equity markets and 0.07% in fixed Deposits.

TABLE: 5.1.6

INVESTMENT IN MUTUAL FUNDS

Investment No: of Investor’s

Yes 90

No 60

36

FIGURE: 5.1.6

90, 60%

60, 40%

Yes No

INFERNCE:

From the above table 60% of the Investor’s were already invested in the mutual funds,

remaining 40% of the Investor’s were invested in some other investment avenues with low returns.

IF THE INVESTOR’S’S CHOICE IS YES, THE FOLLOWING TOPICS ARE ANALYSED.

TABLE: 5.1.6a1

Mode of Investment No: of Investor’s

Equity Fund 63

Debt Fund 2

Balanced Fund 25

37

FIGURE: 5.1.6a1

63

2

25

0

10

20

30

40

50

60

70

No: of Repondent

No: of Repondent 63 2 25

Equity Fund Debt Fund Balanced Fund

INTERPRETATION:

From the above table, 70% of the Investor’s were ready to take high risk by investing in

Equity funds, 2.22% was not in a position to take risk so they invested in Debt Funds and 27.78%

were to take risk and returns equally so they preferred to invest in Balanced Funds.

TABLE: 5.1.6a2

RISK LEVEL OF THE INVESTOR’S

Risk Level No: of Investor’s

<25% 35

25% - 50% 20

38

50% - 75% 21

>75% 14

FIGURE: 5.1.6a2

Risk Level

35

20 21

14

0

5

10

15

20

25

30

35

40

<25% 25% - 50% 50% - 75% >75%

INTERPRETATION:

From the above table, 23.33% of the Investor’s were willing to take only low risk which is

less than 25% on investments in mutual funds when compared to other investments, 13.33% are

ready to take risk between 25% - 50%, 14% were 50% - 75% and 9.34% are ready to take high risk

to earn more returns so they preferred 75% and above it.

TABLE: 5.1.6a3

ALLOCATION OF ANNUAL INCOME FOR INVESTMENT

Allocation No: of Investor’s

<10% 8

10% - 20% 50

39

20% - 30% 24

>30% 8

Total 90

FIGURE: 5.1.6a3

Allocation for investments

<10%9%

10% - 20%55%

20% - 30%27%

>30%9%

INTERPRETATION:

From the above table, only few people allocate their annual income for investing in the

mutual fund. Around 9% Investor’s are below 10%, 55% most of the Investor’s allocate 10% - 20%

of their income to invest in mutual funds, 27% were between 20% - 30%, and the few person only

allocating huge amount from their income for investment..

TABLE: 5.1.6a4

FACTORS FOR INVESTMENTS

Factors No: of Investor’s

Returns 50

40

Total Tax 22

Liquidity 3

All 15

Total 90

FIGURE: 5.1.6a4

Factors for investment

Returns56%Total Tax

24%

Liquidity3%

All17%

INTERPRETATION:

From the above, 56% of the Investor’s expects return from the investment, 24% to exit the

tax amount for their income, 3% were to buy and sell easily in the market to make profit and 17%

prefer all the factors for investment.

TABLE: 5.1.6a5

TYPE OF INVESTMENT IN MUTUAL FUNDS

Type No: of Investor’s

Adhoc 44

41

SIP 27

Both 19

Total 90

FIGURE: 5.1.6a5

Type of mutual funds

49%

30%

21%

Adhoc SIP Both

INTERPRETATION:

From the above, 48.89% of the persons are not investing in single fund they are investing in

multiple funds to avoid losses, 30% are investing their huge amount in single funds only and 21.11%

in the form of both.

TABLE: 5.1.6a6

PREFERNCE FOR INVESTING IN MUTUAL FUNDS

Preference No: of Investor’s

Normal 53

42

More than normal 24

Extreme 13

Others 0

Total 90

FIGURE: 5.1.6a6

Preference to invest

59%27%

14% 0%

Normal More than normal Extreme Others

INTERPRETATION:

Most of the Investor’s 58.89% preferred mutual funds to get normal returns, 26.67% for more

than normal returns than other bonds, securities etc, and 14.44% for extreme option or huge profit

from their investments.

TABLE: 5.1.6a7

SCHEME FOR INVESTMENT IN MUTUAL FUNDS

Type / Schemes Open – ended Close – ended Both Total

EQUITY FUND 43 2 18 63

DEBT FUND 2 - - 2

BALANCED FUND 18 2 5 25

TOTAL 63 4 23 90

43

FIGURE: 5.1.6a7A

EQUITY INVESTOR'S PREF

43

2

18

05

101520253035404550

OPEN CLOSE BOTH

EQUITY

INTERPRETATION:

From the above table, most of the Investor’s willing to invest in the open – ended due to easy

liquidity and it is open for buying and selling, 28% of the equity Investor’s preferred to invest in the

both type of scheme and only 3% were in closed ended scheme.

FIGURE: 5.1.6a7B

44

DEBT INVESTOR'S PREF

2

0 00

0.5

1

1.5

2

2.5

OPEN CLOSE BOTH

DEBT

INTERPRETATION:

From the above table it shows that all of the debt Investor’s preferred only open – ended

scheme for their investments in mutual funds.

FIGURE: 5.1.6a7C

INTERPRETATION:

From the above, it shows that most of the balanced Investor’s goes for the open ended

scheme for investments when compared to close ended, whereas 20% of the Investor’s preferred to

invest n the both scheme and 8% for closed ended funds.

BALANCED INVESTOR’S'S PREF

18

2

5

02468

101214161820

OPEN CLOSE BOTH

BALANCED

45

TABLE: 5.1.6a8

FACTORS FOR SELECTION OF OPEN – ENDED SCHEME


Easy Liquidity 42

Short – term 28

Performance 10

All 10

Total 90

FIGURE: 5.1.6a8

Factors for Open-ended

42

28

10 10

0

5

10

15

20

25

30

35

40

45

Easy Liquidity Short - term Performance All

No: of Respondents

INTERPRETATION:

From the above table, easy buying option and selling option available in open – ended

scheme so most of the Investor’s preferred to select liquidity option, 31.11% preferred for short

period to earn profits, 11.11% for performance and 11.11% prefer all three factors for their

investment in open ended scheme.

TABLE: 5.1.6a9

FACTORS FOR SELECTION OF CLOSED – ENDED SCHEME

46


Long – term 6

Charges 0

Performance 15

Return 6

Total 27

FIGURE: 5.1.6a9

Factors for closed ended

Long - term22%

charges0%

Performance56%

Return22%

INTERPRETATION:

From the above, 22% of the Investor’s preferred long –term factors for investing in closed

ended funds, 56% for performance and 22% for returns.

TABLE: 5.1.6a10

SCHEMES FOR INVESTMENT IN MUTUAL FUNDS

47

Type / Schemes Growth Dividend Dividend-

Reinvestment

Total

EQUITY FUND 16 36 11 63

DEBT FUND 1 - 1 2

BALANCED FUND 5 15 5 25

TOTAL 22 51 17 90

FIGURE: 5.1.6a10A

EQUITY INVESTOR'S PREF

16

36

11

0

5

10

15

20

25

30

35

40

GROWTH DIVIDEND REINVEST

EQUITY

INTERPRETATION:

Most of the equity Investor’s preferred dividend option in the mutual fund scheme to get their

regular income whenever AMC declares it, 25% of the Investor’s preferred growth option to get their

highest net asset value for future sales with the profit, and 17% were dividend reinvestment option to

increase their units in the mutual fund.

FIGURE: 5.1.6a10B

48

DEBT INVESTOR'S PREF

1

0

1

0

0.2

0.4

0.6

0.8

1

1.2


DEBT

INTERPRETATION:

From the table, 1% of the debt Investor’s preferred to invest their amount in the growth

option and reinvestment option, thus dividend option is not preferred by them.

FIGURE: 5.1.6a10C

BALANCED INVESTOR'S PREF

5

15

5

0

2

4

6

8

10

12

14

16


B

INTERPRETATION:

49

From the table, dividend option is preferred by the 60% of the balanced Investor’s to get the

regular returns from the scheme and option, 20% of the Investor’s preferred to growth option and

reinvestment option for their investments each.

TABLE: 5.1.6a11

RATE OF RETURN EXPECT FROM THE INVESTMENT

TYPE /

REUTRNS

<10% 10%-20% 20%-30% >30% TOTAL

EQUITY 4 29 25 5 63

DEBT - 2 - - 2

BALANCED - 17 8 - 25

TOTAL 4 48 33 5 90

FIGURE: 5.1.6a11A

EQUITY INVESTOR'S EXPECTED RETURN

<10%6%

10%-20%46%

20%-30%40%

>30%8%

INTERPRETATION:

50

Most of the Investor’s 46% are expected to get return between 10%-20% from their

investment in equity funds which is high risk and high returns, 40% of the Investor’s are preferring

to get medium return which is between 20%-30% and 8% were expected maximum return that is

above 30% from their investments.

FIGURE: 5.1.6a11B

DEBT INVESTOR'S EXPECTED RETURN

0%

100%

0%

0%

<10% 10%-20% 20%-30% >30%

INTERPRETATION:

From the above, all the debt Investor’s were expected to get 10% - 20% returns from their

investments in the mutual funds.

FIGURE: 5.1.6a11C

BALANCED INVESTOR'S EXPECTED RETURN

0%

68%

32%

0%

<10% 10%-20% 20%-30% >30%

51

INTERPRETATION:

From the above, 68% of the balanced Investor’s were expected to get the returns between

10% - 20% from their balanced investment which is combination of equity and debt. Rests of the

Investor’s were expected to get the maximum of 20% - 30% returns.

TABLE: 5.1.6a12

TIME FRAME

Period No: of Investor’s

1 - 2yrs 58

2 -3yrs 23

>3yrs 9

Total 90

FIGURE: 5.1.6a12

INTERPRETATION:

From the above, Investor’s around 58 can hold their funds for maximum period of 1 – 2

years, 25.56% for 2-3yrs and only10% were willing to hold their fund for long period like 3 years

and above.

Time Frame

58

23

9

0 10 20 30 40 50 60 70

1 - 2yrs

2 -3yrs

>3yrs

No: of Investor’s

52

TABLE: 5.1.6a13

TYPE OF RISK

Risk No: of Investor’s

Market risk 81

Interest risk 6

Financial risk 3

Total 90

FIGURE: 5.1.6a13

Type of Risks

90%

7% 3%

Market risk Interest risk Financial risk

INTERPRETATION:

From the above table, mutual fund risk is mainly subject to market risks so 90% of the

Investor’s accepts to take market risks, 7% for Interest risk, and 3% only person who has expert

knowledge level in funds can take financial risk here only 3% are belongs to this category.

53

TABLE: 5.1.6a14

OPINION FOR INVESTMENT IN MUTUAL FUND

Option No: of Investor’s

Past performance 10

Dividend payout 27

Risk appetite 1

Current performance 40

AMC 0

Fund portfolio 12

Total 90

FIGURE: 5.1.6a14

Opinion to invest

0

10

20

30

40

50

No: of Respondents

No: of Respondents 10 27 1 40 0 12

Past performa

Dividend payout

Risk appetite

Current performa

AMCFund

portfolio

INTERPRETATION:

From the above table, most of the Investor’s refer to the current performance while getting

into an investment here44.44% preferred to see current performance, 30% were looking what was the

dividend payout ration of the funds, 13.33% sees how their amounts are invested in the shares,

stocks, etc.

TABLE: 5.1.6a15

54

CHOICE OF PLANS

Plan No: of Investor’s

SIP 71

SWP 16

STP 3

Total 90

FIGURE: 5.1.6a15

Choice of plan

71

16

3

SIP SWP STP

INTERPRETATION:

From the above table, 78.89% of the Investor’s preferred to invest their amount in monthly

basis by SIP, whereas 17.78% are willing to withdraw his amount from the invested fund monthly

basis and 3.33% likes to transfer their amount from one fund to some other funds.

TABLE: 5.1.6a16

55

SOURCE OF INFORMATION ABOUT MUTUAL FUNDS

Source No: of Investor’s

Newspaper 35

Magazine 12

T.V 23

Agents 3

Friends & relatives 10

Others 7

Total 90

FIGURE: 5.1.6a16

Sources for information

35

12

23

3

107

0

5

10

15

20

25

30

35

40

Newspaper Magazine T.V Agents Friends &relatives

Others

No: of Respondents

INTERPRETATION:

Newspaper is the easiest way to convey the information, so most of the Investor’s’s choice is

Newspaper about the mutual funds information. 25.56% of the Investor’s got information through

visual effect in T.V. 13.33% through magazine which is weekly or monthly etc. 11.11% through

their closed ones like friends, relatives etc.

TABLE: 5.1.6a17

56

INTERMEDIARIES FOR INVESTMENTS

Mode No: of Investor’s

Brokers 62

Banks 2

Agents 24

Others 2

Total 90

FIGURE: 5.1.6a17

No: of Respondents

62

2

24

2

0

10

20

30

40

50

60

70

No: of Respondents 62 2 24 2

Brokers Banks Agents Others

INTERPRETATION:

From the above table, 68.89% of the Investor’s made their investment through brokers,

2.22% through banks, 26.67% through agents and 2.22% through others way for their investment in

mutual funds.

TABLE: 5.1.6a18

57

POST PURCHASE VIEW ON INVESTMENTS

Reaction No: of Investor’s

Not bothering 44

Satisfied 36

Worry 10

Total 90

FIGURE: 5.1.6a18

Post purchase view on investment

49%

40%

11%

Not bothering Satisfied Worry

INTERPRETATION:

From the above table, 49% of the Investor’s were not bothering about their investments in

mutual funds, 40% were satisfied with their investment and 11% were worry about their investment

in the mutual funds.

TABLE: 5.1.6a19

58

FINANCE KNOWLEDGE LEVEL ON INVESTMENT IN MUTUAL FUNDS

Level No: of Investor’s

Expert 2

Proficient 23

Average 55

Poor 10

Total 90

FIGURE: 5.1.6a19

INTERPRETATION:

From the above, 2% of the Investor’s were expert in the finance knowledge, 26% were

proficient, 61% were average in their level, and 11% were poor in investments on mutual funds.

TABLE: 5.1.6a20

KNOWLEDGE LEVEL

2%

26%

61%

11%

Expert Proficient Average Poor

59

SATISFACTION LEVEL OF THE SERVICES RENDERED BY STOCK BROKING LTD


Highly satisfied 10

Satisfied 74

Not satisfied 6

Total 10

FIGURE: 5.1.6a20

Satisfaction level

11%

82%

7%

Highly satisfied Satisfied Not satisfied

INTERPRETATION:

From the above table, 82% of the Investor’s were satisfied with the services rendered by the

each stock broking Ltd, 11% were highly satisfied and 7% were not satisfied with their services.

IF THE INVESTOR’S’S CHOICE IS NO, THE FOLLOWING TOPICS ARE ANALYSED

TABLE: 5.1.6b1

60

OPINION ABOUT INVESTMENT IN MUTUAL FUNDS

Opinion No: of Investor’s

Yes 55

No 5

Total 60

FIGURE: 5.1.6b1

Opinion about investment

92%

8%

Yes No

INTERPRETATION:

From the above table 9/10th of the Investor’s out of 60 were preferred to invest in the mutual

funds to earn good returns and only 1/10th of the Investor’s were not preferred to invest in the mutual

funds.

TABLE: 5.1.6b2

61

AWARENESS ABOUT MUTUAL FUNDS


Risk level 3

Lack of information 55

Charges 2

Total 60

FIGURE: 5.1.6b2

Awareness about mutual funds

3

55

2

0

10

20

30

40

50

60

Risk level Lack of information Charges

No: of Respondents

INTERPRETATION:

From the above table, 5% of the Investor’s out of 60 were not in position to take risks in the

mutual fund due to high risk level, 91.67% were due to lack of information about the mutual funds

regarding their investments and 3.33% were due to charges on the funds.

TABLE: 5.1.6b3

62

POST PURCHASE VIEW ON OTHER INVETMENTS


Expert 2

Proficient 23

Average 30

Poor 5

Total 60

FIGURE: 5.1.6b3

Knowledge level

2

23

30

5

0

5

10

15

20

25

30

35

No: of Respondents 2 23 30 5

Expert Proficient Average Poor

INTERPRETATION:

From the above table, 3.33% of the Investor’s were expert in their investment other than

mutual funds, 38.33% were proficient, 50% were average and 8.34% were poor in their investment

avenues.

TABLE: 5.1.6b4

63

REACTION ON INVESTMENT


Not bothering 44

Satisfied 12

Worry 4

Total 60

FIGURE: 5.1.6b4

44

12

4

0

10

20

30

40

50

Reaction on investments

No: of Respondents 44 12 4

Not bothering Satisfied Worry

INTERPRETATION:

From the above table, 73.33% of the Investor’s were not bothering about their investments,

20% were satisfied with their investments, and 6.67% were worry about their investments in the

different sectors.

TABLE: 5.1.6b5

64

PREFERENCE TO JOIN IN STOCK BROKING LTD

Choice No: of Investor’s

Yes 46

No 14

Total 60

FIGURE: 5.1.6b5

Preference to join

77%

23%

Yes No

INTERPRETATION:

From the above table, 77% of the Investor’s out of 60 were preferred to join with the stock

broking by their name and their services and 23% were not preferred to join.

65

CHAPTER – VI

FINDINGS:

It is observed that 75.33% of the Investor’s belong to male category and 24.67% of the

Investor’s are female.

It is observed that 38% of the Investor’s are below the age group 25 years, 40% are between

25-35 years, 13.33% are between 35-45 years and 8.67% are above the age of 45 years.

In occupation of the Investor’s 4% are business people, 0.06% is retired persons, 85.34% are

salaried persons and 10% are other category.

The Investor’s who’s Annual Income below 60000 is only 8%, most of the people are

between 60000 – 150000, 27.33% are between150000 – 300000, and 11.34% were above

300000.

In choice of investment avenues, 64.67% of the Investor’s preferred bank were not ready to

take risk in their investments so they go for bank deposits, 31.33% preferred to take risk to

get good returns from their investments, 3.33% were preferred to take high risk which yields

high returns or loss means equity markets and 0.07% are fixed deposits and bonds for their

investments.

60% of the Investor’s were already invested in the mutual funds; remaining 40% of the

Investor’s were invested in some other investment avenues with low returns.

If the Investor’s’s choice is YES, the following findings are calculated.

The Investor’s who invested in mutual funds, 70% of the Investor’s were invested in

Equity fund, which are high returns with high risk. 2.22% was Debt Funds which is that

they are not in position to take risks and to be safe in their investments and 27.78% were

invested in Balanced Funds, which means they are safe by investing equally in equity and

debt funds.

The risk level in mutual funds, 23.33% of the Investor’s were willing to take only low

risk which is less than 25% on investments in mutual funds when compared to other

investments, 13.33% are ready to take risk between 25% - 50%, 14% were 50% - 75% and

9.34% are ready to take high risk to earn more returns so they preferred 75% and above it.

Only few people allocate their annual income for investing in the mutual fund.

Around 9% Investor’s are below 10%, 55% most of the Investor’s allocate 10% - 20% of

66

their income to invest in mutual funds, 27% were between 20% - 30%, and the few person

only allocating huge amount from their income for investment..

56% of the Investor’s consider the return on investment factor before making

investments, 24% consider tax factor and 3% preferred liquidity and 17% of the Investor’s

preferred all three factors before making investments.

In survey 48.89% of the persons are not investing in single fund they are investing in

multiple funds to avoid losses, 30% are investing their huge amount in single funds only and

21.11% in the form of both

Most (58.89%) of the Investor’s preferred mutual fund investment for normal returns

which is normal risks and normal returns, 26.67% for more than normal returns they are

ready to take high risk, 14.44% for extreme returns from their investment.

Most of the Investor’s willing to buy and sell their funds only at open-ended scheme,

4.44% opted for Close – ended scheme due to lock-in period and 25.56% opted for both

schemes for investments.

Easy buying option and selling option available in open – ended scheme so most of

the Investor’s preferred for liquidity option, 31.11% preferred for short period to earn profits,

11.11% for performance and 11.11% prefer all three factors for their investment in open

ended scheme.

From the survey, 22% of the Investor’s preferred long term option in close –ended

scheme for their investment, 56% for performance and 22% for the returns.

Preference of option in the scheme, 24.44% chose growth option to increase their per

unit value, 56.67% for dividend option to get their returns at any time when company

declares and 18.89% preferred to invest their earned dividend again in the same funds or

some other funds.

The normal return expected from the investment scheme4.44% of the Investor’s

expects low return from their investment in the mutual funds, most of people expects medium

return when compared to other securities more than 50% between 10% - 20%, 36.67% were

between 20% - 30% and 5.56% only few expects high return than other securities i.e. above

30% from the investments.

Investor’s around 58% can hold their funds for maximum of 1 – 2 years, 25.56% for

2-3yrs and only10% were willing to hold their fund for long period like 3 years and above.

Mutual fund risk is mainly subject to market risks so 90% of the Investor’s were

accepted market risks, 7% for Interest risk, and 3% only person who has expert knowledge

level in funds can take financial risk here only 3% are belongs to this category.

67

Opinion of investment in mutual funds, most of the Investor’s refer to the current

performance while getting into investments here 44.44% preferred to current performance,

30% were looking what was the dividend payout ration of the funds, 13.33% sees how their

amounts are invested in the shares, stocks, etc.

78.89% of the Investor’s preferred to invest their amount in monthly basis by SIP,

whereas 17.78% are willing to withdraw his amount from the invested fund monthly basis

and 3.33% likes to transfer their amount from one fund to some other funds.

Source of information about mutual funds, Newspaper is the easiest way to convey

the information, so most of the Investor’s’s choice is Newspaper about the mutual funds

information. 25.56% of the Investor’s got information through visual effect in T.V. 13.33%

through magazine which is weekly or monthly etc. 11.11% through their closed ones like

friends, relatives etc.

It is observed that 68.89% of the Investor’s made their investments through brokers,

2.22% through banks, 26.67% through agents and 2.22% through others.

Satisfaction level for the services rendered by the individual stock broking, 11% of

the Investor’s are highly satisfied, 82% of the Investor’s are satisfied and only 7% are not

satisfied by the services.

It is observed that 49% of the Investor’s do not worry after making investments, 40%

are satisfied with their investments and 6.67% worry after making an investment in mutual

funds.

Majority of the Investor’s 61% are average in their finance knowledge level regarding

mutual funds, 26% are proficient, 2% are expert in the finance knowledge and 11% are below

average in finance knowledge.

If the Investor’s’s choice is NO, the following findings are calculated.

The majority of the Investor’s 92% say yes for investment in mutual funds, and 8%

says no for investments in mutual funds.

It is observed that 91.67% of the Investor’s were not willing to take risks in mutual

fund investments due to lack of information, 5% for risk level and 3.33% of the Investor’s for

charges in the funds.

The finance knowledge level of the Investor’s, majority of Investor’s 50% are

average, 38.33% are proficient, 3.33% are experts and 8.34% are poor in the knowledge level

regarding investments.

68

The post purchase view on investment, 73.33% of the Investor’s does not worry after

making investment in other avenues, 20% are satisfied about their investments and 6.67% of

the Investor’s worry about their investments.

77% of the Investor’s are willing to join with the stock broking Ltd and 23% are not

willing to join.

The majority of the Investor’s preferred return on investment factor for objective of

investment in mutual funds and it is ranked as first. Tax is second factor weight as

3.98, third is safety with 3.82 as weight, and fourth is liquidity with 3.74 as weight.

From the chi – square calculation, there is a significance relationship between

Investor’s’s annual income and savings allocated for investments in mutual funds,

There is significant correlation between Investor’s’s annual income and Investor’s

risk level in the funds.

There is significant correlation between Investor’s’s risk level and return expected

from the investment.

SUGGESTIONS

69

Most of the salaried people invested only in mutual funds, so we can approach to the business

people and self employed persons also to invest in mutual funds.

Many people do not much aware about the mutual fund investment, even not invested before.

So stock broking Ltd shall offer program and feature to create awareness about the mutual

funds.

Regular updates/feedbacks about the various schemes can be provided to the Investor’s to

maintain a good relationship.

The main factor affecting the choice of investments is returns and high risk. So we can

suggest the private employees, etc about the mutual fund and its schemes with their risks.

We can approach to the Investor’s with the performance of the funds, their dividend payout

details, its net asset value, plans available in it etc, fund portfolios, fund managers etc.

We can also approach to the Investor’s whose ages are below 30 for mutual fund investments

because only that age people can take risk in investments.

In survey 60 Investor’s were not invested in mutual funds, from that 73% of the Investor’s’

wont worry about their investments in other securities. So we can approach that type of

people also and giving the right information for investing in mutual funds.

CONCLUSION

70

From the study one gathers that the mutual fund investments seem to be a popular investment

option. In the last few years, there has been a fundamental change in the household savings, and the

share of investments, as a percentage of the savings has gone up substantially. The number Investor’s

have increased to a great extent and the mutual fund industry is becoming extremely responsive by

launching different products to cater to diverse needs of the Investor’s. Investor’s have lot of option

in the mutual fund schemes.

Majority of the Investor’s prefer to invest in open – ended scheme and the satisfaction level of the

Investor’s is also high. Even it is observed most of the non Investor’s of mutual fund does not care

about their investment in other avenues, so we may approach them to invest in the mutual funds.

From this study the Investor’s preferences are known, which will help the company in launching new

products to the Investor’s.

ANNEXURE

71

BIBLIOGRAPHY

REFERENCES:

BOOKS:

Research methods for business

Uma Sekaran

John Wiley & Sons, Inc., Fourth Edition, 2003.

Investment Avenues and Portfolio Management

Prasanna Chandra.

Punithavathi pandiyan.

Organizational Behavior

Kathik

WEBSITES:

www.amfiindia.com

www.the-finopolis.com

www.equitymaster.com

QUESTIONNAIRE

“ EFFECTIVE INVESTOR’S STRATEGIES TO IMPROVE POSITIVE PERCEPTION TOWARDS MUTUAL FUND SCHEMES ”

72

http://www.the-finopolis.com/

http://www.amfiindia.com/

1. Name :

2. Gender : ( ) Male ( ) Female

3. Age : ( ) <25 ( ) 25-35 ( ) 35-45 ( ) >45

4. Occupation : ( ) Business ( ) Retired ( ) Salaried ( ) Others

5. Annual Income : ( ) <60000 ( ) 60000-150000 ( ) 150000-300000

( ) >300000

6. Choice of investment avenues?

( ) Bank deposits ( ) Mutual Funds ( ) Equity market ( ) F.D. & Bonds

7. Have you invested in Mutual fund before?

( ) Yes ( ) No

If your choice is YES, answer the following questions.

A1. In which fund you have invested?

( ) Equity Fund ( ) Debt Fund ( ) Balanced Fund

A2. What is your risk level in the mutual fund investments?

( ) <25% ( ) 25% - 50% ( ) 50% - 75% ()>75%

A3. What percentage of amount have you allocated for investment from your annual

income?

( ) <10% ( ) 10% - 20% ( ) 20% - 30% ()>30%

A4. What are the factor do you consider before making investment?

( ) Return on investment ( ) Total tax ( ) Liquidity ( ) All

A5. Objectives for investing in mutual funds.

S.no Factors 5 4 3 2 1

1 Return on Investment

2 Tax Exemption

3 Liquidity

4 Risk diversification

5 Professional Management

6 Safety

7 Value Addition

A6. How do you invest your income in mutual funds?

( ) Adhoc funds ( ) SIP funds ( ) Both

73

A7. Why do you select Mutual Funds for Investments?

( ) Normal Returns ( ) More then Normal ( ) Extreme ( ) Others

A8. Which type of mutual fund do you prefer?

( ) Open – ended ( ) Close – ended ()Both

A8.1. Why do you opt for Open – Ended scheme?

( ) Easy liquidity ( ) Short term investment ( ) Performance ( ) All

A8.2 Why do you opt for Close – Ended scheme?

( ) Long term ( ) Performance ( ) Returns

A9. What option do you prefer while investing in mutual fund scheme?

( ) Growth ( ) Dividend ( ) Dividend Reinvestment

A10. What is the normal rate of return do you expect from the scheme?

( ) <10% ( ) 10% - 20% ( ) 20% - 30% ()>30%

A11. What is the time frame you would prefer while investing in mutual funds?

( ) 1-2 yrs ( ) 2-3yrs ( )>3yrs

A12. Which type of risk would you like to appetite?

( ) Market risks ( ) Interest risk ( ) Financial risk

A13. What is the option preferred to invest in the mutual funds?

( ) Past performance ( ) Dividend payout ( ) Risk appetite

( ) Current performance ( ) A.M.C ( ) Fund portfolio

A14. Which plan would you like to join?

( ) Systematic investment plan ( ) Systematic withdrawal plan

( ) Systematic transfer plan

A15. What is the source of the information regarding mutual funds?

( ) Newspaper ( ) Magazine ( ) T.V. ( ) Agents

( ) Friends & relatives ( ) others

A16. How do you made your investment so far?

( ) Through brokers ( ) Through a Bank ( ) Through an Agent ()Others

A17. What is your finance knowledge level regarding mutual fund?

( ) Expert ( ) Proficient ( ) Average ( ) Below average

A18. What is your reaction after making investments in mutual funds?

( ) Not bothering ( ) Satified ( ) Worry about investment

A19. Rank any 5 mutual Fund companies in your opinion Fund

( ) HSBC Mutual Fund ( ) ICICI Mutual Fund

74

( ) Reliance Mutual Fund ( ) SBI Mutual Fund

( ) Standard Chartered Mutual Fund ( ) Sundram Mutual Fund

( ) Tata Mutual Fund ( ) UTI Mutual Fund

If your choice is NO; answer the following questions

B1. Do you think Mutual fund is good choice for investments?

( ) Yes ( ) No

B2. Why don’t go for investments in mutual funds?

( ) Risk Level ( ) Lack of Information ( ) Charges

B3. What is your finance knowledge level regarding investment?

( ) Expert ( ) Proficient ( ) Average ( ) Below Average

B4. What is your reaction after making investments?

( ) Not bothering ( ) Satisfied ( ) Worry

B5. Would you like to join with Stock Broking Ltd?

( ) Yes ( )No

Response sheets

75

Thesis Response sheet: 1

1) Name: V.Sinduja

2) Thesis ID Number: SS810/01382/MKT

3) The Topic of the study: Effective Investor’s Strategies to Improve Positive Perception

towards Mutual Fund Schemes.

4) Date when the Guide was consulted: 10/ 02/ 2011

5) The outcome of the discussion:

The discussion that was carried out with my guide on 10-02-2011 was primarily based on the

literatures that are available in the text and the ways and means of interpretation of the same in the

project and the means of comparing the theories with respect to what is happening in the present. He

has also given some ideas on the preparation of questionnaire for the primary research that is

expected to be done for the project.

6) The Progress of the Thesis:

Analysis of the literatures that are collected regarding the topic and formation of questionnaire

for primary data collection.


1) Name: V.Sinduja

76






Discussion was mainly based on structuring the questionnaire, along with the analysis of

general information collected so far on the mutual funds investments, schemes and products, etc. The

discussion was also carried out on how to proceed further.


The questionnaire is to be re structured thereby starting the interviews with the Investor’s as a part of

primary data collection


1) Name: V.Sinduja


77





The discussion was based on the further proceedings of the thesis. And also on the formulation

strategies such as segregating the target group, sampling styles, assembling and manipulating of

data’s for the interviews to be conducted for the thesis as a part of research analysis.


The responses from the samples will be collected and analyzed. Based on which the further research

analysis will be conducted to obtain the right solution.

78


1) Name: V.Sinduja






The discussion was mainly on the responses obtained from the target group and also on the

strategies to manipulate it accordingly to formulate the path lines there by overcoming the problem.

Formulations of commentaries and its design were discussed.


The responses are analyzed and scrutinized accordingly by which the report generation process has

started to mould up in shape. The analysis part is about in completion with necessary charts and

diagrams explaining the relevant situation more clearly.

79


1) Name: V. Sinduja






The report was formatted based on the report guidelines, the research part was completely

analyzed and Recommendations and conclusions were discussed.


Final draft has to be submitted to the guide by 25th Mach 2011. The final check is in the

process.

80


1) Name: V.Sinduja


3) The Topic of the study: “Effective Investor’s Strategies to Improve Positive Perception

towards Mutual Fund Schemes”.

5) The outcome of the discussion: 26/03/2011

The report was completely analyzed and Overall corrections in the report were discussed and made

accordingly. The final draft is thoroughly checked.


Guide has approved the final draft. The thesis is hence taken up for the final procedure of

submission.

81

Documents

THESIS - FINAL REPORT