A STUDY ON INVESTOR PREFERENCE IN MUTUAL FUND AT ICICI PRUDENTIAL AMC LTD.
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Transcript of A STUDY ON INVESTOR PREFERENCE IN MUTUAL FUND AT ICICI PRUDENTIAL AMC LTD.
A STUDY ON INVESTORPREFERENCE IN MUTUAL FUND ATICICI PRUDENTIAL AMC LTD -VIJAYAWADA
INTRODUCTION
Mutual funds are the financial intermediaries which collect funds from the public and invest them in diversified portfolio of securities which includes equity bonds debentures and other instruments issued by business or government undertakings.
Returns are passed back to the investors
Investors pool their money
with a registered mutual fund
Generates return on the pooled investments. Mutual fund – fund Manager invests this amount with securities
MUTUAL FUND
DEFINITION
Financial intermediary which bring a wide variety of securities within the research of the most modest of investors.
-:FRANK REILLY
IMPORTANCE OF MUTUAL FUND:
• Mutual fund helps small investors to participate in securities market indirectly and this contributes to its spread while reducing the risk.
• Mutual funds all over the world have played a very important role in pooling small savings of individuals and invest them in proper portfolio.
• In UK nearly 80% of investors look into mutual funds for their investment.
• The Annual growth rate of mutual fund business in US is 25% in EUROP also the trend is found to be same.
STRUCTURE OF MUTUAL FUND:
Asset Management Company (AMC)
CLASSIFICATION OF MUTUAL FUND
Mutual fund can be classified under two different categories:
General classification Open -Ended schemes Close – Ended schemes Broad classification
GENRAL CLASSIFICATION Basis of Difference Open- Ended fund Close – Ended fundOpening of fund Subscriptions are
received by offering units or shares on a continuing basis.
Subscriptions are received only for a fixed or limited period
Withdrawal of fund Investors can withdraw funds
Investors are not allowed to withdraw funds at their choice.
Maturity period Open- Ended funds have no fixed maturity period
Close- Ended funds have a fixed maturity period
Listing in stock exchange
Open – Ended funds are not listed at the stock exchanges.
Close – Ended funds are usually listed in the stock exchange and Ordinarily sell at a discounted price
BROAD CLASSIFICATION
Company profile
Mutual funds in India• The end of millennium marks 36 years of existence of mutual
funds in this country. • This ride through these 36 years is not been smooth.• Investor is still divided.• While some are for mutual funds others are against it.• UTI commenced its operations from JULY 1964.• Finance minister, T.T. Krishnamachari set up the idea of a unit
trust that would be “ open to any person or institution as we see it is intended to cater to the needs of individual investors and even among them as possible.
COMPANY PROFILE
The mutual fund industry in INDIA started in 1963 with the formation of unit trust of india, at the initiative of the government of india and reserve bank. The history of mutual funds in india can be broadly divided into four distinct phases.
• First phase-:1964-87• Second phase-:1987-93• Third phase-: 1993-2003• Fourth phase -: since february 2003
Capital gains:
Section 2(42a): Under section 2(42a) of the act, a unit of mutual fund is treated as short term capital asset if the same is held for less than 12 months.
The units held for more than twelve months are treated as long term capital asset.
Section 10(38): Under section 10(38) of the act, long term capital gains from transfer of a unit of mutual fund is exempt from tax if the said transaction is undertaken after October 1 2008 and the securities transaction taxis paid to the appropriate authority.
This makes long term capital gains on equity oriented funds exempt from tax from assessment year 2009-10.
Section 112: Under gains 112 of the act capital gains not covered by the exemption under section 10(38) chargeable on transfer of long term capital on transfer of long term capital assets are
Resident individual – 20% plus surcharge Partnership firms– 20% plus surchargeForeign companies– 20%
DEPARTMENTMENTAL DETAILS:
AMC : ICICI prudential asset management company ltdSet up date : May 1998
Sponsor : ICICI Bank Ltd. Trustee : ICICI prudential Trust Ltd.. Chair Person : Ms. Chandra Kochhar Managing Director and CEO : Mr. Nimesh ShahDeputy Managing Director : Mr. Nilesh ShahFund Managers : Mr.'s. Naren & Mr. chaitanya Pande
Awards and Achievements: “Debt fund house of the year” by
CNBC TV18-CRISIL Mutual fund awards-2010. “ Seven Star fund of the year” by ICRU-Fund awards-2010 for ICICI tax plan. LIPPER fund awards-2010 to ICICI prudential
dynamic plan for mixed asset INR flexible.
MUTUAL FUND SCHEMES:
The types of mutual funds in india offered by the ICICI prudential mutual funds.
The schemes are categorized on the level of risk and return, higher the risk, the higher the return.
Potential risk and return is held minimum in the following ICICI mutual fund schemes:
• ICICI prudential long term floating rate plan.• ICICI prudential Blended plan.• ICICI prudential Short Term floater.• ICICI prudential Short Term plan.• ICICI prudential GILT fund- Treasury option.• ICICI prudential Liquid Plan.
REASEARCH METHODOLOGY:
Need for the study:• The study aims at studying customer preferences
towards ICICI prudential mutual funds and cultivates a new taste of investing in mutual funds.
• The researcher felt that there is need to study why and what investors should choose in for mutual funds investments in stock markets.
• As many players entering into mutual funds sector it is high time to developments and mind profile of prospective investor from time to time.
Scope of the study
Physical scope: • Investor of ICICI pru AMC Ltd Vijayawada.• Investor preferences about ICICI pru Mutual
Fund Schemes.• Employees of ICICI pru AMC Ltd
Vijayawada.
Conceptual scope:• The scope of the study is limited because the study is restricted to
select sample available at the disposal of researcher to carry out the study.
• This study is helpful to researcher academician and the organization.
• The academician can understand the practices of mutual funds industry.
• The academician can observe the investors exceptions towards mutual funds & the other schemes offered to them.
• This study will facilitate an understanding on the trends of mutual fund industry in india.
Objectives of the study:
• The main objective of the present study is to study the customer awareness and their preferences about mutual funds and ICICI prudential mutual funds in particular.
• The study aims at tracking investors preferences and priorities towards different types of mutual funds products.
• To study the investor perception on ICICI prudential mutual funds.
• To study the investor expectations from ICICI Prudential mutual funds.
• To study the gap between the investor expectations and actual performance of mutual funds.
DATA COLLECTION PRIMARY DATASECONDARYDATA
PRIMARY DATA
In my study I was used Questionnaire methodology. Questionnaire are used primary in making status
studies of current practices and conducting opinion pools and surveying attitudes.
The Questionnaire is two types SUPPLY TYPE SELECTION TYPE
SECONDRY DATA:• Secondary data means company profile• Industrial profile and conceptual background can be
collected from the different sources like internet company fact sheets brochures etc..,
• The past performance of company and the present marketing performance with regards to preferences are required for this study.
• The above data is collected from company fact sheets and other company records which are give the preference of customers
DATA ANALYSISTable showing Distribution of respondents Gender wise:
S no Gender No of Respondents
Percentage
1 Male 70 702 Female 30 30
Total 100 100
Sales
1st Qtr2nd Qtr00
INTERPREATATIONS: From the above table it is clear that 70%
of the respondents are male and the remaining 30% of the respondents are female. So it can be concluded that majority of the respondents are male. It can be represented with the help of pie chart.
2. Table showing source of Awareness about mutual funds:
s. no Source of awareness Number of respondents Percentage
1 Advertisement 20 20
2 Company executives 40 40
3 Agents 25 25
4 Others 15 15
Total 100 100
Sales
advertismentcompany executivesagentsothers
INTERPREATATIONS:
From the above table it is clear that 40% of the respondents came to know about MF through company’s executives, 25% through agents, 20% through advertising,15% through others. So the major sources of awareness for mutual funds were through company’s executives & agents, and through advertising.
So the company should concentrate major on its executives& agents by providing them extra incentives & commissions with regards to their increase in each lead to the company in money terms as per their targets .And also the company should invest more in media publicity as they play a major role today in every sector, which attracts more people and in short span of time. . It can be represented with the help of pie chart .
3. Table showing amount invested in mutual fund
S.NO Amount invested Number of respondents Percentage
1 5,000-10,000 30 30
2 10,000-20,000 25 25
3 20,000-30,000 25 25
4 Above-30,000 20 20
Total 100 100
Sales
5000-1000010000-2000020000-30000above-30000
Interpretation:
From the above table it is clear that among 5,000 to10,000 investment was done by 30% of respondents and 10,000 to 20,000 was done 25%of respondents and20,000 to 30,000 was done by 25% of respondents and above 30%of investment was done by 20%of respondents So here many of respondents are interested in investing among 5,000 to10,000 in mutual fund. . It can be represented with the help of pie chart .
QUESTIONNAIRE:
How did you know about Mutual Funds? Advertisement Company executives Agents Others How much of amount do you invested in MF? Rs. 5,000-Rs.10,000 Rs.10,000-Rs.20,000 Rs.20,000-Rs.30,000 above Rs.30,000 What is the major factor do you look forward for investing in
Mutual Funds? Liquidity Performance Returns Consistency If interested MF, then what type do you prefer? Open-ended Closed-ended Interval If Open ended Schemes what are the reasons for choosing it? Flexibility Liquidity