Peneteration of Mutual Funds

8/8/2019 Peneteration of Mutual Funds

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Figure 18

In the rural market investment pattern was a bit different, investors wanted to take very

less risk and 88% (44 out of 50 individuals) people preferred Debt Linked Schemes,

6% (3 out of 50) preferred Equity Linked Schemes and the rest 6% Balanced Schemes.

7. What is the amount you prefer to invest annually?

a. Less than 5000

b. 5000 to 10000

c. 10000 to 50000

d. More than 50000

URBAN MARKET

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0

5

10

15

20

25

a. b. c. d.

No.of persons

Figure 19

This question is analyzed for urban market only as most of the individuals in

rural sector replied that they dont have sufficient funds to invest. In rural

market 50% investors invest more than 50000 annually, 14% invest between

10000 to 50000, 26% invest between 5000 to 10000 and 10% invest less than

5000.

CONCLUSION

From the analysis of above questions, it has been interpreted that awareness level of

mutual funds is very low in India as compared to developed countries. It is quite

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satisfactory in urban market but in rural market it is very low. In both the markets,

people who are aware of mutual funds they dont know about the various kinds of

schemes offered by mutual funds, they simply confuse it with equity shares so it is the

need of the hour to provide the desired information to the general public. In rural as

well as urban market investors are not willing to take any kind of risk, they want stable

returns while taking a very less amount of risk. That is why; Banks and Post-Offices

remain the most favored investment option for investors. In urban market almost every

investors favor Banks and Post Offices and in rural market, investors prefer Real

Estate. In urban market people prefer investing in equity-linked schemes whereas in

rural market preferences of investors are entirely different, they prefer debt-linked

schemes. In both the markets the primary purpose of investments is to save for their

children followed by regular income.

Regarding the quantum of investment made by investors, in the rural market people

say that they dont have sufficient funds to invest as their priorities are different as

compared to investors in urban market.

RECOMMENDATIONS

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Certain recommendations to capture rural market

As earlier discussed, very few people are aware of mutual funds in rural market but the

next market which should be targeted is rural market only therefore there are certain

recommendations to tap rural market:

Awareness level in rural market is very low, to make people aware of mutual

funds some sound advertising campaigns should be designed.

Certain special camps can be organized in rural areas to provide proper

guidance to rural population. People who are a bit aware of mutual funds, they

confuse them with equity shares and therefore they need clarity about the

concept which can conveniently be imparted through organizing such type of

special camps.

Most of the population is illiterate and they find difficulty in understanding

English language, therefore advertisements and brochures should be developed

and designed in local language.

Verbal guidance should also be provided to people in rural area.

People in rural areas find it difficult to undertake activities like selling and

repurchasing their units, so they need agents who can guide them at regular

intervals.

Franchise should be opened so that it becomes convenient for them to perform

various activities related to mutual funds.

As per the survey done in rural market, most of the people want to invest their

surplus funds in real estate, so if SBI Mutual Funds comes out with a new fund

having its objective to invest in real estate, it can prove beneficial to tap rural

market.

Certain recommendations for urban market

As per the survey done in urban market, awareness level of mutual funds in urban

market is quite satisfactory; therefore SBI Mutual Funds needs to capture this market

by taking some new and innovative measures.

Marketing channel of SBI Mutual Funds is very weak as compared to other

asset management companies. It has launched many new and innovative

schemes from time to time like Magnum Contra Fund, Magnum Comma Fund,

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Magnum Emerging Businesses Fund, etc. but there are certain drawbacks in its

marketing strategies, which should be amended.

Advertising expenditure done by SBI Mutual Funds is also very low as

compared to other asset management companies. Therefore it can increase its

advertising expenditure to a certain extent to capture the market share.

As observed from the survey, main investment objective of retail investor is to

save for their children and there is only one scheme i.e. Magnum Childrens

Benefit Plan which is running exclusively for this purpose. This scheme has not

performed well for the last few months; therefore SBI Mutual Funds should

focus its attention in this sphere to increase the share of retail investors.

PENETRATION OF MUTUAL FUNDS IN URBAN SECTOR

GENERAL INFORMATION63


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Name - ..

Address - ..

Occupation - ..

Age - ...

SPECIFIC INFORMATION

1. Do you know about mutual funds?

Yes

No

If yes, then

Do you know that you are investing in a safer way than investing directly in

shares?

Yes

No

2. Do you know about various kinds of schemes offered by mutual funds?

Yes

No

3. What kind of risk you are willing to take?

HIGH MODERATE

LOW

4. In which kinds of schemes you invest?

EQUITY LINKED SCHEMES

DEBT LINKED SCHEMES

BALANCED SCHEMES

5. According to you, which is the best investment option?

BANK / POST OFFICE DEPOSITS64


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REAL ESTATE

MUTUAL FUNDS

6. What is the purpose of your investment?

REGULAR INCOME

TAX-REBATE PURPOSES

SAVINGS FOR CHILDREN

GROWTH IN INVESTMENT

7. What is the amount you prefer to invest annually?

LESS THAN Rs. 5000

Rs. 5000 10000

Rs. 10000 50000

MORE THAN Rs.50000

BIBLIORAPHY

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BOOKS

1. D.C. Anjaria, Dhaivat Anjaria, AMFI Workbook for Employees and Distributors,

Mumbai, December-2001, 2 nd Edition, page number 191-201

2. M.Y. Khan, Indian Financial System, New Delhi, Tata Mcgraw Hill Publishing

Company,Ltd, 2002, 2 nd Edition, page number 14.1-14.51

3. C.R. Kothari, Reseach Methodology Methods and Techniques, New Delhi,

Wishwa Prakashan, 2002, 2 nd Edition, page number 1-29

4. Shashi K Gupta, R. K. Sharma, Financial Management, New Delhi, Kalyani

Publishers, 2000, 3 rd Edition, page number 28.1-28.14

JOURNALS

1. Guide to Mutual Funds, Published by SEBI, page number 3-7

2. Key Information Memorandum of SBI Funds Management Pvt. Ltd

3. Investment Update of SBI MF, May 2005

4. Brochures of Banks and Post Offices

WEBSITES

1. www.sbimf.com
http://www.sbimf.com/http://www.sbimf.com/

Peneteration of Mutual Funds

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