Richa Yadav Project File

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SUMMER TRAINING PROJECT REPORT

ON

“A STUDY ON AWARENESS AND PERCEPTION OF

MUTUAL FUNDS”

AT

.

DEHRADUN

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTSFOR THE MASTER‟S DEGREE IN BUSINESS ADMINISTRATION

OF

UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN

SUBMITTED TO:

INTERNAL GUIDE EXTERNAL GUIDE

Prof.N.N.Pandey Mr. RAJEEV SHANKAR

Asst. Professor Sr.EXECUTIVE

IMS NJ INDIAINVEST PVT.LTD

DEHRADUN DEHRADUN

SUBMITTED BY:

RICHA YADAV

MB10B50

INSTITUTE OF MANAGEMENT STUDIES-DEHRADUN BATCH 2010-12



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ACKNOWLEDGMENTS

With regard to my project on mutual fund I would like to thank each and every

one who offered help, guidance and support whenever requires.

First and foremost I am exuberantly thankful to Mr. RAJEEV SHANKAR (Sr.

Executive) of NJ INDIA INVEST PRIVATE LTD for their support and guidance in the

project work. Further I want to thank to Mr. N.N PANDEY faculty at IMS, Dehradun for

their timely suggestions and for acting as a Guiding star for me, who helped me in their

own way to complete this interim report.

My sincere apologies to those who helped me in a variety of ways and whose name

could not be individually acknowledged.

I sincerely believe that the road of improvement is never ending.

Hence I shall forward to end gratefully acknowledge all suggestions received and I further

welcome inspiration and suggestion to make it best.

RICHA YADAV



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CERTIFICATE

I have the pleasure in certifying that Ms. Richa Yadav is a bonafide student of IInd

Semester of the Master‟s Degree in Business Administration (Batch 2010-12), of Institute

of Management Studies, Dehradun under Uttarakhand Technical University Roll No

010140500110.

She has completed his/her project work entitled “A STUDY ON AWARENESS AND

PERCEPTION OF MUTUAL FUNDS” under my guidance.

I certify that this is his/her original effort & has not been copied from any other source.

This project has also not been submitted in any other Institute / University for the purpose

of award of any Degree.

This project fulfills the requirement of the curriculum prescribed by this Institute for the

said course. I recommend this project work for evaluation & consideration for the award

of Degree to the student.

Signature : ……………………………………

Name of the Guide : Mr. N.N.Padney

Designation : Asst. Professor

Date : ……………………………………



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Executive Summary

Probably nothing can define the spirit of being „mutual‟ better than this verse. And who

else to understand it better than the mutual fund industry. It seems the mutual fund

industry in India is slowly but surely beginning to recognize this aspect for the better.

Today, there is greater emphasis on the role of the industry, the regulator. Securities and

Exchange board of India (SEBI) and industry body, Association of Mutual Funds in

India (AMFI) on creating awareness among investors and improving investor services. In

fact, the efforts of both the regulator as well as AMFI are laudable for promoting the cause

of investor education religiously. The „one product caters to all needs‟ approach has givenway to offering products which suite the specific needs of investors and product

innovation. There is also increased emphasis on convenience in terms of comfortable

transaction services to investors by using delivery or distribution platforms like the

Internet, ATMs, Corporate brokers, etc. Infact, distribution innovation has come to play a

key role in the growth of the industry. Industry players are using different distribution

channels to increase their market penetration. However, that is not to say that the Indian

Mutual Fund Industry is completely problem-free. Issues such as low penetration in both

semi urban as well rural areas (mutual funds have so far been largely an urban affair that

too in big cities), poor investor awareness and exploitation of this fact by industry players

are some of the issues that industry needs to address.

With the increase in domestic saving s and improvement in deployment of

investment through markets, the need and scope for mutual fund operation has increased

tremendously. Mutual funds are not only best suited for the purpose but also are capable of

meeting this challenge effectively. Professionals who manage mutual funds are considered

to have a better knowledge of market behavior. Mutual funds also create awareness among

the urban and rural middle-class about the benefits of investments in capital markets

through profitable and safe avenues. Within short span of time mutual fund operation has

become an integral part of the Indian financial scene and is balanced for rapid growth in

the near future. Today, numerous schemes, tailored to meet the diversified needs of savers,

are being offered by many institutions. In this project an attempt has been made to

evaluate the awareness and perception of mutual fund on different parameters.



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CHAPTER V………………………

Analysis and interpretation of Mutual of data

CHAPTER VII…………………………………

Findings

CHAPTER VIII………………………………

Recommendation

CHAPTER IX…………………………………

Conclusion

CHAPTER X……………………………………

Bibliography

ANNEXURE……………………………………….

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CHAPTER I

OBJECTIVES

The main aim of undertaking this study is to accomplish the following objective:

Conducting a market survey and understanding the customer perception about

mutual funds.

Analyzing the market survey and thereby finding out the investment pattern of the

customer.

Proper understanding and evaluation of mutual funds as an investment option.

Analysis customer awareness about Mutual fund.

Proper understanding and analysis of the perspective investor about this financialproduct in terms of safety, liquidity, service, returns and tax saving.



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SCOPE OF THE STUDY

A boom has been witnessed in mutual fund industry in recent times. A large number

Of new players have entered the market and trying to gain market share in this rapidly

Improving market.

This research was carried in Dehradun .I was sent to one of the branches of NJ India

Invest private limited situated in Dehradun from 10th

June 2011 to 8th

August 2011

where I conducted a market survey as well as completed my project work titled “A

study on awareness and perception of Mutual fund”

This study will help to know the preferences of the investors regarding

Company profile, portfolio, mode of investment, option for getting return and so on

they prefer. This project report may help the company to make further planning and

strategy.



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COMPANY OVERVIEW

1. INTRODUCTION:-

“Success is a journey, not a destination.” If we look for examples to prove this quote then

we can find many but there is none like that of NJ India Invest Pvt. Ltd. Back in the year

1994, two people created history by establishing NJ India Invest Pvt. Ltd leading advisors

and distributors of financial products and services in India.

NJ has over a decade of rich exposure in financial investments space and portfolio

advisory services. From a humble beginning, NJ over the years has evolved out to be a

professionally managed, quality conscious and customer focussed financial / investmentadvisory & distribution firm.

NJ prides in being a professionally managed, quality focused and

customer centric organisation. The strength of NJ lies in the strong domain knowledge in

investment consultancy and the delivery of sustainable value to clients with support from

cutting-edge technology platform, developed in-house by NJ.

At NJ we believe in …

Having single window, multiple solutions that are integrated for simplicity and

sapience.

Making innovations, accessions, value-additions, a constant process.

Providing customers with solutions for tomorrow which will keep them above the

curve.

Today NJ has over INR 60 billion* of mutual fund assets under advice with a wide

presence in over 96 locations* in 18 states* and 500+ employees in India. The

numbers are reflections of the trust, commitment and value that NJ shares with its

clients

NJ Wealth Advisors, a division of NJ, focuses on providing financial planning and

portfolio advisory services to premium clients of high net-worth. At NJ Wealth Advisors,

we have developed processes that focus on providing the best in terms of the advice and

the on-going management of your portfolio and financial plans.

At NJ, our experience, knowledge and understanding enables us to provide you with the

expected value, in an enhanced way. As a leading player in the industry, we continue to

successfully meet the expectations of our clients, through meaningful and comprehensive

solutions offered by NJ Wealth Advisors.



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2. VISION & MISSION OF NJ India Invest:-

Vision

To be the leader in our field of business through,

Total Customer Satisfaction

Commitment to Excellence

Determination to Succeed with strict adherence to compliance

Successful Wealth Creation of our Customers

Mission

Ensure creation of the desired value for our customers, employees and associates, through

constant improvement, innovation and commitment to service & quality. To provide

solutions which meet expectations and maintain high professional & ethical standardsalong with the adherence to the service commitments?

3. PHILOSOPHY:-

At NJ our Service and Investing philosophy inspire and shape the thoughts, beliefs,

attitude, actions and decisions of our employees. If NJ would resemble a body, our

philosophy would be our spirit which drives our body.

Service Philosophy:

Our primary measure of success is customer satisfaction …

We are committed to provide our customers with continuous, long-term improvements and

value-additions to meet the needs in an exceptional way. In our efforts to consistently

deliver the best service possible to our customers, all employees of NJ will make every

effort to:

Think of the customer first, take responsibility, and make prompt service to the

customer a priority

Deliver upon the commitments & promises made on time

Anticipate, visualize, understand, meet, exceed our customer‟s needs .

Bring energy, passion & excellence in everything we do.

Be honest and ethical, in action & attitude, and keep the customer‟s interest

supreme.



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Strengthen customer relationships by providing service in a thoughtful & proactive

manner and meet the expectations, effectively.

Investing Philosophy:

We aim to provide Need-based solutions for long-term wealth creation.

We aim to provide all customers of NJ, directly or indirectly, with true, unbiased, need-

based solutions and advice that best meets their stated & un-stated needs. In our efforts to

provide quality financial & investment advice, we believe that

Clients want need-based solutions, which fits them.

Long-term wealth creation is simple and straight.t

Asset-Allocation is the ideal & the best way for long-term wealth creation.

Educating and disclosing all the important facets which the customer needs to be

aware of, is important.

The solutions must be unbiased, feasible, practical, executable, measurable and

flexible.

Constant monitoring and proper after-sales service is critical to complete the

ongoing process.

At NJ our aim is to earn the trust and respect of the employees, customers, partners,

regulators, industry members and the community at large by following our service and

investing philosophy with commitment and without exceptions.

4. MANAGEMENT:-

The management at NJ brings together a team of people with wide experience and

knowledge in the financial services domain. The management provides direction and

guidance to the whole organization. The management has strong visions for NJ as a

globally respected company providing comprehensive services in financial sector.

The 'Customer First' philosophy is deeply ingrained in the management at NJ. The aim of the management is to bring the best to the customers in terms of –

Range of products and services offered

Quality Customer Service

All the key members of the organization put in great focus on the processes & systems

under the diverse functions of business. The management also focuses on utilizing

technology as the key enabler for all the activities and to leverage the technology for

enhancing overall customer experience.



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The key members of the management are:

Mr. Neeraj Choksi Jt. Managing Director

Mr. Jignesh Desai Jt. Managing Director

Key Sales Team:

Mr. Misbah Baxamusa National Head

Mr. Naveen Rathod V.P. (Sales)

Mr. Kulbhushan Nandwani A.V.P. (Marketing)

Mr. Prashant Kakkad A.V.P. (Sales)

Key Executive Team:

Mr. Shirish Patel Information Technology

Mr. Abhishek Dubey Business Process

Mr. Vinayak Rajput Operations

Mr. Dhaval Desai Human Resources

Mr. Col. Dixit Administration

Mr. Tejas Soni Finance

Mr. Viral Shah Research

Mr. Rakesh Tokarkar Compliance



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5. People & culture:-

People:

Enthusiasm, Enterprise, Education and Ethics form the four pillars at NJ. At NJ one can

witness the vibrant energy, enthusiasm and the enterprising drive to excel flowing freely

throughout the organization. At NJ can also experience the creativity, one-to-one

responsiveness, collaborative approach and passion for delivering value.

At NJ people evolve to be more effective, efficient, and result oriented. Knowledge is

inherent due to the education-centric approach and the experience in handling different

clients groups across diverse product profiles.

NJ understands that the people are the most important assets of the company and it is

not the company that grows but the people. NJ hence undertakes rigorous training

and educational activities for enhancing the entire team at NJ. NJ also believes in the

„Learning through Responsibility‟ concept for its employees.

For people at NJ success is not a new word, but is a regular stepping – stone to realizingthe one vision that everyone shares.

Culture :-

At NJ we believe in transforming the lives of our customers. We exist to create a

difference a change towards a better life.

The culture at NJ reflects this responsibility, this dream of transforming lives. And we at

NJ are always excited and enthused in doing so.

We believe in keeping „You First‟, providing you with products and services that meetyou‟re stated and unstated needs. Client satisfaction and client service is the Mantra we

constantly recite.

This service oriented philosophy runs throughout the organization, from top to bottom.

Employees are given ample freedom in their work. The objective is to keep an open,

healthy environment with ample scope for enterprise, improvement, innovations and out-

of-the box solutions.

Our efforts are constantly engaged in improving our existing services, offering new

and innovative solutions that go beyond your expectations. This focus has made us

one of the most respected and preferred service providers, especially in the mutual

fund industry.

6. SERVICE STANDARDS:-

Service in words, service in action, Service is the key to unlocking customer satisfaction,

which again is key for sustainability Business.

At NJ we understand this very well. NJ has set strict processes in place to delivered

service to customers. AT NJ strict quality service standards are set and a well

defined established and followed religiously by our quality customer service

team.

Performance evaluated on a frequent basis and glitches are iron out.



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But quality service also involves quality people in addition to processes. NJ gives

Significant the proper training and development of the people involved in the

service delivery chain.

Further Us:

Have well-defined “Privacy Policy” to keep clients information confidential &

internal done on the same at regular intervals.

Receive various statistics which are analyzed on an ongoing basis to improve the

standards.

We are committed to improve and enhance our services and undertake new

Services initiative and other services differentiate us with other services providers in

the industry.

Our service commitment…..

The service commitments are to guide the actions of the people at NJ. Clearly stated

Customers can freely communicate any such action /events wherein they feel that

any Of the commitments have been breached/ compromised .

At NJ we desire to honors Our commitments all points of the time and to all our

customers without any bias.

To provide customer-focused need-based valued services.

To provide reliable, accurate and timely information.

To maintain all records in privacy.

To optimize services/benefits at least justifiable cost.

To develop and grow the customers‟ business.

To provide constructive after sales service.

To honor our service commitments.

As NJ Wealth Advisor‟s Global Private Client, you get comprehensive set of

services that ensure you stay informed, insightful, in command, of your investments at

all times.



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7. PRODUCTS:-

Life Vista

Life is counted not in years, but in moments. Moments of truth, joy, achievement andsatisfaction, peace, tranquillity, and freedom.

At NJ, we bring such moments to life.

How we can help you?

We will do a detailed study of your goals and objectives in life and would help you by

devising a comprehensive plan to help you achieve them. We would also regularly

monitor your plans to make sure that you are always on track to achieve your goals.

Asset Vista

Wealth is not an end. Neither is it a beginning. Wealth is a process, a journey. A journey

of power, achievement and responsibility.

At NJ we ensure that this journey continues and grows.

How we can help you?

We will seek to manage and monitor your portfolio as per your objectives and your risk

profile. We would manage your portfolio the Asset Allocation way which is the most

effective & ideal way to manage investments. You would also have access to consolidated

portfolio reports that enable you to see all your investments into multiple avenues at a

single place.

8. SERVICES PROVIDED TO CLIENT:-

As NJ Wealth Advisor‟s Global Private Client, you get comprehensive set of services that

ensure you stay informed, insightful, in command, of your investments at all times.



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Comprehensive Financial Planning:-

We all have many responsibilities and goals in our lives. We have dreams and aspirations

for a better future. But quite often we are not sure as to how we will fulfil these goals and

aspirations. Life changes over time. We may never be sure what today holds for ustomorrow. What if something goes wrong? How do we make sure that we get what we

wish?

A comprehensive Financial Plan is what you need. At NJ Wealth Advisors we offer you

with Comprehensive Financial Planning solutions which would involve …

A detailed study of your goals

Preparation of a comprehensive Financial Plan

Monitoring of the Financial Plan on an on-going basis

At NJ Wealth Advisors we offer you with comprehensive Financial Planning Services

under the product – Life Vista.

Quality Portfolio Advisory:-

Making money is easy. Managing money is difficult. And managing money in today‟s

complex financial markets with multiple products on an ongoing basis becomes even more

difficult.



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As investors we often may feel the lack of time and energy to undertake monitoring and

managing of our investments in multiple avenues. This requires both dedicated efforts and

skills in portfolio management.

At NJ Wealth Advisors we realise the need for quality, unbiased portfolio advisory

services. At NJ we would aim to manage your portfolio with a superior, time tested andmuch effective way of Asset Allocation keeping in mind your risk profile.

At NJ Wealth Advisors we offer you with quality Portfolio Advisory Services under the

product – Asset Vista.

Consolidated Reporting:-

Quality online Wealth Account:

As a premium client you would have access to one of the best online investment accounts

that offer comprehensive reports, many of which are unique in nature and give valuableinsights on our investments

Our online Wealth Account covers almost all the investment avenues that you may have:

Mutual Funds – All AMCs, All Schemes

Direct Equity

Life Insurance

Physical Assets – Gold and Property

Private Equity – Business

Debt Products

Bank Deposits and Company Deposits

RBI / Infrastructure Bonds

Postal Savings – KVP, MIS, NSC

Debentures

Small Savings – PPF, NSS

You would have access to Consolidated Net Asset Reports which would give you a single

view of all your investments into different avenues as given above.

Further, within each of the Asset class we have many more reports and utilities. Some of

the reports covered are …



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Consolidated:

Consolidated Asset Allocation, Consolidated Net Asset, Interest Income, Profit & Loss

Mutual Funds:

Valuation, Transaction, Profit & Loss, Performance, Portfolio reports like - AMC / Sector

/ Equity / Credit / Debt Exposure, Weighted Average Maturity, Dividend history, etc

Direct Equity:

Demat accounts, Transaction, Valuation, and Profit & Loss

Life Insurance:

Policy Report, Premium Reminder, Cash Flow

Debt:

Transaction, Interest Income, Maturity reports for different Asset

Dedicated Team: -

At NJ Wealth Advisors, we work in a team concept to provide quality, effective and

timely service to our clients. The team is designed keeping you at the beginning or the end

of the flow as the originator and the end receiver of any request or service.

The team handling you consists of the Relationship Manager and the Account

Manager who would be in direct touch with you. This would be supported by the

Centralized Research Team, the Chief Portfolio Manager and the Service Team. All the

important investment decisions and/or plans recommended to you are actually

prepared and /or approved by the Chief Portfolio Manager with inputs from the

Research Team. The structure ensures that all the Plans and recommendations that you

receive are unbiased, based on true research & detailed study, and suited to your needs.



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Quality Customer Service

NJ realizes the true importance of quality customer service. The service commitments are to

guide the actions taken at NJ. Clearly stated, customers can freely communicate any such

actions/events wherein they feel that the following commitments have been breached. At NJ

we desire to honors our commitments at all points of time and to all customers without any

bias.

Quality Service:

Highlights-

You will receive regular portfolio reports in hard copies to serve as record

All records are maintained for the plans and recommendations and minutes of all the

meetings are kept.

Dedicated Account Manager directly oversees the operational support to you Quality

Advisory.

True, unbiased recommendations.

Each plan is unique in nature to suit your needs and profile.

Defined Process followed in investment consultancy / portfolio management.

All the plans are prepared and/or approved in line with the set process by Chief

Portfolio Manager with inputs from the Research Team.



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Quality Communications support:

Daily market updates Email

Daily MF tracker-for short term debt fund Email

Weekly performance report Email/

Hard copy

Comprehensive monthly fact sheet Hardcopy

Research articles and reports Email /

Hardcopy

9. 360° – ADVISORY PLATFORM:-

With this philosophy, we try to offer all possible products, services and support which an

Advisor would need in his business.

The support functions are generally in the following areas …



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Business Planning and Strategy

Training and Development – Self and of employees

Products and Service Offerings

Business Branding

Marketing

Sales and Development

Technology

Advisors Resources - Tools, Calculators, etc..

Research

Communications

With this comprehensive supporting platform, the NJ Funds Partners stays ahead of the

curve in each respect compared to other Advisors/competitors in the market.

Recognitions

Some of the awards & recognitions that we have received in past …

Year 2000:

For Outstanding Performance presented by Chairman, Prudential Plc. at London.

Year 2002:

For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at

London.

Year 2003:

For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at

London.

Year 2004:

Among Most Valued Business Associates presented by HDFC Standard Life at

Edinburgh, Scotland.

Year 2005:

For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia.

Year 2006:

Award for mobilizing the Highest Number of SIPs at National Level by Fidelity

Mutual Fund Plc at Mumbai.

Year 2007:

Award – Vietnam



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WHY INSURANCE AGENTS SHOULD SELL MUTUAL FUND?

Reason 1: Easy to make more clients … The Penetration of Mutual Funds is very low …

Whereas relatively,

The Penetration of Insurance is very high ….

Opportunity for you to acquire more clients …

Now no call of yours should get waste

Reason 2: LOW COMPETITION OF MUTUAL FUND ADVISORS

Lack of competition represents a very big opportunity to grow your business anywhere in

India.

> 22 Lakhs Insurance Advisors

V/s

< 70,000 Mutual Fund Advisors

(Very Few Financial Advisors)

(>35 Insurance Advisors V/s 1 Mutual Fund Advisor)

A huge DEMAND of Quality Mutual Fund Agents …

There is a genuine need for more than 2 lakh mutual fund advisors in India …(our

estimates)

Reason 3: More satisfaction to your clients

If you are not selling mutual funds then you must not be aware of what they truly

are and the possibilities that they offer in providing solutions that meet the diverse

needs of different clients.

With mutual funds in your offering, you are in a much better position to fully meet

the client‟s financial and investment needs.

Your client would ideally like you to do that and will be happy once to offer him

multiple solutions.



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Reason 4: Additional source of income

Mutual fund is one product today that potentially has no limits to the volumes

that you can generate.

The important differentiation here with insurance is that you income is not

based on the premium you collect but on the entire AUM (assets under

management) that you have mobilized to counter the low rates.

An agent‟s AUM running into corers in quite common in the industry. The

income from mutual funds can complement your earnings from insurance and

may even substitute them in future …

Reason 5: Leveraging existing clientele base

How to get more out of what you already have?

Well, mutual fund is just the perfect answer to that question.

The truth is that there is a lot of potential to generate further income from yourexisting clientele base.

Much of the investment needs of clients are unexplored and unfulfilled that you

can satisfy.

Reason 6: Strong industry growth ahead

There is a very strong growth of mutual funds ahead …

The reasons are many – good product, low penetration, huge market,

growing income, changing mindset, lack of other attractive investment products,

etc.In US, almost every third household invests in mutual funds.

The US MF industry size is about 67% of the US GDP and is 1.5 times of the bank

deposits in US.

The situation is though almost opposite in India with the MF industry size here

equal to 6% of GDP and bank deposits are 10.50 times of the total industry size.

The potential is huge and India is expected to follow in on the lines of the more

developed countries.

Reason 7: Retention and loyalty of clients

The underlying logic can be found in the growth of multiplexes, shopping

malls, after all the human nature is basically the same …

People today look for easy, fast, and single service point that provides them with

solutions that meets their multiple needs.

your client would probably invest in mutual funds some day or later …

Why not you do the same before anyone else gets to your client?



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Reason 8: Greater choice of products

Till now we haven‟t really talked about what choices you can offer to your clients

… In fact, you can offer cash-flow management, to long-term goal oriented

planning to your clients.

Your basket would include pure equity funds (Diversified / Sectoral / Index Funds)

to pure debt funds (Gilt / Income / Short Term Plans / Floating / Liquid Funds) to

hybrid funds (MIPs / Balance / Arbitrage Funds) to the tax saving ELSS.

With a vast range of Fund houses and many more schemes – the choices

are virtually endless, and one is sure to find what one needs.

Reason 9: Be a Complete Financial Advisor …

What next to Insurance?

There is an opportunity for you to transcend to the next level and offer „real

solutions‟ that will truly add value to your clients.

You should develop yourself and grow more as a „Financial‟ advisor rather than

just „Insurance‟ agent.

The learning‟s can extend beyond products to markets, to equities, debt,

economy, etc. to understanding real financial planning, funds management, etc.

Reason 10: Helps in selling ULIPs … If your focus is also selling ULIPS then, dealing in mutual funds should also help

you in better understanding and helping communicate the same to your clients.

It is a general observation in western countries that as an economy progresses, term

plans and ULIPs have increasing % of fresh investments from clients as far as

insurance is considered.

Your presence in mutual funds would be an advantage to you going forward.

Reason 11: Market potential of mutual funds.

Low Penetration of Mutual Funds in INDIA

Few people have been exposed to the idea & advantages of mutual funds and even fewer

actually invest in mutual funds, because of lack of adequate no. of advisors



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Opportunity to offer such products to clients …

Every person can be a customer!!

Reason12: EXCELLENT PAST PERFORMANCE

Mutual Fund Equity schemes have delivered very attractive returns in last 5 years, giving

over 51% returns annually

Opportunity for you to offer your clients with such equity-related products for long-term

wealth creation.

Measure US

Rupees invested in Mutual Funds out of 100 > 3

MF Industry size as % size of economy (GDP) 83

Total size / value of MF industry (Rs. Lac Crores) > 46

Sc

e N

3 Years 5 Years 7 Years 10 Ave

20.98 35.10 31.92 27.79 BS

23.7 29.19 23.4 12.69 NS



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Industry Profile

HISTORY AND ORGANIZATION OF MUTUAL FUNDS IN INDIA

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 the Reserve Bank. The history of mutual

funds in India can be broadly divided into four distinct phases

First Phase – 1964-87:

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by

the Reserve Bank of India and functioned under the Regulatory and administrative control of

the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial

Development Bank of India (IDBI) took over the regulatory and administrative control inplace of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988

UTI had Rs. 6,700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds):

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks

and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India

(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987

followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),

Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund(Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund

in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004

crores

Third Phase – 1993-2003 (Entry of Private Sector Funds):

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the yearin which the first Mutual Fund Regulations came into being, under which all mutual funds,

except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged

with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and

revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI

(Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds

setting up funds in India and also the industry has witnessed several mergers and



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acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of

Rs. 1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets under

management was way ahead of other mutual funds.

Fourth Phase – since February 2003:

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of

India with assets under management of Rs. 29,835 crores as at the end of January 2003,

representing broadly, the assets of US 64 scheme, assured return and certain other schemes.

The Specified Undertaking of Unit Trust of India, functioning under an administrator and

under the rules framed by Government of India and does not come under the purview of the

Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation

of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under

management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual

Fund Regulations, and with recent mergers taking place among different private sector funds,

the mutual fund industry has entered its current phase of consolidation and growth. As at the

end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores

under 421 schemes.

The graph indicates the growth of assets over the years.

Graph 1: The graph showing Growth in assets under management through Mutual Funds



29

RECENT TRENDS IN MUTUAL FUND INDUSTRY

The most important trend in the mutual fund industry is the aggressive expansion of

the foreign owned mutual fund companies and the decline of the companies floated by

nationalized banks and smaller private sector players.

Many nationalized banks got into the mutual fund business in the early nineties and

got off to a good start due to the stock market boom prevailing then. These banks did

not really understand the mutual fund business and they just viewed it as another kind

of banking activity. Few hired specialized staff and generally chose to transfer staff

from the parent organizations. The performance of most of the schemes floated by

these funds was not good. Some schemes had offered guaranteed returns and their

parent organizations had to safekeeping out these AMCs by paying large amounts of

money as the difference between the guaranteed and actual returns. The service levels

were also very bad. Most of these AMCs have not been able to retain staff, float new

schemes etc. and it is doubtful whether, barring a few exceptions, they have serious

plans of continuing the activity in a major way.

The experience of some of the AMCs floated by private sector Indian companies was

also very similar. They quickly realized that the AMC business is a business, which

makes money in the long term and requires deep-pocketed support in the intermediate

years. Some have sold out to foreign owned companies, some have merged with

others and there is general restructuring going on The foreign owned companies have

deep pockets and have come in here with the expectation of a long pull. They can be

credited with introducing many new practices such as new product innovation, sharp

improvement in service standards and disclosure, usage of technology, broker

education and support etc. In fact, they have forced the industry to upgrade itself and

service levels of organizations like UTI have improved dramatically in the last few

years in response to the competition provided by these.



30

MUTUAL FUND COMPANIES IN INDIA

List of Some of the AMCs Operating in India

Name of the AMC Nature of

ownership

Alliance Capital Asset Management (I) Private Limited Private Foreign

Birla Sun Life Asset Management Company Limited Private Indian

Bank of Baroda Asset Management Company Limited Banks

Bank of India Asset Management Company Limited Banks

Canbank Investment Management Services Limited Banks

Cholamandalam Cazenove Asset Management Company

Limited

Private Foreign

Dundee Asset Management Company Limited Private Foreign

DSP Merrill Lynch Asset Management Company Limited Private Foreign

Escorts Asset Management Limited Private Indian

First India Asset Management Limited Private Indian

GIC Asset Management Company Limited Institutions

IDBI Investment Management Company Limited Institutions

Indfund Management Limited Banks

ING Investment Asset Management Company Private

Limited

Private Foreign

J M Capital Management Limited Private Indian

Jardine Fleming (I) Asset Management Limited Private Foreign

Kotak Mahindra Asset Management Company Limited Private Indian

Kothari Pioneer Asset Management Company Limited Private Indian

Jeevan Bima Sahayog Asset Management Company Limited Institutions

Morgan Stanley Asset Management Company Private

Limited

Private Foreign



31

Punjab National Bank Asset Management Company Limited Banks

Reliance Capital Asset Management Company Limited Private Indian

State Bank of India Funds Management Limited Banks

Shriram Asset Management Company Limited Private Indian

Sun F and C Asset Management (I) Private Limited Private Foreign

Sundaram Newton Asset Management Company Limited Private Foreign

Tata Asset Management Company Limited Private Indian

Credit Capital Asset Management Company Limited Private Indian

Templeton Asset Management (India) Private Limited Private Foreign

Unit Trust of India Institutions

Zurich Asset Management Company (I) Limited Private Foreign

The sponsorers of Association of Mutual Funds in India

Bank Sponsored:

SBI Fund Management Ltd.

BOB Asset Management Co. Ltd.

Canbank Investment Management Services Ltd.

UTI Asset Management Company Pvt. Ltd.

Institutions:

GIC Asset Management Co. Ltd.

Jeevan Bima Sahayog Asset Management Co. Ltd.

Private Sector

Indian:

BenchMark Asset Management Co. Pvt. Ltd.

Cholamandalam Asset Management Co. Ltd.

Credit Capital Asset Management Co. Ltd.



32

Escorts Asset Management Ltd.

JM Financial Mutual Fund

Kotak Mahindra Asset Management Co. Ltd.

Reliance Capital Asset Management Ltd.

Sahara Asset Management Co. Pvt. Ltd

Sundaram Asset Management Company Ltd.

Tata Asset Management Private Ltd.

Predominantly India Joint Ventures:

Birla Sun Life Asset Management Co. Ltd.

DSP Merrill Lynch Fund Managers Limited

HDFC Asset Management Company Ltd

Predominantly Foreign Joint Ventures:

ABN AMRO Asset Management (I) Ltd.

Alliance Capital Asset Management (India) Pvt. Ltd.

Deutsche Asset Management (India) Pvt. Ltd.

Fidelity Fund Management Private Limited

Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.

HSBC Asset Management (India) Private Ltd.

ING Investment Management (India) Pvt. Ltd.

Morgan Stanley Investment Management Pvt. Ltd.

Principal Asset Management Co. Pvt. Ltd.

Prudential ICICI Asset Management Co. Ltd.

Standard Chartered Asset Mgmt Co. Pvt. Ltd.

Association of Mutual Funds in India Publications

AMFI publishes mainly two types of bulletin. One is on the monthly basis and the

other is quarterly. These publications are of great support for the investors to get

intimation of the know-how of their parked money.



33

CHAPTER-III

Introduction about Mutual Fund

Mutual Funds: Why?

Professional management

Diversification and Lowered risks

Low costs

Liquidity

Transparency

Flexibility

Choice of schemes

Tax benefits

Regulation

The advantages of investing in a Mutual Fund are:

Professional Management

Mutual funds hire full-time, high-level investment professionals. Funds can afford to

do so as they manage large pools of money. The managers have real-time access to

crucial market information and are able to execute trades on the largest and most cost-

effective scale.

Diversification :

Mutual funds invest in a broad range of securities. This limits investment risk by

reducing the effect of a possible decline in the value of any one security. Mutual fund



34

unit-holders can benefit from diversification techniques usually available only to

investors wealthy enough to buy significant positions in a wide variety of securities.

Low Costs :

A mutual fund let's you participate in a diversified portfolio for as little as Rs.5,000/-,

and sometimes less. And with a no-load fund, you pay little or no sales charges toown them.

Liquidity :

In open-ended schemes, you can get your money back promptly at net asset value

related prices from the mutual fund itself.

Transparency :

You get regular information on the value of your investment in addition to disclosure

on the specific investments made by the mutual fund scheme.

Convenience and Flexibility :

You own just one security rather than many; yet enjoy the benefits of a diversified

portfolio and a wide range of services. Fund managers decide what securities to trade

collect the interest payments and see that your dividends on portfolio securities are

received and your rights exercised. It also uses the services of a high quality custodian

and registrar in order to make sure that your convenience remains at the top of our

mind.

Personal Service :

One call puts you in touch with a specialist who can provide you with information

you can use to make your own investment choices. They will provide you personal

assistance in buying and selling your fund units, provide fund information and answer

questions about your account status. Our Customer service centers are at your service

and our Marketing team would be eager to hear your comments on our schemes.



35

Mutual Funds: What is it?

Mutual Fund Operation Flow Chart

A Mutual Fund is a trust that pools the savings of a number of investors who share a common

financial goal. The money thus collected is then invested in capital market instruments such as

shares, debentures and other securities. The income earned through these investments and the

capital appreciations realized are shared by its unit holders in proportion to the number of units

owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it

offers an opportunity to invest in a diversified, professionally managed basket of securities at a

relatively low cost.

The flow chart below describes broadly the working of a mutual fund:



36

Mutual Fund: What is it made of?

Investors:

Every investor, given his financial position and personal disposition, has a certain tendency

preference to take risk (risk profile / risk appetite). The hypothesis is that by taking an

incremental risk (of losing capital, wholly or partly), it would be possible for the investor to

earn an incremental return.

But assuming risk without regularly monitoring it is foolhardy. Therefore, it would be

prudent for investors who take a risk to be able to manage this risk.

MF is a solution for investors who lack the time, or the inclination or the skills to actively

manage their investment risk in individual securities. They can delegate this role to the MF,

while retaining the right and the obligation to monitor their investments in the scheme

(which, in turn, invests in individual securities).

In the absence of a MF option, the moneys of such “passive” these investors would lie either

in bank deposits or other “safe” investment options, thus depriving the investors of the

possibility of earning a better return.

Investing through a MF would make economic sense for an investor if his investment, over

the medium to long term, fetches a return (net of all costs and expenses) that is higher than



37

what she would otherwise have earned by investing directly.

Because the goal of investing is to accumulate real wealth – an enhanced ability to pay for

goods and services – the ultimate focus of the long-term investor must be on real, not

nominal, returns.

Trustees:

Trustees are the people within the mutual fund organization, who are responsible to ensure

for ensuring that investors‟ interests are properly taken care of In return for their services,

they are paid trustee fees, which is normally charged to the scheme.

Asset Management Company (AMC):AMCs manage the investment portfolios of schemes. An AMC‟s Income for an AMC

comes through from the management fees that are it charges to the schemes. The

management fee is calculated as a percentage of net assets managed . Some countries

provide for performance based management fees as well.

Distributors :

Distributors earn a commission for bringing investors into the schemes of a MF. This

commission is an expense for the scheme, although there are occasions when the AMC

chooses to bear the cost, wholly or partly.

Depending on the financial and physical resources at their disposal, they distributors could

be:

Tier 1 distributors (having an owned or franchised network reaching out to investors all

across the country); or

Tier 2 distributors (regional players with some reach within their region); or

Tier 3 distributors (marginal players).

It is paradoxical that distributors earn a commission from the AMC, but are expected to

safeguard the financial health of investors from whom they do not earn a fee.

It is almost like a doctor earning a commission from the pharmaceutical company, but

expected to safeguard the physical health of the patient who does not pay him anything.



38

Registrars

The investor‟s‟ holding in various schemes is typically tracked by the scheme‟s Registrar

and Transfer agent (R&T). Some AMCs prefer to handle this role in-house. The registrar / AMC maintains an account of the investor‟s‟ investments in and dis-investment from the

scheme. Requests to invest more money into a scheme or to recover moneys against existing

investments in the scheme are processed by the R&T.

Custodian / Depository

The custodian maintains custody of the securities in which the scheme invests (as distinct

from the registrar who tracks the

Investment by investors in the scheme). This ensures an ongoing independent record of the

investments of the scheme. The custodian also follows up on various corporate actions,

such as rights, bonus and dividends declared by invested companies.

In a situation where securities are increasingly being dematerialized, the role of the

depository for such independent record of investments is increasing growing.

Different types of Mutual Funds:

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial

position, risk tolerance and return expectations etc. The table below gives an overview

into the existing types of schemes in the Industry.



39

TYPES OF MUTUAL FUND SCHEMES

By Structure:

Open - Ended Schemes: An open-end fund is one that is available for subscription

all through the year. These do not have a fixed maturity. Investors can conveniently

buy and sell units at Net Asset Value ("NAV") related prices. The key feature of

open-end schemes is liquidity.

Close - Ended Schemes: A closed-end fund has a stipulated maturity period which

generally ranging from 3 to 15 years. The fund is open for subscription only during a

specified period. Investors can invest in the scheme at the time of the initial publicissue and thereafter they can buy or sell the units of the scheme on the stock

exchanges where they are listed. In order to provide an exit route to the investors,

some close-ended funds give an option of selling back the units to the Mutual Fund

through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at

least one of the two exit routes is provided to the investor.

Interval Schemes: Interval funds combine the features of open-ended and close-

ended schemes. They are open for sale or redemption during pre-determined intervals

at NAV related prices.

By Investment Objective :

Growth Schemes: The aim of growth funds is to provide capital appreciation over

the medium to long- term. Such schemes normally invest a majority of their corpus in

equities. It has been proven that returns from stocks, have outperformed most other

kind of investments held over the long term. Growth schemes are ideal for investors

having a long-term outlook seeking growth over a period of time.

Income Schemes: The aim of income funds is to provide regular and steady income

to investors. Such schemes generally invest in fixed income securities such as bonds,

corporate debentures and Government securities. Income Funds are ideal for capital

stability and regular income.



40

Balanced Schemes: The aim of balanced funds is to provide both growth and

regular income. Such schemes periodically distribute a part of their earning and

invest both in equities and fixed income securities in the proportion indicated in their

offer documents. In a rising stock market, the NAV of these schemes may not

normally keep pace, or fall equally when the market falls. These are ideal for

investors looking for a combination of income and moderate growth.

Money Market Schemes: The aim of money market funds is to provide easy

liquidity, preservation of capital and moderate income. These schemes generally

invest in safer short-term instruments such as treasury bills, certificates of deposit,

commercial paper and inter-bank call money. Returns on these schemes may

fluctuate depending upon the interest rates prevailing in the market. These are ideal

for Corporate and individual investors as a means to park their surplus funds for short

periods.

Load Funds: A Load Fund is one that charges a commission for entry or exit. That is,

each time you buy or sell units in the fund, a commission will be payable. Typically

entry and exit loads range from 1% to 2%. It could be worth paying the load, if the

fund has a good performance history.

No-Load Funds: A No-Load Fund is one that does not charge a commission for entry

or exit. That is, no commission is payable on purchase or sale of units in the fund.

The advantage of a no load fund is that the entire corpus is put to work.

Other Schemes:

Tax Saving Schemes: These schemes offer tax rebates to the investors under

specific provisions of the Indian Income Tax laws as the Government offers tax

incentives for investment in specified avenues. Investments made in Equity Linked

Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of

the Income Tax Act, 1961. The Act also provides opportunities to investors to save

capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the capital

asset has been sold prior to April 1, 2000 and the amount is invested before

September 30, 2000.



41

Special Schemes :

Industry Specific Schemes: Industry Specific Schemes invest only in the industries

specified in the offer document. The investment of these funds is limited to specific

industries like InfoTech, FMCG, and Pharmaceuticals etc.

Index Schemes: Index Funds attempt to replicate the performance of a particular

index such as the BSE Sensex or the NSE 50

Sector Specific Schemes: Sectorial Funds are those, which invest exclusively in a

specified industry or a group of industries or various segments such as 'A' Group

shares or initial public offerings



42

CHAPTER IV

RESEARCH METHODOLOGY

The objective of the present study can be accomplished by conducting a systematic

market survey. Market Research is a systematic design, collection, analysis and

reporting of data and finding that are relevant to different market situation facing by

the company. The marketing research process that will be adopted in the present study

consist of the following stages:

1. Defining the problem and research objective:

The research objective state that what information is needed to solve the problem.

Here the objective of other research is awareness and perception of Mutual fund as an

Investment option and what are the benefits that the investor will get by investing in

Mutual funds.

2. Developing research plan:

Once the problem is defined, the next step is to prepare a plan for getting the

information needed for the research. The present study will adopt exploratory

approach where in there is a need to gather a large amount of information before

making a conclusion if required. The descriptive and casual approaches may also be

used.

3. Collection and Sources of Data:

To collect the data, relevant information is necessary as regards to the project; as a

result data was collected by using two ways:

Primary Data

Secondary Data.

Primary Data:

In this the information is being possessed with first hand information, which is new

and fresh.

The tools used by us for the primary data are:

Questionnaire



43

Face-to-Face Interview

Observation

Secondary data:

The information that is received with the help of Journals, Magazines, Financial

reports or which is already present with the company.

References used from management books

Gathered information through World Wide Web (www).

Support and knowledge provided by Faculty and Company guide.

4. Sampling Plan:

Sampling unit: The customers will be stratified and segmented according to their

age, income, cultural background, gender, education, etc. (Demography).

Sampling size: A survey was conducted for one hundred respondents.

5. Analyze the collected information:

This involves converting raw material in to useful information. It involves tabulation

of data and using statically measures on them for developing frequency distribution

and calculating the averages and dispersions.

6. Report research findings:

This phase will mark the culmination of the marketing research efforts. The report

with the research finding is a formal written document.



44

LIMITATIONS

Though the present study aimed to achieve the above-mentioned objectives in full

earnest and accuracy, it was in a weak position due to certain limitations. Some of thelimitations of this study may be summarized as follows:

Getting accurate responses from the respondents due to their inherent problemswas difficult. They were partial, and refused to cooperate.

Very few people have knowledge about Mutual funds and the other products of the

Mutual fund.

Locating the target respondents was very time consuming.

Sample size was limited due to the limited period of days allocated for the survey.

The selection of respondents to cover the various strata of the society was tedious

and time consuming.



45

ANALYSIS OF FINDINGS

AN OVERVIEW:

This section shows a simple overview of respondents like their age, gender, income

profile, saving habits and qualification

(a) Age-profile:

Table No. I (a) showing age profile of respondents:

S. No Age No .of

respondents

Percentage

1. 20-25 19 19%

2. 25-40 40 40%

3. 40-55 21 21%

4. 55-60 15 15%

5. 60-Above 5 5%

Total 100 100%

19%

40%

21%

15%5%

Age Profile

20-25

25-40

40-45

55-60

60-abve



46

INTERPRETATION:

In this survey I found the maximum number of respondents belongs to the age group

of 25-40 years, followed by 40-55 years of age category.

(b) Gender-wise:

Table No. I (b) showing gender wise profile of respondents:

S. No Gender No. of

respondents

Percentage

1. Male 92 92%

2. Female 8 8%

Total 100 100%

INTERPRETATION:

Table No. I (b) represents the gender ratio of the respondents in this survey.92%of the

covered respondents were male and remaining 8% were female

(c)Income Profile:

Table No. I(c) showing income wise profile of respondents:

92

8

Gender-wise respondent

Male

Female



47

S. No Income No. of

respondents

Percentage

1. Less than 1.0

Lakh

34 17%

2. 1.0-2.0 Lakh 38 38%3. 2.0-3.0 Lakh 30 30%

4. 3.0-5.0 Lakh 6 6%

5. More than 5.0

Lakh

4 4%

6. No response 5 5%

Total 100 100%

INTERPRETATION:

In this survey I found the breakup of the respondents. Around 38%of the respondents

have an income between of Rs.1.0-2.0 Lakhs per annum and 30% of respondents in

between 2.0-3.0 Lakhs .it display the income profile of respondents.

(d) Saving Habits:

.

Table No. I (d) showing saving habits profile of respondents:

S. No Savings No. of

respondents

Percentage

1. Up to Rs. 2000 31 31%

2. Rs.2001-5000 33 33%

3. Rs.5001-

10000

16 16%

0%5%

10%

15%

20%

25%

30%

35%

40%

Less than

1.0 Lakh

1.0-2.0

Lakh

2.0-3.0

Lakh

3.0-5.0

Lakh

More

than 5.0

Lakh

No

response

Income Profile

Income Profile



48

4. Rs.10001-

20000

3 3%

5. Above

Rs.20001

1 1%

6. No Response 16 16%

Total 100 100%

INTERPRETATION:

In this survey around 33% of the respondents reported to have a saving in the range of

Rs.2001-5000 per month .only 1% of the respondents reported having in higher

bracket i.e. more than 20001 per month.

(e) Qualification:

Table No. I (e) showing Qualification profile of respondents:

S.No Qualification No. of

respondents

Percentage

1. Undergraduates 6 6%

2. Graduates 39 39%

3. Postgraduates 40 40%

4. Others 1 1%

5. No response 14 14%

Total 100 100%

up to Rs.2000

31%

Rs. 2001-5000

33%

Rs.5001-10000

16%

Rs.10001-20000

3%

aboveRs.20001

1%

No response

16%

Saving Habits of respondents

up to Rs.2000

Rs. 2001-5000

Rs.5001-10000

Rs.10001-20000

aboveRs.20001

No response



49

INTERPRETATION:

The surveyed groups are well educated group with 40%being post graduates and

39%being graduates. Around 6% of the samples collected were undergraduates.

0%

10%

20%

30%

40%

No. of respondents

6%

39% 40%

1%

14%

Undergraduates

Graduates

Postgraduates

Others

No response



50

KNOWLEDGE OF MUTUAL FUNDS:

In the survey, I attempted to understand from the investors their knowledge of Mutual

fund.

(a)Knowledge of Mutual Fund:

Table No. II (a) showing knowledge of mutual fund of respondents:

S.n No Knowledge of

Mutual Funds

No. of

respondents

Percentage

1. Very good 4 4

2. Good 9 9

3. Average 19 19

4. Poor 64 64

5. No response 4 4

Total 100 100%

INTERPRETATION:

In this survey it was found that 64% of the respondents don‟t‟ know or their

knowledge is very poor about Mutual funds. they ,while 4% respondents rated their

understanding as very good about Mutual funds. it shows knowledge of Mutual funds

are very low..

Very good

4%

Good

9%

Average

19%

Poor

64%

No response

4%

Other

68%

Knowledge of Mutual Fund

Very good

Good

Average

Poor

No response



51

(b) Knowledge related to share market:

Table No. II (b) showing knowledge related to share market of respondents:

S. No Knowledgerelated to share

market

No. of respondents

Percentage

1. Yes 32 32%

2. No 64 64%

3. Can‟t say 4 4%

Total 100 100%

INTERPRETATION :

It was found that 64% of the respondents don‟t know that the Mutual fund is related to

share market. They also don‟t know that a Mutual funds return is affected by thefluctuation in share market.

III. Investment objective/decisions:

This section of survey was aimed at understanding the main reason behind the

investment decision made by an individual. I tried to catch the factor that contributes

to making of an investment portfolio off an individual.

Yes

32%

No

64%

Can't say

4%

Knowledge related to share market:

Yes

No

Can't say



52

(a)Investment objective:

S. No Investment

objective

No. of

respondents

Percentage

1. Capital Gain 21 21%

2. GenerateRegular return

6 6%

3. Secure Future 59 59%

4. Tax benefits 14 14%

Total 100 100%

INTERPRETATION :

Total number of 100 responses was generated for this question and multiple response

were sought for the various investment objectives. the analysis brings out the fact that

investor were more concerned about the secure future(59%) and capital gains(21%),

and after that they considered tax benefits(14%) and regular return(6%) as their main

investment objectives.

(b)Decision affecting Factors:

S. No Decisionaffecting

Factors

No. of respondents

Percentage

1. Economic

scenario

19 19%

2. Company

image

44 44%

3. Fund

performance

21 21%

4. Fund manager

image

2 2%

capital gain21%

generate reguar

return

6%

secure future

59%

tax benefits

14%

Investment Objective of Investor

capital gain

generate reguar return

secure future

tax benefits



53

5. Tax incentive 14 14%

Total 100 100%

INTERPRETATION:

There are certain overall factors that tend to affect the investment decision decision of

the investor, such as economic scenario. I tried to know the respondents opinion on

these macro factors that further tend to affect their investment decisions.

This survey showed that company image acts as the determining factor for

their investment with 44%.the second most important factor was fund performance(21%) and economic scenario (19%).

(c)Information sources regarding Mutual Funds:

S. No Information

sources

No. of

respondents

Percentage

1. Print media 29 29%

2. Electronic media 21 21%

3. Friends/Relative 6 6%

4. Financial advisors 19 19%

5. Personal analysis 4 4%6. Agents 21 21%

Total 100 100%

0

10

20

30

40

50

60

70

80

90

No. of Respondents

38

88

42

4

28

DECISION AFFECTING FACTORS

Economic scenario

Company image

Fund performance

Fund manager image

Tax incentive



54

INTERPRETATION:

In this survey I asked from the respondents about the kind of media that affect their

investment decision.29% of the respondents said that the print media is the major

influencer in making their investment decisions, electronic media(21%) and

agents(21%) were the second major influencer in investment decision making.

(d)Priority of reason for investment:

S. No Priority forinvestment

No. of respondents

Percentage

1. Saving for

future

51 51%

2. Tax incentive 14 14%

3. Returns 23 23%

4. Future outlook 7 7%

5. Brand value 2 2%

6. Risk factors 3 3%

Total 100 100%

29%

21%6%

19%

4%

21%

Information sources regarding Mutual Funds

Print media

Electronic media

Friends/Relative

Financial advisors

Personal analysis

Agents



55

INTERPRETATION:

In this survey I found that saving for the future was the foremost important criteria for

investment in the minds of investors (51%), while 23%respondents said that they

considered the returns before making investment decisions.

IV. Risk-Return profile:

In my study I also tried to understand the risk and return matrix of an individual

investor. this was done in order to obtain information on the relationship between the

kind of funds an individual investor opts to invest in and the relative expectation he

has on the return front.

(a)Investment Avenues:

S. No Investment

Avenues

No. of

respondents

Percentage

1. Post office

schemes

12 12%

2. Insurance 4 4%

3. Banks 66 66%4. Share market 3 3%

5. Mutual funds 7 7%

6. Govt. securities 8 8%

Total 100 100%

Saving for future

51%

Tax incentive

14%

Returns

23%

Future outlook

7%

Brand value

2%Risk factors

3%

Priority of reason for investment

Saving for future

Tax incentive

Returns

Future outlook

Brand value

Risk factors



56

INTERPRETATION:

The risk return matrix of an individual is the key factor in framing his investment

portfolio. I asked the respondents to select the investment avenues they would prefer

to keep their investment portfolio. 66% of investor preferred to have banks savings as

one of the investment avenue. While 12% of the investor said that they would

certainly would like to have post office schemes as one of their preferred investment

avenue.

(b)Return expectation from Mutual funds:

S. No Return

expectation

from Mutual

funds

No. of

respondents

Percentage

1. 5%-10% 5 5%

2. 11%-15% 24 24%

3. 16%-20% 31 31%

4. More than 20% 16 16%

5. Can‟t say 24 24%Total 100 100%

Post office

schemes

12%

Insurance

4%

Banks

66%

Share market

3%

Mutual funds

7% Govt. securities

8%

Investment Avenues

Post office schemesInsurance

Banks

Share market

Mutual funds

Govt. securities



57

INTERPRETATION:

In this survey when I came to return expected, I found that 31% of the investor are

expecting a return in range of 16%-20%, while 24%of the investor are expecting 11%-15% rate of return but 24% of investor can‟t said about return expectation.

(c) Investment pattern preferred in Mutual fund by investor:

S. No Investment

pattern

preferred in

Mutual fund

No. of

respondents

Percentage

1. Growthschemes

41 41%

2. Balanced

schemes

11 11%

3. ELSS 18 18%

4. Sector specific

schemes

6 6%

5. Liquid

schemes

7 7%

6. Can‟t say 17 17%

Total 100 100%

5%-10%5%

11%-15%

24%

16%-20%

31%

More then 20%16%

Can’t say

24%Other

40%

Return expectation from Mutual funds

5%-10%

11%-15%

16%-20%

More then 20%

Can’t say



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INTERPRETATION:

The type of schemes selected for investment depends largely on the risk return matrix

of an individual and the time horizon of his investment.

My findings demonstrate that 41% of investors prefer to invest in

growth schemes, 18% of investor in ELSS schemes.

(d) Return in diversified schemes in Mutual fund:

S. No Return in

diversified

schemes in

Mutual fund

No. of

respondents

Percentage

1. Yes 23 23%

2. No 77 77%

Total 100 100%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

No. of respondents

41%

11%

18%

6% 7%

17%

Investment pattern preferred in

Mutual fund by investorGrowth schemes

Balanced schemes

ELSS

Sector specific schemes

Liquid schemes

Can’t say



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INTERPRETATION:

In this survey I tried to know the knowledge of investors about the return on

diversified schemes .I found that 77%of surveyed people don‟t know that the return

on diversified mutual fund schemes is more than other schemes. so, it shows that vary

lake of awareness about mutual funds.

(e) Sources of product information :

S. No Sources of

productinformation

No. of

respondents

Percentage

1. Company

brochures

39 39%

2. Company

websites

3 3%

3. Investment

advisor

14 14%

4. Newspaper 37 37%

5. Friends and

relatives

7 7%

Total 100 100%

Yes

23%No

77%

Return in diversified schemes in Mutual

fund

Yes No



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INTERPRETATION:

This chart represents the different sources of product information, through which

investor generally tend to know regarding the mutual fund‟s new schemes and

products.39% of the respondents said that they receive the product information from

the company brochures and 37% respondents said that they get it from newspaper.

0%

5%

10%

15%

20%

25%

30%

35%

40%

No. of respondents

39%

3%

14%

37%

7%

Sources of product information

Company brochures

Company websites

Investment advisor

Newspaper

Friends and relatives



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FINDINGS

Out of 100 people being surveyed to know the awareness and perception among

people about mutual funds, I found that 14% knew about mutual funds who mostly

invest in these funds while 86% where not at all aware about the product and its

investments

Some People were less interested in knowing about the product.

They have the impression that these funds are not safe, as the money is locked in

for a particular period, which is known as the lock in period.

Mutual funds, in a country like India is in its growth stage and it would take some

time to enter into the maturity stage.

People investing into mutual funds basically invest at the financial year-end.

They invest into these funds mostly for tax saving purposes other than investment

or return purposes.



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RECOMMENDATIONS

There should be more awareness made about the Mutual Fund and their services bygiving more advertisement.

The Mutual Fund should go for tie-ups with the corporate to invest in MF.

Mutual Fund should organize some events to build its Brand Image in the minds of

the people.

As per customer‟s point of view, they feel that Mutual Fund should open more

number of branches for the convenience of people.

SUGGESTIONS:

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

benefits. Nobody will invest until and unless he is fully convinced. Investors should be

made to realize that ignorance is no longer bliss and what they are losing by not

investing.

Mutual funds offer a lot of benefit which no other single option could offer. But most

of the people are not even aware of what actually a mutual fund is? They only see it

as just another investment option. So the advisors should try to change their mindsets.

The advisors should target for more and more young investors. Young investors as

well as persons at the height of their career would like to go for advisors due to lack of expertise and time.

Mutual Fund Company needs to give the training of the Individual Financial Advisors

about the Fund/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 the investors/customers, their need and time (how long they want to

invest). By considering these three things they can take the customers into

consideration.

Younger people aged under 35 will be a key new customer group into the future, so

making greater efforts 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 market there. To succeed however, advisors must provide sound advice and

high quality.



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Systematic Investment Plan (SIP) is one the innovative products launched by Assets

Management companies very recently in the industry. SIP is easy for monthly salaried

person as it provides the facility of do the investment in EMI. Though most of theprospects and potential investors are not aware about the SIP. There is a large scope

for the companies to tap the salaried persons.

Most leads complain about its fees that are Rs. 8000/Rs.6900. they said that it is too

much amount to complete AMFI exam and become NJ partner. I know it is nothing in

spite of our company gives them. Consideration can be made to reduce the fee to stop

de motivating from taking our services.

NJ has almost 25% market stake of mutual fund advisor (almost 15,000 MF advisors

are partner of NJ. whereas total MF advisors are 75,000 in India.) but NJ is lackingsomewhere in its marketing. NJ needs to advertise its brand to gain the image of a

mutual fund distributer in the minds of insurance advisors who are more concern with

RR and other mutual fund distributors.



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CHAPTER IX

CONCLUSION

After making the whole report I am concluding that this project measures the

awareness of Mutual Funds and its service. As Mutual Funds having good options and

schemes, so we can grow it with creating the awareness among the people. It is also

good for those who want to make their future in it. For that the only thing you need is

to give time to your money to grow, they will surely give good returns and the other

thing is the knowledge of the all product and schemes. As there is lesser no. of people

investing in the Mutual Fund in comparison with other investments like L.I.C, post,

savings a/c etc. so there is a good chance of its growing.

As been analyzed people are very rarely aware about mutual funds because they are

not properly educated about the policies but when made aware they wanted to get

more information about the funds by this we can say that mutual fund is in its infant

stage today but it will reach its growth stage within no time.

Mutual fund has been compared to Unit linked polices, people are more aware of

ULIP than Mutual fund which takes more customer to the insurance sector but slowly

as people are getting more aware of the funds they will surely start investing in these

funds as some of the mutual fund companies have already started giving more than

30% returns which is really a huge amount being 6% minimum and 10% maximum

guidelines given a company.

Mutual funds in this competitive world is very helpful for the people who are

interested into investments as this particular fund can take less investment but give uhefty.



65

Bibliography

WEB SITES VISITED:

www.amfiindia.com

www.mutualfundsindia.com

www.sebi.gov.in

www.wikipedia.com

www.njindia.com

BOOK REFERRED:

MARKETING MANAGEMENT BY PHILIP KOTLER, PEARSON

EDUCATION 2ND

ED.

CONSUMER BEHAVIOR BY LEON G.SCHIFFMAN, PRENTICE-

HALL INDIA 8TH

ED.

NJ INDIA INVEST FACT FILE

http://www.amfiindia.com/

http://www.mutualfundsindia.com/

http://www.sebi.gov.in/

http://www.wikipedia.com/

http://www.njindia.com/

http://www.njindia.com/

http://www.wikipedia.com/

http://www.sebi.gov.in/

http://www.mutualfundsindia.com/

http://www.amfiindia.com/



66

Annexure

Questionnaire

Age profile :

Gender :

Income profile :

Saving habits :

Qualification :

Q1. Do you know about the Mutual Funds?

(a) Very good (b) Good

(c)Average (d) Poor

(e)No response

Q2. What is your objective /motive behind investment?

(a)Capital gain (b) Generate regular(c)Secure future (d) Tax benefits

Q3. Where do you generally invest/save?

(a)Post office schemes

(b)Insurance

(c)Banks(d)Share market

(e)Mutual funds

(f)Govt. securities

Q4. How do you prioritize the reason for investment?

[rank from 1-5,1 being highest priority]

Saving for future __________

Tax incentives __________

Returns __________

Future outlook __________

Brand value __________



67

Risk factor __________

Q5. How did you come to know about mutual fund?

(a)Print media(b)Electronic media

(c)Friend/relative

(d)Financial advisor/C.A(c)Personal analysis

(f)Agents

Q6. What factors affect your decision for investment in Mutual

Fund?

(a)Economic scenario

(b)Company image

(c)Fund performance

(d)Fund manager image(e)Tax incentive

Q7. How much return you expect from Mutual Fund?

(a) 5%-10%

(b) 11% -15%(c) 16%-20%

(d) More than 20%

(e) Can‟t say

Q8. What kind of investment pattern you prefer in Mutual Fund?

(a)Growth schemes

(b)Balanced schemes

(c)ELSS(d)Sector specific schemes

(e)Income schemes

(f)Liquid schemes



Q9. What are the sources of information gathering for you regarding

mutual fund?

(a)Company brochures

(b)Company websites(c)Investment advisor

(d)Newspaper

(e)Friends and relatives

Q10. Are you aware that by investing in diversified investment avenues

the average rate of return would considerable go up?

(a)Yes(b) No

Q11. Do you know that mutual fund is related to share market?

(a) Yes

(b) No

(c) Can‟t say

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