Shikha Internship

download Shikha Internship

of 32

Transcript of Shikha Internship

  • 8/6/2019 Shikha Internship

    1/32

    To study various factors considered by investor

    while going for investment in mutual fund

    Prepared by:

    Shikha Sambyal

    2008MBE24

  • 8/6/2019 Shikha Internship

    2/32

    Concept of Mutual Funds

    A mutual fund is a professionally managed type of collectiveinvestment scheme that pools money from many investors and

    invests it in stocks, bonds, short-term money market

    instruments, and/or other securities. The mutual fund will have a

    fund manager that trades the pooled money on a regular basis.

  • 8/6/2019 Shikha Internship

    3/32

    Mutual Fund Operation Flow Chart

    INVESTORS (Pooltheir money)

    FUNDMANAGER(invests

    in)

    SECURITIES(generates)

    RETURNS(passedback to investors)

  • 8/6/2019 Shikha Internship

    4/32

    Future of Mutual Funds in India

    By December 2004, Indian mutual fund industry reached Rs

    1,50,537 crore. It is estimated that by 2010 March-end, the

    total assets of all scheduled commercial banks should be Rs40,90,000 crore.

    The annual composite rate of growth is expected 13.4%

    during the rest of the decade. In the last 5 years we have seen

    annual growth rate of 9%.

  • 8/6/2019 Shikha Internship

    5/32

    Some facts for the growth of mutual funds in

    India Number of foreign AMC's are in the queue to enter the Indian markets like

    Fidelity Investments, US based, with over US$1trillion assets undermanagement worldwide.

    Our saving rate is over 23%, highest in the world. Only channelizing thesesavings in mutual funds sector is required.

    We have approximately 29 mutual funds which is much less than UShaving more than 800. There is a big scope for expansion.

    Mutual fund can penetrate rural like the Indian insurance industry withsimple and limited products.

    SEBI allowing the MF's to launch commodity mutual funds.

    Emphasis on better corporate governance. Trying to curb the late trading practices.

    Introduction of Financial Planners who can provide need based advice.

  • 8/6/2019 Shikha Internship

    6/32

    TYPES OF SCHEMES

    Schemes according to Structure:

    1) Open-ended Fund/Scheme

    2) Close-Ended Fund/Scheme

    3) Interval Fund

    Schemes according to Investment Objectives:

    1) Growth/Equity oriented scheme

    2) Income/Debt oriented scheme 3) Balanced Fund

    4) Money Market or Liquid Fund

    5) Gilt Fund

    6) Load Fund

    7) No-load Fund

  • 8/6/2019 Shikha Internship

    7/32

    Other Schemes:

    Tax saving Schemes

    Special Scheme:

    1) Industry specific Schemes

    2) Sector Specific Schemes

  • 8/6/2019 Shikha Internship

    8/32

    COMPANY PROFILE

  • 8/6/2019 Shikha Internship

    9/32

    INTRODUCTION TO SBI MUTUAL

    FUNDS SBI Mutual Fund is a fully owned subsidiary of the State Bank ofIndia,

    India's premier and highly respected bank with largest banking operationin the country.

    SBI Funds Management Pvt. Ltd. is one of the leading fund houses in thecountry with an investor base of over 4.6 million and over 20 years of richexperience in fund management consistently delivering value to itsinvestors. SBI Funds Management Pvt. Ltd. is a joint venture between 'TheState Bank ofIndia' one ofIndia's largest banking enterprises, and SocitGnrale Asset Management (France), one of the world's leading fundmanagement companies that manages over US$ 500 Billion worldwide.

  • 8/6/2019 Shikha Internship

    10/32

    PRODUCTS OF SBI MUTUAL FUND

    Equity schemes

    Debt schemes

    Balanced schemes

  • 8/6/2019 Shikha Internship

    11/32

    RESEARCH METHODOLOGY

    OBJECTIVES:

    To study various factors considered by

    investor while going for investment in mutualfund

    To study the type of funds

    To study the type of mutual fund schemes

  • 8/6/2019 Shikha Internship

    12/32

    RESEARCHDESIGN: -

    DESCRIPTIVE RESEARCH

    METHOD OF ACCESSING THE DATA: -

    PRIMARY: - Through the structured questionnaire and the personalinterview which are interviewer administrated.

    SECONDARY: - It will be from the websites, books.

    DATA COLLECTION FORM: -

    STRUCTURED form will be used in which close ended questions are used.CLOSE ENDED QUESTION: - Multiple choice questions is used.

    SAMPLE SIZE: - 100

    SAMPLE AREA: Jammu

    TARGET POPULATION: Mutual fund holder

    SAMPLING FRAME: Records from brokers of Jammu region.

    SAMPLING USED: Convenience Sampling

  • 8/6/2019 Shikha Internship

    13/32

    DATA ANALYSIS

    1. Source of information while investing in mutual funds

    Frequency Percent

    1.00 28 28.0

    2.00 4 4.0

    3.00 12 12.0

    4.00 28 28.05.00 1 1.0

    6.00 14 14.0

    7.00 13 13.0

    Total 100 100.0

  • 8/6/2019 Shikha Internship

    14/32

    1

    2

    3

    4

    5

    6

    7

    1 stands for internet, 2 stands for magazine, 3 stands fornewspaper, 4 stands for financial advisor, 5 stands for spouse, 6stands for friends, 7 stands for advertisementOut of the total respondents, 28% relied on Internet and 28%relied on financial advisor as the source of information whileinvesting in mutual funds .Thus, it can be concluded that thesource of Internet and financial advisor is relatively an importantfactor affecting the sale of Mutual Funds.

    Out of the total respondents, 14% said yes that they took theinformation from their friends while investing in mutual funds andrest 86% said no to the same and 13% said yes that they tookthe information from advertisement.

  • 8/6/2019 Shikha Internship

    15/32

    2. Are you a regular or new investor in mutual fund

    Frequency Percent1.00 57 57.0

    2.00 43 43.0

    Total 100 100.0

    1 stands for regular, 2

    stands for new

  • 8/6/2019 Shikha Internship

    16/32

    3. Your investment portfolio consist of

    Frequency Percent

    1.00 18 18.02.00 4 4.0

    3.00 32 32.04.00 2 2.0

    5.00 21 21.06.00 23 23.0Total 100 100.0

    1-realestate

    2- postoffice

    schemes

    3-mutualfunds

    4 debt

    5- shares

    6-fixeddeposits

  • 8/6/2019 Shikha Internship

    17/32

    4. Type of fund you prefer the most

    Frequency Percent

    1.00 15 15.0

    3.00 10 10.0

    4.00 58 58.0

    5.00 17 17.0

    Total 100 100.0

    1- moneymkt.funds(red)3-debtfunds(blue)4-equityfunds(purple)5- balancedfunds(green)

  • 8/6/2019 Shikha Internship

    18/32

    5. Features that attract most while choosing a specific

    Mutual fund

    Frequency Percent

    1.00 7 7.02.00 76 76.0

    3.00 6 6.04.00 8 8.05.00 3 3.0

    Total 100 100.0

    1

    2

    3

    4

    5

    1- Flexibility

    2- Return

    3- Managed by

    professional

    people4- Risk diversion

    5- Less expenses

  • 8/6/2019 Shikha Internship

    19/32

    6. Type of mutual fund you prefer

    Frequency Percent

    1.00 69 69.0

    2.00 31 31.0

    Total 100 100.0

    1-openendedscheme

    2-closeendedscheme

  • 8/6/2019 Shikha Internship

    20/32

    7. Type of return expect

    Frequency Percent

    1.00 16 16.0

    2.00 19 19.0

    3.00 10 10.0

    4.00 55 55.0Total 100 100.0

    1

    2

    3

    4

    1- monthly

    2-quartely

    3-semi-annual4-annual

  • 8/6/2019 Shikha Internship

    21/32

    8. Investment horizon

    Frequency Percent

    1.00 9 9.02.00 15 15.0

    3.00 10 10.04.00 29 29.0

    5.00 28 28.06.00 9 9.0

    Total 100 100.0 1-upto 6

    months

    2-upto 1

    year

    3- upto 2

    years4- upto 3

    years

    5- upto 5

    years

    6- upto 10

    years

  • 8/6/2019 Shikha Internship

    22/32

    9. Near future liabilities

    Frequency Percent1.00 23 23.0

    2.00 66 66.0

    3.00 11 11.0Total 100 100.0

    1-childmarriage

    2-education

    3- anyother

  • 8/6/2019 Shikha Internship

    23/32

    10. Relationship between regular or new investor and features attract you

    most

    FEATURES Total

    1.00 2.00 3.00 4.00 5.00 1.00

    REGULAR

    NEW

    1.00 3 46 3 3 2 57

    5.3% 80.7% 5.3% 5.3% 3.5% 100.0%

    2.00 4 30 3 5 1 43

    9.3% 69.8% 7.0% 11.6% 2.3% 100.0%

    Total 7 76 6 8 3 100

    7.0% 76.0% 6.0% 8.0% 3.0% 100.0%

    This table tells us that maximum number of investors i.e. 76% investbecause of return they get from the mutual fund schemes. It also tells

    us that the regular investors i.e. 80.7% invest on the basis of returns

    they get and the new ones i.e. 69.8% are investing because of returns.

    7% invest because it is managed by professional people. New investors

    also invest because of risk diversion

  • 8/6/2019 Shikha Internship

    24/32

    11. Relationship between regular or new investor and type of return they

    expect .

    TYPE OF RETURN Total

    1.00 2.00 3.00 4.00 1.00

    REGULAR

    NEW

    1.00 7 11 5 34 57

    12.3% 19.3% 8.8% 59.6% 100.0%

    2.00 9 8 5 21 4320.9% 18.6% 11.6% 48.8% 100.0%

    Total 16 19 10 55 100

    16.0% 19.0% 10.0% 55.0% 100.0%

    Alargenumberoftheinvestors59.6%oftheregularinvestorsexpectannualreturns.48.8%ofthenewinvestorsexpectearlyannualreturns.

  • 8/6/2019 Shikha Internship

    25/32

    12. Relationship between a regular or new investor and their investment

    horizon

    INVESTMENT HORIZON Total

    1.00 2.00 3.00 4.00 5.00 6.00 1.00

    REGULAR

    NEW

    1.00 8 7 8 14 16 4 57

    14.0% 12.3% 14.0% 24.6% 28.1% 7.0% 100.0%

    2.00 1 8 2 15 12 5 43

    2.3% 18.6% 4.7% 34.9% 27.9% 11.6% 100.0%

    Total 9 15 10 29 28 9 100

    9.0% 15.0% 10.0% 29.0% 28.0% 9.0% 100.0%

  • 8/6/2019 Shikha Internship

    26/32

    13. Relationship between a regular or new investor

    and mutual fund scheme they prefer

    VAR00006 Total

    1.00 2.00 1.00

    REGULAR

    NEW

    1.00 42 15 57

    73.7% 26.3% 100.0%2.00 27 16 43

    62.8% 37.2% 100.0%

    Total 69 31 100

    69.0% 31.0% 100.0%

  • 8/6/2019 Shikha Internship

    27/32

  • 8/6/2019 Shikha Internship

    28/32

    FINDINGS:-

    The significant finding of the project is that investors are lured by thereturns MFs are showing. However at the same time they also want tominimize their risk.

    Investors desire or opt open-ended schemes than close-ended schemes.This means that they want flexibility in the inflow and outflow of their

    funds. The investment horizon, which is most liked by the investors, is 3-5 yrs.

    The source of information the investors most rely is on internet. Howeverthey also require the detailed information, which they take from FinancialAdvisors. On other sources the investors are quite apprehensive.

    Investors mostly prefer equity funds than other funds.

    Another finding was that they were more committed towards childeducation.

  • 8/6/2019 Shikha Internship

    29/32

    Investors are mostly relied upon annual returns.

    There is no difference between the new and regular investors incontext of their preference in features which attract them the most.

    There is no difference between the new and regular investors asthey both prefer annual returns.

    There is difference between the new and regular investorspreference as new investors prefer for 3 years and regular investorprefer for 5 years. Regular investors have propensity to invest forgreater periods.

    There is difference between the new and regular investors

    preference as new investors prefer for close-ended schemes andregular investor prefer open-ended schemes.

    There is no difference between the new and regular investor incontext of type of fund they prefer as they both prefer equity fundsand no prefer gilt funds.

  • 8/6/2019 Shikha Internship

    30/32

    RECOMMENDATIONS

    There is lack of awareness among customers regarding mutual funds inJammu region. Therefore, it becomes very important for the AMCs toeducate their customers. It can possible throughadvertisement, personal selling, risk, motivate the investors.

    With the help of personal selling, agents should directly contact with

    customers and solve queries of the customers. Advertising should be done through local channels such as jk

    channel, take one.

    There is risk involved in investing mutual funds. Thatis why people arenot investing in mutual funds. Risk can be reduced by conveying themabout the various schemes.

  • 8/6/2019 Shikha Internship

    31/32

  • 8/6/2019 Shikha Internship

    32/32

    THANK YOU