Research Project Report

“STUDY ON ANALYSIS OF SBI MUTUAL FUNDS’’

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF
BACHELOR OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF

DR. Ravikant Sharma

SUBMITTED BY

Jitendra kumar
1604102013
BBA 2016-2019

SCHOOL OF BUSINESS

2016- 2019

GALGOTIAS UNIVERSITY

1
 CERTIFICATE

This is to certify that the project report “study on analysis of SBI mutual
funds” has been prepared byJitendra kumar under my supervision and
guidance. The research report is submitted towards the partial fulfillment
of 3years, full time Bachelor of Business Administration.

Name and signature of faculty : Dr. Ravikant Sharma

Date:

2
 ACKNOWLEDGEMENT

With regard to my Project with SBI Mutual Fund I would like to thank

each and every one who offered help, guideline and support whenever

required.

I would like to thank SBI for giving me that opportunity to be

associated with an esteemed organization as theirs. I would like to

express my thanks to Prof (Dr.) Ravikant Sharma for giving this

opportunity and provided me valuable mentoring and constant feedback

on my progress made during this project..

I would also like to extend my thanks to other members and my

friends for their support.

3
 DECLARATION

I Jitendra kumar Roll No. 16GSOB102025 student of School of

Business, Galgotias University, Greater Noida, hereby declare that the

research report on “ study on analysis of SBI mutual funds” is an original

and authenticated work done by me.

I further declare that it has not been submitted elsewhere by any other

person in any of the institute for the award of any degree or diploma.

Jitendra kumar
BBA
1604102025

4
 TABLE OF CONTENTS

Chapter - 1 INTRODUCTION

Chapter - 2 OBJECTIVES AND SCOPE

Chapter - 3 RESEARCH METHODOLOGY

Chapter - 4 DATA ANALYSIS AND

INTERPRETATION

Chapter - 5 FINDINGS AND CONCLUSIONS

Chapter - 6 SUGGESTIONS & RECOMMENDATIONS

Chapter- 7 REFERENCES

5
 ABSTRACT

In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being.

Mutual Funds have not only contributed to the India growth story but have also helped

families tap into the success of Indian Industry. As information and awareness is rising more

and more people are enjoying the benefits of investing in mutual funds. The main reason the

number of retail mutual fund investors remains small is that nine in ten people with incomes

in India do not know that mutual funds exist. But once people are aware of mutual fund

investment opportunities, the number who decide to invest in mutual funds increases to as

many as one in five people. The trick for converting a person with no knowledge of mutual

funds to a new Mutual Fund customer is to understand which of the potential investors are

6
more likely to buy mutual funds and to use the right arguments in the sales process that

customers will accept as important and relevant to their decision.

This Project gave me a great learning experience and at the same time it gave me

enough scope to implement my analytical ability. The analysis and advice presented

in this Project Report is based on market research on the saving and investment

practices of the investors and preferences of the investors for investment in Mutual

Funds. This Report will help to know about the investors’ Preferences in Mutual

Fund means Are they prefer any particular Asset Management Company (AMC),

Which type of Product they prefer, Which Option (Growth or Dividend) they prefer

or Which Investment Strategy they follow (Systematic Investment Plan or One time

Plan). This Project as a whole can be divided into two parts.

The first part gives an insight about Mutual Fund and its various aspects, the

Company Profile, Objectives of the study, Research Methodology. One can have a

brief knowledge about Mutual Fund and its basics through the Project.

The second part of the Project consists of data and its analysis collected through

survey done on 200 people. For the collection of Primary data I made a questionnaire

and surveyed of 200 people. I also taken interview of many People those who were

coming at the BSL Branch where I done my Project.This Project covers the topic

“STUDY ON ANALYSIS OF MUTUAL FUNDS.” The data collected has been

well organized and presented. I hope the research findings and conclusion will be of

use.

7
Chapter - 1

Introduction

8
INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS

ASPECTS

Mutual fund is a trust that pools the savings of a number of investors who share a

common financial goal. This pool of money is invested in accordance with a stated

objective. The joint ownership of the fund is thus “Mutual”, i.e. the fund belongs to

all investors. 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 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. A

Mutual Fund is an investment tool that allows small investors access to a well-

diversified portfolio of equities, bonds and other securities. Each shareholder

participates in the gain or loss of the fund. Units are issued and can be redeemed as

needed. The funds Net Asset value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of industries and

sectors and thus the risk is reduced. Diversification reduces the risk because all

stocks may not move in the same direction in the same proportion at the same time.

Mutual fund issues units to the investors in accordance with quantum of money

invested by them. Investors of mutual funds are known as unit holders.

9
When an investor subscribes for the units of a mutual fund, he becomes part owner

of the assets of the fund in the same proportion as his contribution amount put up

with the corpus (the total amount of the fund). Mutual Fund investor is also known as

a mutual fund shareholder or a unit holder.

Any change in the value of the investments made into capital market instruments

(such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the

scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net

of its liabilities. NAV of a scheme is calculated by dividing the market value of

scheme's assets by the total number of units issued to the investors.

10
INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS

ASPECTS

Mutual fund is a trust that pools the savings of a number of investors who share a

common financial goal. This pool of money is invested in accordance with a stated

objective. The joint ownership of the fund is thus “Mutual”, i.e. the fund belongs to

all investors. 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 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. A

Mutual Fund is an investment tool that allows small investors access to a well-

diversified portfolio of equities, bonds and other securities. Each shareholder

participates in the gain or loss of the fund. Units are issued and can be redeemed as

needed. The funds Net Asset value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of industries and

sectors and thus the risk is reduced. Diversification reduces the risk because all

stocks may not move in the same direction in the same proportion at the same time.

Mutual fund issues units to the investors in accordance with quantum of money

invested by them. Investors of mutual funds are known as unit holders.

9
When an investor subscribes for the units of a mutual fund, he becomes part owner

of the assets of the fund in the same proportion as his contribution amount put up

with the corpus (the total amount of the fund). Mutual Fund investor is also known as

a mutual fund shareholder or a unit holder.

Any change in the value of the investments made into capital market instruments

(such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the

scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net

of its liabilities. NAV of a scheme is calculated by dividing the market value of

scheme's assets by the total number of units issued to the investors.

10
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)

1993 was the year in 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. As at the end of January

2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.

13
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 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.

consolidation and growth. As at the end of September, 2004, there were 29 funds,

which manage assets of Rs.153108 crores under 421 schemes.

14
CATEGORIES OF MUTUAL FUND:

15
 Mutual funds can be classified as follow :

❖ Based on their structure:

• Open-ended funds: Investors can buy and sell the units from the fund, at any point

of time.

• Close-ended funds: These funds raise money from investors only once. Therefore,

after the offer period, fresh investments can not be made into the fund. If the fund is

listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley

Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided

liquidity window on a periodic basis such as monthly or weekly. Redemption of units

can be made during specified intervals. Therefore, such funds have relatively low

liquidity.

❖ Based on their investment objective:

Equity funds: These funds invest in equities and equity related instruments. With

fluctuating share prices, such funds show volatile performance, even losses.

However, short term fluctuations in the market, generally smoothens out in the long

term, thereby offering higher returns at relatively lower volatility. At the same time,

such funds can yield great capital appreciation as, historically, equities have

outperformed all asset classes in the long term. Hence, investment in equity funds

should be considered for a period of at least 3-5 years. It can be further classified as:

16
 i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is

tracked. Their portfolio mirrors the benchmark index both in terms of composition

and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading

across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that

they invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related through

some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking

sector fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund: Their investment portfolio includes both debt and equity. As a result,

on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the

ideal mutual funds vehicle for investors who prefer spreading their risk across various

instruments. Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

17
Debt fund: They invest only in debt instruments, and are a good option for

investors averse to idea of taking risk associated with equities. Therefore, they invest

exclusively in fixed-income instruments like bonds, debentures, Government of India

securities; and money market instruments such as certificates of deposit (CD),

commercial paper (CP) and call money. Put your money into any of these debt funds

depending on your investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large

portion being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of

and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt

instruments which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities due to

mis-pricing between cash market and derivatives market. Funds are allocated to

equities, derivatives and money markets. Higher proportion (around 75%) is put in

money markets, in the absence of arbitrage opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in long-term government

securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio

in long-term debt papers.

18
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an

exposure of 10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with

that of the fund.

INVESTMENT STRATEGIES

1. Systematic Investment Plan: under this a fixed sum is invested each month on a

fixed date of a month. Payment is made through post dated cheques or direct debit

facilities. The investor gets fewer units when the NAV is high and more units when

the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and

give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of

the same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund

then he can withdraw a fixed amount each month.

19
 INTRODUCTION TO SBI MUTUAL FUNDS

SBI MUTUAL FUNDS Follows a conservative long term approach to

investment which is based on identifying companies that have good credit

worthiness and are fundamentally strong. It places a lot emphasis on quality of

management and risk control. This is done through extensive analysis that

include factory visits and field research .It has one of the largest team of

research analysis in the Industry. The company is one of the India’s leading

private mutual funds with a large customer base. It has been recognized

nationally with coveted awards.

Today the fund house manages over Rs 28500 crores of assets and has a

diverse profile of investors actively parking their investments across 36 active

schemes. In 20 years of operation, the fund has launched 38 schemes and

successfully redeemed 15 of them, and in the process, has rewarded our

investors with consistent returns. Schemes of the Mutual Fund have time after

time outperformed benchmark indices, honored us with 15 awards of

performance and have emerged as the preferred investment for millions of

investors. The trust reposed on us by over 4.6 million investors is a genuine

tribute to our expertise in fund management.

SBI serves its vast family of investors through a network of over 130 points of

acceptance, 28 Investor Service Centres, 46 Investor Servi ce Desks and 56

District Organizers. SBI Mutual is the first bank-sponsored fund to launch an

offshore fund – Resurgent India Opportunities Fund.

20
VISION :

“To be the first performance of our customers as a integrated provider of complete

financial services through superior value creation and technology”.

COMPETITORS OF STATE BANK MUTUAL FUND

Some of the main competitors of BSL Mutual Fund in Delhi are as Follows:

i. ICICI Mutual Fund

ii. Reliance Mutual Fund

iii. UTI Mutual Fund

iv. BSLI Mutual Fund

v. Kotak Mutual Fund

vi. HDFC Mutual Fund

vii. Sundaram Mutual Fund

viii. LIC Mutual Fund

ix. Principal

x. Franklin Templeton

21
 Chapter - 3

Objectives and scope

22
 OBJECTIVES OF THE STUDY

1. To find out the Preferences of the investors for Asset Management

Company.

2. To know the Preferences for the portfolios.

3. To know why one has invested or not invested in SBI Mutual fund

4. To find out the most preferred channel.

5. To find out what should do to boost Mutual Fund Industry.

Scope of the study

A big boom has been witnessed in Mutual Fund Industry in resent times. A large

number of new players have entered the market and trying to gain market share in

this rapidly improving market.

The research was carried on in Saket. I had been sent at two of the branch of Birla

sun life where I completed my Project work. I surveyed on my Project Topic “Study

of investors preference about mutual fund” on the visiting customers of the Birla sun

life main branch Saket.

The study will help to know the preferences of the customers, which company,

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.

23
Chapter – 4

Research

Methodology

24
 RESEARCH METHODOLOGY

This report is based on primary as well secondary data, however primary data

collection was given more importance since it is overhearing factor in attitude

studies. One of the most important users of research methodology is that it helps in

identifying the problem, collecting, analyzing the required information data and

providing an alternative solution to the problem .It also helps in collecting the vital

information that is required by the top management to assist them for the better

decision making both day to day decision and critical ones.

Data sources:

Research is totally based on primary data. Secondary data can be used only for the

reference. Research has been done by primary data collection, and primary data has

been collected by interacting with various people. The secondary data has been

collected through various journals and websites.

Duration of Study:

The study was carried out for a period of one month, from 22nd June to 8th July 2017.

25
 Sampling:

❖ Sampling procedure:

The sample was selected of them who are the customers/visitors of Birla sun life,

Saket main branch, irrespective of them being investors or not or availing the

services or not. It was also collected through personal visits to persons, by formal

and informal talks and through filling up the questionnaire prepared. The data has

been analyzed by using mathematical/Statistical tool.

❖ Sample size:

The sample size of my project is limited to 200 people only. Out of which only 120

people had invested in Mutual Fund. Other 80 people did not have invested in

Mutual Fund.

❖ Sample techniques:

Data has been presented with the help of bar graph, pie charts, line graphs etc.

26
 Limitation:

➢ Some of the persons were not so responsive.

➢ Possibility of error in data collection because many of investors may have not

given actual answers of my questionnaire.

➢ The research is confined to a certain parts of Delhi and may not adequately
represent the whole market of mutual fund.

27
 Chapter – 5

Data Analysis
&
Interpretation

28
 ANALYSIS & INTERPRETATION OF THE DATA

1. (a) Age distribution of the Investors of Delhi

Age Group <= 30 31-35 36-40 41-45 46-50 >50

No. of 12 18 30 24 20 16
Investors

35
Investors invested in Mutual Fund

30

25

20

15 30
24
10 18 20
16
5 12

0
<=30 31-35 36-40 41-45 46-50 >50
Age group of the Investors

Interpretation:

According to this chart out of 120 Mutual Fund investors of Delhi the most are in

the age group of 36-40 yrs. i.e. 25%, the second most investors are in the age group

of 41-45yrs i.e. 20% and the least investors are in the age group of below 30 yrs.

29
(b). Educational Qualification of investors of Delhi

Educational Qualification Number of Investors

Graduate/ Post Graduate 88

Under Graduate 25

Others 7

Total 120

6%
23%

71%

Graduate/Post Graduate Under Graduate Others

Interpretation:

Out of 120 Mutual Fund investors 71% of the investors in Delhi are Graduate/Post

Graduate, 23% are Under Graduate and 6% are others (under HSC).

30
 c). Occupation of the investors of Delhi

Occupation No. of Investors

Govt. Service 30
.
Pvt. Service 45
Business 35
Agriculture 4
Others 6

50
No. of Investors

40
30
20 45
35 30
10
4 6
0
Govt. Pvt. Service Business Agriculture Others
Service
Occupation of the customers

Interpretation:

In Occupation group out of 120 investors, 38% are Pvt. Employees, 25% are

Businessman, 29% are Govt. Employees, 3% are in Agriculture and 5% are

in others.
31
 RESEARCH METHODOLOGY

This report is based on primary as well secondary data, however primary data

collection was given more importance since it is overhearing factor in attitude

studies. One of the most important users of research methodology is that it helps in

identifying the problem, collecting, analyzing the required information data and

providing an alternative solution to the problem .It also helps in collecting the vital

information that is required by the top management to assist them for the better

decision making both day to day decision and critical ones.

Data sources:

Research is totally based on primary data. Secondary data can be used only for the

reference. Research has been done by primary data collection, and primary data has

been collected by interacting with various people. The secondary data has been

collected through various journals and websites.

Duration of Study:

The study was carried out for a period of one month, from 22nd June to 8th July 2017.

25
(2) Investors invested in different kind of investments.

Kind of Investments No. of Respondents

Saving A/C 195
Fixed deposits 148
Insurance 152
Mutual Fund 120
Post office (NSC) 75
Shares/Debentures 50
Gold/Silver 30
Real Estate 65

65
Kinds of Investment

30
r 50
ilve
S 75
ld/ ) 120
Go NSC
e( 152
ff ic ce 148
O n
o st sura 195
P In A/c
g 0 50 100 150 200 250
v in
Sa

No.of Respondents

Interpretation: From the above graph it can be inferred that out of 200 people,

97.5% people have invested in Saving A/c, 76% in Insurance, 74% in Fixed

Deposits, 60% in Mutual Fund, 37.5% in Post Office, 25% in Shares or Debentures,

15% in Gold/Silver and 32.5% in Real Estate.

33
 Chapter – 5

Data Analysis
&
Interpretation

28
 4. Awareness about Mutual Fund and its Operations

Response Yes No

No. of Respondents 135 65

33%

67%

Yes No

Interpretation:

From the above chart it is inferred that 67% People are aware of Mutual Fund and its

operations and 33% are not aware of Mutual Fund and its operations.

35
(2) Investors invested in different kind of investments.

Kind of Investments No. of Respondents

Saving A/C 195
Fixed deposits 148
Insurance 152
Mutual Fund 120
Post office (NSC) 75
Shares/Debentures 50
Gold/Silver 30
Real Estate 65

65
Kinds of Investment

30
r 50
ilve
S 75
ld/ ) 120
Go NSC
e( 152
ff ic ce 148
O n
o st sura 195
P In A/c
g 0 50 100 150 200 250
v in
Sa

No.of Respondents

Interpretation: From the above graph it can be inferred that out of 200 people,

97.5% people have invested in Saving A/c, 76% in Insurance, 74% in Fixed

Deposits, 60% in Mutual Fund, 37.5% in Post Office, 25% in Shares or Debentures,

15% in Gold/Silver and 32.5% in Real Estate.

33
 3. Preference of factors while investing

Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of 40 60 64 36

Respondents

18% 20%

32% 30%

Liquidity Low Risk High Return Trust

Interpretation:

Out of 200 People, 32% People prefer to invest where there is High Return, 30%

prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 18% prefer

Trust

34
7. Reason for not invested in Mutual Fund

Reason No. of Respondents

Not Aware 65

Higher Risk 5

Not any Specific Reason 10

6%
13%

81%
Not Aware Higher Risk Not Any

Interpretation:

Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of

Mutual Fund, 13% said there is likely to be higher risk and 6% do not have any

specific reason.

38
8. Investors invested in different Assets Management Co. (AMC)

Name of AMC No. of Investors

SBIMF 55
UTI 75
HDFC 30
Reliance 75
ICICI Prudential 56
Kotak 45
Others 70

Others
70
HDFC
30
Name of AMC

Kotak
45
SBIMF
55
ICICI
56
Reliance
75
UTI
75

0 20 40 60 80
No. of Investors

Interpretation:

In Delhi most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120

Investors 62.5% have invested in each of them, only 46% have invested in SBIMF,

47% in ICICI Prudential, 37.5% in Kotak and 25% in HDFC.

39
9. Reason for invested in BSLMF

Reason No. of Respondents

Associated with BSL 64

Better Return 9

Agents Advice 27

27%

9% 64%

Associated with BSL Better Return Agents Advice

Interpretation:

Out of 55 investors of BSLMF 64% have invested because of its association with

Brand BSL, 27% invested on Agent’s Advice, 9% invested because of better return.

40
10. Reason for not invested in STATE BANK MUTUAL FUNDS

Reason No. of Respondents

Not Aware 25

Less Return 18

Agent’s Advice 22

34%
38%

28%
Not Aware Less Return Agent's Advice

Interpretation:

Out of 65 people who have not invested in SBIMF, 38% were not aware with

SBIMF, 28% do not have invested due to less return and 34% due to Agent’s Advice.

41
11. Preference of Investors for future investment in Mutual Fund

Name of AMC No. of Investors

SBIMF 76
UTI 45
HDFC 35
Reliance 82
ICICI Prudential 80
Kotak 60
Others 75

Others 75

Kotak 60
Name of AMC

ICICI Prudential 80

Reliance 82

HDFC 35

UTI 45

SBIMF 76

0 20 40 60 80 100

No. of Investors

Interpretation:

Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential, 63%

in SBIMF, 62.5% in Others, 50% in Kotak, 37.5% in UTI and 29% in HDFC Mutual

Fund.

42
12. Channel Preferred by the Investors for Mutual Fund Investment

Channel Financial Advisor Bank AMC

No. of Respondents 72 18 30

25%

60%
15%

Financial Advisor Bank AMC

Interpretation:

Out of 120 Investors 60% preferred to invest through Financial Advisors, 25%

through AMC and 15% through Bank.

43
13. Mode of Investment Preferred by the Investors

Mode of Investment One time Investment Systematic Investment Plan (SIP)

No. of Respondents 78 42

35%

65%

One time Investment SIP

Interpretation:

Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through

Systematic Investment Plan.

44
14. Preferred Portfolios by the Investors

Portfolio No. of Investors

Equity 56
Debt 20
Balanced 44

37%
46%

17%

Equity Debt Balance

Interpretation:

From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and

17% preferred Debt portfolio

45
15. Option for getting Return Preferred by the Investors

Option Dividend Payout Dividend Growth

Reinvestment

No. of Respondents 25 10 85

21%

8%

71%
Dividend Payout Dividend Reinvestment Growth

Interpretation:

From the above graph 71% preferred Growth Option, 21% preferred Dividend

Payout and 8% preferred Dividend Reinvestment Option.

46
16. Preference of Investors whether to invest in Sectoral Funds

Response No. of Respondents

Yes 25

No 95

21%

79% Yes No

Interpretation:

Out of 120 investors, 79% investors do not prefer to invest in Sectoral Fund because

there is maximum risk and 21% prefer to invest in Sectoral Fund.

47
Chapter – 6

Findings and

Conclusion

48
 FINDINGS

➢ In Delhi in the Age Group of 36-40 years were more in numbers.

The second most Investors were in the age group of 41-45 years

and the least were in the age group of below 30 years.

➢ In Delhi most of the Investors were Graduate or Post Graduate and

below HSC there were very few in numbers.

➢ In Occupation group most of the Investors were Govt. employees,

the second most Investors were Private employees and the least

were associated with Agriculture.

➢ In family Income group, between Rs. 20,001- 30,000 were more in

numbers, the second most were in the Income group of more than

Rs.30,000 and the least were in the group of below Rs. 10,000.

➢ About all the Respondents had a Saving A/c in Bank, 76% Invested

in Fixed Deposits, Only 60% Respondents invested in Mutual fund.

➢ Mostly Respondents preferred High Return while investment, the

second most preferred Low Risk then liquidity and the least

preferred Trust.

➢ Only 67% Respondents were aware about Mutual fund and its

operations and 33% were not.

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➢ Among 200 Respondents only 60% had invested in Mutual Fund

and 40% did not have invested in Mutual fund.

➢ Out of 80 Respondents 81% were not aware of Mutual Fund, 13%

told there is not any specific reason for not invested in Mutual Fund

and 6% told there is likely to be higher risk in Mutual Fund.

➢ Most of the Investors had invested in Reliance or UTI Mutual

Fund, ICICI Prudential has also good Brand Position among

investors, SBIMF places after ICICI Prudential according to the

Respondents.

➢ Out of 55 investors of SBIMF 64% have invested due to its

association with the Brand SBI, 27% Invested because of Advisor’s

Advice and 9% due to better return.

➢ Most of the investors who did not invested in SBIMF due to not

Aware of SBIMF, the second most due to Agent’s advice and rest

due to Less Return.

➢ For Future investment the maximum Respondents preferred

Reliance Mutual Fund, the second most preferred ICICI Prudential,

BSLMF has been preferred after them.

➢ 60% Investors preferred to Invest through Financial Advisors, 25%

through AMC (means Direct Investment) and 15% through Bank.

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➢ 65% preferred One Time Investment and 35% preferred SIP out

of both type of Mode of Investment.

➢ The most preferred Portfolio was Equity, the second most was

Balance (mixture of both equity and debt), and the least preferred

Portfolio was Debt portfolio.

➢ Maximum Number of Investors Preferred Growth Option for

returns, the second most preferred Dividend Payout and then

Dividend Reinvestment.

➢ Most of the Investors did not want to invest in Sectoral Fund, only

21% wanted to invest in Sectoral Fund.

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 Conclusion

Running a successful Mutual Fund requires complete understanding of

the peculiarities of the Indian Stock Market and also the psyche of the

small investors. This study has made an attempt to understand the

financial behavior of Mutual Fund investors in connection with the

preferences of Brand (AMC), Products, Channels etc. I observed that

many of people have fear of Mutual Fund. They think their money will

not be secure in Mutual Fund. They need the knowledge of Mutual Fund

and its related terms. Many of people do not have invested in mutual

fund due to lack of awareness although they have money to invest. As

the awareness and income is growing the number of mutual fund

investors are also growing.

“Brand” plays important role for the investment. People invest in those

Companies where they have faith or they are well known with them.

There are many AMCs in Dehradoon but only some are performing well

due to Brand awareness. Some AMCs are not performing well although

some of the schemes of them are giving good return because of not

awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc.

they are well known Brand, they are performing well and their Assets
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Under Management is larger than others whose Brand name are not well

known like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual

fund. Financial Advisors are the most preferred channel for the

investment in mutual fund. They can change investors’ mind from one

investment option to others. Many of investors directly invest their

money through AMC because they do not have to pay entry load. Only

those people invest directly who know well about mutual fund and its

operations and those have time.

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13. Mode of Investment Preferred by the Investors

Mode of Investment One time Investment Systematic Investment Plan (SIP)

No. of Respondents 78 42

35%

65%

One time Investment SIP

Interpretation:

Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through

Systematic Investment Plan.

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 Suggestions and Recommendations

➢ 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.

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➢ 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.

➢ 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 the prospects

and potential investors are not aware about the SIP. There is a

large scope for the companies to tap the salaried persons.

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 ANNEXURE

QUESTIONNAIRE

Study of investors preference about mutual funds.

1. Personal Details:

(a). Name:-

(b). Add: - Phone:-

(c). Age:-

(d). Qualification:-

Graduation/PG Under Graduate Others

(e). Occupation. Pl tick (√)

Govt. Ser Pvt. Ser Business Agriculture Others

(g). What is your monthly family income approximately? Pl tick (√).

Up to Rs. 10,001 to Rs. 15,001 to Rs. 20,001 to Rs. 30,001 and

Rs.10,000 15000 20,000 30,000 above

2. What kind of investments you have made so far? Pl tick (√). All applicable.

a. Saving account b. Fixed deposits c. Insurance d. Mutual Fund

e. Post Office-NSC, etc f. Shares/Debentures g. Gold/ Silver h. Real Estate

3. While investing your money, which factor will you prefer?

.
(a) Liquidity (b) Low Risk (c) High Return (d) Trust

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14. Preferred Portfolios by the Investors

Portfolio No. of Investors

Equity 56
Debt 20
Balanced 44

37%
46%

17%

Equity Debt Balance

Interpretation:

From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and

17% preferred Debt portfolio

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 c. Reliance
d. HDFC
e. Kotak
f. ICICI

12. Which Channel will you prefer while investing in Mutual Fund?

(a) Financial Advisor (b) Bank (c) AMC

13. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick (√).

a. One Time Investment b. Systematic Investment Plan (SIP)

14. When you want to invest which type of funds would you choose?

a. Having only debt b. Having debt & equity c. Only equity portfolio.
portfolio portfolio.

15. How would you like to receive the returns every year? Pl. tick (√).

a. Dividend payout b. Dividend re-investment c. Growth in NAV

16. Instead of general Mutual Funds, would you like to invest in sectorial funds?
Please tick (√). Yes No

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 BIBLIOGRAPHY

• The Economic Times (10,18 June)

• MUTUAL FUND HAND BOOK

• FACT SHEET AND STATEMENT

• WWW. SBIMF.COM

• WWW.MONEYCONTROL.COM

• WWW.AMFIINDIA.COM

• WWW.ONLINERESEARCHONLINE.COM

• WWW. MUTUALFUNDSINDIA.COM

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