A

Research

Project On

INVESTMENT OPPORTUNITIES IN MUTUAL FUNDS

In partialfulfilment of the requirement for the award of

the degree of MASTER OF BUSINESS ADMINISTRATION of

Mahatama Gandhi Kashi Vidyapith (2018-2020)

INSTITUTE OF MANAGEMENT STUDIES

FACULTY OF COMMERCE AND MANAGEMENT STUDIES

MAHATAMA GANDHI KASHI VIDYAPITH UNIVERSITY

Submitted to Submitted by
Prof. Ajit Kumar Shukla (Dean Surya Dev Rai
and Director)
MBA (IV Sem)
FACULTY OF COMMERCE AND
Roll No-10019527058
MANAGEMENT STUDIES

1
 ACKNOWLEDGEMENT

Sometimes words fall short to show gratitude, the same happened with me during this Research Report. The
immense help and support received from each and every one during my Research time

My sincere gratitude to my guide Mrs. APARNA SINGH for providing me an opportunity to work his and
provided me all the necessary information and his valuable suggestion and comments on bringing out this
report in the best possible way.

I also thank Prof. AJIT KUMAR SHUKLA, Director of I.M.S, MGKVP Varanasi. who has sincerely
supported me with the valuable insights into the completion of this project?

SURYA DEV RAI

 Institute of Management Studies

MAHATMA GANDHI KASHI

VIDYAPITH VARANASI

BONAFIDE CERTIFICATE

Certified that this project report titled “INVESTMENT OPPORTUNITIES IN MUTUAL FUND” is the
Bonafide work of “SURYA DEV RAI” who carried out the project work under my supervision in the partial
fulfilment of the requirements for the award of the MBA degree.

SIGNATURE………………..
 DECLARATION BY THE STUDENT

I, SURYA DEV RAI bearing Reg. NoKA2K19/100527058hereby declare that this project report entitled
“INVESTMENT 0PPOURTUNITIES IN MUTUAL FUND” has been prepared by me towards the
partial fulfilment of the requirement for the award of the Master of Business Administration (MBA)
Degree under the guidance of Mrs. APARNA SINGH

I also declare that this project report is my original work and has not been previously submitted for the
award of any Degree, Diploma, Fellowship, or other similar titles.

Place: Varanasi SURYA DEV RAI

Date:

Reg. No: KA2K19/100527058

 ABSTRACT

The mutual fund is pool of money managed by a professional money manager. The money such collected has
invested in capital market instruments such as shares, debentures, and other securities. The income earned
through these investments and the capital appreciation has been shared by its unit's proportion to the numbers
of units owned by them. Therefore, it is the most suitable investment for novice investors as it offers an
opportunity to invest diversified professionally managed securities relatively at low cost. There are good
amount of researches carried out on the performances or risk adjusted returns, the initial researches are carried
out in foreign countries. The researchers have first studied different parameters of mutual funds like
performance, risk, etc. This is a very new topic for Indians. The research on the mutual fund industry is not
only interesting topic for the researchers but it also finds interesting to other linked fields with mutual funds
like for managers of financial, banking and investment institutions as they were looking for the growing
business into the mutual fiind industry. Some researchers have tried to help investors by their study to improve
the investment strategy and investor's decision-making power. This study tries to highlight on the performance
of selected Asset Management Companies in the selected study period, Apr 2002 to Apr 2011. This study has
used Student's T-distribution, Chi Square and Z test for hypotheses testing. This research study will help to the
investors who have not yet started investing in mutual funds, but willing to explore the opportunity and for
those who want to clear their basics for what is mutual fund and how best it can serve as an investment tool.
The needs of investment vary from person to person. While someone might plan for his children's education,
life after retirement, buying a property etc., someone might be saving for a vacation abroad or VIII buying a
luxury car etc. With objectives defying any range, it is obvious that the products require investments to meet
these objectives will vary as well. Investors saving for the proverbial rainy day may warrant for more secured
avenues of investment while others may give more weightage to just returns.
 CONTENTS
S.NO. Chapter Page no.
1. Introduction 7-16
2. Objective and Scope 17
3. Research Methodology 18-19
4 Data Analysis and Interpretation 20-26
5. Finding and Conclusion 26-28
6. Conclusion 29
7. Suggestion and Recommendation 30
8. Appendix 31-40
9. Bibilography 41
 CHAPTER.1

INTRODUCTION
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 fund’s 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.

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.
1.2. ADVANTAGES OF MUTUAL FUND

• Portfolio Diversification

• Professional management

• Reduction / Diversification of Risk

• Liquidity

• Flexibility & Convenience

• Reduction in Transaction cost

• Safety of regulated environment

• Choice of schemes

• Transparency

1.3. DISADVANTAGE OF MUTUAL FUND

• No control over Cost in the Hands of an Investor

• No tailor-made Portfolios

• Managing a Portfolio Funds

• Difficulty in selecting a Suitable Fund Scheme

1.4. HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of
the Government of India and Reserve Bank. Though the growth was slow, but it accelerated from the year 1987
when non-UTI players entered the Industry.

In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualities wise as well as
quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management
(AUM) was Rs67 billion. The private sector entry to the fund family raised the Aum to Rs. 470 billion in March
1993 and till April 2004; it reached the height if Rs. 1540 billion.

The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be
broadly put into four phases according to the development of the sector. Each phase is briefly described as
under.

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament 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 in place 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 Can bank 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.

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.
1.5. CATEGORIES OF MUTUAL FUND:

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 cannot 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:

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.

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.

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.

RISK V/S. RETURN:

1.8. INTRODUCTION TO SBI MUTUAL FUND

SBI Funds Management Pvt. Ltd. is one of the leading fund houses in the country with an investor base of over
4.6 million and over 20 years of rich experience in fund management consistently delivering value to its
investors. SBI Funds Management Pvt. Ltd. is a joint venture between 'The State Bank of India' one of India's
largest banking enterprises, and Société Générale Asset Management (France), one of the world's leading fund
management companies that manages over US$ 500 Billion worldwide. 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 Funds Management Pvt. Ltd. serves its
vast family of investors through a network of over 130 points of acceptance, 28 Investor Service Centres, 46
Investor Service Desks and 56 District Organizers.SBI Mutual is the first bank-sponsored fund to launch an
offshore fund – Resurgent India Opportunities Fund.Growth through innovation and stable investment policies
is the SBI MF credo.
PRODUCTS OF SBI MUTUAL FUND

Equity schemes

The investments of these schemes will predominantly be in the stock markets and endeavor will be to provide
investors the opportunity to benefit from the higher returns which stock markets can provide. However, they
are also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such
investors who have high risk taking capacities and are willing to think long term. Equity Funds include
diversified Equity Funds, Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks
across different sectors while sectoral funds which are specialized Equity Funds restrict their investments only
to shares of a particular sector and hence, are riskier than Diversified Equity Funds. Index Funds invest
passively only in the stocks of a particular index and the performance of such funds move with the movements
of the index.

 Magnum COMMA Fund

 Magnum Equity Fund

 Magnum Global Fund

 Magnum Index Fund

 Magnum Midcap Fund

 Magnum Multicap Fund

 Magnum Multiplier plus 1993

 Magnum Sectoral Funds Umbrella

 MSFU- Emerging Business Fund

 MSFU- IT Fund

 MSFU- Pharma Fund

 MSFU- Contra Fund

 MSFU- FMCG Fund

 SBI Arbitrage Opportunities Fund

 SBI Blue chip Fund

 SBI Infrastructure Fund - Series I

 SBI Magnum Taxgain Scheme 1993

 SBI ONE India Fund

 SBI TAX ADVANTAGE FUND - SERIES I

Debt schemes

Debt Funds invest only in debt instruments such as Corporate Bonds, Government Securities and Money
Market instruments either completely avoiding any investments in the stock markets as in Income Funds or
Gilt Funds or having a small exposure to equities as in Monthly Income Plans or Children's Plan. Hence they
are safer than equity funds. At the same time the expected returns from debt funds would be lower. Such
investments are advisable for the risk-averse investor and as a part of the investment portfolio for other
investors.

• Magnum Children’s benefit Plan

• Magnum Gilt Fund

• Magnum Income Fund

• Magnum Insta Cash Fund

• Magnum Income Fund- Floating Rate Plan

• Magnum Income Plus Fund

• Magnum Insta Cash Fund -Liquid Floater Plan

• Magnum Monthly Income Plan

• Magnum Monthly Income Plan- Floater

• Magnum NRI Investment Fund

• SBI Premier Liquid Fund

BALANCED

SCHEMES

Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they are less risky than equity
funds, but at the same time provide commensurately lower returns. They provide a good investment
opportunity
to investors who do not wish to be completely exposed to equity markets, but is looking for higher returns than
those provided by debt funds.

• Magnum Balanced Fund

COMPETITORS OF SBI MUTUAL

FUND

Some of the main competitors of SBI Mutual Fund in Varanasi are as Follows:

i. ICICI Mutual Fund

ii. Reliance Mutual Fund

iii. UTI Mutual Fund

iv. Birla Sun Life Mutual Fund

v. Kotak Mutual Fund

vi. HDFC Mutual Fund

vii. Sundaram Mutual Fund

viii. LIC Mutual Fund

ix. Principal

x. Franklin Templeton

AWARDS AND ACHIEVEMENTS

SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award - 8 times, CNBC TV - 18
Crisil Award 2006 - 4 Awards, The Lipper Award (Year 2005-2006) and most recently with the CNBC TV -
18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes.
 CHAPTER - 2

OBJECTIVES AND SCOPE

3.1. 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.

3.2. 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 Varanasi. I had been sent at one of the branch of State Bank of India
Varanasi where I completed my Project work. I surveyed on my Project Topic “A study of preferences of
the Investors for investment in Mutual Fund” on the visiting customers of the SBI Boring Canal Road
Branch.

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.
 CHAPTER – 3

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 two months, from 30th Jan to 2nd

march. Sampling:

 Sampling procedure:

The sample was selected of them who are the customers/visitors of State Bank if India, Boring Canal Road
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 analysed 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 design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.

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.

 Sample size is limited to 200 visitors of State Bank of India, Boring Canal Road

 Branch, Varanasi out of these only 120 had invested in Mutual Fund. The sample.

 Size may not adequately represent the whole market.

 Some respondents were reluctant to divulge personal information which can

 Affect the validity of all responses.

 The research is confined to a certain part of Varanasi.

 CHAPTER – 4

DATA ANALYSIS & INTERPRETATION

5.1. ANALYSIS & INTERPRETATION OF THE DATA

(a) Age distribution of the Investors of Varanasi

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

No. of Investors 12 18 30 24 20 16

Interpretation: According to this chart out of 120 Mutual Fund investors of Varanasi 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.

(b). Educational Qualification of investors of

Varanasi Educational Qualification Number of

Investors Graduate/ Post Graduate 88

Under Graduate 25

Others 7

Total 120

Interpretation: Out of 120 Mutual Fund investors 71% of the investors in Varanasi are Graduate/Post
Graduate, 23% are Under Graduate and 6% are others (under HSC).

c). Occupation of the investors of

Varanasi Occupation No. of

Investors

Govt. Service 30

Pvt. Service 45
Business 35
Agriculture 4

Others 6

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.

(d). Monthly Family Income of the Investors of Varanasi.

Income Group No. of Investors

<=10,000 5

10,001-15,000 12

15,001-20,000 28

20,001-30,000 43

>30,000 32

Interpretation: In the Income Group of the investors of Varanasi, out of 120 investors, 36% investors that is the
maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e. 27% investors
are in the monthly income group of more than Rs. 30,000 and the minimum investors i.e. 4% are in the
monthly income group of below Rs. 10,000

(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
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.

3. Preference of factors while investing

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

Trust No. of Respondents 40 60 64 36

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

4. Awareness about Mutual Fund and its

Operations Response Yes No

No. of Respondents 135 65

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.

5. Source of information for customers about Mutual

Fund Source of information No. of Respondents

Advertisement 18

Peer Group 25

Bank 30

Financial Advisors 62

Interpretation: From the above chart it can be inferred that the Financial Advisor is the most important source of
information about Mutual Fund. Out of 135 Respondents, 46% know about Mutual fund Through Financial
Advisor, 22% through Bank, 19% through Peer Group and 13% through Advertisement.
6. Investors invested in Mutual

Fund Response No. of

Respondents

YES 120

NO 80

Total 200

Interpretation: Out of 200 People, 60% have invested in Mutual Fund and 40% do not have invested in
Mutual Fund.

7. Reason for not invested in Mutual

Fund ReasonNo. of Respondents

Not Aware 65

Higher Risk 5

Not any Specific Reason 10

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.

8. Investors invested in different Assets Management Co.

(AMC) Name of AMCNo. of Investors

SBIMF 55

UTI 75

HDFC 30

Reliance 75

ICICI Prudential 56

Kotak 45

Others 70
Interpretation: In Varanasi 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.

9. Reason for invested in

SBIMF ReasonNo. of

Respondents Associated with

SBI 35

Better Return 5

Agents Advice15

Interpretation: Out of 55 investors of SBIMF 64% have invested because of its association with Brand
SBI, 27% invested on Agent’s Advice, 9% invested because of better return.

10. Reason for not invested in

SBIMF ReasonNo. of Respondents

Not Aware 25

Less Return 18

Agent’s Advice 22

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.

11. Preference of Investors for future investment in Mutual

Fund Name of AMCNo. of Investors

SBIMF 76

UTI 45

HDFC 35

Reliance 82
ICICI Prudential 80
Kotak 60

Others 75

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.

12. Channel Preferred by the Investors for Mutual Fund

Investment Channel Financial Advisor Bank

AMC

No. of Respondents 72 18 30

Interpretation: Out of 120 Investors 60% preferred to invest through Financial Advisors, 25% through AMC
and 15% through Bank.

13. Mode of Investment Preferred by the Investors

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

No. of Respondents 78 42

Interpretation: Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through Systematic
Investment Plan.

14. Preferred Portfolios by the

Investors Portfolio No. of Investors

Equity 56

Debt 20

Balanced 44

Interpretation: From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17% preferred
Debt portfolio
15. Option for getting Return Preferred by the Investors

Option Dividend Pay-out Dividend Reinvestment

Growth No. of Respondents 25

10 85

Interpretation: From the above graph 71% preferred Growth Option, 21% preferred Dividend Payout and 8%
preferred Dividend Reinvestment Option.

16. Preference of Investors whether to invest in Sectoral

Funds Response No. of Respondents

Yes 25

No 95

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.
 CHAPTER – 5

FINDINGS & CONCLUSION

Findings

 In Varanasi 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 Varanasi 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.

 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, SBIMF has been preferred after them.

 60% Investors preferred to Invest through Financial Advisors, 25% through AMC (means
Direct Investment) and 15% through Bank.

 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.
 CHAPTER.6

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 Varanasi 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 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.
 CHAPTER – 7

SUGGESTIONS & 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.

 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.
 CHAPTER.8

APPENDIX

Questionnaire

Respected Madam / Sir / Investor,

I am a MBA student from the MGKVP VARANASI . Presently I am doing a research on Mutual Funds. I
will be more obliged if you could respond to the below mentioned questionnaire. Your response can put
more light on my research work and I can come out with realistic findings.

Yours sincerely
( Prof.APARNA SINGH )

1. You belong to which one of the followingcategory:

Govt. Employee Professional Pvt. Firm Employee Self Employed

Business Person
Agriculturis Others
t

2. Your annual income is in the rangeof:

Below Rs.1 Lakh Between 1 Lakh to 2Lakh

Between 2 Lakh to3 Lakh Between 3 Lakh to 4Lakh

Between 4 Lakh to5 Lakh Above Rs. 5 Lakh.

3. Where do you invest yoursavings?

Savings Bank
Fixed Shares/Debentures Gold/Silve
Deposit
Postal savings
Real Estate Mutual Funds
Insurance

Others (Please Mention)

4. What is the percentage of savings from your total income?

<=25 % <= 50 % <= 75 % others

5. What are the factors to which you give priority when youinvest

Safety High Return Liquidity Less

Risk
6. You invest in the financial instruments / securities which give:

High Risk /
Low Risk Low Risk/
High Return
/Low return High Return
7. Do you know about MutualFunds?

Yes No

If yes, then a few words about

mutual funds

8. Are you an investor in Mutual Funds?

Yes ( If No, then directly

No.
go to
question
No.26 )

9. If yes , then you have invested in the Mutual Fund Which Company?

PleaseMention Scheme:

10. How is your invest pattern:

Monthly (SIP)
Once in Once in a year Very Rare
Six Months

11. You have invested in which type of Mutual FundScheme

Equity fund Debt funds Hybrid Funds

12. If Equity Funds then, in whichcategory
Diversified
Mid-Cap Sector Specific
Equity Funds
Funds Funds

Tax Savings Funds

13. If Debt Funds then, in whichcategory

Gilt Funds Income MIPs Short Term

Funds Pl

Liquid Funds

14. Do you have knowledge about the share market & itsfunctioning

Yes No

15. Are you aware of the fact that Mutual Fund Companies (AMC’s) will invest your money
inShare Market
Yes No.
16. What advantages do you find when you invest in Mutual Funds? GivePriority

Professional
Diversificati Return Potential Low cost
Management
on

Liquidity
Transparenc Flexibility Choice of scheme
y

Well regulated
Economies Simplicity
of scale

17. What do you look before investing in a particular mutual fundscheme?

PastPerformance(NAV) Ratings (by CRISIL, ICRA,Etc.)

Asset ManagementCompanies(AMC) Expert Advise

18. Where do you gather information about the performance of different mutual fundschemes?

Financial
Brokers Financial TV Channels
Institutions
Consultant
s

Magazines Internet

19. Since how many years you are investing in Mutual FundSchemes

One year Two Years Three Years Four

Years More than five years

20. You invest in Mutual Fund Schemes
because: It is a good
investmentinstrument
Its better to invest in Mutual funds rather than investing directly
inshares They give assured and consistentreturn
They provide high return with lowrisk.

Less calculation is required before investing when compared to share market.

Very simple to invest & monitor fund performance on a regular basis
Mutual Funds provide the benefit of cheap access to expensive stocks

Mutual funds diversify the risk of the investor by investing in a basket of assets
Professional fund managers manage them with in-depth research
inputs from investment analysts
21 . Can Mutual Funds be viewed as Risk Free Investments

Yes No.

Why ?

22. Is there a need for creating awareness among the public of Hubli-Dharwad about the benefits
of investing in MutualFunds
Yes No

23. Are there sufficient Mutual Fund investor education and service centers inHubli-Dharwad

Yes No.

24. Do you accept the fact that Investing in Mutual Funds will lead to the economicdevelopment

Yes No.

If no, then why?

25. Have you ever redeemed your Mutual Funds because of the below
mentionedreasons Non Performance ofFunds
Non Availability of good service from Mutual Fund company

Non availability of investment support / service in Hubli – Dharwad

Lack of information about fund performance
Difficulty in monitoring fund performance

OtherReason
 26. You have not invested in mutual funds
because: Its not a lucrative
investmentinstrument
No satisfactory return on investment when compared to other investment instruments. No safety for
funds invested
Risky investment instrument No / Less
Liquidity
No knowledge about how to invest

No knowledge about where to invest / investment centers

No Mutual Fund investors’ education & service center in Hubli-Dharwad.

It is related to share market, so it is very risky and the returns are not guaranteed.

27. According to you, which one do you rate as the best investmentinstrument?

Savings Bank
Fixed Shares/Debentures Gold/Silver
Deposit

Postal savings Real Estate Insurance Others

 Why?

28. Do you have any suggestion to improve the popularity of mutual funds among
the investors of Hubli- Dharwad?

******************Thank You Very Much

***************
 CHAPTER.8
BIBLIOGRAPHY

• NEWS PAPERS

• OUTLOOK MONEY

• TELEVISION CHANNEL (CNBC AAWAJ)

• MUTUAL FUND HAND BOOK

• FACT SHEET AND STATEMENT

• WWW.SBIMF.COM

• WWW.MONEYCONTROL.COM

• WWW.AMFIINDIA.COM

• WWW.ONLINERESEARCHONLINE.COM

• WWW. MUTUALFUNDSINDIA.COM