Emperor International Journal of Finance and Management Research ISSN: 2395-5929

INVESTORS ATTITUDE TOWARDS UTI

MUTUAL FUNDS
(With Special Reference to Tiruvannamalai Town)
Dr. G. SASIKUMAR
Principal,
Sun Arts and Science College,
Tiruvannamalai - 606 755.
R. TAMILSELVAN
Assistant Professor of Commerce
Sun Arts and science College
Tiruvannamalai - 606 755

Abstract I. INTRODUCTION
Indian mutual fund has gained a lot of A Mutual Fund (henceforth MF) is an
popularity from the past few years. Earlier only investment tool that allows small investors access
UTI enjoyed the monopoly in this industry but with to a well-diversified portfolio of equities, bonds
the passage of time many new players entered the and other securities. Each shareholder participates
market, due to which the UTI monopoly breaks in the gain or loss of the fund. Units are issued and
down and the industry faces a severe competition. can be redeemed as needed. MF is a trust that pools
As the time passes this industry has become a buzz the savings of a number of investors who share a
word in the Indian financial system. So it is very common financial goal. The money thus collected
important to know the investors’ perception about is then invested in capital market instruments such
this industry. The present study analyses the mutual as shares, debentures and other securities. The
fund investments in relation to investor’s behavior. income earned through these investments and the
Investors’ opinion and perception has been studied capital appreciation realized is shared by its unit
relating to various issues like type of mutual fund holders in proportion to the number of units owned
scheme, main objective behind investing in mutual by them. Thus, MF is the most suitable investment
fund scheme, role of financial advisors and for the common man as it offers an opportunity to
brokers, investors’ opinion relating to factors that invest in a diversified, professionally managed
attract them to invest in mutual funds, sources of basket of securities at a relatively low cost.
information, deficiencies in the services provided MF industries have already entered into a
by the mutual fund managers, challenges before the world of exciting innovative products. These
Indian mutual fund industry etc. products are now tailor made to suit specific needs
KEYWORDS: Mutual fund, investors perception, of investors. Intensified competition and
investors behavior, investors objectives & involvement of private players in the race of MFs
challenges Garrett ranking have forced professional managers to bring
innovation in mutual funds. Thus, mutual funds
industry has moved from offering a handful of
schemes like equity, debt or balanced funds to
liquid, money market, sector specific funds, index

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 Emperor International Journal of Finance and Management Research ISSN: 2395-5929

funds and gilt edged funds. Besides, recently MFs II. OBJECTIVES
have also introduced some special specific funds 1. To know about the extent of awareness about
like children plans, education plans, insurance mutual funds with special reference to UTI
linked plans, and exchange traded funds. The result Mutual Funds.
is that over the time Indian investors have started 2. To know about the preferences of investors
shifting towards MFs instead of traditional towards mutual funds with special reference to
financial avenues. With the entry of private sector UTI Mutual Funds.
funds in 1993, a new era started in the Indian MFs 3. To know about the perceptions of investors
industry giving the Indian investors a wider choice towards mutual funds with special reference to
of fund families. In the course of time the number UTI Mutual Funds.
of MF houses went on increasing, with many 4. To know about the extent of satisfaction of
foreign MFs setting up funds in India and also the investors towards mutual funds with special
industry has witnessed several mergers and reference to UTI Mutual Funds.
acquisitions. Methodology
Need for study Research Design selected for this research
For retail investor who does not have the is descriptive design and the Universe is
time and expertise to analyze and invest in stocks Tiruvannamalai Town. Data was collected in two
and bonds, mutual funds offer a viable investment ways, i.e., Primary data and Secondary data. The
alternative. This is because mutual funds provide data collection method used for collection of
the benefit of cheap access to expensive stocks. primary data was survey method and the data
Mutual funds diversify the risk of the investor by collection instrument used is structured
investing in a basket of assets. questionnaire. The sampling technique used is non
A team of professional fund managers probability convenience sampling. Sample size is
manages them within-depth research inputs from 225 respondents and sampling units include
investment analysts. Being institutions with good businessmen, Government servants, professional
bargaining power in markets, mutual funds have and retired Individuals. The secondary data was
access to crucial corporate information which collected through journals, magazines, books,
individual investors cannot access. So the present company manuals, websites, etc. and various tools
study has taken up to know the extent of awareness used for this paper like Percentage analysis, Garrett
about mutual funds and to analyze the investors’ ranking method , Mean score, variance,
perception towards mutual funds.
Samples Selection and Data Collection

Questionnaire Questionnaire Incomplete Questionnaire were

Sl. No Zone
issued received questionnaire used for study
1. East 75 58 2 56
2. West 75 62 1 61
3. North 75 61 3 58
4. South 75 52 2 50
Total 300 233 8 225

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 Emperor International Journal of Finance and Management Research ISSN: 2395-5929

Limitations of the Study not totally aware about the systematic investment
 The present study is restricted to UTI Mutual plan. The investor’s will also consider various
funds in Tiruvannamalai town only. factors before investing in MF’s.
 As the survey was pertaining to investment Chen et al. (2011) have tested MFs that
attitude of investors, biased information may engage in tax planning and how do they respond to
restrict validity of inference possible. changes in the capital gains tax rates was
 The study was constrained by limitations of investigated. It was found that there was
time. consistency with tax planning by managers of both

 The raw data was collected with the help of open-end and closed-end MFs and MF managers

structured questionnaire technique. Therefore may not tax plan like individuals because fund

study is bounded by the limitation of this managers have incentives to consider the tax

technique liability of both current and potential investors.

Review of Literature Agapova (2011) has examined the cross-sectional

A Mutual Fund motivates small and big differences among money market mutual funds

investors to entrust their savings to it so that these (MMMFs) in the context of sponsoring fund

are professionally employed ensuring their savings families and found that flows to family non-

to it so that these are professionally employed MMMFs are negatively related to family MMMF

ensuring good return. A large number of investors flows, and family non-MMMF cash flow volatility

have small savings with them. When small savings is positively related to family MMMF cash flow

are pooled and entrusted to mutual funds then these volatility. The study has further suggested that fund

can be used to buy the chips where regular returns family investors also use family MMMFs as cash

and capital appreciation are ensured (Saraswathi, centers by utilizing free asset transfers within the

2006). family.

Badla and Garg (2007) observed that most Badrinath & Gubellini (2011) have

of the schemes outperformed the market and the evaluated the return performance of long-short,

risk undertaken in the schemes is more than the market neutral and bear MFs using multi-factor

market risk. Noronha (2007) has evaluated the models and a conditional CAPM and revealed that

performance of 11 equity schemes of three asset Market-neutral funds provide a down market

management companies with the help of Sharpe hedge, but bear funds do not generate the returns

and Treynor measure for a period April 2002- that investors hope for their investments.

March 2005. The study found that equity, tax plan Data analysis and Interpretation
Table – 1 Demographic Variable Analysis
and index funds offer diversification and are able to
No of
earn better returns as compared to sector specific Demographic variables %
respondents
funds. The study is a commendable work on Male 173 77
performance of MFs highlighting the better earning Gender Female 52 23
capacity of equity, tax plans and index funds Total 225 100
20-30 27 12
K. Singh and Jha (2009) conducted a
31-40 45 20
study on awareness & acceptability of MF’s and
Age group Above 40 153 68
found that consumers basically prefer MF’s due to
return potential, liquidity and safety and they were Total 225 100

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 Emperor International Journal of Finance and Management Research ISSN: 2395-5929

No of in only one plan and 36% of the respondents have

Demographic variables %
respondents
invested in more than three plans.12% have
Schooling 72 32
Under invested in two plans and the rest 10% have
101 45
graduate invested in three plans.
Education
Post graduate 27 12
level Table - 3 Investments in Different Types of Funds
Professional
25 11
degree Type of funds No. of investors Percentage
Total 225 100 Equity 88 39
Less than Income 52 23
14 6
5000 Index 22 10
Income 5000-10000 72 32 Debt 20 9
level 10000-20000 74 33 Balanced 47 21
Above 20000 65 29 Asset 25 11
Total 225 100 Liquid 72 32
Total 225 100
Table – 2 Numbers of Plans Investors have Invested in Mutual
Funds The table 3 shows that investment in
No of plans No. of investors Percentage different types of funds. 39%Investors invest
Only one 95 42
Two 27 12 mainly in Equity funds. And the next preferred type
Three 22 10 of fund is the Liquid fund with a response from
More than Three 81 36
32% investors. 23% investors have invested in
Total 225 100
income funds, 10% investors in index funds, 9%
The table 2 represents that Numbers of investors in debt funds, 21% investors in balanced
plans investors have invested in mutual funds in it funds and 11% investors in assets funds.
is clear that 42% of the respondents have invested
Table – 4 Frequencies of Investors Monitoring the Performance of their Investment

Monitoring the following Monthly Quarterly Half yearly Yearly Never Total
Performance of the fund(NAV) 27 72 108 14 4 225
Risk Factors 16 38 110 50 11 225
Fund Managers profile 5 36 74 65 45 225
Portfolio of securities 27 32 58 81 27 225

The table 4 indicates frequency of investors The table 5 reveals that risk attached to the
monitoring the performance of their investment. investment. 63% of investors feel that Volatility is
The Performance of the Fund (NAV), Risk Factors the main risk attached to their investment, while
and Fund Managers Profile are mostly looked upon 19% feel that inflation risk is attached to their
half yearly and The Portfolio of securities is mostly investment, 14% feel that Credit rate risk is
monitored yearly. attached to their investment and 4% feel that
Table - 5 Risks Attached to the Investment interest rate risk is attached to their investment.
Type of Risk No. of investors Percentage
Volatility 142 63
Interest Rate risk 9 4
Credit rate risk 32 14
Inflation risk 43 19
Total 225 100

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 Emperor International Journal of Finance and Management Research ISSN: 2395-5929

Table – 6 Garrett Ranking and scoring of factors considered by investors while investing in mutual funds

Ranks

Garrett
Score

Rank
Total
Garrett score
Factors
1 2 3 4 5 6 7 8
(80) (67) (60) (53) 47) (40) (32) (20)
Expertise 15 22 36 42 58 24 19 9 11534 IV
Safety 65 61 41 22 16 9 8 3 14341 I
Liquidity 36 45 29 26 17 26 35 11 12192 III
Diversification 14 11 35 31 29 36 45 24 10323 VI
Tax benefit 42 38 31 36 29 21 15 13 12617 II
Regular income 23 21 16 38 45 31 29 22 10944 V
Regular savings 17 19 26 18 22 36 45 42 9901 VII
High returns 13 8 11 12 9 42 29 101 7923 VIII
more important. Investors have given second
The table – 6 represents that investors are preference to Tax benefit and given the rank
ranked in different factors are considered in continuously to the following factors Liquidity,
investing in mutual funds. Most of the investors Expertise, Regular Income, Diversification,
given First rank to the safety of the investment are Regular savings and High returns respectively.
Table – 7 Level of Satisfaction

Level of satisfaction HS S N DS HDS MST MSV

Return earned 29 56 83 32 47 729 3.24
Timeliness in annual reports 25 124 70 3 8 845 3.75556
Timeliness in dealings 128 97 0 0 0 1028 4.56889
Rights of unit holders 63 126 36 0 0 927 4.12
Grievance handling 52 117 56 0 0 896 3.98222
Information availability 56 133 36 0 0 920 4.08889
Options available 52 140 34 0 0 922 4.09778
Performance of the Fund 27 81 29 29 29 633 2.81333
Choice Of Schemes 5 36 162 0 0 655 2.91111
Payment Options 29 155 63 0 0 954 4.24
Tax Benefits 32 79 90 25 0 796 3.53778
Risks 0 47 72 101 5 611 2.71556
Diversification 16 110 72 27 0 790 3.51111
Returns Potential 0 32 122 41 30 606 2.69333
Liquidity 20 65 140 0 0 780 3.46667
Expert Guidance 32 81 22 56 34 729 3.24
OVERALL MSV=3.359
The table 7 reveals that the satisfaction whereas the other factors are not very satisfactory.
level of investors in UTI mutual funds for the The overall MSV is 3.359 the investors overall
timeliness in dealings, rights of unit holders, satisfaction level is Neutral i.e. either satisfied
payment options, information availability and neither are not satisfied.
options available for the investment are high

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 Emperor International Journal of Finance and Management Research ISSN: 2395-5929

Table - 8 Investor’s Perception towards UTI Mutual Funds

Factors HS S N DS HDS MST MSV

Investors receives good quality advice from distributor 38 106 54 27 0 830 3.69
Management fee charged by AMC is reasonable 36 171 18 0 0 918 4.08
Entry /Exit load is reasonable in comparison to the return
29 176 43 0 0 978 4.35
earned
Advertising and performance portrayal is often misleading 18 38 104 61 6 682 3.03
There is need to simplify the information provided to unit
101 61 59 4 0 934 4.15
holders
Scheme’ performance is linked with governance of MF 117 54 38 0 0 915 4.07
Investment in MF units should be for a longer period 50 117 22 25 11 845 3.76
Attending educational programme is beneficial 29 95 101 0 0 828 3.68
No direct regulatory control on distributors 0 9 61 99 56 473 2.10
OVERALL MSV = 3.66
The table 8 reveals that investors IV. SUGGESTIONS
perception towards mutual funds. Perception  The investors should be given the option of
differs from person to person. What one perceives attending investor’s education programme
is a result of interplays between past experiences, once in a month.
one’s culture and the interpretation of the  The information about the products should be
perceived. Investors’ perception is the process of revealed exactly to the investors, and they
attaining awareness or understanding of sensory should be advised on the risks attached to them
information on their investment in Mutual Funds.  Investors can take their own steps in analyzing
Most of the investor agrees that the investment in the market conditions and can be advised to
UTI Mutual funds is good. make a portfolio and investment analysis on
III. FINDINGS their investment.
 Majority of the investors are above 41 years.  The investors should be given all the
 There are more male investors in UTI Mutual information regarding their investment and the
Funds. benefits or the drawbacks of the investments.
 About 33% of the investor’s income lies V. CONCLUSION
between Rs.10001-Rs.20000 per month. From the study on “Investors attitude
 Majority of the investors are under graduates. towards UTI Mutual funds”, it is found that the
 Most of the investors have invested in only one investors have a positive attitude towards their
plan. investment made in UTI Mutual funds. Majority of
 Equity Funds are preferred more than the the investors prefer Mutual Funds for the returns
closed-ended schemes and feel that it is a safe measure of investment. The
 The Performance of the Fund (NAV), Risk investors select the schemes considering the returns
Factors and Fund Managers Profile are mostly earned from them. The preferred schemes and
looked upon half yearly funds are the Equity schemes and Open ended

 Volatility risk is attached to most of the funds. Though the investors are not aware of the

investments. risks attached to the investment they have a

 Most of the investors given First rank to the positive attitude towards the mutual funds.

safety of the investment are more important. The investors are satisfied with their

Investors have given second preference to Tax investment in UTI Mutual Funds. The investors

benefit also feel that the annual reports and other

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 Emperor International Journal of Finance and Management Research ISSN: 2395-5929

publications of the concern help them to analyze 7. Bhalla V.K., Investment Management,
the performance of their investment. The S.Chand & Company Ltd., Eleventh Edition,
organization can educate its investors on the risk 2004
and return in order to make their investments more 8. Prasanna Chandra, Investment Analysis and
effective. The investor’s education programme can Portfolio Management, Tata McGraw-Hill
be conducted by the organization in order to Publishing Company Limited, Third Edition,
educate the investors. 2008
The study has helped the researcher to
gain real time knowledge and has helped to use her
analytical skills to analyze the attitude of the
investors.
VI. REFERENCE
1. Bodla, B S and Bishnoi, S (2008), “Emerging
Trends of Mutual Funds in India: A Study
across Category and type of schemes, “Journal
of Indian Management and Strategy, Vol.13,
p-15.
2. Noronha, M.R., “Performance Evaluation of
Equity Based Mutual Funds: A Case Study of
Three Asset management Companies in India”,
The Management Accountant, Vol. July, pp.
527-534. 2007
3. Singh, B. K., Jha, A.K.,“An empirical study on
awareness & acceptability of mutual fund”,
Presented on Regional Student’s Conference,
ICWAI, pp. 49-55, 2009.
4. Agapova, Anna, 2011, „The Role of Money
Market Mutual Funds in Mutual Fund
Families‟, Journal of Applied Finance, Vol.
21, Issue. 1, pp. 87-102.
5. Chen Feng; Kraft, Arthur; Weiss, Ira, 2011,
„Tax Planning by Mutual Funds: Evidence
from Changes in the Capital Gains Tax Rate‟,
National Tax Journal, Vol. 64, Issue 1, pp.
105-134.
6. Badrinath, S.G & Gubellini, S, (2011), “On the
characteristics and performance of long-short,
market-neutral and bear mutual funds,” Journal
of Banking & Finance, Vol. 35 Issue 7,
pp.1762-1776.

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