about mutual funds lakshmi sharma

8/2/2019 About Mutual Funds Lakshmi Sharma

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A case study of consumers awareness towards Mutual fund in Bhilai Durg city

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CHAPTER -1:- ABOUT MUTUAL FUNDS

1.1 What is a Mutual Fund?

A mutual fund is a common pool of money in to which investors with common

investment objective place their contributions that are to be invested in accordance with

the stated investment objective of the scheme. The investment manager would invest the

money collected from the investor in to assets that are defined/ permitted by the stated

objective of the scheme. For example, an equity fund would invest equity and equity

related instruments and a debt fund would invest in bonds, debentures, gilts etc.

Different investment avenues are available to investors. Mutual funds also offer good

investment opportunities to the investors. Like all investments, they also carry certain

risks. The investors should compare the risks and expected yields after adjustment of tax

on various instruments while taking investment decisions. The investors may seek advice

from experts and consultants including agents and distributors of mutual funds schemes

while making investment decisions.

With an objective to make the investors aware of functioning of mutual funds, an

attempt has been made to provide information in question-answer format which may help

the investors in taking investment decisions. Mutual fund is a mechanism for pooling the

resources by issuing units to the investors and investing funds in securities in accordance

with objectives as disclosed in offer document. 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


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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. The profits or losses are shared by the investors in proportion to

their investments. The mutual funds normally come out with a number of schemes with

different investment objectives which are launched from time to time. A mutual fund is

required to be registered with Securities and Exchange Board of India (SEBI) which

regulates securities markets before it can collect funds from the public.

1.2 Mutual Funds in India and role of SEBI in mutual funds industry .

Unit Trust of India was the first mutual fund set up in India in the year 1963. In early

1990s, Government allowed public sector banks and institutions to set up mutual funds.

In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The

objectives of SEBI are to protect the interest of investors in securities and to promote

the development of and to regulate the securities market As far as mutual funds are

concerned, SEBI formulates policies and regulate the mutual funds to protect the interest

of the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter,

mutual funds sponsored by private sector entities were allowed to enter the capital

market. The regulations were fully revised in 1996 and have been amended thereafter

from time to time. SEBI has also issued guidelines to the mutual funds from time to time

to protect the interests of investors. All mutual funds whether promoted by public sector

or private sector entities including those promoted by foreign entities are governed by the

same set of Regulations. There is no distinction in regulatory requirements for these


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mutual funds and all are subject to monitoring and inspections by SEBI. The risks

associated with the schemes launched by the mutual funds sponsored by these entities are

of similar type. It may be mentioned here that Unit Trust of India (UTI) is not registered

with SEBI as a mutual fund (as on January 15, 2002).

1.3 How is a mutual fund set up

A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset

Management Company (AMC) and custodian. The trust is established by a sponsor or

more than one sponsor who is like promoter of a company. The trustees of the mutual

fund hold its property for the benefit of the unitholders. Asset Management Company

(AMC) approved by SEBI manages the funds by making investments in various types of

securities. Custodian, who is registered with SEBI, holds the securities of various

schemes of the fund in its custody. The trustees are vested with the general power of

superintendence and direction over AMC. They monitor the performance and compliance

of SEBI Regulations by the mutual fund. SEBI Regulations require that at least two thirds

should not be associated with the sponsors. Also, 50% of the directors of AMC must be

of the directors of trustee company or board of trustees must be independent i.e. they

independent. All mutual funds are required to be registered with SEBI before they launch

any scheme. However, Unit Trust of India (UTI) is not registered with SEBI (as on

January 15, 2002).

1.4 Concept of Net Asset Value (NAV) of a scheme


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The performance of a particular scheme of a mutual fund is denoted by Net Asset

Value(NAV). Mutual funds invest the money collected from the investors in securities

markets. In simple words, Net Asset Value is the market value of the securities held by

the scheme. Since market value of securities changes every day, NAV of a scheme also

varies on day to day basis. The NAV per unit is the market value of securities of a

scheme divided by the total number of units of the scheme on any particular date. For

example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and

the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV

per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a

regular basis - daily or weekly - depending on the type of scheme.

1.5 Types of mutual fund schemes

Schemes according to Maturity Period

A mutual fund scheme can be classified into open-ended scheme or close-ended scheme

depending on its maturity period.

1.51 Open-ended Fund/ Scheme

An open-ended fund or scheme is one that is available for subscription and repurchase on

a continuous basis. These schemes do not have a fixed maturity period. Investors can

conveniently buy and sell units at Net Asset Value (NAV) related prices which are

declared on a daily basis. The key feature of open-end schemes is liquidity.


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1.52Close-ended Fund/ Scheme

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is

open for subscription only during a specified period at the time of launch of the scheme.

Investors can invest in the scheme at the time of the initial public issue and thereafter

they can buy or sell the units of the scheme on the stock exchanges where the units are

listed. In order to provide an exit route to the investors, some close-ended funds give an

option of selling back the units to the mutual fund through periodic repurchase at NAV

related prices. SEBI Regulations stipulate that at least one of the two exit routes is

provided to the investor i.e. either repurchase facility or through listing on stock

exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

1.6 Schemes according to Investment Objective

A scheme can also be classified as growth scheme, income scheme, or balanced scheme

considering its investment objective. Such schemes may be open-ended or close-ended

schemes as described earlier. Such schemes may be classified mainly as follows:

1.61 Growth / Equity Oriented Scheme

The aim of growth funds is to provide capital appreciation over the medium to long-

term. Such schemes normally invest a major part of their corpus in equities. Such funds

have comparatively high risks. These schemes provide different options to the investors

like dividend option, capital appreciation, etc. and the investors may choose an option


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depending on their preferences. The investors must indicate the option in the application

form. The mutual funds also allow the investors to change the options at a later date.

Growth schemes are good for investors having a long-term outlook seeking appreciation

over a period of time.

1.62 Income / Debt Oriented Scheme

The aim of income funds is to provide regular and steady income to investors. Such

schemes generally invest in fixed income securities such as bonds, corporate debentures,

Government securities and money market instruments. Such funds are less risky

compared to equity schemes. These funds are not affected because of fluctuations in

equity markets. However, opportunities of capital appreciation are also limited in such

funds. The NAVs of such funds are affected because of change in interest rates in the

country. If the interest rates fall, NAVs of such funds are likely to increase in the short

run and vice versa. However, long term investors may not bother about these fluctuations.

1.63 Balanced Fund

The aim of balanced funds is to provide both growth and regular income as such schemes

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

offer documents. These are appropriate for investors looking for moderate growth. They

generally invest 40-60% in equity and debt instruments. These funds are also affected

because of fluctuations in share prices in the stock markets. However, NAVs of such

funds are likely to be less volatile compared to pure equity funds.

1.64 Money Market or Liquid Fund


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These funds are also income funds and their aim is to provide easy liquidity, preservation

of capital and moderate income. These schemes invest exclusively in safer short-term

instruments such as treasury bills, certificates of deposit, commercial paper and inter-

bank call money, government securities, etc. Returns on these schemes fluctuate much

less compared to other funds. These funds are appropriate for corporate and individual

investors as a means to park their surplus funds for short periods.

1.65 Gilt Fund

These funds invest exclusively in government securities. Government securities have no

default risk. NAVs of these schemes also fluctuate due to change in interest rates and

other economic factors as is the case with income or debt oriented schemes.

1.66 Index Funds

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index,

S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same

weightage comprising of an index. NAVs of such schemes would rise or fall in

accordance with the rise or fall in the index, though not exactly by the same percentage

due to some factors known as "tracking error" in technical terms. Necessary disclosures

in this regard are made in the offer document of the mutual fund scheme. There are also

exchange traded index funds launched by the mutual funds which are traded on the stock

exchanges.

1.67 Sector specific funds/scheme


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These are the funds/schemes which invest in the securities of only those sectors or

industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast

Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are

dependent on the performance of the respective sectors/industries. While these funds may

give higher returns, they are more risky compared to diversified funds. Investors need to

keep a watch on the performance of those sectors/industries and must exit at an

appropriate time. They may also seek advice of an expert.

1.68 Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Income

Tax Act, 1961 as the Government offers tax incentives for investment in specified

avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the

mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-

dominantly in equities. Their growth opportunities and risks associated are like any

equity-oriented scheme.

1.7 Concept of Load or no-load Fund

A Load Fund is one that charges a percentage of NAV for entry or exit. That is,

each time one buys or sells units in the fund, a charge will be payable. This charge is used

by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is

Rs.10. If the entry as well as exit load charged is 1%, then the investors who buy would


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be required to pay Rs.10.10 and those who offer their units for repurchase to the mutual

fund will get only Rs.9.90 per unit. The investors should take the loads into consideration

while making investment as these affect their yields/returns. However, the investors

should also consider the performance track record and service standards of the mutual

fund which are more important. Efficient funds may give higher returns in spite of loads.

A no-load fund is one that does not charge for entry or exit. It means the investors can

enter the fund/scheme at NAV and no additional charges are payable on purchase or sale

of units.

1.8 Know the performance of a mutual fund scheme

The performance of a scheme is reflected in its net asset value (NAV) which is

disclosed on daily basis in case of open-ended schemes and on weekly basis in case of

close-ended schemes. The NAVs of mutual funds are required to be published in

newspapers. The NAVs are also available on the web sites of mutual funds. All mutual

funds are also required to put their NAVs on the web site of Association of Mutual Funds

in India (AMFI) http://www.amfiindia.com/ and thus the investors can access NAVs of

all mutual funds at one place. The mutual funds are also required to publish their

performance in the form of half-yearly results which also include their returns/yields over

a period of time i.e. last six months, 1 year, 3 years, 5 years and since inception of

schemes. The mutual funds are also required to send annual report or abridged annual

report to the unit holders at the Various studies on mutual fund schemes including yields

of different schemes are being published by the end of the year financial newspapers on a
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which would otherwise be extremely expensive. Each unit holder thus gets an exposure to

such portfolios with an investment as modest as Rs.500/-. This amount today would get

you less than quarter of an Infosys share! Thus it would be affordable for an investor to

build a portfolio of investments through a mutual fund rather than investing directly in

the stock market.

1.91-b Diversification

The nuclear weapon in your arsenal for your fight against Risk. It simply means that you

must spread your investment across different securities (stocks, bonds, money market

instruments, real estate, fixed deposits etc.) and different sectors (auto, textile,

information technology etc.). This kind of a diversification may add to the stability of

your returns, for example during one period of time equities might underperform but

bonds and money market instruments might do well enough to offset the effect of a

slump in the equity markets. Similarly the information technology sector might be faring

poorly but the auto and textile sectors might do well and may protect your principal

investment as well as help you meet your return objectives.

1.91-c Variety

MFs offer a tremendous variety of schemes. This variety is beneficial in two ways: first,

it offers different types of schemes to investors with different needs and risk appetites;

secondly, it offers an opportunity to an investor to invest sums across a variety of

schemes, both debt and equity. For example, an investor can invest his money in a

Growth Fund (equity scheme) and Income Fund (debt scheme) depending on his risk


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appetite and thus create a balanced portfolio easily or simply just buy a Balanced

Scheme.

1.91d Professional Management

Qualified investment professionals who seek to maximize returns and minimize risk

monitor investor's money. When you buy in to a mutual fund, you are handing your

money to an investment professional who has experience in making investment decisions.

It is the Fund Manager's job to (a) find the best securities for the fund, given the fund's

stated investment objectives; and (b) keep track of investments and changes in market

conditions and adjust the mix of the portfolio, as and when required.

1.91-e Tax Benefits

Any income distributed after March 31, 2002 will be subject to tax in the assessment of

all Unit holders. However, as a measure of concession to Unit holders of open-ended

equity-oriented funds, income distributions for the year ending March 31, 2003, will be

taxed at a concessional rate of 10.5.In case of Individuals and Hindu Undivided Families

a deduction up to Rs. 9,000 from the Total Income will be admissible in respect of

income from investments specified in Section 80L, including income from Units of the

Mutual Fund. Units of the schemes are not subject to Wealth-Tax and Gift-Tax.

1.91-f Regulations

Securities Exchange Board of India (SEBI), the mutual funds regulator has clearly

defined rules, which govern mutual funds. These rules relate to the formation,

administration and management of mutual funds and also prescribe disclosure and


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accounting requirements. Such a high level of regulation seeks to protect the interest of

investors.

1.92 Benefits of Open-ended Schemes

1.92-a Liquidity;

-In open-ended mutual funds, you can redeem all or part of your units any time you wish.

Some schemes do have a lock-in period where an investor cannot return the units until

the completion of such a lock-in period.

]1.92 b ConvenienceAn investor can purchase or sell fund units directly from a fund,

through a broker or a financial planner. The investor may opt for a Systematic Investment

Plan (SIP) or a Systematic Withdrawal Advantage Plan (SWAP). In addition to this

an investor receives account statements and portfolios of the schemes.

1.92-c Flexibility

Mutual Funds offering multiple schemes allow investors to switch easily between various

schemes. This flexibility gives the investor a convenient way to change the mix of his

portfolio over time.

1.92d Transparency

Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the entire

portfolio monthly. This level of transparency, where the investor himself sees the


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underlying assets bought with his money, is unmatched by any other financial instrument.

Thus the investor is in the know of the quality of the portfolio and can invest further or

redeem depending on the kind of the portfolio that has been constructed by the

investment manager.

1.93 The structure consists of MFs

Fig 1.1 Structure of MFs

1.93-a Sponsor

Sponsor is the person who acting alone or in combination with another body corporate

establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the

Investment Managed and meet the eligibility criteria prescribed under the Securities and

Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not

responsible or liable for any loss or shortfall resulting from the operation of the Schemes

beyond the initial contribution made by it towards setting up of the Mutual Fund.


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and dispatches account statements to the unit holders. The Registrar and Transfer agent

also handles communications with investors and updates investor records.

1.95 Investment Objective

Schemes can be classified by way of their stated investment objective such as Growth

Fund, Balanced Fund, Income Fund etc.

1.95-a Equity Oriented Schemes These schemes, also commonly called Growth

Schemes, seek to invest a majority of their funds in equities and a small portion in money

market instruments. Such schemes have the potential to deliver superior returns over the

long term. However, because they invest in equities, these schemes are exposed to

fluctuations in value especially in the short term.Equity schemes are hence not suitable

for investors seeking regular income or needing to use their investments in the short-term.

They are ideal for investors who have a long-term investment horizon. The NAV prices

of equity fund fluctuates with market value of the underlying stock which are influenced

by external factors such as social, political as well as economic .HDFC Growth Fund,

HDFC Tax Plan 2000 and HDFC Index Fund are examples of equity schemes.


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Fig1.2 RISK/RETURN ON FUNDS

Fig 1.3 LEVEL OF RISK

1.95b General Purpose

The investment objectives of general-purpose equity schemes do not restrict them to

invest in specific industries or sectors. They thus have a diversified portfolio of

companies across a large spectrum of industries. While they are exposed to equity price

risks, diversified general-purpose equity funds seek to reduce the sector or stock specific

risks through iversification. They mainly have market risk exposure. HDFC Growth Fund

is a general-purpose equity scheme.

1.95-c Sector Specific

These schemes restrict their investing to one or more pre-defined sectors, e.g. technology

sector. Since they depend upon the performance of select sectors only, these schemes are


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inherently more risky than general-purpose schemes. They are suited for informed

investors who wish to take a view and risk on the concerned sector.

1.95-d Real Estate funds

Specialized real estate funds would invest in real estates directly, or may fund real estate

developers or lend to them directly or buy shares of housing finance companies or may

even buy their securitized assets.

Debt Based Schemes

Fig 1.4 Debt Based Schemes


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Fig 1.5 Risk/Return level of Debt Based Schemes

1.95-e. Hybrid Schemes

These schemes are commonly known as balanced schemes. These schemes invest in both

equities as well as debt. By investing in a mix of this nature, balanced schemes seek to

attain the objective of income and moderate capital appreciation and are ideal for

investors with a conservative, long-term orientation. HDFC Balanced Fund and HDFC

Childrens Gift Fund are examples of hybrid schemes.

1.95-f. Constitution

Schemes can be classified as Closed-ended or Open-ended depending upon whether they

give the investor the option to redeem at any time (open-ended) or whether the investor

has to wait till maturity of the scheme.

1.95-g. Interval Schemes

These schemes combine the features of open-ended and closed-ended schemes. They may

be traded on the stock exchange or may be open for sale or redemption during pre-

determined intervals at NAV based prices


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1.96 Risks in Mutual Funds

1.96a. the Risk-Return Trade-off

The most important relationship to understand is the risk-return trade-off. Higher the

risk greater the returns/loss and lower the risk lesser the returns/loss. Hence it is upto you,

the investor to decide how much risk you are willing to take. In order to do this you must

first be aware of the different types of risks involved with your investment decision.

1.96 Market Risk

Sometimes prices and yields of all securities rise and fall. Broad outside influences

affecting the market in general lead to this. This is true, may it be big corporations or

smaller mid-sized companies. This is known as Market Risk. A Systematic Investment

Plan (SIP) that works on the concept of Rupee Cost Averaging (RCA) might help

mitigate this risk.

1.96b. Credit Risk

The debt servicing ability (may it be interest payments or repayment of principal) of a

company through its cash flows determines the Credit Risk faced by you. This credit risk

is measured by independent rating agencies like CRISIL who rate companies and their

paper. A AAA rating is considered the safest whereas a D rating is considered poor

credit quality. A well-diversified portfolio might help mitigate this risk.

1.96c. Inflation Risk
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The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of

times people make conservative investment decisions to protect their capital but end up

with a sum of money that can buy less than what the principal could at the time of the

investment. This happens when inflation grows faster than the return on your investment.

A well-diversified portfolio with some investment in equities might help mitigate this

risk.

1.96d. Interest Rate Risk

In a free market economy interest rates are difficult if not impossible to predict. Changes

in interest rates affect the prices of bonds as well as equities. If interest rates rise the

prices of bonds fall and vice versa. Equity might be negatively affected as well in a rising

interest rate environment. A well-diversified portfolio might help mitigate this risk.

1.96e. Political/Government Policy Risk

Changes in government policy and political decision can change the investment

environment. They can create a favorable environment for investment or vice versa.

1.96f. Liquidity Risk


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Liquidity risk arises when it becomes difficult to sell the securities that one has

purchased. Liquidity Risk can be partly mitigated by diversification, staggering of

maturities as well as internal risk controls that lean towards purchase of liquid securities.

1.96 Financial Planning

1.96.a Investors Goals!

The first and most important step in your life as an investor is to define your goals at the

onset of your investing activity. This will map the road ahead for you in terms of time,

amount, type of asset and risk. At this point of time you must also decide how much you

are willing to save. When you look at defining your goals think carefully and try to

include all your requirements, here are a few things that might help you:

RetirementIn how many years? How much money will you need? How long will you need it for? Daughters/Sons wedding When and how much? Daughters/Sons education When and how much? Purchase of big ticket items e.g. House, Car etc. Again, when and how much? 1.96b.Financial Planning


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Fig 1.6 Financial Planning

1.97c.Meeting your Goals Considerations

Time

The principal of time value of money (TVM) applies here. Let us start with an example

first. Two friends, Ajay, and Mustafa are 20 years old. Ajay decides that he wants to start

investing his money early to build himself a secure future and decides to save Rs. 5,000

monthly (i.e. Rs. 60,000 per annum) at the age of 20. Mustafa feel that he is young and

wants to enjoy his money for the time being. Mustafa wakes up late and decides to invest

at the age of 35 years and decides to save Rs. 10,000 per month (i.e. Rs. 1,20,000 per

annum). At the age of 60 years when they want to retire, using an interest rate of 7% per

annum, Ajay who had invested Rs. 5,000 monthly for 25 years has Rs. 1.15 cr. and

Mustafa who had invested Rs. 10,000 monthly for the same amount of time has Rs. 57

lacs.


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Ajay (7%):

Mustafa (7%):

Diversification

The nuclear weapon in your arsenal for your fight against Risk. It simply means that you

must spread your investment across different securities (stocks, bonds, money market

instruments, real estate, fixed deposits etc.) and different sectors (auto, textile,

information technology etc.). This kind of a diversification may add to the stability of

your returns, for example during one period of time equities might underperform but

bonds and money market instruments might do well enough to offset the effect of a

slump in the equity markets. Similarly the information technology sector might be faring


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poorly but the auto and textile sectors might do well and may protect you principal

investment as well as help you meet your return objectives.

InflationDo not invest too conservatively

Inflation. Inflation is the loss of purchasing power over time. A lot of times people make

conservative investment decisions to protect their capital but end up with a sum of money

that can buy less than what the principal could at the time of the investment. This

happens when inflation grows faster than the return on your investment. A well-

diversified portfolio with some investment in equities might help mitigate this risk.

Day Trading / Tips etc.

More often than not we find investors buying stocks in companies suggest by their

friends, while not knowing what the company does or how it is performing. The aim - to

make a quick buck. The result they may probably lose their money. We believe in

buying value, it is imperative that you either do your homework or hire a professional

financial advisor to do it for you. Buying and holding undervalued securities is the

probably the best way to beat the market.

Liquidity

This depends on your cash requirements. If you feel that you might need the funds that

your are investing say sometime in the near future you might consider investing in liquid

assets or plan your cashflows accordingly. Higher liquidity translates into lower returns

and consequently lower risk.


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Rupee Cost Averaging

* Rs. 10.00 is the average sales price achieved by taking an average of all of the sales

prices. Rs. 9.80 is the average cost per unit arrived to by dividing the total amount

invested by the number of units bought. As you see from the example above that even

though you buy units at the higher prices of Rs.11 and Rs. 12 per unit your average cost

per unit still remains at Rs. 9.80 per unit since you have the chance to buy addition units

at lower prices as well. The amount invested per month has to be the same for this to

work since you end up buying more units when the price is low and fewer units when the

price is high, only then will your average cost per unit (Rs. 9.80) remain below your

average sale price (Rs. 10). Please note that Rupee Cost Averaging does not protect

against loss in a declining market scenario.

The Right Asset Allocation for You

There are three major asset classes that you can put your money into, namely equities,

fixed income and money market instruments. In order to decide how much of your

money goes into which investment class you must first consider a few important factors

(most of these will be tackled by you during your goal definition phase):

Return expected on your investment Amount you will be able to save (present as well as future) Cash outflows you might have at certain points of time in the future Risk appetite
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Amount you will require for your retirement Liquidity Your Age

Hence due to the variable nature of the investors finances and requirements there are no

set strategies used by financial consultants. But we can provide you with broad strategies

that you can adapt to meet you own needs.But first please take a look at the chart below

to see which category you broadly fall into. Investment protection leads to safer interest

generating asset allocations where as Investment Growth leads to higher volatility assets,

that may tend to grow over a period of time.

AGGRESSIVE PORTFOLIO

FIG 1.7 AGGRESSIVE PORTFOLIO

MODERATE PORTFOLIO


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FIG 1.8 MODERATE PORTFOLIO

CONSERVATIVE PORTFOLIO

FIG 1.9 CONSERVATIVE PORTFOLIO

Another way to ascertain the right asset allocation is by looking at your life cycle. The

basis of this theory lies in the simple maxim that younger people with secure jobs will

normally opt for higher returns and take higher risks compared to older retired people.

One must remember that these are only indicative strategies and will probably have to be

fine-tuned to meet your individual needs.


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instrument, which can be categorized as a fixed income instrument since the investors

receive a fixed dividend before the regular equity holders receive their dividend

1.97. b. Equity

Is a share in the ownership of a companys assets and earnings? Companies usually issue

equity when they require addition capital to fund their existing business or expand. At

this point of time the company sells part of the ownership of the company to the public.

Listed equities are generally highly liquid since they are traded in the stock exchange.

An investor makes money from equity through dividends paid out by the company (from

its profits) on a periodic basis as well as capital appreciation as reflected in the stock

price, which fluctuates in the market. Hence an investors return are directly related to the

performance of the companys business. Equities do not offer any assured returns, but

historically promise the highest return in the long run, as depicted by the graph below.

Investment Returns (CAGR 19802003)

Fig 1.10 Investment Returns

1.97. c. Money Market Instruments


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These are the short-term version of debt instruments, which typically have a maturity of

less than one year. Yields are slightly above that of the savings account rate in the Banks.

These usually tend to preserve the investors initial investment and are usually the least

risky asset class from the four described here.

LAST YEAR PERFORMANCE (NAVs) OFDIFFERENT MUTUAL FUND

SCHEMES

ICRA ONLINE METHODOLOGY FOR RANKING MUTUAL FUND SCHEMES

ICRA ONLINE Mutual Fund (MF) Rankings seek to inform investors and MF

intermediaries of the category-wise relative performance of MF schemes. The rankings,

covering the two time horizons of one and three years, have been arrived at following an

in-depth analysis of critical parameters, including: risk-adjusted performance; portfolio

concentration characteristics; liquidity; corpus size; average maturity; and portfolio

turnover.

Eligibility Criteria for Ranking

The Net Asset Value (NAV) of the MF scheme should have been disclosed daily during

the period covered by the ranking. In the case of one-year ranking, complete disclosure of

monthly portfolio should have been made for the past one year. In the case of three-year

ranking, complete disclosure of quarterly portfolios should have been made for the past

three years. The schemes corpus size should be at least 5% of the average fund size of


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the category. The average fund size of the category is calculated after classifying all

schemes into various categories on the basis of asset allocation.Any category should have

a minimum of five schemes to be included for the ranking exercise.Only growth option, if

available, of the open ended category has been taken for the ranking.

The categories for ranking are:

o Diversified Equity Schemes-Defensiveo Diversified Equity Schemes-Aggressiveo Sector Schemes (Only Technology Funds considered)o Index Funds (Nifty)o ELSSo Balanced Schemeso Marginal Equity Schemes/Monthly Income Planso Income Schemes-Long Term and Short Termo Gilt Schemes-Long Term and Short Term

o Liquid Schemes

Classification of Schemes

The classification of MF schemes has been done on the basis of the asset allocation

and investment pattern of the schemes concerned. This is different from the traditional

offer document-based scheme classification. The classification on the basis of asset

allocation and investment pattern holds more relevance as these two factors determine the

risk level of MF schemes. MF schemes with equity exposure have been classified as

Marginal Equity, Balanced, and Equity, on the basis of the extent of the equity exposure.


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Then they have been sub-classified as DiversifiedDefensive, Diversified-Aggressive,

and Sector schemes on the basis of their sectoral concentration. Debt-based MF schemes

have been categorised on the basis of their average allocation to Gilt securities. Then they

have been sub-classified as Debt-Short Term and Debt-Long Term schemes, depending

on their average portfolio maturity over the ranking period.

The Ranking Parameters

1. Return Analysis :

Risk adjusted return has been calculated on the basis of "Investor Expectation Ratio

(IE Ratio)" that is defined as the ratio of excess return and risk. The excess return is the

average daily active return of the scheme calculated for the ranking period over the

average peer group return. Downside deviation of the Semi-standard deviation schemes'

return from the expected return of the peer group calculated for the period covered, has

been taken as the surrogate of risk. Here average peer group return has been taken as the

proxy for the expected return. Higher the risk premium per unit risk, better it is. In the

case of Index Schemes, the Return Analysis has been done on the basis of Tracking

Error. Lower the tracking error, better it is.

2. Portfolio Concentration Analysis :

MF schemes that do not have an adequately diversified portfolio carry a higher

risk than well-diversified schemes. While for equity schemes, company concentration has

been considered, sector concentration has been evaluated for debt schemes. Company


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concentration has been judged taking NSE NIFTY as the benchmark to decide the

overexposure in any of the scrips in the portfolio. For debt schemes, the sectors that have

been considered are Gilt; Non-Banking Financial Companies; Manufacturing Companies;

Banks/Financial Institutions/Development Institutions; and Non-Financial/Non-

Manufacturing Companies. Overexposure to any of these sectors has been penalized.

3. Liquidity :

Liquidity analysis has been done only for equity schemes. In this case the liquidity

coefficient for a scheme was calculated as the weighted average of the liquidity

coefficients of all scrips in the portfolio. The liquidity coefficient of a scrip is calculated

as the total number of shares in the portfolio of the scheme divided by the total daily

turnover of the scrip. Schemes with higher liquidity have beenpreferred.

4. Corpus Size:

Since a larger size of the scheme's corpus lends stability to an MF scheme during

periods of high redemption pressure, preference has been accorded to large-size schemes.

5. Average Maturity:

Average maturity has been considered in the case of Debt, Gilt and Liquid categories.

Schemes with higher average maturity carry higher interest rate risks as compared with

schemes with lower average maturity. Lower average maturity has been preferred.

6. Portfolio Turnover: Schemes with low portfolio turnover have been preferred

over ones with higher portfolio turnover.


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Fund

Prudential ICICI Technology

Fund

10.53 1.45 1.45 23.88 25.06 58.58

Reliance Banking Fund 30.68 -2.82 -6.55 4.89 -0.23 26.00

Reliance Pharma 19.21 3.51 4.46 35.44 30.16 52.32

SBI Magnum Sector Funds -

FMCG Fund

19.97 0.96 6.39 17.96 18.10 49.59


IT Fund

17.92 -1.65 -1.81 23.16 34.33 68.90


FMCG Fund

19.97 0.96 6.39 17.96 18.10 49.59


IT Fund17.92 -1.65 -1.81 23.16 34.33 68.90


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Income (Debt)

SCHEME NAME NAVs (Rs) 5 Day 1 Mth 3 Mth 6 Mth 1 Yr

Alliance Income 23.89 0.10 0.07 0.76 1.68 4.34

Birla Bond Index 11.03 0.09 -0.16 0.40 1.57 4.26

Birla Income Plus 28.81 0.14 -0.03 0.63 1.74 4.00

BoB Income Fund 12.44 0.12 0.51 1.49 2.80 5.40

BoB NRI Long-term Plan 10.51 0.09 0.39 1.14 1.95 3.72

Canbank - CanIncome 12.58 0.08 0.36 1.05 2.09 9.28

Chola Triple Ace 11.02 0.10 0.03 0.48 1.46 2.90

DSPML Bond Retail

Fund

23.79 0.08 0.01 0.58 1.35 4.53

Escorts Income Plan 21.56 0.11 0.08 0.97 2.05 4.50

Grindlays SSI Medium-

term11.04 0.08 0.34 0.95 2.17 5.03

Grindlays Super Saver

Income - Investment Plan

ANZINCG IN

16.02 0.09 -0.13 0.18 1.07 3.91


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HDFC Income Fund 16.22 0.10 -0.32 0.16 0.96 3.45

HSBC Income Fund -

Investment plan

11.75 0.07 0.06 0.55 1.40 4.25

ING Vysya Income Fund 17.40 0.08 -0.13 0.31 1.41 3.47

ING Vysya MIP Plan A 10.98 0.08 0.35 0.56 1.54 4.53

Kotak Flexi Debt Fund 10.71 0.11 0.46 1.41 2.78 5.91

LICMF Bond Fund 19.03 0.14 0.41 1.38 2.78 5.10

PRINCIPAL Future

Goals Series - Income

Fund

16.29 0.13 -0.02 0.41 1.51 4.65

Principal Money Value

Bond Fund

19.31 0.07 -0.06 0.39 1.38 4.40

Principal PNB Debt Fund 19.66 0.08 -0.01 0.46 1.49 4.33

Principal Trust Benefit

Fund

12.19 0.09 0.01 0.56 1.70 4.48

Prudential ICICI Advisor

Series Very Cautious Plan

11.08 0.12 0.43 1.30 2.56 5.27

Prudential ICICI Income

Plan

20.40 0.23 -0.02 0.58 1.86 4.34


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Prudential ICICI Income

plan - Long-term

14.51 0.28 0.40 1.30 2.41 8.28

Reliance Income Fund 21.94 0.02 0.14 0.81 1.61 5.12

Reliance Medium Term

Fund

14.69 -0.23 -0.22 0.05 0.99 3.35

Reliance NRI Income 10.53 0.09 0.26 1.16 2.11 4.13

Sahara Income 12.16 0.20 -0.03 0.65 1.90 4.18

SBI Magnum NRI

Investment Fund - Long

Term Bond Plan

10.35 0.02 -0.33 -0.55 0.55 2.37

Sundaram Bond Saver 21.86 0.16 -0.02 0.38 1.10 2.98

Tata Income 0.00 0.00 0.00 0.00 0.00 0.00

Tata Income Plus 11.85 0.08 0.09 0.86 1.53 6.22

Taurus Libra Bond Fund 12.90 0.00 0.01 -0.31 -0.62 -0.88

Templeton India Income 24.54 0.04 -0.34 0.02 1.05 3.84

Templeton India Income

Builder 23.98 0.12 -0.43 -0.11 0.70 3.44


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Money Market


ABN AMRO Cash

Regular

10.70 0.10 0.40 1.25 2.47 5.01

Alliance Cash Manager 17.06 0.11 0.49 1.44 2.71 5.26

Birla Cash Plus Sweep 18.67 0.11 0.49 1.47 2.75 5.36


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BoB Liquid Fund 12.44 0.12 0.51 1.49 2.80 5.40

Canliquid Retail 10.04 0.00 0.00 0.00 0.00 0.00

Chola Liquid Fund 14.03 0.11 0.49 1.50 2.85 5.60

Chola Liquid Fund

Institutional Plan - DD

0.00 0.00 0.00 0.00 0.00 0.00

Deutsche Insta Cash Plus

Fund

11.64 0.12 0.49 1.43 2.72 5.41

HDFC Cash Mgmt Fund -

Call plan

10.43 0.00 0.00 0.00 0.00 0.00

]= HDFC Cash Mgmt

Fund - Savings plan

14.44 0.11 0.49 1.47 2.80 5.53

HDFC Cash Mgmt Fund

Saving Plus plan10.02 -0.01 0.04 0.07 0.04 0.06

HDFC Liquid Fund 13.77 0.11 0.47 1.44 2.74 5.42

HSBC Cash Fund 11.70 0.11 0.46 1.40 2.66 5.26

ING Vysya Liquid Fund 14.73 0.10 0.43 1.37 2.63 5.29

JM High Liquidity Fund 19.11 0.10 0.43 1.32 2.51 4.98

Kotak Liquid Regular 13.78 0.10 0.44 1.33 2.54 5.01


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Kotak Liquid Sweep 14.75 1.57 4.43 24.61 30.29 0.00

LICMF Liquid Fund 10.94 0.01 0.06 0.19 0.43 0.77

Liquid Benchmark ETS 1,000.00 0.00 -0.00 0.00 -0.00 -0.00

Magnum InstaCash

(Cash)

15.58 0.11 0.48 1.44 2.77 5.45

Principal Cash Mgt

Liquid

13.66 0.11 0.47 1.38 2.63 5.21

Prudential ICICI Liquid

plan

17.03 0.11 0.46 1.39 2.65 5.27

Prudential ICICI Sweep

Plan

11.78 0.10 0.42 1.23 2.22 4.31

Reliance Liquid Cash 0.00 0.00 0.00 0.00 0.00 0.00

Sahara Liquid 1,023.88 0.00 0.00 0.00 0.00 0.02

Standard Chartered

Grindlays Cash Fund

12.87 0.10 0.45 1.40 2.64 5.17

Sundaram Money 14.59 0.11 0.48 1.44 2.74 5.39

Tata Liquid 1,607.07 0.11 0.46 1.39 2.68 5.28

Templeton India Liquid

Plus

0.00 0.00 0.00 0.00 0.00 0.00


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Templeton India MMA 1.00 0.00 0.00 0.00 0.00 0.00

Templeton India TMA 1,729.14 0.09 0.42 1.31 2.56 5.14

Gilt


Alliance GSF Long-term 18.91 0.34 -0.39 0.48 1.52 3.99

Alliance GSF Short-term 14.82 0.09 0.35 0.87 1.58 3.51

Birla Gilt Plus Liquid 10.64 -0.00 0.17 -0.19 -0.27 0.20


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BoB Gilt Fund 10.62 0.04 -0.54 0.38 1.19 3.85

Canbank Cangilt (PGS) 17.69 0.20 -0.36 0.81 1.56 4.52

Chola Gilt PF Plan 10.41 0.09 0.36 1.14 1.94 3.01

Chola Gilt-Investment

Plan

18.42 0.32 -0.37 0.42 1.39 3.05

DSPML GSF Longer

Duration

22.23 0.19 0.02 1.21 1.95 6.59

DSPML GSF Shorter

Duration

15.89 0.11 0.45 1.31 2.58 5.14

Escorts Gilt Plan 14.21 0.13 0.02 0.90 2.24 4.13

Grindlays GSF Short-

term Plan

10.02 0.09 0.03 0.07 0.03 0.66

HDFC Gilt Fund - Long-

term plan

11.55 0.10 0.45 1.36 2.65 5.36

HDFC Gilt Fund - Short-

term plan

12.98 0.12 0.03 0.81 1.66 3.94

HDFC India Sovereign

Gilt Fund - Investment

Plan

15.59 0.21 -0.56 0.63 1.61 4.10


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HDFC India Sovereign

Gilt Fund - Provident Plan

17.62 0.19 -0.29 0.87 1.87 4.77

OBJECTIVE & METHODOLOGY OF STUDY

Objective of study

Objective of project to the MFs and study awareness level regarding dif- dif aspect of

MFs among selected MFs in India bhilai & durg area.

1) Awareness regarding mutual funds in bhilai & durg area.2) To identify the Objective of the investors for investing in a mutual funds.3) To study behavior of customer or investor in bhilai & durg area about mutual funds.4) To study investor about mutual funds in bhilai & durg area why not popular as compare

Postoffice saving & other investment instruments.

5) To study Respondent perceptions about time horizon and tax sensitivity aspect ofinvesting in mutual funds.

6) To identify the investment patterns of investors.7) To find out the risk tolerance factors of the investor

Scope of the study

To identify the investors awareness regarding of mutual funds as investment

alternative in bhilai & durg area .

The investor Objectives behinds investing in a mutual funds.


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The risk tolerance Factor of the investor. The underlying tax factor for investing in mutual funds. The Awareness of mutual funds.

CHAPTER-2

2.1 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Descriptive research gives an account of frequency or the characteristics of some of the

variables where casual research help in determined cause and effective relationships. The

study seeks to find out the investors aware about Mutual funds in bhilai & durg area.

DESCRIPTIVE DESIGN

In the research process, descriptive research is used. The descriptive research deign

focus on how to collect the primary data. As pointed out earlier, there ere two

fundamental approaches for collecting Primary data, observation and asking questions.

Although these approaches are used in any type of research design (Exploratory,

Descriptive, Casuals), descriptive design more frequently used data collection procedures

that heavily emphasize asking the respondents set of standardized, structure questions

about what they think situations. There are different approaches referred to as survey

methods that can use engage a person in this question/answer protocol process.


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Over time descriptive research has to come to be viewed and acknowledged as the

different survey method available to marketing researches for collective quantitative

primary data from large group of people though the question/answer protocol process.

Method of Data Collection.

There are two types of data collection methods.

Secondary data collection method. Primary data collection method.

SECONDARY DATA COLLECTION METHOD

The secondary data those, which are already collected by someone for some purpose

and available for the present study. Secondary data are collected from

http://www.myiris.com/mutual . some magazine related to Mutual funds .

Primary Data Collection Method
http://www.myiris.com/mutualhttp://www.myiris.com/mutualhttp://www.myiris.com/mutual


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Primary Data are those, which are collected for the first, and they are original in

character himself to study a particular problem. There are two type of primary data

collection method.

Observation Method. Questionnaire Method

In observation method observing some action or the Respondent collects the

data. Number of question is asked in data collection. Interview of Respondents and

collected data .The action or Behavior of the Respondents are watched personally.The

questionnaire is medium of communication the Investigator and the respondent .The

success of an investigation depends on the framing of the questionnaire. In addition, it

requires skill, wisdom, efficiency and experience.

APPROACH AND METHODOLOGY

The study involved survey of 150 investors in bhilai & durg area as per the break up

below.

Bhilai area

Bhilai town(sector area) Vashali nagar(shanti nagar) Nehru nagar

Durg area


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o Deepak nagaro Ganjparao Padmanapur


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2.2 LIMITATIONS OF THE STUDY

Our project was carried out on the subject AWARENESS REGARDING MUTUAL FUNDS IN

BHILAI & DURG AREA. During our project we carried out survey for the same and we faced

following hurdles that have been stated as under

No Response Error - Some of the participants were not willing to fill up the questionnaire. Respondent Bias not give proper answers of our question. Small sample size (hardly 0.1% of total population) because of time and cost constraints and

therefore study findings may be distorted

Only teachers & Educational poeples were covered as per the survey and therefore, the studyfindings pertain only to this class of the population and do not pertain to people belonging to

other occupations.

CHAPTER;- 3 DATA ANALYSIS AND INTERPRETATION

INVESTER PROFILES

Sex profile of Respondents


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60% respondents age between 20 year to 40 year. 26% respondents age more than 50 year

Income profile of Investor

80% respondents income(p.m) is between 5000 to 15000 only 7% respondent who earn more than 20000 (p.m)

Occupation profile of Respondent

Income (month lt house hold) profile of Respondent

5--1046%

10--15

36%

15-20

11%

20-above

7%

5--10 10--15 15-20 20-above


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21% respondents are farmer 48% respondents are service holder & teacher 19% respondents are professional

Awareness regarding Mutual Funds

Mutual Fund is a relatively new concept and it faces awareness problems in awareness, which

need to be addressed to ensure faster acceptance.

O ccupation profile of Respondent

Bussinessm

an

12%

Farmer

21%

Service

Holder35%

Proffesional

19%

Teacher

13%

Bussinessman

Farmer

Se rvice Holder

Proffesional

Teacher


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1) 75% respondents are some knowledge about mutual fund in Bhilai & Durg area.

2) Most of Nehru Nagar(Bhilai) respondents are good Aware about mutual funds.

3) 25% respondents donot have knowledge about mutual funds in Shanti nagar area.

4) Most of Sector area respondent are not aware mutual funds.

Important factors right investment

SAFETY

He ard about MFs

Ye s

75%

No

25%

Ye s

No


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1) 70% respondent said that safety most Imp factor for investment.2) 26% respondent said Safety is not Imp factor for investment.3) 4% respondent not gave any answered.

RETURN

79% respondents said that Return is Imp Factor for Investment.

Safe ty (Imp Factor for Right Inves tment)

Least

Important

13%

Not Important

13%

Cant say

4%

Important

20%

CompletelyImportant

50%

Least Important

Not Important

Cant say

Important

Complete ly Important

Returns (Imp factor of right Investment)

Least Important

7%

Not Important

8%

Cant say

6%

Important

60%

Completely

Important

19%

Least Important

Not Important

Cant say

Important

Complete ly Important


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15% respondents said that Return is mot or least Imp Factor for Investment

LIQUIDITY

47% respondents said that Liquidity is Imp Factor for Investment.

42% respondents said that Liquidity is mot or least Imp Factor for Investment

Tax-Benefits

Liquidity ( Imp factor right Invesment)

Least Important19%

Not Important

23%Cant say

11%

Important

34%

Completely

Important13% Least Important

Not Important

Cant say

Important

Completely Important


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76% respondents said that Tax Benefit is Imp Factor for Investment.

21% respondents said that Tax Benefit is mot or least Imp Factor for Investment

BRAND NAME

Tax Be ne fit (Imp factor right Inves tmen t)

LeastImportant

4%

Not Important

17%Cant say

3%Important

18%

CompletelyImportant

58%

Least Important

Not Important

Cant say

Important



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In respondent or Investors mind Tax-benefit or Return most Imp factor. Liquidity less Imp of all the factor.

Safety factor as Objective of investment

67% respondent said that safety Imp or most Imp for objective of investment. 30% respondent said that safety not or least Imp for objective of investment 3% respondent not gave any answered.

Return factor as Objective of investment

Safety (Objective of Investment)

Least Import ant

7%

Not Important

23%Cant say

3%

Important

22%

Completely Import ant

45%

Least Import ant

Not Important

Cant say

Important

Completely Import ant


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67% respondent said that Return Imp or most Imp for objective of investment. 30% respondent said that Return not or least Imp for objective of investment 3% respondent not gave any answered.

Liquidity factor as Objective of investment

Returns ( Objective of investment)

5%16%

3%

9%67%

Least Important

Not Important

Cant sayImportant


Liquidity ( objective of investment)

Least

Important

11%

NotImportant

21%

Cant say

12%

Important

29%

Completely

Important

27%

Least

ImportantNot Important

Cant say

Important

Completely

Important


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56% respondent said that Liquidity Imp or most Imp for objective of investment. 32% respondent said that Liquidity not or least Imp for objective of investment 12% respondent not gave any answered.

Brand name factor as Objective of investment

82% respondent said that Brand name Imp or most Imp for objective of investment. 17% respondent said that Brand name not or least Imp for objective of investment 1% respondent not gave any answered.

Mean of All Objectives factor

Brand name( objective of inves tment)

Least

Important

6%

Not

Important

11%

Cant say

1%

Important

36%

Completely

Important

46%

Least Important Not ImportantCant say ImportantCom letel Im ortant


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Brand name & Return both are main factor

Mutual Funds Performance criteria for mutual fund.

Imp factor for Investment

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Safety Returns Liquidity Tax Benefit Brand name

Investment Objectives

ImportanceLevel


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Safety as performance criteria for MFs

71% respondent said that safety most very goodcriteria for investment in mutual Fund.

Perfrmance of Mutal Fund

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Safety Returns Liquidity Tax Benefit Brand name

Performance criteria for Mutual Fund

ImportanceLevel

Responden t vie w about S afety as performance MFs criteria

Poor

10 %Avg.

19 %

Good

13 %Very Good

21 %

Excellent

37 %

Poor Avg. Good Very Good Exce llent


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19% respondent said Safety is Avg criteria for investment in mutual Fund 10% respondent said Safety is Poor criteria for investment in mutual Fund

Safety as performance criteria for MFs

71% respondent said that safety most very goodcriteria for investment in mutual Fund. 19% respondent said Safety is Avg criteria for investment in mutual Fund 10% respondent said Safety is Poor criteria for investment in mutual Fund

Return as performance criteria for MFs

Responden t vie w about S afety as performance MFs criteria

Poor

10 %Avg.

19 %

Good

13 %Very Good

21 %

Excellent

37 %

Poor Avg. Good Very Good Exce llent


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89% respondent said that Return most very goodcriteria for investment in mutual Fund. 10% respondent said Return is Avg criteria for investment in mutual Fund 1% respondent said Return is Poor criteria for investment in mutual Fund

Liquidity as performance criteria for MFs

Respondent view about Returns as perfomance MFs

criteria

Poor 1%Avg. 10%

Good 23%

Very Good

20%

Excellent 46%

Poor Avg. Good Very Good Exce l lent

Respondent view about Liquidity as performance MFs

criteria

Poor

3%

Avg.

4% Good

18%

Very Good

27%

Excellent

48%

Poor Avg. Good Very Good Excellent


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71% respondent said that Liquidity most very goodcriteria for investment in mutual Fund. 19% respondent said Liquidity is Avg criteria for investment in mutual Fund 10% respondent said Liquidity is Poor criteria for investment in mutual Fund

Tax benefit as performance criteria for MFs

71% respondent said that Tax benefit most very goodcriteria for investment in mutual Fund. 19% respondent said Tax benefit is Avg criteria for investment in mutual Fund 10% respondent said Tax benefit is Poor criteria for investment in mutual Fund Knowledge about AMC name

Respondent view about Tax Be ne fit as performance MFs

criteria

Poor

9% Avg.

14%

Good

26%

Very Good

28%

Excellent

23%

Poor Avg. Good Very Good Excellent


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Most of respondents are Aware about UTI mutual funds as per 122 out of 150 Respondentsare said that he know name of UTI.

REL ,SBI , ICICI mutual funds are well know AMC.

Expected rate of Return on their investment p.a

Popurality of Mutual Funds company in

Invester mind

UTI, 122

REL, 108

FEDILITY, 82

SBI, 110

ICICI PRO,

106

HCBC, 83

HDFC, 94

DSP, 79

BIRLA

SUNLIFE, 86

BOB , 97

CAN , 53

UTI

REL

FEDILITY

SBI

ICICI PRO

HCBC

HDFC

DSP

BIRLA SUNLIFE

BOB

CAN

Expected Return on the ir investmen t

6%-9%

3%

9% - 12%

35 %

12%-18%

26 %

18% -24%

23 %

24% Above

13 %

6%-9% 9% - 12% 12%-18% 18% -24% 24% Above


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RCET Page 70

Most of respondents are to expect more than 10% or more than 10% return. 13 % of respondents are to expect 24 % and more return. 59% of respondents are expected 12 % to 24% returns. Only 3% respondents are expected only 6 % to 9% return.

Investment Pattern of respondents

Shanti nagar area people most respondents are prefer Invests his money in Post office & BankSaving.

Nehru nagar people aware about investment alternative so they are investments of their money insuitable instruments.

Padmanapur people no more knowledge about Stock market so they not to readyInvest their money in Stock market.

Ready invest their money in MF

investmest prefer by in vese r

Share market

10%

Mutual fun d

16%Post office

25%

Bank savings

23%

G-sec.

14%

Bond

12%

Share marke t Mutual fund Post office

Bank savings G-sec. Bond


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63% respondent ware ready to invest money in MFs. 31% respondents were not ready to invest their money in MFs.

Mutual fund offer periodic investment

CHAPTER 5 -KEY FINDING

Respondent interes ted in in ves tment in MFs

S.Dis Agree

11%Disagree

20%

Cant say

6%Agree

26%

S.Agree37%

S.Dis Agree Disagree Cant say Agree S.Agree

yes

no


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Most of respondents invest to maximize their returns and they ready to take moderaterisks in their investment portfolios..

Most of respondents prefer tax benefits & return on their investments. In Sector area area respondents recent invests their money in Bank-saving & Post office

(around 60%).

Most of respondent believe that mutual fund investments are going to perform better thanstock.

Most of respondents invest their money in Growth Scheme. Most of Service holder & Teacher invest their money for Regular income but other side

Businessman & Professional are invests money for Capital gain.


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CHAPTER 6; - SOME RECOMMENDATION & CONCLUSION OF

STUDY

RECCOMENDATIONS

To give more advertisement in local news paper, outlet and to give sponsorship banner inshanti & deepak nagar area so Assets Management companies to get more business in

shanti & deepak nagar area.

To held many seminar in this area and give information about mutual funds. To Asset Management Company open more branch in near of sector area town or

ganjpara area .

Asset Management company provide good facility as home collection. or provide info ontelephone so it helps to AMC increase new business.

To appointment more Broker and sub Broker in this area so collection atomicallyincrease this area.

CONCLUSION


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ANNEXTURE

QUESTIONNAIRE FOR

A case study of consumers awareness towards Mutual fund

in Bhilai Durg city.

Q-1) Name of Respondent: _____________________________________

Q-2) Sex [ ] Male [ ] Female

Q-3) Age of Respondent: (Years)

[ ] 20-30 [ ] 31-40

[ ] 41-50 [ ] Above 50

Q-4) Income of Respondent Monthly household income in (Rs.)

[ ] 5,000-10,000 [ ] 10,000- 15,000

[ ] 15,000-20,000 [ ] Above20,000

Q-5) Occupation of the consumers (Rs.)


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[ ] Businessman [ ] Farmer

[ ] Serviceholder [ ] professionals [ ] Teachers

Q-6) Have you are heard about Mutual Funds?

[ ] Yes [ ] No

Q-6) what according to you one of the important factors right investment?

[ ] Safety [ ] Liquidity

[ ] Returns [ ] Tax benefit

Q-7) what is your objective of investment?

[ ] Safety [ ] Liquidity

[ ] Returns [ ] Tax benefit

[ ]Income generation

Q- 8) which companies name come to your mind when we talk about Mutual Funds?

[ ] UTI [ ] ICICI

[ ] SBI [ ] BOB

[ ] SUN BIRLA [ ] HDFC [ ] Any other


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Q-9) How much percentage Return do you expect from investment in your money (p.a)?

[ ] 6%-9% [ ] 9% - 12% [ ] 12%-18%

[ ] 18% -24% [ ] 24% Above

Q-10) Have invested your money in other instrument now? Rank in terms of amount

invested.

[ ] Share market [ ] Mutual fund [ ] Post office

[ ] Bank savings [ ] G-sec. [ ] Bond

Q-11)Do mutual funds offer a periodic investment plan?

[ ] Yes [ ] No

Q-12) Do any mutual funds invest in both stocks and bonds?

[ ]Yes [ ]No

Q-13)How do you evaluate mutual funds performance?

[ ]Poor [ ]Average

[ ] Good [ ]Very good [ ]Excellent

Q-14) Ideally how many different schemes should one invest in?
http://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/114/mfaq12032001130448.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/108/mfaq12032001135204.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/108/mfaq12032001135204.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/114/mfaq12032001130448.htm


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[ ]

Q-15) Do any mutual funds invest in both stocks and bonds?

[ ] Yes [ ] No

Q-16) What is the ratio of mutual funds invest in both stocks and bonds?

[ ] 80:20 [ ]60:40

[ ]50:50 [ ]40:60

CHAPTER-8 BIBLIOGRAPHY

1. Search bellow websites www.myiris.com www.mutualfundsindia.com www.valueresearch.com www.hdfcmf.com
http://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.moneycontrol.com/india/mutualfunds/mfdata/10/16/dispdata/82/mfaq12032001141340.htmhttp://www.myiris.com/http://www.myiris.com/http://www.mutualfundsindia.com/http://www.mutualfundsindia.com/http://www.valueresearch.com/http://www.valueresearch.com/http://www.hdfcmf.com/http://www.hdfcmf.com/http://www.hdfcmf.com/http://www.valueresearch.com/http://www.mutualfundsindia.com/http://www.myiris.com/


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www.karvymfs.com www.indiainfo.com www.sebi.com www.amcindia.com2. Following Book Refers G.C.Beri- Marketing Research,3ed Edition, Tata McGraw-Hill.New Delhi3. Following Magazines Refers CHARTERED FINANCIAL ANALIST-March-2007

ICFAI.Uni

4. Following article refer Das Ranjan,Raveendra.c,(2006) Strategic choices in Mutual Fund Business in Business

Standard
http://www.hdfcmf.com/http://www.hdfcmf.com/http://www.hdfcmf.com/http://www.hdfcmf.com/http://www.hdfcmf.com/http://www.karvymfs.com/http://www.karvymfs.com/http://www.indiainfo.com/http://www.indiainfo.com/http://www.sebi.com/http://www.sebi.com/http://www.amcindia.com/http://www.amcindia.com/http://www.amcindia.com/http://www.sebi.com/http://www.indiainfo.com/http://www.karvymfs.com/


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