icici mutual fund simplified

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SUMMER INTERNSHIP PROJECT REPORT

ON

“MUTUAL FUND SIMPLIFIED”

CUSTOMER AWARENESS

CARRIED ON AT

SUBMITTED TO

ASIA PACIFIC INSTITUTE OF MANAGEMENT, NEW DELHI

IN PARTIAL FULLFILMENT OF THE REQUIREMENTS FOR THE AWARD OF

POST GRADUATE DIPLOMA IN MANAGEMENT

UNDER THE GUIDANCE OF

(PROF. DEVENDRA BHAHADUR)

(OMDS FACULTY)

SUBMITTED BY:

(AMIT KUMAR JHA)

(2K14G010)

PGDM BATCH 2014-2016

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DECLARATION

I, AMIT KUMAR JHA, hereby declare that the project work entitled “MUTUAL FUND

SIMPLIFIED” Submitted towards partial fulfillment of requirements for the award of Post

Graduate Diploma in Management is my original work and the dissertation has not formed the

basis for award of any degree, associate ship, fellowship or any similar title to the best of my

knowledge.

Place: NEW DELHI (Signature of Student)

Date: (AMIT KUMAR JHA)

Roll No: 2K14G010

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ACKNOWLEDGEMENT

It is my proud privilege to release the feelings of my gratitude to several persons who helped me

directly or indirectly to conduct this project work. I express my heart full in debt and owe a deep

sense of gratitude to my teacher and my faculty guide Prof. DEVENDRA BAHADUR, Asia

Pacific Institute of Management and Mr. ANUJ AGARWAL, Training Manager, ICICI

SECURITIES, 17,18,19, 2nd Floor, Kailash Enclave New Delhi, for their sincere guidance and

inspiration in completing this project.

I am extremely thankful to faculty members of the Asia Pacific Institute of Management for their

coordination and cooperation and thankful to Prof. DEVENDRA BAHADUR for his kind

guidance and encouragement.

I am also extremely thankful to all those persons who have positively helped me and ICICI

Securities customers who responded my questionnaire, around whom the whole project cycle

revolves.

I also thank all my friends who have more or less contributed to the preparation of this project

report. I will be always indebted to them.

Thanking you

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CERTIFICATE

This is to certify that Mr. Amit Kumar Jha , Roll number 2K14G010, a student of PGDM in Asia

Pacific Institute of Management, New Delhi, has carried out the Summer Internship Project work

presented in this report titled “MUTUAL FUND SIMPLIFIED’ for the award of Post Graduate

Diploma in Management for the Academic Batch 2014-16, under my guidance.

(Signature)

Prof. Devendra Bahadur

Date:

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PREFACE

In our two years diploma program of POST GRADUTE DIPLOMA IN MANAGEMENT of there

is provision for doing summer internship after III semester. The essential purpose of this project is

to given an exposure and detailed outlook to the student of the practical concepts, which they

already studied research. For this purpose, I was assigned the project for the “MUTUAL FUND

SIMPLIFIED” in ICICI SECURITIES by my project mentor. It is a matter of great privilege to get

training from ICICI SECURITIES, one of the largest organizations of its kind.

The project lasted for a period of eight weeks; it was informative, interesting, inspiring and

challenging task.

I hope this report will provide an experiment outlook to the dynamic functioning in the MUTUAL

FUND department in securities sector.

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CONTENT

S.No TOPICS Page No.

I

CHAPTER- I

1.1 Company profile 10

1.2 Introduction 10

1.3 Overview 11

1.4 Brief about ICICI group 12

1.5 History of ICICI group 12-19

1.6 ICICI group companies 20

1.7 Board of directors 20

1.8 Vision and mission of ICICI group 21

1.9 Privacy Policy 21

1.10 Introduction to ICICI direct 22

1.11 Awards and Accolades 23

1.12 Major Competitors 24

1.13 ICICI direct trading platforms 24

1.14 Products and service offered by ICICI direct 25-34

1.15 How is Mutual Fund set up? 35

1.16 Advantages and Disadvantages of Mutual Fund 35-37

1.17 Different types of Mutual Fund 38-40

II

CHAPTER-II

2.1 Literature Review 42-46

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S. No TOPICS Page No.

III

CHAPTER-III

3.1 Research Methodology 48

3.2 Problem of the Study 48

3.3 Objective of the Study 48

3.4 Scope of the Study 48

3.5 Sampling Framework 49

3.6 Data Collection 49

3.7 Data Analysis 49

3.8 Data Interpretation 49

3.9 Limitation of the Study 49

3.10 Responsibilities assigned by the Company Mentor 50

3.11 Sampling Technique 50

3.12 Statistical Tool used for Analysis 50

IV

CHAPTER-IV

4.1 Data Analysis and Interpretation 52-61

V

CHAPTER-V

5.1 Summary of Findings 63

5.2 Suggestions and Recommendations 64

5.3 Conclusion 65

VI

APPENDIX

6.1 Bibliography 66-67

6.2 Sample Questionnaire 68-70

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LIST OF TABLES

S. No TOPICS Page No.

I Reasons of customers for not investing in MF through ICICI Direct.com 56

II Responses of customers who have done online transactions in the past 57

III How regularly the customers used to transact online. 58

IV How do the customers check performance of all/any of their investment? 60

LIST OF FIGURES

S.No TOPICS Page No.

I No. of customers invested in securities in the last 12 months. 53

II Preferred mode of investment. 54

III Responses of customers about awareness that they can invest in MF through

ICICI direct.com.

55

IV Reasons of customers for not investing in MF through ICICI direct.com. 56

V Responses of customers who have done online transactions in the past. 57

VI How regularly the customers used to transact online. 58

VII Medium of news information and analysis do customers used to update

themselves on investment products.

59

VIII How does the customers check performance of all/any of their investment? 60

IX Responses of customers about switching their investment relationship to ICICI

Direct.com.

61

X Responses of customers about the site features they found useful at ICICI

direct.com.

62

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CHAPTER -I

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COMPANY PROFILE

Company Name ICICI Securities

Founded In 1995

Parent Company ICICI Limited

Headquarter Mumbai

Chairperson Mrs. Chanda D. Kochhar

Managing Director Mr. Anup Bagchi

Website www.icicisecurities.com

INTRODUCTION

ICICI Securities Limited provides various investment banking products and services to corporates,

financial institutions, and retail investors in India and internationally. It provides corporate finance

services to corporations, financial institutions, financial sponsors, and government, which include

equity capital market products, such as initial public offerings (IPO), further public offerings,

rights offerings, convertible offerings, qualified institutional placements, non-convertible

debentures, buyback, delisting, and open offers and international offerings for unlisted and listed

entities. The company also offers mergers and acquisitions advisory services; and private equity

advisory.

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OVERVIEW

ICICI Securities Ltd is an integrated securities firm offering a wide range of services including

investment banking, institutional broking, retail broking, private wealth management, and financial

product distribution. ICICI Securities sees its role as 'Creating Informed Access to the Wealth of

the Nation' for its diversified set of client that includes corporates, financial institutions, high net-

worth individuals, and retail investors. Headquartered in Mumbai, ICICI Securities operates out of

66 cities and towns in India and global offices in Singapore and New York. ICICI Securities Inc.,

the step-down wholly owned US subsidiary of the company is a member of the Financial Industry

Regulatory Authority (FINRA) / Securities Investors Protection Corporation (SIPC). ICICI

Securities Inc. activities include Dealing in Securities and Corporate Advisory Services in the

United States. ICICI Securities Inc. is also registered with the Monetary Authority of Singapore

(MAS) and operates a branch office in Singapore.

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BRIEF ABOUT ICICI GROUP

The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the

initiative of the World Bank, the Government of India and representatives of Indian industry, with

the objective of creating a development financial institution for providing medium-term and long-

term project financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first

Chairman of ICICI Limited. ICICI emerges as the major source of foreign currency loans to Indian

industry. Besides funding from the World Bank and other multi-lateral agencies, ICICI was also

among the first Indian companies to raise funds from international markets.

HISTORY OF ICICI GROUP:-

1986:

ICICI became the first Indian institution to receive ADB Loans.

ICICI, along with UTI, set up Credit Rating Information Services of India Limited, India's

first professional credit rating agency.

ICICI promotes Shipping Credit and Investment Company of India Limited.

1987:

The Corporation made a public issue of Swiss Franc 75 million in Switzerland, the first

public issue by any Indian entity in the Swiss Capital Market.

1988:

ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth

Development Corporation (CDC), the first loan by CDC for financing projects in India.

1993:

Promoted TDICI - India's first venture capital company.

1994:

ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan set up.

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1996:

ICICI Asset Management Company set up.

ICICI Bank set up.

ICICI Ltd became the first company in the Indian financial sector to raise GDR.

1997:

ICICI merged with ICICI Ltd.

Mr. K.V.Kamath appointed the Managing Director and CEO of ICICI Ltd.

ICICI Ltd was the first intermediary to move away from single prime rate to three-tier

prime rates structure and introduced yield-curve based pricing.

1998:

The name The Industrial Credit and Investment Corporation of India Ltd changed to ICICI

Ltd.

ICICI Ltd announced the takeover of ITC Classic Finance.

1999:

Introduced the new logo symbolizing a common corporate identity for the ICICI Group.

ICICI announced takeover of Anagram Finance.

2000:

ICICI launched retail finance - car loans, house loans and loans for consumer durables

ICICI becomes the first Indian Company to list on the NYSE through an issue of American

Depositary Shares.

2001:

ICICI Bank became the first commercial bank from India to list its stock on NYSE.

The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank.

ICICI Bank announces merger with Bank of Madura.

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2002:

ICICI Ltd merged with ICICI Bank Ltd to create India's second largest bank in terms of

assets.

"E Lobby,” a self-service banking centre inaugurated in Pune. It was the first of its kind in

India.

ICICI Bank launched Private Banking.

1100-seat Call Centre set up in Hyderabad

ICICI Bank Home Shoppe, the first-ever permanent aggregation and display of housing

projects in the county, launched in Pune,

ATM-on-Wheels, India's first mobile ATM, launched in Mumbai.

2003:

The first Integrated Currency Management Centre launched in Pune.

ICICI Bank announced the setting up of its first ever-offshore branch in Singapore.

ICICI Bank's UK subsidiary launched.

India's first ever "Visa Mini Credit Card,” a 43% smaller credit card in dimensions

launched.

ICICI Bank subsidiary set up in Canada.

Temasek Holdings acquired 5.2% stake in ICICI Bank.

ICICI Bank became the market leader in retail credit in India.

2004:

Max Money, a home loan product that offers the dual benefit of higher eligibility and

affordability to a customer, introduced

Mobile banking service in India launched in association with Reliance Infocomm.

India's first multi-branded credit card with HPCL and Airtel launched.

Kisaan Loan Card and innovative, low-cost ATMs in rural India launched.

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2005:

ICICI Bank and CNBC TV 18 announced India's first ever awards recognizing the

achievements of SMEs, a pioneering initiative to encourage the contribution of Small, and

Medium Enterprises to the growth of Indian economy.

ICICI Bank opened its 500th branch in India.

ICICI Bank introduced partnership model wherein ICICI Bank would forge an alliance

with existing micro finance institutions (MFIs). The MFI would undertake the promotional

role of identifying, training and promoting the micro-finance clients and ICICI Bank would

finance the clients directly on the recommendation of the MFI.

ICICI Bank introduced the concept of floating rate for home loans in India.

First rural branch and ATM launched in Uttar Pradesh at Delpandarwa, Hardoi.

"Free for Life" credit cards launched wherein annual fees of all ICICI Bank Credit Cards

were waived off.

ICICI Bank and Visa jointly launched mChq- a revolutionary credit card on the mobile

phone.

Private Banking Masters 2005, a nationwide Golf tournament for high net worth clients of

the private banking division launched. This event is the largest domestic invitation amateur

golf event conducted in India.

ICICI Bank became the largest bank in India in terms of its market capitalization.

2006:

ICICI Bank became the first private entity in India to offer a discount to retail investors for

its follow-up offer.

ICICI Bank became the first Indian bank to issue hybrid Tier-1 perpetual debt in the

international markets.

ICICI Bank subsidiary set up in Russia.

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2007:

Introduced a new product - 'NRI smart save Deposits' – a unique fixed deposit scheme for

nonresident Indians.

Representative offices opened in Thailand, Indonesia, and Malaysia.

ICICI Bank became the largest retail player in the market to introduce a biometric enabled

smart card that allows banking transactions to be conducted on the field. A low-cost

solution, this became an effective delivery option for ICICI Bank's micro finance

institution partners.

ICICI Bank raised Rs 20,000 crore (approx. $5 billion) from both domestic and

international markets through a follow-on public offer.

ICICI Bank's GBP 350 million international bond offering marked the inaugural deal in the

sterling market from an Indian issuer and also the largest deal in the sterling market from

Asia.

Launched India's first ever jewellery card in association with jewelry major Gitanjali

Group.

ICICI Bank became the first bank in India to launch a premium credit card -- The Visa

Signature Credit Card.

Introduced SME Toolkit, an online resource centre, to help small and medium enterprises

start, finance, and grow their business.

ICICI Bank signed a multi-tranche dual currency US$ 1.5 billion syndication loan

agreement in Singapore.

In a first of its kind, nationwide initiative to attract bright graduate students to pursue a

career in banking, ICICI Bank launched the "Probationary Officer Program.”

Launched Bank@home services for all savings and current a/c customers residing in India

ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg, Russia.

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2008:

ICICI Bank enters US, launches its first branch in New York.

ICICI Bank launched iMobile, a breakthrough innovation in banking where practically all

internet-banking transactions can now be simply done on mobile phones.

ICICI Bank concluded India's largest ever securitization transaction of a pool of retail loan

assets aggregating to Rs. 48.96 billion (equivalent of USD 1.21 billion) in a multi-tranche

issue backed by four different asset categories. It is also the largest deal in Asia (e.g.-Japan)

in 2008 till date and the second largest deal in Asia (e.g.-Japan & Australia) since the

beginning of 2007

2009:

Ms.Chanda D Kochhar appointed the Managing Director and CEO of ICICI Bank Ltd.

ICICI Bank and Singapore Airlines launch "ICICI Bank Singapore Airlines Visa Platinum

Credit Card"

ICICI Bank ties up with BSNL Cell One for bill payments.

2010:

ICICI Bank launches website in Hindi.

ICICI Bank opens first retail branch in Singapore.

RBI approves the amalgamation of Bank of Rajasthan Ltd with ICICI Bank Ltd.

First private sector Bank to inaugurate its 2000 Branch.

2011:

ICICI Bank offers cash withdrawal at POS terminals

ICICI Bank & Vodafone Essar ink pact for financial inclusion

ICICI Bank & Indian Army sign MoU for banking services

ICICI Bank and Intuit launch "Money Manager"

ICICI Bank Limited Opens Second Retail Branch in Singapore

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2012:

ICICI Bank rolls out 25 electronic branches and launches many next generation banking

solutions

ICICI Bank was the first private sector bank in India to offer PPF account facility at all

bank branches.

Among the first banks to introduce account portability and also the only bank to offer

portability on two additional channels - Internet banking and Phone Banking.

ICICI Bank launches its official Facebook Page. First bank in India to offer one-of-its kind

"Your Bank Account" App, which allows access to bank account information on Facebook.

2013:

ICICI bank has been adjudged winner at the express IT Innovation award under the large

Enterprise category.

ICICI bank wins awards under the categories of ‘Most Innovative Bank’ and ‘Most

innovative use of Multichannel Infrastructure’ at the Indian Bank’s Association’s

BANCON Innovation Awards 2013.

ICICI bank won the Asian Banking & Finance retail banking award 2013 for the online

banking Initiative of the year. ICICI bank won an award under the social media category at

the information week EDGE award

ICICI bank received the award for ‘Best Private Sector Banker’ by the Sunday standard

best bankers Awards 2013.

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2014:

Ms. Chanda Kochhar received an honorary Doctor of Laws from Carleton University,

Canada. The university conferred the award on Ms. Kochhar in recognition of her

pioneering work in the financial sector, effective leadership in a time of economic crisis

and support for engaged business practices.

Ms. Chanda Kochhar featured in the Telegraph (UK) list of 11 most important women in

Finance.

ICICI bank has been recognized as one of the top companies for leaders in India in a study

conducted by Aon Hewitt.

IDRBT has given awards to ICICI Bank In the categories of ‘Social Media and Mobile

Banking’ and ‘Business Intelligence Initiatives.

2015:

ICICI bank has been adjudged the ‘Best Retail Bank in India’ By the Asian Banker. It has

also emerged winners in the categories of ‘Best internet Banking Initiative’. It has also

emerged winners in the categories of ‘Best Internet Banking Initiative’ and Best Customer

Risk Management initiative’ Awards given by the Asian Banker.

ICICI bank has been declared as the first runner up at outlook money awards 2015 in the

category of ‘Best Bank’.

ICICI bank Won an award in the BFSL leadership summit awards in the, Best phone

banking for End users’ category.

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ICICI GROUP COMPANIES

ICICI Bank

ICICI Prudential Life Insurance Company

ICICI Securities Limited

ICICI Securities Primary Dealership Limited

ICICI Lombard General Insurance Company

ICICI Prudential Asset Management Company

ICICI Venture

ICICI Home Finance Company

BOARD OF DIRECTORS

ICICI SECURITIES LIMITED ICICI SECURITIES HOLDING

INC.

ICICI SECURITIES,

INC.

Ms. Chanda D. Kochhar, Chairperson Mr. Sanker Parameswaran,

Director

Mr. Anup Bagchi,

Chairman

Mr. Uday Chitale, Independent Director

Mr. Sriram Iyer, Director Mr. Ajay Saraf

Mr. Vinod Kumar Dhall, Independent

Director

Mr. Warren Law Mr. Subir Saha

Ms. Zarin Daruwala

Mr. Jaideep Goswami

Ms. Shilpa Kumar

Mr. Bishen Pertab

Mr. Anup Bagchi, Managing Director &

CEO Mr. Robert Ng

Mr. Ajay Saraf, Executive Director

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VISION & MISSION OF ICICI GROUP

VISION: To be the leading service provider of financial services in India.

MISSION: We will leverage our people, technology, speed and financial capital to:-

Be the banker of first choice for our customers by delivering high quality, excellent

products and services.

Expand the frontiers of our business globally.

Play a proactive role in the full realisation of India’s potential.

Maintain a healthy financial profile and diversify our earnings across businesses and

geographies.

Maintain high standards of governance and ethics.

Contribute positively to the various countries and markets in which we operate.

Create value for our stakeholders.

PRIVACY POLICY: - ICICI is strongly committed to protecting the privacy of its customers.

DNC (DON'T CALL REGISTRY):- ICICI do respect your privacy, and appreciate that some of

you may not want to be contacted over the phone for our telemarketing activities. If this is the case

with you, you may use the Do Not Call form given below and register your phone number(s) that

you want excluded from our telemarketing list. The details that you enter in the form will remain

confidential

CODE OF CONDUCT AND BUSINESS ETHICS: -ICICI Group expects all its employees,

officers and directors to act in accordance with high professional and ethical standards.

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INTRODUCTION TO ICICI DIRECT

ICICIDirect is an online trading and investment platform on ICICI Securities, the largest stock

broker firm in India providing a wide range of investment options to the retail and institutional

customers. ICICI Securities is part of ICICI Group, India's top financial service provider offering

banking and other financial services.

ICICI Securities (I-Sec) is the top equity house in India with over 20 lakh customers.

ICICIDirect.com is the flagship website of I-Sec. This website was the first online trading platform

lunched in India to provide browser based equity, commodity and currency trading; all under one

login.

ICICIdirect.com is the most visited investment portal in India and by NRI's living across countries.

It is one website, which provides options to invest in over 20 financial products including Equity,

Derivatives, Currency Futures, IPO, Mutual Funds, ETF, Fixed Deposits, Loans, Tax Services,

New Pension Systems and Insurance.

ICICI direct also provide current stock market information which includes stock prices, news,

market research reports, stocks tips, events, IPO News and company results. Its 'Centre for

Financial Learning' initiative offers number of online and classroom programs for investors.

The 3-in-1 account, which includes ICICI Bank Account, ICICI Direct Trading Account and ICICI

Demat Account, is the best offering for retail investors in India as it provides easiest way to invest

in stock market and other financial instruments. The customers can visit any of the over 1500

ICICI Bank branches to get help on financial products which are sold through ICICI direct.

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AWARDS AND ACCOLADES

Franchisor of the year award 2009

Retail concept of the year awards 2009

ICICIDirect wins the prestigious Outlook Money - India's Best e-Brokerage House for

2009.

ICICIDirect has also won the CNBC AWAAZ Consumer Award for the Most Preferred

Brand of Financial Advisory Services.

ICICIDirect been winning the prestigious Outlook Money - India's Best e-Brokerage House

for 2003-2004, 2004-2005, 2006-2007 and 2007-2008.

ICICIDirect wins the prestigious Outlook Money - India's Best e-Brokerage House for

2008.

ICICIDirect, the neighborhood financial superstore won the prestigious Franchise India

`Service Retailer of the Year 2008 award.

Best Broker - Web 18 Genius of the Web Awards 2007

CMO Asia Awards for Excellence in Branding and Marketing –

Brand Leadership Award (overall)

'Campaign of the Year' for the Trade Racer Campaign

Brand Excellence in Banking and Financial Services for the store format

Award for Brand Excellence in the Internet Business

Frost and Sullivan Award for Customer Service Leadership

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MAJOR COMPETITORS:

HDFC Securities Kotak Securities SBI Capital

Sharekhan Broker IDBI Capital HSBC InvestDirect

Angel Broking Indiabulls Services Reliance Securities

Bajaj Capital 5paisa.com Marwadi

Motilal Oswal Reliance Capital TATA

Goldman Sachs

ICICI DIRECT'S TRADING PLATFORMS:

ICICI Direct offers 2 trading platforms to its customers:-

1. SHARE TRADING ACCOUNT (WEBSITE BASED TRADING)

Website based online Share Trading Account by ICICIDirect is primarily for buying and selling of

stocks at BSE and NSE. The ICICIDirect website allows Cash Trading, Margin Trading,

MarginPLUS Trading, Spot Trading, Buy Today Sell Tomorrow, IPO Investment, Mutual Fund

Investment etc. ICICIDirect.com website is the primary Investment vehicle of ICICI Limited.

2. TRADE RACER (TRADING TERMINAL)

Trade Racer is a power packed Trading platform, which provides an investor with Live streaming

quotes & Research Calls, integrated fund transfer system along with multiple watch list facility.

Investor can also do technical analysis with the help advance charting tools. Single Order entry

page for Equities and Derivatives, Technical Analysis, Integrated Fund Transfer System,

Customized Interface, Intra-day and EOD Charts and Shortcut keys for faster access to markets are

some of the key features of Trade Racer Terminal

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PRODUCTS & SERVICES

1. EQUITY: ICICIdirect.com offers various options while trading in shares:-

1.1. CASH TRADING: This is a delivery based trading system, which is generally done with

the intention of taking delivery of shares or monies.

1.2. MARGIN PRODUCT : Investor can also do an intra-settlement trading up to 3 to 4 times

available funds, wherein Investor take long buy/ short sell positions in stocks with the

intention of squaring off the position within the same day settlement cycle.

1.3. MARGINPLUS PRODUCT : Through Margin PLUS Investor can do an intra-settlement

trading up to 25 times your available funds, wherein Investor take long buy/ short sell

positions in stocks with the intention of squaring off the position within the same day

settlement cycle. Margin PLUS will give a much higher leverage in Investor account

against his limits.

1.4. CALLNTRADE: CallNTrade allows Investor to call on a local number in your city &

trade on the telephone through our Customer Service Executives. This facility is currently

available in over 11 major states across India.

1.5. TRADING ON NSE/BSE: Through ICICIdirect.com, can trade on NSE as well as BSE.

1.6. MARKET ORDER: Investor could trade by placing market orders during market hours

that allows to trade at the best obtainable price in the market at the time of execution of the

order.

1.7. LIMIT ORDER: Allows to place a buy/sell order at a price defined by Investor. The

execution can happen at a price more favorable than the price, which is defined by

Investor, limit orders can be placed by Investor during holidays & non-market hours too.

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2. DERIVATIVES:-

2.1 FUTURES: Through ICICIdirect.com, investor can now trade in index and stock futures on

the NSE. In futures trading, investor takes buy/sell positions in index or stock contracts having a

longer contract period of up to 3 months.

Trading in FUTURES is simple! If, during the course of the contract life, the price moves in

investor favor (i.e. rises in case investor has a buy position or falls in case investor has a sell

position), make a profit.

Presently only selected stocks, which meet the criteria on liquidity and volume, have been enabled

for futures trading.

Calculate Index and Know your Margin are tools to help you in calculating investor margin

requirements and the index & stock price movements. The Centre for Financial Learning is a

comprehensive guide on futures and options trading.

2.2 OPTIONS

An option is a contract, which gives the buyer the right to buy or sell shares at a specific price, on

or before a specific date. For this, the buyer has to pay to the seller some money, which is called

premium. There is no obligation on the buyer to complete the transaction if the price is not

favorable to him.

To take the buy/sell position on index/stock options, investor has to place certain percentage of

order value as margin. With options trading, investor can leverage on his trading limit by taking

buy/sell positions much more than what he could has taken in cash segment.

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The Buyer of a Put Option has the right but not the Obligation to sell the Underlying Asset at the

specified strike price by paying a premium whereas the Seller of the Put has the obligation of

buying the Underlying Asset at the specified Strike price.

3. CURRENCY DERIVATIVES

ICICI Direct offers a simple and convenient way to trade and hedge currency risk in four pair of

Currencies- Dollar, Euro, Pound and Japanese Yen against Indian Rupee.

By offering the choice of trading in different asset class of Currencies ICICI Direct offers the

opportunity to diversify investor portfolio.

THE BENEFITS OF CHOOSING ICICI DIRECT FOR YOUR CURRENCY TRADING ARE:

Convenience - Provides a well-diversified set platform for online trading with competitive

brokerage under a single sign-on and completely paper-less investing experience

Expertise - Investor can access Daily Research Reports as well as Fundamental &

Technical Reports and Advisory.

Flexibility – Investor can select the Currency Pair USD/INR, EUR/INR, GBP/INR and

JPY/INR in which he wish to trade

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FEW ADVANTAGES OF THIS MARKET ARE:

Trading hours of 09:00 am to 05:00 pm provide more trading opportunities

Trade in prominent currencies like US Dollar, EURO, Pound, and Yen against Indian

Rupee

Real time and Transparent Currency Rates in comparison to OTC Rates.

No Counterparty Default risk due to settlement guarantee by regulated clearing house.

Low Taxation (No STT and CTT)

THE BENEFITS OF CHOOSING ICICI DIRECT FOR INVESTMENT IN MUTUAL FUNDS

ARE:

Convenience - Provides a well-diversified set of investment products under a single sign-on

and completely paper-less investing experience.

Expertise - Investor can access some of the researched funds selected based on rigorous

criterion.

Flexibility - Investor may select the fund that best suits his need.

EXCHANGE TRADED FUNDS

Exchange Traded Funds or ETFs are securities that are traded, like individual stocks, on an

exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold throughout the

trading day like any stock.

Most ETFs charge lower annual expenses than many mutual funds. As with stocks, one must pay a

brokerage to buy and sell ETF units.

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ICICI DIRECT ADVANTAGE:

The benefits of choosing ICICI direct for ETF investment are:

Invest in a paperless manner

No need to cut cheque

Get instant confirmation & Calculate capital gains at click of a button

Check portfolio for realized and unrealized profit/loss

LIFE INSURANCE

Wealth insurance ensures that investor receives a lump sum amount of money at the maturity of

the Policy. In the unfortunate event of death during the term of the policy, investor family

receives lump sum amount, called the Sum Assured. Thus it combines the benefits of protection

and saving in a single instrument. In ULIP policies, the investment risk in the investment

portfolio is borne by the policy holder.

Conditions Apply: Guaranteed benefits are available only if all premiums are paid as per the

premium payment term and the policy is in-force till the completion of entire policy term.

30 | P a g e

PRODUCT SUITABILITY FEATURES

Min/Max age at entry 0/69 years

depending on PPT

For anyone who is looking for

Equity or Debt linked savings

plan.

A unit-linked, non-participating,

savings and protection oriented

insurance plan.

Pay premiums for a limited period

or for the entire policy term.

Invest in Funds of choice or opt

for Life Cycle based Portfolio

strategy.


depending On PPT.

For anyone who is looking to save

Rs. 2 lac or more in a Equity or

Debt linked savings plan.



insurance plan

Flexibility of Premium Payment

term

Choose between different Equity

or debt funds


depending on PPT.

For anyone who is looking to save

Rs. 5 lac or more in a Equity or

Debt linked savings plan.



insurance plan

Choose between different Equity

or debt funds

Enjoy Guaranteed loyalty

additions which enhance your

returns

Min/Max age at entry 1Pay - 8/70;

5 pay - 8/60 years.

For anyone who is looking to

invest into equity and yet wants

his/her capital to be protected.

Protect savings from market

downturns through an Assured

Benefit

Pay premium just once or for a

limited period of 5 years

Get rewarded with Loyalty

Additions and Wealth Booster

Min/Max age at entry 5Pay -3;

7pay - 1; 10PAY - 0 / 65 years.


Guaranteed regular income

A savings and protection oriented

plan.

Pay premiums for just 5, 7 or 10

years.

Guaranteed Maturity Benefit plus

bonuses at maturity for long term

goals.

Min/Max age at entry 0/60 years.


guarantee in a savings cum

Insurance plan

A participating savings and

protection oriented plan

Guaranteed Maturity Benefit +

Guaranteed Additions at maturity

Pay premiums for a limited period

or for the entire policy term.

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GENERAL INSURANCE

General Insurance products cover Health, Home, Motor and Travel, and help protect financial

health unforeseen events strike close to home. ICICI Lombard is the leading private general

insurance company and has one of the best products.

Partnership with ICICI Lombard enables to bring the entire range of insurance offerings personal

and professional needs, with minimal paperwork and at the comfort of home or office. Select

products can be entirely bought online on ICICIdirect.com with instant policy issuance.

FIXED DEPOSITS & BONDS

1. CORPORATE FIXED DEPOSITS: - ICICI Direct offers a range of Corporate Fixed

Deposits varying in tenures, interest rates & institutions to suit investment needs. The

deposit schemes have been specially chosen from high-safety options to ensure that

customers enjoy the twin benefits of returns and protection.

WHY OPT FOR CORPORATE FIXED DEPOSITS?

If risk appetite is low, fixed deposits are perfect. Since most of the instruments are rated,

corporate fixed deposits have a very high safety level.

Attractive returns at interest rates higher than bank’s Fixed Deposits.

Higher Interest rates for senior citizens.

High liquidity; most of these issuers offer 75% of the investment amount as loan @ 2%

over the interest rate on the deposit, as well as a pre-mature withdrawal Option.

Potential to earn compounding interest on money by reinvesting the principal amount along

with the interest earned.

Flexible tenure - there are various tenures ranging from 1 to 7 years.

32 | P a g e

2. BONDS: - Bond refers to a security issued by a company, financial institution or

government, which offers regular or fixed payment of interest in return on the amount,

borrowed money for a certain period.

Thus by purchasing a bond, investor loans money for a fixed period at a predetermined

interest rate. While the interest is paid to the bond holder at regular intervals, the principal

amount is repaid later, known as the maturity date. While both bonds and stocks are

securities, the principle difference between the two is that bond holders are lenders, while

stockholders are the owners of the organization. Another difference is that bonds usually

have a defined term, or maturity, after which the bond is redeemed, whereas stocks may be

outstanding indefinitely.

Customer also has the option of recurring interest along with Principal i.e. Cumulative

Interest. Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the

lender (creditor), and the coupon is the interest. Bonds provide the borrower with external

funds to finance long-term investments, or, in the case of government bonds, to finance

current expenditure. Bonds must be repaid at fixed intervals over a period.

3. ELOCKER: - ICICIdirect.com's eLocker helps with the convenience and flexibility to store

and retrieve important documents when need them. Can store scanned copies of Passport,

PAN, Agreements or even medical reports securely under your ICICI direct account.

ELocker helps eliminate to carry copies of important documents either as a physical photo

copy or in storage devices like Compact Disks, USB token etc. With eLocker, can store

documents in one central secure location and know that documents are just a few clicks

away.

33 | P a g e

KEY BENEFITS:

Secure and Accessible - eLocker ensures that documents are secure and accessible only via

a secure login.

Anywhere, anytime access - eLocker is available from anywhere, via an Internet

connection under ICICI direct account login.

Durability and Longevity - Storage of documents in CD's or other portable media is prone

to handling them with care, eLocker lets store documents online, which ensures durability

and longevity.

No storage or retrieval hassles - Since documents are stored in a digital format under ICICI

direct account, the account is available to you wherever you go.

TRADE RACER

Trade Racer is a trading platform, which provides live streaming quotes & Research Calls,

integrated fund transfer system along with multiple watch list facility. Power-packed with new

features, Trade Racer gives the power to identify market opportunities while enjoying the

attractive new look and feel of the trading terminal.

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NATIONAL PENSION SYSTEM (NPS)

Pension Fund Regulatory and Development Authority (PFRDA) was established by the

Government of India on August 23, 2003 to promote old age income security by establishing,

developing and regulating pension funds, to protect the interests of subscribers to schemes of

pension funds and for matters connected therewith or incidental thereto.

The NPS is a new voluntary contributory pension scheme introduced by the Central Government.

Under the National Pension System, individuals can open a personal retirement account and can

accumulate a pension corpus during their work life to meet financial needs post retirement. These

contributions would grow and accumulate over the years, depending on the returns earned on the

investment made. When the person retires, he will be able to use these savings to take care of the

needs and expenses of his family during old age. The subscribers may use the accumulated pension

wealth under the scheme to purchase a life annuity from a life insurance company. Alternatively,

depending on the age of the subscriber, a part of the wealth may be withdrawn as lump-sum.

ICICI Securities Limited (I-Sec) has obtained the Point of Presence (POP) Registration Certificate

from PFRDA to offer NPS accounts. Any individual customer of icicidirect.com desiring to open

an NPS account t can do so by clicking on "Subscribe NPS" and fulfilling the prerequisite process.

SEBI regulations require that at least two thirds of the directors of trustee company or board of

trustees must be independent i.e. they should not be associated with the sponsors. In addition, 50

per cent of the directors of AMC must be independent. All Mutual Funds are required to be

registered with SEBI before they launch any scheme.

35 | P a g e

HOW IS A MUTUAL FUND SET UP?

A Mutual Fund is set up in the form of a trust, which has a sponsor, trustees, and asset

management company (AMC) and custodian. The trust is established by a sponsor or more than

one sponsor who is like a promoter of a company. The trustees of the Mutual Fund hold its

property for the benefit of the unit holders. 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.

ADVANTAGES OF MUTUAL FUNDS

Mutual funds have designed to provide maximum benefits to investors, and fund manager have

research team to achieve schemes objective. Assets Management Company has different type of

sector funds, which need to proper planning for strategic investment and to achieve the market

return.

1. PORTFOLIO DIVERSIFICATION

Mutual Funds invest in a well-diversified portfolio of securities, which enables investor to hold a

diversified investment portfolio (whether the amount of investment is big or small).

2. PROFESSIONAL MANAGEMENT

Fund manager undergoes through various research works and has better investment management

skills, which ensure higher returns to the investor than what he can manage on his own.

36 | P a g e

3. LESS RISK: -Investors acquire a diversified portfolio of securities even with a small

investment in a Mutual Fund. The risk in a diversified portfolio is lesser than investing in

merely 2 or 3 securities.

4. LOW TRANSACTION COSTS: -Due to the economies of scale (benefits of larger volumes),

mutual funds pay lesser transaction costs. These benefits are passed on to the investors.

5. LIQUIDITY: -An investor may not be able to sell some of the shares held by him very easily

and quickly, whereas units of a mutual fund are far more liquid.

6. CHOICE OF SCHEMES: -Mutual funds provide investors with various schemes with different

investment objectives. Investors have the option of investing in a scheme having a correlation

between its investment objectives and their own financial goals. These schemes further have

different plans/options

7. TRANSPARENCY: -Funds provide investors with updated information pertaining to the

markets and the schemes. All material facts are disclosed to investors as required by the

regulator.

8. FLEXIBILITY: - Investors also benefit from the convenience and flexibility offered by

Mutual Funds. Investors can switch their holdings from a debt scheme to an equity scheme

and vice-versa. Option of systematic (at regular intervals) investment and withdrawal is also

offered to the investors in most open-end schemes.

9. SAFETY: -Mutual Fund industry is part of a well-regulated investment environment where

the interests of the investors are protected by the regulator. All funds are registered with SEBI

and complete transparency is forced.

37 | P a g e

DISADVANTAGES OF MUTUAL FUNDS

The mutual fund not just advantage of investor but also has disadvantages for the funds. The fund

manager not always made profits but might create loss for not properly managed. The fund have

own strategy for investment to hold, to sell, to purchase unit at particular time.

1. COSTS CONTROL NOT IN THE HANDS OF AN INVESTOR: -Investor has to pay

investment management fees and fund distribution costs as a percentage of the value of his

investments (as long as he holds the units), irrespective of the performance of the fund

2. NO CUSTOMIZED PORTFOLIOS: -The portfolio of securities in which a fund invests is

a decision taken by the fund manager. Investors have no right to interfere in the decision

making process of a fund manager, which some investors find as a constraint in achieving

their financial objectives.

3. DIFFICULTY IN SELECTING A SUITABLE FUND SCHEME: -Many investors find it

difficult to select one option from the plethora of funds/schemes/plans available. For this,

they may have to take advice from financial planners in order to invest in the right fund to

achieve their objectives.

38 | P a g e

DIFFERENT TYPES OF MUTUAL FUNDS

(A) ON THE BASIS OF OBJECTIVE:

EQUITY FUNDS/ GROWTH FUNDS: Funds that invest in equity shares are called equity

funds. They carry the principal objective of capital appreciation of the investment over the

medium to long-term. The returns in such funds are volatile since they are directly linked to

the stock markets. They are best suited for investors who are seeking capital appreciation.

There are different types of equity funds such as Diversified funds, Sector specific funds

and Index based funds.

DIVERSIFIED FUNDS: These funds invest in companies spread across sectors. These

funds are generally meant for risk-taking investors who are not bullish about any particular

sector.

SECTOR FUNDS: These funds invest primarily in equity shares of companies in a

particular business sector or industry. These funds are targeted at investors who are

extremely bullish about a particular sector.

INDEX FUNDS: These funds invest in the same pattern as popular market indices like

S&P 500 and BSE Index. The value of the index fund varies in proportion to the

benchmark index.

TAX SAVING FUNDS: These funds offer tax benefits to investors under the Income Tax

Act. Opportunities provided under this scheme are in the form of tax rebates U/s 88 as well

saving in Capital Gains U/s 54EA and 54EB. They are best suited for investors seeking tax

concessions.

39 | P a g e

DEBT / INCOME FUNDS: These Funds invest predominantly in high-rated fixed-income-

bearing instruments like bonds, debentures, government securities, commercial paper and

other money market instruments. They are best suited for the medium to long-term

investors who are averse to risk and seek capital preservation. They provide regular income

and safety to the investor.

LIQUID FUNDS / MONEY MARKET FUNDS: These funds invest in highly liquid

money market instruments. The period of investment could be as short as a day. They

provide easy liquidity. They have emerged as an alternative for savings and short-term

fixed deposit accounts with comparatively higher returns. These funds are ideal for

Corporates, institutional investors and business houses who invest their funds for very short

periods.

GILT FUNDS: These funds invest in Central and State Government securities. Since they

are Government backed bonds they give a secured return and also ensure safety of the

principal amount. They are best suited for the medium to long-term investors who are

averse to risk.

BALANCED FUNDS: These funds invest both in equity shares and fixed-income-bearing

instruments (debt) in some proportion. They provide a steady return and reduce the

volatility of the fund while providing some upside for capital appreciation. They are ideal

for medium- to long-term investors willing to take moderate risks.

HEDGE FUNDS: These funds adopt highly speculative trading strategies. They hedge

risks in order to increase the value of the portfolio.

40 | P a g e

(B) ON THE BASIS OF FLEXIBILITY

OPEN-ENDED FUNDS: These funds do not have a fixed date of redemption. Generally

they are open for subscription and redemption throughout the year. Their prices are linked

to the daily net asset value (NAV). From the investors' perspective, they are much more

liquid than closed-ended funds.

CLOSE-ENDED FUNDS: These funds are open initially for entry during the Initial Public

Offering (IPO) and thereafter closed for entry as well as exit. These funds have a fixed date

of redemption. One of the characteristics of the close-ended schemes is that they are

generally traded at a discount to NAV; but the discount narrows as maturity nears. These

funds are open for subscription only once and can be redeemed only on the fixed date of

redemption. The units of these funds are listed (with certain exceptions), are tradable and

the subscribers to the fund would be able to exit from the fund at any time through the

secondary market.

INTERVAL FUNDS: These funds combine the features of both open-ended and close-

ended funds wherein the fund is close ended for the first couple of years and open-ended

thereafter. Some funds allow fresh subscriptions and redemption at fixed times every year

(say every six months) in order to reduce the administrative aspects of daily entry or exit,

yet providing reasonable liquidity

(C) ON THE BASIS OF GEOGRAPHIC LOCATION

DOMESTIC FUNDS: These funds mobilize the savings of nationals within the country.

OFFSHORE FUNDS: These funds facilitate cross border fund flow. They invest in

securities of foreign companies. They attract foreign capital for investment.

41 | P a g e

CHAPTER -II

42 | P a g e

LITERATURE REVIEW

SAHIL JAIN measured the performance of the equity based mutual funds in India. The

assets under management in this industry is more than Rs 6.8 thousand billion. The Indian

market is flooded with more than a thousand mutual fund schemes, promising better returns

than others. A total of 45 schemes offered by 2 private sector companies and 2 public

sector companies, have been studied over the period April 1997 to April 2012 (15 years).

The analysis has been made using the risk-return relationship and Capital Asset Pricing

Model (CAPM). The overall analysis finds that HDFC and ICICI have been the best

performers, UTI an average performer and LIC the worst performer which gave below-

expected returns on the risk-return relationship.

According to CRISIL Mutual Fund Year book Apr 2013, In 2012 Equities emerged as the

star performer with the benchmark CNX Nifty gaining 28%. The debt market too

performed well with long-term debt funds gaining prominence due to some easing of

monetary stance by the Reserve Bank of India (RBI) and expectations of further easing by

the central bank to pump prime the economy. The mutual fund industry’s average assets

under management (AUM) grew by 15% in 2012 to Rs 7.87 trillion in December 2012;

debt funds’ AUM rose by over 26% to Rs 5.34 trillion and equity funds’ AUM by 19% to

Rs 1.92 trillion. The focus on retail investors and improving the penetration of mutual

funds continued through the year with Securities and Exchange Board of India (SEBI)

announcing various guidelines to promote investor education, reduce operational

bottlenecks and costs. Further, SEBI doled out incentives to fund houses that distribute

their products beyond the top 15 cities. Single plan structures and introduction of direct

plans were other investor friendly measures introduced by the regulator.

43 | P a g e

VIJAYALAKSHMI SUNDAR measured that Mutual funds in India are becoming an ideal

investment choice compared to safe investments such as Fixed Deposits and postal which

gives comparatively low returns. Since the year 2003 from which the present stage of bull

run in the Indian capital markets began, the mutual fund industry While the growth in terms

of the AUM was subdued over the period from 2009-2013, it has gained unprecedented

momentum over the four year period until March 2013. The growth of the capital markets

in terms of BSE -30 shares Sensex has been still higher, and the banking sector has been on

a roll over the last couple of years, throwing up huge opportunities for wealth creation on

the way. As the Indian economy does well with over recent times, banks tend to be one of

the biggest beneficiaries. In fact, post the global financial crisis of 2008 and 2009, the

banking index delivered a return of 82% during May 2009 until October 2010, compared to

a return of 40% delivered by the broader market. Investment in banking sector funds is one

of the best avenue which guarantees stable return with medium risk when compare to other

sectors.

JAFRI ARSHAD HASAN measured that Indian mutual fund industry is going through a

very crucial phase because of the changing regulations and confusing atmosphere. In this

study he discuss the impact of regulatory changes by SEBI on mutual fund industry and it’s

after affects. It will also throw some light on the international factors that affected Indian

mutual fund industry and its sentiments. At the end of the, there will be some suggestions

for the regulator, the intermediaries and the Investors. This is an attempt to minimize the

level of negativity and pessimism from the market and to create an atmosphere of trust,

information and optimism.

44 | P a g e

According to CII, all efforts at the moment are being synchronized towards attaining the

objective of financial inclusion. The drive to expand reach beyond Tier 1 cities and make

mutual fund offerings available to people in smaller towns and cities has indeed taken up

the attention of the industry. However, several components of such an initiative, like

investor awareness, broadening investor participation and product innovation, need to be

aligned in order to fully establish inclusive growth. The industry needs to give due

emphasis on the above factors, drawing out an efficient business and operating model to

ensure that the inherent challenges that the industry is facing is efficiently dealt with.

Designing a competent and all pervasive business model has all the more become important

in the current scenario of changing business and regulatory legislations.

According to KPMG report, The Mutual fund industry needs to have an ‘outside-in’

perspective as compared to ‘inside-out’ perspective. Understanding investors’ needs should

be followed by a product channel alignment. A number of change catalysts discussed in the

previous section like technology, investment in B-15 cities, investment adviser etc. would

be required to help ensure the overall objective of prudent growth and profitability.

Investor awareness campaigns should be conducted to increase the AUM in smaller cities

which would help industry to progress in a holistic manner. AMC, distributors and IFAs

are all doing their bit but AMFI and SEBI should also play a major role in creating

awareness. For future growth, tax could act as an enabler as tax benefits can be a pull factor

for investors. The future potential of Investment Advisors could be decided by Investors

and the regulators. Presence of an unbiased advisor could build investor trust on the one

hand and reward performing products on the other.

45 | P a g e

According to CII Mutual fund summit 2013, the outlook of the mutual fund industry is

governed to a great extent by the economic situation in the country. The current economic

scenario with sticky inflation and rising fuel prices is likely to adversely impact

perceptions, resulting in depressed equity inflows into the market. They believe that the

mutual fund industry manifests huge opportunity for growth and further penetration, and

this can be achieved over time, with support from technology. The key lies in strengthening

distribution networks and enhancing levels of investor education to increase presence in

rural areas. In terms of opportunity, the infrastructure debt market has become very

attractive, luring investors to invest in this space.

According to Ms. Avani shah, Faculty Shree Chimanbhai Patel Institute of Management

and Research, Ahmedabad, and Dr. Narayan baser Associate Professor, Shri Jairambhai

Patel Institute of Management and Computer Application, Ghandhinagar, found that a

mutual fund is a common pool of money into which investors place their contributions that

are to be invested in accordance with a stated objective. Being a part of financial markets

although mutual funds industry is responding very fast by analyze investor’s perception

and expectations. In their study research of 305 mutual fund investors was conducted in

Ahmedabad using non-probability convenience sampling. After using One-Way

ANNOVA, researcher had come to a conclusion that Funds reputation, Withdrawal

facilities, brand name, Sponsor’s past performance in terms of risk & return varies among

the investors of different age group & investor’s different occupation group.

46 | P a g e

According to Prof Gauri Prabhu Associate Professor AISSMS Institute of Management,

Pune and Dr. N.M. Vechalekar Associate Dean, IndSearch, Pune, the Mutual Funds provide

a platform for a common investor to participate in the Indian capital market with

professional fund management irrespective of the amount invested. The Indian mutual fund

industry is growing rapidly and this is reflected in the increase in Assets under management

of various fund houses. Mutual fund investment is less risky than directly investing in

stocks and is therefore a safer option for risk averse investors. Monthly Income Plan funds

offer monthly returns and invest majorly in debt oriented instruments with little exposure to

equity. However it has been observed that most of the investors are not aware of the

benefits of investment in mutual funds. This is reflected from the study conducted in this

research paper. This paper makes an attempt to identify various factors affecting perception

of investors regarding investment in Mutual funds.

According to Deepti Goel Dept. of Economics, Assistant Professor, PGDAV College,

D.U., India and Richa Gupta Dept. of Commerce Assistant Professor PGDAV College,

D.U., India found that the landscape of the financial sector in India is continuously

evolving, accredited to regulatory changes being undertaken, which is leading market

participant like the asset management companies (AMCs) and distributors to restructure

their strategies and adopt business models which will yield sustainable benefits. Some of

the other trends which have emerged strongly over the past year are heavy outflows

triggered by market volatility and partnering of asset management companies with banks,

to increase the strength of distribution networks.

47 | P a g e

CHAPTER- III

48 | P a g e

RESEARCH METHODLOGY

Research methodology is a methodology for collecting all sorts of information & data pertaining to

the subject in question. The objective is to examine all the issues involved & conduct situational

analysis. The methodology includes the overall research design, sampling procedure & fieldwork

done & finally the analysis procedure. The methodology used in the study consistent of sample

survey using primary data. The primary data has been collected with the help of questionnaire. The

questionnaire has been drafted & presented by the ICICI Securities, which was in online mode

PROBLEM OF THE STUDY

Most of the customers of ICICI Mutual Fund simplified are inactive for long time.

For improving their service.

For creating awareness of their updated website among their existing customer.

To know about their future investment.

OBJECTIVE OF STUDY

To create awareness to its customer about Mutual Fund.

To make them aware of online portfolio of ICICI Direct.

To know about response of the customer for future investments in mutual fund.

SCOPE OF THE STUDY

All the analysis and suggestions are based on the analysis of the primary data, which I will

collect with the help of questionnaire.

A big boom has been witnessed in Mutual Fund Industry in recent 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 Kailash Colony. I had been sent at Kailash Colony branch

of ICICI Securities where I completed my project work.

49 | P a g e

SAMPLING FRAMEWORK:

Sample Size: - Sample of 50 customers of ICICI Securities will be taken into study and

their data will be collected.

Sample Area: - Sampling area will be taken around Delhi – NCR.

Duration of project: - Time will be taken to complete the project is 2 months

DATA COLLECTION:

Collection of data (primary) by:

Questionnaire

Face to face interaction

DATA ANALYSIS:- After data collection, I am able to analyze customer views, perception and

opinions related to mutual fund and from this, ICICI Securities will come to know the customers’

requirements.

DATA INTERPRETATION: - Interpretation of data is done by using statistical tools like Pie

diagrams, Bar diagrams etc. and using quantitative techniques (by using these techniques) accurate

information will obtained.

LIMITATIONS OF THE STUDY-

I had to rely upon the information given to me by the customers to arrive at conclusion.

Their responses might not be fully true.

This study is only limited to Kailash Colony, therefore the conclusion may not be

universally applicable.

Since the researcher is a student, he lacks professional approach.

50 | P a g e

RESPONSIBILITIES ASSIGNED BY THE PROJECT MENTOR:

I have to meet ICICI Securities customers and have to tell them about mutual fund and its

benefit.

I have to show mutual fund and ICICI Direct site demo to customers.

I am responsible to solve their queries about mutual fund.

If customers want to know about online portal and online trading I have to give them site

demo.

I have to make customer fill up one online feedback form.

SAMPLING TECHNIQUE: Study the Project, a Simple Random Sampling technique is used.

DATA INTERPRETATION: Interpretation of data is done by using statistical tools like Pie

diagrams. Bar diagrams etc. and using quantitative techniques (by using these techniques) accurate

information is obtained.

STATISTICAL TOOLS USED FOR ANALYSIS: -Out of the total respondents, the respondents

who responded logically were taken into account while going into statistical details & analysis of

data. The tools that have been used for analyzing data & inference drawing are mainly statistical

tools like percentage, averages, etc. As per questionnaire, I have find out different responses from

different people. According to their responses, I analyze the findings and draw certain remarks.

51 | P a g e

CHAPTER-IV

52 | P a g e

DATA ANALYSIS AND INTERPRETATION

Q1. Have you invested in any of the following in the last 12 months?

Equity Futures and Option Mutual funds

Insurance Corporate FD Debenture/ bonds

PPF Others None

Ans:

Figure no.2. Number of customers invested in securities in the last 12 months.

Analysis: It is seen in the above graph that most of the customers in ICICI securities prefer to

make investment in equity and mutual fund and less in Futures and Option, insurance etc.

0

5

10

15

20

25

30

35

40

RESPONSES

Responses

53 | P a g e

Ques 2. What is your preferred mode of investment?

Online Offline

Figure no. 3: Preferred mode of investment.

Analysis:

It is seen in the above graph that out of 50 customers 32 prefer to do their investment online,

But only 18 customers are preferred to do their investment offline.

0

5

10

15

20

25

30

35

online offline

RESPONSES

responses

54 | P a g e

Ques 3. Have you invested in any of the following through ICICI Direct.com in the last 12

months?

Equity Futures and option Mutual funds

Insurance Debenture/ bonds None

Ans: Out of 50 customers not even a single person invested in any of the above mention funds

through ICICIdirect.com in the last 12 months. Mainly the customers assigned was inactive

customers.

Q4. Were you aware that you can invest in mutual funds through ICICI direct.com?

Yes NO

Figure No.4: - Reponses of customer about awareness that they can invest in MF through

ICICIDirect.com.

Analysis: According to the survey, out of 50 customers, 47 customers already knew that they

Can invest in Mutual Fund through ICICI direct.com but there are still 3 customers who didn’t

Knew about this.

94%

6%

RESPONSES

Yes

no

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Q5. What are the reasons for not investing in mutual funds through ICICI direct.com?

I need assistance to invest in Mutual Fund through ICICI direct.com

I need more knowledge on Mutual Fund before I invest.

I am not interested as I invest through other brokers/agents.

I do not invest in Mutual Fund.

Ans:

Table no. 1. Table showing reasons of customers for not investing in mutual funds through ICICI

direct.com

Figure no 5. Figure showing reasons of customers for not investing in mutual funds through

ICICI direct.com

Analysis: According to the survey it is been seen that out of 50 customers, majority of customers

do not want to invest in mutual funds. There can be a lot of reasons for not investing in mutual

funds. The reason could be lack of awareness, fear of losing their money and many more but still

there are 16 customers out of 50 who want to invest in MF but want some assistance to invest in

Mutual Fund.

32%

12%6%

50%

RESPONSES

I need assistance to invest in MFthrough ICICI direct.com

I need more knowledge on MFbefore I invest

I am not interested as I investthrough other brokers/agents.

I do not invest in MF

Options Responses

I need assistance to invest in Mutual Fund through ICICI direct.com 16

I need more knowledge on Mutual Fund before I invest 6

I am not interested as I invest through other brokers/agents. 3

I do not invest in Mutual Fund 25

56 | P a g e

Q6. Which of the following online transactions have you done in the past?

I buy movie tickets online I buy flight tickets online

I book hotels online. I use online banking

I do not do any online transactions.

Ans:

Table no2. Table showing responses of customers who have done online transactions in the

past.

Figure No. 6 Figure showing responses of customers who have done online transactions in the

past.

Analysis: According to the survey, it is been seen that most of the customers use online

transactions for using online banking, but some of the customers are also doing online transactions

for buying movie tickets, hotels. But still there are some customers who did not do any online

transactions.

23%

19%

13%

42%

3%

RESPONSES

I buy movie tickets online

I buy flight tickets online

I book hotels online.

I use online banking

I do not do any onlinetransactions.

Options Responses

I buy movie tickets online 21

I buy flight tickets online 17

I book hotels online. 12

I use online banking 39

I do not do any online transactions. 3

57 | P a g e

Q7 How often do you transact online in the above mentioned transaction?

Monthly Quarterly

Once in 6 months once in a year

Ans.

Table no. 3. Table showing how regularly the customers used to transact online.

Figure no. 7. Figure showing how regularly the customers used to transact online.

Analysis: - According to a survey, out of 50 customers, 32 customers used to transact online

monthly. While there are 7 customers who used to transact online once in a quarter, while there are

still 5 persons who used to transact online once in a year.

64%14%

12%

10%

RESPONSES

Monthly

Quarterly

Once in 6 months

Once in a year

Options Responses

Monthly 32

Quarterly 7

Once in 6 months 6

Once in a year 5

58 | P a g e

Q8. Which medium of news information and analysis do you use to keep yourself updated on

investment products?

I discuss with my friends/family/ colleagues

I use financial websites for comparisons and news

I have a financial advisor/ broker/ MF distributor who provides me the information.

I read media reports

I prefer to do my own research

Ans:

Figure no. 8 Figure showing medium of news information and analysis customers use to keep

themselves updated on investment products.

Analysis:- According to the survey, it is been seen that most of the customers read media reports

and prefer todo their own research to keep themselves updated on investment products. While the

customers using financial websites and who discus with their family and friends to update

themselves on investment products are less in numbers.

5

6

6

38

20

0 5 10 15 20 25 30 35 40


I use financial websites for comparions and news

I have a financial advisor/ broker/ MF distributor whoprovides me the information.



RESPONSES

responses

59 | P a g e

Q9. How do you check the performance of all/any of your investment?

I update investment details on a third party portfolio website and check regularly.

I ask my financial advisor/ broker/ Mf distributor to send me the information.

My broker/ bank provides me the information.

Others____________________

Table no. 4. Table showing how does the customers check performance of all/any of their

investment.

Figure no. 9 Figure showing how does the customers check performance of all/any of their

investment.

Analysis: According to the survey, out of 50 customers, 26 customers ask their broker/bank to

provide them the information to check the performance of all/any of their investment. But 10

customers are still there who check performance of all/any of their investment on their own.

7

7

26

10

0 5 10 15 20 25 30

I update investment details on a third party portfoliowebsite and check regularly.

I ask my financial advisor/ broker/ Mf distributor tosend me the information.


others

RESPONSES

responses

Options Responses

I update investment details on a third party portfolio website and check regularly. 7

I ask my financial advisor/ broker/ Mf distributor to send me the information. 7

My broker/ bank provides me the information. 26

Others 10

60 | P a g e

Q10. Would you consider switching your investment relationship to ICICIdirect.com?

Yes No

Ans:

Figure No.10 Figure showing responses of customers about switching their investment relationship

to ICICI direct.com

Analysis: According to the survey it is been seen that out of 50 customers 45 customers were

interested in switching their investment relationship to icicidirect.com while 5 customers disagree

to switch their relationship to ICICI direct.com.

0

5

10

15

20

25

30

35

40

45

50

yes no

RESPONSES

responses

61 | P a g e

Q11. Which of the following site features do you find useful at ICICI direct site?

Capital gain statement

Portfolio monitoring

Ease of purchase/redemption

Personalized research recommendations against holdings

Others

Ans:

Figure No.11 Figure showing responses of customers about the site features they found useful at

ICICIdirect.com.

Analysis: According to the survey it is found that most of the ICICI securities’ customers found

capital gain statement useful at icici direct site.

0 5 10 15 20 25 30 35 40





Others

RESPONSES

Series1

62 | P a g e

CHAPTER-V

63 | P a g e

FINDINGS

Most of the customers were not fully aware with mutual fund and its advantage.

Customers even who know about mutual fund, are not investing their money into it because

of lack of knowledge about mutual fund.

Customers prefer to invest in other alternatives mostly in equity and Share market.

In future, customers would like to invest in mutual fund if ICICI Securities create

awareness and provide right knowledge about mutual fund among customers.

Most of the customers were using online mode of payment frequently.

Almost every customer were agree to continue with ICICI Securities services.

There was communication gap with some customers to their respective Relationship

Manager.

Mostly customers update themselves about investment decision by their own or take advice

with family and friends.

64 | P a g e

SUGGESTIONS AND RECOMMENDATIONS

ICICI Securities should provide proper guidance to its customers about mutual fund

through seminars or other way of interaction.

There should be one department, which will call customer once in a month and notice their

problem or their complaint so there would not be any communication gap.

At the time of opening account, ICICI Securities can offer one tutorial class about mutual

fund or about other investment plans so there would not be any lack of knowledge in

customer mind.

ICICI Securities can send details about investment decision to its customers through e-mail

or SMS.

Before making any investment financial advisors should first enquire about the risk

tolerance of the investors, their need, and time. By considering these three things they can

take the customers into consideration.

65 | P a g e

CONCLUSION

Running of successful Mutual Funds requires complete understanding the mind set of small

investors. This is a study taken to make an attempt to understand the financial behavior and

perception of ICICI Securities customers. I observed that many of customers have fear of Mutual

Fund. Many of customers do not invest in mutual fund due to lack of awareness although they

have money to invest. Most of customers prefer to invest in equity. Investors should be made

aware of the benefits. Nobody will invest till he/she is fully convinced of the scheme.

66 | P a g e

BIBLIOGRAPHY

Jain, Sahil, (July-Aug. 2012), Analysis of Equity Based Mutual funds in India (IOSR

Journal of Business and Management (IOSRJBM) Volume 2, Issue 1), PP 01-04.

Kaur, Gurjeet, Sharma R.D, Mahajan Neha, Oct-Dec 2014, Segmentation of Bank

Customer by Loyalty and Switching Intentation, Vol(39) No.4.

CRISIL Research, Apr 2013, CRISIL Mutual Fund Year Book, PP 01-80

Sundar, Vijayalakshmi, Mar-Apr 2014, Growth and Development of Mutual fund industry

with reference to banking Sector Funds: An Indian Perspective, Financial & Business

management (IFBM), Vol.2 No.2 PP 01-05.

Hasan, Arshad Jafri, 2013, analysis of Mutual Fund Industry of India in the light of New

Regulation and International factors, I.J.E.M.S, Vol.4(2), PP01-03.

CII 6th Mutual fund Summit, 2010, international conference.

www.kpmg.com/in, Indian Mutual Fund Industry, Distribution Continuum: Key to success.

CII Mutual Fund Summit, 2013, Indian Mutual Fund Industry: Unearthing the growth

potential in untapped markets, PP 04-26.

Shah, Avani & Baser Narayan, Oct 2012, Mutual Fund: Behavioral Finance’s perspective,

Asia pacific Journal of Marketing & management Review, Vol.1 No.2, PP 01-11.

Mehta, Shantanu & Shah, Charmi, Sept 2012, Preference of Investors for Indian mutual

funds and its performance Evaluation, Pacific Business review international, Vol.5 issue 3,

PP 01-16.

Prabhu, Gauri & Vechalekar, N.M, perception of Indian Investor towards investment in

mutual funds with special reference to MIP funds, IOSR Journal of Economics and Finance

(IOSR-JEF), PP 01-09.

Chakrabarti, Rajesh & Malik, Sarat & Khairnar, Sudhakar & Verma, Aadhaar, (2013),

penetration of Mutual Funds in India: Opportunities and Challenges, PP 01-62.

67 | P a g e

Subrahmanyam, N, (2008-09), Mutual Funds and Banking: India and Global Experience,

PP 03-54.

Goel, Deepti & Gupta, Richa, May 2014, Mutual Fund Industry in India: An Overview,

International journal of Emerging research in management & Technology Vol. 3, Issue 5,

PP 01-04.

Dunna, Murlidhar, Oct 2012, mutual Funds in India-Issues, Opportunities and Challenges,

Asia pacific journal of Marketing & Management Review, Vol 1, No.2 , PP 01-10.

http://www.icicigroupcompanies.com

http://www.icicisecurities.com

http://www.assetmanagement.hsbc.com/in/mutual-funds/learning-centre/investor-

progrm/mutual_fund.html

http://www.mutualfundindia.com

http://www.icicigroupcompanies.com/history.html

68 | P a g e

ANNEXURE

SAMPLE QUESTIONNAIRE

I am conducting a small research on the above topic. The information provided will be kept

confidential and will be used solely for academic research. Your response is highly appreciated.

Name: ________________ Age: _________________

Gender: Male Female Occupation: ___________

Q 1. Have you invested in any of the following in the last 12 months?


Insurance Corporate FD Debenture/ bonds

PPF Others None

Q2. What is your preferred mode of investment?

Online Offline

Q3. Have you invested in any of the following through ICICI Direct.com in the last 12 months?


Insurance Debenture/ bonds None

Q4. Are you aware that you can invest in mutual funds through ICICI direct.com?

Yes NO

Q5 what are the reasons for not investing in mutual funds through ICICI direct.com?

I need assistance to invest in Mutual Fund through ICICI direct.com

I need more knowledge on Mutual Fund before I invest.

I am not interested as I invest through other brokers/agents.

I do not invest in Mutual Fund.

69 | P a g e

Q6. Which of the following online transactions have you done in the past?

I buy movie tickets online

I buy flight tickets online

I book hotels online.

I use online banking

I do not do any online transactions.

Q7. How often do you transact online in the above mentioned transaction?

Monthly Quarterly

Once in 6 months Once in a year

Q8. Which medium of news information and analysis do you use to keep yourself updated on

investment products?


I use financial websites for comparisons and news

I have a financial advisor/ broker/ Mutual Fund distributor who provides me the

information.



Q9. How do you check the performance of all/any of your investment?

I update investment details on a third party portfolio website and check regularly.

I ask my financial advisor/ broker/ Mutual Fund distributor to send me the information.


Others____________________

70 | P a g e

Q10. Would you consider switching your investment relationship to ICICIdirect.com?

Yes No

Q11. Which of the following site features do you find useful at ICICI direct site?





Others

Q12. Any suggestions/ recommendations-

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

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