investors beheaviour

8/12/2019 investors beheaviour

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SUMMER TR INING REPORTON

BEH VIOUR OF INVESTORS TOW RDS INVESTMENT(MUTUAL FUND )

ADITYA BIRLA MONEY

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FORTHE POST GRADUATE DEGREE OF MASTER OF FINANCE CONTROL

(MFC)Prepared by

Bikash (1106284006)

UNDER THE GUIDANCE OF

INTERNAL GUIDE EXTERNAL GUIDE

Mr .Sandhadarshan Das Mr. SANDEEP DAS MOHAPATRA

Professor, in finance Branch Manager

Arya School of Management Aditya BirlaMoney

& IT BBSR.

ARYA SCHOOL OF MANAGEMENT & IT

BHUBANESWAR 2012


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Contents..

Subjects. Sl. number

Declaction 1

Acknowledgement 2

Executive summary3

Introduction 4

Company profile 5

Riview of literature 6

Objective of study 7

Concept of mutul fund 8

Research Methodology 9

Data collection 10

Suggestion 11

Conclusion

Bibilography

Questionnires

12

13

14

Declaration


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I hereby declare that the Project work done by me is an original work

and the matter embodied here is prepared solely for the purpose of

submission of the summer internship report as a part of the partial

fulfillment of the MFC curriculum under UTKAL UNIVERCITY.

Date.

Place.

Bikash jena

Reg.no.- MF110807

ACKNOWLEDGEMENTENT


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I express my heartfelt in debebtdness & my deep snce &

gratitude to our Director Dr.Manmath kumar Nayak & our

academic advisor mr.manash ranjan pattanaik for trusting

&supporting us & giving an opportunity & a plat form toshow our performance

I am heart fully indebted & express my special sence of

gratitude to my faculty guide Mr. sandhaya darshan Das,Arya

School opf management & It for his valuable suggestions

constant inspiration complit this study also express my depe

sance of gratitude & hart felt thank to my external/industryguide mr.Sandip Das mahapatra (B.M of Aditya birla Money

mart Ltd.)&Mr.Satyabratya prusty for their emmense support

,valuable time kind co-operation which helped me to

complete my study & gain some knowledge about the

financial market & its environment.

Bikash Jena


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CERTIFICAT

This is to certify that Bikash Jena student of Arya school of management & IT

BBSR has completed her field work report at Aditya Birla money Ltd. on the topic

of Behaviour of invstorst to wards investment and has submitted the field work

report in partial fulfillment of MFC of the UTKAL UNIVERCITYfor the academic

year 2011-13

He has worked under our guidance and direction. The said report is based on

bonafide information.

Mr. Sandhya darsha66n Das

Prof. finance,ASMIT


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EXECUTIVESUMMARY

Indian mutual fund industry now represents perhaps the most

appropriate investmentopportunity for most investors. As financial markets becomemore sophisticated and complex, investors need a financial intermediary who provides the

required knowledge and professional expertise on successful investing. There are various

choices available to the investor of today. One however needs to invest carefully, and work

out various investment options and decide on how to make best of the investment in terms of

monetary benefits.

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.

A mutual fund uses the money collected from investors to buy those assets which are

specifically permitted by its stated investment objective. Thus, an equity fund would buy

mainly equity assets- ordinary shares, preference share, warrants etc. It is these assets which

are owned by the investors in the same proportion as their contribution bears to the total

contributions of all investors put together.

Since each owner is a part owner of a mutual fund, it is necessary to establish the

value of his part. In other words, each share or unit that an investor holds needs to be

assigned a value. Since the units held by an investor evidence the ownership of the funds

assets, the value of the total assets of the fund when divided by the total number of units

issued by the mutual fund gives us the value of one unit. This is generally called the Net

Asset Value of one unit or one share. The value of an investors part ownership is this

determined by the NAV of the number of units held.

The author conducted the study as part of summer training at Aditya Birla Money

Mart Ltd. of Bhubaneswar, which is a financial institution dealing with every type of

financial instrument. Its headquarter is in Chennai and it has 850 sub broking branches and

more than 400000 customer all over the country.

In India we are having lack of awareness about financial instruments offered by different

Asset Management Co.s (AMC). Here people generally use to invest in insurance because

they dont have faith on other financial products.

They are having less knowledge about equity, mutual fund, commodities etc. So we

have to create awareness among rural people and young generations of our country.

Investment by these people may generate more and more capital for the industries by which

industries growth may increase. It will also give more and more return to the customers and

in overall total per capita income will increase which will lead to the growth of country. Now

a days financial institutions are giving wrong suggestions to their client just for the sake of

more and more income. So, AMCs should give right suggestions to the customers by which

they will not get exploited.


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INTRODUCTION

In this competitive world to sustain every business need a sound number of customers andtheir support. Now also there are some areas where people are not aware of investment.

Those who are investing by the influence of others they also dont know about their benefits

and different procedures. People in this era also believe in govt. investments but not in

private ones. For example people are much interested in LIC but not in Reliance or Birla

insurances. So it needs guidance and also they need some basic knowledge about different

type of investments.

In Bhubaneswar I try to find the financial behavior of people those who are already

investing in different sectors. In which type of investment people are interested weather is it

Mutual Fund or Insurance. What is the expectation of investor from the investment? Is thereany relationship between the income and the return they are expecting? This research is

mainly dealing with Mutual fund.


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OBJECTIVES OF THE STUDY

To study The Demographic Profile of People at Bhubaneswar. To know the customers investment pattern.(Life insurance & Mutual fund)

To study the different sectors in which they want to invest.

To know customer income range and the return they expect from mutual fundinvestment.


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RESEARCH METHODOLOGY

Investment in mutual fund is not a one-time activity. It is a continuous activity. The same

investor, if satisfied, will come to the fund again and again. When the investor sends his

application, it is not only an application, but it also contains vital information. Most of this

information if tabulated and analyzed would provide important insights into investor needs,

preferences and behavior and enables us to target customers need more accurately, to achieve

better penetration, deeper loyalty and reduced costs. It is in this context that direct marketing

will assume increased importance. Knowing the customer thoroughly is of utmost

importance. Unlike the consumer goods industry, it is not possible for mutual fund industry to

test market and have pilot projects before launch. At the same time, focusing and

concentrating on a particular geographic area where the fund has a strong presence and

proven marketing network, can help reduce network, can help reduce issue expenses and

ultimately translate into higher returns for the investor. Very little research on investor

preference is available, but the industry can collectively have a data bank, and share theinformation for appropriate use.

This study on Mutual funds in India has been based on primary as well as secondary data

sources.

Primary data:It has been collected from individual the region with thehelp of questionnaire.

The primary data is collected by the getting the questionnaire filled from thecommon investor above the age of 22.

For this research, I have made use of a questionnaire for ascertaining the investment pattern

of a common investor.

The questionnaire consisted of 8 questions in total, each question having various multiple

choices. Depending upon the choice selected by the respondent, each respondent gets a total

score which represents his degree of favorability towards the kind of investment he makes

and his knowledge about the Investments.

The main aim of conducting the survey using a questionnaire was to understand the

perception of small investors, who are the most exploited in Indian capital Market, analyzethe type of funds available for the investor, and understand the investment pattern of a

common investor, importance of marketing Strategies in mutual funds.

This was done by ascertaining the average response of all the samples for the total 8

questions asked in the questionnaire. The results for the 10 questions asked were further

graphically represented, showing the favorability towards different parameters.

The secondaryresources used in the study are:

Books or Magazine Articles Internet Websites


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COMPANY PROFILE

Aditya Birla Money Mart Ltd, formally known as Apollo Sindhoori Capital Investment Ltd is

a leading player in broking space. The company is principally engaged in the business of

stock broking and related activities. They have one subsidiarycompany, namely Apollo

Sindhoori Commodities Trading Ltd. The company offers services such as, trading facility in

equity segment on and derivative segment in NSE & BSE through a single screen; trading

facility in commodity segment, including bullion, oils, gaur seed etc. through their subsidiary;

depository Participant services of NSDL and CDSL at major locations; Online bidding for

IPO and distribution of mutual fund. The company is headquartered in Chennai. They are

having a strong distribution network of over 221 own and 687 franchisee branches, a large

customer base in excess of 175000 and a scalable business model based on a strong

technology backbone and a wide product mix. Aditya Birla Money Ltd, a part of Aditya BirlaFinancial Services Group was incorporated in the year 1995 as Apollo Sindhoori Capital

Investment Ltd. Earlier, the company was promoted by Prathap C Reddy, Chairman of

Apollo Hospitals Group. In March 2009, the company became a part of Aditya Birla Group,

when the group acquired 76% of the company. The company commenced their operations in

Chennai in the year 1996. They spent their initial time in establishing and consolidating their

presence throughout South India. Until 2001, they established their presence in 13 locations

throughout the South India. Within four years, they established their presence in over 350

locations all over the country. During the year 2004-05, the company added 106 new offices

all over the country. Their subsidiary Apollo Sindhoori Commodities Trading Ltd startedtheir expansion through the branches of the company and during the year, the subsidiary was

operating from 100 locations. During the year 2005-06, the company added 120 new offices

and the client base rose to 77000 from around 45000 of previous year. During the year 2006-

07, they added 71 sub-broker offices and 51 branches and the number of customers has gone

up by 22780. During the year 2007-08, the company added 237 offices and the client base

stands at over 159000 recording an impressive growth of 49% from around 107000 of

previous year. During the period, the number of offices has correspondingly gone up from

561 to 798 and the number of own branches growing from 168 to 197. The companys

subsidiary, Apollo Sindhoori Commodities Trading Ltd introduced Systematic Gold Saving

Scheme for Purchase of gold by investors through Commodity Exchange. The scheme was

initially launched in Tamilnadu and latter the scheme was launched all over India. During the

year 2008-09, the company added 43 new branches including 18 offices placed in the

premises of Birla Sun Life Distribution Ltd. The active sub-broker offices rose from 539 to

580 during the year. In August 28, 2008, the company entered into share purchase Agreement

with Aditya Birla Nuvo Ltd for sale of 56% equity shares of the company. Pursuant to this

agreement, Aditya Birla Nuvo Ltd made an open offer for purchase of 20% equity shares of

the company, which was completed on February 24,, 2009. As result, the company became a

subsidiary of Aditya Birla Nuvo Ltd with effect from March 6, 2009. The company changed

their name from Apollo Sindhoori Capital Investments Ltd to Aditya Birla Money Ltd witheffect from August 3, 2009.


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REVIEW OF LITERATURE

A brief history of Mutual Funds in India:

The origin of mutual fund industry in India is with the introduction of

the concept of mutual fund by UTI in the year 1963. Through the growth was slow, but it

accelerated from the year 1987 when non-UTI players entered the industry.

In the past decade, Indian mutual fund industry had seen dramatic improvement, both

qualities wise as well as quantity wise. Before, the monopoly of the market had seen an

ending phase; the Assets under Management (AUM) were Rs.670bn. The private sector entry

to the fund family raised the AUM to Rs.470bn in March 1993 and till April 2004; it reached

the height of 1540bn. Putting the AUM of the Indian Mutual Fund Industry into comparison,

the total of it is less than the deposits of SBI alone, constitute less than 11% of the total

deposits held by the Indian banking Industry.

The main reason of its poor growth is the mutual fund industry in India is new in the country.

Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is

the prime responsibility of all mutual fund companies, to market the product correctly abreast

of selling.

The mutual fund industry can be broadly put into four phases according to the development

of the sector. Each phase is briefly described as under.

First Phase 1964-87:- Unit trust of India (UTI) was established on 1963 by an Act of

Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory

and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the

RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and

administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme

1964. At the end of 1988 UTI had Rs.6700 crores of assets under management.

Second Phase-1987-1993(Entry of Public Sector Funds):- Entry of non-UTI

mutual funds. SBI Mutual Fund was the first followed by Canada bank Mutual Fund(Dec 87),

Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund(Nov 89), Bank of

India(Jun 90), Bank of Baroda Mutual Fund(Oct 92). LIC in 1989 and GIC in 1990. The end

of 1993 marked Rs.47004 as assets under management.

Third Phase-1993-2003(Entry of Private Sector Funds):- With the entry of

private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the

Indian investors a wider choice of fund families. Also, 1993 was the year in which the first

Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to

be registered and governed. The erstwhile Kothari Pioneer(now merged with Franklin

Templeton) was the first private sector mutual fund registered in July 1993.


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The 1993 SEBI(Mutual Fund) Regulations were substituted by a more comprehensive and

revised Mutual Fund Regulations in 1996. The Industry now functions under the

SEBI(Mutual Fund) Regulations 1996.

The number of Mutual Fund houses went on increasing, with many foreign mutual funds

setting up funds in India and also the Industry has witnessed several mergers and

acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of

Rs.121805 crores. The Unit Trust of India with Rs. 44541 crores of assets under management

was way ahead of other mutual funds.

Fourth Phase-Since February 2003:- This phase had bitter experience for UTI. It

was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust

of India with AUM of Rs. 29835 crores(as on January 2003). The specified Undertaking of

unit trust of india, functioning under an administrator and under the rules framed by

Government of India and does not come under the purview of the Mutual Fund Regulations.The second is the UTI Mutual Fund Ltd, Sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBIA and functions under the Mutual Fund Regulations. With the

bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76000 crores of

AUM and with the up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund

Regulations, and with recent mergers taking place among different private sector funds, the

mutual fund industry has entered its current phase of consolidation and growth.


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Performance of Mutual Funds in India

Let us start the discussion of the performance of mutual funds in India from the day the

concept of mutual fund took birth in India. The year was 1963. Unit Trust of India invited

investors or rather to those who believed in savings, to park their money in UTI Mutual Fund.

For 30 year it goaled without a single second player. Though the 1988 year saw some new

mutual fund companies, but UTI remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to

satisfactory level. People rarely understood, and of course investing was out of question. But

yes, some 24 million shareholders were accustomed with guaranteed high returns by the

beginning of liberalization of the industry in 1992. This expectation of investors touched the

sky in profitability factor after the liberalization.

The Assets under Management of UTI was Rs.67bn. by the end of 1987. Let me concentrateabout the performance of mutual funds in India through figures. From Rs.67bn. the Assets

under Management rose to Rs. 470bn. In March 1993 and the figure had a three times higher

performance by April 2004. It rose as high as Rs.1540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started falling

in the year 1992. Those days, the market regulations did not allow portfolio shifts into

alternative investments. There were rather no choices apart from holding the cash or to

further continue investing in shares. One more thing to be noted, since only closed-end funds

were floated in the market, the investors disinvested by selling at a loss in the secondary

market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market

scandal, the losses by disinvestments and of course the lack of transparent rules in the

whereabouts rocked confidence among the investors. Partly owing to a relatively weak stock

market performance, mutual funds have not yet recovered, with funds trading at an average

discount of 1020 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and competitive

environment in mutual funds. Some of them were like relaxing investment restrictions into

the market, introduction of open-ended funds, and paving the gateway for mutual funds to

lunch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving. The

more the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and

higher profitability within a short span of time, more and more people will be inclined to

invest until and unless they are fully educated with the dos and donts of mutual funds.


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CONCEPT OF MUTUAL FUND

Mutual fund is a professionally managed collective investment scheme where a

number of investors pool their money and this money is turn invested in

different instruments

including equity,

government bonds,commodities, debtmarket etc. Theinvestors invest the money in various types of schemes brought by the AMCs or

Asset Management Companies who in turn invest this money in various

instrument to give the best possible returns of investment to the investor.

Structure of Mutual Funds:- In India the mutual funds are regulated by the

guidelines of SEBI or Securities and Exchange Board of India. AMFI or Association

Sponsor

Unit

Saving

AMC

Trus

Investmen

Returns


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of Mutual Funds in India also sets some rules governing the mutual fund companies

in India. The structure of mutual fund is as shown below.

A. Sponsor:Sponsor of the Mutual Fund is the promoter of the Mutual Fund. Itestablishes the Mutual Fund and registers the same with SEBI. The sponsor can be abank like SBI, PNB ICICI etc, a financial institution like Fidelity, Franklin Templeton

etc. According to SEBI regulation the sponsor must have a 5 year experience in the

financial services market and should have been profitable for at least 3 years. This is

done to ensure that the fund is promoted by an experienced entity with which the

public will have faith in handling their money. The sponsor appoints the AMC,

trustees and the custodians with prior approval of SEBI. It also contributes at least

40% of the net worth of the AMC.

B.Trust:

According to SEBI regulation the Mutual Funds in India is a trust established

under the Indian Trust Act 1982. The trust is managed by a board of trustees or by a

trustee company. There are at least 4 members in the board of trustees and 2/3rdof the

board is independent. The trustees hold the unit holders money in a fiduciary capacity.

The trustees also appoint the AMC in consultation with the sponsor and according to

the SEBI regulation.

C. AMCs:The Asset Management companies are the public face of the Mutual Fund.They are appointed by the sponsors and the trust under the guidelines of SEBI. The

AMC should have the net worth of minimum Rs10crore. Half of the members of the

board of the AMC should be independent. It researches the best investment options to

put the money in so that the investors get the maximum return on their investment.

There is a fund manager and his team which carries out the research. The AMC floats

a number of schemes for the investors to invest their money based on their investment

objectives and risk appetite. These varied schemes help attract the public to the

company. Some of the AMCs in India are reliance Mutual Fund, HDFC Bank Mutual

fund, ICICI Prudential Mutual Fund etc.

D. Registrar:The registrar processes the applications and records the details of theinvestors. They process the dividend Payouts to the investors and send information to

them. Thus they maintain the backend operations of the Mutual Fund.

Trust

Custodian AMC Registrar

Structure of Mutual Fund


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E. Custodian:It is the guardian of the funds and the assets of the investor. It isappointed by the board of trustees and is responsible for the securities held in the

Mutual Funds portfolio. It is also regulated by the SEBI.

Classification of Funds:-Mutual Fund can be classified in a variety of ways. In this

report the classification of Mutual Fund on basis of structure, investment objectives and

scheme wise classification will be discussed. The types of mutual funds can be as depicted in

figure.

Types of Mutual Funds

Structure: The most basic classification of the Mutual Funds is on the structure of the

fund. This classification is based on the premise whether the fund is an Open Ended or a

Close Ended Fund.

ELSSEquity

Fixed

Term Plan

Debt

BalancedClose

Ended

SIPMoneyMarket

Types of Mutual Funds

Structure InvestmentScheme

Wise

Open

ended


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A. Open Ended Fund: An open ended Mutual Fund is a Fund where in the investorcan invest at any point of time and for any duration that he or she wants. The investors

can buy or sell the units of the fund at NAV related prices at any point of time directly

from the fund. The open ended fund is not traded at the stock market and is redeemed

at the NAV. The number of outstanding units of the fund changes everyday based onthe NAV of the fund on the particular day. The minimum subscription amount for the

fund is Rs. 50 Crore. The amount subscribed is redeemed if the minimum subscription

amount is not reached by the fund. The corpus of the Open Ended Scheme changes

every day and the unit capital is not fixed.

B. Close Ended Fund:A Close Ended Fund is a fund where in an investor can investonly during a fixed period of time. This investment is for a fixed duration as specified

in the offer document of the fund. The close ended funds are listed in the stock

exchange. If an investor wishes to invest in the fund after the time period of the fund

he will have to buy the units of the fund from the stock market. The prices at which

the units are sold or redeemed depend in the market prices which are linked to the

NAV. The number of units of the and the unit capital remains unchanged in case of a

Close Ended Fund. The minimum subscription amount of the fund is Rs.20 Crore.

The amount subscribed is redeemed if the minimum subscription amount is not

reached by the fund.

Investment Objective:A Mutual Fund can also be classified based on the

investment objectives of the fund. These investment objectives are based on the risk

appetite of the investors and the returns that they expect from the funds. The

classification based on the investment objectives of the fund is whether the fund

invests in Equity Market, Debt Market or the Money Market.

A. Equity Funds:The Equity Funds are those funds which invest primarily in theEquity Market. The money of the investors is invested in the shares of the various

companies. These companies are chosen based on the objectives of the fund as

stated in the offer documents. Thus they can be large-cap or mid-cap companies

or they can be companies in a particular sector of the economy like infrastructure

or power. Some funds which are index funds may invest in companies which form

the part of the index the fund considers as a base for example the B.S.E. 30 or

Nifty 50 etc. The equity funds usually have growth and dividend options. In

growth option the customer is not given any dividend but in the dividend option

the customer has the choice of either getting the dividend or reinvesting it in the

shares of the companies. The equity funds are characterized by high risk and high

returns. Over a period of 5-7 years equity funds give a CAGR of more than 18-

20% and they generally outperform the share market. These returns are one of the

highest returns generated by the various investment instruments. Equity based

Mutual Funds outperform the stock market mainly because the fund managers not

only invest in the stocks of major companies in the stock market but also in the

stocks of smaller companies also which are likely to give good returns.

B. Debt Funds:The debt funds are those funds that invest primarily in the debtmarket. These funds invest in the government securities and corporate bonds.


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Within debt funds there are a lot of type of funds depending on which instruments

they invest in. Some of the funds invest in AAA and AA commercial papers.

Others like Gilt funds invest only in the government securities. The level of risk

and returns in the case of Debt Funds depend on the instruments that the funds

have invested in but are overall less risky then equity based funs. At the same timethese funds cant match the level of returns that are generated by the equity based

funds. These are recommended for people with no fixed level of earnings and a

low risk appetite like retirees who want a source of investment for their savings

but dont want to involve in the vagaries of the stock market.

C. Balanced Funds: These funds are a combination of Equity funds and Debtfunds with some portion of the fund invested in the share market while other is

invested in the government securities and corporate bonds. They offer the best of

both Equity and Debt funds as they have manageable amount of risks and also

give good returns. Some funds like the ICICI Prudential Target Returns Fund

invest initially in the Equity market and then after getting the profit invest the

same in the Debt Market thus giving the investors best of both worlds.

D. Money Market:The Money Market or Liquid funds are those funds which areinvested in the short term or money market. These are invested in the instrument

with maturity period of less than 1 year like treasury bills, commercial papers,

certificates of debt etc. The investment portfolio is very liquid and enables the

investor to hold their investments for very liquid and enables the investors to hold

their investments for very short horizons of a day or more. These funds have zero

risk and they also give good returns to their investors. They are mainly offered to

people who have excess money to invest over a short period of time only.

Scheme Wise:Mutual Funds can also be classified based on the various types

of the schemes that are offered to the public. These schemes help the public in

managing their investments based in the investment objectives of the different

investors. The flexibility of Mutual Funds. Some of the major types of scheme

available to the investors are described below.

A. ELSS:The ELSS or Equity Linked Saving Scheme is a very popular schemeof Mutual Fund for the purpose of tax saving. As the name suggest the Mutual

Fund under ELSS invests at least 90% of the fund in the stock market. The

fund usually has a 3 year lock in period. It can be an open ended or a close

ended fund. Investments made under ELSS are used to save tax. Under the

section 80c of income tax investment of up to Rs.1 Lac in ELSS is tax

deductible. The dividends earned under this scheme are also tax free. The

investors also benefit in terms of the long term capital gain taxation. Thus

financial planners strongly advise their clients to invest in this fund during tax

planning.

B. Fixed Term Plan: (FTP) or Fixed Term Plan schemes are special schemesof Mutual Funds. These are short term close ended schemes. The AMCs issuea fixed number of units for each series only once and then the issue is closed


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after the initial offering period. These units are not listed in the stock market.

FTPs are generally offered in money market funds. They can be considered as

an alternative to investing in the corporate deposits or bank deposits as they

give a higher rate of return.

C.SIP: SIP one of the best schemes of Mutual Funds is considered to be SIP orSystematic Investment Plan. The basic fund of SIP is to encourage the people

to invest a small amount in a regular basis. Under SIP one can invest as little

as Rs. 100 per month in mutual funds. This regular investment over a large

period of time gives fantastic returns to the individuals. The major reason for

high returns of SIP investments as compared to others is the concept of Rupee

Cost Averaging. When the market is booming the value of the units bought by

the investors have increased while in the bearish market when the NAV of the

funds fall then the number ifunits allotted are more. The value of these higher

numbers of units increases when the Bull Run begins again. Thus the

investors set to gain both when the market is up or down. This coupled with

the small amount needed to invest has led to SIP being one of the most

popular Mutual Fund schemes.

Advantage & Disadvantage of Mutual Funds

Advantages of mutual funds

Mutual funds have advantages compared to direct investing in individual securities. These

include:

Increased diversification Daily liquidity Professional investment management Ability to Participate in investments that may be available only to larger investors Service and convenience Government oversight Ease of comparison

Disadvantages of mutual funds

Mutual funds have disadvantages as well, which include

Fees Less control over timing of recognition of gains Less predictable income No opportunity to customize


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Why Invest in Mutual Funds?

If you are considering investing in stock market and are afraid of its some what

unpredictable fluctuations, you can definitely consider investing in mutual funds. Some of the

reasons that go strongly in favor of mutual funds are their lowest risk factors owing to

diversification of assets in to various sectors and scrip or instruments within. As with the risk,

the costs of unit share too are spread across making them affordable by almost any one. If

you are looking at open end funds you can always purchase them from the company at the

NAV minus some loads or expenses. The closed end funds give you the flexibility of

independent stocks while combining the best of the features of mutual funds.

Many people purchase mutual funds because they are a convenient and cost-effective method

of obtaining diversification and professional management. Because mutual funds holdanywhere from a few securities to several hundred, risk is spread out over a number of

investments. Additionally, mutual funds generally buy and sell securities in volume, which

allows investors to benefit from lower trading, management and research costs.

Thus a Mutual Fund is the most suitable investment for the common man as it offers an

opportunity to invest in a diversified, professionally managed basket of securities at a

relatively low cost. The flow chart below describes broadly the working of a mutual fund.

Investors pool theirmoney with a

Registered Mutual Fund

Returns arepassed back tothe investors

Generates Returns Mutual Fund-On the Pooled Fund Manager invests

Investments this amount with Securities

Mutual Fund


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Mutual funds can be either or both of Open ended and closed ended investment companies

depending on their fund management pattern. An open-end fund offers to sell its shares(units)

continuously to investors either in retail or in bulk without a limit on the number as opposed

to a closed-end fund. Closed end funds have limited number of shares.

Mutual funds have diversified investments spread in calculated proportions amongst

securities of various economic sectors. Mutual funds get their earnings in two ways. First is

the most organic way, which is the dividend they get on the securities they hold. Second is by

the redemption of their shares by investors will be at a discount to the current NAVs (net

asset values).

Tips To Do Mutual Fund Analysis

It is needless to say that you need to have some rudimentary knowledge of investing instocks and securities apart from street smartness to research mutual funds. Here are a few tips

for analysis before investing mutual funds. We will begin our exercise from the point you

have collected all the relevant information about competing funds.

Look At The Portfolio of Your Pick of Funds

Most of the plans will have invested in multiple stocks or securities for diversification.

Critical point here is in what proportion they have invested in different stocks. Giving ahigher weight age to a high returning stock leaves less opportunity for broader allocation and

may back fire when market is bearish(plummeting steadily), Also higher returning stocks

carry high element of risk.

The ptimum Portfolio SizeWhat should be the optimum portfolio size(assortment investments under one plan) for your

pick of fund? Well, opinions are divided about this, but it is crucial to look into the specifics

of stock bets and sectors you will be exposed to. Higher exposure to specific sectors may see

you loosing out on broad based rallies in the bourses (stock markets). Optimally 65% to 85%may be allocated in stocks from different sectors for diversification plus growth and the

balance being in typical bond and money market instruments.


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GRAPHICAL

REPRESENTATION OF DATA

(Sample Size:100)

1. What is your occupation?(TABLE-1.1)

Service 48%

Business 47%

Others 5%


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As from the above graph we can conclude that 47% of business people and 48%

service people are interested in investment. And the others that 5% are retired

persons, house wife.

2. What is your income level? (TABLA-1.2)

3,00,000 44%

48%

47%

5%

0%

Chart Title

service Business Others


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Those person who have income less than 1,00,000 per year are not interested in different type

of investment because that income is not sufficient for them. Only 12%, who have income

1,00,000-1,50,000 are interested in investment. Mainly those who have greater income they

only interested to invested to invest. As shown in the graph 44% of people whose income is

quite greater they interest in investing.

3. Have you ever invested in your money in any sector ?(TABLE-1.3)

0%

12%

44%

44%

Chart Title

3,00,000

YES 80%

NO 20%


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Only 80% people are invest his money in the different sector, because they are income level

is high but other 20% people are not invest his money, because they are income level is low.

4. Why are you interested to invest money?(TABLE-1.4)

YES

80%

NO

20%

0% 0%

Chart Title

To be rich 51%

To make plans for after retirement 17%

To meet future needs 28%

Others 4%


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Every one want to earn money thats why they are investing. But 17% people go for

investment for their retirement, so that they can safe their future.

5. Which type of investment are you interested?(TABLE-1.5)

To be ri

Mutual Fund 33%

Equity 8%

Bank saving 17%

Insurance 42%


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As show in the graph 33% people prefer Mutual Fund, and mainly People go for insurance, it

may be any private or LIC. So many people have insurance of LIC. Many people go for

mutual fund and also insurance. Only17% interested in savings.

(TABL-1.6)

Reliance 40%

TATA 17%

SBI 15%


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People mainly prefer long term return so they are mainly interested for open-ended scheme.

6. Are you satisfied with the returns you are getting from Investment?(TABLE-1.7)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Reliance TATA SBI ICICI Others

MUTUAL FUNDS

MUTUAL FUNDS

ICICI 18%

Others 10%


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As people of Bhubaneswar are much aware of investment, so they dont know about the time

of redemption so that they will not have much loss.

7. What is the return generally you expect from mutual fund?(TABLE-1.8)

30%

18%

40%

12%

Chart TitleYes No So SO Can't Say

Yes 30%

No 18%

So So 40%

Can't Say 12%


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People are not satisfied with the return, they get from the fixed deposit thats why they go for

mutual fund, So more than 50% of people expect more than 50% return.

8. How do you describe your investment decision? (TABLE-1.9)

0%

10%

20%

30%

40%

Chat Title

More than Fixed Deposit 15%-20% 20%-30% 30%-50% More than 50%

More than Fixed Deposit 0

15%-20% 10%

20%-30% 20%

30%-50% 30%

More than 50% 40%


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According to people their decision making quality are average not so perfect. Thats why

they afraid of investment in stock market.

9. Which investment advisory company are you dealing with? (TABLE-2.1)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Very good Good Not so bad Bad

Chart Title

Chart Title

Very good 18%

Good 33%

Not so bad 46%

Bad 3%


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In Bhubaneswar, Reliance, Anagram are competitors but in this research 40% of investors

prefer Birla sun life.

10.Why you choose this company as your investment advisory company?(TABLE-2.2)

25%

40%

24%

11%

Chart Title

Reliance Birla Sun life Anagram Others

Reliance 15%

Birla Sun life 40%

Anagram 16%

Others 29%


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As every companys main strong point is its relation with customers so people like their

service of their stock broking hours.

78%

19%

3%

Chart Title

Better service peovider Procedures are less time taking Others

Better service provider 78%

Procedures are less time taking 19%

Others 3%


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FINDINGS

In Bhubaneswar some people are not much aware of different type of investment,mainly about mutual fund and somehow people know about other investment but they

totally blind about commodity market.

People are investing money in different area, but they have not getting exact rate ofreturn against their investment.

People feel that mutual fund is unsafe in this era, because they have suffered somekind of fraud by the different companies.Minimum 50-65 percentage people are investing their money in insurance sector; still

they have believe the insurance sector is save for them and earn high rate of return

against their investment.


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SUGG TION


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SUGGETION

In Bhubaneswar people are not much aware of different type of investmentmainly about mutual fund. A Customer awareness programmed is required so

that more people should attract towards mutual funds. People should know how to see the stock values in news papers. And also they

should know how to trade. Actually they need a guide. People invest in mutual

funds but they dont know how to analyze that and different strategies. So they

need guidance.

In Bhubaneswar somehow people know about other investment but theytotally blind about commodity market so it need an awareness regarding

commodity exchange.

There should be a minimum return guarantee expected from mutual funds sothat it will not be regarded as unsafe investment, actually mutual fundinvestment are subject to market risk. So if the market is not performed well

then the total amount of investment may become zero. But as people are

invested their hard earned money in this and due to market risk if their capital

invested becomes zero then nobody will go for it. So if the AMC can provide

any financial support incase of heavy loss or can compensate it within a

stipulated time period then the consumer can easily go for investment in

mutual fund. The loss may not be fully recovered but if some percentage of

loss is compensated then people dont thought it as unsecured investment.

If all the AMC go for less investment SIP then the small investors can easilyavailed the mutual fund schemes- Like Reliance and ICICI mutual fund if

every AMC go for SIP like Rs.100 and Rs.50 P.M then it is easy for the small

investors to invest in mutual funds. Here it can be noted that small investors

are basically targeted as students, small businessman etc. They can also able to

earn from it by investing a very less amount. Now days in the modern business

ear investment of Rs.100 P.M are not a very big issue.

There should be a minimum return guarantee expected from mutual funds sothat it will not be regarded as unsafe investment- actually mutual fund

investment are subject to market risk. So if the market is not performed well

then the total amount of investment may become zero. But as people are

invested their hard earned money in this and due to market risk if their capital

invested becomes zero then nobody will go for it. So if the AMC can provide

any financial support incase heavy loss or can compensate it within a

stipulated time period then the consumer can easily go for investment in

mutual fund. The loss may not be fully recovered but if some percentage of

loss is compensated then people dont thought it as unsecured investment.

Also there are some cases where investors face some problem. People investin some sectors but due to lack of time or lack of knowledge they cant able to

make any decisions regarding that. So companies should take some steps toguide them.


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Conclusion


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Conclusion

From the analysis part we can conclude that the average age of people interested in investing

their money is 39. 74. Because this is main part of life to earn and they require a lot of money

for their life. So they interested to invest. But in Bhubaneswar much people are not aware ofinvestment that means they know about insurance but not properly aware of mutual fund.

If we compare mutual fund and stock trading then people believe stock trading has much risk

as compared to mutual fund so they go for mutual fund rather than stock market. If we look

the research then 33% people invest in mutual fund, and 42% invest in insurance and more

people invest in both mutual fund and insurance. But only 8% invest in equity and 17% in

Banking saving. This shows that as in mutual fund they should not have to decide to invest in

which stock so they go for mutual fund but in stock trading they have to choose their stocks.

Those people who invest in mutual fund, they mainly prefer open ended scheme. But now a

days people mainly prefer SIP(Systematic Investment Planning) because it will minimize the

risk as well as it reduces the burden of payment for the investor.

From customer satisfaction point of view 30% people are satisfied with the return and 40%

are average. Most of people are not aware of the methods for observing mutual fund so theyare making losses. So they should know when to redeem the fund.


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BIBLIOGRAPHY

Websites:

www.amfiindia.com www.moneycntrol.com www.indiainfoline.com www.google.com www.nse-india.com www.adityabirlamony.com http:/en.wikipedia.org/wiki/Mutual fund
http://www.amfiindia.com/http://www.amfiindia.com/http://www.moneycntrol.com/http://www.moneycntrol.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.google.com/http://www.google.com/http://www.nse-india.com/http://www.nse-india.com/http://www.adityabirlamony.com/http://www.adityabirlamony.com/http://www.adityabirlamony.com/http://www.nse-india.com/http://www.google.com/http://www.indiainfoline.com/http://www.moneycntrol.com/http://www.amfiindia.com/


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QUSTIONNAIRES ANALYSIS

NAME:

AGE: SEX:

1. What is your occupation?a. Service b. Business c.Others

2. What is your income level?a. Less than 1,00,000

b. 1,00,000-1,50,000c. 1,50,000 - 3,00,000d. more than 3,00,000

3. Have you ever invested in your money in any sector ?a. Yes b. No

4. If yes, In which sector have you invest?a. Post officeb.Fixed deposit c. Insuranced. Mutual fund

5. Why are you interested to invest money?a. To be richb. To make plans for after retirement c. To meet future needsd. Others6. In which type of investment you are interested?a. Mutual Fund b.Equity c. Future & Options d. Insurance7. If Mutual Fund

Which Mutual fund do you hold?

a. Reliance b.TATA c. SBI d.ICICI e. Any other please specify.

8. Which type of mutual fund are you holding?a. Open ended b. Close ended c. Interval scheme

9. Are you satisfied with the returns you are getting from mutual fund?a. Yes b. No c. So- So d. Cant say


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10.What is the return generally you expect from mutual fund?a. More than Fixed Deposit

b. 15%-20%

c. 20%-30%d. 30%-50%e. More than 50%

11.How do you describe your investment decision?a. Very good b.Good c. Not so bad d. Bad

12.Which investment advisory company are you dealing with?a. Birla sun life

b. Reliancec. Bajaj Capitald. Others please specify..

13.Why you choose this company as your investment advisory company?a. Better service provider

b. Procedures are less time takingc. Any other please specify

investors beheaviour

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