thesis - final report
TRANSCRIPT
THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT
Chennai
“EFFECTIVE INVESTOR’S’s STRATEGIES TO IMPROVE POSITIVE PERCEPTION TOWARDS MUTUAL FUND SCHEMES”
In partial fulfillment of the requirement for the award of the degree inMasters in Business Administration
Submitted by
V.SINDUJAPGP/SS/08-10/Finance
Thesis ID: SS810/01382/MKTUnder the esteemed guidance of
Mr. BOOVARAGAN MAMANDUR KIDAMBI(Senior Executive - Finance, Wipro Technologies)
Abstract
1
The marketing tactics has its own plays wherever it is implemented and on whatsoever situations.
The word Tactics has its distinguished meaning in it, which works on all the fields upon its right usage
patterns by the marketers. The formation of a brand has an elaborate processes integral with it. Creating
a brand is easy but making it in the top of the mind of the consumer is the real task to get achieved. Once
a brand has formed and acquired its position it is very important to hold the same position till the end of
the saturation stage where it is succeeded by a new generation brand or an extension, gradually killing
the older brand. This is a general concept of brand cycle.
The project is done in “Effective Investor’s Strategies to Improve Positive Perception towards
Mutual Fund Schemes”. The study is also known as the future market of mutual fund. The research
design used was descriptive research since it is helpful in knowing the proportion of the people in the
given population behaved in a particular manner.
The tool used for the collection of the data was through questionnaire. The researcher chose
150 samples with the help of the area sampling method in order to present the information in an
understandable way the researcher has used various statistical tools like percentage analysis, chi –
square and weighted average.
This study shows how the Investor’s are investing their income in the different avenues with
risk appetite. The major findings the researcher found is that Investor’s expect the financial advisor
for making investments. The company should create awareness about the mutual funds to other
people too.
To Whom It May Concern
2
This is to certify that Ms. V.Sinduja of The Indian Institute of Planning and Management,
Chennai had successfully completed her thesis work under my guidance for the topic “Effective
Investor’s Strategies to Improve Positive Perception towards Mutual Fund Schemes”. I’m also certifying
that the thesis is complete and its objective accomplished. I wish her all the best for her career and her
life.
Yours truly, Boovaragan Mamandur KidambiChennai28/03/2011
Thesis Approval Letter
3
THESIS TOPIC APPROVAL (Marketing)
PGP/SS/08-10
Dear SINDUJA,
I have received your synopsis as well as the confirmation that Mr.Boovaragan Mamandur Kidambi, Senior Executive - Finance, Wipro Technologies, would guide you through the thesis. This letter is a formal approval of the topic proposed by you “EFFECTIVE INVESTOR’s STRATEGIES TO IMPROVE POSITIVE PERCEPTION TOWARDS MUTUAL FUND SCHEMES"
Please go ahead with the thesis. However, remember to focus on primary research based on an elaborate research methodology taking into account an overall sample size of approximately 100 + samples, spanning various sample segment groups, using appropriate sampling techniques.
Your Thesis Id is SS810/01382/MKT, since this is your unique identification number you are advised to quote this id for any future correspondence.
Remember that all theses need to be submitted, within 3 months after the completion of 5th trimester, as per the guidelines. I would like to inform you that for any late submission of the thesis beyond the last date, the institute reserves the right to impose a fine, as applicable for the batch. As per the last notification, late thesis submission fines are as follows:- The penalty for all ex-students up to 06-08 batch is Rs. 5000. For 07-09 batch it is Rs.1000.
Furthermore, you are required to send me at least 6 Thesis Guidance Response Sheets in all. Please ensure to send one response sheet for each interaction that you would have with your External Guide during the course of the Thesis, say, once a week / 10 days. The format of Response sheet is attached herewith.
Kindly also go through the attached guidelines for Thesis Viva Voce.
Kindly revert for any further clarifications.
Regards,
Bharath Kumar S P
Head Team Manager -Events & Academics
IIPM
Level 4, IIPM Tower, 145, Marshall's Road
Egmore, Chennai - 600 008, T.N. (India)
4
Ph: 91-44-30276827(Direct)
Mobile: +919884260757
Fax: 91-44-28416226
E-mail:[email protected]
Website: www.iipm.edu
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Thesis Guide Approval
5
Subject: confirming project guidanceWednesday, 5 January, 2011 5:45:44 AM
From: Boovaragan MK <[email protected]>To: sindhu du <[email protected]>Sent: Wed, 5 January, 2011 5:45:44 AMSubject: Thesis Synopsis & Approval Letter.
Dear Sindhuja,
With reference to your mail I hereby accord my approval for assisting you as an external guide in your thesis work titled " Effective Investor’s Strategies to Improve Positive Perception towards Mutual Fund Schemes " Wishing you all the best. RegardsM.K.BoovaraganSenior Executive - Finance, Wipro Technologies
Acknowledgement
6
First of all, I thank God the Almighty, who has been guiding me and being with me all through
these days. Along with Him I like to thank my parents and my friends, without their encouragement and
support, I would not have accomplished this Research project.
The thesis has given me an opportunity to understand and exercise the marketing dynamics in
Investor’s Perception towards Mutual Fund Schemes. The research conducted is part of Thesis at the
Indian Institute of Planning and Management, Chennai.
I take this as an opportunity to thank my guide Mr.Boovaragan Mamandur Kidambi, Senior
Executive - Finance, Wipro Technologies. For his timely help in both knowledge and the guidance to
complete this work. My sincere thanks to you Sir.
I also thank through my heart our respected Professor R. Krishnan- Dean and our professors for
their advice and assistance. My thanks are also due to my Investor’s without whom my research would
have not taken the present shape..
Table of Contents
CHAPTER TITLE PAGE NO:
7
IAbstract
To Whom It May Concern
Thesis Approval Letter
Thesis Guide Approval
Acknowledgement
02
03
05
06
07
II INTRODUCTION
1.1 Out Line of the Project
1.2 Need / Importance
1.3 Scope of the Study
12
15
16
III 2.1 Research Methodology
2.2 Limitation of the Study
2.3 Chapterisation
18
23
24
IV 3.1 Literature Review 25
V 4.1 Industry Profile/ Company Profile
4.2 Product Profile
30
32
VI 5.1 DATA ANALYSIS AND INTERPRETATION
5.1.1 Table Percentage Analysis
5.1.2 Figure
5.2 STATISTICAL TOOLS
35
36
68
69
VII 6.1 SUMMARY AND CONCLUSION
6.1.1 Findings 6.1.2 Suggestions 6.1.3 Conclusion
ANNEXURE
6.1.4 Bibliography
74 78
79
80
8
VIII
7.2 Questionnaire for quantitative research 81
IX
7.3 Response sheets
7.3.1 Thesis Response sheet: 1
7.3.2 Thesis Response sheet: 2
7.3.3 Thesis Response sheet: 3
7.3.4 Thesis Response sheet: 4
7.3.5 Thesis Response sheet: 5
7.3.6 Thesis Response sheet: 6 81
8485
86
87
88
89
LIST OF TABLES
TABLE NO: PARTICULARS PAGE NO:
9
5.1. 1 Nature of the Investor’s 35
5.1. 2 Age of the Investor’s 365.1. 3 Nature of the Employment 375.1. 4 Income level of the Investor’s 385.1. 5 Choice of Investment Avenues 395.1. 6 Investments in Mutual Funds 405.1. 6a1 Mode of Investment 415.1. 6a2 Risk Level 425.1. 6a3 Allocation of Annual Income 435.1. 6a4 Factors for Investments 445.1. 6a5 Types of Investments 455.1. 6a6 Preference for investments 475.1. 6a7 Types of Schemes 495.1. 6a8 Factors for Selecting open ended scheme 505.1. 6a9 Factors for Selecting Close ended scheme 515.1. 6a10 Schemes of option to invest 52
5.1. 6a11 Rate of Expected return 545.1. 6a12 Time Frame 585.1. 6a13 Types of Risks 595.1. 6a14 Opinion to Invest in mutual funds 605.1. 6a15 Choice of Plans 615.1. 6a16 Source of information 625.1. 6a17 Intermediaries in investments 635.1. 6a18 Post purchase view 645.1. 6a19 Finance knowledge level 655.1. 6a20 Satisfaction level 665.1. 6b1 Opinion about to investment 675.1. 6b2 Awareness about mutual funds 685.1. 6b3 Post purchase view 695.1. 6b4 Reaction after investments 705.1. 6b5 Preference to join 715.1. 7 Weighted Average for Objectives of Investment 72
5.1. 8 Weighted Average for Ranking the Funds 735.1. 9 Relationship between annual income and savings 745.1. 10 Correlation between annual income and risk level 755.1. 11 Correlation between risk level and expected returns 76
LIST OF FIGURES
TABLE NO: PARTICULARS PAGE NO:5.1. 1 Nature of the Investor’s 35
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5.1. 2 Age of the Investor’s 365.1. 3 Nature of the Employment 375.1. 4 Income level of the Investor’s 385.1. 5 Choice of Investment Avenues 395.1. 6 Investments in Mutual Funds 405.1. 6a1 Mode of Investment 415.1. 6a2 Risk Level 425.1. 6a3 Allocation of Annual Income 435.1. 6a4 Factors for Investments 445.1. 6a5 Types of Investments 455.1. 6a6 Preference for investments 465.1. 6a7A Equity Investor’s Preference 47 5.1. 6a7B Debt Investor’s Preference 485.1. 6a7C Balanced Investor’s Preference 495.1. 6a8 Factors for Selecting open ended scheme 505.1. 6a9 Factors for Selecting Close ended scheme 515.1. 6a10A Equity Investor’s Option 525.1. 6a10B Debt Investor’s Option 535.1. 6a10C Balanced Investor’s Option 545.1. 6a11A Equity Investor’s Expected Returns 555.1. 6a11B Debt Investor’s Expected Returns 565.1. 6a11C Balanced Investor’s Expected Returns 575.1. 6a12 Time Frame 585.1. 6a13 Types of Risks 595.1. 6a14 Opinion to Invest in mutual funds 605.1. 6a15 Choice of Plans 615.1. 6a16 Source of information 625.1. 6a17 Intermediaries in investments 635.1. 6a18 Post purchase view 615.1. 6a19 Finance knowledge level 655.1. 6a20 Satisfaction level 665.1. 6b1 Opinion about to investment 675.1. 6b2 Awareness about mutual funds 685.1. 6b3 Post purchase view 695.1. 6b4 Reaction after investments 705.1. 6b5 Preference to join 71
CHAPTER – I
INTRODUCTION
OUT LINE OF THE PROJECT:
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Mutual fund industry has made their road in the financial market with more schemes for the
benefit of the Investor’s to invest their savings. A trust that pools the amount from the different
Investor’s, that huge amount in invested in different securities like shares, debentures etc. Trusts
agree to distribute the profit earned through that fund, in an Investor’s investments ratio basis.
A mutual fund is a professionally managed investment company that combines the money of
many people, who have no contact with each other. Mutual funds are conceived as institution for
providing small Investor’s with the avenues of investments in the capital market. They generate
returns from them and pass it back to the Investor’s in the form of dividends, capital appreciation or
a combination of both.
In mutual fund two type of scheme is available open – ended and close – ended, in open
ended Investor’s can easily buy and sell their funds at any time but in closed ended Investor’s can
buy only at the time of new fund offer or sell after the lock – in period of the funds.
In mutual fund there are three options for Investor’s are growth, dividend and dividend
reinvestment for their investments. This study was conducted to know about the Investor’s
perception toward mutual fund.
With the help of risk level one can determine we can determine the returns.
Here, this study helps to give an idea as to how to reach the new Investor’s without losing
existing Investor’s .
Statistical tools like chi – square is used too calculate the relationship between the Investor’s
annual income and the allocation of amount from the income or saving for investments.
MUTUAL FUND
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Payment of Return Collection of Small / Income Savings
Deposits/Savings Deployment of Savings
IMPORTANCE OF THE STUDY
DEPOSITING PUBLIC
MUTUAL FUND COMPANY
OpenEnded
CloseEnded
IncomeFund
GrowthFund
BondFund
SectoralFund
GlittFund
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INCOME AND CAPITAL GAINS GENERATION
This study was conducted on the “INVESTOR’S PERCEPTION ON MUTUAL FUND
SCHEMES” With special reference to Stock Broking Ltd, Chennai. In order to know about the
Investor’s perception towards mutual Fund schemes.
Stock Broking Ltd.., is one of the leading service agency, has been successfully
operating in all over India, providing a wide range of services to its Investor’s in respect of
investments in different avenues.
This study helps to know the Investor’s choice of investments in the mutual fund
schemes from their income level.
This study is also helps to know about how the Investor’s taking risks in their
investments – mutual funds.
This study was undertaken with the objective of helping the company to design new
approach to suit the retail Investor’s.
2.2 SCOPE OF THE STUDY
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. The study covers the mutual fund Investor’s of Chennai.
The research gives an understanding of the Investor’s perception on mutual fund schemes.
The study will help the Stock Broking Ltd to reach Investor’s in better way by their services.
The study helps to know about the objectives of investments.
The study helps to make awareness about the mutual funds for Investor’s.
OBJECTIVES OF THE STUDY
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PRIMARY OBJECTIVES:
To study the Investor’s perception in mutual fund schemes
To study the factors that influences the Investor’s choice of mutual fund schemes.
SECONDARY OBJECTIVES:
To study the mutual fund investments objective among Investor’s.
To study the risk appetite of the Investor’s.
To study the returns expected from the investments.
To study either Investor’s needs regular information about mutual funds for investments from
the stock broking Ltd.
RESEARCH METHODOLOGY
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Research in common parlance refers to a search for knowledge. One can also define research
as a scientific and systematic search for pertinent information on a specific topic. In fact, research is
an art of scientific investigation.
Research is a process of systematic study
Research is in depth study about the particular problem.
Research is for any particular topic.
Research is the search of knowledge
Research is a movement from known to unknown.
Research can be called as voyage of discovery.
Research has to proceed systematically in the already planned direction with the help of a number
of step in sequence. To make the research systemized the researcher has to adopt certain methods.
The method adopted by the researcher for completing the project is called Research Methodology.
Data becomes information only when a proper methodology is adopted. Thus we say
methodology is a tool, which process the data to reliable information. The present chapter attempt to
highlight the Research Methodology adopted by this project.
DEFINITION
According to D. Slesinger and M.Stephenson in the encyclopedia of social sciences defines
research as “ The manipulation of things, concepts or symbols for the purpose of generalizing to
extent, correct or verify knowledge aids construction of theory or in the practice of an art.
RESEARCH DESIGN:
The formidable problem that follows the task of defining the research problem is the
preparation of the design of the research project, popularly known as the Research Design. A
research design is the arrangement of conditions for collection for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure.
A research is purely and simply the framework and plan for the study that guides the
collection and analysis of data. It is a blue print that is followed in completing a study.
TYPES OF RESEARCH DESIGN
1. Exploratory research design
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2. Descriptive research design
3. Experimental research design
DESCRIPTIVE AND DIAGNOSTIC RESEARCH DESIGN
The researcher has to decide which type of data is useful for the study and accordingly has to
select any one or both the method for data collection.
Descriptive research design is concerned with the research studies with a focus on the
characteristics of a particular individual, or group whereas diagnostic research design determine the
frequency with which something occurs or it is associated are examples of diagnostic.
DATA COLLECTION METHOD
Data refers to information or facts. It is not only refers numerical figures but also includes
descriptive facts.
The method of data collection includes two types for the study, such as primary data and
secondary data.
PRIMARY DATA COLLECTION METHOD
Primary data is the data that is collected for the first time by the researcher. The primary data
are collected with specific set of objective to assess the current status of any variable studied.
Primary data is useful only particular period.
METHODS OF PRIMARY DATA COLLECTION
The main four methods used in primary data collection are:
a. Questionnaire
b. Schedule
c. Interview
d. Observation
QUESTIONNAIRE
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In this method, pre-printed list of questions arranged in a sequence which is used by the
researcher for collecting data. The questionnaire is filled by the Investor’s. The questionnaire is
considered as the heart of the survey.
SAMPLE DESIGN
A sample design is a definite plan for obtaining a sample from a given population. It refers to
the technique or the procedure that the researcher would adopt in selecting items for the sample.
Sample design may as well lay down the number of items to be including in the sample, i.e., the size
of the sample. Sample design is determined before data are collected. There are many sample designs
from which a researcher can choose.
Some designs are relatively more precise and easier too apply than others. Researcher must
select/prepare a sample design that should be reliable and appropriate for his research study.
UNIVERSE
All the items under consideration in any field of enquiry constitute a ‘universe’ or
‘population’ the term universe refers to the total items through which information can be gathered
from the population. In this population is infinity. It is pivotal point of research.
SAMPLE FRAME
The sample frame is the list of all sample units. It is the study of the researcher to frame the
samples for easy and best data collection. In this sample is 150, sizes are mainly decided on the basis
of the selection of the statistical tools. The selection of the appropriate sample size can be done by
statistical tool.
SAMPLE PROCEDURE
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Sampling is a procedure by which the Investor’s are selected. There are basically two types of
sampling methods are:
1. Probability sampling methods
2. Non- Probability sampling methods.
In this study area sampling method was adopted (probability sampling) the required number of
sample (sample size 150) was selected.
SAMPLING TECHNIQUE
In this we have used probability sampling. The term probability refers to the samples having
an equal chance of being selected. In this we have used area sampling.
The area sampling refers to the population being divided into various areas and samples are
collected from STATISTICAL TOOLS “By statistics we mean aggregates of facts to a marked
extend by multiplicity of causes, numerically expressed, and enumerated according to reasonable
standard of accuracy, collected in a systematic manner for a predetermined purpose and place in
relation to each other.”In this study the researcher is going to apply with percentage analysis, chi –
square, bar diagram and pie charts.
LIMITATIONS OF THE STUDY
The study has been conducted in a short span of three months, which was a limitation to the
project.
The sample size was restricted to 150 keeping in account the various constraints such as time,
cost and availability of Investor’s.
The Investor’s were reluctant to disclose their personal decisions on investments.
This study is conduct only with stock brokering clients so it is main limitation.
CHAPTERISATION
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The Report contains six chapter, which are arranged in a systematically order.
Chapter I
Includes the outline of the project both about the Topic and Company details, Need
of the study and Scope of the study.
Chapter II
Includes the Research Methodology and Limitation of the study.
Chapter III
Includes Literature Review.
Chapter IV
Includes the Company Profile and Product Profile.
Chapter V
Includes the Data analysis and Interpretation that is shown is the form of
Percentage Analysis and Figures.
Chapter VI
This is the final chapter of the project which contains Summary and Conclusions.
This summary and conclusion gives Findings of the study, suggestions are given and also
enclosed with the Conclusion.
Bibliography, Appendices and References are also attached.
CHAPTER - III
LITERATURE REVIEW
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PERCEPTION
“Perception is the process of selecting, organizing and interpreting attaining to events
happening in environment”
Perception is a mental process, whereby an individual selects data from the environment,
organizes it and then draws significances.
Perception is basically a cognitive or thinking process and an individual emotion, feelings
etc.., are based on his or her perception of their environment.
Perception is the process of seeing something selecting the necessary inputs organizing the
selected inputs and interpreting them.
STIMULI
PERCEPTION
INPUT
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MAJOR INFLUENCES ON THE PERCEPTION PROCESS
1. The characteristics of the Perceiver.
2. The characteristics of the Perceived.
3. The characteristics of the Situation.
Characteristics of the Perceiver
PERCEPTUAL THOUGHT INPUT
RECEIVING, SELECTING, ORGANISING,
INTERPRETING PERPCEPTUAL PROCESS
DECISION
ACTION
BEHAVIOUR
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The characteristics of the perceiver include such factors such as needs, values, experience and
attitudes. A persons needs, habits, impacts of past experience ethics and personality all influences the
perceptual process.
Characteristics of the Perceived
It may defy logic and objectivity but perception about others are influenced by their physical
characteristics such as appearance, facial expression, age, gender, manner of communication as well
as personality traits and other forms of behavior.
Characteristics of the Situation
Physical, social and organizational settings or event can also influences perception.
PERCEPTUAL ORGANISATION
Perceptual organization is a process by which we group outside stimuli into recognizable or
identifiable patterns and whole objects. Once the stimulus is received from the outside, the mental
process begins organizing the stimulus into meaningful and identifiable whole.
FIGURE GROUND
The figure ground principle simply means that we tend to be attentive to such perceived
objects that stand out as background.
PERCEPTUAL GROUPING
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Perceptual grouping identifies our tendency to group several individuals’ stimuli into a
meaningful and recognizable pattern. This tendency is very basic in nature and largely seems to be
inborn.
Factors:
Continuity
Closure
Proximity
Similarity
PERCEPTUAL SELECTIVITY
Perceptual selectivity refers to the tendency to select certain objects from the environment for
attention that these objects are consistent with our existing beliefs, values and needs.
EXTERNAL FACTORS
a. Size: The larger the size of the object, the more likely that it will be noticed. We are most
likely to notice things that stand out because of their size relative to other things in that area.
b. Intensity: Intensity refers to the brighter, louder and more colorful objects as compared to other
object around. If all the objects are very bright, then the intensity of brightness does not necessarily
activate our senses.
c. Contrast: If an object in some way contrasts with surroundings, it is more noticeable.
d. Repetition: A repeated message is more likely to be perceived than a single message. Work
instructions that are repeated tend to be received better.
e. Movement: Moving objects are more likely to be perceived than stationary object. Movement
increases our awareness of the object before we become aware of the stationary surrounding.
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f. Novelty & Familiarity: This principle states that either the familiar or the novel factor can serve
as the attention getter. Now objects in a familiar setting or familiar objects in a new setting will draw
attention.
g. Order: The order in which objects or stimuli are presented is an important factor in
influencing selective attention.
INTERNAL FACTORS
a. Learning: Learning is an important factor in developing perceptual sets. A perceptual set is
basically what a person expects from the stimuli on the basis of his learning and experience relative
to same or similar stimuli.
b. Motivation: Motivation also plays an important role in influencing the process of perception.
Similarly people who are motivated by a need for power will be more attentive to such relative
environment variables, which enhance power.
CHAPTER – IV
INDUSTRY PROFILE
The main components of capital market are securities market and financial intermediaries.
A formal capital market was present in our country from early 1900’s.But remained very inactive at
that time. The inactiveness of capital market has continued even after independence. The growth of
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capital market has acquired momentum only from mid eighties. Till then debt instruments were more
popular and the Investor’s have not shown much interest in direct investment. Besides the
Government’s policy towards promotion of capital market was also not much encouraging.
Concentration was given to the growth of agricultural sector. The plan for industry-centered growth
had been mainly encouraged only for eighties. During mid eighties the foreign collaboration policy
of the Government has inspired the industries towards the channel of growth and development. It has
been further strengthened by the liberation and privatization measures instituted by the Government
as a part of new economic policy. This coupled with the excellent performance of the private sector
has made the capital market more active.
The radical changes in the policies of the Government and the development of industrial
sector have attracted many Investor’s into the capital market. Investor’s satisfaction, motivation and
the promotion of investment cult among the Investor’s are given more emphasis. SEBI guidelines of
Investor’s protection, foreign equity participation and the permission of global issues etc. have given
further contributed towards the growth of our capital market. The growth of Indian economy, at
present is virtually depends upon the growth of the capital market.
The Indian capital market has made substantial progress during the post-independence
period. However, the amount of capital raised in the form of equity and preference shares and
debentures by the corporate sector has not been large over a number of years. There has been a
raising trend since 1975 but the increase was not all that large. The Indian capital market has grown
so sharply in the 80’s that the decade itself has been christened as a decade of the capital market.
More particularly, during the later part of the eighties, the primary and the secondary markets have
grown by leaps and bounds. It is evident from the fact that against an annual average amount of just
Rs.90 crores raised from the new issues market in the 70’s about Rs.27, 344 crores are being raised
during 1992-93.
The total capital issues of both the private and public sectors during the years ended 31st
March 1991, 1992 and 1993 were Rs.9,683 crores Rs.13,450 crores and Rs.Rs.27,344 crores
respectively. The number of public issues has also increased year by year and the total number of
public issues of securities for the years ending as on 31st March 1991, 1992 and 1993 aggregate to
335,572 and 1,036 respectively. All these issues were subscribed to by the individual and
institutional Investor’s, non-resident Indians, foreign institutional Investor’s and mutual funds, and
27
the public participation was overwhelming and the issues were always over subscribed a number of
times.
In tune with the growth in the new issues market during the eighties, the secondary
market also expanded fast during this period. The number of stock exchanges has increased from 8 in
1980 to total of 21 in 1993. The membership of the stock exchanges has also increased substantially
to around 3,000in 1993 from about 1,200 a decade ago. The listed companies of all stock exchanges
stood to above 6,500 in 1993, which were only 2,733 in 1980. The market capitalization has also
shown a substantial increase in the eighties. The volume of daily turnover of trade has also increased
more than ten-fold over the decade to Rs.250 crores in 1992.
On Bombay stock Exchange, the number of dealings per hour put through was as high as
40,000. The paid-up share capital of listed companies in 1980 was Rs.3, 143 crores, while in 1990;
the figure was more than Rs.12, 000 crores. The market value of the capital of these limited
companies stood at around Rs.3 lack crores in 1992.Besides, the number of joint stock companies at
work has increased significantly to 2, 75, 664 with the paid-up capital of Rs.90, 962.2 crores as on
31st March 1993, which was only 56, 493 with the paid-up capital of Rs.14, 607 crores up to 31st
March 1980.
Investor’s population has increased from 2 millions in 1980’s and reached beyond 10,000
and the number of stock exchanges are 21.In addition to these stock exchanges the NSEIL and
OTCEI have been set-up for solving the problem arising in out of the structural weaknesses of our
market and provide more transparency in deals and a nationwide network of trade.
PRODUCT PROFILE
MUTUAL FUNDS
Mutual fund is a Financial Service Organization that receives money from the share holders,
invests it, earns on it, attempts to make it grow and agrees to pay the shareholder cash on demand for
the current value of his investment.
28
A trust that pools the savings of Investor’s, who share a common financial goal, is known as
a ‘Mutual Fund’. The money thus collected is then invested in financial market instruments such as
shares, debentures and other securities like government paper, etc.
The income earned through these investments, and the capital appreciation realized by its unit
holders in proportion to the number of units owned by them.
SCHEMES
Operational Classification:
1. Open – ended Scheme:
When a fund is accepted and liquidated on a continuous basis by a mutual fund manager,
it is called a ‘Open – ended Scheme’. The fund manager buys and sells units constantly on demand
by the Investor’s. Under this scheme, the capitalization of the fund will constantly change, since it is
always open for the Investor’s to sell or buy their units.
2. Close – ended Scheme:
When units of a scheme are liquidated only after the expiry of a specified period, it is
known as a ‘Close – ended Scheme’. Such funds have fixed capitalization and remain as a corpus
with the mutual fund manager. Units of close – ended scheme are to be quoted, and therefore traded,
on the floors of a stock exchange in the secondary market.
3. Interval Scheme:
It is the kind of close – ended scheme with a peculiar feature that it remains open during a
particular part of the year for the benefits of Investor’s, either to off – load their holdings or to
undertake purchase of units at the NAV.
Return – based Classification:
Income Fund Scheme
Growth Fund Scheme
Conservative Fund Scheme
Investment – based Classification
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Equity Fund Scheme
Bond Fund Scheme
Balanced Fund Scheme
Sectoral Fund Scheme
Fund – of – fund Scheme
Leverage – Fund Scheme
Gilt Funds
Index – funds
Tax – Savings Schemes
Other Funds
Load Funds
No Load Funds
Offshore Mutual Funds
MMMF
TYPES OF MUTUAL FUND ASSET MANAGEMENT COMPANIES IN INDIA.
Alliance Capital AMC
BOB Mutual AMC
Benchmark AMC
Birla Sunlife AMC
Canbank AMC
Chola AMC
DSP Merrill Lynch AMC
Duetsche AMC
Escorts AMC
Fidelity AMC
Franklin Templeton AMC
GIC AMC
HDFC AMC
HSBC AMC
ING Vysya AMC
JM Financial AMC
Kotak Mahindra AMC
30
LIC AMC
Lotus India AMC
Morgan Stanley AMC
PRINCIPAL AMC
Prudential ICICI AMC
Reliance AMC
SBI AMC
Sahara AMC
Standard Chartered AMC
Sundaram AMC
Tata AMC
UTI AMC.
CHAPTER V
DATA ANALYSIS AND INTERPRETATION
TABLE: 5.1.1
NATURE OF INVESTOR’S
31
Gender No: of Investor’s
Male 113
Female 37
Total 150
FIGURE: 5.1.1
No: of Repondent
Male, 113
Female, 37
Male Female
INTERPRETATION:
From the above table 75.33% of the Investor’s were male and 24.67% of the
Investor’s were female of the sample size.
TABLE: 5.1.2
AGE OF INVESTOR’S
Age No: of Investor’s
<25 57
32
25-35 60
35-45 20
>45 13
Total 150
FIGURE: 5.1.2
5760
20
13
0
10
20
30
40
50
60
70
No: of Repondent
<25
25-35
35-45
>45
INTERPRETATION:
From the above table 38% of the Investor’s were below 25 years, 40% were between 25 -35 years,
13.33% were between 35 -45 years and 8.67% were above 45 years.
TABLE: 5.1.3
NATURE OF THE EMPLOYMENT
Profession No: of Investor’s
Business 6
Retired 1
33
Salaried 128
Others 15
Total 150
FIGURE: 5.1.3
61
128
15
0
20
40
60
80
100
120
140
No: of Repondent
Business
Retired
Salaried
others
INTERPRETATION:
From the above table 4% of the Investor’s were doing business, 0.06% were Retired ones,
85.34% were paid Salary peoples and 10% were others category like self employed.
TABLE: 5.1.4
INCOME LEVEL OF THE INVESTOR’S
Income level No: of Investor’s
<60000 12
60000-150000 80
34
150000-300000 41
>300000 17
Total 150
FIGURE: 5.1.4
12
80
41
17
0
10
20
30
40
50
60
70
80
90
No: of Repondent
<60000
60000-150000
150000-300000
>300000
INTERPRETATION:
From the above table, the Investor’s who’s Annual Income below 60000 is only 8%, most of
the people are between 60000 – 150000, 27.33% are between150000 – 300000, and 11.34% were
above 300000.
TABLE: 5.1.5
CHOICE OF INVESTMENT AVENUES OF THE INVESTOR’S
Investment Choices No: of Investor’s
Bank Deposits 97
Mutual Funds 47
35
Equity Markets 5
Fixed Deposits 1
Total 150
FIGURE: 5.1.5
97
47
51
0
20
40
60
80
100
120
No: of Repondent
Bank Deposits
Mutual Funds
Equity Markets
Fixed Deposits
INTERPRETATION:
From the above table, 64.67% of the Investor’s were prefers to invest in the Bank Deposits
which is low risk and returns when compared to other mode of investments, 31.33% in Mutual
Funds, 3.33% in Equity markets and 0.07% in fixed Deposits.
TABLE: 5.1.6
INVESTMENT IN MUTUAL FUNDS
Investment No: of Investor’s
Yes 90
No 60
36
FIGURE: 5.1.6
90, 60%
60, 40%
Yes No
INFERNCE:
From the above table 60% of the Investor’s were already invested in the mutual funds,
remaining 40% of the Investor’s were invested in some other investment avenues with low returns.
IF THE INVESTOR’S’S CHOICE IS YES, THE FOLLOWING TOPICS ARE ANALYSED.
TABLE: 5.1.6a1
Mode of Investment No: of Investor’s
Equity Fund 63
Debt Fund 2
Balanced Fund 25
37
FIGURE: 5.1.6a1
63
2
25
0
10
20
30
40
50
60
70
No: of Repondent
No: of Repondent 63 2 25
Equity Fund Debt Fund Balanced Fund
INTERPRETATION:
From the above table, 70% of the Investor’s were ready to take high risk by investing in
Equity funds, 2.22% was not in a position to take risk so they invested in Debt Funds and 27.78%
were to take risk and returns equally so they preferred to invest in Balanced Funds.
TABLE: 5.1.6a2
RISK LEVEL OF THE INVESTOR’S
Risk Level No: of Investor’s
<25% 35
25% - 50% 20
38
50% - 75% 21
>75% 14
FIGURE: 5.1.6a2
Risk Level
35
20 21
14
0
5
10
15
20
25
30
35
40
<25% 25% - 50% 50% - 75% >75%
INTERPRETATION:
From the above table, 23.33% of the Investor’s were willing to take only low risk which is
less than 25% on investments in mutual funds when compared to other investments, 13.33% are
ready to take risk between 25% - 50%, 14% were 50% - 75% and 9.34% are ready to take high risk
to earn more returns so they preferred 75% and above it.
TABLE: 5.1.6a3
ALLOCATION OF ANNUAL INCOME FOR INVESTMENT
Allocation No: of Investor’s
<10% 8
10% - 20% 50
39
20% - 30% 24
>30% 8
Total 90
FIGURE: 5.1.6a3
Allocation for investments
<10%9%
10% - 20%55%
20% - 30%27%
>30%9%
INTERPRETATION:
From the above table, only few people allocate their annual income for investing in the
mutual fund. Around 9% Investor’s are below 10%, 55% most of the Investor’s allocate 10% - 20%
of their income to invest in mutual funds, 27% were between 20% - 30%, and the few person only
allocating huge amount from their income for investment..
TABLE: 5.1.6a4
FACTORS FOR INVESTMENTS
Factors No: of Investor’s
Returns 50
40
Total Tax 22
Liquidity 3
All 15
Total 90
FIGURE: 5.1.6a4
Factors for investment
Returns56%Total Tax
24%
Liquidity3%
All17%
INTERPRETATION:
From the above, 56% of the Investor’s expects return from the investment, 24% to exit the
tax amount for their income, 3% were to buy and sell easily in the market to make profit and 17%
prefer all the factors for investment.
TABLE: 5.1.6a5
TYPE OF INVESTMENT IN MUTUAL FUNDS
Type No: of Investor’s
Adhoc 44
41
SIP 27
Both 19
Total 90
FIGURE: 5.1.6a5
Type of mutual funds
49%
30%
21%
Adhoc SIP Both
INTERPRETATION:
From the above, 48.89% of the persons are not investing in single fund they are investing in
multiple funds to avoid losses, 30% are investing their huge amount in single funds only and 21.11%
in the form of both.
TABLE: 5.1.6a6
PREFERNCE FOR INVESTING IN MUTUAL FUNDS
Preference No: of Investor’s
Normal 53
42
More than normal 24
Extreme 13
Others 0
Total 90
FIGURE: 5.1.6a6
Preference to invest
59%27%
14% 0%
Normal More than normal Extreme Others
INTERPRETATION:
Most of the Investor’s 58.89% preferred mutual funds to get normal returns, 26.67% for more
than normal returns than other bonds, securities etc, and 14.44% for extreme option or huge profit
from their investments.
TABLE: 5.1.6a7
SCHEME FOR INVESTMENT IN MUTUAL FUNDS
Type / Schemes Open – ended Close – ended Both Total
EQUITY FUND 43 2 18 63
DEBT FUND 2 - - 2
BALANCED FUND 18 2 5 25
TOTAL 63 4 23 90
43
FIGURE: 5.1.6a7A
EQUITY INVESTOR'S PREF
43
2
18
05
101520253035404550
OPEN CLOSE BOTH
EQUITY
INTERPRETATION:
From the above table, most of the Investor’s willing to invest in the open – ended due to easy
liquidity and it is open for buying and selling, 28% of the equity Investor’s preferred to invest in the
both type of scheme and only 3% were in closed ended scheme.
FIGURE: 5.1.6a7B
44
DEBT INVESTOR'S PREF
2
0 00
0.5
1
1.5
2
2.5
OPEN CLOSE BOTH
DEBT
INTERPRETATION:
From the above table it shows that all of the debt Investor’s preferred only open – ended
scheme for their investments in mutual funds.
FIGURE: 5.1.6a7C
INTERPRETATION:
From the above, it shows that most of the balanced Investor’s goes for the open ended
scheme for investments when compared to close ended, whereas 20% of the Investor’s preferred to
invest n the both scheme and 8% for closed ended funds.
BALANCED INVESTOR’S'S PREF
18
2
5
02468
101214161820
OPEN CLOSE BOTH
BALANCED
45
TABLE: 5.1.6a8
FACTORS FOR SELECTION OF OPEN – ENDED SCHEME
Factors No: of Investor’s
Easy Liquidity 42
Short – term 28
Performance 10
All 10
Total 90
FIGURE: 5.1.6a8
Factors for Open-ended
42
28
10 10
0
5
10
15
20
25
30
35
40
45
Easy Liquidity Short - term Performance All
No: of Respondents
INTERPRETATION:
From the above table, easy buying option and selling option available in open – ended
scheme so most of the Investor’s preferred to select liquidity option, 31.11% preferred for short
period to earn profits, 11.11% for performance and 11.11% prefer all three factors for their
investment in open ended scheme.
TABLE: 5.1.6a9
FACTORS FOR SELECTION OF CLOSED – ENDED SCHEME
46
Factors No: of Investor’s
Long – term 6
Charges 0
Performance 15
Return 6
Total 27
FIGURE: 5.1.6a9
Factors for closed ended
Long - term22%
charges0%
Performance56%
Return22%
INTERPRETATION:
From the above, 22% of the Investor’s preferred long –term factors for investing in closed
ended funds, 56% for performance and 22% for returns.
TABLE: 5.1.6a10
SCHEMES FOR INVESTMENT IN MUTUAL FUNDS
47
Type / Schemes Growth Dividend Dividend-
Reinvestment
Total
EQUITY FUND 16 36 11 63
DEBT FUND 1 - 1 2
BALANCED FUND 5 15 5 25
TOTAL 22 51 17 90
FIGURE: 5.1.6a10A
EQUITY INVESTOR'S PREF
16
36
11
0
5
10
15
20
25
30
35
40
GROWTH DIVIDEND REINVEST
EQUITY
INTERPRETATION:
Most of the equity Investor’s preferred dividend option in the mutual fund scheme to get their
regular income whenever AMC declares it, 25% of the Investor’s preferred growth option to get their
highest net asset value for future sales with the profit, and 17% were dividend reinvestment option to
increase their units in the mutual fund.
FIGURE: 5.1.6a10B
48
DEBT INVESTOR'S PREF
1
0
1
0
0.2
0.4
0.6
0.8
1
1.2
GROWTH DIVIDEND REINVEST
DEBT
INTERPRETATION:
From the table, 1% of the debt Investor’s preferred to invest their amount in the growth
option and reinvestment option, thus dividend option is not preferred by them.
FIGURE: 5.1.6a10C
BALANCED INVESTOR'S PREF
5
15
5
0
2
4
6
8
10
12
14
16
GROWTH DIVIDEND REINVEST
B
INTERPRETATION:
49
From the table, dividend option is preferred by the 60% of the balanced Investor’s to get the
regular returns from the scheme and option, 20% of the Investor’s preferred to growth option and
reinvestment option for their investments each.
TABLE: 5.1.6a11
RATE OF RETURN EXPECT FROM THE INVESTMENT
TYPE /
REUTRNS
<10% 10%-20% 20%-30% >30% TOTAL
EQUITY 4 29 25 5 63
DEBT - 2 - - 2
BALANCED - 17 8 - 25
TOTAL 4 48 33 5 90
FIGURE: 5.1.6a11A
EQUITY INVESTOR'S EXPECTED RETURN
<10%6%
10%-20%46%
20%-30%40%
>30%8%
INTERPRETATION:
50
Most of the Investor’s 46% are expected to get return between 10%-20% from their
investment in equity funds which is high risk and high returns, 40% of the Investor’s are preferring
to get medium return which is between 20%-30% and 8% were expected maximum return that is
above 30% from their investments.
FIGURE: 5.1.6a11B
DEBT INVESTOR'S EXPECTED RETURN
0%
100%
0%
0%
<10% 10%-20% 20%-30% >30%
INTERPRETATION:
From the above, all the debt Investor’s were expected to get 10% - 20% returns from their
investments in the mutual funds.
FIGURE: 5.1.6a11C
BALANCED INVESTOR'S EXPECTED RETURN
0%
68%
32%
0%
<10% 10%-20% 20%-30% >30%
51
INTERPRETATION:
From the above, 68% of the balanced Investor’s were expected to get the returns between
10% - 20% from their balanced investment which is combination of equity and debt. Rests of the
Investor’s were expected to get the maximum of 20% - 30% returns.
TABLE: 5.1.6a12
TIME FRAME
Period No: of Investor’s
1 - 2yrs 58
2 -3yrs 23
>3yrs 9
Total 90
FIGURE: 5.1.6a12
INTERPRETATION:
From the above, Investor’s around 58 can hold their funds for maximum period of 1 – 2
years, 25.56% for 2-3yrs and only10% were willing to hold their fund for long period like 3 years
and above.
Time Frame
58
23
9
0 10 20 30 40 50 60 70
1 - 2yrs
2 -3yrs
>3yrs
No: of Investor’s
52
TABLE: 5.1.6a13
TYPE OF RISK
Risk No: of Investor’s
Market risk 81
Interest risk 6
Financial risk 3
Total 90
FIGURE: 5.1.6a13
Type of Risks
90%
7% 3%
Market risk Interest risk Financial risk
INTERPRETATION:
From the above table, mutual fund risk is mainly subject to market risks so 90% of the
Investor’s accepts to take market risks, 7% for Interest risk, and 3% only person who has expert
knowledge level in funds can take financial risk here only 3% are belongs to this category.
53
TABLE: 5.1.6a14
OPINION FOR INVESTMENT IN MUTUAL FUND
Option No: of Investor’s
Past performance 10
Dividend payout 27
Risk appetite 1
Current performance 40
AMC 0
Fund portfolio 12
Total 90
FIGURE: 5.1.6a14
Opinion to invest
0
10
20
30
40
50
No: of Respondents
No: of Respondents 10 27 1 40 0 12
Past performa
Dividend payout
Risk appetite
Current performa
AMCFund
portfolio
INTERPRETATION:
From the above table, most of the Investor’s refer to the current performance while getting
into an investment here44.44% preferred to see current performance, 30% were looking what was the
dividend payout ration of the funds, 13.33% sees how their amounts are invested in the shares,
stocks, etc.
TABLE: 5.1.6a15
54
CHOICE OF PLANS
Plan No: of Investor’s
SIP 71
SWP 16
STP 3
Total 90
FIGURE: 5.1.6a15
Choice of plan
71
16
3
SIP SWP STP
INTERPRETATION:
From the above table, 78.89% of the Investor’s preferred to invest their amount in monthly
basis by SIP, whereas 17.78% are willing to withdraw his amount from the invested fund monthly
basis and 3.33% likes to transfer their amount from one fund to some other funds.
TABLE: 5.1.6a16
55
SOURCE OF INFORMATION ABOUT MUTUAL FUNDS
Source No: of Investor’s
Newspaper 35
Magazine 12
T.V 23
Agents 3
Friends & relatives 10
Others 7
Total 90
FIGURE: 5.1.6a16
Sources for information
35
12
23
3
107
0
5
10
15
20
25
30
35
40
Newspaper Magazine T.V Agents Friends &relatives
Others
No: of Respondents
INTERPRETATION:
Newspaper is the easiest way to convey the information, so most of the Investor’s’s choice is
Newspaper about the mutual funds information. 25.56% of the Investor’s got information through
visual effect in T.V. 13.33% through magazine which is weekly or monthly etc. 11.11% through
their closed ones like friends, relatives etc.
TABLE: 5.1.6a17
56
INTERMEDIARIES FOR INVESTMENTS
Mode No: of Investor’s
Brokers 62
Banks 2
Agents 24
Others 2
Total 90
FIGURE: 5.1.6a17
No: of Respondents
62
2
24
2
0
10
20
30
40
50
60
70
No: of Respondents 62 2 24 2
Brokers Banks Agents Others
INTERPRETATION:
From the above table, 68.89% of the Investor’s made their investment through brokers,
2.22% through banks, 26.67% through agents and 2.22% through others way for their investment in
mutual funds.
TABLE: 5.1.6a18
57
POST PURCHASE VIEW ON INVESTMENTS
Reaction No: of Investor’s
Not bothering 44
Satisfied 36
Worry 10
Total 90
FIGURE: 5.1.6a18
Post purchase view on investment
49%
40%
11%
Not bothering Satisfied Worry
INTERPRETATION:
From the above table, 49% of the Investor’s were not bothering about their investments in
mutual funds, 40% were satisfied with their investment and 11% were worry about their investment
in the mutual funds.
TABLE: 5.1.6a19
58
FINANCE KNOWLEDGE LEVEL ON INVESTMENT IN MUTUAL FUNDS
Level No: of Investor’s
Expert 2
Proficient 23
Average 55
Poor 10
Total 90
FIGURE: 5.1.6a19
INTERPRETATION:
From the above, 2% of the Investor’s were expert in the finance knowledge, 26% were
proficient, 61% were average in their level, and 11% were poor in investments on mutual funds.
TABLE: 5.1.6a20
KNOWLEDGE LEVEL
2%
26%
61%
11%
Expert Proficient Average Poor
59
SATISFACTION LEVEL OF THE SERVICES RENDERED BY STOCK BROKING LTD
Level No: of Investor’s
Highly satisfied 10
Satisfied 74
Not satisfied 6
Total 10
FIGURE: 5.1.6a20
Satisfaction level
11%
82%
7%
Highly satisfied Satisfied Not satisfied
INTERPRETATION:
From the above table, 82% of the Investor’s were satisfied with the services rendered by the
each stock broking Ltd, 11% were highly satisfied and 7% were not satisfied with their services.
IF THE INVESTOR’S’S CHOICE IS NO, THE FOLLOWING TOPICS ARE ANALYSED
TABLE: 5.1.6b1
60
OPINION ABOUT INVESTMENT IN MUTUAL FUNDS
Opinion No: of Investor’s
Yes 55
No 5
Total 60
FIGURE: 5.1.6b1
Opinion about investment
92%
8%
Yes No
INTERPRETATION:
From the above table 9/10th of the Investor’s out of 60 were preferred to invest in the mutual
funds to earn good returns and only 1/10th of the Investor’s were not preferred to invest in the mutual
funds.
TABLE: 5.1.6b2
61
AWARENESS ABOUT MUTUAL FUNDS
Factors No: of Investor’s
Risk level 3
Lack of information 55
Charges 2
Total 60
FIGURE: 5.1.6b2
Awareness about mutual funds
3
55
2
0
10
20
30
40
50
60
Risk level Lack of information Charges
No: of Respondents
INTERPRETATION:
From the above table, 5% of the Investor’s out of 60 were not in position to take risks in the
mutual fund due to high risk level, 91.67% were due to lack of information about the mutual funds
regarding their investments and 3.33% were due to charges on the funds.
TABLE: 5.1.6b3
62
POST PURCHASE VIEW ON OTHER INVETMENTS
Level No: of Investor’s
Expert 2
Proficient 23
Average 30
Poor 5
Total 60
FIGURE: 5.1.6b3
Knowledge level
2
23
30
5
0
5
10
15
20
25
30
35
No: of Respondents 2 23 30 5
Expert Proficient Average Poor
INTERPRETATION:
From the above table, 3.33% of the Investor’s were expert in their investment other than
mutual funds, 38.33% were proficient, 50% were average and 8.34% were poor in their investment
avenues.
TABLE: 5.1.6b4
63
REACTION ON INVESTMENT
Factors No: of Investor’s
Not bothering 44
Satisfied 12
Worry 4
Total 60
FIGURE: 5.1.6b4
44
12
4
0
10
20
30
40
50
Reaction on investments
No: of Respondents 44 12 4
Not bothering Satisfied Worry
INTERPRETATION:
From the above table, 73.33% of the Investor’s were not bothering about their investments,
20% were satisfied with their investments, and 6.67% were worry about their investments in the
different sectors.
TABLE: 5.1.6b5
64
PREFERENCE TO JOIN IN STOCK BROKING LTD
Choice No: of Investor’s
Yes 46
No 14
Total 60
FIGURE: 5.1.6b5
Preference to join
77%
23%
Yes No
INTERPRETATION:
From the above table, 77% of the Investor’s out of 60 were preferred to join with the stock
broking by their name and their services and 23% were not preferred to join.
65
CHAPTER – VI
FINDINGS:
It is observed that 75.33% of the Investor’s belong to male category and 24.67% of the
Investor’s are female.
It is observed that 38% of the Investor’s are below the age group 25 years, 40% are between
25-35 years, 13.33% are between 35-45 years and 8.67% are above the age of 45 years.
In occupation of the Investor’s 4% are business people, 0.06% is retired persons, 85.34% are
salaried persons and 10% are other category.
The Investor’s who’s Annual Income below 60000 is only 8%, most of the people are
between 60000 – 150000, 27.33% are between150000 – 300000, and 11.34% were above
300000.
In choice of investment avenues, 64.67% of the Investor’s preferred bank were not ready to
take risk in their investments so they go for bank deposits, 31.33% preferred to take risk to
get good returns from their investments, 3.33% were preferred to take high risk which yields
high returns or loss means equity markets and 0.07% are fixed deposits and bonds for their
investments.
60% of the Investor’s were already invested in the mutual funds; remaining 40% of the
Investor’s were invested in some other investment avenues with low returns.
If the Investor’s’s choice is YES, the following findings are calculated.
The Investor’s who invested in mutual funds, 70% of the Investor’s were invested in
Equity fund, which are high returns with high risk. 2.22% was Debt Funds which is that
they are not in position to take risks and to be safe in their investments and 27.78% were
invested in Balanced Funds, which means they are safe by investing equally in equity and
debt funds.
The risk level in mutual funds, 23.33% of the Investor’s were willing to take only low
risk which is less than 25% on investments in mutual funds when compared to other
investments, 13.33% are ready to take risk between 25% - 50%, 14% were 50% - 75% and
9.34% are ready to take high risk to earn more returns so they preferred 75% and above it.
Only few people allocate their annual income for investing in the mutual fund.
Around 9% Investor’s are below 10%, 55% most of the Investor’s allocate 10% - 20% of
66
their income to invest in mutual funds, 27% were between 20% - 30%, and the few person
only allocating huge amount from their income for investment..
56% of the Investor’s consider the return on investment factor before making
investments, 24% consider tax factor and 3% preferred liquidity and 17% of the Investor’s
preferred all three factors before making investments.
In survey 48.89% of the persons are not investing in single fund they are investing in
multiple funds to avoid losses, 30% are investing their huge amount in single funds only and
21.11% in the form of both
Most (58.89%) of the Investor’s preferred mutual fund investment for normal returns
which is normal risks and normal returns, 26.67% for more than normal returns they are
ready to take high risk, 14.44% for extreme returns from their investment.
Most of the Investor’s willing to buy and sell their funds only at open-ended scheme,
4.44% opted for Close – ended scheme due to lock-in period and 25.56% opted for both
schemes for investments.
Easy buying option and selling option available in open – ended scheme so most of
the Investor’s preferred for liquidity option, 31.11% preferred for short period to earn profits,
11.11% for performance and 11.11% prefer all three factors for their investment in open
ended scheme.
From the survey, 22% of the Investor’s preferred long term option in close –ended
scheme for their investment, 56% for performance and 22% for the returns.
Preference of option in the scheme, 24.44% chose growth option to increase their per
unit value, 56.67% for dividend option to get their returns at any time when company
declares and 18.89% preferred to invest their earned dividend again in the same funds or
some other funds.
The normal return expected from the investment scheme4.44% of the Investor’s
expects low return from their investment in the mutual funds, most of people expects medium
return when compared to other securities more than 50% between 10% - 20%, 36.67% were
between 20% - 30% and 5.56% only few expects high return than other securities i.e. above
30% from the investments.
Investor’s around 58% can hold their funds for maximum of 1 – 2 years, 25.56% for
2-3yrs and only10% were willing to hold their fund for long period like 3 years and above.
Mutual fund risk is mainly subject to market risks so 90% of the Investor’s were
accepted market risks, 7% for Interest risk, and 3% only person who has expert knowledge
level in funds can take financial risk here only 3% are belongs to this category.
67
Opinion of investment in mutual funds, most of the Investor’s refer to the current
performance while getting into investments here 44.44% preferred to current performance,
30% were looking what was the dividend payout ration of the funds, 13.33% sees how their
amounts are invested in the shares, stocks, etc.
78.89% of the Investor’s preferred to invest their amount in monthly basis by SIP,
whereas 17.78% are willing to withdraw his amount from the invested fund monthly basis
and 3.33% likes to transfer their amount from one fund to some other funds.
Source of information about mutual funds, Newspaper is the easiest way to convey
the information, so most of the Investor’s’s choice is Newspaper about the mutual funds
information. 25.56% of the Investor’s got information through visual effect in T.V. 13.33%
through magazine which is weekly or monthly etc. 11.11% through their closed ones like
friends, relatives etc.
It is observed that 68.89% of the Investor’s made their investments through brokers,
2.22% through banks, 26.67% through agents and 2.22% through others.
Satisfaction level for the services rendered by the individual stock broking, 11% of
the Investor’s are highly satisfied, 82% of the Investor’s are satisfied and only 7% are not
satisfied by the services.
It is observed that 49% of the Investor’s do not worry after making investments, 40%
are satisfied with their investments and 6.67% worry after making an investment in mutual
funds.
Majority of the Investor’s 61% are average in their finance knowledge level regarding
mutual funds, 26% are proficient, 2% are expert in the finance knowledge and 11% are below
average in finance knowledge.
If the Investor’s’s choice is NO, the following findings are calculated.
The majority of the Investor’s 92% say yes for investment in mutual funds, and 8%
says no for investments in mutual funds.
It is observed that 91.67% of the Investor’s were not willing to take risks in mutual
fund investments due to lack of information, 5% for risk level and 3.33% of the Investor’s for
charges in the funds.
The finance knowledge level of the Investor’s, majority of Investor’s 50% are
average, 38.33% are proficient, 3.33% are experts and 8.34% are poor in the knowledge level
regarding investments.
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The post purchase view on investment, 73.33% of the Investor’s does not worry after
making investment in other avenues, 20% are satisfied about their investments and 6.67% of
the Investor’s worry about their investments.
77% of the Investor’s are willing to join with the stock broking Ltd and 23% are not
willing to join.
The majority of the Investor’s preferred return on investment factor for objective of
investment in mutual funds and it is ranked as first. Tax is second factor weight as
3.98, third is safety with 3.82 as weight, and fourth is liquidity with 3.74 as weight.
From the chi – square calculation, there is a significance relationship between
Investor’s’s annual income and savings allocated for investments in mutual funds,
There is significant correlation between Investor’s’s annual income and Investor’s
risk level in the funds.
There is significant correlation between Investor’s’s risk level and return expected
from the investment.
SUGGESTIONS
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Most of the salaried people invested only in mutual funds, so we can approach to the business
people and self employed persons also to invest in mutual funds.
Many people do not much aware about the mutual fund investment, even not invested before.
So stock broking Ltd shall offer program and feature to create awareness about the mutual
funds.
Regular updates/feedbacks about the various schemes can be provided to the Investor’s to
maintain a good relationship.
The main factor affecting the choice of investments is returns and high risk. So we can
suggest the private employees, etc about the mutual fund and its schemes with their risks.
We can approach to the Investor’s with the performance of the funds, their dividend payout
details, its net asset value, plans available in it etc, fund portfolios, fund managers etc.
We can also approach to the Investor’s whose ages are below 30 for mutual fund investments
because only that age people can take risk in investments.
In survey 60 Investor’s were not invested in mutual funds, from that 73% of the Investor’s’
wont worry about their investments in other securities. So we can approach that type of
people also and giving the right information for investing in mutual funds.
CONCLUSION
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From the study one gathers that the mutual fund investments seem to be a popular investment
option. In the last few years, there has been a fundamental change in the household savings, and the
share of investments, as a percentage of the savings has gone up substantially. The number Investor’s
have increased to a great extent and the mutual fund industry is becoming extremely responsive by
launching different products to cater to diverse needs of the Investor’s. Investor’s have lot of option
in the mutual fund schemes.
Majority of the Investor’s prefer to invest in open – ended scheme and the satisfaction level of the
Investor’s is also high. Even it is observed most of the non Investor’s of mutual fund does not care
about their investment in other avenues, so we may approach them to invest in the mutual funds.
From this study the Investor’s preferences are known, which will help the company in launching new
products to the Investor’s.
ANNEXURE
71
BIBLIOGRAPHY
REFERENCES:
BOOKS:
Research methods for business
Uma Sekaran
John Wiley & Sons, Inc., Fourth Edition, 2003.
Investment Avenues and Portfolio Management
Prasanna Chandra.
Punithavathi pandiyan.
Organizational Behavior
Kathik
WEBSITES:
www.amfiindia.com
www.the-finopolis.com
www.equitymaster.com
QUESTIONNAIRE
“ EFFECTIVE INVESTOR’S STRATEGIES TO IMPROVE POSITIVE PERCEPTION TOWARDS MUTUAL FUND SCHEMES ”
72
1. Name :
2. Gender : ( ) Male ( ) Female
3. Age : ( ) <25 ( ) 25-35 ( ) 35-45 ( ) >45
4. Occupation : ( ) Business ( ) Retired ( ) Salaried ( ) Others
5. Annual Income : ( ) <60000 ( ) 60000-150000 ( ) 150000-300000
( ) >300000
6. Choice of investment avenues?
( ) Bank deposits ( ) Mutual Funds ( ) Equity market ( ) F.D. & Bonds
7. Have you invested in Mutual fund before?
( ) Yes ( ) No
If your choice is YES, answer the following questions.
A1. In which fund you have invested?
( ) Equity Fund ( ) Debt Fund ( ) Balanced Fund
A2. What is your risk level in the mutual fund investments?
( ) <25% ( ) 25% - 50% ( ) 50% - 75% ()>75%
A3. What percentage of amount have you allocated for investment from your annual
income?
( ) <10% ( ) 10% - 20% ( ) 20% - 30% ()>30%
A4. What are the factor do you consider before making investment?
( ) Return on investment ( ) Total tax ( ) Liquidity ( ) All
A5. Objectives for investing in mutual funds.
S.no Factors 5 4 3 2 1
1 Return on Investment
2 Tax Exemption
3 Liquidity
4 Risk diversification
5 Professional Management
6 Safety
7 Value Addition
A6. How do you invest your income in mutual funds?
( ) Adhoc funds ( ) SIP funds ( ) Both
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A7. Why do you select Mutual Funds for Investments?
( ) Normal Returns ( ) More then Normal ( ) Extreme ( ) Others
A8. Which type of mutual fund do you prefer?
( ) Open – ended ( ) Close – ended ()Both
A8.1. Why do you opt for Open – Ended scheme?
( ) Easy liquidity ( ) Short term investment ( ) Performance ( ) All
A8.2 Why do you opt for Close – Ended scheme?
( ) Long term ( ) Performance ( ) Returns
A9. What option do you prefer while investing in mutual fund scheme?
( ) Growth ( ) Dividend ( ) Dividend Reinvestment
A10. What is the normal rate of return do you expect from the scheme?
( ) <10% ( ) 10% - 20% ( ) 20% - 30% ()>30%
A11. What is the time frame you would prefer while investing in mutual funds?
( ) 1-2 yrs ( ) 2-3yrs ( )>3yrs
A12. Which type of risk would you like to appetite?
( ) Market risks ( ) Interest risk ( ) Financial risk
A13. What is the option preferred to invest in the mutual funds?
( ) Past performance ( ) Dividend payout ( ) Risk appetite
( ) Current performance ( ) A.M.C ( ) Fund portfolio
A14. Which plan would you like to join?
( ) Systematic investment plan ( ) Systematic withdrawal plan
( ) Systematic transfer plan
A15. What is the source of the information regarding mutual funds?
( ) Newspaper ( ) Magazine ( ) T.V. ( ) Agents
( ) Friends & relatives ( ) others
A16. How do you made your investment so far?
( ) Through brokers ( ) Through a Bank ( ) Through an Agent ()Others
A17. What is your finance knowledge level regarding mutual fund?
( ) Expert ( ) Proficient ( ) Average ( ) Below average
A18. What is your reaction after making investments in mutual funds?
( ) Not bothering ( ) Satified ( ) Worry about investment
A19. Rank any 5 mutual Fund companies in your opinion Fund
( ) HSBC Mutual Fund ( ) ICICI Mutual Fund
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( ) Reliance Mutual Fund ( ) SBI Mutual Fund
( ) Standard Chartered Mutual Fund ( ) Sundram Mutual Fund
( ) Tata Mutual Fund ( ) UTI Mutual Fund
If your choice is NO; answer the following questions
B1. Do you think Mutual fund is good choice for investments?
( ) Yes ( ) No
B2. Why don’t go for investments in mutual funds?
( ) Risk Level ( ) Lack of Information ( ) Charges
B3. What is your finance knowledge level regarding investment?
( ) Expert ( ) Proficient ( ) Average ( ) Below Average
B4. What is your reaction after making investments?
( ) Not bothering ( ) Satisfied ( ) Worry
B5. Would you like to join with Stock Broking Ltd?
( ) Yes ( )No
Response sheets
75
Thesis Response sheet: 1
1) Name: V.Sinduja
2) Thesis ID Number: SS810/01382/MKT
3) The Topic of the study: Effective Investor’s Strategies to Improve Positive Perception
towards Mutual Fund Schemes.
4) Date when the Guide was consulted: 10/ 02/ 2011
5) The outcome of the discussion:
The discussion that was carried out with my guide on 10-02-2011 was primarily based on the
literatures that are available in the text and the ways and means of interpretation of the same in the
project and the means of comparing the theories with respect to what is happening in the present. He
has also given some ideas on the preparation of questionnaire for the primary research that is
expected to be done for the project.
6) The Progress of the Thesis:
Analysis of the literatures that are collected regarding the topic and formation of questionnaire
for primary data collection.
Thesis Response sheet: 2
1) Name: V.Sinduja
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2) Thesis ID Number: SS810/01382/MKT
3) The Topic of the study: Effective Investor’s Strategies to Improve Positive Perception
towards Mutual Fund Schemes.
4) Date when the Guide was consulted: 26/ 02/ 2011
5) The outcome of the discussion:
Discussion was mainly based on structuring the questionnaire, along with the analysis of
general information collected so far on the mutual funds investments, schemes and products, etc. The
discussion was also carried out on how to proceed further.
6) The Progress of the Thesis:
The questionnaire is to be re structured thereby starting the interviews with the Investor’s as a part of
primary data collection
Thesis Response sheet: 3
1) Name: V.Sinduja
2) Thesis ID Number: SS810/01382/MKT
77
3) The Topic of the study: Effective Investor’s Strategies to Improve Positive Perception
towards Mutual Fund Schemes.
4) Date when the Guide was consulted: 01/ 03/ 2011
5) The outcome of the discussion:
The discussion was based on the further proceedings of the thesis. And also on the formulation
strategies such as segregating the target group, sampling styles, assembling and manipulating of
data’s for the interviews to be conducted for the thesis as a part of research analysis.
6) The Progress of the Thesis:
The responses from the samples will be collected and analyzed. Based on which the further research
analysis will be conducted to obtain the right solution.
78
Thesis Response sheet: 4
1) Name: V.Sinduja
2) Thesis ID Number: SS810/01382/MKT
3) The Topic of the study: Effective Investor’s Strategies to Improve Positive Perception
towards Mutual Fund Schemes.
4) Date when the Guide was consulted: 07/ 03/ 2011
5) The outcome of the discussion:
The discussion was mainly on the responses obtained from the target group and also on the
strategies to manipulate it accordingly to formulate the path lines there by overcoming the problem.
Formulations of commentaries and its design were discussed.
6) The Progress of the Thesis:
The responses are analyzed and scrutinized accordingly by which the report generation process has
started to mould up in shape. The analysis part is about in completion with necessary charts and
diagrams explaining the relevant situation more clearly.
79
Thesis Response sheet: 5
1) Name: V. Sinduja
2) Thesis ID Number: SS810/01382/MKT
3) The Topic of the study: Effective Investor’s Strategies to Improve Positive Perception
towards Mutual Fund Schemes.
4) Date when the Guide was consulted: 23/ 03/ 2011
5) The outcome of the discussion:
The report was formatted based on the report guidelines, the research part was completely
analyzed and Recommendations and conclusions were discussed.
6) The Progress of the Thesis:
Final draft has to be submitted to the guide by 25th Mach 2011. The final check is in the
process.
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Thesis Response sheet: 6
1) Name: V.Sinduja
2) Thesis ID Number: SS810/01382/MKT
3) The Topic of the study: “Effective Investor’s Strategies to Improve Positive Perception
towards Mutual Fund Schemes”.
5) The outcome of the discussion: 26/03/2011
The report was completely analyzed and Overall corrections in the report were discussed and made
accordingly. The final draft is thoroughly checked.
6) The Progress of the Thesis:
Guide has approved the final draft. The thesis is hence taken up for the final procedure of
submission.
81