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Project Report of Axis Mutual Fund by Kamal Sharma
Project Report of Axis Mutual Fund by Kamal Sharma
ON
CHANNEL MANAGEMENT OF
AXIS MUTUAL FUND
&
ANALYSING PREFERENCES OF THE INVESTORS
FOR INVESTMENT IN MUTUAL FUNDS
AT
AXIS ASSET MANAGEMENT COMPANY LTD.
JAIPUR
BY
KAMLESH SHARMA
Project Guide:
Faculty Guide: Ms. Aditi Gosain
Company Guide: Mr. Ashish Sharma (Sr. RM)
Date: 07-July-2012
Kamlesh Sharma
PGDM
(BA-1122)
ACKNOWLEDGEMENT
I put myself in humblest desk in order to give the same measure and recognition to all
those who have instrumental through out the entire process of carrying out this project
report. I would like to take this opportunity to acknowledge and thanks to Axis Asset
Management Company Ltd. Jaipur for providing me this highly coveted opportunity to
associate my summer internship project with the organisation of national repute.
I am very thankful to my faculty guide Ms. Aditi Gosain for constant support and
encouragement as well as the valuable guidance and direction. She has provided the
information to complete my project report.
My special thanks and heartiest gratitude flows to Mr. Devendra Saini (Regional
Manager), Mr. Sandesh joshi (Branch Manager), Mr. Ashish Sharma (Sr.
Relationship Manager), Mr. Vineet Mathur (Sr. Relationship Manager), Ms. Poorva
Jain (Investor service) Axis Mutual Fund, Jaipur. Their help in various capacities towards
making me familiar with the research problem and preparing the report is invaluable. Their
knowledge, nature and judgement along with their experience were an immense source of
inspiration in completing this project.
I was indeed an enriching experience for me as a management student for getting a chance
to do a project in an organization of international repute like AXIS AMC.
EXECUTIVE SUMMARY
In few years Mutual Fund has emerged as a tool for ensuring ones financial well being.
Mutual Funds have not only contributed to the India growth story but have also helped
families tap into the success of Indian Industry. As information and awareness is rising
more and more people are enjoying the benefits of investing in mutual funds. The main
reason the number of retail mutual fund investors remains small is that nine in ten people
with incomes in India do not know that mutual funds exist. But once people are aware of
mutual fund investment opportunities, the number who decide to invest in mutual funds
increases to as many as one in five people. The trick for converting a person with no
knowledge of mutual funds to a new Mutual Fund customer is to understand which of the
potential investors are more likely to buy mutual funds and to use the right arguments in
the sales process that customers will accept as important and relevant to their decision.
This Project gave me a great learning experience and at the same time it gave me enough
scope to implement my analytical ability. The analysis and advice presented in this Project
Report is based on market research on the saving and investment practices of the investors
and preferences of the investors for investment in Mutual Funds. This Report will help to
know about the investors Preferences in Mutual Fund means Are they prefer any particular
Asset Management Company (AMC), Which type of Product they prefer, Which Option
(Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic
Investment Plan or One time Plan). This Project as a whole can be divided into two parts.
The first part gives an insight about Mutual Fund and its various aspects, the Company
Profile, Objectives of the study, Channel Management and Research Methodology. One
can have a brief knowledge about Mutual Fund and its basics through the Project.
The second part of the Project consists of data and its analysis collected through survey
done on 200 people. For the collection of Primary data I made a questionnaire and
surveyed of 200 people. I also taken interview of many People those who were coming
at the Axis Bank Branch where I done my Project. I visited other AMCs in Jaipur to get
some knowledge related to my topic. I studied about the products and strategies of
other AMCs in Jaipur to know why people prefer to invest in those AMCs. This
Project covers the topic Channel Management of Axis Mutual Fund & Analysing
Preferences of The Investors For Investment In Mutual Funds The data collected has
been well organized and presented. I hope the research findings and conclusion will be
of use.
TABLE OF CONTENTS
Ref No
TITLES
iii
ACKNOWLEDGEMENT
iv
EXECUTIVE SUMMARY
1.
INDUSTRY PROFILE
1.1
1.2
1.3
2.
2.1
2.2
3.
OBJECTIVE
4.
4.1
4.2
5.
5.1
Methodology
5.2
Sampling
6.
7.
8.
9.
CONCLUSION
10.
ANNEXURE
10.1
Questionnaire
10.2
Bibliography
Page No.
Chapter-1
Industry Profile
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them. 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:
The flow chart below describes broadly the working of a mutual fund:
A Mutual Fund is a trust that pools the savings of a number of investors who share
common financial goal; investments may be in shares, debt securities, money market
securities or a combination of these. Those securities are professionally managed on behalf
of the unit-holders, and each investor holds a pro-rata share of the portfolio i.e. entitled to
any profits when the securities are sold, but subject to any losses in value as well.
The income earned through these investments and the capital appreciations realized are
shared by its unit holders in proportion to the number of units owned by them. 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.
Reasons to invest in mutual funds :
Limited risk: Mutual funds are diversification in action and hence do not rely on the
performance of a single entity.
More for less: For the price of one blue chip stock for instance, you could get
yourself a number of units across a number of companies and industries when you
invest in a fund!
Easy investing: You can invest in a mutual fund with as little as Rs. 5,000. Salaried
individuals also have the option of investing in a monthly savings plan.
Convenience: You can invest directly with a fund house, or through your bank or
financial adviser, or even over the internet.
Investor protection: A mutual fund in India is registered with SEBI, which also
monitors the operations of the fund to protect your interests.
Quick access to your money: It's good to know that should you need your money at
short notice, you can usually get it in four working days.
Low transaction costs: A mutual fund, by sheer scale of its investments is able to
carry out cost-effective brokerage transactions.
Tax benefits: Over the years, tax policies on mutual funds have been favourable to
investors and continue to be so.
Sponsor :
Sponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. The sponsor of a fund is akin to promoter of a company as he
gets the fund registered with SEBI. The sponsor will form a Trust and appoint a Board of
Trustees. The sponsor will also generally appoint as Asset Management Company as fund
managers. The sponsor, either directly or acting through the Trustees, will also appoint a
Custodian to hold the fund asset. All these appointments are made in accordance with
SEBI Regulations.
Sponsor must contribute at least 40% of the net worth of the Investment Managed and
meet the eligibility criteria prescribed under the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any loss or
shortfall resulting from the operation of the Schemes beyond the initial contribution made
by it towards setting up of the Mutual Fund.
Trust :
The Mutual Fund in India is constituted in the form of a public Trust created under the
Indian Trustees Act, 1882. The fund sponsor acts as the settler of the trust, contributing to
its initial capital, and appoints Trustees to hold the asset of the Trust for the benefit of the
unit holders, who are the beneficiaries of the Trust. The fund then invites investors to
contribute their money in the common pool, by subscribing to Units issued by various
schemes established by the trust, units being the evidence of their beneficial interest in the
fund.
It should be understood that a mutual fund is just a pass-through vehicle. Under the
Indian trusts Act, or the fund has no independent legal capacity itself, rather it is the
Trustee or Trustees who have the legal capacity and therefore all acts in relation to the
trust are taken on its behalf by the Trustees. The Trustees hold the unit holders money in a
fiduciary capacity, i.e the money belongs to the unit holders and is entrusted to the fund
for the purpose of investment. In legal parlance, the investor or the unit-holders are the
beneficial owners of the investment held by the Trust, even as these investments are
held in the name of the trustees on a day to - day basis.
Being public Trusts, mutual fund can invite any number of investors as beneficial owners
in their investment schemes.
Trustee:
The trust the mutual fund may be a Board of Trustees a body of individuals, or a
Trust company a corporate body. Most of the funds in India are managed by Board of
Trustees. While the board of Trustees is governed by the provisions of the Indian Trusts
Act, where the Trustee is a corporate body, it would also be required to comply with the
provisions of the companies Act, 1956. The Board or the Trustee Company, as an
independent body, act as protector of the unit holders interests. The Trustee doesnt
directly manage the portfolio of securities. For this specialist function, they appoint an
Asset Management Company. They ensure that the fund is managed by the AMC as per the
defined objectives and in accordance with the Trust Deed and SEBI regulations.
The trust is created through a document called the Trust Deed that is executed by the fund
sponsor in favour of the Trustees. Trust Deed is required to be stamped as registered under
the provisions of the Indian Registration Act and registered with SEBI. Clauses in the Trust
Deed, inter alia, deal with the establishment of the Trust, the appointment of Trustees, their
powers and duties, and the obligations of the Trustees towards the unit-holders and AMC.
These clauses also specify activities that the fund/ AMC cannot undertake. The third
schedule of the SEBI (MF) Regulations, 1996 specifies the contents of the Trust Deed.
The Trustees being the primary guardians of the unit-holders funds and assets, a Trustee
has to be a person of high repute and integrity. SEBI has laid down a set of conditions to be
fulfilled by the individuals being proposed as trustees of mutual funds independent and
non - independent. Besides specifying the disqualifications, SEBI has also set down the
Right and obligations of the Trustees. Broadly, the Trustees must ensure that the investors
interests are safeguarded and that the AMCs operations are along professional lines. They
must also ensure that the management of the fund is in accordance with SEBI Regulations.
To ensure the independence of the trustee company, SEBI mandates a minimum of twothird independent directors on the board of the trustee company.
Asset Management Company (AMC) :
The role of an AMC is to act the investment manager of the Trust. The sponsors or the
trustees, if so authorized by the Trust Deed, appoint the AMC. The AMC so appointed is
required to be approved by SEBI.
supervision of its own Board of Directors, and also under the directions of the Trustees and
SEBI. The Trustees are empowered to terminate the appointment of the AMC and appoint a
new AMC with the prior approval of SEBI and unit-holders
The AMC would, in the name of the Trust, float and then manage the different investment
schemes as per SEBI Regulations and as per the Investment Management Agreement it
signs with the Trustees. Mutual fund Regulations,1996 describes the issues relevant to
appointment, eligibility criteria, and restrictions on business activities and obligations of
the AMC.
The AMC of a mutual fund must have a net worth of at least Rs. 10 crores at all times.
Directors of the AMC, both independent and non independent, should have adequate
professional experience in financial services and should be individuals of high moral
standing, a condition also applicable to other key personnel of the AMC. The AMC cannot
act as a trustee of any other mutual fund. Besides its role as the fund manager, it may
undertake specified activities such as advisory services and financial consulting, provided
these activities are run independently of one another and the AMCs resources are properly
segregated by activity. The AMC must always act in the interest of the unit-holders and
report to the trustees with respect to its activities. To ensure the independence of the asset
management company, SEBI mandates that a minimum of 50% of the directors of the
board of the asset management company should be independent directors.
Registrar and Transfer Agent :
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to
the Mutual Fund. The Registrar processes the application form; redemption requests and
dispatches account statements to the unit holders. The Registrar and Transfer agent also
handles communications with investors and updates investor records.
Custodian :
Mutual funds are in the business of buying and selling of securities in large volumes.
Handling these securities in terms of physical delivery and eventual safekeeping is
therefore a specialized activity. The custodian is appointed by the Board of Trustees for
safe keeping of physical securities or participating in any clearing systemthrough approved
depository companies on behalf of mutual fund in case of dematerialized securities. A
custodian must fulfill its responsibilities in accordance with its agreement with the mutual
fund. The custodian should be an entity independent of the sponsers and is required to be
registered with SEBI.
Origin of mutual fund industry in India is with the introduction of the concept of mutual fund by
UTI in the year 1963. Though 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 a 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. 67bn. The private sector entry to the fund family
raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of 1,540 bn.
Putting the AUM of the Indian Mutual Funds 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 that 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 Indian mutual funds industry was non existent till 1960s. in 1963, the govt. of India
took the initiative by passing the UTI Act, under which the Unit Trust of India (UTI) was
set up as a statutory body. The designated role of UTI was to act as a mutual fund. This
was expanded in 1985 to make UTI a financial institution as well.
UTIs first scheme, called the US-64, which was an open end scheme, was launched in
1964. It subsequently launched a number of schemes to suit the differing needs of the
investors. Till 1987, UTI was the only mutual fund in the market since no one else was
legally allowed to set up mutual fund. In 1987, other public sector institutions like banks,
financial institutions and insurance companies started establishing mutual fund, following
the governments decision to allow them to do so. State Bank of India became the first one
to launch a mutual fund when it launched the SBI Mutual fund in November, 1987. It was
followed by the Can bank mutual fund, LIC Mutual fund, etc. In this regulated era, UTI
was acting more as a vehicle for the implementation of the economic policies and the
developmental activities of the government, than as an investment vehicle for the investors.
Finally in 1992, the government allowed private sector players to set-up mutual funds. A
few of them are, Kothari pioneer MF, ICICI MF, Birla MF, Morgan Stanley MF, Tauras
MF, ect. As the number of mutual funds increased giving a choice to the competition in the
industry increased, thus jolting the hitherto complacent public sector mutual fund into
action. As a result, the investors not only had a wider choice regarding the kind of schemes
and the sponsor of the mutual fund, they started getting better service even from the old
players. These private sector funds provided an added advantage to the investors. These
were generally set-up in partnership with foreign mutual funds, with the letter providing
the technology and the experience in managing funds. The investors could thus derive the
consequent benefits by investing in these funds.
As the industry developed, the need was felt to regulate it. From the beginning, UTI was
governed by the provisions of the UTI Act 1963.Till 1987, as there were no other players
in the market, the need to come out with specific regulations for investment companies did
not arise. With the government allowing banks, financial institutions and insurance
companies to set-up mutual funds in 1987, a set of regulations was also needed. However,
till 1989, the only regulations in place were those which required banks to obtain RBIs
permission before setting up a mutual fund.
In 1989, RBI came out with comprehensive guidelines applicable to mutual funds
promoted by banks. Following this, the Central Government came out with guidelines
applicable to all mutual funds in June, 1990. The letter was to be administered by SEBI.
SEBI was initially established as an interim body under the Ministry of Finance in April,
1988 to regulate and develop the capital markets. It was later converted into a statutory
body under the SEBI Act, 1992 and given wide ranging powers. Mutual funds were one of
the players SEBI was authorized to regulate.
In August, 1990, SEBI ruled that the guidelines would only supplement those issued by the
Central Government. Hence the mutual funds sponsored by banks were required to fulfill
obligations under both sets of regulations. After allowing private sectors to enter the
industry, the Government came out with a fresh set of comprehensive guidelines for all the
players in February, 1992. These guidelines superseded the earlier guidelines of the
government and RBI. All mutual funds except money market mutual fund (those investing
exclusively in the money market) and offshore mutual funds were governed by these
guidelines. While the former were governed by guidelines issued by RBI, the latter were
governed by the Department of Economics Affairs under the Ministry of Finance.
Subsequently, SEBI issued even more detailed, comprehensive and stringent Mutual Funds
Regulations in 1993, which replaced the guidelines issued by the government in 1992.
These were further revised and replaced by Mutual Funds Regulations, 1996.
In October, 1999, the administration of Money Market Mutual Funds was handed over by
RBI to SEBI. With effect from March 7, 2000, RBI has withdrawn its guidelines on Money
Market Mutual Funds. Accordingly, such money market mutual fund schemes, like any
other mutual fund schemes, would exclusively be governed by the SEBI (Mutual Fund)
Regulations, 1996.
The fact that UTI, which is the biggest mutual fund in the country, does not fall under the
purview of SEBI, result in ineffective regulation by the latter. Besides, as compare the
performance of UTIs schemes with other mutual funds schemes. To avoid this, SEBI tried
for a long time to bring UTI under its purview. However, UTI being a statutory body, it
was finally ruled that it cannot be regulated by another statutory body. As a result of further
efforts on both sides, finally an arrangement was arrived at between SEBI and UTI
whereby the latter agreed to voluntarily comply with SEBI s regulations for certain
schemes.
The mutual fund industry grew tremendously during 1998 to 2000. the total net assets of
Rs. 97,228 crore managed by 34 mutual funds through their 259 schemes as on march
31,1998 increased to 1,02,434.52 crore managed by 39 mutual funds including UTI,
through their 550 schemes as on February 28,2001.
The year 2001 was a watershed year in the history of the Indian mutual funds industry. In
July, that year, UTI froze purchase and sale of units of its flagship scheme US-64 for a
period of six months, causing panic among many individual as well as large institutional
investors. Shelving its assured returns quality, US-64 became a market return NAV based
mutual fund in January 2002. Its opening NAV was Rs. 5.81 against the face value of Rs.
10.In January 2003, the Government of India bifurcate the UTI into UTI I and UTI II. UTI
I is now managed by a public administrator, while UTI II was handed over to the State
Bank of India, Panjab National Bank, Bank of Baroda and the Life Insurance Corporation,
with each institutions having an equal share in the company. It also came under the ambit
of regulation by SEBI. UTI II was renamed UTI mutual fund in February 2003. As on 31
March 2003, UTI AMC had under its management, 42 SEBI complaints schemes and 4
offshore funds, aggregating to a corpus of more than Rs. 15,000crore from about 10
million investor accounts.
As a August, 2004 the mutual fund industry had Rs.155, 845crore wroth of asset under its
management. Of this Rs.20, 256crore were those of UTI, Rs.1, 23,258.04 were those of the
private sector, and Rs.12, 171.20 were those of the other public sector. More than 75% of
the total assets under management were managed by the private sector mutual funds.
With the increase in mutual fund players in India, a need for mutual fund association in
India was generated to function as a non-profit organisation. Association of Mutual Funds
in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset
Management Companies (AMC) which has been registered with SEBI. Till date all the
AMCs are that have launched mutual fund schemes are its members. It functions under the
supervision and guidelines of its Board of Directors.
Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a
professional and healthy market with ethical lines enhancing and maintaining standards. It
follows the principle of both protecting and promoting the interests of mutual funds as well
as their unit holders.
The objectives of Association of Mutual Funds in India
The Association of Mutual Funds of India works with 30 registered AMCs of the country.
It has certain defined objectives which supports the guidelines of its Board of Directors.
The objectives are as follows:
This mutual fund association of India maintains high professional and ethical
standards in all areas of operation of the industry.
It also recommends and promotes the top class business practices and code of
conduct which is followed by members and related people engaged in the activities
of mutual fund and asset management. The agencies who are by any means
connected or involved in the field of capital markets and financial services also
involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual
fund industry.
Association of Mutual Fund of India does represent the Government of India, the
Reserve Bank of India and other related bodies on matters relating to the Mutual
Fund Industry.
AMFI undertakes all India awareness programme for investors in order to promote
proper understanding of the concept and working of mutual funds.
At last but not the least association of mutual fund of India also disseminate
informations on Mutual Fund Industry and undertakes studies and research either
directly or in association with other bodies.
The third largest categories of mutual funds are the ones floated by the private sector domestic mutual funds and the
private sector foreign mutual funds. The largest of these in private sector domestic mutual funds are Reliance
mutual fund, JM capital management company ltd. Tata mutual, Axis mutual fund, Birla sun life asset management
pvt. Ltd. and in private foreign mutual funds these are alliance capital asset management private ltd, Franklin
Templeton Investments, Sun F&C asset management private ltd, Lurich asset management company pvt ltd. The
aggregate corpus of the assets managed by this category of amcs is about 42000 cr.
The money market mutual fund segment has a total corpus of 1.48 trillion in the U.S.
Out of the top 10 mutual fund worldwide, eight are worldwide sponsored. Only fidelity and capital
are non-bank mutual funds in this group.
In the U.S. the total numbers of schemes is higher than that of the listed companies
Internationally, mutual funds are allowed to go short. In India fund managers do nothave such
leeway.
In the U.S. about 9.7 million households will manage their assets online by the year 2003, such a
facility is not yet of avail in India and jeevan bima sahayog amc floated by the LIC are some of the
other prominent ones. The aggregate corpus of the funds managed by this category of amcs is
around 8300 cr.
Chapter-2
Company profile
Company
Date of Incorporation of AMC
Website
Board of Directors
Axis Mutual Fund Trustee Limited:
Dr T C Nair, Chairman, Independent Director
Mr. B Gopalakrishnan, Associate Director
Mr. Kedar Desai, Independent Director
Mr. Uday M Chitale, Independent Director
Axis Bank was the first of the new private banks to have begun operations in 1994, after
the Government of India allowed new private banks to be established. The Bank was
promoted jointly by the Administrator of the specified undertaking of the Unit Trust of
India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC) and other four PSU insurance companies, i.e. National
Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance
Company Ltd. and United India Insurance Company Ltd.
The Bank as on 31st March, 2011 is capitalized to the extent of ` 410.54 crores with the
public holding (other than promoters and GDRs) at 53.60%.
The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai.
The Bank has a very wide network of more than 1281 branches (including 169 Service
Branches/CPCs as on 31st March, 2011). The Bank has a network of over 6270 ATMs (as
on 31st March, 2011) providing 24 hrs a day banking convenience to its customers. This is
one of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to adopting
the best industry practices internationally in order to achieve excellence.
VISION
To be the preffered financial solutions provider excelling in customer delivery through
insight, empowered employees and smart use of technology.
CORE VALUE
Customer Centricity
Ethics
Transparency
Teamwork
Ownership
BUSINESS PHILOSOPHY
Outside-in View
Long-term Relationships
Equity Funds:
Axis Equity Fund
Axis Long Term Equity Fund
Axis Midcap Fund
Axis Focused 25 Fund
Hybrid Funds:
Axis Triple Advantage Fund
Axis Income Saver
Gold Funds:
Axis Gold Fund
Axis Gold ETF
However, there can be no assurance that the investment objective of the scheme will be
achieved.
Key Features
A diversified equity fund that invests primarily in the Indian equity markets
Also provides tax benefits under section 80C of the Income Tax Act, 1961
Lock-in period of only 3 years is the lowest amongst all section 80C options
available today
An equity fund that invests primarily in mid sized companies to capitalise on their
fast paced growth
Amongst the mid sized companies, it has a preference for the larger ones that carry
relatively lower risk
It is suitable when you want to plan for a bigger home, better holidays, bigger cars,
etc.
Nurtures companies over their business cycle without being affected by short term
market volatility
An extremely low risk fund suitable for an investment horizon of 1 day 90 days
Returns are calculated for the number of days you remain invested
Key Features
Returns are calculated for the number of days you remain invested
Tax efficient as dividends are tax-free in your hands (post deduction of 14.1625%
dividend distribution tax for individual investors - inclusive of cess and surcharge)
Aims to provide stable returns by investing in debt and money market instruments
Returns are calculated for the number of days you remain invested
Tax efficient as dividends are tax-free in your hands (post deduction of 14.1625%
dividend distribution tax for individual investors - inclusive of cess and surcharge)
Does not track benchmarks, i.e. can be invested in money market during rising rate
environment
Provides diversification across three asset classes viz. equity, fixed income and
gold thereby leading to reduction in risk
Returns more stable than pure equity or gold investments over the long term
Offers convenience. Now one single application is sufficient for investment in three
asset classes.
Offers the potential for capital growth through limited exposure to equity
instruments
Open-ended nature allows you to buy or sell units of the scheme at any point of
time subject to applicable loads
Key Features
Buy gold in amounts as small as Rs 1000 without having to worry about purity
Buy/sell units of Axis Gold Fund on any business day at NAV based prices
Chapter-3
Objective
Chapter-4
Channel Management
AXIS AMC
CORPORATI
ON
BUSINESS
INSTITUTION
AL
RETAIL
COMPANY
PARTNERSHIP
HUF
BANKS
IFAs
1. BUSINESS
Under the category of business there are two sub-divisions.
1.1
INSTITUTIONAL
National distributors come under it. They are more viable in nature. Have more
business generating capacity.
1.2
RETAIL
Under the category of retail mainly Banks and IFAs have major role.
1.2.1
BANKS
There banks acts as a mediator between investors and asset management companies
through that they help in promoting various schemes. On the basis of their business
generating capability they got commission.
1.2.2
IFAs
Individual financial agencies are the distributors who work for selling mutual funds
directly to the investors.
2. CORPORATION
2.1
COMPANY
2.2
PARTENRSHIP
Under Banking channel I mate with relationship managers and convinced them regarding
the schemes and I was in regular contact with them in case of any query.
Chapter-5
Research
Methodology
RESEARCH METHODOLOGY
This report is based on primary as well secondary data, however primary data
collection was given more importance since it is overhearing factor in attitude
studies. One of the most important users of research methodology is that it helps in
identifying the problem, collecting, analyzing the required information data and
providing an alternative solution to the problem. It also helps in collecting the vital
information that is required by the top management to assist them for the better
decision making both day to day decision and critical ones.
Data sources:
Research is majorly based on primary data. Secondary data has been used only for
the reference. Research has been done by primary data collection, and primary data
has been collected by interacting with various people. The secondary data has been
collected through various journals and websites.
Duration of Study:
The study was carried out for a period of two months, from 2nd May to 2nd July 2012.
Sampling:
Sampling procedure:
The sample was selected of them who are the customers/visitors of Axis Bank,
Malviya Nagar and Vaishali Nagar Branch, irrespective of them being investors or
not or availing the services or not. It was also collected through personal visits to
persons, by formal and informal talks and through filling up the questionnaire
prepared. The data has been analyzed by using mathematical/Statistical tool.
Sample size:
The sample size of my project is limited to 200 people only. Out of which only 120
people had invested in Mutual Fund. Other 80 people did not have invested in
Mutual Fund.
Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.
Chapter-6
Data Presentation
and Analysis
Age Group
<= 30
31-35
36-40
41-45
46-50
>50
No. of
12
18
30
24
20
16
Investors
35
3
30
25
5
20
Investors invested in Mutual Fund
15
6
30
1
10
24
18
5 12
20
16
0
<=30
31-35
36-40
41-45
46-50>50
Age group of the Investors
Interpretation:
According to this chart out of 120 Mutual Fund investors of Jaipur the most
are in the age group of 36-40 yrs. i.e. 25%, the second most investors are in
the age group of 41-45yrs i.e. 20% and the least investors are in the age
group of below 30 yrs.
Educational Qualification
Number of Investors
88
Under Graduate
25
Others
Total
120
6%
23%
Graduate/Post Graduate
Under Graduate
71%
Others
Interpretation:
Out of 120 Mutual Fund investors 71% of the investors are Graduate/Post
Graduate, 23% are Under Graduate and 6% are others (under HSC).
Occupation
No. of Investors
Govt. Service
30
Pvt. Service
45
Business
35
Agriculture
Others
50
45
40
35
30
25
No. of Investors
20
15
10
5
0
2
1
3
45
35
30
4
4
Govt. Service
Pvt. Service Business Agriculture
Occupation of the customers
5
6
Others
Interpretation:
In Occupation group out of 120 investors, 38% are Pvt. Employees,
25% are Businessman, 29% are Govt. Employees, 3% are in
Agriculture and 5% are in others.
Income Group
No. of Investors
<=10,000
10,000-15,000
12
15,000-20,000
28
20,000-30,000
43
>30,000
32
50
45
40
35
30
25
No. of Investors
20
15
10
5
0
43
32
28
5
<=10
12
10-15
15-20
20-30
>30
Interpretation:
In the Income Group of the investors, out of 120 investors, 36%
investors that is the maximum investors are in the monthly income
group Rs. 20,001 to Rs. 30,000, Second one i.e. 27% investors are
in the monthly income group of more than Rs. 30,000 and the
minimum investors i.e. 4% are in the monthly income group of
below Rs. 10,000
9.17
35
10-20%
15.83
21-30%
31-40%
40
Less than 0%
19
10-20%
48
21-30%
42
31-40%
11
Interpretation
Everybody saves some proportion of the income looking at the present and future needs.
The pie chart shows that major proportion that is 40 % investors have annual savings
ranging from 10 -20% whereas 35% investors annual saving ranges from 21-30%.
High-Risk
Reluctant
Low risk
Care ful
Careful
33
10
15
Low risk
49
20
25
30
35
40
Reluctant to risk
24
45
High risk
14
Interpretation
There are very few investors who believe in avoiding risk while investing in different
avenues. The major proportion is those of low risk taker here the investors invest their
wealth mainly in mutual funds, fixed deposits etc.
Kind of Investments
No. of Respondents
Saving A/C
98
Fixed deposits
74
Insurance
76
Mutual Fund
80
36
Shares/Debentures
30
Gold/Silver
25
32
Real Estate
8
7
32
25
6
5
30
36
Kinds of Investment
120
76
74
1
0
98
50
100
150
No.of Respondents
Interpretation:
From the above graph it can be inferred that out of 120 people, 81.66% people have
invested in Saving A/c, 63.33% in Insurance, 61.6% in Fixed Deposits, 66% in
Mutual Fund, 30% in Post Office, 25% in Shares or Debentures, 20.8% in
Gold/Silver and 26.6% in Real Estate.
3. Preference of factors while investing:
Factors
(a) Liquidity
(d) Trust
No. of
30
35
32
23
Respondents
19%
Liquidity
27%Low Risk
25%
High
Return
29%
Trust
Interpretation:
Out of 120 People, 27% People prefer to invest where there is High Return,
29% prefer to invest where there is Low Risk, 25% prefer easy Liquidity
and 19% prefer Trust
Response
Yes
No
No. of Respondents
135
65
33%
Yes
No
68%
Interpretation:
From the above chart it is inferred that 67% People are aware of Mutual
Fund and its operations and 33% are not aware of Mutual Fund and its
operations.
Source of information
No. of Respondents
Advertisement
18
Peer Group
25
Bank
30
Financial Advisors
62
No. of Respondents
70
60
50
40
2
2
30
1
20
25
18
10
0
Advertisement
Peer Group
4
4
3
3
30
BankFinancial Advisors
Source of Information
Interpretation:
From the above chart it can be inferred that the Financial Advisor is the
most important source of information about Mutual Fund. Out of 135
Respondents, 46% know about Mutual fund Through Financial Advisor,
22% through Bank, 19% through Peer Group and 13% through
Advertisement.
62
Response
No. of Respondents
YES
80
NO
40
Total
120
No; 33%
Yes; 67%
Interpretation:
Out of 120 People, 67% have invested in Mutual Fund and 33% do not have
invested in Mutual Fund.
Reason
No. of Respondents
Not Aware
32
Higher Risk
13% 8%
Not Aware
Interpretation:
80%
Higher Risk
Not Any
Out of 40 people, who have not invested in Mutual Fund, 80% are not aware
of Mutual Fund, 12% said there is likely to be higher risk and 8% do not
have any specific reason.
Name of AMC
No. of Investors
AxisMF
55
UTI
75
HDFC
30
Reliance
75
ICICI Prudential
56
Kotak
45
Others
70
Name of AMC
Others
7
7
HDFC
6
6
Kotak
5
5
AxisMF
4
4
ICICI
3
3
Reliance
2
2
UTI
1
1
0
70
30
45
55
56
75
75
10 20 30 40 50 60 70 80
No. of Investors
Interpretation:
Most of the Investors preferred UTI and Reliance Mutual Fund. Out of 80
Investors 62.5% have invested in each of them, only 46% have invested in
AxisMF, 47% in ICICI Prudential, 37.5% in Kotak and 25% in HDFC.
Reason
No. of Respondents
35
Better Return
Agents Advice
15
27%
9%
Associated with AX IS
Better Return
64%
Agents Advice
Interpretation:
Out of 55 investors of AxisMF 64% have invested because of its association
with Brand AXIS, 27% invested on Agents Advice, 9% invested because
of better return.
Reason
No. of Respondents
Not Aware
25
Less Return
18
Agents Advice
22
34%
Not Aware
38%
Less Return
28%
Agent's Advice
Interpretation:
Out of 65 people who have not invested in AxisMF, 38% were not aware
with AxisMF, 28% do not have invested due to less return and 34% due to
Agents Advice.
Name of AMC
No. of Investors
AxisMF
38
UTI
22
HDFC
17
Reliance
35
ICICI Prudential
30
Kotak
28
Others
35
0 10 20 30 40 50
32%
1
AxisMF
18%
2
UTI
14%
3
HDFC
Name of AMC
29%
4
Reliance
25%
5
ICICI Prudential
23%
6
Kotak
29%
7
Others
No. of Investors
Interpretation:
Out of 120 investors, 29% prefer to invest in Reliance, 25% in ICICI
Prudential, 32% in AxisMF, 23% in Kotak, 18% in UTI and 14% in HDFC
Mutual Fund.
Channel
No. of Respondents
Financial Advisor
72
Bank
AMC
18
30
25%
15%
Financial
Advisor
Bank
60%
AMC
Interpretation:
Out of 120 Investors 60% preferred to invest through Financial Advisors,
25% through AMC and 15% through Bank.
Mode of Investment
No. of Respondents
78
42
35%
One time Investment
65%
SIP
Interpretation:
Out of 120 Investors 65% preferred One time Investment and 35 %
Preferred through Systematic Investment Plan.
Portfolio
No. of Investors
Equity
56
Debt
20
Balanced
44
37%
Equity
47%
17%
Debt
Balance
Interpretation:
From the above graph 46% preferred Equity Portfolio, 37% preferred
Balance and 17% preferred Debt portfolio
Option
Dividend Payout
Dividend
Growth
Reinvestment
No. of Respondents
25
10
85
21%
71%
Dividend Payout
8%
Dividend Reinvestment
Growth
Interpretation:
From the above graph 71% preferred Growth Option, 21% preferred
Dividend Payout and 8% preferred Dividend Reinvestment Option..
cost-effective scale.
Diversification
Mutual funds invest in a broad range of securities. This limits investment risk by
reducing the effect of a possible decline in the value of any one security..
Low Cost
A mutual fund let's you participate in a diversified portfolio for as little as
Rs.5,000/-, and sometimes less. And with a no-load fund, you pay little or no sales
charges to own them.
Personal Service
One call puts you in touch with a specialist who can provide you with information
you can use to make your own investment choices.
Liquidity
In open-ended schemes, you can get your money back promptly at net asset value
related prices from the mutual fund itself.
Transparency
You get regular information on the value of your investment in addition to
disclosure on the specific investments
WEAKNESS
Risk is defined as short-term price variability. But on a long-term basis, risk is the
possibility that your accumulated real capital will be insufficient to meet your financial
goals. And if you want to reach your financial goals, you must start with an honest
appraisal of your own personal comfort zone with regard to risk.
Individual tolerance for risk varies, creating a distinct "investment personality" for each
investor. Some investors can accept short-term volatility with ease, others with near panic.
So whether you consider your investment temperament to be conservative, moderate or
aggressive, you need to focus on how comfortable or uncomfortable you will be as the
value of your investment moves up or down.
OPPORTUNITIES
As per the BLOOM BERG survey India's total disposable income will increase to 40% by
2015,along with total income of an average Indian family will be 450000.
As people are getting aware of the fact of investment and want to invest more with
specialized assistant mutual funds have a great opportunities.
As the risk is diversified and funds are available as per the different objective people can
invest as per their requirement.
Maximum money is invested in equity market and as the GDP is growing studily this is a
great opportunity for the companies to go ahead and invest more in to the market.
THREATS
A new competitor in your home market
Price wars with competitors
Competitor has new innovative product or service
Taxation
Chapter-7
Suggestions and
Recommendations
Systematic Investment Plan (SIP) is one the innovative products launched by Assets
Management companies very recently in the industry. SIP is easy for monthly salaried
person as it provides the facility of do the investment in EMI. Though most of the
prospects and potential investors are not aware about the SIP. There is a large scope for the
companies to tap the salaried persons.
Chapter-8
Limitations and
scope
Limitation:
Possibility of error in data collection because many of investors may have not
given actual answers of my questionnaire.
Sample size is limited to 200 visitors of Axis Bank , Malviya Nagar and
Vaishali Nagar out of these only 120 had invested in Mutual Fund. The
sample size may not adequately represent the whole market.
Chapter-9
Conclusion
Findings
The Age Group of 36-40 years were more in numbers. The second
most Investors were in the age group of 41-45 years and the least were
in the age group of below 30 years.
Most of the Investors were Graduate or Post Graduate and below HSC
there were very few in numbers.
In Occupation group most of the Investors were Govt. employees, the
second most Investors were Private employees and the least were
associated with Agriculture.
In family Income group, between Rs. 20,001- 30,000 were more in
numbers, the second most were in the Income group of more than
Rs.30,000 and the least were in the group of below Rs. 10,000.
About all the Respondents had a Saving A/c in Bank, 76% Invested in
Fixed Deposits, Only 60% Respondents invested in Mutual fund.
Mostly Respondents preferred High Return while investment, the
second most preferred Low Risk then liquidity and the least preferred
Trust.
Only 67% Respondents were aware about Mutual fund and its
operations and 33% were not.
Among 200 Respondents only 60% had invested in Mutual Fund and
40% did not have invested in Mutual fund.
Out of 80 Respondents 81% were not aware of Mutual Fund, 13%
told there is not any specific reason for not invested in Mutual Fund
and 6% told there is likely to be higher risk in Mutual Fund.
Most of the Investors had invested in Reliance or UTI Mutual Fund,
ICICI Prudential has also good Brand Position among investors,
AxisMF places after ICICI Prudential according to the Respondents.
Out of 55 investors of Axis MF 64% have invested due to its
association with the Brand Axis, 27% Invested because of Advisors
Advice and 9% due to better return.
Most of the investors who did not invested in Axis MF due to not
Aware of Axis MF, the second most due to Agents advice and rest
due to Less Return.
For Future investment the maximum Respondents preferred Reliance
Mutual Fund, the second most preferred ICICI Prudential, Axis MF
has been preferred after them.
60% Investors preferred to Invest through Financial Advisors, 25%
through AMC (means Direct Investment) and 15% through Bank.
65% preferred One Time Investment and 35% preferred SIP out of
both type of Mode of Investment.
The most preferred Portfolio was Equity, the second most was
Balance (mixture of both equity and debt), and the least preferred
Portfolio was Debt portfolio.
Conclusion
Running a successful Mutual Fund requires complete understanding of the
peculiarities of the Indian Stock Market and also the psyche of the small investors.
This study has made an attempt to understand the financial behavior of Mutual Fund
investors in connection with the preferences of Brand (AMC), Products, Channels
etc. I observed that many of people have fear of Mutual Fund. They think their
money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund
and its related terms. Many of people do not have invested in mutual fund due to lack
of awareness although they have money to invest. As the awareness and income is
growing the number of mutual fund investors are also growing.
Brand plays important role for the investment. People invest in those Companies
where they have faith or they are well known with them. There are many AMCs in
Jaipur but only some are performing well due to Brand awareness. Some AMCs are
not performing well although some of the schemes of them are giving good return
because of not awareness about Brand. Reliance, UTI, AxisMF, ICICI Prudential etc.
They are well known Brand, they are performing well and their Assets Under
Management is larger than others whose Brand name are not well known like
Principle, Sunderam, etc.
Distribution channels are also important for the investment in mutual fund. Financial
Advisors are the most preferred channel for the investment in mutual fund. They can
change investors mind from one investment option to others. Many of investors
directly invest their money through AMC because they do not have to pay entry load.
Only those people invest directly who know well about mutual fund and its
operations and those have time.
Chapter-10
Annexure
QUESTIONNAIRE
1. Personal details:
(a). Name:(b). City: (c). Age:-
contact no:-
(d). Qualification:Graduation/PG
Under Graduate
Others
Pvt. Ser
Business
Agriculture
Others
20,000
30,000
30,000
and above
(g). What much do you think you will be able to save on an annual basis as a % of your
total annual income?
Less than 10% 10-20%
20-30%
2. What kind of investments you have made so far? Pl tick (). All applicable.
A. Saving account
B. Fixed deposits
E. Post office-nsc, etc F.
Shares/debentures
C. Insurance
G. Gold/ Silver
D. Mutual fund
H. Real Estate
(d) Trust
4. Are you aware about mutual funds and their operations? Pl tick ().
a) Yes
b) No
B. Peer group
C. Banks
D. Financial advisors
b) No
8. If yes, in which mutual fund you have invested? Pl. Tick (). All applicable.
A.
B.
C.
D.
AxisMF
UTI
HDFC
Reliance
E. Kotak
F. Other specify
9. If invested in Axis MF, you do so because (pl. Tick (), all applicable).
A. Axis MF is associated with Axis Bank
B. They have a record of giving good returns year after year.
C. Agent advice
10. If not invested in Axis MF, you do so because (pl. Tick () all applicable).
A. You are not aware of Axis MF.
B. Axis MF gives less return compared to the others.
C. Agent advice
11. When you plan to invest your money in Asset management co. Which AMC will you
prefer?
12. Which channel will you prefer while investing in mutual fund?
(a) Financial advisor
(b) Bank
(c) AMC
13. When you invest in mutual funds which mode of investment will you prefer? Pl. Tick
().
14. When you want to invest which type of funds would you choose?
A. Having only debt B. Having debt & equity C. Only equity portfolio.
portfolio
portfolio.
15. How would you like to receive the returns every year? Pl. Tick ().
A. Dividend payout
B.
Dividend
investment
BIBLIOGRAPHY
i.
News papers
vi. www.axismf.com
vii. www.moneycontrol.com
viii. www.amfiindia.com
ix. www.onlineresearchonline.com
x. www. mutualfundsindia.com