Professional Documents
Culture Documents
ON
MUTUAL FUND SIMPLIFIED
CARRIED ON AT
SUBMITTED TO
ASIA PACIFIC INSTITUTE OF MANAGEMENT, NEW DELHI
SUBMITTED BY:
(AMIT KUMAR JHA)
(2K14G010)
PGDM BATCH 2014-2016
1 | Page
DECLARATION
I, AMIT KUMAR JHA, hereby declare that the project work entitled MUTUAL FUND
SIMPLIFIED submitted towards partial fulfillment of requirements for the award of Post
Graduate Diploma in Management is my original work and the dissertation has not formed
the basis for award of any degree, associate ship, fellowship or any similar title to the best of
my knowledge.
(Signature of Student)
Date:
2 | Page
Acknowledgement
It is my proud privilege to release the feelings of my gratitude to several persons who helped
me directly or indirectly to conduct this project work. I express my heart full in debt and owe
a deep sense of gratitude to my teacher and my faculty guide Prof. DEVENDRA
BAHADUR, Asia Pacific Institute of Management and Mr. ANUJ AGARWAL, Training
Manager, ICICI SECURITIES, 17,18,19, 2nd Floor, Kailash Enclave New Delhi, for their
sincere guidance and inspiration in completing this project.
I am extremely thankful to faculty members of the Asia Pacific Institute of Management for
their coordination and cooperation and thankful to Prof. DEVENDRA BAHADUR for his
kind guidance and encouragement.
I am also extremely thankful to all those persons who have positively helped me and ICICI
Securities customers who responded my questionnaire, around whom the whole project cycle
revolves.
I also thank all my friends who have more or less contributed to the preparation of this
project report. I will be always indebted to them.
Thanking you
3 | Page
CERTIFICATE
4 | Page
CERTIFICATE
This is to certify that Mr. Amit Kumar Jha , Roll number 2K14G010, a student of PGDM in
Asia Pacific Institute of Management, New Delhi, has carried out the Summer Internship
Project work presented in this report titled MUTUAL FUND SIMPLIFIED for the award
of Post Graduate Diploma in Management for the Academic Batch 2014-16, under my
guidance.
(Signature)
Devendra Bahadur
Date:
5 | Page
PREFACE
6 | Page
CONTENT
S.No
Topics
1.
Declaration
2.
Acknowledgement
Certificate
Preface
List of tables
List of figures
Page no.
CHAPTER- I
7
Company profile
10
Introduction
10
Overview
12
10.
12
11
13-19
12
20
13
Board of directors
20
14
21
15
Privacy policy
21
16
22
17
23
18
Major Competitors
24
19
24-25
20
25-34
21
35
22
35-37
23
Different types of MF
38-40
24
Literature Review
CHAPTER-II
7 | Page
42-47
CHAPTER-III
2
Research Methodology
49-53
CHAPTER-IV
Data Analysis and Interpretation
55-64
5
2
6
CHAPTER-V
2
Findings
65
7
2
66
8
2
Conclusion
67
9
2
Bibliography
68-69
8
2
Annexure (questionnaire)
70-72
8 | Page
CHAPTER -I
9 | Page
COMPANY PROFILE
Company Name
Founded In
Parent Company
Headquarter
Chairperson
Managing Director
Website
ICICI Securities
1995
ICICI Limited
Mumbai
Mrs. Chanda D. Kochhar
Mr. Anup Bagchi
www.icicisecurities.com
INTRODUCTION
ICICI Securities Limited provides various investment banking products and services to
corporates, financial institutions, and retail investors in India and internationally. It provides
corporate finance services to corporations, financial institutions, financial sponsors, and
government, which include equity capital market products, such as initial public offerings
(IPO), further public offerings, rights offerings, convertible offerings, qualified institutional
placements, non-convertible debentures, buyback, delisting, and open offers and international
offerings for unlisted and listed entities. The company also offers mergers and acquisitions
advisory services; and private equity advisory.
OVERVIEW
10 | P a g e
ICICI Securities Ltd is an integrated securities firm offering a wide range of services
including investment banking, institutional broking, retail broking, private wealth
management, and financial product distribution. ICICI Securities sees its role as 'Creating
Informed Access to the Wealth of the Nation' for its diversified set of client that includes
corporates, financial institutions, high net-worth individuals, and retail investors.
Headquartered in Mumbai, ICICI Securities operates out of 66 cities and towns in India and
global offices in Singapore and New York. ICICI Securities Inc., the step-down wholly
owned US subsidiary of the company is a member of the Financial Industry Regulatory
Authority (FINRA) / Securities Investors Protection Corporation (SIPC). ICICI Securities
Inc. activities include Dealing in Securities and Corporate Advisory Services in the United
States. ICICI Securities Inc. is also registered with the Monetary Authority of Singapore
(MAS) and operates a branch office in Singapore.
11 | P a g e
The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at
the initiative of the World Bank, the Government of India and representatives of Indian
industry, with the objective of creating a development financial institution for providing
medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami
Mudaliar elected as the first Chairman of ICICI Limited. ICICI emerges as the major source
of foreign currency loans to Indian industry. Besides funding from the World Bank and other
multi-lateral agencies, ICICI was also among the first Indian companies to raise funds from
international markets.
1987:
The Corporation made a public issue of Swiss Franc 75 million in Switzerland, the
first public issue by any Indian entity in the Swiss Capital Market.
1988:
ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth
Development Corporation (CDC), the first loan by CDC for financing projects in
India.
1993:
1994:
12 | P a g e
ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan set
up.
1996:
1997:
1998:
The name The Industrial Credit and Investment Corporation of India Ltd changed to
ICICI Ltd.
ICICI Ltd announced the takeover of ITC Classic Finance.
1999:
Introduced the new logo symbolizing a common corporate identity for the ICICI
Group.
ICICI announced takeover of Anagram Finance.
2000:
ICICI launched retail finance - car loans, house loans and loans for consumer durables
ICICI becomes the first Indian Company to list on the NYSE through an issue of
American Depositary Shares.
2001:
ICICI Bank became the first commercial bank from India to list its stock on NYSE.
The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI
Bank.
13 | P a g e
2002:
ICICI Ltd merged with ICICI Bank Ltd to create India's second largest bank in terms
of assets.
"E Lobby, a self-service banking centre inaugurated in Pune. It was the first of its
kind in India.
ICICI Bank launched Private Banking.
1100-seat Call Centre set up in Hyderabad
ICICI Bank Home Shoppe, the first-ever permanent aggregation and display of
2003:
launched.
ICICI Bank's UK subsidiary launched.
India's first ever "Visa Mini Credit Card, a 43% smaller credit card in dimensions
launched.
ICICI Bank subsidiary set up in Canada.
Temasek Holdings acquired 5.2% stake in ICICI Bank.
ICICI Bank became the market leader in retail credit in India.
2004:
Max Money, a home loan product that offers the dual benefit of higher eligibility and
2005:
ICICI Bank and CNBC TV 18 announced India's first ever awards recognizing the
achievements of SMEs, a pioneering initiative to encourage the contribution of Small,
14 | P a g e
ICICI Bank introduced partnership model wherein ICICI Bank would forge an
alliance with existing micro finance institutions (MFIs). The MFI would undertake the
promotional role of identifying, training and promoting the micro-finance clients and
ICICI Bank would finance the clients directly on the recommendation of the MFI.
ICICI Bank introduced the concept of floating rate for home loans in India.
First rural branch and ATM launched in Uttar Pradesh at Delpandarwa, Hardoi.
"Free for Life" credit cards launched wherein annual fees of all ICICI Bank Credit
mobile phone.
Private Banking Masters 2005, a nationwide Golf tournament for high net worth
clients of the private banking division launched. This event is the largest domestic
2006:
ICICI Bank became the first private entity in India to offer a discount to retail
international markets.
ICICI Bank subsidiary set up in Russia.
2007:
Introduced a new product - 'NRI smart save Deposits' a unique fixed deposit scheme
15 | P a g e
Group.
ICICI Bank became the first bank in India to launch a premium credit card -- The Visa
agreement in Singapore.
ICICI Bank became the first private bank in India to offer both floating and fixed rate
on car loans, commercial vehicles loans, construction equipment loans, and
India
ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg, Russia.
2008:
ICICI Bank enters US, launches its first branch in New York.
ICICI Bank enters Germany, opens its first branch in Frankfurt.
ICICI Bank launched iMobile, a breakthrough innovation in banking where
practically all internet-banking transactions can now be simply done on mobile
phones.
ICICI Bank concluded India's largest ever securitization transaction of a pool of retail
loan assets aggregating to Rs. 48.96 billion (equivalent of USD 1.21 billion) in a
multi-tranche issue backed by four different asset categories. It is also the largest deal
16 | P a g e
in Asia (ex-Japan) in 2008 till date and the second largest deal in Asia (ex-Japan &
Australia) since the beginning of 2007
2009:
Ms.Chanda D Kochhar appointed the Managing Director and CEO of ICICI Bank
Ltd.
ICICI Bank and Singapore Airlines launch "ICICI Bank Singapore Airlines Visa
2010:
2011:
2012:
17 | P a g e
ICICI Bank was the first private sector bank in India to offer PPF account facility at
ICICI Bank
ICICI Prudential Life Insurance Company
ICICI Securities Limited
ICICI Securities Primary Dealership Limited
ICICI Lombard General Insurance Company
ICICI Prudential Asset Management Company
ICICI Venture
ICICI Home Finance Company
18 | P a g e
Board of Directors
19 | P a g e
Privacy Policy
ICICI is strongly committed to protecting the privacy of its customers.
DNC (Don't Call Registry)
ICICI do respect your privacy, and appreciate that some of you may not want to be contacted
over the phone for our telemarketing activities. If this is the case with you, you may use the
Do Not Call form given below and register your phone number(s) that you want excluded
from our telemarketing list. The details that you enter in the form will remain confidential
Code of Conduct and Business Ethics
ICICI Group expects all its employees, officers and directors to act in accordance with high
professional and ethical standards.
Introduction to ICICI Direct
ICICIDirect is an online trading and investment platform on ICICI Securities, the largest
stock broker firm in India providing a wide range of investment options to the retail and
institutional customers. ICICI Securities is part of ICICI Group, India's top financial service
provider offering banking and other financial services.
ICICI Securities (I-Sec) is the top equity house in India with over 20 lakh customers.
ICICIDirect.com is the flagship website of I-Sec. This website was the first online trading
platform lunched in India to provide browser based equity, commodity and currency trading;
all under one login.
ICICIdirect.com is the most visited investment portal in India and by NRI's living across
countries. It is one website, which provides options to invest in over 20 financial products
20 | P a g e
including Equity, Derivatives, Currency Futures, IPO, Mutual Funds, ETF, Fixed Deposits,
Loans, Tax Services, New Pension Systems and Insurance.
ICICI direct also provide current stock market information which includes stock prices, news,
market research reports, stocks tips, events, IPO News and company results. Its 'Centre for
Financial Learning' initiative offers number of online and classroom programs for investors.
The 3-in-1 account, which includes ICICI Bank Account, ICICI Direct Trading Account and
ICICI Demat Account, is the best offering for retail investors in India as it provides easiest
way to invest in stock market and other financial instruments. The customers can visit any of
the over 1500 ICICI Bank branches to get help on financial products which are sold through
ICICI direct.
2009.
ICICIDirect has also won the CNBC AWAAZ Consumer Award for the Most
2008.
ICICIDirect, the neighborhood financial superstore won the prestigious Franchise
21 | P a g e
Major Competitors
HDFC Securities
Kotak Securities
SBI Capital
Sharekhan Broker
IDBI Capital
HSBC InvestDirect
Angel Broking
Indiabulls Services
Reliance Securities
Bajaj Capital
22 | P a g e
23 | P a g e
CallNTrade: CallNTrade allows Investor to call on a local number in your city & trade on
the telephone through our Customer Service Executives. This facility is currently available in
over 11 major states across India.
Trading on NSE/BSE: Through ICICIdirect.com, can trade on NSE as well as BSE.
Market Order: Investor could trade by placing market orders during market hours that allows
to trade at the best obtainable price in the market at the time of execution of the order.
Limit Order: Allows to place a buy/sell order at a price defined by Investor. The execution
can happen at a price more favorable than the price, which is defined by Investor, limit orders
can be placed by Investor during holidays & non-market hours too.
Derivatives
Futures: Through ICICIdirect.com, investor can now trade in index and stock futures on the
NSE. In futures trading, investor takes buy/sell positions in index or stock contracts having a
longer contract period of up to 3 months.
Trading in FUTURES is simple! If, during the course of the contract life, the price moves in
investor favor (i.e. rises in case investor has a buy position or falls in case investor has a sell
position), make a profit.
Presently only selected stocks, which meet the criteria on liquidity and volume, have been
enabled for futures trading.
Calculate Index and Know your Margin are tools to help you in calculating investor margin
requirements and the index & stock price movements. The Centre for Financial Learning is a
comprehensive guide on futures and options trading.
24 | P a g e
OPTIONS
An option is a contract, which gives the buyer the right to buy or sell shares at a specific
price, on or before a specific date. For this, the buyer has to pay to the seller some money,
which is called premium. There is no obligation on the buyer to complete the transaction if
the price is not favorable to him.
To take the buy/sell position on index/stock options, investor has to place certain percentage
of order value as margin. With options trading, investor can leverage on his trading limit by
taking buy/sell positions much more than what he could has taken in cash segment.
The Buyer of a Call Option has the Right but not the Obligation to Purchase the Underlying
Asset at the specified strike price by paying a premium whereas the Seller of the Call has the
obligation of selling the Underlying Asset at the specified Strike price.
The Buyer of a Put Option has the Right but not the Obligation to Sell the Underlying Asset
at the specified strike price by paying a premium whereas the Seller of the Put has the
obligation of buying the Underlying Asset at the specified Strike price.
Currency Derivatives
ICICI Direct offers a simple and convenient way to trade and hedge currency risk in four pair
of Currencies- Dollar, Euro, Pound and Japanese Yen against Indian Rupee.
By offering the choice of trading in different asset class of Currencies ICICI Direct offers the
opportunity to diversify investor portfolio.
25 | P a g e
The benefits of choosing ICICI Direct for your Currency Trading are:
Convenience - Provides a well-diversified set platform for online trading with competitive
brokerage under a single sign-on and completely paper-less investing experience
Expertise - Investor can access Daily Research Reports as well as Fundamental & Technical
Reports and Advisory.
Flexibility Investor can select the Currency Pair USD/INR, EUR/INR, GBP/INR and
JPY/INR in which he wish to trade
Few Advantages of this market are
Trading hours of 09:00 am to 05:00 pm provide more trading opportunities
Trade in prominent currencies like US Dollar, EURO, Pound, and Yen against Indian Rupee
Real time and Transparent Currency Rates in comparison to OTC Rates.
No Counterparty Default risk due to settlement guarantee by regulated clearing house.
Low Taxation (No STT and CTT)
Daily Cash Settlement in INR via MTM (Mark to Market)
The benefits of choosing ICICI Direct for investment in mutual funds are:
Convenience - Provides a well-diversified set of investment products under a single sign-on
and completely paper-less investing experience.
26 | P a g e
Expertise - Investor can access some of the researched funds selected based on rigorous
criterion.
Flexibility - Investor may select the fund that best suits his need
Exchange Traded Funds
Exchange Traded Funds or ETFs are securities that are traded, like individual stocks, on an
exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold throughout
the trading day like any stock.
Most ETFs charge lower annual expenses than many mutual funds. As with stocks, one must
pay a brokerage to buy and sell ETF units.
ICICI direct advantage:
The benefits of choosing ICICI direct for ETF investment are:
Life Insurance
Wealth insurance ensures that investor receives a lump sum amount of money at the maturity of
the Policy. In the unfortunate event of death during the term of the policy, investor family
receives lump sum amount, called the Sum Assured. Thus it combines the benefits of protection
and saving in a single instrument. In ULIP policies, the investment risk in the investment
portfolio is borne by the policy holder.
27 | P a g e
Conditions Apply: Guaranteed benefits are available only if all premiums are paid as per the
premium payment term and the policy is in-force till the completion of entire policy term.
PRODUCT
SUITABILITY
FEATURES
General Insurance
General Insurance products cover Health, Home, Motor and Travel, and help protect financial
health unforeseen events strike close to home. ICICI Lombard is the leading private general
insurance company and has one of the best products.
Partnership with ICICI Lombard enables to bring the entire range of insurance offerings
personal and professional needs, with minimal paperwork and at the comfort of home or
office. Select products can be entirely bought online on ICICIdirect.com with instant policy
issuance.
Fixed Deposits & Bonds
Corporate Fixed Deposits: - ICICI Direct offers a range of Corporate Fixed Deposits
varying in tenures, interest rates & institutions to suit investment needs. The deposit schemes
have been specially chosen from high-safety options to ensure that customers enjoy the twin
benefits of returns and protection.
Why opt for Corporate Fixed Deposits?
If risk appetite is low, fixed deposits are perfect. Since most of the instruments are
rated, corporate fixed deposits have a very high safety level.
Attractive returns at interest rates higher than banks Fixed Deposits.
29 | P a g e
Agreements or even medical reports securely under your ICICI direct account. ELocker helps
eliminate to carry copies of important documents either as a physical photo copy or in storage
devices like Compact Disks, USB token etc. With eLocker, can store documents in one
central secure location and know that documents are just a few clicks away.
Key Benefits:
Secure and Accessible - eLocker ensures that documents are secure and accessible
only via a secure login.
Anywhere, anytime access - eLocker is available from anywhere, via an Internet
connection under ICICI direct account login.
Durability and Longevity - Storage of documents in CD's or other portable media is
prone to handling them with care, eLocker lets store documents online, which ensures
durability and longevity.
No storage or retrieval hassles - Since documents are stored in a digital format under
ICICI direct account, the account is available to you wherever you go.
Trade Racer
Trade Racer is a trading platform, which provides live streaming quotes & Research Calls,
integrated fund transfer system along with multiple watch list facility. Power-packed with
new features, Trade Racer gives the power to identify market opportunities while enjoying
the attractive new look and feel of the trading terminal.
31 | P a g e
32 | P a g e
desiring to open an NPS account t can do so by clicking on "Subscribe NPS" and fulfilling
the prerequisite process.
SEBI regulations require that at least two thirds of the directors of trustee company or board
of trustees must be independent i.e. they should not be associated with the sponsors. In
addition, 50 per cent of the directors of AMC must be independent. All Mutual Funds are
required to be registered with SEBI before they launch any scheme.
How is a Mutual Fund set up?
A Mutual Fund is set up in the form of a trust, which has a sponsor, trustees, and asset
management company (AMC) and custodian. The trust is established by a sponsor or more
than one sponsor who is like a promoter of a company. The trustees of the Mutual Fund hold
its property for the benefit of the unit holders. Asset Management Company (AMC) approved
by SEBI manages the funds by making investments in various types of securities. Custodian,
who is registered with SEBI, holds the securities of various schemes of the fund in its
custody. The trustees are vested with the general power of superintendence and direction over
AMC. They monitor the performance and compliance of SEBI regulations by the Mutual
Fund.
Advantages of mutual funds
Mutual funds have designed to provide maximum benefits to investors, and fund manager
have research team to achieve schemes objective. Assets Management Company has different
type of sector funds, which need to proper planning for strategic investment and to achieve
the market return.
Portfolio Diversification
33 | P a g e
34 | P a g e
Transparency
Funds provide investors with updated information pertaining to the markets and the schemes.
All material facts are disclosed to investors as required by the regulator.
Flexibility
Investors also benefit from the convenience and flexibility offered by Mutual Funds.
Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa.
Option of systematic (at regular intervals) investment and withdrawal is also offered to the
investors in most open-end schemes.
Safety
Mutual Fund industry is part of a well-regulated investment environment where the interests
of the investors are protected by the regulator. All funds are registered with SEBI and
complete transparency is forced.
Disadvantages of mutual funs
The mutual fund not just advantage of investor but also has disadvantages for the funds. The
fund manager not always made profits but might create loss for not properly managed. The
fund have own strategy for investment to hold, to sell, to purchase unit at particular time.
Costs Control Not in the Hands of an Investor
Investor has to pay investment management fees and fund distribution costs as a percentage
of the value of his investments (as long as he holds the units), irrespective of the performance
of the fund
No Customized Portfolios
35 | P a g e
The portfolio of securities in which a fund invests is a decision taken by the fund manager.
Investors have no right to interfere in the decision making process of a fund manager, which
some investors find as a constraint in achieving their financial objectives.
Difficulty in Selecting a Suitable Fund Scheme
Many investors find it difficult to select one option from the plethora of funds/schemes/plans
available. For this, they may have to take advice from financial planners in order to invest in
the right fund to achieve their objectives.
Different types of Mutual funds
(A) On the basis of Objective:
Equity Funds/ Growth Funds: Funds that invest in equity shares are called equity
funds. They carry the principal objective of capital appreciation of the investment
over the medium to long-term. The returns in such funds are volatile since they are
directly linked to the stock markets. They are best suited for investors who are seeking
capital appreciation. There are different types of equity funds such as Diversified
funds, Sector specific funds and Index based funds.
Diversified funds: These funds invest in companies spread across sectors. These
funds are generally meant for risk-taking investors who are not bullish about any
particular sector.
Sector funds: These funds invest primarily in equity shares of companies in a
particular business sector or industry. These funds are targeted at investors who are
extremely bullish about a particular sector.
36 | P a g e
Index funds: These funds invest in the same pattern as popular market indices like
S&P 500 and BSE Index. The value of the index fund varies in proportion to the
benchmark index.
Tax Saving Funds: These funds offer tax benefits to investors under the Income Tax
Act. Opportunities provided under this scheme are in the form of tax rebates U/s 88 as
well saving in Capital Gains U/s 54EA and 54EB. They are best suited for investors
seeking tax concessions.
Debt / Income Funds: These Funds invest predominantly in high-rated fixed-incomebearing instruments like bonds, debentures, government securities, commercial paper
and other money market instruments. They are best suited for the medium to longterm investors who are averse to risk and seek capital preservation. They provide
regular income and safety to the investor.
Liquid Funds / Money Market Funds: These funds invest in highly liquid money
market instruments. The period of investment could be as short as a day. They provide
easy liquidity. They have emerged as an alternative for savings and short-term fixed
deposit accounts with comparatively higher returns. These funds are ideal for
Corporates, institutional investors and business houses who invest their funds for very
short periods.
Gilt Funds: These funds invest in Central and State Government securities. Since
they are Government backed bonds they give a secured return and also ensure safety
of the principal amount. They are best suited for the medium to long-term investors
who are averse to risk.
37 | P a g e
Balanced Funds: These funds invest both in equity shares and fixed-income-bearing
instruments (debt) in some proportion. They provide a steady return and reduce the
volatility of the fund while providing some upside for capital appreciation. They are
ideal for medium- to long-term investors willing to take moderate risks.
Hedge Funds: These funds adopt highly speculative trading strategies. They hedge
risks in order to increase the value of the portfolio.
Interval funds: These funds combine the features of both open-ended and closeended funds wherein the fund is close ended for the first couple of years and openended thereafter. Some funds allow fresh subscriptions and redemption at fixed times
every year (say every six months) in order to reduce the administrative aspects of
daily entry or exit, yet providing reasonable liquidity
(c) On the basis of geographic location
Domestic funds: These funds mobilize the savings of nationals within the country.
Offshore Funds: These funds facilitate cross border fund flow. They invest in
securities of foreign companies. They attract foreign capital for investment.
CHAPTER -II
39 | P a g e
LITERATURE REVIEW
Sahil Jain measured the performance of the equity based mutual funds in India. The assets
under management in this industry is more than Rs 6.8 thousand billion. The Indian market is
flooded with more than a thousand mutual fund schemes, promising better returns than
others. A total of 45 schemes offered by 2 private sector companies and 2 public sector
companies, have been studied over the period April 1997 to April 2012 (15 years). The
analysis has been made using the risk-return relationship and Capital Asset Pricing Model
(CAPM). The overall analysis finds that HDFC and ICICI have been the best performers,
UTI an average performer and LIC the worst performer which gave below- expected returns
on the risk-return relationship.
According to CRISIL Mutual Fund Year book Apr 2013, In 2012 Equities emerged as the star
performer with the benchmark CNX Nifty gaining 28%. The debt market too performed well
with long-term debt funds gaining prominence due to some easing of monetary stance by the
Reserve Bank of India (RBI) and expectations of further easing by the central bank to pump
40 | P a g e
prime the economy. The mutual fund industrys average assets under management (AUM)
grew by 15% in 2012 to Rs 7.87 trillion in December 2012; debt funds AUM rose by over
26% to Rs 5.34 trillion and equity funds AUM by 19% to Rs 1.92 trillion. The focus on retail
investors and improving the penetration of mutual funds continued through the year with
Securities and Exchange Board of India (SEBI) announcing various guidelines to promote
investor education, reduce operational bottlenecks and costs. The regulator directed fund
houses to allocate 2 basis points of their AUM towards investor education initiatives. Further,
SEBI doled out incentives to fund houses that distribute their products beyond the top 15
cities. Single plan structures and introduction of direct plans were other investor friendly
measures introduced by the regulator.
Vijayalakshmi Sundar measured that Mutual funds in India are becoming an ideal investment
choice compared to safe investments such as Fixed Deposits and postal which gives
comparatively low returns. Since the year 2003 from which the present stage of bull run in
the Indian capital markets began, the mutual fund industry While the growth in terms of the
AUM was subdued over the period from 2009-2013, it has gained unprecedented momentum
over the four year period until March 2013. The growth of the capital markets in terms of
BSE -30 shares Sensex has been still higher, and the banking sector has been on a roll over
the last couple of years, throwing up huge opportunities for wealth creation on the way. As
the Indian economy does well with over recent times, banks tend to be one of the biggest
beneficiaries. In fact, post the global financial crisis of 2008 and 2009, the banking index
delivered a return of 82% during May 2009 until October 2010, compared to a return of 40%
delivered by the broader market. Investment in banking sector funds is one of the best avenue
which guarantees stable return with medium risk when compare to other sectors.
41 | P a g e
Jafri Arshad Hasan measured that Indian mutual fund industry is going through a very crucial
phase because of the changing regulations and confusing atmosphere. In this study he discuss
the impact of regulatory changes by SEBI on mutual fund industry and its after affects. It
will also throw some light on the international factors that affected Indian mutual fund
industry and its sentiments. At the end of the, there will be some suggestions for the regulator,
the intermediaries and the Investors. This is an attempt to minimize the level of negativity
and pessimism from the market and to create an atmosphere of trust, information and
optimism.
According to CII, all efforts at the moment are being synchronized towards attaining the
objective of financial inclusion. The drive to expand reach beyond Tier 1 cities and make
mutual fund offerings available to people in smaller towns and cities has indeed taken up the
attention of the industry. However, several components of such an initiative, like investor
awareness, broadening investor participation and product innovation, need to be aligned in
order to fully establish inclusive growth. The industry needs to give due emphasis on the
above factors, drawing out an efficient business and operating model to ensure that the
inherent challenges that the industry is facing is efficiently dealt with. Designing a competent
and all pervasive business model has all the more become important in the current scenario of
changing business and regulatory legislations.
According to KPMG report, The Mutual fund industry needs to have an outside-in
perspective as compared to inside-out perspective. Understanding investors needs should
be followed by a product channel alignment. A number of change catalysts discussed in the
previous section like technology, investment in B-15 cities, investment adviser etc. would be
42 | P a g e
required to help ensure the overall objective of prudent growth and profitability. Increasing
financial literacy will be the key to unlock the doors to B-15 and also to remove the
perception that equates mutual fund to only equity. Investor awareness campaigns should be
conducted to increase the AUM in smaller cities which would help industry to progress in a
holistic manner. AMC, distributors and IFAs are all doing their bit but AMFI and SEBI
should also play a major role in creating awareness. Knowledge about mutual fund industry
should be included in educational curriculum. For future growth, tax could act as an enabler
as tax benefits can be a pull factor for investors. The future potential of Investment Advisors
could be decided by Investors and the regulators. Presence of an unbiased advisor could build
investor trust on the one hand and reward performing products on the other.
According to CII Mutual fund summit 2013, the outlook of the mutual fund industry is
governed to a great extent by the economic situation in the country. The current economic
scenario with sticky inflation and rising fuel prices is likely to adversely impact perceptions,
resulting in depressed equity inflows into the market. They believe that the mutual fund
industry manifests huge opportunity for growth and further penetration, and this can be
achieved over time, with support from technology. The key lies in strengthening distribution
networks and enhancing levels of investor education to increase presence in rural areas. In
terms of opportunity, the infrastructure debt market has become very attractive, luring
investors to invest in this space.
According to Ms. Avani shah, Faculty Shree Chimanbhai Patel Institute of Management and
Research, Ahmedabad, and Dr. Narayan baser Associate Professor, Shri Jairambhai Patel
Institute of Management and Computer Application, Ghandhinagar, found that a mutual fund
is a common pool of money into which investors place their contributions that are to be
43 | P a g e
invested in accordance with a stated objective. Being a part of financial markets although
mutual funds industry is responding very fast by analyze investors perception and
expectations. In their study research of 305 mutual fund investors was conducted in
Ahmedabad using non-probability convenience sampling. After using One-Way ANNOVA,
researcher had come to a conclusion that Funds reputation, Withdrawal facilities, brand name,
Sponsors past performance in terms of risk & return varies among the investors of different
age group & investors different occupation group.
According to Prof Gauri Prabhu Associate Professor AISSMS Institute of Management, Pune
and Dr. N.M. Vechalekar Associate Dean, IndSearch, Pune, the Mutual Funds provide a
platform for a common investor to participate in the Indian capital market with professional
fund management irrespective of the amount invested. The Indian mutual fund industry is
growing rapidly and this is reflected in the increase in Assets under management of various
fund houses. Mutual fund investment is less risky than directly investing in stocks and is
therefore a safer option for risk averse investors. Monthly Income Plan funds offer monthly
returns and invest majorly in debt oriented instruments with little exposure to equity.
However it has been observed that most of the investors are not aware of the benefits of
investment in mutual funds. This is reflected from the study conducted in this research paper.
This paper makes an attempt to identify various factors affecting perception of investors
regarding investment in Mutual funds.
44 | P a g e
According to Deepti Goel Dept. of Economics, Assistant Professor, PGDAV College, D.U.,
India and Richa Gupta Dept. of Commerce Assistant Professor PGDAV College, D.U., India
found that the landscape of the financial sector in India is continuously evolving, accredited
to regulatory changes being undertaken, which is leading market participant like the asset
management companies (AMCs) and distributors to restructure their strategies and adopt
business models which will yield sustainable benefits. Some of the other trends which have
emerged strongly over the past year are heavy outflows triggered by market volatility and
partnering of asset management companies with banks, to increase the strength of distribution
networks.
According to Anand Singh Research Scholar, Faculty of Commerce, B.H.U, Varanasi and
Prof. C.P Mall, Professor, Faculty of Commerce, B.H.U, Varanasi found that investors are
pooled together for investment in a diversified portfolio of securities to spread risk and to
ensure steady returns. These funds bring a wide variety of securities within the reach of the
most modest of investors. It is essentially a mechanism of pooling together savings of large
number of investors for collective investment with an approved objective of attractive yield
and appreciation in value. The Mutual Funds offers different investment objectives such as
growth, income and Tax planning. In the recent times the Indian Capital Market has
witnessed new trends, one of them being the spectacular growth of Mutual Funds. There are
more than 600 schemes offered by Mutual Funds, and these funds have mobilized substantial
amount of the household savings.
45 | P a g e
CHAPTER- III
46 | P a g e
RESEARCH METHODLOGY
Research methodology is a methodology for collecting all sorts of information & data
pertaining to the subject in question. The objective is to examine all the issues involved &
conduct situational analysis. The methodology includes the overall research design, sampling
procedure & fieldwork done & finally the analysis procedure. The methodology used in the
study consistent of sample survey using primary data. The primary data has been collected
with the help of questionnaire. The questionnaire has been drafted & presented by the ICICI
Securities, which was in online mode
PROBLEM OF THE STUDY
Most of the customers of ICICI Mutual Fund simplified are inactive for long time.
For improving their service.
For creating awareness of their updated website among their existing customer.
To know about their future investment.
OBJECTIVE OF STUDY
To create awareness to its customer about Mutual Fund.
To make them aware of online portfolio of ICICI Direct.
To know about response of the customer for future investments in mutual fund.
47 | P a g e
48 | P a g e
S.N
o.
Name
Are you
Planning to
Invest in MF
Any Feedback /
Suggestion
1.
Vijay Mehandiratta
4 No
NA
Bhanwar Sharma
4 No
NA
Vivek Singh
4 No
good demo
Pravesh Kumar
3 No
Namrata Rashmi
4 No
good demo
Tribesh Choudhuri
3 No
ok
Mukul Garg
4 Yes
NA
Surender Chouhan
4 No
NA
Sunita Aggarwal
10. Debnath Banerjee
11. Surendra
Shekhawat
12. Sajinder Kaur
13. Saleem Khan
14. M Nair
15.
Anil Gautam
16.
Ravi Gupta
17. Anil Kumar
18. Rakesh Kumar
5 No
3 No
good
ok
3
4
5
5
NA
good
NONE
Ok. very good
Lack of knowledge
and experience.
personal loan
settlement
NA
NA
2.
3.
4.
5.
6.
7.
8.
9.
49 | P a g e
No
No
No
Yes
4 No
4 No
3 No
4 No
Visalakshi
Satyamurthy
27. Ram Chauhan
28.
Kumkum Grover
29. Rakesh Rastogi
30. Kalindi Rastogi
31. Suchitra Dutta
32. Swaraj Barua
33. Syama Sundara
Obulapuram
34.
Danwati
35. Nitin Saxena
36. Yogesh Kumar
37. Nipun Lamba
38. Indu Lal
39. Sushmita Basu
40. Neelam Budhwar
41. Rishi Saxena
42. Shailendra Mishra
43. Sanjay Kumar
44. N Banik
45. Poonam Sharma
46. Archana Pandey
47.
Prakash Pradhan
50 | P a g e
4
4
3
3
3
4
3
No
No
No
No
No
No
No
5 Yes
4 No
3
4
4
2
3
No
No
No
No
No
NA
NA
NA
NA
NA
good
NA
Very god
professional
website. since icici
direct is getting
commission like
any other
distributor it is
suggested for
discontinuation of
charges of Rs 30
and service tax on
every sip
investment
NA
Service is very
poor.
good
good
good
NA
3 No
NA
4
3
4
4
3
3
3
4
3
5
4
4
3
Yes
Yes
No
No
No
No
No
No
No
Yes
No
No
No
4 Yes
4 No
3 Yes
M Kathait
51. Ravi Mittal
52.
4 No
5 No
S Dey
53. Mohammed Arf
54. Narpinder Kaur
55. Mihir Singhal
56. Jay Shah
57. Habibur Rahman
58. Bharti Kukreti
59. Tanmaya Sahu
60. Anil Singla
61. Mukul Rastogi
62. Gyana Das
2
4
4
4
3
3
3
5
4
4
4
No
Yes
No
No
No
No
No
No
yes
No
No
NA
NA
Customer did not
know about daily
NAV changing
information.
Very good
Yes it is a good
product. I will ask
my friends.
NA
NA
NA
Good
Good
Ok. service is good
No
Ok. Good service
No
good
I have to meet ICICI Securities customers and have to tell them about mutual fund
and its benefit.
I have to show mutual fund and ICICI Direct site demo to customers.
I am responsible to solve their queries about mutual fund.
If customers want to know about online portal and online trading I have to give them
site demo.
I have to make customer fill up one online feedback form.
SAMPLING TECHNIQUE: Study the Project, a Simple Random Sampling technique is
used.
51 | P a g e
DATA INTERPRETATION: Interpretation of data is done by using statistical tools like Pie
diagrams. Bar diagrams etc. and using quantitative techniques (by using these techniques)
accurate information is obtained.
CLASSIFICATION & TABULATION OF DATA:
The data thus collected were classified according to the categories, counting sheets & the
summary tables were prepared. The resultant tables were one dimensional, two-dimensional.
CHAPTER-IV
52 | P a g e
Equity
Mutual funds
Insurance
Corporate FD
Debenture/ bonds
PPF
Others
None
Ans:
53 | P a g e
Responses
Responses
54 | P a g e
Online
Offline
responses
responses
55 | P a g e
Ques 3. Have you invested in any of the following through ICICI Direct.com in the last 12
months?
Equity
Mutual funds
Insurance
Debenture/ bonds
None
Ans: Out of 50 customers not even a single person invested in any of the above mention
funds through ICICIdirect.com in the last 12 months. Mainly the customers assigned was
inactive customers.
Q4. Were you aware that you can invest in mutual funds through ICICI direct.com?
Yes
Ans:
56 | P a g e
NO
Yes
no
Figure no.4 Reponses of customer about awareness that they can invest in MF through
ICICIDirect.com.
Analysis: According to the survey, out of 50 customers, 47 customers already knew that they
can invest in MF through ICICI direct.com but there are still 3 customers who didnt knew
about this.
Q5. What are the reasons for not investing in mutual funds through ICICI direct.com?
I need assistance to invest in MF through ICICI direct.com
I need more knowledge on MF before I invest
I am not interested as I invest through other brokers/agents.
I do not invest in MF
Ans:
options
respons
es
16
6
3
25
Table no. 1. Table showing reasons of customers for not investing in mutual funds through
ICICI direct.com
57 | P a g e
responses
I need assistance to
invest in MF through ICICI
direct.com
I am not interested as I
invest through other
brokers/agents.
I do not invest in MF
Figure no 5. Figure showing reasons of customers for not investing in mutual funds
through ICICI direct.com
Analysis: According to the survey it is been seen that out of 50 customers, majority of
customers do not want to invest in mutual funds. There can be a lot of reasons for not
investing in mutual funds. The reason could be lack of awareness, fear of losing their money
and many more but still there are 16 customers out of 50 who want to invest in MF but want
some assistance to invest in MF.
Q6. Which of the following online transactions have you done in the past?
I buy movie tickets online
options
responses
21
17
12
39
3
Table no2. Table showing responses of customers who have done online transactions
in the past.
58 | P a g e
responses
I buy movie tickets
online
I buy flight tickets
online
I book hotels online.
I use online banking
I do not do any online
transactions.
Quarterly
Once in 6 months
once in a year
Ans.
options
Monthly
Quarterly
Once in 6 months
Once in a year
respons
es
32
7
6
5
Table no. 3. Table showing how regularly the customers used to transact online.
59 | P a g e
responses
Monthly
Quarterly
Once in 6 months
Once in a year
Figure no. 7. Figure showing how regularly the customers used to transact online.
Analysis. According to a survey, out of 50 customers, 32 customers used to transact online
monthly. While there are 7 customers who used to transact online once in a quarter, while
there are still 5 persons who used to transact online once in a year.
Q8. Which medium of news information and analysis do you use to keep yourself updated on
investment products?
I discuss with my friends/family/ colleagues
I use financial websites for comparisons and news
I have a financial advisor/ broker/ MF distributor who provides me the information.
I read media reports
I prefer to do my own research
Ans:
60 | P a g e
responses
responses
Figure no. 8
Options
respons
es
7
Table no. 4. Table showing how does the customers check performance of all/any of their
investment.
responses
responses
Figure no. 9 Figure showing how does the customers check performance of all/any of their
investment.
Analysis: According to the survey, out of 50 customers, 26 customers ask their broker/bank to
provide them the information to check the performance of all/any of their investment. But 10
customers are still there who check performance of all/any of their investment on their own.
62 | P a g e
No
responses
responses
Q11. Which of the following site features do you find useful at ICICI direct site?
Capital gain statement
Portfolio monitoring
63 | P a g e
Ease of purchase/redemption
Personalized research recommendations against holdings
Others
Ans:
Figure no.11 Figure showing responses of customers about the site features they found useful
at ICICIdirect.com.
Analysis: According to the survey it is found that most of the ICICI securities customers
found capital gain statement useful at icici direct site.
FINDINGS
Most of the customers were not fully aware with mutual fund and its advantage.
64 | P a g e
Customers even who know about mutual fund, are not investing their money into it
because of lack of knowledge about mutual fund.
Customers prefer to invest in other alternatives mostly in equity.
In future, customers would like to invest in mutual fund if ICICI Securities create
awareness and provide right knowledge about mutual fund among customers.
Most of the customers were using online mode of payment frequently.
Almost every customer were agree to continue with ICICI Securities services.
There was communication gap with some customers.
Mostly customers update themselves about investment decision by their own or take
advice with family and friends.
ICICI Securities should provide proper guidance to its customers about mutual fund
though seminars or other way of interaction.
65 | P a g e
There should be one department, which will call customer once in a month and notice
their problem or their complaint so there would not be any communication gap.
At the time of opening account, ICICI Securities can offer one tutorial class about
mutual fund or about other investment plans so there would not be any lack of
knowledge in customer mind.
ICICI Securities can send details about investment decision to its customers through
e-mail or SMS.
Before making any investment financial advisors should first enquire about the risk
tolerance of the investors, their need, and time. By considering these three things they
can take the customers into consideration.
CONCLUSION
Running of successful Mutual Funds requires complete understanding the mind set of small
investors. This is a study taken to make an attempt to understand the financial behavior and
perception of ICICI Securities customers. I observed that many of customers have fear of
Mutual Fund. Many of customers do not invest in mutual fund due to lack of awareness
66 | P a g e
although they have money to invest. Most of customers prefer to invest in equity. Investors
should be made aware of the benefits. Nobody will invest till he/she is fully convinced of the
scheme.
REFERENCE
1. Jain, Sahil, (July-Aug. 2012), Analysis of Equity Based Mutual funds in India (IOSR
Journal of Business and Management (IOSRJBM) Volume 2, Issue 1), PP 01-04.
2. Kaur, Gurjeet, Sharma R.D, Mahajan Neha, Oct-Dec 2014, Segmentation of Bank
Customer by Loyalty and Switching Intentation, Vol(39) No.4.
3. CRISIL Research, Apr 2013, CRISIL Mutual Fund Year Book, PP 01-80
4. Sundar, Vijayalakshmi, Mar-Apr 2014, Growth and Development of Mutual fund
industry with reference to banking Sector Funds: An Indian Perspective, Financial &
Business management (IFBM), Vol.2 No.2 PP 01-05.
5. Hasan, Arshad Jafri, 2013, analysis of Mutual Fund Industry of India in the light of
New Regulation and International factors, I.J.E.M.S, Vol.4(2), PP01-03.
6. CII 6th Mutual fund Summit, 2010, international conference.
67 | P a g e
68 | P a g e
Questionnaire
Name: ________________
Age: _________
Gender:
Male
Female
Occupation ___________
Q 1. Have you invested in any of the following in the last 12 months?
Equity
Mutual funds
Insurance
Corporate FD
Debenture/ bonds
PPF
Others
None
Offline
Q3. Have you invested in any of the following through ICICI Direct.com in the last 12
months?
Equity
69 | P a g e
Mutual funds
Insurance
Debenture/ bonds
None
Q4. Are you aware that you can invest in mutual funds through ICICI direct.com?
Yes
NO
Q5 what are the reasons for not investing in mutual funds through ICICI direct.com?
I need assistance to invest in MF through ICICI direct.com
I need more knowledge on MF before I invest
I am not interested as I invest through other brokers/agents.
I do not invest in MF
Q6. Which of the following online transactions have you done in the past?
I buy movie tickets online
I buy flight tickets online
I book hotels online.
I use online banking
I do not do any online transactions.
Q7. How often do you transact online in the above mentioned transaction?
Monthly
Quarterly
Once in 6 months
Once in a year
Q8. Which medium of news information and analysis do you use to keep yourself updated on
investment products?
I discuss with my friends/family/ colleagues
I use financial websites for comparisons and news
I have a financial advisor/ broker/ MF distributor who provides me the information.
I read media reports
70 | P a g e
No
Q11. Which of the following site features do you find useful at ICICI direct site?
Capital gain statement
Portfolio monitoring
Ease of purchase/redemption
Personalized research recommendations against holdings
Others
71 | P a g e
72 | P a g e