Data Analysis

Analysis of Investment in Mutual Funds
INDEX
CHAPTER
NO.
1.
2.
TOPIC
Executive summary
Industry Profile
2.1 Introduction to Mutual Funds
2.2 Benefits of Mutual Fund investment
2.3 Types of Mutual Funds
2.4 Risk associated with Mutual Funds
2.5 Competition in Mutual Funds Industry
2.6 Major players in Mutual Funds Industry
3.
Company profile
3.1 Introduction to AnandRathi company
3.2 Milestones
3.3 AnandRathi core strength
3.4 Management team
3.5 Different branches in INDIA
3.6 List of products
3.7 Mission & Vision
4.
Objectives & limitations of the project
5.
Methodology & objectives
6.
Analysis & Interpretation
7.
Conclusions
8.
Suggestions
9.
Bibliography
10.
Annexure
1
LN College Of Management & Technology, Surat
EXECUTIVE
SUMMARY
2
EXECUTIVE SUMMARY
I have completed my training on the topic of Analysis of Investment in
Mutual Funds. I have collected my data for analysis through personal
contacts which helped me lot in collecting primary data.
Role of financial system is to enthusiast economic development. As
investors are getting more educated, aware & prudent they look for
innovative investment instruments so that they are able to reduce
investment risk, minimize transaction costs, & maximize returns along with
certain level of convenience as a result there has been as advent of
numerous innovative financial instrument such as bonds, company deposits,
insurance, & mutual funds. All of which could be matched with individuals
investment needs. Mutual funds score over all other investment options in
terms of safety, liquidity, returns, & are as transparent, convenient as it can
get. Goal of a mutual fund is to provide an efficient way to make money. In
India there are 36 mutual funds with different investment strategies & goals
to choose from different mutual funds have different risks, which differ
because of funds manager, & investment styles.
DEFINATION OF RESEARCH
According to PHILIP KOTLER Marketing Research is the systematic design,

collection, analysis, & reporting of data & findings relevant to a specific
marketing situation facing the company.
This is Marketing Research.
3
OBJECTIVES OF THE STUDY

The objective of the research is to study & analyze the awareness level
of investors of mutual funds.
To measure the satisfaction level of investors regarding mutual funds.

To know the mutual funds performance levels in the present market.
LIMITATIONS OF THE STUDY
Found respondents unaware of Mutual funds investment.
Respondents were not having time to fill the questionnaire.
Some respondents give fake answers which are not correct & is difficult
to analyze the data & solve the problem.
RESEARCH PROCESS
My research project has a specified framework for collecting the data in an
effective manner. Such framework is called RESEARCH DESIGN. The
research process which was followed by me consisted following steps:
A. PROBLEM:
The problem at hand was to study & measure the awareness level of
people regarding mutual funds in the city.
B. DEVELOPING THE RESEARCH PLAN:
The development of research plan has the following steps:
DATA
SOURCES:
Two
types
of
data
were
taken
into
consideration i.e. Secondary data & Primary data. My major

4

emphasis was on gathering the primary data. The secondary
data has been used to make things more clear.
PRIMARY DATA: Direct collection of data from the source

of information, technology, including personal interviewing,
survey.
SECONDARY DATA: Indirect collection of data from

sources containing past or recent past information like
books, magazines, internet etc.
RESEARCH INSTRUMENT
My research instrument was my questionnaire by which I did
survey & collected my data for solving my research problem.
Questionnaire consisting of a set of questions made to be filled
by various respondents.
SAMPLING PLAN
The sampling plan calls for three decisions.
SAMPLING UNIT: I have completed my survey in Kribhco

township, Reliance township, & in Banks.
SAMPLE SIZE: The sample consisted of 100 respondents.

The sample was collected from every & any customer as it
was open for all. The selection of the respondents was
done on the basis of simple random sampling.
CONTACT METHODS: I have contacted the respondents

through personal interviews.
COLLECTING THE INFORMATION

After this, I have collected the information from the respondents
with the help of questionnaire.
ANALYZE THE INFORMATION
5

The next step is to extract the relevant findings from the
collected data. I have tabulated the collected data & developed
proportion distributions. Thus, the whole data was grouped
aspect wise & was presented in tabular form. Thus, percentages
were prepared to render impact of the study.
PRESENTATIONS OF FINDINGS
This was the last step of the survey.
CONCLUSION
Found around 15% of investors were unknown from investing in
Mutual Funds.
Some more investors didnt found profits in investing in mutual
funds, rather many of them were sayings that in mutual funds we
dont earn much profits as the percentages on interest is less
than other preferences of investing.
Many of them invests so they compared ICICI PRUDENTIAL BANK
WITH HDFC BANK. They said that ICICI is more better than HDFC
as their services, percentages are more better than HDFC & also
it is very convenient to invest as their small branches are
scattered on each & every place but HDFC has their limited
branches.
SUGGESTIONS
I suggest that the government should increase the
percentages & give more benefits in comparison to other
preferences of investing so that the more investors could
get attract towards investing in mutual funds.
6

Government should give more advertisements on investing
in preferences so that the majority should get aware of
investing their money in such preferences so that they
could enjoy their benefits.
HDFC bank should increase their branches on every place
& provide more good services so that investors could get
fascinated towards their bank & invest their money.
INDUSTRY
PROFILE
7
WHAT IS MUTUAL FUND???

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
8

AMC
Savings
Investments
Trust
Units
Returns
Unit holders
Registrar
SEBI
Trust
Custodian
AMC
The structure of Mutual Funds in India is governed by SEBI (Mutual Fund)

Regulations, 1996.
It is mandatory to have a three tier structure of Sponsor Trustee Asset

Management Company.
The trust is established by a Sponsor or more than one sponsor who is like
a promoter of a company. He appoints the Trustees who are responsible to
the investors of the fund.
The Trustees of the mutual fund hold its property for the benefit of the
unit holders.
Asset Management Company (AMC) approved by SEBI is the business face

of the mutual fund as it manages all the affairs of the fund by making
investments in various types of securities.
Custodian, who is registered with SEBI, holds the securities of various

schemes of the funds in its custody.
9
THE SCENARIOHOW
IT STARTED AND HOW
SCENARIO
IS IT TODAY
M U TUA L F U NDS - T HE G LOB A L P ER SP EC TI V E
Mutual Funds as a concept developed in the early 20 th century. But the idea
of pooling together money for investment purposes started in Europe in the
mid-1800s mainly in Netherlands and Scotland followed by Belgium, England
and France. Though today the largest market of Mutual Funds is USA yet the
first Mutual Fund that was launched in USA is the New York Stock Trust in
1889 followed by the widely known open-ended Massachusetts Investors
Trust in 1924, now called the MFS. These developments led to the
establishment of Fidelity Investments which today is the worlds largest
Mutual Fund Company and other companies like Pioneer, Scudder and
Putnam funds. Mutual Funds were initially termed as trusts.
M U T UA L F U N D S I N D U S T RY
IN
INDIA
Mutual Fund industry started in India in 1963 at the initiative of the

Government of India and the Reserve Bank of India which led to the
formation of UTI (Unit Trust of India).
The Mutual fund industry can be broadly put into four phases:
First Phase (1964-87) - UTI commenced its operations from July

1964 with a view to encouraging savings and investment and
participation in the income, profits and gains accruing to the
corporation from the acquisition, holding management and disposal of
securities. The first scheme launched by UTI was called the UNIT
Scheme 1964 more popularly US-64.
Second Phase (1987-1993) - Initially, the growth was slow but it

accelerated from the year 1987. In 1987, public sector Mutual Funds
10

was setup by public sector banks, the LIC (Life Insurance Corporation
of India) and the GIC (General Insurance Corporation of India). SBI
(State Bank of India) launched the first non-UTI Mutual Fund in 1987
followed by other public sector banks.
Third Phase (1993-2003) - In 1993 the first private sector Mutual

Fund was launched by Kothari Pioneer which now has merged with
Franklin Templeton. The number of mutual fund houses went on
increasing, with many foreign mutual funds setting up funds in India
and also the industry has witnessed several mergers and acquisitions.
As at the end of January 2003, there were 33 mutual funds with total
assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541
crores of assets under management was way ahead of other mutual
funds.
Fourth Phase (Since February 2003) - UTI was bifurcated into two
separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29835 crores as at the end
of January 2003, representing broadly, the assets of US 64 scheme,
assured return and certain other schemes. The Specified Undertaking
of Unit Trust of India, functioning under an administrator and under the
rules framed by Government of India and does not come under the
purview of the Mutual Fund Regulations. The second is the UTI Mutual
Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI
and functions under the Mutual Fund Regulations. With the bifurcation
of the erstwhile UTI which had in March 2000 more than Rs.76, 000
crores of assets under management and with the setting up of a UTI
Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with
recent mergers taking place among different private sector funds, the
mutual fund industry has entered its current phase of consolidation
and growth. As at the end of September, 2004, there were 29 funds,
which manage assets of Rs.153108 crores under 421 schemes.
11

The first Mutual Fund regulations were formed in 1993 which was the SEBI
(Mutual Fund) Regulations 1993. The present day Mutual Fund industry is
governed by the SEBI (Mutual Fund) Regulations 1996.
The following figure shows the growth in AUM (Asset under Management) of
the Indian Mutual Fund Industry as on March 2009.
12

Today there are over 30 AMCs offering a huge number of schemes giving the
investor a huge horizon to choose from. The market has become very
competitive with the companies fighting tooth and nail to attract and keep
the investor from investing in their competitors schemes. Today, Reliance
Mutual Funds is the leading company in this sector with total assets under
management being Rs.46, 307 crores while Prudential ICICI being in the
second position with Rs.37, 870 crores. The following graph shows the
composition of five of the top AMCs in India-
Basic Organisation of a Mutual Fund

There are many entities involved and the diagram below illustrates the
organizational set up of a Mutual Fund. These entities will be explained later
in the report.
Mutual Funds diversify their risk by holding a portfolio of instead of only one
asset. This is because by holding all your money in just one asset, the
entire fortunes of your portfolio depend on this one asset. By creating a
portfolio of a variety of assets, this risk is substantially reduced.
Mutual Fund investments are not totally risk free. In fact, investing in
Mutual Funds contains the same risk as investing in the markets, the only
difference being that due to professional management of funds the
controllable risks are substantially reduced. A very important risk involved
in Mutual Fund investments is the market risk. However, the company
specific risks are largely eliminated due to professional fund management.
IMPORTANT CHARACTERISTICS OF A MUTUAL FUND
A Mutual Fund actually belongs to the investors who have pooled their
13

Funds. The ownership of the mutual fund is in the hands of the
Investors.
A Mutual Fund is managed by investment professional and other

Service providers, who earns a fee for their services, from the funds.
The pool of Funds is invested in a portfolio of marketable investments.
The value of the portfolio is updated every day.
The investors share in the fund is denominated by units. The value

Of the units changes with change in the portfolio value, every day.
The
Value of one unit of investment is called net asset value (NAV).
The investment portfolio of the mutual fund is created according to

The stated
Investment objectives of the Fund.
OBJECTIVES OF A MUTUAL FUND
To Provide an opportunity for lower income groups to acquire without

Much difficulty, property in the form of shares.
To cater mainly of the need of individual investors who have limited

means.
To Manage investors portfolio that provides regular income, growth,

Safety, liquidity, tax advantage, professional management and
diversification.
14
BENEFITS OF MUTUAL FUND INVESTMENT
Professional Management
Mutual Funds provide the services of experienced and skilled professionals,
backed by a dedicated investment research team that analyses the
performance and prospects of companies and selects suitable investments to
achieve the objectives of the scheme.
Diversification
Mutual Funds invest in a number of companies across a broad cross-section
of industries and sectors. This diversification reduces the risk because
seldom do all stocks decline at the same time and in the same proportion.
15

You achieve this diversification through a Mutual Fund with far less money
than you can do on your own.
Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many
problems such as bad deliveries, delayed payments and follow up with
brokers and companies. Mutual Funds save your time and make investing
easy and convenient.
Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a
higher return as they invest in a diversified basket of selected securities.
Low Costs
Mutual Funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in
brokerage, custodial and other fees translate into lower costs for investors.
Liquidity
In open-end schemes, the investor gets the money back promptly at net
asset value related prices from the Mutual Fund. In closed-end schemes, the
units can be sold on a stock exchange at the prevailing market price or the
investor can avail of the facility of direct repurchase at NAV related prices by
the Mutual Fund.
Transparency
You get regular information on the value of your investment in addition to
disclosure on the specific investments made by your scheme, the proportion
invested in each class of assets and the fund manager's investment strategy
and outlook.
16

Flexibility
Through features such as regular investment plans, regular withdrawal plans
and dividend reinvestment plans, you can systematically invest or withdraw
funds according to your needs and convenience.
Affordability
Investors individually may lack sufficient funds to invest in high-grade stocks.
A mutual fund because of its large corpus allows even a small investor to
take the benefit of its investment strategy.
Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a
lifetime.
Well Regulated
All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors.
The operations of Mutual Funds are regularly monitored by SEBI.
TYPES OF MUTUAL FUNDS

Mutual fund schemes may be classified on the basis of its structure and its
investment objective.
By Structure:
Open-ended Funds
17

An open-end fund is one that is available for subscription all through the
year. These do not have a fixed maturity. Investors can conveniently buy and
sell units at Net Asset Value ("NAV") related prices. The key feature of openend schemes is liquidity.
Closed-ended Funds
A closed-end fund has a stipulated maturity period which generally ranging
from 3 to 15 years. The fund is open for subscription only during a specified
period. Investors can invest in the scheme at the time of the initial public
issue and thereafter they can buy or sell the units of the scheme on the stock
exchanges where they are listed. In order to provide an exit route to the
investors, some close-ended funds give an option of selling back the units to
the Mutual Fund through periodic repurchase at NAV related prices. SEBI
Regulations stipulate that at least one of the two exit routes is provided to
the investor.
Interval Funds
Interval funds combine the features of open-ended and close-ended
schemes. They are open for sale or redemption during pre-determined
intervals at NAV related prices.
By Investment Objective:
Growth Funds
The aim of growth funds is to provide capital appreciation over the medium
to long- term. Such schemes normally invest a majority of their corpus in
equities. It has been proven that returns from stocks, have outperformed
most other kind of investments held over the long term. Growth schemes are
ideal for investors having a long-term outlook seeking growth over a period
of time.
18
Income Funds
The aim of income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such as
bonds, corporate debentures and Government securities. Income Funds are
ideal for capital stability and regular income.
Balanced Funds
The aim of balanced funds is to provide both growth and regular income.
Such schemes periodically distribute a part of their earning and invest both
in equities and fixed income securities in the proportion indicated in their
offer documents. In a rising stock market, the NAV of these schemes may not
normally keep pace, or fall equally when the market falls. These are ideal for
investors looking for a combination of income and moderate growth.
Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of
capital and moderate income. These schemes generally invest in safer shortterm instruments such as treasury bills, certificates of deposit, commercial
paper and inter-bank call money. Returns on these schemes may fluctuate
Depending upon the interest rates prevailing in the market. These are ideal
for Corporate and individual investors as a means to park their surplus funds
for short periods.
Load Funds
A Load Fund is one that charges a commission for entry or exit. That is, each
time you buy or sell units in the fund, a commission will be payable. Typically
entry and exit loads range from 1% to 2%. It could be worth paying the load,
if the fund has a good performance history.
No-Load Funds
19

A No-Load Fund is one that does not charge a commission for entry or exit.
That is, no commission is payable on purchase or sale of units in the fund.
The advantage of a no load fund is that the entire corpus is put to work.
Other Schemes:
Tax Saving Schemes
These schemes offer tax rebates to the investors under specific provisions of
the Indian Income Tax laws as the Government offers tax incentives for
investment in specified avenues. Investments made in Equity Linked Savings
Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the
Income Tax Act, 1961. The Act also provides opportunities to investors to
save capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided
the capital asset has been sold prior to April 1, 2000 and the amount is
invested before September 30, 2000.
Special Schemes
Industry Specific Schemes
Industry Specific Schemes invest only in the industries specified in the offer
document. The investment of these funds is limited to specific industries like
InfoTech, FMCG, and Pharmaceuticals etc.
Index Schemes
Index Funds attempt to replicate the performance of a particular index such
as the BSE Sensex or the NSE 50.
Sectoral Schemes:Sectoral Funds are those, which invest exclusively in a specified industry or a
group of industries or various segments such as 'A' Group shares or initial
public offerings.
20
Structure of the Indian Mutual Fund industry

The largest categories of Mutual Funds are the ones floated by the private
sector and by Foreign Asset Management Companies. The largest of these
are Prudential ICICI AMC and Birla Sun Life AMC. The aggregate corpus of
assets managed by this category of AMCs is in excess of Rs.350 bn.
Earlier the Indian Mutual Fund industry was dominated by the Unit Trust of
India which has a total corpus of Rs.700 bn collected from more than 20
million investors. The UTI has many funds/schemes in all categories i.e.
equity, balanced, income etc. with some being open-ended and some being
closed-ended. The Unit Scheme 1964 commonly referred to as US 64, which
is a balanced fund, is the biggest scheme with a corpus of about Rs.200 bn.
UTI was floated by financial institutions and is governed by a special Act of
Parliament. Most of its investors believe that the UTI is government owned
and controlled, which, while legally incorrect, is true for all practical
purposes.
The second largest categories of mutual funds are the ones floated by
nationalized banks. Canara bank Asset Management floated by Canara Bank
and SBI Funds Management floated by the State Bank of India are the largest
of these. GIC AMC floated by the General Insurance Corporation and Jeevan
Bima Sahayog AMC floated by the LIC are some of the other prominent ones.
The aggregate corpus of funds managed by this category of AMCs is about
Rs.200 bn.
WHY MUTUAL FUNDS???

An
investor
normally
prioritizes
his
investment
needs
before
undertaking an investment. So different goals will be allocated

21

different proportions of the total disposable amount. Investments for
specific goals normally find their way into the debt market as risk
reduction is of prime importance. This is the area for the risk-averse
investors and here, mutual funds are generally the best option. The
reasons are not difficult to see.
One can avail of the benefits of better returns with added benefits of
anytime liquidity by investing in open-ended debt funds at lower risk.
Many people have burnt their fingers by investing in fixed deposits of
companies who were assuring high returns but have gone bust in
course of time leading to distraught investors as well as pending cases
in the Company Law Board.
This risk of default by any company that one has chosen to invest in,
can be minimized by investing in mutual funds as the fund managers
analyze the companies financials more minutely than an individual
can do as they have the expertise to do so.
They can manage the maturity of their portfolio by investing in

instruments of varied maturity profiles. Since there is no penalty on
pre-mature withdrawal, as in the cases of fixed deposits, debt funds
provide enough liquidity.
Moreover, mutual funds are better placed to absorb the fluctuations in

the prices of the securities as a result of interest rate variation and one
can benefits from any such price movement.
Apart from liquidity, these funds have also provided very good post-tax
returns on year to year basis. Even historically, we find that some of
the debt funds have generated superior returns at relatively low level
22

of risks. On an average debt funds have posted returns over 10 percent
over one-year horizon. The best performing funds have given returns of
around 14 percent in the last one-year period.
In nutshell we can say that these funds have delivered more than what
one expects of debt avenues such as post office schemes or bank fixed
deposits. Though they are charged with a dividend distribution tax on
dividend payout at 10 percent (plus a surcharge of 10 percent), the net
income received is still tax free in the hands of investor and is
generally much more than all other avenues, on a post tax basis.
Moving up in the risk spectrum, we have people who would like to take
some risk and invest in equity funds/capital market. However, since
their appetite for risk is also limited, they would rather have some
exposure to debt as well. For these investors, balanced funds provide
an easy route of investment.
Armed with the expertise of investment techniques, they can invest in
equity as well as good quality debt thereby reducing risks and
providing the investor with better returns than he could otherwise
manage. Since they can reshuffle their portfolio as per market
conditions, they are likely to generate moderate returns even in
pessimistic market conditions.
This risk of default by any company that one has chosen to invest in,
can be minimized by investing in mutual funds as the fund managers
analyze the companies financials more minutely than an individual
can do as they have the expertise to do so. They can manage the
maturity of their portfolio by investing in instruments of varied
maturity profiles. Since there is no penalty on pre-mature withdrawal,
as in the cases of fixed deposits, debt funds provide enough liquidity.
23

Moreover, mutual funds are better placed to absorb the fluctuations in
the prices of the securities as a result of interest rate variation and one
can benefits from any such price movement.
Next come the risk takers.
Risk takers by their very nature, would not be averse to

investing in high-risk avenues. Capital markets find their fancy
more often than not, because they have historically generated
better returns than any other avenue, provided, the money was
judiciously invested.
Though the risk associated is generally on the higher side of the

spectrum,
the
return-potential
compensates
for
the
risk
attached.
Capital markets interest people, albeit not all for there are
several problems associated. First issue is that of expertise.
While investing directly into capital market one has to be
analytical enough to judge the valuation of the stock and
understand the complex undertones of the stock.
One needs to judge the right valuation for exiting the stock too.
It is very difficult for a small investor to keep track of the
movements of the market. Entrusting the job to experts, who
watch the trends of the market and analyze the valuations of the
stocks will solve this problem for an investor.
Mutual funds specialize in identification of stocks through

dedicated experts in the field and this enables them to pick
24

stocks at the right moment. Sector funds provide an edge and
generate good returns if the particular sector is doing well.
Next problem is that of funds/money. A single person cant invest in
multiple high-priced stocks for the sole reason that his pockets are not
likely to be deep enough. This limits him from diversifying his portfolio
as well as benefiting from multiple investments.
Investing through MF route enables an investor to invest in many good
stocks and reap benefits even through a small investment. This not
only diversifies the portfolio and helps in generating returns from a
number of sectors but reduces the risk as well. Though identification of
the right fund might not be an easy task, availability of good
investment consultants and counselors will help investors take
informed decision
How are the Mutual Funds Structured?

The Mutual Funds are structured in two forms: Company form and Trust form.
Company Form: These forms of mutual funds are more popular in US.
Trust Form: In India, mutual funds are organized as Trusts. The Trust
is either managed by a Board of Trustees or by a Trustee Company.
There must be at least 4 members in the Board of Trustees and at least
2/3 of the members of the board must be independent.
Trustee of one mutual fund cannot be a trustee of another mutual fund.
Unit Trusts Constituents
25

A Mutual Fund is set up in the form of a Trust which has the following
constituents:1. Fund Sponsor
2. Mutual Fund as Trust
3. Asset Management Company
4. Other Fund Constituents
4.1. Custodian and Depositors
4.2. Brokers
4.3. Transfer Agent
4.4. Distributors
FUND SPONSOR
What a promoter is to a company, a sponsor is to a mutual fund. The
sponsor initiates the idea to set up a mutual fund. It could be a financial
services company, a bank or a financial institution. It could be Indian or
foreign. It could do it alone or through a joint venture. In order to run a
mutual fund in India, the sponsor has to obtain a license from SEBI. For this,
it has to satisfy certain conditions, such as on capital and profits, track record
(at least five years in financial services), default-free dealings and a general
reputation for fairness. The sponsor must have been profit making in at least
3 years of the above 5 years.
The Sponsor appoints the Trustees, Custodian and the AMC with the prior
approval of SEBI and in accordance with SEBI Regulations.
Like the company promoter, the sponsor takes big-picture decisions related
to the mutual fund, leaving money management and other such nitty-gritty
to the other constituents, whom it appoints. The sponsor should inspire
confidence in you as a money manager and, preferably, be profitable.
26

Financial muscle, so long as it is complemented by good fund management,
helps, as money is then not an impediment for the mutual fund- it can hire
the best talent, invest in technology and continuously offer high service
standards to the investors.
In the days of assured return schemes, sponsors also had to fulfill return
promises made to the unit holders. This sometimes meant meeting shortfalls
from their own pockets, as the government did for UTI. Now that assured
return schemes are passed, such bailouts wont be required. All things
considered, choose sponsors who are good money managers, who have a
reputation for fair business practices and who have deep pockets.
TRUST
The Mutual Fund is constituted as a Trust in accordance with the provisions of
the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under
the Indian Registration Act, 1908. The Trust appoints the Trustees who are
responsible to the investors of the fund.
TRUSTEES
Trustees are like internal regulators in a mutual fund, and their job is to
protect the interests of the unit holders. Trustees are appointed by the
sponsors, and can be either individuals or corporate bodies. In order to
ensure they are impartial and fair, SEBI rules mandate that at least twothirds of the trustees be independent, i.e., not have any association with the
sponsor.
27

Trustees appoint the AMC, which subsequently, seeks their approval for the
work it does, and reports periodically to them on how the business being run.
Trustees float and market schemes, and secure necessary approvals. They
check if the AMCs investments are within defined limits and whether the
funds assets are protected. Trustees can be held accountable for financial
irregularities in the mutual fund.
Rights of the Trustees:
Trustees appoint the AMC in consultation with the sponsor and
according to the SEBI Regulations.
All Mutual Fund Schemes floated by the AMC have to be approved by
the Trustees.
Trustees can seek information from the AMC regarding the operations
and compliance of the mutual fund.
Trustees can seek remedial actions from AMC, and in cases can
dismiss the AMC.
Trustees review and ensure that the net worth of the AMC is according
to the stipulated norms, every quarter.
Obligations of the Trustees:
Trustees must ensure that the transactions of the mutual fund are in
accordance with the trust deed.
Trustees must ensure that the AMC has systems and procedures in
place.
Trustees must ensure due diligence on the part of AMC in the
appointment of constituents and business associates.
Trustees must furnish to the SEBI, on half yearly basis a report on the
activities of the AMC.
28

Trustees must ensure compliance with SEBI Regulations.
ASSET MANAGEMENT COMPANY (AMC)
TOP 5 AMC's
13%
27%
17%
Reliance
Prud ICICI
21%
UTI MF
HDFC MF
Franklin Templeton
22%
29

An AMC is the legal entity formed by the sponsor to run a mutual fund. The
AMC is usually a private limited company in which the sponsors and their
associates or joint venture partners are the shareholders. The trustees sign
an investment agreement with the AMC, which spells out the functions of the
AMC. It is the AMC that employs fund managers and analysts, and other
personnel. It is the AMC that handles all operational matters of a mutual fund
from launching schemes to managing them to interacting with investors.
The people in the AMC who should matter the most to you are those who
take investment decisions. There is the head of the fund house, generally
referred to as the Chief Executive Officer (CEO). Under him comes the Chief
Investment Officer (CIO), who shapes the funds investment philosophy, and
fund managers, who manages its schemes. They are assisted by a team of
analysts, who track markets, sectors and companies.
Although these people are employed by the AMC, its you, the unit holders,
who pays their salaries, partly or wholly. Each scheme pays the AMC an
annual fund management fee, which is linked to the scheme size and
results in a corresponding drop in your return. If a schemes corpus is up to
Rs.100 crores it pays 1.25% of its corpus a year; on over Rs.100 crores, the
fee is 1% of the corpus. So, if a fund house has two schemes, with a corpus
of Rs.100 crores and Rs.200 crores respectively, the AMC will earn Rs.3.25
crore (1.25+2) as fund management fee that year.
If an AMCs expenses for the year exceed what it earns as fund management
fee from its schemes, the balance has to be met by the sponsor. Again,
financial strength comes into play: a cash-rich sponsor can easily pump in
money to meet short falls, while a sponsor with less financial clout might
force the AMC to trim costs, which could well turn into an exercise in cutting
corners.
Regulatory requirements for the AMC:
30
Only SEBI registered AMC can be appointed as investment managers of

mutual funds.
AMC must have a minimum net worth of Rs.10 crores at all times.
An AMC cannot be an AMC or Trustee of another Mutual Fund.
AMCs cannot indulge in any other business, other than that of asset
management
At least half of the members of the Board of an AMC have to be
independent.
The 4th schedule of SEBI Regulations spells out rights and obligations of
both trustees and AMCs.
Obligations of the AMC:
Investments have to be according to the investment management
agreement and SEBI regulations.
The actions of its employees and associates have to be as mandated
by the trustees.
AMCs have to submit detailed quarterly reports on the working and
performance of the mutual fund.
AMCs have to make the necessary statutory disclosures on portfolio,
NAV and price to the investors.
Restrictions on the AMC:
AMCs cannot launch a scheme without the prior approval of the
trustees.
AMCs have to provide full details of the investments by employees and
Board members in all cases where the investment exceeds Rs.1 lakh.
31

AMCs cannot take up any activity that is in conflict with the activities of
the mutual fund.
Conditions under which two AMCs can be merged:
SEBI Regulations require the following:
SEBI and Trustees of both the funds must approve of the merger.
Unit holders should be notified of the merger, and provided the option
to exit at NAV without load.
Conditions under which an AMC can be taken over:

SEBI approval is required for the change of ownership and unit holders have
to be informed of the takeover.
Scheme take over: If an existing mutual fund scheme is taken over by
another AMC, it is called as scheme take over. The two mutual funds
continue to exist. Trustee and SEBI approval and notification of the unit
holders are required for scheme take over.
CUSTODIAN
A custodian handles the investment back office of a mutual fund. Its
responsibilities include receipt and delivery of securities, collection of
income, and distribution of dividends and segregation of assets between the
schemes. It also track corporate actions like bonus issues, right offers, offer
for sale, buy back and open offers for acquisition. The sponsor of a mutual
fund cannot act as a custodian to the fund. This condition, formulated in the
interest of investors, ensures that the assets of a mutual fund are not in the
hands of its sponsor. For example, Deutsche Bank is a custodian, but it
cannot service Deutsche Mutual Fund, its mutual fund arm.
32
BROKERS
Role of Brokers in a Mutual Fund:
They enable the investment managers to buy and sell securities.
Brokers are the registered members of the stock exchange.
They charge a commission for their services.
In some cases, provide investment managers with research reports.
Act as an important source of market information.
REGISTRAR OR TRANSFER AGENTS

Registrars, also known as the transfer agents, are responsible for the
investor servicing functions. This includes issuing and redeeming units,
sending fact sheets and annual reports. Some fund houses handle such
functions in-house. Others outsource it to the Registrars; Karvy and CAMS are
the more popular ones. It doesnt really matter which model your mutual
fund opt for, as long as it is prompt and efficient in servicing you. Most
mutual funds, in addition to registrars, also have investor service centers of
their own in some cities.
Some of the investor related services are: Processing investor applications.
Recording details of the investors.
Sending information to the investors.
Processing dividend payout.
33

Incorporating changes in the investor information.
Keeping investor information up to date.
DISTRIBUTORS
Role of Selling and Distribution Agents:
Selling agents bring investors funds for a commission.
Distributors appoint agents and other mechanisms to mobilize funds
from the investors.
Banks and post offices also act as distributors.
The commission received by the distributors is split into initial
commission which is paid on mobilization of funds and trail commission
which is paid depending on the time the investor stays with the fund.
RISKS ASSOCIATED WITH MUTUAL FUND
34

The most important relationship to understand is the risk-return trade-off.
Higher the risk greater the returns/loss and lower the risk lesser the
returns/loss.
Hence it is up to you, the investor to decide how much risk you are willing to
take. In order to do this you must first be aware of the different types of risks
involved with your investment decision.
MARKET RISK
Sometimes prices and yields of all securities rise and fall. Broad outside
influences
Affecting the market in general lead to this. This is true, may it be big
corporations or smaller mid-sized companies. This is known as Market Risk. A
Systematic Investment Plan (SIP) that works on the concept of Rupee Cost
Averaging (RCA) might help mitigate this risk.
CREDIT RISK
The debt servicing ability (may it be interest payments or repayment of
principal) of a company through its cash flows determines the Credit Risk
faced by you. This credit risk is measured by independent rating agencies
like CRISIL who rate companies and their paper. An AAA rating is considered
the safest whereas a D rating is considered poor credit quality. A welldiversified portfolio might help mitigate this risk.
INFLATION RISK
Things you hear people talk about: Rs. 100 today is worth more than Rs.
100 tomorrow. Remember the time when a bus ride costed 50 paisa?
Mehangai Ka Jamana Hai.
The root cause, Inflation. Inflation is the loss of purchasing power over time.
A lot of times people make conservative investment decisions to protect their
capital but end up with a sum of money that can buy less than what the
35

principal could at the time of the investment. This happens when inflation
grows faster than the return on your
Investment. A well-diversified portfolio with some investment in equities
might help mitigate this risk.
INTEREST RATE RISK
In a free market economy interest rates are difficult if not impossible to
predict. Changes in interest rates affect the prices of bonds as well as
equities. If interest rates rise the prices of bonds fall and vice versa. Equity
might be negatively affected as well in a rising interest rate environment. A
well-diversified portfolio might help mitigate this risk.
POLITICAL RISK
Changes in government policy and political decision can change the
investment environment. They can create a favorable environment for
investment or vice versa.
LIQUIDITY RISK
Liquidity risk arises when it becomes difficult to sell the securities that one
has purchased. Liquidity Risk can be partly mitigated by diversification,
staggering of maturities as well as internal risk controls that lean towards
purchase of liquid securities. You have been reading about diversification
above, but what is it? Diversification The nuclear weapon in your arsenal for
your fight against Risk. It simply means that you must spread your
investment across different securities (stocks, bonds, money market
instruments, real estate, fixed deposits etc.) and different sectors (auto,
textile, information technology etc.). This kind of a diversification may add to
the stability of your returns,
36
ACCOUNTING AND VALUATION

Net Asset Value (NAV)
The net asset value of the fund is the cumulative market value of the assets
fund net of its liabilities. In other words, if the fund is dissolved or liquidated
by selling off all the assets in the fund, this is the amount that the
shareholders would collectively own. This gives rise to the concept of net
asset value per unit, which is the value represented by the ownership of one
unit in the fund. It is calculated simply by dividing the net asset value of the
fund by the number of units. However, most people refer loosely to the NAV
per unit as NAV, ignoring the per unit. We also abide by the same
convention.
Calculation of Net Asset Value
The most important part of the calculation is the valuation of the assets
owned by the fund. Once it is calculated, the NAV is simply the net value of
assets divided by the number of the units outstanding. The detailed
methodology for the calculation of the net asset value is given below:
NAV
Market value of investments
+ Current assets and other assets
+ Accrued income
- Current liabilities and other liabilities
Accrued expenses
BETA RATIO
A high beta is good or bad depending on the state of the market. If the
market sentiments are bullish, i.e., the market is seeing a rise in general,
37

then a high beta stock is better and if the market sentiment is bearish then
low beta is preferred.
A beta of 1 indicates that the security's price will move with the
market. A beta less than 1 means that the security will be less
volatile than the market. A beta greater than 1 indicates that the
security's price will be more volatile than the market.
R_SQUARED
A statistical measure that represents the percentage of a fund's or
security's movements that are explained by movements in a benchmark
index. R-squared values range from 0 to 100. An R-squared of 100 means
that all movements of a security are completely explained by movement in
index.
A higher R-squared value will indicate a more useful beta figure.
SHARP RATIO
High returns are generally associated with a high degree of volatility. The
Sharpe ratio represents this trade off between risk and returns. At the same
time it also factors in the desire to generate returns, which are higher than
those from risk free returns.
The greater a portfolio's Sharpe ratio, the better its risk-adjusted
performance is.
Sharpe Index = (Ri Rf) / Si
Where,
Ri = Return on Fund.
Rf = Risk free rate of Return.
Si = Standard Deviation of the fund.
38
EXPENSE RATIO
The percentage of total fund assets that is used to cover expenses
associated with the operation of a mutual fund. This amount is taken out of
the fund's assets and lowers the return that fund holders achieve. These
expenses include management fees and operating expenses
. So lesser the expense ratio the better it is for the investors
COMPETITION IN MUTUAL FUNDS INDUSTRY

The most important trend in the mutual fund industry is the aggressive
expansion of the foreign owned mutual fund companies and the decline of
the companies floated by nationalized banks and smaller private sector
players.
Many nationalized banks got into the mutual fund business in the early
nineties and got off to a good start due to the stock market boom
prevailing then. These banks did not really understand the mutual fund
business and they just viewed it as another kind of banking activity. Few
hired specialized staff and generally chose to transfer staff from the
parent organizations. The performance of most of the schemes floated by
these funds was not good. Some schemes had offered guaranteed returns
and their parent organizations had to bail out these AMCs by paying large
amounts of money as the difference between the guaranteed and actual
returns. The service levels were also very bad. Most of these AMCs
have not been able to retain staff, float new schemes etc. and it is
doubtful whether, barring a few exceptions, they have serious plans of
continuing the activity in a major way.
39

The experience of some of the AMCs floated by private sector Indian
companies was also very similar. They quickly realized that the AMC
business is a business, which makes money in a long term and requires
deep-pocketed support in the intermediate years. Some have sold out to
foreign owned companies, some have merged with others and there is
general restructuring going on.
The foreign owned companies have deep pockets and have come in here
with the expectation of a long haul. They can be credited with introducing
many new practices such as new product innovation, sharp improvement
in service standards and disclosure, usage of technology, broker
education and support etc. In fact, they have forced the industry to
upgrade itself and service levels of organizations like UTI have improved
dramatically in the last few years in response to the competition provided
by these.
MAJOR PLAYERS IN MUTUAL FUNDS INDUSTRY

40
SAHARA
MUTUAL
FUND
MUTUAL
FUND
INDUSTR
Y
TATA
MUTUAL
FUND
ABN AMRO
MUTUAL
FUND
STATE BANK OF
INDIA MUTUAL FUND
BIRLA SUN LIFE

MUTUAL FUND
COMPANY
RELIANCE
MUTUAL
FUND
HSBC
MUTUAL
FUND
PROFILE
BANK OF
BARODA MUTUAL
FUND
HDFC
MUTUAL
FUND
41
ORGANIZATION HISTORY
About AnandRathi
42

AnandRathi (AR) is a leading full service securities firm providing the entire
gamut of financial services. The firm, founded in 1994 by Mr. AnandRathi,
today has a pan India presence as well as an international presence through
offices in Dubai and Bangkok. AR provides a breadth of financial and advisory
services including wealth management, investment banking, corporate
advisory, brokerage & distribution of equities, commodities, mutual funds
and insurance, structured products - all of which are supported by powerful
research teams.
The firm's philosophy is entirely client centric, with a clear focus on providing
long term value addition to clients, while maintaining the highest standards
of excellence, ethics and professionalism. The entire firm activities are
divided across distinct client groups: Individuals, Private Clients, Corporate
and Institutions and was recently ranked by Asia Money 2006 poll amongst
South Asia's top 5 wealth managers for the ultra-rich.
In year 2007 Citigroup Venture Capital International joined the group as a
financial partner.
Equity & Derivatives Brokerage

AnandRathi provides end-to-end equity solutions to institutional and individual
investors.
Consistent delivery of high quality advice on individual
stocks, sector trends and investment strategy has established us a competent and
reliable research unit across the country.
Clients can trade through us online on BSE and NSE for both equities and
derivatives. They are supported by dedicated sales & trading teams in our trading
desks across the country. Research and investment ideas can be accessed by
clients either through their designated dealers, email, web or SMS
43
Milestones
1994
1995
1997
1999
2001
2002
2003
2004
2005
2006
2007
started activities in consulting & institutional equity sales with

staff of 15
set up a research desk & empanelled with major institutional
investors
introduced investment banking business
retail brokerage services launched
lead managed first IPO & executed first M & A deal
initiated wealth management services
retail business expansion recommences with ownership model
wealth management assets cross Rs.1500 crores
Insurance broking launched
Launch of wealth management services in Dubai
Retail branch network exceeds 50
Commodities brokerage & real estate services introduced
wealth management assets cross Rs.3000 crores
Institutional equities business re-launched & senior research
team put in place
Retail branch network expands across 100 locations within
India
Real estate private equity fund launched
Retail branch network expands across 200 locations within
India exchange (DGCX)
AR middle east, WOS acquires membership of Dubai gold &
commodity exchange ()
Ranked amongst South Asias top 5 wealth managers for the
ultra-rich by Asia Money 2006 poll
Ranked 6th in FY2006 for all India Broker Performance in equity distribution in
net worth individuals (HNI) category
Ranked 9th in the Retail category having more than 5% market
share
completes its presence in all states across the country with
offices at 300+ locations within India
Citigroup Venture capital international picks up 19.9% equity
stake
Retail customer base crosses 100 thousand Establishes
presence in over 350 locations
44
ANANDRATHI Core Strengths

Breadth of Services
In line with its client-centric philosophy, the firm offers to its clients the entire
spectrum of financial services ranging from brokerage services in equities
and commodities, distribution of mutual funds, IPOs and insurance products,
real estate, investment banking, merger and acquisitions, corporate finance
and corporate advisory.
Clients deal with a relationship manager who leverages and brings together
the product specialists from across the firm to create an optimum solution to
the client needs.
Management Team
AR brings together a highly professional core management team that
comprises of individuals with extensive business as well as industry
experience.
In-Depth Research
Our research expertise is at the core of the value proposition that we offer to
our clients. Research teams across the firm continuously track various
markets and products. The aim is however common - to go far deeper than
others, to deliver incisive insights and ideas and be accountable for results.
45
MRPAOHSKYTGWUEFr.NJDIL
Management Team
The senior Management comprises a diverse talent pool that brings together
rich experience from across industry as well as financial services.
ORGANIZATIONAL HIERACHY
46
47
In India where ANANDRATHI is present in 10 STATES:
D
E
L
H
I
O
R
R
IJ
H
S
A
S
R
A
K
H
A
N
D
P
U
N
J
A
B
A
S
S
A
M
A
N
A
N
D
R
A
M
T
A
H
ID
H Y
A
P
R
A
D
E S
H
R
A
J I
S
T
H
A
N
B
I
G
H
O
G
A
A
U
R
J
A
R
A
T
48
LIST OF PRODUCTS:
PRODUCTS
D
49
MV I S ISIO NO N
50
OBJECTIVES
&
LIMITATIONS
OF
THE PROJECT
OBJECTIVES OF THE PROJECT
51

During training I learned many things practically. I was able to put my most
of the theory knowledge into practical. I learned many new things like some
new schemes of mutual funds, new financial terms etc. which i was not
aware of it. Many of them were there who bolster me a lot. Following are the
objectives of the project & during my training also are:
Primary Objectives
The objective of the research is to study & analyze the awareness level
of investors of mutual funds.
To get insight knowledge about mutual funds.
Secondary Objectives
I got to know about market that how many of them are investing in
mutual funds, their trading preferences, about their sources of
investing & by which features they get attract to invest in mutual
funds.
52
LIMITATIONS OF THE PROJECT

During my training I faced many problems, like:
During survey I found very difficulty in filling up the questionnaire
because the respondents were busy.
Found some respondents unaware about schemes & benefits of mutual
funds,
so
the
respondents
found
difficulty
in
filling
up
the
questionnaire.
Some respondents were not willing to disclose their investment profile.
Respondents gives bias answers & sometimes do not co-operate or
because of illiteracy they do feel comfortable in filling questionnaire.
53
METHODOLOGY
&
OBJECTIVES
RESEARCH METHODOLOGY
54
AN INTRODUCTION
MEANING OF RESEARCH
Research in common parlance refers to a search for knowledge. Once can
also define research as a scientific & systematic search for pertinent
information on a specific topic. In fact, research is an art of scientific
investigation. The Advanced Lerners Dictionary of current English lays down
the meaning of research as a careful investigation or inquiry especially
through search for new facts in any branch of knowledge. Redman & Mory
define research as a systematized effort to gain new knowledge. Some
people consider research as a movement, a movement from the known to
the unknown. It is actually a voyage of discovery. We all possess the vital
instinct of inquisitiveness for, when the unknown confronts us, we wonder &
our inquisitiveness makes us probe & attain full & fuller understanding of the
unknown. This inquisitiveness is the mother of all knowledge & the method,
which man employs for obtaining the knowledge of whatever the unknown,
can be termed as research.
Research is an academic activity & as such the term should be used in a
technical sense. According to Clifford Woody research comprises defining &
redefining
problems,
formulating
hypothesis
or
suggested
solutions,
collecting, organizing & evaluating data; making deductions & reaching

conclusions; & at last carefully testing the conclusions to determine whether
they fit the formulating hypothesis. D.slesinger & M. Stephenson in the
Encyclopedia of social sciences define research as the manipulation of
things, concepts or symbols for the purpose of generalizing to extend,
correct or verify knowledge, whether that knowledge aids in construction of
theory or in the practice of an art. Research is, thus, an original contribution
to the existing stock of knowledge making for its advancement. It is the
55

pursuit of truth with the help of study, observation, comparison &
experiment. In short, the search for knowledge through objective & systemic
method of finding solution to a problem is research. The systematic approach
concerning generalization & the formulation of a theory is also research. As
such the term research refers to the systematic method consisting of
enunciating the problem, formulating a hypothesis, collecting the facts or
data, analyzing the facts & reaching certain conclusions either in the form of
solutions(s) towards the concerned problem or in certain generalizations for
some theoretical formulation.
RESEARCH PROCESS
Before embarking on the details of research methodology and techniques, it
seems appropriate to present a brief overview of the research process.
Research process consists of series of actions or steps necessary to
effectively carry out research and the desired sequencing of these steps.
56
RESEARCH PROCESS IN FLOW CHART
Ddid
i
eryn
ir
r(tc
st
ag&t
nr
pdsf
do
es
&
e
fi
n
e
s
i
dn e et tse n e i gg t r i mn f
en ed s ea at a r c h
p r e
eiy o n ps l c l e e e l u s c d i n
a& m p l i
ri o sc n ah m p l e
eg p
r
o
b
l
e
s
i
g
oo re rt u s m ir g c s nne )
m
s i z e
57
Research process is described as below:

DEFINE
RESEARCH
PROBLEM:
This is process in which the
researcher has to define its problem on which the researcher is

working. In this process my problem is to analyze that how many
investors are unaware of investments in mutual funds. Where I found
that about 15% of people are still unaware about investment in mutual
funds.
DEVELOPING RESEARCH PLAN: This is the second process in which
the researcher collects his/her data i.e. is the sources of collecting
data. According to this process I have researched by simple method.
My data is collected by two different sources are: Primary data &
Secondary data.
Primary data: This source was collected by personal contacting

with the respondents.
Secondary data: This source was collected by different books,

internet, and newspaper.
SMAPLING PLAN: A sampling plan is a very important part of

research process. The marketing researcher has to decide whether it
will be a sample survey or a census. In my research sampling plan
consists of three decisions are:
SAMPLING UNIT: I have done survey in the area of Kribhco

township, Reliance township & in Banks.
58
SAMPLING SIZE: My sampling size is 100. I have completed my

survey by receiving data from 100 respondents.
CONTACTING METHODS: I have completed my survey by

contacting personally going to everyone & make them to fill
questionnaire in order to collect data.
RESEARCH INSTRUMENT: This is the third process which involves

many different methods of collecting data. There are two methods of
collecting data are: Observational method & Survey method. My
research method was Survey method & instrument was questionnaire.
Through which I collected my primary data which was very helpful in
my researching my problem.
INTERPRET & REPORT: This is last step of research process in which
the researcher analyzes the whole data & reports the solutions to
his/her problem. I have analyzed my problem by survey method &
interpret the whole data. The report has been written with objectivity,
clarity in the presentation of the ideas & used charts, & diagrams.
59
ANALYSIS
&
INTERPRETATIO
N
60
DATA ANALYSIS
KINDS OF INVESTMENTS
PARTICULAR
Provident Fund
Fixed Deposit
Insurance
Mutual Fund
National Saving Certificate
Shares/Debentures
Bullion
Real Estate
DATA IN PERCENTAGE
17%
15.03%
14.02%
11%
9%
12%
13.43%
9%
KINDS OF INVESTMENTS
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
17.00%
15.03%
14.02%
13.43%
12.00%
11.00%
9.00%
9.00%
61
INTERPRETATION: By this graph we can interpret that majority is investing their money in
provident funds & only 11% of investors are investing in mutual fund. Only 9% of people
believe to invest their money in real estate & national saving certificate. So many of them are
unaware of benefits & schemes of mutual funds.
SUGGESTIONS: I suggest that the investors who are unaware of investing in mutual funds or
in other preferences should increase their knowledge about the schemes of other preferences also
because many other preferences also provides lots of benefits with greater profits.
EXPECTATIONS OF CONSUMERS
PARTICULARS
DATA IN PERCENTAGE
Liquidity
14%
Low Risk
28%
High Return
10%
Company Reputation
48%
EXPECTIONS OF CONSUMERS
14%
Liquidity
Low Risk
48%
28%
High Return
Company Reputation
10%
62

INTERPRETATION: Majority of the investors invest in mutual fund by getting attracted
towards company reputation & for the most part of them invest from the point of view of low or
stumpy risk.
EXPERIENCE IN THE MARKET

PARTICULARS
Less than 1 year
1-4 years
more than 4 years
DATA IN PERCENTAGE
20%
56%
24%
EXPERIENCE IN THE MARKET

60%
50%
40%
30%
56%
20%
10%
24%
20%
0%
less than 1 year
1-4 years
more than 4 years
Interpretation: - The experience in the market was the factor which influenced the investments.
There are very few who have experience of less than a year. These are those investors who
entered into the market after noticing the rise in the market. Major part was having vast
experience that is of 1-4 years. These are the ones who have been in the market and saw it rising
to conquer the 10,000 peak.
63
SUGGESTIONS: I suggest that the investors should look for their profits, best schemes &
should consult with many people who else is investing & clear all the doubts related to
investment so that they bare with low risk in the market. The investors should always updated so
that they can earn more & more profits.
KINDS OF COMPANIES FOR INVESTING

PARTICULARS
DATA IN PERCENTAGE
public companies
42%
private companies
58%
KINDS OF COMPANIES FOR INVESTING
42%
58%
public companies
private
companies
64

INTERPRETATION: Through this graph we can interpret that majority are investing in private
companies. As most of them think that while investing in private companies is very profitable
instead of investing in public companies.
SUGGESTIONS: I suggest that the investors should also invest in public companies too as it
also has the advantages such as investors who hold stock in such companies typically have a
liquid asset; buying & selling shares of public companies is relatively easy to do as compared to
private companies.
FACTORS INFLUENCING INVESTMENT

PARTICULARS
Advertisements
Peer Group
Banks
Financial Advisors
Broker
Friends
Current News
Self Evaluation
DATA IN PERCENTAGE
0%
4%
11%
12.04%
30.12%
7.23%
36.14%
0%
FACTORS INFLUENCING INVESTMENT
65
40%
36%
35%
30%
30%
25%
20%
15%
10%
11%
12%
7%
4%
5%
0%
0%
Advertisements
Banks
Current News 0%
Broker
Interpretation: - There are many factors which influence the investment decision of the
investors. It may be the current news (political, technological, financial, etc.), Magazines,
friends, etc. in the study it proved that many people trust the current news & broker most for the
investment decisions. These are the ones who have less experience. The Self-Evaluation &
Advertisements are the next major factor. The experienced person trust himself thereafter
he/she invests. Banks & Financial advisors also matters. Any bad news can make a person
change his/her decision.
INFLUENCED BY COMPANY NAME
PARTICULARS
YES
NO
DATA IN
PERCENTAGE
94%
6%
INFLUENCED BY COMPANY NAME
66
6%
YES
NO
94%
INTERPRETATION: Greater part of the investors are mainly get influenced by company
name.
SUGGESTION: I suggest that other companies should also increase their
awareness in the market so that investors get attracted towards them can
the company could hold their reputation in the market.
TYPES OF SCHEMES
PARTICULARS
DATA IN PERCENTAGE
Open-ended scheme
74%
Close-ended scheme
26%
TYPES OF SCHEME
67
Chart Title
26%
open ended
close ended
74%
Interpretation: - The schemes offered in the market are of two types, closed ended and open
ended. The more demand was for the Open ended funds with a locking period of around 2-3
years. The exit load avoid doing the person from quit sting earlier.
SUGGESTION: According to me, I suggest that the company should increase

their benefits in other schemes also. They should give importance to each &
every schemes at the same level.
TRADING PREFERENCE IN MUTUAL FUNDS

PARTICULARS
DATA IN PERCENTAGE
Speculation
26%
Investments
50%
Both
24%
TRADING PREFERENCE IN MUTUAL FUNDS
68
24%
26%
Speculation
Investments
Both
50%
Interpretation: - The presence in the market is because of two reasons. Either the investors
prefer to speculate and benefit out of it or it is simply to have it as one more investment avenue
just like the fixed deposits, etc. Main purpose of investment in MF by people was not to
speculate. They considered it as a safer avenue for investment rather than going to Share Market
which is much risky as compared to MF. Few still prefer to speculate and wait for NAVs to
appreciate.
SUGGESTION: Company should give more benefits in speculation
preference of mutual funds also. They should make people aware about other
preferences by advertising & by using many more methods.
BANKS OF INVESTING
PARTICULARS
SBIMF
UTI
HDFC
ICICI PRUDENTIAL FUNDS
DATA IN PERCENTAGE
5%
14%
28%
33%
69

JM MUTUAL FUNDS
OTHERS
4%
16%
BANKS OF INVESTING
35%
30%
25%
20%
15%
10%
5%
0%
28%
33%
14%
16%
5%
4%
INTERPRETATION: We can interpret that large number of investors believe in investing in

mutual funds in ICICI PRUDENTIAL FUNDS as it provides good services & give interests
more better than other banks. Than comes HDFC banks, many other investors prefer to invest
in this bank. As it also provides better services but there is only difference in percentages in
interest.
SUGGESTION: Other banks also should increase their hold in the market. They should increase
their branches on every place so that investors could find easy to invest in their company.
MODE OF MUTUAL FUND
PARTICULARS
DATA IN
PERCENTAGE
One time investment

26%
systematic investment
plan
74%
70
MODE OF MUTUAL FUND
74%
One time investment
26%
systematic
investment plan
INTERPRETATION: We can interpret that large number of investors are using only systematic
investment plan as mode of mutual funds but some number of investors find benefits in investing through
one time investment as mode of mutual fund.
SUGGESTION: Government should give preference to one time investment

also. They should increase benefits in every modes also.
AVERAGE INVESTMENT PERIOD

PARTICULARS
0-3 MONTHS
DATA IN PERCENTAGE
24%
71

3-9 MONTHS
9-2 YEARS
MORE THAN 2 YEARS
30%
36%
10%
INVESTMENT OF PERIOD
36%
0-3 MONTHS
3-9 MONTHS
30%
10%
9-2 YEARS
MORE THAN 2 YEARS
24%
INTERPRETATION: - The investment period is very important to increase the

profits. The timing must be right enough to benefit from fluctuations. The
smart investor decides it in advance for how much time he would be keeping
his money in the market and when he should leave squaring-up. Many
people consider the investment for 9 months 2 years as a right option. Still
some want to be invested for 3-9 months. The least responded to the more than 2 years
months period.
RISK WILLING TO TAKE

PARTICULAR
DATA IN PERCENTAGE
High
52%
LN College Of Management & Technology,
Surat
Moderate
30%
Low
18%
72
RISK WILLING TO TAKE
18%
High
52%
Moderate
Low
30%
INTERPRETATION: - The higher the Risk, the more the Profits. The people
need to take the risk to enjoy the benefits. Some investors were willing to
take lower risk and this was the reason they gave for investing in the MF.
Most of the people would like moderate level of risk in there investments.
RECEIVE THE RETURNS

PARTICULARS
DATA IN PERCENTAGE
Dividend payout
16%
LN
College
Of
Management
&
Technology,
Surat
Dividend re-investment
26%
Growth in NAV
58%
73
RECEIVE THE RETURNS
16%
Diviend payout
58%
26%
Dividend reinvestment
Growth in NAV
INTERPRETATION: From the data collected it is clear that most of people look at the current
NAV & not in dividend payout.
SUGGESTION: As many of them are receiving their returns at the current NAV so company
should look after other types of returns.
CONCLUSIONS
From this study, I conclude that around 15% of respondents are still unaware
about the investments. Many of them are investing in Mutual Funds but still
large number of investors does not find profits in investing in mutual funds.
74

According to the investors private companies are best to invest their money.
High numbers of investors are ready to take risk by investing money into the
market.
Majority of investors depends on the current net asset value (NAV) in respect
to their returns. Usually investors invest their money in the average time
period of between 9-2 years, & only 10% of them are investing more than 2
years. Most of the people prefer to invest only in ICICI Prudential banks
because its branches are easily available to every place where they find
convenient to invest easily & they provide services to the satisfaction level.
SUGGESTIONS
After analyzing the whole problem & studying the whole market I would like
to suggest that government should make people aware about investments,
for their savings so that majority of people can make their investments at
safe site & earn more & more profits. Government should increase the
percentages of interests in other sources also so that investors would invest
in other preferences also. Government should increase the benefits of public
companies so that everyone would invest in it.
Company should increase the benefits of other modes, schemes so that
everyone would be able to use them with some risks. I suggest that other
banks should also increase their branches on every place so that investors
find easy to invest into other banks also & bank would be able to hold their
reputation in the market.
BIBLOGRAPHY
75
SITES VISITED
1. www.anandrathi.in
2. www.mutualfundsindia.com
3. www.indiainfoline.com
4. www.amfiindia.com
5. www.sebi.gov.in
BOOKS REFERRED
Amfi Mutual Fund
Marketing Research
by Philip Kotler,
millennium edition, tenth edition
PUBLICATION?????????????
Marketing management
Publication of Mc Graw-Hill,
second edition
76
ANNEXURE
QUESTIONNAIRE
Dear Sir / Madam,
77
I, RAKHEE DUBEY, student of LN COLLEGE OF MANAGEMENT & TECHNOLOGY

am conducting this survey, as a part of our project from ANANDRATHI
COMPANY in the field of Market Research. The purpose of this activity is to
provide awareness of the Mutual funds. Therefore I kindly request you to
spare some of your precious time to answer the following questions.
Thank you,
1. What kind of investments you prefer most? Pl tick (). All
applicable
a. PF
b. Fixed deposits
e. Post Office- f.
NSC
Shares/Debentur
es
c. Insurance d. Mutual Fund

g.
Gold/ h. Real Estate
Silver
2. While investing your money, your expectations?

Liquidity
Low Risk
High
Return
Company
reputation
(3) From how many years you are investing in the market?
Less than a years
1-4 years
More than 4
years
(4) Where do you find your knowledge level about mutual funds?
Totally ignorant
[]
Partial knowledge of mutual funds
[]
Aware only of any specific scheme in which you invested
[]
Fully aware
[]
(5) In which kind of mutual fund you would like to invest?

Public companies [ ]
Private companies [ ]
(6) How do you come to know about investing in Mutual Fund?
78

Advertisements
Banks
Advice from Broker
Friends
Peer Group
Financial Advisors
Advice from
Current news
Self Evaluation
Others___________________________________________________
(7) Which mutual fund scheme have you used?
(8)
Open-ended
Close-ended
Liquid fund
Mid- Cap
Growth fund
Regular Income fund
Long-Cap
Sector fund
Do you get influenced by the name of Company promoting
Mutual Funds?
No
Yes
If no, why___________________________________________
(9) What is your Trading Preference?
Speculation
Investments
Both
(10) Which feature of the mutual funds attracts you most?

Diversification
[]
Better return and safety
[]
Reduction in risk and transaction cost
[]
Regular Income
[]
Tax benefit
[]
(11) In which Mutual Fund you have invested? Please tick (). All
applicable.
79
SBIMF
HDFC
UTI
ICICI PRUDENTIAL FUNDS
JM
MUTUAL FUNDS
OTHERS_____________________________________________________
(12) When you invest in Mutual Funds which mode of investment
will you prefer?
a.One Time Investment
b. Systematic
Plan (SIP)
Investment
(13) What is your Average investment period?

Less than 3 months.
3 to 9 months.
9 months to 2 year.
More than 2 year.
(14) What is your preference in Mutual Funds?
A. Equity B. Income C. Money Market Fund

D. ELSS
E. Balanced Fund
F. SIP G. Others
(15) From which source you purchase mutual funds?

Directly from the AMCs [ ]
Brokers only
Brokers/ sub-brokers
[]
[]
Other sources ______________________
80
(16) How would you like to receive the returns every year?
[ ] Dividend payout
[ ] Dividend
investment
re- [ ] Growth in NAV
12. How much Risk are you willing to take?

High
Moderate
Low
Personal Details:
Name: .....
Phone: .....
Occupation:
Age:
18-20
21-25
More than 25
Income (p.a):
2 lacs-3lacs
1 lacs- 2 lacs
More than 3 lacs
THANK YOU
81
82

Data Analysis

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Data Analysis

Uploaded by

Copyright:

Available Formats

Analysis of Investment in Mutual Funds

Objectives & limitations of the project

Methodology & objectives

Analysis & Interpretation

Analysis of Investment in Mutual Funds

Analysis of Investment in Mutual Funds

According to PHILIP KOTLER Marketing Research is the systematic design,

Analysis of Investment in Mutual Funds

OBJECTIVES OF THE STUDY

To measure the satisfaction level of investors regarding mutual funds.

consideration i.e. Secondary data & Primary data. My major

Analysis of Investment in Mutual Funds

PRIMARY DATA: Direct collection of data from the source

SECONDARY DATA: Indirect collection of data from

SAMPLING UNIT: I have completed my survey in Kribhco

SAMPLE SIZE: The sample consisted of 100 respondents.

CONTACT METHODS: I have contacted the respondents

COLLECTING THE INFORMATION

Analysis of Investment in Mutual Funds

Analysis of Investment in Mutual Funds

Analysis of Investment in Mutual Funds

WHAT IS MUTUAL FUND???

Analysis of Investment in Mutual Funds

The structure of Mutual Funds in India is governed by SEBI (Mutual Fund)

It is mandatory to have a three tier structure of Sponsor Trustee Asset

Asset Management Company (AMC) approved by SEBI is the business face

Custodian, who is registered with SEBI, holds the securities of various

Analysis of Investment in Mutual Funds

Mutual Fund industry started in India in 1963 at the initiative of the

First Phase (1964-87) - UTI commenced its operations from July

Second Phase (1987-1993) - Initially, the growth was slow but it

Analysis of Investment in Mutual Funds

Third Phase (1993-2003) - In 1993 the first private sector Mutual

Analysis of Investment in Mutual Funds

Analysis of Investment in Mutual Funds

Basic Organisation of a Mutual Fund

Analysis of Investment in Mutual Funds

A Mutual Fund is managed by investment professional and other

The pool of Funds is invested in a portfolio of marketable investments.

The value of the portfolio is updated every day.

The investors share in the fund is denominated by units. The value

The investment portfolio of the mutual fund is created according to

OBJECTIVES OF A MUTUAL FUND

To Provide an opportunity for lower income groups to acquire without

To cater mainly of the need of individual investors who have limited

To Manage investors portfolio that provides regular income, growth,

Analysis of Investment in Mutual Funds

BENEFITS OF MUTUAL FUND INVESTMENT

Analysis of Investment in Mutual Funds

Analysis of Investment in Mutual Funds

TYPES OF MUTUAL FUNDS

Analysis of Investment in Mutual Funds

Analysis of Investment in Mutual Funds

Money Market Funds

Analysis of Investment in Mutual Funds

Analysis of Investment in Mutual Funds

Structure of the Indian Mutual Fund industry

WHY MUTUAL FUNDS???

undertaking an investment. So different goals will be allocated

Analysis of Investment in Mutual Funds

They can manage the maturity of their portfolio by investing in

Moreover, mutual funds are better placed to absorb the fluctuations in

Analysis of Investment in Mutual Funds