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AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

EXECUTIVE SUMMARY
INDUSTRY PROFILE
Stock Exchange:
Stock markets refer to a market place where investors can buy and sell stocks. The price at
which each buying and selling transaction takes is determined by the market forces (i.e.
demand and supply for a particular stock)
In earlier times, buyers and sellers used to assemble at Stock Exchanges to make a
transaction but mow with the dawn of IT, most of the operations are done electronically and
the stock markets have become almost paperless. Now investors dont have to gather at the
Exchanges, and can trade freely from their home or office over the phone or through
internet.

Stock brokering:

A licensed dealing member of an exchange.

To deal in financial instruments available in the money & capital market.

A stock brokers is a regulated professional broker who buys and sells shares and
other securities through market or agency only firms of investors .A broker may be
employed by a broker.

Stock brokering services :


- Stock brokering
- New issues
- Research & portfolio management
- Bond traders

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

COMPANY PROFILE
OVER VIEW:
(MOSL) was founded in 1987 as a small sub-broking unit, with just two people
running the show. Focus on customer-first-attitude, ethical and transparent business
practices, respect for professionalism, research-based value investing and implementation of
cutting-edge technology has enabled us to blossom into an over 1600 member team.
Today they are a well diversified financial services firm offering a range of financial
products and services such as Wealth Management, Broking & Distribution, Commodity
Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment
Banking Services and Principal Strategies.
They have a diversified client base that includes retail customers (including High
Net worth Individuals), mutual funds, foreign institutional investors, financial institutions
and corporate clients. We are headquartered in Mumbai and as of Dec 31st, 2011, had a
network spread over 555 cities and towns comprising 1,563 Business Locations operated by
our Business Partners and us. As at Dec 31st, 2011, we had 738,156 registered customers.

THEORITICAL CONCEPTS
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 appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a mutual fund is the most suitable
investment of the common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost.
According to Weston J. Fred and Brigham, Eugene, F, Unit trusts are corporations
which accept dollars from savers and then use these dollars to buy stock, long term bonds,
short term debt instruments issued by business or government units; these corporations pool
funds and thus reduce risk by diversification.

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

RESEARCH METHODOLOGY

a.

STATEMENT OF THE PROBLEM:

Due to the falling Rate of Interest on Bank deposits, it is obvious that Investment in Mutual
Fund will grow in year to come. However lack of Awareness of Mutual Fund is a hindering
factor in expected growth of Mutual Fund Business. Under noted problems are envisaged in
this area: Difficult in convincing people for investment. Difficult to change mind of the
investor according to age and Profession. Difficult to make an approach to investors.
Difficult to take an appointment with professional people. Difficult to get the documents
required for formalities from investors Difficult to overcome an impassionate person who
wants return in less time. Difficult to follow up the people whose names are being stored in a
data. Difficult to remove the fear of risk from the minds of investors.

b.

NEED FOR THE STUDY:

Mutual Funds are considered as one of the best available investment option as compare to
others. It collects the savings form small investors and these funds are invested on their
behalf. Lack of awareness is one of the disadvantages for the success of mutual funds.
Hence here may studied is confined to know the awareness of mutual funds and its scope
among public providing required suggestions.

c.

OBJECTIVE OF STUDY:
1. To know the awareness of MUTUAL FUND among people.
2. To see the interest of people in investing in MUTUAL FUNDS.
3. To know the scope of MUTUAL FUNDS in India.
4. To know the different attitudes of people regarding risk, rate of return, period of
investment etc.

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

d.

SOURCE OF DATA:

Primary data:
Primary data is collected through Questionnaire
Secondary Data:
The data can be collected from Secondary Sources. The data was collected from Past
Records, Books, Journals, Magazines, Internet and all other types of published data.

e.

TOOLS USED FOR ANALYSIS:

Simple percentages and graphs

f.

RESEARCH DESIGN:

Research Type

descriptive research design

Population

people in and around madanapalle

Sample size

100 people

Sample technique

convience sampling

g.

SCOPE OF THE STUDY:

The study is confined to local investors in and around madanapalle

h.

LIMITATIONS OF THE STUDY:

Every work has its own limitations. Limitations are extent to which the process should not
exceed. The following limitations for the project are:
1. Duration of project was not enough to make our conclusion on such a vast subject. Time
constraints has also become a major limitation
2. The sample size taken for drawing the conclusion was not sizeable

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


3. Investor ignorance was faced during discussions with respondents

FINDINGS
From the above analysis it is observed that 50% of the respondents are at the age of 25
40, 30% of the respondents are at the age below 25, 20% of the respondents are at the
age above 40.
From above analysis observed that 56% of the respondents are Employee, 40% of the
respondents are Business men 4% of the respondents are Students.
From the above analysis observed that 64% of the respondents are 1 lakh 1.5 lakh,
14% of the respondents are 1.5 lakh to 3 lakhs, 14% of the respondents are less than 1
lakh, 8% of the respondents are above 3 lakhs.
From the above analysis it is observed that 41% of the respondents are invested in Bank
Deposits, 35% of the respondents invested in Mutual Funds, 13% of the respondents
invested in Gold and Silver, 7% of the respondents invested in Shares and Deposits, 4%
of the respondents invested in insurance.
From the above analysis it is observed that 80% of the respondents invested in Mutual
Funds and 20% are not invested in Mutual Funds.
From the above analysis it is observed that 80% of the respondents came to know about
Mutual Funds through friends, 15% through Stock Brokers, 5% through advertisements.
It is observed that most of the investors have partial knowledge about Mutual Funds.
Only 80% of investors have better awareness about working of Mutual Funds and 20%
are totally ignorant about Mutual Funds.
It is observed that 70% of respondents invested through stock brokers, 20% through
banks and 10% invested directly.
Most of the respondents are invested in Public Limited Mutual Funds and 30% invested
in private sector.

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


From the above analysis it is observed that 60% invested in open ended scheme, 20% on
close ended scheme and 15% equity growth and 5% on income schemes.
Most of the investors invested to debt oriented schemes because of they are offering tax
benefit.
From the analysis it is observed that 50% of investors are interested to invest in equity
mutual funds because of higher returns, 20% because of long term capitals gains and
15% because of tax benefit.
Regular income attract most of the investors to invest in mutual funds, 30% of investors
attract because of better returns and safety.
From the analysis it is observed that 45% of investors prefer for SBI mutual funds, 20%
for ICICI, 15% each for Reliance and HDFC and 5% for UTI.
From the analysis it is observed that 55% investors are plan to systematic investment and
45% plans for one time investment.
It is observed that most of the respondents showed interest on banking sector, 30% on
real estate and 15% on oil and petroleum.
From the analysis it is observed that most of investors invested in mutual funds because
they are offering steady returns.
From the analysis it is observed that nearly 60% of investors chosen mutual fund as
investment option because of tax benefit.
Most of investors depended on banks as external advisors, 30% on distributers and 10%
on agents as external advisors.
60% of the respondents are not invested on mutual funds because lack of knowledge,
20% because of better past experience, 15% because of inefficient investment advisors.
It is observed that if mutual funds offer steady returns, tax benefit, liquidity,
diversification

of portfolio, lesser risk, 90% of respondents are interested to invest in

mutual funds.

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

SUGGESTIONS
From the analysis it is found that 20% of the employees are at age group 40. So here it is
suggested that lot of awareness has to be created to attract this age group.
Only 8% of respondents i.e., income above 3 lakhs are invested in mutual funds so here
attention has to be given by the AMC and advisor to attract this group by offering risk
less and regular return schemes.
Stock brokers and AMCs need to take more initiation in bringing the investors into their
services by providing quality and better services and advises to the investors.
Private mutual fund companies need to take lot of promotional activities and offer more
and more diversified schemes to attract more investors.
Give full awareness about mutual fund to investors before the industry.
It is risk less to invest in public ltd mutual funds .
To suggest the investor to invest in strategic investment to gain more profit they one time
investment .
Most of the investors to be are to be prefer safety and regular income to suggest then to
it in available is our investment.

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

CONCLUSION
It can be concluded that mutual funds are the better investment options. Investing in
portfolio of mutual funds can minimize risk. By creating awareness and better advises on
mutual funds working then it provides a option to attract more and more investors to invest in
mutual funds.
The market is growing day by day and public is invested in better investment options
brokers, agents, AMCs need to take initiation to create awareness on mutual funds to increase
its scope and to attract more investors.

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

CHAPTER-1
INDUSTRY PROFILE
Stock Exchange:

Introduction
Stock markets refer to a market place where investors can buy and sell stocks. The price at
which each buying and selling transaction takes is determined by the market forces (i.e.
demand and supply for a particular stock)
In earlier times, buyers and sellers used to assemble at Stock Exchanges to make a
transaction but mow with the dawn of IT, most of the operations are done electronically and
the stock markets have become almost paperless. Now investors dont have to gather at the
Exchanges, and can trade freely from their home or office over the phone or through
internet.

HISTORY OF THE INDIAN STOCK MARKET- THE ORIGIN

One of the oldest stock market in Asia, the Indian Stock Markets has a 200 years old
history.

18th century East India Company was the dominant institutions and by end of the
century, business in its loan securities gained full momentum

1830s Business on corporate stocks and shares in Bank and Cotton presses started in
Bombay. Trading list by the end of 1839 got .broader.

1840s Recognition from banks and merchants to about half a dozen brokers.

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

1850s Rapid development of commercial enterprise saw brokerage business


attracting more people into the business.

1860s The number of brokers increased to 60.

1860-61 The American Civil War broke out which caused a stoppage of cotton
supply from United States of America; marking the beginning of the Share Mania
in India

1862-63 The number of brokers increased to about 200 to 250

1865

A disastrous Slump began at the end of the American Civil War (as an

example,

Bank of Bombay Share which had touched Rs.2850 could only be

sold at Rs. 87)

Pre-Independence

Scenario-Establishment

of

Different

Stock

Exchange

1874

With the rapidly development share trading business, brokers used to gather

at a

street (now well known as Dalal Street) for the purpose of transacting

business.

1875

The Native Share and Stock Brokers Association (also known as The

Bombay

Stock Exchange) was established in Bombay.

1880s Development of cotton mills industry and set up of many others.

1894

1880-90s

Sharp increase in share prices of jute industries in 1870s was

followed by

a boom in tea stocks and coal.

1908

Establishment of The Ahmedabad Share and Stock Brokers Association.

The Calcutta Stock Exchange Association was formed.

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1920

Madras witnessed boom and business at The Madras Stock Exchange was

transacted with 100 brokers.

1923

When recession followed, number if brokers came down to 3 and the

Exchange

was closed down.

1934

Establishment of the Lahore Stock Exchange.

1936

Merger if the Lahore Stock Exchange with the Punjab Stock Exchange.

1937

Re-organization and set up of the Madras Stock Exchange Limited (Pvt.).

Limited

led by improvement in stock market activities in South India with

establishment if new textile mills and plantation companies.

1940

Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited

were

established.

1944

Establishment of Hyderabad Stock Exchange Limited.

1947

Delhi Stock and Share Brokers Association Limited and The Delhi Stock

and

Share Exchange Limited were established and later in merged into The

Delhi Stock

Exchange Association Limited

Post Independence Scenario:


The depression witnessed after the independence led to closure of a lot of exchange
in the country. Lahore Stock Exchange was closed down after the partition of India, and later
on merger with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was
registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in a
miserable state till 1957 when they applied for recognition under Securities Contracts
(Regulations) Act, 1956.
Exchanges that were recognized under the Act were:
Bombay

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Calcutta
Madras
Ahmadabad
Delhi
Hyderabad
Bangalore
Indore
Many more stock exchanges were established during 1980s, namely:

Cochin Stock Exchange (1980)

Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982)

Pune Stock Exchange Limited (1982)

Ludhiana Stock Exchange Association Limited (1983)

Gouhati Stock Exchange Limited (1984)

Kanara Stock Exchange Limited (at Mangalore, 1985)

Magadh Stock Exchange Association (at Patna, 1986)

Jaipur Stock Exchange Limited (1989)

Bhuvaneshwar Stock Exchange Association Limited (1989)

Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989)

Vadodara Stock Exchange Limited (at Baroda, 1990)

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Coimbatore Stock Exchange

Meerut Stock Exchange

Indian Stock Exchange allows a member broker to perform following activities:

Act as an agent,

Buy and sell securities for his clients and charge commission for the same,

Act as a trader or dealer as a principal,

Buy and sell securities in his own account and risk.

OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)


Traditionally, trading in Stock Exchange in India followed a conventional style where people
used to gather at the Exchange and bids and offers were made by open outcry
This age-old trading mechanism in the Indian stock markets used to create much functional
inefficiency. Lack of liquidity and transparency, long settlement periods and beamy
transactions are a few examples that adversely affected investors. In order to overcome these
inefficiencies, OTCEI was incorporated in 1990 under the companys act 1956. OTCEI is
the first screen based nationwide stock exchange in India created by Unit Trust of India,
Industrial Credit and Investment Corporation of India, Industrial Development Bank of
India, SBI Capital Market, Industrial Finance Corporation of India, General Insurance
Corporation and its subsidiaries and Can Bank Financial Services.

Advantages of OTCEI
Greater liquidity and lesser risk of intermediary charges due to widely spread trading
mechanism across India.
The screen-based scruples trading ensures transparency and accuracy of prices
Faster settlement and transfer process as compared to other exchanges

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Shorter allotment procedure (in case of a new issue) than other exchanges

National Stock Exchange


In order to lift the Indian stock market trading system in par with the international standards.
On the basis of the recommendations of high powered pherwani committee, the National
Stock Exchange was incorporated in 1922 by industrial Development Bank of India,
industrial Credit and Investment Corporation of India, all insurance Corporations, selected
commercial banks and others.
NSE provided exposure to investors in two types of markets, namely:

Wholesale debt market

Capital market

Wholesale Debt Market


Similar to money market operations, debt market operations involve institutional investors
and corporate bodies entering into transactions of high value in financial instruments like
treasury bills, government securities, commercial papers etc,.
Fully automated screen-based trading mechanism

Trading at NSE

Fully automated screen-based trading mechanism

Strictly follows the principle of an order-driven market

Trading members are linked through a communication network

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This network allows them to execute trade from their offices

The prices at which the buyer and seller are willing to transact will appear on the
screen

When the prices match the transaction will be completed

A confirmation slip will be printed at the office of the trading member

Advantages of trading at NSE

Integrated network for trading in stock market of India

Fully automated screen based system that provides degree of transparency

Investors can transact from any part of the country at uniform prices

Greater functional efficiently supported by totally computerized network.

Stock brokering
Stock brokering meaning:

A licensed dealing member of an exchange.

To deal in financial instruments available in the money & capital market.

A stock brokers is a regulated professional broker who buys and sells shares and
other securities through market or agency only firms of investors .A broker may be
employed by a broker.

Stock brokering services:


- Stock brokering
- New issues
- Research & portfolio management

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- Bond traders
STOCK BROKERS:

Receives and process transaction order.

Individuals [buy & sells].

Maintaining proper record of transactions.

Arranges nominal transfer.

Floor dealing.

Act as stockbrokers to new issues.

Custodian and control of security.

NEW ISSUES:

Introduced the issues of the stock exchange.

Process the application for listing at the exchange.

Advise the issuer on the pricing market satiations

Circulates the offer documents on the floor on the exchange and market issue.

Receives proceeds of application.

Providing underwriting services.

Preparing activity schedule and time table of an issue.

RESEARCH & PORTFOLIO MANAGEMENT:

Prepares and circulate periodic research report on accompany or sector.

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Evaluate clients portfolio.

Suggest buy/ sell options to investors.

Ensures that up to date corporate and market information are available.

Analyzing and supplying information on quoted companies to stock broking


department.

BOND TRADERS:

Buy and sells

MAJOR STOCK BROKERS COMPANIES IN INDIA:Kotak securities.


Exclusive security ltd.
Motilal oswal securities.
Share khan ltd.
Karvy stock broking ltd.
Surya prakash Toshniwal.
Apollo sindhoori.
Apollo sindhoori capital investment.
ICICI direct.
India bulls.
India infoline.
Geojit securities.

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HDFC.
Reliance money.
Geojit.
Angle broking.

COMPANY PROFILE

OVER VIEW:
(MOSL) was founded in 1987 as a small sub-broking unit, with just two people
running the show. Focus on customer-first-attitude, ethical and transparent business
practices, respect for professionalism, research-based value investing and implementation of
cutting-edge technology has enabled us to blossom into an over 1600 member team.
Today they are a well diversified financial services firm offering a range of financial
products and services such as Wealth Management, Broking & Distribution, Commodity
Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment
Banking Services and Principal Strategies.
They have a diversified client base that includes retail customers (including High
Net worth Individuals), mutual funds, foreign institutional investors, financial institutions
and corporate clients. We are headquartered in Mumbai and as of Dec 31st, 2011, had a
network spread over 555 cities and towns comprising 1,563 Business Locations operated by
our Business Partners and us. As at Dec 31st, 2011, we had 738,156 registered customers.
FINANCIAL PATTERN:

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In 2006, the Company placed 9.48% of its equity with two leading private equity
investors based out of the US New Vernon Private Equity Limited and Bessemer Venture
Partners. The company got listed on BSE and NSE on September 9, 2007. The issue which
was priced at Rs.825 per share (face value Rs.5 per share) got a overwhelming response and
was subscribed 27.18 times in turbulent market conditions. The issue gave a return of 21%
on the date of listing. As of end of financial year 2008, the group networth was Rs.7 bn and
market capitalization as of March 31, 2008 was Rs.19 bn.
Credit rating agency Crisil has assigned the highest rating of P1+ to the Companys
short-term debt program.
Shareholding Pattern at on 30th June, 2011.
As of June 30th, 2011; the total shareholding of the Promoter and Promoter Group
stood at 69.16%. The shareholding of institutions stood at 12.07% and non-institutions at
18.77%.
BUSINESS STREAMS:
1.

Institutional Equities

2.

Asset management

3.

Investment Banking

4.

Private equity

5.

Principle Strategies

6.

Wealth management

Portfolio management

Private Equity

Structured products

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Insurance

Investment Banking Services

7.

Brokering and Distribution

Equities

Derivatives

Commodities

Depository Services

Portfolio Management services

Mutual Funds

IPO

Benefits of opening an account with MOSL:

Wide range of investment choices - Equity, Derivatives, IPOs and Mutual Funds

Award winning research trusted by Institutions & Fund Managers

Flexible Online Trading Platform from your Desktop, Web, Mobile or Call N Trade

Superior Leverage Products allowing you to trade more on your margin#

Discounted Brokerage Schemes that offer you true value for money

Better Security with 128-bit Secure Socket Layer encryption

Complete ease of operation with 46+ Banks for funds transfer

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Integrated view of your investments, customised news & alerts, watchlists, etc.
through My Motilal Oswal

MANAGEMENT TEAM:
1.

Motilal Oswal
Chairman and Managing Director, MOFSL

2.

Raamdeo Agrawal
Joint Managing Director, MOFSL

3.

Navin Agarwal
Director, MOFSL

4.

Ramnik Chhabra
Associate Director - Head Marketing, MOFSL

5.

Sameer Kamath
Chief Financial Officer, MOFSL

6.

Mr. Sudhir Dhar


Senior Vice President - Head HR & Admin, MOFSL

CORPORATE SOCIAL RESPONSIBILITY:


Philosophy
MOFSL believes that it has a responsibility beyond its basic responsibility towards its
stakeholders; a responsibility towards a larger constituency the society. There are many
who may not be as privileged as we are and we consider it our duty to help those deserving,
to provide them with opportunities and enhance their lives. It is an investment for the future
of the society. Our goal is to do our bit to make our planet a better place.
We are associated with the Light of Life Trust Enlighten a Life, whose vision is to create
an awakening amongst the underprivileged. We are contributing our resources to the society
through them. We are forming a group of volunteers who will be going every weekend to the

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centres of this Trust to impart knowledge and skills to the children and their families. While
some projects are already underway, more are on the anvil!

Programs:
Blood donation drive 2010
Employees charity
Mumbai marathon

Association:
LIGHT OF LIFE TRUST
Light of Life Trust (LOLT) is a non-governmental organization established in 2002 with a
vision to transform the lives of underprivileged rural communities. The Founder and
Chairperson of Light of Life Trust, Villy Doctor, along with a few likeminded & concerned
individuals came together to look at different avenues through which various supportive &
sustainable programmes could be initiated to reach out to women & children, the most
venerable section of

Indian society especially in rural India. Integrity, excellence,

transparency, passion and commitment, respect, trust and joy are the core values of the
organization that are clearly reflected in all the areas of our work.
Light of life Trust has three verticals Project Anando, Project Jagruti and Project Aangan.
Project Anando is based on the belief that no child should be forced to drop out of school.
The project aims to realize the untapped potential of Indias rural children and empower
them through the 3 E approach Educate, Empower and Equip for Employability.A
community centre for women, a senior citizen home, a childrens home and a medical

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diagnostic centre have been established through Project Jagruti; and a hospice & a Research
& Development centre through Project Aangan.
For any further queries about the trust or to make a difference by making a donation please
contact :
Light of Life Trust
181, Hill Road, Bandra (West), Mumbai - 4000050.
Call : 022-26557792 Website : www.lolt.in
Enlighten a life, we can together make a difference

Core Purpose:
To be a well respected and preferred global financial services organization enabling wealth
creation for all our customers.
Team work :Attaining goals collectivity and collobarativily and .
Meritocracy:Performance gets differentiated recognized and rewarded in an apolitical environment.
Passion & attitude :High energy and self motivated with a Do It attitude and entrepreneurial spirit.
Excellence in execution :Time bound results within the frame work of the companies value systems.

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Vision

To be the most admired Asset Management Company by innovatively catering to the


investment requirements across asset classes for all investors. To fulfill our
commitment of bringing prosperity into the lives of our investors and create value for
all stakeholders.

Mission

To establish L&T Investment Management Ltd. into a leadership position in the asset
management business.

To be a one stop shop for all investment requirements.

To create a stimulating environment to attract and retain the best talent.

To be known for efficiency, ethics and professionalism in our approach and


processes.

To harness technology in all aspects of business - such as product innovation,


investor servicing & investment management

Values
Solidity: We believe that a strong foundation is key to building a great structure. We will
ensure that our foundations are based on thorough knowledge and expertise, and constantly
strengthen it.
Commitment: We believe in utmost commitment to our responsibilities. And to you, we
don't believe in just selling a financial solution but building a long term partnership. We are
with you for life. And through every stage of your life.
Innovation: We believe in constantly looking ahead, envisioning the future and anticipating
and adapting to it, rather than merely keeping pace with it, which is why you will always
find us devising innovative ways to build your wealth.

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CHAPTER-2
THEORITICAL CONCEPTS
Introduction:
In the financial industry, the talk of the day is Mutual Funds. The driving force of
mutual funds is the safety of the principal guaranteed, plus the added advantage of capital
appreciation together with the income earned in the form of interest or dividend. Thus,
mutual funds act as gateway to enter into big companies hitherto inaccessible to an ordinary
investor with his small investment.
A mutual fund collects the savings from small investors, invest them in Government
and other corporate securities and earn income through interest and dividends, besides
capital gains. It works on the principle of small drops of water make a big ocean. Each
fund is divided into a small fraction called units equal value.

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Every investor, whether big or small, will have a stake in the fund cal enjoy the wide
portfolio of the investment held by the fund. Thus, mutual funds are corporations which pool
funds by selling their own shares and reduce risk by diversification. 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.
Mutual funds really captured the public's attention in the 1980s and '90s when
mutual fund investment hit record highs and investors saw incredible returns. However, the
idea of pooling assets for investment purposes has been around for a long time. Here we
look at the evolution of this investment vehicle, from its beginnings in the Netherlands in the
18th century to its present status as a growing, international industry with fund holdings
accounting for trillions of dollars.
In the Beginning:
Historians are uncertain of the origins of investment funds; some cite the closed-end
investment companies launched in the Netherlands in 1822 by King William I as the first
mutual funds, while others point to a Dutch merchant named Adriaan van Ketwich whose
investment trust created in 1774 may have given the king the idea. Ketwich probably
theorized that diversification would increase the appeal of investments to smaller investors
with minimal capital. The name of Ketwich's fund, Eendragt Maakt Magt, translates to
"unity creates strength". The next wave of near-mutual funds included an investment trust
launched in Switzerland in 1849, followed by similar vehicles created in Scotland in the
1880s.
The idea of pooling resources and spreading risk using closed-end investments soon took
root in Great Britain and France, making its way to the United States in the 1890s. The
Boston Personal Property Trust, formed in 1893, was the first Closed-end fund
In the U.S. The creation of the Alexander Fund in Philadelphia in 1907 was an
important step in the evolution toward what we know as the modern mutual fund. The
Alexander Fund featured semi-annual issues and allowed investors to make withdrawals on
demand.

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The Arrival of the Modern Fund:


The creation of the Massachusetts Investors' Trust in Boston, Massachusetts,
heralded the arrival of the modern mutual fund in 1924. The fund went public in 1928,
eventually spawning the mutual fund firm known today as MFS Investment Management.
State Street Investors' Trust was the custodian of the Massachusetts Investors' Trust. Later,
State Street Investors started its own fund in 1924 with Richard Paine, Richard Saltonstall
and Paul Cabot at the helm. Saltonstall was also affiliated with Scudder, Stevens and Clark,
an outfit that would launch the first no-load fund
In 1928. A momentous year in the history of the mutual fund, 1928 also saw the
launch of the Wellington Fund, which was the first mutual fund to include stocks and bonds,
as opposed to direct merchant bank style of investments in business and trade.

Regulation and Expansion:


By 1929, there were 19 open-ended mutual funds competing with nearly 700 closedend funds. With the stock market crash of 1929, the dynamic began to change as highlyleveraged closed-end funds were wiped out and small open-end funds managed to survive.
Government regulators also began to take notice of the fledgling mutual fund
industry. The creation of the Securities and Exchange Commission (SEC), the passage of the
Securities Act of 1933 and the enactment of the Securities Exchange Act of 1934put in place
safeguards to protect investors: mutual funds were required to register with the SEC and to
provide disclosure in the form of a prospectus. The Investment Company Act of 1940 put in
place additional regulations that required more disclosures and sought to minimize conflicts
of interest.
MUTUAL FUND:
A mutual fund is just the connecting bridges or a financial intermediary that allows a
group of investors to pool their money together with a predetermined investment objective.

27

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


The mutual fund will have a fund manager who is responsible for investing the gathered
money into specific securities (stocks or bonds). When you invest in a mutual fund, you are
buying units or portions of the mutual fund and thus in investing becomes a shareholder or
unit holder of the fund.
Mutual funds are considered as one of the best available investment as compare to
others they are very cost efficient and also easy to invest in, thus by pooling money together
in a mutual fund, investors can purchase stocks or bonds with much lower trading costs that
if they tried to do it on their own. But the biggest advantage to mutual funds is
diversification, by minimizing risk and maximizing returns.
To state in simple words, a mutual fund collects the savings from small investors,
invest them in Government and other corporate securities and earn income through interest
and dividends, besides capital gain. It works on the principle of small drop of water makes
a big ocean.
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 appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a mutual fund is the most suitable
investment of the common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost.

DEFINITION
The securities and Exchange Board of India (Mutual Funds) Regulation, 1993 defines
a mutual fund a fund established in the form of a trust by a sponsor, to raise monies by the
trustees through the sale of units to the, public, under one or more schemes, for investing in
securities in accordance with these regulations
According to Weston J. Fred and Brigham, Eugene, F, Unit trusts are corporations
which accept dollars from savers and then use these dollars to buy stock, long term bonds,

28

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


short term debt instruments issued by business or government units; these corporations pool
funds and thus reduce risk by diversification.
HISTORY OF MUTUAL FUNDS
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 open-end schemes is liquidity
The Mutual fund industry in India started in 963 with the formation of UTI (united
trust of India), at the initiative of government of India. The history of Mutual Funds in India
can be broadly divided into Four Phases

First Phase- 1964-87


Unit Trust of India was established by an act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and Administrative control of
the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and IDBI took over the
regulatory and administrative control in place of RBI. The first scheme launched by UTI
was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6700 crores of assets under
management.

Second phase-1987-1993(entry of public sector funds)


1987 marketed the entry of non-UTI, public sector mutual funds set up by public sector
banks and life insurance Corporation of India (LIC) and general Insurance Corporation of
India (GIC). SBI Mutual fund was the first non-UTI Mutual fund established in June 1987
followed by can bank Mutual fund (Dec 1987), Punjab national bank mutual fund (August
89). India bank mutual fund (Nov 89). Bank of India (June 90), bank of Baroda mutual fund
(Oct 92). LIC established its mutual fund in Nov 1989 while GIC had set up its mutual fund

29

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


in December 1990 at the end of 1993, the mutual fund industry had asset under management
of Rs.47, 004 cores.

Third phase-1993-2003 (entry of private sector funds)


With the entry of private sector funds in 1993, an era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families, Also. 1993 was the
year in which the first mutual fund regulations came into being, under which all mutual
funds, except UTI were to be registered and governed, the Kothari pioneer (now merged
with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (mutual funds ) registrations were substituted by a more comprehensive and
revised mutual funds regulations in 1996 the number of mutual funds houses went on
increasing, with many foreign mutual funds setting up funds in India and also the industry
has witnessed several mergers and acquisition. As at the of Jan 2003, there ware 33 mutual
funds with total assents of Rs. 1,21,805 crores. The UTI with Rs. 44,541 crores of assets
under management was way ahead of other mutual funds.
REGULATORY AUTHORITIES:
To protect the interest of the investors, SEBI formulates policies and regulates
mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines
from time to time. MF either promoted by public or by private sector entities including one
promoted by foreign entities is governed by these Regulations.
SEBI approved Asset Management Company (AMC) manages the funds by making
investments in various types of securities. Custodian, registered with SEBI, holds the
securities of various schemes of the fund in its custody.
According to SEBI Regulations, two third of the directors of Trustee Company or
board of trustees must be independent.
The Association of Mutual funds in India (AMFI) reassure the investors in Units of
mutual funds that the mutual funds function within the strict regulatory framework. Its

30

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


objective is to increase public awareness of the mutual fund industry. AMFI also is engaged
in up grading professional standards and in promoting best industry practices in diverse
areas such as valuation, disclosure, transparency etc.

Diversification
Diversification is nothing but spreading out your money across available or different
types of investments. But choosing to diversity respective investment holdings reduces risk
tremendously up to certain extent.
The most basic level if diversification is to buy multiple stocks rather than just one
stock. Mutual funds are set up to buy many stocks. Beyond that, you can diversify even
more by purchasing different kinds of stocks, then adding bonds, then international, and so
on. It could take you weeks to buy all these investments, but if you purchased a few mutual
funds you could be done in a few hours because mutual funds automatically diversify in a
predetermined category of investments (i.e. growth companies, emerging or mid size
companies, low grade corporate bonds, etc.,).

Types of Mutual Funds Schemes in India


Wide variety of Mutual Funds Schemes exist to cater to the needs such as financial
position, risk tolerance and return expectations etc. thus mutual funds has variety of flavor,
being a collection of many stocks, an investors can go for picking a mutual funds might be
easy. There are over hundreds of mutual funds scheme to choose form. It is easier to think of
mutual funds on categories, mentioned below.

Overview of existing schemes existed in mutual fund category:


BY STRUCTURE
1.

Open-Ended Schemes:

31

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


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 open-end schemes is liquidity.
2.

Close-Ended Schemes:
These schemes have a pre-specified maturity period. One can invest directly in the

scheme at the time of initial issue. Depending on the structure of the scheme there are two
exit options available to an investor after the initial offer period closes. Investors can
transact (buy and sell) the units of the scheme on the stock exchanges where they are listed.
The market price at the stock exchanges could vary from the net asset value (NAV) of the
scheme in account of demand and supply situation, expectations of unit holder and other
market factors. Alternatively some close-ended schemes provide an additional option of
selling the units directly to the Mutual Fund through periodic repurchase at the schemes
NAV however one cannot buy units and can only sell units during the liquidity window.
SEBI Regulations ensure that at least one of the two exit routes is provided to the investor.
3.

Internal Schemes:
Internal Schemes are that scheme, which combines the features of open-ended and

close-ended schemes. The units may be traded on the stock exchange or may be open for
sale or redemption during pre-determined intervals at NAV related prices.
INVESTMENT OBJECTIVE:
Equity Funds Dividend
The aim of Equity Funds Dividend 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.
Equity Funds Growth

32

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


The aim of Equity Funds growth 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.
Balanced Funds Dividend
The aim of balanced funds dividend is to provide both dividend 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.
Balanced Funds Growth
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.

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.
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.

33

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50.
Spectral Scheme
Spectral 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.
ADVANTAGES OF INVESTING IN MUTUAL FUNDS

Professional management.

Diversification.

Convenient administration.

Return potential.

Low cast.

Liquidity.

Flexibility.

Choice of schemes.

Tax benefits.

Well regulated.

TAX - BENEFITS

No tax on dividends in the hands of the investor (only a 12.610/0 dividend


distribution

tax paid by the fund before distribution of dividends)

34

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

No dividend distribution tax for equity mutual funds (completely tax free dividends)

Tax liability only when investment is redeemed/ withdrawn (not every year)

Long term capital" gains tax benefits.

Benefit of indexation for investments held over a year.

MUTUAL FUNDS IN INDIA

ABN AMRO Mutual Fund

Birla Sun Life Mutual Fund

Bank of Baroda Mutual Fund (BOB Mutual Fund)

HDFC Mutual Fund

HSBC Mutual Fund

ING Vysya Mutual Fund

Prudential ICICI Mutual Fund

Sahara Mutual Fund

State Bank of India Mutual Fund (SBI)

Tata Mutual Fund.


The concept of mutual funds in India dates back to the year 1963. The era between

1963 and 1987 marked the existence of only one mutual fund Company in India with Rs.
67bn assets under management (AUM).by the end of its monopoly era. The Unit Trust of
India (UTI), by the end of the 80s decade, few other mutual fund companies in India took
their position in mutual fund market.

35

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank
Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India
Mutual Fund.
The succeeding decade showed a new horizon in India mutual fund industry. By the
end of 1993, the total AUM of the industry was Rs.470.04 bn. The private sector funds
started penetrating the fund families. In the same year the first Mutual Fund Regulations
came into existence with re-registering all mutual funds except UTI. The regulation was
further given a revised shape in 1996.
Kothari Pioneer was the first private sector mutual fund company in India which has
now merged with Franklin Templeton. Just after ten years with private sector players
penetration, the total assets rose up to Rs. 1218.05 bn . Today there are 33 mutual fund
companies India.

ASSET MANAGEMENT COMPANIES


Asset management companies are the companies involved in the mutual fund
business. These companies manage all the transaction of mutual funds from the beginning to
the end.
The following are the list of AMCs operating currently in India. They are
A. UTI Asset management company (P) ltd
B. Bank sponsored
BoB asset management company ltd
Can bank investment management services ltd

36

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


PNB asset management company ltd
SBI funds management company ltd
C. Institutions
GIC asset management company ltd
IDBI principal asset management co ltd
IL&FS asset management co ltd
Jeevan bima sahayoge asset management co ltd
D. Private sector
1. Indian
Benchmark asset management co ltd
Cholamandalam asset management co ltd
Escort asset management co ltd
JM capital management ltd
Kotak Mahindra asset management ltd
Sundaram asset management co ltd
Reliance capital asset management ltd
2.

Joint ventures - Pre dominantly Indian


Burlap sun life insurance management co ltd
Credit capital asset management co ltd
DSP Merrill Lynch fund manager pvt ltd
First Indian management co ltd

37

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


Tata TD water house asset management pvt ltd
HDFC asset management pvt ltd
3.

Joint ventures - Pre dominantly Foreign


Alliance capital asset management (India) pvt ltd
Deut she asset management (India) pvt ltd
Dundee investment management research pvt ltd
HSBC asset management (India) pvt ltd
ING investment management (India) pvt ltd
Morgan Stanley investment management pvt. Ltd.
Prudential ICICI management co. Ltd.
Standard Chartered asset management co pvt. Ltd.
Sun F & C asset management (India) pvt. Ltd.

CHAPTER-3
RESEARCH METHODOLOGY
a. STATEMENT OF THE PROBLEM:
Due to the falling Rate of Interest on Bank deposits, it is obvious that Investment in Mutual
Fund will grow in year to come. However lack of Awareness of Mutual Fund is a hindering
factor in expected growth of Mutual Fund Business. Under noted problems are envisaged in
this area: Difficult in convincing people for investment. Difficult to change mind of the
investor according to age and Profession. Difficult to make an approach to investors.
Difficult to take an appointment with professional people. Difficult to get the documents
required for formalities from investors Difficult to overcome an impassionate person who

38

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


wants return in less time. Difficult to follow up the people whose names are being stored in a
data. Difficult to remove the fear of risk from the minds of investors.

b.NEED FOR THE STUDY:


Mutual Funds are considered as one of the best available investment option as compare to
others. It collects the savings form small investors and these funds are invested on their
behalf. Lack of awareness is one of the disadvantages for the success of mutual funds.
Hence here may studied is confined to know the awareness of mutual funds and its scope
among public providing required suggestions.

c.OBJECTIVE OF STUDY:
1. To know the awareness of MUTUAL FUND among people.
2. To see the interest of people in investing in MUTUAL FUNDS.
3. To know the scope of MUTUAL FUNDS in India.
4. To know the different attitudes of people regarding risk, rate of return, period of
investment etc.

d.SOURCE OF DATA:
Primary data:
Primary data is collected through Questionnaire
Secondary Data:
The data can be collected from Secondary Sources. The data was collected from Past
Records, Books, Journals, Magazines, Internet and all other types of published data.

e.TOOLS USED FOR ANALYSIS:


Simple percentages and graphs

39

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

f.RESEARCH DESIGN:
Research Type

descriptive research design

Population

people in and around Madanapalle

Sample size

100 people

Sample technique

convience sampling

g.SCOPE OF THE STUDY:


The study is confined to local investors in and around madanapalle

h.LIMITATIONS OF THE STUDY:


1. Duration of project was not enough to make our conclusion on such a vast subject.
Time constraints has also become a major limitation
2. The sample size taken for drawing the conclusion was not sizeable
3. Investor ignorance was faced during discussions with respondents

CHAPTER-4
4. DATA ANALYSIS
Question 4.1 : Age
Option
Below 25
25 to 40
Above 40

No. of Respondents
30
50
20

40

Percentage
30%
50%
20%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the above analysis it is observed that 50% of the respondents are at the age of
25 to 40, 30% of the respondents are at the age below 25, 20% of the respondents are at the
age above 40.

Question 4.2 : Occupation


Option
Student
Employee
Businessman
House holder
Others

41

No. of Respondents
4
56
40
-

percentage
4%
56%
40%
-

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the above analysis it is observed that 56% of the respondents are the
employees, 40% of the respondents are business man, 4% of the respondents are the students
and 0% of house holds.

Question 4.3: Income

Option
Less than 1 lakh
1 lakh to 1.50 lakhs
1.50 lakhs to 3 lakhs
Above 3 lakhs

42

No. of Respondents
14
64
14
8

percentage
14%
64%
14%
8%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the above analysis it is observed that 64% of the respondents are at the income
levels 1 lakh to 1.50 lakhs, 14% of the respondents are at the income levels 1.50 lakhs to 3
lakhs, 14% of the respondents are at the income levels less than 1 lakh , 8% of the
respondents are at the income levels above 3 lakhs.

Question 4.4 : What kind of Investment do you prefer


Option
Shares and bonds
Bank deposit
Insurance
Mutual funds
Post office savings
Real estates
Gold and silver

43

No. of Respondents
7
41
4
35
13

Percentage
7%
41%
4%
35%
13%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the above analysis it is observed that 41% of the respondents are invested in Bank
Deposits, 35% of the respondents invested in Mutual Funds, 13% of the respondents
invested in Gold and Silver, 7% of the respondents invested in Shares and Deposits, 4% of
the respondents invested in insurance.

Question : 4.5 Have you ever invested your money in Mutual Fund (if yes)
Option
Yes
No

No. of Respondents
80
20

44

percentage
80%
20%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the above analysis it is observed that 80% of the respondents invested in Mutual Funds
and 20% are not invested in Mutual Funds

Question 4.6 : How do you come to know about Mutual Fund


Option
Friends
Stock brokers
Advertisement
Banks

No. of Respondents
80
15
5
-

45

percentage
80%
15%
5%
-

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


Others

Interpretation:
From the above analysis it is observed that 80% of the respondents came to know about
Mutual Funds through friends, 15% through Stock Brokers, 5% through advertisements.

a) Where do you find yourself as Mutual Fund investors


Option

No.

Respondents
Totally ignorant
20
Partially knowledge of mutual fund
63
Aware only of any specific scheme in 5
which your invested

46

of percentage
20%
63%
5%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


Fully aware

12

12%

Interpretation:
It is observed that most of the investors have partial knowledge about Mutual Funds. Only
80% of investors have better awareness about working of Mutual Funds and 20% are totally
ignorant about Mutual Funds

Question 4.7 : You have invested you money through which channels
Option
Banks
Stock brokers
Directly
Others

No. of Respondents
20
70
10
-

47

percentage
20%
70%
10%
-

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
It is observed that 70% of respondents invested through stock brokers, 20% through banks
and 10% invested directly.

Question 4.8 : In which kind of Mutual Fund companies do you like to invest?
Option
Public
Private

No. of Respondents
70
30

48

percentage
70%
30%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
Most of the respondents are invested in Public Limited Mutual Funds and 30% invested in
private sector.

Question4. 9 : Which Mutual Fund scheme you like to invest


Option
Open ended scheme
Close ended scheme
Equity or growth fund
Debt or income fund

49

No. of Respondents
60
20
15
5

percentage
60%
20%
15%
5%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the above analysis it is observed that 60% invested in open ended scheme, 20% on
close ended scheme and 15% equity growth and 5% on income schemes.

Question 4.10 : You invest in debt Mutual Fund because it offers


Option
Steady returns
Tax benefits
Liquidity
Less risk
Others (if any)

No. of Respondents
20
55
15
10
-

50

percentage
20%
55%
15%
10%
-

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
Most of the investors invested to debt oriented schemes because of they are offering tax
benefit.

Question 4.11 : You invest in equity Mutual Fund because it offers


Option

No. of Respondents

percentage

Higher returns

50

50%

capital 20

20%

gains
Tax benefits

15

15%

Others (if any)

15

15%

Long

term

51

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the analysis it is observed that 50% of investors are interested to invest in equity
mutual funds because of higher returns, 20% because of long term capitals gains and 15%
because of tax benefit.

Question 4.12 : Which feature of the Mutual Fund attracts you most?
Option
Diversification
Better return and safety
Relation in risk transaction

No. of Respondents
5
30
10

percentage
5%
30%
10%

cost
Regular income
Tax benefit

55
-

55%
-

52

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
Regular income attract most of the investors to invest in mutual funds, 30% of investors
attract because of better returns and safety.

Question 4.13 :Which AMC will you prefer to invest?


Option
SBIMF
UTI
Reliance
HDFC
Kotak
ICICI
JM Finance

53

No. of Respondents
45
5
15
15
0
20
0

percentage
45%
5%
15%
15%
20%
-

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the analysis it is observed that 45% of investors prefer for SBI mutual funds, 20% for
ICICT, 15% each for Reliance and HDFC and 5% for UTI.

Question 4.14 : When you invest in Mutual Fund which mode you will prefer
Option
One time investment
Systematic
investment plan

54

No. of Respondents
45
55

percentage
45%
55%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the analysis it is observed that 55% investors are plan to systematic investment and
45% plans for one time investment.

Question 4.15 : Which area do you prefer most to invest?


Option

No.

Oil and petroleum


Real estate
Banking
Power

Respondents
15
30
55
-

55

of percentage
15%
30%
55%
-

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


Other specify

--

Interpretation:
It is observed that most of the respondents showed interest on banking sector, 30% on real
estate and 15% on oil and petroleum.

Question 4.16 : Do you know that Mutual Funds offer steaded returns?
Option
Yes
No
Not sure

No. of Respondents
75
25
-

56

percentage
75%
25%
-

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
From the analysis it is observed that most of investors invested in mutual funds because they
are offering steady returns.

Question4.17 :Do you know that you can get tax advantage by investing in the Mutual
Funds
Option
Yes
No
Not sure

No. of Respondents
60
30
10

57

percentage
60%
30%
10%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:From the analysis it is observed that nearly 60% of investors chosen mutual fund as
investment option because of tax benefit.
.

Question 4.18 : On whose external advise do you invest?


Option

No.

Bank
Distributor
Agent
On your own

Respondents
60
30
10
-

58

of percentage
60%
30%
10%
-s

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation
Most of investors depended on banks as external advisors, 30% on distributers and 10% on
agents as external advisors.

Question 4.19 : You do not invest in Mutual Funds because of


Option
Better past experience
Lack of knowledge
Difficulty in selection of

No. of Respondents
20
60
5

schemes
In- efficient investment 15
advisors

59

percentage
20%
60%
5%
15%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
Most of investors depended on banks as external advisors, 30% on distributers and 10% on
agents as external advisors.

Question 4.20 :If Mutual Fund offer you steady returns, tax benefits, liquidity,
diversification of portfolio, lesser risk would you consider it as an investment option in
future
Option
Yes
No

No. of Respondents
90
10

60

percentage
90%
10%

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Interpretation:
It is observed that if mutual funds offer steady returns, tax benefit, liquidity,
diversification of portfolio, lesser risk, 90% of respondents are interested to invest in mutual
funds

CHAPTER-5
FINDINGS
.From the above analysis it is observed that 50% of the respondents are at the age of
25 40, 30% of the respondents are at the age below 25, 20% of the respondents are
at the age above 40.

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AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


.From above analysis observed that 56% of the respondents are Employee, 40% of
the respondents are Business men 4% of the respondents are Students.
.From the above analysis observed that 64% of the respondents are 1 lakh 1.5 lakh,
14% of the respondents are 1.5 lakh to 3 lakhs, 14% of the respondents are less than
1 lakh, 8% of the respondents are above 3 lakhs.
From the above analysis it is observed that 41% of the respondents are invested in
Bank Deposits, 35% of the respondents invested in Mutual Funds, 13% of the
respondents invested in Gold and Silver, 7% of the respondents invested in Shares
and Deposits, 4% of the respondents invested in insurance.
.From the above analysis it is observed that 80% of the respondents invested in
Mutual

Funds and 20% are not invested in Mutual Funds.

From the above analysis it is observed that 80% of the respondents came to know
about Mutual Funds through friends, 15% through Stock Brokers, 5% through
advertisements.
It is observed that most of the investors have partial knowledge about

Mutual

Funds. Only 80% of investors have better awareness about working of Mutual Funds
and 20% are totally ignorant about Mutual Funds
It is observed that 70% of respondents invested through stock brokers, 20% through
banks and 10% invested directly.
Most of the respondents are invested in Public Limited Mutual Funds and 30%
invested in private sector.From the above analysis it is observed that 60% invested in
open ended scheme, 20% on close ended scheme and 15% equity growth and 5% on
income schemes.
Most of the investors invested to debt oriented schemes because of They are offering
tax benefit.

62

AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

From the analysis it is observed that 50% of investors are interested to invest in
equity mutual funds because of higher returns, 20% because of long term capitals
gains and 15% because of tax benefit.

. Regular income attract most of the investors to invest in mutual funds,

30% of

investors attract because of better returns and safety.


. From the analysis it is observed that 45% of investors prefer for SBI

mutual

funds, 20% for ICICT, 15% each for Reliance and HDFC and 5% for UTI.
. From the analysis it is observed that 55% investors are plan to systematic
investment and 45% plans for one time investment.
.It is observed that most of the respondents showed interest on banking sector, 30%
on real estate and 15% on oil and petroleum.
.From the analysis it is observed that most of investors invested in mutual funds
because they are offering steady returns.
.From the analysis it is observed that nearly 60% of investors chosen mutual fund as
investment option because of tax benefit.
Most of investors depended on banks as external advisors, 30% on distributers and
10% on agents as external advisors.
60% of the respondents are not invested on mutual funds because lack of knowledge,
20% because of better past experience, 15% because of inefficient investment
advisors.
It is observed that if mutual funds offer steady returns, tax benefit, liquidity,
diversification of portfolio, lesser risk, 90% of respondents are interested to invest in
mutual funds.

SUGGESTIONS

From the analysis it is found that 20% of the employees are at age group 40. So here it is
suggested that lot of awareness has to be created to attract this age group.

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AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Only 8% of respondents i.e., income above 3 lakhs are invested in mutual funds so here
attention has to be given by the AMC and advisor to attract this group by offering risk
less and regular return schemes.

Stock brokers and AMCs need to take more initiation in bringing the investors into their
services by providing quality and better services and advises to the investors.

Private mutual fund companies need to take lot of promotional activities and offer more
and more diversified schemes to attract more investors.

Give full awareness about mutual fund to investors before the industry.
It is

risk less to invest in public ltd mutual funds .

To suggest the investor to invest in strategic investment to gain more profit they one time
investment .

Most of the investors to be are to be


safety and regular income to suggest then to it in available is our investment.

CONCLUSION

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AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


It can be concluded that mutual funds are the better investment options. Investing in
portfolio of mutual funds can minimize risk. By creating awareness and better advises on
mutual funds working then it provides a option to attract more and more investors to invest in
mutual funds.
The market is growing day by day and public is invested in better investment options
brokers, agents, AMCs need to take initiation to create awareness on mutual funds to increase
its scope and to attract more investors.

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AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

Please answer the questions and tick at the place that matches your
opinion
1. Name __________________________________________
2. Age
a. Below 25
3. Occupation
a. Student
d. House holder
4. Income

b. 25 to 40

c. Above 40

b. Employee c. Businessman
e. Others.
[

]
a. Less than 1 lakh b. 1 lakh to 1.50 lakhs
c. 1.50 lakhs to 3 lakhs
d. Above 3 lakhs.
5. What kind of investment do you prefer
[
a. Shares and bonds
b. Bank deposits
c. Insurance
d. Mutual funds
e. post office savings f. real estates
g. gold and silver
6. Have you ever invested your money in mutual fund (if yes)
[
a. Yesb. No
A. Where do you find yourself as Mutual Fund investors
[
a. Totally ignorant
b. Partially knowledge of mutual fund
c. Aware only of any specific scheme in which your invested
d. Fully aware
7. How do you come to know about mutual fund
[
a. Friends
b. Stock brokers
c. Advertisement
d. Banks .

]
]

e. Others.

8. You have invested your money through which channels.


a. Bank

b. Stock Brokers

c. Directly

d. Others.
9.

In which kind of Mutual Fund companies do you like to invest?


a. Public

b. Private

10. Which Mutual Fund scheme you like to invest


c. Equity or growth fundd. Debt or income fund.
11. You invest in Debt Mutual Fund because it offers
a. Steady returns

c. Tax benefits

b. Liquidity

d. Less risk

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AWARNESS OF MUTUAL FUNDS AND ITS SCOPE


e. Others (if any)..
12. you invest in Equity Mutual Fund because it offers
a. Higher returns

[
c. Tax benefits

b. Long term capital gains

e. Others (if any)..

13. Which feature of the Mutual Fund attracts you most?


a. Diversification

d. Regular income

e. Tax benefit.

14. Which AMC will you prefer to invest?


f. ICICI

b. Better return and safety

c. Relation in risk transaction cost


a. SBIMF

b. UTI c. Reliance

d. HDFC e. Kotak

g. JM finance

15. When you invest in Mutual Fund which mode you will prefer
[
]
a. One time investment b. Systematic investment plan
16. Which area do you prefer most to invest?
[
]
a. Oil and Petroleum
b. Real estate
c.
Banking
d. Power
e.
Other specify................................................
17. Do you know that Mutual funds offer studied returns?
a. Yes

b. No

c. Not sure

18. Do you know that you can get tax advantage by investing in the mutual funds
a. Yes

b. No

c. Not sure

19. On whose external advice do you invest?


a. Bank b. Distributor

c. Agent

d. On your own

20. You do not invest in Mutual Funds because of


a. Bitter past experience

c. Difficulty in selection of schemes

b. Lack of knowledge

d. In-efficient investment advisors

21. If Mutual Fund offer you Steady Returns, Tax Benefits, Liquidity, Diversification of
Portfolio, Lesser Risk would you consider it as an investment option in future.
a. Yes

b. No

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AWARNESS OF MUTUAL FUNDS AND ITS SCOPE

BIBLIOGRAPHY
http://www Businessweek.com
http://www.tradingeconomics.com/india/inflation-cpi
http://www.commodityonline.com
http://www.moneycontrol.com
http://www.yahoo.finance.com
http://www.nseindia.com
Security Analysis and Portfolio management-Pandian
NSE Capital Market Module.

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