ACKNOWLEDGEMENT

A research study cannot be completed without the guidance, assistance, inspiration

and co- operation from various quarters. The study also bears the imprints of many

persons. I feel pleased to have an opportunity to express my deep and sincere

feeling of gratitude towards those personalities who positively helped me to

complete my project.

For making this project possible, I am grateful to faculty members, especiallyMiss

MANISHA SIKKA . I would also like to express my thanks to my guide in this

project Miss Urvashi for hER kind Co-operation and guidance, without which this

project could have never been completed on time.

I am also grateful to all my colleagues who continuously helped me in my project

and for their kind co-operation and by spend their valuable time in providing me the

information needed.

(SAVITA HOODA)

PREFACE

Master of Business Administration is a stepping stone to the Management Career. In

order to achieve Practical, Positive and concrete result, the class room leaving needs

to be effectively collaborated with the realities of the situation existing in the real

corporate world. It has great pleasure in presenting this research project which is

essential in partial fulfillment of MBA Programme.

Research project is an integral part of curriculum and its purpose is to provide the

student with the practical exposure of the today’s changing scenario. It helps in the

development of practical skills and analytical thinking process. It provides with

basic skills required to perform the survey and statistical tool needed to analyses the

data. Thus it helps in moulding the students according to the requirement of actual

world.

This research project makes the study on “Investor behaviour regarding financial

services”. Objective of this research were to find out the Perception of the investors

regarding different financial instrument and to examine why and where people

invest.

TABLE OF CONTENTS

CONTENTS

 Industry Profile.

 Conceptual Framework of Study.

Scope of Study

Objective of Study

Research Methodology

Limitations of Study

 Introduction to investment.

 Data Presentation & Interpretation.

 Conclusion.

 Recommendation

 Bibliography.

 Annexure.

Questionnaire

List of Tables

List of Graphs

INDUSTRY PROFILE

 Banks acquired 54 insurance agencies and 46 securities firm in 2004. accounted for $8.6 % and Business debt rose 3.Financial services industry grows as the time passes.7% trillion in 1993 to $30.  The assets of the financial services sector grew 12% from $42.0 trillion in 2004. homeowners withdrew $160 billion in cash when they refinanced their mortgages. a structure created by the 1999 Grame Leach Bliley act to expand the financial services activities of Bank Holding Companies(BHCs).  Excluding real estate.  Financial Holding Companies (FHCs).7% from 2003 to 2004.  In 2004. compared with 138 billion in 2003.  U.  Household debt rose 10. the financial service sector‘s contribution to the gross domestic product total led 7. the latest data available. .  Insurance underwriting assets reported by FHCs rose to $356 billion in 2004 from $347 billion in 2003.9 trillion in 2003 to $48 . household’s financial assets debt rose 94.S. In 2000 these assets amounted to $ 116 billion.3 trillion in assets in 2004.5 trillion in 2003.3 % from $15.7% in 2004.  Securities underwriting /dealing assets of FHCs increased dramatically from $962 billion in 2000 to $ 1620 billion in 2004.

POST OFFICES. .Bank post offices and pf are still dominating the investment industry it is clear form the diagram that only bank and post offices holds 84% of the total investment industry. DIFFERENT INSTITUTIONS MKT. PF 84% CORPORATE BROKERS 12% INDIVIDUAL AGENTS 4% Only 12% share of the industry is being held by the corporate brokers and merely 4% share is with individual agents. SHARE BANKS.

FINANCIAL SERVICES PROVIDERS MARKET SHARE BAJAJ CAPITAL 27% INDIA BULLS 25% RELIANCE CAPITAL 15% OTHERS 33% Bajaj Capital and India Bulls are the major players in the financial services market with 27% and 25% share of the total market. Reliance is the third largest player with 15% market share and the rest of the market is fragmented. .

MAJOR PLAYERS IN THE INDUSTRY .

(Oberoi Hotels. 1975:. IRFC offer a series of Bond Issues. NHPC.Bajaj Capital manages its first Equity issue (through associate company) of Grauer & Weil India Ltd. 1965:.Bajaj Capital expands its product range & includes all UTI schemes and Government saving schemes in addition to Company Fixed Deposits.Bajaj Capital sets up its first 'Investment Centre' in New Delhi to guide individual investors on where. 1966:. EIL Ltd. India's first Mutual Fund. then known as Associated Hotels of India Ltd. later followed by IOC. when & how to invest. Thus opening floodgates for growth of retail investment market in India.SAIL becomes the first government company to accept deposits. 1969:.) becomes the first company to raise Fixed Deposits. Unit Trust (UTI) of India is incorporated in the same year. Bajaj Capital tops ranking in . 1986:. BHEL BPCL. BAJAJ CAPITAL Bajaj Capital is one of the oldest and largest Investment Advisory Companies in India.Bajaj Capital is incorporated as a company and in the same year innovates a new financial instrument ‘Companies Fixed Deposits’. Bajaj Capital plays an active role in all the schemes as ‘Principal Brokers’.Public Sector Undertakings (PSU’s) start making Public issues of Bonds- MTNL. right from drafting of prospectus to marketing of issue.Bajaj Capital starts offering ‘need based’ investment advice to investors which would later be christened as ‘Financial Planning’ in the investment world. in operation since 1964. 1981:. HPCL & others. History 1964:.

CAs.most of them.Private sector players lead revival of Mutual Funds in India through Open ended Debt schemes. 1999:. Bajaj Capital becomes the top mobiliser with collections over US $ 20 million. on all India basis. Bajaj Capital plays a significant role in fund mobilisation for all these players. Investment Experts and Law Graduates. Our team of over 1500 highly motivated professionals includes MBAs. 1995:. Financial Analysts.IDBI & ICICI start issuing their series of Bonds for retail investors. 1987:. Bajaj Capital is Co-manager in all these offerings & rank constantly among top 5 mobilisers. Nationwide Presence and Modern Infrastructure Bajaj Capital has a vast network of 109 offices spread all across the country. Bajaj Capital achieves milestone of becoming top ‘Pension Scheme’ seller in India & launches marketing of Health insurance schemes of GIC. . 1991:. Bajaj Capital consolidates its position as India’s largest retail Distributor of Mutual funds. Bajaj Capital plays an active role and ranked among top mobilisers for all these schemes. 1997:. Insurance Experts.Launch of Public Sector Mutual Funds in India led by SBI.Bajaj Capital starts marketing Life & General Insurance Products of LIC & GIC (through associate firm) in anticipation of opening up of the Insurance Sector. 1993:. Our operations are fully computerized.SBI issues ‘India Development Bonds’ for NRIs.Kothari Pioneer followed by Birla & Alliance in the following years.Launch of first Private Sector Mutual Fund. Financial Planners.

Range of Products and Services Investment Advisory Products » Company fixed deposits » Bonds » Mutual funds » Life insurance » General insurance » Pension schemes » Post office schemes » Tax saving schemes » Insurance linked investment schemes » Initial public offerings » Housing loans » NRI schemes » Car insurance .SEBI Authorization. SEBI is a government body specially created for investors' protection. Bajaj Capital is a Securities and Exchange Board of India (SEBI) authorized Merchant Banker and Investment Advisory Company.

Some of the additional services offered are: » Dedicated relationship managers » Periodic portfolio review » Regular update of portfolio valuation » Need based advice "Financial Planning Group" offers comprehensive Financial Planning Services for long-term investors. Bajaj Capital offers tailor made Investment Advisory and Financial Planning Services customized exclusively to meet the needs of high net worth individuals. We pride ourselves in helping you meet your life's goals. We do this by helping you assess your goals.Financial Planning Services » Investment planning » Retirement planning » Insurance planning » Children's future planning » Tax planning » Short-term cash flow planning Specialty Service Groups "Wealth Management Group" offers Wealth Management Services for High Net worth Individuals. plan for them and finally implement .

We take a comprehensive approach to planning your future by including in each financial plan. solutions in all of the following areas: » Investment Planning » Insurance Planning » Cash flow Planning » Children's Future Planning » Tax Planning » Retirement Planning .them.

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93.101. Net profit also increased from Rs. During the year. 800 crores as per the terms of the offer. The instruments carrying this rating are of high quality by all standards.700 crores and discount bonds to the tune of Rs. Gross income for the year increased 11.156.22 crores for the year 2001-02.18 crores (previous year Rs.91:1 well below the comparable levels in the industry.548. including long term and short term debt. Resources and Liquidity: During the financial year 2001-02. has reported satisfactory financial and operating performance during the period under review i. one of India's leading private sector non-banking financial services companies (NBFCs).172.50 crores). RELIANCE CAPITAL Reliance Capital Ltd. RCL's gross debt: equity ratio. financial year 2001-02.202 crores during the year. the ratings on the company's long term debt were re-affirmed at "AA+" by Credit Analysis and Research Ltd. RCL also redeemed non-convertible debentures (NCDs) to the tune of Rs. and the tax provision decreased to Nil (previous year Rs.92 crores in the previous year.20 crores in the previous financial year. 55. Depreciation was lower at Rs.7.e.40 crores as against Rs. 492. (CARE). RCL redeemed preference shares of Rs.46% to Rs. as on 31st March.45 crores to Rs. is a conservative 1. .71. and are of high investment grade. (RCL). 2002. Gross profit for the year was lower at Rs.59 crores compared to Rs.97 crores).

. Leasing: The Company's activity in the leasing business stood at Rs. 22 crores. These NBFCs provide a variety of services including fund based. and customer-oriented services will dominate the sector in future. Industry Structure and Developments: The Non-Banking Financial Services (NBFC) industry in the private sector in India is represented by a mix of a few large companies with nationwide presence. During this period. Business Review: RCL continued to focus on the infrastructure projects providing immense growth opportunities and substantial tax benefits. efficiency. and niche segments. the highest credit rating that may be assigned to short term debt instruments. and fee based activities. effective regulations have brought in wide ranging changes on prudential norms and continuous monitoring mechanism. The financial sector through the last decade has undergone wide volatility and change. thereby improving overall industry environment. and a large number of small and medium sized companies with regional focus. as well as cater to retail and non-retail markets.RCL's short term borrowing programme is rated ''PR1+'' by CARE. The NBFCs with high credibility.

contributing to the overall economic development.78 crores. RCL has taken a new strategic initiative by entering into the life insurance and general insurance business. Your company's investment in infrastructure projects stood at Rs. The company's investments in the insurance sector stood at Rs. The service sector in India is expected to contribute at a faster pace to the overall economy in the future. and upon receipt of approval from the Reserve Bank of India. telecommunications. Insurance: During the year. RCL is well positioned to take advantage of emerging attractive growth opportunities in the Indian economy by offering wide range of products to suit the needs of the Indian consumer. . RCL intends to invest further in this sector. ports etc. 1.. presenting additional opportunities for companies like RCL that are active in the area of infrastructure investments. Development of key infrastructure sectors is a focus area for the government.Investments in the Infrastructure Sector: RCL's investment in infrastructure sector included high growth areas of power.238 crores. Opportunities: The Indian economy provides several attractive growth opportunities with GDP generally forecast to grow by 5%-6% per annum over the next several years. This is likely to create a positive environment for the financial services industry in India.

recorded and reported correctly. RCL manages these risks by maintaining a conservative financial profile. and by following prudent business and risk management practices. Risks and Concerns: RCL is exposed to the normal industry risk factors of interest rate volatility. and credit risk. and that the transactions are authorised. Adequacy of Internal Control: RCL has a proper and adequate system of internal controls to ensure that all activities are monitored and controlled against any unauthorised use or disposition of assets. and adoption of prudent business strategies have enabled it to consistently post satisfactory performance despite competitive conditions. RCL's strong financial position.Challenges: RCL faces normal market competition in its business. Outlook: RCL is likely to maintain its focus on infrastructure investments and insurance sector. The company will also seek attractive opportunities in other growth areas in the financial services sector. RCL ensures adherence to all internal control policies and procedures as well as . economic cycle. reflected by healthy credit rating and low debt:equity ratio.

compliance with all regulatory guidelines. The number of employees stood at 29. . The audit committee of the Board of Directors reviews the adequacy of internal controls. Human Resource Development (HRD): RCL has a team of able and experienced industry professionals.

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INTRODUCTION TO INVESTMENT © PROPERTY OF WAY2WEALTH SECURITIES © PROPERTY OF WAY2WEALTH SECURITIES .

All investment choices are made at points of time in accordance with the personal investment ends and a contemplation of an uncertain future. such decision-making has not only to be continuous but rational too. of investment and disinvestment. amount. form time to time. timing. Further. grade etc. Expectations relating to the outcomes of alternative investments are subjective and hypothetical in any case but their . the observable environment and general as well as particular features of the securities and firms in which he may invest. Broadly speaking. Investment choices or decisions are found to be the outcome of three different but related classes of factors. mix. The first may be described as factual or informational premises . and investment decision is a trade off between risk and returns. INVESTMENT Investment is the sacrifice of certain present value for the uncertain future reward. entering into investment decisions may be described as expectation premises.The factual premises of investment decisions are provided by many streams of data which taken together. Investors in securities will. changed expectations and ends. The second class of factors. It entails arriving at numerous decisions such as type. represent to an investor. the reliable bases for reasoned expectations become more and more vague as once conceives of the distance future. reappraise and re-evaluate their various investment commitments in the light of new information. Since investments in securities are revocable investment ends are transient and investment environment is fluid. therefore.

How much cash can I expect to receive? 2.How confident can I be that I will get the amount of cash I expect. which may legitimately be entertained. These limit not only the range of investments. When can I expect to receive it? 3. but also the expectations of outcomes. and how certain can I be that I will get it when I expect it? . which may be undertaken.foundations are necessarily provided by the environmental and financial facts available to investors. Investment: the three things that matter 1. For investors generally these comprise the structure of subjective preferences for the size and regularity of the income to be received from and for the safety and negotiability of specific investment or combinations of investments as these are appraised from time to time. The third and final class of factors may be described as valuation premises.

the result of so called investment is quickly resolved by the roll of the dice or the turn of a card. Those involved in speculations are reluctant to refer to this activity as speculation because they dislike the connotations of the word. A financial asset purchased with a very short holding period in mind probably is not really an investment. INVESTMENT/SPECULATION/GAMBLING People usually make investments with a future end date in mind.it may be simply a gamble or a speculation. The holding period for most gambles can be measured in seconds. That is. investment is well grounded and carefully planned speculation whereas it is an ostrich-like form of involuntary and unconscious . There is no precise dividing line with respect to the length of investment holding periods that could be used to separate gambles from speculations and speculations from investments. they prefer to refer to speculations as investment activities.term investment in a game of chance. Such activities have planning horizons that are far too brief to do the research that should precede any investment activity. Speculation is typically last longer than gambles but is briefer than investment. The length of time from the date when investment is purchased to the final date can be called the investor’s planning horizon. investment horizon. A gamble is usually a very short. At its best. or holding period. A speculation usually involves the purchase of a salable asset in hopes of making a quick profit from an increase in the price of the asset. which expected to occur within a few weeks or months.

speculation at its worst. Investment Management Process The factors that drive interest rates can be broken into three broad categories: » Economic Fundamentals » Market Psychology » Market Valuations . There are no set rules or permanently establishing which securities is investment and which are speculations.

A weekly checklist process that assigns a bullish or bearish assessment to the factors that drive the direction of interest rates PORTFOLIO PORTFOLIODECISION DECISIONATTRIBUTE ATTRIBUTE RECOMMENDATION RECOMMENDATION FEATURES OF AN INVESTMENT PROGRAMME ECONOMIC MARKET MARKET MARKET MARKET ECONOMIC PSYCHOLOGY VALUATIONS FUNDAMENTAS FUNDAMENTAS PSYCHOLOGY VALUATIONS FEATURES OF AN MONEY SUPPLY MONEY SUPPLY POLITICAL RISK DEPOSIT GROWTH POLITICAL RISK VOLUME TRADED DEPOSIT GROWTH EVENT RISK VOLUME TRADED FISCAL POLICY EVENT RISK STEEPNESSOF YIELD FISCAL POLICY MONEY FLOW STEEPNESSOF YIELD CREDIT GROWTH MONEY FLOW CURVE CREDIT GROWTH INDIAN RUPEE CURVE ECONOMIC GROWTH INDIAN RUPEE OVERSEAS RATE ECONOMIC GROWTH ECONOMIC VIEW OVERSEAS RATE INFLATION ECONOMIC VIEW INFLATION INVESTMENT PROGRAMME Objective decision making process insulates from excessive “market noise” .

Thus. Safety of Principal The safety sought in investment is not absolute or complete.Choosing specific investments. For an investment to be liquid it must be (1) reversible or (2) marketable. It calls for careful review of economic and industry trends before deciding types and timing of investments. Stability of income . in addition. The following are the suggested features as the ingredients from which many successful investors compound their selection policies. it rather implies protection against loss under reasonably likely conditions or variations. The difference between reversibility and marketability is that reversibility is the process whereby the transaction is reversed or terminated while marketability involves the sale of the investment in the market for cash. investors will need definite ideas regarding features which their portfolios should posses. should afford them all the incidental conveniences and advantages which are possible under the circumstances. it recognized that errors are unavoidable for which extensive diversification is suggested as an antidote. These features would be consistent with the investors’ general objectives and. Adequate Liquidity and Collateral Value An investment is a liquid asset if it can be converted into cash without delay at full market value in any quantity.

An investor must consider stability of monetary income and stability of purchasing power of income.Stability of income must be looked at in different ways just as was security of principal. investors and their advisers constantly are seeking “growth stock’. that is anxious to have maximum cash returns on their investments. recognizing the connection between corporation and industry growth and very large capital appreciation. On the other hand. capital growth and diversification will be limited. It is exceedingly difficult to make a successful choice. If monetary income stability is stressed. The ideal “growth stocks” is the right issue in the right industry. emphasis upon income stability may not always be consistent with other investment principles. and is prone to take excessive risks. bought at the right time. thus affecting their choices. investors who are not pressed for cash income often find that income taxes deplete certain types of investment income less than others. Purchasing Power Stability . one concerned with the amount of income paid by the investment and the other with the burden of income taxes upon that income. Tax Benefits To plan an investment programme without regard to one’s tax status may be costly the investor. Capital Growth Capital appreciation has today become a important principle. There are really two problems involved here. When investor’s income is small. However.

Concealability To be safe from social disorders. investors should carefully study (1) the degree of price level inflation they expect. property must be concealable and leave no record of income received from its use or sale. (2) the possibility of gain and loss in the investment available to them. For maintaining purchasing power stability. Gold and precious stones have long been esteemed for this purpose because they combine high value with small bulk and are readily transferable. and (3) the limitations imposed by personal and family considerations. INCREASE POPULARITY OF INVESTMENTS . government confiscation. or unacceptable levels of taxation.Since an investment nearly always involves the commitment of current funds with the objective of receiving greater amount of future funds. the purchasing power of the future funds should be considered by the investors.

Availability of large and attractive investment alternatives. 6. etc. Ability of investments to provide income and capital gains. . Increase in tendency of people to hedge against inflation. today. But.Investing has been an activity confined to the rich and business class in the past. we find that investment has become a household word and is very popular with people forming all walks of life. Provision of tax incentives in respect of investment in specified channels. This can be attributed to the fact that availability of investible funds is a pre- requisite to deployment of funds. larger family incomes and consequent higher savings. 4. 5. 3. Increase in working population. Increase in investment related publicity. Increase in popularity of investments can be attributed to the following factors: 1. 2.

That satisfaction may be in the form of:  Security of money  High return of money  Tax Benefit of money. Investment Behaviour is reflected by various factor:-  Income factor  Age factor  Educational Factor  Risk Factor  Beliefs . Retailers are the shopkeepers having different nature and behaviour. Investment behaviour signifies the ways from when the investors get satisfaction by investment. INVESTMENT BEHAVIOUR Before knowing about the investment behaviour we have to know which class we are going to read.

Other than these. The Previous INSTRUMENTS belong to low income group have lack of funds and they need security first for their investment. On the Basis of income. Where as high level income group consists of the people which like  INSURANCE  high BONDS return but exception is always there.  Middle EQUITY incomeSHARES group may go for risk investment because they are doing balanced  MUTUAL FUND investment. we consider only income factor. . financial service market has some characteristics on which also investment behaviour will depend:  Intangibility  Inseparability  Variability  Perishability  High involvement purchase/ complex products  High level of brand loyalty DIFFERENT FINANCIAL In this study.

ADVANTAGES OF EQUITY SHARES: 1. Potential for Profit The potential for profit is greater in equity share than in any other investment security. The total yield or yields to maturity may be substantial over a period of time. Shareholders may lose their investment. Thus. When investors buy equity shares. They are not further liable for any failure on the part of the corporation to meet its obligation. 2. but no more. It is a residual claim. In bankruptcy equity holders are in principle entitled only to assets remaining after all prior claimants have been satisfied. in the sense that creditors and shareholders must be paid as scheduled before equity shareholders can receive any payment. Current dividend yield may be low but potential of capital gain is great. EQUITY SHARES Equity represents an ownership position in a corporation. its owners have. generally. limited liability. The certificate states the number of shares purchased and their par value. . Limited Liability In corporate form of organization. they received certificates of ownership as proof of being owners of company. risk is highest with equity shares and so must be its expected return. Equity Share is usually fully paid.

Hedge Against Inflation The equity share is a good hedge against inflation though it does not fully compensate for the declining purchasing power as it is subject to the money- rate risk.3. when interest rates are high shares tend to be less attractive. Tax Advantages Equity shares also offer tax advantages to the investor.The buyer should ensure that the issuing corporation transfers the ownership on its books so that dividends. The larger yield on equity shares results from an increase in principal or capital gains which are taxed at lower rate than other incomes in most of the countries. For this reason. Although the individual has the right to sell his shares. Free Transferability The owner of shares has the right to transfer his interest to someone elese. But. 5. there is little or no trading in the shares of many corporations due to the lack of interested buyers. . and prices tend to depress. 6. Share in Growth The major advantage of investment in equity shares is its ability to increase in value by sharing in the growth of company profits over the long run. equity shares of many small businesses are non liquid and difficult to market. voting right and other privileges will accrue to the new owner. 4.

When the bond matures the investor’s money is usually returned with the earned interest included. Therefore you can buy the bonds after they are originally issued while at the same time you can sell bonds before they mature.  a federal agency. Bonds give income based on their rate of return. Bonds are like stocks because they are both traded. . Bonds are usually much less volatile than stocks. The loans can be from  the federal government. As return on our money.  municipality or  Corporation. BOND Bond is a loan. fixed rate of interest has been paid over a set period of time. At the time of issue of bond the persons are promised to get their money back. Some of Bonds are tax-free. At the time of purchase of bonds we are lending our money to which we buy the bonds from.

Types of Bonds:  Convertible Bonds  Fixed rate Bonds  Floating-rate bonds  High-yield bonds  Zero-coupon bonds  Subordinated . Bonds also carry with them some heavy terminology.  Bonds are like stocks because their prices are sensitive to interest rates as well. which can be confusing and hard to understand. Disadvantages of bonds are:  Lower returns than stocks and mutual funds.

INSURANCE

“Insurance is a contract between two parties where by one party called insurer

undertakes in exchange for a fixed sum called premiums, to pay the other

party called insured a fixed amount of money on the happening of a certain

event”.

WHY PEOPLE GO FOR INSURANCE

 To ensure continuity of income

 To pay off any debt left behind

 To provide liquidity to one’s assets

 To create an asset for one’s heirs

 A great investment vehicle

Types of Insurance

 Life insurance

 General Insurance

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 realised are shared by its unit

holders in proportion to the number of units owned by them. Thus a Mutual Fund is

the most suitable investment for the common man as it offers an opportunity to

invest in a diversified, professionally managed basket of securities at a relatively

low cost.

In other words we can say this is the way to make small investors to invest their

money in the share market.

Types of Mutual Funds Schemes in India
Wide variety of Mutual Fund Schemes exists some of them are as:

By Structure

 Open - Ended Schemes

 Close - Ended Schemes

 Interval

By Investment Objective

 Growth Schemes

 Income Schemes

 Balanced Schemes

Other Schemes

 Tax Saving Schemes

 Special Schemes

 Index Schemes

 Sector Specific Schemes

ADVANTAGES OF MUTUAL FUNDS

The advantages of investing in a Mutual Fund are:

 Professional Management

 Low Costs

 Liquidity

 Transparency

 Flexibility

 Diversification

 Choice of schemes

 Tax benefits

 Convenient Administration

 Return Potential

Such prices are NAV related. It may include a sales load. FREQUENTLY USED TERMS Net Asset Value (NAV) NAV= Mkt. Value of Assets. Sales Load It is charge collected by a scheme when it sells the units. This is the price on which we invest in MF. . Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity.Liabilities Sale Price Also known as Offer Price.

CONCEPTUAL FRAMEWORK OF STUDY Chapter 3 RESEARCH DESIGN .

3. OBJECTIVES OF THE STUDY 1. 4. If not then what is the reason for that. 2. To find out the preferred option for investment on the basis of income group and what they like first before investment. To find out who will be preferred as an investment guide by the public. To find out whether people like to invest in mutual fund or not. If not then what is the reason for that. To find out whether people like to invest in shares or not. H SECURY2EALSECUR .

judgement sampling was used and a sample of 100 investors was selected from Jind City.e. SOURCE OF DATA For the purpose of research two types of data was required i. Primary data: Questionnaire Personal Interviews Secondary data: Books Magazines Websites DATA ANALYTICAL TOOL Percentage method . primary & secondary data. the universe is the investor (retailers) in Jind. SAMPLE SIZE For the study. METHODOLOGY CONTENT UNIVERSE In the present study. SAMPLE DESIGN A sample design is a definite plan for obtaining a sample from a given population.

 As manually analysis is done. Some of the major are as follows:  The study area is only related to the investors of Jind only and sample size may small only 100 shopkeepers.  The study is basically based on the Primary data and observation. so few error may be there even lot of precautions have been taken. LIMITATION OF THE STUDY Each and every study must have some limitations because no one is sufficient in itself. So this study also has some limitations. the possibility of the personal control be over ruled. .  Many of respondents were not ready to give exact information because they feel lack of their secret.  Due to lack of time and financial restrictions the study was not able to achieve its desired target of accuracy.

SCOPE OF THE STUDY The study has been carried out in Jind City selecting a sample of 100 people (Shopkeepers).g. ThisP RbeE can SatEruralNarea done TAT also. The aim of the study was to analyse People’s perception regarding different investment instruments e. An attempt D ATA was made to understand the Investment behaviour with the help of Investor’s as well as Firm. I O N & I N T E R P E TAT I O N ANALYSIS AND INTERPRETATION . Equity Shares etc. Mutual Fund.

.  30% people like to invest for high return  Only 10% people want tax benefit. Table-1 Purpose of investment SECURITY 60% RETURN 30% TAX BENEFIT 10% GRAPH 1 TAX BENEFIT 10% RETURN SECURITY 30% SECURITY RETURN 60% TAX BENEFIT Interpretation: The above table and graph shows that the security is the main purpose of the different investors.  60% people make investment for the purpose of security.

Table-2 Most Preferred option for investment BANK FDs 48% PPF/NSC 8% BONDS 5% INSURANCE 30% MUTUAL FUND 4% SHARES 5% GRAPH 2 60% 48% 50% 40% 30% 30% 20% 8% 10% 5% 4% 5% 0% D E ES s SC S FD N C D FU AN AR N N BO K F/ R SH N AL PP SU BA TU IN U M .

People want security of their money that’s why they go for invest in bank and insurance mostly . where their money is more secured. This table and graph shows as:  48% people want security to invest in bank  8% people prefer PPF/NSC  5% people prefer Bonds  30% people prefer Insurance  4% people prefer Mutual Fund  5% people like Shares investment So Bank and insurance is the most preferred option for investment.Interpretation: The above table and graph is presenting the preferred option of different investors.

Table-3 Various Plan under insurance TERM PLAN 23% ENDOWMENT PLAN 25% MONEY BACK PLAN 35% PENSION PLAN 7% MEDICLAIM PLAN 10% GRAPH 3 TERM PLAN 10% 23% 7% ENDOWMENT PLAN MONEY BACK PLAN PENSION PLAN 35% 25% MEDICLAIM PLAN Interpretation: .

 Near about 85% people have invested their money in these three plans. This table indicates that most of the people have invested in Term Plan. .The above table and graph indicates the various plan under insurance. Endowment Plan and Money Back Plan.  In Table-1 we find out that 50% people wants security of their money and insurance is a very-very preferred option for investments.

Table-4 Guidance Preference INVESTMENT CONSULTANT 30% BANK 45% AGENTS 25% GRAPH 4 25% 30% INVESTMENT CONSULTANT BANK AGENTS 45% Interpretation: .

This is clear from the table and graphs that:  30% people prefer the guidance of the investment consultant. Table-5 .  45% people prefer banks as guider  25% people think agents as their best guider The reason being that the different persons have their own mind setup.The above table is showing the preferred option for guidance of the different investors.

Investor’s Perception Regarding the Shares LACK OF KNOWLEDGE 20% RISKY 31% NOT INTERESTED 25% NO FUND & TIME 16% LACK OF GUIDANCE 8% GRAPH 5 8% LACK OF 20% KNOWLEDGE 16% RISKY NOT INTERESTED NO FUND & TIME 25% 31% LACK OF GUIDANCE Interpretation: .

It is very clear from the table that most of the people are afraid of shares and they think those risky. Also when asked about reason many of them answers in not interested.The Table-5 is indicating the investor’s perception regarding the shares. There are more chances of increase in the investment in shares in the near future as people are now wanted to go for that. Table-6 .

Around 50% people ask about Mutual Fund.  But MF is not thinking so much risky in comparison to the shares. Perception Regarding Mutual Fund LACK OF KNOWLEDE 45% RISKY 10% LACL OF GUIDANCE 17% LACK OF INTEREST 13% NO FUND 15% GRAPH 6 LACK OF 15% KNOWLEDE RISKY 13% 45% LACL OF GUIDANCE LACK OF 17% INTEREST 10% NO FUND Interpretation: The above table shows the people’s perception regarding the mutual fund.  From the above table that most of the people have not so much knowledge regarding the MF. Table-7 Whether people invest in Mutual Funds YES 5% NO 95% .

Table-8 Perception regarding Mutual Fund based on Income Group WHY NOT MUTUAL FUND? INCOME DISTRIBUTION LESS THAN 1.5 1. GRAPH 7 YES 5% NO 95% YES NO Interpretation: The above table and graph shows that only 5% people make investment in Mutual Funds.5% .5 TO MORE THAN 3 LAKH 3 LAKH LAKH LACK OF KNOWLEDGE 38% 60% 33% RISKY 12% 9% 6.

.  The reason is being lack of knowledge for middle income group.5 LAKH 40% 1.5% GRAPH 8 70% 60% 50% LESS THAN 1.LACK OF GUIDANCE 18% 11% 26% NOT INTERESTED 12% 9% 26% LACK OF FUNDS 20% 11% 6.  This table also indicates that these people interested in investing in MF.5 TO 3 LAKH 30% MORE THAN 3 LAKH 20% 10% 0% D Y E E S TE K C G D IS AN N D ES R LE FU ID R W U F TE O O G KN IN K F O C T F LA O K O C N K LA C LA Interpretation: Table-8 indicates the perception of the investors relating to different income group regarding Mutual Fund.  The reason is being lack of guidance and lack of interest.

. Table-9 Whether people invest in Shares YES 5% NO 95% GRAPH 9 YES 5% YES NO NO 95% Interpretation: The above table and graph shows that only 5% people make investment in Shares.

It is clear from the above table that The investors whose income is less than 1.5 TO 3 LAKH MORE THAN 1.5 40% 35% 30% 1.5 TO 3 LAKH 25% 20% 15% MORE THAN 3 10% 5% LAKH 0% INTEREST RISKY GUIDANCE NO FUND KNOWLEDE LACK OF LACK OF LACK OF Interpretation: The above table and graph shows the perception regarding the shares of the different investors based on income group.5 lakh . Table-10 Perception regarding Shares based on different Income Group WHY NOT SHARES? DISTRIBUTION OF INCOME LESS THAN 1.5 3 LAKH LACK OF KNOWLEDE 26% 14% 13% RISKY 20% 43% 40% LACK OF GUIDANCE 4% 9% 20% LACK OF INTEREST 30% 20% 20% NO FUND 20% 14% 7% GRAPH 10 50% 45% LESS THAN 1.

The investors whose income is more than 1. so there is more chances of increase in investment in shares in near future.  Most of the people think that it is too risky to invest in shares. But if we put a sight on the current situation than we find that the stock market is performing well.  They have not so much funds with them to invest in shares. Table-11 Preferred option for investment based on income group .5 lakh  Those people have also a perception in the mind that it is risky.

5 1.2 INCOME MORE 0.6 INCOME LESS 0.4 INCOME 1.5 TO 0.5 TO 3 LAKH MORE THAN 3 LAKH LAKH BANK 66% 37% 13% PPF/NSC 2% 12% 20% BONDS 2% 3% 20% INSURANCE 26% 42% 14% MUTUAL FUND 2% 3% 13% SHARES 2% 3% 20% GRAPH 11 0.7 0.OPTION INCOME LESS THAN 1.5 0.3 3 LAKH 0.1 THAN 3 LAKH 0 SH ND A L CE M UR DS ES BO C F/ K N S FU T U AN AR S N BA N PP IN U .5 THAN 1.

Table-12 Purpose of the Investor based on Income Group PURPOSE INCOME LESS THAN 1. they are more concerned about the security because they do not have so much money. On the other hand investors.5 lakh. whose income is less than 1. Middle income group want both security and return as a result they can take some risk. they want to invest their money in mutual fund and shares for high return.5 TO 3 LAC ABOVE 3 LAC SECURITY 70% 60% 27% RETURN 26% 31% 40% TAX BENEFIT 4% 9% 33% .Interpretation: The Table indicates the preferred option for investment of the different investors based on income groups. whose income is more than 3 lakh. It is quite clear form the above table that investors.5 LAC 1.

5 LAC LAC LAC Interpretation: The Table and graph shows the purpose of investors based on income group.5 TO 3 ABOVE 3 1. .5 to 3 lakhs  They want security as well as high return.  They are more conservative and want only security of their money.5 lakhs.  They are more conscious about tax benefit rather than other groups. Investors whose income is above three lakhs. Investors whose income is between 1. GRAPH 12 80% 70% 60% 50% SECURITY 40% RETURN 30% TAX BENEFIT 20% 10% 0% LESS THAN 1. Investors whose income is less than 1.  They are also ready to take risk for high return.

 Some peoples are ready for small investments in Mutual Fund scheme e. CONCLUSION From the above study we can conclude that  Most of the people does not have any knowledge about Mutual Fund  When we talk with them about investment in shares or mutual funds then they directly say that this is very much risky.  They are afraid of UTI scam. .g. SIP  Low income group like to security first due to that purpose they ignore risky investment.

and TV channels. presentations. RECOMMENDATIONS Till Now.  Most of them preferred that option in which they make investment earlier. Indian market is in boom stage. .  A lot of work is needed to spread awareness among people. So Company has to follow these recommendation & suggestion.  Advertising is the best tool to create awareness among the investor’s for Mutual Fund and Shares e. So there is lot of scope in that Industry.  Their must be full customer satisfaction. print media.g.

BIBLIOGRAPHY  V..com .Chand & Company Ltd.  L M Bhole. Financial Services. 3rd edition.com  Website: www.amfiindia. Tata McGraw_Hill publishing Company Ltd. New Delhi. S.. New Delhi. Tata McGraw_Hill publishing Company Ltd.Bhalla.  Newspaper: Economic Times. New Delhi. Financial Institution and Markets.nseindia. 3rd edition. Financial Management.LICindia.com  Website: www. Delhi. Ram Nager.K.  Website :www.  M Y Khan.

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: . ANNEXURE QUESTIONNAIRE Personal Details: Name : Occupation and Designation : Contact No.

5 Lacs Between 1. What comes in your mind first while making an investment? Security & Saving High returns Tax benefit 2. What is your preferred option for investment? .Age : Marital Status : Spouse status : Annual household Income : Less than 1.5 to 3 Lacs Between 3 to 5 Lacs Above 5 Lacs Children Their age ________________ ________________ Investment Details: 1.

Specify plan opted ……………… 1. Money back plan 4. Do you invest in Mutual Funds? Yes No 5. Do you invest in Shares? . Govt. No funds 6. Mediclaim plan 6. Please. Are you adequate insured? Yes No If Yes. Mutual Fund 6. PPF/NSC 3. Why you don’t invest in Mutual Funds? 1. Lack of knowledge 2. Pension plan 5. Lack of guidance 4. Lack of interest 5. Specify risk cover amount ……………… If Yes. Term plan 2. 1. Insurance 5. Risky 3. Endowment plan 3. Bank FD 2. Shares 3. Please. Bonds 4. Child plan 4.

Lack of guidance 4. Risky 3. What do you think who can better guide you for investment making? Broker/ Agent Banks Investment Consultants List of Tables Table-1 Purpose of investment Table-2 Most Preferred option for investment Table-3 Various Plan under insurance Table-4 Guidance Preference Table-5 Investor’s Perception Regarding the Shares Table-6 Perception Regarding Mutual Fund . Why you don’t invest in Shares? 1. Lack of knowledge 2. No funds 8. Yes No 7. Lack of interest 5.

Table-7 Whether people invest in Mutual Fund Table-8 Perception regarding Mutual Fund based on Income Group Table-9 Whether people invest in Shares Table-10 Perception regarding Shares based on different Income Group Table-11 Preferred option for investment based on income group Table-12 Purpose of the Investor based on Income Group List of Graphs Graph-1 Purpose of investment Graph-2 Most Preferred option for investment Graph-3 Various Plan under insurance Graph-4 Guidance Preference Graph-5 Investor’s Perception Regarding the Shares .

Graph-6 Perception Regarding Mutual Fund Graph-7 Whether people invest in Mutual Fund Graph-8 Perception regarding Mutual Fund based on Income Group Graph-9 Whether people invest in Shares Graph-10 Perception regarding Shares based on different Income Group Graph-11 Preferred option for investment based on income group Graph-12 Purpose of the Investor based on Income Group .