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Mutual BRP
Mutual BRP
2, February 2016
Abstract—Mutual Fund has emerged as a tool for ensuring one’s financial well being. As information and
awareness is rising more and more people are enjoying the benefits of investing in mutual funds. This research
will introduce the customer perception with regard to mutual funds that is the schemes they prefer, the plans
they are opting, the reasons behind such selections and also this research dealt with different investment
options, which people prefer along with and apart from mutual funds. Like postal saving schemes, recurring
deposits, bonds, and shares. The findings from this project is that most of the people are hesitant in going for
new age investments like mutual funds and prefer to avert risks by investing in less riskier investment options
like recurring deposits and so.
Keywords—Asset Management Company (AMC); Investment Option; Investor; Liquidity; LPG; Mutual Fund.
T
HE first introduction of a mutual fund in India services of professional fund managers, which would
occurred in 1963, when the Government of India otherwise be costly for an individual investor.
launched Unit Trust of India (UTI). UTI enjoyed a
monopoly in the Indian mutual fund market until 1987, when 1.1.2. Diversification
a host of other government-controlled Indian financial Mutual funds provide the benefit of diversification across
companies established their own funds, including State Bank different sectors and companies. Mutual funds widen
of India, Canara Bank, and Punjab National Bank. This investments across various industries and asset classes. Thus,
market was made open to private players in 1993, as a result by investing in a mutual fund, you can gain from the benefits
of the historic constitutional amendments brought forward by of diversification and asset allocation, without investing a
the then Congress-led government under the existing regime large amount of money that would be required to build an
of Liberalization, Privatization and Globalization (LPG). The individual portfolio.
first private sector fund to operate in India was Kothari
Pioneer, which later merged with Franklin Templeton. In 1.1.3. Liquidity
1996, SEBI, the regulator of mutual funds in India, Mutual funds are usually very liquid investments. Unless they
formulated the Mutual Fund Regulation which is a have a pre-specified lock-in period, your money is available
comprehensive regulatory framework. Income from MFs to you anytime you want subject to exit load, if any.
could take two forms—dividends and capital gains [1]. Normally funds take a couple of days for returning your
A mutual fund is a pool of money from numerous money to you. Since they are well integrated with the
investors who wish to save or make money just like you. banking system, most funds can transfer the money directly
Investing in a mutual fund can be a lot easier than buying and to your bank account.
selling individual stocks and bonds on your own. Investors
can sell their shares when they want. [2]. 1.1.4. Flexibility
Investors can benefit from the convenience and flexibility
1.1. Benefits of Investing in Mutual Funds: [3] offered by mutual funds to invest in a wide range of schemes.
1.1.1. Professional Management The option of systematic (at regular intervals) investment and
withdrawal is also offered to investors in most open-ended
When you invest in a mutual fund, your money is managed
schemes. Depending on one’s inclinations and convenience
by finance professionals. Investors who do not have the time
one can invest or withdraw funds.
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 2, February 2016
1.1.5. Low Transaction Cost with a risk. Change of a fund manager can also
Due to economies of scale, mutual funds pay lower cause style drift.
transaction costs. The benefits are passed on to mutual fund
investors, which may not be enjoyed by an individual who II. RESEARCH OBJECTIVES
enters the market directly.
To know investor view towards Mutual fund
1.1.6. Transparency To know the awareness of mutual fund in
Funds provide investors with updated information pertaining Aurangabad people
to the markets and schemes through factsheets, offer To know the preference of people for investment
documents, annual reports etc.
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 2, February 2016
not that much known to investors, still investor rely upon will help mutual fund companies to identify the areas
bank and post office deposits, most of the investor used to required for improvement in order to create greater awareness
invest in mutual fund for not more than 3 years and they used among investors regarding investment in mutual funds [Gauri
to quit from The fund which was not giving desired results. Prabhu & Vechalekar, 7].
Equity option and SIP mode of investment were on top Dr. Shantanu Mehta, Charmi Shah
priority in investors’ list. It was also found that maximum The survey is undertaken of 100 educated investors of
number of investors did not analyze risk in their investment Ahmedabad and Baroda city and the major findings reveal
and they were depending upon their broker and agent [Ravi the major factors that influence buying behavior mutual funds
Vyas,5]. investors, sources that investor rely more while making
Dr. Binod Kumar Singh investment and preferable mode to invest in mutual funds
In this paper, structure of mutual fund, operations of mutual market. The study will be immensely useful to the AMC';s,
fund, comparison between investment in mutual fund and Brokers, distributors and to the other potential investors and
bank and calculation of NAV etc. have been considered. In last but not least to academician as well [Shantanu Mehta &
this paper, the impacts of various demographic factors on Charmi Shah, 8].
investors’ attitude towards mutual fund have been studied. Gaurav Agrawal & Dr. Mini Jain
For measuring various phenomena and analyzing the In today’s competitive environment, different kinds of
collected data effectively and efficiently for drawing sound investment avenues are available to the investors. All
conclusions, Chi-square ( ) test has been used and for investment modes have advantages & disadvantages. An
analyzing the various factors responsible for investment in investor tries to balance these benefits and shortcomings of
mutual funds, ranking was done on the basis of weighted different investment modes before investing in them. Among
scores and scoring was also done on the basis of scale. The various investment modes, Mutual Fund is the most suitable
study shows that most of respondents are still confused about investment mode for the common man, as it offers an
the mutual funds and have not formed any attitude towards opportunity to invest in a diversified and professionally
the mutual fund for investment purpose. It has been observed managed portfolio at a relatively low cost. In this paper, an
that most of the respondents having lack of awareness about attempt is made to study mainly the investment avenue
the various function of mutual funds. Moreover, as far as the preferred by the investors of Mathura, and we have tried to
demographic factors are concerned, gender, income and level analyze the investor’s preference towards investment in
of education have significantly influence the investors’ ’ mutual funds when other investment avenues are also
attitude towards mutual funds. On the other hand the other available in the market [Gaurav Agrawal & Mini Jain, 9].
two demographic factors like age and occupation have not R Padmaja
been found influencing the attitude of investors’ ’ towards A mutual fund is a type of professionally-managed collective
mutual funds. As far as the benefits provided by mutual funds investment vehicle that pools money from many investors to
are concerned, return potential and liquidity have been purchase securities. As there is no legal definition of mutual
perceived to be most attractive by the invertors’ followed by fund, the term is frequently applied only to those collective
flexibility, transparency and affordability. Apart form the investments that are regulated, available to the general public
above, in India there is a lot of scope for the growth of mutual and open-ended in nature. Mutual funds have both
fund International Journal of Research in Management ISSN advantages and disadvantages compared to direct investing in
2249-5908 Issue2, Vol. 2 (March-2012) Page 68 companies individual securities. Today they play an important role in
provided that the funds satisfy everybody’s needs and sharp household finances. So the present study aims at consumer
improvements in service standards and disclosure [Binod behavior towards mutual funds with special reference to
Kumar Singh, 6]. ICICI Prudential Mutual Funds Limited, Vijayawada. Data
Prof Gauri Prabhu, Dr N.M. Vechalekar was collected through primary and secondary sources.
Mutual Funds provide a platform for a common investor to Primary data was collected through structured questionnaire.
participate in the Indian capital market with professional fund Convenience sampling method was used to collect the data
management irrespective of the amount invested. The Indian and entire study was conducted in Vijayawada City. The
mutual fund industry is growing rapidly and this is reflected study explains about investors’ awareness towards mutual
in the increase in Assets under management of various fund funds, investor perceptions, their preferences and the extent
houses. Mutual fund investment is less risky than directly of satisfaction towards mutual funds. Some suggestions were
investing in stocks and is therefore a safer option for risk also made to increase the awareness towards mutual funds
averse investors. Monthly Income Plan funds offer monthly and measures to select appropriate mutual funds to maximize
returns and invest majorly in debt oriented instruments with the returns [Padmja, 10].
little exposure to equity. However it has been observed that Dr. D. Rajasekar
most of the investors are not aware of the benefits of ―A Study on Investor’s preference of mutual funds with
investment in mutual funds. This is reflected from the study reference to reliance private limited‖ a project which is
conducted in this research paper. This paper makes an mainly carried out to know about the investor’s perception
attempt to identify various factors affecting perception of with regard to their profile, income, savings pattern,
investors regarding investment in Mutual funds. The findings investment patterns and their personality traits. In order to
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 2, February 2016
understand the level of investor’s preference, a survey was Pritam P. Kothari & Shivganga C. Mindargi
conducted taking in to consideration various parameters This study analyzes the impact of different demographic
involved in investors decision making. For the purpose of variables on the attitude of investors towards mutual funds.
evaluation, a questionnaire survey method was selected Apart from this, it also focuses on the benefits delivered by
keeping in mind objectives of the study. The data was mutual funds to investors. To this end, 200 respondents of
collected from primary and secondary sources. The primary Solapur City, having different demographic profiles were
sources were collected from the investors who invested in surveyed. The study reveals that the majority of investors
various avenues. The secondary sources are from books, have still not formed any attitude towards mutual fund
journals and internet. Since the investor population is vast a investments [Pritam P. Kothari & Shivganga C. Mindargi,
sample size of 150 was taken for the project. The data was 14].
analyzed using the statistical tools like percentage analysis, Dhimen Jagdishbhai Jani, Bhautik Alpeshkumar Patel &
chi square, weighted average. The report was concluded with Rajeev V. Jain
findings and suggestions and summary. From the findings, it This study focused on the consumer’s perception towards
was inferred overall that the investor are highly concerned mutual fund as an investment option in Valsad city from
about safety and growth and liquidity of investments. Most of Gujarat. They revealed that Consumers perception were
the respondents are highly satisfied with the benefits and the positive toward investment in mutual funds [Dhimen
service rendered by the reliance mutual funds [Rajasekara, Jagdishbhai Jani et al., 15].
11].
Dr. Geeta Kesavaraj
VII. DATA ANALYSIS AND INTERPRETATION
The researcher carried out the study with the aim to measure
the ―Customer Perception towards various types of Mutual As per investors point of view everyone wants their money
Funds". It focuses its attention towards the possibilities of should be safely invest by AMC because of the saving which
measuring the expectations and satisfaction level of more they have deposited are invested in various investment option
mutual fund products. It also aims to suggest techniques to and most safest investment option they feel is the bank
improve the present level of perception. The study will help deposit because there is no fear of losing money at any point
the firm in understanding the expectations, future needs and of time unless bank gets default and chances of it is very less
requirements and complaints of the consumers. The study had so most safest investment option investors feel are the bank
been dedicated mainly towards the promotion of product or deposit.
concept in the Chennai Market. The researcher used the
Table1: Option Selected by No. Investors
Descriptive type of research design in her study. The
Options No. of Investor
researcher used the Primary data collection method in her
Mutual Fund 4
study by framing a structured Questionnaire. The researcher Stock Market 1
went with convenient type of sampling method in her study. Bank Deposit 24
The sample is taken as 204 by the researcher. For the purpose Others 1
of Analysis and Interpretation the researcher used the Total 30
following statistical tools namely Simple Percentage
Analysis, Chi-Square Test, Karl Pearson's Correlation and
One way Anova. Based on the Analysis and Interpretation the 24
researcher arrived out with the major findings in her study 25
and Suggestions are given in such a way so that the
customers can attain the wealth maximization [Geeta 20
Kesavaraja, 12].
15
Y. Prabhavathi, N.T. Krishna Kishore
The advent of Mutual Funds changed the way the world 10
invested their money. The start of Mutual Funds gave an 4
opportunity to the common man to hope of high returns from 5 1 1
their investments when compared to other traditional sources
of investment .The main focus of the study is to understand 0
the attitude, awareness and preferences of mutual fund Mutual Stock Bank Others
investors. Most of the respondents prefer systematic Fund Market Deposit
investment plans and got their source of information
primarily from banks and financial advisors. Investors Safest investment option
preferred mutual funds mainly for professional fund
management and better returns and assessed funds mainly Figure 1: Option wise Analysis of No. of Investors
through Net Asset Values and past performance [Prabhavathi The Hypothesis was tested on 4 categories using chi 2
& Krishna Kishore, 13]. goodness of fit in IBM SPSS using statistic software (See
table 2).
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 2, February 2016
6
4
3 3 Aware only of
4 AMC Prefers any specific
2 1 Awareness, scheme in which
0 6, 20% Awareness, you invested
0 13, 43%
Fully aware
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 2, February 2016
Awareness The most preference of the investors are the fixed deposit
Observed N Expected N Residual because they feel it is the safest and returns are fixed and
Totally ignorant 6 7.5 -1.5 not having fear of losing the money
partial knowledge
13 7.5 5.5 Apart from these found that there are investors facing
of mutual fund
various problems in selecting mutual fund as an
aware only of any
6 7.5 -1.5 investment option because of share market uncertainties
specific scheme
fully aware 5 7.5 -2.5 and risk associated with it so investors avoid the
Total 30 investing in mutual fund
Test Statistics Mutual fund are link with share market and investors are
not taking advice from expert advisor to guide them for
Awareness
their investment in mutual fund so it creates the difficulty
Chi-Square 5.467a
to select the mutual fund scheme beneficial for them.
df 3
Asymp. Sig. .141
a. 0 cells (0.0%) have expected frequencies less than 5. The IX. SUGGESTIONS OF THE STUDY
minimum expected cell frequency is 7.5.
As per the test apply and result shown in the table we are There are some suggestions for batter investing for
accepting the null hypothesis. investors that they should keep their investment for long
time keeping in mind the level of risk involves and
saving pattern investors first look over the risk factor
VIII. CONCLUSION because they are investing for the maximum returns.
Once they invested in mutual fund they need returns and
The objective which is set to study the investors view if it is not giving proper returns to them again it is
towards mutual fund as per the sample size and test
affecting the interest of the investors to invest in MF.
which is applied to the study. found that the investors are
To keep the interest of the investors in mutual fund the
not choosing or feeling confident in investing in mutual
companies will play a vital role to attract the investors to
fund because they think that mutual fund is risky than
invest in mutual fund so for that companies should bring
other investment option.
such plans which is having very low risk
The awareness level of mutual fund among the investors
As per the study the investors wants safe returns on their
are very low because of only having the partial
investment and all investors know the risk in share
knowledge about the mutual fund which prevent them to
market and which is the main reason investors avoid to
invest in mutual fund to avoid risk bearing factor and
invest in shares and equities or mutual fund because of
fear of losing money
the fear of losing the money
APPENDICES
QUESTIONNAIRE
QUALIFICATION:-______________________________ AGE:-____________
PROFESSION:-__________________________________ GENDER:-________
CONTACT NO.__________________________________
1. In this highly volatile market, do you think Mutual Funds are a destination for Investments?
YES NO
2. Are you interested in investing in Mutual fund?
YES NO
3. Have you ever invested your money in mutual fund?
YES NO
4. Are you satisfied with your Investment option?
YES NO
5. While investing your money, which factor you prefer most? Any one
Liquidity Low Risk High Return Company Reputation
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 2, February 2016
Television
Internet
Newspaper / Journals
Friends / Relatives
Sales Representative
9. Which factors prevent you to invest in mutual fund?
Bitter Past Experience
Lack of Knowledge
Other
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 2, February 2016
Reliance
HDFC
Kotak
ICICI Prudential funds
JM Mutual Fund
Other Specify
Other
Fully aware
20. If Not Invested in Mutual Fund then Why? And where did you invest and why?
______________________________________________________________________________________
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