You are on page 1of 92

Research Project Report

On
“STUDY ABOUTINVESTORSPERCEPTIONAND
INVESTMENTPETTERNINMUTUAL FUND ATIDFC
AMC ltd”

Under the guidance of


Mr. Sunny Masand Mr.Tarun Bose
Asst. Professor Asst. Professor

Submitted in the partial fulfilment for the award of Post Graduate Diploma in
Management (PGDM), equivalent to MBA by AICTE
By
Rohit Tripathi
Enrolment No. – 1546

INTERNATIONAL INSTITUTE FORSPECIAL EDUCATION,


Lucknow
(2016-2018)
DECLARATION

I, Rohit Tripathi, student of International Institute for Special Education,


hereby declare that this project report entitled “STUDY ABOUT
INVESTORS PERCEPTION AND INVESTMENT PETTERN IN
MUTUAL FUND AT IDFC AMC ltd'' is my original work.

The findings in this report are based on the data collected by me during the
course of the project. While preparing this project, I have not copied from
any other report.

Finally, I am very thankful to Mr. Sunny Masand for his valuable academic
guidance in my project work.

I understand that any coping is liable to be punished in a way that the


authorities deem fit.

2
PREFACE

“One can learn about a road by travelling it, than by consulting


all the maps in the world.”
Efficient management of material, time and financial resources is
very important for the accomplishment of any objective. Above to
this coordination is must, which determine the degree of success.
This is true both at micro level and at the macro level.

Keeping all this view, report of ”STUDY ABOUT INVEST


OR SPERCEPTION AND INVESTMENT PETTERN IN
MUTUAL FUND ATIDFC AMC ltd” is prepared by all rounded
encouraging support by many persons towards this report has
created in me the confidence regarding the approval of the subject
matter. During this project, I have made the study of all departments
and consulted heads, staff members of respective departments.

This report is a result of an assignment to improve myself and


gain confidence. In this I have done my best to make it a genuine
study. But as well all know a maxim “To err is human”. Therefore
there is a chance for some mistakes. Also a critical appraisal by
anyone will be heartily welcome.

3
ACKNOWLEDGEMENT

First of all I am thankful to our Mr. Sunny Masand under


whose guideline I am able tocomplete our project. Throughout my
project she gave through in struction regarding the project.

I am whole heartedly thankful to the forgiving me their valuable time


& attention and for providing me as stematic way for completing my
project in time.

Rohit Tripathi

1546

4
ABSTRACT
Being such ahot and much takedabout financial product in the recent times, we takeit asa
greatopportunitytostudyandanalyzetheIndianmutualfundIndustryandgivemyobservationonit.Itwillnot
nlyhelpbuildingmycareerbutitwillalsohelpMahindra financein certain aspect.

TheIndianMutualFundsIndustryhaswitnessedaseachangesinceUTIwasfirstestablishedin
1963.Fromasingleplayerthenumberofplayershasincreasedtomorethan30andthenumberof
schemeshasspiraledtomorethan3500.Thelastdecadehasbeenaperiodofrapidgrowthforthe
MFindustry.Theindustryisinnascentstageatpresent.Ithascomealongwayandstillhaslotsof potential for
growth.

MyprojectinIDFCmainlydealswithtoUnderstandingInvestorsperceptionandinvestmentpattern
inmutualfundatIDFCandalsosellingthroughseveralfinancialchannelsavailableinthemarket. And mymain aim
is to attain profit for the company and give them goodbusiness. Fistpart ofstudy,
weundertaketheresearchstudysurveythroughquestionnairefilluponinvestmentpatternin
mutualfundbyInvestors.AndafterthatIvisitedthelistofbankgiventomeKotak,HDFC,Axis
Banketc.AndMeetwithRelationshipmanagerandtrytogivethemknowledgeabouttheproduct
andthentrytosaletheproducttotheirclientandUnderstandingofInvestorsperceptionand investment pattern in
mutualfund.

Andintheseprojectmy mainaimtoseewhichschemesare givingbetter returnsandatareasonable


risk.Butriskitselfisaverysubjectivetermsthatdependonpersontoperson.Andalsohowasset
managementcompaniesare performingandhowtheirrankingininvestmenttermsis.Andduring the
courseoftheprojectwehavenotonlylearntaboutmutualfundindustrybutalsotryto Understanding ofInvestors
perception and investment patternin mutual fund atIDFCthe company.

5
Tableof Content

ChapterNo. Particulars PageNo.

Part:1Generalinformation

1 1.1 AboutTheMutualfund Industry 9

1.2 Mutualfund Industryin India 9

1.3 Conceptual Framework ofMutual Fund 13

1.4 Conceptof Mutualfund 15

1.5 HowTo InvestinMutualfund 28

2 2.1 CompanyProfile 36

2.2 SWOTAnalysis ofCompanyand Its Competitors 43

2.3 Scheme ofIDFC 44

Part:2PrimaryStudy

3 3.1 Introduction of thestudy 53

3.2 Literature Review 53

3.3 Background ofstudy 56

3.4 ProblemStatement 60

3.5 Objectives Ofthestudy 61

3.6 Hypothesis

5 ResearchMethodology 62

4.1 ResearchDesign 62

4.2 Source ofData 62

6
4.3 Sampling Method 63

4.4 SamplingSize 63

4.5 DataCollection Instrument 63

4.6 StatisticalTools Used 63

5 Analysis & Datainterpretation 64

6 Hypothesis testing 89

7 Suggestions 91

8 Limitations ofthe study 93

9 Findings 93

10 Conclusion 94

11 Bibliography 95

12 Annexure 96

7
1.1AboutThe Mutual fundIndustry

TheoneinvestmentvehiclethathastrulycomeofageinIndiainthepastdecadeismutual
funds.Today,themutualfundindustryinthecountrymanagesaroundRs329,162crore
(AsofDec,2006)ofassets,alargepartofwhichcomesfromretailinvestors.Andthis
amountisinvestednotjustinequities,butalsointheentiregamutofdebtinstruments.
Mutualfundshaveemergedasaproxyforinvestinginavenuesthatareoutofreachof mostretail
investors, particularlygovernment securities and moneymarket instruments.

Specializationistheorderoftheday,beitwithregardtoascheme’sinvestmentobjective
oritstargetedinvestmentuniverse.Giventheplethoraofoptionsonhandandthehard-sell
adoptedbymutualfundsvyingforapieceofyoursavings,findingtherightschemecan
sometimesseemabitdaunting.Mindyou,it’snotjustaboutgoingwiththefundthatgives
youthehighestreturns.It’salsoaboutmanagingrisk–findingfundsthatsuityourrisk appetite and
investmentneeds.
So,howcanyou,theretailinvestor,createwealthforyourself by investingthroughmutual
funds?Toanswerthat,weneedtogetdowntobrasstacks–whatexactlyisamutual
fund?Verysimply,amutualfundisaninvestmentvehiclethatpoolsinthemoniesof
severalinvestors,andcollectivelyinveststhisamountineithertheequitymarketorthe
debtmarket,orboth,dependinguponthefund’sobjective.Thismeansyoucanaccess either the
equityor thedebt market, or both, without investing directlyin equityor

debt.1.2MUTUALFUNDINDUSTRYININDIA

The end of millennium marks 36years of existence of mutual funds in this country.The
ridethrough these36years is not been smooth.Investors opinion is still divided.While
some arefor mutual funds others are against it.

UTIcommenced its operation fom july1964. The impetus


for establishing a formal institution came from the desireto increasethe propensityof the
middle and lower groupsto save and to invest. UTI came into existenceduring a period

8
marked bygreat political and economic uncertainityinIndia. With was on the bordersand
economicturmoil that depressed thefinancial market, entrepreneurswere hesitant to enter
capital market.Though the growth was slow, Butitaccelerated from theyear 1987, when
non- UTIplayers enteredthe industry.In the past decade,Indian mutual fund industryhad
seen a

dramatic improvement, both qualities wise as wellas quantitywise. Before, the monopoly of
themarket had seenan ending phase: the Assent under Management(AUM) was Rs.67bn.
The private sector entryto the fundfamilyraised theAUM to Rs.470bn in March 1993 and
till April 2004;it reached the height of 1,540bn.

Putting the AUM of the Indian Mutual FundsIndustryinto


comparison, the total of it is less than the deposits of SBIalone, constitute less than 11%of
the total depostits held bytheIndian banking industry.

Themain reason of its poor growth is theat the mutual fund industryinIndia is new in the
country.Large sections ofIndian investrorsareyet to be intellect wih theconcept. Hence, it
is the primeresponsibilityof all mutual fund companies, to market theproduct correctly
abreast of selling.

Themutual fund industry can bebroadlyput into four phases according to the development
of thesector, Each phase is brieflydescribedas under.

First Phase-1964-87

Unit Trust ofIndia(UTI) was established on 1963byAct of Parliament.Itwas set up bythe


ReserveBank ofIndia and functioned uned the Regulatory and admisnistrative control of the
ReserveBankfIndia.In 1978UTIwas de-linked from RBIand the Industrial Development
Bank of India(IDBI) took ove the regulatoryand admistrativecontrol in

9
placeof RBI. The first scheme launched byeUTI was Unit Scheme 1964. At te end of1988
UTIhad Rs.6,700 croresof assets under management.

Second phase 1987-1993(entryof publicsector funds)

Theperiod 1986-1993can be termed as the periodof public sector mutual funds (PMSs).
From one player in 1985the number increased to8 in 1993. Entryof non-UTImutual funds.
SBImutual fundwas the first followed Canbank Mutual Fund (Dec 87), Punjab National
Bank Mutual Fund (Aug 89),Indian Bank Mutual Fund (Oct 90), Bank of
BarodaMutual fund (oct 92).LIC in 1989and GIC in 1990. The end of 1993 marked Rs.
47,000 as assets under management. The industrywas one-entityshow till 1986 when the
UTImonopolywas broken when SBIand BOI,LIC, GICetc. sponsored bypublic sector
banks.Starting with an assetbaseof Rs. 0.25bn in 1964 the industryhas grown at a
compounded averagegrowth rate of26.34% to its current size of Rs. 1130bn.

Third phase 1990-2003(entryof privatesectorfunds)

When the privatesectormade its debut in 1993-94, the stock market was booming. Also,
1993 was theyear in which the first Mutual fundRegulations came into being, under which
all mutual funds, exceptUTIwereto be registered and governed. Theerstwhile Kothari
Pioneer (now merged with Franklin Templeton) was the first private sectormutual fund
registered in july1993.Other Private sector mutual funds areMorgan Sanley, Jardine
Fleming,JP Morgan, GeorgeSorosand CapitalInternational along with the host of domestic
players join theparty.The 1993 SEBI(Mutual Fund)

Regulations substituted byamore comprehensiveand revised Mutual Find regulations


1996. But for the equityfunds, the period of1994-96 was one of the worst in the historyof
Indian Mutual Funds, But theyear 1999 saw immensefuturepotential anddevelopmentsin
this sector. Thisyear signaled theyear of resurgenceof mutualfunds andthe regainingof
investor confidenceinthese MF’s. As at the endof January2003, Therewere33 mutual

10
fund with total assets of Rs.1,21,805 crores. TheUnit Trust ofIndia with Rs. 44,541 crores
of assets under management was way ahead of other mutual funds.

Fourth Phase– Since February2003

This phasehad bitter experience forUTI.It was bifurcated into two separate entities. One
is the Specified Undertaking of the Unit Trust ofIndia with AUM ofRs.29,835 crores(as on
January2003). The specified undertaking of UnitTrust ofIndia,functioning under an
adminisratior and undethe rules framed byGovernment ofIndia and Doesnot come under
the purviewof theMutual Fund Regulations.

ThesecondistheUTIMutualFundLtd,sponsoredbySBI,PNB,BOBandLIC,Itis
registeredwithSEBIandfunctionsundertheMutualFundRegulations.Withthe bifurcation
of the erstwhile UTI which had in March 2000more than Rs.76,000crores
ofAUMandwiththesettingupofaUTImutualfund,conformingtotheSEBIMutual
FundRegulations,andwithrecentmergerstakingplaceamongdifferentprivate
sectorfunds,themutualfundindustryhasentereditscurrentphaseofconsolidation
andgrowth.AsattheendofSeptember2004,Therewere29fund,Whichmanage
assetsofRs.153108croresunder421StructureofMutualFundsinIndia.Attheend
ofyear2006theAUMcrossed 2,50,000crores.

GROWTHINASSETSUNDERMANAGEMENT

11
Theessentialfeaturesofthemutualfundsdistinguishingfromotheroftheinvestmentsare:-

 Themutualfundisatrustintowhichmanyrelativelysmallinvestorsinvesttheir
moneytoformalargepoolofcashwhichistheninvestedinsecuritiesbythemanagerof the trust.
 Thepriceatwhichunitscanbeboughtandsoldisgovernedsolelybythevalueof
theunderlyingsecuritiesheld by theMFanddealinginunitsareonthebasisofnetmarket value
ofthe investment per unit.
 ThemanagersofMFareobligedtoredeemany unitsinissueondemandorcertain specified
period.
 AlldividendincomethattheMFreceivesonitsinvestmentsispaidouttounit holders.
 Sincetheunitheldbyinvestorevidencestheownershipofthefund’sassets,the value ofan
investors partownership is determinedbythe NAV of thenumber ofunits held.

1.3Conceptual FrameworkofMutualFund
AmutualfundisconstitutedasapublictrustcreatedundertheIndianTrustAct,1882.
SEBI(mutualfund)regulations,1996regulatethestructureofthemutualfundsinIndia. As per
theseregulationsshould havethe following three-tier structure:

i)Sponsor
ii)Trust/trustee
iii)Asset Management Company

Apart from this mutual fund consistof

12
Sponsor

Sponsoristhepersonwhoactingaloneorincombinationwithanotherbodycorporate
establishesamutualfund.Thesponsorestablishesthemutualfundandregistersthesame
withSEBI.SponsorappointstheTrustees,custodiansandtheAMCwithpriorapprovalof
SEBIandinaccordancewithSEBIRegulations.Sponsormusthavea5-yeartrackrecord
ofbusinessinterestinthefinancialmarkets.Sponsormusthavebeenprofitmakinginat
least3oftheabove5years.Sponsormustcontributeatleast40%ofthenetworthofthe
InvestmentManagedandmeettheeligibilitycriteriaprescribedundertheSecuritiesand
ExchangeBoardofIndia(MutualFunds) Regulations,1996.TheSponsorisnotresponsible
orliableforanylossorshortfallresultingfromtheoperationoftheSchemesbeyondthe initial
contribution madebyit towards setting up of the Mutual Fund.

 Trust
TheMutualFundisconstitutedasatrustinaccordancewiththeprovisionsoftheIndian
TrustsAct,1882bytheSponsor.ThetrustdeedisregisteredundertheIndianRegistration Act,
1908.

 Trustee

13
Trusteeis usuallya company(corporate body)oraBoard ofTrustees (bodyof individuals).
ThemainresponsibilityoftheTrusteeistosafeguardtheinterestoftheunitholdersand
interaliaensurethattheAMCfunctionsintheinterestofinvestorsandinaccordancewith
theSecuritiesandExchangeBoardofIndia(MutualFunds)Regulations,1996,the
provisionsoftheTrustDeedandtheOfferDocumentsoftherespectiveSchemes.Atleast
2/3rddirectorsoftheTrusteeareindependentdirectorswhoarenotassociatedwiththe Sponsor in
anymanner.

 AssetManagementCompany(AMC)
TheAMCisappointedbytheTrusteeastheInvestmentManageroftheMutualFund.The
AMCisrequiredtobeapprovedbytheSecuritiesandExchangeBoardofIndia(SEBI)to
actasanassetmanagementcompanyoftheMutualFund.Atleast50%ofthedirectorsof the AMC
areindependent directorswhoare notassociated with the Sponsor in anymanner. TheAMC
musthaveanet worth of at least 10 crore at all times.

 RegistrarandTransferAgent
TheAMCifsoauthorizedbytheTrustDeedappointstheRegistrarandTransferAgentto
theMutualFund.TheRegistrarprocessestheapplicationform,redemptionrequestsand
dispatchesaccountstatementstotheunitholders.TheRegistrarandTransferagentalso handles
communicationswith investors and updates investor records.

 Custodian
Acustodianisanagent,bank,trustcompany,orotherorganizationwhichholdsand
safeguards an individual's, mutual funds, orinvestment company'sassets for them.

2.1Concept ofa MutualFund

AMutualFundisatrustthatpoolsthesavingsofanumberofinvestorswhosharea
commonfinancialgoal.Themoneythuscollectedistheninvestedincapitalmarket
instrumentssuchasshares,debenturesandothersecurities.Theincomeearn
14
theseinvestmentsandthecapitalappreciationrealizedissharedbyitsunitholdersin
proportiontothenumberofunitsownedby them.ThusaMutualFundisthemostsuitable
investmentforthecommonmanasitoffersanopportunitytoinvestinadiversified,
professionallymanagedbasketofsecuritiesatarelativelylowcost.Theflowchartbelow describes
broadlythe working of amutual fund:-

Savings form an important part of theeconomyofanynation. With savingsinvested in


various options availableto the people, themoney acts as the driver for growth of the
country.Indian financialscenetoo presents multiple avenues to the investors. Though
certainlynot the best or deepest of markets in theworld, it has ignited the growth rate in
mutual fund industryto provide reasonable options for an ordinaryman to invest his
savings.
Investment goals varyfrom person to person. While somebodywants security, others might
givemoreweightagetoreturnsalone.Somebodyelsemightwanttoplanforhischild’s
educationwhilesomebodymightbesavingfortheproverbialrainydayorevenlifeafter
retirement.Withobjectivesdefyinganyrange,itisobviousthattheproductsrequiredwill varyas
well.

InvestorsearnfromaMutualFundinthreeways:
1.Incomeisearnedfromdividendsdeclaredbymutualfundschemesfromtimeto time.

15
2.Ifthefundsellssecuritiesthathaveincreasedinprice,thefundhasacapitalgain.
Thisisreflectedinthepriceofeachunit.Wheninvestorsselltheseunitsatprices higherthan
their purchase price, theystand to make again.
3.Iffundholdingsincreaseinpricebutarenotsoldbythefundmanager,thefund's
unitpriceincreases.Youcanthensellyourmutualfundunitsforaprofit.Thisis tantamount
to a valuation gain.

Thoughstillatanascentstage,IndianMFindustryoffersaplethoraofschemesandserves
broadlyalltypeofinvestors.Therangeofproductsincludesequityfunds,debt,liquid,gilt
andbalancedfunds.Therearealsofundsmeantexclusivelyforyoungandold,smalland
largeinvestors.Moreover,thesetupofalegalstructure,whichhasenoughteethto
safeguardinvestors’interest,ensuresthattheinvestorsarenotcheatedoutoftheirhard-
earnedmoney.Allinall,benefitsprovidedbythemcutacrosstheboundariesofinvestor
categoryand thus createfor them, auniversal appeal.
Investorsofallcategoriescouldchoosetoinvestontheirowninmultipleoptionsbutopt formutual
funds for thesole reason thatall benefits come in apackage.

Advantagesof Mutual Funds

1.ProfessionalManagement
MutualFundsprovidetheservicesofexperiencedandskilledprofessionals,backedbya
dedicatedinvestmentresearchteamthatanalysestheperformanceandprospectsof
companiesandselectssuitableinvestmentstoachievetheobjectivesofthescheme.This
riskofdefaultbyanycompanythatonehaschosentoinvestin,canbeminimizedby
investinginmutualfundsasthefundmanagersanalyzethecompanies’financialsmore
minutelythananindividualcandoastheyhavetheexpertisetodoso.Theycanmanage the
maturityof their portfolio byinvesting in instruments of varied maturityprofile

2.Diversification
16
MutualFundsinvestinanumberofcompaniesacrossabroadcross-sectionofindustries and
sectors. This diversification reduces the riskbecause seldom doall stocksdeclineat the
sametimeandinthesameproportion.YouachievethisdiversificationthroughaMutual Fund with
far less moneythan youcan do onyour own.

3.ConvenientAdministration
InvestinginaMutualFundreducespaperworkandhelpsyouavoidmany problemssuchas
baddeliveries,delayedpaymentsandfollowupwithbrokers andcompanies.Mutual Funds
saveyour time and makeinvesting easyand convenient.

4.ReturnPotential
Overamediumtolong-term,MutualFundshavethepotentialtoprovideahigherreturnas
theyinvestinadiversifiedbasketofselectedsecurities.Apartfromliquidity,thesefunds
havealsoprovidedverygoodpost-taxreturnsonyeartoyearbasis.Evenhistorically,we
findthatsomeofthedebtfundshavegeneratedsuperiorreturnsatrelativelylowlevelof
risks.Onanaveragedebtfundshavepostedreturnsover10percentoverone-yearhorizon.
Thebestperformingfundshavegivenreturnsofaround14percentinthelastone-year
period.Innutshellwecansaythatthesefundshavedeliveredmorethanwhatoneexpects
ofdebtavenuessuchaspostofficeschemesorbankfixeddeposits.Thoughtheyare
chargedwithadividenddistributiontaxondividendpayoutat12.5percent(plusa
surchargeof10percent),thenetincomereceivedisstilltaxfreeinthehandsofinvestor and is
generallymuch morethan all otheravenues, on a post-tax basis.

5.LowCosts
MutualFundsarearelativelylessexpensivewaytoinvestcomparedtodirectlyinvesting
inthecapitalmarketsbecausethebenefitsofscaleinbrokerage,custodialandotherfees translate
into lower costsforinvestors.

6.Liquidity
17
Inopen-endschemes,theinvestorgetsthemoneybackpromptlyatnetassetvaluerelated
pricesfromtheMutualFund.Inclosed-endschemes,theunitscanbesoldonastock
exchangeattheprevailingmarketpriceortheinvestorcanavailofthefacilityofdirect
repurchaseatNAVrelatedpricesbytheMutualFund.Sincethereisnopenaltyonpre-
maturewithdrawal,asinthecasesoffixeddeposits,debtfundsprovideenoughliquidity.
Moreover,mutualfundsarebetterplacedtoabsorbthefluctuationsinthepricesofthe
securitiesasaresultofinterestratevariationandonecanbenefitsfromanysuchprice movement.

7.Transparency
Investorsgetregularinformationonthevalueofyourinvestmentinadditiontodisclosure
onthespecificinvestmentsmadebyyourscheme,theproportioninvestedineachclassof assets and
the fund manager's investment strategyand outlook.

8.Flexibility
Throughfeaturessuchasregularinvestmentplans,regularwithdrawalplansanddividend
reinvestmentplans;youcansystematicallyinvestorwithdrawfundsaccordingtoyour needs and
convenience.

9.Affordability
Asinglepersoncannotinvestinmultiplehigh-pricedstocksforthesolereasonthathis
pocketsarenotlikelytobedeepenough.Thislimitshimfromdiversifyinghisportfolioas
wellasbenefitingfrommultipleinvestments.Hereagain,investingthroughMFroute
enablesaninvestortoinvestinmanygoodstocksandreapbenefitseventhroughasmall
investment.Investorsindividuallymaylacksufficientfundstoinvestinhigh-gradestocks.
Amutualfundbecauseofitslargecorpusallowsevenasmallinvestortotakethebenefit of its
investment strategy.

10.ChoiceofSchemes
Mutual Funds offer afamilyof schemes to suityour varying needs overalifetime.

18
11.WellRegulated
AllMutualFundsareregisteredwithSEBI andtheyfunctionwithintheprovisionsofstrict
regulationsdesignedtoprotecttheinterestsofinvestors.TheoperationsofMutualFunds
areregularlymonitored bySEBI.

12.TaxBenefits
Lastbutnottheleast,mutualfundsoffersignificanttaxadvantages.Dividendsdistributed
bythemaretax-freeinthehandsoftheinvestor.Theyalsogiveyoutheadvantagesof
capitalgainstaxation.Ifyouholdunitsbeyondoneyear,yougetthebenefitsofindexation.
Simplyput,indexationbenefitsincreaseyourpurchasecostby acertainportion,depending
upontheyearlycost-inflationindex(whichiscalculatedtoaccountforrisinginflation), thereby
reducingthegapbetweenyouractualpurchasecostandsellingprice.Thisreduces
yourtaxliability.What’smore,tax-savingschemesandpensionschemesgiveyouthe
addedadvantage of benefits under Section 88. You canavail ofa 20 percent tax exemption
on an investment of up to Rs 10,000 in the scheme inayear.

IndianEquity Others

Incomefrom
Incomefrom dividends-(investor-
dividends-(investor- free&DDT-individual
free& DDT-NIL) & HUL-14.025&
others-22.440

Incomefromcapital
Iincomefromcapital
gains-(shortterm-
gains-(short term-
asper taxslab & long
15%& long term-
term-10%or
free)
20%withindexation

19
Disadvantages of mutual funds
Mutualfundsaregoodinvestmentvehiclestonavigatethecomplexandunpredictable
worldofinvestments.However,evenmutualfundshavesomeinherentdrawbacks. Understand
these before you commityour moneyto amutual fund.

1.Noassuredreturnsandnoprotectionofcapital
Ifyou are planning to gowith a mutual fund, this must beyour mantra: mutual funds do not
offerassuredreturnsandcarryrisk.Forinstance,unlikebankdeposits,yourinvestmentin
amutualfundcanfallinvalue.Inaddition,mutualfundsarenotinsuredorguaranteedby
anygovernmentbody(unlikeabankdeposit,whereuptoRs1lakhperbankisinsuredby
theDepositandCreditInsuranceCorporation,asubsidiaryoftheReserveBankofIndia).
Therearestrictnormsforanyfundthatassuresreturnsanditisnowcompulsoryforfunds
toestablishthattheyhaveresourcestobacksuchassurances.Thisisbecausemostclosed-
endfundsthatassuredreturnsintheearly-ninetiesfailedtosticktotheirassurancesmade
atthetimeoflaunch,resultinginlossestoinvestors.Aschemecannotmakeany guarantee
ofreturn,withoutstatingthenameoftheguarantor,anddisclosingthenetworthofthe guarantor.
The past performanceof the assuredreturn schemes should alsobe given.

2.Restrictivegains
Diversificationhelps,ifriskminimizationisyourobjective.However,thelackof
investmentfocusalsomeansyougainlessthanifyouhadinvesteddirectlyinasingle
security.Assume,Relianceappreciated50percent.Adirectinvestmentinthestockwould
appreciateby50percent.Butyourinvestmentinthemutualfund,whichhadinvested10 per cent of
its corpus in Reliance, will seeonlya5 per centappreciation.

3.Taxes
Duringatypicalyear,mostactivelymanagedmutualfundssellanywherefrom20to70
percentofthesecurities intheirportfolios.Ifyourfundmakesaprofitonitssales,youwill paytaxes
on theincome you receive, even ifyou reinvest the money you made.

20
4.Managementrisk
Whenyouinvestinamutualfund,youdependonthefund'smanagertomaketheright
decisionsregardingthefund'sportfolio.Ifthemanagerdoesnotperform aswellasyouhad
hoped,youmightnotmakeasmuchmoneyonyourinvestmentasyouexpected.Of
course,ifyouinvestinIndexFunds,youforegomanagementrisk,becausethesefundsdo not
employmanagers.

TYPES OF MUTUAL FUND SCHEMES

ThereareawidevarietyofMutualFundschemesthatcatertoyourneeds,whateveryour
age,financialposition,risktoleranceandreturnexpectations.Whetherasthefoundationof
yourinvestmentprogrammeorasasupplement,MutualFundschemescanhelpyoumeet
yourfinancial goals.

21
TYPESOFMUTUALFUNDSCHEME

ByInvestment
Bystructure OtherSchemes
Objectives

Tax savingfund
Open-ended DebtSchemes Equity Schemes
Schemes

CloseEnded
Schemes Sectorspecific fund

22

22
MM Mutual
Large capfund
fund

Interval Schemes Index Schemes


FMP Mid cap Fund
Figure3 OtherDebt Equity Fund
Schemes
(AI) ByStructure

 Open-EndedSchemes

Thesedonothaveafixedmaturity.YoudealdirectlywiththeMutualFundforyour
investmentsandredemptions.Thekeyfeatureisliquidity.Youcanconvenientlybuyand sellyour
units at Net Asset Value ("NAV") relatedprices.

 Close-EndedSchemes

Schemesthathaveastipulatedmaturityperiod(rangingfrom2to15years)arecalled
close-endedschemes.Youcaninvestdirectlyintheschemeatthetimeoftheinitialissue
andthereafteryoucanbuyorselltheunitsoftheschemeonthestockexchangeswhere
theyarelisted.Themarketpriceatthestockexchangecouldvaryfromthescheme'sNAV
onaccountofdemandandsupplysituation,Unitholders'expectationsandothermarket factors.

Oneofthecharacteristicsoftheclose-endedschemesisthattheyaregenerallytradedata
discounttoNAVbutclosertomaturity,thediscountnarrows.Someclose-endedschemes
giveyouanadditionaloptionofsellingyourunitsdirectlytotheMutualFundthrough
periodicrepurchaseatNAVrelatedprices.SEBI Regulationsensurethatatleastoneofthe two exit
routes areprovided to the investor.

 IntervalSchemes

Thesecombinethefeaturesofopen-endedandclose-endedschemes.Theymaybetraded
onthestockexchangeormaybeopenforsaleorredemptionduringpredetermined intervals at
NAVrelatedprices.

23
(B) ByInvestment Objective

 GrowthSchemes

Aimtoprovidecapitalappreciationoverthemediumtolongterm.Theseschemes
normallyinvestamajorityoftheirfundsinequitiesandarewillingtobearshort-term
declineinvalueforpossiblefutureappreciation.Theseschemesarenotforinvestors seeking
regular income or needing their moneybackin the short term.

 IncomeSchemes

Aimtoprovideregularandsteadyincometoinvestors.Theseschemesgenerallyinvestin
fixedincomesecuritiessuchasbondsandcorporatedebentures.Capitalappreciationin such
schemes maybe limited.

Idealfor

 Retired people and others with a need for capitalStabilityandregular income 


 Investor who need someincome to supplement their earnings.

 BalancedSchemes

Aimtoprovidebothgrowthandincomebyperiodicallydistributingapartoftheincome
andcapitalgainstheyearn.Theyinvestinbothsharesandfixedincomesecuritiesinthe
proportionindicatedintheirofferdocuments.InarisingstockmarkettheNAVofthese schemes
maynot normallykeep pace, or fall equallywhen the market falls.

Idealfor:

 Investors looking for a combination of income and moderate growth.

24
 MoneyMarket/LiquidSchemes

Aimtoprovide easyliquidity,preservationofcapitalandmoderate income.These schemes


generallyinvestinsafer,short-terminstrumentssuchastreasurybills,certificatesof
deposit,commercialpaperandinter-bankcallmoney.Returnsontheseschemesmay fluctuate,
depending upon theinterest rates prevailing in the market.

Idealfor:

 Corporateandindividualinvestorsasameanstoparktheirsurplusfunds
forshort periods orawaiting a more favorable investment alternative.

 Other Schemes
 TaxSavingSchemes

Theseschemesoffertaxrebatestotheinvestorsundertaxlawsasprescribedfromtimeto
time.ThisismadepossiblebecausetheGovernmentoffers taxincentivesforinvestmentin
specifiedavenues.Forexample,EquityLinkedSavingsSchemes(ELSS)andPension
Schemes.Thedetailsofsuchtaxsavingschemesareprovidedintherelevantoffer documents.

Idealfor:

 Investors seeking taxrebates.

 SpecialSchemes

Thiscategoryincludesindexschemesthatattempttoreplicatetheperformanceofa
particularindexsuchastheBSESensexortheNSE50,orindustryspecificschemes
(whichinvestinspecificindustries)orsectorialschemes(whichinvestexclusivelyin segments
such as A Group shares or initial publicofferings)

25
 DifferentModesofReceivingtheIncome
Earned FromMutual Fund Investments

Mutual funds offer three methods of receivingincome:

Growth Plan:
Inthisplan,dividendisneitherdeclarednorpaidouttotheinvestorsbutitisbuilt
intothevalueoftheNAV.Intheotherwords,theNAVincreasesovertimedueto
suchincomesandtheinvestorrealizesonlythecapitalappreciationonredemption of his
investment.

IncomeplanorDividendPayoutPlan:
Inthisplan,dividendsarepaid-outtotheinvestors.Inotherwords,theNAVonly reflects
thecapital appreciation or depreciation inthe market price ofthe underlying portfolio.

DividendReinvestmentPlan:
Inthisplan,dividendisdeclaredbutnotpaidouttotheinvestors.Instead,itis reinvested
back in to thescheme at thethen prevailing NAV.In otherwords, the

26
RISKHIERARCHYOFMUTUALFUNDS
RISK

Money DebtFund Equity Fund


Market Fund
HybridFund
Gilt Fund

Growth and Aggressive


HighYield
Income Funds Growth Fund
DebtFunds

Growth Funds
Focused Flexible Asset
DebtFunds Allocation Fund
Value Funds

Diversified Equity
Fund

Equity Income
Funds

MoneyMarket Diversified Index Fund


Gilt Funds Balanced Funds
Funds DebtFund

TYPEOF FUND

27
Mutual Fund Investment Strategies

 SystematicInvestment Plan (SIP):

SIPsentailaninvestortoinvestafixedsumofmoneyatregularintervalsinMFscheme
theinvestorhaschosen.Thismayhelpyougainfromanyappreciationintheeventof upside or
alternatively, average your cost during downside.
SeeingthepresentvolatilityinthemarketSIPisthebestoptionavailabletotheinvestor
duetoregularentryintothemarketwhichcausesrupeecostaveragingandhencecovers the
volatility.

 Systematic Withdrawal Plan (SWPs):

Theseplansarebestsuitedforpeoplenearingretirement.Intheseplansinvestorinvestina
mutualfundschemeandisallowedtowithdrawafixedsumofmoneyatregularintervals to take
care of expenses.

 Systematic TransferPlan (STP):

Theyallowtheinvestortotransferonaperiodicbasisaspecifiedamountfromonescheme
toanotherwithinthesamefundfamilymeaningtwoschemesbelongingtothesame
mutualfund.Atransferwillbetreatedasredemptionofunitsfromtheschemefromwhich the
transfer is made.

2.2HOW TO INVESTIN MUTUALFUNDS.

StepOne-Identifyyourinvestmentneeds.Yourfinancialgoalswillvary,basedonyour
age,lifestyle,financialindependence,familycommitments,levelofincomeandexpenses among
manyother factors. Therefore, thefirst step is to assessyour needs.

28
StepTwo-ChoosetherightMutualFund.Onceyouhaveaclearstrategyinmind,you
nowhavetochoosewhichMutualFundandschemeyouwanttoinvestin.Theoffer
documentoftheschemetellsyouitsobjectivesandprovidessupplementarydetailslikethe
trackrecordofotherschemesmanagedbythesameFundManager.Somefactorsto evaluatebefore
choosinga particular Mutual Fund are:

 Thetrackrecordofperformanceoverthelastfewyearsinrelationtothe
appropriateyardstick andsimilar funds in the same category.
 HowwelltheMutualFundisorganizedtoprovideefficient,promptand
personalized service.
 Degreeoftransparencyasreflectedinfrequencyandqualityoftheir
communications.

Step Three-SelecttheidealmixofSchemes.
InvestinginjustoneMutualFundschememaynotmeetallyourinvestmentneeds.You may
consider investing in a combination of schemes to achieveyour specific goals.

Thefollowingchartscouldproveusefulinselectingacombinationofschemesthatsatisfyyour
needs.

AggressivePlan
GrowthScheme

Income Scheme

Figure4 Money market Scheme

Balanced Scheme

This plan maysuit


 Investor seekingIncome&moderate growth.
 Investor looking for growth &stabilitywith moderaterisk
29
ConservativePlan

GrowthScheme
Income Scheme
Money Scheme
Balanced Scheme

Figure5

Step Four-Invest regularly.

Step Five-Keepyour taxes in mind

StepSix-StartearlyItisdesirabletostartinvestingearlyandsticktoaregularinvestment
plan.Ifyoustartnow,youwillmakemorethanifyouwaitandinvestlater.Thepowerof
compoundingletsyou earnincomeonincomeandyourmoneymultipliesatacompounded rateof
return.

StepSeven-ThefinalstepallyouneedtodonowistogetintouchwithaMutualFundor
yourAgent/brokerandstartinvesting.Reaptherewardsintheyears tocome.Mutual Funds
aresuitableforeverykindofinvestor-whetherstartingacareerorretiring,conservativeor risk
taking, growth oriented or income seeking.

Whatfeesandcommissionswillyoupaywhenyouinvestinmutual
funds?

Thefeesandcommissionsyoumaybechargedcanvarywidelyfromonefund,andone
dealer,tothenext.Someofthechargesmaybenegotiable,butyoushouldmakesurethat
youunderstandallofthecostsbeforeyouinvest.Therearetwomaincoststoconsider–
themanagementandoperatingexpensesthatarechargedtothefundeachyear,andthe
salescharges (orloads)thatyou paywhenyou buyor sellthe fund.
30
ManagementandOperatingExpensesareexpensespaideachyearbythefundand
includesuchthingsasthemanager’sfees,legalandaccountingfees,custodialfeesand
bookkeepingcosts.TheManagementExpenseRatio(MER)isthepercentageofthe
fund’saveragenetassetsthattheseexpensesrepresent.Forexample,ifa$100millionfund
has$2millionincostsfortheyearitsMERwillbe2%.MERscanrangefromunder1%
peryearforsomemoneymarketfundstoalmost3%forsomeequityfunds.Thehigherthe
MER,thegreatertheimpactonthefund’sperformanceandthereturntoitsinvestors becausethese
expenses areremoved beforethe value is reported.

SalesCharges(Loads)arethecommissionsthatyoumayhavetopaywhenyoubuyor redeem units


of afund. Sales charges maybe applied whenyou buyunits of the fund (Afront-
endload),whenyouredeemyourunits(aback-endload),ortheremaybeno saleschargesatall(no-
load).Wherefront-endloadsarecharged,theratecanvary
fromdealertodealerandmaybenegotiable.Shoparound,andrememberthateverydollar
youpayup-frontincommissionisadollarthatdoesnotgotoworkforyouinthe fund.Manyfunds
aresold on a back-end load basis, meaninggenerallythatthe sales charges
areappliedonlywhenyouredeemthefund.Back-endloadfeesarepaidbythe
fundmanagementcompanytoyourmutualfundsalesperson–youdonotpaythisfee.You
do,however,paya‘redemptionfee’ifyouredeemyourunitsinthefundbeforeacertain
timeperiod,typically7years.Redemptionfeesdeclineeachyearthatyouholdthe investment.

Forexample,youmighthavetopaya6%feeifyouredeemthefundafteroneyear,4%if
youredeemafterthreeyears,andnocommissionifyouredeemaftersevenyears.An
increasingnumberoffundsarebeingsoldonano-loadbasis,inwhichinvestorspayno
salescharges,butbeforeyoudecidethatano-loadfundisrightforyou,considerthefund’s
performance,itsmanagementexpenseratioandthelevelofserviceandadviceyouwill receive.

31
DifferentAvenuesofinvestment
OPTIONS RETURN RISK LIQUIDITY
Savings account Verylow Verylow High
Fixed Deposits Low Low Low
Direct Equity Veryhigh return Veryhigh High
Insurance Medium Low Low
Companyfixed deposits Low High Verylow
Debentures Low Medium Medium
Bonds Low Low Low
Mutualfunds High Medium High
Post officeschemes Low Low Low
Government securities Low Low Low
Real estate High High Low
Currency High High High
Bullion Medium High Medium

RISKS OF INVESTING IN MUTUAL


FUNDSMarket/InterestRisk
Volatilityof prices leading to “floating” returns
Largelymitigated with aholding periodof over 6months
CreditRisk
Potential default of bonds on the portfolio
EquityRisk
Possibilityof the fundmanager notable to meet redemptions

32
IMPACTOF TECHNOLOGY

Mutualfund,duringthelastonedecadebroughtoutseveralinnovationsintheirproducts
andisofferingvalueaddedservicestotheirinvestors.Someofthevalueaddedservices that
arebeing offered are:
• Electronicfundtransfer facility.
• Investment and re-purchase facilitythrough internet.
• Added features like accident insurance cover, medclaim etc.
• Holdingtheinvestmentinelectronicform,doingawaywiththetraditionalformof
unitcertificates.
• Chequewriting facilities.
• Systematic withdrawal and deposit facility.

ONLINE MUTUAL FUNDTRADING

Theinnovationtheindustrysawwasinthefieldofdistributiontomakeitmoreeasily
accessibletoaneverincreasingnumberofinvestorsacrossthecountry. Forthefirsttime in
Indiathemutualfundstartusingtheautomatedtrading,clearingandsettlementsystemof stock
exchanges forsale and repurchase of open-ended de-materialized mutual fund units.

SystematicInvestmentPlan(SIP)andSystematicWithdrawalPlan(SWP)wereoptions
introducedwhichhavecomeinveryhandyfortheinvestortomaximizetheirreturnsfrom
theirinvestments.SIPensuresthatthereisaregularinvestmentthattheinvestormakeson
specifieddatesmakinghispurchasestospreadoutreducingtheeffectoftheshortterm
volatilityofmarkets.SWPwasdesignedtoensurethatinvestorswhowantedaregular
incomeorcashflowfromtheirinvestmentswereabletodosowithapre-defined
automatedform.TodaytheSWfacilityhascomeinhandyfortheinvestorstoreducetheir taxes.

33
2.1 COMPANYPROFILE-
IDFChave beenan integral part of the country'sdevelopment storysince 1997, when our
companywas formed with the specific mandate tobuild the nation.
Since 2005, wehave built on our vision to be the 'onefirm'that looks afterthe diverseneeds of
infrastructuredevelopment. Whetherit is financial intermediation forinfrastructure projects
and services, adding value through innovative products to the infrastructurevalue chain or
asset maintenanceof existing infrastructureprojects, wefocusonsupporting companies to get
the bestreturn on investments.
Ourgrowth has been driven bythe substantial investment requirements of the infrastructure
sector inIndia combinedwith the growth in theIndian economyover the last severalyears.
Our abilityto tap globalas well asIndianfinancial resources makes us theacknowledged
experts in infrastructure finance. This, coupledwith a strong synergybetween the company
management and keyshareholders, anda dedicated team of over 550 people makes us an
organization that is committed to improving the faceofIndia's infrastructure sector.
AtIDFC, our commitment to building India's infrastructuregoes beyond business. We work
closelywith governmententities and regulators toadvise and assist them in formulating
policyandregulatoryframeworks that support private investment and public-private
partnerships in infrastructure development.

Mission
“Tobetheleadingknowledge-drivenfinancial services
company,creatingenduringvalue,promoting infrastructureandnationbuilding”

Values

Integrity
We engagein honest and straight forward communication with all stakeholders and adhere
to the highest ethical standards in everythingwe do. Our reputation is paramount. We will
act in the best interests ofour clients but without compromising our values and principles.

NurturingHumility

34
We aremodest enough toknow that wecan bewrong and smart enough tolearn from our
mistakes. We treat everyone as an equal— no task is beneath us.

Stewardship
We act as custodians ofourfirm and accept thechargeof passing on abetter business than the
oneweinherited. Ouractions will be guided byrulesand ethical principles creating long term
value with due carefor societyandenvironment.

Partnership
We emphasize aONE FIRM culture. We foster mutual respectand proactivelycollaborate
with each other,with clients, and with partners keeping just one thing in mind– to be the
best at what wedo.

Initiative
We encourage new ideasand independentactionwithin a culturethat fosters sharing
knowledge and information, critical debate and constructive dissent.

Responsibility
We takecomplete ownership for our actions, emphasizing a results-oriented and problem-
solving approach to business. We arepersonallyaccountableto thecommunities that we
serve.

Excellence
We constantlystrive to raise industrystandards, be theemployer of choice,and work to be
the best ratherthan the biggest. Dedication to excellenceresults in superiorexecution and
generates creative, imaginative and innovative outcomes.

Board Committees

Nomination &: Dr. Omkar Goswami


Remuneration Chairman
Audit :Mr. S. H. Khan Committee Dr. Rajiv B.Lall
Committee Chairman Mr. Gautam Kaji
Dr. Omkar Goswami Mr. Donald Peck
Mr. Gautam Kaji
Ms. MarianneØkland
Ms.Snehlata
Shrivastava
Stakeholders' : Mr. S. H. Khan
Relationship Chairman
Committee Dr. Rajiv B.LallMr.
VikramLimaye

35
Corporate : Dr. Rajiv B.Lall Risk :Mr. Gautam Kaji
Social Chairman Committee Chairman
Responsibility Dr. Omkar Goswami Mr. S. H. Khan
Committee Mr. VikramLimaye Dr. Rajiv B.Lall
Ms. MarianneØkland
Mr. VikramLimaye

Executive :Dr. Rajiv B.Lall


Committee Chairman
Mr. S. S. Kohli
Mr. S. H. Khan
Dr. Omkar Goswami
Mr. Donald PeckMr.
VikramLimaye

History& Timelines
OurGroup was born outof the needfor aspecialized financial intermediaryfor
infrastructure.Incorporated on January30, 1997 in Chennai, our companywas set up on the
recommendations of the'Expert Groupon Commercialisation ofInfrastructureProjects' under
theChairmanshipof Dr. Rakesh Mohan.
Since then, wehave beena leading catalystforproviding private sector
infrastructuredevelopment inIndia. We focus on developing and leveraging our knowledge
basein the infrastructure space to devise and provide appropriate financing solutions to our
customers. Ourstrong capitalization reflects the crucial role that weplayin
infrastructuredevelopment.

1997
 IDFC is founded on therecommendations of the'Expert Group on Commercialization of
InfrastructureProjects'under theChairmanship ofDr.Rakesh Mohan. Thegroup is
conceptualized to channel private capital into commerciallyviableprojects.

1999

 Is notifiedas a Public FinancialInstitution under Section 4A ofthe Companies Act.

2000

 Gets registered with SEBI as a merchant banker.

36
2001

 Gets registered with SEBI as a debenturetrustee.


 Sets upInfrastructureDevelopment Corporation (Karnataka)Limited (iDeCK)

2002

 Sets upIDFC Private Equityas an investment manager for private equityfunds. 


 Sets up UttaranchalInfrastructureDevelopment CompanyLimited (UDEC).

2003

 Successfullyraises $200million for the India Development Fund, the first infrastructure-
focused private equityfund.

2005

 Becomes apublic companyafter listing its shareson NSE and BSE.

2006

 Successfullyraises $450million for its second infrastructure- focused private equityfund.

2007

 Raises Rs. 2,100 crorethrough QIP.


 Sets upIDFC Project EquityCompany Limited asa specialized projectfinance entity
focused on developingIndian infrastructure projects.
 EstablishesIDFC Projects to develop, implement, own and operate projects in the
infrastructure space.

2008

 Successfullyraises $930million through theIndiaInfrastructureFund to invest equity


capital in infrastructureprojects and $700 million inits third private equityfund.
 Enters into asset management byacquiring the AMC business of Standard Chartered Bank
inIndia.
 IncorporatesIDFC Capital (Singapore) Pte Limited, for an emerging markets private equity
fund-of-funds business.

2009

 The company's loan book crosses Rs. 20,000 crore with morethan 200 infrastructure
projects funded.

37
 EstablishesIDFC Foundation to focus on capacitybuilding, policyadvisoryand
sustainabilityinitiatives.
 Becomes part of Nifty50.

2010

 Raises additional capitalof Rs. 26,542 million through aQualifiedInstitution Placement at


Rs.168.25 per share andCCPSat a conversion priceof Rs.176 per share.Government
shareholding reduces to18%.
 Classified as anInfrastructureFinanceCompany(IFC).
 Raises Rs. 480 crores in the first tranche of itsLong TermInfrastructure Bonds.

2011

 Certified asIndia's first "GreenData Centre". 


 IDFC opensan office inUS.
 Sets upIDFC Foundation as aSection 25 Companyfor all its developmental work. 
 IDFC&Natixis GlobalAssetManagement enterinto a strategicpartnership.
 Raise USD 310 million of ECB's.
 Starts "Partners Program".

2012

 IDFC Completes 15years with over 1.5 million investors.


 Launches"InOur Hands" anyouth engagement initiative, to socialize the policyadvocacy
work being done under the aegis of theIndiaInfrastructureReport (IIR).
 Releases ahandbook titled "EVOLVINGPERSPECTIVESIN THE DEVELOPMENT OF
INDIANINFRASTRUCTURE", encompassing the policywork donein thelast 15years.

IDFC business
 Corporate Investment  Real Estate
Banking
 Project Finance  Public MarketAsset
 Financial Management
MarketsGroup  Mutual Fund
 Securities
 Foundation
AlternativeAsset  Government
Management AdvisoryServices
 Private  PolicyAdvocacy
Equity  CapacityBuildingInitiatives
 Infrastructure
CommunityEngagement

38
Structure ofthe organization

Company’s structure

Structure of the companyconsistsoffollowingentities:-

Countryhead
Statehead
distributionchannel
Clusterheads
ofinvestments
Individualbrokers
Backoffice
operation
Salesteam

StateheadlooksafteralltheoperationinKarnatakaregionlikeBellary,MysoreandothercitiesofKarnataka
andcoordinateswithassetmanagementcompaniesi.e.AMCsandreportstocountryhead,andclusterheads
ofinvestmentsareresponsibleforsalesteamandreporttostateheaddistributionchannelandsalespeople

39
whodirectlyinteractwithinvestorsfortheinvestmentsreporttoclusterheadinvestment.Salesteamis
supportedbybackoffice operations, like role of backoffice operation

2.2 SWOTanalysisofthe company and its competitor

STRENGTH WEAKNESS

BRANDNAME BRANCHASE OFCOMPANYISLESS


KNOWN TO BE ETHICAL ONLY27ININDIA.
PRESENCEIN ALLOVERINDIA LACK OF MANPOWER
EXPERIENCEDPEOPLE INTHE NOT HAVING NECESSARY
COMPANY INFRASTRUCTURE
UNBIASNESS

OPPORTUNITY THREATS

ZEROBASE INDIVIDUAL BROKERS


LACK OF PROPERSERVICES  ITS COMPETITOR’S
AVAILABLE INTHE MARKET PROMOTIOALACTIVITIES
ABSENCE OF LEADER IN THE
MARKET, INDISTRIBUTION ( ITS COMPETITOR’NEW BUSINESS
MUTUAL FUNDS) PLANS
HUGE POTENTIAL OFMUTUAL ATTRITION
FUNDMARKET LACK OF MANPOWER
GROWTH OF MUTUAL FUND NOT HAVING NECESSARY
MARKET INFRASTRUCTURE
INCREASEININCOME LEVEL OF
PEOPLE

40
AverageAssetsunder Management

Assets under management (AUM)is a financial term denoting the market value of all the
funds being managed byafinancial institution (amutual fund, hedgefund,private equity
firm, venturecapital firm, or brokeragehouse) onbehalf ofits clients, investors, partners,
depositors, etc.
The average Assets under management of all Mutual funds inIndia for the quarter Jul-13 to
Sep-13 (inINR billion) is given below:

SrNo MutualFundName AverageAUM %

12 HDFCMutualFundRel 1,034.42 12.70%


34 ianceMutualFund 952.288 11.69%
56 ICICIPrudentialMutualFundB 53.0377 10.48%
78 irlaSunLifeMutualFundUTIM 3.44700. 9.50%8
91 utualFund 57595.5 .60%7.
01 SBIMutualFund 8448.12 31%5.5
11 FranklinTempletonMutualFundI 396.653 0%4.87
21 DFCMutualFund 52.9930 %4.34
31 KotakMahindraMutualFundD 4.86179. %3.74
41 SPBlackRockMutualFundTat 66170.5 %2.21
51 aMutualFund 9150.79 %2.10
61 DeutscheMutualFundL 139.471 %1.85
71 &T 32.5712 %1.71
81 MutualFundSundaram 5.12123. %1.63
92 MutualFundJPMorgan 1879.76 %1.54
02 MutualFund 76.1667. %1.51
12 ReligareInvescoMutualFundA 1862.44 %0.98
22 xisMutualFund 52.6347. %0.94
32 LICNOMURAMutualFundC 7143.00 %0.83
4 anaraRobecoMutualFundHS 41.49 %0.77
25 BCMutualFund %0.65
JMFinancialMutualFundBar %0.59
odaPioneerMutualFundIDBI %0.53
MutualFundPRINCIPALMut %
ualFund 0.51%
GoldmanSachsMutualFund
41
SrNo MutualFundName AverageAUM %

26 BNPParibasMutualFundMor 35.38 0.43%0


27 ganStanleyMutualFundPeerle 32.90 .40%0.
28 ssMutualFund 28.35 35%0.3
29 TaurusMutualFundPrameric 27.32 4%0.27
30 aMutualFundUnionKBCMu 21.66 %0.24
31 tualFundIndiabullsMutualF 19.80 %0.20
32 undINGMutualFundPineBri 16.06 %0.14
33 dgeMutualFundBOIAXAM 11.05 %0.14
34 utualFundMiraeAssetMutua 11.03 %0.13
35 lFundMotilalOswalMutualF 10.82 %0.06
36 undQuantumMutualFundPP 5.084 %0.05
37 FASMutualFundEscortsMu .373. %0.04
38 tualFundSaharaMutualFund 152.6 %0.03
39 IIFLMutualFundEdelweiss 72.52 %0.03
40 MutualFundDaiwaMutual 2.332 %0.03
41 FundIL&FSMutualFund(I .071. %0.03
42 DF)ShriramMutualFundS 940.5 %0.02
43 REIMutualFund(IDF) 1- %0.01
44 - %0.00
GrandTotal
45 - %0.00
46 %0.00
8,142.68
47 %100.0
%

42
CHRONICLE ORDEROFCOMPANIESGIVING MOST RETURN.

Fund Category 5
YrRetu
rn
DSPMLT.I.G.E.R.Fund Equity: Diversified 45.45

TataInfrastructure Equity: Diversified 44.92

MagnumContra Equity: Diversified 44.81

KodakOpportunities Equity: Diversified 44.57

UTIInfrastructure Equity: Diversified 43.14

RelianceGrowth Equity: Diversified 42.88

MagnumMultiplierPlus Equity: Diversified 42.76

SundaramBNPParibasSelectMidcap Equity: Diversified 40.64

43
HDFCTop200 Equity: Diversified 39.29

BoBGrowth Equity: Diversified 38.57

PrincipalChildBenefit Hybrid: Equity-oriented 36.79

MagnumBalanced Hybrid: Equity-oriented 31.24

HDFCPrudence Hybrid: Equity-oriented 29.68

BirlaSunLifeIncome Debt:Medium-term 8.29

ABNAMROFlexiDebtPlan Debt:Medium-term 7.78

ICICIPrudentialLong-term Debt:Medium-term 7.55

BirlaDynamicBondRetail Debt:Medium-term 7.51

KotakFlexiDebt Debt:Medium-term 7.47

SundaramBNPParibasS... Equity: Diversified 43.35

ICICIPrudentialDynamic Equity: Diversified 43.26

DWSInvestmentOpportunity Equity: Diversified 43.07

DSPMLEquityFund Equity:Diversified 42.89

DSPMLTop100EquityReg Equity: Diversified 41.96

Kotak30 Equity: Diversified 41.33

IDFCPremierEquityfund Equity-oriented 29.67

RANKING OF THE COMPANY

Bylookingatthistable we canrankvariousassetmanagementcompaniesonthebasisofassetunder
management. They are asfollows:

44
1) Reliancemutual fund

2)ICICIprudential mutual fund

3) UTImutual fund

4) BIRLA sun life mutual fund

5) SBImutual fund

BylookingatthisrankwecansaythatinIndiapeopleprefertoinvestin
relianceschemeand they arehaving great faith on RelianceCompany.

SCHEMESOFIDFC

Scheme:IDFCAdvantageFund

Type Openended growth scheme


Investment 70%inequity&30% inDebt
pattern
Fund Objective Long termgrowthof capital
Investment Min ofone year
horizon

Scheme:IDFCDividendYieldplus

Type Openended GrowthScheme


Investment 100% in equity
pattern
Fundobjective Capitalgrowth&income
Investment Min ofone year
horizon

Scheme:IDFCEquityplan
45
Type Openended equitylinkedsavings schemes
Investment 80%inequity&20% inshort term, money market&
liquid instruments
Fundobjective Long termgrowthof capital along with income tax
relief for investment
Investment Minimumof 3years
horizon

Scheme:IDFCIndexFund

Type Openended index Linked Scheme


Investment 100% in Securities
pattern
Fund Objective Generate Returns
Investment Min ofone Year
Horizon

Scheme:IDFCopportunitiesFund

Type Openended growth scheme


Investment 70-100%inequity,30%in cash &money market
pattern instruments
Fundobjective Long termgrowthof capital
Investment Minimumof one year
horizon

Scheme:IDFCMidCapFund

Type Openended growth scheme


Investment 65-100%inequityrelated companies withmarket
pattern capitalization of Rs.150crorestoRs.1,500crores
35%inequityrelatedcompanies witha market
capitalization.
Fund Objective Long termgrowthof capital
Investment Minimumof 1 year
horizon

46
Scheme:IDFCBalanceFund

Type Openended balancedscheme


Investment 50to 75% in equity25-50% indebt
pattern
Fundobject To balance income requirements with longtermgrowth
ofcapital
Investment Minimumof one year
horizon

Scheme:IDFCAssetAllocationFund

Type Openendedfundof funds


Investment Aggressiveplan70-80% in equity20-25%indebt
pattern Moderate plan 40-60%inequity40-60% indebt
Conservativeplan20-25%inequity75-80%indebt
Fundobjective Income & capital Application withdiversification in
equity& debtschemesin line with risk profile of
investor
Investment Minimumof one year
horizon
Scheme:IDFCGiltPlus

Type Openended governments securitiesschemes


Investment 100% in securitiespermittedbyRBI
pattern
Fundobjective To generateinincome &capital appreciationthrough
investments in governmentsecurities.
Investment Least6 months to1 year
horizon

Scheme:IDFCDynamicBondFund

Type Openended income scheme


Investment 50-65% in Governmentsecurities,25-35%incorporate
pattern bonds,0-25% in cash liquidinstruments.

47
Fundobjective To generateoptimalreturns withhighliquidity
Investment Minimumof one year
horizon

Scheme:IDFCIncomePlus

Type Openended income scheme


Investment 100% in debt &moneymarket
pattern
Fundobjective To generate consistent income
Investment Minimumof 1 year
horizon

48
3.1IntroductiontoStudy
• Tostudy variousinvestmentalternativesandinparticularinvestorspreference
towards mutual funds.
• To studythe preference of investors in today’s scenario (less risk and morereturn).

• Toassesstheriskofinvestorswithreferencetodiversifiablerisk&non-
diversifiablerisk.
• To studymarket potentialityof mutual fund among investors.
• To studywhether theinvestors are consideringIDFC a better option or not.

3.2LITERATUREREVIEW
Literatureonmutualfundperformanceevaluationisenormous.Afewresearchstudiesthat
haveinfluenced the preparation of this paper substantiallyare discussed in this section.

Sharpe,WilliamF.(1966)suggestedameasurefortheevaluationofportfolioperformance.
Drawingonresultsobtainedinthefieldofportfolioanalysis,economistJackL.Treynorhas
suggestedanewpredictorofmutualfundperformance,onethatdiffersfromvirtuallyall
thoseusedpreviouslybyincorporatingthevolatilityofafund'sreturninasimpleyet meaningful
manner.

Michael C. Jensen (1967) deriveda risk-adjustedmeasureof portfolio performance


(Jensen’salpha)thatestimateshowmuchamanager’sforecastingabilitycontributesto fund’s
returns.
AsindicatedbyStatman(2000),theeSDARofafundportfolioistheexcessreturnofthe portfolio
overthe return of thebenchmarkindex, wherethe portfolio is leveraged to havethe benchmark
index’sstandard deviation.

49
NarayanRao,ET.al.,evaluatedperformanceofIndianmutualfundsinabearmarketthrough
relativeperformanceindex,risk-returnanalysis,Treynor’sratio,Sharpe’sratio,
Sharpe’smeasure,Jensen’smeasure,andFama’smeasure.Thestudyused269open-ended
schemes(outoftotalschemesof433)forcomputingrelativeperformanceindex.Thenafter
excludingfundswhosereturnsarelessthanrisk-free returns,58schemesarefinallyusedfor
furtheranalysis.Theresultsofperformancemeasuressuggestthatmostofmutualfund
schemesinthesampleof58wereabletosatisfyinvestor’sexpectationsbygivingexcess returns
over expected returns based on both premiums for systematic riskand total risk.

BijanRoy,ET.al.,conductedanempiricalstudyonconditionalperformanceof
Indianmutualfunds.Thispaperusesatechniquecalledconditionalperformanceevaluation
onasampleofeighty-nineIndianmutualfundschemes.Thispapermeasuresthe
performanceofvariousmutualfundswithbothunconditionalandconditionalformof
CAPM,Treynor-MazuymodelandHenriksson-Mertonmodel.Theeffectofincorporating
laggedinformationvariablesintotheevaluationofmutualfundmanagers’performanceis
examinedintheIndiancontext.Theresultssuggestthattheuseofconditioninglagged
informationvariablesimprovestheperformanceofmutualfundschemes,causingalphasto shift
towards right and reducing the numberof negative timing coefficients.

Mishra, et al., (2002) measured mutual fund performanceusing lower partial moment.Inthis
paper,measuresofevaluatingportfolioperformancebasedonlowerpartialmomentare developed.
Riskfromthelowerpartialmomentismeasuredbytakingintoaccountonlythosestatesin
whichreturnisbelowapre-specified“targetrate”likerisk-freerate.KshamaFernandes
(2003)evaluatedindexfundimplementationinIndia.Inthispaper,trackingerrorofindex
fundsinIndiaismeasured.Theconsistencyandleveloftrackingerrorsobtainedbysome well-
runindexfundsuggeststhatitispossibletoattainlowlevelsoftrackingerrorunder
Indianconditions.Atthesametime,theredoseemtobeperiodswherecertainindexfunds appear
todepart fromthedisciplineofindexation.K.Pendarakietal.studiedconstructionof
mutualfundportfolios,developedamulti-criteriamethodologyandappliedittotheGreek
marketofequitymutualfunds.Themethodologyisbasedonthecombinationofdiscrete
andcontinuousmulti-criteriadecisionaidmethodsformutualfundselectionand

50
composition.UTADISmulti-criteriadecisionaidmethodisemployedinordertodevelop mutual
fund’s performancemodels.

Goalprogrammingmodelisemployedtodetermineproportionofselectedmutualfundsin
the finalportfolios.
ZakriY.Bello(2005)matchedasampleofsociallyresponsiblestockmutualfunds
matchedtorandomlyselectconventionalfundsofsimilarnetassetstoinvestigate
differencesincharacteristicsofassetsheld,degreeofportfoliodiversificationandvariable
effectsofdiversificationoninvestmentperformance.Thestudyfoundthatsocially
responsiblefundsdonotdiffersignificantlyfromconventionalfundsintermsofanyof
theseattributes.Moreover,theeffectofdiversificationoninvestmentperformanceisnot different
betweenthetwogroups.BothgroupsunderperformedtheDomini400SocialIndex and S &P 500
during thestudyperiod.

Michael C. Jensen (1967) deriveda risk-adjustedmeasureof portfolio performance

(Jensen’salpha)thatestimateshowmuchamanager’sforecastingabilitycontributesto fund’s
returns.

AsindicatedbyStatman(2000),theeSDARofafundportfolioistheexcessreturnofthe
portfoliooverthereturnofthebenchmarkindex,wheretheportfolioisleveragedtohave
thebenchmarkindex’sstandarddeviation. S.NarayanRao,ET.al.,evaluatedperformance of
Indianmutualfundsinabearmarketthroughrelativeperformanceindex,risk-return
analysis,Treynor’sratio,Sharpe’sratio,Sharpe’smeasure,Jensen’smeasure,andFama’s
measure.Thestudyused269open-endedschemes(outoftotalschemesof433)for
computingrelativeperformanceindex.Thenafterexcludingfundswhosereturnsareless thanrisk-
freereturns,58schemesarefinallyusedforfurtheranalysis.Theresultsof
performancemeasuressuggestthatmostofmutualfundschemesinthesampleof58were
abletosatisfyinvestor’sexpectationsbygivingexcessreturnsoverexpectedreturnsbased on both
premiums for systematic risk and total risk.

51
3.3Background Information

How toCalculate the valueof aMutualFund:

Theinvestor’sfundsaredeployedinaportfolioofsecuritiesbythefundmanager.The
valueoftheseinvestmentskeepschangingasthemarketpriceofthesecuritieschange.
Sinceinvestorsarefreetoenterandexitthefundatanytime,itisessentialthatthemarket
valueoftheirinvestmentsisusedtodeterminethepriceatwhichsuchentryandexitwill
takeplace.Thenetassetsrepresentthemarketvalueofassets,whichbelongtothe investors, on
agiven date.

NetAssetValueorNAVofamutualfundisthevalueofoneunitofinvestmentinthefund, in net asset


terms.

NAV=NetAssetofthescheme/NumberofUnitsOutstanding

WhereNet Assets arecalculated as:-

(Marketvalueofinvestment+currentassetsandotherassets+Accruedincome–current
liabilitiesandotherliabilities–lessaccruedexpenses)/No.ofUnitsOutstandingasatthe NAV date.

NAVofallschemesmustbecalculatedandpublishedatleastweeklyforclosed–end
schemes and dailyfor open- end schemes.

Themajor factors affecting the NAVof afund are :

 Sale and purchase of securities


 Sale and repurchase of units
 Valuation of assets
 Accrual of incomeand expenses

52
.NAV-:

Net Asset Value isthemarket value ofthe assets of the scheme minus its liabilities.The per unitNAV
isthe netasset valueofthescheme divided bythe number of unitsoutstandingon the Valuation Date.

How is NAVcalculated?

Thevalueof all thesecurities in the portfolio incalculateddaily.From this, all expensesare deducted and
the resultantvalue divided bythe number ofunitsin the fund is the fund’s NAV.

ExpenseRatio

AMCschargeanannualfee,orexpenseratiothatcoversadministrativeexpenses,salaries,
advertisingexpenses,brokeragefee,etc.A1.5%expenseratiomeanstheAMCchargesRs1.50forevery Rs100
inassets under management.

Afund'sexpenseratioistypicallytothesizeofthefundsundermanagementandnottothereturns
earned.Normally,thecostsofrunningafundgrowslowerthanthegrowthinthefundsize-so,themore
assetsinthefund,thelowershould beits expense.

Entryloadandanexitload

SomeAssetManagementCompanies(AMCs)havesalescharges,orloads,ontheirfunds(e
and/orexitload)tocompensatefordistributioncosts.Fundsthatcanbepurchasedwithoutasalesch
calledno-
loadfunds.Entryloadischargedatthetimeaninvestorpurchasestheunitsofascheme.yloadpercentageisaddedto
theprevailingNAVatthetimeofallotmentofunits.Exitloadischarge
timeofredeeming(ortransferringaninvestmentbetweenschemes).Theexitloadpercentageisdedu
mtheNAVatthetimeofredemption(ortransferbetweenschemes).ThisamountgoestotheA nagement
Companyand not into the pool of funds of thescheme.

53
How does "entryload"affect theinvestment returns?

A2.25%entryloadsoundssmall.Butitstillbitesachunkoffthereturnsoveralongperiodoftime.
Forinstance,Rs1lakhinvesteddirectly intheno-loadoptionofanequityfundthatgrowsatarateof
15%overaperiodof20yearsyieldsaroundRs16.36lakhagainstRs15.99lakhthataloadfund wouldreturn—
adifferenceofRs36,820.Thisisbecauseevenasmallsumof2.25%gets compounded over theyears.

The pinchremainsthe sameeveninasystematicinvestmentplan(SIP).AsSIPsentailinvestmentson


aregularbasis,sayeverymonth,youenduppayingentryloadsonallyourinvestmentinstallments.
AssumeyouhadinvestedRs5,000inRelianceVisionFund(RVF)onJanuary1,2003througha
monthlySIP.Ifyouhadwithdrawnyourentireinvestmentafterfiveyears,onDecember31,2007,
youwouldhavegotbackRs11.52lakhintheno-loadoptionandRs11.25lakhinaloadoption,a differenceof a
cool Rs 25,914.

Areinvestments inmutual fundunits risk-freeorsafe?

Thisdependsontheunderlyinginstrumentthatamutualfundinvestsin,basedonitsinvestment
objectives.Mutualfundsthatinvestinstockmarket-relatedinstrumentscannotbetermed“risk-free
orsafe”asinvestmentinsharesareinherentlyriskybynature,whereasfundsthatinvestinfixed-
incomeinstrumentsarerelativelysafeandthosethatinvestonlyingovernmentsecuritiesarethe safest.

Why Mutual Funds are an investmentoption?

Firstly,wearenotallinvestmentprofessionals.Wegotoadoctorwhenweneedmedicaladviceora
lawyerforlegalguidance,similarlymutualfundsareinvestmentvehiclesmanagedbyprofessional
fundmanagers.AndunlessyouratehighlyontheInvestmentIQQuiz,werecommendyouusethis
optionforinvesting.Mutualfundsarelikeprofessionalmoneymanagers,howeverakeyfactorin
theirfavoristhattheyaremoreregulatedandhenceofferinvestorstheabilitytoanalyzeand
evaluatetheirtrackrecord.

54
Secondly,investingisbecomingmorecomplex.Therewasatimewhenthingswerequitesimple-
themarketwentupwiththearrivalofthefirstmonsoonshowersandeveryyeararoundDiwali.
SinceIndiastartedintegratingwiththeworld(withthestartoftheliberalizationprocess),complex
factorssuchasanincreaseinshort-termUSinterestrates,thecollapseoftheBraziliancurrencyor
defaultonitsdebtbytheRussiangovernment,havestartedhavinganimpactontheIndianstock
market.AlthoughitispossibleforanindividualinvestortounderstandIndiancompanies(and
investing)insuchanenvironment,theprocesscanbecomefairlytimeconsuming.Mutualfunds
(whosefundmanagersarepaidtounderstandtheseissuesandwhoseassetmanagementcompany invests in
research) provide an option of investing without getting lostinthe complexities.

Lastly,andmostimportantly,mutualfundsprovideriskdiversification:Diversification ofaportfolio
isamongsttheprimarytenetsofportfoliostructuring(seeTheNeedtoDiversify).Andanecessary
onetoreducethelevelofriskassumedbytheportfolioholder.Mostofusarenotnecessarilywell
qualifiedtoapplythetheoriesofportfoliostructuringtoourholdingsandhencewouldbebetteroff leaving that
to a professional. Mutual funds represent one such option.

How toselect amutualfund scheme?

What'sstrategygottodowithselectingamutualfund?Shouldn'tyoujustgoandinvestinthebest
performingfund?Theanswerisno.Mutualfundinvestingrequiresasmuchstrategicinputasany
otherinvestmentoption.Buttheadvantageisthatthestrategyhereisanaturalextensionofyour
assetallocationplan(useourAssetAllocatortounderstandwhatyouroptimumassetallocationplan
shouldbe,basedonyourpersonalriskprofile).Thefollowingprocessesareimportanttoselecta mutual fund
scheme.

Identify funds whose investment objectives match your asset allocation needs
Justasyouwouldbuyacomputerthatfitsyourneedsandbudget,youshouldchooseamutualfund
thatmeetsyourrisktolerance(need)andyourriskcapacity(budget)levels(i.e.hassimilar
investmentobjectivesasyourown).Typicalinvestmentobjectivesofmutualfundsincludefixed
incomeorequity,generalequityorsector-focused,highriskorlowrisk,blue-chipsorturnarounds, long-
termor short-termliquidityfocus. Theinvestment objectives match yoursare
Evaluatepastperformance,lookforconsistency.Althoughpastperformanceisnoguaranteeof
futureperformance,itisausefulwayofassessinghowwellorbadlyafundhasperformedin
comparisontoitsstatedobjectivesandpeergroup.Agoodwaytodothiswouldbetoidentifythe
55
fivebestperformingfunds(withinyourselectedinvestmentobjectives)overvariousperiods,say3
months,6months,oneyear,twoyearsandthreeyears.Shortlistfundsthatappearinthetop5in
eachofthesetimehorizonsastheywouldhavethusdemonstratedtheirabilitytobenotonlygood
butalso,consistent performers..

Are investmentsin mutualfund units risk-free orsafe?

Thisdependsontheinstrumentmutualfundinvestsin,basedonitsinvestmentobjectives.Mutual
fundsthatinvestinstockmarket-relatedinstrumentscannotbetermed“risk-freeorsafe”as
investmentinsharesareinherentlyriskybynature,whereasfundsthatinvestinfixed-income instruments
arerelativelysafeand those that invest onlyin government securities arethe safest.

RoleofaFundManager:

Fundmanagersareresponsibleforimplementingaconsistentinvestmentstrategythatreflectsthe
goalsandobjectivesofthefund.Normally,fundmanagersmonitormarketandeconomictrendsand analyze
securities in order to make informed investment decisions.

How are mutualfundsregulated?

AllAssetManagementCompanies(AMCs)areregulatedbySEBIandortheRBI(incasetheAMC
ispromotedbyabank).Inaddition,everymutualfundhasaboardofdirectorsthatrepresentsthe unit holders’
interests in the mutual fund.

3.4 STATEMENTOFPROBLEM

MutualFundsareFinancialintermediariesconcernwiththemobilizingsavingsofsurplus income
&channelisationof thesesavings in thoseavenues wherethereis demand offunds.

Themain purpose behindthis studyof investmentpreferences inMutual Funds is to seethat


howtheinvestorsareemployingtheirresourcesinamannertoafford,combinebenefitsto
lowrisks,steadyorconsistentreturns,highliquidity&capitalappreciationthrough

56
diversification & ExpertManagement.

Thereforetheactivitiesofmutualfundshavebothshort&longtermimpactonthesavings
&capitalmarket&thenationaleconomy.MutualFunds,thus,assisttheprocessof financial
depending &intermediation.

3.5ObjectivesoftheStudy
• Tostudy variousinvestmentalternativesandinparticularinvestorspreference
towards mutual funds.
• To studythe preference of investors in today’s scenario (less risk and morereturn).

• Toassesstheriskofinvestorswithreferencetodiversifiablerisk&non-
diversifiablerisk.
• To studymarket potentialityof mutual fund among investors.
• To studywhether theinvestors are consideringIDFCa better option or not.

57
Chapter: -4
Research
Methodology4.1ResearchDesign
ResearchMethodologyisasystematicmethodofdiscoveringnewfactsorverifyingold
facts,theirsequence,inter-relationship,casualexplanationandthenaturallawswhich
governsthem.Initwestudythevariousstepsthataregenerallyadoptedbyaresearcherin the
studying his researchproblem along with the logic behind them.

Differentstagesinvolvedinresearchconsistsofenactingtheproblem,formulatinga
hypothesis,collectingthefactsordata,analyzingthefactsandreachingcertainconclusion
eitherintheformofsolutiontowardstheconcernedproblemoringeneralizationforsome
theoretical formulation.
Type of Sample Design:Judgment Sampling

4.2Data Collection
The Data is divided in two parts:
a) PrimaryData.
b) SecondaryData.
PrimaryData is the data, which is collected directlybydirect personal
interview,Interview,indirectoralinvestigation,Informationreceivedthroughlocalagents,Draftin
ga schedule, drafting aquestionnaire.

SecondaryData is the data, which is collected from:


Various books.
Magazine and material.
Internet
Fact sheets of various MFs
ThedatawhichisstoredintheorganizationandprovidebytheFINANCEpeoplearealso
secondarydata.Thevariousinformationistakenoutregardingthatsubjectaswellother
58
subjectfromvarioussourcesandstored.Thelastyearsdatastoredcanalsobesecondary
data. This datais kept for the internal use ofthe organization.
TheFINANCEmanualisfortheinternaluseoftheorganizationtheyaresecondarydata
whichhelppeopletogaininformation.Inthisreportthedataplaysaverycrucialrole.For
thisreportthedatawasprovidedtomebyFINANCEdepartmentandotherdepartmental head in
theorganization.

4.3 Sampling Method


ThesamplingmethodsoastoobtainarepresentativesampleistheNon-Probability
Samplingmethods.Undernon-probabilitysampling,weselectedtherespondentstothe surveyon
the basis of Judgment sampling with Conveniencetaken into account.

4.4 Sample Size:200

4.5 Datacollection
instumentResearch instrument

Theresearch instrumentused for this surveyisa structured questionnaire.The questionnaire


containsbothopen-endedandcloseendedquestions.Thequestionnaireprovidesa provision with
respect torating scales.

4.6StatisticalToolsUsed
We have chosenANOVA and CHI-SQURE as Statistical Tools forTesting Hypothesis.

59
CHAPTER:-5
DataAnalysisandInterpritation.

TABLE-1:

AGEWISECLASSIFICATIONOFRESPONDENTS

AGE NO.OFRESPONDENTS PERCENTAGE

BELOW 20 NIL NIL


20-29 69 34.5
30-39 13 6.5
40-49 34 17
50-59 35 17.5
ABOVE60 49 24.5
TOTAL 200 100

AGEWISENOOFRESPONDENTS

492 0- 2 9 69 3 0- 39
40- 4 9
50- 5 9
35
13 A B O V E60 34

Interpretation:
According to the surveythe respondents wereof differentagegroups. There are
no respondents of age below 20 arein no number.The investors of age 20-29 are69 in
numberwith 34.5%. The investors of age30-39 are 13 with 6.5%, 40-49 thereare34

investors with 17% and in between 50-59 there are 35 investors with 17.5% and above 60
thereare49 investors with 24.5%.

60
TABLE-2:

GENDEROFTHERESPONDENTS

GENDER NO. OF RESPONDENTS PERCENTAGE


MALE 158 79
FEMALE 42 21
TOTAL 200 100

GENDEROFTHERESPONDENTS

180
/

160
NO.OFRESPONDENTS

140
PERCENTAGE

120 NO. OF
100 RESPONDENTS
80 PERCENTAGE
60
40
20
0
MALE FEMALE
GENDER

Interpretation:Inthesurveynumberofmalerespondentsaremoreinnumberthat
isabout79%&thenextpositionhasbeenoccupiedbyfemalerespondentstheyare about 21%
ofthe sampleso, mainlymen arepreferring to go for investments.

61
TABLE-3:

OCCUPATIONOFTHERESPONDENTS

OCCUPATION NO.OFRESPONDENTS PERCENTAGE


HOUSE HOLD 9 4.5
BUSINESS 46 23
SERVICE 84 42
PROFESSIONAL 30 15
RETIRED 15 7.5
STUDENT 16 8
TOTAL 200 100

OCCUPATIONOFTHERESPONDENTS

16 9
15 HOUSE HOLD
46 BUSINESS
30 SERVICE
PROFESSIONAL
RETIRED
STUDENT
84

Interpretation:
According to the surveythe respondents wereof different occupations. Most of
respondents are from service sector is about 42%of the sample. Respondents from the
business areoccupying 23%, then comes professional with 15%, students occupy8%,
retired people occupy7.5%, with house hold occupying 4.5%.

62
TABLE-4:

ANNUALINCOMEOFTHERESPONDENTS

ANNUAL NO. OF RESPONDENTS PERCENTAGE

< 1,00,000 53 26.5


1-2LAKHS 84 42
2-3LAKHS 48 24
ABOVE3LAKHS 15 7.5
TOTAL 200 100

ANNUALINCOMEOFTHERESPONDENTS

90
NO.OFRESPONDENTS/

80
70
PERCENTAGE

60 NO. OF
50 RESPONDENTS
40 PERCENTAGE
30
20
10
0
0 S H
S00 HS
H K
A
0,
1,0 2 LAK 3LAK 3L
< - -
1 2 VE
O
AB
ANNUALINCOM
E

Interpretation:
According to the survey,the respondents of the income group of less than 1 lack are
of 26.5%. Theywere about 42% of the respondents areofthe income groupbetween 1-2 lack.
24%of the respondents wereof the income group 2-3 lacks. 7.5%respondents wereof the
income group morethan 3 lacks.

63
TABLE-5:

DOTHERESPONDENTSINVESTTHEIRMONEY

INVESTMENTS NO.OFRESPONDENTS PERCENTAGE

YES 200 100


NO NIL NIL
TOTAL 200 100

RESPONDENTSINVESTINGTHEIRMONEY

250
NO.OFRESPONDENTS/

200
PERCENTAGE

NO. OF
150 RESPONDENTS
100 PERCENTAGE

50

0
YES NO
INVESTMENTS

Interpretation:
All the respondents considered in the sample, do invest their savings.
Out of the total sample the respondents going for investments aretotal in numbers with all the two
hundred respondents considered insample aregoingfor completeinvestments with 100%.

64
TABLE-6:

Whatpercent of your income doyoukeepaside for different investment


options?
OPTIONS NO.OFRESPONDENTS PERCENTAGE
0% to 5% 24 12
5% to 10% 38 19
10%to15% 60 30
15%to20% 34 17
20%to30% 24 12
Above 30% 20 10
TOTAL 200 100

incomekeepaside
70
60
50
40
30 NO. OF RESPONDENTS
20
10
0
0% to 5% to 10% to15% to20% toAbove 15%
5% 10% 20% 30% 30%

65
TABLE-7

Important factorsto youconsider before choosing an investment?


NO.OFRESPON
OPTIONS DENTS PERCENTAGE
Safetyof investment
principle 70 35
Opportunityfor
growth 82 41
Liquidity 48 24
TOTAL 200 100

Importantfactors
90
80
70
60
50
40
30 NO.OF RESPONDENTS
20
10
0
Safety of Opportunity for Liquidity
investment growth
principle

Interpritation:- fromthetable we cansee that 41% of respondentare


consider the fector Opportunityfor growth before choosing an investment

66
TABLE-8:

INVESTORSPREFERENCEFORVARIOUSINVESTMENTS

OBJECIVES

OPTIONS
RANK SCORE
SECURITY 1 55
YEILD 2 47
MATURITY 4 35
TAXBENEFITS 5 22
LIQUIDITY 3 40

INVESTMENTOBJECTIVEOFTHEINVESTOR

SECURITY
LIQUIDITY 7%
20%
YEILD
SECURITY
13%
YEILD
MATURITY
TAXBENEFITS
MATURITY
27% LIQUIDITY
TAXBENEFITS
33%

67
Interpretation:
Differenttypesofinvestors look forward to differentinvestmentobjectives. Most ofthe
investors ranked 1sttosecurity, 2ndrank to yield, 3rdrank has been given to liquidity, 4th
&5thranksfor maturity&tax benefits.

INVESTORPREFERENCEFORVARIOUSINVESTMENTS

OBJECTIVES

ATTRIBUTES I II III IV V WEIGHTED RANK


AVERAGE
SECURITY 88 64 32 9 7 55 I
YEILD 63 44 46 24 23 47 II
MATURITY 19 24 45 85 27 35 IV
TAX BENEFIT 8 25 5 42 120 22 V
LIQUIDITY 22 43 72 40 23 40 III

MODELCALCULATION:

=88*5 + 64*4 +32*3 +9*2 + 7*1 / 1 + 2 +3 +4+5

=440 + 256 +96 +18+ 7 / 15

=817/15

=55.

68
TABLE-9:

AWARENESSOFMUTUALFUNDS

OPTIONS NO.OFRESPONDENTS PERCENTAGE


YES 200 100
NO 00 00
TOTAL 200 100

AWARENESSOFMUTUALFUNDS250
200

150

NO.OF RESPONDENTS
100

50

0
YES NO

Interpretation:
According to the survey,mostinvestors areaware of mutual funds.Itcan be
observed from the above table that 100%of respondents are aware of Mutual

69
TABLE-10:

AWARENESSOFMUTUALFUNDSISTHROUGH

OPTION NO.OFRESPONDENTS PERCENTAGE


ADVERTISEMENT 52 26
FRIENDS 37 19
FAMILYMEMBERS 19 10
FINANCIALADVISORS 66 32
RELATIVES 26 13
TOTAL 200 100

INFLUENCEOFINVESTMENTDECISIONIST
HROUGH

ADVERTISEME
RELATIVES NT
13% ADVERTISEMENT
26%
FRIENDS
FINANCIAL FAMILY MEMBERS
ADVISORS FRIENDS FINANCIALADVISORS
32% FAMILY 19% RELATIVES
MEMBERS
10%

Interpretation:
According to the survey,the respondents are more aware of mutual funds through
Financial Advisors whooccupy32%, followed byAdvertisements 26%, Friends 19%,
Relatives 13%&FamilyMembers 10%

70
TABLE11:

MUTUALFUNDISAGOODINVESTMENTOPTION.

OPTIONS NO.OFRESPONDENTS PERCENTAGE


YES 159 79.5
NO 41 20.5
TOTAL 200 100

MUTUALFUNDISAGOODINVESTMENTOPTION

180
/

160
NO.OFRESPONDENTS

140
PERCENTAGE

120 NO. OF
100 RESPONDENTS
80 PERCENTAGE
60
40
20
0
YES NO
OPTIONS

Interpretation:
Manyof the individuals areof the viewthat mutual fund is a good investment option.
Of the total sample surveyaround 79.5%of the respondents feel that mutual fund is a good
investment option &20.5% of the respondents feel that it is not a good investment option.

71
TABLE12:

Whatisyour return expectationonyourinvestmentin mutual fund?

NO.OFRESPON
OPTION DENTS PERCENTAGE
Up to
8%
OPTION 52
NO.OFRESPONDENTS 26PERCENTAGE
< 1 year Betwee 46 23
37.5
1to 3 n8%
year to18% 75
3to 5 year 80 50 40 25
> 5 year Above 29 15.5
TOTAL 200 100
18% 68 34
TOTAL 200 100

returnexpectation9
0
80
70
60
50
40
NO.OF
30
RESPONDENTS
20
10
0
Up to8% Between 8%to Above 18%
18%

In
Interpretation:- more no of respondent expecting 8%to18%ofreturn on theirinvestment

72
TABLE13
How long are youplanningtostayinvestin mutualfund?

NO.OFRESPONDENTS80
70
60
50
40
NO.OF
30
RESPONDENTS
20
10
0
< 1 year 1 to3 year3 to 5 year > 5 year

Interpritation:- fromthetable 75 respondentareplanningtostayinvestin


mutualfundfor the periodof 1-3year.and only2975 respondent areplanning
tostayinvestinmutual fundfor the period of>5 year.

73
TABLE-14:

RESPONDENT SPREFFERINGIDF CASA DISTRIBUTOR OF MUTUAL


FUNDS

OPTION NO.OFRESPONDENTS PERCENTAGE


IDFC 138 69
OTHERS 62 31
TOTAL 200 100

IDFCASADISTRIBUTOROFM
UTUALFUNDS
/

160
RESPONDENTS

140
120
PERCENTAGE

NO. OF
100
RESPONDENTS
80
PERCENTAGE
60
OF

40
200
O
N

IDFC OTHERS
OPTIONS

Interpretation:
According to the survey,69% of therespondents are awareof idfcas a distributor of mutual
funds &these69% of the investors would like to invest in idfc mutual fund option. The rest 31%
oftherespondents would like to prefer ot

74
TABLE-15:

TYPEOFFUNDSRESPONDENTSPREFERTO

OPTION NO.OFRESPONDENTS PERCENTAGE


DEBTFUND 42 30.5
EQUITY FUND 78 56.5
HYBRIDFUND 18 13
TOTAL 138 100
TYPE
OFFUNDSRESPONDENTSPREFERTO
RESPONDENTS

90
80
PERCENTAGE

70
60 NO. OF
50 RESPONDENTS
OF

40 PERCENTAGE
30
O
N

20
.

10
0
DEBTFUND EQUITYFUND
H
YBRID
FUND
OPTIONS

Interpretation:
From the surveyconducted
the respondents
preferEquityfunds morein
number
theyoccupy56.5%,followed
byDebt funds with30.5% and
averyfew respondents prefer
to hybrid funds with 13%.

75
TABLE-16:

TYPEOFSCHEMEPREFEREDBYRESPONDENTINDEBTFUNDS

OPTION NO.OFRESPONDENTS PERCENTAGE


LIQUIDFUND 2 5
FLOATERATE 4 10
GILTFUND 5 12
DYNAMICBONDFUND 15 35
INCOMEPLUS 7 17
BONDINDEXFUND 9 21
TOTAL 42 100

TYPEOFSCHEMEPREFEREDBYRESPONDENTINDE
BTFUNDS

21% 5% 10% LIQUIDFUND


12% FLOATERATE
GILT FUND
DYNAMIC BOND FUND
17%
INCOMEPLUS
35% BONDINDEXFUND

Interpretation:
Based on the survey, it is found that the respondents prefer dynamicbond fund which occupies
35%, then follows isthe bondIndex Fund with 21%, thirdly Income Plus is seen with
morepercentagewith 17, followed byGilt Fund, FloatingRate Fund, &Liquid Fund with 12, 10,
5.

76
TABLE19:

RESPONDENTSPREFFERINGOTHERBRANDSOFMUTUAL

FUNDS

OPTION NO.OFRESPONDENTS PERCENTAGE


HDFC 12 19
FRANKLINTEMPLETON 18 29
HSBC 6 10
KOTAKMAHINDRA 11 18
DSPMERYLLICH 5 8
UTI 10 16
TOTAL 62 100

RESPONDENTSPREFFERINGOTHERBRANDSOF
MUTUALFUNDS

HDFC

FRANKLIN 16%
19% TEMPELTON
8% HSBC
KOTAKMAHIN
DRA
18% 29%
10% DSPMERYILCH

UTI

Interpretation:
Based on the survey, it is found that the respondents would definitelypreferother

brands of Mutual Funds with Franklin Templeton in the leadwith 29%, then HDFC with
18%, UTIin the fourth placewith 16%,Kotak Mahindra with 18%, HSBCwith 10% &
DSPmerllich with 8%.

77
TABLE20:

RESPONDENTRECOMMENDINGIDFCMUTUALFUNDASABE
TTERINVESTMENTOPPURTUNITY

OPTIONS NO.OFRESPONDENTS PERCENTAGE


YES 156 78
NO 44 22
TOTAL 200 100

ISIDFCABETTERINVESTMENT

180
/

160
NO.OFRESPONDENTS

140
PERCENTAGE

120 NO. OF
100 RESPONDENTS
80 PERCENTAGE
60
40
20
0
YES NO
OPTIONS

Interpretati
According to the surveythe respondents recommendingIDFCMutual Fund as a
better investment opportunityis of 78%.&the respondents who do not recommend idfc
as abetter investment opportunityare 22%.

78
TABLE21:

Tick& Rate IDFC mutual fund ascompare toother mutual fund company.(1=
verygood&5= verybad)
1 2 3 4 5
OPTIONS NO.OFRESPONDENTS PERCENTAGE
1 120 60
2 32 16
3 24 12
4 16 8
5 8 4
TOTAL 200 100

120
100
80
60 OPTIONS
40 NO.OF RESPONDENTS
20
0
1 OPTIONS
2 3 4 5

Interpritation:-higherno. of responders areverysatisfied and leastnoof


respondent aresays its verybad.

79
TABLE22:

Express your Experiencetoinvestinmutual fund.

CHAPTER:-6HYPOTESISTESTING

H0: Thereis no SignificantRelationship between Income ofRespondent and Preferred Scheme of


Mutualfund.(Null Hypothesis)

H1: ThereisSignificant Relationshipbetween Income of Respondentand Preferred Scheme of


Mutualfund.(Alternate hypothesis)

CaseProcessingSummary

Cases

Valid Missing Total

N Percent N Percent N Percent

ANNUAL INCOME *TYPE


OF FUNDS RESPONDENTS 200 100.0% 0 .0% 200 100.0%
PREFER TO

ANNUALINCOME*TYPEOFFUNDSRESPONDENTSPREFERTOCrosstabulation

Count

TYPE OF FUNDS RESPONDENTS PREFERTO

DEBTFUND EQUITYFUND HYBRID FUND Total

ANNUAL INCOME <1,00,000 7 12 0 19

1-2 LAKHS 6 23 13 42

2-3 LAKHS 21 33 13 67

ABOVE 3 LAKHS 26 33 13 72

Total 60 101 39 200

Chi-SquareTests

80
Asymp. Sig. (2-
Value df sided)

Pearson Chi-Square 12.382a 6 .054

LikelihoodRatio 16.382 6 .012

Linear-by-Linear Association .507 1 .476

N ofValid Cases 200


a.1cells(8.3%)have expected countless than 5. The minimum
expected countis 3.71.

Interpritation:- Ther is averystrong Evidence ofrelationship betweenIncome ofInvestorand


Scheme Preferred bythem.
Tabulated value is 0.05and calculated value is 0.054(>.05)
So don’t Reject H0(null hypothisis)

ANOVA

ANNUAL INCOME

Sum ofSquares Df MeanSquare F Sig.

Between Groups 2.221 2 1.110 1.167 .314

Within Groups 187.459 197 .952

Total 189.680 199

Interpritation:- Ther is averystrong Evidence ofrelationship betweenIncome ofInvestorand


Scheme Preferred bythem.
Tabulated value is 0.314and calculated value is
1.167(>.0314) So don’t Reject H0(null hypothesis)

81
CHAPTER:-7SUGGESTION

Companyshould showitspresenceinthe market byits strongmarketingstrategies whichare asfollows


1.Bill boardsand hoardings
2.Ads in print and
electronic Media
3.Corporate tie-ups
4.Roa
d
show
s
5.Pam
phlets
6.Con
tests

 Companyshould provideconsistentcustomer servicebytime

1.submission of application
formsinprescribedtime 2.proper follow-up
3.transparencyin the process
4.Providing everypossible information about the product
5.Companycan also work servicerecoveryprocessif anyofthis kind of problem occurs

Failure inServices delivery

In general,services delivery system failures consistofthreetypesoffailures

1. Unavailable service

2. Unreasonableslow services

82
3. Other core service failures

Service recovery isconcerned with the processof addressingthefailure of the serviceshere question
comes how
thatcanbedoneorhowMahindrafinancehasdone,forthatthereshouldbecomplainfrominvestorssideorit
shouldreflect inthe researchdoneby company

BellandZemkehasproposedfiveingredientsforrecoverywhichcompanycanuseforits
recovery.

Apology- a first person apology rather than acorporate apology


Urgentreinstatement–speedofactioncoupledwithagallantattempttoputthingsrightevenifit isnot
possible tocorrectthe situation
Empathy-asincereexpression offeelingforthe customer’splight
Symbolicatonement-aformofcompensationthatmightincludenotchargingfortheserviceoroffering
futureservice freeordiscounted
Followup- an after recovery callto ascertainthattheconsumer issatisfied with the recoveryprocess

A successfulrecoveryinclude following four keyelements

1.acknowledgementof theproblem
2.explanationof the problem
3.apologywhere appropriate
4.compensationasrequired

83
CHAPTER:-8
LIMITATIONOFSTUDY

LIMITATIONSOFTHESTUDY

1) Sometime stock market are not performing well so people are not interestedto invest

2) Sometimebecauseofnegativesentimentsinthemarketpeoplearenotreadytoinvestfore.g.the
subprime crisis in US affected thestock market inIndia.
3)Many peoplehavegoodknowledgeoftheequitymarket by themselvessothey don’twanttoinvestin
mutual fund
4)Manyare looking forthe short term benefits for which sometime mutual fund is not the best
option

5)Manypeople whowant to have high risk highreturn are not suitable formutual fund

6)Somepeoplearenotreadytoinvestinmutualfundbecauseofthelackofknowledgeaboutthe product
7)Mostofthetimepeoplearebusyintheirscheduleandsotheydon’twanttolistentoanythingonthe
telephonecalls.
8)Insmalltownspeoplearenotwillingtopurchasemutualfundbecauseoflackofknowledgethey
ratherprefer to invest in real state
9)It is also difficult to measure economic factorassociated with time
constrain 10) Time constrain

84
CHAPTER:-9
FINDINGS

Final findings and observations

Fromthecomparisonofvariousmutualfundschemes,itisunderstandthattheequity
diversifiedschemeisprovidingagoodreturnforalongerperiodofinvestment.Butthereturniswholly
dependingonthemarket.Sotheriskishighercomparetoanyotherschemes.OntheotherhandtheGiltfundis
investingin Government securities, treasury bills,bonds, debenturesetc. But inthis case thereturnis low.
But risk
isverylowcomparabletoanequitydiversifiedscheme.IntheELSSscheme,thereisalockingperiodof3years.

Stillmostofthetaxschemesgiveagoodreturnthroughdividendsalso.ButtheMIPschemeisnotgivingagood
return. As thisschemeis also investing in bonds and debentures,it gives acontinuous returntothe investors.

85
CHAPTER:-10
CONCLUSION
Fromthecomparisonofvariousmutualfundschemes,itisunderstandthattheequity
diversifiedschemeisprovidingagoodreturnforalongerperiodofinvestment.Butthereturniswholly
dependingonthemarket.Sotheriskishighercomparetoanyotherschemes.OntheotherhandtheGiltfundis investingin
Government securities, treasury bills,bonds, debenturesetc. But inthis casethereturnis low. But risk
isverylowcomparabletoanequitydiversifiedscheme.IntheELSSscheme,thereisalockingperiodof3years.
Stillmostofthetaxschemesgiveagoodreturnthroughdividendsalso.ButtheMIPschemeisnotgivingagood return. As
thisschemeis also investing in bonds and debentures,it gives acontinuous returnto the investors.

So if one has todecidewhat factors tobe considered whilegivingservices,following points tobeconsidered


Easeofavailability,valueaddedservicesReductionofrisk,transactioncostVarietyoffundsandCostinvolved
inthefundbecauseacompanyshouldknowitscorebusiness,strengthsandweaknessherecompany’score
businessisprovidingvaluebasedservicestotheircustomer,whichcanbetheinferredfromtheresearch,
marketingandpromotionalactivitiesareneedofthehourtomakefull-fledgedmarketpresenceandtarget
marketspecificmarketingisrequiredforgivingserviceeffectivelyforexamplepeopleinsoftwarecompanydo
nothaveenoughtimetogoforresearchdecideuponinvestmentoptionsocompanycanprovideinformation
andsolutiononlinewithpersonalizeservicesecondlyiftargetcustomerisrequiredsometextinlocallanguagewe
shouldprovidethe same.

Companyhasgoodchancestobeno.1inmutualfunddistributionhouseprovidedwhatservicesisbeen
providedbythecompany,Ithinkcompanyinservicessectorcannotaffordtohaveunhappycustomerbecause

successofservices sectorcompany depends onword ofmouth publicityofthepeopleand one happycustomer


will bring ten more customer and one unhappy customer will stop tenprospectivecustomer,incase if there has
beenthe casesof service failure,company shouldtakeappropriateaction while fixingtheproblem .

86
CHAPTER:-11
BIBLIOGRAPHY

BIBILOGRAPHY

 Marketing managementby“Philip Kotler ”


 Sales Management ByStill, Cundiff and Govoni
 Business PolicyAnd Strategic ManagementbyAzharkazmi
 Research MethodologybyPannerselvam
 Studymaterial atIDFCfinance
 AMFIBooklet
 Broachers of various fund houses
 Fund fact sheet of various fund houses
 CRISILreport
WEBILOGRAPHY

www.mutualfundsIndia.com
www.moneycontrol.com
www.mahindrafinance.com
www.amfiindia.com
www.valueresearch.com
www.IDFC.com
www.bseindia.com
www.crisil.com

87
CHAPTER:-12
ANNEXURE

Questionnaire

Name:-__________________________________________________Mobile

no.:-________________

Q: (1)AGE:-
BELOW 20 40-49
20-29 50-59
30-39 ABOVE 60

Q: (2)GENDER:-
MALE
FEMALE

Q: (3)OCCUPATION:-
HOUSE HOLD
BUSINESS
SERVICE
PROFESSIONAL

88
Q: (4)ANNUALINCOME:-
< 1,00,0001-
2 LAKHS 2-
3 LAKHS
ABOVE 3 LAKHS

Q: (5)DOTHEYOUINVESTTHEIR MONEY

YES
NO

Q:(6)whatpercentofyourincomedoyoukeepasidefordifferentinvestment options?

0% to 5%
5% to 10%
10%to15%
15%to20%
20%to30%
Above 30%

Q: (7)Important factorstoyou consider before choosing an investment?

Safetyof investmentprinciple
Opportunityfor growth
Liquidity

Q: (8)INVESTORS PREFERENCEFOR VARIOUS INVESTMENTS


OBJECIVES

SECURITY
YEILD
MATURITY
TAX BENEFITS
LIQUIDITY

Q: (9)AWARENESS OF MUTUAL FUNDS

89
YES
NO

Q: (10) AWARENESSOF MUTUAL FUNDS IS THROUGH

ADVERTISEMENT
FRIENDS
FAMILY MEMBERS
FINANCIALADVISORS
RELATIVES

Q: (11) MUTUALFUNDISA GOODINVESTMENT OPTION.

YES
NO

Q: (12) what is your return expectation on your investmentin mutual fund?

Up to 8%
Between 8%to18%
Above 18%

Q: (13) How long are youplanningtostayinvestinmutual fund?

< 1 year
1to 3 year
3to 5 year
> 5 year

Q:(14)RESPONDENTSPREFFERINGIDFCASADISTRIBUTOROF
MUTUALFUNDS

IDFC
OTHERS

Q: (15) TYPE OF FUNDS RESPONDENTS PREFER TO

DEBTFUND
EQUITYFUND
HYBRIDFUND

90
Q: (16) TYPE OF SCHEMEPREFERED BY RESPONDENT IN DEBTFUNDS

LIQUIDFUND
FLOATERATE
GILTFUND
DYNAMIC BONDFUND
INCOMEPLUS
BONDINDEX FUND

Q: (17) TYPE OF SCHEMEPREFEREDIN EQUITY FUNDS

ADVANTAGEFUND
MID CAP
EQUITYPLAN
MNC FUND
INDEXFUND
DIVIDEND YEILDPLUSINDIA
OPPURTUNITIES FUND

Q: (18) TYPE OF SCHEMEPREFERRED IN HYBRIDFUND

MIP I
MIP II
BALANCEDFUND

Q:(19)RESPONDENTSPREFFERINGOTHERBRANDSOFMUTUAL FUNDS

HDFC
FRANKLIN TEMPLETON
HSBC
KOTAK MAHINDRA
DSPMERYLLICH
UTI

Q:(20)RESPONDENTRECOMMENDINGIDFCMUTUALFUNDASA
BETTERINVESTMENTOPPURTUNITY
YES
NO

91
Q: (21) Tick & Rate IDFC mutual fund ascompare to other mutualfundcompany.
(1=verygood &5= verybad)
1 2 3 4 5

Q: (22) express yourExperiencetoinvest in mutualfund.

92