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A

PROJECT REPORT
ON
“Comparative Analysis Between Systematic Investment Plan and Lump sum Investment
in Mutual Fund”
for
“NJ India Invest. Pvt. Ltd.”

Submitted to
C K SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT

IN PARTIAL FULFILLMENT OF THE


REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
Under
Gujarat Technological University
UNDER THE GUIDANCE OF

Mr. Gaurang Badheka Mr. Mehul Trivedi


Assistant Professor Branch Maneger

Submitted by
YATRI SHAH
Enrollment No.:137050592123
M.B.A – SEMESTER III

C K Shah Vijapurwala Institute of Management


M.B.A PROGRAMME
Affiliated to Gujarat Technological University
Ahmedabad
July 2014

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Preface

The report consists of the project undertaken at NJ India Invest Pvt. Ltd. The study
was conducted as a part of the summer training in the program of Masters of Business
Administration (MBA).

Complying with this, the student’s skills and ability to conduct a research is polished and
the analysis and interpretation of the findings helps to tackle the problems by applying
theoretical concepts and statistical data.

I, as a student of this program, is fortunate to undertake a training at NJ India Invest


Pvt. Ltd., Baroda. The project report undertaken by me is titled “Comparative analysis
between systematic investment plan and lump sum investment in mutual fund” from 9th
June, 2014 to 19th July, 2014.

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Acknowledgement

As any good work is incomplete without acknowledging the people who made it possible, this
report is incomplete without thanking the people without whom this project would not have taken
shape.

This project is the result of continuous co-operation, effective guidance and support from all the
people associated with this project. I would like to express my regards and thanks to our
Director Dr. Rajesh Khajuria and Prof Gaurang Badheka, my Guide of “Comparative analysis
between systematic investment plan and lump sum investment in mutual fund”, for giving me an
opportunity to work on this project and learn something new.

I would also like to thank my Company guide Mr. Mehul Trivedi and Mr. Rohit Patel, who
taught me right way to look for the investments and how one should be money hearted, and all
the employees of NJ India Invest Pvt. Ltd. for their kind support and giving me full knowledge
and guidance on different aspects of investments.

Lastly, I would like to thank my family members and friends for their continuous support,
blessings and encouragement. I sincerely hope this project would strive to answer need of the
corporate world. This project gave me a challenging experience in research study.

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Declaration

I, YATRI SHAH, hereby declare that the report for “Summer Internship Project” entitled
“Comparative analysis between systematic investment plan and lump sum investment in
mutual fund” is a result of my own work and my indebtedness to other work
publications, references, if any, have been duly acknowledged.

Place: Vadodara
Date : YATRI SHAH

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Executive Summary

There is always a dream of people to invest somewhere and get high return. But choices and
preference of people change based on many factor such as budget, size of family, income etc.

As a part of my Summer Internship Program I have under taken a research project for NJ India
Invest Pvt. Ltd. to know best investment options available.

My research project includes investor’s behavior towards systematic investment plan and lump
sum investment in mutual fund and also comparative analysis of both investment tools. I also
took analysis with interpretation of investing systematically every month. At end of my report I
am able to provide some useful information for the investors and some findings which can help
the investors to invest their money wisely. Lastly some suggestions are provided so that they
can start to do investment with best option with best schemes.

And these projects also help me to get practical training of share market trends and the working.
Thus through my training period I get lot of practical experience which require to various
investment tools.

I hope that the information incorporated in this project report would be appreciated as I have put
in may be efforts in leaving no stone unturned as I consider it to be true, fair and relevant in its
content and context to the best of my knowledge and ability.

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Table of Contents

SR.
NO. PARTICULARS PAGE
NOS.
PART – I GENERAL INFORMATION (IF IT IS INDUSTRY
SPECIFIC)/ THEORETICAL BACKGROUND 10

1 1.1 About the Industry / History & Evolution 10

1.2 World Market 10


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1.3 Indian Market
11
1.4 Growth of the industry

2 2.1 About major Companies in the Industry 13

2.2 About NJ India Invest Pvt. Ltd. 13


3 3.1 Products Baskets of NJ India Invest 17
PART – II PRIMARY STUDY 27
4 4.1 Introduction of the Study 27
4.2 Literature Review 32

4.3 Background of the Study 36


36
4.4 Problem Statement and Importance of the Study
37
4.5 Objectives of the Study
5 Research Methodology 38
5.1 Research Design 38

5.2 Source/s of Data 38


38
5.3 Data Collection Method
38
5.4 Population
38
5.5 Sample size
38
5.6 Sampling Method
38
5.7 Date Collection Instrument
6 Data Analysis and Interpretation 39

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7 Results and Findings 59
8 Limitations of the Study 60
9 Conclusion/Suggestions/ Recommendations 61
10 Annexure 64
11 Bibliography 66
12 List of tables, graphs and diagrams 67

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PART-I GENERAL INFORMATION

1.1 About the Industry

Investment is referred to as the concept of deferred consumption, which could be in the


form of an asset, rendering a loan, keeping the saved funds in a bank account such that
it might generate lucrative returns in the future etc. The options of investments are
huge; all of them having different risk-reward trade off. This concludes that the
investment industry is really broad and that is why understanding the core concepts of
investments and accordingly analyzing them is essential. Only after thorough
understanding of the investment industry, can an investor create and manage his own
investment portfolio such that the returns are maximized with the minimum level of risk.

Mutual funds have emerged as a strong financial intermediary and are the fastest
growing segment of the financial services sector in world. It aims at promoting a
diversified, efficient and competitive financial sector increasing the return on investment
and promoting and accelerating the growth of the economy. It is a medium of
investment suitable to the small investors, who are not able to invest in stock market
directly.

1.2 World Market

The first mutual funds were established in Europe. One researcher credits a Dutch
merchant with creating the first mutual fund in 1774. The first mutual fund outside the
Netherlands was the Foreign & Colonial Government Trust, which was established in
London in 1868. It is now the Foreign & Colonial Investment Trust and trades on the
London stock exchange.

Mutual funds were introduced into the United States in the 1890s. They became popular
during the 1920s. These early funds were generally of the closed-end type with a fixed
number of shares which often traded at prices above the value of the portfolio.

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1.3 Indian Market
The Indian mutual fund industry, though still small in comparison to the size of the Indian
economy, offers Indian, and in some cases global investors, both big and small, an avenue to
invest safely and securely, at a reduced cost, in a diverse range of securities, spread across a
wide range of industries and sectors.

The first Indian mutual fund was set up in 1963, when the Government of India created the Unit
Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian mutual fund market and
sold a range of mutual funds through a network of financial intermediaries. At the end of 1988
UTI had Rs. 6,700 crores of assets under management

1.4 Growth of the Industry

The mutual fund industry in India started in 1964 with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank of India. The history of mutual funds in
India can be broadly divided into four distinct phases

 First Phase - 1964-1987

 Second Phase - 1987-1993 (Entry of Public Sector Funds)

 Third Phase - 1993-2003 (Entry of Private Sector Funds)

 Fourth Phase - since February 2003

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Growth of mutual fund business in India in the four decades from 1964 –

Period(Year) Aggregate Period(Year) Aggregate


investment in Crores of investment in Crores of
Rupees Rupees
1964-69 65 1992-93 46988.02

1969-74 172 1993-94 61301.21

1974-79 402 1994-95 75050.21

1979-84 1261 1995-96 81026.52

1986-87 4563.68 1996-97 80539.00

1987-88 6738.81 1997-98 68984.00

1988-89 13455.65 1998-99 63472.00

1989-90 19110.92 1999-00 107966.10

1990-91 23060.45 2000-01 94587.00

1991-92 37480.20 2001-02 94571.00

Industry AUM tripled from 1.50 lac crore 2003 to 4.50 lac crore in Nov. 08.Currently, investment
in the mutual funds and in the SIP schemes of the mutual funds has become quite common.
There are many companies that offer the opportunity of investment in the SIP.

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2.1 About major Companies in the Industry

 Birla Sun Life Mutual Fund


 AXIS Mutual Fund
 DSP BlackRock Mutual Fund
 HDFC Mutual Fund
 ICICI Prudential Mutual Fund
 IDBI Mutual Fund
 IDFC Mutual Fund
 SBI Mutual Fund
 Reliance Mutual Fund
 UTI Mutual Fund

2.2 About NJ India Invest Pvt. Ltd

NJ Wealth - Financial Products Distributors Network, one of India's leading and most
successful network of distributors in the financial services industry.

Started in 2003, NJ Wealth seeks to reach out to the common man and extend the
opportunity to create wealth through an empowered network of financial products
distributors – the NJ Wealth Partners. To its Partners, NJ Wealth provides a full service,
comprehensive business platform with end-to-end solutions critical for success in
financial products distribution practice. With its compelling set of offerings covering
every area of distribution practice, NJ Wealth has managed to successfully transform
the lives of many small and big distributors.

To the common man, NJ Wealth offers a comprehensive wealth management platform


with a wide choice of financial and non-financial products. Backed by high levels of
excellence in operational and service standards, NJ Wealth offers customers of its

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Partners, with solutions that truly make a difference.

Driven by the strong vision of 'Creating Wealth and Transforming Lives', NJ Wealth's
constant endeavour is to build on the ideas that are meaningful & effective in scaling
business challenges, seizing available opportunities and serving the interests of the
customer.

The NJ Wealth family has grown steadily and today it has over 19,000 NJ Wealth
Partners, spread across 97 branches in 21 states in India with over 19 lac + investors,
and over INR 13,500 crores of mutual fund assets under advice. Irrespective of the
numbers though, it is trust in us which fuels the passion for creating solutions with
excellence that touch many lives, day after day.

We warmly welcome all, to NJ Wealth to experience this passion to excel and to serve.

Management Team

Mr. Neeraj Choksi & Mr. Jignesh Desai are the two first generation entrepreneurs who
began the journey of NJ in 1994. The promoters of NJ Group were friends since their
college years and the bond between Mr. Neeraj Choksi & Mr. Jignesh Desai has been
instrumental in the success of NJ.

Driven by their passion for financial well-being of customers & the mission for
transforming lives, the promoters started NJ Wealth, previously known as - NJ Funds
Network, in the year 2003. With their strong vision and guidance, NJ Wealth Financial
Products Distributors Network is on the forefront of innovation & growth. Both believe
that the trust of our distributors and investors has played a very important role in NJ's
journey, and in every step that we have taken. The desire is to help the masses access
the best of the financial products & services and thereby positively transform their lives.
This is also the responsibility and the vision, that the entire team at NJ believes in.

NJ Advantages

The following are the reasons, which we believe enable NJ Wealth offer added
advantage to associated NJ Partners and their customers.

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1. Strong lineage and commitment to the business

Since its birth in 1994, NJ Group has grown into a diversified business group in
the last 21 years. The business of financial products distribution is the flagship
business of the group and it remains at the heart of NJ Group. The management
and team at NJ share a very strong vision for the business and are commited to
further strengthen and expand. NJ Wealth also gets complemented and benefited
with the growing presence of NJ Group in other businesses.

2. Customer Centric Approach

The work culture of NJ Wealth is geared towards helping customers win with
solutions covering all critical areas of success. Be it NJ Wealth Partners or their
customers, NJ's continuous focus has been to design, deliver and enrich our
value-proposition in areas of product & service offerings, operational excellence,
service quality, technology, governance and more. The business and wealth
management ideas and strategies propogated at NJ are also centered around
sound, proven principles that serve the best interests of the customers. With the
continued trust of our customers, we are confident to steadfastly maintain the
course of building strong customer relationships and experience.

3. Effective use of technology

At NJ we have constantly tried to see technology as an enabler to meaningfully


deliver the most critical and relevant needs first. With our rich experience,
understanding and an in-house team we have custom built our entire platform to
match customer needs. Our integrated technology setup covers a gamut of
business areas including customer offerings like online desks to the critical
operations processes and all important areas of business management. NJ also
has adapted global standards and best practices in information security,
customer privacy and network, infrastructure management. The effective use of
technology has helped us to manage the business growth and deliver solutions in
a reliable, effective and secured fashion.

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4. Controls through well defined processes

NJ Wealth takes governance, compliance and risk management as equally


important business areas in addition to customer solutions and operational
excellence. The culture at NJ has evolved over the years to be strong policy,
process and systems oriented. We have put strong internal controls and
monitoring mechanisms in place on one hand, while removed people
dependency and atomized processes on the other. We continue to evolve our
controls and processes to mitigate business risks, offer standard services,
enhance productivity and improve customer experience and satisfaction.

5. Access to multiple products, single window solutions

NJ provides easy access to a wide range of financial and non-financial products


in diverse asset classes. The products are available to the customers of NJ
Partners. The product basket available includes all mutual funds schemes; direct
equity, ETFs, PMS and fixed income products like banks, NCDs, Company
Deposits, and real estate properties. In addition to products, NJ also offers the
services of Demat and Trading account with online and Call & Transact facility
and also mobile trading service in mutual funds. The product & service basket is
enough to meet the needs and build the entire portfolio for any retail, HNI or
corporate client.

6. Wide reach across India

Access to NJ branch is never very far with presence at 97 branches in 21 states.


Further, internal systems at NJ provide the freedom for any Partner and/or Client
to transact from across all the branches of NJ. Clients can also approach NJ for
any assistance/transaction in absence of their Partners at any of our branches.

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3.1 Product Basket:
The following is broadly the product basket available to NJ Wealth Partner on eligibility /
registration basis. The NJ Wealth Distributors can engage in active distribution of the
following products to their clientele through NJ.

1. Mutual Funds

NJ has tie-ups with all Asset Management Companies (AMCs) and all mutual
funds schemes are part of the product basket. Eligible Partners can offer any
mutual fund scheme to their client from day one of their association with NJ. The
customers have a single window access to any mutual fund product / scheme
they would like to access.

2. Capital Market – Direct Equity & ETFs

NJ is a SEBI registered member for NSE & BSE and capital markets. Clients of
NJ Demat & Trading Account service have access to capital market products of
direct equity stocks and Exchange Traded Funds (ETFs). One can undertake
transaction online or through Call & Transact facility.

3. Fixed Income

NJ has also entered into tie-ups with leading companies / institutions for
distribution of fixed income products, namely Non-Convertible Debentures,
Infrastructure / RBI Bonds, Company Deposits, etc. The availability of fixed
income products in addition to mutual funds, makes the product basket even
more attractive.

4. Portfolio Management Services (PMS)

NJ has its own PMS offerings with NJ Advisory Services Pvt. Ltd., a group
company, being a PMS service provider. The existing strategies have mutual
funds as the underlying, one of very few in the industry. In addition to this, PMS
products by other leading PMS service providers also regularly form a part of the

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product basket with Partners. Clients can subscribe to the PMS products of NJ /
other providers through their Partners. Access to NJ PMS products are
exclusively available for NJ Partners only.

5. Real Estate

In addition to the investment products, NJ Partners and clients also have access
to the real estate properties across India. NJ regularly enters into tie-ups with
leading developers in India for distribution of their products. In addition to this,
exclusive projects handled by NJ Realty are available to clients only through
eligible NJ Partners. The exclusive projects are those where NJ Realty is actively
engaged in project management, execution and/or distribution.

Mutual Fund

A mutual fund is just the connecting bridge or a financial intermediary that allows a
group of investors to pool their money together with a predetermined investment
objective. The mutual fund will have a fund manager who is responsible for investing the
gathered money into specific securities (stocks or bonds).

For example when you invest in a mutual fund, you are buying units or portions of the
mutual fund and thus on investing becomes a shareholder or unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to
others they are very cost efficient and also easy to invest in, thus by pooling money
together in a mutual fund, investors can purchase stocks or bonds with much lower
trading costs than if they tried to do it on their own. But the biggest advantage to mutual
funds is diversification, by minimizing risk & maximizing returns.

Mutual funds are a vehicle to mobilize money from investors, to invest in different
markets and securities, in line with the investment objectives agreed upon, between the
mutual fund and the investors.

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Diagram No: 1

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Diagram No: 2

Types of
Mutual
Fund

By By Investment
Constitution Objective

Open Close Equity Debt Hybrid


Interval Funds Funds Funds
Ended Ended

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Mutual Fund Investment Based on Constitution

1. Open-ended schemes

Open-ended schemes do not have a fixed maturity period. Investors can buy or sell
units at NAV-related prices from and to the mutual fund, on any business day. These
schemes have unlimited capitalization, do not have a fixed maturity date, there is no cap
on the amount you can buy from the fund and the unit capital can keep growing. These
funds are not generally listed on any exchange.

Open-ended schemes are preferred for their liquidity. Such funds can issue and redeem
units any time during the life of a scheme. Hence, unit capital of open-ended funds can
fluctuate on a daily basis. The advantages of open-ended funds over close-ended are
as follows:

 An any time exit option, the issuing company directly takes the responsibility of
providing an entry and an exit. This provides ready liquidity to the investors and
avoids reliance on transfer deeds, signature verifications and bad deliveries.
 An any time entry option, an open-ended fund allows one to enter the fund at any
time and even to invest at regular intervals.

2. Close-ended schemes

Close-ended schemes have fixed maturity periods. Investors can buy into these funds
during the period when these funds are open in the initial issue. After that, such
schemes cannot issue new units except in case of bonus or rights issue. However, after
the initial issue, you can buy or sell units of the scheme on the stock exchanges where
they are listed. The market price of the units could vary from the NAV of the scheme
due to demand and supply factors, investors' expectations and other market factors.

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3. Interval schemes

These schemes combine the features of open-ended and closed-ended schemes. They
may be traded on the stock exchange or may be open for sale or redemption during
pre-determined intervals at NAV based prices

Mutual Funds Classification based on Investment Objective

1. Equity Oriented Funds


A mutual fund is that invest principally in stocks. It can be actively or passively (index
fund) managed.
Stock mutual funds are principally categorized according to company size, the
investment style of the holdings in the portfolio and geography:
Size is determined by a company's market capitalization, while the investment style,
reflected in the fund's stock holdings, is also used to categorize equity mutual funds.
Stock funds are also categorized by whether they are domestic or international. These
can be broad market, regional or single-country funds.

 Large Cap Funds :- are those that invest in companies with a large market
capitalization

 Mid Cap Funds:- are those that invest in companies with a medium market
capitalization

 Small Cap Funds:- are those that invest in companies with a small market
capitalization

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A. General Purpose Schemes
The investment objectives of general-purpose Equity schemes do not restrict these
funds from investing only in specific industries or sectors. Hence these funds have a
diversified portfolio of companies spread across a vast spectrum of industries. While
these schemes are exposed to equity price risks, diversified general-purpose equity
funds seek to reduce the sector or stock specific risks through diversification. They
mainly have market risk exposure.

B. Theme/Sector Specific Schemes

These schemes restrict their investing to one or more pre-defined sectors, e.g.
technology sector. Since they depend upon the performance of select sectors only,
these schemes are inherently more risky than general-purpose schemes. They are best
suited for informed investors who wish to take a view and risk on the concerned sector.

A mutual fund that invests predominately or exclusively in securities representing a


single thing. For example, a theme fund may invest only in energy stocks, securities
related to real estate, or in investment vehicles that conform to a set of ethical
standards. While some theme funds can be relatively diversified, many are exposed to
the risk that a downturn in the "themed" industry will impact the fund disproportionately.

An investment company that chooses investments according to a particular issue or


theme. For example, a fund built on an agricultural theme might invest in the equities of
farm equipment manufacturers, chemical companies, and other firms that sell
agricultural products. Likewise, an investment company might choose to invest in
equities that would reflect an ecological or baby-boomer theme.

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C. Special schemes

 Index schemes

The primary purpose of an Index is to serve as a measure of the performance of the


market as a whole, or a specific sector of the market. An Index also serves as a relevant
benchmark to evaluate the performance of Mutual Funds. Some investors are interested
in investing in the market in general rather than investing in any specific fund. Such
investors are happy to receive the returns posted by the markets. As it is not practical to
invest in each and every stock in the market in proportion to its size, these investors are
comfortable investing in a fund that they believe is a good representative of the entire
market. Index Funds are launched and managed for such investors.

 Tax saving schemes

Investors (Individuals and Hindu Undivided Families ("HUFs") are now encouraged to
invest in Equity markets through Equity Linked Savings Scheme (ELSS) by offering
them a tax rebate. Units purchased cannot be assigned / transferred/ pledged /
redeemed / switched - out until completion of 3 years from the date of allotment of the
respective Units.

The Scheme is subject to Securities & Exchange Board of India (Mutual Funds)
Regulations, 1996 and the notifications issued by the Ministry of Finance (Department
of Economic Affairs), Government of India regarding ELSS.

Investments in ELSS schemes are eligible for deduction under Sec 80C.An example of
ELSS scheme is the Kotak ELSS scheme, HDFC ELSS scheme, Etc.

 Real Estate Funds

Specialized real estate funds would invest in real estate’s directly, or may fund real
estate developers or lend to them directly or buy shares of housing finance companies
or may even buy their securitized assets.

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2. Debt Based Funds

These schemes, (also commonly referred to as Income Schemes), invest in debt


securities such as corporate bonds, debentures and government securities. The prices
of these schemes tend to be more stable as compared to Equity schemes. Most of the
returns to the investors are generated through dividends or steady capital appreciation
in these schemes. These schemes are ideal for conservative investors or those not in a
position to take higher Equity risks, such as retired individuals. However, when
compared to the money market schemes they do have a higher price fluctuation risk.

A. Income Schemes

These schemes invest in money markets, bonds and debentures of corporate with
medium and long-term maturities. These schemes primarily target current income
instead of capital appreciation. Hence they distribute a substantial part of their
distributable surplus to the investor by way of dividend distribution. Such schemes
usually declare quarterly dividends and are suitable for conservative investors who have
medium to long-term investment horizon and are looking for regular income through
dividend or steady capital appreciation.

B. Liquid Income Schemes

Liquid Income Schemes are similar to the Income schemes but have a shorter maturity
period.

C. Money Market Schemes

These schemes invest in short term instruments such as commercial paper ("CP"),
certificates of deposit ("CD"), treasury bills ("T-Bill") and overnight money ("Call"). The
schemes are the least volatile of all the types of schemes because of their investments
in money market instruments with short-term maturities. These schemes have become
popular with institutional investors and high net worth individuals having short-term
surplus funds.

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D. Gilt Funds

These schemes primarily invest in Government securities. Hence the investor usually
does not have to worry about credit risk since Government Debt is generally credit risk
free.

3. Hybrid Funds

These schemes are commonly known as balanced schemes and invest in both equities
as well as debt. By investing in a mix of this nature, balanced schemes seek to attain
the objective of income and moderate capital appreciation and are ideal for investors
with a conservative, long-term orientation.
Balanced fund include both equity and debt schemes, with 65-35 per cent in equity and
the rest in debt.

Diagram No: 3

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PART – II PRIMARY STUDY

4.1 Introduction of the Study

One of the main objectives of the study is to understand SIP as the investment tool and
comparison of the return from lump sum and SIP tools in MF. The study also does
comparative study of two different MF companies and different SIP schemes offered by
them.

Lump sum Investment

It is nothing but investing all your money at one go. Say you have Rs 5 lakh with you
and you decide to invest the entire amount in stocks or mutual funds or gold together
then you are making lump sum investments. What you get in return are units (if you are
buying into a mutual fund) at the then8 prevailing net asset value (NAV).

A lump sum is a single payment of money, as opposed to a series of payments made


over time

A lumpsum investment means you invest large amounts at a time, as and when you
have a surplus. It is advised to only those who can time the market well. “Lumpsum
investments can go either way: You could make huge gains or suffer tremendous
losses. This the reason why such investments are not advised for retail investors,”

Systematic Investment Plan

Systematic Investment Plan (SIP) is a smart financial planning tool that helps you to create
wealth, by investing small sums of money every month, over a period of time. Systematic
Investment Plan (SIP) is a planned approach to investments and an investment technique that

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allows you to provide for the future by investing small amounts of money in Mutual Fund
schemes of your choice.

Currently, investment in the mutual funds and in the SIP schemes of the mutual funds has
become quite common. There are many companies that offer the opportunity of investment in
the SIP.

fund house to other. The SIP provides them a way to invest in the fund of their choice in
installments. A SIP is a method of investing in mutual funds, by investing a fixed sum at a
regular frequency, to buy units of a mutual fund schemes. It is quite similar to a recurring
deposit of a bank or post office. For the convenience, an investor could start a SIP with as low
as Rs 500; however this amount may differ from one

SIP of Rs. 1000 invested per month @ 8% pa till the age of 60

Starting Age Total Amount Saved Value at the age of 60

25 4,20,000 23,09,175

30 3,60,000 15,00,295

35 3,00,000 9,57,367

40 2,40,000 5,92,947

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Features of SIP

1. It's an expert's field - Let's leave it to them

Management of the fund by the professionals or experts is one of the key advantages of
investing through a mutual fund. They regularly carry out extensive research - on the
company, the industry and the economy - thus ensuring informed investment. Secondly,
they regularly track the market. Thus for many of us who do not have the desired
expertise and are too busy with our vocation to devote sufficient time and effort to
investing in equity, mutual funds offer an attractive alternative.

2. Putting eggs in different baskets

Another advantage of investing through mutual funds is that even with small amounts
we are able to enjoy the benefits of diversification. Huge amounts would be required for
an individual to achieve the desired diversification, which would not be possible for
many of us. Diversification reduces the overall impact on the returns from a portfolio, on
account of a loss in a particular company/sector.

3. It's all transparent & well regulated

The Mutual Fund industry is well regulated both by Securities and Exchange Board of
India and Association of mutual funds in India. They have, over the years, introduced
regulations, which ensure smooth and transparent functioning of the mutual funds
industry. This makes it safer and convenient for investors to invest through the mutual
funds.

4. Market timing becomes irrelevant

One of the biggest difficulties in equity investing is WHEN to invest, apart from the other
big question WHERE to invest. While, investing in a mutual fund solves the issue of
'where' to invest, SIP helps us to overcome the problem of 'when'. SIP is a disciplined
investing irrespective of the state of the market. It thus makes the market timing totally
irrelevant. And today when the markets are high, it may not be prudent to commit large

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sums at one go. With the next 2-3 years looking good from Indian Economy point of
view, one can expect handsome returns thru' regular investing.

5. Does not strain our day-to-day finances

Mutual Funds allow us to invest very small amounts (Rs 500 - Rs 1000) in SIP, as
against larger one-time investment required, if we were to buy directly from the market.
This makes investing easier as it does not strain our monthly finances. It, therefore,
becomes an ideal investment option for a small-time investor, who would otherwise not
be able to enjoy the benefits of investing in the equity market.

6. Reduces the average cost

In SIP we are investing a fixed amount regularly. Therefore, we end up buying more
number of units when the markets are down and NAV is low and less number of units
when the markets are up and the NAV is high. This is called rupee-cost averaging.
Generally, we would stay away from buying when the markets are down. We generally
tend to invest when the markets are rising. SIP works as a good discipline as it forces
us to buy even when the markets are low, which actually is the best time to buy.

7. Helps to fulfill our dreams

The investments we make are ultimately for some objectives such as to buy a house,
children's education, marriage etc. And many of them require a huge one-time
investment. As it would usually not be possible raise such large amounts at short notice,
we need to build the corpus over a longer period of time, through small but regular
investments. This is what SIP is all about. Small investments, over a period of time,
result in large wealth and help fulfill our dreams & aspirations

30
Risk Factors of SIP

All investments involve some form of risk. Mentioned below are the common types of
risks. An investor would do well to evaluate them against potential rewards while
selecting an investment.

1) Market Risk
At times, the prices or yields of all the securities in a particular market rise or fall due to
broad outside influences. When this happens, the stock prices of both an outstanding,
highly profitable company and a fledgling corporation may be affected. This change in
price is due to "market risk". It is also known as systematic risk.

2) Inflation Risk
Sometimes referred to as "loss of purchasing power." Whenever inflation rises forward
faster than the earnings on your investment, one runs the risk of actually being able to
buy less, not more. Inflation risk also occurs when prices rise faster than returns.

3) Interest Rate Risk


Changing interest rates affect both Equities and bonds in many ways. Investors are
reminded that "predicting" which way rates will go, is rarely successful. A diversified
portfolio can help in offsetting these changes.

4) Exchange risk
A number of companies generate revenues in foreign currencies and may have
investments or expenses also denominated in foreign currencies. Changes in exchange
rates may, therefore, have a positive or negative impact on companies which in turn
would have an effect on the investment of the fund.

5) Investment Risks
In sartorial fund schemes, investments will be predominantly in Equities of select
companies in the particular sectors. Accordingly, the NAV of the schemes are linked to

31
the equity performance of such companies and may be more volatile than a more
diversified portfolio of Equities.

4.2 Literature Review

An investment vehicle that is made up of a pool of funds collected from many investors

for the purpose of investing in securities such as stocks, bonds, money

market instruments and similar assets. Mutual funds are operated by money managers,

who invest the fund’s capital and attempt to produce capital gains and income for the

fund’s investors. A mutual fund’s portfolio is structured and maintained to match the

investment objectives stated in its prospectus.

Diagram No: 4

32
Mutual Funds over the years have gained immensely in their popularity. Apart from the

many advantages that investing in mutual funds provide like diversification, professional

management, the ease of investment process has proved to be a major enabling factor.

However, with the introduction of innovative products, the world of mutual funds

nowadays has a lot to offer to its investors. With the introduction of diverse options,

investors needs to choose a mutual fund that meets his risk acceptance and his risk

capacity levels and has similar investment objectives as the investor.

Most importantly, mutual funds provide risk diversification: diversification of a portfolio is

amongst the primary tenets of portfolio structuring, and a necessary one to reduce the

level of risk assumed by the portfolio holder. Most of us are not necessarily well

qualified to apply the theories of portfolio structuring to our holdings and hence would be

better off leaving that to a professional. Mutual funds represent one such option.

Lastly, Evaluate past performance, look for stability and although past performance is

no guarantee of future performance, it is a useful way to assess how well or badly a

fund has performed in comparison to its stated objectives and peer group. A good way

to do this would be to identify the five best performing funds (within your selected

investment objectives) over various periods, say 3 months, 6 months, one year, two

years and three years. Shortlist funds that appear in the top 5 in each of these time

horizons as they would have thus demonstrated their ability to be not only good but

also, consistent performers.

33
SIP and Lump sum are the two techniques to invest in mutual funds. Any investor can

choose one out of them and can invest their money into mutual funds. SIP is Systematic

Investment Plan which is very helpful to salaried and middle class man. They can invest

their saving into Systematic Investment Plan and can collect huge funds for future.

Just like bank and post office offers recurring deposit schemes, mutual funds offer an

SIP option. Investor option for an SIP Option commits investing a pre-specified sum of

money at regular intervals (generally every month) in a particular mutual fund scheme.

Each periodic investment entitles investors to receive units of that mutual fund scheme,

which is subject to its NAV prevailing at that time.

SIP is very useful for a time horizon of 10-15 years. An investor should carefully fix the

amount to be invested so that it does not impact his cash flows over this time horizon.

SIP imparts discipline to savings. On giving a post dated cheques or ECS instruction to

any fund saving and investing happens automatically.

SIP can be used in any type of mutual fund, equity or fixed income. This strategy is best

used in an equity fund where an investor can capture the volatility in the equity markets

to reduce the cost of investment. The NAV of any fund is determined by the market

price of the stocks the fund has invested in. When an investor invests a fixed sum every

month or quarter he gets more units of the fund when the markets are down and NAV is

low than when the markets are up and the NAV is high. By investing across time

horizons and market cycles, investors stand a better chance of lowering their

investment cost.

34
SIP also helps investors to overcome the problem of ‘when’ to invest in the equity

markets as irrespective of the state of the market an investor is always invested. SIP

takes away the decision-making and converts it into a mechanized one.

The lowering of risk, by entering at different time periods, however has the

disadvantage of “averaging” out returns.

A very important aspect to be kept in mind is the entry and exit load charged by all

mutual funds. In a normal investment most funds either charge entry load or exit load.

But in a SIP along with an entry load charged for each installment, an exit load is

charged if the program is withdrawn before a specified period. This period could vary

from six months to two years. This double whammy will reduce the returns in the short

term. This makes SIP an inflexible investment program and expensive if withdrawn

prematurely due to unforeseen emergencies.

But lump sum is paid only one time and the whole transaction is based on this investing

money. Opting SIP, an investor can invest their saving into it and can safe his money

doing that. SIP is good because if it seems that market will goes down in few days so an

investor can safely withdraw his money and can safe his money.

35
4.3 Background of the study
The proposed study will provide insight on current mutual fund industry with focus on

SIP as investment tool. This study will help to understand investor’s pattern based on

their demography, which will help Mutual Fund companies to design innovative and

customized products for their customers.

4.4 Problem Statement and Importance of the study

Comparative Analysis between systematic investment plan and lump sum investment in
mutual fund and also Investor’s behavior towards systematic investment plan and lump
sum.

The importance of the study is to provide some useful information for the investors and
some findings which can help the investors to invest their money wisely. And also it
gives the idea about what is more beneficial sip or lump sum.

36
4.5 Objectives of the study

The objectives of the study is to analyses in detail the growth pattern of mutual fund industry in
India and to evaluate performance of different schemes floated by most preferred mutual
funds in public fund in public and private sector.

Primary Objective

1. Comparative analysis between systematic investment plan and lump sum


investment in mutual fund.

Secondary Objective

1. Investor’s option for entry into mutual fund.

 Lump sum
 SIP

2. To study the various Mutual Funds schemes in India.


3. To study about the risk factors involved in the SIP and lump sum investment and
How to analyze it.
4. To compare mutual funds of selected two companies on the basis of their
different schemes.

37
Research Methodology

5.1 Research Design -


Exploratory and descriptive research Design

5.2 Source/s of Data -


Primary Data and Secondary data

5.3 Data Collection Method-


Survey Method
Historical Document
Observation Method
5.4 Population-
Investors
5.5 Sample Size-
100 Respondents

5.6 Sampling Method-


Systematic Random sampling

5.7 Date Collection Instrument-


Structured Questionnaire
Past Records

38
Data Analysis and Interpretation

1. Age Group:

Table No: 1

Age 0-15 18-30 30-45 45-60


Percentage 0% 18% 46% 36%

Graph No: 1

Age group invest most


50% 46%

40% 36%

30%
18% Percentage
20%

10%
0%
0%
0-15 18-30 30-45 45-60

Above graph shows which age group of people is doing investment maximum. Although this is
not a true indicator of market share, it gives us some idea or the closeness in which age group
doing more investment. Here, age group up to 15years people are not investing their money, in
the 18-30years 18%, 30-45years 46% and 45-60years 36% people are doing investment.

39
2. Gender:

Table No: 2

Gender Male Female


Percentage 68% 34%

Graph No: 2

Gender Invest most


80% 68%
60%
40% 34%
Percentage
20%
0%
Male Female

Above graph shows who are doing more investment, male or female. Here, in this graph 68%
people are male investors and 34% people are female investors.

3. Occupation:

Table No: 3

Occupation Business Govt. Pvt.Employess Student Other


employee
Percentage 24% 14% 36% 8% 20%

40
Graph No: 3

Occupation
40% 36%
30% 24%
20%
20% 14%
8%
10%
0% Percentage

Above graph shows who are doing investment more on the bases of occupation. Here,
Businessman 24%, Government employee 14%, Pvt. Employee 36%, student 8%, other
20% of people are investors.

4. Investment Options:

Table No: 4

Investment Mutual Fund Derivatives Real Government Bank Equity


Option Estate Bonds Deposits
Percentage 100 10 32 36 64 32

Graph No: 4

Investment Option
150
100
100 64
32 36 32
50 10
0 Series2

41
Above graph shows from the total investment option, 100 people are investing in MF, 10 in
Derivatives, 32 in real estate, 36 in government bonds, 64% in bank deposits and 32% in equity.

5. Types of Schemes by Structure:

Table No: 5

Schemes Open Ended Fund Close Ended Interval


fund Schemes
Percentage 56% 34% 10%

Graph No: 5

Schemes
60% 56%
50%
40% 34%
30%
Percentage
20%
10%
10%
0%
Open Ended Fund Close Ended fund Interval Schemes

Above graph shows investors are investing in which fund more. Here, 56% in open ended, 34%
in close ended and 10% in interval fund.

6. Types of schemes by Investment Objective:

Table No: 6

Types of Equity Debt scheme Balanced


schemes Schemes scheme
Percentage 40% 30% 30%

42
Graph No: 6

Types of schemes

50%
40%
40%
30% 30%
30%
20% Percentage

10%
0%
Equity Schemes Debt scheme Balanced scheme

Above graph shows which types of scheme investors investing most. Here, 40% equity
schemes, 30% debt schemes, 30% Balanced schemes.

7. Types of Funds:

Table No: 7

Funds Tax saver Index Sactorial Diversified


Funds Funds Funds
Percentage 38% 18% 12% 32%

Graph No: 7

Funds
38%
40% 32%
30%
18%
20% 12%
10% Percentage

0%
Tax saver Index Funds Sactorial Diversified
Funds Funds

43
Above graph shows which funds investors prefer to invest. Here, 38% in Tax saver funds, 18%
in index funds, 12% in sactorial funds and 325 I diversified funds.

8. Revised Portfolio:

Table No: 8

Revised Monthly Quarterly Half Yearly


Portfolio Yearly
Percentage 28% 46% 12% 14%

Graph No: 8

Revised Portfolio
50% 46%

40%
28%
30%

20% Percentage
12% 14%
10%

0%
Monthly Quarterly Half Yearly Yearly

Above graph shows how frequently investors are revised their portfolio. Here, 28% people are
monthly, 46% quarterly, 12% half yearly and 14% yearly.

9. Part of Income Invest:

Table No: 9

Income Invest Up to 10-20% 20-30% More


10% than 30%
Percentage 26% 64% 8% 2%

44
Graph No: 9

% of Income Invest
70% 64%
60%
50%
40%
26%
30%
20% Percentage
8%
10% 2%
0%
Up to 10% 10-20% 20-30% More than
30%

Above graph shows how many percentage of income investors are investing. Here, 26% people
are investing their up to 10% income, 64% people are 10-20% income, 8% people are 20-30%
income and 2% people are more than 30% income.

10. Preferable tools:

Table No: 10

Tools SIP Lump sum Both


Percentage 54% 10% 36%

Graph No: 10

Tools
60% 54%
50%
40% 36%
30%
Percentage
20% 10%
10%
0%
SIP Lumpsum Both

45
Above graph shows investors are preferred which tool most. Here, 54% investors preferred SIP
, 10% investors preferred lump sum and 36% investors preferred both.

11. SIP Allocation for monthly Investment:

Table No: 11

Allocation <1000 1000- 3000- >5000


3000 5000
Percentage 10% 56% 14% 20%
Graph No: 11

SIP Allocation
60% 56%
50%
40%
30%
20% Percentage
20% 14%
10%
10%
0%
<1000 1000-3000 3000-5000 >5000

Above graph shows allocation criteria for SIP. 10% investors are monthly investing <1000,56%
investors are 1000-3000, 14% investors are 3000-5000 and 20% investors are investing >5000
monthly.

12. Time Period of Investment:

Table No: 12

Time 1year 1 to 3 3 to 5 more than


Period 5 years
Percentage 20% 36% 30% 14%

46
Graph No: 12

Time Period
40% 36%
30%
30%
20%
20% 14%
Percentage
10%
0%
1year 1 to 3 3 to 5 more than 5
years

Above graph shows investors are invest their money for how much time period. Here, 10%
investors are investing for 1year, 36% investors for 1 to 3years, 30% investors for 3 to 5years
and 14% investors for more than 5years.

13. Giving more Profit:

Table No: 13

SIP Lump sum


Percentage of Profit 78% 22%

Graph No: 13

Percentage of Profit
100%
78%
80%
60%
40% Percentage of Profit
22%
20%
0%
SIP Lumpsum

47
Above graph shows which is gives more profit, sip or lump sum. Here, 78% for SIP and 22% for
Lump sum.

14. Reason For SIP/ Lump sum:

Table No: 14

Reason Amount of Risk Return Time Market


Investment Period Fluctuation
Frequency 64 20 44 10 54

Graph No: 14

Reason for SIP/Lump sum


80 64
60 54
44
40
20 Frequancy
20 10
0
Amount of Risk Return Time Period Market
Investment Fluctuation

Above graph shows the reason behind, why investors go for systematic investment plan or lump
sum investment. Here, amount of investment, market fluctuation and Rate of return are the
major reason for investors to choose SIP or Lump sum.

15. Benefits of SIP:

Table No: 15

Benefits of Small Amount Monthly Advantages No need Easy


SIP of investment savings of market to Liquidity
fluctuation remember the
Track
Frequency 77 82 54 32 10 38

48
Graph No: 15

Benefits of SIP
100
77 82
80
60 54
38
40 32
Frequancy
20
0
Small Monthly Advantages No need to Easy
Amount of savings of market remember Liquidity
investment fluctuation the Track

Above graph shows why investors prefer systematic investment plan. Here, the major benefits
of the sip are the monthly savings, small amount of investment and advantages of market
fluctuation. Because of these are the benefits, investors choose systematic investment plan.

49
Return on SIP and Lump sum investment from Different Schemes

For comparative analysis between systematic investment plan and lump sum
investment and to know which is the better option to invest in mutual fund Here, we are
taking data of best companies’ top schemes, the data includes return on SIP and Lump
sum Investment of 10years (in %) on the bases of secondary data.

Equity Funds

 Large Cap Funds

Return on SIP of last 10years (in %)

Table No: 16

Starting-April 2012 2010 2008 2006 2003 2001


month of
Years 1 3 5 7 10 12
Invested 1,20,000 3,60,000 4,80,000 8,40,000 1,200,000 1,440,000
Amount
Schemes Returns % - CAGR

Birla Sun 11.50 6.44 11.74 11.19 17.40 -


Life Equity
Fund - Gr
DSP Black -0.91 2.23 8.33 9.06 16.71 -
Rock Top
100 Fund-
Growth

HDFC Top 2.51 2.44 10.45 10.72 18.17 23.15


200 Fund-
Growth

50
 Mid Cap Funds
Table No: 17

Starting-April 2012 2010 2008 2006 2003 2001


month of
Years 1 3 5 7 10 12
Invested 1,20,000 3,60,000 4,80,000 8,40,000 1,200,000 1,440,000
Amount
Schemes Returns % - CAGR

DSP Blak -6.67 -0.15 11.77 - - -


Rock Small &
Midcap Fund

IDFC Premier 4.94 6.98 16.00 16.41- - -


Equity Fund

 Small Cap Funds


Table No: 18

Starting-April 2012 2010 2008 2006 2003 2001


month of
Years 1 3 5 7 10 12
Invested 1,20,000 3,60,000 4,80,000 8,40,000 1,200,000 1,440,000
Amount
Schemes Returns % - CAGR

Sundaram - 12.70 12.42 11.06 - -


SMILE
Funds-
Growth

DSP Black -14.85 -3.02 11.70 - - -


Rock Micro
Cap Fund –
Growth

51
Return on Lump sum of last 10years (in %)

Table No: 19

Equit NAV 180Da 1yea 2yea 3yea 5yea 7yea


y Growth Dividend ys r r r r r
Fund
s
Birla Sun 94.6700 21.1100 2.70 16.55 3.38 5.33 8.35 13.02
Life
Equity
Fund -
Gr
DSP 102.086 20.0730 -2.37 5.01 0.88 3.54 6.85 11.37
Black
0
Rock
Top 100
Fund-
Growth

HDFC 210.485 37.5340 -1.78 6.99 -0.29 4.44 9.13 11.79


Top 200
0
Fund-
Growth

DSP 11.79 12.1400 -6.29 4.79 1.01 4.36 9.32 -


Blak
Rock
Small &
Midcap
Fund

IDFC 36.5048 21.5498 -0.11 13.12 8.81 9.81 12.37 16.27


Premier
Equity
Fund

52
Sundara 27.9528 9.9836 -12.75 1.32 -3.90 -3.23 3.70 7.30
m SMILE
Funds-
Growth

DSP 14.8280 9.0040 -11.32 1.29 0.92 3.28 8.34 -


Black
Rock
Micro
Cap
Fund –
Growth

Balanced Funds
Table No: 20

180Days 1year 2year 3year 5year 7year


NAV
HDFC 222.4660 -2.69 5.39 2.74 7.02 11.37 12.91
Prudence
Fund-
Growth

DSP 66.6880 -2.60 4.28 1.03 3.69 6.96 10.09


Black
Rock
Balance
Fund-
Growth

53
Theme Funds / Sector Funds
Table No: 21

NAV 180Days 1year 2year 3year 5year


Growth Dividend

ICICI 24.5700 -7.07 -0.41 -8.58 -5.55 -0.61


Prudential
Infrastructur
e Fund

Reliance 105.6714 -0.67 14.32 -0.81 10.25 14.58


Banking

Reliance 65.3336 0.16 19.82 11.37 10.69 23.85


Pharma

Reliance 48.2050 -16.04 -12.14 -17.14 -15.18 -5.68


Diversified
Power
Sector Fund

From above all 10years data, we can see that the SIP % of return is higher than
the Lump sum investment % of return.

54
Comparative Analysis between Systematic Investment Plan and Lump sum
Investment
Following is the example how Mutual SIP Scheme Return on Investment is calculated.

Table No: 22

55
Table No: 23

56
Table No: 24

57
As we can see the above calculation of return on Systematic Investment Plan and lump
sum Investment plan that is 27.23% and 17.39% respectively in 3years in IDFC premier
Equity fund Scheme. So, we easily see the difference of % of return in both investment
plan . and there is return on systematic investment plan is higher then the lump sum
investment plan in same scheme.

Interpretation

People should not confuse about them. Both are better themselves. After Comparative
Analysis, I can interpret that from SIP and Lump sum investment plan people should go
for the SIP. Because, SIP is a Tension free investment, SIP invest money in
different-different sector and Investment are consistent and steady

When market is ups and don nature it is better to invest their money through SIP
another reason for SIP is because it is monthly investment so when there are salaried
person who want to invest money in mutual fund then SIP is good techniques because
they have limited saving that is why SIP is good for salaried persons.

Other then that when I surveyed in the market to know the perception of people where
they invest so, there are many people who really don’t know what actually mutual fund
means is. I realized that there are many persons who don’t invest money in mutual fund
they only invest in insurance o fixed deposit.

58
Results & Findings

 Maximum Investors are investing their money in Mutual Funds and Bank
deposits.
 Reasons for choosing Systematic investment plan or Lump sum investment
are amount of investment and market fluctuation.
 Investors preferred SIP more than Lump sum but some of them preferred both.
 Investors preferred Systematic investment plan because of monthly savings
and small amount of investment.
 Systematic Investment plan is more beneficial over a long period of time than
the Lump sum investment.
 SIP is tension free investment.
 SIP invests money in different-different sector.
 Investment is consistent and steady.
 Power of compounding more the length of investment, more the earnings
 Power of Rupee cost averaging market’s volatility shall work wonders for you.
 Investors are preferred open ended schemes more than the close ended and
interval schemes.
 Maximum Investors investing their money in equity scheme where some of
them are investing in Debt and Balanced scheme.
 Investors are preferred to invest in tax saver and Diversified funds most.
 Maximum Investors revised their portfolio after a month.
 Maximum Investors investing their income up to 10-20%

Disadvantages of SIP

 SIPs don’t perform well in rising markets


 SIP in a poor Fund it performs poorly

59
Limitation of the Study

 Time was the main limiting factor. More précised information could be obtained if
more time could be given.
 No one can predict future. So it is not at all necessary that the company’s data
mentioned in the report will benefit the investor in future. The research is totally
based on past data and investor’s preference.
 For Investment in mutual fund, investors have to take patience because it is a
beneficial over a long period of time.

60
Suggestions

Investment Planning

Investment planning is a systematic approach towards achieving your financial goals. Though it
assumes much importance, most of us feel reluctant to do it ourselves; the reason may be
sheer lack of knowledge, time or resources. In such a case,

Mutual funds come in handy as they provide professional management in addition to a shoal of
other benefits, such as diversification, cost‐reduction, flexibility, convenience, liquidity,
transparency etc. But to enjoy these benefits, you need to choose some funds those are
suitable for your unique financial requirements.

Investor Do’s and Don’ts

 When one is investing in the market, they should first analyze the market.
 While investing, one should keep some amount aside as a reserve.
 People should invest in small sums and must diversify their investments. One should
never keep all eggs in single basket.
 Investing in small amount is also helpful as then, in case of a loss, the amount can be
recovered easily.
 SIP is a method by which customers have the option to invest their funds at a particular
fixed frequency of time.
 When market is high you should buy less number of shares, and when the market is
low you should buy more number of shares

61
Recommendations

 Everybody can invest in mutual fund because,


 When I surveyed in the market there are many people who really don’t know what
actually mutual fund means is.
 I realized that there are many persons who don’t invest money in mutual fund they only
invest in insurance or fixed deposit.
 When market is ups and down nature it is better to invest their money through SIP
 SIP is monthly investment so when there are salaried person who have limited saving
that is why SIP is good for them.
 If you do not have a lump sum, you don’t have to save up until you have a large amount
to invest- You can go for SIP

You can see that mutual funds offer a range of investment options with varying risk and return
combination. All you need is a little bit of careful in investment planning and you can construct a
well‐diversified mutual fund portfolio, all by yourself.

62
Conclusion

Systematic Investment Plan (SIP) is the winning strategy in present market scenario.
Small investor can make his/her investment in Equity Fund through the monthly or
quarterly of in multiple of 500 i.e. 50, 1000, 1500, 2000 and so on. Small investor can
enjoy the volatility (ups & downs) by investing regularly. Old investment in stock market
is in present time showing losses event though SIP investment RETURN is far better in
Comparison of ONE TIME investment. At this present down trend one can investment in
Balanced Fund schemes. An SIP may not be able to lower the average purchase cost if
equity markets rise in a secular manner.

In such a scenario, the average purchase cost actually rise. So, in a market rally, SIPs
could prove to be more expensive vis-à-vis a lump sum investment.

Systematic Investment Plan is very useful for beginners as it is risk free and
independent of markets. You also get better returns by investing regular fixed
investments.

63
Annexure
Questionnaire
(Hello, I am Yatri Shah. I need your spare time to fill up the questionnaire, as this is the part of my
Project work “Comparative Analysis between Systematic Investment Plan and Lump sum investment in
mutual fund”)
NAME: ______________________________________ __________________
AGE: 0-15_____ 18-30_____ 30-45_____ 45-60______

GENDER: Male
Female
OCCUPATION: Businessman [ ] Pvt. Employee [ ]
Govt. Employee [ ] Student [ ]
Other (specify):________

Q1. In which of these Investment Option do you invest into?


Mutual Funds [ ] Government Bonds [ ]
Derivatives [ ] Bank Deposits [ ]
Real Estate [ ] Equity [ ]

Q2 .By structure in which type of schemes did you invested?


Open Ended Fund [ ]
Close Ended Fund [ ]
Interval Schemes [ ]

Q3.By investment objective in which type of schemes have you invested?


Equity Schemes [ ]
Debt Schemes [ ]
Balanced Schemes [ ]
Others [ ]

Q4.In which type of funds you want to invest?


Tax Saver Funds [ ]
Index Funds [ ]
Sactorial Funds [ ]
Diversified [ ]

Q5. Did you revised your portfolio after your initial investments?
Monthly[ ] Quarterly [ ] Half yearly [ ] Yearly [ ]

Q6. What percentage of your earnings do you invest in Mutual Funds?


Up to 10% [ ] 10-20% [ ] 20-30%[ ] More than 30% [ ]

Q7. In which Methodology do you preferred?


SIP [ ] Lump Sum [ ] Both [ ]

Q8. What is your allocation criterion?


<1000 [ ] 1000-3000 [ ] 3000-5000 [ ] >5000 [ ]

64
Q9. For what time period you have invested?
< 1 year [ ] 1 to 3 [ ] 3 to 5 [ ] More than 5 years [ ]

Q10. Which has given you more profit?


SIP [ ] Lump Sum [ ]

Q11. What are the reason for choosing SIP/Lump sum plan in mutual fund?
Amount of Investment [ ]
Risk [ ]
Return [ ]
Time period [ ]
Market Fluctuation [ ]

Q12. Why do you prefer Systematic Investment Plan?


Small Amount of Investment [ ]
Monthly savings [ ]
Advantages of market fluctuation [ ]
No need to Remember the Track [ ]
Easy Liquidity [ ]

65
Bibliography

 Business Map of India: http://business.mapsofindia.com/investment-industry/,


accessed July2014.
 NJ India Invest Pvt. Ltd: http://www.njgroup.in/aboutus.php , accessed July2014.
 NJ India Invest Pvt. Ltd
http://www.njwealth.in/njwealth/returncalculator.fin?cmdAction=loadReturnsCalculato
r , accessed July2014
 http://mba-posts.blogspot.in/2012/07/literature-review-on-mutual-funds.html,
accessed July2014.
 IIFL: http://www.indiainfoline.com/MutualFunds/FundHouses/ , accessed July2014

 Naresh Malhotra and Satyabhushan Dash. Marketing Research: An applied


orientation: sixth edition.

66
List of Tables, Graphs and Diagrams
TABLE PARTICULARS PAGE NO.
NO.
1 Age Group 39
2 Gender 40
3 Occupation 40
4 Investment Option 41
5 Types Of scheme by structure 42
6 Types of schemes by Investment 42
Objective
7 Types of Funds 43
8 Revised Portfolio 44

9 Part of Income Invest 44


10 Preferable tools 45

11 SIP Allocation for monthly Investment 46

12 Time Period of Investment 46

13 Giving more Profit 47


14 Reason For SIP/ Lump sum 48

15 Benefits of SIP 48
16 Large Cap Funds 50
17 Mid Cap Funds 51
18 Small Cap Funds 51
19 Equity Funds 52
20 Balanced Funds 53
21 Theme Funds / Sector Funds 54

22 Calculation of Return from MF SIP 55


schemes
23 Market value of SIP 56
24 SIP-Lump sum comparison for 57
Recommended schemes

67
GRAPH PARTICULARS PAGE NO.
NO.
1 Age Group 39
2 Gender 40
3 Occupation 41
4 Investment Option 41
5 Types Of scheme by structure 42
6 Types of schemes by Investment 43
Objective
7 Types of Funds 43
8 Revised Portfolio 44

9 Part of Income Invest 44


10 Preferable tools 45

11 SIP Allocation for monthly Investment 46

12 Time Period of Investment 46

13 Giving more Profit 47


14 Reason For SIP/ Lump sum 48

15 Benefits of SIP 48

Diagram PARTICULARS PAGE NO.


NO.
1 Mutual Fund Works 19
2 Types of Mutual Fund 20
3 Risk Profile 26
4 Mutual Fund Process 32

68
69
This checklist is to be attached as the last page of the report.

Yes No
Is the report properly hard bound?
Is the Cover page in proper format?
Is the Title page (Inner cover page) in proper format?
Is the Certificate received from the Company Guide?
Is the Certificate received from the Faculty Guide?
Is the Executive Summary included in the report properly written within one page?
Is the title of your report appropriate? The title should be adequately descriptive,
precise and must reflect scope of the actual work done.
Have you included the List of abbreviations / Acronyms? Uncommon abbreviations /
Acronyms should not be used in the title.
Does the Report contain a summary of the literature survey?
Does the Table of Contents include page numbers?
(i) Are the Pages numbered properly?
(ii) Are the Figures numbered properly? (Figure Numbers and FigureTitles at
the bottom of the figures)
(iii) Are the Tables numbered properly? (Table Numbers and Table Titles at the
top of the tables)
(iv) Are the Captions for the Figures and Tables proper?
(v) Are the Appendices numbered properly?
Are References or Bibliography given at the end of the Report?
Have the References been cited properly inside the text of the Report?
Is the citation of References in proper format?
A Compact Disk (CD) containing the softcopy of the Final Report and a copyof the
Final SIP Presentation (both preferably in PDF format) has been placed in a protective
jacket securely fastened to the inner back cover of the Final Report. Please write your
name and Roll No with a marker on the CD as well as the CD Jacket.

Declaration by Student:

I certify that I have properly verified all the items in this checklist and ensure that the report is in
proper format as specified.

Enrolment No: _____________________

Name of the Student: _____________________________________________________

Sign of the Student: __________________

Date: ______________________________

70