CHAPTER-1

INTRODUCTION

1
MUTUAL FUND CONCEPT:

A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market in-
struments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in pro-
portion to the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a diversified, pro-
fessionally managed basket of at a relatively low cost.The flow chart below desribes
broadly the working of mutual fund:

A Mutual Fund is a trust that pools the savings of a number of investors who share
common financial goal; investments may be in shares, debt securities, money market
securities or a combination of these. Those securities are professionally managed on
behalf of the unit-holders, and each investor holds a pro-rata share of the portfolio i.e.
entitled to any profits when the securities are sold, but subject to any losses in value as
well.

The income earned through these investments and the capital appreciations realized are
shared by its unit holders in proportion to the number of units owned by them. Thus a
Mutual Fund is the most suitable investment for the common man as it offers an oppor-
tunity to invest in a diversified, professionally managed basket of securities at a rela-
tively low cost.

2
 Reasons to invest in mutual funds :

 Expert on your side: When you invest in a mutual fund, you buy into the experience
and skills of a fund manager and an army of professional analysts

 Limited risk: Mutual funds are diversification in action and hence do not rely on the
performance of a single entity.

 More for less: For the price of one blue chip stock for instance, you could get yourself a
number of units across a number of companies and industries when you invest in a
fund!

 Easy investing: You can invest in a mutual fund with as little as Rs. 5,000. Salaried
individuals also have the option of investing in a monthly savings plan. Convenience:
You can invest directly with a fund house, or through your bank or financial adviser, or
even over the internet.

 Investor protection: A mutual fund in India is registered with SEBI, which also moni-
tors the operations of the fund to protect your interests.

 Quick access to your money: It's good to know that should you need your money at
short notice, you can usually get it in four working days.

3
MUTUAL FUND INDESTRY IN INDIA:

Origin of mutual fund industry in India is with the introduction of the concept of mutual
fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the
year 1987 when non-UTI players entered the industry. In the past decade, Indian mutu-
al fund industry had seen a dramatic improvement, both qualities wise as well as quan-
tity wise. Before, the monopoly of the market had seen an ending phase; the Assets un-
der Management (AUM) were Rs. 67bn. The private sector entry to the fund family
raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height
of 1,540 bn.

Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is
less than the deposits of SBI alone, constitute less than 11% of the total deposits held
by the Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new in
the country. Large sections of Indian investors are yet to be intellectuated with the con-
cept. Hence, it is the prime responsibility of all mutual fund companies, to market the
product correctly abreast of selling.

The Indian mutual funds industry was non – existent till 1960s. in 1963, the govt. of In-
dia took the initiative by passing the UTI Act, under which the Unit Trust of India
(UTI) was set –up as a statutory body. The designated role of UTI was to act as a mutu-
al fund. This was expanded in 1985 to make UTI a financial institution as well. UTI‟s
first scheme, called the US-64, which was an open –end scheme, was launched in 1964.
It subsequently launched a number of schemes to suit the differing needs of the inves-
tors. Till 1987, UTI was the only mutual fund in the market since no one else was legal-
ly allowed to set –up mutual fund. In 1987, other public sector institutions like banks,
financial institutions and insurance companies started establishing mutual fund, follow-
ing the government‟s decision to allow them to do so. State Bank of India became the
first one to launch a mutual fund when it launched the SBI Mutual fund in November,
1987. It was followed by the Can bank mutual fund, LIC Mutual fund, etc. In this regu-
lated era, UTI was acting more as a vehicle for the implementation of the economic
policies and the developmental activities of the government, than as an investment ve-
hicle for the investors.

4
Finally in 1992, the government allowed private sector players to set-up mutual funds.
A few of them are, Kothari pioneer MF, ICICI MF, Birla MF, Morgan Stanley MF,
Tauras MF, ect. As the number of mutual funds increased giving a choice to the compe-
tition in the industry increased, thus jolting the hitherto complacent public sector mutu-
al fund into action. As a result, the investors not only had a wider choice regarding the
kind of schemes and the sponsor of the mutual fund, they started getting better service
even from the old players. These private sector funds provided an added advantage to
the investors. These were generally set-up in partnership with foreign mutual funds,
with the letter providing the technology and the experience in managing funds. The in-
vestors could thus derive the consequent benefits by investing in these fund.As the in-
dustry developed, the need was felt to regulate it. From the beginning, UTI was gov-
erned by the provisions of the UTI Act 1963.Till 1987, as there were no other players in
the market, the need to come out with specific regulations for investment companies
did not arise. With the government allowing banks, financial institutions and insurance
companies to set-up mutual funds in 1987, a set of regulations was also needed. How-
ever, till 1989, the only regulations in place were those which required banks to obtain
permission before setting up a mutual fund.

5
 Association of Mutual Funds in India (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in India
was generated to function as a non-profit organisation. Association of Mutual Funds in India
(AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Manage-
ment Companies (AMC) which has been registered with SEBI. Till date all the AMCs are
that have launched mutual fund schemes are its members. It functions under the supervision
and guidelines of its Board of Directors.

Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a
professional and healthy market with ethical lines enhancing and maintaining standards. It
follows the principle of both protecting and promoting the interests of mutual funds as well as
their unit holders.

The objectives of Association of Mutual Funds in India

The Association of Mutual Funds of India works with 30 registered AMCs of the coun-
try. It has certain defined objectives which supports the guidelines of its Board of Di-
rectors. The objectives are as follows:

 This mutual fund association of India maintains high professional and ethical stand-
ards in all areas of operation of the industry.
 It also recommends and promotes the top class business practices and code of con-
duct which is followed by members and related people engaged in the activities of
mutual fund and asset management. The agencies who are by any means connected
or involved in the field of capital markets and financial services also involved in this
code of conduct of the association.

 AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund
industry.

6
  Association of Mutual Fund of India does represent the Government of India, the Re-
serve Bank of India and other related bodies on matters relating to the Mutual Fund
Industry.
 It develops a team of well qualified and trained Agent distributors. It implements a
programme of training and certification for all intermediaries and other engaged in
the mutual fund industry.
 AMFI undertakes all India awareness programme for investor‟s in order to promote
proper understanding of the concept and working of mutual funds.
 At last but not the least association of mutual fund of India also disseminate infor-
mation‟s on Mutual Fund Industry and undertakes studies and research either direct-
ly or in association with other bodies.

Company’s Profile Axis Asset management Company Limited is a privately owned

investment manager. The firm manages mutual funds for its clients. It invests in the public
equity and fixed income market of india. The firm also invest in gold for some of its funds.
It is based in Mumbai, India. Axis Asset Management Company Limited operates as a sub-
sidiary of Axis Bank Limite

Axis Bank was the first of the new private banks to have begun operations in 1994, after
the Government of India allowed new private banks to be established. The

Bank was promoted jointly by the Administrator of the specified undertaking of the
Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e.
National Insurance Company Ltd., The New India Assurance Company Ltd.

The Bank today is capitalized to the extent of Rs. 405.17 crores with the public hold-
ing)at 53.09%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at
Mumbai. The Bank has a very wide network of more than 1000 branches and Exten-

7
sion Counters (as on 31st March 2010). The Bank has a network of over 4055 ATMs
(as on 31st March 2010) providing 24 hrs a day banking convenience to its customers.

Name of the Mutual Fund Axis Mutual Fund

Date of set up of Mutual Fund September 4, 2009

Name of Sponsor Axis Bank Limited

Name of the Asset Management Axis Asset Management Company Limited

Company

Date of Incorporation of AMC January 13, 2009

Website www.axismf.com

Registrar and Transfer Agent KarvycomputersharePvt. Ltd.

Assets under management 8,815 (Rs.Cr)

The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve excellence.

8
 Axis Mutual Fund launched its first scheme in October 2009 Since then Axis Mutual
fund has grown strongly. We attribute our success thus far to our 3 founding principles -
Long term wealth creation, Outside in (Customer) view and Long term relationship.
Come join our growing family of investors and give shape to your desires.

SWOT Analaysis of Axis AMC:

STRENGTHS:

 Professional investment management

 Diversification
 Low Cost
 Convenience and Flexibility

WEAKNESS:

Risk is defined as short-term price variability. But on a long-term basis, risk is the possi-
bility that your accumulated real capital will be insufficient to meet your financial goals.
And if you want to reach your financial goals, you must start with an honest appraisal of
your own personal comfort zone with regard to risk.

Individual tolerance for risk varies, creating a distinct "investment personality" for each
investor. Some investors can accept short-term volatility with ease, others with near pan-
ic. So whether you consider your investment temperament to be conservative, moderate
or aggressive, you need to focus on how comfortable or uncomfortable you will be as
the value of your investment moves up or down.

OPPORTUNITIES:

As per the BLOOM BERG survey India's total disposable income will increase to 40%
by 2015,along with total income of an average Indian family will be 450000.

As people are getting aware of the fact of investment and want to invest more with spe-
cialized assistant mutual funds have a great opportunities.

9
 As the risk is diversified and funds are available as per the different objective people can
invest as per their requirement.

Maximum money is invested in equity market and as the GDP is growing studily this is
a great opportunity for the companies to go ahead and invest more in to the market.

THREATS:

 A new competitor in your home market

 Price wars with competitors
 Competitor has new innovative product or service
 Taxatios

SPONSOR OF AXIS AMC

Axis Bank Limited:

Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was

promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India
(UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd., The
New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd.

The Bank as on 31st March, 2011 is capitalized to the extent of ` 410.54 crores with the public
holding (other than promoters and GDRs) at 53.60%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The
Bank has a very wide network of more than 1281 branches (including 169 Service Branch-
es/CPCs as on 31st March, 2011). The Bank has a network of over 6270 ATMs (as on 31st
March, 2011) providing 24 hrs a day banking convenience to its customers. This is one of the
largest ATM networks in the country.

The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.

10
 VISION

To be the preffered financial solutions provider excelling in customer delivery through in-
sight, empowered employees and smart use of technology

BUSINESS PHILOSOPHY

Our business will be built on three pillars. These are:

Outside-in View

 Investor at the heart of every single decision.

 Communicate in his language, not in ours.

Enduring Wealth Creation

 Play a serious and credible role in investor's money basket.

 Encourage investors to build a long-term perspective of the mutual fund category.


Long-term Relationships

 Leverage the equity of the 'Axis' brand

 Aim at building relationships rather than being transactional.

OBJECTIVES OF THE STUD

1. To find out the physiology of investors in India towards investment in mu-

tual funds.

2. To know the Preferences for the portfolios.

3. To know why one has invested or not invested in Axis Mutual fund

4. To find out the most preferred channel.

5. To find out what should do to boost Mutual Fund Industry.

11
6. It is to understand the concept of mutual funds as well as to know the
scope of various schemes.

7. To Study and analyze the Economic impacts of growth of the Mutual Funds
industry in India.

8. The main objective of this project is concerned with getting the opinion of
people regarding mutual funds and what they feel about availing the ser-
vices of financial advisors.

9. I have tried to explore the general opinion about mutual funds. It also co-
vers why/ why not investors are availing the services of financial advisors.

12
CHAPTER-2
LITERATURE
REVIEW

13
LITERATURE REVIEW

Edwin Flippo defines Recruitment and selection process as "A process of searching for pro-
spective employees and stimulating and encouraging them to apply for jobs in an organiza-
tion."

In simpler terms, recruitment and selection are concurrent processes and are void without
each other. They significantly differ from each other and are essential constituents of the
organization. It helps in discovering the potential and capabilities of applicants for expected
or actual organizational vacancies. It is a link between the jobs and those seeking jobs.

Jack Treynor (1965) developed a methodology for performance evaluation of a mutual fund
that is referred to as reward to volatility measure, which is defined as average excess return
on the portfolio. This is followed by Sharpe (1966) reward to variability measure, which is
average excess return on the portfolio divided by the standard deviation of the portfolio.

Sharpe (1966) developed a composite measure of performance evaluation and imported su-
perior performance of 11 funds out of 34 during the period 1944-63.

Michael C. Jensen (1967) conducted an empirical study of mutual funds in the period of
1954-64 for 115 mutual funds. The results indicate that these funds are not able to predict
security prices well enough to outperform a buy the market and hold policy. The study ig-
nored the gross management expenses to be free. There was very little evidence that any
individual fund was able to do significantly better than which investors expected from mere
random chance.

Jensen (1968) developed a classic study; an absolute measure of performance based upon
the Capital Asset Pricing Model and reported that mutual funds did not appear to achieve
abnormal performance when transaction costs were taken into account.

Carlsen (1970) evaluated the risk-adjusted performance and emphasized that the conclu-
sions drawn from calculations of return depend on the time period, type of fund and the
choice of benchmark. Carlsen essentially recalculated the Jensen and Shape results using

14
annual data for 82 common stock funds over the 1948-67 periods. The results contradicted
both Sharpe and Jensen measures.

Fama (1972) developed a methodology for evaluating investment performance of managed

portfolios and suggested that the overall performance could be broken down into several
components.

John McDonald (1974) examined the relationship between the stated fund objectives and
their risks and return attributes. The study concludes that, on an average the fund managers
appeared

to keep their portfolios within the stated risk. Some funds in the lower risk group possessed
higher risk than funds in the most risky group.

James R.F. Guy (1978) evaluated the risk-adjusted performance of UK investment trusts
through the application of Sharpe and Jensen measures. The study concludes that no trust
had exhibited superior performance compared to the London Stock Exchange Index.

Henriksson (1984) reported that mutual fund managers were not able to follow an invest-
ment strategy that successfully times the return on the market portfolio. Again Henriksson
(1984) conclude there is strong evidence that the funds market risk exposures change in re-
sponse to the market indicated. But the fund managers were not successful in timing the
market.

Grinblatt and Titman (1989) concludes that some mutual funds consistently realize abnor-
mal returns by systematically picking stocks that realize positive excess returns.

Richard A. Ippolito (1989) concluded that mutual funds on an aggregate offer superior re-
turns. But expenses and load charges offset them. This characterizes the efficient market
hypothesis.

Ariff and Johnson (1990) made an important study in Singapore and found that the perfor-
mance of Singapore unit trusts spread around the market performance with approximately
half of the funds performing below the market and another half performing above the mar-
ket on a risk-adjusted basis.

15
Cole and IP (1993) investigated the performance of Australian equity trusts. The study
found evidence that portfolio managers were unable to earn overall positive excess risk-
adjusted returns.

Vincent A. Warther(1995) in the article entitled “aggregate mutual fund flows and security
returns” concluded that aggregate security returns are highly correlated with concurrent un-
expected cash flows into MFs but unrelated to concurrent expected flows. The study result-
ed in an unexpected flow equal to 1 percent of total stock fund assets corresponds to a 5.7
percent increase in stock price index. Fund flows are correlated with the returns of the secu-
rities held by the funds, but not the returns of other types of securities. The study found an
evidence of positive relation between flows and subsequent returns and evidence of a nega-
tive relation between returns & subsequent flows.

Bansal’s book (1996) “mutual fund management & working” included a descriptive study
of concept of mutual funds, Management of mutual funds, accounting & disclosure stand-
ards, Mutual fund schemes etc.

Sadhak’s book (1997) “Mutual funds in India, Marketing strategies and investment practic-
es” is highly analytical & thought provoking. Much research has gone into writing of this
book and hence highly useful to researchers. An attempt is made of the first time in present-
ing Marketing strategies of Mutual funds.

Verma’s book (1997) ‘Guide to mutual funds & Investment portfolios of Indian mutual
funds with some statistical data guidelines to the investors in selection of schemes etc.

K. Pendaraki (2001) et al. studied construction of mutual fund portfolios, developed a mul-
ti-criteria methodology and applied it to the Greek market of equity mutual funds. The
methodology is based on the combination of discrete and continuous multi-criteria decision
aid methods for mutual fund selection and composition. UTADIS multi-criteria decision aid
method is employed in order to develop mutual fund’s performance models. Goal program-
ming model is employed to determine proportion of selected mutual funds in the final port-
folios.

16
Michael K. Berkowitz and Yehuda Katouritz (2002) in their paper examined the relationship
between the fees changes by mutual funds and their performance. The work distinguished
between high & low quality funds and sheds some additional light on the growing contro-
versy concerning the role of independent directors as monitors of the fee setting practices
written the funds. They found that for high quality managers, there is a positive relationship
between fees & performance. In contrast for lower Quality Managers, there is a negative
relationship between fees and performance. The authors believed this reflects the incentive
for poor managers to extract shorter benefits from investors as the likelihood of survival is
lower for poor performing managers. The results were consistent with the notion that the
independent directors whose responsibility is to safeguard the interest of shareholders may
not be effective in doing so.

S.Narayan Rao (2003) et. al., evaluated performance of Indian mutual funds in a bear mar-
ket through relative performance index, risk return analysis, Treynor’s ratio, Sharpe’s ratio,
Jensen’s measure, and Fama’s measure. The study used 269 open-ended schemes (out of
total schemes of 433) for computing relative performance index. Then after excluding funds
whose returns are less than risk-free returns, 58 schemes are finally used for further analy-
sis. The results of performance measures suggest that most of mutual fund schemes in the
sample of 58 were able to satisfy investor’s expectations by giving excess returns over ex-
pected returns based on both premium for systematic risk and total risk.

Work by Korsten (2003) and Jones et al. (2006)

According to Korsten (2003) and Jones et al. (2006), Human Resource Management theo-
ries emphasize on techniques of recruitment and selection and outline the benefits of inter-
views, assessment and psychometric examinations as employee selection process. They fur-
ther stated that recruitment process may be internal or external or may also be conducted
online. Typically, this process is based on the levels of recruitment policies, job postings
and details, advertising, job application and interviewing process, assessment, decision mak-
ing, formal selection and training (Korsten 2003).

Jones et al. (2006) suggested that examples of recruitment policies in the healthcare, busi-
ness or industrial sector may offer insights into the processes involved in establishing re-
cruitment policies and defining managerial objectiv

17
Work by Alan Price (2007)

Price (2007), in his work Human Resource Management in a Business Context, formally
defines recruitment and selection as the process of retrieving and attracting able applications
for the purpose of employment. He states that the process of recruitment is not a simple se-
lection process, while it needs management decision making and broad planning in order to
appoint the most appropriate manpower.

Work by Hiltrop (1996)

Hiltrop (1996) was successful in demonstrating the relationship between the HRM practices,
HRM-organizational strategies as well as organizational performance. He conducted his re-
search on HR manager and company officials of 319 companies in Europe regarding HR
practices and policies of their respective companies and discovered that employment securi-
ty, training and development programs, recruitment and selection, teamwork, employee par-
ticipation, and lastly, personnel planning are the most essential practices (Hiltrop 1999).

Work by Jackson et al. (2009) and Bratton and Gold (1999)

As discussed by Jackson et al. (2009), Human resource management approaches in any

business organization are developed to meet corporate objectives and materialization of stra-
tegic plans via training and development of personnel to attain the ultimate goal of improv-
ing organizational performance as well as profits. The nature of recruitment and selection
for a company that is pursuing HRM approach is influenced by the state of the labour mar-
ket and their strength within it. Furthermore, it is necessary for such companies to monitor
how the state of labour market connects with potential recruits via the projection of an im-
age which will have an effect on and reinforce applicant expectations. Work of Bratton &
Gold (1999) suggest that organizations are now developing models of the kind of employees
they desire to recruit, and to recognize how far applicants correspond to their models by
means of reliable and valid techniques of selection. Nonetheless, the researchers have also
seen that such models, largely derived from competency frameworks, foster strength in
companies by generating the appropriate knowledge against which the job seekers can be
assessed. However, recruitment and selection are also the initial stages of a dialogue among

18
applications and the company that shapes the employment relationship (Bratton & Gold
1999).

Paramita Mukherjee & Suchismita (2008)

Bose in the paper “Does the Stock Market in India Move with Asia? A Multivariate Co-
integration Vector Auto regression Approach” if the Indian stock market moves with other
markets in Asia and the United States in an era of capital market reforms and the sustained
interest of foreign investors in that market. By using techniques of co-integration, vector
auto regression, vector error correction models, and Granger causality, the research indicat-
ed that, though there is definite information leadership from the U. S. market to all Asian
markets, the U. S. indexes do not uniquely influence the integration of Asian markets, while
Japan is found to play a unique role in the integration of Asian markets. The U. S. market is
seen not only to influence, but also to be influenced by information from most of the major
Asian markets. The Indian stock return in recent times is definitely led by major stock index
returns in the United

States, Japan, as well as other Asian markets, such as Hong Kong, South Korea, and Singa-
pore. More important, returns on the Indian market are also seen to exert considerable influ-
ence on stock returns in major Asian markets.

Work by Taher et al. (2000)

Toward that end Taher et al. (2000) carried out a study to critique the value-added and non-
value activities in a recruitment and selection process. The strategic manpower planning of a
company, training and development programme, performance appraisal, reward system and
industrial relations, was also appropriately outlined in the study. This study was based on
the fact that efficient HR planning is an essence of organization success, which flows natu-
rally into employee recruitment and selection (Taher et al. 2000).

19
 CHAPTER-3
RESEARCH
METHODOLOGY

20
 RESEARCH METHODOLOGY

This report is based on primary as well secondary data, however primary data collec-
tion was given more importance since it is overhearing factor in attitude studies. One
of the most important users of research methodology is that it helps in identifying the
problem, collecting, analyzing the required information data and providing an alterna-
tive solution to the problem. It also helps in collecting the vital information that is re-
quired by the top management to assist them for the better decision making both day
to day decision and critical ones.

Data sources:

Research is totally based on primary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, and primary data has
been collected by interacting with various people. The secondary data has been col-
lected through various journals and websites.

Duration of Study:

The study was carried out for a period of two months, from 2nd JUNE to 1st AUGUST
2018

Sampling

Sampling procedure:

The sample was selected of them who are the customers/visitors of Axis Bank, Malvi-
ya Nagar and Vaishali Nagar Branch, irrespective of them being investors or not or
availing the services or not. It was also collected through personal visits to persons, by
formal and informal talks and through filling up the questionnaire prepared. The data
has been analyzed by using mathematical/Statistical tool.

Sample size:

21
 The sample size of my project is limited to 200 people only. Out of which only 120
people had invested in Mutual Fund. Other 80 people did not have invested in Mutual
Fund.

Sample design:

Data has been presented with the help of bar graph, pie charts, line graphs etc.

Limitations of the study

The following are the major limitations of the study.

 The sample was restricted to specified region only.

 The sample collected may not represent the entire population and the result may not
be a true representation of total universe.

22
 CHAPTER-4
DATA ANALYSIS
AND
INTERPRETATION

23
 ANALYSIS & INTERPRETATION OF THE DATA

1. a) Age distribution of the Investors

Age Group <= 30 31-35 36-40 41-45 46-50 >50

No. of 12 18 30 24 20 16
Investors

Table 1(a)
Investors invested in Mutual Fund

35

30

25

20

15 30
24
10 18 20
16
12
5

0
<=30 31-35 36-40 41-45 46-50 >50
Age group of the Investors
Figure 1(a)
Interpretation:
According to this chart out of 120 Mutual Fund investors of Jai-
pur the most are in the age group of 36-40 yrs. i.e. 25%, the sec-
ond most investors are in the age group of 41-45yrs i.e. 20% and
the least investors are in the age group of below 30 yrs.

24
b). Educational Qualification of investors:

Educational Qualification Number of Investors

Graduate/ Post Graduate 88

Under Graduate 25

Others 7

Total 120

Table 1(b)

6%

23%

71%

Figure 1(B)

Graduate/Post Graduate Under Graduate Others

Interpretation:

Out of 120 Mutual Fund investors 71% of the investors are Gradu-
ate/Post Graduate, 23% are Under Graduate and 6% are others (under
HSC).

25
No. of Investors
c). Monthly Family Income of the Investors:

Income Group No. of Investors

<=10,000 5

10,001-15,000 12
15,001-20,000 28
20,001-30,000 43
>30,000 32

50
45
40
35
30
25
43
20
15 28 32
10
5 12
5
0
<=10 10-15 15-20 20-30 >30
Income Group of the Investorsn (Rs. in Th.)

Interpretation:

In the Income Group of the investors, out of 120 investors,

36% investors that is the maximum investors are in the
monthly income group Rs. 20,001 to Rs. 30,000, Second one
i.e. 27% investors are in the monthly income group of more
than Rs. 30,000 and the minimum investors i.e. 4% are in the
monthly income group of below Rs. 10,000

26
d). Risk-Taking Ability Of Investors:

Careful Low risk Reluctant to risk High risk

33 49 24 14

Table 1(d)

High-Risk

Reluctant

Low risk

Careful

0 10 20 30 40 50

Figure 1(d)

Interpretation
There are very few investors who believe in avoiding risk while investing in different ave-
nues. The major proportion is those of low risk taker here the investors invest their wealth
mainly in mutual funds, fixed deposit

27
2. Preference of factors while investing:

FACTORS Liquidity Low risk High return Trust

NO.OF RESPOND- 40 60 10 10
ENTS
Table 2

liqidity low risk high return trust

9%
8%
33%

50%

Figure 2

Interpretation:

Out of 120 People, 8% People prefer to invest where there is High Return, 50% prefer
to invest where there is Low Risk, 33% prefer easy Liquidity and 9% prefer Trust

28
3.Awareness about mutual funds and its operations:

reponses Yes no
No.of respondents 95 25
Table 3

yes no

21%

79%

Figure 3

Interpretation:

From the above chart it is inferred that 79% People are aware of Mutual Fund and its opera-
tions and 21% are not aware of Mutual Fund and its operations.

29
4.Source of information for customers about Mutual Fund:

Source of information No. of Respondents

Advertisement 18

Peer Group 10

Bank 30

Financial Advisors 62

Table 4

70 62
60
50
40 30
30
18
20 10
10
0
advertisement peer group bank financial advisors

Figure 4

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the most important
source of information about Mutual Fund. Out of 120 Respondents, 51% know about Mutual
fund Through Financial Advisor, 25% through Bank, 9% through Peer Group and 15%
throughAdvertisement.

30
5.Investors invested in Mutual funds:

Response No. of Respondents

YES 80

NO 40

Table 5

no
33%

yes
67%

Figure 5

Interpretation:

Out of 120 People, 67% have invested in Mutual Fund and 33% do not have invested in
Mutual Fund.

31
6.Reason for not invested in Mutual Fund:

Reason No. of Respondents

Not Aware 65

Higher Risk 45

Not any Specific Reason 10

Table 6

not aware higher risk not any specific reason

8%

38% 54%

Figure 6

Interpretation:

Out of 120 people, who have not invested in Mutual Fund, 54% are not aware of Mutual
Fund, 38% said there is likely to be higher risk and 8% do not have any specific reason.

32
7. Channel Preferred by the Investors for Mutual Fund Investment

Channel Financial Advisor Bank AMC

No. of 72 18 30

Respondents

Table 7

AMC
25%

bank financial
15% advisor
60%

Figure 7

Interpretation:

Out of 120 Investors 60% preferred to invest through Financial Advisors, 25% through
AMC and 15% through Bank.

33
8. Mode of Investment Preferred by the Investors

Mode of Investment One time Investment Systematic Investment Plan

(SIP)

No. of Respondents 78 42

Table 8

systematic
investment plan
35%
one time
investment
65%

Figure 8

Interpretation:

Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through
Systematic Investment Plan.

34
9. Preferred Portfolios by the Investors

Portfolio No. of Investors

Equity 56

Debt 20

Balanced 44

Table 9

balanced
37% equity
46%

debt
17%

Figure 9

Interpretation:

From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17%
preferred Debt portfolio

35
10. Option for getting Return Preferred by the Investors

Option Dividend Payout Dividend Growth

Reinvestment

No. of Respondents 25 10 85

Table 10

dividend
payout
21%

dividend
reinvestment
8%

growth
71%

Figure 10

Interpretation:

From the above graph 71% preferred Growth Option, 21% preferred Dividend Payout
and 8% preferred Dividend Reinvestment Option..

36
 CHAPTER-5
FINDINGS AND
CONCLUSIONS

37
Findings
 The Age Group of 36-40 years were more in numbers. The second most Investors
were in the age group of 41-45 years and the least were in the age group of below 30
years.
 Most of the Investors were Graduate or Post Graduate and below HSC there were
very few in numbers.
 In Occupation group most of the Investors were Govt. employees, the second most
Investors were Private employees and the least were associated with Agriculture.
 In family Income group, between Rs. 20,001- 30,000 were more in numbers, the
second most were in the Income group of more than Rs.30,000 and the least were in
the group of below Rs. 10,000.

 About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Depos-
its, Only 60% Respondents invested in Mutual fund.

 Mostly Respondents preferred High Return while investment, the second most pre-
ferred Low Risk then liquidity and the least preferred Trust.

 Only 67% Respondents were aware about Mutual fund and its operations and 33%
were not.
 Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not
have invested in Mutual fund.
 Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not
any specific reason for not invested in Mutual Fund and 6% told there is likely to be
higher risk in Mutual Fund.
 Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI Pruden-
tial has also good Brand Position among investors, AxisMF places after ICICI Pru-
dential according to the Respondents.

38
 Out of 55 investors of Axis MF 64% have invested due to its association with the
Brand Axis, 27% Invested because of Advisor‟s Advice and 9% due to better re-
turn.

 Most of the investors who did not invested in Axis MF due to not

 Aware of Axis MF, the second most due to Agent‟s advice and rest due to Less Re-
turn.

 For Future investment the maximum Respondents preferred ReliancE Mutual Fund,
the second most preferred ICICI Prudential, Axis MF has been preferred after them.

 60% Investors preferred to Invest through Financial Advisors, 25% through AMC
(means Direct Investment) and 15% through Bank.

 65% preferred One Time Investment and 35% preferred SIP out of both type of
Mode of Investment.

 The most preferred Portfolio was Equity, the second most was Balance (mixture of
both equity and debt), and the least preferred Portfolio was Debt portfolio.

39
 Conclusion

Running a successful Mutual Fund requires complete understanding of the peculiarities of

the Indian Stock Market and also the psyche of the small investors. This study has made an
attempt to understand the financial behavior of Mutual Fund investors in connection with
the preferences of Brand (AMC), Products, Channels etc. I observed that many of people
have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They
need the knowledge of Mutual Fund and its related terms. Many of people do not have in-
vested in mutual fund due to lack of awareness although they have money to invest. As the
awareness and income is growing the number of mutual fund investors are also growing.

“Brand” plays important role for the investment. People invest in those Companies where
they have faith or they are well known with them. There are many AMCs in Jaipur but only
some are performing well due to Brand awareness. Some AMCs are not performing well
although some of the schemes of them are giving good return because of not awareness
about Brand. Reliance, UTI,AxisMF, ICICI Prudential etc. They are well known Brand,
they are performing well and their Assets Under Management is larger than others whose
Brand name are not well known like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. Financial Advi-
sors are the most preferred channel for the investment in mutual fund. They can change in-
vestors‟ mind from one investment option to others. Many of investors directly invest their
money through AMC because they do not have to pay entry load. Only those people invest
directly who know well about mutual fund and its operations and those have time.

40
 CHAPTER-6

SUGGESTIONS AND

RECOMMENDATIONS

41
 Suggestions and Recommendations


The most vital problem spotted is of ignorance. Investors should be made aware of
the benefits. Nobody will invest until and unless he is fully convinced. Investors
should be made to realize that ignorance is no longer bliss and what they are losing
by not investing.


Mutual funds offer a lot of benefit which no other single option could offer. But
most of the people are not even aware of what actually a mutual fund is? They only
see it as just another investment option. So the advisors should try to change their
mindsets. The advisors should target for more and more young investors. Young
investors as well as persons at the height of their career would like to go for advi-
sors due to lack of expertise and time.


Mutual Fund Company needs to give the training of the Individual Financial Advi-
sors about the Fund/Scheme and its objective, because they are the main source to
influence the investors.


Before making any investment Financial Advisors should first enquire about the
risk tolerance of the investors/customers, their need and time (how long they want
to invest). By considering these three things they can take the customers into con-
sideration.

42

Younger people aged under 35 will be a key new customer group into the future, so
making greater efforts with younger customers who show some interest in invest-
ing should pay off.


Customers with graduate level education are easier to sell to and there is a large un-
tapped market there. To succeed however, advisors must provide sound advice and
high quality.

 Systematic Investment Plan (SIP) is one the innovative products launched by Assets
Management companies very recently in the industry. SIP is easy for monthly salaried
person as it provides the facility of do the investment in EMI. Though most of the
prospects and potential investors are not aware about the SIP. There is a large scope
for the companies to tap the salaried person

43
 BIBLIOGRAPHY

 News papers
 Outlook money
 Television channel (cnbcaawaj)
 Mutual fund hand book
 Fact sheet and statement
 www.axismf.com
 www.moneycontrol.com
 www.amfiindia.com
 www.onlineresearchonline.com
 www. mutualfundsindia.com

44
ANNEXURES

45
 QUESTIONNAIRE

Personal details:

(a). Name:-

(b). City: -
contact no:-

(c). Age:-

1.(a) What is your age?

<=30 31-35 36-40 41-45 46-50 >50

(b) What is your education qualification?

Graduate/post graduate Under Graduate Others

(c). What is your monthly family income approximately?

Upto Rs.10,000 Rs.10,001-15000 Rs.15,001-20,000 Rs.20,001-30,000 >30,000

(d). How would you honestly describe yourself as a risk-taker?

Careful Low risk taking capability

Extremely reluctant to risk High risk taking capability

46
2. While investing your money, which factor will you prefer?

Liquidity Low risk High return trust

3. Are you aware about mutual funds and their operations?

a) yes b) no

4. If yes, how did you know about mutual fund?

A. Advertisement B. Peer group C. Banks D. Financial advisors

5. Have you ever invested in mutual fund?

a) yes b) no

6. If not invested in mutual fund then why?

(a) not aware of mutual funds (b) higher risk (c) not any specific reason

47
7. Which channel will you prefer while investing in mutual fund?

(a) financial advisor (b) bank (c) AMC

8. When you invest in mutual funds which mode of investment will you prefer?

A. One time investment B. Systematic investment plan (sip)

9. When you want to invest which type of funds would you choose?

A. Having only debt B. Having debt & equity C. Only equity portfolio.

portfolio portfolio.

10. How would you like to receive the returns every year?

B. dividend rein-
A. Dividend payout vestment C. Growth

48
49