CHAPTER -1

INTRODUCTION

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1.1 INTRODUCTION TO MUTUAL FUNDS
The one investment vehicle that has truly come of age in India in the past decade is
mutual funds. Today, the mutual fund industry in the country manages around Rs
329,162 crore (As of Dec, 2006) of assets, a large part of which comes from retail
investors. And this amount is invested not just in equities, but also in the entire gamut
of debt instruments.
Mutual funds have emerged as a proxy for investing in avenues that are out of reach
of most retail investors, particularly government securities and money market
instruments. Specialization is the order of the day, be it with regard to a scheme‘s
investment objective or its targeted investment universe. Given the plethora of options
on hand and the hard-sell adopted by mutual funds vying for a piece of your savings,
finding the right scheme can sometimes seem a bit daunting. Mind you, it‘s not just
about going with the fund that gives you the highest returns. It‘s also about managing
risk–finding funds that suit your risk appetite and investment needs.
So, how can you, the retail investor, create wealth for yourself by investing through
mutual funds? To answer that, we need to get down to brass tacks–what exactly is a
mutual fund? Very simply, a mutual fund is an investment vehicle that pools in the
monies of several investors, and collectively invests this amount in either the equity
market or the debt market, or both, depending upon the fund‘s objective. This means
you can access either the equity or the debt market, or both, without investing directly
in equity or debt.
 The essential features of the mutual funds distinguishing from other of the
investments are:-

 The mutual fund is a trust into which many relatively small investors invest their
money to form a large pool of cash which is then invested in securities by the
manager of the trust
 The price at which units can be bought and sold is governed solely by the value of
the underlying securities held by the MF and dealing in units are on the basis of
net market value of the investment per unit.
 The managers of MF are obliged to redeem any units in issue on demand or
certain specified period.
 All dividend income that the MF receives on its investments is paid out to unit
holders.

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 Since the unit held by investor evidences the ownership of the fund‘s assets, the
value of an investors part ownership is determined by the NAV of the number of
units held.

1.1.1 Concept of a Mutual Fund

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

Savings form an important part of the economy of any nation. With savings invested
in various options available to the people, the money acts as the driver for growth of
the country. Indian financial scene too presents multiple avenues to the investors.
Though certainly not the best or deepest of markets in the world, it has ignited the
growth rate in mutual fund industry to provide reasonable options for an ordinary man
to invest his savings. Investment goals vary from person to person. While somebody
wants security, others might give more weight age to returns alone. Somebody else
might want to plan for his child‘s education while somebody might be saving for the
proverbial rainy day or even life after retirement. With objectives defying any range,
it is obvious that the products required will vary as well.

Investors earn from a Mutual Fund in three ways:

1. Income is earned from dividends declared by mutual fund schemes from time to
time.
2. If the fund sells securities that have increased in price, the fund has a capital gain.
This is reflected in the price of each unit. When investors sell these units at prices
higher than their purchase price, they stand to make a gain.
3. If fund holdings increase in price but are not sold by the fund manager, the fund's
unit price increases. You can then sell your mutual fund units for a profit. This is
tantamount to a valuation gain. Though still at a nascent stage, Indian MF industry

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offers a plethora of schemes and serves broadly all type of investors. The range of
products includes equity funds, debt, liquid, gilt and balanced funds. There are also
funds meant exclusively for young and old, small and large investors. Moreover, the
setup of a legal structure, which has enough teeth to safeguard investors‘ interest,
ensures that the investors are not cheated out of their hard- earned money. All in all,
benefits provided by them cut across the boundaries of investor category and thus
create for them, a universal appeal. Investors of all categories could choose to invest
on their own in multiple options but opt for mutual funds for the sole reason that all
benefits come in a package.

Conceptual Framework of Mutual Fund

A mutual fund is constituted as a public trust created under the Indian Trust Act,
1882. SEBI (mutual fund) regulations, 1996 regulate the structure of the mutual funds
in India.
As per these regulations should have the following three-tier structure:
i) Sponsor
ii) Trust/trustee
iii) Asset Management Company

Apart from this mutual fund consist of

1. Sponsor
Sponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. The sponsor establishes the mutual fund and registers the
same with SEBI. Sponsor appoints the Trustees, custodians and the AMC with prior
approval of SEBI and in accordance with SEBI Regulations. Sponsor must have a 5-
year track record of business interest in the financial markets. Sponsor must have been
profit making in at least 3 of the above 5 years. Sponsor must contribute at least 40%
of the net worth of the Investment Managed and meet the eligibility criteria prescribed
under the Securities and Exchange Board of India (Mutual Funds) Regulations,
1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from
the operation of the Schemes beyond the initial contribution made by it towards
setting up of the Mutual Fund.

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2. Trust
The Mutual Fund is constituted as a trust in accordance with the provisions of the
Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian

Board of Trustees (body of individuals). The main responsibility of the Trustee is to

safeguard the interest of the unit holders and inter alia ensure that the AMC functions
in the interest of investors and in accordance with the Securities and Exchange Board
of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the
Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are
independent directors who are not associated with the Sponsor in any manner.

3.Asset Management Company (AMC)

The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund.
The AMC is required to be approved by the Securities and Exchange Board of India
(SEBI) to act as an asset management company of the Mutual Fund. At least 50% of
the directors of the AMC are independent directors who are not associated with the
Sponsor in any manner. The AMC must have a net worth of at least 10 crore at all
times.

Registrar and Transfer Agent

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer
Agent to the Mutual Fund. The Registrar processes the application form, redemption
requests and dispatches account statements to the unit holders. The Registrar and
Transfer agent also handles communications with investors and updates investor
records.
Custodian
A custodian is an agent, bank, trust company, or other organization which holds and
safeguards an individual's, mutual funds, or investment company's assets for them.

1.1.2 Advantages of Mutual Funds

1. Professional Management
Mutual Funds provide the services of experienced and skilled professionals, backed
by a dedicated investment research team that analyses the performance and prospects
of companies and selects suitable investments to achieve the objectives of the scheme.
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This risk of default by any company that one has chosen to invest in, can be
minimized by investing in mutual funds as the fund managers analyze the companies‘
financials more minutely than an individual can do as they have the expertise to do so.
They can manage the maturity of their portfolio by investing in instruments of varied
maturity profiles.
2. Diversification
Mutual Funds invest in a number of companies across a broad cross-section of
industries and sectors. This diversification reduces the risk because seldom do all
stocks decline at the same time and in the same proportion. You achieve this
diversification through a Mutual Fund with far less money than you can do on your
own.
3. Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems
such as bad deliveries, delayed payments and follow up with brokers and companies.
Mutual Funds save your time and make investing easy and convenient.
4. Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher
return as they invest in a diversified basket of selected securities. Apart from liquidity,
these funds have also provided very good post-tax returns on year to year basis. Even
historically, we find that some of the debt funds have generated superior returns at
relatively low level of risks. On an average debt funds have posted returns over 10
percent over one-year horizon. The best performing funds have given returns of
around 14 percent in the last one-year period. In nutshell we can say that these funds
have delivered more than what one expects of debt avenues such as post office
schemes or bank fixed deposits. Though they are charged with a dividend distribution
tax on dividend payout at 12.5 percent (plus a surcharge of 10 percent), the net
income received is still tax free in the hands of investor and is generally much more
than all other avenues, on a post-tax basis.
5. Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly
investing in the capital markets because the benefits of scale in brokerage, custodial
and other fees translate into lower costs for investors.

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6. Liquidity
In open-end schemes, the investor gets the money back promptly at net asset value
related prices from the Mutual Fund. In closed-end schemes, the units can be sold on
a stock exchange at the prevailing market price or the investor can avail of the facility
of direct repurchase at NAV related prices by the Mutual Fund. Since there is no
penalty on pre- mature withdrawal, as in the cases of fixed deposits, debt funds
provide enough liquidity. Moreover, mutual funds are better placed to absorb the
fluctuations in the prices of the securities as a result of interest rate variation and one
can benefits from any such price movement.
7. Transparency
Investors get regular information on the value of your investment in addition to
disclosure on the specific investments made by your scheme, the proportion invested
in each class of assets and the fund manager's investment strategy and outlook.
8. Flexibility
Through features such as regular investment plans, regular withdrawal plans and
dividend reinvestment plans; you can systematically invest or withdraw funds
according to your needs and convenience.
9. Affordability
A single person cannot invest in multiple high-priced stocks for the sole reason that
his pockets are not likely to be deep enough. This limits him from diversifying his
portfolio as well as benefiting from multiple investments. Here again, investing
through MF route enables an investor to invest in many good stocks and reap benefits
even through a small investment. Investors individually may lack sufficient funds to
invest in high-grade stocks. A mutual fund because of its large corpus allows even a
small investor to take the benefit of its investment strategy.
10. Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
11. Well Regulated
All Mutual Funds are registered with SEBI and they function within the provisions of
strict regulations designed to protect the interests of investors. The operations of
Mutual Funds are regularly monitored by SEBI.
12. Tax Benefits
Last but not the least, mutual funds offer significant tax advantages. Dividends
distributed by them are tax-free in the hands of the investor. They also give you the
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advantages of capital gains taxation. If you hold units beyond one year, you get the
benefits of indexation. Simply put, indexation benefits increase your purchase cost by
a certain portion, depending upon the yearly cost-inflation index (which is calculated
to account for rising inflation), thereby reducing the gap between your actual purchase
cost and selling price. This reduces your tax liability. What‘s more, tax-saving
schemes and pension schemes give you the added advantage of benefits under Section
88. You can avail of a 20 per cent tax exemption on an investment of up to Rs 10,000
in the scheme in a year.

1.1.3 Disadvantages of Mutual Funds

Mutual funds are good investment vehicles to navigate the complex and unpredictable
world of investments. However, even mutual funds have some inherent drawbacks.
Understand these before you commit your money to a mutual fund.
1. No assured returns and no protection of capital If you are planning to go with
a mutual fund, this must be your mantra:
Mutual funds do not offer assured returns and carry risk. For instance, unlike bank
deposits, your investment in a mutual fund can fall in value. In addition, mutual funds
are not insured or guaranteed by any government body (unlike a bank deposit, where
up to Rs 1 lakh per bank is insured by the Deposit and Credit Insurance Corporation, a
subsidiary of the Reserve Bank of India). There are strict norms for any fund that
assures returns and it is now compulsory for funds to establish that they have
resources to back such assurances. This is because most closed- end funds that
assured returns in the early-nineties failed to stick to their assurances made at the time
of launch, resulting in losses to investors. A scheme cannot make any guarantee of
return, without stating the name of the guarantor, and disclosing the net worth of the
guarantor. The past performance of the assured return schemes should also be given.
Indian Equity Income from dividends-(investor- free & DDT-NIL) Iincome from
capital gains-(short term-15% & long term- free) Others Income from dividends-
(investor- free & DDT-individual & HUL-14.025 & others-22.440 Income from
capital gains-(short term- as per tax slab & long term-10% or 20% with indexation
2. Restrictive gains
Diversification helps, if risk minimization is your objective. However, the lack of
investment focus also means you gain less than if you had invested directly in a single
security. Assume, Reliance appreciated 50 per cent. A direct investment in the stock
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would appreciate by 50 per cent. But your investment in the mutual fund, which had
invested 10 per cent of its corpus in Reliance, will see only a 5 per cent appreciation.
3. Taxes
During a typical year, most actively managed mutual funds sell anywhere from 20 to
70 percent of the securities in their portfolios. If your fund makes a profit on its sales,
you will pay taxes on the income you receive, even if you reinvest the money you
made. 4. Management risk When you invest in a mutual fund, you depend on the
fund's manager to make the right decisions regarding the fund's portfolio. If the
manager does not perform as well as you had hoped, you might not make as much
money on your investment as you expected. Of course, if you invest in Index Funds,
you forego management risk, because these funds do not employ managers.

1.1.4 Types of Mutual Fund Schemes

There are a wide variety of Mutual Fund schemes that cater to your needs, whatever
your age, financial position, risk tolerance and return expectations. Whether as the
foundation of your investment programme or as a supplement, Mutual Fund schemes
can help you meet your financial goals.

(A) By Structure
Open-Ended Schemes
These do not have a fixed maturity. You deal directly with the Mutual Fund
for your investments and redemptions. The key feature is liquidity. You can
conveniently buy and sell your units at Net Asset Value ("NAV") related
prices.
Close-Ended Schemes
Schemes that have a stipulated maturity period (ranging from 2 to 15 years)
are called close-ended schemes. You can invest directly in the scheme at the
time of the initial issue and thereafter you can buy or sell the units of the
scheme on the stock exchanges where they are listed. The market price at
the stock exchange could vary from the scheme's NAV on account of
demand and supply situation, Unit holders' expectations and other market
factors.

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 One of the characteristics of the close-ended schemes is that they are
generally traded at a discount to NAV but closer to maturity, the discount
narrows. Some close-ended schemes give you an additional option of
selling your units directly to the Mutual Fund through periodic repurchase
at NAV related prices. SEBI Regulations ensure that at least one of the two
exit routes are provided to the investor.
Interval Schemes
These combine the features of open-ended and close-ended schemes. They
may be traded on the stock exchange or may be open for sale or redemption
during predetermined intervals at NAV related prices.

(B) By Investment Objective

Growth Schemes
Aim to provide capital appreciation over the medium to long term. These
schemes normally invest amajority of their funds in equities and are willing
to bear short-term decline in value for possible future appreciation. These
schemes are not for investors seeking regular income or needing their
money back in the short term.
Income Schemes
Aim to provide regular and steady income to investors. These schemes
generally invest in fixed income securities such as bonds and corporate
debentures. Capital appreciation in such schemes may be limited.
Ideal for:
Retired people and others with a need for capital Stability and regular

Balanced Schemes
Aim to provide both growth and income by periodically distributing a part
of the income and capital gains they earn. They invest in both shares and
fixed income securities in the proportion indicated in their offer documents.
In a rising stock market the NAV of these schemes may not normally keep
pace, or fall equally when the market falls.
Ideal for:
Investors looking for a combination of income and moderate growth.

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Money Market/Liquid Schemes
Aim to provide easy liquidity, preservation of capital and moderate income.
These schemes generally invest in safer, short-term instruments such as
treasury bills, certificates of deposit, commercial paper and inter-bank call
money. Returns on these schemes may fluctuate, depending upon the
interest rates prevailing in the market.
Ideal for:
Corporate and individual investors as a means to park their surplus funds
for short periods or awaiting a more favorable investment alternative.
Other Schemes
Tax Saving Schemes
These schemes offer tax rebates to the investors under tax laws as
prescribed from time to time. This is made possible because the
Government offers tax incentives for investment in specified avenues. For
example, Equity Linked Savings Schemes (ELSS) and Pension Schemes.
The details of such tax saving schemes are provided in the relevant offer
documents.
Ideal for:
Investors seeking tax rebates.
Special Schemes
This category includes index schemes that attempt to replicate the
performance of a particular index such as the BSE Sensex or the NSE 50, or
industry specific schemes (which invest in specific industries) or sectorial
schemes (which invest exclusively in segments such as A Group shares or
initial public offerings) \
Different Modes of Receiving the Income Earned From Mutual Fund
Investments
Mutual funds offer three methods of receiving income:

Growth Plan:
In this plan, dividend is neither declared nor paid out to the investors but it
is built into the value of the NAV. In the other words, the NAV increases
over time due to such incomes and the investor realizes only the capital
appreciation on redemption of his investment.
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 Income plan or Dividend Payout Plan:
In this plan, dividends are paid-out to the investors. In other words, the
NAV only reflects the capital appreciation or depreciation in the market
price of the underlying portfolio.
Dividend Reinvestment Plan:
In this plan, dividend is declared but not paid out to the investors. Instead, it
is reinvested back in to the scheme at the then prevailing NAV. In other
words, the investor is given additional units and not cash as dividend

Mutual Fund Investment Strategies

 Systematic Investment Plan (SIP): SIPs entail an investor to invest a fixed sum
of money at regular intervals in MF scheme the investor has chosen. This may
help you gain from any appreciation in the event of upside or alternatively,
average your cost during downside. Seeing the present volatility in the market SIP
is the best option available to the investor due to regular entry into the market

 Systematic Withdrawal Plan (SWPs): These plans are best suited for people
nearing retirement. In these plans investor invest in a mutual fund scheme and is
allowed to withdraw a fixed sum of money at regular intervals to take care of

 Systematic Transfer Plan (STP): They allow the investor to transfer on a

periodic basis a specified amount from one scheme to another with in the same
fund family meaning two schemes belonging to the same mutual fund. A transfer
will be treated as redemption of units from the scheme from which the transfer is
made.

1.1.5 Growth of Mutual Fund Industry in India

While the Indian mutual fund industry has grown in size by about 320% from March,
1993 (Rs.470 billion) to December, 2010 (Rs.4505 billion) in terms of AUM, the
AUM of the sector excluding UTI has grown over times from Rs.152 billion in March
1999 to $ 148 billion as at March 2008.

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Though India is a minor player in the global mutual fund industry, its AUM as a
proportion of the global AUM has steadily increased and has doubled over its levels
in 1999. The growth rate of Indian mutual fund industry has been increasing for the
last few years. It was approximately 0.12% in the year of 1999 and it is noticed 0.50%
in 2010 in terms of AUM as percentage of global AUM.
Some facts for the growth of mutual funds in India
• 100% growth in the last 6 years.
• Number of foreign AMC‘s is in the queue to enter the Indian markets.
• Our saving rate is over 23%, highest in the world. Only channelizing these savings
in mutual funds sector is required.
• We have approximately 29 mutual funds which are much less than US having
more than 800. There is a big scope for expansion.
• Mutual fund can penetrate rural like the Indian insurance industry with simple and
limited products.
• SEBI allowing the MF's to launch commodity mutual funds.
• Emphasis on better corporate governance.
• Trying to curb the late trading practices.
• Introduction of Financial Planners who can provide need based advice.

1.1.6 Risks of Investing in Mutual Funds

Market / Interest Risk
 Volatility of prices leading to ―floating‖ returns Largely mitigated with a holding
period of over 6 months

Credit Risk
 Potential default of bonds on the portfolio

Equity Risk
 Possibility of the fund manager not able to meet redemptions

1.1.7 Impact of Technology

Mutual fund, during the last one decade brought out several innovations in their
products and is offering value added services to their investors.
Some of the value added services that are being offered are:
• Electronic fund transfer facility.

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• Investment and re-purchase facility through internet.
• Added features like accident insurance cover, med claim etc.
• Holding the investment in electronic form, doing away with the traditional form of
unit certificates.
• Cheque writing facilities.
• Systematic withdrawal and deposit facility.

1.1.8 Online Mutual Fund Trading

The innovation the industry saw was in the field of distribution to make it more easily
accessible to an ever increasing number of investors across the country. For the first
time in India the mutual fund start using the automated trading, clearing and
settlement system of stock exchanges for sale and repurchase of open-ended de-
materialized mutual fund units.

Systematic Investment Plan (SIP) and Systematic Withdrawal Plan (SWP) were
options introduced which have come in very handy for the investor to maximize their
returns from their investments. SIP ensures that there is a regular investment that the
investor makes on specified dates making his purchases to spread out reducing the
effect of the short term volatility of markets. SWP was designed to ensure that
investors who wanted a regular income or cash flow from their investments were able
to do so with a pre-defined automated form. Today the SW facility has come in handy
for the investors to reduce their taxes.

1.1.9 How to Invest in Mutual Funds.

Step One- Identify your investment needs. Your financial goals will vary, based on
your age, lifestyle, financial independence, family commitments, level of income and
expenses among many other factors. Therefore, the first step is to assess your needs.
Step Two- Choose the right Mutual Fund. Once you have a clear strategy in mind,
you now have to choose which Mutual Fund and scheme you want to invest in. The
offer document of the scheme tells you its objectives and provides supplementary
details like the track record of other schemes managed by the same Fund Manager.
Some factors to evaluate before choosing a particular Mutual Fund are:
• The track record of performance over the last few years in relation to the
appropriate yardstick and similar funds in the same category.
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• How well the Mutual Fund is organized to provide efficient, prompt and
personalized service.
• Degree of transparency as reflected in frequency and quality of their
communications.
Step Three- Select the ideal mix of Schemes. Investing in just one Mutual Fund
scheme may not meet all your investment needs. You may consider investing in a
combination of schemes to achieve your specific goals. The following charts could
prove useful in selecting a combination of schemes that satisfy your needs.
Step Four - Invest regularly.
Step Five- Keep your taxes in mind.
Step Six- Start early.
It is desirable to start investing early and stick to a regular investment plan. If you
start now, you will make more than if you wait and invest later. The power of
compounding lets you earn income on income and your money multiplies at a
compounded rate of return.
Step Seven-The final step
All you need to do now is to get in touch with a Mutual Fund or your Agent/broker
and start investing. Reap the rewards in the years to come. Mutual Funds are suitable
for every kind of investor-whether starting a career or retiring, conservative or risk
taking, growth oriented or income seeking.

What fees and commissions will you pay when you invest in mutual funds?
The fees and commissions you may be charged can vary widely from one fund, and
one dealer, to the next. Some of the charges may be negotiable, but you should make
sure that you understand all of the costs before you invest. There are two main costs
to consider – the management and operating expenses that are charged to the fund
each year, and the sales charges (or loads) that you pay when you buy or sell the fund.

Management and Operating Expenses are expenses paid each year by the fund and
include such things as the manager‘s fees, legal and accounting fees, custodial fees
and bookkeeping costs. The Management Expense Ratio (MER) is the percentage of
the fund‘s average net assets that these expenses represent. For example, if a $100
million fund has $2 million in costs for the year its MER will be 2%. MERs can range
from under 1% per year for some money market funds.
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Sales Charges (Loads) are the commissions that you may have to pay when you buy
or redeem units of a fund. Sales charges may be applied when you buy units of the
fund (Afront-end load), when you redeem your units (a back-end load), or there may
be no sales charges at all (no-load).Where front-end loads are charged, the rate can
vary from dealer to dealer and may be negotiable. Shop around, and remember that
every dollar you pay up-front in commission's a dollar that does not go to work for
you in the fund. Many funds are sold on a back-end load basis, meaning generally that
the sales charges are applied only when you redeem the fund. Back-end load fees are
paid by the fund management company to your mutual fund salesperson – you do not
pay this fee. You do, however, pay a ‗redemption fee‘ if you redeem your units in the
fund before a certain time period,typically 7 years. Redemption fees decline each year
that you hold the investment. For example, you might have to pay at 6% fee if you
redeem the fund after one year, 4% if you redeem after three years, and no
commission if you redeem after seven years.An increasing number of funds are being
sold on a no-load basis, in which investors pay no sales charges, but before you
decide that a no-load fund is right for you, consider the fund‘s performance, its
management expense ratio and the level of service and advice you will receive.

1.2 OBJECTIVES OF THE STUDY

 To study awareness of respondents towards mutual funds.
 To study the perception of respondents regarding schemes in mutual funds.
 To study the factors considered while investing in mutual funds.

1.3 NEED AND SCOPE OF THE STUDY

Need
The brief study on review of literature revealed the fact that number of studies have
been carried out in the area of the mutual funds but in Indian context, still a wide gap
exist in the research field with particular stress on the same aspect. In order to fill the
research gap, focus only on the mutual fund companies and the need aroused to
identify awareness of mutual funds.
Scope of the Study
The scope of the study is limited to customers of IDFC Asset Management Company
Limited, Jalandhar.

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1.4 RESEARCH METHODOLOGY
Research means a search for knowledge or gain some new knowledge and
methodology can properly refer to the theoretical analysis of the methods appropriate
to a field of study or to the body of methods and principles particular to a branch of
knowledge. A Research methodology has a specified framework for collecting the
data in an effective manner. Research methodology means a "defining a problem,
defining the research objectives, developing the research plan, collecting the
information, analyzing the information and presentation of findings." Such framework
is called "Research Design". The research process that was followed consists
following steps;
Research Define
The definition of problem includes the study of “Awareness of Mutual Funds”.

1.4.1 Research Design

A research design is the arrangement of conditions for the collection and analysis of
data in a manner that aims to combine relevance to research purpose with economy in
procedure. This research is descriptive in nature. So after careful relocation residents
of Jalandhar City were interviewed. This step of the study consists of developing the
most efficient plan for gathering the relevant data. The following factors were under
focus in the research plan:
1.4.1.1 Data Design
It involves different aspects like the nature of data, the data sources, the data
frequency and the data tools.
1.4.1.2 Nature of Data
The nature of data that has been used under project is both primary and secondary in
nature. The term data can be defined as facts, figures and information, systematically
collected and presented for the purpose of drawing inferences. The firsthand
information bearing on any research, which has been collected by the researcher, or
his agent or assistant is called “primary data”. The results based on primary data are
bound to be empirical and of great utility. Once the primary data has been put to use,
the original characters disappear and the data becomes secondary. The data which has
already been collected, compiled and presented earlier by any agency, may be used
for the purpose of investigation.

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1.4.1.3 Type of Research
Survey is best suited for descriptive and analytical research. Survey are undertaken to
learn about people's knowledge, beliefs, preferences, satisfaction and so on and to
measure these magnitudes in the general public.

1.4.2 Sampling Design

It is a definite plan for obtaining a sample from a given population. It refers to the
technique or the procedure the researcher would adopt in selecting items for the
sample. The sampling plan or design calls for the following decisions:
a. Universe: Research sample unit refers to the geographical area which is covered
while conducting the research. The universe of present study is Jalandhar City.
b. Sample Unit: The sample unit pertaining to present study is the customers of
IDFC Asset Management Company Limited, Jalandhar.
c. Sample Size: How many people will be surveyed? This refers to number of
respondents to be selected from the universe to constitute a sample. An optimum
sample is one that fulfills the requirements of efficiency, reliability and flexibility.
The sample size of 100 served the purpose of present study.
d. Sample Method: The sampling method used is non-probability convenience
sampling (where the researcher selects the most accessible population members
from which to obtain information).
1.4.3 Methods of Data Collection and Analysis
The researcher can get two types of data:
1.4.3.1 Data Collection
a) Primary Data
b) Secondary Data
a. Primary Data: Primary data is a data which did not exist earlier and is being
collected by the researcher first time for its specific objectives. In other words,
direct collection of data from the source of information, technology including
personal interview, telephonic interviews, observation, Questionnaire and through
schedules.
b. Secondary data: Any data which have been collected earlier for some purpose
are the secondary data. Indirect collection of data from sources containing past or
recent past information like brochures, annual publication, books etc. Secondary
sources used are:

18
• Text books
• Internet sites
• Newspaper articles
• Brouchers

1.4.3.2 Tools of Analysis

Data after collection have been processed and analyzed in accordance with the outline
laid down in the research plan. Data obtained during the study have been
systematically tabulated and interpreted with the help of tables or pie charts and Cross
Tabulation.

1.4.4 Limitations of the Study

• The paucity of time and resources was the major constraint
• The sample size was limited
• The sample was taken from the population residing in Jalandhar only, so the
results are not applicable to whole of the India.
• Non co-operation of some respondents has also affected the research‘s results.
• The comparison is not done between all types of scheme.
• Being an opinion survey a lot of subjectivity is involved in the study.

19
 CHAPTER -2
COMPANY PROFILE

20
2.1 INTRODUCTION TO IDFC ASSET MANAGEMENT
COMPANY LIMITED
IDFC Asset Management Company Ltd. was established in 2000 and is one of
the largest Mutual Fund houses in India (in terms of AUM). It has developed a robust
network to deliver consistent value to its investors across India.

Pursuant to RBI‘s requirements for banking license, IDFC Ltd. transferred its
shareholding in IDFC Asset Management Company Ltd. to IDFC Financial Holding
Company Limited, a Non-Operative Financial Company, which is a wholly owned
subsidiary of IDFC Ltd.Currently, IDFC Financial Holding Company Limited/ its
nominees hold the entire shareholding in IDFC AMC. Even after the transfer, IDFC
continues to be the sponsor of IDFC Mutual Fund and also continues to hold
controlling interest in IDFC AMC.

IDFC Ltd. is a leading diversified financial institution providing a wide range of

financing products and fee-based services with infrastructure as its focus area. The
key businesses of IDFC Ltd. included Project Finance, Principal Investments,
Financial Markets and Investment Banking, Broking, Advisory Services and Asset
Management, which comprises
(i) private equity investments and project equity investments through its
subsidiary, IDFC Alternatives Limited and
(ii) public markets asset management services through its subsidiary IDFC AMC.

IDFC Ltd. received the banking license / approval from the Reserve Bank of India to
set a bank and has launched the IDFC Bank on October 01, 2015. IDFC Bank
comprises three distinct businesses i.e. commercial & wholesale bank, rural bank and
personal & business bank.

IDFC Ltd. was set up in 1997 by the Government of India as a financier and catalyst
for private sector's involvement in infrastructure development in India.

21
Mission
―To be the leading knowledge-driven financial services company, creating enduring
value, promoting infrastructure and nation building‖
Integrity
They are engage in honest and straight forward communication with all stakeholders
and adhere to the highest ethical standards in everything we do. Their reputation is
paramount. They will act in the best interests of our clients but without compromising
our values and principles.
Nurturing Humility
They are modest enough to know that we can be wrong and smart enough to learn
from our mistakes.They treat everyone as an equal— no task is beneath us.
Stewardship
They act as custodians of our firm and accept the charge of passing on a better
business than the one we inherited. Their actions will be guided by rules and ethical
principles creating long term value with due care for society and environment.
Partnership
They emphasize a ONE FIRM culture. They foster mutual respect and proactively
collaborate with each other, with clients, and with partners keeping just one thing in
mind – to be the best at what we do.
Initiative
They encourage new ideas and independent action within a culture that fosters sharing
knowledge and information, critical debate and constructive dissent.
Responsibility
They take complete ownership for our actions, emphasizing a results-oriented and
problem- solving approach to business. They are personally accountable to the
communities that we serve.
Excellence
They constantly strive to raise industry standards, be the employer of choice, and
work to be the best rather than the biggest. Dedication to excellence results in superior
execution and generates creative, imaginative and innovative outcomes.

2.1.1 History & Timelines

Their Group was born out of the need for a specialized financial intermediary for
infrastructure. Incorporated on January 30, 1997 in Chennai, our company was set up
22
on the recommendations of the 'Expert Group on Commercialisation of Infrastructure
Projects' under the Chairmanship of Dr. Rakesh Mohan. Since then, we have been a
leading catalyst for providing private sector infrastructure development in India. We
focus on developing and leveraging our knowledge base in the infrastructure space to
devise and provide appropriate financing solutions to our customers. Our strong
capitalization reflects the crucial role that we play in infrastructure development.
2000
 IDFC is founded on the recommendations of the 'Expert Group on
Commercialization of Infrastructure Projects' under the Chairmanship of Dr.
Rakesh Mohan.
 The group is conceptualized to channel private capital into commercially viable
projects.
2002
 Is notified as a Public Financial Institution under Section 4A of the Companies
Act.
2003
 Gets registered with SEBI as a merchant banker.
2004

2005
 Sets up Infrastructure Development Corporation (Karnataka) Limited (iDeCK)
2006
 Sets up IDFC Private Equity as an investment manager for private equity funds.
 Sets up Uttaranchal Infrastructure Development Company Limited (UDEC).
2008
 Successfully raises $200 million for the India Development Fund, the first
infrastructure- focused private equity fund.
2009
 Becomes a public company after listing its shares on NSE and BSE.
2011
 Successfully raises $450 million for its second infrastructure - focused private
equity fund.

23
2012
 Raises Rs. 2,100 crore through QIP.
 Sets up IDFC Project Equity Company Limited as a specialized project finance

 Establishes IDFC Projects to develop, implement, own and operate projects in the
infrastructure space.
2013
 Successfully raises $930 million through the India Infrastructure Fund to invest
equity capital in infrastructure projects and $700 million in its third private equity
fund.
 Enters into asset management by acquiring the AMC business of Standard
Chartered Bank in India.
 Incorporates IDFC Capital (Singapore) Pte Limited, for an emerging markets
private equity fund-of-funds business.
2014
 The company's loan book crosses Rs. 20,000 crore with more than 200
infrastructure projects funded.
 Establishes IDFC Foundation to focus on capacity building, policy advisory and
sustainability initiatives.
 Becomes part of Nifty 50.
2015
 Raises additional capital of Rs. 26,542 million through a Qualified Institution
Placement at Rs.168.25 per share and CCPS at a conversion price of Rs.176 per
share. Government shareholding reduces to 18%.
 Classified as an Infrastructure Finance Company (IFC).
 Raises Rs. 480 crores in the first tranche of its Long Term Infrastructure Bonds.
2016
 Certified as India's first "Green Data Centre".
 IDFC opens an office in US.
 Sets up IDFC Foundation as a Section 25 Company for all its developmental
work. IDFC & Natixis Global Asset Management enter into a strategic
partnership.
 Raise USD 310 million of ECB's.

24
 Starts "Partners Program".
2017
 IDFC Completes 17 years with over 1.5 million investors.
 Launches "In Our Hands" an youth engagement initiative, to socialize the policy
advocacy work being done under the aegis of the India Infrastructure Report (IIR).
 Releases a handbook titled "EVOLVING PERSPECTIVES IN THE
DEVELOPMENT OF INDIAN INFRASTRUCTURE", encompassing the policy
work done in the last 17 years.
Company’s structure
 Country head
 State head distribution channel
 Cluster heads of investments
 Individual brokers
 Back office operation
 Sales team
State head looks after all the operation in Karnataka region like Bellary, Mysore and
other cities of Karnataka and coordinates with asset management companies i.e.
AMCs and reports to country head, and cluster heads of investments are responsible
for sales team and report to state head distribution channel and sales people who
directly interact with investors for the investments report to cluster head investment.
Sales team is supported by back office operations like role of back office operation
Schemes of IDFC Mutual Funds
IDFC Advantage Fund
IDFC Dividend Yield Plus
IDFC Equity Plan
IDFC Index Fund
IDFC Opportunity Fund
IDFC Mid Cap Fund
IDFC Balance Fund
IDFC Asset Allocation Fund
IDFC Gilt Plus
IDFC Dynamic Bond Fund
IDFC Income Plus

25
 CHAPTER -3
DATA ANALYSIS AND
INTERPRETATION

26
 DATA ANALYSIS AND INTERPRETATION

The data has been processed and analyzed by tabulation interpretation so that findings
can be communicated and can be easily understood. The findings are presented in the
best possible way. Tables and graphs had been used for illustration of findings of the
research.
Table 3.1: Demographic Profile of Customers
Demographics No. of Respondents Percentage of Respondents
Age
25-35 years 20 20
35-45 years 40 30
45-55 years 20 20
Above 55 years 20 20
Total 100 100
Gender
Male 60 60
Female 40 40
Total 100 100
Occupation
Govt. Employees 60 60
Private Employees 30 30
Businessman 10 10
Others please specify 0 0
Total 100 100
Income (Rs.)/month
Below10,000 30 30
10,000-30,000 40 40
30,000-50,000 20 20
Above 50,000 10 10
Total 100 100

27
Statement 1: Awareness About Various Mutual Funds

Table 3.1: Awareness About Mutual Funds

Level of Awareness Number of Respondents Percentage of Respondents

Aware 100 100
Not Aware 0 0
Total 100 100

Figure 3.1: Awareness About Mutual Funds

Not Aware
0%

Aware
100%

Analysis and Interpretation:

All the respondents were aware of the concept of mutual funds. 100% respondents
gave the response ‗yes‘ which show the awareness of mutual fund investors.

28
Statement 2: Awareness of People Regarding Various Mutual Fund Houses.

Table 3.3: Awareness of People Regarding Various Mutual Fund Houses

Name of Company Number of Respondents Percentage of Respondents
SBI 86 19
Kotak Mahindra 86 19
HDFC 95 20
IDFC 75 17
ICICI Prudential 85 19
Other 32 6
Total 459* 100

Figure 3.2: Awareness of People Regarding Various Mutual Fund Houses

6
19

19
SBI
Kotak Mahindra
HDFC
IDFC
19
ICICI Prudential

17 Other

20

Analysis and Interpretation:

From the above chart, it was clear that about 20% of the respondents were aware of
HDFC mutual fund, 19% were aware of SBI, Kotak Mahindra, ICICI Prudential .
By this we interpret that the people were aware of almost all the players due to a lot of
promotions done by all the mutual fund houses.

29
Statement 3: Mutual Fund House Offering Most Lucrative Schemes.

Table 3.4: Mutual Fund House Offering Most Lucrative Schemes

Name of the Company Number of Respondents Percentage of Respondents
SBI 49 35
Kotak Mahindra 21 15
HDFC 50 36
IDFC 4 3
ICICI Prudential 13 10
Other 2 1
Total 139* 100

Figure 3.3: Mutual Fund House Offering Most Lucrative Schemes

1
10
3

35 SBI
Kotak Mahindra
HDFC
IDFC
ICICI Prudential
36 Other

15

Analysis and Interpretation:

From the above chart, it was clear that 36% of the people believe that HDFC was
offering most lucrative schemes, 35% feels it as SBI, 15% of Kotak Mahindra and rest
of others.

30
Statement 4: Preference of People For Mutual Fund Investment.

Table 3.5: Preference of People for Mutual Fund Investment

Preference Number of Respondents Percentage of Respondents

Prefer 98 98
Not Prefer 2 2
Total 100 100

Figure 3.4: Preference of People for Mutual Fund Investment

Not Prefer
2%

Prefer
98%

Analysis and Interpretation:

From the above chart, it was clear that 98% of the people want to invest in mutual
fund as they provide better returns.

31
Statement 5: Preference of People Towards a Mutual Fund House.

Table 3.6: Preference of People Towards a Mutual Fund House

Name of the Company Number of Respondents Percentage of Respondents

SBI 43 29
Kotak Mahindra 25 17
HDFC 47 31
IDFC 5 4
ICICI Prudential 27 18
Other 3 1
Total 150* 100

Figure 3.5: Preference of People Towards a Mutual Fund House

1
18
29
SBI

4 Kotak Mahindra
HDFC
IDFC
ICICI Prudential
Other

31 17

Analysis and Interpretation:

From the above chart, it was clear that about 31% of the respondents want to invest in
HDFC mutual fund, 29% in Reliance, 18% in ICICI Prudential, 17% in Kotak Mahindra,
4% in IDFC and 1% in others.

32
Statement 6: Reasons For Investing in Mutual Fund

Table 3.7: Reasons for Investing in Mutual Fund

Particulars Number of Respondents Percentage of Respondents

Association with brand 34 32
Good track record 52 50
Distributor's advice 16 15
Any other reason 4 3
Total 106* 100

Figure 3.6: Reasons For Investing in Mutual Fund

3
15

32

Association with brand

Good track record
Distributor's advice
Any other reason

50

Analysis and Interpretation:

From the above chart, it was clear that about 50% of the respondents want to invest in
mutual fund because of its good track record. 32% because of brand name, 15% due
to distributor's advice and rest because of its business ethics and professionalism.

33
Statement 7: Rank the Following Factors From 1-8 that Affect Investment
Decision of an Investor Regarding any Mutual Fund.

Table 3.8: Factors Affecting Investment Decision

RANKS → 1 2 3 4 5 6 7 8 WEIGHTED RANK

FACTORS AVERAGE
↓ SCORE
Star rating 29 16 23 8 6 8 4 6 316 2
Track record 35 29 15 10 3 1 4 3 251 1
Brand 16 22 20 17 12 4 6 3 338 3
After sale services 2 3 9 14 26 24 16 6 408 4
Exit load 1 5 6 5 8 21 25 29 622 8
Distributor's advice 4 9 10 8 15 24 16 14 527 6
Experience of Fund 3 4 6 21 15 12 12 27 560 7
manager
Type of scheme 10 9 12 18 16 6 16 13 468 5

Number of respondents- 100

Rank 1- Most Important
Rank 8- Least Important
Data Analysis & Interpretation
In the above table, the various factors affecting investment decision of an investor
regarding any mutual fund were ranked. Track record was ranked first with a
weighted average score of 251, Star rating was ranked second and Brand was ranked
third and Exit load was given the last rank.
Thus it was concluded that track record and brand were considered by the customer at
the time of investment in mutual funds.

34
Statement 8: AMC Providing Better Services.

Table 3.9: AMC Providing Better Services

Name of the Company Number of Respondents Percentage of Respondents
SBI 46 33
Kotak Mahindra 18 13
HDFC 52 37
IDFC 2 2
ICICI Prudential 18 13
Other 4 2
Total 140* 100

Figure 3.7: AMC Providing Better Services

2
13

2 33 SBI
Kotak Mahindra
HDFC
IDFC
ICICI Prudential
Other
37
13

Analysis and Interpretation:

From the above chart, it was clear that about 33% of the respondents believed that
SBI was providing better services, 37% of HDFC and 13% of ICICI Prudential and
Kotak manhindra.

35
Statement 9: Ranking of the Statements on the Likert's Scale.
Table 3.10: Satisfaction Level of Respondents
Particulars Strongly Agree Neutral Disagree Strongly Summated
agree disagree score
AMC acts as a trendsetter. 17 49 17 14 3 363

Products of AMC are 15 52 26 6 1 374

more lucrative.

Promotional schemes 22 39 27 8 4 367

affect sales of mutual
fund.
AMC offers better 12 54 26 6 1 367
platform for transacting
and performance
monitoring of mutual
funds.

Brand equity of Company 18 59 18 4 1 389

influences customers.

AMC has core 44 37 13 4 2 416

competency
in financial products.
amc offers wide product 15 46 34 5 0 371
range.

AMC provides better after 11 44 30 11 4 347

sale services to
attract customers.
Total 154 380 175 45 16

Number of respondents -100

Maximum Score –
Strongly agree (100*5) – 500
Agree (100*4) – 400
Neutral (100*3) – 300
Disagree (100*2) – 200
Strongly Disagree (100*1) – 100

36
Analysis and Interpretation:-
As from the above table comparison was done between maximum score and
summated score. Maximum score was the score which represents the satisfaction level
among the respondents. So, information related to the level of satisfaction or least
satisfaction to various factors influencing the satisfaction level of respondents was
interpreted in following manner:-
It was clear that the statement that AMC acts as a trendsetter‘ was near to agreed. So
the respondents agree to the statement with summated score of 363.
It was clear that the statement that 'Products of AMC were more lucrative ' is between
agreed and neutral but was closer to agree level. So the respondents agree to the
statement with summated score of 374.
It was clear that the statement that ‗Promotional schemes affect sales of mutual fund‘
was between agreed and neutral but was closer to agree level. So the respondents
agree to the statement with summated score of 367.
It was clear that the statement that ‗AMC offers better platform for transacting and
performance monitoring of mutual funds‘ was between agreed and neutral but was
closer to agree level. So the respondents agree to the statement with summated score
of 367.
It was clear that the statement that ‗Brand equity of AMC influences customers‘ was
between agreed and neutral but was closer to agree level. So the respondents agree to
the statement with summated score of 389.
It was clear that the statement that ‗AMC had core competency in financial products'
was between strongly agreed and agreed but was closer to agree level. So the
respondents agree to the statement with summated score of 416.
It is clear that the statement that ‗AMC offers wide product range ' is between agreed
and neutral but is closer to agree level. So the respondents agree to the statement with
summated score of 371.
It is clear that the statement that ‗AMC provides better after sale services to
attract customers‘ is between agreed and neutral but is closer to agree level. So the
respondents agree to the statement with summated score of 347.

37
Statement 10: AMC Having More Demand in the Market.

Table 3.11: AMC Having More Demand in the Market

Name of the Company Number of Respondents Percentage of Respondents
SBI 49 39
Kotak Mahindra 11 8
HDFC 57 43
IDFC 3 3
ICICI Prudential 7 6
Other 1 1
Total 128* 100

Figure 3.8: AMC Having More Demand in the Market

6 1
3

SBI
39
Kotak Mahindra
HDFC
IDFC
ICICI Prudential
43
Other

Analysis and Interpretation:

From the above chart, it is clear that about 43% of the respondents believe that HDFC
has more demand in the market, 39% of SBI, and 8% of Kotak Mahindra.

38
Statement 11: AMC Having Greater Customer Base.

Table 3.12: AMC Having Greater Customer Base

Name of the Company Number of Respondents Percentage of Respondents
SBI 60 58
Kotak Mahindra 4 3
HDFC 30 29
IDFC 3 3
ICICI Prudential 7 7
Other 0 0
Total 104 100

Figure 3.9: AMC Having Greater Customer Base

7 0
3

SBI
Kotak Mahindra
HDFC
29
IDFC
58 ICICI Prudential
Other

Analysis and Interpretation:

From the above chart, it is clear that about 58% of the respondents believe that SBI
has greater customer base, 29% of HDFC, 4% of Kotak Mahindra and 3% IDFC.

39
Statement 12: AMC that Has Made Most Advantageous Use of Print and
Electronic Media.
Table 3.13: AMC Has Made Most Advantageous Use of Print and Electronic
Media
Name of the Company Number of Respondents Percentage of Respondents
SBI 54 39
Kotak Mahindra 21 15
HDFC 40 29
IDFC 2 1
ICICI Prudential 21 15
Other 1 1
Total 139* 100

Figure 3.10: AMC That Has Made Most Advantageous Use of Print and
Electronic Media

1
15

1 SBI
39 Kotak Mahindra
HDFC
IDFC
ICICI Prudential
29
Other

15

Analysis and Interpretation:

From the above chart, it is clear that about 39% of the respondents believe that
Reliance has made most advantageous use of print and electronic media to motivate
investors and potential investors, 29% of HDFC, and rest of others.

40
Statement 13: Rank the Following Funds From 1-8, According to Your
Perception About Their Performance in the Market.

Table 3.14: Top Performing Funds in the Market

RANKS → 1 2 3 4 5 6 7 8 WEIGHTED RANKS

FUNDS AVERAGE
↓ SCORE
IDFC Premier Equity 7 17 10 17 15 9 10 15 458 5
Plan AG
SBI Regular Savings 13 15 34 20 6 5 6 1 365 2
Equity
DSP Black Rock Top 13 21 10 17 17 18 4 0 374 3
100
UTI Dividend Yield 2 5 2 4 23 36 13 15 576 7
HDFC Top 200 Fund 48 17 19 8 0 3 5 5 264 1
UTI Magnum Equity 3 4 11 6 19 17 25 15 560 6
Franklin Templeton 7 4 1 14 10 4 28 32 600 8
Dynamic PE
Tata Infrastructure 6 21 10 17 12 6 9 19 457 4

Number of Respondents- 100

Rank 1- Most Important
Rank 8- Least Important

Data Analysis & Interpretation

In the above table, the various funds are ranked according to their performance in the
market. HDFC Top 200 Fund is ranked first with a weighted average score of 264,
SBI Regular Savings Equity is ranked second and DSP Black Rock Top 100 is ranked
third and Franklin Templeton Dynamic PE is given the last rank.

41
 CHAPTER -4
FINDINGS OF THE
STUDY

42
 FINDINGS OF THE STUDY

The research was conducted on different people to know their perspective over
different aspects of Derivative instruments. And after conducting the survey, the
various findings of the research are mentioned below:

 The people were aware of almost all the mutual fund houses.
 The study shows that HDFC & SBI mutual funds were offerings most
lucrative schemes.
 It is found that most of the people want to invest in mutual funds.
 The study showed that people want to invest in HDFC and SBI mutual funds.
 The study stated that it was clear that people want to invest in HDFC mutual
fund because of its good track record, brand name, business ethics.
 The study showed that the track record and brand were most considered by the
customer at the time of investment in mutual funds
 It showed that majority of the people believe that SBI and HDFC were
providing better services.
 It showed that most of the people believe that AMC had core competency in
financial products.
 The study showed that majority people believe that SBI had greater customer
base in comparison to other players.
 The study showed that majority people believe that SBI and HDFC had made
most advantageous use of print and electronic media to motivate investors and
potential investors.
 People wanted to invest in mutual funds to take benefit of returns.
 HDFC Top 200 fund, SBI Regular Savings Equity, DSP Black Rock Top 100
were performing well in the market.

43
 CHAPTER -5
CONCLUSION AND
RECOMMENDATIONS
OF THE STUDY

44
5.1 CONCLUSION OF THE STUDY
All the Mutual Fund houses play very important role in Indian economy. Now days,
people want to invest in mutual funds. Investment decision of the investor is affected
by track record, brand name, and star rating of the mutual fund. A mutual fund uses
the money collected from investors to buy those assets which are specifically
permitted by its stated investment objective. The Indian mutual fund industry
currently consists of 38 players that have been given regulatory approval by SEBI.

Finally it is concluded that the respondents were aware of almost all the mutual fund
houses. HDFC & SBI mutual funds were offerings most lucrative schemes. Most of
the people want to invest in mutual funds. People want to invest in HDFC and SBI
mutual funds. The study stated that it was clear that people want to invest in mutual
fund because of its good track record, brand name, business ethics. Majority of the
people believe that SBI and HDFC were providing better services. The study showed
that majority people believe that SBI had greater customer base in comparison to
other players. Majority people believe that SBI and HDFC had made most
advantageous use of print and electronic media to motivate investors and potential
investors. People wanted to invest in mutual funds to take benefit of returns. HDFC
Top 200 fund, SBI Regular Savings Equity, DSP Black Rock Top 100 were
performing well in the market.

45
 CHAPTER -6
RECOMMENDATIONS
OF THE STUDY

46
6.1 RECOMMENDATIONS OF THE STUDY:
The research has been conducted to know Awareness of mutual funds. Various view
point has been given by different people to know the Position. Some of the valuable
recommendations out of those suggestions are included in this research:

 Mutual Fund houses should focus on more lucrative schemes.

 Provision of quality service at less cost would help AMC to capture market in
coming future.
 Mutual Fund houses should focus on more promotional schemes to attract
people.
 Indian mutual fund industry needs to address efficiency and customer
centricity.
 Mutual fund houses should begin to focus on cities beyond Top 20 by building
their branch presence and strengthening distribution reach.

47
REFERENCES

48
 REFERENCES

 Bello et. al. (2015). Performance of Mutual Funds; Managerial Finance, 31(2),
100-112.
 Fernades M. (2015). The Rise of Mutual Funds; Oxford University Press. p. 9.
 Gupta et. al. (2014). Final Rule: Registration Form Used by Open-End
Management Investment Companies: Sample Form and instructions. U.S.
Securities and Exchange Commission (SEC).
 Jensen et. al. (2013). Mutual fund investing through employee sponsored pension
plans-invest knowledge and policy implications. Managerial Finance, 23(8), 5-29.
 Klemosky et. al. (2014). The Origins of Mutual Funds; Yale ICF Working Paper
No. 04-48.
 McDonald et. al. (2014). Investment Company Fact Book. Investment Company
Institute. Retrieved 2016-06-18.
 Rao J.(2016). An Analysis of Investor‘s Risk Perception towards Mutual Funds
Services. International Journal of business and Management, 4(5), 106-120.
 Sharp et. al. (2012). Risk-adjusted performance of international mutual funds.
Managerial Finance, 34(1), 5-22.
 Treynor J. and Mazuy S. (2013). Analyzing Investors‘ Attitude towards Mutual
Funds as an Investment Option. The IUP journal of Management Research, 8(7),
56-64.
 Williams et. al. (2017). Bargain Hunting or Star Gazing? Investors‘ Preferences
for stock Mutual Funds. Journal of Business, 70(4), 645-663.

49
ANNEXURE

50
 ANNEXURE A)
QUESTIONNAIRE

I am pursuing MBA from Apeejay Institute of Management Technical Campus,

Jalandhar. As a part of my summer training, I am conducting a research on
―Awareness of Mutual Fund”. So I request you to spare few minutes from your busy
schedule and fill this form. I assure you that the information provided by you will be
kept confidential.

Demographic Information: -

Name - ____________________________________________

Age - 15-25years 26-35years 36-45years

Above 45years

Address - ____________________________________________

Occupation - Student Business

Service Housewife

If any other please specify_________________________________

Contact No -____________________________________________

QUESTIONS

Q1. Are you aware of mutual funds?

(i) Yes (ii) No

Q2. Which of the following mutual funds are you aware of?

(i) SBI (ii) Kotak Mahindra

(iii) HDFC
(iv) IDFC (v) ICICI Prudential
(vi) Other please specify_____________

Q3. In your opinion, which AMC (Asset Management Company) is offering

most lucrative schemes?

(i) SBI (ii) Kotak Mahindra

(iii) HDFC
(iv) IDFC (v) ICICI Prudential
(vi) Other please specify_____________

51
Q4. Have you invested/ Do you want to invest in mutual funds?

(i) Yes (ii) No

Q5. If yes, in which mutual fund would you like to invest?

(i) SBI (ii) Kotak Mahindra

(iii) HDFC
(iv) IDFC (v) ICICI Prudential
(vi) Other please specify_____________

Q6. If you will invest in mutual fund, you will do so because

(i) It is associated with brand.

(ii) Track record of giving good returns year after year.

(iii) Distributor's advice.

(iv) Any other reason. (Please specify)

__________________________________________________

Q7. Kindly rank the following factors from 1-8 that affect investment decision of an
investor regarding any mutual fund.

(i) Star rating (ii) Track record

(iii) Brand (iv) After

sale services

(v) Exit load (vi) Distributor's advice

(vii)Experience of (viii) Type of scheme

Fund manager (open/close ended scheme)

Q8. Which AMC provides better services than other players?

(i) SBI (ii) Kotak Mahindra

(iii) HDFC
(iv) IDFC (v) ICICI Prudential
(vi) Other please specify_____________

Q9. Kindly rate the following statements on Likert‘s scale from 1-5 where 1
corresponds to 'strongly agree' & 5 corresponds to 'strongly disagree'?

Statements Strongly Agree Neutral Disagree Strongly

agree disagree

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AMC acts as a trendsetter.

Products of AMC are more

lucrative.

Promotional schemes
affect sales of mutual fund.

AMC offers better platform

for transacting
and performance monitoring
of mutual funds.

Brand equity of AMC influence

customers.

AMC has core competency

in financial products.

AMC offers wide

product range.

AMC provides better after

sale services to
attract customers.

Q10. In your opinion, mutual funds of which AMC have more demand in the market?

(i) SBI (ii) Kotak Mahindra

(iii) HDFC
(iv) IDFC (v) ICICI Prudential
(vi) Other please specify_____________

Q11. In your opinion, which AMC has greater customer base?

(i) SBI (ii) Kotak Mahindra

(iii) HDFC
(iv) IDFC (v) ICICI Prudential
(vi) Other please specify_____________

Q12. In your opinion, which AMC has made most advantageous use of print and
electronic media to motivate investors and potential investors?

(i) SBI (ii) Kotak Mahindra

(iii) HDFC
(iv) IDFC (v) ICICI Prudential
(vi) Other please specify_____________

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Q13. Kindly rank the following funds from 1-8, according to your perception about
their performance in the market.

(i) IDFC Premier Equity Plan AG

(ii) SBI Regular Savings Equity

(iii) DSP Black Rock Top 100

(iv) UTI Dividend Yield

(v) HDFC Top 200 Fund

(vi) UTI Magnum Equity

(vii) Franklin Templeton Dynamic PE

(viii) Tata Infrastructure

Thanks for your co-operation.

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