PARTICULARS Page.

No.
1
CHAPTER- I : INTRODUCTION 2-3
1.1 Introduction of Mutual Fund 3-4
1.2 The Mutual fund Industry In India 5-7
1.3 Types of Mutual Fund 7-8
1.4 How Mutual Fund operate? 8-11
1.5 Benefits of Investing in Mutual Fund 11-12
1.6 Risk involved in investing in Mutual Fund
13-16
CHAPTER- II : 2.1 LITERATURE SURVEY

17
CHAPTER - III : 3.1 RESEARCH METHODOLOGY 18
3.2 OBJECTIVES OF THE STUDY 19
3.3 SAMPLING 19-28
3.4 DATA ANALYSIS 29
3.5 LIMITATION OF THE STUDY
30-31
CHAPTER - IV : FINDINGS

32-34
CHAPTER- V : SUGGESTIONS

35-36
CHAPTER-VI: CONCLUSION

37-39
CHAPTER- VII: REFERENCES

40-41
QUESTIONNAIRE

1
 Chapter - 1

Introduction

2
1.1 INTRODUCTION OF 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 invested in capital
market instruments such as shares, debentures, and other securities. The income
earned through these investments 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.

The concept of mutual funds gained momentum because of the increasing

complexities of the capital market. It is difficult for an individual investor to create
and manage his portfolio of investment, due to the lack of knowledge and
experience about the stock market. Mutual funds provide the benefit of
diversification of unitholders as a result of which the risk of investment get
minimized. The concept of mutual fund is that a group of expert will mobilize
small saving of investors, pool such investment in the form of a corpus and invest
it judiciously to have gain out of it. The gain of distributed among the unit holder
after deducting the expenses required to manage the mutual fund organization.

A mutual fund is the ideal vehicle for today’s complex and modern
financial scenario. Markets for equity shares, bond and other fixed income
instruments, real estate, derivatives and other assets have become mature and
information driven. Price changes in these assets are driven by global events
occurring in faraway places. A typical individual is unlikely to have the
knowledge, skills, inclination and time to keep track of events, understand their
implication and act speedily. An individual also finds it difficult to keep track of
ownership of his assets, investment, brokerage dues and bank transactions, etc.

A mutual fund is the answer to all these situations. It appoints

professionally qualified and experienced staff that manages each of these functions
on a full time basis. The large pool of money collected in the funds allows it to hire
such staff at a very low cost to each investor. In effect, the mutual fund vehicle

3
 exploits economies of scale in all three areas – research, investment and
transaction processing. While the concept of individual coming together to invest
money collectively is not new, mutual funds gained popularity only after the
Second World War. Globally, there are thousands of firms offering tens of
thousands of mutual funds with different investment objectives. Today, mutual
fund collectively manages almost as much as or more money as compared to bank.

1.2 THE MUTUAL FUND INDUSTRY IN INDIA:

The mutual fund industry in India started in 1963 with the formation
of Unit Trust of India (UTI) at the initiative of the Reserve Bank of India (RBI)
and the Government of India. The objective then was to attract small investors and
introduce them to market investments.

The Indian mutual fund industry is dominated by UTI which has a total
corpus of Rs 700 billion collected from more than 20 million investors. The UTI
has many funds/schemes in all categories, I e. equity, balanced, income etc.., with
some being open –ended and some being closed –ended. The unit schemes
1964commonly referred to as US 64, which is a balanced fund, is a biggest scheme
with a corpus of about 200 billion.UTI was floated by financial institution and is
governed by a special Act of parliament.

The second largest category of mutual fund are ones floated by nationalized
banks. Can bank Assets Management floated by Canara bank and SBI fund
management floated by state bank of India are the largest of these.

The third largest categories of mutual fund are the ones floated by private
sector and by foreign assets management companies. The largest of these are
prudential ICICI AMC and Birla Sun Life AMC. The aggregate corpus of assets
managed by this category of AMCs is in excess of RS 250 billion.

Mutual funds have opened new vistas to millions of investors by virtually

taking investment to their doorstep. In India, investor generally goes for such kind
of information, which do not provide hedge against inflation and often have

4
 negative real returns. He finds himself to be an odd man out in the investment
game. Mutual funds have come, as a much needed help to these investors. Thus the
success of MFs is essentially the result of the combined efforts of competent fund
managers and alert investors.

SOME RENOWNED FUND HOUSES OF MF

5
 1.3 TYPES OF MUTUAL FUND
Based on the maturity period
Open-endedFund

An open-ended fund is a fund that is available for subscription and can be

redeemed on a continuous basis. It is available for subscription throughout the year
and investors can buy and sell units at NAV related prices. These funds do not
have a fixed maturity date. The key feature of an open-ended fund is liquidity.

Close-ended Fund

A close-ended fund is a fund that has a defined maturity period, e.g. 3-6 years.
These funds are open for subscription for a specified period at the time of initial
launch. These funds are listed on a recognized stock exchange.

Interval Funds

Interval funds combine the features of open-ended and close-ended funds. These
funds may trade on stock exchanges and are open for sale or redemption at
predetermined intervals on the prevailing NAV.

Based on investment objectives

Equity/Growth Funds

Equity/Growth funds invest a major part of its corpus in stocks and the investment
objective of these funds is long-term capital growth. When you buy shares of an
equity mutual fund, you effectively become a part owner of each of the securities
in your fund’s portfolio. Equity funds invest minimum 65% of its corpus in equity
and equity related securities. These funds may invest in a wide range of industries
or focus on one or more industry sectors. These types of funds are suitable for
investors with a long-term outlook and higher risk appetite.

Debt/Income Funds

Debt/ Income funds generally invest in securities such as bonds, corporate

6
debentures, government securities (gilts) and money market instruments. These
funds invest minimum 65% of its corpus in fixed income securities. By investing
in debt instruments, these funds provide low risk and stable income to investors
with preservation of capital. These funds tend to be less volatile than equity funds
and produce regular income. These funds are suitable for investors whose main
objective is safety of capital with moderate growth.

Balanced Funds
Balanced funds invest in both equities and fixed income instruments in line with
the pre-determined investment objective of the scheme. These funds provide both
stability of returns and capital appreciation to investors. These funds with equal
allocation to equities and fixed income securities are ideal for investors looking for
a combination of income and moderate growth. They generally have an investment
pattern of investing around 60% in Equity and 40% in Debt instruments.

Money Market/ Liquid Funds

Money market/ Liquid funds invest in safer short-term instruments such as

Treasury Bills, Certificates of Deposit and Commercial Paper for a period of less
than 91 days. The aim of Money Market /Liquid Funds is to provide easy liquidity,
preservation of capital and moderate income. These funds are ideal for corporate
and individual investors looking for moderate returns on their surplus funds.

Gilt Funds

Gilt funds invest exclusively in government securities. Although these funds carry
no credit risk, they are associated with interest rate risk. These funds are safer as
they invest in government securities.

Other Schemes
Tax-Saving (Equity linked Savings Schemes) Funds
Tax-saving schemes offer tax rebates to investors under specific provisions of the
Income Tax Act, 1961. These are growth-oriented schemes and invest primarily in
equities. Like an equity scheme, they largely suit investors having a higher risk
appetite and aim to generate capital appreciation over medium to long term.

Index Funds

7
 Index schemes replicate the performance of a particular index such as the BSE
Sensex or the S&P CNX Nifty. The portfolio of these schemes consist of only
those stocks that represent the index and the weightage assigned to each stock is
aligned to the stock’s weightage in the index. Hence, the returns from these funds
are more or less similar to those generated by the Index.

Sector-specific Funds
Sector-specific funds invest in the securities of only those sectors or industries as
specified in the Scheme Information Document. The returns in these funds are
dependent on the performance of the respective sector/industries for example
FMCG, Pharma, IT, etc. The funds enable investors to diversify holdings among
many companies within an industry. Sector funds are riskier as their performance
is dependent on particular sectors although this also results in higher returns
generated by these funds.

1.4 How mutual fund operates?

A mutual fund company collects money from several investors, and invests it in
various options like stocks, bonds, etc. This fund is managed by professionals who
understand the market well, and try to accomplish growth by making strategic
investments. Investors get units of the mutual fund according to the amount they
have invested. The Asset Management Company is responsible for managing the

8
investments for the various schemes operated by the mutual fund. It also
undertakes activities such like advisory services, financial consulting, customer
services, accounting, marketing and sales functions for the schemes of the mutual
fund.

1.5 Benefits of mutual fund

Mutual fund investments in stocks, bonds and other instruments require

considerable expertise and constant supervision, to allow an investor to take the
right decisions. Small investors usually do not have the necessary expertise and
time to undertake any study that can facilitate informed decisions. While this is the
predominant reason for the popularity of mutual funds, there are many other
benefits that make mutual funds appealing.

Low Transaction Costs:

Mutual fund transactions are generally very large. These large volumes
attract lower brokerage commissions and other costs as compared to smaller
volumes of the transactions that individual investors enter into. The brokers quote
a lower rate of commission due to two reasons. The first is competition for the
institutional investors business. The second reason is that the overhead cost of
executing a trade does not differ much for large and small orders. Hence for a large
order these costs spread over a large volume enabling the broker to quote a lower
commission rate.

Availability of Various Schemes:

There are four basic types of mutual funds: equity, bond, hybrid and money
market. Equity funds concentrate their investments in stocks. Similarly bond funds
primarily invest in bonds and other securities. Equity, bond and hybrid funds are
called long-term funds. Money market funds are referred to as short-term funds
because they invest in securities that generally mature in about one year or less.
Mutual funds generally offer a number of schemes to suit the requirement of the
investors.
Professional Management:

9
 Management of a portfolio involves continuous monitoring of various
securities and innumerable economic variables that may affect a portfolio's
performance. This requires a lot of time and effort on part of the investors along
with in-depth knowledge of the functioning of the financial markets. Mutual funds
are managed by fund managers generally with knowledge and experience whose
time is solely devoted to tracking and updating the portfolio. Thus investment in a
mutual fund not only saves time and effort for the investor but is also likely to
produce better results.

Liquidity
Liquidating a portfolio is not always easy. There may not be a liquid
market for all securities held. In case only a part of the portfolio is required to be
liquidated, it may not be possible to see all the securities forming a part of the
portfolio in the same proportion as they are represented in the portfolio; investing
in mutual funds can solve these problems. A fund house generally stands ready to
buy and sell its units on a regular basis. Thus it is easier to liquidate holdings in a
Mutual Fund as compared to direct investment in securities.
Returns
In India dividend received by investors is tax-free. This enhances the yield
on mutual funds marginally as compared to income from other investment options.
Also in case of long-term capital gains, the investor benefits from indexation and
lower capital gain tax.

Flexibility
Features of a MF scheme such as regular investment plan, regular
withdrawal plans and dividend reinvestment plan allows investors to
systematically invest or withdraw funds according to the needs and convenience.
Wellregulated
All mutual funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interest of investors. The
SEBI regularly monitors the operations of an AMC.

10
WONDERS OF MONEY COMPOUNDING

11
 1.6 Risk involved in investing in mutual fund

Mutual funds invest in different securities like stocks or fixed income securities,
depending upon the fund’s objectives. As a result, different schemes have different risks
depending on the underlying portfolio. The value of an investment may decline over a
period of time because of economic alterations or other events that affect the overall
market. Also, the government may come up with new regulations, which may affect a
particular industry or class of industries. All these factors influence the performance of
Mutual Funds.

Risk and Reward:

12
The diversification that mutual funds provide can help ease risk by offsetting
losses from some securities with gains in other securities. On the other hand, this
could limit the upside potential that is provided by holding a single security.

Lack of Control:

Investors cannot determine the exact composition of a fund’s portfolio at

any given time, nor can they directly influence which securities the fund manager
buys

13
 Chapter – 2

REVIEW OF LITERATURE

14
 De Bondt and Thaler (1985)11while investigating the possible
psychological basis for investor behaviour, argue that mean reversion in stock
prices is an evidence of investor over reaction where investors overemphasis recent
firm performance in forming future expectations.

Suguna G (1986)2studied an investors attitude towards saving pattern in

Coimbatore. There exists poor positive savings are increasing when the income
increase but in the same perception. There exists high positive correlation between
income and tax indicating that the tax are increasing when the income increases
most of the bank executives expressed the view that due to insufficiency of income
they were not able to contribute to savings scheme like public provident fund, post
office time deposit

Shanmugam (1990)3 studied a group of 90 investors to examine the factors

affecting investment decisions. The study focused its analysis on investment
objectives and the extent of awareness of factors affecting investment decisions.
The study concluded that the investors were high risk takers, then interested in
capital gains and current dividend income. Investors possessed adequate
knowledge of govt. regulations, monetary and fiscal policy

Gupta L.C. (1991)4 studied that designing portfolio for a client is much
more than merely picking up securities for investment. The portfolio manager
needs to understand the psyche of his client while designing his portfolio.
According to Gupta, investors in India regard equity, debentures and company
deposits as being in more or less the same risk category and consider including all
mutual funds, including all equity funds, almost as safe as bank deposits.

Sitkin and Pablo (1992), 5defined risk perception as risk assessment in

uncertainty and it depends on the familiarity with organizational and management
system. The authors also developed a model of determinants of risk behavior and
identified personal risk preferences and past experiences are the important risk
factors and social influence also affects the individual‟s perception.

15
 Ippolito (1992)6 reported that fund selection by investors is based on past
performance of the funds and money flows into winning funds more rapidly than
they flow out of losing funds.

Noel Capon (1994)7in a study “Affluent investors and mutual fund

purchases” stated that there are many evidences that supports that in spite of risk
and return other factors also effect on mutual fund selection, for example a
consumer survey 1990 on mutual fund it was founded that past performance and
level of risk are two aggregate important factors but other factors also effect like
management fee, amount of sales charges, reputation of fund family, funds already
owned in family, recommendation from magazine and newsletter and clarity of
accounting statements.

Sikidar and Singh (1996) carried out a survey with an objective to

understand the behavioral aspects of the investors of the North Eastern Region
towards equity and MFs investment portfolio. The survey revealed that the salaried
and self employed formed the major investors in MF primarily due to tax
concessions.

AnjanChakarabarti and Harsh Rungta(2000) stressed the importance of

brand effect in determining the competitive position of the AMCs. Their study
reveals that brand image factor, though cannot be easily captured by computable
performance measures, influences the investor's perception and hence his fund/
scheme selection.

Shanmugham(2000) conducted a survey of 201 individual investors to

study the information sourcing by investors, their perceptions of various
investment strategy dimensions and the factors motivating share investment
decisions, and reports that among the various factors, psychological and
sociological factors dominated the economic factors in share investment decisions.

Hirshleifer(2001) categorized different types of cognitive errors that

investors make i.e. self-deception, occur because people tend to think that they are
better than they really are; heuristic simplification, which occurs because
individuals have limited attention, memory and processing capabilities; disposition
effect, individuals are prone to sell their winners too quickly and hold on to their
losers too longs.

16
Singh and Vanita (2002)8 have examined the investors' preferences and
perception towards MF investments by conducted a survey of 150 respondents in
the city of Delhi. The findings of the study were that the investors' preferred to
invest in public sector MFs with an investment objective of getting tax exemptions
and stayed invested for a period of 3-5 years and the investors evaluated past
performance. The study further concludes by stating that majority of the investors
were dissatisfied with the performance of their MFs and belonged to the category
who held growth schemes.
Ranganayaki N (2003)9 has concluded a study on the title of “investor‟s
perception towards investment with special to women investors.” A sample of 100
respondents in Sulur and adjoining areas was taken. It is concluded that recurring
deposit and post office savings are most preferable investment avenues in the
banking sector. It may be due to safety, liquidity and also for the benefits.
Whenever, one thinks of women and investment the first thing that comes to mind
is gold and Jewellery. But now-a-day‟s women are disproving the above said
belief.
Shanmugaraj R K (2005)10 stated that every human saves one part of his income
for some future needs. For this purpose, people are interested to save theirincome
through bank saving, post office saving, chit funds, share market, mutual funds,
insurance. The study has concluded that „Tax Benefits‟ are the motto of the
salaried and retired people and „Higher Returns‟ are the motto of the business
people. 5-10% of the income is the amount invested. Many do not perceive mutual
funds as a diversification of risk or consistency of returns when mutual funds
provide such benefits. This needs to be given a closer look. The feeling that mutual
funds have a high degree of risk associated with it should be eradicated.

Parihar B.B.S., Rajeev Sharma and Deepika Singh Parihar (2009)

revealed that majority of investors have still not formed any attitude towards
mutual fund investments.
JothiBaskara Mohan, Ramji P.R. (2013) conducted a study on „Women
Investors Recital at Rajapalayam City - A Study‟. The results of the study shows
that92 per cent of respondents are aware of Investment and remaining 8 per cent
are unaware of Investment avenues.

17
 Chapter-3

DATA ANALYSIS
AND INTERPRETATION

18
\

3.1 Research Methodology

Research Design

● In this study, data were collected by using questionnaires-based survey. For

this study ,convenience sampling method was used. This method most
often used during the exploratory phase of a research project and is perhaps
the best way of getting some basic information quickly and efficiently.

Study Area

For studying the investors perception toward investing in mutual fund, data has
been collected from residents of Chhattisgarh.

Sample Size

Sample size of respondents are of 50 from different parts of Chhattisgarh which

has been taken by using sampling techniques.

Sources and collection of data :

1 Primary sources :Questionnaire.

2 Secondary source :Books, newspapers and internet.

19
 3.2 Objectives Of The Study
The specific objectives of the study are to:
1. To study the level of awareness of mutual funds.

2. To analyse the perception of investors toward investment in mutual fund.

3. To determine the type of mutual fund investors prefers the most.

4. To analyse the benefits of mutual fund in market.

3.3 Sampling

The study has taken Random Sampling method by conducting the survey. In this method
everyone in the entire population has an equal chance of being selected.

This is similar to the national lottery .If the “population” is everyone who has bought a
lottery ticket, then each person has an equal chance of winning the lottery
(assuming they all have one ticket each).

Random samples require a way of naming or numbering the target population and then
using some type of raffle method to choose to make up the sample. Random
samples are the best method of selecting your sample from the population of
interest.
3.4 Data Analysis

20
In which part of this mode you will invest?
Table 3.1

Options Numbers Percentage

Shares 16 32%
Equity 2 4%
Bank Deposits 5 10%
Mutual Fund 15 30%
Insurance 6 12%
Options Numbers Percentage
Shares 16 32%

MODES OF INVESTMENT
BANK
DEPOSITS
9%
INSURANCE

10%

MF
SHARE
23%
58%

Interpretation :-
From the above graph we can interpret that 58% of respondents are investing in shares,
where majority of respondents belong to 20 to 35 age group.
23% persent of respondents are investing in mutual fund that belongs to age group of 35 to
50. Rest of the respondents are more attracted towards insurance and bond.
Why do you prefer the above option?

21
Table 3.2
OPTIONS NUMBERS PERCENTAGE
Return pattern 10 20%
Tax exemption 14 28%
Liquidity 5 10%
Safety and Security 10 20%
Profitability 6 12%
Guaranteed return 4 8%

return pat
tax exemp
liquidity
safety
profit
guarante

Interpretation :-
From this graph we can understand that people are attracted towards investment for
different purpose. Government sector respondents are investing for tax exemption and as
well as return pattern. While private sector’s respondents are investing for higher return.
While some of the retired respondent were attracted towards liquidity and guaranteed
return
How long would you like to invest?

22
Table 3.3
OPTION NUMBER PERCENTAG
S S E
Short 18 36%
term
Medium 22 44%
term
Long 10 20%
term

Short term
Medium term
Long term

Interpretation: -
In this graph we can interpret that people are more investing for medium term.44% of
respondents are investing for medium term.
36% for short term.22% for long term.

23
Are you willing to invest in Mutual Fund?
Table 3.4
OPTIONS NUMBERS PERCENTAGE
Yes 29 58%
No 21 42%

60%

50%

40%
58%
30%
42%
20%

10%

0%
Yes No

Interpretation: -
In this graph it is clear that majority of respondents are willing to invest in mutual fund.
58% of respondents are willing to invest in mutual fund.And the other 442% of
respondents are not.

If not invested in mutual fund then why?

24
Table 3.5
OPTIONS NUMBERS PERCENTAGE
Not aware of MF 9 43%
High risk 8 38%
Not any specific reason 4 19%

19%

43%

Not
aware of
MF
High risk
38%

Interpretation: -
This graph shows the result of the respondents who are not willing to invest in mutual
fund and the reason behind it is :-
● 43% are not aware
● 38% consider it as risky
● And the following that is 19% said not specific reason

If yes, in which scheme of mutual fund have you invested?

Table 3.6
OPTIONS NUMBER PERCENTAGE
Debt 5 17%

25
Equity 8 29%
Liquidity 4 14%
Mixed 10 34%
Other 2 7%

7%
17% Debt

Equity

Liquidity
33%

Mixed
29%
Other

14%

Interpretation: -
Mixed fund is most preferred which is the mixture of equity + debt. 17% of respondents
prefer equity and rest of the respondent prefer debt as it is not so risky.14% prefer
liquidity.

While investing your money, which factor you prefer most?

Table 3.7
OPTIONS NUMBER PERCENTAGE
Liquidity 10 20%
Low risk 10 20%
High risk 12 24%

26
Company reputation 18 36%

Liquidity
Low risk
High risk
Company reputation

Interpretation: -
Company reputation strongly influence the investors and high risk that leads to higher
return this factor also influence the investors.
● 36% of respondents prefer company reputation.
● 24% prefer high risk.
● 20% prefer liquidity.
● 20% prefer low risk.

When you invest in mutual fund which mode of investment you prefer?
Table 3.8
OPTIONS NUMBERS PERCENTAGE
One time investment 23 46%
Systematic Investment 37 74%
Plan

27
 80%
70%
60%
50%
40%
30%
20%
10%
0%

One time investment

Systematic Investment Plan

Interpretation: -
Systematic Investment Plan are more preferred as compared to one time investment.
● 74% of respondent choose systematic investment plan
● And rest 46% choose one time investment.

How would you like to receive the return every year?

Table 3.9
OPTIONS NUMBERS PERCENTAGE
Dividend payout 8 16%
Dividend re-investment 14 28%
Growth in NIV 28 56%

28
 16%

Dividend
payout

56%
28% Dividend
re-
investme
nt
Growth in
NIV

Interpretation: -

In this graph we can interpret that –

● 16% of respondents like to receive the return through dividend payout.
● 28% in dividend reinvestment.
● 56% in growth in NIV.

29
3.5 Limitations Of The Study

1. The study is confined to some parts of Chhattisgarh only.

2. There is possibility of sampling errors in the study.

3. The response of the investors may not be genuine.

4. The questions included in the questionnaire may not be comprehensive.

5. Lack of professional approach since researcher is a student.

30
Chapter -4

Findings

31
FINDINGS
From the study we can understand the following things:-
1. Investors are more interested in shares then mutual fund.
2. The awareness of mutual fund is high.
3. The main reason of investors investing in mutual fund is tax exemption.
4. Third most preferred reason for investing in mutual fund is the portfolio
managers who have full knowledge of investment. So the investors find it
convenient as they don’t have enough knowledge.
5. At the same time some of the investors find mutual fund risky and a
lengthy process.
6. In this study we also find that 44% of investors prefer medium term
investment, 36% prefer short term investment and rest 22% in long term
investment.
7. While investing in mutual fund the type of investment preferred the most is
mixed which is a mixture of both debt and equity.
8. Investors are highly influenced by SIP that is systematic investment plan.

32
Chapter - 5

Suggestions

33
SUGGESTIONS:

Suggestions to Mutual Fund Companies:

1. Disclosure of Risk: The funds should disclose the level of risk

associated with investment in the fund return in offer documents
and in comparative levels of returns and risk in the annual reports
for the sake of prospective and existing investors.

2. Educating the agents: While investing the agents/salesmen should

clearlyexplain the investors all the features both positive as well as
negatives associatedwith a fund. Primarily, the agent/salesmen
should first understand the purpose/need for the investment by the
investor

3. Educating the public and the investors: Workshops or seminars

explaining the importance and risk factor associated with different
classes of assets may be conducted from time to time for the
existing investors. At the same time awareness programmes more in
all areas and more in number should be conducted for the public.

4. Understanding the Psychology of the Investors: AMCs should

put extra effort in studying and understand the psychology of
investors in order to provide better schemes and better service.
5. Lack of Awareness and information: Mutual funds offer
comprehensive life cycle financial planning and not immediate
returns. A recent report on Mutual Fund Investments in India
published by research and analytics firm, Boston Analytics,
suggests investors are holding back from putting their money into
mutual funds due to their perceived high risk and a lack of
information on how mutual funds work. This report is based on a

34
 survey of approximately 10,000 respondents in 15 Indian cities and
towns as of March 2010.
Suggestions to the investors:

1. Understand the purpose of investment: The first point to analyze

before investing in a fund is to find out whether the objective
matches with the scheme. It is necessary, as any mismatch of the
same would directly affect the prospective probable returns. For
example, a scheme that invests heavily in large-cap stocks is not
suited for a conservative equity investor. He should be better off in
a scheme, which invests mainly in blue chips. Similarly, one should
pick up schemes that meet your specific needs. Examples: pension
plans, children’s plans, sector-specific schemes, etc. Mutual funds
proved to be the most preferential financial avenue provided it is
put forth before investors in the desired form.

2. Low risk tolerance: Those investors with less risk tolerance should
go for debt schemes, as they are relatively safer, when compared to
empowered schemes like equity. Aggressive investors can go for
equity investments. Investors that are even more aggressive can opt
for schemes that invest in specific industry or sector.
3. Period of Investment: One should look at covering the volatility
exposure which can be done by holding onto the investment for
longer periods which also enables the scheme to gain.

35
Chapter-6

CONCLUSION

36
It is concluded that the MFs business in Chhattisgarh is still in as embryonic stage. So,
concerted Efforts are needed for its success. The success depend upon high returns,
professional competence of Fund managers, a MF brings together a group of people and
invests their money in stocks, bonds and other securities, it have so many advantages such
as professional Management, economics of scale. The MF should be easy to buy and sell
through broker or directly in the market. It also has some draw backs such as low
awareness, too many formalities, difficult to select.

MFs have emerged as an important segment of financial markets and so far have
delivered value to the investors. The study reveals that the investors’ perception is
dependent on the demographic profile and assesses that the investor’s age, marital status
and occupation has direct impact on the investors’ choice of investment. The study further
reveals that female segment is not fully tapped and even there is low target on higher
income group people. Hence, fund managers should take steps to tap the female segment
and higher income group segment to enhance more investment in MF Investment
Avenuewhich would really help the industry to flourish. Further, the findings of the
research were on the factors influencing investor’s perception on public private MF’s. It
reveals that liquidity, flexibility, tax savings, service quality and transparency etc. are the
factors which have a higher impact on perception of investors. These factors
give them the required boosting in the investment process.

Therefore, it becomes imperative on part of the fund managers to enhance these features
for attracting. more investors and also to retain the trust, the investors have in them.

37
Chapter-7

REFERENCES

38
References:-
BOOKS :
1. The Mutual funds book by Alan Northcott
2. Mutual funds for beginners book by John Border

WEBSITES:
https://www.mutualfundindia.com/
http://www.mutualfundssahihai.com/
https://economictimes.indiatimes.com/mf/analysis/how-to-invest-in-a-
mutualfund/articleshow/63076867.cms
http://shodhganga.inflibnet.ac.in/bitstream/10603/28733/14/14_chap
https://www.sbimf.com/en-us/ways-to-invest/online-portal

1. De Bondt, W.F.M. and Thaler, R, (1985), “Does the stock market over react?” Journal of
Finance,
2. 40, 793-805.

3. Suguna G, Courtesy from Group Project (1986), “A study on investment behaviour of the
working women in Coimbatore city”.

4. Shanmugam (1990), A study on investors awareness of investment, An Unpublished M.Phil

dissertation submitted to PSG CAS.

5. Gupta L.C., (1991), Share Holders Survey: Geographic Distribution, Manas Publications, New
Delhi, p. 86

6. Sitkin and Pablo (1992), “Reconceptualizing the Determinants of Risk Behaviour”, academy of
Management Review. Vol. 17, Issue 1, pp. 9-39.

7. Ippolito, Richard. A. (1992), “Consumer Reaction to Measures of poor Quality-Evidence from

Mutual Fund industry”, Journal of Law and Economics, 35, pp 45-70.

39
8. Capon, N., G. J. Fitzsimons, et al. (1994), Affluent investors and mutual fund purchases,
International Journal of Bank Marketing, Vol. 12, Issue 3. pp 17-25.

9. Singh, Y.P., and Vanita (2002), “Mutual Fund Investors' Perceptions and Preferences-A Survey”,
The Indian Journal of Commerce, Vol. 55, No. 3, 8-20.

10. Ranganayaki N (2003), Investors perception towards investment with special reference to women
investors, Unpublished thesis.

11. Shanmugaraj R K (2005), A study of investment patterns and customer perception towards mutual
funds in Chennai city.

40
QUESTIONNAIRE
1) PERSONAL DETAIL : (Please write or fill the details with a )
a) NAME :……………………………………….
b) ADDRESS :……………………………………….
c) AGE :……………………………………….
d) QUALIFICATION :
Under Graduate Graduation PG others
e) OCCUPATION :
Govt. Sector Pvt. Sector Business
Agriculture Other

f) What is your Yearly Income approximately?

Upto ` 2 lakh Upto ` 2 to 5 lakh Upto ` 5 to

10 lakh Above `10 lakh

2 In which part of this mode you will invest?

Shares Equity Bank Deposits
Mutual Funds Insurance Bonds
Others

3 Why do you prefer above option

Return pattern Tax exemption Liquidity
Safety and Security Profitability Guaranteed return
All the above

4 How long would you like to invest?

Short term Medium term Long term

5 Are you willing to invest in a Mutual Fund?

Yes No
6 If not invested in mutual fund then why?
Not aware of MF Higher risk Not any specific reason
7 If yes, in which scheme of mutual fund have you invested?
Debt Equity Liquidity
Mixed (debt & equity) Others
41
 8 While investing your money, which factor you prefer most?
Liquidity Low Risk High Risk Company reputation
9 When you invest in Mutual fund which mode of investment you
prefer? One
Time Investment Systematic Investment Plan
10 How would you like to receive the returns every year?
Dividend payout Dividend re-investment Growth in NAV

DATE :……………….....
PLACE:…………………
SIGN of the Participant : …………………..

***

42