CASIRJ Volume 7 Issue 10 [Year - 2016] ISSN 2319 – 9202

A STUDY OF INVESTORS PERCEPTION TOWARDS MUTUAL FUNDS IN THE

CITY OF SIRSA

Jatin*

* Jatin, Assistant Professor, Department of Commerce, D.N. College, Hisar; E-mail ID –

Jatin_wadhwa_hns@yahoo.com

ABSTRACT

I have undertaken a study on mutual funds. The mutual fund sectors are one of the fastest
growing sectors in Indian Economy and have awesome potential for sustained future growth.
Mutual funds make saving and investing simple, accessible, and affordable. The advantages of
mutual funds include professional management, diversification, variety, liquidity, affordability,
convenience, and ease of recordkeeping – as well as strict government regulation and full
disclosure. In this paper, the impacts of occupation on investors’ attitude towards mutual fund
have been studied.

KEYWORDS: Mutual Funds, Diversified Portfolio, Asset management, Investors Preference

INTRODUCTION

Saving is the surplus of income over expenditure and when such savings are invested to generate
more money, it is called investment. Livestock, land and precious metals are some of the
traditional investment options. During 19th century, revolution in investment took place through
the banking system as it provide many investment options like Fixed deposits (FDs), government
bonds, Public Provident Fund (PPF) to its investors. With the development of capital market,
investment in stocks became a good option for generating higher returns. However, greater risk
and lack of knowledge about the movement of stock prices were also associated with them.
Therefore, mutual funds emerged as an ultra modern method of investment to lessen the risk at
low cost with experts’ knowledge1.
A Mutual Fund pools the money of people with certain investment goals. The money invested in
various securities depending on the objectives of the mutual fund scheme and the profits (or loss)
are shared among investors’ in proportion to their investment. Investments in securities are
spread across a wide cross-section of industries and sectors. Diversification reduces the risk

1
Goel, S. (2013). Performance of Mutual Funds And Investors' Behaviour. Jaypee Institute of
Information Techonogy .
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CASIRJ Volume 7 Issue 10 [Year - 2016] ISSN 2319 – 9202

because all stocks may not move in the same direction in the same proportion at the same time.
Mutual fund issues units to the investors’ in accordance with quantum of money invested by
them. Investors’ of mutual funds are known as unit holders. The profits or losses are shared by
the investors’ in proportion to their investment. The mutual funds normally come out with a
number of schemes with different investment objectives which are launched from time to time. A
mutual fund is required to be registered with Securities and Exchange Board of India (SEBI)
which regulates securities markets before it can collect funds from the public2.

OBJECTIVES OF THE STUDY

1. To know about opinion of investor towards mutual funds and their preference.
2. To study the growth of mutual fund industry in India.
3. To analyze the investors awareness and perception regarding investing in mutual funds.

CHARACTERISTICS OF MUTUAL FUNDS

Some important characteristics are3:
1. Investors purchase mutual fund shares from the fund itself (or through a broker for the
fund) instead of from other investors on a secondary market, such as the New York Stock
Exchange or Nasdaq Stock Market.
2. The price that investors pay for mutual fund shares is the fund's per share net asset value
(NAV) plus any shareholder fees that the fund imposes at the time of purchase (such as
sales loads)
3. Mutual funds generally create and sell new shares to accommodate new investors. In
other words, they sell their shares on a continuous basis, although some funds stop selling
when, for example, they become too large.
4. The investment portfolios of mutual funds typically are managed by separate entities
known as "investment advisers" that are registered with the SEC.

RESEARCH METHODOLOGY

For the purpose of the study two sets of data has been used. The first set of data is the primary
data. This type of data has been collected from the 50 investors with the help of a Questionnaire.
The second set of data used for the study is the secondary data. The secondary data relating to
net resources mobilized by banks and financial institution sponsored mutual funds, journals,
articles etc.

2
Singh, B. K. (2012). A Study on Invertors Attitude Towards Mutual Funds as an Investment
Option. International Journal Of Research In Management , 2 (2), 61-70
3
Saini, S., Anjum, B., & Saini, R. (2011). Investors Awareness And Perception About Mutual
Funds. International Journal Of Multidisciplinary Research , 1 (1), 14-29.
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STATISTICAL TOOLS USED

To carry out the research work different statistical tools are used in order to derive certain
meaningful information and results. In case of primary data Bar Diagram, Pie Diagram, Standard
Deviation and Mean Deviation have been used.

DATA ANALYSIS AND INTERPRETATION

Q. Do you heard about the Mutual Fund?
Table 1.1
Percentage
Frequency (%)
No 3 6
Yes and don’t understand 27 54
Yes and understand clearly 20 40

Percentage
60
50
40
30
20
10 Percentage
0
No Yes and don’t Yes and
understand understand
clearly

Fig. 1.1
Interpretation: Fig. 1.1 shows that 54 percent respondents heard about the mutual funds
whereas 6 percent respondents do not heard about mutual funds.
Q. From which channel do you heard about Mutual Funds?
Table 1.2
Frequency Percentage (%)
Financial Advisor 30 60
Newspaper & Magazines 6 12
TV/ Radio 2 4
Friends 5 10
Others 7 14

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CASIRJ Volume 7 Issue 10 [Year - 2016] ISSN 2319 – 9202

Percentage
Financial Advisor

Newspaper &
Magazines
TV/ Radio

Fig. 1.2
Interpretation: Fig. 1.2 shows that 60 percent respondents get information about the mutual
funds by financial advisor whereas 4 percent respondents get information about the mutual funds
by TV/radios.

Q. Which form of investment is more superior?

Table 1.3
Frequency Percentage (%)
Mutual Funds 29 29
Post Office 30 30
Bank Account 41 41

Percentage

Mutual Funds
Post Office
Bank Account

Fig. 1.3
Interpretation: Fig. 1.3 shows that 41 percent respondents told that bank account is more
superior whereas 29 percent respondents told that a mutual fund is best.

Q. Factors responsible for investment in Mutual Fund.

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Table 1.4: Factors Responsible for Investment in Mutual Fund (Occupation wise)
Govt. Employees Professional Businessman Total
Occupation (23.5%) (19%) (32.5%) (100%) ANOVA
Factors N Mean SD N Mean SD N Mean SD N Mean SD F Value df Sig.
Saving 23 3.26 .449 7 2.43 .535 20 2.00 .000 50 2.64 .693 66.387 2 .000
Tax Benefit 23 3.48 .593 7 2.00 .000 20 2.00 .000 50 2.68 .844 82.414 2 .000
High Return 23 2.48 .994 7 1.00 .000 20 1.00 .000 50 1.68 .999 29.339 2 .000
Simplicity 23 3.96 .706 7 2.57 .535 20 2.00 .000 50 2.98 1.059 78.469 2 .000
Economical 23 3.87 .344 7 3.00 .000 20 2.00 .000 50 3.00 .904 336.833 2 .000
Liquidity 23 2.96 .706 7 2.00 .000 20 1.10 .308 50 2.08 1.007 68.020 2 .000
Choice of schemes 23 2.39 .583 7 1.00 .000 20 1.00 .000 50 1.64 .802 75.550 2 .000
Others 23 3.57 .507 7 2.29 .488 20 1.50 .513 50 2.56 1.091 89.947 2 .000
* 5 percent significance level
Source: Survey (Data processed through SPSS 16.0 version)

Table 1.4 shows that the respondents having govt. employees perceived that choice of schemes
(𝑥 = 2.39; σ = .583) followed by high return (𝑥 = 2.48; σ = .994). On the other hand, the
respondents having govt. employees disagreed that simplicity (𝑥 = 3.96; σ = .706). Further table
4.10 shows that the respondents having professional perceived that high return (𝑥 = 1.00; σ =
.000) followed by choice of schemes (𝑥 = 1.00; σ = .000). On the other hand, the respondents
having professional disagreed that economical (𝑥 = 3.00; σ = .000). Further table 4.10 shows that
the respondents having businessman perceived that high return (𝑥 = 1.00; σ = .000) followed by
choice of schemes (𝑥 = 1.00; σ = .000). On the other hand, the respondents having business
disagreed that economical (𝑥 = 2.00; σ = .000). Further table 4.10 shows that the respondents
having different occupation perceived that choice of schemes (𝑥 = 1.64; σ = .802) followed by
high return (𝑥 = 1.68; σ = .999). On the other hand, the respondents having different occupations
disagreed that economical (𝑥 = 3.00; σ = .904). Statistically, it is found that the respondents do
not differ significantly towards the factors that saving. Therefore, the hypothesis that there is a
significant difference among respondents based on their occupation towards systematic
investment plan at 5 percent significance level (F = 66.387; df = 2; p = .000). Hence, the
hypothesis is rejected. Further statistically, it is found that the respondents do not differ
significantly towards the factor that tax benefit. Therefore, the hypothesis that there is a
significant difference among respondents based on their occupation towards systematic
investment plan at 5 percent significance level (F = 82.414; df = 2; p = .000). Hence, the
hypothesis is rejected. Further statistically, it is found that the respondents do not differ
significantly towards the factor that flexibility. Therefore, the hypothesis that there is a
significant difference among respondents based on their occupation towards systematic
investment plan at 5 percent significance level (F = 231.040; df = 2; p = .000). Hence, the
hypothesis is rejected. Further statistically, it is found that the respondents do not differ
significantly towards the factor that high return. Therefore, the hypothesis that there is a
significant difference among respondents based on their occupation towards Systematic
investment plan at 5 percent significance level (F = 29.339; df = 2; p = .000). Hence, the
hypothesis is rejected. Further statistically, it is found that the respondents do not differ

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significantly towards the factor that simplicity. Therefore, the hypothesis that there is a
significant difference among respondents based on their occupation towards Systematic
investment plan at 5 percent significance level (F = 78.469; df = 2; p = .000). Hence, the
hypothesis is rejected. Further statistically, it is found that the respondents do not differ
significantly towards the factor that economical. Therefore, the hypothesis that there is a
significant difference among respondents based on their occupation towards Systematic
investment plan at 5 percent significance level (F = 336.833; df = 2; p = .000). Hence, the
hypothesis is rejected. Further statistically, it is found that the respondents do not differ
significantly towards the factor that liquidity. Therefore, the hypothesis that there is a significant
difference among respondents based on their occupation towards Systematic investment plan at 5
percent significance level (F = 68.020; df = 2; p = .000). Hence, the hypothesis is rejected.
Further statistically, it is found that the respondents do not differ significantly towards the factor
that choice of schemes. Therefore, the hypothesis that there is a significant difference among
respondents based on their occupation towards Systematic investment plan at 5 percent
significance level (F = 75.550; df = 2; p = .000). Hence, the hypothesis is rejected. Further
statistically, it is found that the respondents do not differ significantly towards the factor that
others. Therefore, the hypothesis that there is a significant difference among respondents based
on their occupation towards Systematic investment plan at 5 percent significance level (F =
89.947; df = 2; p = .000). Hence, the hypothesis is rejected.

CONCLUSION

Mutual funds are among the most preferred investment instruments. For middle income
individuals, investing in mutual funds yields higher interest and comes with good principal
amount at the end of the maturity period of the mutual fund investment. Investment is the
allocation of funds to assets and securities after considering their return and risk factors. The
main objectives of rational investors are maximizing returns and minimizing risk, safety of the
principal, tradability and liquidity are his subsidiary objectives. For the purpose of investment of
saving the investor are having options to invest money in mutual funds and other financial
instruments like equity shares, debentures, bonds, warrant, bank deposits.
It is hopeful that this study creates awareness that the mutual funds are worth investment
practice. The various schemes of mutual funds provide the investors with a wide range of
investments options according to his risk bearing capacities and interest. Besides they also give a
handy return to the investors. But most of the respondents are not preferred to mutual funds
because process of investing in mutual funds is very difficult. Every person not understand the
performance of mutual funds, due to lack of understand-ability they prefer bank account for
saving.

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FUTURE SCOPE

According to the study of the investors, it is being observed that investors are doing well in
investments like, Mutual funds, Shares etc. In near future a proper planning is required to invest
capital in all type of financial product because there is excellent prospective in market to endow.
The main objective of this paper is to know the current situation of investors’ awareness and
perception towards mutual funds.

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Saini, S., Anjum, B., & Saini, R. (2011). Investors Awareness And Perception About Mutual
Funds. International Journal Of Multidisciplinary Research , 1 (1), 14-29.

Sarish, & Jain, A. (2012). Analysis Regarding Mutual Funds Awareness And Opinion. VSRD
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Singh, B. K. (2012). A Study on Invertors Attitude Towards Mutual Funds as an Investment

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