CHAPTER 1

INTRODUCTION
 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.

Investments in securities are spread across a wide cross section of industries and sectors and

thereby reduce the risk. Asset Management Companies (AMCs) normally come out with a

number of schemes with different investment objectives from time to time. A mutual fund is

required to be registered with the Securities and Exchange Board of India (SEBI), which

regulates securities markets before it can collect funds from the public.

A mutual fund is a professionally managed investment fund that pools money from many

investors to purchase securities. These investors may be retail or institutional in nature.

Mutual funds have advantages and disadvantages compared to direct investing in individual

securities.

A mutual fund is formed when capital collected from different investors is invested in

company shares, stocks or bonds. Shared by thousands of investors (including you), a mutual

fund is managed collectively to earn the highest possible returns.

 HISTORY OF MUTUAL FUND

Prof K Geert Rouwenhorst in 'The Origins of Mutual Funds', states that the origin of pooled

investing concept dates back to the late 1700s in Europe, when "a Dutch merchant and broker

invited subscriptions from investors to form a trust to provide an opportunity to diversify for

small investors with limited means." The emergence of "investment pooling" in England in

the 1800s brought the concept closer to the US shores.

The enactment of two British laws, the Joint Stock Companies Acts of 1862 and 1867,

permitted investors to share in the profits of an investment enterprise and limited investor

liability to the amount of investment capital devoted to the enterprise. Shortly thereafter, in

1868, the Foreign and Colonial Government Trust was formed in London.

It resembled the US fund model in basic structure, providing "the investor of moderate means

the same advantages as the large capitalists by spreading the investment over a number of

different stocks." More importantly, the British fund model established a direct link with the

US securities markets, helping finance the development of the post-Civil War US economy.

The Scottish American Investment Trust, formed in February 1873, by fund pioneer Robert

Fleming, invested in the economic potential of the US, chiefly through American railroad

bonds. Many other trusts followed them, who not only targeted investment in America, but

led to the introduction of the fund investing concept on the US shores in the late 1800s and

the early 1900s. The first mutual or 'open-ended' fund was introduced in Boston in March

1924. The Massachusetts Investors Trust, which was formed as a common law trust,

introduced important innovations to the investment company concept by establishing a

simplified capital structure, continuous offering of shares, and the ability to redeem shares

rather than holding them until dissolution of the fund and a set of clear investment restrictions

as well as policies.

The stock market crash of 1929 and the Great Depression that followed greatly hampered the

growth of pooled investments until a succession of landmark securities laws, beginning with

the Securities Act, 1933 and concluded with the Investment Company Act, 1940,

reinvigorated investor confidence. Renewed investor confidence and many innovations led to

relatively steady growth in industry assets and number of accounts.

CHAPTER-2

INDUSTRY
 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. Since

then, the history of mutual funds in India can be broadly divided into six distinct phases.

Phase I (1964-87): Growth of UTI

In 1963, UTI was established by an Act of Parliament. As it was the only entity offering

mutual funds in India, it had a monopoly. Operationally, UTI was set up by the Reserve Bank

of India (RBI), but was later delinked from the RBI. The first scheme, and for long one of the

largest launched by UTI, was Unit Scheme 1964.

Later in the 1970s and 80s, UTI started innovating and offering different schemes to suit the

needs of different classes of investors. Unit Linked Insurance Plan (ULIP) was launched in

1971. The first Indian offshore fund, India Fund was launched in August 1986. In absolute

terms, the investible funds corpus of UTI was about Rs 600 crores in 1984. By 1987-88, the

assets under management (AUM) of UTI had grown 10 times to Rs 6,700 crores.

Phase II (1987-93): Entry of Public Sector Funds:

The year 1987 marked the entry of other public sector mutual funds. With the opening up of

the economy, many public sector banks and institutions were allowed to establish mutual

funds. The State Bank of India established the first non-UTI Mutual Fund, SBI Mutual Fund

in November 1987. This was followed by Canbank Mutual Fund,LIC Mutual Fund, Indian

Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund.

From 1987-88 to 1992-93, the AUM increased from Rs 6,700 crores to Rs 47,004 crores,

nearly seven times. During this period, investors showed a marked interest in mutual funds,

allocating a larger part of their savings to investments in the funds.

Phase III (1993-96): Emergence of Private Funds:

A new era in the mutual fund industry began in 1993 with the permission granted for the

entry of private sector funds. This gave the Indian investors a broader choice of 'fund

families' and increasing competition to the existing public sector funds. Quite significantly

foreign fund management companies were also allowed to operate mutual funds, most of

them coming into India through their joint ventures with Indian promoters.

The private funds have brought in with them latest product innovations, investment

management techniques and investor-servicing technologies. During the year 1993-94, five

private sector fund houses launched their schemes followed by six others in 1994-95.

Phase IV (1996-99): Growth and SEBI Regulation:

Since 1996, the mutual fund industry scaled newer heights in terms of mobilization of funds
and number of players. Deregulation and liberalization of the Indian economy had introduced

competition and provided impetus to the growth of the industry.

A comprehensive set of regulations for all mutual funds operating in India was introduced

with SEBI (Mutual Fund) Regulations, 1996. These regulations set uniform standards for all

funds. Erstwhile UTI voluntarily adopted SEBI guidelines for its new schemes. Similarly, the

budget of the Union government in 1999 took a big step in exempting all mutual fund

dividends from income tax in the hands of the investors. During this phase, both SEBI and

Association of Mutual Funds of India (AMFI) launched Investor Awareness Programme

aimed at educating the investors about investing through MFs.

Phase V (1999-2004): Emergence of a Large and Uniform Industry:

The year 1999 marked the beginning of a new phase in the history of the mutual fund

industry in India, a phase of significant growth in terms of both amount mobilized from

investors and assets under management. In February 2003, the UTI Act was repealed. UTI no

longer has a special legal status as a trust established by an act of Parliament. Instead it has

adopted the same structure as any other fund in India - a trust and an AMC.

UTI Mutual Fund is the present name of the erstwhile Unit Trust of India (UTI). While UTI

functioned under a separate law of the Indian Parliament earlier, UTI Mutual Fund is now

under the SEBI's (Mutual Funds) Regulations, 1996 like all other mutual funds in India.The

emergence of a uniform industry with the same structure, operations and regulations make it

easier for distributors and investors to deal with any fund house. Between 1999 and 2005 the
size of the industry has doubled in terms of AUM which have gone from above Rs 68,000

crores to over Rs 1,50,000crores.

Phase VI (From 2004 Onwards): Consolidation and Growth:

The industry has lately witnessed a spate of mergers and acquisitions, most recent ones being

the acquisition of schemes of Allianz Mutual Fund by Birla Sun Life, PNB Mutual Fund by

Principal, among others. At the same time, more international players continue to enter India

including Fidelity, one of the largest funds in the world.

 CHAPTER-3

PERFORMANCE
 Performance of Mutual Funds in India

Abstract: The Indian mutual fund industry has come a long way since its inception in 1963.

The industry has witnessed sufficient growth on all parameters be it; number of fund

houses, number of schemes, funds mobalised, assets under management etc. One of the

important goals of the mutual fund industry is to attract and mobalise major portion of the

House Hold Savings (HHS) in order to enable the small savers to benefit from the economic

growth by facilitating them to park their savings into the assets which yield better risk-

adjusted returns. Therefore, the question arises, has the Indian mutual industry succeeded

in achieving this goal? The present study will try to look for the answers. Though, the

mutual fund industry has recorded significant progress on all fronts yet it has not been

able to utilize its potential fully. On almost on all parameters it is far behind the

developed economics and even most of the emerging economics of the world. The industry is

confronted with number of challenges like low penetration ratio, lack of product

differentiation, lack of investor awareness and ability to communicate value to customers,

lack of interest of retail investors towards mutual funds and evolving nature of the industry.

Based on the analysis the study suggests that if the industry has to utilize its potential fully, it

has to address these challenges.

I. INTRODUCTION
With the increasing emphasis in domestic savings and their mobilization and

allocation towards profitable investments, the need and scope of mutual fund operations has

increased. The mutual funds is one of the important classes of financial intermediaries which

enables millions of small and large savers spread across the country as well as internationally

to participate in and derive the benefits of the capital market growth. It is an alternative

vehicle of intermediation between the suppliers and users of investable financial resources

which is becoming increasingly popular in India and aboard due to higher investor return and

relativity low risk and cost. Thus the involvement of mutual funds in the transformation of

Indian economy has made it urgent to view their services not only as financial intermediary

but also as pace settlers as they are playing role in mobilizing and efficient allocation of

investable funds through markets. The fact is that the mutual funds have a lot of potential

to grow but to capitalize the potential fully, it would need to create and market innovative

products and frame distinct marketing strategies. Moreover, the equity culture has not yet

developed fully in the country as such, investor education would be equally important for

greater penetration of mutual funds.

The history of mutual funds dates back to 19thcentury with its origin to Great Britain. Robert

Fileming set-up in 1868 the first investment trust under the title ‘Foreign and Colonial

Investment Trust’ to manage the finances of moneyed classes of Scotland by spreading the

investment and other investment trusts which were subsequently set-up in Britain and the

US, resembled today’s close-ended mutual fund schemes. The first mutual fund in the US

namely, Massachusetts Investors’ Trusts, was set up in 1924. In India, the mutual fund

industry started in 1963, however, its history has been divided into four phases.

II. GROWTH AND DEVELOPMENT OF MUTUAL FUNDS IN INDIA

The Mutual funds industry that started its journey in the country in 1963 has turned as

one of the important constituents of the financial sector. The industry has witnessed

sufficient expansion and standardization in terms of products and services offered,

regulatory mechanism, and the proliferation of large number of private sector funds both

domestic and foreign. The fact is that the fund market in the country has graduated from

offering plain vanilla equity and debt funds, to an array of diverse products such as Gold

Funds (GF), Exchange Traded Funds (ETFs), and capital protection oriented funds and even

the native funds (Fozia, 2013). Truly, the mutual fund industry in the country has come from

long-way but the moot question is that whether it has realized its potential fully. In order to

answer this question, we would need to critically analyze its growth. For this purpose in the

following para’s the growth that the mutual funds industry has achieved over a certain

period of time has been analyzed in respect of the following parameters

 Number of funds

 Fund Schemes offered

 Mobilization of Funds

 Assets Under Management

 Household Savings mobilized

 Performance of AMCs in terms of earnings and profitability

III. GROWTH IN NUMBER OF FUNDS

As already stated that the first mutual fund namely UTI was established in 1963 which

dominated the industry in the country till 1992. With the entry of other public sector and

private sector funds, it gradually lost its dominance. As can be seen from Table1.1 that the

number of mutual funds which were 31 in 1997-98 have

grown to 41 in 2010-11 at a compound growth rate of 2 percent which doesn’t compare

well with the growth rates in other emerging economies of the world. As compared to 2

percent growth rate in India, the mutual fund industry worldwide has registered a compound

growth rate of 40 percent during 1990-2009 as becomes clear from the data detailed in Table

1.2. During said period, the numbers of private sector funds have grown from 21 funds in

1997-98 to 35 funds in 2010-11 at a compound growth rate of 4 percent. Compared to this,

the public sector funds have witnessed a significant decline. The number of funds which were

10 in 1997-98 has declined to 6 funds in 2010-11 at a negative compound growth rate of 4

percent.

IV. FUNDS MOBILIZED

Launching more and more new schemes are aimed at meeting the varied needs of the

investing public in order to mobilize more funds. As such launching new schemes serves the

purpose only when such schemes have enabled to mobilize more and more funds. The

total funds raised by the mutual fund industry in the country has increased from INR

18,701 crores in 1997-98 to INR 88,59,515crores in 2010-11 thereby having registered a

compound growth rate of 67 percent as becomes clear from Table 1.6. It can be seen from the

said table that public sector mutual funds were major mobiliser of funds in the years

1997-98 and 1998-99 accounting for 82.69 percent and 65.50 percent respectively of the

total funds mobilized. After 1998-99, the private sector mutual funds dominated the mutual

fund industry in terms of funds mobilized. The private sector funds which accounted for just

34.50 percent of the total funds mobilized in 1998-97have increased its share to 71.40 percent

in 1999-00 which kept increasing up to 2003-04 to 90.59 percent

sector mutual funds declined after 2003-04 to 76.84 percent of the total funds

mobilized in 2009-10. But surprisingly in 2010-11 the share of private sector mutual funds

declined sharply to 21.86 percent only which seems to be an exceptional event. What

emerges from the above is that mutual industry in the country has witnessed some growth

in the amount of funds mobilized over the period under study. Further, private sector funds

which accounted for little portion of the funds mobilized in 1997-98, have overtaken public

sector funds significantly and till 2009-10 these funds occupied dominant place with respect

to the mobilization of funds. Category wise: Regular Income Funds accounted for major

portion of the funds mobilized in the years from 1997-98 to 1999-00 with a total

contribution of 68.33 percent, 64.27 percent and 29.64 percent respectively followed by

Balance Funds in 1997-98 which accounted for 25.19 percent. In 1998-99, the other

major contributor was Money Market Funds which accounted for 25.95 percent of the total

funds mobilized. After 2000-01, most of the funds in the industry were mobilized in Money

Market Funds whose share in 1998-99 was 25.95 which had increased to 83.92 percent in

2006-07 and as on 2010-11 it remained at 74.49 percent. As against this the Income Scheme

which accounted for a major portion of the funds mobilized in 1997-98 had witnessed a

steady decline in its share of funds mobilized during the reference period (1997-98 to 2010-

11). Its share had declined from 68.33 percent in 1997-98 to a low of 10.89 percent in 2006-

07 and as on today it accounted for 24.52 percent only. After 2000-01 the other schemes

namely Growth, Balanced, ELSS, Gilt, Money Market and other schemes contributed very

little to the total funds mobilized. The combined share of these schemes ranged only

between 4 to 5 percent which is negligible by all standards. From the above

discussion, two inferences can be drawn that over a period of time, the Money Market Mutual

Funds (MMMF) emerged as a major contributor to the funds mobilized and since 2000-01 it

continues to dominate the industry in terms of funds mobilized. Contrary, the Income Scheme
which was initially dominant schemes gradually lost its ground to the MMMF and had

witnessed a sharp decline in the share of funds mobilized during the period. Among other

schemes, except ELSS and Growth Schemes, all other schemes have registered little or no

growth in the funds mobilized. The Growth & ELSS Scheme have registered sufficient

growth in the funds mobilized during the period but right from the beginning ELSS Scheme

accounted for very little portion of the funds mobilized, but is gaining popularity. The

Growth Scheme which continued to be one of the important schemes till 2000-01

CHAPTER-4

ADVANTAGES
 ADVANTAGES OF MUTUAL FUNDS

Diversification Benefits

Diversified investment improves the risk return profile of the portfolio. Optimal

diversification has limitations due to low liquidity among small investors. The large corpus of

a mutual fund as compared to individual investments makes optimal diversification possible.

Due to the pooling of capital, individual investors can derive benefits of diversification.

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

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.

Well Regulated

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.
CHAPTER-5

STRUCTURE
 STRUCTURE OF MUTUAL FUNDS IN INDIA

In India, the mutual fund industry is highly regulated with a view to imparting operational

transparency and protecting the investor's interest. The structure of a mutual fund is

determined by SEBI regulations. These regulations require a fund to be established in the

form of a trust under the Indian Trust Act, 1882. A mutual fund is typically externally

managed. It is now an operating company with employees in the traditional sense.

Instead, a fund relies upon third parties that are either affiliated organizations or independent

contractors to carry out its business activities such as investing in securities. A mutual fund

operates through a four-tier structure. The four parties that are required to be involved are a

sponsor, Board of Trustees, an asset management company and a custodian.

Sponsor: A sponsor is a body corporate who establishes a mutual fund. It may be one person

acting alone or together with another corporate body. Additionally, the sponsor is expected to

contribute at least 40% to the net worth of the AMC. However, if any person holds 40% or

more of the net worth of an AMC, he shall be deemed to be a sponsor and will be required to

fulfill the eligibility criteria specified in the mutual fund regulation.

Board of Trustees: A mutual fund house must have an independent Board of Trustees,

where two-thirds of the trustees are independent persons who are not associated with the

sponsor in any manner. The Board of Trustees of the trustee company holds the property of

the mutual fund in trust for the benefit of the unit-holders. They are responsible for protecting

the unit-holder's interest.

Asset Management Company: The role of an AMC is highly significant in the mutual fund

operation. They are the fund managers i.e. they invest investors' money in various securities

(equity, debt and money market instruments) after proper research of market conditions and

the financial performance of individual companies and specific securities in the effort to meet

or beat average market return and analysis. They also look after the administrative functions

of a mutual fund for which they charge management fee.

Custodian: The mutual fund is required by law to protect their portfolio securities by placing

them with a custodian. Nearly all mutual funds use qualified bank custodians. Only a

registered custodian under the SEBI regulation can act as a custodian to a mutual fund.

Over the years, with the involvement of the RBI and SEBI, the mutual fund industry has

evolved in a big way giving investors an opportunity to make the most of this investment

avenue. With a proper structure in place, the industry has been able to cater to more number

of investors. With the increase in awareness about mutual funds several new players have

joined the bandwagon.

 CHAPTER-6

COMPARISION
 COMPARISION OF OTHER AVENUES WITH MUTUAL FUNDS

If you were to ask your parents how they invested their money, their answers would tilt in the

favour of Fixed Deposits (FDs), Public Provident Fund (PPF) or gold. Their only investment

in real estate is likely to be the house they had built around their mid 40s. But, you can’t

really blame them for their investment decisions because it was not so common then to invest

in mutual funds or shares. When it comes to your generation, there is a plethora of investment

options to choose from. Mutual Funds have arisen to become one of the most favoured

options of the latest generation. Here are a few reasons why Mutual Funds have unravelled to

become a lucrative investment option.

Fixed Deposits

Most Indian investors prefer investing in FDs since they are considered one of the safest

investments and can be withdrawn anytime (except tax-saving FDs with lock-in period of 5

years) with nominal penalty charges. However, interest rates are not attractive anymore and

they have dipped even further after demonetization. Moreover, interest from FDs is subject to

full taxation as per one’s marginal tax bracket which makes FDs extremely tax ineffective. It

makes sense to invest in FDs only if you are extremely conservative investor or you have a

short-term horizon.

Public Provident Fund 

Another popular investment among the investors with very low risk tolerance, PPF currently

fetches the interest rate of 7.9%. Though the maturity amount and interest earned are

exempted from tax, the maximum investment limit is only Rs. 1,50,000 per annum. PPF is

also very low on liquidity as there is a lock-in period of 15 years and partial withdrawals can
be made from the 6th year onwards only. The interest rate on PPF is revised every quarter,

which means that the returns can go lower than what you expect.

Gold

Indians are crazy about gold and the whole world knows about it. If they are not flaunting it,

then they are hoarding it in their tijoris. Given that gold is a precious metal, it is often valued

high in the market, even when the prices are tumbling down. While most people buy gold

during weddings, festivals or special occasions, there is also a segment who invests in gold

because either they don’t have bank accounts or want to avoid any documentation against

purchase or sale. Gold is a highly liquid asset and as good as paper money. Unfortunately,

people have a tendency to accumulate gold over generations and don’t sell it even when the

prices are high or unless there is a dire need of money. If kept at home, then there is a risk of

theft. If kept in a bank locker, there is a fee you need to pay. If you take insurance, you need

to declare it. Then, there is a question of purity as well.

Over the past few years, gold as ETF (Exchange Traded Funds) has also emerged as a more

convenient and secure option to physical gold. But, again, gold ETF is subject to transaction

and fund management charges. 

So, in reality, you are not earning any return on the investment of gold and it is as good as a

dead investment. It merely serves as an hedge against inflations and store of value.

Real Estate

It is fascinating how young investors are keen to invest in real estate as soon as they start

earning or at least, have decent savings. But, buying a home should not be confused with

investing in a property. What’s the difference? Well, you buy a home for personal use and
most probably, take a loan against it. So, your investment is actually a liability and not an

asset till you are paying EMIs. When you buy a property, you are investing the money which

is lying idle with you (assuming and hoping you are not taking a loan!) with the intention of

earning a return on it through recurring rental income or sale for capital gain. 

The rental income from the property is taxed at the marginal tax rate of the investor after

deducting the payment of municipal taxes and the interest paid to banks on the property loan.

It is also a common fact that real estate is not an easily ‘saleable’ investment, making it

highly unfavourable on the liquidity scale. Even if you manage to sell it, there are huge

transaction and maintenance costs, as well as the tax factor to be considered.

The housing prices may or may not become cheaper, but housing loans are slated to become

less expensive, especially after the recent demonetisation drive. Most of the banks are

expected to cut their lending rates. So, while buying property will get cheaper, selling it for

profit you expect, may become a dream.

Direct Equity

Any investor who is ready to take the plunge in the market is often faced with this question –

buy stocks/shares directly or invest in mutual funds? Direct equity is a high risk, high return

investment option. It is subject to frequent price fluctuations due to market volatility and can

result in complete erosion of capital in an adverse scenario. In order to buy and sell shares at

the right market timing and reap profits, you also actively need to monitor the price

movement and do thorough research. If you lack discipline or time to do so, and do not have

an appetite for high risk then direct equity is not the option for you.

Mutual Funds
Mutual funds are a pool of funds collected from several investors to invest in securities such

as stocks, bonds, money market instruments and similar assets. They are specifically

designed from the perspective of diversifying your portfolio and catering to risk appetite of

every kind. For instance, debt mutual funds give you steady returns, equity mutual funds give

you a possibility of high returns and hybrid mutual funds (mix of debt and equity) which give

you benefits of steady returns as well as capital appreciation. Since mutual funds invest in a

basket of over 20-30 stocks, they do not make or break an investor`s portfolio owing to price

movements of individual stocks.

Unlike gold or real estate, you don’t require much amount to invest in mutual fund you can

set up a Systematic Investment Plan (SIP) with a minimum investment of Rs500/- per month.

This ensures that you are not burdened by your investments and you can still get superior

returns on investment. Also, the other benefit is that if you wish to invest in 10 quality stocks

and have a corpus of only Rs. 1000, you will not be able to buy all 10 (because of higher

prices). Through a structured vehicle like mutual funds, you can easily buy a portfolio of 30-

50 stocks with an investment as low as Rs. 1000

Mutual funds are also inflation beating instruments, definitely a great advantage over FDs

and PPFs. You can also buy or sell mutual funds easily, subject to entry and exit loads of the

scheme. 

The core mantra of financial planning is that you keep a long-term horizon to optimize your

returns without risking the safety of your investment or affecting the liquidity. Mutual funds

meet all these criteria, making them the right fit into your portfolio.
 WHY SHOULD ONE INVEST IN A MUTUAL FUND?

Convenience 

Mutual funds are an ideal investment option when you are looking at convenience and

timesaving opportunity. With low investment amount alternatives, the ability to buy or sell

them on any business day and a multitude of choices based on an individual’s goal and

investment need, investors are free to pursue their course of life while their investments earn

for them.

Diversification

Going by the adage, ‘Do not put all your eggs in one basket’, mutual funds help mitigate risks

to a large extent by distributing your investment across a diverse range of assets. Mutual

funds offer a great investment opportunity to investors who have a limited investment capital.

Liquidity

Investors have the advantage of getting their money back promptly, in case of open-ended

schemes based on the Net Asset Value (NAV) at that time. In case your investment is close-

ended, it can be traded in the stock exchange, as offered by some schemes.

Higher Return Potential

Based on medium or long-term investment, mutual funds have the potential to generate a

higher return, as you can invest on a diverse range of sectors and industries.

Safety &Transparency

Fund managers provide regular information about the current value of the investment, along

with their strategy and outlook, to give a clear picture of how your investments are doing.
Moreover, since every mutual fund is regulated by SEBI, you can be assured that your

investments are managed in a disciplined and regulated manner and are in safe hands.

Every form of investment involves risk. However, skilful management, selection of

fundamentally sound securities and diversification can help reduce the risk, while increasing

the chances of higher returns over time.

 FACTORS THAT DETERMINE YOUR RISK APPETITE

1. Current Scenario – Your age, financial dependents, assets and liabilities, sources of

income, level of engagement (active or passive investor) and investible capital

2. Past Experience – Knowledge about investment products, inclination to learn, nature and

composition of the last held portfolio and its performance

3. Future Outlook – Time horizon available to fulfil the investment objectives, liquidity

requirements in the near future, importance of tax savings vis-à-vis return on investment

4. Investment Attitude – Willingness towards risk taking, ability to withstand short-term

notional losses in return for long-term high returns

CHAPTER-7

TYPES
 TYPES OF MUTUAL FUND SCHEME

Types of Mutual Funds based on structure

 Open-Ended Funds: These are funds in which units are open for purchase or

redemption through the year. All purchases/redemption of these fund units are done at

prevailing NAVs. Basically these funds will allow investors to keep invest as long as they

want. There are no limits on how much can be invested in the fund. They also tend to be

actively managed which means that there is a fund manager who picks the places where

investments will be made. These funds also charge a fee which can be higher than

passively managed funds because of the active management. They are an ideal investment

for those who want investment along with liquidity because they are not bound to any

specific maturity periods. This means that investors can withdraw their funds at any time

they want thus giving them the liquidity they need.

 Close-Ended Funds: These are funds in which units can be purchased only

during the initial offer period. Units can be redeemed at a specified maturity date. To

provide for liquidity, these schemes are often listed for trade on a stock exchange. Unlike

open ended mutual funds, once the units or stocks are bought, they cannot be sold back to

the mutual fund, instead they need to be sold through the stock market at the prevailing

price of the shares.

 Interval Funds: These are funds that have the features of open-ended and close-

ended funds in that they are opened for repurchase of shares at different intervals during
 the fund tenure. The fund management company offers to repurchase units from existing

unitholders during these intervals. If unitholders wish to they can offload shares in favour

of the fund.

Types of Mutual Funds based on asset class

 Equity Funds: These are funds that invest in equity stocks/shares of companies.

These are considered high-risk funds but also tend to provide high returns. Equity funds

can include specialty funds like infrastructure, fast moving consumer goods and banking to

name a few.

 Debt Funds: These are funds that invest in debt instruments e.g. company

debentures, government bonds and other fixed income assets. They are considered safe

investments and provide fixed returns. These funds do not deduct tax at source so if the

earning from the investment is more than Rs. 10,000 then the investor is liable to pay the

tax on it himself.

 Money Market Funds: These are funds that invest in liquid instruments e.g. T-

Bills, CPs etc. They are considered safe investments for those looking to park surplus funds

for immediate but moderate returns. Money markets are also referred to as cash markets

and come with risks in terms of interest risk, reinvestment risk and credit risks.

 Balanced or Hybrid Funds: These are funds that invest in a mix of asset

classes. In some cases, the proportion of equity is higher than debt while in others it is the

other way round. Risk and returns are balanced out this way. An example of a hybrid fund
 would be Franklin India Balanced Fund-DP (G) because in this fund, 65% to 80% of the

investment is made in equities and the remaining 20% to 35% is invested in the debt

market. This is so because the debt markets offer a lower risk than the equity market.

Types of Mutual Funds based on investment objective

 Growth funds:  Under these schemes, money is invested primarily in equity stocks

with the purpose of providing capital appreciation. They are considered to be risky funds

ideal for investors with a long-term investment timeline. Since they are risky funds they are

also ideal for those who are looking for higher returns on their investments.

 Income funds: Under these schemes, money is invested primarily in fixed-income

instruments e.g. bonds, debentures etc. with the purpose of providing capital protection and

regular income to investors.

 Liquid funds: Under these schemes, money is invested primarily in short-term or

very short-term instruments e.g. T-Bills, CPs etc. with the purpose of providing liquidity.

They are considered to be low on risk with moderate returns and are ideal for investors

with short-term investment timelines.

 Tax-Saving Funds (ELSS): These are funds that invest primarily in equity

shares. Investments made in these funds qualify for deductions under the Income Tax Act.

They are considered high on risk but also offer high returns if the fund performs well.
 Capital Protection Funds: These are funds where funds are are split between

investment in fixed income instruments and equity markets. This is done to ensure

protection of the principal that has been invested.

 Fixed Maturity Funds: Fixed maturity funds are those in which the assets are

invested in debt and money market instruments where the maturity date is either the same

as that of the fund or earlier than it.

 Pension Funds:  Pension funds are mutual funds that are invested in with a really

long term goal in mind. They are primarily meant to provide regular returns around the

time that the investor is ready to retire. The investments in such a fund may be split

between equities and debt markets where equities act as the risky part of the investment

providing higher return and debt markets balance the risk and provide lower but steady

returns. The returns from these funds can be taken in lump sums, as a pension or a

combination of the two.

Types of Mutual Funds based on specialty

 Sector Funds: These are funds that invest in a particular sector of the market e.g.

Infrastructure funds invest only in those instruments or companies that relate to the

infrastructure sector. Returns are tied to the performance of the chosen sector. The risk

involved in these schemes depends on the nature of the sector.

 Index Funds: These are funds that invest in instruments that represent a particular

index on an exchange so as to mirror the movement and returns of the index e.g. buying

shares representative of the BSE Sensex.

 Fund of funds: These are funds that invest in other mutual funds and returns

depend on the performance of the target fund. These funds can also be referred to as multi

manager funds. These investments can be considered relatively safe because the funds that

investors invest in actually hold other funds under them thereby adjusting for risk from any

one fund.

 Emerging market funds: These are funds where investments are made in

developing countries that show good prospects for the future. They do come with higher

risks as a result of the dynamic political and economic situations prevailing in the country.

 International funds: These are also known as foreign funds and offer

investments in companies located in other parts of the world. These companies could also

be located in emerging economies. The only companies that won’t be invested in will be

those located in the investor’s own country.

 Global funds: These are funds where the investment made by the fund can be in a

company in any part of the world. They are different from international/foreign funds

because in global funds, investments can be made even the investor's own country.

 Real estate funds: These are the funds that invest in companies that operate in the

real estate sectors. These funds can invest in realtors, builders, property management
 companies and even in companies providing loans. The investment in the real estate can be

made at any stage, including projects that are in the planning phase, partially completed

and are actually completed.

 Commodity focused stock funds: These funds don’t invest directly in the

commodities. They invest in companies that are working in the commodities market, such

as mining companies or producers of commodities. These funds can, at times, perform the

same way the commodity is as a result of their association with their production.

 Market neutral funds: The reason that these funds are called market neutral is

that they don’t invest in the markets directly. They invest in treasury bills, ETFs and

securities and try to target a fixed and steady growth.

 Inverse/leveraged funds: These are funds that operate unlike traditional mutual

funds. The earnings from these funds happen when the markets fall and when markets do

well these funds tend to go into loss. These are generally meant only for those who are

willing to incur massive losses but at the same time can provide huge returns as well, as a

result of the higher risk they carry.

 Asset allocation funds: The asset allocation fund comes in two variants, the

target date fund and the target allocation funds. In these funds, the portfolio managers can

adjust the allocated assets to achieve results. These funds split the invested amounts and

invest it in various instruments like bonds and equity.

 Gift Funds:  Gift funds are mutual funds where the funds are invested in

government securities for a long term. Since they are invested in government securities,
 they are virtually risk free and can be the ideal investment to those who don’t want to take

risks.

 Exchange traded funds: These are funds that are a mix of both open and close

ended mutual funds and are traded on the stock markets. These funds are not actively

managed, they are managed passively and can offer a lot of liquidity. As a result of their

being managed passively, they tend to have lower service charges (entry/exit load)

associated with them.

Types of Mutual Funds based on risk

 Low risk: These are the mutual funds where the investments made are by those who

do not want to take a risk with their money. The investments in such cases are made in

places like the debt market and tend to be long term investments. As a result of them being

low risk, the returns on these investments are also low. One example of a low risk fund

would be gift funds where investments are made in government securities.

 Medium risk: These are the investments that come with a medium amount of risk

to the investor. They are ideal for those who are willing to take some risk with the

investment and tend to offer higher returns. These funds can be used as an investment to

build wealth over a longer period of time.

 High risk: These are those mutual funds that are ideal for those who are willing to

take higher risks with their money and are looking to build their wealth. One example of
high risk funds would be inverse mutual funds. Even though the risks are high with these

funds, they also offer higher returns.

 CHAPTER-8

List of mutual fund

companies in India

List of mutual fund companies in India

There are 44 asset management companies (AMCs) or mutual fund houses operating in India.
These companies manage the investments of investors to fetch them optimal returns. Below
we have provided a list of mutual fund houses in India:

1. Axis Asset Management Company Ltd.

This AMC launched its first mutual fund in October 2009 and since then the firm has
been able to make its presence in over 90 cities in India. It manages more than 20 lakh
investor accounts and offers around 50 mutual fund schemes in the categories of debt,
equity, hybrid, ETFs (Exchange-Traded Funds), FoFs (Fund of Funds), etc. The
schemes offered by the fund house are given below:

Category Name of the fund

o Axis Banking & PSU
Fund
o Axis Liquid Fund
o Axis Gilt Fund
o Axis Corporate Debt
Fund
o Axis Dynamic Bond
Fund
Debt Funds
o Axis Strategic Bond Fund
o Axis Credit Risk Fund
o Axis Short Term Fund
o Axis Treasury Advantage
Fund
o Axis Ultra Short Term
Fund

o Axis Focused 25 Fund

o Axis Bluechip Fund
o Axis Mid Cap Fund
o Axis Multicap Fund
o Axis Growth
Equity Funds
Opportunities Fund
o Axis Small Cap Fund
o Axis Long Term Equity
Fund

Hybrid Funds o Axis Dynamic Equity

Fund
o Axis Arbitrage Fund
o Axis Equity Hybrid Fund
o Axis Equity Saver Fund
o Axis Regular Saver Fund
 o Axis Triple Advantage
Fund

o Axis Gold ETF

o Axis Gold Fund
FoF and ETF
o Axis Nifty ETF

o Axis Children’s Gift

Special Situation Funds Fund

2. Aditya Birla Sun Life AMC Limited

Touted as one of the 3rd largest AMCs in India in terms of domestic AAUM
(Average Assets Under Management). The firm forms a part of the Aditya Birla
Group, a Fortune 500 Indian multinational and offers 24 schemes in the debt, equity,
and hybrid categories. Below we have provided the names of the schemes offered by
the AMC:

Category Name of the fund

o Aditya Birla Sun Life Savings Fund
o Aditya Birla Sun Life Corporate Bond Fund
o Aditya Birla Sun Life Medium Term Plan
o Aditya Birla Sun Life Credit Risk Fund
o Aditya Birla Sun Life Low Duration Fund
o Aditya Birla Sun Life Money Manager Fund
Debt Funds
o Aditya Birla Sun Life Banking & PSU Debt Fund
o Aditya Birla Sun Life Dynamic Bond Fund
o Aditya Birla Sun Life Floating Rate Fund
o Aditya Birla Sun Life Short Term Opportunities
Fund

o Aditya Birla Sun Life Tax Relief 96

o Aditya Birla Sun Life Frontline Equity Fund
o Aditya Birla Sun Life Equity Fund
o Aditya Birla Sun Life Equity Advantage Fund
o Aditya Birla Sun Life Pure Value Fund
o Aditya Birla Sun Life Focused Equity Fund
Equity Funds o Aditya Birla Sun Life Arbitrage Fund
o Aditya Birla Sun Life MNC Fund
o Aditya Birla Sun Life Midcap Fund
o Aditya Birla Sun Life Small Cap Fund
o Aditya Birla Sun Life Banking & Financial
Services Fund

Hybrid Funds o Aditya Birla Sun Life Equity Hybrid ‘95 Fund
o Aditya Birla Sun Life Balanced Advantage Fund
 o Aditya Birla Sun Life Regular Savings Fund

3. Baroda Asset Management India Limited

Previously known as Baroda Pioneer Asset Management Co. Ltd., this AMC is a
wholly owned subsidiary of the Bank of Baroda, India’s second largest public sector
bank. It offers 16 mutual fund schemes in the categories of equity, debt income, and
liquid. We have provided the names of the schemes offered by Baroda Asset
Management below:

Category Name of the fund

o Baroda Short Term Bond Fund
o Baroda Treasury Advantage Fund
o Baroda Income Fund
o Baroda Gilt Fund
Debt Income Funds o Baroda Conservative Hybrid Fund
o Baroda Dynamic Bond Fund
o Baroda Credit Risk Fund
o Baroda Ultra Short Duration Fund

o Baroda Mid-Cap Fund

o Baroda Large Cap Fund
o Baroda ELSS ‘96
o Baroda Multi Cap Fund
Equity Funds o Baroda Hybrid Equity Fund
o Baroda Banking and Financial
Services Fund
o Baroda Dynamic Equity Fund

o Baroda Liquid Fund

Liquid Funds

4. BNP Paribas Asset Management India Private Limited

This AMC is a part of the BNP Paribas Asset Management, one of the leading asset
managers in the word. It has its presence in 30 countries and in India, it offers 15
mutual fund schemes. The schemes are categorised into debt, equity, and hybrid funds
and the names of the funds have been provided below:

Category Name of the fund

Debt Funds o BNP Paribas Flexi Debt Fund
o BNP Paribas Corporate Bond Fund
o BNP Paribas Short Term Fund
o BNP Paribas Low Duration Fund
o BNP Paribas Liquid Fund
 o BNP Paribas Medium Term Fund

o BNP Paribas Large Cap Fund

o BNP Paribas Long Term Equity Fund
o BNP Paribas Multi Cap Fund
o BNP Paribas Midcap Fund
Equity Funds
o BNP Paribas Focused 25 Equity Fund
o BNP Paribas India Consumption
Fund

o BNP Paribas Arbitrage Fund

o BNP Paribas Substantial Equity
Hybrid Fund
Hybrid Funds o BNP Paribas Conservative Hybrid
Fund

5. BOI AXA Investment Managers Private Limited

The firm is a joint venture between AXA Investment Managers and Bank of India, a
public sector bank. AXA Investment Managers, on the other hand, is a part of the
AXA group, one of the world’s largest financial protection firms. The fund house
offers 12 mutual fund schemes, the category and names of which are given below:

Category Name of the fund

o BOI AXA Large & Mid Cap Equity Fund
o BOI AXA Tax Advantage Fund
o BOI AXA Manufacturing & Infrastructure
Equity Funds
Fund
o BOI AXA Small Cap Fund

o BOI AXA Conservative Hybrid Fund

o BOI AXA Equity Debt Rebalancer Fund
o BOI AXA Mid & Small Cap Equity &
Hybrid Funds
Debt Fund
o BOI AXA Arbitrage Fund

o BOI AXA Liquid Fund

o BOI AXA Ultra Short Duration Fund
Debt Funds o BOI AXA Short Term Income Fund
o BOI AXA Credit Risk Fund

6. Canara Robeco Asset Management Company Limited

 The fund house is a joint venture between public sector lender Canara Bank and
Netherlands-based investment firm, Robeco. The firm was founded in December 1987
and initially was known as Canbank Mutual Fund. The fund house was later renamed
to Canara Robeco Mutual Fund in 2007 and offers 18 schemes in various categories
(equity, debt, hybrid, and ETF). The schemes and their categories have been listed
below:

Category Name of the fund

o Canara Robeco Infrastructure
o Canara Robeco Equity Diversified
Fund
o Canara Robeco Emerging Equities
o Canara Robeco Equity Tax Saver
Equity Funds Fund
o Canara Robeco Consumer Trends
Fund
o Canara Robeco Blue Chip Equity
Fund

o Canara Robeco Equity Hybrid Fund

o Canara Robeco Conservative Hybrid
Hybrid Funds
Fund

o Canara Robeco Savings Fund

o Canara Robeco Income Fund
o Canara Robeco Gilt Fund
o Canara Robeco Dynamic Bond Fund
o Canara Robeco Corporate Bond Fund
Debt Funds
o Canara Robeco Short Duration Fund
o Canara Robeco Ultra Short Term
Fund
o Canara Robeco Liquid Fund

o Canara Robeco Gold Savings Fund

o Canara Robeco Gold Exchange
Other Funds
Traded Fund

7. DHFL Pramerica Asset Managers Private Limited

The AMC is headquartered in Mumbai and is sponsored by DHFL and Pramerica.

DHFL is one of the leading mortgage finance institutions in India while Pramerica is
the world’s leading financial services groups. The fund offers 22 schemes across the
categories of debt, equity, hybrid, and international FoF. The names of the schemes
have been provided below:

Category Name of the fund

Equity Funds o DHFL Pramerica Large Cap Fund
 o DHFL Pramerica Diversified Equity Fund
o DHFL Pramerica Midcap Opportunities
Fund
o DHFL Pramerica Long Term Equity Fund
o DHFL Pramerica Arbitrage Fund

o DHFL Pramerica Hybrid Debt Fund

o DHFL Pramerica Equity Savings Fund
Hybrid Funds
o DHFL Pramerica Hybrid Equity Fund

o DHFL Pramerica Insta Cash Fund

o DHFL Pramerica Low Duration Fund
o DHFL Pramerica Ultra Short Term Fund
o DHFL Pramerica Floating Rate Fund
o DHFL Pramerica Short Maturity Fund
o DHFL Pramerica Medium Term Fund
Debt Funds o DHFL Pramerica Dynamic Bond Fund
o DHFL Pramerica Premier Bond Fund
o DHFL Pramerica Credit Risk Fund
o DHFL Pramerica Banking and PSU Debt
Fund
o DHFL Pramerica Gilt Fund

o DHFL Pramerica Euro Equity Fund

o DHFL Pramerica Global Equity
International FoF
Opportunities Fund

8. DSP Investment Managers Private Limited

The fund house is owned by the DSP Group, one of India’s most respected and oldest
financial services companies. One of the family members of the DSP Group is also a
founding member of the Bombay Stock Exchange. The AMC was previously known
as DSP BlackRock Investment Managers Pvt. Ltd. The list of schemes offered by the
fund house are given below:

Category Name of the fund

Equity Funds o DSP Top 100 Equity Fund
o DSP Equity Fund
o DSP Equity Opportunities Fund
o DSP India T.I.G.E.R Fund
o DSP Small Cap Fund
o DSP Midcap Fund
o DSP Tax Saver Fund
o DSP Natural Resources & New
Energy Fund
o DSP Focus Fund
 o DSP Dynamic Asset Allocation Fund
o DSP Equity Savings Fund
o DSP Arbitrage Fund
o DSP Healthcare Fund
o DSP Equal Nifty 50 Fund

o DSP Equity & Bond Fund

Hybrid Funds o DSP Regular Savings Fund

o DSP Government Securities Fund

o DSP 10Y G-Sec Fund
o DSP Banking & PSU Debt Fund
o DSP Bond Fund
o DSP Low Duration Fund
o DSP Liquidity Fund
Debt Funds o DSP Ultra Short Fund
o DSP Short Term Fund
o DSP Savings Fund
o DSP Strategic Bond Fund
o DSP Credit Risk Fund
o DSP Corporate Bond Fund

o DSP US Flexible Equity Fund

o DSP World Agriculture Fund
o DSP Global Allocation Fund
International FoFs o DSP World Energy Fund
o DSP World Gold Fund
o DSP World Mining Fund

9. Edelweiss Asset Management Limited

The asset firm is a subsidiary of Edelweiss Financial Services Ltd. and is a part of the
Edelweiss Group. The AMC offers 25 schemes in the categories of equity, fixed
income, ETFs, and international funds. The schemes have been listed below:

Category Name of the fund

Equity Funds o Edelweiss Arbitrage Fund
o Edelweiss Balanced Arbitrage Fund
o Edelweiss Large Cap Fund
o Edelweiss Long Term Equity Fund
o Edelweiss Multi-Asset Allocation Fund
o Edelweiss Large and Mid Cap Fund
o Edelweiss Equity Savings Fund
o Edelweiss Mid Cap Fund
o Edelweiss Multi-Cap Fund
 o Edelweiss Tax Advantage Fund

o Edelweiss Government Securities Fund

o Edelweiss Banking and PSU Debt Fund
o Edelweiss Liquid Fund
Fixed Income o Edelweiss Short Term Fund
Funds o Edelweiss Dynamic Bond Fund
o Edelweiss Corporate Bond Fund
o Edelweiss Low Duration Fund

o Edelweiss ETF-Nifty 50
o Edelweiss ETF-Nifty Bank
ETFs
o Edelweiss ETF-Nifty 100 Quality 30

o Edelweiss ASEAN Equity Offshore Fund

o Edelweiss Europe Dynamic Equity Offshore Fund
o Edelweiss Greater China Equity Offshore Fund
International Funds o Edelweiss US Value Equity Offshore Fund
o Edelweiss Emerging Markets Opportunities
Equity Offshore Fund

10.Essel Finance AMC Limited

The AMC is owned by Essel Finance Wealth Zone Pvt. Ltd. which is a part of the
Essel Group, one of the most prominent business houses in India. It offers 8 schemes
in the categories of equity, debt, and hybrid and have been listed below:

Category Name of the fund

o Essel Equity Fund
o Essel Midcap Fund
Equity Funds o Essel Long Term
Advantage Fund

o Essel Liquid Fund

o Essel Short Term Fund
o Essel Ultra Short Term
Debt Funds
Fund
o Essel Income Plus Fund

o Essel 3 in 1 Fund
Hybrid Funds

11.Franklin Templeton Asset Management (India) Private Limited

The fund house was established in 1996 and launched its first mutual fund scheme in
September the same year. It offers 37 schemes and we have listed them below:
 Category Name of the fund
o Franklin India Taxshield
ELSS Funds
o Franklin Build India Fund
o Franklin India Bluechip Fund
o Franklin India Equity Advantage Fund
o Franklin India Equity Fund
o Franklin India Focused Equity Fund
o Franklin India Index Fund - NSE Nifty Plan
Equity Funds o Franklin India Opportunities Fund
o Franklin India Prima Fund
o Franklin India Smaller Companies Fund
o Franklin India Technology Fund
o Franklin Templeton India Equity Income Fund
o Franklin Templeton India Value Fund

o Franklin India Banking & PSU Debt Fund

o Franklin India Corporate Debt Fund
o Franklin India Credit Risk Fund
o Franklin India Dynamic Accrual Fund
o Franklin India Government Securities Fund
Fixed Income
o Franklin India Income Opportunities Fund
Funds
o Franklin India Low Duration Fund
o Franklin India Savings Fund
o Franklin India Short Term Income Plan
o Franklin India Ultra Short Bond Fund

o Franklin India Debt Hybrid Fund

o Franklin India Dynamic PE Ratio Fund of Funds
o Franklin India Equity Hybrid Fund
o Franklin India Equity Savings Fund
o Franklin India Life Stage Fund of Funds - 20s Plan,
Hybrid Funds
30s Plan, 40s Plan, 50s Plus Floating Rate Plan, 50s Plus
Plan
o Franklin India Multi-Asset Solution Fund
o Franklin India Pension Plan

o Franklin Asian Equity Fund

o Franklin India Feeder-Franklin European Growth
International Fund
Funds o Franklin India Feeder-Franklin U.S Opportunities
Fund

12.HDFC Asset Management Company Limited

This asset management firm is sponsored by the Housing Development Finance
Corporation Limited (HDFC Ltd.) and Standard Life Investments Ltd. The fund house
launched its first scheme in July 2001 and at the moment, offers 40 schemes, the
categories and names of which have been given below:

Category Name of the fund

o HDFC TaxSaver Fund
o HDFC Capital Builder Value Fund
o HDFC Equity Fund
o HDFC Focused 30 Fund
o HDFC Growth Opportunities Fund
Equity Funds
o HDFC Mid-Cap Opportunities Fund
o HDFC Small Cap Fund
o HDFC Top 100 Fund
o HDFC Infrastructure Fund

o HDFC Banking and PSU Debt Fund

o HDFC Corporate Bond Fund
o HDFC Credit Risk Debt Fund
o HDFC Dynamic Debt Fund
o HDFC Floating Rate Debt Fund
o HDFC Gilt Fund
o HDFC Income Fund
Debt Funds o HDFC Liquid Fund
o HDFC Low Duration Fund
o HDFC Medium Term Debt Fund
o HDFC Money Market Fund
o HDFC Overnight Fund
o HDFC Short Term Debt Fund
o HDFC Ultra Short Term Fund

o HDFC Arbitrage Fund

o HDFC Balanced Advantage Fund
o HDFC Equity Savings Fund
Hybrid Funds o HDFC Hybrid Debt Fund
o HDFC Hybrid Equity Fund
o HDFC Multi-Asset Fund

o HDFC Index Fund-Sensex Plan

o HDFC Index Fund-Nifty 50 Plan
o HDFC Nifty 50 ETF
Gold ETF/Index o HDFC Sensex ETF
Funds/FoF o HDFC Dynamic PE Ratio Fund of Funds
o HDFC Gold ETF
o HDFC Gold Fund

Solution-Oriented Funds o HDFC Children’s Gift Fund

 o HDFC Retirement Savings Fund-Hybrid
Equity Plan
o HDFC Retirement Savings Fund Equity
Plan
o HDFC Retirement Savings Fund-Hybrid
Debt Plan

13. HSBC Asset Management (India) Private Ltd.

This AMC is sponsored by HSBC Securities and Capital Markets (India) Private Ltd.
(HSCI), which is a member of the HSBC Group. It offers 20 schemes in the
categories of active equities, fixed income, liquidity, and multi-asset. The name of the
schemes have been provided below:

Category Name of the fund

o HSBC Large Cap Equity Fund
o HSBC Multi Cap Equity Fund
o HSBC Small Cap Equity Fund
o HSBC Infrastructure Equity Fund
o HSBC Tax Saver Equity Fund
o HSBC Asia Pacific Dividend Yield
Active Equities
Fund
o HSBC Brazil Fund
o HSBC Global Emerging Markets Fund
o HSBC Global Consumer Opportunities
Fund

o HSBC Dynamic Asset Allocation Fund

o HSBC Regular Savings Fund
o HSBC Equity Hybrid Fund
o HSBC Managed Solutions India -
Growth
Multi-Asset
o HSBC Managed Solutions India -
Moderate
o HSBC Managed Solutions India -
Conservative

o HSBC Debt Fund

o HSBC Short Duration Fund
Fixed Income o HSBC Low Duration Fund
o HSBC Flexi Debt Fund

o HSBC Cash Fund

Liquid Funds

14. ICICI Prudential Asset Management Company Limited

This AMC is a joint venture between India’s largest private lender, ICICI Bank and
UK-based financial services firm, Prudential Plc. 59 schemes are offered by the fund
house and they are as follows:

Category Name of the fund

o ICICI Prudential Bluechip Fund
o ICICI Prudential Value Discovery Fund
o ICICI Prudential Long Term Equity Fund (Tax
Saving)
o ICICI Prudential Infrastructure Fund
o ICICI Prudential Pharma Healthcare and
Diagnostics Fund
o ICICI Prudential Multicap Fund
o ICICI Prudential Technology Fund
o ICICI Prudential Large & Mid Cap Fund
Equity Funds
o ICICI Prudential US Bluechip Equity Fund
o ICICI Prudential Exports & Services Fund
o ICICI Prudential MidCap Fund
o ICICI Prudential Dividend Yield Equity Fund
o ICICI Prudential FMCG Fund
o ICICI Prudential Small Cap Fund
o ICICI Prudential Focused Equity Fund
o ICICI Prudential Banking and Financial
Services Fund

o ICICI Prudential Regular Savings Fund

o ICICI Prudential Equity & Debt Fund
o ICICI Prudential Equity-Arbitrage Fund
Hybrid Funds o ICICI Prudential Multi-Asset Fund
o ICICI Prudential Equity Savings Fund
o ICICI Prudential Balanced Advantage Fund

Debt Funds o ICICI Prudential Savings Fund

o ICICI Prudential Floating Interest Fund
o ICICI Prudential Corporate Bond Fund
o ICICI Prudential Liquid Fund
o ICICI Prudential Short Term Fund
o ICICI Prudential Money Market Fund
o ICICI Prudential Long Term Bond Fund
o ICICI Prudential All Seasons Bond Fund
o ICICI Prudential Medium Term Bond Fund
o ICICI Prudential Gilt Fund
o ICICI Prudential Bond Fund
o ICICI Prudential Banking & PSU Debt Fund
o ICICI Prudential Constant Maturity Gilt Fund
o ICICI Prudential Ultra Short Term Fund
 o ICICI Prudential Credit Risk Fund

Solution-Oriented o ICICI Prudential Child Care Plan

Funds
o ICICI Prudential Nifty ETF
o ICICI Prudential Sensex ETF
o ICICI Prudential Midcap Select ETF
o ICICI Prudential Nifty 100 ETF
o ICICI Prudential Nifty Low Vol 30 ETF
o ICICI Prudential NV20 ETF
o ICICI Prudential Gold ETF
o Bharat 22 ETF
o ICICI Prudential S&P BSE 500 ETF
o ICICI Prudential Advisor Series-Debt
Management Fund
o ICICI Prudential Global Stable Equity Fund
o ICICI Prudential Sensex Index Fund
ETFs
o ICICI Prudential Advisor Series-Passive
Strategy Fund
o ICICI Prudential Advisor Series-Conservative
Fund
o ICICI Prudential Regular Gold Savings Fund
o ICICI Prudential Nifty Next 50 Index Fund
o ICICI Prudential Nifty Index Fund
o ICICI Prudential Advisor Series-Thematic
Fund
o ICICI Prudential Advisor Series-Hybrid Fund
o ICICI Prudential Nifty Next 50 ETF
o ICICI Prudential Liquid ETF

15.IDBI Asset Management Ltd.

This AMC is sponsored by IDBI Bank Ltd. and was established on 25 January 2010.
The fund house offers 22 schemes in the categories of debt, equity, hybrid, and gold.
The names of the schemes have been given below:

Category Name of the fund

Equity Funds o IDBI Dividend Yield Fund
o IDBI Long Term Value Fund
o IDBI Banking & Financial
Services Fund
o IDBI Focused 30 Equity Fund
o IDBI Small Cap Fund
o IDBI Midcap Fund
o IDBI Diversified Equity Fund
o IDBI Equity Advantage Fund
 o IDBI India Top 100 Equity Fund
o IDBI Nifty Junior Index Fund
o IDBI Nifty Index Fund
o IDBI Dividend Yield Fund

o IDBI Hybrid Equity Fund

Hybrid Funds o IDBI Equity Savings Fund

o IDBI Credit Risk Fund

o IDBI Gilt Fund
o IDBI Dynamic Bond Fund
Debt Funds o IDBI Short Term Bond Fund
o IDBI Ultra Short Term Fund
o IDBI Liquid Fund

o IDBI Gold Exchange Traded

Fund
Gold Funds
o IDBI Gold Fund

16.IDFC Asset Management Company Limited

This fund house was set up in the year 2000 and in terms of AUM (Assets Under
Management), it is one of India’s largest fund houses. The firm is sponsored by IDFC
Ltd. and offers 34 schemes in various categories. The schemes have been listed
below:

Category Name of the fund

o IDFC Sterling Value Fund
o IDFC Tax Advantage Fund
o IDFC Multi Cap Fund
o IDFC Core Equity Fund
o IDFC Infrastructure Fund
Equity Funds
o IDFC Nifty Fund
o IDFC Focused Equity Fund
o IDFC Large Cap Fund
o IDFC Arbitrage Fund

Debt Funds o IDFC Government Securities Fund-Constant

Maturity Plan
o IDFC Government Securities Fund-IP
o IDFC Dynamic Bond Fund
o IDFC Dynamic Bond Fund-Income Plan
o IDFC Low Duration Fund
o IDFC All Seasons Bond Fund
o IDFC Bond Fund-Medium Term Plan
o IDFC Bond Fund - Short Term Plan
 o IDFC Cash Fund
o IDFC Banking and PSU Debt Fund
o IDFC Money Manager Fund

o IDFC Asset Allocation Fund of Funds-Aggressive

Plan
o IDFC Asset Allocation Fund of Funds-Moderate
Plan
o IDFC Regular Savings Fund
Hybrid Funds o IDFC Asset Allocation Fund of Funds-
Conservative Plan
o IDFC Equity Savings Fund
o IDFC Hybrid Equity Fund
o IDFC Dynamic Equity Fund

o IDFC Nifty ETF

ETFs o IDFC Sensex ETF

17.IIFCL Asset Management Co. Ltd.

This fund house was set up as a trust on 17 August 2012 by the India Infrastructure
Finance Company Ltd. (IIFCL), one of India’s top-ranked institutions in the
infrastructure sector. The firm offers only two schemes, both of which are close-ended
which means investors can only invest during a specified period. The schemes are
named as IIFCL Mutual Fund Infrastructure Debt Fund Series I and IIFCL Mutual
Fund Infrastructure Debt Fund Series II. The IIFCL Mutual Fund Infrastructure Debt
Fund Series I was open for subscription from 31 December 2013 to 9 February 2014.
Series II of the same scheme was open for subscription from 31 March 2017 to 12
April 2017.

>

18.IIFL Asset Management Ltd.

Previously known as India Infoline Asset Management Co. Ltd., this AMC is
sponsored by IIFL Wealth Management Limited (IIFLW), which is also a mutual
funds distributor. The fund house offers only 4 schemes in the categories of equity,
fixed income, and liquid. The names of the schemes are IIFL Focused Equity Fund
(equity), IIFL Capital Enhancer Fund Series I (subscription now closed, IIFL Liquid
Fund (liquid), and IIFL Dynamic Bond Fund (fixed income).

>

19.IL&FS Infra Asset Management Limited

It is the AMC responsible for managing the IL&FS Infrastructure Debt Fund (IIDF).
The fund was launched in partnership with General Insurance Corporation of India
 (GIC), Life Insurance Corporation of India (LIC), National Insurance Co. Ltd. (NIC),
and United India Insurance Company Limited (UII). The fund targets banking
institutions, foreign investors, pension funds, insurance firms, sovereign wealth funds,
etc., as its investors.

>

20. Indiabulls Asset Management Company Ltd.

This AMC is sponsored by Indiabulls Housing Finance Limited, one of the leading
financial services firms in India. The fund house offers 10 schemes in the debt and
equity categories. The list of the schemes are as follows:

Category Name of the fund

o Indiabulls Blue Chip
Fund
o Indiabulls Arbitrage Fund
o Indiabulls Value
Equity Funds
Discovery Fund
o Indiabulls Tax Savings
Fund

o Indiabulls Liquid Fund

o Indiabulls Ultra Short
Term Fund
o Indiabulls Short Term
Fund
Debt Funds
o Indiabulls Income Fund
o Indiabulls Savings
Income Fund
o Indiabulls Savings Fund

21.JM Financial Asset Management Limited

The AMC is wholly-owned by JM Financial Ltd., which is a part of the JM Financial

Group. The firm offers 15 schemes in various categories and they have been listed
below along with the names of the schemes.

Category Name of the fund

Equity Funds o JM Equity Hybrid
Fund
o JM Value Fund
o JM Core 11 Fund
o JM Large Cap Fund
o JM Tax Gain Fund
 o JM Multi Cap Fund

o JM Arbitrage Fund
Arbitrage Fund
o JM Dynamic Debt
Fund
o JM G-Sec Fund
o JM Income Fund
o JM Low Duration
Fund
Debt Funds
o JM Money Market
Fund
o JM Short Term Fund
o JM Ultra Short
Duration Fund

o JM Liquid Fund
Liquid Fund
CHAPTER - 9

LITERATURE

REVIEW
 LITERATURE REVIEW

The literature review means

Many studies concern to Mutual Funds has been considered and reviewed, from which

following are found related to our topic. Hence, hereby it has been covered.

Singh and Jha (2009) conducted a study on awareness & acceptability of mutual funds and

found that consumers basically prefer mutual fund due to return potential, liquidity and safety

and they were not totally aware about the systematic investment plan. The invertors’ will also

consider various factors before investing in mutual fund. Desigan et al (2006)conducted a

study on women investors” perception towards investment and found that women investors”

basically are indecisive in investing in mutual funds due to various reasons like lack of

knowledge about the investment protection and their various investment procedures, market

fluctuations, various risks associated with investment, assessment of investment and

redressed of grievances regarding their various investment related problems. Savings is a

habit specially embodied into women. Even in the past, when women mainly depended on

their spouses’ income, they used to save to meet emergencies as well as for future activities.

In those days, women did not have any awareness about various investment outlets. But as

time passed, the scenario has totally changed.

Ramamurthy and Reddy (2005) conducted a study to analyze recent trends in the mutual

fund industry and draw a conclusion that the main benefits for small investors’ due to

efficient management, diversification of investment, easy administration, nice return

potential, liquidity, transparency, flexibility, affordability, wide range of choices and a proper

regulation governed by SEBI. The study also analyzed about recent trends in mutual fund

industry like various exit and entry policies of mutual fund companies, various schemes
related to real estate, commodity, bullion and precious metals, entering of banking sector in

mutual fund, buying and selling of mutual funds through online.

Mittal and Gupta (2008) in their paper examined the awareness of the investors about

mutual funds and various factors affecting the investment decision in the mutual funds. The

study revealed that mutual funds had comparative advantage over other options due to high

return, high safety, high liquidity and high convenience with moderate volatility. When

compared to other investment options, it ranked third most preferred option, Insurance and

government bonds having first and second positions. The overwhelming majority (85%) of

the respondents were aware of the mutual fund product and risk associated with it and most

of them were satisfied with the service provided by mutual fund.

CHAPTER 10

RESEARCH

METHODOLOGY
 RESEARCH METHODOLOGY

Nature of the study

The research study involves exploration of which attribute of mutual fund is more intense

effect on the investor decision and which attributes of mutual funds are relatively significant

or insignificant for investors, and also to determine which level of each attributesis most or

least preferred. The study involves collecting data through

questionnaire and formulating the data in the required format to apply statistical tools to find

out whether the investor are influenced by the attributes of mutual funds in mutual fund

industry, are attributes are really significant in helping the users or not and to convey the

same to mutual fund houses to use the findings for effective design and redesigning of mutual

fund products.

Significance of the study

Becoming increasingly competitive, the mutual fund industry has registered rapid growth

dramatically with more complex structure and increasing diversification. Determining the

salient characteristics of mutual funds or Attributes of mutual funds as demanded by

professional investors is of great importance for the mutual fund founder when introducing

new funds and structuring the funds under their management. Furthermore, identifying such

characteristics or attributes will guide the mutual fund houses and other small investors in

their investment decision.

Statement of the problem

“Mutual Fund investment is today flooded with innumerable number of players both

indigenous, Foreign and collaboration. Annual Growth rate of Mutual Fund increasing offer

of investment patterns and plans open the Crepitate innumerable research study aiming to

throw light on various aspect of Mutual Fund Investment. These Developments resulted in

offer of many products to customers by various investment agencies. The present research

forms of the proposals endeavouring to establish the behaviour of an individual to invest in

mutual funds according to the ratio of their income and saving composition.”

Objectives of the study

1. To know the consumer behaviour of various age groups, income groups and people who

engaged in different professions towards Mutual Funds.

2. To know the savings from their monthly income and their expected return in the proportion

of their investment.

3. Priorities given to the various factors while investing in various schemes available in the

market.

4. Awareness of customers regarding Mutual funds and their expectations.

Sample universe

Covers maximum Investors (Male and Female) of any kind of Mutual funds houses in

Gorakhpur City.
Sample size

Sample size of 100 respondents is selected for the study to make the study meaningful

and relevant. The number of respondents is less than the minimum standard due to the time

constraint.

Sampling technique

Convenient Sampling is used in our survey. Data is collected from the respondents of

Gorakhpur city. Majority of people who have participated in the research project reside in

Gorakhpur, hence we have taken this city as our basis of sampling.

Sample unit

Males and Females who save at least some portion of their income and are willing to invest

into mutual fund schemes were taken for this research.

Questionnaire

The questionnaire for the study is based on the attributes of earning and saving composition

of people. It has questions related to how much percentage do people actually save from their

income, how much returns do they expect from their savings, `are they aware of any kind of

mutual fund schemes to invest upon etc. And if so from whom are they willing to take over

the transactions on their behalf. Majority of questions consists of 4 options which helps the

respondent to pick the most nearest one to their opinion. These questions evaluate the

intensity of respondent on various parameters with convenient sampling method.

Data sources
An empirical study of this nature should generate sufficient data through survey to base its

findings on evaluation of data. The data collected for the present study comprises of both

primary and secondary sources.

 Primary Sources

It is the detailed information from respondent collected through questionnaire. The

respondents were interviewed and asked to fill the questionnaire. The first part of

questionnaire deals with questions concerning the respondents profile in terms of their Age,

Gender, Education, profession background and income. The second part of the questionnaire

contains the attributes evaluation of their investment behaviour towards mutual funds.

 Secondary Sources

Since we have done a survey of 100 respondents through questionnaire methods, we have not

included and secondary data in this research process. All the analysis of the data and the

whole basis of the project relies on the raw data personally collected by us from Internet.
CHAPTER 11
ANALYSIS AND
INTERPRETATIONS
 ANALYSIS AND INTERPRETATIONS

Question 1: Gender?

Frequency Percent
Male 64 64.0
Valid Female 36 36.0
Total 100 100.0

Here, above pie diagram shows that 64% of whole population is male whereas, 36% of

population is female. So finally we can say that majority investors are male.
Question 2: Age?

Frequency Percent
18-25 32 32.0
26-44 53 53.0
Valid 45-65 14 14.0
66 & above 1 1.0
Total 100 100.0

Majority of the mutual fund holder are belongs to 26-44 age group which is 53%. Mutual

fund holder of Age group between 18-25 is 32%. There are 14% of holders who belongs to

45-65 age groups. There are only 1% of holder who belongs to age group of 66 and above.

Question 3: Profession?
 Frequency Percent
Private Sector 66 66.0
Public Sector 25 25.0
Valid Retire 2 2.0
Student 7 7.0
Total 100 100.0

From the total respondents, it has been found that 66% mutual fund holders are belongs to

private sector whereas, 25% are belongs to public sector. In addition to it, only 2% are retired

investors and only 7% are student respondent of survey.

Question 4: What is your monthly income range?

Frequency Percent
1000 & under 9 9.0
10000-20000 31 31.0
Valid 20000-50000 40 40.0
50000 & above 20 20.0
Total 100 100.0

Out of the total population selected for the survey 9% of people are having the monthly

income range of Rs. 1000. 31% of people come under the range of 10000-20000. 40% of

people earn approximately between Rs. 20000-50000 and only 20% of the population earns

Rs 50000 & above. Hence, we can say that majority of the people fall under the category of

upper-middle class families according to the survey.

Question 5: What is the percentage of savings from your monthly income?

Frequency Percent
less than 10% 17 17.0
10%-15% 42 42.0
Valid 15%-20% 36 36.0
above 20% 5 5.0
Total 100 100.0

Savings= income- consumption

The needs, wants and luxuries of individuals vary from person to person. Hence, linking the

savings of people with their income does not give any kind of conclusion on the topic of their

investment behavior. People who think about future are nearly to save more than people who

believe in living with high standards. So, according to the bar diagrams 17% of people are

having savings from their monthly income less than 10%. 42% of people are having savings

from their monthly income between the range of 10% to 15%. 36% of people are having

savings from their monthly income between the range of 15% to 20% and 5% save above

20%.
Question 6: What are the factors to which you give priority when you invest?

Frequency Percent
Safety 36 36.0
High Return 35 35.0
Valid Liquidity 14 14.0
Less Risk 15 15.0
Total 100 100.0

Investment priorities in Mutual Fund are divided into four categories namely: safety, high

return, liquidity and less risk.

The top most priority is given to safety of funds i.e. 36% which shows that most people

prefer safety above all other factors. The second preference is given to high return Mutual

Fund scheme i.e. 35%.

14% of people prefer to invest in such kind of schemes which gives them freedom to

withdraw their funds as and when required. Lastly 15% of the people tend to invest in such

kind of schemes where risk of loss is very low.

Question 7: What is your expected return?

Frequency Percent
less than 10% 24 24.0
10%-15% 51 51.0
Valid 15%-20% 19 19.0
above 20% 6 6.0
Total 100 100.0

Expected returns and percentage of savings are directly proportional to each other. Hence,

people who tend to take less risk are supposed to get less return. It is visible in the bar

diagram that 24% of people expect less than 10% return from their investments. 51% of

people expect 10 – 15% returns from their investments.

19% of people are likely to invest in such schemes which gives them at least 15 – 20% return

on their investment. And finally those who are expecting high returns of their savings are

only 6% of the total population which is above 20%.

Question 8: How frequently you would like to know the investment status of
your fund?
 Frequency Percent
Once a week 23 23.0
Every fortnight 21 21.0
Valid Once a month 41 41.0
Once in twenty days 15 15.0
Total 100 100.0

Informed Investors as well as Cautious Investors are likely to check their investment
status once a week. And according to our survey 23% of population belong to this
group.

21% of population would like to know their investment status every fortnight. In this
group of people their also lies a group who can be called as Ignorant Investors i.e,
41% who prefers to know about their investment status only once a month. The
lowest percentage that is 15% of people belong to a category who tend to know their
investment status either themselves of through agents are once in 20 days.

Question 9: Where0 do you find yourself as a mutual fund investor?

Frequency Percent
Valid Totally Ignorant 12 12.0
Partial knowledge of mutual fund 42 42.0
 Aware only of any specific scheme in which you
31 31.0
invested
Fully aware 15 15.0
Total 100 100.0

Being a mutual fund investor is not an easy job. An individual must have good knowledge of

market and schemes prevailing in the market. According to the survey 12% of people are

totally ignorant about investing themselves. 42% of people have partial knowledge of

investment funds which is highest amongst the total population studied. 31% of people tend

to have good knowledge only about the schemes in which they have invested in. And 15% of

the total population prefer having a complete knowledge about the ups and downs market or

the best time to invest etc.

Question 10: What do you look before investing in a particular mutual fund scheme?

Frequency Percent
Past Performance (NAV) 22 22.0
Ratings (by CRISIL, ICRA, etc.) 29 29.0
Valid Asset Management Companies (AMC) 22 22.0
Expert Advice 27 27.0
Total 100 100.0
Ratings of how good or bad a particular mutual fund scheme is, are given by certain agencies

like Information and Credit Rating Acency (ICRA), Credit Rating Information Service of

India Limited (CRISIL) etc. 29% which is the highest percentage of population relies on

these kind of agencies for investment.

27% of population tends to take expert advice before investing. 44% of total population

relies equally on Past performance and Asset Management Companies respectively.

Question 11: Which feature of the mutual funds attracts you most?

Frequency Percent
Diversification 14 14.0
Better return & safety 52 52.0
Valid Reduction in risk & transaction cost 17 17.0
Tax benefit 17 17.0
Total 100 100.0
14% of the people tend to invest in diversified portfolio which ultimately reduces the overall

risk of investing in one particular scheme. The highest percentage of population which is

52% believe that better return and safety of their funds is of more importance than risk

factors. 34% of people are equally attracted towards the Mutual fund schemes which provides

them with lower risk and lower transaction cost as well as provides certain tax benefits.

Question 12: From where do you purchase mutual fund?

Frequency Percent
Directly from AMCs 18 18.0
Brokers only 39 39.0
Valid Brokers/ Sub-Brokers 23 23.0
Other sources 20 20.0
Total 100 100.0
Purchasing Mutual Funds is not a difficult task. 18% of People tend to make a direct purchase

from Asset Management Companies. But brokers have a high influence on the investment

market, hence highest percentage of people i.e, 39% investors have faith in the decisions

made by the brokers and so purchase from them. Some brokers are themselves Busy

Investors and Active Investors hence they assign sub brokers who are mostly, always

available for their clients who caters to 23% of the investors. The 20% of the population

invest in mutual funds through various other sources.

Question 13: In which mutual fund schemes you have invested?

Frequency Percent
Open-ended scheme 13 13.0
Money market/ Liquid fund 16 16.0
Index Fund 8 8.0
Income/ Debt oriented scheme 13 13.0
Valid
Balanced fund 23 23.0
Close-ended scheme 8 8.0
Growth scheme 19 19.0
Total 100 100.0
There are many kinds of mutual fund schemes available in the market. 13% of the total

population have invested in open-ended scheme. 16% have invested in money market / liquid

fund scheme. 8% tend to invest in Index fund scheme. 13% people invested in Income/Debt

oriented scheme. 23% people invest Balances fund scheme. 8% people prefer Close ended

scheme. And finally 19% of the total population have invested in Growth Schemes.
Question 14: What influence you to invest in mutual fund?

Frequency Percent
Advertisement 25 25.0
Advisor 41 41.0
Valid Relatives 15 15.0
Co- Workers 12 12.0
Other sources 7 7.0
Total 100 100.0

Nowadays investing in mutual funds has become a new trend. Anyways it is important to

save money for future needs. There are many options which influence an investor to invest in

various schemes. Out of which the highest influence on the customers is made by Financial

Advisors i.e, 41%.

Advertisements in mass media influence 25% of people. Relatives and Co-workers who are

the well wishers of their loved ones influence 15% and 12% of investors respectively. 7% of

people are influenced by various other sources of investment.

Question 15: What are your expectations from mutual fund agencies?

Frequency Percent
Increase the exemption limit under section 80C 36 36.0
Allow mutual funds to launch pension products 39 39.0

Aadhar number to be replaced as a single folio number 15 15.0

Valid
To remove the limit of rupees 50000 per AMC per
10 10.0
financial year while investing through Aadhar OTP
Total 100 100.0

From the above bar chart we can see that the majority of the investors expect from the

agencies to allow mutual funds to launch pension products (39%) and 35% of the population

expect to increase the exemption limit under section 80C. On other side, only 15% and 20%

of people expect respectively that aadhar number should be replaced as a single folio number

and to move the limit of rupees 50000 per AMC per financial year while investing trough

Aadhar OTP.
CHAPTER-12

FINDINGS
 FINDINGS

1) According to the survey majority of the investors are males and female investors

consists of only 36%

2) People who lie under the age group of 26-44 have more experience and are more

intended in investing in mutual funds.

3) People working in private sectors are likely to have more income than the public

sectors as people in government sector receive more benefits and allowances which

ultimately does not allow them to invest more of their savings into any kind of benefit

schemes.

4) Amongst the whole population 20k-50k income earners are highest category

prevailing in the market.

5) Any individual, be it lower middle class or upper class or having a rich background at

least invests 10 to 15% of their total income irrespective of the income.

6) While investing into various mutual fund schemes highest priority is given to factors

like Safety and High Return of their investment rather than Liquidity and Less Risk.
7) Irrespective of the amount invested, people at least expect 10-15% of returns from the

amount invested.

8) According to the survey done we find that majority of people are Casual Investors

who depend on others for their investment business.

9) Due to various kinds of advertisements and internet facilities etc. available, nowadays

many people are partially aware about various mutual fund schemes and other

important investment opportunity as well.

10) Ratings and Expert Advice are highly recommended by people who tend to invest in

Mutual Fund Schemes.

11) People are more attracted towards mutual funds as safety levels are higher due to

diversified portfolio and High Returns also give more benefit to the investors.

12) Most of the people purchase mutual fund from brokers because they think that they

don’t have all the required knowledge about mutual fund and most of them are casual

investor who are very busy with their work and do not have sufficient time to devote

in selection of fund.
13) Most of the people prefer to invest in balanced fund because this scheme aims to

provide both growth and income by periodically distributing a part of the income and

capital gains they earn.

14) With respect to mutual funds, people mostly influence by advisor who provide theme

all the required information, make them aware about all schemes and recommend

particular scheme as per their investment goal and objective.

15) Most of the people expect from mutual fund agencies to allow mutual funds to launch

pension products.
 CHAPTER-13

RECOMMENDATION
 RECOMMENDATION

 In this project we have studied investors behaviour towards mutual funds

 In total 100 people who are the potential investors were interviewed on the basis of

questionnaire.

 On the basis of the data received we would like to recommend the following

1. Instead of spending most of the money in advertisement mutual fund

providers could try to start a new concept of campaigning in various

colleges, Malls, etc…

2. The initiative of campaigns in colleges and malls could definitely motivate

youth population to invest in mutual funds to secure the future for the family.

3. Also not only in youth but to increase the sales of mutual fund schemes in

elderly population mutual fund providers can increase the types of Pension

plans which also gives certain kind of security to the elderly people.

4. Over the years we have seen mutual fund Industries provides various

facilities like safety of funds, secure security of future, flexibility,

reliability, greater benefits etc. Compare to history, many investor

protection initiatives has been taken from the industry and it resulted into
good inflow to mutual fund industry. Hence, mutual fund industry should

continue this kind of initiatives to maintain the growth of inflows of funds.

CHAPTER-14

CONCLUSION
 CONCLUSION

Mutual Funds now represent perhaps most appropriate investment opportunity for most

investors. As financial markets become more sophisticated and complex investors need a

financial intermediary who provides the required knowledge and professional expertise on

successful investing. As always tries to maximize the return and minimise the risk. Mutual

fund satisfies these requirements by providing attractive means with affordable risks. The

fund industry has always overtaken the banking industry more funds being under the mutual

fund investment then deposited with the banks. With the emergence of tough competition in

this sector Mutual Funds are launching a variety of schemes, which car does the requirement

of a particular class of investors. Risk takers for getting capital appreciation should invest in

growth equity schemes. Investors who are in need of regular income should invest in income

plants investors who are in need of regular income should invest in income plans.

The stock market has been rising from over 3 years now. This in turn has not only protected

the money invest in the funds but also helped to grow these investments.

This is also installed greater confidence among fund investors why investing more into the

market through the mutual fund route than ever before.

The mutual fund industry as a whole gets less than 2% of household savings against the 46%

that going to bank deposits. Some fund managers say that it indicates the sectors potential.

More importantly while concluding I would like to say “is Mutual Fund succeed in chipping

away at Bank deposits, even a triple digit growth is possible over, the next few years.”
CHAPTER-15

REFRENCES
 REFRENCES

http://www.ijemr.net/DOC/AStudyOnInvestorsBehaviorTowardsMutualFundsInRohta
kHaryana(224-228)ad80d2cf-a69d-46aa-b57f-c6b17505c3f5.pdf

http://ijrmbs.com/vol1issue4/rajesh_k_2.pdf
 CHAPTER-16

QUESTIONNAIRE
 QUESTIONNAIRE

Dear

Sir/Madam,

We [Nidhi, Manasvi, Pinal, Vibhuti] are students of V.M Patel college of

management studies, Ganpat University [BBA (F.S.), Semester VI] are conducting survey on

“ Investor behaviour towards mutual fund investment with reference to Gandhinagar

city“ and hear by request you to fill up the questionnaire. The information provided by you

will be kept strictly confidential and will be used for academic purpose only.

Name-

1) Gender?

a) Male

b) Female

2) Age?

a) 18-25
b) 26-44

c) 45-65

d) 66 and above

3) Profession?

a) Private Sector

b) Public Sector

c) Retired

d) Student

4) What is your monthly income range?

a) 10,000 and under

b) 10,000-20,000

c) 20,000-50,000

d) 50,000 and above

5) What is the percentage of savings from your monthly income?

a) Less than 10 %

b) 10 – 15 %

c) 15-20 %

d) Above 20 %

6) What are the factors to which you give priority when you invest?
a)Safety

b) High Return

c) Liquidity

d) Less Risk

7) What is your expected return?

a) Less than 10 %

b) 10 – 15 %

c) 15-20 %

d) Above 20 %

8) How frequently you would like to know the investment status of your fund?

a) Once a week

b) Every fortnight

c) Once a month

d) Once in twenty days

9) Where do you find yourself as a mutual investor?

a) Totally ignorant

b) Partial Knowledge of mutual funds

c) Aware only of any specific scheme in which you invested

d) Fully aware
10) What do you look before investing in a particular mutual fund scheme?

a)Past Performance (NAV)

b) Ratings (by CRISIL, ICRA, Etc.)

c) Asset Management Companies (AMC)

d) Expert Advise

11) Which feature of Mutual Funds allure you most?

a) Diversification

b) Better return and safety

c) Reduction in risk and transaction cost

d) Tax benefit

12) From where do you purchase mutual funds?

a) Directly from AMCs

b) Brokers only

c) Broker/sub-broker

d) Other sources

13) In which mutual fund schemes you have invested?

a) Open-ended scheme e) balanced fund

b) Money market/ liquid fund f) close-ended scheme

c) Index fund g) Growth scheme

d) Income/ debt oriented scheme

14) What influence you to invest in mutual fund?

a) Advertisement

b) Advisor

c) Relatives

d) Co- workers

15) What are your expectations form mutual fund agenesis?

a) Increase the exemption limit under section 80C

b) Allow Mutual funds to launch pension products

c) Aadhar number to be replaced as a single folio number

d) To remove the limit of rupees 50,000 per AMC per financial year while investing through

Aadhar OTP