A

Dissertation Report

On

“A COMPARATIVE STUDY ON PUBLIC AND PRIVATE SECTOR

MUTUAL FUNDS”

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

IN THE PARTIAL FULFILMENT OF TWO YEARS FULL TIME

MASTERS DEGREE IN BUSINESS ADMINISTRATION (MBA)

SUBMITTED BY

GAURI VISHWAKARMA

(BATCH: 2018-2020)

UNDER THE GUIDANCE OF

DR. MAHIMA SINGH

THROUGH

KES’s

PRATIBHA INSTITUTE OF BUSINESS MANAGEMENT

CHINCHWAD.411019

1
 DECELARATION

I, GAURI VISHWAKARMA hereby declare that the Project Report entitled

“A COMPARATIVE STUDY ON PUBLIC AND PRIVATE SECTOR MUTUAL
FUNDS” written and submitted by me to the Savitribai Phule Pune
University, in partial fulfillment of the requirement for the award of
degree of Master of Business Administration under the guidance of
DR.MAHIMA SINGH It is my original work and the conclusions drawn there
in are based on the material collected by myself.

Place
Date GAURI VISHWAKARMA

2
 ACKNOWLEDGEMENT

It’s a great privilege that I have done my project from BUSINESS

STANDARD LTD. I am grateful to those who helped and supported me in
completing the project in time.

I would also like to extend my thanks to Mr. Abhijeet Kurhade (Marketing

Developing officer) for providing me all the relevant data needed for the
project work as well as for \his timely guidance.

I would also like thank my guide Prof. Gururaj Dangare for his valuable
and timely guidance that has helped me in completing the project
successfully.

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SR .NO TOPIC PAGE NO.

1 Introduction

1.1 Introduction of the study

1.2 Need & Significance of the study
1.3 Objectives of the Study
1.4 Scope and limitations of the Study

2 Review of Literature

3 Research Methodology

4.1 Data Collection Process

4
Data Analysis & Interpretation

5 Findings and Recommendation

References

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 A COMPARITIVE ANALYSIS ON PUBLIC AND PRIVATE
SECTOR MUTUAL FUNDS
INTRODUCTION

The introduction of mutual funds, Debt schemes of mutual funds,

organization of mutual funds, Types of mutual funds schemes, and need
of mutual funds.

Different investments avenues are available to investors. Mutual funds

also offer good investments opportunities to the investors. Like all
investments, they also carry certain risk. The investors should compare
the risks and expected yields after adjustments of tax on various
instruments while taking investments decisions. The investors may seek
advice from experts and consultants including agents and distributors of
mutual funds schemes while making investments decisions.

An efficient articulate and developed financial system is must for the rapid
economic growth and development of a country. Financial system
facilitates the transformation of savings of individuals, government and
businesses into investments and consumption. The process of economic
development is accompanied by a corresponding and parallel growth of
financial institutions. Financial institutions are business organization that
act as immobilizers and depositories of savings, and as purveyors of credit
1
of finance. They also provide various financial services to the country.
Financial system helps in improving the standard of living and increase the
Social welfare of the community by mobilizing the savings and investing
them gainfully. It is financial system which establishes a link between
savers and investors and help converting investments ideas into reality.
This link is provided by a mechanism through which savings of different
kinds of savers, small, moderate, and large savers are pooled together and
are put at the disposal of those who are able and willing to invest. Such a
mechanism includes wide varieties of institutions, which meet the safety,
liquidity, and profitability requirements of savers. These institutions
grouped as money market and capital market. Money market institutions,
comprising of 9 development banks and financial institutions grants long
term loans and invest in securities of the industrial and trading concerns.
The financial institutions help reducing the risk by diversification. These
institutions also engage in the services of expert investment analysis,
professional knowledge and expertise for the selection and supervision of
their investment portfolio. Thus, a financial institution can assure the
investors triple benefit of:
1. Low risk
2. Steady returns
3. Capital appreciation

A significant outcome of this economic and financial development is the

emergence of mutual funds, leasing, depository, factoring services,
merchant banking etc. Thus mutual funds act as a gateway to enter into

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big companies hitherto inaccessible to an ordinary investor with his small
investments

WHAT IS A MUTUAL FUND?

Mutual fund is a mechanism for pooling the resources by issuing units to

the investors and investing funds in securities in accordance with
objectives as disclosed in offer document.
Investments in securities are spread across a wide cross-section of
industries and sectors and thus the risk is reduced. Diversification reduces
the risk because all sectors may not move in same direction in the same
proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of
mutual funds are known as unit holders.

The investors in proportion to their investments share the profits and

losses. The mutual funds normally come out with a number of schemes
with different investments objectives that are launched from time to time.
A mutual fund is required to be registered with securities and exchange
board of India (SEBI), which regulates securities market before it can
collect funds from the public.
Mutual fund means a non-depository or non-banking financial
intermediary, which acts as “important vehicle for bringing wealth holders
and deficit units together indirectly”. Mutual fund is a type of investment.
company which is concerned with garnering savings of individuals and
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institutions and channelization of these savings in corporate securities in
such a way as to ensure to its investors steady returns and capital
appreciation with low exposure to the risk. Thus, mutual funds facilitate
the investors to pool their funds to invest in a diversified portfolio of
securities. These funds are invested in a wide variety of securities in such
a way as to minimize risk while ensuring steady returns. The mutual funds
pool the resources of the savers by creating claims against themselves in
the form of units sold to investors.
Basically, there are two types of investments companies VIZ. open end
and close end. Open end Investment Company continuously offer its units
for sale and always stands ready to buy securities (units) at any time. This
renders the capitalization of the company to undergo a constant changes
the investors purchase and sale their units directly with the fund. Such
purchase and sale takes place invariably at the net asset value at the time
the unit holders request for redemption. Close end-company has a fixed
no of shares that can be owned by the investing public. It is just like
another incorporated association with a fixed amount of capital. A mutual
fund is a trust that pools the savings of a no of investors who share a
common financial goal. The money thus collected is then invested in
capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital
appreciation realized are shared by its unit holders in proportion to the
number of units owned by them. Thus a mutual fund is the most suitable
investment for the common men as it offer an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low
cost. The flow chart below describes broadly the working of a mutual
fund:

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An open-ended fund operated by an investment company which raises
money from shareholders and invests in a group of assets, in accordance
with a stated set of objectives. Mutual fund raise money by selling shares
of the fund to the public, much like any other type of company can sell
stock in itself to the public. Mutual funds then take the money they
receive from the sale of their shares (along with any money made from
previous investments) and use it to purchase various investment vehicle,
such as stock, bonds and money market instruments. In return for the
money they give to the fund when purchasing shares, shareholders
receive an equity position in the fund and, in effect, in each of its
underlying securities. For most mutual funds, shareholders are free to sell
their shares at any time, although the price of a share in a mutual fund

5
will fluctuate daily, depending upon the performance of the securities
held by the fund.

BENEFITS OF THE MUTUAL FUND: include diversification and

professional money management. Mutual funds offer choice, liquidity,
and convenience, but charge fees and often require a minimum
investment. A closed-end fund is often incorrectly referred to as a mutual
fund, but is actually an investment trust. There are many types of mutual
funds, including aggressive growth fund, asset allocation fund, balanced
fund, blend fund, bond fund, capital appreciation fund, clone fund, closed
fund, crossover fund, equity fund, fund of funds, global fund, growth fund,
growth and income fund, hedge fund, index fund, international fund,
money market fund, municipal bond fund, prime rate fund, regional fund,
sector fund, specialty fund, stock fund, and tax free bond fund.

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TYPES OF MUTUAL FUND SCHEMES
Wide varieties of mutual fund schemes exist to cater to the needs such as
financial position, risk tolerance and return expectations etc. The table
below gives an overview into the existing types of schemes in the
industry.
TYPES OF MUTUAL FUND SCHEMES
BY STRUCTURE
• Open – Ended schemes
• Close – Ended schemes
• Interval schemes

BY INVESTMENT OBJECTIVE
• Growth schemes
• Income schemes
• Balanced schemes
• Money market schemes

OTHER SCHEMES
• Tax Saving Schemes
• Special Schemes
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• Index Schemes
• Sector Specific Schemes

Schemes according to structure:

A mutual fund scheme can be classified into open-ended scheme or
close-ended scheme depending on its maturity period.
• Open – ended fund/ scheme:
An open ended fund or scheme is one that is available for subscription
and repurchase on a continuous basis. These schemes do not have a fixed
maturity period. Investors can conveniently buy and sell units at Net Asset
Value (NAV) related prices that are declared on a daily basis. The key
features of open-end schemes is liquidity.
• Close – ended fund / scheme:
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7
years. The fund is open for subscription only during a specified period at
the time of launch of the scheme. Investors can invest in the scheme at
the time of the initial public and thereafter they can buy or sell the units
of the scheme on the stock exchange where the units are listed. In order
to provide an exit route to the investors, some close- ended funds give an
option of selling back the units to the mutual fund through periodic
repurchase at NAV related prices.
• Interval schemes
These combine the features of open-ended and close-ended schemes.
They may be traded on the stock exchange or may be open for sale or
redemption during predetermined intervals at NAV related prices.
Schemes according to investment objectives: A scheme can also be
8
classified as growth scheme, income scheme, or balanced scheme
considering its investment objective. Such schemes may be open-ended
or close-ended schemes as described earlier. Such schemes may be
classified mainly as follows:
• Growth / Equity oriented scheme
The aim of growth fund is to provide capital appreciation over the
medium to long-term. Such schemes normally invest a major part of their
corpus in equities. Such funds have comparatively high risks. These
schemes provide different options to the investors like dividend option,
capital appreciation, etc. and the investors may choose an option
depending on their preferences.
• Income / debt oriented scheme
The aim of income fund is to provide regular and steady income to the
investors. Such schemes generally invest in fixed income securities such as
bonds, corporate debentures, government securities and money market
instruments. Such funds are less risky compared to equity schemes. These
funds are not affected because of fluctuations in equity markets.
• Balanced fund
The aim of balanced fund is to provide both growth and regular income.
As such schemes invest both in equities and fixed income securities in the
proportion indicated in their offer document. These are appropriate for
investors looking for moderate growth. They generally invest 40-60 % in
equity and debt instruments. These funds are also affected because of
fluctuations in share prices in the stock markets. However NAVs of such
funds are likely to be less volatile compared to pure equity funds.
• Money market or liquid fund
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These funds are also income funds and their aim is to provide easy
liquidity, preservation of capital and moderate income. These schemes
invest exclusively in safer short-term instruments such as treasury bills,
certificates of deposits, commercial papers and interbank call money,
government securities, etc.
Other schemes:
• Tax saving schemes
These schemes offer tax rebates to the investors under specific provisions
of the income tax act, 1961 as the government offers tax incentives for
investments in specified avenues. E.g. Equity linked saving schemes
(ELSS). Pension schemes launched by the mutual funds also offer tax
benefits.
• Gilt fund
These funds invest exclusively in government securities. Government
securities have no default risk. NAV of these schemes also fluctuate due to
change in interest rates and other economic factors as are the case with
income or debt oriented schemes.
• Index funds
Index fund replicate the portfolio of a particular index such as the BSE
Sensitive index, S&P NSE 50 index (nifty), etc. These schemes invest in the
securities in the same weightage comprising of an index. NAVs of such
schemes would rise and fall in accordance with the rise or fall in the index,
though not exactly by the same percentage due to some factors known as
“tracking error” in technical terms.
• Sector specific funds/ schemes

10
 These are the funds schemes, which invest in the securities of only those
sectors or industries as specified in the offer document. E.g.
pharmaceuticals, software, fast moving consumer goods (FMCG),
Petroleum stocks etc. the return in these funds are dependent on the
performance of the respective sectors/industries.
• Load or no-load fund
A load fund is one that charges a percentage of NAV for entry or exit. That
is, each time one buys or sells units in the fund, a charge will be payable.
This charge is used by the mutual fund for marketing and distribution
expenses. A no-load fund is one that does not charge for entry or exit. It
means the investors can enter the fund /scheme at NAV and no additional
charges are payable on purchase or sale of units.

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 MUTUAL FUND INDUSTRY IN INDIA
In four decades of its existence in India, the mutual fund industry has
gone through several structural changes.
From the UTI’s monopoly, until 1987, when the industry was opened first
two other public sector enterprises, and then to private sector plays in
1993, it has come a long way. The entry of private players has galvonised
the sector as increased competition has forced industry players to focus
on product innovation, market penetration, identifying new channels of
distribution, and last but not the least, improving investor’s service. These
measures have helped the industry grow significantly from having assets
worth Rs. 47000 Crores under management in March 1993 to Rs. 150198
Crores by December 2004. However, and the industry is going to face
significant challenges in the future as the competitive pressure increases.
Debt funds too have been benefited by the soft bias in the interest rates.
The volatility in the bond prices has helped debt oriented funds delivered
handsome returns. However, this is not to take credit away from the fund
manager’s investment management skills which played a major role in the
funds’ performance. However, with the industry moving up the learning
curve, significant changes in the investment environment such as
increased competition, ongoing reforms which allow mutual funds to
invest abroad as well as in derivatives instruments and increased
integration of global financial markets pose significant challenges to the
industry in the country. Also, the funds need to be investor friendly and
would have to significantly improve their portfolio disclosure practices.
The key to success would be size, geographic reach, product innovation,
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better investment management skills, and last but not the least, customer
services.

MUTUAL FUND SETUP

A mutual fund is set up in the form trust, which has sponsor, trustees,
asset Management Company (AMC) and custodian. The trust is
established by a sponsor or more than one sponsor who is like promoter
of a company the trustees of the mutual fund holds its property for the
benefit of the unit holders. Asset management Company (AMC) approved
by SEBI manages the funds by making investments in various types of
securities. Custodian, who is registered with SEBI, holds the securities of
various schemes of the fund in its custody. The trustees are wasted with
the general power of superintendence and direction over AMC. They
monitor the performance and compliance of SEBI regulations by the
mutual funds.
SEBI Regulations require that at least two thirds of the directors of trustee
company or board of trustees must be independent i.e. they should not
be associated with the sponsors. Also, 50% of the directors of AMC must
be independent. All mutual funds are required to be registered with SEBI
before they launch any scheme.

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 LIST OF MUTUAL FUND IN PUBLIC AND PRIVATE SECTOR IN INDIA

A: Public Sector Mutual Fund

1. UTI Asset Management Company (p) Ltd.
2. BOB Asset Management Co.Ltd
3. Canbank Investment Management Services Ltd.
4. PNB Asset Management Co Ltd.
5. SBI Funds Management Ltd.
6. GIC Asset Management Co .Ltd.
7. IL& FS Asset Management Co.Ltd.
8. Jeevan Bima Sahayog asset Management Co.Ltd
B: Private Sector Mutual Fund
1 Cholamandlam Assets Management Co.pvt .Ltd
2 Escorts Assets Management Ltd
3 J. M Capital Management PVT.LTd
4 Kotak Mahindra Assets Management co Ltd
5 Reliance Capital Assets Management Ltd

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6 Sundram Assets Management co Ltd
Private sector in Joint Venture - Pre dominantly Indian
1 Birla Sun Life Asset Management co. Ltd
2 DSP Merrill inch Fund Management Ltd
3 H.D.F.C Asset Management Co Ltd
4 Tata TD Water house Assets Mgt Pvt.Ltd.
Private sector in Joint Venture -Predominantly Foreign
1 Deutsche Asset Management (India) Pvt .Ltd
2 HSBCAsset Management (India) private Ltd
3 ING investment Management (India) Ltd
4 Prudential ICICI Asset Management co. Ltd
5 Standard Chartered Asset Management co Pvt Ltd
6 Sun F & C Assets Management (India) Pvt Ltd
7 Templeton Assets Management (India) Pvt Ltd

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THE SALE AND ACQUISITION OF MUTUAL FUNDS COMPANIES IN INDIA
SINCE 2004

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 TOP 10 LARGEST FUNDS IN MARCH 2019

TOP 5 LARGEST FUNDS IN SELECTED CATEGORIES OF

PUBLIC AND PRIVATE MUTUAL FUND – 2019 REPORT

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 TIMELINE OF GROWTH IN MUTUAL FUNDS - 2019 REPORT

The UTI was established in 1963 by an act of parliament, set up by the

Reserve Bank of India (RBI) and operated under the regulatory control of
the RBI until the two were delinked in 1978 and entire control was
transferred to the Industrial Development Bank of India (IDBI).
In 1964, UTI launched its first fund called “Unit Scheme 1964” (US-64). It
was designed to be an income fund and offered regular and stable
dividends. It had a strong emphasis on debt rather than equity until 1979,
when the Foreign Exchange Regulation Act (FERA) was introduced
allowing foreign companies to hold up to 40% equity in Indian companies.
The UTI’s exposure to equity increased substantially after 1979.
In 1966-67, due to the popularity of US-64, UTI launched a reinvestment
plan. Another popular scheme, the Unit Linked Insurance Plan (ULIP), was
launched in 1971. The first decade of UTI’s operations (1964-74) was the
formative period. By the end of June 1974, UTI had 600,000 (six lakh) unit
18
holders. The unit capital totaled around INR1.5 trillion (152 crores or
US$22 billion) and investible funds some INR1.7 trillion (172 4 crores or
US$25 billion). Six more schemes were introduced by UTI between 1981
and 1984. At the end of June 1984, the investible funds crossed INR10
billion (1,000 crores) or US$143 million, and the number of unit holders
reached 1.7 million (17 lakhs).
Between 1984 and 1987, more new schemes were launched, e.g.
Children’s Gift Growth Fund (1986) (India’s first offshore fund), Master
Share Unit Scheme (1987) and India’s first Equity Diversified Scheme. By
the end of 1987, UTI had launched 20 schemes raising AUM of INR12
billion (1,261.1 crore) and net AUM exceeding INR45 billion (4,563 crore
or US$650 million). The number of unit holders reached 2.9 million (29.8
lakhs)
For the period of 23 years between 1964 and 1987, UTI enjoyed a
complete monopoly and thus was the biggest mutual funds organization
in the country. However, the majority of unit holders of the US-64 scheme
were no longer individual investors (as was perceived at the time of
launch) for whom the objective had been to channel small household
savings. By now, a majority were from the corporate sector, which used it
as a safe source of income for companies. This eventually led to the split
of UTI in 2003. One part was the US-64 portion, which was regarded as a
separate entity due to the nature of its investors, and the remainder, UTI
Mutual Fund (UTI MF) was the majority retail mutual funds business,
which came under SEBI regulatory control and more directly competed
with the public and private sector-owned mutual funds companies.
Since 2003, UTI MF has competed in the Indian mutual funds market
against others, without its monopoly positioning. In 2009, T Rowe Price
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Group (of the US) bought a 26% share in the business, with the remaining
shareholders (State Bank of India, Life Insurance Corporation of India,
Bank of Baroda and Punjab National Bank) each owning 18.24%. It has
been expected these shareholdings would be reduced following a SEBI
requirement that rival organizations may not hold more than a 10% stake
in competitors, although that has yet to occur.
UTI MF manages assets across all areas of the asset management
business. It is a household name in India and has a wide portfolio
targeting the varied needs of investors. With 150 branches, 47,000 IFAs,
320 chief agents and business development associates and over 10 million
(1 crore) investor accounts, UTI MF is one of the leading financial
institutions with a pan-Indian presence.

AUM OF INDIAN MUTUAL FUNDS ACROSS ASSET CLASSES BY % TOTAL-

REPORT 2019

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 AUM OF INDIAN MUTUAL FUNDS ACROSS ASSET CLASSES BY VALUE-
REPORT 2019

In order to better categories funds, SEBI seeks to define mutual funds into
clearly identifiable categories. Broadly, these categories are: • Equity
schemes
• Debt schemes
• Hybrid schemes
• Solution oriented schemes
• Other schemes
Further uniformity was also sought in equity funds by categorizing the
investment universe according to market capitalization of stock exchange-
listed companies as:

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• Large cap: top 100 listed companies by market cap
• Mid cap: 101-250 listed companies by market cap
• Small cap: 251 or below listed companies by market cap
As part of the attempt to clarify fund categories, SEBI then also sought to
define subsections within the main categories. Thus, for equity schemes a
further 10 subsector categories have been defined; for debt schemes, 16;
for hybrid schemes, six. Under solution-oriented schemes, there is a split
between retirement funds and children’s funds. Lastly, under other
schemes appears index funds and ETFs, and fund of funds (overseas or
domestic). In addition to these requirements, SEBI also likes to adopt a
policy of restricting each fund house to only one fund per defined
category.
Incorporated within the above mentioned Master Circular are all the
various investment restrictions applicable to Indian mutual funds, issues
such as fees, charges, expenses and commissions payable to distributors.

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.

IMPORTANCE OF THE STUDY:

In view of increasing number of schemes and growing competition in
mutual fund industry, investors are finding it difficult to make a right
selection of schemes. By the emergence of both private and public sectors
even a single wrong decision may put the investor and his investments in
trouble. The proper performance evaluation with expert services removes
such confusion and helps the investor in selecting right fund under right
sector.
LIMITATIONS OF THE STUDY:
As the study is totally based on the secondary data, so all the limitation
exists, which arises due to use of secondary data. Other side of limitations
exists as less time was available, constraint of money

SCOPE OF THE STUDY

The scope of the study is kept limited to the period of five years. The data
for the selected schemes pertaining to a five year period.
The study covers the ten selected schemes of top 5 schemes of both
public and private sector mutual fund houses each listed on the Indian
stock exchange.
To compare debt schemes of both sectors on the basis of Benchmark
index to evaluate over-performance or under-performance of selected

23
mutual funds. For this comparison BSE Sensex is taken as Benchmark
index.

OBJECTIVES OF STUDY:
• To study the investors choice mutual funds scheme in public and
private sector in India.
• To compare private and public sectors on the basis of rate of return
offered to evaluate investments in India.
• To study the most preferred mutual fund schemes in private and
public mutual fund sector.
 To study comparing the level of investing risk in the mutual fund of
the public and private sector.

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 LITERATURE REVIEW
Megharaja B and Dr. Chalawadi CI (2017)3, in their study selected sectors
equity mutual fund to measure their performance in terms of risk and
returns base as compared with benchmark return in the market along
with risk free rate of return 364 day T-bill. The study revealed that
majority of selected schemes performed better than the market.
RBI (2017)4, in its Preliminary Assessment on Macroeconomic Impact of
Demonetization, revealed that reduction in deposit interest rates by
banks after demonetization enhanced the relative attractiveness of debt
oriented mutual funds (MFs). As a result, there were net inflows in
income/debt schemes during November 2016-January 2017 in contrast to
net outflows during November 2015-January 2016. This was reflected in a
sharp increase in the overall resources mobilized by mutual funds during
November 2016-Janauary 2017 in contrast to outflows in the same period
of last year.
M. Gowri and Malabika Deo (2016)5, in their study attempted to evaluate
the performance of fund of funds on the basis of risk-adjusted methods.
An analysis performed on the sample of equity oriented fund of mutual
funds showed that all the fund of funds in the sample earned negative
returns in excess of the risk free rate of return offered by 91 days Treasury

25
bill. The comparison of rates of return of the benchmark index and the
sample of fund of funds indicated that majority of the equity fund of
funds included in the sample had underperformed the benchmark. Such
results might be because of double layer of fees. The results revealed that
the performance of fund of funds had posted a negative Sharpe, Treynor,
and Jensen alpha. The underperformance of fund of mutual funds
strongly explained the double layer of fees.
Priyanka G. Bhatt and Prof. (Dr.) Vijay H.Vyas (2014)6 , in their article
made performance analysis of the six selected equity funds and concluded
that all the funds have performed well during the study period. They also
pointed out that the fall in the CNX NIFTY during the year 2011 has
impacted the performance of all the selected funds. In the eventual
analysis, they concluded that it is fundamental for investors and
prospective investors to consider these parameters like Sharpe ratio &
treynor ratio along with beta and standard deviation as have given
specific performance evaluations from various dimension to make certain
steady performance of mutual funds in India.
Syed Husain Ashraf and Dhanraj Sharma(2014)7 , in his article made the
risk return analysis and point out that out of 10 schemes 3 have
underperform the market, 7 are found to have lower total risk than the
market and all the schemes have given returns higher than risk free rates.
The Treynor ratio of all the mutual funds scheme have over performed
the benchmark market index and Sharpe ratio of 3 mutual funds scheme
underperformed the benchmark market index. They also concluded that
the result of regression analysis suggests that benchmark market return
index has statistically significant impact on mutual fund return at 5% level
of significance.

26
 Shilpi Pal and Arti Chandani (2014) 8, concluded in their article that
popularity of income schemes has only increased in the last decade.
Income mutual funds they have seen tremendous growth in their number
of schemes from
91 on 31st march 2001 to 330 on 31st march 2010. 506 in 2008 was the
maximum ever in terms of total schemes floating in the market.
This category has seen a decline only twice in the last decade. First fall
was posted in the year 2003 and the second fall was reported in the year
2010. One striking fact which comes to light is the huge percentage
contribution of income schemes towards the total AUM of the Indian
mutual funds industry.

27
 RESEARCH METHODOLOGY

Attempt has been made to give the details regarding the research
materials and methods used to achieve the research objective besides
research objective, it consist need of the study, scope of the study,
database and data collection methods. Also, the tools of analysis and
limitations of the study have been described herein.
Data is collected from secondary source related to various schemes will
be taken from various investment journals, capital market reports,
research reports, related books and internet whereas analysis is done by
own. The collected data should be analyzed and through references

Type of Research: -
1. Descriptive Research:-
Descriptive research includes survey and facts finding enquires of
different kinds. The major purpose of descriptive research is description of
the state of affairs as it exists at present. Descriptive research involves
gathering data that describe events and then organizes, tabulates,
depicts, and describes the data collection. Descriptive research includes
survey and facts finding enquires of different kinds. The major purpose of

28
descriptive research is description of the state of affairs as it exists at
present.

SOURCES OF DATA COLLECTION:-

Research methodology is a way to solve research in study and solving
research problems along with logic behind them are defined through
research methodology. So that research result is capable of being
evaluated either by research. For carrying out a research project
successfully one should follow a step-by step logical process

Primary Data
Primary sources are original sources form which researcher directly
collects data that have not been previously collected. e.g... Primary data
are first-hand information collected through various methods such as:
• Observation
• Interviewing
• Experimentation

Primary data used in this is few which collected through formal and
informal discussion with the internal guide

29
Secondary data
This refers to data already existing or published in order to carry out the
study data has been collected from various source like books, magazine
and material, reports, etc. The data which is stored in the organization
and provide by the HR people are also secondary data. The various
information is taken out regarding that subject as well other subject from
various sources and stored. The last years data stored can also be
secondary data. This data is kept for the internal use of the organization.

• Magazines and journals.

• Microfinance on Web site
• Company report

30
 DATA ANALYSIS

1: INVESTORS CHOICE FOR MUTUAL FUNDS:

PUBLIC SECTOR PRIVATE SECTOR NONE
42% 36% 22%

INVESTORS CHOICE
NONE
22%

PUBLIC
SECTOR
42%

PRIVATE
SECTOR
36%

PUBLIC SECTOR PRIVATE SECTOR NONE

42% of the investment by individual in public sector mutual fund. 36%

investor prefers investment in private sector mutual funds though private
31
companies provide very attractive offers for investment and they are also
giving neck to neck challenges to public sector mutual funds undertaking.
From the total population 22% investors' have no idea about the
investment in mutual funds.

2: RATE OF RETURN OFFERED BY PUBLIC SECTOR MUTUAL FUNDS

VERY HIGH AVERAGE VERY LOW
6% 72% 22%

RATE OF RETURN OFFERED

VERY LOW
22% VERY HIGH
6%

AVERAGE
72%

VERY HIGH AVERAGE VERY LOW

Most of the investors feel average rate of return from investment in

public sector. It is up to 72% due to fund house employee’s having public

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sector mindset; they don’t give proper attention and care to the
expectation of Investors because of which they lose the investor faith.
22% public sector mutual fund offer very low rate of return. Only 6% PSU
provide a high rate of return.

3. RATE OF RETURN OFFERED BY PRIVATE SECTOR MUTUAL FUNDS

VERY HIGH HIGH AVERAGE VERY LOW

16% 30% 44% 10%

RATE OF RETURN OFFERED

VERY LOW
10% VERY HIGH
16%

HIGH
30%
AVERAGE
44%

VERY HIGH HIGH AVERAGE VERY LOW

Most of the investors feel higher return from investment in private sector
mutual fund. Private sector mutual funds give high return due to
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continuous research of market behavior, adequately professional work
force, hard work and freedom to take timely decision. They try to give the
optimal return to the investors and like to enhance the brand of fund
house. Total 46% (including 16% very high and 30% high) investor get high
and above return on mutual funds.44% investor get average return only
10% get very low rate of return from private sector mutual funds.
4. PREFERRED MUTUAL FUND SCHEMES IN PRIVATE MUTUAL FUND.
EQUITY BALANCE DEBT EQUITY & DEBT
54% 22% 2% 22%

PRIVATE MF SCHEMES

EQUITY &
DEBT
22%

DEBT
2%
EQUITY
54%

BALANCE
22%

EQUITY BALANCE DEBT EQUITY & DEBT

More than 50% of investor invest equity related mutual fund. They would
like to get higher return and have proper faith on the private fund house.
22% investor preferred investment in balanced fund and equity/debt
funds. Only 2% investors invest in debt fund. The private sector
companies are offering various offers for equity and balanced funds

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 5. PREFERRED MUTUAL FUND SCHEMES IN PUBLIC MUTUAL FUND.
EQUITY BALANCE DEBT EQUITY & DEBT
71% 24% 3% 2%

PUBLIC MF SCHEMES

EQUITY &
DEBT
DEBT
3%2%

BALANCE
24%

EQUITY
71%

EQUITY BALANCE DEBT EQUITY & DEBT

More than 71% of investor invest equity related mutual fund. They would
like to get higher return and have proper faith on the private fund house.
24% investor preferred investment in balanced fund and equity/debt
funds. Only 3% investors invest in debt fund.
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 6. LEVEL OF RISK'IN INVESTING IN PRIVATE SECTOR MUTUAL FUNDS
VERY HIGH HIGH AVERAGE VERY LOW
16% 30% 44% 10%

LEVEL OF RISK PRIVATE SECTOR

VERY LOW
10% VERY HIGH
16%

HIGH
AVERAGE 30%
44%

VERY HIGH HIGH AVERAGE VERY LOW

44% Investors generally get average risk with private sector MF. There are
predefined measures taken by SEBI to control the Fund houses. All Fund
houses are mandatory to submit the financial statement and portfolio of
the scheme and return of the scheme. 30% investor get high risk in
investing in mutual funds. 16% investors feel very high risk in investment
in mutual fund.
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7. THE LEVEL OF RISK IN INVESTING IN PUBLIC SECTOR MUTUAL FUNDS
VERY HIGH AVERAGE VERY LOW
8% 78% 14%

LEVEL OF RISK IN PUBLIC SECTOR

VERY LOW VERY HIGH

14% 8%

AVERAGE
78%

VERY HIGH AVERAGE VERY LOW

Near about 78% investor feels average risk from public sector Mutual
Fund. Since the public sector mutual funds have conservative mind set,
they give more emphasis on safer return rather than risky return. 14%
investor having low risk in mutual funds and 8% public sector mutual
funds are very risky.

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 FINDINGS
 Most of the investor invests in public sector MF because they feel
comfortable with Mutual Funds house backed by government, with
huge capital base, and infrastructure. Therefore 42% public mutual
funds which is more than private mutual funds i.e. 36%.

 Investors invest only when the get huge rate of return to their
investments therefore, accordingly comparison between public and
private mutual funds sectors, the survey shows public sector gives
average rate of return i.e. 72%, were as private gives high rate of
return i.e. 46 %.

 The comparison of preferred schemes of public and private mutual

funds sectors, the analysis done through in which mutual fund is
more demand in both sectors, the equity mutual fund is high in
demand in both the sectors i.e. 54% private and 71% in public sector.

 The comparison of mutual fund sectors, the survey shows the 44%
Investors generally get average risk with private sector MF. There are
predefined measures taken by SEBI to control the Fund houses. And
78% investor’s think of safest mutual fund is public mutual fund.

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 RECOMMENDATION

This days mutual funds are the most studied areas in developed and
developing countries due to its efficient and effective role in reducing risk
and increasing return by managing the funds professionally.
Before investing investors need to know the risk and returns associated
with the individual mutual fund schemes and whether their performance
is commensurate with the market performance or not, to base their
decision upon.

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 CONCLUSION

The level of risk in the both mutual fund sectors is done to measures of
risk which are further used to compare the performance of selected funds
with respect to market. It was found that the sample mutual fund
schemes performed either well or their performance was appropriate
with the market's performance. Thus, investors get ideas for investing and
get more rate of return through comparing the public and private mutual
funds. When public and private mutual funds were compared, the private
mutual fund companies were found much more beneficial rather than
public mutual fund companies for the investors to invest in.

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 REFERENCES

https://www.fincash.com/l/best-mutual-fund-investment-companies
http://www.citigroup.com/emeaemailresources/gra30616_2019_IndiaCo
untryUpdate_v9.pdf

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