SUMMER TRAINING REPORT

ON
“A Study on Investors Preference with
Special Reference to Mutual Fund”
Submitted in partial fulfillment of
MASTER OF BUSINESS ADMINISTRATION (MBA)

Conducted by
DR APJ AK TECHNICAL UNIVERSITY, LUCKNOW
Under the guidance of Under the guidance of
(Prathana Sahi)

Submitted By
Devansh Singh
MBA III Semester
Enrolment No.1674870009
SESSION- 2017-18

ANSAL TECHNICAL CAMPUS, LUCKNOW

SECTOR-C, POCKET-9, SUSHANT GOLF CITY, SHAHEED PATH, LUCKNOW
www.aitmlucknow.edu.in
 ACKNOWLEDGEMENT
Any fruitful work is in complete without a word of thanks to those involved directly or

indirectly in its completion. With my sincere gratitude I would like to thanks everyone

who has supported me in my project.

I would like to extend my sense of acknowledgement to learning Experience. I would like

to thanks my HOD for their support of Ansal Technical Campus, Lucknow for their

blessings which always gave me courage to face all challenges and made my path easier.

Their insight as well as guidance helped me understand the essentials of the report I

would like to thanks for their support college Guide of Ansal for their immense help and

guidance that they have provided during the research report .The present work has taken

its sharp largely to their wise counsels, concrete and constructive suggestions.

Devansh Singh
 TABLE OF CONTENT

 Certificate
 Acknowledgement
 Preface

Chapters Page Nos.

Chapter -1 Introduction

Chapter -2 Company profile

Chapter -3 Objectives of the study

Chapter -4 Research Methodology

Chapter -5 Data Analysis & Interpretations

Chapter -6 Findings

Chapter -7 Suggestions/Recommendations

Chapter -8 Conclusion

Chapter -9 Limitations

Bibliography

Appendix
CHAPTER-1

INTRODUCTION

1
 Introduction

Customer preference analysis is really a call to action. By understanding the preference

formation components and the preference expectation evaluations by group or segment of

customers, companies can design response strategies that are truly responsive to vital

customer expectations and that differentiate in the marketplace.

  Indian retail sector is witnessing one of the most hectic Marketing activities of all

times.  The companies are fighting to win the hearts of customer who is God said by the

business tycoons. There is always a ‘first mover advantage’ in an upcoming sector. In

India, that advantage goes to “Sharekhan Limited”. It has brought about many changes in

the buying habits of people. It has created formats, which provide all items under one

roof at low rates, or so it claims. In this project, we will study its marketing strategies and

promotional activities.

The training report titled “A Study on Investors Preference with Special Reference to

Mutual Fund” helps us to understand the effect of customer preference which is

responsible for attracting customer towards Sharekhan Limited This study helpful to top

level management to improve the present things of Sharekhan Limited.

The report deals with the impact of customer preference which attracting customer

towards Sharekhan Limited.

 The research was carried out as per the steps of Marketing Research. The well supportive

objectives were set for the study. To meet the objectives primary research was

undertaken. The data collection approach adopted was experimental research & survey

research. The instrument used for the data collection was observation & questionnaire.

2
The target respondents were the visitors of Sharekhan Limited, with the sample size of

100 for topic of the company. Tables & charts were used to translate responses into

meaningful information to get the most out of the collected data. Based on those the

inferences have been drawn with peer supportive data.

Customer preference analysis is the process that can allow an organization to

concentrate its limited resources on the greatest opportunities to increase sales and

achieve a sustainable competitive advantage. Customer preference analysis should be

centered on the key concept that customer satisfaction is the main goal.

Customer preference analysis can serve as the foundation of a marketing plan. A

marketing plan contains a set of specific actions required to successfully implement a

marketing strategy.

A strategy consists of a well thought out series of tactics to make a marketing plan

more effective. Marketing strategies serve as the fundamental underpinning of marketing

plans designed to fill market needs and reach marketing objectives. Plans and objectives

are generally tested for measurable results.

Customer preference analysis often integrates an organization's marketing goals,

policies, and action sequences (tactics) into a cohesive whole. Similarly, the various

strands of the strategy , which might include advertising, channel marketing, internet

marketing, promotion and public relations can be orchestrated. Many companies cascade

a strategy throughout an organization, by creating strategy tactics that then become

strategy goals for the next level or group. Each one group is expected to take that strategy

goal and develop a set of tactics to achieve that goal. This is why it is important to make

each strategy goal measurable.

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Investor buying behavior is the sum total of a Investor's attitudes, preferences,

intentions, and decisions regarding the Investor's behavior in the marketplace when

purchasing a product or service.

Buying Behavior is the decision processes and acts of people involved in buying and

using products.

Need to understand:

 Why Investors make the purchases that they make?

 What factors influence Investor purchases?

 The changing factors in our society.

Investor Buying Behavior refers to the buying behavior of the ultimate Investor. A firm

needs to analyze buying behavior for:

 Buyers reactions to a firms marketing strategy has a great impact on the firms

success.

 The marketing concept stresses that a firm should create a Marketing Mix (MM)

that satisfies (gives utility to) customers, therefore need to analyze the what,

where, when and how Investors buy.

 Marketers can better predict how Investors will respond to marketing strategies.

Stages of the Investor Buying Process

4
Six Stages to the Investor Buying Decision Process (For complex decisions). Actual

purchasing is only one stage of the process. Not all decision processes lead to a purchase.

All Investor decisions do not always include all 6 stages, determined by the degree of

complexity...discussed next.

The 6 stages are:

1. Problem Recognition(awareness of need)--difference between the desired state

and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger

stimulates your need to eat.

Can be stimulated by the marketer through product information--did not know

you were deficient? I.E., see a commercial for a new pair of shoes, stimulates

your recognition that you need a new pair of shoes.

2. Information search--

o Internal search, memory.

o External search if you need more information. Friends and relatives (word

of mouth). Marketer dominated sources; comparison shopping; public

sources etc.

A successful information search leaves a buyer with possible alternatives, the

evoked set.

Hungry, want to go out and eat, evoked set is

o Chinese food

o Indian food

5
 o burger king

o Klondike kates etc

3. Evaluation of Alternatives--need to establish criteria for evaluation, features the

buyer wants or does not want. Rank/weight alternatives or resume search. May

decide that you want to eat something spicy, indian gets highest rank etc.

If not satisfied with your choice then return to the search phase. Can you think of

another restaurant? Look in the yellow pages etc. Information from different

sources may be treated differently. Marketers try to influence by "framing"

alternatives.

4. Purchase decision--Choose buying alternative, includes product, package, store,

method of purchase etc.

5. Purchase--May differ from decision, time lapse between 4 & 5, product

availability.

6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive

Dissonance, have you made the right decision. This can be reduced by warranties,

after sales communication etc.

After eating an Indian meal, may think that really you wanted a Chinese meal

instead.

6
Types of Investor Buying Behavior

Types of Investor buying behavior are determined by:

 Level of Involvement in purchase decision. Importance and intensity of interest in

a product in a particular situation.

 Buyers level of involvement determines why he/she is motivated to seek

information about a certain products and brands but virtually ignores others.

High involvement purchases--Honda Motorbike, high priced goods, products visible to

others, and the higher the risk the higher the involvement. Types of risk:

 Personal risk

 Social risk

 Economic risk

The four type of Investor buying behavior are:

 Routine Response/Programmed Behavior--buying low involvement frequently

purchased low cost items; need very little search and decision effort; purchased

almost automatically. Examples include soft drinks, snack foods, milk etc.

 Limited Decision Making--buying product occasionally. When you need to obtain

information about unfamiliar brand in a familiar product category, perhaps.

Requires a moderate amount of time for information gathering. Examples include

Clothes--know product class but not the brand.

7
  Extensive Decision Making/Complex high involvement, unfamiliar, expensive

and/or infrequently bought products. High degree of

economic/performance/psychological risk. Examples include cars, homes,

computers, education. Spend a lot of time seeking information and deciding.

Information from the companies MM; friends and relatives, store personnel etc.

Go through all six stages of the buying process.

 Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same Buying Behavior.

Product can shift from one category to the next.

For example:

Going out for dinner for one person may be extensive decision making (for someone that

does not go out often at all), but limited decision making for someone else. The reason

for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends

will also determine the extent of the decision making.

Categories that Effect the Investor Buying Decision Process

A Investor, making a purchase decision will be affected by the following three factors:

1. Personal

2. Psychological

3. Social

8
The marketer must be aware of these factors in order to develop an appropriate MM for

its target market.

Personal

Unique to a particular person. Demographic Factors. Sex, Race, Age etc.

Who in the family is responsible for the decision making.

Young people purchase things for different reasons than older people.

Psychological factors

Psychological factors include:

 Motives--

A motive is an internal energizing force that orients a person's activities toward

satisfying a need or achieving a goal.

Actions are effected by a set of motives, not just one. If marketers can identify

motives then they can better develop a marketing mix.

MASLOW hierarchy of needs!!

o Physiological

o Safety

o Love and Belonging

o Esteem

o Self Actualization
9
 Need to determine what level of the hierarchy the Investors are at to determine

what motivates their purchases.

Perception--

What do you see?? Perception is the process of selecting, organizing and interpreting

information inputs to produce meaning. IE we chose what info we pay attention to,

organize it and interpret it.

Information inputs are the sensations received through sight, taste, hearing, smell and

touch.

Selective Exposure-select inputs to be exposed to our awareness. More likely if it is

linked to an event, satisfies current needs, intensity of input changes (sharp price drop).

Selective Distortion-Changing/twisting current received information, inconsistent with

beliefs.

Advertisers that use comparative advertisements (pitching one product against another),

have to be very careful that Investors do not distort the facts and perceive that the

advertisement was for the competitor. A current example...MCI and AT&T...do you ever

get confused?

Selective Retention-Remember inputs that support beliefs, forgets those that don't.

Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30

minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't

be expected to be aware of all these inputs, and certainly will not retain many.

10
Interpreting information is based on what is already familiar, on knowledge that is stored

in the memory.

 Ability and Knowledge--

Need to understand individuals capacity to learn. Learning, changes in a person's

behavior caused by information and experience. Therefore to change Investors' behavior

about your product, need to give them new information re: product...free sample etc.

South Africa...open bottle of wine and pour it!! Also educate american Investors about

changes in SA. Need to sell a whole new country.

When making buying decisions, buyers must process information.

Knowledge is the familiarity with the product and expertise.

Inexperience buyers often use prices as an indicator of quality more than those who have

knowledge of a product.

Non-alcoholic Beer example: Investors chose the most expensive six-pack, because they

assume that the greater price indicates greater quality.

Learning is the process through which a relatively permanent change in behavior results

from the consequences of past behavior.

 Attitudes--

Knowledge and positive and negative feelings about an object or activity-maybe tangible

or intangible, living or non- living.....Drive perceptions

11
Individual learns attitudes through experience and interaction with other people.

Investor attitudes toward a firm and its products greatly influence the success or failure of

the firm's marketing strategy.

 Personality--

all the internal traits and behaviors that make a person unique, uniqueness arrives from a

person's heredity and personal experience. Examples include:

 Workaholism

 Compulsiveness

 Self confidence

 Friendliness

 Adaptability

 Ambitiousness

 Dogmatism

 Authoritarianism

 Introversion

 Extroversion

 Aggressiveness

 Competitiveness.

Traits effect the way people behave. Marketers try to match the store image to the

perceived image of their customers.

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There is a weak association between personality and Buying Behavior, this may be due to

unreliable measures. Nike ads. Investors buy products that are consistent with their self

concept.

 Lifestyles--

Recent US trends in lifestyles are a shift towards personal independence and

individualism and a preference for a healthy, natural lifestyle.

Lifestyles are the consistent patterns people follow in their lives.

EXAMPLE healthy foods for a healthy lifestyle. Sun tan not considered fashionable in

US until 1920's. Now an assault by the American Academy of Dermatology.

Social Factors

Investor wants, learning, motives etc. are influenced by opinion leaders, person's family,

reference groups, social class and culture.

 Opinion leaders--

Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay)

spokespeople to market their products. Michael Jordon (Nike, McDonalds,

Gatorade etc.)

13
 Roles and Family Influences--

Role...things you should do based on the expectations of you from your position

within a group.

People have many roles.

Husband, father, employer/ee. Individuals role are continuing to change therefore

marketers must continue to update information.

Family is the most basic group a person belongs to. Marketers must understand:

o that many family decisions are made by the family unit

o Investor behavior starts in the family unit

o family roles and preferences are the model for children's future family

(can reject/alter/etc)

o family buying decisions are a mixture of family interactions and individual

decision making

o family acts an interpreter of social and cultural values for the individual.

The Family life cycle: families go through stages, each stage creates different

Investor demands:

o bachelor stage...most of BUAD301

o newly married, young, no children...me

o full nest I, youngest child under 6

o full nest II, youngest child 6 or over

o full nest III, older married couples with dependant children

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 o empty nest I, older married couples with no children living with them,

head in labor force

o empty nest II, older married couples, no children living at home, head

retired

o solitary survivor, in labor force

o solitary survivor, retired

o Modernized life cycle includes divorced and no children.

 Reference Groups--

Individual identifies with the group to the extent that he takes on many of the values,

attitudes or behaviors of the group members.

Families, friends, sororities, civic and professional organizations.

Any group that has a positive or negative influence on a persons attitude and behavior.

Membership groups (belong to)

Affinity marketing is focused on the desires of Investors that belong to reference groups.

Marketers get the groups to approve the product and communicate that approval to its

members. Credit Cards etc.!!

Aspiration groups (want to belong to)

Disassociate groups (do not want to belong to)

Honda, tries to disassociate from the "biker" group.

15
The degree to which a reference group will affect a purchase decision depends on an

individuals susceptibility to reference group influence and the strength of his/her

involvement with the group.

 Social Class--

an open group of individuals who have similar social rank. US is not a classless society.

US criteria; occupation, education, income, wealth, race, ethnic groups and possessions.

Social class influences many aspects of our lives. IE upper middle class Americans prefer

luxury cars Mercedes.

 Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names.

 Lower-upper class, 1.2%, newer social elite, from current professionals and

corporate elite

 Upper-middle class, 12.5%, college graduates, managers and professionals

 Middle Americans-middle class, 32%, average pay white collar workers and blue

collar friends

 Working class, 38%, average pay blue collar workers

 Lower Americans-lower class, 9%, working, not on welfare

 Lower-lower class, 7%, on welfare

Social class determines to some extent, the types, quality, quantity of products that a

person buys or uses.

16
Lower class people tend to stay close to home when shopping, do not engage in much

prepurchase information gathering.

Stores project definite class images.

Family, reference groups and social classes are all social influences on Investor behavior.

All operate within a larger culture.

 Culture and Sub-culture--

Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous

group of people and transmitted to the next generation.

Culture also determines what is acceptable with product advertising. Culture determines

what people wear, eat, reside and travel. Cultural values in the US are good health,

education, individualism and freedom. In american culture time scarcity is a growing

problem. IE change in meals. Big impact on international marketing.

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Mutual funds are basically financial intermediaries, which collect the savings of investors

and invest them in a large and well-diversified portfolio of securities such as money

market instruments, corporate and government bonds and equity shares of joint stock

companies. A mutual fund is a pool of common funds invested by different investors,

who have no contact with each other. Mutual funds are conceived as institutions for

providing small investors with avenues of investments in the capital market. Since small

investors generally do not have adequate time, knowledge, experience and resources for

directly accessing the capital market, they have to rely on an intermediary, which

undertakes informed investment decisions and provides consequential benefits of

professional expertise. The raison of mutual funds is their ability to bring down the

transaction costs. The advantages for the investors are reduction in risk, expert

professional management, diversified portfolios, liquidity of investment and tax benefits.

By pooling their assets through mutual funds, investors achieve economies of scale. The

interests of the investors are protected by the SEBI, which acts as a watchdog. Mutual

funds are governed by the SEBI (Mutual Funds) Regulations, 1996.

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 MUTUAL FUND OPERATIONS FLOW CHART

The flow chart below describes broadly the working of a Mutual Fund:

THE

GOAL OF

MUTUAL FUND

The goal of a mutual fund is to provide an individual to make money. There are several

thousand mutual funds with different investments strategies and goals to chosen from.

Choosing one can be over whelming, even though it need not be different mutual funds

have different risks, which differ because of the fund’s goals fund manager, and

investment style. The fund itself will still increase in value, and in that way you may also

make money therefore the value of shares you hold in mutual fund will increase in value

when the holdings increases in value capital gains and income or dividend payments are

best reinvested for younger investors Retires often seek the income from dividend

distribution to augment their income with reinvestment of dividends and capital

19
distribution your money increase at an even greater rate. When you redeem your shares

what you receive is the value of the share.

ORGANISATION OF A MUTUAL FUND

There  are  many  entities  involved  and  the  diagram  below  illustrates  the 

organizational set up of a mutual fund:

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 HISTORICAL VIEW:

History and Structure of Indian Mutual Fund Industry

The mutual fund industry in India started in 1963 with the formation of Unit Trust of

India, at the initiative of the Government of India and Reserve Bank. The history of

mutual funds in India can be broadly divided into four distinct phases:

First Phase – 1964-87:

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up

by the Reserve Bank of India and functioned under the Regulatory and administrative

control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the

Industrial Development Bank of India (IDBI) took over the regulatory and administrative

control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the

end of 1988 UTI had Rs.6, 700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds):

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector

banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation

of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June

1987 followed by Can-bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund

(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda

Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set

up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had

assets under management of Rs.47, 004 crores.

21
Third Phase – 1993-2003 (Entry of Private Sector Funds):

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the

year in which the first Mutual Fund Regulations came into being, under which all mutual

funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer

(now merged with Sharekhan Limited) was the first private sector mutual fund registered

in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now

functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund

houses went on increasing, with many foreign mutual funds setting up funds in India and

also the industry has witnessed several mergers and acquisitions. As at the end of January

2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit

Trust of India with Rs.44, 541 crores of assets under management was way ahead of

other mutual funds.

Fourth Phase – since February 2003:

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust

of India with assets under management of Rs.29, 835 crores as at the end of January

2003, representing broadly, the assets of US 64 scheme, assured return and certain other

schemes. The Specified Undertaking of Unit Trust of India, functioning under an

administrator and under the rules framed by Government of India and does not come

under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund

Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions

22
under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had

in March 2000 more than Rs.76, 000 crores of assets under management and with the

setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and

with recent mergers taking place among different private sector funds, the mutual fund

industry has entered its current phase of consolidation and growth. As at the end of

September, 2004, there were 29 funds, which manage assets of Rs.1, 53, 108 crores under

421 schemes.

CLASSIFICATION OF MUTUAL FUND SCHEMES:

Any mutual fund has an objective of earning income for the investors and/ or getting

increased value of their investments. To achieve these objectives mutual funds adopt

different strategies and accordingly offer different schemes of investments. On this basis

the simplest way to categorize schemes would be to group these into two broad

classifications:

OPERATIONAL AND PORTFOLIO CLASSIFICATION:

Operational classification highlights the two main types of schemes, i.e., open-ended

and close-ended which are offered by the mutual funds.

Portfolio classification projects the combination of investment instruments and

investment avenues available to mutual funds to manage their funds. Any portfolio

scheme can be either open ended or close ended.

Operational Classification:

 Open Ended Schemes: As the name implies the size of the scheme (Fund) is

open – i.e., not specified or pre-determined. Entry to the fund is always open to

23
the investor who can subscribe at any time. Such fund stands ready to buy or sell

its securities at any time. It implies that the capitalization of the fund is constantly

changing as investors sell or buy their shares. Further, the shares or units are

normally not traded on the stock exchange but are repurchased by the fund at

announced rates. Open-ended schemes have comparatively better liquidity despite

the fact that these are not listed. The reason is that investors can any time

approach mutual fund for sale of such units. No intermediaries are required.

Moreover, the realizable amount is certain since repurchase is at a price based on

declared net asset value (NAV). No minute to minute fluctuations in rates haunt

the investors. The portfolio mix of such schemes has to be investments, which are

actively traded in the market. Otherwise, it will not be possible to calculate NAV.

This is the reason that generally open-ended schemes are equity based. Moreover,

desiring frequently traded securities, open-ended schemes hardly have in their

portfolio shares of comparatively new and smaller companies since these are not

generally traded. In such funds, option to reinvest its dividend is also available.

Since there is always a possibility of withdrawals, the management of such funds

becomes more tedious as managers have to work from crisis to crisis. Crisis may

be on two fronts, one is, that unexpected withdrawals require funds to maintain a

high level of cash available every time implying thereby idle cash. Fund managers

have to face questions like ‘what to sell’. He could very well have to sell his most

liquid assets. Second, by virtue of this situation such funds may fail to grab

favorable opportunities. Further, to match quick cash payments, funds cannot

have matching realization from their portfolio due to intricacies of the stock

24
 market. Thus, success of the open-ended schemes to a great extent depends on the

efficiency of the capital market and the selection and quality of the portfolio.

 Close Ended Schemes: Such schemes have a definite period after which their

shares/ units are redeemed. Unlike open-ended funds, these funds have fixed

capitalization, i.e., their corpus normally does not change throughout its life

period. Close ended fund units trade among the investors in the secondary market

since these are to be quoted on the stock exchanges. Their price is determined on

the basis of demand and supply in the market. Their liquidity depends on the

efficiency and understanding of the engaged broker. Their price is free to deviate

from NAV, i.e., there is every possibility that the market price may be above or

below its NAV. If one takes into account the issue expenses, conceptually close

ended fund units cannot be traded at a premium or over NAV because the price of

a package of investments, i.e., cannot exceed the sum of the prices of the

investments constituting the package. Whatever premium exists that may exist

only on account of speculative activities. In India as per SEBI (MF) Regulations

every mutual fund is free to launch any or both types of schemes.

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Portfolio Classification of Funds:

Following are the portfolio classification of funds, which may be offered. This

classification may be on the basis of (A) Return, (B) Investment Pattern, (C) Specialized

sector of investment, (D) Leverage and (E) Others.

Return based classification:

To meet the diversified needs of the investors, the mutual fund schemes are made to

enjoy a good return. Returns expected are in form of regular dividends or capital

appreciation or a combination of these two.

1. Income Funds: For investors who are more curious for returns, Income funds are

floated. Their objective is to maximize current income. Such funds distribute

periodically the income earned by them. These funds can further be spitted up into

categories: those that stress constant income at relatively low risk and those that

attempt to achieve maximum income possible, even with the use of leverage.

Obviously, the higher the expected returns, the higher the potential risk of the

investment.

2. Growth Funds: Such funds aim to achieve increase in the value of the underlying

investments through capital appreciation. Such funds invest in growth oriented

securities which can appreciate through the expansion production facilities in long

run. An investor who selects such funds should be able to assume a higher than

normal degree of risk.

3. Conservative Funds: The fund with a philosophy of “all things to all” issue offer

document announcing objectives as: (i) To provide a reasonable rate of return, (ii)

To protect the value of investment and, (iii) To achieve capital appreciation

26
 consistent with the fulfillment of the first two objectives. Such funds which offer

a blend of immediate average return and reasonable capital appreciation are

known as “middle of the road” funds. Such funds divide their portfolio in

common stocks and bonds in a way to achieve the desired objectives. Such funds

have been most popular and appeal to the investors who want both growth and

income.

 Investment Based Classification:

Mutual funds may also be classified on the basis of securities in which they invest.

Basically, it is renaming the subcategories of return based classification.

1. Equity Fund: Such funds, as the name implies, invest most of their investible

shares in equity shares of companies and undertake the risk associated with the

investment in equity shares. Such funds are clearly expected to outdo other funds

in rising market, because these have almost all their capital in equity. Equity

funds again can be of different categories varying from those that invest

exclusively in high quality ‘blue chip companies to those that invest solely in the

new, unestablished companies. The strength of these funds is the expected capital

appreciation. Naturally, they have a higher degree of risk.

2. Bond Funds: such funds have their portfolio consisted of bonds, debentures, etc.

this type of fund is expected to be very secure with a steady income and little or

no chance of capital appreciation. Obviously risk is low in such funds. In this

category we may come across the funds called ‘Liquid Funds’ which specialize in

investing short-term money market instruments. The emphasis is on liquidity and

is associated with lower risks and low returns.

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 3. Balanced Fund: The funds, which have in their portfolio a reasonable mix of

equity and bonds, are known as balanced funds. Such funds will put more

emphasis on equity share investments when the outlook is bright and will tend to

switch to debentures when the future is expected to be poor for shares.

 Sector Based Funds:

There are number of funds that invest in a specified sector of economy. While such funds

do have the disadvantage of low diversification by putting all their all eggs in one basket,

the policy of specializing has the advantage of developing in the fund managers an

intensive knowledge of the specific sector in which they are investing. Sector based funds

are aggressive growth funds which make investments on the basis of assessed bright

future for a particular sector. These funds are characterized by high viability, hence more

risky.

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 PERFORMANCE OF MUTUAL FUND IN INDIA

The performance of mutual funds in India from the day the concept of mutual fund took

birth in India. The year was 1963 Unit Trust of India invited investors or rather to those

who believed in savings, to park their money in UTI Mutual Fund. For 30 years it ranked

top without a single second player. Though the 1988 year saw some new mutual fund

companies, but UTI remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to

satisfactory level. People rarely understood, and of course investing was out of question.

But yes, some 24 million shareholders was accustomed with guaranteed high returns by

the beginning of liberalization of the industry in 1992. This good record of UTI became

marketing tool for new entrants. The expectations of investors touched the sky in

profitability factor. However, people were miles away from the preparedness of risks

factor after the liberalization.

The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me

concentrate about the performance of mutual funds in India through figures. From Rs.

67bn. the Assets under Management rose to Rs. 470 bn. in March 1993 and the figure had

a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started

falling in the year 1992. Those days, the market regulations did not allow portfolio shifts

into alternative investments. There were rather no choices apart from holding the cash or

to further continue investing in shares. One more thing to be noted, since only closed-end

funds were floated in market, the investors disinvested by selling at a loss the in the

secondary market.

29
The performance of mutual funds in India suffered qualitatively. The 1992 stock market

scandal, the losses by disinvestments and of course the lack of transparent rules in the

whereabouts rocked confidence among the investors. Partly owing to a relatively weak

stock market performance, mutual funds have not yet recovered, with funds trading at an

average discount of 1020 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and

competitive environment in mutual funds. Some of them were like relaxing investment

restrictions into the market, introduction of open-ended funds, and paving the gateway for

mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving.

The more the variety offered, the quantitative will be investors. At last to mention, as

long as mutual fund companies are performing with lower risks and higher profitability

within a short span of time, more and more people will be inclined to invest until and

unless they are fully educated with the dos and don’ts of mutual funds

30
CHAPTER-2
COMPANY
PROFILE

31
 COMPANY PROFILE

COMPANY
PROFILE
Company Name:
SHAREKHAN LIMITED
Parental Company: SSKI Group
(Shripal Sevantilal Kantilal Ishwarlal Pvt. Ltd)
Establishment year: 1922
CEO of the
Mr. Tarun Shah
company:
Head Office:
A-206, Phoenix House,
2nd Floor, Senapati Bapat Marg,
Lower Parel,
Mumbai- 400 013.

Surat Main Branch:

M- 1 to 6, Jolly Plaza,
(Where I have taken
Mezzanine Floor,
training)
Athwa Gate,
Surat - 395001
Telephone No: (022) 67482000
0261- 6560310-314
Online division as
“Sharekhan” 8th February 2000
Web Site: www.sharekhan.com
Email: surat@branch.sharekhan.com
Offices(Network): More than 640 outlets in 280 cities

32
 INTRODUCTION OF SHAREKHAN

Sharekhan is one of the leading share broking and retail brokerage firms
in the country. It is the retail broking arm of the Mumbai-basedSSKI Group
(Shripal Sevantilal Kantilal Ishwarlal Pvt. Ltd), which has more than 88 years
of experience in the stock broking business. SSKI is a veteran equities solutions
company with more than 8 decades of trust and credibility in the Indian stock
markets. It helps the customers/people to make informed decisions and simplifies
investing in stocks.

Sharekhan brings to you a user- friendly online trading facility, coupled

with a wealth of content that will help you stalk the right shares. SSKI named its
online division as a Sharekhan and it is into retail broking. The business of the
company overhauled 10 years ago on February 8, 2000. It acts as a discount
brokerage house to a full service investment solution provider. It has specialized
research product for the small investors and day traders.

Sharekhan’s online trading and investment site ww.sharekhan.com  was

launched in 2000. 

Though the www.sharekhan.com, have been providing investors a

powerful online trading platform, the latest news, research and other knowledge-
based tools and Sharekhan's equity related services include trade execution on
BSE, NSE, Derivatives, commodities, depository services, online trading and
investment advice.

Sharekhan’s ground network includes over 640 Share shops across 280
cities in India. With branches and outlets across the country, Sharekhan’s
ground network is one of the biggest in India!

33
 They have talent pool of experienced professionals specially designated
to guide you when you need assistance, which is hy investigating with us is
bound to be a hassle-free experience for you!

The Sharekhan provides its Customers First Step program, built

specifically for all investors, so testament is –

“YOUR GUIDE TO THE FINANCIAL JUNGLE” means

“Our commitment to being your guide throughout your investing lifecycle”

The institutional broking arm of SSKI was also awarded ‘India’s best
broking house for 2004 by Asia Money brokers poll recently & It has also won
the prestigious Awaaz Consumer Vote Awards 2005 for the Most Preferred
Stock Broking Brand in India, in the Investment Advisors category.

They have 640 share shops across 280 cities in India to get a host of trading
related services – our friendly customer service staff will also help you with any
account related queries you may have.

Sharekhan won the award by the vote of consumers around the country,
as part of India’s largest consumer study cover 7000 respondents – 21 products
and services across 21 major cities. The study, initiated by Awaaz – India’s first
dedicated Consumer Channel and member of the worldwide CNBC Network, &
AC Nielsen–ORG Marg, was aimed at understanding the brand preferences of
the consumers & to decipher what are the most important loyalty criteria for the
consumer in each vertical.
The reasons behind the preferences for brands were unveiled by
examining the following:

 Tangible features of product / service.

 Softer, intangible features like imagery, equity driving preference.
 Tactical measures such as promotional / pricing schemes.

34
 Sharekhan completes 10 years in Retail Broking Business:
Sharekhan Ltd, India’s leading online retail broking house with a strong
online trading platform, has completed a decade in the business offering services
such as portfolio management, trade execution in equities, futures & options,
commodities and distribution of mutual funds, insurance and structured products.

In a short span of 10 years, the company has scripted a remarkable

growth story. Starting from beginnings in 8th February 2000 as an online trading
portal, Sharekhan today has a pan-India presence as well as global footprint in
UAE and Oman with over 1,200 outlets serving 9,50,0000 customers across
400 cities.

Mr. Tarun Shah, CEO, Sharekhan,

Says - “We are proud to be
completing a decade of setting new
standards in the industry. This
journey has been eventful. And the

35
 journey couldn’t have been such a
rewarding one without the support of
our patrons who infused immense
faith in our services in the last 10
years. We profusely thank our
patrons for the same.”

Sharekhan in its decade-old journey has set category leadership through

pioneering initiatives like ‘Trade Tiger’; a net based executable application that
emulates a broker terminal besides providing information and tools relevant to
traders. Through its ‘First Step’ program Sharekhan has been guiding first-time
investors and helping them makes informed decisions.

 ABOUT SHAREKHAN

 SSKI named its online division as SHAREKHAN and it is into retail broking.
 The business of the company overhauled 10 years ago on February 8,
2000.
 It acts as a discount brokerage house to a full service investment solutions
provider.
 It has specialized research product for the small investors and day traders.
 Largest chain of 640 shares shops in 280 cities across India.
 The site was also launched on February 8, 2000 and named it as
www.sharekhan.com.
 The Speed Trade account of Sharekhan is the next generation technology
product launched on April 17, 2002.
 It offers its customers with the trade execution facilities on the NSE and BSE,
for cash as well as derivatives, depository services.

36
 Ensures convenience in Trading Experience: Sharekhan’s trading services are
designed to offer an easy, hassle free trading experience, whether trading is
done daily or occasionally. Sharekhan providing the customers with a multi-
channel access to the stock markets.
 It gives advice based on extensive research to its customers and provides
them with relevant and updated information to help him make informed about
his investment decisions.
 Sharekhan offers its customers the convenience of a broker-DP.
 It helps the customers meet his pay in obligations on time thereby reducing the
possibility of auctions. And execute the instruction immediately on receiving it
and thereafter the customer can view his updated account statement on
Internet.
 Sharekhan depository services offer Demat services to individual and
corporate investors. A customer can avail of Demat, repurchase and
transmission facilities at any of the Sharekhan branches and business partners
outlets.

 BRAND NAME:

The company as a whole in its offline business

has named itself as SSKI Securities Private Limited – Shripal Sevantilal
Kantilal Ishwarlal Securities Private Limited. The company has preferred to
name themselves under a blanket family name.

But, in its online division started since 1997, the company preferred to
name itself as “SHAREKHAN”. The Brand name “SHAREKHAN” itself suggests
the business in which the company is dealing so that the customer could easily
identify the product or service category.

37
  SHAREKHAN’S MISSION & VISION:

· MISSION

“To educate and empower the retail investor

to help him/her take better investment decisions.”

· VISION

“To be the best retail broking brand in the Indian

equities market.”

 ROLE OF SHAREKHAN:

Ø Interface between the stock

Ø Assistance to investors in precise allocation of funds.
Ø Building awareness amongst general public about stock market.

Core Services of Sharekhan:

As a Sharekhan customer you can decide the channel through which you
want to receive different Services.

38
39
  OTHER SERVICES PROVIDED BY SHAREKHAN

1. Online Services
2. Offline Services
3. Depository Services: Demat & Remat Transactions
4. Derivatives Trading (Futures and Options)
5. Commodities Trading
6. IPOs & Mutual Funds Distribution
7. Fundamental Research
8. Technical Research
9. Portfolio Management
10. Free access to investment advice from Sharekhan's Research team
11. Sharekhan Value Line (a monthly publication with reviews of
recommendations, stocks to watch out for etc)
12. Daily research reports and market review (High Noon & Eagle Eye)
13. Pre-market Report (Morning Cuppa)
14. Daily trading calls based on Technical Analysis
15. Cool trading products (Daring Derivatives and Market Strategy)
16. Personalised Advice
17. Live Market Information
18. Internet-based Online Trading: SpeedTrade

1. Online Services:
Online BSE and NSE executions (through BOLT & NEAT terminals
Mutual Funds
Commodity Futures
PMS (Portfolio Management Services)
Technical PMS

40
 Demat Services
Share shops

2. Offline Services:

Trading with the help of Dealer

Trading without credit
By calling to the Share shops
Credit facility (Only in Delivery-based)
Special website for Offline Clients: www.mysharekhan.com
Physical contract notes

 It provides various On-line trading services through various account:

The company provided mainly two types of services to their customers for
the Demate Accounts.
(1) Online Account and

(2) Offline Account

41
1. Online Account: -

In the Online account, the company simply provides the terminal to the
customers or clients and the clients can do trading himself/herself when he/she
wants. The charges of online account is Rs. 750 /-, which is varies from company
to company. Online accounts are most popular than the Offline accounts.
In the Online A/C, the company provides 3 types of facilities to their clients
as per the requirements.
A. Classic Accounts

B. Trade Tiger Accounts

C. Dial – n –Trade

A. Classic Accounts:

Investing Online is so much

easier!
In Classic accounts, it is very simple to do trading. Here customer has first
to open a Demat account with Sharekhan and after opening an account he can
get the login ID and password. With the help of login ID and password, the client
can login to the Sharekhan.com and in the classic a/c whatever company’s
information the clients wants, he has to type the company’s name or code and he
will get all the necessary information about that company and he can buy or sell
the that company’s stock or shares. But, here in the classical account the client
can access only one scrip at a time.

42
 Features of Classic Account:

Classic account enables you to buy and sell shares through our website. You
get features like

 Online trading account for investing in Equities and Derivatives via

sharekhan.com
 Integration of: Online trading + Bank + Demat account
 Instant cash transfer facility against purchase & sale of shares
 Make IPO bookings
 You get Instant order and trade confirmations by e-mail
 Streaming Quotes
 Personalised Market Scan with your own customized stock ticker!
 Single screen interface for cash and derivatives
 Your very own Portfolio Tracker!

B. Trade Tiger Account: -

Earlier it was known as Speed Trade and now it is known as Tiger

Trade.

This account is same as fast trade account. But, difference between these
two accounts is that in the Tiger Trade Account the client can access more than
25 scripts at a time and buy and sell the share from wherever they wants. This
account also provides the charts and graphs, so that the clients can easily
understand about the stock of the company. This is only for big clients and dealer

43
kind of customers. This account is mainly for active traders who trade frequently
during the

trading
session.

 Features of Trade Tiger Account: -

 A single platform for multiple exchange BSE & NSE (Cash & F&O),
MCX, NCDEX, Mutual Funds, IPOs
 Multiple Market Watch available on Single Screen
 Multiple Charts with Tick by Tick Intraday and End of Day Charting
powered with various Studies
 Graph Studies include Average, Band- Bollinger, Know Sure Thing,
MACD, RSI, etc
 Apply studies such as Vertical, Horizontal, Trend, Retracement & Free
lines

44
  User can save his own defined screen as well as graph template, that is,
saving the layout for future use
 User-defined alert settings on an input Stock Price trigger
 Tools available to gauge market such as Tick Query, Ticker, Market
Summary, Action Watch, Option Premium Calculator, Span Calculator
 Shortcut key for FAST access to order placements & reports
 Online fund transfer activated with 12 Banks

C. Dial-n-trade:

 Features of Dial-n-trade:

 TWO dedicated numbers for placing your orders with your cell phone or
landline. Toll free number: 1-800-22-7050. For people with difficulty in
accessing the toll-free number, we also have a Reliance number (Your
Local STD Code) 30307600 which is charged at as a local call.
 Simple and Secure Interactive Voice Response based system for
authentication
 No waiting time. Enter your TPIN to be transferred to our telebrokers
 You also get the trusted, professional advice of our telebrokers

45
  After hours order placement facility between 9.00 am and 9.30 am
(timings to be extended soon)

2. Offline Account: -

This is simple way to do trading. In the offline account, the client

can place the order by telephone or through personal visit in the office.
The client who is very busy in their jobs or business, they can directly
place the order by the telephone or the client who are not much busy; they
can come to the office of Sharekhan.
Sharekhan also provide the Dial-n-trade service to their customers.
So that customers can directly place the order by the telephone.

 Demat Account Opening & Brokerage Charges: -

46
· Fee structure for General Individual:

Charges Classic Account Trade Tiger Account

Account Opening Charges Rs. 750/- Rs. 1000/-

Brokerage Intra-day : 0.10 Intra-day : 0.10 %

% Delivery : 0.50 %
Delivery : 0.50
%
Annual Maintenance Charges Rs. NIL first year
Rs. 300/= p.a. from second year
onwards

For Intra-day Trades:-

 This is subject to a minimum brokerage of 5 paisa per share. This means

that if the share price you trade in is Rs 50/- or less, a minimum brokerage
of 5 paisa per share will be charged.

For Delivery Based Trades :-

 This is subject to a minimum brokerage of 10 paisa per share. Minimum

brokerage of 10 paisa per share will be applicable when the share price
is Rs 20/- or less.

47
  Sharekhan launchs ShareMobile, an
exclusive live streaming quotes and trading
facility for its online trading customers

 Next time when you are on move, you need

not worry about your favorite stocks price
movement. You can carry stock market
terminal with you anywhere – anytime.
 Have you ever missed an investment or an
opportunity to book profit / loss, just because
you were on move?
 Sharekhan brings your freedom of being
Mobile. Yes, it’s so easy with ShareMobile to
track your favorite stocks price movement
tick-by-tick.

 How ShareMobile does empower you?

 Live tick by tick stock price.
 Latest News Headlines
 Track your My Trade Portfolio investments
 Live Research Fundamental & Trading Calls

48
 Sharekhan Depository Services:

 Sharekhan Depository Services offers dematerialization services to individual

and corporate investors.

 Sharekhan has a team of professionals and the latest technological expertise

dedicated exclusively to our Demat department, apart from a national network
of franchisee, making the services quick, convenient and efficient.

 Trading in Commodity Futures:

 It provides with facility to trade in commodities (Bullion: Gold, silver and

agricultural commodities) through a wholly owned subsidiary of its Parent
SSKI.

 Sharekhan is a member of 2 Commodity Exchanges and offers trading

facility at both these exchanges:

1. Multi Commodity Exchange Of India (MCX)

2. National Commodity And Derivative Exchange, Mumbai (NCDEX)

 Software (Technology) Used In Sharekhan: -

Sharekhan is using different technology for the running of their daily

transactions.
Mainly for the trading, the company using three software.

49
 1. ODIN (VSAT Based)
2. Trade Tiger (WEB Based)
3. Classic/Fast Trade (WEB Based)

And also NEAT System Used for making transaction in NSE listed
company & same way BOLT System Used for making transaction BSE listed
company.
And for the client information or customer service, the company using two
software.
1. CIS – Client Information System.
2. BOC – Back Office.

 Some Information about Sharekhan:

Turnover Rs. 15 corers daily

Employees Strength 35

Offices More than 640 outlets in 280 cities

Clients : Demat A/c 5000

Trading A/c 3000

Head office Mumbai

Working Capital More than 400 corers

 Sharekhan Classic Account

Special Features  Sharekhan Trade Tiger Account
 Dial – n - Trade

50
 Sharekhan provide right investment decision to
Investors according to their needs

Seven Reasons

Why Customer’s first choice is SHARAKHAN…?

1. EXPERIENCE:
51
 SSKI has more than eight decades of trust and Credibility in the Indian
stock market. In the Asia Money broker’s poll held recently, Sharekhan won the
‘India best broking house for 2004’ award. Ever since it launched Sharekhan
as its retail broking division in February 2000, it has been providing
institutional-level research & broking services to investors.

2. TECHNOLOGY:

With Sharekhan online trading account you can buy and sell shares in an
instant from any PC with an internet connection. You will get access to our
powerful online trading tools that will help you take complete control over your
investment in shares.

3. KNOWLEDGE:
In a business where the right information at the right time can translate
into direct profits, you get access to a wide range of information on Sharekhan’s
website www.sharekhan.com. You will also get a useful set of Knowledge-based
tools that will empower you to take informed decisions.

4. ACCESSIBILITY:

In addition to Sharekhan online and phone trading services also very

useful. Sharekhan also have a ground network of 640 share shops across 280
Cities in India where you can get personalize Services.

5. CONVENIENCE:

52
 You can call Sharekhan’s Dial-n-Trade number to get investment advice
and execute your transactions. Sharekhan have a dedicated Call Center to
provide this service via a toll-free number from anywhere in India.

6. CUSTOMER SERVICE:

Sharekhan’s customer service team will assist you for any help that you
need relating to transactions, billing, demat and other queries. Sharekhan’s
customer service can be contacted via a toll-free number-mail or live chat on
Sharekhan.com.

7. INVESTMENT ADVICE:

Sharekhan has dedicated research teams for fundamental and technical

research. Sharekhan’s analysts constantly track the pulse of the market and
provide timely investment advice to you in form of daily research e-mail, online
chat, printed reports and SMS on your phone.

SWOT ANALYSIS of Sharekhan

STRENGTHS:

 Online Trading Facility

 Largest Chain of Retail Share Shops in India
 88 years of Experience in securities market
 Dedicated and responsive workforce/staff
 Value added service for HNI client
 Research Center
 Membership of NSE & BSE
 Trading option like Future & Option and Commodities
 Volume based differentiated product.

53
 WEAKNESSES:

 Less informative website

 Does not have slab rate brokerage which is provided by competitors
 Problems due to network crash
 Unawareness Among Investors

OPPORTUNITY:

 Collaboration with international financial institution

 To tap the Untapped market
 To capture the market lost to its Competitors.
 To focus on developing a superior and powerful portal
 To spread awareness of its Brand Name.

THREATS:

 Follow government laws

 Competitors develops
 Prolonged depression and high volatility in the market
 New Entrants.

 Awards & Achievements of SHAREKHAN:

 2001 - Web Award winner of Chip

magazines Best Financial Website
Award.

 2004 - Best Local Brokerage by

Advisory Poll of Poll 2004.

54
 2005 - Awaaz Consumer Awards Best
Broking House by CNBC channel.

 Sharekhan is amongst top 3 online

Brokers in India.

55
 CHAPTER-3

Objectives of the
study

56
 OBJECTIVE OF THE STUDY

 To study the consumer preference towards mutual fund in Lucknow City

 To study and analyze the impact of various demographic factors on investors’

attitude towards mutual fund.

 To study consumer attitude towards mutual Fund and towards Sharekhan Limited.

 To study about the factors responsible for the selection of mutual funds as an

investment option.

 To study the people in which age and income group prefer mutual funds over

other investment options

57
CHAPTER-4

Research

Methodology

58
 RESEARCH METHODOLOGY
METHODOLOGY- The science dealing with principles of procedure in research and
study.
 Various investment options have been selected like Mutual Fund, Gold, Bank
Deposits, Post Office Savings and Insurance.

 Various parameters taken for comparison

 Risks

 Time Horizon

 Return on Investment

 Liquidity

Research Design- Descriptive Research Design

Research Approach- Survey Approach

Research Instruments- Questionnaire

Sample Universe- Lucknow

Sample Area - Lucknow

Target population: Investor who invests money into various investment options.

Sampling Element: High Net worth Investors (HNI) and middle class retail investors.

59
Sample method- Random Sample method

Sample Size- 100

Data source- Primary data & Secondary Data

SOURCES OF DATA

The two main sources of data for the present study have been primary data and

secondary data.

1. Primary Data:

Primary data consists of original information collected for specific purpose. The

primary data for this research study was collected through a direct survey with the

viewers guided by a structured questionnaire. The questions were structured and direct

as to make viewers understand easily.

2. Secondary Data:

Secondary data consists of information that already exists somewhere, having

been collected for specific purpose in the study. The secondary data for this study

collected from various books, company websites, and from company brochures.

The main statistical tools used for the collection and analyses of data in this project

are:

 Questionnaire

 Pie Charts

 Bar Diagrams

60
 CHAPTER-5

Data Analysis

61
 Data Analysis

Profile of Sample:
Here we have mentioned profile of sample like age, gender, Income etc. The sample size
of our project is limited to 100 people only.
A. Classification as per Gender

Male Female
Respondent 93 7

Gender

7%

Male
Female

93%

Figure 1: Classification as per Gender

Data Interpretation:
Figure 1 Total number of respondents is 100 out of which 93% are male and 7% are
female respondents. Hence we can say that the majority of our respondents are male and
due to this reason NO further analysis of the impact of gender as a dependant
(demographic) factor on other independent factors is.

B: Classification as per Age

62
 Respondent

Less than 30 52

31-40 17

41-50 14

More than 50 17

total 100

Classification as per Age

Less than 30 31 to 40 41 to 50 More than 50

17%

14%
52%

17%

Figure 2: Classification as per Age

Data Interpretation:
Figure 2 This shows that majority of the respondents are young and they have just started
their career. It might be possible that these respondents do not have complete knowledge
of mutual fund and they might be investing in various avenues according to the advices
given by their brokers and agents.

63
C: Classification as per Qualification
Respondents
SSC/HSC 6
Graduate 46
Post Graduate 29
Professional 19
Total 100

Qualification Distribution

19%
6%

SSC/HSC
Graduate
Post Graduate
46%
Professional

29%

Figure 3: Classification as per Qualification

Data Interpretation:
Figure 3. A minor portion of 6% of the respondents are high school pass out while
maximum of them i.e. 46% are graduates while 29% and 19% of the respondents hold
Postgraduate and Professional qualification respectively.

64
 D: Classification as per Occupation
Respondents
Professional 12
Business 33
Salaried 51
Retired 4
Total 100

Occupation Distribution

4% 12%

Professional
Business
Salaried
Retired
33%
51%

Figure 4: Classification as per Occupation

Data Interpretation:
Figure 4. 51% of the respondents are salaried employees which forms a majority. 33%
are business persons 12% are practicing professionals (like Chartered Accountants,
Architects, Lawyers etc.) while a minor portion of 4% of them are retired employees.

E: Profile of Investors on the basis of Income

65
 Respondents
3 - 5 lakhs 59
5 - 15 lakhs 34
15 - 25 lakhs 6
Above 25 lakhs 1
Total 100

Distribution on the basis of Income

6% 1%

3 to 5 lakhs
34% 5 to 15 lakhs
15 to 25 lakhs
Above 25 lakhs
59%

Figure 5: Profile of Investors on the basis of Income

Data Interpretation:
Figure 5. Majority of the respondents i.e. 59% lie in the slab of annual income between
Rs. 3-5 lakhs. 34% of the respondents have an income ranging from Rs. 5-15 lakhs, while
a minor portion of 6% and 1% of the respondents have an annual income of Rs. 15-25
lakhs and above Rs. 25 lakhs respectively.

F: Investors’ preference for investing money

Respondents
66
 Saving Account 16
Fixed Deposit 13
Insurance 10
Mutual fund 16
Post Office - NSC 8
Shares/Debentures 13
Gold and Silver 15
Real Estate 9
Total 100

Preferred Investment Avenue by Investors

Savings A/c Fixed Deposit Insurance Mutual Fund
Post Office Shares/Debentures Gold and Silver Real Estate
15% 16%
9%
13%

13%
8% 10%
16%

Figure 6: Investors’ preference for investing money

Data Interpretation:
Figure 6. This chart mainly talks about the respondents’ preference to Investment
Avenue. As per our survey it is seen that investors give second preference to mutual fund
investment after savings A/c. It shows that mutual fund has gained popularity among the
investors and they also prefer it as investment tool.

G: Factor consider while investing money

Respondents
Liquidity 22
Low Risk 41
High Returns 25
Company Reputation 12
Total 100
67
 Factor Preferred Most

12% 22%
Liquidity
Low Risk
25% High Returns
Company Reputation

41%

Figure 7: Factor consider while investing money

Data Interpretation:

Figure 7 mainly talks about the factor considered by investors while investing their
money in different financial product. It is found that most of the investors are look at the
safety of their money here as per our survey 41% people prefer low risk while investing
their money. Around 25 % people are ready to take risk and attract to high returns
followed by liquidity and company reputation which is 22% and 12% respectively.

68
H. Invested Money in Mutual Fund
Respondents
Yes 72
No 28
Total 100

Have you ever invested money in Mutual Fund?

28%

Yes
No

72%

Figure 8: No of Investors who invest in Mutual Fund

Data Interpretation:
Figure 8 This chart mainly talks about the respondents’ interest in investing in Mutual
Fund. Out of 100 people surveyed it is seen that 72% of the people are investing or
invested their money in MF whereas just 28% of the people are not investing in MF. This
shows that mutual fund is considered as a good option for investment by most of the
respondents.

69
 I. Reason for not investing in MF
Respondents
Not aware of MF 15
Higher Risk 7
Difficult to Understand 3
Not any specific Reason 3
Total 28

Reason for not investing in Mutual Fund

11% 11%
Not aware about MF
Higher Risk
Difficult to understand
54%
Not any specific reason

25%

Figure9: Reason for not investing in MF

Data Interpretation:
Figure 9 is clearly shows that 53% of people who don’t invest in mutual fund are due to
lack of awareness and knowledge. And second most important reason is risk factor it is
seen that 25% people think that mutual fund is a risky investment. Also 11% people think
that it is difficult to understand and same no. of people also don’t give specific reason for
not investing in mutual fund.

70
J. Awareness level of Mutual Fund Investors
Respondents
Totally Ignorant 10
Partial Knowledge of Mutual Fund 23
Aware only of any specific scheme in 26
which you invested
Fully Aware 13
Total 72

Level of awareness in Mutual Fund Investors

17% 14%

Totally ignorant

Partial Knowledge of MF

Aware only about

32% any specific
scheme in which you invested
38%
Fully Aware

Figure 10: Awareness level of Mutual Fund Investors

Data Interpretation:
Figure10 This chart mainly talks about level of awareness among the mutual fund
investors. It is seen that only 17% people are fully aware about mutual fund, where as
14% people are fully ignorant and it seems that they invest their money in mutual fund as
per their advice of their financial advisor. Around 37% people are aware only about
specific scheme in which they have invested their money and 32% are having partial
knowledge about mutual fund.

71
K. Source of information for investors
Respondents
Advertisement 7
Peer Groups 10
Banks 18
Financial Advisors 36
Total 72

Source of Information

10% 14%
Advertisement
Peer Groups
51% Banks
Financial Advisors

25%

Figure 11: Source of information for investors

Data Interpretation:
Figure 11 mainly talks about the source of information for mutual fund investors. It is
clearly seen that the financial advisors stands first as the main source of information that
is 51% of sample size followed by banks (that is 25% of sample) peer groups (that is 14%
of sample) and advertisement (that is 10% of sample). The point to be noted is that most
of the people prefer advice of their financial advisor before investing in mutual fund.

L. Key features which attract investors

Respondents

72
 Diversification 24
Better Returns & Safety 26
Regular Income 12
Tax Benefits 10
Total 72

Features which attract Investors

32% 14%

Diversification
Better returns & Safety
Regular income
Tax Benefits
38%
17%

Figure 12: Key features which attract investors

Data Interpretation:
Figure 12 mainly talks about the key features which attract investors towards mutual
fund. We can see that 37% of the respondents have attracted because mutual fund provide
better returns and safety followed by tax benefits (that is 32% of sample), regular income
(that is 17% of sample), diversification (that is 14% of sample).

73
M. Preferable mode of investment in Mutual Fund
Respondents
One time investment 23
Systematic Investment Plan 49
Total 72

Mode of Investment
31%

One time investment

Systematic Investment
Plan (SIP)

69%

Figure 13: Preferable mode of investment in Mutual Fund

Data Interpretation:
Figure 13 shows the respondents’ mode of investment in mutual fund and it is seen that
69% of people prefer systematic investment plan and 31% people prefer one time
investment in mutual fund.

74
N. Intermediaries in Mutual Fund
Respondents
Direct in AMCs 11
Distributor/Broker 27
Financial Advisor 32
Other Source 2
Total 72

Intermediaries in MF

3% 15%
Direct in AMCs
38%
Financial Advisor
Distributor/Broker
Other Source

44%

Figure 14: Intermediaries in Mutual Fund

Data Interpretation:
Figure 14 talks about who are the most effective intermediaries in mutual fund. It is
clearly seen that the financial advisors stands first as the main intermediaries that is 44%
of sample size followed by distributor/broker (that is 38% of sample) direct AMCs (that
is 15% of sample) and other source (that is 3% of sample).

N. Mode of receive returns

Respondents

75
 Dividend Payout 21
Dividend re-investment 11
Growth in NAV 40
Total 72

Preferred mode to receive returns

29%

Dividend Payout
Dividend re-investment
56% Growth in NAV

15%

Figure 15: Mode of receive returns

Data Interpretation:
Figure 15 mainly talks about the preferred mode to receive returns. It is found that most
of the investors are preferred returns in terms of growth in NAV. Their number stands to
be at 56% followed by 29% people would like to receive returns in form dividend payout
and 15% people would like to re invest their returns in mutual fund or other investment
avenue.

76
O. Most preferred AMCs as per Investors

Name of AMC No. Of Respondents Rank

Sharekhan Limited 14 1
HDFC 13 2
AXIS 11 3
Birla Sun Life 9 4
SBI MF 8 5
ICICI Prudential 7 6
Kotak Mahindra 6 7
Other 4 8

No. Of Respondents
Reliance HDFC AXIS Birla Sun Life
SBI MF ICICI Prudential Kotak Mahindra Other
8% 19%
6%
10%

11% 18%

13% 15%

Figure 16: Most preferred AMCs as per Investors

Data Interpretation:
Figure 16 It is shows Sharekhan Limited is most preferred AMCs among mutual fund
investors followed by HDFC, AXIS, Birla Sun Life, SBI MF, ICICI Prudential and Kotak
Mahindra.

77
CHAPTER-6

Findings

78
 Findings

 Figure 1 Total number of respondents is 100 out of which 93% are male and 7%

are female respondents. Hence we can say that the majority of our respondents are

male and due to this reason NO further analysis of the impact of gender as a

dependant (demographic) factor on other independent factors is.

 Figure 2 This shows that majority of the respondents are young and they have just

started their career. It might be possible that these respondents do not have

complete knowledge of mutual fund and they might be investing in various

avenues according to the advices given by their brokers and agents.

 Figure 3. A minor portion of 6% of the respondents are high school pass out while

maximum of them i.e. 46% are graduates while 29% and 19% of the respondents

hold Postgraduate and Professional qualification respectively

 Figure 4. 51% of the respondents are salaried employees which forms a majority.

33% are business persons 12% are practicing professionals (like Chartered

Accountants, Architects, Lawyers etc.) while a minor portion of 4% of them are

retired employees

 Figure 5. Majority of the respondents i.e. 59% lie in the slab of annual income

between Rs. 3-5 lakhs. 34% of the respondents have an income ranging from Rs.

5-15 lakhs, while a minor portion of 6% and 1% of the respondents have an

annual income of Rs. 15-25 lakhs and above Rs. 25 lakhs respectively.

79
 Figure 6. This chart mainly talks about the respondents’ preference to Investment

Avenue. As per our survey it is seen that investors give second preference to

mutual fund investment after savings A/c. It shows that mutual fund has gained

popularity among the investors and they also prefer it as investment tool.

 Figure 7 mainly talks about the factor considered by investors while investing

their money in different financial product. It is found that most of the investors

are look at the safety of their money here as per our survey 41% people prefer low

risk while investing their money. Around 25 % people are ready to take risk and

attract to high returns followed by liquidity and company reputation which is 22%

and 12% respectively.

 Figure 8 This chart mainly talks about the respondents’ interest in investing in

Mutual Fund. Out of 100 people surveyed it is seen that 72% of the people are

investing or invested their money in MF whereas just 28% of the people are not

investing in MF. This shows that mutual fund is considered as a good option for

investment by most of the respondents.

 Figure 9 is clearly shows that 53% of people who don’t invest in mutual fund are

due to lack of awareness and knowledge. And second most important reason is

risk factor it is seen that 25% people think that mutual fund is a risky investment.

Also 11% people think that it is difficult to understand and same no. of people

also don’t give specific reason for not investing in mutual fund.

 Figure10 This chart mainly talks about level of awareness among the mutual fund

investors. It is seen that only 17% people are fully aware about mutual fund,

where as 14% people are fully ignorant and it seems that they invest their money

80
 in mutual fund as per their advice of their financial advisor. Around 37% people

are aware only about specific scheme in which they have invested their money

and 32% are having partial knowledge about mutual fund.

 Figure 11 mainly talks about the source of information for mutual fund investors.

It is clearly seen that the financial advisors stands first as the main source of

information that is 51% of sample size followed by banks (that is 25% of sample)

peer groups (that is 14% of sample) and advertisement (that is 10% of sample).

The point to be noted is that most of the people prefer advice of their financial

advisor before investing in mutual fund.

 Figure 12 mainly talks about the key features which attract investors towards

mutual fund. We can see that 37% of the respondents have attracted because

mutual fund provide better returns and safety followed by tax benefits (that is

32% of sample), regular income (that is 17% of sample), diversification (that is

14% of sample).

 Figure 13 shows the respondents’ mode of investment in mutual fund and it is

seen that 69% of people prefer systematic investment plan and 31% people prefer

one time investment in mutual fund.

 Figure 14 talks about who are the most effective intermediaries in mutual fund. It

is clearly seen that the financial advisors stands first as the main intermediaries

that is 44% of sample size followed by distributor/broker (that is 38% of sample)

direct AMCs (that is 15% of sample) and other source (that is 3% of sample).

81
 Figure 15 mainly talks about the preferred mode to receive returns. It is found that

most of the investors are preferred returns in terms of growth in NAV. Their

number stands to be at 56% followed by 29% people would like to receive returns

in form dividend payout and 15% people would like to re invest their returns in

mutual fund or other investment avenue.

 Figure 16 It is shows Sharekhan Limited is most preferred AMCs among mutual

fund investors followed by HDFC, AXIS, Birla Sun Life, SBI MF, ICICI

Prudential and Kotak Mahindra.

 It is shows Sharekhan Limited is most preferred AMCs among mutual fund

investors followed by HDFC, AXIS, Birla Sun Life, SBI MF, ICICI Prudential

and Kotak Mahindra.

 It has been identified that investors showing more interested towards SIP

(systematic investment plans) rather than anything else.

 It has been identified that some of investors are looking for safe returns along

with low risk.

 Respondents are looking for more visibility from an individual AMC’s. In terms

of transparency, and facts.

 Investors looking for more advantageous products which should able to cover

retirement benefit in a better way.

82
CHAPTER-7

RECOMMENDATION

83
 RECOMMENDATION

 There is need to build awareness of the new funds among the investors with

constantly being in contact with them.

 Proper training should be given to the advisor so that they will solve the question

of the customer mind.

 Some of investors have asked for periodical market report about stock market so

that they can get the knowledge properly.

 AMC’s should go for increasing more awareness about different facilities of

investment such as SIP & MIP among investors.

 The AMC should advertise their tax saving plan more so that they can

gain more customers.

 The promotional activities play a vital role. So it should be given importance for

creating more awareness among the people.

84
CHAPTER-8

CONCLUSION

85
 CONCLUSION

Even though the first mutual fund was introduced in year 1963, the awareness about

mutual fund is comparatively low among the Indian investors. Most of the Indians are

unaware of a financial option called mutual funds. Till now, the major part of saving goes

into bank deposits, postal deposits and insurance. In the competitive business

environment good performance of scheme of a particular mutual fund company plays a

vital role in the minds of the existing investors will deciding to invest than the brand

name of the AMC.

Further this study shows that most of respondents are still confused about the mutual

funds and have not formed any attitude towards the mutual fund for investment purpose.

It has been observed that most of the respondents having lack of awareness about the

various function of mutual funds. Moreover, as far as the demographic factors are

concerned, gender, income and level of education have significantly influence the

investors’ attitude towards mutual funds. As far as the benefits provided by mutual funds

are concerned, return potential and liquidity have been perceived to be most attractive by

the investors followed by flexibility, transparency and affordability. Apart from the

above, in India there is a lot of scope for the growth of mutual fund.

86
CHAPTER-9
Limitations

87
 Limitations of the study

 As we limited time span so it is not possible to cover each & every detail of the

topic.

 Company uses various software’s which have certain financial information and I

as a trainee cannot access them.

 As the samples are taken randomly and population size of Lucknow is large,

sample errors are inevitable.

 The study will heavily depend on primary data which will be collected from

public at large; hence the authenticity of data can be a limitation.

88
Bibliography

89
 Bibliography
Books:

 Agrawal, Ashok Motilal (2000) “Mutual Funds- Emerging Trends and

Prospects”

 Agrawal G D (1992) “Mutual Funds and Investors’ Interest”

Journals

 Broadbridge,A..and Morgan,H. 2001. Investor buying behaviour of, and

perception towards retail brand buying products. J. consum. cult. Vol.30(4): 25-

53.

 Davis, H. and Rigaux 1974. Perceptions of marital role in decision processes.

Journal of Investor Research, p.51-62

 Freda Gnana Selvan (1995). New year discountsale – The psychology of price.

Indian.J.Market. Vol.24 : p.11-15

90
ANNEXURE

91
 QUESTIONNAIRE

Section: I

Name: _______________________________________________________

A) Age : _____________________ B) Gender: ______________________

C) Qualification D) occupation E) Yearly Income

a. SSC/HSC   a. Professional   a. 3 - 5 lakhs  

b. Graduate   b. Business   b. 5 - 15 lakhs  

c. Post Graduate   c. Salaried   c. 15 - 25 lakhs  

e. Professional   d. Retired   d. Above 25 lakhs  

Section: II
F. What kind of investment do you prefer most?
(Kindly tick () which are applicable)
a. Saving Account   e. Post Office - NSC  

b. Fixed Deposit   f. Shares/Debentures  

c. Insurance   g. Gold and Silver  

d. Mutual fund   h. Real Estate  

Note: Kindly tick () on any one option for the following questions
G. While inventing your money which factor you would consider most?
a. Liquidity   c. High Returns  

b. Low Risk   d. Company Reputation  

92
 1. Have you ever invested money in mutual fund?
a. Yes  

b. No  

If No,
 2. If you do not invest in mutual fund then why?
a. Not aware of MF  

b. Higher Risk  

c. Difficult to Understand  

d. Not any specific Reason  

If Yes, Please Answer the below questions.

Section: III
3. Where do you find yourself as a mutual fund Investor?
a. Totally Ignorant  

b. Partial Knowledge of Mutual Fund  

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

d. Fully Aware  

4. How do you come to know about various mutual funds scheme?

a. Advertisement  

b. Peer Groups  

c. Banks  

d. Financial Advisors  

93
5. Which feature of mutual fund allure you most?
a. Diversification  

b. Better Returns & Safety  

c. Regular Income  

d. Tax Benefits  

6. When you invest in mutual fund which mode of investment will you prefer?
a. One time investment  

b. Systematic Investment Plan  

7. Where do you go to invest your money in mutual funds?

a. Direct in AMCs  

b. Financial Advisor  

c. Distributor/Broker  

d. Other Source  

8. How would you like to receive returns every year?

a. Dividend Payout  

b. Dividend re-investment  

c. Growth in NAV  

9. Which AMC would you like to prefer to invest your money?

a. HDFC   e. ICICI Prudential  

b. Sharekhan Limited   f. Birla Sun Life  

c. SBI MF   g. Kotak Mahindra  

d. AXIS   h. Other  

94