VIDYA VIKAS MANDAL’s

SHREE DAMODAR COLLEGE OF COMMERCE & ECONOMICS

MARGAO, GOA – 403601

Comparative Study Of Investors Preception Towards Stock Market And Mutual Funds
Term Paper submitted in partial fulfilment of the requirements of the
Corporate Summer Internship of the BBA (Financial Services) Programme

By
Ms. Swizel Meva Dacosta
Mr. Vernon Savio George

Class: TYBBA (Financial Services)

Division: B
Roll Number: 19968 & 19977
E-Mail: swizelmevadacosta.sdcce@vvm.edu.in
&
vernonsaviogeorge.sdcce@vvm.edu.in

Under the supervision of

Ms. Ashwini Korde

Assistant Professor in Commerce
BBA (Financial Service) Department
E-Mail ID: Ashwini.korde@vvm.edu.in

For the academic year

2021-2022

Bachelor of Business Administration

(Financial Services)
DECLARATION

We Ms. Swizel Meva Dacosta & Mr. Vernon Savio George. , students of
TYBBA(Financial
Services) – B, Bearing Roll Number: 19968 and 19977, hereby declare that this term paper
entitled
‘ Comparative Study Of Investors Preception Towards Stock Market And Mutual Funds’ is a
record of original work done by me under the supervision of Ms. Grishmi G. Thakur during
the academic year
2021 - 2022. To the best of my knowledge, it has neither previously formed the
Basis for the award of any degree, diploma or other similar title by the
University or any other University, nor it has been published in any form,
Elsewhere. The term paper strictly complies to the conditions for plagiarism And
is duly checked by a verified plagiarism detection tool.

Roll number Name Of The Student Signature

19968 Ms. Swizel Meva Dacosta

19977 Mr. Vernon Savio George

Date:

Place: Margao, Goa

 CERTIFICATE

I hereby certify that this term paper entitled ‘Comparative Study Of Investors Preception
Towards Stock Market And Mutual Funds’ is a record of original work done by Ms.
Swizel Meva Dacosta & Mr. Vernon Savio George . Under my supervision during the
academic year 2020 – 2021. To the best of
My knowledge, it has neither previously formed the basis for the award of any
Degree, diploma or other similar title by the University or any other University,
Nor it has been published in any form, elsewhere. The term paper strictly Complies
to the conditions for plagiarism and is duly checked by a verified Plagiarism
detection tool.

__________________

Ms. Grishmi G. Thakur

Assistant Professor in Commerce
BBA(Financial Services) Department
VVM’s Shree Damodar College of Commerce & Economics Margao, Goa

Date:

Place: Margao, Goa.

PASSING CERTIFICATE OF THE NISM/NCFM COURSE
 Comparative Study Of Investors Preception Towards Stock
Market And Mutual Funds.

Abstract

The mutual fund industry in India has registered significant growth since the
liberalization of Indian Economy in 1991 and has emerged as a significant
financial intermediary. The growing importance of Indian mutual funds may be
noted in terms of the increased mobilization of funds and the increasing number
of schemes and investors in the industry. The results show that there is a
significant association between educational qualification of the investors and
the risk tolerance level and occupation of the investors and the risk tolerance
level. The results further indicate that there is no significant association between
occupation of the investors and the level of knowledge of mutual fund and
monthly savings of the investors and the level of knowledge of mutual fund.
Therefore, the investors have to consider the prevailing rate of risk free returns
and to compare the fund returns with it. Based on this the selection of schemes
and the choice of investment avenues can be decided. Due to the fund
manager’s poor risk bearing capacity, timing skill, stock selection ability, and
imperfect diversification the schemes had suffered with low return. Hence to
increase the fund return the concerned fund managers have to improve all these
skills.

Keywords: Mutual funds – Investors’ Perception – Risk Tolerance Level –

Expected Return – Level of Knowledge of Mutual Fund - Confidence Level in
Mutual Fund Investment.

Introduction
The economic reforms in the field of trade, commerce and industry have been
introduced by the government of India to bring about the integration of the
Indian economy with the global economy. Along with the growth of the Indian
economy and the capital market, the investor size has also increased rapidly.
The Indian capital market has experienced a remarkable development and
changes in the past few years. New innovative financial instruments and
institutions have emerged and have been playing the role of financial
intermediaries. Today the reduction in the interest rates by the government on
different instruments, which were considered for savings by the small investors,
made the mutual fund industry play an important role. Hence the need andscope
for mutual fund operation has increased tremendously.The mutual fund industry in
India has registered significant growth since the liberalization of Indian Economy in 1991and
has emerged as a significant financial intermediary. The growing importance of Indianmutual
funds may be noted in terms of the increased mobilization of funds and the increasing
number of schemes and investors in the industry. To fulfill the expectations of millions of
account holders, the mutual funds are required to function as successful institutional
investors. Measuring the growth and evaluating the performance of mutual funds is important
as well as a matter of concern to the fund managers, investors and researchers alike.

NEED FOR THE STUDY

In India mutual fund mobilization has been on the increasing trend since its inception in
1963. In 1987 and 1989, mutual funds market was thrown open to private sector in India.
Since 1993, the investment trend shifted in favour of private sector funds. The preference to
the investment avenues like bank deposits, real estate, gold , provident fund and the like has
come down especially due to fall in interest rates coupled with rising influence and mutual
funds have obviously become a viable alternative. The total assets under management of the
mutual fund industry worldwide had increased to around 180%, whereas the assets under
management in the Indian mutual fund industry increased to around 1150% over the study
period.
Similarly the worldwide number of mutual funds increased by 30.52% whereas the number of
mutual funds in India increased by around 472% over the study period. Money so invested
comes out of the hard earned savings of investors. It brings out the need for studying what the
investors feel about mutual fund. A proper evaluation measure will remove the confusion and
help investors to decide the choice of investment avenues and the level of investment in
various mutual fund schemes. It also helps to understand their financial performance over a
period of time, and the risk associated with their investment, so as to avoid loss and maximize
the returns. The study covers a period of ten years.

OBJECTIVES OF THE STUDY

The overall objective of the study is to analyze the investors perception towards stock market
mutual funds. The specific objectives of the study are stated below:
 To understand investment in stock markets and mutual funds as great investment
avenues.
 To undertint the preference of investors towards stock market and mutual funds.
Investors’ perception:
 Investor’s perception refers to the choosing, purchasing and consumption of goods
And services for the satisfaction of their wants. There are different processes involved in
the investor perception. Basicallythe investor attempts to find what kind of investments
he/she would like to consume, after that investors selects only those investments that
promise greater utility.
After selecting the investment, the investor makes an estimate of the available money
which he/she can spend. Lastly, the investor analyzes the prevailing prices of investment
and takes the decision about the investment he/she should consume.
Investment avenues:
Fixed deposits: These are such financial assets which gives moderately high return but
cannot be
traded in market. They are Bank Deposits, post Office schemes, Company FDs and PPF.
Shares: These are shares of company and can be traded in secondary market. Investors
get benefit in price of share and dividend given by companies.
Bonds/Debentures: Bonds are the instruments that are considered as a relatively safer
investment avenues.
Mutual Funds:A mutual fund is a trust that pools together the savings of a number of
investors who share a common financial goal. The fund manager invests this pool of
money in securities, ranging from shares, debentures to money market instruments or in a
mixture of equity and debt, depending upon the objective of the scheme. Thedifferent
types of schemes are Balanced Funds, Sector Fund etc

Gold/Silver: Investors can also invest in the things which have value. These comprises
Gold, Silver, Precious stones and Art objects.

REVIEW OF LITERATURE:
Murty.T.N and Sastry.P.V.S.H (2013) has stated in their research that investors invest in
the stock market with the sole aim of return optimization. Variations in the returns from the
expectations of the investors lead for the risk and the subjective analysis of various
attributes helps for the minimization or the avoidance of the risk.
Ravichandran.K(2008) in his research has stated that younger generation investors are
willing to invest in capital market instruments and that too very highly in derivatives
segment. Even though the knowledge to the investors in the derivative segment is not
adequate, they tend to take
decisions with the help of brokers or through their friends and were trying to invest in the
market. He concludes that most of the investors are of age 31-40 and are mostly
entrepreneurs and working
executives. He also says that friends and relatives followed by brokers are the most
influential
persons to pull the investors into the capital market.
GunjanTripathi(2014) has found in his research that education, profession and gender do
not affect
the derivative investing behavior. However income is found to have a significant role on
derivatives.
He also added that investors are using these securities for different purposes namely risk
management, profit enhancement, speculation and arbitrage.
ManasaVipparthi and Ashwin Margam (2012) revealed that the investors’ perception is
dependent
on the demographic profile and assesses that the investors age, marital status and
occupation has
direct impact on the investor’s choice of investment. The study further revealed that female
segment are not fully tapped and even there is low target on higher income people. It
reveals that
Liquidity, Flexibility, Tax savings, Service Quality and Transparency are the factors which
have a
higher impact on perception of investors.
Shailendra Kumar Chaturvedi, Aravind Kumar Singh and Karanveer Singh (2014) in their
research
found out that mutual fund is a tax saving instrument and to a certain extent a return
oriented
investment. It was also found that the investors were more prone to public companies rather
than
private companies.
Neel Kamal Purohit (2013) in his research has found out that income has significant impact
on
frequency of trading in stock market, selection of mode of trading and selection of market
segments. Age and income has significant impact on taking exposure.
Sukhwinder Kaur, Batra .G.S and BimalAnjum(2014) has suggested that investors should
consider
long historical data, size and age of the fund, fund charges and some measure to analyze the
funds for investments in mutual funds. It revealed that investor consider mutual funds as
flexible
investment option as mutual fund companies efficiently manage assets and they think
investment in stock market is risky and complete.

RESEARCH METHODOLOGY:
The study is based on both primary and secondary data. The primary data is collected
through structured questionnaires. The questionnaire is designed keeping in view the
objectives of present research work. The secondary data is also made use of at some places
 of the study wherever it became necessary. The secondary data which is related to the study
gathered from the reports, books, journals, periodicals, dailies, magazines, and websites.
The researcher selected various market investors in Hyderabad. For this purpose visited all
the stock broking agencies in Hyderabad and collected information through structured
questionnaire. Simple random sampling Hyderabad. The researcher selected a minimum of
10 investors from 21 stock broking agencies in technique is used for the study. The total
sample size is 200

Literature review

Discussion/Result

FINDINGS AND CONCLUSION:

The study found that majority of respondents aware of all the savings schemes like national
mutual funds, insurance schemes, bank fixed deposits, shares, bonds and debentures,
government securities etc.As per the respondents opinion many of them are showing interest
in the fixed deposits savings and it was followed by stock markets, mutual funds, gold/silver
and bonds/debentures respectively. Regarding savings avenues the majority of respondents
were opined that fixed deposits in bank was a preferred savings avenue. Whereas the least
preferred option was meant to bonds and debentures 12.25 per cent. The same finding was
also reflected the mean scores, because of 4.44 mean score was opted by fixed deposits in
bank and the least mean score was 3.15 for bonds and debentures. The study distinctly comes
out with the regular income was prime objective for investment and it was followed by more
income/ profit, capital appreciation and safety return of capital and interest respectively The
analysis and interpretations very clearly shows that the investors have different views like
investment pattern by market movement, factors influencing their decision, frequency of
investment, alternatives available and investment preferences truly influence their perception
towards different investments in market. Thus study concludes that the Indian investment
community have shown much interest in investing in safer investment like bank deposits and
also other different financial products available in the markets developing due to the spiraling
growth of Indian GDP, better performance by the companies, liberal rules and regulations by
the authority like SEBI to protect the investors’ interest and this process will grow much
quicker in the future.

References