Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. This pool of money is invested in accordance with a stated objective. The joint ownership of the fund is thus “Mutual”, i.e. the fund belongs to all investors. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. A Mutual Fund is an investment tool that allows small investors access to a welldiversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The fund’s Net Asset value (NAV) is determined each day.

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



To give a brief idea about the benefits available from Mutual Fund



To find out the Preferences of the investors for Asset Management



To know why one has invested or not invested in LIC Mutual fund


To understand the Mutual fund scheme offered by LIC and its benefit to

the investors. 5) fund. To understand the views of financial advisor on performance of Mutual

A big boom has been witnessed in Mutual Fund Industry in recent times. A large number of new players have entered the market and trying to gain market share in this rapidly improving market. The study covers the basic concept of mutual fund and investor’s knowledge & preference with regard to mutual fund schemes. The study is based on the financial advisor and investor’s view on different type of mutual fund schemes and AMC Companies. The study and survey which I have conducted is restricted to broker and investors as well as non investors view. The project cover basic concept

Project covers the history, basic concept and scheme offered by UTI Mutual Fund Company and survey on information provided by the investor investing in mutual fund.

The importance of project is to see the working of Mutual fund industry and to identify the investor and non - investor in mutual fund. Through my project one can get detailed information about unit link insurance scheme offered by LIC. The project will help investor to understand the benefit of investing in mutual fund scheme. Project mentions some suggestion which investor has to follow before investing in mutual fund. Project also includes findings regarding the behaviour of investors. With my project, the investor can be aware of mutual fund and its basic concept.

To achieve the objective of studying the stock market data has been collected. Research methodology carried for this study can be two types 1.Primary 2.Secondary

PRIMARY: The data, which has being collected for the first time and it is the original data. In this project the primary data has been taken by interviewing investor SECONDARY: The secondary information is mostly taken from websites, books, journals, etc.


Some of the persons were not so responsive. Possibility of error in data collection because many of investors may

have not given actual answers of my questionnaire.

Sample size is limited to 50 people out of which only 27 are investors in

mutual fund size may not adequately represent the whole market.

Some respondents were reluctant to divulge personal information which

can affect the validity of all responses.

The research is confined to a certain part of Goa.


When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder.

Any change in the value of the investments made into capital market instruments (such as

debentures etc) is reflected in

the Net Asset Value (NAV) of the scheme. NAV is defined as the 5

market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.


Portfolio diversification: Mutual funds normally invest in a well-

diversified portfolio of securities. Each investor in a fund is a part owner of all of the fund’s assets. This enables him to hold a diversified investment portfolio even with a small amount of investment, which would otherwise require big capital.

Professional management: Even if an investor has a big

amount of capital available to him, he benefits from the professional management skills brought in by the fund in the management of the investor’s portfolio. The investment management skills, along with the needed research into available investment options, ensure a much better return than what an investor can manage on his own. Few investors have the skills and resources of their own to succeed in today’s fast –moving, global and supplicated markets.

Reduction/Diversification of Risk: An investor in a mutual fund

acquires a diversified portfolio, no matter how small his investment. 6

Diversification reduces the risk of loss, as compared to investing directly in one or two shares or debenture or other instruments. When an investor invests directly, all the risk of potential loss is his own. While investing in the pool of funds with other investor, any loss on one or two securities is also shared with other investors. This risk reduction is one of the most important benefits of a collective investment vehicle like the mutual fund.

Reduction of transaction costs: What is true of risk is also true

of the transaction costs. A direct investor bears all the costs of investing such as brokerage or custody of securities. When going through a fund, he has the benefit of economies of scale; the fund pay lesser costs because of larger volumes, a benefit passed on to its investors.

Liquidity: Often, investors hold shares or bonds they cannot

directly, easily and quickly sell. Investment in a mutual fund, on the other hand, is more liquid. An investor can liquidate the investment by selling the units to the fund if it is an open-end fund, or by selling the units in the stock market if the fund is a closed-end fund, since closed ends funds have to be listed on a stock exchange, In case, the investor in a closed end fund receives the sale proceeds at the end of a period specified by the mutual fund or the stock exchange.







companies offer many investor services that a direct market 7

investor cannot get. Within the same fund family, investor can easily transfer/switch their holdings from one scheme to another. They can also invest or withdraw their money at regular investors in most open end schemes. Mutual fund investment process has been made further more convenient with the facility offered by funds for investors to buy or sell their units through the internet or email or using other communication means. The investors also get updated market information from the funds.

Safety: Mutual Fund industry is well-regulated; all funds are

registered with SEBI which lays down rules to protect the investors. Thus, investors also benefit from the safety of a regulated investment environment.





No Control over Costs: an investor in a mutual fund has any

control over the overall cost of investing. He pays investment management fees as long as he remains with the fund, albeit in return for the professional management and research. Fees are usually payable as a percentage of the value of his investments, whether the fund value is rising or declining. A mutual fund investor also pays fund distribution costs, which he would not incur in direct investing. However, this shortcoming only means that there is a cost to obtain the benefits of mutual fund services, and this cost is often less than the cost of direct investing by the investors. Besides, the 8

regulator have prescribed a ceiling on the maximum expenses that the mutual fund managers can charge to the schemes, thus limiting the investor’s expense of investing through mutual funds.

No Tailor-made Portfolios: Investors who invest on their own

can build their own portfolios of shares, bonds and other securities. Investing through funds means he delegates this decision to the fund managers. High-net-worth individuals or large corporate investors may find this to be a constraint in achieving their objectives. However, most mutual funds help investors overcome this constraint by offering families of schemes- a large number of different schemes-within the same fund. In each scheme there are various plans and options. An investor can choose from the different investment schemes/plans/options and construct an investment portfolio that meets his investment objectives.

Managing a Portfolio of Funds: Availability of large number of

options from mutual funds can actually mean too much choice for the investor. He may again need advice on how to select a fund to achieve his objectives, quite similar to the situation when he has to select individual shares or bonds to invest in. Fortunately, India now has a large number of AMFI registered and tested fund distributors and financial planners who are capable of guiding the investors.








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. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the Industry. In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualities wise as well as quantity wise. Before, 10

the monopoly of the market had seen an ending phase; the Assets under Management (AUM) was Rs67 billion. The private sector entry to the fund family raised the Amount to Rs. 470 billion in March 1993 and till April 2004; it reached the height if Rs. 1540 billion. The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under. First Phase – 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament 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 Canbank Mutual Fund (Dec 87), Punjab National Bank 11

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. Third Phase – 1993-2003 (Entry of Private Sector Funds) 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 Franklin Templeton) 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. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.

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 second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.






Mutual funds can be classified as follow :
 Based on their structure:

Open-ended funds:

Investors can buy and sell the units

from the fund, at any point of time.

Close-ended funds:

These funds raise money from investors

only once. Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity.

Based on their investment objective:

Equity funds: These funds invest in equities and equity
related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can be further classified as:
i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark

index both in terms of composition and individual stock weightages. 15

ii) Equity diversified funds- 100% of the capital is invested in equities spreading across different sectors and stocks. iii|) Dividend yield funds- it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc. v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will invest in banking stocks. vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund: Their investment portfolio includes both debt and equity. As a
result, on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities. ii) Equity-oriented funds remaining in debt.

at least 65% in equities,


Debt fund: They invest only in debt instruments, and are a good
option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income

instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs. i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in call money market. ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills. iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate. iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash market and

derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities. v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities. vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term debt papers. 17

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.

1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA) 2. Systematic Transfer Plan: under this an investor invest in

debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund. 3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month.







LIC Mutual Fund was started on June 19, 1989. It is promoted by Life Insurance Corporation of India which is the biggest life insurer in India. LIC Mutual Fund's investment manager is LIC Mutual Fund Asset Management Company Ltd. which was set up on April 20th, 1994.

An overview of LIC Mutual Fund
LIC Mutual Fund was established by Life Insurance Corporation of India on June 19th, 1989 which made a contribution of around Rs. 2 crores towards the principal of the fund. LIC Mutual Fund was set up as a Trust according to the rules of the Indian Trust Act, 1882. The investment manager of LIC Mutual Fund is LIC Mutual Fund Asset Management Company Ltd.

Which was established on April 20th, 1994 according to the provisions of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993. LIC Mutual Fund had assets worth around Rs. 10,703 crores under its management as per estimates of August, 2006.







The trustees have the sole possession of the trust fund and they are vested with the responsibilities of management and superintendence of the activities of the trust.


The trustees hold the right to appoint a Custodian and ensure that the works of the trust and the Asset Management Company continue without any interruption according to the rules and regulations of the SEBI or the Securities and Exchange Board of India. It is also the responsibility of the trustee to report to the SEBI about the operations of the fund. The investors can give a written application to the LIC Mutual Fund Asset Management Company Ltd. for a copy of the Trust Deed. The LIC made a contribution of about Rs 2 crores for the setup of the Mutual Fund Trust according to the rules of the Indian Trust Act, 1882. The manager of investments of LIC Mutual Fund is LIC Mutual Fund Asset Management Company Ltd. The LIC Mutual Fund Asset Management Company Ltd was set up according to the regulations of SEBI. LIC Mutual Fund had assets worth around Rs. 10,703 crores under its management as per approximations of August, 2006.


Awards received by LIC Mutual Fund

LIC Mutual Fund has received the ICRA Mutual Fund Gold Award for the performance of its LICMF Liquid Fund till December 31, 2005.

LIC Mutual Fund has also received the ICRA Mutual Fund Gold Award for the performance of its LICMF Floating Rate Fund - STP till December 31, 2005.


The investments of these schemes will predominantly be in the stock markets and endeavour will be to provide investors the opportunity to benefit from the higher returns which stock markets can provide. However they are also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such investors who have high risk taking capacities and are willing to think long term. Equity Funds include diversified Equity Funds, Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks across different sectors while sectoral funds which are specialized Equity Funds restrict their investments only to shares of a particular sector and hence, are riskier than Diversified Equity Funds. Index Funds invest passively only in the stocks of a particular index and the performance of such funds move with the movements of the index.


Debt schemes
Debt Funds invest only in debt instruments such as Corporate Bonds, Government Securities and Money Market instruments either completely avoiding any investments in the stock markets as in Income Funds or Gilt Funds or having a small exposure to equities as in Monthly Income Plans or Children's Plan. Hence they are safer than equity funds. At the same time the expected returns from debt funds would be lower. Such investments are advisable for the risk-averse investor and as a part of the investment portfolio for other investors.

Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they are less risky than equity funds, but at the same time provide commensurately lower returns. They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets, but is looking for higher returns than those provided by debt funds.



Some of the main competitors of SBI Mutual Fund in Dehradoon are as Follows: i. ii. iii. iv. v. vi. vii. viii. ix. x. ICICI Mutual Fund Reliance Mutual Fund UTI Mutual Fund Birla Sun Life Mutual Fund Kotak Mutual Fund HDFC Mutual Fund Sundaram Mutual Fund SBI Mutual Fund Principal Franklin Templeton








Financial Advisor

For the purpose of getting more information on mutual fund and its performance in market I visited LIC Mutual fund office in Panjim. Where Miss Candice D’Sauza provided me with the valuable information which helped me in understanding the working of mutual fund industry in market. Miss Candice D’Sauza completed her Graduation in commerce and working as a financial advisor for past 3 years. According to her Awareness of mutual fund is very less among people. . Financial advisor or broker depend upon the customer profile suggest him the scheme which will help in fulfilling his/her needs and creating wealth. Mutual Funds are creating maximum return with minimising risk. People think investing in mutual fund means investing in stock market but it’s not true mutual fund is not always about investing in the stock market. They also invest in bond, FMP etc. She also explained different categories of mutual fund and the concept of market capitalisation. She also provided me with various reasons which make LIC ULIS fund better for middle class group.


Benefits to Investor
       Capital Appreciation Tax Saving U/s 80C Low Cost Life Insurance Free Accidental Insurance One time investment and SIP Facility Guaranteed Maturity Bonus No High Allocation Charges

These are the some of the tax benefits
  

Investment in ULIS are eligible for tax benefit u/s 80c Tax rebate can be taken for amount up to Rs. 100000 Dividend declared in the scheme is tax free Maturity proceeds of the scheme are tax free


This scheme also provides insurance cover along with returns on the investment. These are the some of the insurance benefits
      

Life insurance cover up to Rs. 1500000 Very low cost of life insurance cover No medical examination report required No income proof documents required Allowed age 12-60 yrs Maximum maturity age 70 Yrs. Free accidental insurance cover Total permanent disability also covered


(a) Age distribution of the Investors of Dehradoon

Age Group No. of Investors

<= 30 2

31-35 7

36-40 20

41-45 9

46-50 6

>50 6

According to this chart out of 50 Mutual Fund investors of Goa the most are in the age group of 36-40 yrs. i.e. 40%, the second most investors are in the age group of 41-45yrs i.e. 18% and the least investors are in the age group of below 30 yrs. 36

b). Occupation of the investors of Goa

Govt. Service Pvt. Service Business Entrepreneur Others .

No. of Investors
15 7 13 10 5


In Occupation group out of 50

investors, 30% are Govt. Employees, 26% are Businessman, 37

20% are entrepreneur, 14% are in Agriculture and 10% are in others.

1. Different kind of investments preferred by investor. Kind of Investments
Saving A/C

Fixed deposits Insurance Mutual Fund Post office (NSC) Shares/Debent ures

No. of Respondents 20 10 7 7 2 4



From the above graph it can be inferred that invest in Saving A/c,

out of 50 people, 40% people would like to

14% in Insurance, 20% in Fixed Deposits, 14% in Mutual Fund, 4% in Post Office and 8% in Shares or Debentures.

2. Preference of factors while investing
Factors (a) Liquidity (b) Low Risk No. of Respondents 10 15 (c) High Return 20 (d)reputatio n 5




Out of 50 People, 40% People prefer to invest where there is High Return, 30% prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 10% prefer Trust









Response No. of Respondents

Yes 30

No 20


From the above chart it is inferred that 60% People are aware of Mutual Fund and its operations and 40% are not aware of Mutual Fund and its operations.

4. Investors invested in Mutual Fund
Response YES NO Total No. of Respondents 25 25 50


Out of 50 People, 50% have invested in Mutual Fund and 50% do not have invested in Mutual Fund.

5. Knowledge of the investor knowledge
Totally ignorant Partial knowledge Aware only of specific scheme Fully aware

No. of Respondents
5 5 12 3


20% Totally ig norant P artial know ledge aware of specific schem e 20% fully aw are


Out of 25 investors 48% aware of the specific scheme, 20% are totally ignorant of the mutual fund, 20% have partial knowledge and 12% are fully aware of the mutual fund.


6. Is Mutual fund risk free Portfolio
Yes No I don’t know

No. of Investors
15 20 15






I don’t know

From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17% preferred Debt portfolio

7. Types of mutual fund preferred

Types Public private

No. of Respondents 20 5


Y es



Out of 25 investors, 80% investors prefer to invest in public mutual fund because there is minimum risk and 20% prefer to invest in private Fund.


9. Source of information for customers about Mutual Fund
Source of information Advertisement Peer Group Bank Financial Advisors No. of Respondents 3 5 7 10

1 0 8 6 4 2 3 5 0 Advertis ent P Group em eer B nk a F ncia Advisors ina l 7 1 0

d n e o p s t R f . N

S ourc of Inform tion e a

From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. Out of 50 Respondents, 40% know about Mutual fund Through Financial Advisor, 24% through Bank, 20% through Peer Group and 16% through Advertisement.

10. Investors invested in different Assets Management Co. (AMC)

Name of AMC
Birla UTI HDFC Reliance ICICI Prudential Kotak LIC

No. of Investors 2 15 7 7 2 1 15

16 14 12 10 8 6 4 2 0 Birla UTI HDF C Reliance IC I P IC rudential Kotak L IC No. of Investors

As per my survey most of the Investors preferred UTI, and LIC Mutual Fund. Out of 25 Investors 60% have invested in each of them, only 8% have invested in Birla, 8% in ICICI Prudential, 4% in Kotak and 28% each in HDFC and Reliance.


11. No of AMC mutual fund in which investor has invested
Option one two More than two No. of Respondents 5 15 5






m than two ore

From the above graph 60% investors have invested in 2 funds, 20% invested in one fund and 20% invested in more than 2 funds.


12. Most preferred type of fund Type
Open-ended fund Close-ended fund Equity fund Balance fund Regular fund

No. of Respondents
25 0 15 4 5

10% 8% O pen-endedfund clos ed-ended equityfund 51% 31% 0% ba nce fund la reg lr fund ua

Out of 25 people who have invested, 51% have invested in openended fund, 31% in equity fund, 10% in regular fund, 8% in balanced fund and no one invested in closed ended scheme.


13. Reason for not invested in Mutual Fund
Reason Not Aware Higher Risk Not any Specific Reason No. of Respondents

15 5 5


Not Aware H her R k ig is Not Any



Out of 25 people, who have not invested in

Mutual Fund, 60% are not aware of Mutual Fund, 20% said there is likely to be higher risk and 20% do not have any specific reason.

14. Features of mutual fund preferred by investor
Feature Diversification No. of Respondents


Better return and safety Regular income Tax benefits

9 7 8

8% 31 %

divers ificatio n better return

reg ualr incom e ta benefits x


Out of 25 people, invested in Mutual Fund, 34% investors prefer better return along with safety as main feature, 31% prefer tax benefit, 27% prefer regular income and 8% prefer diversification.








Mode of Investment One time Investment Systematic Investment Plan (SIP) 51

No. of Respondents





One tim Inves ent e tm


Out of 25 Investors 60% preferred One time Investment and 40% Preferred through Systematic Investment Plan.

16. Channel Preferred by the Investors for Mutual Fund Investment
Channel AMC Broker Other 52

resour No. of Respondents 8 15 ce 3

12% 31%

AMC B er rok Other resourc e

Out of 25 Investors 57% preferred to invest through brokers, 31% through AMC and 12% through Bank.

17. Option for getting Return Preferred by the Investors
Option Dividend Payout Dividend Reinvestment 5 Growth

No. of Respondents




32% 48%

D ividend Payout Dividend R einves ent tm Growth

From the above graph 48% preferred Growth Option, 32% preferred Dividend Payout and 20% preferred Dividend Reinvestment Option.

18. Time span of the investment
Time Less than year No. of Respondents 54 1 2 1 year 2 years 2-5 years 20 5– 10 years 1 More than 10 years 1

0% 4% 4% 4%

les than year s 1 year 2 years 2-5 years 5-10 years m than 10 years ore


From the above graph 80% investors have invested for 2- 5 year, 8% for 2 years, 4% each for 1 year, 5-10 year and for more than 10 years. No investors want to keep the fund for less than a year.

19. According to investors which Mutual fund company has more demand in the market Name of AMC
Birla UTI HDFC Reliance

No. of Investors 2 5 1 12

ICICI Prudential Kotak LIC

0 0 5

L IC K otak0
Na of AMC me


IC I Prudential0 IC R eliance H F 1 DC UTI Birla 0 2 2 4 6 8 10 12 5 12

No. of Inves tors

Out of 25 investors, 48% prefer to invest in Reliance, 8% in Birla, 20% in LIC, 20% in UTI, 4% in HDFC Mutual Fund and no investor is ready for Kotak and ICICI Mutual fund.

20. Are mutual investor satisfied by the service provided? answers No. of Respondents

Yes no

20 5


Y es



Out of 25 investors, 80% investors are satisfied with services provided and 20% are not happy with service provided and is of opinion of that there is need for improvement.

 In Goa in the Age Group of 36-40 years were more in numbers.

The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years.  In Occupation group most of the Investors were Govt.

employees, the second most Investors were businessman and the least were associated with others. 57

About all the Respondents had a Saving A/c in Bank, 20%

Invested in Fixed Deposits, Only 14% Respondents invested in Mutual fund.  Mostly Respondents preferred High Return while investment,

the second most preferred Low Risk then liquidity and the least preferred company reputation.  Only 60% Respondents were aware about Mutual fund and its

operations and 40% were not.  Among 50 Respondents only 50% had invested in Mutual Fund

and 50% did not have invested in Mutual fund.  Out of 25 Respondents 60% were not aware of Mutual Fund,

20% told there is not any specific reason for not invested in Mutual Fund and 20% told there is likely to be higher risk in Mutual Fund.  Most of the Investors had invested in LIC or UTI Mutual Fund,

HDFC and Reliance mutual fund has also good Brand Position among investors, Birla, ICICI Prudential and Kotak is less popular.  For Future investment the maximum Respondents preferred

Reliance Mutual Fund, the second most preferred UTI and LIC mutual fund. Birla has been preferred after them.  57% Investors preferred to Invest through Broker, 31% through

AMC (means Direct Investment) and 12% through other resource.  60% preferred One Time Investment and 40% preferred SIP

out of both type of Mode of Investment.  Maximum Number of Investors Preferred Growth Option for

returns, the second most preferred Dividend Payout and then Dividend Reinvestment.


Most of the investors prefer to keep the investment for more 2

to 5 years.  Majority of the investor have invested in open-ended fund and

than in equity fund and no investor has invested in close-ended fund.  Out of 25 investors 60% investors have invested in 2 mutual

funds.  The featured which is most allured by the investors is better

return and safety. Tax benefits are also important features for the investors but diversification is least wanted feature.  Most of the investors are happy with services provided by the

mutual fund but few investors still feel that there is need for improvement.



Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behaviour of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, and Channels etc. I

observed that many of people have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of mutual fund investors are also growing. “Brand” plays important role for the investment. People invest in those Companies where they have faith or they are well known with them. There are many AMCs in Goa but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. Reliance, UTI, Birla, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. Financial Advisors are the most preferred channel for 60

the investment in mutual fund. They can change investors’ mind from one investment option to others. Many of investors directly invest their money through AMC because they do not have to pay entry load. Only those people invest directly who know well about mutual fund and its operations and those have time.

Suggestions and Recommendations

The most vital problem spotted is of ignorance. Investors

should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing.  Mutual funds offer a lot of benefit which no other single option

could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time.  Mutual Fund Company needs to give the training of the

Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors.  Before making any investment Financial Advisors should first

enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration.  Younger people aged fewer than 35 will be a key new

customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off.


Customers with graduate level education are easier to sell to

and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality.

Systematic Investment Plan (SIP) is one the innovative

products launched by Assets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. Though most of the prospects and potential investors are not aware about the SIP. There is a large scope for the companies to tap the salaried persons.


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