A Study On Investment Pattern Of General Public in Mutual Fund (Focus on Mutual Fund

)

Name Company Designation Contact No.

: : : :

JAY VYAS

Administrative Management College, Bangalore – 83.

1. Does your company invest'?

[ ] Yes [ ] No Department of Management Studies. Administrative Management College.

2. Which are the investment tools your company invests in? [ ] Bank Fixed Deposit [ ] RBI Bonds [ ] Mutual Funds [ ] Equities [ ] others (Please specify) 3. Your company primarily invest for (Rank according to your preference) [ ] Tax Benefits [ ] Returns [ ] Liquidity [ ] Savings [ ] Any other (Please specify) 4. Rank the investments options according to your company's preference of investment [ ] Bank Fixed Deposit [ ] RBI Bonds [ ] Mutual Funds [ ] Equities . [ ] Any other (Please specify) 5. What is the frequency of your company's investments? [ ] Once in 15 Days [ ] Once in 3 Months [ ] Once a Month [ ] Once in 6 Months [ ] Once a Year [ ] Weekend Parking 6. What is average tenure of investment? Short-Term Long-Term 7. What is expected rate of return of your company from debt investments? [ ] 4%-5% [ ] 5% - 6% [ ] 6%-7% [ ] >7% 8. What is expected rate of return of your company from equity investments? [ ] 5%-10% [ ] 10%-15% [ ] 15%-20% [ ] >20% 9. Does your company invest in Mutual Funds? [ ] Yes [ ] No 10. If the answer to question 9 is "Yes" a. Are you aware of the various schemes offered by Mutual Funds? [ ] Yes [ ] No [ ] Few b. Do you know that Mutual Funds offers Liquidity to your funds? [ ] Yes [ ] No [ ] Not Sure

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c. Do you know that Mutual Funds offers steady returns? [ ] Yes [ ] No [ ] Not Sure d. Do you know that you can get Tax Advantages by investing in Mutual Funds? [ ] Yes [ ] No [ ] Not Sure e. On whose external advice do you invest? [ ] Bank [ ] Distributor [ ] Agents [ ] Direct investments [ ] C.A.

f. Mutual Fund investment is what % of your company's total investment portfolio? g. h. Which types of Mutual Fund does your company invest in? [ ] Debt [ ] Equities [ ] Balanced Your company invests in Debt Mutual Fund because it offers, [ ] Steady Returns [ ] Liquidity [ ] Tax Benefits [ ] Less risk [ ] Any other (Please specify)

i.

Your company invests in Equities Mutual Funds because it offers, [ ] Higher Returns [ ] Long Term Capital Gains [ ] Return > Inflation [ ] Wealth Creation [ ] Tax Advantage [ ] Any other (Please specify) j. Your company invests in Balanced Mutual Funds because it offers, [ ] Higher Returns than debt funds [ ] Return > Inflation Advantage [ ] Any other (Please specify) 11. a. i. ii. iii. iv. v. b. i. If the answer to question 9 is "No" Your company does not invest in Mutual Fund because of Bitter past experience [ ] Yes [ ] No [ ] May be Lack of Knowledge [ ] Yes [ ] No [ ] Maybe Lack of confidence in service being provided [ ] Yes [ ] No [ ] Maybe Difficulty in selection of schemes [ ] Yes [ ] No [ ] Maybe In-efficient investment advisors [ ] Yes [ ] No [ ] May be Would you invest in Mutual Funds for your company if it offered Greater Tax Benefits V/S others. 1 2 3 4 5 [ ] Tax

Strongly Disagree
ii.

Disagree Neutral

Agree
4 Agree

Strongly Agree
5 Strongly Agree 5 Strongly Agree

Greater liquidity V/S others. 1 2 3 Strongly Disagree Disagree Neutral iii.

Investment for a shorter duration, even for one day. 1 2 3 4 Strongly Disagree Disagree Neutral Agree

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iv.

Steady Returns. 1 2 Strongly Disagree Disagree v.

3 Neutral

4 Agree

5 Strongly Agree

Net returns better than a Bank Fixed Deposit with high liquidity. 1 2 3 4 5 Strongly Disagree Disagree Neutral Agree Strongly Agree Diversification of portfolio. 1 2 3 Strongly Disagree Disagree Neutral 3 Neutral 4 Agree 4 Agree 5 Strongly Agree

vi.

vii.

Minimization of risks. 1 2 Strongly Disagree Disagree

Strongly Agree

12. Are you aware that current account surpluses can also earn interest by parking in Mutual Funds even for one day? [ ] Yes [ ] No [ ] Maybe 13. If Mutual Fund offer you Steady Returns, Tax Benefits, Liquidity, Diversification of Portfolio, Lesser Risk would consider it as an investment option in the future for your company? [ ] Yes [ ] No [ ] May be

14. Would you be interested to know more about Mutual Funds? [ ] Yes [ ] No.

Analysis of Study
⇒ HOW MANY PEOPLE INVESTS?
This is very important to know that how many people do investments among all respondents. Some people not in position to do investment because of some reason, like they re-invest in their own unit, working on expansion plans, or they do not have enough surpluses for investment. Table showing how many people invests Department of Management Studies. Administrative Management College.

No. of respondents Invest Does not Invest Total 158 52 210

Percentage 75.24 24.76 100

The following pie chart shows the pictorial view of the above statistical data: Chart showing how many people invests

➢ Here we can find that, maximum No. of respondents do investments (Approx 75%). ➢ And the people who do not invest have some reason. Let’s see what the reasons for what they do not invest are.

⇒ WHY PEOPLE DO NOT INVEST?
People are not able to make investments because they working on their expansion plans, some of them re-invest their surplus in their own unit and some do not have enough surpluses to make investment. Following table shows that for what reason people do not invest. Table showing why people do not invest? Reasons Working on Expansion Plan Re-invest in their own unit Do not have enough No of Respondents 16 16 20 % Of the Respondents 30.77 30.77 38.46

surpluses to make an investment. Total 52 100

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The following pie chart shows the pictorial view of the above statistical data: Chart showing why People do not invests?

➢ From the above figure, we can say that 30.77% of the respondents are working on expansion plans. ➢ From the above figure, we can say that 30.77% of the respondents are reinvesting their surpluses in their own unit. ➢ From the above figure, we can say that 38.46% of the respondents do not have enough surplus to make an investment/

⇒ SHARE OF DIFFERENT INVESTMENT TOOLS
We have several investment tools. Here we see that in which investment tools people like to invest more. Here I took one option i.e. others which includes LIC, Other insurance, Post saving schemes etc. Following table shows preference of people for particular investment tool.

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Table showing share of different Investment tools. Investment Tool Bank Fixed Deposits RBI Bonds Mutual Fund Equities Other3 No. Of Investors (who invest) 123 76 40 118 32 31.62 19.54 10.28 30.33 08.23 % of Investors1 % Of Investors (Out Of 158)2 77.85 48.10 25.32 74.68 20.25

Here we calculate % on the basis of total i.e. total of investor who invest in different tool eg. Bank FD has 123 investors so we calculate % 123/389. 2 Here we have 158 respondents who invest at present. 3 Consist of LIC, other insurance, Post saving schemes etc .
1

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The following pie chart shows the pictorial view of the above statistical data: Chart showing Share of different Investment tools

➢ Majority of the respondents invest their money in Bank Fixed Deposits. ➢ Following Bank Fixed Deposits 2nd is Equities in which people prefer to invest. ➢ RBI Bonds has average part in total. ➢ Small No. of investors invests in Mutual fund.

⇒ FACTORS CONSIDERED BY INVESTORS WHILE INVESTING

Once the motive of the investor is clear, he will consider certain factors before making an investment. We have tried to cover most of the factors in our questionnaire, which the investor takes into account while making an investment. Here I used ranking for different factors. Respondent asked to give rank as per his/her choice i.e. 1st rank to which factor he/she consider most important and like this go further in ranking.

Table showing Factors Considered by the Investor for Investment

Rank given
Factor considered for investment Tax Benefit 68 68 22 0

1

2

3

4

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Return Liquidity Saving

66 14 10

30 29 31

50 30 50

12 70 61

The following chart shows the pictorial view of the above statistical data: Chart showing Factors Considered by the Investor for Investment

➢ More of the people consider tax benefit as most important criteria for investment. As we can see that 68 people has ranked it as 1st and another 68 ranked it as 2nd. ➢ People while making an investment also take return into account. But return has relatively less important as compared to Tax Benefit. A SME person is also considered about liquidity. But here we see that liquidity is not given more importance.

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⇒ RANKING FOR INVESTMENT OPTIONS
Here I asked the respondents to give rank to different investments options as per their preference. It is totally based on a person’s point of thinking and ability to take risk and investing money in the market. Here we see the result in following table. Table showing ranking for investments options Investment s Options

Ranks
1 2
36 35 6 59

3
18 54 28 21

4
12 12 56 6

5
0 2 2 2

Bank FDs RBI Bonds Mutual Funds Equities

81 15 4 52

The following chart shows the pictorial view of the above statistical data: Chart showing ranking for investments options

⇒ HOW MANY INVESTORS INVESTS IN MUTUAL FUND?
In this research we have 158 people who do investments. Out of that some invests in Mutual Funds and some do not invests in Mutual Fund. Following table shows us the no of people who invests in Mutual Fund out of 158 people. Table showing how many Investors Invests in Mutual Fund Invests in Mutual Fund? Yes No 42 116 No. Of Investors % Of Respondents Knowing the Scheme 26.58 73.42

The following pie chart shows the pictorial view of the above statistical data: Chart showing how many Investors Invests in Mutual Fund. Department of Management Studies. Administrative Management College.

⇒ REASON FOR NOT INVESTING IN MUTUAL FUND
I asked to investors about the reasons for not investing in Mutual Fund. I given them some reason and asked them to give their opinion about those reasons. Following table shows us data related to this. There are 258 respondents because a person has more than one reason for not to invest in Mutual Fund. Table showing reasons for not investing in Mutual Funds. Reasons Bitter Past Experience Lack of Knowledge Lack of Confidence Difficult Scheme Selection In-efficient Adviser Total No. of Respondent 02 98 70 45 43 258 % of Respondent 00.78 37.98 27.13 17.44 16.67 100

The following pie chart shows the pictorial view of the above statistical data: Chart showing reasons for not investing in Mutual Funds.

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➢ Mostly people not investing in Mutual Funds because of lake of knowledge (37.98%) and lack of confidence (27.13%). ➢ Some investors have difficulty in selection of schemes. ➢ Some of them are not getting proper guidance from their advisers. Few no. of investors has bitter past experience so they decided that they do not invest in Mutual Funds in future.

⇒ AWARENESS OF SCHEMES OF MUTUAL FUND
People may have basic idea about Mutual Funds. But they may or may not know the different schemes available in Mutual Funds. Here we see that how many people know all the schemes, some of the schemes or none of the schemes. Table showing awareness of Different Schemes of Mutual Funds Aware about schemes. Yes No Few 14 02 26 No. Of Investors % Of Respondents Knowing the Scheme 33.33 04.76 61.91

The following pie chart shows the pictorial view of the above statistical data: Chart showing awareness of Different Schemes of Mutual Funds

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➢ Majority of the respondents were aware of few Mutual Fund Schemes (61.91%). ➢ But there are respondents who know all schemes of Mutual Funds (33.33%).

⇒ WILL MUTUAL FUND BE AN OPTION FOR INVESTMENT IN

FUTURE FOR INVESTORS?
Now a days Mutual funds are becoming an investment option for people. When I told about benefits of Mutual Fund to respondents and ask them will they consider Mutual Fund as an investment option in future? Following table shows result of that question.

Table showing will Mutual Fund be an Investment option for Investors in future? Benefits from Mutual Fund Highly Disagree Opinion of respondents Disagree Neither Agree Disagree nor Greater Tax Benefits Greater Liquidity Investment for Shorter Duration (for 1 day) Steady Returns Net Return > Bank FD Diversification of Portfolio Minimization of Risk 00 02 00 00 02 08 03 00 35 49 16 16 59 51 62 51 20 06 35 49 00 00 00 06 06 11 Agree 40 41 67 68 63 32 02 06 06

Highly Agree

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The following chart shows the pictorial view of the above statistical data: Chart showing will Mutual Fund be an Investment option for Investors in future?

RESEARCH METHODOLOGY
⇒ MAIN OBJECTIVE

To study Investment pattern of general public in Mutual Funds.
⇒ SUB OBJECTIVES
    To find out in which investment tool people invests most. To study the general investment criteria of people. To find out the awareness of Mutual Funds and it’s various schemes. To study the interest of people for further investment in Mutual Funds.

⇒ RESEARCH DESIGN
A research design is the master plan or model for the conduct of formal investigation and survey. It is a specification of methods and procedures for acquiring the information Department of Management Studies. Administrative Management College.

needs for solving the problem. It decides the source of information and methods for gathering the data. A questionnaire and other forms are tested to use the collection of data. A sampling design is to be selected. Good research design ensures that the information obtained is relevant to the research question and that it was collected by objectives. Since research design is simply the framework of plan for a study, it should be used as a guide in collecting and analyzing the data. It is a blueprint that is followed in completing the research study. Our approach to research is descriptive. The major objective of the descriptive research is to describe something – usually market features or functions. It requires a clear specification of the who, what, when, where, why, & the way (the 6 Ws) of the research. Our 6 Ws are:

a) Who: Who should be considered for the research?
All categories of people are considered for research.

b) What: What information should be obtained from the respondent?
What is the investment pattern of the respondent?

c) When: When respondent?

should

the

information

be

obtained

from

the

First of all direct approach to respondent and if they are busy then take appointment.

d) Where: Where should the respondents be contacted to obtain the required information?
1. At the business place of the respondent. 2. At the residence of the respondent.

e) Why: Why are we obtaining the information from the respondents?
To know Investment Pattern of respondent and check Awareness of Mutual Fund among them.

f) Way: In what way we are going to obtain the information from the respondents?
Personal Interview Method.

⇒ DATA COLLECTION METHOD
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In this research, I have used two types of data. Primary Data. Secondary Data.  Primary Data are the first hand data collected by us by filling the questionnaire from the respondents. It is more reliable, fresh and accurate.  Secondary Data are the data collected for some purpose other than the problem at hand. I have collected secondary data from magazines, newspapers, periodicals and Internet. It is less reliable and secured data as compared to primary data.

⇒ SAMPLING

i. ii. iii. iv. v.

Sample size-210 Elements- General Public. Sampling Units- Business place. Extent- Bangalore City Research Instrument-Questionnaire

⇒ RESPONSE RATE
The response rate was average. As we had a questionnaire asking for the financial information of the respondent, most of the people hesitated to provide the required information. Also the questionnaire contained some financial terms that were technical in nature, which resulted into reduced response rate. I have visited nearly 280 potential respondents, out of which only 200 gave proper response. Hence, Response Rate = 200/280 = 71.43%

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Department of Management Studies, Administrative Management College.

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