Final Yr Project

SALARIED INVESTOR’S PERCEPTION ON MUTUAL FUNDS
AND PERFORMANCE ANALYSIS OF MUTUAL FUNDS WITH

REFERENCE TO CHENNAI
Project Report submitted to SASTRA University

In Partial fulfilment of the requirements for the Degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by
RAM PRAKASH R
(Reg. No: 117071083)
Under the Guidance of
Dr. J. SETHURAMAN,
B.Sc.,M.B.A.,CAIIB,DBM(IIB),PGDHRM,AIII(LIFE
INSURANCE),AIII(GENERAL INSURANCE),Ph.D
Professor, School of Management
SASTRA University, Thanjavur - 613401
SASTRA UNIVERSITY
SCHOOL OF MANAGEMENT
THANJAVUR – 613 401
April - 2017
BONAFIDE CERTIFICATE
This is to certify that this project entitled “SALARIED INVESTOR’S

PERCEPTION ON MUTUAL FUNDS AND PERFORMANCE ANALYSIS OF
MUTUAL FUNDS WITH REFERENCE TO CHENNAI” is a bonafide work done by
Mr. RAM PRAKASH R (Reg. No: 117071083) for the academic year 2016-2017, in
partial fulfilment of the requirements for the award of the Degree of Master of
Business Administration.
Guide & Supervisor Dean, School of Management

Dr. J. Sethuraman Dr. V. Badrinath
Professor, Dean,
School of Management, School of Management,
SASTRA University, SASTRA University,
Thanjavur-613401 Thanjavur-613401
Submitted for Project Viva -Voce examination held on ______________
Internal Examiner External Examiner
I
DECLARATION
I hereby declare that this project report titled “SALARIED INVESTOR’S

PERCEPTION ON MUTUAL FUNDS AND PERFORMANCE ANALYSIS OF
MUTUAL FUNDS WITH REFERENCE TO CHENNAI” submitted by me for the
academic year 2016-2017 in partial fulfillment of the requirements for the award of the
Degree of Master of Business Administration. This is my original work and the project has not
formed the basis for the award of any degree, diploma or any other similar titles.
Place : Thirumalaisamudram Student Signature:
Date : Student Name: ( RAM PRAKASH R)
II
ACKNOWLEDGEMENT
I take this opportunity to thank god, the almighty, with whose blessings I have been
able to successfully carry out this Project work.
I also take this opportunity to acknowledge my deep sense of gratitude to our
honourable Vice Chancellor, SASTRA University having, given me an opportunity to this
MBA program.
My special gratitude goes to Dr. S. Vidhyasubramaniam, Dean, Planning &
Development, SASTRA University for giving concrete support to this project work.
I am thankful to our beloved Registrar, Dr. G. Bhalachandran, SASTRA University
for his vital support.
I would like to thank Dr. V. Badrinath, Dean, School of Management for giving me
permission for the project, for his guidance and constant supervision.
I extend my sincere thanks to my guide Dr. J. Sethuraman, Professor, for his
constant encouragement, cheerful attitude, dynamic approach and constructive suggestions
throughout the project.
I would like to thank my friends and relatives for their support. Lastly, I would like to
thank my parents for their continuous guidance and support.
III
TABLE OF CONTENTS
Chapter No. Title of the chapters Page No.
Acknowledgement III
List of Tables V
List of Figures VI
I Introduction 1
II Industry Profile 8
III Conceptual & Literature Review 10
IV Data Analysis and Interpretations 16
V Summary of Findings & Recommendations 43
Bibliography/References i
Appendices/Annexure vi
IV
LIST OF TABLES
Table Page
Topic
No No
4.1 Age of the Respondents 16
4.2 Gender of the Respondents 17
4.3 Marital Status of the Respondents 18
4.4 Educational Background of the Respondents 19
4.5 Occupation/Profession of the Respondents 20
4.6 Family size of the Respondents 21
4.7 Number of earning members 22
4.8 Monthly Income of the Respondents 23
4.9 ANOVA for Risk Perception of Investment avenues with age 24
4.10 ANOVA for Return Perception of Investment avenues with age 26
4.11 ANOVA for Risk Perception on Investment avenues with marital status 28
4.12 ANOVA for Return Perception on Investment avenues with marital status 30
4.13 ANOVA for Risk Perception on Investment avenues with Monthly income 32
ANOVA for Return Perception on Investment avenues with Monthly
4.14 34
income
4.15 Friedman Rank for the risk factors of investment avenues 36
4.16 Friedman Rank for the return factors of investment avenues 37
4.17 Correlation for Risk – Return trade off on Investment avenues 38
4.18 Evaluation for performance of Mutual funds 40
V
LIST OF FIGURES
Page
Fig No Topic
No
4.1 Age of the Respondents 16
4.2 Gender of the Respondents 17
4.3 Marital Status of the Respondents 18
4.4 Educational Background of the Respondents 19
4.5 Occupation/Profession of the Respondents 20
4.6 Family size of the Respondents 21
4.7 Number of earning members 22
4.8 Monthly Income of the Respondents 23
VI
“SALARIED INVESTOR’S PERCEPTION ON MUTUAL FUNDS AND
PERFORMANCE ANALYSIS OF MUTUAL FUNDS
WITH REFERENCE TO CHENNAI”
Registration No : 117071083
Category : Finance
EXECUTIVE SUMMARY:
This study is about the risk-return perception of salaried investors and the
performance analysis of Indian mutual funds in the different categories market such as
Equity, Balanced, Debt, Liquid, Gilt, Dynamic, ETF, Speciality, and Fund of Funds-
Overseas. This analysis is carried out through analysing the investors’ perception towards
investing in mutual funds and also analysing the actual performance of mutual funds through
relative performance index, risk-return analysis, Treynor’s ratio, Sharp’s ratio, and Jensen’s
measure. The source data used are primary data collected from salaried investors; NAVs and
AUMs are taken from the website of Mutual Funds India (MFI) and Association of Mutual
Funds of India (AMFI).
Study is pertaining to the current scenario of salaried investors’ perception and

performance of top performing mutual funds, which will also be applicable to every top
performing mutual funds of any time. It started with a sample group of 10 top performing
mutual funds which is considered as the market for analyzing further. The results of
perception measures suggest that most of the mutual funds were not able to perform
according to the expectations over both risk and return. But the evaluation towards Mutual
funds gave the result as they were able to outperform with the benchmark indexes.
From among the salaried investors, the mutual funds have the fifth position in the
investment avenues. In contrary, the result shows that investors doesn’t have interest to invest
in mutual funds, But the performance proves to provide decent returns when compared with
respective indexes. Hence, Mutual funds should provide necessary awareness to the investors
so as to bring more salaried investors to invest in mutual funds and to gain more profits
accordingly.
Keywords: mutual funds, performance analysis, risk-return analysis, ETF, Benchmark Index
Chapter - I
Introduction
1.1 Introduction:
Nowadays, Mutual Funds have become the source of investment significantly for
mostly every user. There are players such as Government, Corporate securities, private and
foreign companies in the mutual fund industry.
The regulations of mutual funds are being done by SEBI and all MFs come under
Indian Trust Act as they are established as trusts. Permission for the private institutions has
been given by RBI in 1995, for setting up Money Market Mutual Funds. Their investments
could cover the investments such as commercial paper, call & notice money, certificates of
deposit, treasury bills, and other dated government securities having maturity period uo to
one year and are unexpired.
There is Asset Management Company (AMC) which takes care of fund management
practices. Those companies should have applied for the allotment in public issues. To be a
manager in any other funds, the AMC should have a minimum net-worth of Rs.50 million.
The registration has to be made with SEBI to float any other schemes by Mutual Funds.
Presently, there are over 35,000 agents all over the country, thus encouraging the
small investors to invest in the diversified capital market especially in Mutual Funds by the
government through UTI. The scrip of UTI has shown a drastic increase over the trends of
Benchmark or any other indexes available. But, the same could not be made applicable to
every Mutual Fund.
The idea of the study is to explain about finding the returns of the underlying top
performing mutual fund stocks from the different Equity, Balanced, Debt, Liquid, Gilt,
Dynamic, ETF, Speciality, and Fund of Funds- Overseas; and the evaluation by using:
• Relative performance index;

• Risk-return analysis;
• Treynor’s ratio;
• Sharpe’s ratio; and
• Jensen’s alpha.
And the perception of the investors has been analysed through the following methods
such as percentage; ANOVA; Correlation; and the Friedman Mean Rank.
1
1.2 Statement of problem:
This era has become the era of prospective investments. The investors have their own
investing strategies and objectives. The mutual funds are losing hope amongst the investors
while the performance of the same is up to the mark. And the decisions solely lie on the
manager who manages the allocation of funds in the organization. Most of the fund managers
are not selecting the appropriate stock, so that the returns are not as expected by the investors
in the market. Thus the perception of salaried investors is changing to the other investment
avenues.
1.3 Objective of the study:
The study analyzes about both the performance of Mutual funds industry and as well
as the decisions of fund managers in selecting the stocks for investment. It details about the
performance through their NAVs and the sensitivity of the appropriate indexes. The
relationship between both the elements and its combined behaviour that could reap result for
the investors to invest on the stocks that the managers advice to do so.
The Objectives of the study are as follows:
 To analyze the performance of top 10 mutual funds in the equity oriented schemes;
 To find the comparison between the mutual funds and the benchmark of the same;
 To examine the perception of salaried investors regarding investing in mutual funds;
 To communicate mutual funds about the perception of investors and helping them to
educate about their schemes to the investors.
The Study also investigates other specific objectives such as:
 To examine the preference of salaried investors over other possible avenues of

investments;
 To identify which are the investment avenues that attracts most for the salaried
investors;
 To find the correlation between the risk and return for the possible investment
avenues.
2
1.4 Scope of the study:
The study is to track the perception of the corporate salaried investors towards
investing in Mutual fund. Keeping a view on the constraints, the scope of the study is limited
to 248 investors by using random sampling. Out of which, 244 samples are considered valid.
Other data are taken from the AMFI, Mutual Fund India websites, etc.
1.5 Research Methodology:
Research methodology is that an action through which a particular problem could be

solved. There are two sets of data involved in this study (primary and secondary). Primary
data referred here is collected through the questionnaire from the corporate salaried
employees who are investors in several investment avenues to know their perception about
the mutual funds. And the secondary data is collected from the Association of Mutual Funds
India (AMFI), Mutual Fund India websites for the purpose of obtaining information such as
factsheet, NAVs, AUMs, etc.
1.5.1 Type of Research:
The Research is based on the primary as well as secondary data combined together.
Primary data collected from the respondents is for the analysis of perception of salaried
investors towards mutual funds, and the secondary data is used for the purpose of analysing
Net Asset Value are considered.
1.5.2 Data Collection:
The Mutual Fund schemes have been selected according to top 10 performing
schemes given from the Mutual Fund India website. This analysis is mainly based on the
secondary data. And the perception of the corporate employee investors data are collected
based on the random sampling method which allows all members of a group or population to
have an equal chance to get selected for a sample.
1.5.3 Tools for analysis:
The Analysis in this study in addition uses the statistical tools such as Relative
Performance index (RPI), Return, Risk, Beta, Co-efficient of determination, Treynor, Sharpe,
and Jensen’s ratio.
3
Relative Performance Index (RPI):
Relative Performance Index is defined as the ratio of the percentage change in NAV
and the percentage change in Benchmark Index.
Return:
The market returns are computed on similar lines with Benchmark such as BSE, NSE,
and CRISIL, etc,
Risk:
Measure of Total Risk Financial analysts and statisticians prefer to use a quantitative
risk surrogate called the variance of returns. The square root of the variance is called the
standard deviation. The standard deviation and the variance are equally acceptable and
equivalent quantitative measures of an asset’s total risk. The variance and standard deviation
are computed from logarithmic monthly returns.
Beta: Measure of Systematic Risk
To obtain the measure of systematic risk (Beta) of the mutual fund scheme, Market
Model is applied. Higher values of β indicate a high sensitivity of fund returns against market
returns; the lower value indicates low sensitivity. Higher β values are desired for the mutual
funds during bull phase of the market and lower β values are desired during the bear phase to
out-perform the market. There are unequal sample observations and non-identical time
periods for the selected mutual fund schemes. It is assumed that beta is stationary during the
period. The constants α and β are computed through regression analysis by regressing the
monthly market return with the monthly mutual fund return. The regression also provides the
value of r2 (coefficient of determination) that gives the strength of co-relation between the
market and the fund returns and indicates the extent of diversification.
Co-efficient of Determination: Measure of Diversification
The potential advantage of mutual fund investment is the diversification of portfolio.

Diversification reduces the unique or unsystematic or diversifiable risk and thus improves the
performance. The diversification extent can be measured by the value of coefficient of
determination (r2). A low r2 value indicates the fund has large scope for diversification. A
comparison of diversification degree and unique risk is made for clarity.
4
Treynor’s Ratio:
Jack Treynor (1965) conceived an index of portfolio performance measure called as

reward to volatility ratio, based on systematic risk defined in equation. He assumes that the
investor can eliminate unsystematic risk by holding a diversified portfolio. Hence his
performance measure denoted as TP is the excess return over the risk free rate per unit of
systematic risk, in other words it indicates risk premium per unit of systematic risk.
Sharpe’s Ratio:
William F. Sharpe (1966) devised an index of portfolio performance measure,

referred to as reward to variability ratio denoted by SP defined in equation. He assumes that a
small investor invests fully in the mutual fund and does not hold any portfolio to eliminate
unsystematic risk and hence demands a premium for the total risk.
The superiority of the Sharpe ratio over the Treynor ratio is, it considers the point
whether investors are reasonably rewarded for the total risk in comparison to the market. A
mutual fund scheme with a relatively large unique risk may outperform the market in
Treynor’s index and may underperform the market in Sharpe ratio. A mutual fund scheme
with large Treynor ratio and low Sharpe ratio can be concluded to have relatively larger
unique risk. Thus the two indices rank the schemes differently.
Sharpe Measure:
Sharpe (1963) suggested that, it is possible to consider the return for each security to
be represented by an equation. Sharpe noted that the variance explained by the index could be
referred as the systematic risk and the unexplained variance is called residual or unsystematic
risk. A well diversified fund is expected to have lower unsystematic risk.
Jensen’s Measure:
Sharpe and Treynor ratios rely mainly on ranking of portfolios in comparison to the
market portfolio. They are unable to answer question like: Has fund given more than/less
than/ equal to expected returns? Hence there is a need for a better performance measure.
Michael C. Jensen (1968) has given different dimension and confined his attention to
the problem of evaluating a fund manager’s ability of providing higher returns to the
investors. He measures the performance as the excess return provided by the portfolio over
5
the expected (CAPM) returns. The performance measure, denoted by JP is defined in
equation
ANOVA:
ANOVA is used to compare differences of means among more than 2 groups. It does
this by looking at variation in the data and where that variation is found (hence its name).
Specifically, ANOVA compares the amount of variation between groups with the amount of
variation within groups. It can be used for both observational and experimental studies.
Friedman Mean Rank:
The Friedman test is the non-parametric alternative to the one-way ANOVA with
repeated measures. It is used to test for differences between groups when the dependent
variable being measured is ordinal.
1.6 Sources of Information:
1.6.1 Primary data resources:
The Primary data is collected from the corporate salaried investors’ by means of
questionnaire and mailed questionnaire (Google forms). The samples collected were
combined and evaluated through the software SPSS.
1.6.2 Secondary data resources:
This refers to the processed data collected from the websites, journals, publishers, and
from the finding of other published articles from management.
1.7 Limitations of the study:
The present study has the following scope, limitations and the period constraints:
1. The NAVs used in the study are obtained from Mutual Funds India’s website, which in
turn is supplied by the members. Members in turn have not followed any uniform rule in its
computation due to the flexibilities offered under SEBI regulations.
2. Initially all mutual fund schemes were directly linked to stock market. Nowadays they are
having numerous schemes which are independent of stock market (debt & money market
6
funds) are introduced and such schemes’ returns need not have correlation with BSE sensex,
and the sensex is not adjusted for dividends.
3. Banks are free to accept deposits at any interest within the ceilings fixed by Reserve Bank
of India and interest rates can vary from client to client. Hence there can be an inaccuracy in
the risk-free rates.
4. The perception of the investors from the corporate employees about the mutual funds could
be bogus for the analysis required to arrive at the results.
5. The analysis is not free from the limitations of non-identical time periods and unequal
sample observations.
6. The study excludes the effect of entry and exit loads of the mutual funds.
1.8 Chapter Design:
i. In the Chapter-I, the methodology for the research has been covered;
ii. In the Chapter-II, the profile of the industry is being covered briefly;
iii. The Literature about the study is being analysed in the chapter-III;
iv. Data and the interpretation is clearly done in the chapter-IV; and
v. Findings, recommendations and conclusions are given in the chapter-V.
7
Chapter - II
Industry Profile
2.1 Industry/Company Profile
In the year 1963, Indian Mutual Fund started its pace with the incorporation of Unit
Trust of India, which was the combined initiative of Government of India and Reserve Bank
of India. The divisions of Mutual Funds could be broadly classified into four phases
distinctly.
The history of mutual funds in India can be broadly divided into four distinct phases.
The First Phase which had its head-start from 1964 to 1987 by creation of Unit Trust of India
(UTI) by the Act of Parliament (1963). It was under the control of Reserve Bank of India
through Regulatory and Administrative control. The Control was took over due to de-linkage
of UTI from IDBI and RBI.UTI had Rs.6,700 crores of AUM at the end of 1988 from its first
scheme namely Unit Scheme 1964.
The Second Phase which had its time from 1987 to 1993 gave some boost to power up
the mutual fund industry. The year 1987 earmarked the entry of public sector players in
mutual funds. Firstly the public sector banks, General Insurance Corporation (GIC), and Life
Insurance Corporation of India (LIC). Followed by the other players such as SBI Mutual
Fund, Punjab National Bank Mutual Fund, Canbank Mutual Fund, Indian Bank Mutual Fund,
Bank of Baroda Mutual Fund, and Bank of India came into the industry. Thus The industry of
Mutual Fund had AUM of Rs.47,004 crores.
The year of 1993 gave the green card for the private players to perform in mutual
funds. This was considered as the third phase in the industry which covered from 1993 to
2003. It was considered to be a new era in the Indian mutual fund industry. There were wider
choices of preference for the investors to invest in the families of fund. Every mutual fund
players have to be registered and governed except the UTI. The first private sector mutual
fund registered in July 1993 was The erstwhile Kothari Pioneer which was then merged with
Franklin Templeton. The Mutual Fund industry is presently under the SEBI (Mutual Fund)
Regulations 1996 which came after the regulations in 1993.
With the foreign mutual fund players setting up in India and several other mergers and
acquisitions in the industry lead to a componential increase in the number of mutual fund
houses. The UTI had a way before other mutual fund houses with Rs.44,541 crores of AUM
while the other 33 mutual funds were with Rs.1,21,805 crores as consolidated.
The Fourth Phase starts its presence from 2003 which was bifurcated Unit Trust of
India into two separate entities. One undertaking with AUM of Rs.29,835 crores of UTI
8
which came under the control of Government of India and not being reviewed by Mutual
Fund Regulations.
The other UTI Mutual Fund is registered with SEBI and works under Mutual Fund
Regulations which was being sponsored by SBI, PNB, BOB, and LIC. This phase of
consolidation and growth, with the bifurcation constituting more than Rs.76,000 crores of
AUM along with the recent mergers of private fund players in the industry.
The increase in the value of assets through the phases has been clearly shown through
the graph. The value has so far increased from ₹ 25 crores to that of ₹ 1082757 crores. Over
the years, it has seen a so much rise in the growth of assets, making the investors believe that
mutual fund is one of the good investment avenues available.
Source: www.amfi.in
9
Chapter - III
Literature Review
Literature Review
1. The study exhibits the technique which measures the performance of mutual funds
through the Sharpe- Ratio technique. Thus the technique is giving a noble method also
to evaluate the decisions of managers in stock selection. (Sharpe, William F.1994)
2. MF performance takes into count the return which is a risk-free rate made to be as
target rate and encompasses through lower partial movement evaluation.(Mishra et, al
2000)
3. The derivation of risk-adjusted portfolio performance (Jensen’s alpha) measure which
the forecasting of manager will associate to fund’s return. The estimation of
manager’s ability to contribute towards the fund’s returns has been given in this
paper. (Michael C. Jensen 1967)
4. The Inflow and Outflow of the funds are being increased. Though, the funds’
outflows were more during the periods of crisis. Hence, the financial consistency on
contagion become the evidence for the same (Graciela L. Kaminsky, et, al 2001)
5. The decision of investment on mutual funds relies on the past performance of funds
along with the influence of managers in increase of performance of MF. Through this
it is clear he supports the argument between the managers and performance. (Michael
K. Berkowitz et, 1997)
6. The study made by Bala Ramasamy has said that the effects are due to three elements
such as past performance, cost of transactions, and size of funds. (Bala Ramaswamy
et, 2003)
7. Evaluation of performance of mutual funds stocks are done through risk – return
analysis & Relative Performance Management index. (Prof. S. Rao, et,al)
8. The usage of Residual variance for the MF portfolio diversification and its impact on
performance measure of shape funds for improving the MF performance and
evaluation of selection. (Sharad Panwar et, 2005)
9. Performance of mutual funds which has more number of securities pooled in it,
exhibits that the return of those are higher than that of the benchmark or average
returns. Hence this provides the result as performance is better and it gives higher
return with lower risk. (Goyal, M.M, 2015)
10. The Return gap that predicts the future performance of the mutual funds and the
additional measures that evaluate the performance are being demonstrated through the
10
information creating values for some of the funds. (Marcin T. Kacperczyk, et, al
2005)
11. Analysis of both the Fund manager’s decisions and the investor’s investment level are
being given in this study. The savings and investment habit of the investors influences
the decision of fund manager in investment of fund. (Agrawal Dr. Deepak, Jun 2011)
12. Measuring the performance of MF schemes with form of CAPM model both
conditionally and unconditionally, which results in improving the performance
through causing the shift in the way and reduces the negative coefficients in the
timings. (Bijan Roy, et, al)
13. The Evaluation of Challenges and Opportunities of Mutual Funds in India has been
provided by Sharma, et, al. The author says that the investors are given the freedom to
invest in the diversified portfolio and the rural markets could be tapped for the
financial inclusions through the use of information technology. (Sharma, et, al 2014)
14. The stock picking strategies of Fund Managers of equity based mutual funds schemes
being explained by Mishra, et, al. He adds that the small investors in India prefers
mostly equity linked mutual funds as the fund managers takes care ensuring high
returns with low risk, the investment avenues are such as large cap, large & mid cap,
mid & small cap, mutlicap and tax savings schemes, available in the market. (Mishra,
et, al 2013)
15. The analysis of SBI mutual fund along with scrutinizing the importance of capital
formation. The capital formation is indispensable for the development of economy
and financial markets. (James, Thomas 2013)
16. Researcher has come up with the growth and the risk-return patter of the selected
private equity funds. He stresses that nowadays the mutual funds have become the
part of investment for the savings class people. (Maruti, et, al 2013)
17. The study is related to the performance of mutual funds of three sectors such as
Public, Private and Foreign private sectors during the period of recession (i.e) 2008-
2009. (Jan 2008 – Feb 2009) (Roy, et, al 2012)
18. About 60% of the 28 equity Indian fund schemes from January 2007 to June 2011 bet
the benchmark markets. Better performing fund schemes were exposed to higher risk
but were less afflicted to market crisis. (Kumar, Rakesh 2012)
19. The risk- adjusted performance measures suggested bu Sharpe, Treynor and Jensen
have been used to analyse 32 growth-oriented open-ended Equity Linked Saving
11
Schemes (ELSS) of tax-saving mutual funds with the Indian stock market benchmark
S&P CNX NIFTY. (Santhi. N S, Gurunathan. K, Balaganga 2012)
20. The present study is confined to evaluate the performance of mutual funds on the
basis of yearly returns compared with BSE Indices to help average investors
successfully identify skilled managers. (HemaDivya. K 2012)
21. This article is an attempt to investigate the dynamics of the relationship between
mutual funds investment flow and stock market returns in India between January 2000
and May 2010 using the application of Todo and Yomamoto approach to the Granger
causality tests which provides evidence of unidirectional causality running to the
stock market returns to mutual funds investment flow. (Mishra.P K 2011)
22. An Exchange-Traded Fund (ETF), an innovative product, which provides a new way
to build investment strategies, would help the investors to manage their funds
effectively. (Gunasekaran, Indhumathi, Selvam, Murugesan, Palanisamy,
Bhuvaneswari 2011)
23. This study states that it is important for the Indian investors and the fund houses to
know the performance of their mutual funds to reduce the risks. (Puri, Himanshu
2010)
24. This article deals with the difficulty that a common investor faces to choose among
the multiple institutions offering a variety of products andmultiple options attached
with each product. (Puri, Himanshu 2010)
25. Financial Innovations are becoming a regular feature that attracts many investors
nowadays. Mutual funds is the obvious choice because of its higher returns and low
risk. (Walia, Nidhi, Kiran, Ravi 2009)
26. Mutual Fund was introduced in India in 1963 with the formation of Unit Trust in
India at the initiative of the Government of India and Reserve Bank. This is managed
on behalf of the investors, by therespective Asset Management Company.
(Chandrika.N, Chalama. G.V 2008)
27. Mutual finance investment is most effective part of the U.S family domain investment
portfolios. This research presents a new proof on the casual effects of chosen mutual
finance features on total mutual finance efficiency by using: a) different times, b)
different features, c) more recent data. (Michael Millstone 2008)
28. This is an attempt to examine components and sources of the investment performance,
and also to identify a part of observed return which is due to pick up the best
securities at given level of risk. (Anand. S, Murugiah.V 2007)
12
29. This study analyses the financial performance of select 419 open-ended equity mutual
fund schemes netween April 1, 2005 and March 31, 2006 pertaining to the two
dominant investment styles and tested the hypothesis if the differences in performance
are statistically significant. (Rao, Dabbeeru Neelakanteswar 2007)
30. This study analyses the financial performance of select 419 open-ended equity mutual
fund schemes between April 1, 2005 and March 31, 2006 pertaining to the two
dominant investment styles and tested the hypothesis if the differences in performance
are mathematically significant. (D.N.Rao 2006)
31. This study shows the under performance of the Japanese people mutual fund market is
mostly due to the tax-dilution results and not actually the inadequate control. (Stephen
J.Brown 1997)
32. This study is to understand preferred investment avenues for mutual funds and
identify significant factors such as : Partnership with reputed financial institutions like
banks; Fringe benefits and Grievance redressal machinery. (K Lubza Nihar and
Padma Narayan)
33. This study focuses on measuring the investors’ expectation and preference. It also
attempts to gauge factors that they take into consideration before making any
investment. This was conducted in Kolkata between November 2008 and January
2009. (Sowmya Saha and Munmun Dey, 2011)
34. This study attempts to study the earlier studies of investor’s perception and their
impact on investment decision considering factors like methodologies followed and
studies undertaken during 2001 to 2003 (Dakshayani G.N, 2014).
35. This study analyses the mutual fund investments in relation to investor’s behaviour
including factors like main objective of investing in mutual funds, role of financial
advisors, sources of information (Kotishwar A. And Akbar Ali Khan, 2012).
36. This study is an attempt to understand knowledge of respondents and find if there
exists any relationship between risk and knowledge (K Lubza Nihar).
37. This study includes importance attached to various factors by the respondent while
making mutual funds investments, Nature-wise, Sector-wise and Scheme-wise
investment pattern of mutual fund investors with the data collected from 200 mutual
fund investors in Punjab (Rajesh Kumar and R. S. Arora, July 2012).
38. This study reveals that the majority of investors have not still formed any attitude
towards the mutual fund investments due to lack of awareness (B B S Parihar, Rajeev
Sharma and Deepika Singh Parihar, 2009).
13
39. This paper aims to identify the differences, if any, between factors defining risk of
investment in euity mutual fund for a financial expert against a lay investor (Manju
Tripathi, Tuhin and Chattopadhyay, 2013).
40. This paper states the perceptions of investors towards mutual funds by November
2002 analyzing the reasons for withdrawal and not investing any more in mutual
funds (Jaspal Singh and Subbash Chander, 2004)
41. This is the study of investment products like mutual funds, perceived purchase risk is
simply a chance that the investment in a certain MF scheme will not meet the return
expectations of an investor (Sanjay Kumar Mishra and Manoj Kumar, 2012). This
study is anticipated with the asset management companies to improve in conducting
awareness regarding various mutual fund products and their benefits in Tirupathi
between 2007 and 201 (Neelima Reddy.S and Venkata H Reddy).
42. This study aims to know the pulse of an investor. This is an attempt to identify the
preference pattern in mutual fund schemes and to analyse the factor influencing the
selection of these schemes (Neelam Jain and Sugandh Rawal, 2012).
43. This paper examines the Investor buying behaviour of rural investors for financial
assets specifically focussed on mutual fund. It states thatthere is significant impact on
demographical factors like Age, Gender, Occupation, Education and income on the
decision making process to buy mutual fund (Dhinem J. Jani & Rajeev Jain, 2014).
44. This study conducted a survey through structured questionnaire targeting 100 retail
investors of Delhi/NCR region to understand the awareness and attractiveness of
different derivative securities amongst the retail investors(Gunjan Tripathi).
45. The main objective of this paper is to analyse the pattern of investors’ behaviour
regarding periodic and non-periodic investment and to analyse the factors which
regulate their decision to investments in mutual funds (Anoop Pandey, 2011).
46. This study proposes and validates a model of information search and processing
mutual fund investors. It is done by combining multiple domains of literature, viz.,
Traditional Finance, Behavioural Finance and Consumer Behaviour (Sanjay Kumar
Mishra and Manoj Kumar).
47. This paper is an attempt to identify various factors affecting perception of investors
regarding investment in mutual funds (N.M. Vechalekar).
48. This paper analyses the development of Behavioural finance, and how an investor
influences selection of mutual fund schemes (Ms. Shilpa Sachdeva, Ms. Monika
Bhatia and Ms. Rameesha Kalra, 2013).
14
49. This is an analysis made into preferred investor’s behaviour towards investment
avenues in Indore City. It has also studied the difference of opinion of age on
investor’s behaviour while selection of any avenue (Heena Kothari,2013).
50. A study of the investor’s perception and preferences has a greater impact in the
formulation of policies for the development and regulation of security markets in
general and thus protecting and promoting small and household investors in particular
(S. Prakash and C. Sundar, 2013).
51. This research generated few factors affecting perception of investors regarding mutual
fund selection, which vary from one state to another which will help the mutual fund
companies to improve upon their weak areas (Neha Parashar, 1997)
52. This paper is to identify the investors’ perception on investment decision in equity
market based on the frequency analysis and various statistical tools that describes the
variables (P. Varadarajan and P.Vikkaraman, 2011).
53. This study explains about investor’s awareness towards mutual funds, investor
perceptions, their preferences and the extent of satisfaction towards mutual funds with
few suggestions to select appropriate mutual funds to maximize the returns (R
Padmaja, 2013).
54. This research identifies to investigate various factors that investors think before
selecting any mutual fund scheme. This study is concerned with the behavioural
finance area and focusing area and focusing on the investment behaviour of individual
investors (N.N.Patel & S.K.Bhatt, Jaykumar, Joshi, 2013).
55. This study analyses the mutual fund investments in relation to the investor’s
behaviour. It also analyses factors such as source of information, deficiencies in the
services provided by the mutual fund managers, challenges before the Indian mutual
fund industry, etc (Simran Saini Bimal Anjum and Ramandeep Saini, 2011).
15
Chapter - IV
Data Analysis and Interpretation

4. DATA ANALYSIS AND INTERPRETATION
Table no 4.1
Age of the Respondents
Cumulative
Age Frequency Percent Percent
Below 20 16 6.6 6.6
20-40 219 89.8 96.3
40-60 9 3.7 100.0
Total 244 100.0
Source: Primary Data
From the population, it can be seen that the age below 20 years are only 16; the age
between 20 – 40 years are 219; and the age between 40 – 60 years are only 9. The total
number of respondents amounts to 244. And the pertaining percentages of the age categories
are given in the table 1.1 respectively. The Bar chart shows the actual picture of the ages of
the respondents in a systematic way.
Chart - 4.1
Source: Table no 4.1
16
Table - 4.2
Gender of the Respondents
Cumulative
Gender Frequency Percent Percent
Male 168 68.9 68.9
Female 76 31.1 100.0
Total 244 100.0
From the population, it can be seen that the male members are 168; and the female
members are 76. The total number of respondents amounts to 244. And the pertaining
percentages of the gender categories are given in the table 1.2 respectively. The Bar chart
showing the actual picture of the gender of the respondents is given below.
Chart - 4.2
17
Table - 4.3
Marital Status of the Respondents
Marital Cumulative
Status Frequency Percent Percent
Married 36 14.8 14.8
Unmarried 208 85.2 100.0
Total 244 100.0
From the population, it can be seen that the married respondents are 36; and the
unmarried respondents are 208. The total number of respondents amounts to 244. And the
pertaining percentages of the marital status categories are given in the table 1.3 respectively.
The Bar chart showing the actual picture of the marital status of the respondents is given
below.
Chart -4.3
18
Table - 4.4
Educational Background of the Respondents
Educational Cumulative
Background Frequency Percent Percent
School
6 2.5 2.5
Education
Under-Graduate 55 22.5 25.0
Post-Graduate 176 72.1 97.1
Diploma 7 2.9 100.0
Total 244 100.0
From the population, it can be seen that the respondents completed school education
are 6; the under-graduate respondents are 55; the post-graduate respondents are 176; and that
of respondents completed diploma are only 7. The total number of respondents amounts to
244. And the pertaining percentages of the educational background categories are given in the
table 1.4 respectively. The Bar chart showing the actual picture of the educational
background of the respondents is given below.
Chart – 4.4
19
Table – 4.5
Occupation/Profession of the Respondents
Occupation/ Cumulative
Professional Frequency Percent Percent
Salaried 108 44.3 44.3
Professionals 52 21.3 65.6
Business 5 2.0 67.6
Others 79 32.4 100.0
Total 244 100.0
From the population, it can be seen that the respondents salaried are 108; the
professionals are 52; the businessmen are 5; and that of respondents with other occupation are
79. The total number of respondents amounts to 244. And the pertaining percentages of the
occupation/professionals categories are given in the table 1.5 respectively. The Bar chart
showing the actual picture of the occupation/ profession of the respondents is given below.
Chart – 4.5
20
Table – 4.6
Family size of the Respondents
Family Cumulative
Size Frequency Percent Percent
less than 4 84 34.4 34.4
4-6 153 62.7 97.1
Above 6 7 2.9 100.0
Total 244 100.0
From the population, it can be seen that the respondents having the family size less
than 4 are 84; the respondents having family size between 4 – 6 are 153; and that the
respondents having family size above 6 are 7. The total number of respondents amounts to
244. And the pertaining percentages of the family size of respondents are given in the table
1.6 respectively. The Bar chart showing the actual picture of the family size of the
respondents is given below.
Chart – 4.6
21
Table – 4.7
Number of earning members
Earning Cumulative
members Frequency Percent Percent
1 87 35.7 35.7
2 110 45.1 80.7
3 & above 47 19.3 100.0
Total 244 100.0
From the population, it can be seen that the number of earning members in
respondent’s family with 1 are 87; the number of earning members in respondent’s family
with 2 are 110; and that the number of earning members in respondent’s family with 3 &
above are 47. The total number of respondents amounts to 244. And the pertaining
percentages of the number of earning members in respondent’s family are given in the table
1.7 respectively. The Bar chart showing the number of earning members in respondent’s
family is given below.
Chart – 4.7
22
Table – 4.8
Monthly Income of the Respondents
Cumulative
Monthly Income Frequency Percent Percent
Below Rs.20,000 60 24.6 24.6
Rs.20,000 -
107 43.9 68.4
Rs.40,000
Rs.40,000 and above 77 31.6 100.0
Total 244 100.0
From the population, it can be seen that the monthly income of respondents below
Rs.20,000 are 60; the monthly income of respondents between Rs.20,000 – Rs.40,000 are
107; and that the monthly income of respondents Rs.40,000 & above are 77. The total
number of respondents amounts to 244. And the pertaining percentages of the monthly
income of respondents are given in the table 1.8 respectively. The Bar chart showing the
monthly income of respondents is given below.
Chart – 4.8
23
Table no 4.9
ANOVA for Risk Perception of Investment avenues with age
Null Hypothesis (H0) – There is no significant difference between risk perception on

investment avenues and age.
Risk perception on Investment Significance

F - Value Result
avenues Value
Risk perception on Shares 2.116 0.123 Accepted
Risk perception on Bonds/Debentures 2.956 0.054 Accepted
Risk perception on Options/Futures 0.677 0.509 Accepted
Risk perception on Mutual Funds 0.487 0.615 Accepted
Risk perception on NSC/PPF/PF 6.547 0.002 Rejected
Risk perception of FD 2.298 0.103 Accepted
Risk perception on Insurance 1.322 0.268 Accepted
Risk perception on Real Estate 0.679 0.508 Accepted
Risk perception on Gold/Silver 1.515 0.222 Accepted
Source: Primary data
 From the above table, it is concluded that the null hypothesis is accepted since F value
= 2.116 and P value = 0.123 and hence there is no difference between risk perception
on shares and age of the respondents.
on Bonds/Debentures and age of the respondents.
on Options/Futures and age of the respondents.
on Mutual funds and age of the respondents.
 From the above table, it is concluded that the null hypothesis is rejected since F value
= 6.547 and P value = 0.002 and hence there is a difference between risk perception
on NSC/PPF/PF and age of the respondents.
24
on Fixed deposits and age of the respondents.
on Insurance and age of the respondents.
on Real estate and age of the respondents.
on Gold/Silver and age of the respondents.
25
Table no 4.10
ANOVA for Return Perception of Investment avenues with age
Null Hypothesis (H0) – There is no significant difference between return perception on

investment avenues and age.
Return perception on Investment Significance

F - Value Result
avenues Value
Return perception on Shares 2.488 0.085 Accepted
Return perception on Bonds 8.914 0.000 Rejected
Return perception on Options/Futures 4.412 0.013 Rejected
Return perception on Mutual Funds 0.692 0.501 Accepted
Return perception on NSC/PPF/PF 1.517 0.222 Accepted
Return perception on FD 4.953 0.008 Rejected
Return perception on Insurance 8.880 0.000 Rejected
Return perception on Real Estate 0.393 0.675 Accepted
Return perception on Gold/Silver 0.541 0.583 Accepted
= 2.488 and P value = 0.085 and hence there is no difference between return
perception on shares and age of the respondents.
= 8.914 and P value = 0.000 and hence there is a difference between return perception
on bonds and age of the respondents.
on options/futures and age of the respondents.
perception on Mutual funds and age of the respondents.
perception on NSC/PPF/PF and age of the respondents.
26
on Fixed deposit and age of the respondents.
on Insurance and age of the respondents.
perception on Real estate and age of the respondents.
perception on Gold/Silver and age of the respondents.
27
Table no 4.11
ANOVA for Risk Perception on Investment avenues with marital status

investment avenues and marital status.

F - Value Result
avenues Value
Risk perception on Shares 7.319 0.007 Rejected
Risk perception on Options/Futures 4.350 0.038 Rejected
Risk perception on Mutual Funds 2.439 0.120 Accepted
Risk perception of FD 1.615 0.205 Accepted
Risk perception on Insurance 9.891 0.002 Rejected
Risk perception on Real Estate 9.811 0.002 Rejected
Risk perception on Gold/Silver 0.745 0.389 Accepted
on shares and marital status of the respondents.
on Bonds/Debentures and marital status of the respondents.
on Options/Futures and marital status of the respondents.
on Mutual funds and marital status of the respondents.
on NSC/PPF/PF and marital status of the respondents.
28
on Fixed deposits and marital status of the respondents.
on Insurance and marital status of the respondents.
on Real estate and marital status of the respondents.
on Gold/Silver and marital status of the respondents.
29
Table no 4.12
ANOVA for Return Perception on Investment avenues with marital status

investment avenues and marital status.

F - Value Result
avenues Value
Return perception on Bonds 1.608 0.206 Accepted
Return perception on Options/Futures 4.312 0.039 Rejected
Return perception on NSC/PPF/PF 9.941 0.002 Rejected
Return perception on FD 4.112 0.044 Rejected
Return perception on Insurance 8.728 0.003 Rejected
Return perception on Real Estate 0.011 0.918 Accepted
perception on shares and marital status of the respondents.
perception on Bonds and marital status of the respondents.
on Options/Futures and marital status of the respondents.
perception on Mutual funds and marital status of the respondents.
on NSC/PPF/PF and marital status of the respondents.
30
on Fixed deposits and marital status of the respondents.
on Insurance and marital status of the respondents.
perception on Real estate and marital status of the respondents.
perception on Gold/Silver and marital status of the respondents.
31
Table no 4.13
ANOVA for Risk Perception on Investment avenues with Monthly income

investment avenues and monthly income.

F - Value Result
avenues Value
Risk perception on Shares 2.628 0.074 Accepted
Risk perception on Options/Futures 1.572 0.210 Accepted
Risk perception on Mutual Funds 4.277 0.015 Rejected
Risk perception of FD 5.258 0.006 Rejected
Risk perception on Insurance 3.819 0.023 Rejected
Risk perception on Real Estate 2.095 0.125 Accepted
Risk perception on Gold/Silver 5.063 0.007 Rejected
on Shares and monthly income of the respondents.
on Bonds/Debentures and monthly income of the respondents.
on Options/Futures and monthly income of the respondents.
on Mutual funds and monthly income of the respondents.
on NSC/PPF/PF and monthly income of the respondents.
32
on Fixed deposits and monthly income of the respondents.
on Insurance and monthly income of the respondents.
on Real estate and monthly income of the respondents.
on Gold/Silver and monthly income of the respondents.
33
Table no 4.14
ANOVA for Return Perception on Investment avenues with Monthly income

investment avenues and monthly income.

F - Value Result
avenues Value
Return perception on Bonds 1.361 0.258 Accepted
Return perception on Options/Futures 0.146 0.864 Accepted
Return perception on NSC/PPF/PF 0.872 0.419 Accepted
Return perception on FD 0.623 0.537 Accepted
Return perception on Insurance 1.049 0.352 Accepted
Return perception on Real Estate 5.739 0.004 Rejected
perception on Shares and monthly income of the respondents.
perception on Bonds and monthly income of the respondents.
perception on Options/Futures and monthly income of the respondents.
perception on Mutual funds and monthly income of the respondents.
perception on NSC/PPF/PF and monthly income of the respondents.
34
perception on Fixed Deposits and monthly income of the respondents.
perception on Insurance and monthly income of the respondents.
on Real estate and monthly income of the respondents.
perception on Gold/Silver and monthly income of the respondents.
35
Table no 4.15
Friedman Rank for the risk factors of investment avenues
Mean
Risk Factors Rank
Rank
Risk perception on Shares 6.41 1
Risk perception on
5.17 5
Bonds/Debentures
Risk perception on Options/Futures 6.37 2 N 244
Chi-
Risk perception on Mutual Funds 5.53 4
Square 473.754
Risk perception on NSC/PPF/PF 4.05 7 df 8
Asymp.
Risk perception of FD 3.22 9
Sig. 0
Risk perception on Insurance 3.66 8
Risk perception on Real Estate 6.07 3
Risk perception on Gold/Silver 4.52 6
 Friedman ranking relates to the primary sources and hence it is found that the risk
perception on shares is the major risk perceived by the respondents.
 From the table above, it is inferred that the mean rank of risk perception on mutual
funds is ranked fourth from the investment avenues by the respondents.
36
Table no 4.16
Friedman Rank for the return factors of investment avenues

Mean
Return Factors Rank
Rank
Return perception on Shares 5.41 1
Return perception on Bonds 4.51 9
Return perception on
5.17 4 N 244
Options/Futures
Return perception on Mutual Chi-
5.12 5 40.764
Funds Square
Return perception on NSC/PPF/PF 4.99 6 df 8
Asymp.
Return perception on FD 4.69 7 0
Sig.
Return perception on Insurance 4.57 8
Return perception on Real Estate 5.34 2
Return perception on Gold/Silver 5.22 3
 Friedman ranking relates to the primary sources and hence it is found that the return
perception on shares is the major return perceived by the respondents.
 From the table above, it is inferred that the mean rank of risk perception on mutual
funds is ranked fifth from the investment avenues by the respondents.
37
Table no 4.17
Correlation for Risk – Return trade off on Investment avenues
Risk - Return Correlation
Shares 0.184
Bonds/Debentures 0.156
Options/Futures 0.241
Mutual funds 0.044
NSC/PPF/PF 0.168
Fixed Deposit 0.380
Insurance 0.116
Real Estate 0.104
Gold/Silver 0.206
 Correlations for the risk – return perception of investors for the Shares shows the
result of 0.184, which means the risk and return for the shares are slightly positively
correlated.
 Correlations for the risk – return perception of investors for the Bonds/Debentures
shows the result of 0.156, which means the risk and return for the Bonds/Debentures
are slightly positively correlated.
 Correlations for the risk – return perception of investors for the Options/Futures
shows the result of 0.241, which means the risk and return for the Options/Futures are
slightly positively correlated.
 Correlations for the risk – return perception of investors for the Mutual funds shows
the result of 0.044, which means the risk and return for the Mutual funds are almost
has no correlation.
 Correlations for the risk – return perception of investors for the NSC/PPF/PF shows
the result of 0.168, which means the risk and return for the Mutual funds are slightly
positively correlated.
 Correlations for the risk – return perception of investors for the Fixed Deposits shows
the result of 0.380, which means the risk and return for the Fixed Deposits are slightly
38
 Correlations for the risk – return perception of investors for the Insurance shows the
result of 0.116, which means the risk and return for the Insurance are slightly
 Correlations for the risk – return perception of investors for the Real Estate shows the
result of 0.104, which means the risk and return for the Real Estate are slightly
 Correlations for the risk – return perception of investors for the Gold/Silver shows the
result of 0.206, which means the risk and return for the Gold/Silver are slightly
39
Table no 4.18
Evaluation for performance of Mutual funds
DSP BlackRock Natural Resources And New Energy Fund - Regular -

Growth
Covariance 1.222468968
Beta 0.373567756
Treynor -15.91909188
Sharpe -5.674319245
Jensen -3.746224352
ICICI Prudential Banking and Financial Services Fund - Growth

Beta 1.028194724
Treynor -5.694547485
Sharpe -8.499054349
Jensen 0.227828757
SBI Magnum COMMA Fund - REGULAR PLAN - Growth

Beta 1.183388828
Treynor -5.060347881
Sharpe -9.478255138
Jensen 1.100646718
L&T Emerging Businesses Fund - Regular Plan - Growth Option

Beta 1.92307883
Treynor -3.080785884
Sharpe -13.26688737
Jensen 5.550371364
Birla Sun Life Banking and Financial Services Fund - Regular Plan -
Growth
Beta 1.189061531
Treynor -4.909339445
Sharpe -6.783046161
Jensen 1.225753552
40
SBI TAX ADVANTAGE FUND - SERIES II - GROWTH
Beta 2.418071347
Treynor -2.485908088
Sharpe -12.74374868
Jensen 8.546380114
Tata Banking And Financial Services Fund-Regular Plan-Growth

Beta 0.930877575
Treynor -6.305930319
Sharpe -10.35454636
Jensen -0.340452562
IDFC Infrastructure Fund-Regular Plan-Growth

Beta 1.040103326
Treynor -5.759120771
Sharpe -9.46191267
Jensen 0.280529264
Tata Equity P/E Fund Regular Plan -(Growth Option)

Beta 3.606928801
Treynor -1.664103486
Sharpe -14.88363742
Jensen 15.87103765
Sahara Midcap Fund-Growth Plan

Beta 1.364232657
Treynor -4.427503492
Sharpe -10.84180491
Jensen 2.054393185
From the above table, it is clear that the performance of all above listed equity based
mutual funds has been giving the best of all throughout by keeping itself mostly above the
41
benchmark performance. The schemes are the top 10 among the category based on the equity
related schemes. Even though the some schemes don’t show good results, it is comparably
good with other schemes in the same category.
42
Chapter - V
Findings, Recommendations and

Conclusion
Findings:
 The Chart 4.1 exhibits that the percentage of age of respondents below 20 is at 6.6%;
the percentage of age of respondents between 20 – 40 is at 89.8%; and that of
percentage of age of respondents between 40 – 60 is only 3.7%. And thus the Bar
chart is formed with the percentages which amount to 100% as in the chart 1.1. Hence
the respondents are more in ages between 20 – 40 and very less in the ages between
40 – 60.
 The Chart 4.2 exhibits that the percentage of male members is at 68.9%; and that of
the percentage of female members is at 31.1%. And thus the Bar chart is formed with
the percentages which amount to 100% as in the chart 1.2. Hence the male
respondents are more than the female respondents in the population.
 The Chart 4.3 exhibits that the percentage of married members is at 14.3%; and that
of the percentage of unmarried members is at 85.7%. And thus the Bar chart is formed
with the percentages which amount to 100% as in the chart 1.3. Hence the unmarried
respondents are more than the married respondents in the population.
 The Chart 4.4 exhibits that the percentage of education of respondents done school
education is at 2.5%; the percentage of respondents done under-graduate is at 22.5%;
and that of percentage of respondents done post-graduate is at 72.1%; and percentage
of respondents done diploma is at 2.9%. Thus there are more post-graduate
respondents and very less of school and diploma done respondents.
 The Chart 4.5 exhibits that the percentage of occupation of salaried respondents is at
44.3%; the percentage of respondent’s profession is at 21.3%; and percentage of
businessmen is at 2%; and that of percentage of respondents doing other occupations
is at 32.4%. Thus there are more salaried respondents in the population.
 The Chart 4.6 exhibits that the percentage of family size of respondents having less
than 4 is at 34.4%; the percentage of family size of respondents between 4 – 6 is at
62.7%; and that of percentage of family size of respondents above 6 is at 2.9%. Thus
there are more respondents with the family size between 4 – 6 and there are very less
families with family size of above 6.
 The Chart 4.7 exhibits that the percentage of the number of earning members in
respondent’s family with 1 is at 35.7%; the number of earning members in
respondent’s family with 2 is at 45.1%; and that of percentage the number of earning
43
members in respondent’s family with 3 & above is at 19.3%. Thus there are more
respondents having 2 earning members in the family.
 The Chart 4.8 exhibits that the percentage of the number monthly income of
respondents below Rs.20,000 is at 24.6%; the percentage of monthly income of
respondents between Rs.20,000 – Rs.40,000 is at 43.9%; and that of percentage of the
monthly income of respondents above Rs.40,000 is at 31.6%. Thus there are more
respondents having monthly income between Rs.20,000 – Rs.40,000.
 From table no 4.9, it is clear that there is only difference between the age of the
respondent and the risk perception on National Savings Certificate (NSC), Public
Provident Fund (PPF), and Provident Fund (PF). Otherwise, Regardless of age of the
respondent, the risk perception doesn’t have any difference with the other investment
avenues.
 From table no 4.10, it is clear that there are difference between the age of the
respondent and the return perception on Bonds, Options/Futures, Fixed Deposits
(FD), and Insurance. Otherwise, Regardless of age of the respondent, the return
perception doesn’t have any difference with the other investment avenues.
 From table no 4.11, it is clear that there are difference between the marital status of
the respondent and the risk perception on Shares, Options/Futures, National Savings
Certificate (NSC), Public Provident Fund (PPF), and Provident Fund (PF), Insurance
and Real estate. Otherwise, Regardless of marital status of the respondents, the risk
perception doesn’t have any difference with the other investment avenues.
 From table no 4.12, it is clear that there are difference between the marital status of
the respondents and the return perception on Options/Futures, National Savings
Certificate (NSC), Public Provident Fund (PPF), and Provident Fund (PF), Fixed
Deposits (FD), and Insurance. Otherwise, Regardless of marital status of the
respondent, the return perception doesn’t have any difference with the other
investment avenues.
 From table no 4.13, it is clear that there are difference between the monthly income of
the respondent and the risk perception on Mutual funds, National Savings Certificate
(NSC), Public Provident Fund (PPF), and Provident Fund (PF), Fixed Deposits (FD),
Insurance and Gold/Silver. Otherwise, Regardless of monthly income of the
respondents, the risk perception doesn’t have any difference with the other investment
avenues.
44
 From table no 4.14, it is clear that there is only difference between the monthly
income of the respondents and the return perception on Real Estate. Otherwise,
Regardless of monthly income of the respondent, the return perception doesn’t have
any difference with the other investment avenues.
 From table no 4.15, results shows that from the risk perception on Mutual funds ranks
fourth, while the first rank has been given to the risk perception on shares. And the
perception of return on Mutual funds ranked fifth, when the perception on shares has
been allotted first from the table no 4.16.
 From the table no 4.17, the result of correlation shows that all possible investment
avenues are slightly positively correlated. And that the mutual fund’s correlation
between risk and return is almost near to the zero (i.e) 0.044.
 From the table no 4.18, it is clear that the performance of all above listed equity based
mutual funds has been giving the best of all throughout by keeping itself mostly above
the benchmark performance. The schemes are the top 10 among the category based on
the equity related schemes. Even though the some schemes don’t show good results, it
is comparably good with other schemes in the same category.
45
Recommendations:
On the basis of the findings of study, the important suggestions are being listed below
in the following:
 The investors are more interested in investing in shares and most investors are not
having a portfolio for their investments. Hence, investors are to be educated to have
their risk diversified over a portfolio of investments.
 The Asset Management Companies (AMC) should emphasis on ensuring the essential
knowledge for the investors in investing on mutual funds. The Companies should
provide necessary awareness to the investors.
 Due to the changing scenario, there arises a need for online trading platform for all
possible investment avenues to get more investments because there are more number
of salaried investors who are in need of the same for easy accountability and
maintenance.
 The Confidence and the Morale of the investors are to be boosted through some
necessary steps. This could be done through proper communication channel. The
latest trends in the market have to be communicated through possible mode of
communication so that the investors could cope up with the same.
46
Conclusion:
Today, there are lots of investments opportunities in the financial markets that are
available at the doorsteps of the investors. And at the same time, there are some investors
who hire portfolio managers to manage their own portfolio. These portfolio managers being
experts ensure at least minimum returns with bearable risk from the portfolio. Now, there are
wealth management companies in rise, who provide the portfolio management services to the
customers of their company. Thus, Mutual funds should provide the investors a safety shed to
maintain their own funds in the market. The investors’ perception towards the risk – return on
the investment avenues states that the portfolio are managed by their own and some investors
hire fund managers for their investments.
The present interrogation outlined that the investors have a moderate approach
towards investing in mutual funds. In order to boost their confidence and morale in mutual
funds, they should be loaded with proper and timey information relating to the current trend
in the industry. To achieve the most investments towards mutual funds, the corporate should
formulate some strategies in such a way that it helps the investors in fulfilling their financial
expectations. There are really large numbers of prospective and potential investors in the
markets for mutual funds. But, the challenge for mutual fund company is to convert the
prospective and potential investors to the real investors. By doing this, most of the mutual
fund companies could achieve their own targets. There is also a need for new and innovative
schemes to be launched for timely need of the customers. All the scenarios will lead to an
overall growth and development of the mutual funds industry, as well as the holistic growth
and development for the entire financial sector.
47
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v
Appendix
A QUESTIONNAIRE ON SALARIED INVESTOR’S PERCEPTION ON
MUTUAL FUNDS AND PERFORMANCE ANALYSIS OF MUTUAL FUNDS
WITH REFERENCE TO CHENNAI
This is a questionnaire for a project used only for educational purposes. The project title
is on mutual funds and wants to know its preference of salaried investors in the capital
markets. The title of the project is "Salaried investors’ perception on mutual funds and
performance analysis of mutual with reference to chennai"
Demographics
Name (Optional) - __________________
Age
Below 20
20-40
40-60
A
Above 60
A
b
Sex
o
Male
F Female
e
m
a
Marital Status
k
l Married
Unmarried
Educational Background
School Education
S Under – Graduate
c
h Post – Graduate
o
o vi
l
E
Diploma
Other: ______________
Occupation/Profession
Salaried
Professionals
Business
Other: _______________
Family Size
Less than 4
4-6
Above 6
Number of Earning members
3 & Above
Monthly Income
Below Rs.20,000
Rs.20,000 – Rs.40,000
Rs.40,000 and above
vii
Pattern of Investment
State the Investments in your portfolio

Shares
Bonds/Debentures
Options or Future Stocks
Mutual Funds
National Savings Certificate/ Public Provident Fund/ Provident Fund
Fixed Deposits
Insurance Policies
Real Estate
Gold/ Silver
Your Risk Perception association with the investment avenues (in scaling)
Describe your perception of risk associated with the investments.
Neither
Very Low Very
Low High
Low nor High
High
Risk perception on Shares
Risk perception on
Bonds/Debentures
Risk perception on
Options/Futures
Risk perception on Mutual Funds
Risk perception on NSC/PPF/PF
Risk perception of FD
Risk perception on Insurance
Risk perception on Real Estate
Risk perception on Gold/Silver
viii
Your Perception of Return association with the investment avenues (in scaling)
Describe your perception of return associated with the investments.
Neither
Very Low Very
Low High
Low nor High
High
Return perception on Shares
Return perception on Bonds
Options/Futures
Return perception on Mutual
Funds
NSC/PPF/PF
Return perception on FD
Return perception on Insurance
Return perception on Real Estate
Return perception on Gold/Silver
Level of Importance towards the basic investment objectives
Describe your level of importance about why you invest in the avenues available.
Neither
Very Low Very
Low High
Low nor High
High
Importance towards Dividends
Importance towards Quick gains
Importance towards Tax benefits
Importance towards
Rights/Bonus issues and stock
split
Importance towards Capital
Appreciation
Importance towards Safety
Importance towards Liquidity
Importance towards Hedge
against Inflation
Importance towards
Diversification of assets holding
ix
Expected and Derived Returns
Describe about your expected and desired returns
State your expected returns on Investment Avenues (in %)
Less than 9%
10% - 18%
19% - 27%
27% & above
State your derived returns on Investment Avenues (in %)
Less than 9%
10% - 18%
19% - 27%
27% & above

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SALARIED INVESTOR’S PERCEPTION ON MUTUAL FUNDS

AND PERFORMANCE ANALYSIS OF MUTUAL FUNDS WITH

Project Report submitted to SASTRA University

MASTER OF BUSINESS ADMINISTRATION

Under the Guidance of

THANJAVUR – 613 401

This is to certify that this project entitled “SALARIED INVESTOR’S

Guide & Supervisor Dean, School of Management

Submitted for Project Viva -Voce examination held on ______________

Internal Examiner External Examiner

I hereby declare that this project report titled “SALARIED INVESTOR’S

Place : Thirumalaisamudram Student Signature:

Date : Student Name: ( RAM PRAKASH R)

Chapter No. Title of the chapters Page No.

III Conceptual & Literature Review 10

IV Data Analysis and Interpretations 16

V Summary of Findings & Recommendations 43

4.1 Age of the Respondents 16

4.2 Gender of the Respondents 17

4.3 Marital Status of the Respondents 18

4.4 Educational Background of the Respondents 19

4.5 Occupation/Profession of the Respondents 20

4.6 Family size of the Respondents 21

4.7 Number of earning members 22

4.8 Monthly Income of the Respondents 23

Study is pertaining to the current scenario of salaried investors’ perception and

• Relative performance index;

1.3 Objective of the study:

The Objectives of the study are as follows:

The Study also investigates other specific objectives such as:

 To examine the preference of salaried investors over other possible avenues of

1.5 Research Methodology:

Research methodology is that an action through which a particular problem could be

1.5.1 Type of Research:

1.5.2 Data Collection:

1.5.3 Tools for analysis:

Beta: Measure of Systematic Risk

Co-efficient of Determination: Measure of Diversification

The potential advantage of mutual fund investment is the diversification of portfolio.

Jack Treynor (1965) conceived an index of portfolio performance measure called as

William F. Sharpe (1966) devised an index of portfolio performance measure,

Friedman Mean Rank:

1.6 Sources of Information:

1.6.1 Primary data resources:

1.6.2 Secondary data resources:

1.7 Limitations of the study:

1.8 Chapter Design:

Data Analysis and Interpretation

Source: Table no 4.1

Source: Table no 4.2

Source: Table no 4.3

Source: Table no 4.4

Source: Table no 4.5

Source: Table no 4.6

Source: Table no 4.7

Source: Table no 4.8

ANOVA for Risk Perception of Investment avenues with age

Null Hypothesis (H0) – There is no significant difference between risk perception on

Risk perception on Investment Significance

ANOVA for Return Perception of Investment avenues with age

Null Hypothesis (H0) – There is no significant difference between return perception on

Return perception on Investment Significance

ANOVA for Risk Perception on Investment avenues with marital status