CHAPTER -1

INTRODUCTION

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What is a mutual fund?

Figure: 1.1

Quite simply, a mutual fund is a mediator that brings together a group of people and invests
their money in stocks, bonds and other securities.

Each investor owns shares, which represent a portion of the holdings of the fund. Thus, a
mutual fund is one of the most viable investment options for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost.

The Securities and Exchange Board of India (SEBI) regulations 1993, defines a “mutual fund
as a fund in the form of a trust by a sponsor, to raise money by the trustees through the sale of
units to the public, under one or more schemes, for investing in securities in accordance with
these regulations”. A mutual fund is a professionally-managed form of collective investments
that pools money from many investors and invests it in stocks, bonds, short-term money
market instruments, and other securities.

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The flow chart below describes broadly the working of a mutual
fund:

A Mutual Fund is a trust that pools the savings of a number of investors who share common
financial goal investments may be in shares, debt securities, money market securities or a
combination of these. Those securities are professionally managed on behalf of the unit-
holders, and each investor holds a pro-rata share of the portfolio i.e. entitled to any profits
when the securities are sold, but subject to any losses in value as well.
The income earned through these investments and the capital appreciation realized are shared
by its unit holders in proportion to 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.

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Benefits of investing in a mutual fund

Investing in a mutual fund offers you a gamut of benefits

Some of them are as below:

• Small investments:
With mutual fund investments, your money can be spread in small bits across varied
companies. This way you reap the benefits of a diversified portfolio with small
investments.
• Professionally managed:
The pool of money collected by a mutual fund is managed by professionals who
possess considerable expertise, resources and experience. Through analysis of
markets and economy, they help pick favorable investment opportunities.
• Flexibility:
Investors also benefit from the convenience and flexibility offered by Mutual Funds.
Investors can switch their holdings from a debt scheme to an equity scheme and vice-
versa. Option of systematic (at regular intervals) investment and withdrawal is also
offered to the investors in most open-end schemes.
• Safety:
Mutual Fund industry is part of a well-regulated investment environment where the
interests of the investors are protected by the regulator. All funds are registered with
SEBI and complete transparency is forced.
• Low Transaction Costs: Due to the economies of scale (benefits of larger volumes),
mutual funds pay lesser transaction costs. These benefits are passed on to the
investors.
• Spreading risk:
A mutual fund usually spreads the money in companies across a wide spectrum of
industries. This not only diversifies the risk, but also helps take advantage of the
position it holds.
• Transparency and interactivity:
Mutual funds clearly present their investment strategy to their investors and regularly
provide them with information on the value of their investments. Also, a complete

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 portfolio disclosure of the investments made by various schemes along with the
proportion invested in each asset type is provided.
• Liquidity:
Closed ended funds can be bought and sold at their market value as they have their
units listed at the stock exchange. In addition to this, units can be directly redeemed to
the mutual fund as and when they announce the repurchase.
• Choice:
A wide variety of schemes allow investors to pick up those which suit their risk /
return profile.

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DISADVANTAGES OF MUTUAL FUNDS

The mutual fund not just advantage of investor but also has disadvantages for the funds. The
fund manager not always made profits but might creates loss for not properly managed. The
fund have own strategy for investment to hold, to sell, to purchase unit at particular time
period.
Costs Control Not in the Hands of an Investor

Investor has to pay investment management fees and fund distribution costs as a percentage
of the value of his investments (as long as he holds the units), irrespective of the performance
of the fund

No Customized Portfolios

The portfolio of securities in which a fund invests is a decision taken by the fund manager.
Investors have no right to interfere in the decision making process of a fund manager, which
some investors find as a constraint in achieving their financial objectives.

Difficulty in Selecting a Suitable Fund Scheme

Many investors find it difficult to select one option from the plethora of funds/schemes/plans
available. For this, they may have to take advice from financial planners in order to invest in
the right fund to achieve their objectives.

How are mutual funds classified

Every investor has a different investment objective. Some go for stability and opt for safer
securities such as bonds or government securities.

Those who have a higher risk appetite and yearn for higher returns may want to choose risk-
bearing securities such as equities. Hence, mutual funds come with different schemes, each
with a different investment objective.

There are hundreds of mutual fund schemes to choose from. Hence, they have been
categorized as mentioned below.

• By structure: Closed-Ended, Open-Ended Funds, Interval funds.

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 • By nature: Equity, Debt, Balance or Hybrid.
• By investment objective: Growth Schemes, Income Schemes, Balanced Schemes,
Index Funds.

Different types of mutual funds

There are hundreds of mutual fund schemes to choose from. Hence, they have been
categorized by structure, nature and investment objective.

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Types of mutual funds by structure

Close ended fund/scheme: A close ended fund or scheme has a predetermined maturity
period (eg. 5-7 years). The fund is open for subscription during the launch of the scheme for a
specified period of time. Investors can invest in the scheme at the time of the initial public
issue and thereafter they can buy or sell the units on the stock exchanges where they are
listed. In order to provide an exit route to the investors, some close ended funds give an
option of selling back the units to the mutual fund through periodic repurchase at NAV
related prices or they are listed in secondary market.

Open ended fund/scheme: The most common type of mutual fund available for investment
is an open-ended mutual fund. Investors can choose to invest or transact in these schemes as
per their convenience. In an open-ended mutual fund, there is no limit to the number of
investors, shares, or overall size of the fund, unless the fund manager decides to close the
fund to new investors in order to keep it manageable. The value or share price of an open-
ended mutual fund is determined at the market close every day and is called the Net Asset
Value (NAV).

Interval schemes: Interval schemes combine the features of open-ended and close-ended
schemes. The units may be traded on the stock exchange or may be open for sale or
redemption during pre-determined intervals at NAV related prices. FMPs or Fixed maturity
plans are examples of these types of schemes.

Types of mutual funds by nature

Equity mutual funds: These funds invest maximum part of their corpus into equity
holdings. The structure of the fund may vary for different schemes and the fund manager’s
outlook on different stocks. The Equity funds are sub-classified depending upon their
investment objective, as follows:

• Diversified equity funds

• Mid-cap funds
• Small cap funds
• Sector specific funds
• Tax savings funds (ELSS)

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Equity investments rank high on the risk-return grid and hence, are ideal for a longer time
frame.

Debt mutual funds: These funds invest in debt instruments to ensure low risk and provide a
stable income to the investors. Government authorities, private companies, banks and
financial institutions are some of the major issuers of debt papers. Debt funds can be further
classified as:

• Gilt funds
• Income funds
• MIPs
• Short term plans
• Liquid funds

Balanced funds: They invest in both equities and fixed income securities which are in line
with pre-defined investment objective of the scheme. The equity portion provides growth
while debt provides stability in returns. This way, investors get to taste the best of both
worlds.

Types of mutual funds by investment objective

Growth schemes

Also known as equity schemes, these schemes aim at providing capital appreciation over
medium to long term. These schemes normally invest a major portion of their fund in equities
and are willing to withstand short-term decline in value for possible future appreciation.

Income schemes

Also known as debt schemes, they generally invest in fixed income securities such as bonds
and corporate debentures. These schemes aim at providing regular and steady income to
investors. However, capital appreciation in such schemes may be limited.

Index scheme

These schemes attempt to reproduce the performance of a particular index such as the BSE
Sensex or the NSE 50. Their portfolios will consist of only those stocks that constitute the

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index. The percentage of each stock to the total holding will be identical to the stocks index
weight age. And hence, the returns from such schemes would be more or less equivalent to
those of the Index.

Organizational structure of mutual fund in India:

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ORGANISATION OF MUTUAL FUNDS
In accordance with the provisions of the Indian Trust Act, 1882 every mutual fund shall be
constituted in the form of a trust. SEBI Guidelines, 1992 spell out in clear terms the
establishment norms for mutual funds. It contemplated a three tier system for managing the
affairs of mutual funds. The three constituents are the sponsoring company, the trustees and
the assets management company (AMC). These three constituents were incorporated in SEBI
Regulations, 1996 for the management of mutual funds. Apart from these three, Custodians
and transfer agents are two more important constituents of mutual funds.
i. SPONSOR
Sponsor of a mutual fund is akin to the promoter of a company as he gets the fund registered
with SEBI. Under SEBI regulations, sponsor is defined as any person who acting alone or in
combination with another body corporate establishes the mutual fund. Sponsor can be Indian
companies, banks or financial institutions, foreign entities or a joint venture between two
entities. As Reliance mutual fund has been sponsored fully by an Indian entity.
Whereas, funds like Fidelity mutual fund and J P Morgan mutual fund are sponsored fully by
foreign entities. ICICI Prudential mutual fund has been set up as a joint venture between
ICICI Bank and Prudential plc. Both sponsors have contributed to the capital of the Asset
Management Company of ICICI Prudential. SEBI has laid down the eligibility criteria for
sponsor as it should have a sound track record and at least five years’ experience in the
financial services industry. SEBI ensures that sponsor should have professional competence,
financial soundness and general reputation off and integrity in business transactions. At least
40 percent of the capital of AMC has to be contributed by the sponsor. Also, they identify
and appoint the trustees and Asset Management Company. Sponsors are also free to get
incorporated an AMC as well as to appoint a board of trustees. They, either directly or acting
through trustees, will appoint a custodian to hold the fund assets. To submit trust deed and
draft of memorandum and articles of association of AMC to SEBI is also a duty of sponsor.
After the mutual fund is registered,
sponsors technically take a backseat.
ii. TRUSTEES
Under the Indian trust act 1882, a sponsor creates mutual fund trust, which is the main body
in creation of mutual funds. Trustees may be appointed as an individual or as a trustee
company with the prior approval of SEBI. As defined under the SEBI regulations,
1996,trustees mean board of trustees or Trustee Company who hold the property of mutual

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fund for the benefit of the unit holders. A Trustee acts as the protectors of the unit holders’
interests and is the primary guardians of the unit holders’ funds and assets. Sponsor executes
and registers a trust deed in favour of trustees. There must be at least 4 members in the board
of trustees and least two third of them need to be independent. For example, HDFC Trustee
Company Limited is the Trustee of HDFC Mutual Fund vides the Trust deed dated June
8,2000. It has five board members, of whom three are independent. To ensure fair dealings,
mutual fund regulations require that trustee of one mutual fund cannot be a trustee of another
one, unless he is an independent trustee in both the cases ,and has approval of both the
boards. AMC, its directors or employees shall not act as trustees of any mutual fund. Trustees
must be the person with experience in financial services and every trustee should be a person
of integrity, ability and standing. SEBI has also defined the rights and obligations of trustees.
Under their rights, trustees appoint AMC with the prior approval of SEBI. They approve each
of the schemes floated by AMC in consultation with the sponsors. They have the right to
obtain from the AMC, such information as they consider necessary to fulfill their obligations.
can even dismiss AMC with the approval of the SEBI and in accordance with the regulations.
Under their obligations, trustees must ensure that the transactions of mutual funds are in
accordance with the trust deed and its activities are in compliance with SEBI regulations.
They must ensure that AMC has all the procedures and systems in place, and that all the fund
constituents are appointed. Also, they must ensure due diligence on the part of AMC in the
appointment of business associates and constituents. Trustees must furnish to SEBI, on half-
yearly basis a report on the activities of the AMC.

iii. ASSEST MANAGEMENT COMPANY (AMC)

Asset Management Company is the body engaged to run the show of a mutual fund. The
sponsor or trustees appoint AMC to manage the affairs of the mutual fund to ensure efficient
management. SEBI desires that AMC must have a sound track record in terms of net worth,
dividend paying capacity, profitability, general reputation and fairness in transactions.
AMC is involved in basically three activities as portfolio management, investment analysis
and financial administration. Therefore, the directors of AMC should be expert in these
fields. SEBI’s regulation for AMC requires that it should have a net worth of at least Rs. 10
crore at all times and that a company can act as an AMC of one mutual fund only. Also, at
least 50percent of the members of the board of an AMC have to be independent and these can
be the director of another AMC also. Its chairman should be an independent person .AMCs
cannot engage in any business other than that of financial advisory and investment
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management. Its memorandum and articles of association have to be approved by the SEBI.
Statutory disclosures regarding AMCs operations should be periodically submitted to SEBI.
Prior approval of the trustees is required, before a person is appointed as a director on the
board of AMC. An AMC cannot invest in its own schemes until it is disclosed in the offer
document. Moreover in such investments, AMC will not be eligible for fees also. The
appointment of an AMC can be terminated by the majority of trustees or by 75 percent of unit
holders. Example: HDFC Asset Management Company Ltd. was approved by SEBI vide its
letter dated June 30, 2000 to act as an Asset Management Company of the HDFC mutual
fund. In terms of investment management agreement, the trustee appointed this AMC. HDFC
holds 60 percent of the capital and Standard Life Investments holds remaining 40 percent of
the capital of the AMC. Its board has 12 members of whom 6 are independent .Apart from
three constituents discussed above, Custodians and transfer agents are another two important
constituents of mutual funds. These have been discussed below.

iv. CUSTODIAN
SEBI requires that each mutual fund shall have a custodian who is independent and registered
with it. SEBI regulations provide for the appointment of a custodian by trustees of the mutual
fund who are responsible for carrying on the activities of safe keeping of securities and
participating in any clearing system on behalf of mutual fund. Custodian is not permitted to
act as a custodian of more than one mutual fund without the prior approval of SEBI. They
should be independent of the sponsors. As for example, ICICI Bank is a sponsor of ICICI
Prudential Mutual fund. It is also a custodian bank. But it cannot offer its services to ICICI
Prudential Mutual fund, because it is a sponsor of this fund .The appointment of any agency
as custodian depends upon its track record, quality of services, experience, transparency,
computerization and other infrastructure facilities. Custodians primarily perform securities
settlement functions. However, some also offer fund Accounting and valuation services. The
responsibilities of custodian include delivering and accepting securities and cash, to complete
transactions made in the investment portfolio of mutual funds. Custodians also track and keep
payouts and corporate actions such as bonus, rights, offer for sale, buy back offers, dividends,
interest and redemption on the securities held by the fund. They also look after that the
discrepancies and failure must be timely resolved.

v. TRANSFER AGENT

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Registrar and transfer (R&T) agents are responsible for creating and maintaining investor
records kept in numbered account called folios and servicing them. They accept and process
investor transactions and also operate investor service centre (ISCs) which acts as an official
points for accepting investor transactions with a fund. As for example, Computer Age
Management Services (CAMS) is the R&T agent for HDFC mutual fund. R&T functions
include issuing and redeeming the units and updating the unit capital account. R&T perform
creating, maintaining and updating the investors’ records and enabling their transactions such
as redemption, purchase and switches. Banking the payment instruments such as drafts and
cheques given by investors and notifying the AMC is also done by them. R&T send statutory
and periodic information to investors and process payouts to investors in the form of
dividends and redemptions.

SEBI Guideline of Mutual Fund

In India mutual fund play the role as investment with trust, some of the formalities laid down
by the SEBI to be establishment for setting up a mutual fund. As the part of trustee sponsor
the mutual fund, under the Indian Trust Act, 1882, under the trustee company are represented
by a board of directors.

Board of Directors is appoints the AMC and custodians. The board of trustees made relevant
agreement with AMC and custodian. The launch of each scheme involves inviting the public
to invest in it, through an offer documents.

Depending on the particular objective of scheme, it may open for further sale and repurchase
of units, again in accordance with the particular of the scheme, the scheme may be wound up
after the particular time period.

1. The sponsor has to register the mutual fund with SEBI.

2. To be eligible to be a sponsor, the body corporate should have a sound track record and a
general reputation of fairness and integrity in all his business transactions.

SEBI and/or the RBI (in case the AMC is promoted by a bank) regulates all Asset
Management Companies (AMCs).

In addition, every mutual fund has a board of directors that represents the unit holders'
interests in the mutual fund.

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TERMS RELATED TO MUTUAL FUNDS

Net asset value (NAV)

Net Asset Value (NAV) is the actual value of one unit of a given scheme on any given
business day.

The NAV reflects the liquidation value of the fund's investments on that particular day after
accounting for all expenses. It is calculated by deducting all liabilities (except unit capital) of
the fund from the realizable value of all assets and dividing it by number of units outstanding.

Sale price

It is the price paid by an investor when investing in a scheme of a Mutual Fund. This price
may include the sales or entry load.

Redemption/repurchase price

Redemption or Repurchase Price is the price at which an investor sells back the units to the
Mutual Fund. This price is NAV related and may include the exit load.

The role of a fund manager

Fund managers constantly monitor market and economic trends and analyze securities in
order to make informed investment decisions.

They play a vital role in implementing a consistent investment strategy that is in synergy with
the goals and objectives of the fund.

Sector funds

These are funds that invest exclusively in stocks that fall into a certain sector of the economy.
This scheme is perfect for investors who have decided to confine their risk and return to one
particular sector. Thus, an Infrastructure Fund would invest in companies that manufacture
and support companies which deal with construction, raw material production, etc.

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Switching facility

Investors have an option of transferring the funds amongst different types of schemes or plans
with a switching facility.

Investors can opt to switch units between Dividend Plan and Growth Plan at NAV based
prices. Investors can also switch into/from other select open-ended schemes currently within
the fund family or schemes that may be launched in the future at NAV based prices.
However, investors need to be careful of entry and exit loads while switching between Debt
and Equity Schemes. There is an entry load on switching from a Debt Scheme to Equity
scheme, while there is none on the other way round.

Registrar

A Registrar is responsible for accepting and processing the unit holders' applications,
carrying out communications with them, resolving their grievances and dispatching Account
Statements to them.

In addition, the registrar also receives and processes redemption, repurchase and switch
requests. The Registrar maintains an updated and accurate register of unit holders of the Fund
and other records as required by SEBI Regulations and the laws of India. An investor can get
all the above facilities at the Investor Service Centers of the Registrar.

Employee Unique Identification Number (EUIN)

The EUIN is a seven digit unique alpha numeric number that is issued by AMFI to all the
employees/relationship manager/sales persons of the distributor, interacting with the investor
for the sale of Mutual Fund products. It is necessary that the EUIN be provided for
transactions that are advisory in nature. This means that transactions, for which advice is
sought by the investor from a distributor, should be accompanied by the EUIN.AMFI has
allotted EUIN to all ARN holders and their employees who interact with the investor for the
sale of mutual fund products. EUIN is alpha-numeric, with one alphabet and six numerals, for
example E123456

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Systematic Investment Plan

SIP is a method of investing a fixed/regular sum every month or every quarter. With the
growing everyday expenses, it becomes difficult to accumulate a considerable sum which can
be invested at one go.

But with an SIP, you can start with a modest amount of Rs. 250 every month and this can be
invested in any scheme of your choice as most mutual funds have this facility for their
schemes.

Why is SIP a great investment option

The biggest advantage of an SIP is the habit of regular, disciplined savings. Every month, like
all other EMIs, this also gets deducted from the bank a/c through electronic clearing service,
which is convenient. A SIP does not pinch the pocket much if started at an earlier stage.

• Another benefit is that when investing through SIP, it is not necessary to time the
market. Investments will be made systematically every month or quarter depending on
the option. It ensures investing in all phases of the market where more units will be
accumulated during a bearish phase and a lesser number of units in a bullish phase.
This way, the investor enjoys the benefit of rupee cost averaging under this method.
• With an SIP investment, you give your savings the power of compounding.

ORIGIN AND GROWTH OF MUTUAL FUNDS

Mutual fund originated in the western countries. First mutual fund named, ‘Foreign
and Colonial Government Trust’ was set up in United Kingdom (U.K.) in 1868. This
trust was established to spread risk for investors over large number of securities. In
U.S. the idea took root in the beginning of the 20th century and in 1924, first open-
ended investment company was formed. A major setback for U.S.A. mutual funds
was stock market crash of 1929.Enactment of the Securities and Exchange
Commission (SEC) in 1933 and the investment Company Act in 1940 led to the
recovery and regulation of mutual funds in the U.S.A.
• The post World War-II period witnessed a boost in mutual funds as people not having
the knowledge of how to invest on their own and with the expectation to reap the

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 benefit of economic growth flocked to mutual funds. In Canada, during the decade of
1920 many close ended investment companies were organized which were generally
known as investment trusts. The first mutual fund in Canada to issue its share to
general public was the Canadian Investment Fund in 1932. In recent years, mutual
funds in Japan and Far East countries have been showing excellent performance.
Countries in pacific area like Hong Kong, Thailand, Singapore and Korea have also
entered this field long way. Netherlands and Mauritius are emerging as tax havens for
off-shore mutual funds. Thus, mutual funds culture is now global in scope. In India,
concept of mutual funds took root in 1963 with the formation of UTI mutual fund at
the initiative of Government of India and Reserve Bank of India (RBI). In the
year1992, SEBI act was passed. The SEBI commend mainly three statutory objectives
as: (a) to protect the interest of investors in securities; (b) to regulate the securities
market; (c) to promote the development of securities market [44]. For mutual funds,
SEBI formulates policies and regulates them to protect the interest of investors. First
mutual fund regulations were notified by SEBI in 1993, which were then fully revised
in 1996 and have been amended after from time to time. As per AMFI, the history and
growth of mutual funds in be broadly divided in to four phases as discussed below:

HISTORY OF MUTUAL FUND’S IN INDIA

• 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 of India. The
history of mutual funds in India can be broadly divided into four distinct phases

• First Phase - 1964-1987

• Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set
up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from
the RBI and the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first scheme launched by
UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets
under management.

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• 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 Canra bank Mutual Fund (Dec 87), Punjab
National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of
India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund
in June 1989 while GIC had set up its mutual fund in December 1990.
• At the end of 1993, the mutual fund industry had assets under management of Rs.
47,004 crores.

• Third Phase - 1993-2003 (Entry of Private Sector Funds)

• With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice of fund families. Also, 1993
was the year in which the first Mutual Fund Regulations came into being, under
which all mutual funds, except UTI were to be registered and governed. The erstwhile
Kothari Pioneer (now merged with 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.
• The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with total
assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets
under management was way ahead of other mutual funds.

• Fourth Phase - since February 2003

• In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs. 29,835 crores as at the end of
January 2003, representing broadly, the assets of US 64 scheme, assured return and
certain other schemes. The Specified Undertaking of Unit Trust of India, functioning
under an administrator and under the rules framed by Government of India and does
not come under the purview of the Mutual Fund Regulations.

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• The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76,000
crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth.
• LEGAL AND REGULATORY ENVIRONMENT
• The legal and regulatory framework governing mutual fund industry is broadly
classified under two heads:
• i. Regulatory Bodies/ Agencies involved in regulating various elements of the mutual
fund industry
• ii. The specific provisions that seek the protection of investor interests.

• REGULATORY BODIES/ AGENCIES

• i. Securities and Exchange Board of India (SEBI)
• Securities and Exchange Board of India (SEBI) is entrusted with the role of regulating
and supervising mutual funds in India. It has been set up by an Act of Parliament
namely the SEBI Act, 1992 and is supervised by the Ministry of Finance. As the
regulator of Indian capital market, SEBI came out with its first mutual fund
regulations in 1993 that were revised REGULATORY BODIES/ AGENCIES
• i. Securities and Exchange Board of India (SEBI)
• Securities and Exchange Board of India (SEBI) is entrusted with the role of regulating
and supervising mutual funds in India. It has been set up by an Act of Parliament
namely the SEBI Act, 1992 and is supervised by the Ministry of Finance. As the
regulator of Indian capital market, SEBI came out with its first mutual fund
regulations in 1993 that were revised AMFI certification examination has been made
mandatory for all the distributors and agents of mutual funds. Mutual funds need to
specify certain information about their scheme in the offer document as the name of
directors of Asset Management Company, trustees and the contact person whom unit
holders may approach in case of any query, complaints or grievances. Investors can
also approach SEBI for rectifying their complaints after which, SEBI takes up the
matter with the concerned mutual fund and follows up with them till the matter is
resolved.
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• ii. Reserve Bank of India (RBI)
• RBI is the regulatory authority of banks in India. Banks can function as sponsors
,custodians and distributors of mutual funds. For performing these functions, they are
subject to regulations stipulated by RBI from time to time. RBI is the regulator of the
government securities and money markets in India. Since mutual funds may invest in
these securities, they are required to abide by the RBI Regulations as may be
applicable.
iii. Stock Exchanges
• It is mandatory for close-ended funds to be listed on a stock exchange. Mutual funds
also offer exchange traded funds (ETF) that can be bought and sold on a stock
exchange. For these funds, the mutual fund will enter into a listing agreement with
stock exchange and subject itself to the necessary regulatory and disclosure
requirements.
• iv. Association of Mutual Funds in India (AMFI)
• AMFI is the apex body of all the registered asset management companies (AMC). It
was incorporated on August 22, 1995 as a non profit organization. All the AMCs that
have launched mutual fund schemes are its members. The objective of AMFI is to
promote
• investor’s interest by defining and maintaining high ethical and professional standards
in the mutual fund industry. It recommends the best business practices and code of
conduct for its members. AMFI represents the mutual fund industry regarding its
various matters to
• regulators and policy makers as SEBI, RBI and Government of India. It also conducts
various awareness programmes to promote the understanding of mutual funds and
disseminates information on mutual fund industry .It is mandatory for intermediaries
to register themselves with AMFI after completing the certification exam and obtain
AMFI Registration Number (ARN). A distributor, whether individual or corporate
will be empanelled by an AMC only after obtaining an ARN. The AMFI code of
ethics (ACE) set out the standards of good practices to be followed by the asset
management companies in their operations and dealings with investors, intermediaries
and the public. AMFI has also framed a set of guidelines and code of conduct as
AMFI Guidelines
• and Norms for Intermediaries (AGNI), for intermediaries who sell and distribute
mutual fund products. According to SEBI it is mandatory for all distributors to follow
22
this code of conduct. If it is violated by any distributor, AMFI is authorized by SEBI
to seek explanation ,issue warnings or cancel the registration of that intermediary.

23
CHAPTER 2:
REVIEW OF
LITERATURE

24
Ratan (2002) in his study examined in detail the prevalent practices in management of mutual
funds in India. The researcher carried out comparative performance evaluation of the selected
mutual funds. Total 10 mutual funds were selected randomly. Standard Deviation, Beta,
Alpha, R-Square, Sharpe measure and Treynor’s measure were used for the analysis of the
data. It was found that Indian investors including mutual fund houses have typically operated
with a firm belief that the principles underlying capital markets and portfolio theory are not
applicable to the Indian Capital Market. However, the scenario is changing rapidly with the
entry of young, professional and trained manpower in the financial service industry. It was
revealed that as many as 50 percent of the respondent mutual funds are not managing risk
properly. Fund managers are not taking due care for minimising the risk and are in a race to
post higher and higher returns during the phase of bull-run. It was also depicted that
managers and trustees of the mutual funds are not much careful in taking risk while making
investments and mutual funds houses do not follow the portfolio theory in true spirit.

Jyothi (2012) in her research work evaluated and compared the performance of Public and
Private Sector Mutual Funds and extracted the factors that influences the selection of mutual
fund schemes and products by the investors. It was found that investors select the particular
fund/scheme on the basis of Product related factors, Fund Sponsor related factors and
Investor Services related factors which are the main broad factors and these broad factors are
based on some minor factors. The study revealed that majority of the Public Sector Schemes
underperformed in comparison with that of Private Sector Schemes. The researcher described
that the inability to fix the responsibility on the fund managers and fluctuations in the market
conditions led to the poor performance of mutual funds. Prajapati and Patel (2012) in their
study evaluated the comparative performance of mutual funds of 5 top Assets Management
Companies. They undertook 5 schemes for study from each AMC. BSE-Sensex was taken as
the benchmark index. The Yield to Maturity of 364 days T-bill was taken as the risk-free
return. The researcher used Treynor’s Ratio, Sharpe Ratio, Jensen’s Ratio and Fama’s
measure in the study for comparative analysis. It was found that HDFC and Reliance Mutual
Fund have performed well as compared to the benchmark return. ICICI Prudential and UTI
Mutual Fund have lower level of risk as compared to HDFC and Reliance Mutual Fund. The
values of Beta Coefficient were less than one for all the selected mutual fund companies.
Sharpe’s Index of HDFC Mutual Fund was higher than others, hence it showed better
performance than other mutual funds. The results ofTreynor’s index revealed that the HDFC
and Reliance Mutual Fund offers better return than others for the same level of risk exposure.

25
Garg (2014) carried out her research work to evaluate the selected mutual funds in India with
the help of standard performance models like Sharpe, Treynor, Jensen, Eugene Fama etc. The
performance of mutual funds from investor’s point of view was also studied. The secondary
data for the period 2002-03 to 2012-13 was taken for analysis. Total 50 schemes were studied
by the researcher. It was observed that 68.5 percent investors like to invest their savings in
the real estate and 51.2 percent investors prefer to invest in Balanced Income and Growth
Funds. Further, it was found that 78.8 percent of the investors go for tax benefits, 59 percent
prefer safety and 48.9 percent for diversification objective. It was also observed that UTI
regulated funds before 2003 performed better than SEBI regulated funds. However, the
performance of UTI funds declined drastically when the UTI funds came under the regulation
of SEBI after 2003.

Nomani and Ahmad (2014) in their study examined and analysed the equity mutual fund
schemes. Large Cap, Small Cap, Mid Cap and Diversified Equity Mutual Fund Schemes
which were ranked one by CRISIL were taken for the study. The researcher used Standard
Deviation, Sharpe Ratio, R-Squared, Expense Ratio and Corpus Size of funds for analysis. It
was found that the Large Cap Schemes were generating average return with respect to their
benchmark but the values of their Standard Diversified Schemes were performing
outstanding. Small and Mid Cap Schemes were also generating higher returns but at a higher
risk.

Pal and Chandani (2014) attempted to make a critical analysis of top 10 equity funds in India.
Various parameters like CAGR, S.D., Expense Ratio and Sharpe Ratio etc. were used to
compare the performance of the schemes and it was found that HDFC Midcap Opportunities
(G) is the best mutual fund scheme among all.

Qamruzzaman (2014) studied 32 Growth Oriented Mutual Funds of Bangladesh on the basis
of monthly return in comparison to benchmark returns. The author used Jensen’s Alpha,
Treynor’s Index and Sharpe Ratio for analysis of the data. The researcher found that growth
oriented mutual funds had not performed better. It was also found that most of the funds were
not highly diversified. The highly diversified mutual funds helped in reduction of relative risk
of the funds. Further, it was found that the fund managers were poor in terms of their ability
of market timing and selectivity.

Adhav and Chauhan (2015) in their study made a comparison between mutual fund schemes
of selected companies. The funds include Equity, Debt and Hybrid Schemes. Total 390

26
schemes were studied. It was found that the sectorfunds in Equity Segment were the best
performer, whereas Infrastructure funds followed by Large Cap Equity Funds were the worst
performers. It was found that Debt Funds and Hybrid Funds outperformed the market during
the period of study.

Chaturvedi (2015) in her research evaluated the performance of selected Public and Private
Sector mutual funds by using Sharpe, Treynor and Jensen’s measures with the help of data
for the period 2010 to 2013. The study covers 4 selected schemes of Public and Private
Sector Mutual Funds. State Bank of India and UTI mutual funds were taken from Public
Sector Mutual Fund Houses and HDFC & Birla Sunlife Mutual Fund Houses were taken
from Private Sector Mutual Fund Houses. It was observed that the Private Sector Mutual
Fund Houses earn more return on equity funds as compared to Public Sector Mutual Fund
Houses. Debt funds have performed well during the review period. All the funds have
recorded a better return in comparison to the market. Similarly, the Hybrid funds have
recorded a positive performance throughout the review period.

Ayaluru (2016) studied the performance of top ten mutual fund schemes of Reliance Mutual
Fund. BSE-Sensex and Nifty-50 were taken as benchmark indices. The study analysed the
fund’s performance for the period August 2009 to July 2014. Return on 91 days T-Bill was
taken as risk free return. It was found that all the schemes are beating their benchmark
returns. The author suggested the Tax Saver ELS Scheme for risk aversers, Reliance Small
Cap Funds for medium risk takers and Reliance Banking Funds for high risk takers while
making investment.

Rao (2016) undertaken a research work with the objective to study the relationship between
the performance of market index with growth schemes, to evaluate the risk of growth
schemes, to study the factors influencing choice of investment in mutual funds by the fund
managers and to study the attitude of investors and brokers towards investment in mutual
funds. The data from 2004-05 to 2014-15 was taken for the study. Total 12 growth schemes
were taken for the study and primary data was collected through questionnaire from brokers
and investors. The RBI Bank rate was taken as the risk-free return for the study. CAPM,
Covariance, Coefficient of Correlation, Coefficient of determination, CAGR, CGR, Rank
Correlation, Kendall’s Coefficient of Concordance, Chi-square test, Z test, ANOVA, Sharpe
Ratio, Treynor Index, Jensen and Eugene Fama’s decomposition of total return etc. were used
for the analysis of the data. The study reveals that the investors preference towards financial

27
assets is increasing. The sample schemes outperformed the market in terms of absolute
returns in many years but all the sample schemes and the market did not provide adequate
return to cover risk-free return and total risk of the scheme. Schemes in general performed
better than the market. Further the researcher found that all the sample schemes were not well
diversified as was evident from the difference in the Jensen Alpha and Sharpe Differential
return. Further it was found that the investors had a high preference for bank deposits while
brokers preferred equity shares. Investors select mutual funds on the basis of regular income,
safety, profitability and tax benefits. Both the investors and brokers prefer growth schemes
followed by income schemes. Brokers and agents were the main source of information about
mutual funds. Investors prefer mutual funds due to its profitability whereas brokers preferred
mutual funds for its portfolio diversification, liquidity of investment and professional
management. Quality of service was the most important determinant of success for mutual
funds.

Das (2017) conducted his research with the objectives to assess the trend of growth of Mutual
Funds industry in India during the period from 2004-05 to 2014-15, to examine the
performance of the fund houses in terms of selected parameters, to delineate the prevalent
regulatory framework with regard to the mandatory disclosure by fund houses,to examine the
disclosure practices of these houses and finally to find whether any association exists
between the disclosure practices and the performance of Fund Houses in India. The period of
2007-15 was specifically considered for the study. Total 8 fund houses were purposively
taken for the study. Average Assets under Management (AAUM) and the Net Resource
Mobilisation were taken as the indicators of the aggregate performance of the mutual funds.
Further Attempt was made to seek answer to the question - “whether a higher performance-
ranking of a fund house also means for it a higher rank in terms of responsiveness to statutory
disclosure-requirements and vice-versa”. Cramer’s V test was used for ascertaining the
possibility of existence of association between the stated two sets of variables. It was found
that HDFC Mutual Fund had the largest share (36.5 percent) in total net accretion to AAUM
followed by Birla Sun Life Mutual Fund (27.6 percent). LIC Nomura Mutual Fund had
negative net accretion to AAUM during the period of study. In terms of Total Net Resource
Mobilisation, HDFC Mutual Fund was the topper followed by Birla Sun Life Mutual Fund.
Again, LIC Nomura Mutual Fund was found to mobilise the lowest amount of net resources.
HDFC fund was ranked at the top on the basis of Composite Performance Index followed by
Birla Sun Life Mutual Fund. LIC Nomura Mutual Fund was ranked 8th in terms of

28
Composite Performance Index too. It was found that none of the selected fund house was
making full disclosure of the required information. Cramer’s V value against both the
performance parameters vis-à-vis disclosure levels was 1 which was broadly indicative of the
existence of an association between performance and disclosure levels.

Jegadeeshwaran and Kumar (2017) analysed the Net Resources Mobilised by Bank-
sponsored and FI-sponsored mutual funds in India and the researchers tried to find out the
relationship between the UTI and other Mutual Fund institutions. The data was analysed with
the help of CAGR, One Sample t-test, ANOVA and regression analysis. It was found that
there is no significant difference between the returns of Bank sponsored mutual funds and FI-
sponsored mutual funds. It was also found that there is no significant relationship between the
Net Resources mobilised by UTI and the other mutual funds.

Chakraborty (2018) conducted his research with the objective to evaluate the performance of
selected Sector-Specific mutual fund schemes. The study is based on 27 sector-specific
mutual fund schemes spread over five different sectors. The data for the period 2009 to 2016
was taken for analysis. Standard Deviation, Sharpe Ratio, Sortino Ratio, Treynor Ratio, Beta,
Jensen’s Alpha, M2 Measure and Fama’s Decomposition were used for analysis and
comparison of the data. In addition Kendall’s Tau Test has been applied to the risk-adjusted
performance measures. It was found that Kotak PSU Bank ETF was the best mutual fund
scheme among the schemes under study on the basis of three indicators viz. NAV, CAGR
and Simple Return. Invesco India Banking was the worst performer in terms of efficiency. On
the basis of risk-adjusted performance analysis, ICICI Prudential Banking and Financial
Service Regular was the best performer and DSPBR Technology.com Regular was the worst
performer.

Poddar (2019) conducted her research to evaluate the risk adjusted performance of the
sampled schemes and to examine the stock selection and diversification abilities of the funds
managers through Sharpe Differential Return Measure and Fama’s break up of returns in
terms of beta, diversification and selectivity. Total 36 open-ended equity schemes were taken
for the study and data for the period 2007 to 2017 was taken for the analysis. Statistical
toolse.g. S.D., beta, Coefficient of Determination, CAGR and specific measures e.g. Sharpe
measure, Treynor’s measure, MM Approach, Sharpe Differential Return Measure and Fama-
Impact of Beta, Impact of Diversification and Impact of Selectivity etc. have been used in the
study for the analysis of the data. It was found that Reliance Banking Fund-Growth Plan-

29
Growth Option was the highest return earner and ICICI Prudential FMCG Fund - Growth was
the least risky scheme with the lowest standard deviation and beta. On the basis of average
performance ranking analysis, Reliance Banking Fund- Growth Plan -Growth Option hold the
first position with the lowest average rank and Aditya Birla Sunlife New Millenium Fund-
Growth-Regular plan and UTI Top 100 Fund-Growth Option were the worst performer with
the highest average rank. It was found that Reliance Pharma Fund-Growth Plan-Growth
Option has the highest net selectivity value portraying better ability of the fund manager in
respect of security selection and diversification.

Vasani (2020) studied the profitability of mutual fund companies, returns to the shareholders
of the companies and comparative analysis of performance of selected mutual funds.
Researcher applied Profit Before Tax Ratio, Profit After Tax Ratio, Cash Profit Ratio,
Operating Profit Ratio, Return on Equity Share capital Ratio, Return on Equity Shareholders
Fund, Earning Per Share, ANOVA and F-Test for the analysis of data. The period of the
study was 10 years from 2008-09 to 2017-18. Top 15 mutual fund companies having highest
AUM and having history of at least 10 years were taken for the study. The financial data
reveals that HDFC Mutual Fund Assets Management Company have generated the highest
average Revenue Income. The lowest Coefficient of Variance was in TATA which indicate
highest stability in Revenue Income whereas the highest CV was reported for Kotak which
indicate lowest stability. The highest PAT Ratio was for HDFC in 2012-13. It was revealed
that all the selected companies under the study were having positive Cash Operating Ratio
during study period.Bala (2021) analysed the growth and performance of open-ended
Equity/Growth sectoral mutual fund schemes in India from 2010 to 2019. Total 11 mutual
fund schemes consisting 2 from Public Sector Mutual Funds and 9 from Private Sector
Mutual Funds were taken for the study. CAGR, Sharpe measure, Treynor measure, Jensen
measure, Fama and Sortino measure, One way ANOVA, Coefficient of Correlation and
Independent sample t-test were used for the analysis of data. It was found that majority of
sectoral schemes have outperformed the market in terms of quarterly returns and benchmark
indices. The performance of sample schemes was found in the same direction as that of the
market as evident from the positive beta values. No statistically significant difference was
found between the returns of Public and Private Sector Mutual Fund Schemes. Gaggar (2021)
undertook her research with the major objective to determine the performance of equity and
hybrid mutual fund schemes. Total 22 Equity Schemes of 9 different mutual fund houses
were analysed. It was revealed that most of the respondents look for expert advice for making

30
an investment and the investor compare the performance of a particular fund with the
Benchmark Portfolio and comparing with the Performance of similar schemes of other funds.
A strong positive correlation was found between public and private sector mutual fund
schemes in India.

Malakar (2021) undertook his research with the main objective to make a comparative
analysis of Equity, Balance and Income Schemes of mutual funds and to examine the
comparative performance of selected Public and Private Mutual funds. A period of 10 years
ranging from 2010-2019 was taken to examine the performance of IndianMutual Fund
industry and includes 5 Public Sector Mutual Funds and 5 Private Sector Mutual Funds. From
each company, 5 schemes were taken from Equity, Balance and Income schemes. Mean,
Standard Deviation, risk adjusted return, Sharpe Ratio, Regression Analysis and Karl
Pearson’s co-efficient of Correlation were used for analysis of the data. It was revealed from
the study that the mutual fund companies are more interested in launching of income schemes
due to its high level of inflows and these companies are not very much excited in launching
of balanced schemes. In terms of resource mobilisation, income schemes outperform over
balanced and equity schemes. Further it was found that Private Sector Mutual Funds
outperform Public Sector Mutual Funds in equity and hybrid scheme segment whereas public
sector slightly outperforms the private sector in debt schemes. Rokade (2021) analysed the
performance of 15 mutual fund equity schemes run by top five mutual fund companies on the
basis of risk and return during the period 2009-2019. Large Cap Funds with growth option
were taken for the study. Sharpe ratio, Treynor’s measure and Jensen’s Alpha were used for
analysis of the schemes. On the basis of Sharpe Ratio, HDFC Top 200 was assigned the first
rank followed by Birla Top 100, ICICI Top 100 and Reliance Top 200. On the basis of
Treynor Measure, HDFC Top 200 was assigned the first rank followed by Birla Top 100,
ICICI Top 100 and Reliance Top 200. On the basis of Jenson’s Alpha, HDFC Top 200 again
remain on top followed by Birla Top 100, Reliance Top 200 and ICICI Top 100.

Karunamoorthy (2022) carried out her research to make a comparative study between public
sector companies and private sector companies and to understand the variation between the
returns under different groups. Further the risk and return analysis was carried out with the
help of Treynor’s index, Sharpe’s index and Jenson’s alpha. Further an attempt was made to
identify the investor’s attitude towards investment, their risk tolerance capacity and their
level of preferences towards selection of mutual fund company with respect to willingness to
take risk. The study shows that investors evaluate important aspects such as service quality,

31
fund quality, the core of the product and other variables while investing in mutual fund
products. Further, it was found that all the schemes under study were performing well. It was
also revealed that private sector mutual fund companies were able to earn superior returns
than their public sector counterparts but the investors prefer public sector mutual funds due to
safety concern.

Khinchi (2022) found that there is a significant difference in the performance of selected
schemes and also there is a significant difference in the returns generated by schemes and
their respective benchmark index. Similarly, it was revealed from the study that Age of Fund,
Age of Fund House, Expense ratio, Portfolio Turnover Ratio, Sharpe Ratio, Jensen Alpha
have no significant impact on performance. It was found that Standard Deviation, Beta and
AUM have a significant impact on fund’s performance.

32
CHAPTER-3

RESEARCH METHODOLOGY

33
RESEARCH METHODOLOGY

Research methodology is a methodology for collecting all sorts of information & data
pertaining to the subject in question. The objective is to examine all the issues involved &
conduct situational analysis. The methodology includes the overall research design, sampling
procedure & fieldwork done & finally the analysis procedure. The methodology used in the
study consistent of sample survey using primary data. The primary data has been collected
with the help of questionnaire. The questionnaire has been drafted & presented by the ICICI
Securities, which was in online mode.

Responsibilities

➢ Firstly I have to fix the meetings with the existing customer of ICICI Securities.
➢ I have to meet ICICI Securities customers and have to tell them about mutual
fund and its benefit.
➢ I have to show mutual fund and ICICI Direct site demo to customers.
➢ After the demo video we ask our clients to fill up 3 questions as a feedback
which is a kind of semi interview.
➢ If customer has any kind of complain or suggestion, I have to make report and
submit it to branch manager.

SAMPLING FRAMEWORK:
➢ Sample Size: - Sample of 60 customers of ICICI Securities will be taken into study
and their data will be collected.
➢ Sample Area: -Sampling area will be taken around Delhi –NCR.
➢ Duration of project: - Time will be taken to complete the project is 2 months

TOOLS FOR ANALYSIS

➢ STATISTICAL TOOL

• STANDARD DEVIATION

34
Standard Deviation is a statistical tool, which measures the variability of returns from the expected
value, or volatility. It is denoted by sigma(σ) . It is calculated using the formula

mentioned below: Where, is the sample mean, xi’s are the observations (returns), and N is the
total number of observations or the sample size.

• BETA

Systematic risk is measured in terms of Beta, which represents fluctuations in the NAV of the fund
vis-à-vis market. The more responsive the NAV of a Mutual Fund is to the changes in the market;
higher will be its beta. Beta is calculated by relating the returns on a Mutual Fund with the returns
in the market

➢ RATIO ANALYSIS TOOL

• SHARPE RATIO :-
In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is a
ratio of returns generated by the fund over and above risk free rate of return and the total risk
associated with it.
Sharpe ratio = Risk Premium/ Total Risk
• TREYNOR’S RATIO :-
Treynor’s ratio is a measurement of the returns earned in excess of what could have been
earned on a riskless investment. Higher the Treynor Ratio is meant the better portfolio.

TREYNOR’S RATIO =Risk Premium/Systematic Risk Index

DATA COLLECTION:
Collection of data (primary) by:

➢ Questionnaire
➢ Face to face interaction

PRIMARY DATA
35
 It is the first hand information collected directly from the respondents. The tool used
here is questionnaire. Primary Data is collected through survey among the people who
already invested and willing to invest in mutual funds.

SECONDRY DATA

Secondry data is collected through various books and websites .

Work done during internship

➢ Total number of Customer 500
➢ Number of customer who gave appointment 30
➢ Number of customer who were not interested 194
➢ Number of customer who were not contacted 255
➢ Number of customer who were not in Delhi 21

DATA ANALYSIS
➢ After data collection, I am able to analyze customer views, perception and opinions
related to mutual fund and from this, ICICI Securities will come to know the customers’
requirements

COLLECTION OF RESPONSES FROM THE RESPONDENTS:

Rate the Demo

Are you
Sno on the scale of
Planning to Any Feedback /
Name 1-5 (5- Highest
Invest in Suggestion
Score, 1 -
MF
Lowest Score)

36
1 Harvinder Luthra 5 No NA
2
AbhishekTyagi 5 No NA
3 Goutam Kalita 5 No NA
4 Ehtesham
Hussain 5 No NA
5 Madhu
Srivastava 4 No NA
6 Zulfiqar Hussain 5 No NA
7 Sumit Dhawan 5 No NA
8 Zulfikar Ali 5 No NA
9 Nitish
Yaduvanshi 5 Yes NA
10 Ashish Jain 5 No NA
11 Sudip Sinha 5 Yes NA
12 Ranjeet Kumar 4 No NA
13 Geetanjali Kirti 5 Yes NA
14 Prakhar Mishra 5 No NA
15 I am intrested in
mutual funds but i
already invest in
Alika Kumari 5 Yes mutual funds of icici.
16 Punita Sharma 4 No NA
17 Amit Sharma 4 No NA
18 Uttam Bisht 5 No NA
19 Mohd Afroz 4 No NA
20 Anil Thakur 5 No NA
21 Aastha Bajaj 5 No NA
22 Gayatri explained
regarding investment
on mutual fund is very
good. Really
Deepak Tarasia 5 Yes appreciated.

37
23 i already invest in
mutual funds .. i don’t
want any new
Abhijit Roy 5 No investment .
24 Amar Srivastava 5 No NA
25 Akansha Jain 4 No NA
26 Ganga Sati 4 No NA
27 Brij Bhushan 4 No NA
28 Syed Husain
Naqvi 4 No NA
29 Aditya Kher 5 No NA
30 i already invest in
Santosh Singh 4 No mutual funds . thanks.
31 Safdar Azizi 4 No NA
32 Arpit Bansal 4 No NA
33 Farrukh Kidwai 5 No NA
34 Deepak Kumar 5 No NA
35 Pawan Kumar 3 No NA
36 Vineet Saxena 5 No NA
37 Krutika Ravi 4 No NA
38 Rakesh Jha 5 No NA
39 Demo was good but i
don’t have Demat
account , and i don’t
Pradipta want to invest in
Bandyopadhyay 4 No mutual funds .
40 Ranjeev Singh 5 Yes I all ready invested
41 Salil Verma 5 Yes NA
42 Rovin Agarwal 4 No NA
43 Mahesh Rathour 5 No NA
44 Saurabh Kumar 5 Yes NA
45 Pramod Dube 5 No NA
46 Jasmeet Singh 4 No NA

38
47 Bhumika Kanojia 4 No NA
48 Ritwik Namtirtha 5 No NA
49 Indresh Kumar 4 No NA
50 Intekhab Ahmad 5 No NA
51 Krishna Bandi 4 No NA
52 Shadab Arshi 4 No NA
53 Dinesh Kumar 5 No NA
54 Rashi Verma 5 No NA
55 Proper guidance is
needed , that in which
Chiraqudeen mf we should invest to
Khan 4 Yes get better returns
56 Mansoor Alam 4 No NA
57
Shankar Kumar 4 Yes demo was good
58 Shweta Singh 4 Yes NA
59 Nalini Goyal 5 Yes NA

60 Mormukat Tomar 4 No NA
61 Mohammad
Malik 5 No NA
62 Mohd Alam 4 No NA
63 right now i am not
intrested in mutual
Hamid Raza 5 No funds

OBJECTIVE OF STUDY
➢ To create awareness to its customer about Mutual Fund.
➢ To make them aware of online portfolio of ICICI Direct.

39
 ➢ To know about response of the customer for future investments in mutual fund.
➢ To investigate how efficiently the hard earned money of the investors.
➢ To analyze the performance of any mutual fund scheme offered in the ICICI Bank.
➢ To study the performance of Mutual fund with the help different parameters such as
Standard Deviation, Beta, Sharpe Ratio, Treynor Ratio, Jenson alpha and NAV
Calculation mutual funds

SCOPE OF THESTUDY
➢ All the analysis and suggestions are based on the analysis of the primary data, which I
will collect with the help of questionnaire.
➢ Mutual fund is booming sector now a days and it has lot of scope to generate income
and providing return to the investor. A large number of new players have entered the
market and trying to gain market share in this rapidly improving market.
➢ The research was carried on in KAILASH COLONY . I had been sent at kailash
colony branch of ICICI Securities where I completed my project work.

PROBLEM OF THE STUDY

➢ Most of the customers of ICICI Mutual Fund simplified are inactive for long time.
➢ For improving their service.
➢ For creating awareness of their updated website among their existing customer.
➢ To know about their future investment.
➢ Questionnaire was in online mode therefore without internet connection was not
possible to open it.

➢ Customers who had huge loss with ICICI securities are talked very rudely on phone.

40
CHAPTER 4:
COMPANY PROFILE

41
COMPANY PROFILE

Company Name ICICI Securities

Founded In 1995
Parent Company ICICI Limited
Headquarter Mumbai
Chairperson Mr. Vijay chandok
Managing Director & CEO Mr. Vijay chandok
Executive Director Mr. Vijay chandok
Website www.icicisecurities.com

INTRODUCTION

ICICI Securities Limited provides various investment banking products and services to
corporate, financial institutions, and retail investors in India and internationally. It provides
corporate finance services to corporations, financial institutions, financial sponsors, and
government, which include equity capital market products, such as initial public offerings
(IPO), further public offerings, rights offerings, convertible offerings, qualified institutional
placements, non-convertible debentures, buyback, delisting, and open offers and international
offerings for unlisted and listed entities. The company also offers mergers and acquisitions
advisory services; and private equity advisory.

OVERVIEW

ICICI Securities Ltd is an integrated securities firm offering a wide range of services
including investment banking, institutional broking, retail broking, private wealth
management, and financial product distribution. ICICI Securities sees its role as 'Creating
Informed Access to the Wealth of the Nation' for its diversified set of client that includes
corporate, financial institutions, high net-worth individuals, and retail investors.
Headquartered in Mumbai, ICICI Securities operates out of 66 cities and towns in India and
global offices in Singapore and New York. ICICI Securities Inc., the step-down wholly

42
owned US subsidiary of the company is a member of the Financial Industry Regulatory
Authority (FINRA) / Securities Investors Protection Corporation (SIPC). ICICI Securities
Inc. activities include Dealing in Securities and Corporate Advisory Services in the United
States. ICICI Securities Inc. is also registered with the Monetary Authority of Singapore
(MAS) and operates a branch office in Singapore.

Brief about ICICI Group

The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at
the initiative of the World Bank, the Government of India and representatives of Indian
industry, with the objective of creating a development financial institution for providing
medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami
Mudaliar elected as the first Chairman of ICICI Limited. ICICI emerges as the major source
of foreign currency loans to Indian industry. Besides funding from the World Bank and other
multi-lateral agencies, ICICI was also among the first Indian companies to raise funds from
international markets.
ICICI SECURITIES

ICICI Securities Ltd is the largest equity house in the country providing end-to-end
solutions (including web-based services) through the largest non-banking distribution channel
so as to fulfill all the diverse needs of retail and corporate customers. ICICI Securities (I-Sec)
has a dominant position in its core segments of its operations - Corporate Finance including
Equity Capital Markets Advisory Services, Institutional Equities, Retail and Financial
Product Distribution

The stock broking industry is a service-oriented industry where brokers act as agents for
investors when a security is bought or sold and are compensated with a commission.
Investors would not hesitate to switch to alternative brokerage houses if they do not obtain
satisfaction. Providing quality service and hence customer satisfaction should thus be
recognized as a key strategy and a crucial element of long-run success and profitability for
stock broking businesses.

ICICI Securities Limited provides various products and services to corporates, financial
institutions, and retail investors INDIA and internationally. It provides corporate finance
services to corporations, financial institutions, financial sponsors, and government, which
include equity capital market products, such as initial public offerings (IPO), further public

43
offerings, rights offerings, convertible offerings, qualified institutional placements, non-
convertible debentures, buyback, delisting, and open offers and international offerings for
unlisted and listed entities. The company also offers mergers and acquisitions advisory
services; and private equity advisor

ICICI Group Companies

➢ ICICI Bank
➢ ICICI Prudential Life Insurance Company
➢ ICICI Securities Limited
➢ ICICI Securities Primary Dealership Limited
➢ ICICI Lombard General Insurance Company
➢ ICICI Prudential Asset Management Company
➢ ICICI Venture
➢ ICICI Home Finance Company

Awards and achievements

• ICICI Bank has ranked second at the 'National Energy Conservation Award 2014'
under the office buildings (less than 10 lakh kWh/year consumption) category.
• ICICI Bank has been honoured as The Best Service Provider - Risk Management,
India at The Asset Triple A Transaction Banking, Treasury, Trade and Risk
Management Awards 2014.
• ICICI Bank has won The Corporate Treasurer Awards 2013 in the categories of 'Best
Cash Management Bank in India' & 'Best Trade Finance Bank in India'.
• ICICI Securities Business Partners has been conferred the Franchise India Awards
2013, for being the 'Franchisor of the year' in the Financial Services category
• ICICIdirect.com won the 'Stock Broker of the Year' award at the Money Today
FPCIL Awards 2012

44
 • ICICI Securities Business Partners (Sub Broker channel) won the 'Franchisor of the
Year' at the Franchise Awards 2012 for the fourth time in a row
• ICICI Securities Business Partners (Sub Broker channel) won the 'Franchisor of the
Year at the Franchise Awards 2011', third time in a row
• CMO Asia Awards for Excellence in Branding and Marketing 2010 :
1. Brand Leadership Award (overall)
2. 'Campaign of the Year' for the Trade Racer Campaign
3. Brand Excellence in Banking and Financial Services for the store format
4. Award for Brand Excellence in the Internet Business
• Franchisor of the year award 2009.
• Retail concept of the year awards 2009.
• ICICI Direct wins the prestigious Outlook Money - India's Best e-Brokerage House
for 2009.
• ICICI Direct has also won the CNBC AWAAZ Consumer Award for the Most
Preferred Brand of Financial Advisory Services.
• ICICI Direct been winning the prestigious Outlook Money - India's Best e-Brokerage
House for 2003-2004, 2004-2005, 2006-2007 and 2007-2008.
• ICICI Direct wins the prestigious Outlook Money - India's Best e-Brokerage House
for 2008..
• Best Broker - Web 18 Genius of the Web Awards 2007
• CMO Asia Awards for Excellence in Branding and Marketing –
• Brand Leadership Award (overall)
• 'Campaign of the Year' for the Trade Racer Campaign
• Brand Excellence in Banking and Financial Services for the store format
• Award for Brand Excellence in the Internet Business
• Frost and Sullivan Award for Customer Service Leadership

COMPETITORS

ICICI Securities is providing share trading facilities. The ICICI was the 1st in India to
introduce concept of online share trading. Now in the market there are few players who are
providing the share trading facilities. Some of them are mentioned below who are providing
some competition in the market.

45
1. HDFC Securities:-

HDFC bank is also one of the growing banks in India. It has also given new definition to
banking services with providing extra services than the traditional banking services. HDFC
was in housing finance initially but in last few years it has widen its scope of working area. It
has entered in almost all the sectors in which ICICI is dealing. HDFC is providing the demat
account to its customers. The HDFC is not providing the online share trading like ICICI.
Here it stays slightly behind the ICICI bank.

2. Kotak Street:-

Kotak Street is also emerging as a good competitor to all the share trading service providing
company. It is also entering in the all the financial services like the ICICI and HDFC bank.
The Kotak Street is relatively new compared to ICICI and HDFC in the field of share trading.
Initially when the Kotak group had not entered in banking field it had collaboration with
HDFC for the saving accounts of the customers who had or wanted to open the share trading
account with the Kotak street. But now as the Kotak group has its own bank, all the saving
accounts are opened in the Kotak bank. The Kotak group has also entered in the field of
insurance with name.

3. India bulls

India bulls are also one of the companies which are providing the share trading facility. It is a
company which is providing the share trading facility only. It does not provide any saving
account facility to its customer.

4 Axis Bank

Axis Bank is the third largest private-sector banks in India offering a comprehensive suite of
financial products. Headquartered in Mumbai, the bank has 2,959 branches, 12,743 ATMs
and nine international offices. The bank employs over 50,000 people and had a market
capitalization of ₹1.0583 trillion (US$16 billion) (as on March 31, 2016). It offers the entire
spectrum of financial services to customer segments, spanning large and mid-corporates,
SME, and retail businesses.

5. Citi bank

Citi bank is the consumer division of financial services multinationalCitigroup. Citibank was
founded in 1812 as the City Bank of New York, later First National City Bank of New York.

46
The United States is the largest single market with approximately 26% of branches,
generating 51% of revenues. Citibank's 983 North American branches are concentrated in
major metropolitan areas including New York City, Chicago, Los Angeles, San
Francisco, Washington, D.C., and Miami.

6. Kotak Mahindra Bank

Kotak Mahindra Bank is an Indian private sector bankingheadquartered

in Mumbai, Maharashtra, India. In February 2003, Reserve Bank of India (RBI) gave the
licence to Kotak Mahindra Finance Ltd., the group's flagship company, to carry on banking
business. It offers a wide range of banking products and financial services for corporate and
retail customers through a variety of delivery channels and specialized subsidiaries in the
areas of personal finance, investment banking, life insurance, and wealth management. Kotak
Mahindra Bank has a network of 1,336 branches and 2,044 ATMs spread across 702
locations in the country.

7. Yes Bank

Yes Bank is the only Greenfield Bank licence awarded by the RBI in the last two decades.
YES BANK is a “Full Service Commercial Bank”, and has steadily built a Corporate, Retail
& SME Banking franchise, Financial Markets, Investment Banking, Corporate Finance,
Branch Banking, Business and Transaction Banking, and Wealth Management business lines
across the country.

SWOT ANALYSIS

SWOT analysis is done by all the companies to be aware about the competitor andnew
changes in the market. The SWOT analysis leads the company to take strategic decisions.
Company always highlight its strength, try to hide own weakness and in the same way try to
find out strength and weakness of the competitors.

S-Strength

Strength of the ICICI Securities is the main feature of the service. As it gives 3 in 1account to
the customer, the ease to trade at your convenient time is the main strength of the ICICI
Direct. Following are some of the strong points of the company. Convenience of time to
trade Faster transaction Paperless work 3 in 1 account facility so all work done at one place.
The bank has strength of the latest technologies and the most modern banking channels as net

47
banking and the schemes such as young saver accounts also. The young and energetic staff of
the bank is also one of the strengths.

W- Weaknesses

Weakness of company is fond out to remove it and then make the product or service better
than current status. Each and every product and service has weakness. It is just like two side
of the coin, if you have strength then you have weakness. The weakness of the ICICI
Direct.com can be said its high charges compared to other companies.

O – Opportunity

Opportunity of the company is with the growth of volume of share trading and if company
decides to reduce the prices to some extent then a new market segment will come up as a
customer of the service. Jetpur, being the big industrial city of Saurashtra region the Bank has
enough of opportunities to flourish its business here. ICICI Bank can also grab the
opportunity of establishing its market in the nearby towns and villages by keeping their ATM
machines and also by sending their marketing executives to these remote places on some
specific days.

T – Threat

Threat for the company can be considered as following. Growing competition Change in
government rules which is negative for stock market Low prices of local broker’s Low
awareness of computer in public The other threat of the new entrants in the market will take
up the share from them. Now a day’s many of the financing companies are entering the
Jetport’s market, which is one of the biggest threats for the Banks as they provide the finance
to the customers at very less rates and also at the quickest.

Vision & Mission of ICICI group

Vision:

“To be the leading provider of financial services in India and a major global bank."

48
Mission:

The mission statement of ICICI Bank consists of several points, but the first is to become
the first choice among customers by providing world-class services. We will leverage our
people, technology, speed and financial capital to:

➢ Be the banker of first choice for our customers by delivering high quality, excellent
products and services.
➢ Expand the frontiers of our business globally.
➢ Play a proactive role in the full realisation of India’s potential.
➢ Maintain a healthy financial profile and diversify our earnings across businesses and
geographies.
➢ Maintain high standards of governance and ethics.
➢ Contribute positively to the various countries and markets in which we operate.
➢ Create value for our stakeholders.

49
CHAPTER-5

DATA ANALYSIS

AND
INTERPRETATION

50
51
Q1. Have you invested in any of the following in the last 12 months?

Equity Futures and option Mutual funds

Insurance Corporate FD Debenture/ bonds

PPF Others None

Ans:

Responses
40
35
30
25
20
15
Responses
10
5
0

Figure no.2. Number of customers invested in securities in the last 12 months.

Analysis: It is seen in the above graph that most of the customers in ICICI securities prefer to make
investment in equity and mutual fund and less in F&O, insurance etc.

52
Q 2. What is your preferred mode of investment?

Online Offline

responses
35

30

25

20

responses
15

10

0
online offline

Figure no. 3: Preferred mode of investment.

Analysis:

It is seen in the above graph that out of 50 customers 32 prefer to do their investment online

But only 18 customers are preferred to do their investment offline.

Ques 3. Have you invested in any of the following through ICICI Direct.com in the last 12
months?

Equity Futures and option Mutual funds

Insurance Debenture/ bonds None

Ans: Out of 50 customers not even a single person invested in any of the above mention
funds through ICICIdirect.com in the last 12 months. Mainly the customers assigned was
inactive customers.

53
Q4. Were you aware that you can invest in mutual funds through ICICI direct.com?

Yes NO

Ans:

Yes
no

Figure no.4 Reponses of customer about awareness that they can invest in MF through
ICICIDirect.com.

Analysis: According to the survey, out of 50 customers, 47 customers already knew that they

can invest in MF through ICICI direct.com but there are still 3 customers who didn’t knew

about this.

Q5. What are the reasons for not investing in mutual funds through ICICI direct.com?

I need assistance to invest in MF through ICICI direct.com

I need more knowledge on MF before I invest

I am not interested as I invest through other brokers/agents.

I do not invest in MF

Options responses

I need assistance to invest in MF through ICICI direct.com 16

I need more knowledge on MF before I invest 6

54
Ans: I am not interested as I invest through other brokers/agents. 3

I do not invest in MF 25

Table no. 1. Table showing reasons of customers for not investing in mutual funds through
ICICI direct.com

responses
I need assistance to invest in
MF through ICICI direct.com
I need more knowledge on MF
before I invest
I am not interested as I invest
through other brokers/agents.
I do not invest in MF

Figure no 5. Figure showing reasons of customers for not investing in mutual funds
through ICICI direct.com

Analysis: According to the survey it is been seen that out of 50 customers, majority of
customers do not want to invest in mutual funds. There can be a lot of reasons for not
investing in mutual funds. The reason could be lack of awareness, fear of losing their money
and many more but still there are 16 customers out of 50 who want to invest in MF but want
some assistance to invest in MF.

Q6. Which of the following online transactions have you done in the past?

I buy movie tickets online I buy flight tickets online

I book hotels online. I use online banking

I do not do any online transactions.

options responses

I buy movie tickets online 21

I buy flight tickets online 17

55
Ans: I book hotels online. 12

I use online banking 39

I do not do any online transactions. 3

Table no2. Table showing responses of customers who have done online transactions
in the past.

responses

I buy movie tickets online

I buy flight tickets online

I book hotels online.

I use online banking

Figure no 6 Figure showing responses of customers who have done online

transactions in the past.

Analysis: According to the survey, it is been seen that most of the customers use online
transactions for using online banking, but some of the customers are also doing online
transactions for buying movie tickets, hotels. But still there are some customers who did not
do any online transactions.

Q7 How often do you transact online in the above mentioned transaction?

Monthly Quarterly

Once in 6 months once in a year

Ans.
56
 options responses

Monthly 32

Quarterly 7

Table Once in 6 months 6 no. 3.

Table
Once in a year 5

showing how regularly the customers used to transact online.

responses

Monthly
Quarterly
Once in 6 months
Once in a year

Figure no. 7. Figure showing how regularly the customers used to transact online.

Analysis. According to a survey, out of 50 customers, 32 customers used to transact online

monthly. While there are 7 customers who used to transact online once in a quarter, while
there are still 5 persons who used to transact online once in a year.

Q8. Which medium of news information and analysis do you use to keep yourself updated on
investment products?

I discuss with my friends/family/ colleagues

I use financial websites for comparisons and news

I have a financial advisor/ broker/ MF distributor who provides me the information.

I read media reports

57
 I prefer to do my own research

Ans:

responses
40
35
30
25
20
15
10
responses
5
0
I discuss with my I use financial I have a financial I read media I prefer to do my
friends/family/ websites for advisor/ broker/ reports own research
colleagues comparions and MF distributor
news who provides me
the information.

Figure no. 8 Figure showing medium of news information and analysis customers use to keep
themselves updated on investment products.

Analysis: According to the survey, it is been seen that most of the customers read media
reports and prefer to do their own research to keep themselves updated on investment
products. While the customers using financial websites and who discus with their family and
friends to update themselves on investment products are less in numbers.

Q9. How do you check the performance of all/any of your investment?

58
 I update investment details on a third party portfolio website and check regularly.

I ask my financial advisor/ broker/ Mf distributor to send me the information.

My broker/ bank provides me the information.

Others____________________

Ans:
Options responses

I update investment details on a third party portfolio website and 7

check regularly.

I ask my financial advisor/ broker/ Mf distributor to send me the 7

information.

My broker/ bank provides me the information. 26

Others 10

Table no. 4. Table showing how does the customers check performance of all/any of their
investment.

responses
others
My broker/ bank provides me the…
I ask my financial advisor/ broker/ Mf… responses
I update investment details on a third…

0 5 10 15 20 25 30

Figure no. 9 Figure showing how does the customers check performance of all/any of their
investment.

Analysis: According to the survey, out of 50 customers, 26 customers ask their broker/bank
to provide them the information to check the performance of all/any of their investment. But

59
10 customers are still there who check performance of all/any of their investment on their
own.

Q10. Would you consider switching your investment relationship to ICICIdirect.com?

Yes No

Ans:

responses
50

40

30
responses
20

10

0
yes no

Figure no.10.Figure showing responses of customers about switching their investment

relationship to ICICI direct.com

Analysis: According to the survey it is been seen that out of 50 customers 45 customers were
interested in switching their investment relationship to icicidirect.com while 5 customers
disagree to switch their relationship to icici direct.com.

Q11. Which of the following site features do you find useful at ICICIdirect site?

Capital gain statement

60
 Portfolio monitoring

Ease of purchase/redemption

Personalized research recommendations against holdings

Others

Ans:

Capital gain statement

Portfolio monitoring

Ease of purchase/redemption

Personalized research
recommendations against
holdings
Others

Figure no.11 Figure showing responses of customers about the site features they found useful
at ICICIdirect.com.

Analysis: According to the survey it is found that most of the ICICI securities’ customers
found capital gain statement useful at icici direct site.

61
CHAPTER -6
FINDINGS

62
FINDINGS :

➢ Most of the customers were not fully aware with mutual fund and its advantage.
➢ Customers even who know about mutual fund, are not investing their money into it
because of lack of knowledge about mutual fund.
➢ Customers prefer to invest in other alternatives mostly in equity.
➢ In future, customers would like to invest in mutual fund if ICICI Securities create
awareness and provide right knowledge about mutual fund among customers.
➢ Most of the customers were using online mode of payment frequently.
➢ Almost every customer were agree to continue with ICICI Securities services.
➢ There was communication gap with some customers.
➢ Mostly customers update themselves about investment decision by their own or take
advice with family and friends.

63
CHAPTER-7
SUGGESTIONS
AND
RECOMMENDATIONS

64
SUGGESTIONS AND RECOMMENDATIONS:

➢ ICICI SECURITIES should provide proper guidance to its customers about mutual
fund though seminars or other way of interaction.
➢ There should be one department, which will call customer once in a month and notice
their problem or their complaint so there would not be any communication gap.
➢ At the time of opening account, ICICI Securities can offer one tutorial class about
mutual fund or about other investment plans so there would not be any lack of
knowledge in customer mind.
➢ ICICI SECURITIES can send details about investment decision to its customers
through e-mail or SMS.
➢ Before making any investment financial advisors should first enquire about the risk
tolerance of the investors.
➢ Before making any investment financial advisors should first enquire about their need,
and time. By considering these things they can take the customers into consideration.
➢ ICICI SECURITIES can use digital media like facebook, watsapp, twitter to promote
and spread awareness about mutual funds among their customers
➢ ICICI SECURITIES should conduct seminars, guest lectures in various colleges to
create awareness and to have a better understanding.
➢ ICICI SECURITIES should tie up with various clubs like rotary club, lion club.
➢ They can show a small presentation in various events like blood donating camp.
➢ Company should decrease the account opening charges so that more & more
customers can be attracted
➢ . Annual charges should be decrease because as the other companies have very less
annual charges.
➢ Awareness should create among the people with the help of seminar and expert
session about ICICIDIRECT.COM portal as it is a new and robust website.

65
CHAPTER-8
CONCLUSION

66
 CONCLUSION

Running of successful Mutual Funds requires complete understanding the mind set of small
investors. This is a study taken to make an attempt to understand the financial behavior and
perception of ICICI Securities customers. I observed that many of customers have fear of
Mutual Fund. Many of customers do not invest in mutual fund due to lack of awareness
although they have money to invest. Most of customers prefer to invest in equity. Investors
should be made aware of the benefits. Nobody will invest till he/she is fully convinced of the
scheme.After this survey, I have come to know about different aspects of mutual funds and
mutual funds industry. India is an emerging market.

67
 APPENDICES

Questionnaire

Name: ________________

Age: _________

Gender: Male

Female

Occupation ___________

Q 1. Have you invested in any of the following in the last 12 months?

Equity Futures and option Mutual funds

Insurance Corporate FD Debenture/ bonds

PPF Others None

Q2. What is your preferred mode of investment?

Online Offline

Q3. Have you invested in any of the following through ICICI Direct.com in the last 12
months?

Equity Futures and option Mutual funds

Insurance Debenture/ bonds None

Q4. Are you aware that you can invest in mutual funds through ICICI direct.com?

Yes NO

68
Q5 what are the reasons for not investing in mutual funds through ICICI direct.com?

I need assistance to invest in MF through ICICI direct.com

I need more knowledge on MF before I invest

I am not interested as I invest through other brokers/agents.

I do not invest in MF

Q6. Which of the following online transactions have you done in the past?

I buy movie tickets online

I buy flight tickets online

I book hotels online.

I use online banking

I do not do any online transactions.

Q7. How often do you transact online in the above mentioned transaction?

Monthly Quarterly

Once in 6 months Once in a year

Q8. Which medium of news information and analysis do you use to keep yourself updated on
investment products?

I discuss with my friends/family/ colleagues

I use financial websites for comparisonsand news

I have a financial advisor/ broker/ MF distributor who provides me the information.

I read media reports

I prefer to do my own research

69
Q9. How do you check the performance of all/any of your investment?

I update investment details on a third party portfolio website and check regularly.

I ask my financial advisor/ broker/ Mf distributor to send me the information.

My broker/ bank provides me the information.

Others____________________

Q10. Would you consider switching your investment relationship to ICICIdirect.com?

Yes No

Q11. Which of the following site features do you find useful at ICICIdirect site?

Capital gain statement

Portfolio monitoring

Ease of purchase/redemption

Personalized research recommendations against holdings

Others

Any suggestions/ recommendations-

__________________________________________________

70
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WEBLINKS
1. www.icicisecurities.com
2. www.icicidirect.com
3. www.moneycontrol.com/mutualfundindia/evaluate/
4. www.mutualfundindia.com/MF/ReaserchReportView/Research
5. www.indiainfoline.com/MutualFunds/Equity-Funds.aspx
6. www.amfiindia.com/press-release
7. http://www.assetmanagement.hsbc.com/in/mutual-funds/learning-centre/investor-
progrm/mutual_fund.html

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