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(With Special Reference to UTI MUTUAL FUNDS Ltd., COONOOR)
A MAJOR PROJECT REPORT
SUBMITTED BY SASHIKALA V. (07 PIT29)
IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF
MS. SHWETA G.JAIN, M.B.A.
AVINASHILINGAM SCHOOL OF MANAGEMENT TECHNOLOGY AVINASHILINGAM UNIVERSITY FOR WOMEN COIMBATORE -641043
INVESTOR’S ATTITUDE TOWARDS UTI MUTUAL FUNDS
(With Special Reference to UTI MUTUAL FUNDS Ltd., COONOOR)
A MAJOR PROJECT REPORT
SUBMITTED BY SASHIKALA V.
A MAJOR PROJECT REPORT SUBMITTED FOR AVINASHILINGAM SCHOOL OF MANAGEMENT TECHNOLOGY, AVINASHILINGAM UNIVERSITY FOR WOMEN, COIMBATORE.
IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
CERTIFIED AS BONAFIDE RESEARCH WORK
Signature of the Dean
Signature of the External Examiner
Signature of the Guide
“Gratitude is not only the greatest of virtues, but the parent of all the others.” The researcher acknowledges the Chancellor, Mr.T.K.Shanmuganadham, B.A, B.L., the Vice Chancellor, Mrs.Saroja Prabhakaran, M.A. Dip.Ed, Ph.D., and the Registrar, Mrs.Gowri Ramakrishnan, M.Sc., M.Phil., Ph.D of Avinashilingam University for women, Coimbatore, for having given an opportunity to undertake this project work, which forms part of the curriculum. It gives the researcher great pleasure to express her deep sense of gratitude and profound thanks to the Dean Mrs.Shantha B.Kurup.M.Com, Dip.Ed, M.B.A., M.Phil, Ph.D., Avinashilingam School of Management Technology, for her support, and encouragement during the project. The researcher expresses her deep sense of gratitude to Ms. Shweta G.Jain, M.B.A., Lecturer, Avinashilingam School of Management Technology, for her timely advice, valuable guidance and encouragement in bringing this project to a good shape. The Researcher would like to thank Mr. Kandavel, Agency Manager, UTI Mutual Funds, Coonoor for giving the researcher an opportunity to do the project for UTI Mutual Funds Ltd. The Researcher would like to thank her Family, Friends and all others who have helped her throughout the completion of the project.
Any investor would like to invest in a reputed Mutual Fund organization. The data was collected with the help of a questionnaire. CONTENTS . It was found that the awareness towards the risk related to the investment was relatively low. The tools used for the analysis include Percentage Analysis and Mean Score Values. The analysis was divided into 2 phases which are Personal Factors and Investment Factors.SYNOPSIS Mutual funds are seemingly the easiest and the least stressful way to invest in the stock market. UTI is one such organization that provides a better overview of the Mutual Fund industry. The research was done on the topic “Investors Attitude towards UTI Mutual Funds”. Understanding the attitude of investors on their investment would help the company to increase their profits. The investors mainly look into the returns earned from the investment. The sample size considered for the study was 100 wherein all the samples were investors of UTI Mutual Funds in Coonoor. The study revealed that the investors have a positive attitude towards their investments in UTI Mutual Funds. Quiet a large amount of money has been invested in mutual funds during the past few years. In UTI they believe that the investors attitude would result in profits. The study aims at analysing the attitude of the investors towards UTI Mutual Funds. Based on the analysis Suggestions for improvement are provided.
3 1 8 23 28 29 30 31 45 49 105 107 108 .6 II III IV V 5.4 1.1 1.NO I 1.3 1.2 1.5 1.CHAPTER NO.1 5.2 5. PARTICULARS List of Tables List of Charts Introduction Mutual Fund Industry UTI Mutual Funds Attitude towards UTI Mutual Fund Scope of the study Objectives of the study Limitations of the study Review of Literature Research Methodology Analysis and Interpretation Summary Findings Suggestions Conclusion Bibliography Annexure P.
1 4.2 4. 4.5 CONTENTS AGE DISTRIBUTION OF INVESTORS IN UTI MUTUAL FUNDS GENDER DISTRIBUTION OF INVESTORS INCOME OF THE INVESTORS AMOUNT OF MONEY INVESTED IN OF MUTUAL FUNDS QUALIFICATION INVESTORS PAGE NO. 50 52 54 56 58 STANDARD .4 4.LIST OF TABLES TABLE NO.3 4.
20 THEIR INVESTMENT PREFERENCE OF INVESTORS TOWARDS SIP AGREEMENT TOWARDS THE 86 88 STATEMENT “WHEN RETURN IS MORE 4. INVESTMENT IN DIFFERENT TYPES OF FUNDS TYPE OF SCHEMES SELECTED BY 60 62 64 4.16 4.7 4.9 4.15 4.12 4.18 66 68 70 72 74 76 78 80 82 84 INVESTORS REASONS FOR SELECTION OF SCHEMES INVESTMENT ANALYSIS AWARENESS AND TOWARDS PORTFOLIO THE RISK RELATED TO THE SCHEME RETURNS EXPECTED BY INVESTORS PREFERRED OPTIONS BY INVESTORS FOR THEIR INVESTMENTS FREQUENCY OF INVESTORS MONITORING THE PERFORMANCE OF 4.19 4.14 4.4.17 4.22 4.21 4.23 RISK IS MORE” RISKS ATTACHED TO THE INVESTMENT PAYMENT OPTIONS PROVIDED TO INVESTORS RANKING THE OBJECTIVES OF THE 90 92 94 .6 4.10 4.8 INVESTORS HAVING AN INSURANCE POLICY REASONS OF PREFERENCE TOWARDS MUTUAL FUNDS PREFERENCE TOWARDS INVESTING IN MUTUAL FUND IN COMPARISON TO SHARES NUMBER OF PLANS INVESTORS HAVE INVEST IN MUTUAL FUNDS MEDIAS THROUGH WHICH INVESTOR’S KNOW ABOUT UTI MUTUAL FUNDS.13 4.11 4.
3 4.1 4.2 4.4 4.26 4.5 4.7 4. 4.25 4.9 67 .SCHEMES 4.24 4.8 CONTENTS AGE DISTRIBUTION OF INVESTORS IN UTI MUTUAL FUNDS GENDER DISTRIBUTION OF INVESTORS INCOME OF THE INVESTORS AMOUNT OF MONEY INVESTED IN OF MUTUAL FUNDS QUALIFICATION PAGE NO. 51 53 55 57 59 61 63 65 STANDARD INVESTORS INVESTORS HAVING AN INSURANCE POLICY REASONS OF PREFERENCE TOWARDS MUTUAL FUNDS PREFERENCE TOWARDS INVESTING IN MUTUAL FUND IN COMPARISON TO SHARES NUMBER OF PLANS INVESTORS HAVE INVEST IN MUTUAL FUNDS 4.27 LEVEL OF SATISFACTION RELEVENCE OF ANNUAL REPORTS RELEVENCE OF PUBLICATIONS INVESTORS PERCEPTION TOWARDS UTI MUTUAL FUNDS 96 99 101 103 LIST OF CHARTS CHART NO.6 4.
17 4.20 THEIR INVESTMENT PREFERENCE OF INVESTORS TOWARDS SIP AGREEMENT TOWARDS THE 87 89 STATEMENT “WHEN RETURN IS MORE 4.24 4.21 4.11 4.12 4.25 4.23 4.18 MEDIAS THROUGH WHICH INVESTOR’S KNOW ABOUT UTI MUTUAL FUNDS.4.26 4.27 RISK IS MORE” RISKS ATTACHED TO THE INVESTMENT PAYMENT OPTIONS PROVIDED TO INVESTORS RANKING THE OBJECTIVES OF THE SCHEMES 91 93 95 98 100 102 104 LEVEL OF SATISFACTION RELEVENCE OF ANNUAL REPORTS RELEVENCE OF PUBLICATIONS INVESTORS PERCEPTION TOWARDS UTI MUTUAL FUNDS .14 4.10 4.16 4.13 4. INVESTMENT IN DIFFERENT TYPES OF FUNDS TYPE OF SCHEMES SELECTED BY 69 71 73 75 77 79 81 83 85 INVESTORS REASONS FOR SELECTION OF SCHEMES INVESTMENT ANALYSIS AWARENESS AND TOWARDS PORTFOLIO THE RISK RELATED TO THE SCHEME RETURNS EXPECTED BY INVESTORS PREFERRED OPTIONS BY INVESTORS FOR THEIR INVESTMENTS FREQUENCY OF INVESTORS MONITORING THE PERFORMANCE OF 4.19 4.22 4.15 4.
In the past decade. Indian mutual fund industry had seen a dramatic improvement.1 INTRODUCTION TO THE INDUSTRY MUTUAL FUNDS INDUSTRY IN INDIA The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. but it accelerated from the year 1987 when non-UTI players entered the industry. Putting the AUM of the Indian Mutual Funds Industry into comparison. Before. Yet it has been the subject of perhaps the most elaborate and prolonged regulatory effort in the history of the country. the Assets Under Management (AUM) was Rs. 470 bn in March 1993 and till April 2004. The main reason of its poor growth is that the mutual fund industry in India is new . which is achieved by the pooling of a number of small investments into a large bucket. it reached the height of 1. Though it is perhaps the smallest segment of the industry. The private sector entry to the fund family rose the AUM to Rs. constitute less than 11% of the total deposits held by the Indian banking industry. Though the growth was slow. 67bn. it is also the most glamorous – in that it is a young industry where there are changes in the rules of the game everyday. the total of it is less than the deposits of SBI alone. both qualitywise as well as quantitywise. the monopoly of the market had seen an ending phase.CHAPTER I INTRODUCTION 1. The mutual fund is structured around a fairly simple concept. the mitigation of risk through the spreading of investments across multiple entities. and there are constant shifts and upheavals.540 bn. The mutual fund industry is a lot like the film star of the finance business.
This is where Mutual Funds come into picture. which is declared by the fund from time to time. (Most investors don’t have the time or know-how to do all the necessary research. instead of buying individual stocks or bonds directly. bonds and other securities. Mutual funds are an excellent way to invest in stocks. Different business groups/ financial institutions/ banks have sponsored these AMCs. the task of generating superior returns at similar levels of risk is arduous to say the least. Appreciation or reduction in value of investments is reflected in net asset value (NAV) of the concerned scheme. Transaction costs are often lower than what you would pay if you invested in individual securities (the mutual fund buys and sells large amounts of securities at a time). Large sections of Indian investors are yet to be intellectuated with the concept.) • You diversify your investment risk by owning shares in a mutual fund. Each unit of any scheme represents the proportion of pool owned by the unit holder (investor). either alone or in collaboration with reputed international firms.in the country. so most of the investment research is done for you. Many more international Mutual Fund giants are expected to come into Indian markets in the near future. Mutual fund schemes are managed by respective Asset Management Companies (AMC). it is the prime responsibility of all mutual fund companies. Hence. to market the product correctly abreast of selling. They are a good choice of investment because: • They are managed by professional money managers. . • For those who are not adept at understanding the stock market. Several international funds like Alliance and Templeton are also operating independently in India. Mutual Funds are essentially investment vehicles where people with similar investment objective come together to pool their money and then invest accordingly.
named as Unit Scheme 1964 (US-64). It launched ULIP in 1971.1964-87 Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. The history of mutual fund industry in India can be better understood divided into following phases: Phase 1. Establishment and Growth of Unit Trust of India . which attracted the largest number of investors in any single investment scheme over the years. Mastershare (Inida's first equity diversified scheme) in 1987 and Monthly Income Schemes (offering assured returns) during 1990s. six more schemes between 1981-84. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts of the Government of India and the Reserve Bank of India. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of Industrial Development Bank of India (IDBI). . UTI's assets under management grew ten times to Rs 6700 crores. UTI launched its first scheme in 1964.The Evolution The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986. By the end of 1987. UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors.
Emergence of Private Secor Funds . In November 1987. Indian Bank Mutual Fund. SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund in India.Phase II. the assets under management of the industry increased seven times to Rs. 47. LIC Mutual Fund.1% Management Phase III.1987-1993 The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987.964 13.247 8.9% 6.2% 0. However. Mobilisation 1992-93 Amount Mobilised Assets Under as % of gross Domestic Savings UTI Public Sector Total 11.004 5.004 crores. Bank of India Mutual Fund. Entry of Public Sector Funds .1993-96 The permission given to private sector funds including foreign fund management .021 38. SBI Mutual Fund was later followed by Canbank Mutual Fund.757 47.057 1. GIC Mutual Fund and PNB Mutual Fund. By 1993. UTI remained to be the leader with about 80% market share.
with an objective to educate investors and make them informed about the mutual fund industry. Private funds introduced innovative products.companies (most of them entering through joint ventures with Indian promoters) to enter the mutal fund industry in 1993. investment techniques and investor-servicing technology. 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The mobilisation of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds. Various Investor Awareness Programmes were launched during this phase. SEBI (Mutual Funds) Regulations. Phase IV. both by SEBI and AMFI. about 11 private sector funds had launched their schemes.1996-2004 The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The Specified Undertaking. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. . UTI was re-organised into two parts: 1. In February 2003. Growth and SEBI Regulation . By 1994-95. provided a wide range of choice to investors and more competition in the industry. The primary objective behind this was to bring all mutual fund players on the same level. Investors' interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order to encourage them.
5 36 4.48.377 01-April-99 13.192 74.50 13.523 01-April-02 2.173 184.108.40.206 67 2. there was a significant growth in mobilisation of funds from investors and assets under management which is supported by the following data: GROSS FUND MOBILISATION (RS.61 3 22.92 1.6 79 1.5 1.4 13 6.039 42. Assured Return Schemes) are being gradually wound up. UTI Mutual Fund is still the largest player in the industry. In 1999.352 92.64 3 5.957 01-April-01 4. The UTI Mutual Fund Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64.966 220.127.116.118 01-April-00 12.979 . However. CRORES) PUB LIC SEC TOR PRIV ATE SECT OR FROM TO UTI TOTAL 01-April-98 31March99 31March00 31March01 31March02 31- 11.732 7.
435 65.662 01-April-05 - 1.Jan-03 31March03 31March04 31March05 31March06 5 3 7.55 8 5.860 PUB LIC SEC TOR PRIV ATE SECT OR TO TA L 68. 246 7. 446 9.694 01-April-03 - 68.-03 * 58.7 12 10.292 6. CRORES) U AS ON T I 31March99 53.83.03.259 * 51 01-Feb.21.4 16 8.36.15 8 ASSETS UNDER MANAGEMENT (RS.190 01-April-04 - 1.6 32 5.90.320 18.104.22.168 72 GROWTH IN ASSETS UNDER MANAGEMENT .39.
000 crore. It is estimated that by 2010 March-end. Growth and Consolidation . There were 29 funds as at the end of March 2006.4% during the rest of the decade.Phase V. Indian mutual fund industry reached Rs 1. The annual composite rate of growth is expected 13. Mutual fund India assets will be double . Franklin Templeton Mutual Fund etc.2004 Onwards The industry has also witnessed several mergers and acquisitions recently. the total assets of all scheduled commercial banks should be Rs 40. more international mutual fund players have entered India like Fidelity. Simultaneously.90. In the last 5 years there is an annual growth rate of 9%.537 crore by March 2004.50. examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life. Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. by year 2010. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players. According to the current growth rate.
admired by all stakeholders The largest and most efficient money manager with global presence The best in class customer service provider The most preferred employer The most innovative and best wealth creator A socially responsible organisation known for best corporate governance Genesis Jan 14. the SEBI (Mutual Funds) Regulations and the objectives of the schemes. Our mission is to make UTI Mutual Fund: • • • • • • The most trusted brand. The UTI Asset Management Company provides professionally managed back office support for all business services of UTI Mutual Fund (excluding fund management) in accordance with the provisions of the Investment Management Agreement.2 INTRODUCTION TO THE COMPANY UTI MUTUAL FUNDS Vision To be the most Preferred Mutual Fund. .1. State-ofthe-art systems and communications are in place to ensure a seamless flow across the various activities undertaken by UTIMF. who has been appointed by the UTI Trustee Company Limited for managing the schemes of UTI Mutual Fund and the schemes transferred/migrated from the erstwhile Unit Trust of India. the Trust Deed. 2003 is when UTI Mutual Fund started to pave its path following the vision of UTI Asset Management Company Limited.
3 satellite offices have also been opened in select towns and districts. registered in Guernsey. To ensure better management of funds. Dubai and Bahrain. With a view to reach to common investors at district level. professional fund management teams. The fund managers are also ably supported with a strong in-house securities research department. All the branches. . Reliability UTIMF has consistently reset and upgraded transparency standards. Channel Islands. All these have evolved UTI Mutual Fund to position as a dynamic. a risk management department is also in operation. responsive.UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers) Regulations. restructured. UTI International Limited. 56. It has a nationwide network consisting 79 UTI Financial Centres (UFCs) and UTI International offices in London.854 Crores as on 31st Dec 2007 (source: www. who have been highly empowered to manage funds with greater efficiency and accountability in the sole interest of unit holders. Assets under Management UTI Asset Management Company presently manages a corpus of over Rs.amfiindia. They have well-qualified. UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizenry. for undertaking portfolio management services and also acts as the manager and marketer to offshore funds through its 100 % subsidiary. efficient and transparent SEBI compliant entity. UFCs and registrar offices are connected on a robust IT network to ensure cost-effective quick and efficient service.com) . 1993 on 3rd February 2004.
each holding 25% of the paid up capital. UTI AMC is a SEBI registered Portfolio Manager bearing registration number INP 000000860 and offers Discretionary. Our relationship with our employees works both ways. UTI AMC is the investment manager to the schemes of UTI Mutual Fund. Punjab National Bank and Bank of Baroda. opportunities and growth. the employees and the company flow in one direction. they give their best and we give them the best.. we strike the right balance at work. It also manages offshore funds and provides support to the Specified Undertaking of the Unit Trust of India. (UTI AMC) has been promoted by State Bank of India. Employee Benefits • • • • • Competitive salaries Comfortable work environment Career opportunities Insurance benefits Recreational amenities UTI Asset Management Company Ltd. It is the holding company for UTI Venture Funds Management Company which manages venture funds and UTI International Ltd. Life Insurance Corporation of India. there is ample amount of possibilities. When the combined force of both. Non-Discretionary and Advisory services to High Net Worth clients. Corporate and Institution .Work culture : We believe in providing an environment that encourages employees to achieve and fulfil personal goals and that of the company. The work culture at UTI Mutual Fund is simple – work is priority and the rest follows. which markets offshore funds to overseas investors.
In mid.Subsequently..1980s public sector banks were allowed to open mutual funds. Once again UTI has emerged as a serious player in the industry. LIC. SUUTI holds over 27% stake Axis Bank. SUUTI. when a massive decline in the market indices and negative investor sentiments after Ketan Parekh scam created doubts about the capacity of UTI to meet its obligations to the investors. Systematic study of its problems role and functions was carried out with the help of a reputed international consultant. UTI has been able to benchmark its employee . Some of the funds have won famous awards.UTI Mutual Fund was created as a SEBI registered fund like any other mutual fund.when the new share-holders actually paid the consideration money to Government its market share had come down to close to 10%! A new board was constituted and a new management inducted. In order to distance Government from running a mutual fund the ownership was transferred to four institutions. the UTI Act was repealed and the institution was bifurcated into two parts . including the Best Infra Fund globally from Lipper. organizational structure was changed to focus on newly emerging investor and distributor groups and massive changes in investor services and funds management carried out.For more than two decades it remained the sole vehicle for investment in the capital market by the Indian citizens.!! Fearing a run on the institution and possible impact on the whole market Government came out with a rescue package and change of management in 2001. The real vibrancy and competition in the MF industry came with the setting up of the Regulator SEBI and its laying down the MF Regulations in 1993. The assets and liabilities of schemes where Government had to come out with a bail-out package were taken over directly by the Government in a new entity called Specified Undertaking of UTI.Unit Trust of India was created by the UTI Act passed by the Parliament in 1963. Fresh talent was recruited from the private market. Certain reforms like improving the salary from PSU levels and effecting a VRS were carried out UTI lost its market dominance rapidly and by end of 2005. namely. each owning 25%. This was further compounded by two factors. namely SBI.UTI maintained its pre-eminent place till 2001. its flagship and largest scheme US 64 was sold and re-purchased not at intrinsic NAV but at artificial price and its Assured Return Schemes had promised returns as high as 18% over a period going up to two decades. BOB and PNB.
Gn Block. This measure indicates its revenue. registered in Guernsey. The UTI Asset Management Company has its registered office at: UTI Tower. has introduced Performance Related Payouts and ESOPs. The JV has got its license and has started its operations. Besides running domestic MF Schemes UTI AMC is also a registered portfolio manager under the SEBI (Portfolio Managers) Regulations. About 50% of the total IFAs in the industry work for UTI in distributing its products! India Posts.Kurla Complex. Dubai and Bahrain. PSU Banks and all the large Private and Foreign Banks have started distributing UTI products. UTI has also launched a Private Equity Infrastructure Fund along with HSH Nord Bank of Germany and Shinsei Bank of Japan. . In the area of alternate assets.compensation to the best in the market.400051.earning capacity and its financial strength. Mumbai . UTI International Limited. UTI has a 100% subsidiary called UTI Ventures at Bangalore This company runs two successful funds with large international investors being active participants. It runs different portfolios for is HNI and Institutional clients. In terms of equity AUM it ranked second and in terms of Equity and Balanced Schemes AUM put together it ranked FIRST in the industry. 530 billion and it ranked fourth. Channel Islands. It is also running a Sharia Compliant portfolio for its Offshore clients. Bandra (East).It has over 70 schemes in domestic MF space and has the largest investor base of over 9 million in the whole industry. It has branches in London. Bandra . For its international operations UTI has set up its 100% subsidiary. It has set up a Joint Venture with Shinsei Bank in Singapore. It is present in over 450 districts of the country and has 100 branches called UTI Financial Centers or UFCs. The total average Assets Under Management (AUM) for the month of June 2008 was Rs. UTI tied up with Shinsei Bank of Japan to run a large size India-centric portfolio for Japanese investors.
UTI has plans to further develop its offshore mutual funds unit.PRODUCTS AVAILABLE UTI Mutual Fund UTI Asset Management Company Ltd. The mutual funds organization offers a variety of schemes to Indian customers. manages the activities of UTI Mutual Fund in India. The corporate head office of UTI Mutual Fund is situated in Mumbai. Awards: Some of the important awards won by UTI Mutual Fund have been listed below. Many of the Indian entrepreneurs have benefited from their dealings with UTI Venture Funds. UTI Mutual Fund has several offices located across the country of India. Subsidiaries: UTI Mutual Fund has 2 subsidiaries: UTI Venture Funds and UTI International Ltd. Dubai and Bahrain.2008 . UTI Venture Funds: UTI Venture Funds is a private equity organization in India. • Lipper Fund Awards. UTI International Ltd: UTI International Ltd. has significant presence in international locations like London. The main focus area of UTI Venture Funds is growth capital.
• • • • UTI Asset Fund UTI Index Funds UTI Balanced Fund UTI Contra Fund .• • ICRA Mutual Funds Award. • • • • State Bank of India Bank of Baroda Punjab National Bank Life Insurance Corporation of India UTI Mutual Fund Schemes: UTI Mutual Fund offers a number of useful schemes to its customers.2007 Several ICRA 5 Star and 7 Star Awards UTI Mutual Fund Sponsors: Some of the biggest names in the financial and banking sector in India continue to sponsor UTI Mutual Fund. Some of the popular products launched by the mutual fund organization have been listed below. The sponsors of UTI Mutual Fund have been listed below.
UTI Contra Fund To provide long-term capital appreciation / dividend distribution through investments in listed equities and equity relayed instruments. The fund offers an opportunity to benefit from the impact of non rational investors behavior by focusing on stocks that are currently under valued because of emotional and behavioral patterns present in the stock market . UTI Master Plus (Equity) Capital appreciation through investments in Equities and equity related instruments. derivatives in India and also in overseas markets.SOME OF THE FUNDS OF UTI WITH THEIR OBJECTIVES UTI Master Share An equity fund aiming to provide benefit of capital appreciation and income distribution through investing in equity. convertible debentures. UTI Equity Fund UTI equity fund is opened-ended equity scheme with an objective of investing at least 80% of its funds in equity and equity related instrument with medium to high risk profile and up to 20% in debt and money market instrument with low to medium risk profile.
oil and gas. Building materials. which offer high dividend yield. UTI Services Industries Fund An open-ended equity scheme which invests in the equities of the Services Sector companies in the country. UTI Infrastructure Fund An open-ended equity fund with the objective to provide capital appreciation through investing in the stocks of the companies engaged in the sectors like Metals. chemicals. The fund will invest in the stocks of the companies which form part of infrastructure industries. engineering etc. UTI Dividend fund An open-ended equity scheme which aims to provide medium to long term capital gains and/or dividend distribution by investing in equity or equity related instruments. One of the growth sector funds aiming to provide growth of capital over a period of time as well as to make income distribution by investing the funds in stocks of companies engaged in service sectors. power. UTI Market Value Fund An open-ended equity fund investing in stocks which are currently under valued to the future earning potential and carry medium risk profile to provide ‘Capital Appreciation’ UTI mid Cap Fund .UTI Wealth Builder To achieve long term capital appreciation by investing predominantly in a diversified portfolio of equity and equity related instruments.
UTI Energy Fund To provide capital appreciation through investments in the stocks of the companies/institutions engaged in the banking and energy providing sectors. UTI Transportation & Logistics Fund An open-ended equity fund with the objective to provide capital appreciation through investments in the stocks of the companies/institutions engaged in the Transportation and Logistics Sector. . UTI Pharma & Healthcare Fund An open-ended fund which exclusively invests in the equities of the Pharma & Healthcare sector companies.An open-ended equity scheme which aims to provide ‘Capital appreciation’ by investing in mid cap stocks. UTI Banking Sector Fund An open-ended equity fund with the objective to provide capital appreciation through investments in the stocks of the companies/institutions engaged in the banking and financial services activities. UTI MNC Fund The investments of funds under the scheme will be predominantly in stocks of MNCs and other Liquid stocks.
UTI Index Select Fund It invests in select stock of the BSE Sensex and the S&P CNX Nifty. UTI Sunder Provide returns that closely correspond to the performance & yield of S&P CNX Nifty index. UTI Balanced Fund An open ended balanced fund investing between 40% to 75% in equity/equity related securities and the balance in debt with a view to generate regular income with . UTI Master Equity Plan Unit Scheme The scheme aims at securing for the investors capital appreciation by investing the funds of the scheme in equity shares of companies with good growth prospects. UTI Nifty Index Fund (Equity Index) MIF is a passively managed fund with the objective to invest in securities of companies comprising the S&P CNX Nifty in the same weightage as that of S&P CNX Nifty with the intention of minimizing the performance difference between the S&P Nifty and the fund and keep tracking error to the minimum.UTI Equity Tax saving Plan It aims at enabling members to avail tax rebate and also to participate in the benefits of growth through investments in equity and equity related instruments. The fund does not replicate any of the indices but aims to attain performance of the indices.
UTI Children’s Career Balanced Plan To invest in the name of the children up to the age of 15 years so as to provide them. treasury bills and repos of varying maturities with a view to generate credit risk free return UTI Gilt Advantage Fund To generate credit risk-free return through investment in sovereign securities issued the Central and / or a State Government. a means to receive scholarship to meet the cost of higher education and/or to help them in setting up a profession. UTI Bond Fund (Debt) Open – end pure debt scheme. UTI Retirement Benefit Pension Fund To provide pension to investors particularly self employed persons. which invests in rated corporate Debt papers and government securities with relatively low risk and easy liquidity. practice or business or enabling them to set up a home or finance the cost of other social obligations.capital appreciation. after they attend the age of 18 years. UTI G-Sec Fund Debt Invests only in Central government securities including call money. .
.UTI Liquid Fund Cash Plan The objective of the scheme is to generate reasonable returns with low risk and high liquidity from a portfolio of money market securities and high quality of debt instrument FUND PERFORMANCE Fund Performance is an exclusive section wherein the data quoted represents past performance of the various funds offered by UTI Mutual Funds. The performance figures are represented by the percent of the investment returns the funds have generated. The data is collated and represented right from the inception of the fund to the funds previous 3 and 2 years performance hence.
47% 38.74% 37.91% Last 1 yr 35.57% 36.29% 0.02% 53.87% 29.49% 16.21% 34.11% 6.49% 31.19% 13.45% 8.71% 32.01% 39.29% 17.51% 11.09% 41.97% 34.95% 21.62% .11% 24.85% 9.61% Last 3 yrs 32.02% 25.Fund performance UTI Mastershare1 UTI Master Plus (Equity) UTI Equity Fund UTI Contra Fund UTI Wealth Builder UTI India Lifestyle Fund UTI Infrastructure Fund UTI Dividend Yield Fund UTI Services Industries Fund UTI Master Value Fund UTI Mid Cap Fund UTI Leadership Equity Fund UTI Mastergrowth (Equity) UTI MNC Fund UTI Opportunities Fund UTI Software Fund UTI Banking Sector Fund UTI Pharma & Healthcare Fund UTI Auto Sector Fund UTI Equity Tax Saving Plan UTI Long Term Advantage Fund UTI Master Equity Plan Unit Scheme UTI Spread Fund UTI Master Index Fund (Equity-Index) 1 Since launch 18.84% 10.16% 30.07% 21.83% 12.15% 39.65% 32.67% 16.32% 25.19% 34.37% 44.64% 19.44% 24.76% 8.61% 13.21% 34.18% 17.28% 25.34% 7.11% -9.65% 26.84% 21.35% 30.85% 52.68% 12.4% 28.2% 28.44% -33.5% 27.31% 32.16% -18.7% 47.16% 17.99% 26.51% 31.35% 25.1% 27.29% 35.
87% 8.92% 6.67% 5.91% 21.19% 18.18% 26.2% 12.48% 5.31% 43.65% 7.92% 5.3% 5.79% 11.83% 7.22% 8.46% 36.59% 18.95% 23.57% 14.54% 8.16% 12.62% 23.09% 6.83% 11.79% 15.65% 7.32% 15.98% 24.21% 8.27% 9.36% 7.98% 15.65% .23% 6.69% 7.31% 13.46% 11.88% 8.24% 8.03% 15.14% 24.9% 5.62% 4.UTI Nifty Index Fund (Equity Index) UTI Index Select Fund UTI Sunder UTI Variable Investment Scheme UTI Balanced Fund (Balanced) UTI Children's Career Plan (Balanced) UTI Mahila Unit Scheme UTI CRTS UTI ULIP UTI Retirement Benefit Pension Fund UTI G-Sec Fund (Debt) (IP) UTI G-Sec Fund (Debt) (STP) UTI GILT Advantage Fund UTI Bond Fund (Debt) UTI Liquid Plus Fund UTI Children's Career Plan (Bond) UTI Monthly Income Scheme UTI MIS Advantage Plan UTI Floating Rate Fund UTI Money Market Fund (Liquid) UTI Liquid Fund Cash Plan UTI Short Term Income Fund 16.53% 15.01% 6.69% 9.8% 35.53% 20.29% 19.05% 20.82% 6.07% 13.76% 15.8% 6.75% 6.24% 8.77% 18.17% 6.87% 9.2% 35.88% 19.67% 6.74% 5.3% 6.36% 12.09% 8.
While some mutual funds aim to produce short term. high yield profits. professionally managed basket of securities at a relatively low cost. There are an incredibly large number of mutual funds. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. others look for the long term profit. Individuals are then able to invest small amounts of money into the fund for making a reasonable profit.3 INTRODUCTION TO THE PROJECT Concept Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares.1. debentures and other securities. The flow chart below describes broadly the working of a mutual fund: Mutual Fund Operation Flow Chart The simplest mutual funds definition is that they are an investment group set up by professional investors and headed by an investment manager. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. .
But that is what any successful investor attempts to do. Some of the other major benefits of investing in them are: Number of available options Mutual funds invest according to the underlying investment objective as specified at the time of launching a scheme. So. debt funds. On the other hand a long-term growth manager should try at least to beat the Dow Jones Industrial Average or the S&P 500 in a given fiscal year. a mutual fund is a pool of money contributed to by individual investors. Briefly put. In that case s/he would work hard to provide the highest return at the lowest risk.Mutual funds are seemingly the easiest and least stressful way to invest in the stock market. we have equity funds. So. debt funds offer the kind of security that is aimed for at the time of making investments. The only pertinent factor here is that the fund has to be selected keeping the risk profile of the investor in mind because the products listed above have different risks associated with them. The availability of these options makes them a good option. There will be a fund manager hired to invest this cash with a primary goal that depends upon the type of fund. while equity funds are a good bet for a long term. and anyone with a similar approach can be expected to make the same earnings. Diversification . S/he may be a fixed-income fund manager. and other organizations. While equity funds can be as risky as the stock markets themselves. The benefits on offer are many with good post-tax returns and reasonable safety being the hallmark that we normally associate with them. companies. gilt funds and many others that cater to the different needs of the investor. Quite a large amount of new money has been put into mutual funds during the past few years. The manger usually diversifies in a manner such that the net average earning is expected to be considerably positive. Balance Funds cater to the investors having an appetite for risk greater than the debt funds but less than the equity funds. Money market funds offer the liquidity that is desired by big investors who wish to park surplus funds for very short-term periods. they may not find favour with corporates or High Net worth Individuals (HNIs) who have short-term needs.
Liquidity Fixed deposits with companies or in banks are usually not withdrawn premature because there is a penal clause attached to it. Though they are affected by the interest rate risk in general. Mutual funds also provide the facility of direct repurchase at NAV related prices. People can pick their investment horizon and stay put in the chosen fund for the duration. They use intensive research techniques to analyze each investment option for the potential of returns along with their risk levels to come up with the figures for performance that determine the suitability of any potential investment. One can achieve this diversification through a Mutual Fund with far less money than one can on his own. Professional Management Mutual Funds employ the services of skilled professionals who have years of experience to back them up. . Equity funds can outperform most other investments over long periods by placing long-term calls on fundamentally good stocks. In closed-end schemes. the returns generated are more as they pick securities with different duration that have different yields and so are able to increase the overall returns from the portfolio. Potential of Returns Returns in the mutual funds are generally better than any other option in any other avenue over a reasonable period of time. Diversification reduces the risk because all stocks don’t move in the same direction at the same time. the units can be transacted at the prevailing market price on a stock exchange. The investors can withdraw or redeem money at the Net Asset Value related prices in the open-end schemes.Investments are spread across a wide cross-section of industries and sectors and so the risk is reduced. The debt funds too will outperform other options such as banks.
custodial . Affordable and a Low Cost affair Mutual Funds offer a relatively less expensive way to invest when compared to other avenues such as capital market operations. where there is little control with the investment being considered as unsecured debt from the legal point of view. SEBI acts as a true watchdog in this case and can impose penalties on the AMCs at fault. outlooks of the market and scheme related details are disclosed with reasonable frequency to ensure that transparency exists in the system. The regulations. Transparency Being under a regulatory framework. This means that the investment strategy. mutual funds have to disclose their holdings. Flexible. without much reduction in yield. Some mutual funds however. decisions judiciously taken. designed to protect the investors’ interests are also implemented effectively. investment pattern and all the information that can be considered as material. The fee in terms of brokerages. This is unlike any other investment option in India where the investor knows nothing as nothing is disclosed. This means that the money can be withdrawn anytime. charge exit loads for withdrawal within a period linked to Well Regulated Unlike the company fixed deposits. the Mutual Fund industry is very well regulated. Bullish market may result in schemes trading at Premium while in bearish markets the funds usually trade at Discount.The market prices of these schemes are dependent on the NAVs of funds and may trade at more than NAV (known as Premium) or less than NAV (known as Discount) depending on the expected future trend of NAV which in turn is linked to general market conditions. before all investors. All investments have to be accounted for.
Investment in mutual funds also offers a lot of flexibility with features such as regular investment plans. Diversification is definitely a good approach when it comes to successful investing by a reasonable investor. The research would reveal results regarding the investment attitude of various investors . volatility (Standard Deviation) is the measure of the degree to which a fund's return varies on a day-to-day or month-to-month basis. can benefit from a portfolio comprising of high-priced stocks because they are purchased from pooled funds. The research involves only a general study related to the investment attitude of investors towards UTI mutual funds. The research was conducted with 100 samples and was restricted to the town Coonoor and the villages surrounding it.fees and other management fees are substantially lower than other options and are directly linked to the performance of the scheme. regular withdrawal plans and dividend reinvestment plans enabling systematic investment or withdrawal of funds. Diversification minimizes the inherent risks of stock trading by spreading out the capital over many stocks. The more volatile a stock or market. But with mutual funds. the more money an investor can gain (or lose!) in a short time. Even the investors. It is usually expressed as a percentage and computed as the annualized standard deviation of the percentage change in daily price. It all depends really on the overall investment climate and the sectors in which funds are flowing in. But over-diversification is again a bad thing. which is in the Nilgiris District. who could otherwise not enter stock markets with low investible funds. In referring to mutual funds. there is that the controllers may over-diversify. 1.4 SCOPE OF THE STUDY The research study undertaken does not probe too much about whether the respondents have a very fine insight into mutual funds. The researcher has made a study of the attitude of the investors in UTI Mutual Funds and has also analysed their satisfaction level from the investors point of view and has analysed the relevance of different publications and information provided to investors. Volatility is a measurement of the change in price (fluctuations) over a given time period.
. 1. The study will help the concern to work on the areas of importance for further planning.about UTI mutual funds and thus in turn helps the organization to identify the attitude of various investors and to improve the marketing of mutual funds. Find out the proportion of various schemes invested in UTI Mutual Funds. The study has been done with a motive to change the attitude of the investors and help them gain more knowledge on their investment. Find out the main usage of UTI Mutual Funds. The study has helped the researcher to gain real time experience by interacting with the investors and has helped to analyse “The attitude of the investors towards UTI Mutual Funds”.5 OBJECTIVES OF THE STUDY PRIMARY OBJECTIVES: Find out the attitude of customers towards UTI Mutual Funds.
SECONDARY OBJECTIVE: Measure the level of Customer satisfaction in UTI Mutual Funds. .6 LIMITATIONS OF THE STUDY The project done is restricted to UTI Mutual funds in Coonoor and its surroundings only. biased information may restrict validity of inference possible. 1. As the survey was pertaining to investment attitude of investors.
the literature review usually precedes a research proposal. The study was constrained by limitations of time. such as a thesis. . The raw data was collected with the help of structured questionnaire technique. Chapter II REVIEW OF LITERATURE A Literature review is a body of text that aims to review the critical points of current knowledge on a particular topic. Therefore study is bounded by the limitation of this technique. Most often associated with science-oriented literature.
Its ultimate goal is to bring the reader up to date with current literature on a topic and forms the basis for another goal. current and relevant references with consistent. 2.1 Systematic Investment Plan 2.1 Investors and Investment 2.3 NAV 2. and an unbiased and comprehensive view of the previous research on the topic. On the other hand those in the developed markets say that volatility would make them go for an increased allocation in .4 Investors Attitude towards Mutual Funds.1 Investors and Investments Investors in emerging markets say that they look at market volatility as a good opportunity to increase the level of risk in their portfolio.2 Mutual funds 2. such as the justification for future research in the area. A good literature review is characterized by: a logical flow of ideas.methodology and results section.2. appropriate referencing style. Here we discuss on different reviews related to the following: 2. proper use of terminology.
cash and exercise increased caution with regard to investment. “Investors increasing allocation of cash is not because their ability to bear that risk has been impacted”, says Bansal. 
JOHN C. BOGLE  the former CEO of Vangaurd Group Of Mutual Funds, in his article “Six Lessons for Investors - Be diversified and don't assume past performance will continue” on Jan 08, 2009 says, There is almost no limit to the ability of investors to ignore the lessons of the past. This cost them dearly last year. Here are six of the most important of these lessons: 1) Beware of market forecasts, even by experts. 2) Never underrate the importance of asset allocation. 3) Mutual funds with superior performance records often falter. 4) Owning the market remains the strategy of choice. 5) Look before you leap into alternative asset classes. 6) Beware of financial innovation.
Investment is the employment of funds with the aim of achieving additional income or growth in value. The essential quality of an investment is that it involves ‘waiting’ for a reward. The term investment does not appear to be simple as it has been defined. Investment is the allocation of monetary resources to assets that are expected to yield or positive return over a given period of time says Preeti Singh. 
2.2 Mutual Funds Mutual Fund schemes are witnessing an increasing amount of innovation as funds
try to ensure that their offerings caver a wide variety of options. This translates into an increasing array of schemes on offer for investors. However a large choice often means more confusion for investors.  Mutual Funds are perhaps the only segment in the financial services businesses where the private sector has grown to dominate. Several innovations, efficiencies and technological improvements can be attributed to the incentives these players had, to differentiate themselves.  Mutual Funds disclose the entire portfolio, a practice not followed in many markets. Fund managers would ideally like to build up their positions, before letting the world know what they are buying. In terms of transparency and disclosure the mutual fund industry has indeed taken a big leap in the last 10 years.  “Mutual Funds have been gaining lot of importance in the Indian Capital Market arena from the time of launch. The growth envisioned in the Mutual Fund Industry has made the Central Government keep a close watch on the issues pertaining to the mutual fund industry. In this process the various governments have brought in regulations as regard to Mutual Funds in the Budgets” says Pradeep Kumar S and Murugavel A.  India's mutual fund industry is one of the brightest spots in an already fast-growing domestic financial sector.Assets under management have swollen in the past year by almost 60 per cent to more than Rs5,379bn ($137bn) as the country's once-conservative retail investors have been attracted to equities by new highs on the stock market says Joe Leahy, Andrew Hill and Paul Betts.  Mutual Funds are increasingly gaining popularity among the Indian investors and have become the much sought after investment option, a latest Nielsen survey says. According to a survey conducted by global media and information company Nielsen, as much as 90 per cent of investors parked their funds in mutual funds last year, raising the share of MF investments in the overall portfolios to 40 per cent from 34 per cent previously. Interestingly, the profile of investors in mutual funds has been falling into a
younger category with males in their mid-30s investing more in them, compared to those in their 40s, the 'Nielsen Mutual Fund Brand Health Monitor 4' survey stated. "The marketing efforts of Mutual Fund AMCs (Asset Management Companies), coupled with the media coverage the sector has enjoyed, have contributed to their increasing popularity as an investment option," The Nielsen Company Associate Director Customized Research Kalyan Karmakar said. The high returns and ease of operating in the equity market take precedence over tax benefits as the key reasons for investing in a mutual fund. Even with the drop in Sensex, equity funds at 53 per cent have the highest share of future mutual fund investments, the survey revealed. "We are now seeing a change in mindset, where investors previously regarded Mutual Funds as a tax saving option but are now buying them in the hope of greater financial return as a result of the whopping rise in Sensex bringing greater profit to many investors last year," Karmarkar added.  We note that there is a common tendency amongst insurance companies to not just protect clients from risks to their lives, health, and assets, but also to manage clients’ investments. Insurers do this through unit-linked insurance plans (ULIPs). Insurers’ profitability today depends largely on attracting investments in the garb of life cover. ULIPs turn out very expensive for investors, especially for terms shorter than 10 years. ULIPs when compared with mutual funds differ on liquidity, tax efficiency, and expenses. Broadly speaking, we can say that mutual funds offer better advantages in terms of investment says Mr. Sameer Kamdar the Country Head, Mutual Funds, Mata Securities in his article Mutual Funds offer investors more flexibility.  Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because all the
decline at the same time and in the same proportion. This diversification through an MF is achieved with far less money than one can be on his own. Top-performing MF schemes have produced good returns, which a naive investor rarely achieves in course of direct stock-market trading. Not everyone has the skill, knowledge and time to plan his/her investments. The easier way out is to select the right MF and transfer the entire responsibility of managing the money to the fund manager. Thus they can avail of services of experienced and skilled professionals who are backed by a dedicated investment
 The mutual fund industry is a lot like the film star of the finance business. Yet it has been the subject of perhaps the most elaborate and prolonged regulatory effort in the history of the country. Today. The total asset under management of Mutual Fund industry rose by 9. The Indian mutual funds industry has been growing at a healthy pace of 16. 2006 as published by AMFI. its size was Rs. which is achieved by the pooling of a number of small investments into a large bucket.72. debt and money market instruments. Since then this figure has been increasing tremendously and thus revealing the efficiency of growth in the mutual fund industry.1. you can simply move to a debt fund or an MIP. If you are unsure about the equity markets this year. Here again. The mutual fund is structured around a fairly simple concept. This means an annual growth rate of 21% for the next nine years.  According to the Global Asset Management 2006 Report form Boston Consulting Group. while it might not be a good bet for the short term. which went up to Rs. Though it is perhaps the smallest segment of the industry. Mutual Funds provide an attractive and simple way of tapping the potential of various investment options like equity.309953.68 per cent for the past eight years and the trend will move further as has been emphasized by the report.000 crores.45% from Rs. Investment at regular intervals helps to average out the cost of purchase. and there are constant shifts and upheavals.100 crores in 1991 and subsequently touched a figure of Rs. investors are now being presented with a broad array of Mutual Fund choices.46 crores in November. the MF proves to be beneficial since they provide features like systematic investment/transfer plans.research team. the mitigation of risk through the spreading of investments across multiple entities.04 crores to 339232. It is advisable to spread out the investments rather than lump-sum ones. With the entrance of new fund houses and the introduction of new funds into the market. There are chances of continued volatility agues the Park Financial Advisors. India-managed assets will exceed more than $1 trillion by 2015. it is also the most glamorous – in that it is a young industry where there are changes in the rules of the game everyday. 4.Indian markets have the potential over the long run.000 crores in 1998.  . In 1987.
Allocating one’s equity portfolio across diverse investment styles and themes ensures sustainable return across market cycles. Hence one buys more units when the market is low and less when the market is high. infrastructure and dividend yield themes to ensure that the basket outperforms irrespective of the market conditions during different time periods. SIP is a smart way to create wealth. This average cost per unit will determine your overall return on your investments. And over a long period.UTI Dividend Yield is a pure equity fund that aims at capital appreciation says Swati Kulkarni manager of UTI Equity Funds in her article “Investing across themes is safest bet”.2.  2. The returns are expected to be consistent and less volatile compared with funds tat follow an aggressive investment style. Power of compounding: By extending the investment period one can earn profit. middle cap. every month will do. Hence. investors can expect returns similar to any diversified-equity fund.  By Systematic Investment Plan one can invest a predetermined amount of money in chosen schemes at the applicable NAV based Sale Price on each transaction date.1 SIP (Systematic Investment Plan) SIP is a good Habit. Each transaction will fetch some additional units that will be added to the investment account. ones investment averages out the market highs and lows. . Just a little. Thus every investor should build a basket of funds across large cap. With SIP. one need not time the market. It doesn’t demand lump sum investments. SIP is truly small on savings and big on benefits says the CEO of Kotak Mutual Funds. Rupee cost averaging: With UTI SIP one can invest a uniform amount regularly and average out the cost of acquisition of units.
• Rupee-cost averaging: Since the investments are evenly spread. Here are some of the benefits of SIP: • No need to time the market: It is a very difficult task to judge the right time to pump in their money in the market.and accumulate more wealth. They'll be able to earn a substantial corpus on a small monthly investment in the short-term or on a medium-term basis. they dont commit the error of buying units when the market is at its peak. they may do so when the NAV is really high. Since they are buying small amounts continuously. one’s money buys lesser units when the market is high and more units when the market is low. For instance. If the market dips after then. SIP helps your fund grow by the power of compounding. let's say if they bought the units of a fund when the bull run was at its peak.000. leading to a high NAV. Over time.  When one buys the units of a fund. But. their investment will average out over a period of time. They will end up buying some units at a high cost and some units a lower price. the value of the investments falls and he/she may have to wait for a long while to make a return on their investment.  Kairav Shah in his article “Investing in Mutual Funds” says SIP or Systematic Investment Plan is a great way to discipline oneself as it purchases mutual fund units every month at a predetermined date and amount. . their chances of making a profit are much higher when compared to an one-time investment says Rachana. investors can easily start saving and investing without altering their present budget in a big way. And that’s where SIP helps. This helps bring down the average cost per unit and helps investors benefit from market volatility. One can invest as low as Rs 500 through post-dated cheques or by instructing their bank for an ECS. • Low cost of investment: With the monthly contribution being as low as Rs 1. if one invest via a SIP. SIP is for those who fear to invest in equities at the right time.
" He says.• Liquidity: The liquidity of SIPs adds to its beauty.  . the investor stands to benefit from rupee cost averaging. irrespective of the market rising. as the investor will be entering the fund at different NAVs. the investor ends up buying more units when the price is low and fewer units when the price is high. This will enable him to invest regularly i. The other investment option comparable to SIPs is the recurring deposit schemes from Post office and banks. Therefore. "Systematic Investment Plan makes the volatility of the securities markets work in your favor.e. Also. Basically. where securities markets (equities and fixed income instruments) can be volatile and it is rarely possible to time the markets and predict the future. It is useful for those who want to get their investments going. We can seldom accurately predict when a particular stock will move up or where the interest rates are headed. This concept is called Rupee Cost Averaging (RCA). or fluctuating. Investing in SIPs is also known as Rupee cost averaging. The advantage of rupee cost averaging is that the Net asset value (NAV) is averaged out. which may be higher or lower depending on the market condition. improve investing discipline. Since the amount invested per month is a constant. under an SIP option an investor commits making a regular (monthly) investment in a particular mutual fund/deposit.  SIP is a way of investing specifically designed for those who are interested in building wealth over a long-term and plan out a better future for themselves and their family. the average unit cost will always be less than the average sale price per unit. but don't have a large sum of money to invest. The trade cycle of equity related SIPs is T+3 days and that of debt and liquid related SIPs is T+1 day. One can easily get their money in a short timeframe. falling. An investor who is not having a lump-sum amount to invest and also does not want to take much risk on his investment should always select a ‘Systematic Investment Plan’ option."  SIP is an investment option that is presently available only with mutual funds. "In developing economies like India. Sharma aptly sums it up.
through its valuation norms. however. even though they realize owning funds carries risks and may not always be profitable. they are far less likely to view funds as safe or profitable. it can. As far as the mutual funds are . has been trying to ensure some degree of standardization in the manner in which different AMCs handle this subjectivity.  2. those who either owned funds in the past but do not now or who indicate they do not ever expect to own funds have far less positive attitudes toward funds.4 ATTITUDES TOWARD MUTUAL FUNDS A strong majority of current fund owners have positive attitudes toward funds. In particular. preferences. conceal as much as it reveals. each asset and liability of the scheme needs to be valued. This part tries to review the literature available on the mutual funds scheme in India and abroad. It can also be calculated as: Unit capital plus reserves. Nav = value of all assets minus value of liabilities other than to unit-holders. Those who do not own funds but expect to do so in the future have attitudes toward funds that are neither as positive as those of current owners nor as negative as those of other non-owners.3 NAV NAV is the single most widely talked about figure or indicator when reviewing mutual funds. SEBI. In contrast. At one level a simple ratio. The existing studies on “Investment patterns of investors” are very few and very little information is available about investor perceptions.2. There is a significant element of subjectivity in the valuation of assets. attitudes and behavior. In order to calculate the NAV of a scheme.
During this period.  Madhusudhan Vs Jambodekar (1996) conducted a study to assess the awareness of MFs among investors. to the policy makers and mutual funds to design the financial products for the future.  Nalini and Sasikumar studied about the mutual funds in India. De Bond and Thaler (1985) while investigating the possible psychological basis for investor behavior. to identify the information sources influencing the buying decision and the factors influencing the choice of a particular fund. The main objectives of the study were to analyze how the mutual fund schemes help to mobilize savings from the household sector. Mutual funds have now made their presence felt in Indian financial market by mobilizing the savings of household and corporate sectors and deploying the same in the market.5% and estimates showed that more than 5.6% of the total financial savings of the Indian public were invested in mutual funds.  Gupta (1994) made a household investor survey with the objective to provide data on the investor preferences on MF’s and other financial assets. In spite of this limitation. the share of mutual funds in the household financial savings rose from 2. The findings of the study were more appropriate. at that time. Investors look for safety of Principal.3%to 3. The study reveals among other things that Income Schemes and Open Ended Schemes are more preferred than Growth Schemes and Close Ended Schemes during the then prevalent market conditions. The period of study was 1987 – 91.concerned. there are hardly few studies undertaken earlier. All efforts in this direction are fragmented. Newspapers and Magazines are the first source of information through which investors get . argue that mean reversion in stock prices is an evidence of investor over reaction where investors over emphasize recent firm performance in forming future expectations of the investment. Liquidity and Capital appreciation in the order of importance. a few of the parallel and related studies are reviewed here under.
psychological and sociological factors dominated the economic factors in share investment decisions.  In India.00. Agents play a vital role in spreading the Mutual Fund culture. their economic and demographic profile.to know about MFs/Schemes and investor service is a major differentiating factor in the selection of Mutual Fund Schemes. portfolio size.  Syama Sunder (1998) conducted a survey to get an insight into the mutual fund operations of private institutions with special reference to Kothari Pioneer. for.  Ippolito (1992) says that fund/scheme selection by investors is based on past performance of the funds and money flows into winning funds more rapidly than they flow out of losing funds. age and income are the two important determinants in the selection of the fund/scheme. open-end schemes were much preferred then. investment preference for equity as well as other savings instruments. data was collected from 3. SEBI – NCAER Survey (2000) was carried out to estimate the number of households and the population of individual investors.0000 geographically dispersed rural and urban households. Some of the relevant findings of the study are : Households preference for instruments match their risk perception.  Shanmugham (2000) conducted a survey of 201 individual investors to study the information sourcing by investors. brand image and return are the prime considerations while investing in any Mutual Fund. The survey revealed that awareness about Mutual Fund concept was poor during that time in small cities. and reports that among the various factors. Bank . This is a unique and comprehensive study of Indian Investors. one of the earliest attempts was made by NCAER in 1964 when a survey of households was undertaken to understand the attitude towards and motivation for saving of individuals. Another NCAER study in 1996 analysed the structure of the capital market and presented the views and attitudes of individual shareholders. their perceptions of various investment strategy dimensions and the factors motivating share investment decisions.
behavior gets modified. A few among them are Vidyashankar (1990). Lall . We have to wait and watch the investors’ reaction to the July 2nd 2001.  Anjan Chakarabarti and Harsh Rungta (2000) stressed the importance of brand effect in determining the competitive position of the AMCs. Sadhak (1991). the higher income groups have higher share of investments in Mutual Funds (MFs) signifying that MFs have still not become truly the investment vehicle for small investors. professional and research journals. Sarkar (1991). UTI. the study predicts that in the next two years (i.  Shankar (1996) points out that the Indian investors do view Mutual Funds as commodity products and AMCs. explaining the basic concept of Mutual Funds and highlight their importance in the Indian capital market environment. 43% of the non-investor households equivalent to around 60 million households (estimated) apparently lack awareness about stock markets. compared with low income groups. Since 1986. They touch upon varied aspects like Regulation of Mutual Funds. Investor protection. Investor expectations. to capture the market should follow the consumer product distribution model. though cannot be easily captured by computable performance measures. Their study reveals that brand image factor.e. So as situation changes. a number of articles and brief essays have been published in financial dailies. (Note: Behavior is a reaction to a situation.  Goetzman (1997) states that there is evidence that investor psychology affect Fund/scheme selection and switching. periodicals. 2000 hence) the investment of households in Mutual Funds is likely to increase. Agarwal (1992). great fall of the Big Brother. Sharma C. influences the investor’s perception and hence his fund/scheme selection. Trend in growth of Mutual Funds and some are critical views on the performance and functioning of Mutual Funds. findings and predictions of behavior studies should be viewed accordingly).Deposit has an appeal across all income class.. and. Nevertheless. Hence.
wsj. Anagh Pal. Investment Management Security Analysis and Portfolio Management. Mishra also points out that “Brand” plays an important role for the investment. financial intermediaries. Sandeep Bamzai (2001). Krishnan (1999). Pp2 5. Ajay Srinivsasn (1999). Barua (1991). 56 . Oct 8. Pp6 2. Himalaya Publishing House. Eleventh Edition.” says Mishra. Outlook Money.  Akhilesh Mishra(2008) has done a study on the topic “Mutual Fund as a Better Investment Plan” and states that many of the people have the fear of Mutual Funds. Pp1 3. Investor’s characteristics on the basis of their investment size Raja Rajan (1997).(1991). like academicians. industrialists. Atmaramani (1996).html?mod=googlenews_wsj 4. Subramanyam (1999). http://online. Preeti Singh. P 30.  From the above review it can be inferred that Mutual Fund as an investment vehicle is capturing the attention of various segments of the society. Atmaramani (1995).com/article/SB123137479520962869. investors and regulators for varied reasons and deserves an in depth study.2008. 30th July 2008. Segmentation of investors on the basis of their characteristics was highlighted by Raja Rajan (1997). Outlook Money. REFERENCES 1. 2003. and the relationship between stage in life cycle of the investors and their investment pattern was studied by Raja Rajan (1998). he adds. Birenshah. SBI Mutual Funds.Cashing in on turmoil. The A to Z of Mutual Funds-The Guide to investments. Many of the people have not invested in Mutual funds due to lack of Awareness although they have money to invest. he adds. “They think their money will not be secure in Mutual funds. Only people who invest directly know well about the Mutual fund and its operations. He also says that the investors need the knowledge of Mutual Funds and its related terms. Samir K.
March 2008..cms 9. Updated at Tue.rediff.asp?date=10/1/2001&story=3 http://sify.org/pdfs/mutual_fund_survey_report.com/downloads/MutualFunds.consumerfed.php?id=13525011 18. http://vidyasagar. http://www. SIP Plan.pdf 21.utimf.com/product_services/value_added_services/sip_next.personalfn. 2005 at 11:21 Source: Moneycontrol.com) 17. Investing across themes is safest bet. Number 2. 19. Mutual Fund Insight. Issue 3.com/detail.cms 10.in/Journal/Commerce/vol12/10th%20Article.com/finance/fullstory. October 2008. http://economictimes.curpg-2. and Murugavel A. Jan 27.com/doc/13246827/PROJECT-ON-MUTUAL-FUNDAKHILESH-MISHRA 22.com/Personal_Finance/Mutual_Funds/Analysis/M Fs_offer_investors_more_flexibility/articleshow/msid-3095105.com/articleshow/3013728.com/cms/admin/article.aspx .pdf 12. http://www. UTI Fund Watch. Volume VI. 2008. DNA.com/mccode/news/article/news_article. http://www.Kotak Mutual Fund.com/Cmc/PDFs/2001/rajeswari.indiatimes.jsp?aid=8352 16. http://www. http://www.indiatimes. http://www.ac.aspx 13.rediff.utiicm. Akhilesh Mishra.moneycontrol.pdf 20. Pp11 7.com/money/2007/dec/14mf.bseindia.scribd.htm 15.htm 14. Feb 01. Pp 139.6. http://www.php? autono=160578 (SIP: Why is it good for you? Published on Thu. Mutual funds is the better investment plan. 2005 at 11:27. Volume2. http://www. http://economictimes. Swati Kulkarni. http://www.window2india. 15th October-14th November. http://www.pdf 11.indiastudychannel. 8. Karvy the finapolis. http://www. Pradeep Kumar S.com/projects/666-A-STUDY-ON-MUTUALFUNDS-IN-INDIA.com/getahead/2005/nov/09sip.
the search for knowledge through objective and systematic method of finding solution to a problem is research. comparison and experiment.CHAPTER III RESEARCH METHODOLOGY Research is an original contribution to the existing stock of knowledge making for its advancement. In short. It is the pursuit of truth with the help of study. . observation.
2.2 Sampling Technique 3.2.4 Sample Unit 3. Selection or .3 Sampling Size 3.5.2 Sampling Design 3.A research method refers to the methods the researchers use in performing research operations. Descriptive research is used to obtain information concerning the current status of the phenomena to describe.2.2. Research Methodology is a way to systematically solve the research problem.2.6 Statistical Tools 3.1 Population 3. By research methodology not only the research methods are considered but also the logic behind the methods used in the context of the research study and explanations are given on why a particular technique is used.1 Primary Data 3. Identification of information needed to solve the problem. The focus of this study was on self-reported decisions made by various investors regarding the investment patterns in mutual funds.2.2 Secondary Data 3. Thus it involves Statement of the problem.5. "What exists" with respect to variables or conditions in a situation. The researcher has discussed the following: 3.5 Sources Of Data 3.2.1 Research Design 3.2.1 RESEARCH DESIGN The research design that is adopted in this study is descriptive design.
2.1 SAMPLING DESIGN POPULATION: The population for this study is investors of UTI mutual funds in Coonoor city. Design of procedure for information collection.2 3. Collection of information. From the obtained database cheque number was selected as the primary key. The sample frame for this study is the company’s database of Coonoor city (finite universe).2. Analysis of information. Random numbers were generated and using random number tables 100 investors were selected. Under this sampling design. every item of the universe has an equal chance of inclusion in the sample. . Then primary key is compared with random numbers and if the primary key and random numbers are matching those numbers are picked up. 3. Simple random sampling is also known as “probability sampling” or “chance sampling”.2 SAMPLING TECHNIQUE: The sampling technique used is simple random sampling. Identification of target population and determination of sampling procedure. Such picked up random numbers were the sample respondents from whom the questionnaires were collected.3 SAMPLE SIZE: The sample size for this study is 100 investors of UTI mutual funds in Coonoor city out of entire population 2000 which consists of 5% of the population. 3.2. The Nilgiris. 3.development of instruments for gathering the information. Generalizations and/or predictions.
company fact sheets.2.5. magazines and brochures.5 SOURCES OF DATA: Data were collected through both primary and secondary data sources.2. the logical and sequential arrangement of questions has been taken care of. 3. and thus happen to be original in character. The research was done in the form of direct personal interviews and through telephone interviews.1 QUESTIONNAIRE DESIGN Proper care has been taken to ensure that the information needed match the objectives. have been collected.22.214.171.124 SECONDARY DATA Secondary data consist of information that already exists somewhere. families. 3. 3. which in turn match the data collected through the questionnaire.4 SAMPLE UNIT: Individuals. The primary data with the help of questionnaire were collected from various investors. Primary data was collected through questionnaires.5. The basic cardinal rules of Questionnaire design like using simple and clear words. . Secondary data is collected from company websites. other websites. 3.1 PRIMARY DATA A primary data is a data.3. partnership firms and sole proprietors were the target respondent groups from which the data were collected. corporates. which is collected afresh and for the first time.1.2.
3.6 STATISTICAL TOOLS The statistical tools used for this analysis are: Simple Percentage analysis: Percentages are calculated and in certain cases percentages along with cross tabulation has been calculated. “in the process of analysis.2. relationships or differences supporting or conflicting with original or new hypotheses should be subjected to statistical tests of significance to determine with what . CHAPTER IV ANALYSIS AND INTERPRETATION The term analysis refers to the computation of certain measures along with searching for patterns of relationship that exist among data groups. Mean Score Values: Mean score values has been calculated for the different scales used to find the perception and satisfaction level of investors. Thus.
PHASE I: PERSONAL FACTORS AGE OF THE INVESTORS The age of individual indirectly represents the amount of service the individual possesses. PHASE II Investment Factors: In this particular phase the responses for the various investment related factors that have been considered in the questionnaire have been analysed. The investors’ attitude and satisfaction related factors have been analysed in this phase. gender. Normally individuals who are aged tend to be more mature in their thoughts and . qualification and work status. The factors considered are age.” Interpretation refers to the task of drawing inferences from the collected facts after an analytical and /or experimental study.validity data can be said to indicate any conclusions. The factors are analyzed under the following broad phases: PHASE I : Personal Factors PHASE II: Investment Factors PHASE I Personal Factors: This phase includes the personal details of the investors.
TABLE 4. there are more of above middleaged investors who can easily follow the investment and the market movements.1 .1 Age distribution of investors in UTI Mutual Funds Age 20-30 31-40 >41 No of investors 12 20 68 Percentage 12 20 68 From the table it is found that almost 68% of the investors of UTI Mutual Funds are above the age of 41 years. As they have the experience they will be in a position to adjudge how the investment would help in the future. Thus. CHART 4.try to be committed in whatever work they do. 20% of the investors belong to the age group of 31-40 years and only 12% belong to the age group of 20-30 years.
in a given social group or system. It is a focus of analysis in the .Age Distribution of investors 80 Percentage 60 40 20 0 20-30 30-40 >40 Age in years no of investors GENDER A gender is defined as a set of perceived behavioral norms associated particularly with males or females.
whereas only 23% of female investors invest in UTI Mutual Funds.2 . TABLE 4. Gender role refers to the attitudes and behaviors that class a person’s stereotypical identity.social sciences and humanities.2 GENDER DISTRIBUTION OF INVESTORS Gender Male Female No of Investors 77 23 Percentage 77 23 There are about 77% of male investors. CHART 4. Gender has an influence on the mentality towards investing in Mutual funds as mutual funds involve risk.
GENDER 23% Male Female 77% INCOME OF INVESTORS .
29% have a income of above 20000 per month. Table 4. 32% of investor’s have a income between Rs.10000 per month. when an investor has sufficient income he will like to invest in many plans.3 INCOME OF THE INVESTORS Income per month <5000 5000-10000 10000-20000 >20000 No of investors 6 32 33 29 Percentage 6 32 33 29 33% of investor’s have a income between Rs 10001 – 20000 per month. There are 6% of investor’s who have an income less than Rs.5000 per month CHART 4.The income level of investors is an important factor for investment. as a measure to earn from the investment. 5001.3 .
>20000 10000-20000 5000-10000 <5000 0 6 10 20 30 40 No.Income of investors Amount in Rs. of Investors 29 33 32 AMOUNT INVESTED IN MUTUAL FUNDS .
Such amount may be a small sum or a large sum according to the interest of the investor’s.4 AMOUNT OF MONEY INVESTED IN MUTUAL FUNDS Amount Invested <100000 >100000 Total No of investors 69 31 100 Percentage 69 31 100 69% investors have invested less than Rs. Table 4.Investor’s will like to invest certain sum of money for future benefits. .100000 in Mutual funds.100000 in Mutual funds whereas 31% have invested more than Rs.
4 Am ount invested in Mutual Funds >100000 24% <100000 >100000 <100000 76% .CHART 4.
Table 4. . of investors 32 45 12 11 100 Percentage 32 45 12 11 100 Nearly 45% of the investor’s are under graduates whereas 12% of the investor’s are post graduates. 11% are professional degree holders and 32% have completed their schooling.QUALIFICATION OF INVESTORS The Qualification of investors is an important aspect related to Investments in Mutual Funds.5 QUALIFICATION STANDARD OF INVESTORS Qualification Pre-schooling Under graduate Post graduate Professional degree Total No.
of investors Qua lifica tion . of Investors No.CHART 4.5 Qalification of Investors 50 45 40 35 30 25 20 15 10 5 0 Pr esc ho oli ng Un de rg ra du at e Po st gr ad ua Pr te of es sio na ld eg re e No.
TABLE 4. in order to secure their life’s (Life Insurance) and their properties (General Insurance).6 INVESTORS HAVING AN INSURANCE POLICY Insurance policy Yes No Total No. .INVESTORS HAVING AN INSURANCE POLICY “Insurance” is yet another investment avenue where people can invest. of investors 79 21 100 Percentage 79 21 100 The above table shows that 79% of investors have an insurance policy in addition to their investment while 21% of investors do not have such policies. Insurance has helped many investors’ from various disasters.
6 Investors having Insurance Policy 21% Yes No 79% .CHART 4.
REASONS FOR PREFERENCE OF MUTUAL FUNDS Mutual funds are preferred for various reasons.7 REASONS FOR PREFERENCE OF MUTUAL FUNDS Preference of Mutual Funds Savings Returns Diversification Risk tolerance Total No. In case of mutual fund its distinctive features also act as a reason for investor’s to invest in it. The benefits derived from mutual fund investment acts as a reason for preferring mutual funds. TABLE 4. risk tolerance for 23% and diversification for 8% of the respondents . of investors 28 41 8 23 100 Percentage 28 41 8 23 100 Returns has been the main reason for preferring mutual funds as 41% of the respondents have opted for it. while saving is the reason for 28% of investor’s.
Chart 4.of investors . of investors Factors/Reasons Di v er si No.7 Reasons for preference of Mutual funds 45 40 35 30 25 20 15 10 5 0 gs Re tu rn s n Sa vin fic at io to le re n Ri s k ce No.
of investors 46 22 12 20 100 Percentage 46 22 12 20 100 .. They differentiate the two with different factors including risk.PREFERENCE TOWARDS INVESTING IN MUTUAL FUND IN COMPARISON TO SHARES Investing in shares is yet another option provided to people. Table 4. tax benefits and so on.8 PREFERENCE TOWARDS INVESTING IN MUTUAL FUND IN COMPARISON TO SHARES Difference Savings Tax benefits Diversification Risk tolerance Total No. but still investor’s since out differences towards investing in mutual funds than in shares.
22% of investor’s feel that tax benefits is considered as a factor to invest in mutual fund than investing in shares and 20% feel that risk tolerance is the factors of difference and 12% feel that diversification is the factor considered to invest in mutual funds rather than in shares. Chart 4.From the above table it is clear that 46% of the respondents feel that savings is the major factor of difference for investing in mutual funds rather than in shares.8 .
The Difference in investing in Mutual funds rather than Stocks. 50 45 40 35 Percentage 30 25 20 15 10 5 0 gs its n er si fic at io Di v to le re nc e Ri s k Sa vin be ne f Ta x Factors No. of investors .
NUMBERS OF PLANS INVESTORS HAVE INVESTED IN MUTUAL FUNDS Investor’s Invest in not only one plan in mutual fund. . They select as to which would be beneficial for them and accordingly invest in many plans which fulfill their desire.12% have invested in two plans and the rest 10% have invested in three plans. TABLE 4.9 NUMBERS OF MUTUAL FUND PLANS INVESTORS HAVE INVESTED IN No of plans Only one Two Three More than Three Total No. of investors 42 12 10 36 100 Percentage 42 12 10 36 100 From the above table it is clear that 42% of the respondents have invested in only one plan and 36% of the respondents have invested in more than three plans.
of investors .of Plans No.9 Number Of Mutual Fund Plans Investors have Invested in 45 40 35 30 Percentage 25 20 15 10 5 0 Only one Two Three > Three No.Chart 4.
TABLE 4. A word of mouth from a person can also be a media as means through which information is conveyed to the public.MEDIAS THROUGH WHICH INVESTOR’S KNOW ABOUT UTI MUTUAL FUNDS. There are various medias as such when mutual funds are considered. Awareness about Mutual Fund Friends / Agents Relatives TV Newspaper Others Total No of investors 54 2 21 23 0 100 Percentage 54 2 21 23 0 100 . Media is any kind of a source that publishes information.10 MEDIAS THROUGH WHICH INVESTOR’S KNOW ABOUT UTI MUTUAL FUNDS.
10 Medias through which Investors know about UTI Mutual Funds 60 50 Percentage 40 30 20 10 0 Fr ie nd s es r Ne ws pa pe O th er s at iv M ed ia 54 21 23 2 0 Re l Factors No of investors . Chart 4.The investors have mainly gained knowledge about investments through friends showing the response percentage as 54%. while Media and Newspapers have influenced to an extent of 21% and 23%.
of investors . TABLE 4. There are 7 main types of funds available in mutual fund industry.11 INVESTMENT IN DIFFERENT TYPES OF FUNDS Type of funds No. Such type of fund has its own benefits which are preferred by investor’s in accordance to such benefits.INVESTMENT IN DIFFERENT TYPES OF FUNDS A Mutual Fund Company has different types of funds in which one can invest.
Equity Income Index Debt Balanced Asset Liquid 39 23 10 9 21 11 32 Investors invest mainly in Equity funds as shown in the above table as the number of investors are 39 in number. 23 investors have invested in income funds. 10 investors in index funds. Chart 4. 9 investors in debt funds.11 . And the next preferred type of fund is the Liquid fund with a response from 32 investors. 21 investors in balanced funds and 11 investors in assets funds.
Investors in different types of funds 40 Equity. 11 . 21 Index. 9 Asset . 10 Debt. 39 N o o f I n v e s t o r s 35 30 25 20 15 10 5 0 Equity Index Balanced Liquid Types of funds Liquid. 23 Balanced. 32 Income.
depending on the maturity periods of the schemes.TYPE OF SCHEMES SELECTED BY INVESTORS Mutual funds schemes are classified into three. TABLE 4. Among which two of them open – ended and close ended schemes are more popular in different mutual funds.12 TYPE OF SCHEMES SELECTED BY INVESTORS Scheme selected Open ended Close ended Interval No. . of Investors 78 22 0 Percentage 78 22 0 Most of the investors prefer Open ended schemes which nears up to 78% whereas the rest 22% prefer only Close ended schemes.
Chart 4.12 Type of Schemes selected by Investors 22% 78% Open ended Close ended .
TABLE 4.13 REASONS FOR SELECTION OF SCHEMES Factors Returns Portfolio Risk management Dividend No. of investors 46 12 23 19 . such reason would often be a benefit which is received or expected to be received from the investment.REASONS FOR SELECTION OF SCHEMES There are various factors of the schemes of mutual fund which act as main reason for selecting a particular schemes in.
13 .Total 100 The above table states that 46% of the respondents select the schemes on the basis of returns. while 23% select on basis of risk Management. Chart 4.
Reasons for selection of scheme 50 45 40 35 30 25 20 15 10 5 0 rn s en t lio rtf o ge m et u de nd D ivi No of investors Po R R INVESTMENT AND PORTFOLIO ANALYSIS isk m an a Reasons .
14 INVESTMENT AND PORTFOLIO ANALYSIS Investment Analysis Yes No Total Portfolio Analysis Yes No Total No. as the portfolio of the shares or stocks have a greater impact on the return from the investment.14 . of Investors 36 64 100 No.An investment analysis is very important to an investment. Chart 4. of investors 32 68 100 36% of investors make an Investment analysis and 32% make a Portfolio analysis. TABLE 4. Such analysis helps the investor how the performance of the investment is as necessary as an investment analysis.
Investment Analysis 18% Yes 50% 32% No Total Portfolio Analysis 16% Yes 50% 34% No Total AWARENESS TOWARDS THE RISK RELATED TO THE SCHEME .
The risks are far more related to the returns of the investment.15 AWARENESS TOWARDS THE RISK RELATED TO THE SCHEME Risks related to the scheme Yes To an extent No Total No.There are certain risks present in every kind of Investment Avenue these days. Chart 4. of investors 34 44 22 100 From the above table it is inferred that 34% of investors are aware of the risks related to their investment while 44% are aware only to an extent and the rest are unaware of such risks. Every investor should have adequate knowledge about the risks related to the investment. TABLE 4.15 . which would help in judging the progress of the investment.
Awareness towards the risk related to the schemes 50 45 40 35 30 25 20 15 10 5 0 Yes To an extent Opinion No RETURNS EXPECTED BY INVESTORS No. of investors .
Investments are made keeping the returns as an important factor/benefit. of investors 100 0 0 0 All the investors expect that their returns should be only positive.16 RETURNS EXPECTED BY INVESTORS Return expectation Positive Negative Double None No. Such return expectation would be different according to the type of investment. TABLE 4. .
Chart 4. of investors 100 80 60 40 20 0 Positive Negative Return expectation Double No.of investors OPTIONS PREFERRED ON INVESTMENT .16 Returns expected by Investors 120 No.
TABLE 4.Mutual Fund investments provide certain options for investment according to the schemes. growth option and dividend options which help investors to either let their investment grow with the fund or withdraw dividend as the investment matures. . UTI offers two options.17 PREFERRED OPTIONS BY INVESTORS FOR THEIR INVESTMENTS Options preferred Growth Dividend Total No. of investors 79 21 100 79% of investors prefer their investment with a Growth option while the rest 21% prefer the Dividend option.
Chart 4.17 Preferred options by Investors for their Investment 21% Growth Dividend 79% .
Every investor would like to know his/her investments performance by monitoring it on specific time basis.FREQUENCY OF INVESTORS MONITORING THE PERFORMANCE OF THEIR INVESTMENT The performance of Mutual Funds has to be monitored in order to know how it has grown or what are the changes made in various aspects. . Risk Factors and Fund Managers Profile are mostly looked upon half yearly and The Portfolio of securities are mostly monitored Yearly. TABLE 4.18 FREQUENCY OF INVESTORS MONITORING THE PERFORMANCE OF THEIR INVESTMENT Half Monitoring the following Performance of the fund(NAV) Risk Factors Fund Managers profile Portfolio of securities Total Monthly 12 7 2 12 100 Quarterly 32 17 16 14 100 yearly 48 49 33 26 100 Yearly 6 22 29 36 100 Never 2 5 20 12 100 The Performance of the Fund (NAV).
18 Frequency of investors monitoring the performance of their investment 60 No. of Investors 50 40 30 20 10 0 Monthly Quarterly Half yearly Period Performance of the fund(NAV) Risk Factors Fund Managers profile Portfolio of securities Yearly Never .Chart 4.
of investors 39 61 100 .19 PREFERENCE OF INVESTORS TOWARDS SIP Preference of SIP Yes No Total No. It is truly small on savings and big on returns.PREFERENCE OF INVESTORS TOWARDS SIP Systematic Investment Plan (SIP) is a smart way to invest in mutual funds. TABLE 4. It doesn’t demand lump sum investment. Hence SIP’s are preferred by many investors now-a-days.
19 Preference of Investors towards SIP 39% 61% Yes No . Reasons For preference: All the investors have pointed out that Small investment amount is the main reason for the preference towards SIP’s. Chart 4.From the above table it is inferred that 39% of investors prefer SIP’s whereas 61% do not prefer them.
likewise in mutual funds the general rule is “When return is more risk is also more”.20 AGREEMENT TOWARDS THE STATEMENT “WHEN RETURN IS MORE RISK IS MORE” Risk and return No. This proves true to UTI Mutual Funds too. TABLE 4.“WHEN RETURN IS MORE RISK IS MORE” Risk and return are the two major factors in investment. of investors Percentage . There is a relationship between risks and returns in any investment avenue.
Agree Disagree Total
100 0 100
100 0 100
All the investors agree to the statement “When Return is more risk is also more”.
"When Return is more Risk is more"
120 100 No. of Investors 80 60 40 20 0 Agree Agreement level 0 Disagree
No. of investors
RISKS ATTACHED TO THE INVESTMENT Risks in investments are of different types. Every investor should know what type of risk is attached to his/her investment. This plays an important role in analysis the returns of the investment too. TABLE 4.21 RISKS ATTACHED TO THE INVESTMENT
Type of Risk Volatility Interest Rate risk Credit rate risk Inflation risk Total
No. of investors 63 4 14 19 100
63% of investors feel that Volatility is the main risk attached to their investment, while 19% feel that inflation risk is attached to their investment, 14% feel that Credit rate risk is attached to their investment and 4% feel that interest rate risk is attached to their investment.
21 Risks attached to the investment 70 60 50 Percentage 40 30 20 10 0 Volatility Interest Rate risk Credit rate risk Inflation risk 4 19 14 63 Type of risk .Chart 4.
PAYMENT OPTIONS PROVIDED TO INVESTORS Investors are generally provided with different payment options. These options help the investor make their payments on a timely basis in an efficient manner. of investors 14 22 0 64 100 . With the developments in technology the payment options have also increased. TABLE 4.22 PAYMENT OPTIONS PROVIDED TO INVESTORS Payment Options Direct Payment ECS Internet Executives at door Total No.
64% of investors prefer executives at the door for payments. while 22% prefer ECS and 14% prefer direct payment option. Chart 4.22 .
Payment options provided to Investors 120 100 No of investors 80 60 40 20 0 en t ym EC S 100 64 14 22 0 In te ec rn ut et iv es at do or To ta l D ire ct Pa Options provided Ex .
The investors would analyse the investment objective with the schemes objective and would then invest.RANKING THE OBJECTIVES OF THE SCHEMES Every scheme of the investment has its own objective. TABLE 4. Balanced risk.23 RANKING THE OBJECTIVES OF THE SCHEMES Objectives Savings Tax benefits Portfolio Balanced risks Potential returns Total Weightage 345 292 230 313 320 Rank I IV V III II The main objective that the investors consider for investment is Savings. Tax benefits and Portfolio. The other objectives that are considered are Potential Returns. .
23 Ranking the Objectives of the scheme Potential returns Balanced risks Objectives Portfolio Tax benefits Savings 0 50 100 150 200 250 300 350 Total weightage Total Weightage .Chart 4.
51 . TABLE 4. Only if investors are satisfied they would make an efficient investment and would continue to be loyal to the investment.74 4.24 LEVEL OF SATISFACTION Level Of satisfaction Return earned Timeliness in annual reports Timeliness in dealings Rights of unitholders Grievance handling Information availability Options available Performance of the Fund Choice Of Schemes Payment Options Tax Benefits Risks Diversification Extremely satisfied Satisfied 13 11 57 28 23 25 23 12 2 13 14 0 7 25 55 43 56 52 59 62 36 16 69 35 21 49 Extremely Unsatisfied Unsatisfied 14 3 0 0 0 0 0 26 0 0 11 45 12 21 0 0 0 0 0 0 13 0 0 0 2 0 Neutral 37 31 0 16 25 16 15 13 72 28 40 32 32 MST 325 374 457 412 398 409 408 308 290 425 352 272 351 MSV 3.08 3.LEVEL OF SATISFACTION The investor’s satisfaction in the fulfillment or gratification of a desire.72 3.12 3.09 4.98 4.25 3.9 4.52 2.57 4.08 2. need or appetite of the investment they have made.25 3.
68 3. . rights of unit holders.47 3. payment options.09 OVERALL MSV=3.Returns Potential Liquidity Expert Guidance 0 9 14 14 29 36 54 62 10 18 0 25 14 0 15 268 347 309 2.565 The satisfaction level for the timeliness in dealings. information availability and options available for the investment are high whereas the other factors are not very satisfactory.
24 .Chart 4.
Level of Satisfaction Expert Guidance Liquidity Returns Potential Diversification Risks Tax Benefits Payment Options Factors Choice Of Schemes Performance of the Fund Options available Information availability Grievance handling Rights of unitholders Timeliness in dealings Timeliness in getting annual reports Return earned 0 10 20 30 40 50 60 NOR Extremely satisfied Satisfied Neutral Unsatisfied Extremely Unsatisfied 70 80 .
Such annual reports are of great importance to every investor of the concern as it helps him/her identify the growth of their investment.25 RELEVENCE OF ANNUAL REPORTS Annual Reports Yes No Total No. . TABLE 4. of Investors 67 33 100 Nearly 67% of the investors feel that the Annual reports of UTI Mutual Funds are relevant in all aspects related to their investment but 33% do not feel so.RELEVENCE OF ANNUAL REPORTS The annual reports of every concern reveal the progress/performance of the concern with various factors under consideration.
Chart 4.25 Relevence of Annual Reports 33% 67% Yes No .
64 4.73 0 403 4.26 . Chart 4.RELEVENCE OF PUBLICATIONS Investment concerns publish details of their performance periodically which helps investors and the general public follows the performance of the concern as well as the various funds of investments.69 3.26 RELEVENCE OF PUBLICATIONS Extremely Factors Monthly updates Quarterly Results Half yearly Reports Annual Reports Newspapers AMFI website Websites of respective mutual funds 42 19 39 0 Relevent 34 27 22 64 23 21 Extremely Relevent Neutral Irrelevent Irrelevent 45 54 32 32 33 25 21 29 34 4 34 56 0 0 12 0 10 0 0 0 0 0 0 0 MST 413 438 364 460 369 373 MSV 4.03 All the investors feel that the publications provided by the company are relevant.03 OVERALL MSV= 4. TABLE 4.6 3.38 3. The relevance of these publications help to create a good relationship with the investors.13 4.
R e le v e n c e o f P u b lic a tio n s W e b s ite s o f re s p e c t ive m u tu a l fu n d s A M F I w e b s ite N e w s p a p e rs Various means A n n u a l R e p o rts H a lf y e a rly R e p o rts Q u a rt e rly R e s u lts M o n t h ly u p d a te s 0 10 20 30 40 50 60 70 NOR E x t re m e ly R e le veR e le ve n t N e u tra l Irre le ve n t E x t re m e ly Irre le ve n t nt INVESTORS PERCEPTION TOWARDS MUTUAL FUNDS Perception differs from person to person. What one perceives is a result of .
interplays between past experiences.03 45 27 26 2 0 415 4.15 52 24 17 0 0 407 4.69 4.07 22 13 0 52 42 4 10 45 27 11 0 44 5 0 25 375 368 210 3.68 2. one’s culture and the interpretation of the perceived.75 3.27 INVESTOR’S PERCEPTION TOWARDS UTI MUTUAL FUNDS Fully agree Fully Disagree Disagree MST MSV Factors Investors receives good quality advice from distributor Management fee charged by AMC is reasonable Entry /Exit load is reasonable in comparison to the return earned Advertising and performance portrayal is often misleading There is need to simplify the information provided to unitholders Scheme’ performance is linked with governance of MF Investment in MF units should be for a longer period Attending educational programme is beneficial No direct regulatory control on distributors Agree Neutral 17 16 47 76 24 8 12 0 0 0 369 408 3.08 13 78 19 0 0 434 4.34 8 17 46 27 3 303 3. TABLE 4.1 . Investors perception is the process of attaining awareness or understanding of sensory information on their investment in Mutual Funds.
OVERALL MSV = 3.27 Investors Perception towards UTI Mutual Funds No regulatory control on distributors Investor educational Longer period F a c t o r s Performance and governance Need to simplify information Advertising is misleading Load and returns Management fee Quality advice 0 20 40 60 80 100 No of Investors Fully agree Agree Neutral Disagree Fully Disagree .653 Most of the investor agree that the investment in UTI Mutual funds is good. Chart 4.
There are more male investors in UTI Mutual Funds. It is clear that the main factor of differentiation when comparing mutual funds with that of shares is Savings.FINDINGS Majority of the investors are above 41 years.20000 per month.10001-Rs. . Majority of the investors are under graduates. Most of the investors have invested less than Rs. About 33% of the investor’s income lies between Rs.100000 in mutual funds. Returns earned on Mutual Funds are the cause for many investors to invest in UTI Mutual Funds. Open-ended schemes are preferred more than the closed-ended schemes. Friends and Agents are the knowledge providers for most of the investments in UTI Mutual Funds. Most of the investors have invested in only one plan. Equity Funds are preferred more than the closed-ended schemes.
The relevance of information in analyzing the performance of investments is satisfactory.(MSV 4. All the investors agree. The overall satisfaction level of the investors is neutral as the overall mean score value is 3. Selection of schemes is based on the returns from the scheme.65 .” Volatility risk is attached to most of the investments. The perception of investors towards mutual funds is also found to be Neutral with a MSV of 3. It is clear that savings is the main reason for preference towards Mutual Funds. Awareness towards the risk related to the scheme and products is less.57. “High Risk involves High returns. Most of the investors are provided with the option of executives at door for their payments. It is clear that most of the investors do not make either investment analysis or Portfolio analysis.03) Most of the investors go through the annual reports of the company to track the performance of the scheme.
• • • • • The investors should be given the option of attending investor’s education programme once in a month. The information about the products should be revealed exactly to the investors, and they should be advised on the risks attached to them. Programmes creating awareness towards the various products of UTI Mutual Funds should be conducted especially in the Villages. Portfolio of the securities should be kept under check so as to increase the growth of funds, which in turn will increase the satisfaction of the investors. Providing proper reports revealing all the information related to the investment have to be sent to the investors regularly and this can change the general attitude towards mutual funds. • • • The returns cannot be guaranteed by the concern but then the brand image can help the concern to overcome this problem. Investors can take their own steps in analyzing the market conditions and can be advised to make a portfolio and investment analysis on their investment. The investors should be given all the information regarding their investment and the benefits or the drawbacks of the investments.
In any Mutual Fund Industry investors awareness plays an important role. With the increasing number of Mutual Fund organisations, there is a need for every company to educate investors and the general public on various aspects concerned with the mutual fund investments which in turn reveals their attitude towards such investments. From the study on “Investors attitude towards UTI Mutual funds”, it is found that the investors have a positive attitude towards their investment made in UTI Mutual funds. Majority of the investors prefer Mutual Funds for the returns and feel that it is a safe measure of investment. The investors select the schemes considering the returns earned from them. The preferred schemes and funds are the Equity schemes and Open ended funds. Though the investors are not aware of the risks attached to the investment they have a positive attitude towards the mutual funds. The investors are satisfied with their investment in UTI Mutual Funds. The investors also feel that the annual reports and other publications of the concern help them analyse the performance of their investment. The organisation can educate its investors on the risk and return in order to make their investments more effective. The investor’s education programme can be conducted by the organization in order to educate the investors. The study has helped the researcher gain real time knowledge and has helped to use her analytical skills to analyse the attitude of the investors.
• • • • • • Ambika Prased Dash, Security Analysis and Portfolio Management,
I.K.International Publishing House Pvt. Ltd., 2008 Bhalla V.K., Investment Management, S.Chand & Company Ltd., Eleventh Edition, 2004 Emmett J.Vaughan, Therese Vaughan, Fundamemtals of Risk and Insurance, Willey India Pvt. Ltd., Ninth Edition, 2003 Kothari C.R., “Research Methodology-methods and Techniques”, K.K Gupta for New Age International private ltd, 2006. Preeti Singh, Investment Management Security Analysis and Portfolio Management, Himalaya Publishing House, Eleventh Edition, 2003, Pp[‘. 1 Prasanna Chandra, Investment Analysis and Portfolio Management, TataMcGrawHill Publishing Company Limited, Third Edition, 2008
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WEBSITES • • • • • • http://www.com/projects/666-A-STUDY-ON-MUTUALFUNDS-IN-INDIA.utimf.indiastudychannel.aspx http://www.amfiindia.com/Mutual_funds.com/navreport.aspx http://www. UTI Fund Watch.in/Journal/Commerce/voll2/10th%20Articlepdf http://www. http://vidyasagar. Investing across themes is safest bet.scribd.com/doc/13246827/PROJECT-ON-MUTUAL-FUNDAKHILESH-MISHRA .indiatimes. DNA. October 2008.• Swati Kulkarni.ac.com/ http://economictimes.
QUESTIONNAIRE ON INVESTORS ATTITUDE TOWARDS MUTUAL FUNDS PERSONAL PROFILE Name of the Investor: Age Gender Address Qualification Designation Office Address : : : : O Under Graduate O Post Graduate : : Mobile Contact Number(s) : INVESTMENT DETAILS Residence O Graduate O Professional Degree O Male O Female 1) Have you invested in Mutual Funds? 2) Do you have an insurance policy? 3) Amount Invested in Mutual Funds O Yes O Yes O No O No .
please mention 10) Your investment is for a period of < 1 year 1-2 years 3 years >3 years 11) Do you have complete knowledge of the Mutual Fund Industry? O Yes O Not fully O Not at all .O Below Rs. please mention ………………… 9) What is the reason for you to select this mutual fund company? Reputation Provides good returns Experts Advice Others.000 Diversification Risk Tolerance 5) What do you think is the basic difference in investing in Mutual funds rather than Stocks? Savings Risk Tolerance Diversification Tax Benefits 6) In which of the following have you invested? UTI Mutual Funds SBI Mutual Funds Others Mention Others …………………………… 7) How many plans have you invested in? Only one Two Three More than three 8) How did you come to know about the Mutual Fund you have invested in? Friends Relatives Media Newspapers Others.100.100.000 4) Why do you prefer a Mutual Fund? Savings Returns O Above Rs.
12) What type of funds have you invested in? Equity Fund Index Fund Income Fund 13) What scheme have you taken? Open ended Close Ended Interval Debt Fund Asset Fund Liquid Fund Balanced Fund 14) What is the reason for selecting this Scheme? Returns Portfolio Risk Management Dividend 15) Have you made any investment analysis on the investment? Yes No 16) Have you made any portfolio analysis on the investment? Yes No 17) Are you sure about the risks related to the schemes? Yes To an Extent Not Sure 18) How do you prefer your Returns to be? Positive Negative Doubled No Returns 19) Which option do you prefer for your investment? Dividend Growth 20) How often do you monitor the following? (Please tick appropriate column) .
Rank them From 1—4(1 for the most preferred to 4 the least preferred) Savings .Monthly Quarterly Half yearly Performance of your investments (NAV) Risk factors Portfolio of securities Profile manager of Fund Yearly Never 21) Do you prefer a SIP (Systematic Investment Plan).” Do you agree? Agree Partially Agree Disagree 23) Which of the following risks do you think are attached to your investment? Volatility Interest rate risk Credit risk Inflation Risk 24) Which of the options are provided for you for making payments? Direct Payment ECS Internet Executives at your door 25) Rank the Objectives of the investment. why? 22) “High Returns involve high Risks.
Tax Benefits Portfolio Management Balanced Risk Potential Returns 26) Do you seriously go through the Annual report of your scheme to evaluate the performance of your scheme? Yes No 27) Reveal your Level of Satisfaction on the following: Factors Return earned Timeliness in getting annual reports Timeliness in dealings Rights of unitholders Grievance handling Information availability Options available Performance of the Fund Choice Of Schemes Payment Options Tax Benefits Risks Diversification Returns Potential Liquidity Expert Guidance Extremely satisfied Satisfied Neutral Unsatisfied Extremely unsatisfied 28) Do you find following source of information relevant to analyze the performance of your investment: (Please tick appropriate column) .
mutual fund investors should have say in the management of mutual fund Attending investor educational programme is beneficial There is no direct regulatory control on distributors .Extremely Relevant relevant Monthly updates Quarterly Results Half yearly Reports Annual Reports Newspapers AMFI website Websites of respective mutual funds Neutral Irrelevant Extremely Irrelevant 29) Indicate your perception on the given scale with regard to the following. (Tick the relevant column) Fully agree Agree Neutral Disagree Strongly Disagree Investors receives good quality advice from distributor Management fee charged by AMC is reasonable Entry /Exit load is reasonable in comparison to the return earned Advertising and performance portrayal is often misleading There is need to simplify the information provided to unitholders Scheme’ performance is linked with governance of mutual fund Investment in mutual fund units should be for a longer period Like in a company.
30) Any other opinion about your Investment: .
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