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“INVESTOR PERCEPTION TOWARDS MUTUAL FUNDS”
SUBMITTED TO LOVELY PROFESSIONAL UNIVERSITY In partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY :Group no.: F 02 MGT739 Kamaljeet Bhandari 11003155 Ravikant 11004837 Hemant Dubey 11004913 Vivek Mahala 11003565
FACULTY GUIDE :MR. ASHISH SHUKLA
DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA (2012)
TABLE OF CONTENT
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Introduction to Subject Review of Literature Need & scope Objective Research Methodology Analysis and interpretation Findings Suggestions Limitations and conclusion Refrences Annexure Questionnaire
10-17 18-20 21 21 22 21-35 36 37 38 39 40-51 52-55
CERTIFICATION/THESIS APPROVAL BY FACULTY ADVISOR
TO WHOMSOEVER IT MAY CONCERN
This is to certify that the project report titled INVESTOR PERCEPTION TOWARDS MUTUAL FUNDS carried out by the following students has been accomplished under my guidance & supervision as a duly registered MBA student of the Lovely Professional University, Phagwara. This project is being submitted by them in the partial fulfillment of the requirements for the award of the Master of Business Administration from Lovely Professional University. Their dissertation represents their original work and is worthy of consideration for the award of the degree of Master of Business Administration.
___________________________________ (Name & Signature of the Faculty Advisor) Date:
DECLARATION OF AUTHENTICITY BY STUDENT
We, hereby declare that the work presented herein is genuine work done originally by me and has not been published or submitted elsewhere for the requirement of a degree programme. Any literature, data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section.
KAMALJEET BHANDARI REG NO 11003155
data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section. RAVI KANT REG NO 11004837 5|Page . hereby declare that the work presented herein is genuine work done originally by me and has not been published or submitted elsewhere for the requirement of a degree programme.DECLARATION OF AUTHENTICITY BY STUDENT DECLARATION We. Any literature.
Any literature. data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section. hereby declare that the work presented herein is genuine work done originally by me and has not been published or submitted elsewhere for the requirement of a degree programme.DECLARATION OF AUTHENTICITY BY STUDENT DECLARATION We. VIVEK MAHALA REG NO 11003565 6|Page .
Any literature.DECLARATION OF AUTHENTICITY BY STUDEN DECLARATION We. HEMANT DUBEY REG NO 11004913 7|Page . data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section. hereby declare that the work presented herein is genuine work done originally by me and has not been published or submitted elsewhere for the requirement of a degree programme.
An endeavor in any field needs inspiration. Without his guidance it was not possible for us to work on the research project. Though language is an inadequate medium to express one’s sentiments it is the only way one can record one’s grateful in debtness to one’s guide and benefactor. guidance and moral support at every step. Acknowledgements are not the full expression of one’s gratitude towards the person whose help is acknowledged. We feel obliged in taking the opportunity to thank “Mr. 8|Page . So we must preface our Report by expressing sincere and deep gratitude to those who made it possible for us to complete our research work. Encouragement and guidance are the two rays. Ashish Shukla” for his help & guidance. which takes us on the path of success.ACKNOWLEDGEMENT At the level of learning it is often difficult to understand the wide spectrum of knowledge without proper guidance. An accomplishment requires the efforts of many people and this work is no different.
The obtained data were analyzed on the excel sheet and spss. Consequently the study determined the factors of investment.EXECUTIVE SUMMARY This study examined the investors perception towards mutual funds. The main objectives are: Study the investors perception towards mutual funds To study factor affecting investment decision towards mutual funds Trend analysis of mutual funds 9|Page .100 samples were systematically selected in the study. The purpose of our research project is to find the perception of investors and studying the past trend of mutual funds. One questionnaire was employed and distributed among population of jalandhar and Ludhiana.
bonds and other securities. he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Investors of mutual funds are known as unit holders. i. This pool of money is invested in accordance with a stated objective. 10 | P a g e . The funds Net Asset value (NAV) is determined each day. The joint ownership of the fund is thus “Mutual”. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. A Mutual Fund is an investment tool that allows small investors access to a welldiversified portfolio of equities. the fund belongs to all investors. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. Mutual fund issues units to the investors in accordance with quantum of money invested by them. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors. The money thus collected is then invested in capital market instruments such as shares. Any change in the value of the investments made into capital market instruments (such as shares. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. When an investor subscribes for the units of a mutual fund. debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. Units are issued and can be redeemed as needed. Each shareholder participates in the gain or loss of the fund. debentures and other securities.e.INTRODUCTION :Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. professionally managed basket of securities at a relatively low cost. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Mutual Fund investor is also known as a mutual fund shareholder or a unit holder.
at the initiative of the Government of India and Reserve Bank.ADVANTAGES OF MUTUAL FUND Portfolio Diversification Professional management Reduction / Diversification of Risk Liquidity Flexibility & Convenience Reduction in Transaction cost Safety of regulated environment Choice of schemes Transparency DISADVANTAGE OF MUTUAL FUND No control over Cost in the Hands of an Investor No tailor-made Portfolios Managing a Portfolio Funds HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. but it accelerated from the year 1987 when non-UTI players entered the Industry. In the past decade. Before. the monopoly of the market had 11 | P a g e . Indian mutual fund industry had seen a dramatic improvement. both qualities wise as well as quantity wise. Though the growth was slow.
004 crores. The private sector entry to the fund family raised the Aum to Rs.UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87). Bank of Baroda Mutual Fund (Oct 92). At the end of 1988 UTI had Rs. Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non.700 crores of assets under management. Punjab National Bank Mutual Fund (Aug 89). The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to the development of the sector.6.seen an ending phase. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. 1540 billion. the Assets Under Management (AUM) was Rs67 billion. except UTI were to be registered and governed. Indian Bank Mutual Fund (Nov 89). Bank of India (Jun 90). The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The first scheme launched by UTI was Unit Scheme 1964.UTI.At the end of 1993. The industry now 12 | P a g e . 470 billion in March 1993 and till April 2004. Each phase is briefly described as under. it reached the height if Rs. under which all mutual funds. SBI Mutual Fund was the first non.47. Third Phase – 1993-2003 (Entry of Private Sector Funds) 1993 was the year in which the first Mutual Fund Regulations came into being. public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). the mutual fund industry had assets under management of Rs. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. First Phase – 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
As at the end of September. there were 29 funds. BOB and LIC.153108 crores under 421 schemes. representing broadly. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. assured return and certain other schemes The second is the UTI Mutual Fund Ltd.29. consolidation and growth. the assets of US 64 scheme. 13 | P a g e .functions under the SEBI (Mutual Fund) Regulations 1996. there were 33 mutual funds with total assets of Rs. It is registered with SEBI and functions under the Mutual Fund Regulations. 2004. sponsored by SBI.835 crores as at the end of January 2003. which manage assets of Rs. 1.805 crores. As at the end of January 2003. Fourth Phase – since February 2003 In February 2003.21. PNB. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities.
CATEGORIES OF MUTUAL FUND: Mutual funds can be classified as follow : Based on their structure: 14 | P a g e .
at any point of time. short term fluctuations in the market.g. even losses. iii|) Dividend yield funds. If the fund is listed on a stocks exchange the units can be traded like stocks (E. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. Hence. Open-ended funds: Investors can buy and sell the units from the fund. such funds have relatively low liquidity. e.. Recently. fresh investments can not be made into the fund. e. after the offer period. most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. However. generally smoothens out in the long term. 15 | P a g e . thereby offering higher returns at relatively lower volatility. Based on their investment objective: Equity funds: These funds invest in equities and equity related instruments. like BSE Sensex or Nifty is tracked. iv) Thematic funds.Invest 100% of the capital in a specific sector. -An infrastructure fund invests in power. Redemption of units can be made during specified intervals.100% of the capital is invested in equities spreading across different sectors and stocks. Close-ended funds: These funds raise money from investors only once. cements sectors etc. such funds show volatile performance. v) Sector funds. Morgan Stanley Growth Fund). At the same time.In this case a key stock market index. construction.g. With fluctuating share prices. .A banking sector fund will invest in banking stocks.Invest 100% of the assets in sectors which are related through some theme. historically. such funds can yield great capital appreciation as. Therefore.it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. equities have outperformed all asset classes in the long term.g. It can be further classified as: i) Index funds. investment in equity funds should be considered for a period of at least 3-5 years. ii) Equity diversified funds. Therefore.
Government of India securities. derivatives and money markets.These funds invest 100% in money market instruments. Higher proportion (around 75%) is put in money markets. they fall between equity and debt funds. Balanced fund: Their investment portfolio includes both debt and equity.They invest 100% of their portfolio in long-term government securities.They invest 100% of their portfolio in government securities of and T-bills. Debt fund: They invest only in debt instruments. iv) Arbitrage fund. vi) Income funds LT.Equity Linked Saving Scheme provides tax benefit to the investors. Put your money into any of these debt funds depending on your investment horizon and needs. 16 | P a g e . debentures. they invest exclusively in fixed-income instruments like bonds. ii) Equity-oriented funds -Invest at least 65% in equities. i) Liquid funds. a large portion being invested in call money market. As a result. Floaters invest in debt instruments which have variable coupon rate. and money market instruments such as certificates of deposit (CD). remaining in debt.vi) ELSS. v) Gilt funds LT. Funds are allocated to equities.They generate income through arbitrage opportunities due to mispricing between cash market and derivatives market. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. ii) Gilt funds ST.Invest in short-term debt papers.Typically. such funds invest a major portion of the portfolio in long-term debt papers. commercial paper (CP) and call money. Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities. Therefore. in the absence of arbitrage opportunities. and are a good option for investors averse to idea of taking risk associated with equities. iii) Floating rate funds . on the risk-return ladder.
Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month.fixed monthly plans invest in debt papers whose maturity is in line with that of the fund. 3. at a fixed interval. Payment is made through post dated cheques or direct debit facilities. to an equity scheme of the same mutual fund. viii) FMPs. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum. INVESTMENT STRATEGIES 1.vii) MIPs.Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month 17 | P a g e . The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA) 2.
Gupta and Sehgal (2001) evaluated performance of 80 mutual fund schemes over four years (1992-96). The study tested the proposition relating to fund diversification. and mutual funds. The study revealed that. UTI followed by LIC Mutual Fund dominated the market with 54 and 15 schemes respectively. to reap the benefits of investing in blue chip shares through firm allotment in primary market. access to price sensitive information and spread risk along with the benefits ofprofessional fund management. Krishnamurthi S (1997) identified mutual funds as an ideal investment vehicle for small and medium investors with limited resources. mutual funds provided opportunity for the middle and lower income groups to acquire shares. His interview with 120 respondents showed that. tax-planning schemes 30 percent CAGR followed by balanced schemes with 28 percent CAGR and income schemes with 18 percent CAGR. The savings of household sector constituted more than 75 percent of the GDS along with a shift in the preference from physical assets to financial assets and also identified that.REVIEW OF LITERATURE :Kale and Uma (1995) conducted a study on the performance of 77 schemes managed by 8 mutual funds. income–cum-growth option and capital appreciation were very important aspects while choosing a fund. parameter of performance and risk-return relationship. growth schemes yielded 47 percent CAGR. Rao. 96 percent invested in UTI due to better service and return. Sahadevan S and Thiripalraju M (1997) stated that. 50 percent of shareholding and 25 percent of unit-holding respondents were from metro cities. savings pattern of households shifted from bank deposits to shares. He identified that the close-end schemes were very popular among investors and respondents in general expected private sector 18 | P a g e . consistency of performance. The study noticed the existence of inadequate portfolio diversification and consistency in performance among the sample schemes. avoid dud shares. Mohana P (2002) opined that. debentures. Investor’s services.
4.564 crores during 1986-87. Agrawal. The cumulative investible funds of the mutual funds industry recorded a skyrocketing growth since 1987 and reached Rs.funds to improve the quality of services. 16 schemes reported greater risk than the market volatility. Mumbai. He further identified that the fund managers of 26 schemes had missed the chance of gaining from scheduling with response to changes in the market. Narasimhan M S and Vijayalakshmi S (2007) analysed the top holding of 76 mutual fund schemes from January 1998 to March 1999. Irissappane Aravazhi (2005) evaluated the investment pattern and performance of 34 close-end schemes from 1988-98 and elicited the views of investors and managers belonging to Chennai. The transformation in the previous decade was the outcome of policy initiatives taken by the Government of India to break the monolithic structure of the industry in 1987 by permitting public sector banks and insurance sectors to enter the market. transparency of information. Pune and Delhi. 19 | P a g e . The study showed that. Negative values in the case of Treynor and Sharpe index among many schemes indicated the mockery of the market. Gupta Amitabh (2005) identified that the IMFI had come a long way since its inception in 1964. The survey identified that the investors desired a return equivalent to market. distinct marketing and distribution systems to rebuild confidence. 62 stocks were held in portfolio of several schemes.8. products and the problems faced by the IMFI. He suggested the turnaround strategies of awareness programs.059 crores by December 31. Kumar V K (2004) analysed the roles. Majority of the schemes had a lower beta. The top holdings showed higher risk levels compared to the return. The correlation between portfolio stocks and diversification benefits was significant at one percent level for 30 pairs and at five percent level for 53 pairs. 1995 from Rs. Ashok Motilal (2006) opined that mutual funds had made a remarkable progress during 1987-95. of which only 26 companies provided positive gains. The top holdings represented more than 90 percent of the total corpus in the case of 11 funds. investors’ confidence besides reducing fraud and mismanagement.
Return. the percentage of investors holding only UTI schemes reduced. Jaspal and Subhash Chander (2008) identified that past record and growth prospects influenced the choice of scheme. Investors had the same level of confidence towards shares and mutual funds. Singh.Bansal Manish (2007) survey of 2. The ANOVA results indicated that. occupational status. portfolio selection and NAV were important criteria’s for mutual fund appraisal. Salaried and retired categories had priority for past record and safety in their mutual fund investment decisions. 20 | P a g e . The unit holders’ loyalty seemed to have become a myth as investors were looking for performance. age had insignificant influence on the choice of scheme. 60 percent of investors preferred growth schemes. Investors in mutual funds expected repurchase facility. Satish D (2008) opined that investors from seven major cities in India had a preference for mutual funds compared to banking and insurance products. prompt service and adequate information. The image of AMC acted as a major factor in the choice of schemes.819 respondents revealed that. Investors expected moderate return and accepted moderate risk. Unit-holders spread their holdings over two or more funds with an urge to diversify increasing competitive mutual fund environment.
The study will help to know the perception of the customers. factors they look for and have mutual funds helped in improving the level of income OBJECTIVE OF THE STUDY :1) To study investors perception towards mutual funds.NEED AND SCOPE OF THE STUDY A big boom has been witnessed in Mutual Fund Industry in resent times. 2) To study factor affecting investment decision towards mutual funds. 3) TREND ANALYSIS 21 | P a g e . A large number of new players have entered the market and trying to gain market share in this rapidly improving market.
RESEARCH DESIGN:In the further study Descriptive Research is being followed because it is used to obtain information concerning the current status of the phenomena to describe “what exists” with respect to variables and conditions in a situation. 22 | P a g e . TARGET POPULATION:The target population are investors of Punjab. SAMPLE SIZE:The sample size of the study will be 100 respondents. Further simple random sampling is used.RESEARCH METHODOLOGY:TYPE OF RESEARCH :Qualitative Research will be done for the study because it aims to gather an in depth understanding of human behaviour and the reason that govern such behavior and quantitative for trend analysis. Secondary data is been collected from journals as well as magazines. newspapers and different websites. DATA ANALYSIS TOOLS:Various data analysis tools like SPSS. Microsoft excel will be used to analyze the data. SAMPLE TECHNIQUE:Probability sampling technique is used as in probability sampling technique there are equal chance to select each and every respondent. Graphs & charts. DATA COLLECTION:Primary data will be collected from the investors with the help of structured questionnaire which will include close and open ended questions.
in our research sample of total 100 respondant 80% were male and 20% were female respondant were there AGE Below 30 31-40 41-50 Above 50 14 46 30 10 23 | P a g e .ANALYSIS & INTERPRETATION :INVESTOR PROFILE SEX Male Female NO OF RESPONDENTS 78 22 22 Male Female 78 Interpretation:.
10% were from the age group of above 50 and remaining 14% were from below 30 OCCUPATION Salaried Business Retired 65 26 9 9 26 65 OCCUPATION Salaried Business Retired 24 | P a g e .from total sample of 100 respondant 46% respondant were from the age group of 31-40 and 30% were from the age group of 41-50.10 14 Below 30 31-40 30 46 41-50 Above 50 Interpretation:.
in the research sample the income of the respondant were 44% are from 3-4 lacs and 36% were from the group who were earning 1.5to 3 lacs and 12% were from above 4 lacs and remaining 8% were from below1. ANNUAL INCOME (Rs) Below 150000 150000 – 300000 300000 – 400000 Above 400000 8 36 44 12 12 8 ANNUAL INCOME (Rs) 36 Below 150000 150000 – 300000 300000 – 400000 Above 400000 44 Interpretation:.Interpretation:.5lacs age mutual fund bank deposit life insurance postal saving stocks provident fund 25 | P a g e .in our research sample of 100 respondant most of the respondant were from the group of salaried that is 65 % and 26% were from businessman and remaininng 9 % were retaired.
below 30 30-40 40-50 above 50 40 35 30 25 20 15 10 5 0 22 24 17 13 18 25 38 14 18 0 6 22 8 22 8 19 16 10 16 25 11 25 8 15 below 30 30-40 40-50 above 50 mutual fund bank deposit life insurance postal saving stocks provident fund Rnak Returns Growth of Returns Safety of investment Convenience Tax Benefit Opportunity for invvesting in corporate growth Speculation Long term investment Meduim term Investment Less Risk Involved 1 24 7 13 10 31 12 9 11 9 21 2 6 18 11 4 9 8 11 8 12 12 3 9 6 10 8 8 9 15 13 15 8 4 3 7 7 10 6 15 8 9 8 9 5 3 6 8 9 7 6 10 8 5 6 6 7 4 8 12 4 9 6 6 6 8 7 4 3 7 11 5 8 3 7 8 7 8 2 10 8 6 6 6 9 5 4 4 9 6 14 6 5 2 4 7 4 5 3 10 16 5 2 5 2 3 2 9 8 2 26 | P a g e .
513 .537 Initial 1.000 1.000 1.703 . Chi-Square df Sig.848 Extraction .314 .000 Rescaled Extraction .609 431.000 1.000 1.218 .634 27 | P a g e .853 .680 .709 .000 1.223 .738 .35 30 25 20 15 10 5 0 Series1 Series2 Series3 Series4 Series5 Series6 Series7 Series8 Series9 KMO and Bartlett's Test a Kaiser-Meyer-Olkin Measure of Sampling Adequacy.000 1.727 .946 .834 .016 . Based on correlations .658 1.154 1.000 Communalities Raw Initial Fund's/scheme's performance record Fund's/ Scheme's brand name Scheme's expense ratio Scheme's portfolio constituents reputation of scheme.690 .621 .934 .166 253 .762 .521 .852 .473 .686 .728 . portfolio manager withdrawl facilities rating by a rating agency Innovativeness of the scheme products with tax benefits entry and exit load Reputation of the sponsoring firm sponsor offer a wide range of schemes with differentinvestment objective . Bartlett's Test of Sphericity Approx.000 1.612 .000 1.606 1. a.000 1.000 1.741 .855 .855 1.108 .338 .611 .466 .000 1.
000 1.942 .brand name of sponsor sponsor has a well developed agency network efficient research wing expertise in managing money disclosure in investment objective and method disclosure of method.701 .000 1.000 1.000 1. Extraction Method: Principal Component Analysis.727 .762 .688 . free credit card etc.686 .625 .977 .835 .860 .755 .847 .518 1.000 .000 1.671 28 | P a g e .415 .680 . periodicity of scheme's sales and repurchase in offer documents announcement of NAV Disclosure of deviation of the investment disclosure of scheme investments grievance redressal machinery additional services like insurance.742 .673 .468 .534 .532 .657 .909 .810 .000 1.000 .777 .000 .620 .679 .871 . .637 .000 1.570 1.702 .000 1.802 .585 1.
Total Variance Explained Compo nent Raw 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Rescaled 1 2 3 4 5 6 7 8 Total 3.924 1.776 8.461 73.071 7.258 1.430 2.127 49.139 9.868 4.478 .868 a Extraction Sums of Squared Loadings Total 3.070 64.495 1.785 85.890 % of Variance 17.816 3.714 95.840 90.930 4.890 .916 34.410 87.139 9.632 .251 1.000 17.982 4.140 7.070 64.137 9.500 6.071 7.816 6.161 5.868 4.930 4.417 1.443 .873 53.249 1.816 7.588 1.372 1.269 46.982 4.812 98.798 1.321 3.383 1.160 16.088 60.653 .517 1.140 7.461 Cumulative % 17.980 .333 .916 34.167 .031 5.042 16.980 .986 42.021 93.598 79.516 .751 .924 1.372 1.035 58.231 .588 1.693 1.214 2.014 17.938 3.441 5.986 42.973 2.953 33.769 40.585 .405 1.031 5.625 2.137 25.523 Cumulative % 17.071 7.127 49.088 60.982 4.812 82.519 1.174 1.776 8.588 1.127 49.711 2.523 3.158 55.930 4.924 1.938 69.405 1.031 5.580 97.298 .070 64.232 1.158 55.167 .372 1.277 76.139 26.958 .405 1.139 26.088 60.380 .958 .158 55.167 .931 1.349 1.986 42.231 96.476 63.916 34.383 1.090 92.986 100.958 Initial Eigenvalues % of Variance 17.383 1.776 8.140 7.604 6.139 26.199 3.266 .980 .938 69.242 .518 29 | P a g e .139 9.
714 95.231 96.830 Minimum 1 Maximum 5 80 80 80 2.074 1 1 1 1 5 5 4 5 30 | P a g e .873 .785 85.925 . When analyzing a covariance matrix.10 1.925 1 1 1 5 5 5 80 80 80 80 2.840 90.090 92.277 76.986 100.783 .9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 .598 79.19 1.91 2.349 1.580 97.199 4.523 3.242 . a.517 1.186 Extraction Method: Principal Component Analysis.214 2.816 3.333 .973 2.410 87. the initial eigenvalues are the same across the raw and rescaled solution.89 2.249 1.380 .430 2.266 .104 .931 1.653 .231 .812 82. portfolio manager withdrawl facilities rating by a rating agency Innovativeness of the scheme 80 Mean 1.174 1.693 1.461 73.014 69.890 .516 .232 1.15 2.812 98.18 1.074 4.021 93.751 .321 3.298 .000 1.08 .478 .632 .76 Std.585 .625 2. Deviation .668 68. NON PARAMETRIC TESTS Descriptive Statistics N Fund's/scheme's performance record Fund's/ Scheme's brand name Scheme's expense ratio Scheme's portfolio constituents reputation of scheme.811 1.443 .
921 1 5 80 80 80 80 2.036 Scheme's expense ratio Scheme's portfolio constituents .058 .989 .873 1 4 80 80 1.920 1 5 80 2.333 .953 .05 2.745 .08 2.002 .19 .967 .053 .728 .139 .02 .029 . free credit card etc.085 .927 1 1 5 5 80 2.035 -.133 .042 .914 1 5 80 2.070 -.20 . periodicity of scheme's sales and repurchase in offer documents announcement of NAV Disclosure of deviation of the investment disclosure of scheme investments grievance redressal machinery additional services like insurance.406 -.11 .271 .05 2.29 2.058 .286 .038 -.882 1 1 1 1 5 4 5 5 80 2.970 .933 1 5 Rotated Component Matrix a Component 1 Fund's/scheme's performance record Fund's/ Scheme's brand name 2 3 4 5 .products with tax benefits entry and exit load Reputation of the sponsoring firm sponsor offer a wide range of schemes with differentinvestment objective brand name of sponsor sponsor has a well developed agency network efficient research wing expertise in managing money disclosure in investment objective and method disclosure of method.478 6 .093 .194 .839 1 1 1 5 5 4 80 2.552 .91 2.084 7 8 9 .101 .445 -.261 .176 .118 .063 -.10 2.153 -.077 -.04 . 80 80 80 2.830 .08 1.015 31 | P a g e .00 .029 .01 .900 1 5 80 2.220 .236 .359 .21 .
400 .041 .060 .617 -.034 32 | P a g e .304 -.074 .361 . portfolio manager withdrawl facilities .043 - .667 .298 .094 .645 -.198 -.203 -.121 .143 -.156 .131 -.000 -.180 -.213 .102 .025 -.180 -.222 Reputation of the sponsoring firm sponsor offer a wide range of schemes with differentinvestment objective brand name of sponsor .007 .534 .100 .151 .160 .129 .378 .181 - .177 -.045 Innovativeness of the scheme products with tax benefits entry and exit load .073 .134 .148 -.657 .235 .027 .316 .008 -.073 .224 .036 rating by a rating agency .090 .183 .581 .019 .369 -.192 -.680 - - .166 .104 .087 .008 .084 -.285 .638 .424 .102 .029 .267 -.224 .038 .300 .116 .203 .015 -.178 .531 .056 .024 -.120 .287 -.087 .284 .100 .229 .109 .043 -.815 .110 .304 .021 -.052 expertise in managing money .121 .021 .056 .013 -.347 .080 .189 .154 .157 .reputation of scheme.029 .225 .180 .113 .318 .088 -.021 -.111 -.165 -.034 -.114 .037 .073 .134 -.164 sponsor has a well developed agency network efficient research wing .002 .071 -. periodicity of scheme's sales and repurchase in offer documents announcement of NAV .091 .055 .168 .084 .191 .104 .448 .136 - .273 .076 .014 .050 .304 .080 -.535 .077 .053 .171 .307 .570 .358 .173 -.820 -.018 .025 .007 -.143 .131 Disclosure of deviation of the investment disclosure of scheme investments grievance redressal machinery additional services like insurance.106 .799 .741 - .259 .024 .062 disclosure in investment objective and method disclosure of method.084 .023 .066 -.212 .161 . free credit card etc.068 .012 .054 .291 .065 .212 .172 .773 .216 .244 .850 .202 -. .094 -.156 .092 .132 .049 .824 .
7 43374.21745 42.3 66765.2177 2007 100 100 100 100 100 2008 2009 2010 2011 2012 125.75 31734.3 172191 189607 131796.26 148730.9 34043.319 2267.74 56347.3012 161.5 DSP BR Top 100 Equity Fund RP G 6629.19309 35.51 Reliance Equity Fund-RP Growth 256298.4475 177.93646 72.93 SBI BLUE CHIP FUND-GROWTH 140579.4 TREND ANALYSIS 2006 95.5 8202.065 67.73532 99.20953 58.918 1606.23584 94.5496 63.0179 686.5 40633.56 106654.8127 91.5 700000 600000 500000 400000 300000 200000 100000 0 1 2 3 4 5 6 7 Reliance Equity Fund-RP Growth UTI Leadership Equity Fund-Growth SBI BLUE CHIP FUNDGROWTH DSP BR Top 100 Equity Fund RP Growth Fidelity Equity FundGrowth Option 2008 134184. a.63 64780.99082 73.33457 45.7357 126.9 31ST MARCH 2009 97300. TREND ANALYSIS OF LARGE CAPS AND SMALL NAD MID CAP FUNDS TOP 5 LARGE CAP FUNDS AS ON 31ST MARCH 2012 Assets under Management (AUM) as on 31st march(Rs in Lakhs) NAME OF FUND 2006 2007 Fidelity Equity Fund-Growth Option 102078.66 36010.22985 134.43047 32.4136 82.Extraction Method: Principal Component Analysis.777 415.2 155308 185966 60803.697 1893.87957 33 | P a g e .2 71945. Rotation converged in 23 iterations.89 47350.66 UTI Leadership Equity Fund-Growth 84964.53566 71.18 43630.34 41421.7 31410 118167.81868 146.8 for large caps 2010 2011 2012 143238.24459 50.98 96206.27 203060.20133 49.4 43821.1229 194. Rotation Method: Varimax with Kaiser Normalization.79 101955.70957 80.
91 36396.84 7515.04 8709.G UTI Mid Cap Fund-Growth Option ICICI Prudential Discovery Fund-G 50000 SBI EMERGING BUSINESSES FUND .33 57914.72 10630.61 14740.G 1 2 3 4 5 6 7 200000 150000 100000 0 34 | P a g e .03 16706.83 15095.11 26622.58 112458.56 26998.1 3468.82 3618.09 250000 Reliance MID Term FundGrowth SBI Magnum MIDCAP FUND .22 ICICI Prudential Discovery Fund-G 37266.5 9679.6 109695.46 12527.5 UTI Mid Cap Fund-Growth Option 375.2 Reliance MID Term Fund-Growth 23070.71 10440.06 8602.39 6093.2 8517.96 23194.G 10013.7 122164.88 8910.16 17274.67 15513.38 6337.G 10804.93 51931.52 SBI Magnum MIDCAP FUND .3000 2500 2000 1500 1000 500 0 1 2 3 4 5 6 7 Series5 Series4 Series3 Series2 Series1 TOP 5 SMALL SMALL AND MID CAPS 31ST Assets under Management (AUM) as on 31st march(Rs in Lakhs) MARCH for small and mid caps NAME OF FUND 2006 2007 2008 2009 2010 2011 2012 SBI EMERGING BUSINESSES FUND .91 7668.63 63187.6 78358.
9781 335.6449 45.198 531.6922 80.52376 428.3347 63.68627 142.2204 112.63936 111.2268 247.9013 1600 1400 1200 1000 800 600 400 200 0 1 2 3 4 5 6 7 Series5 Series4 Series3 Series2 Series1 35 | P a g e .6135 2009 2010 2011 2012 59.5994 392.3509 180.38587 146.22728 111.6811 308.7184 443.13963 107.902078 69.3199 102.073 126.3902 4.1817 56.75544 68.72705 82.64841 156.5159 2007 100 100 100 100 100 2008 123.6779 744.0412 28.2006 164.
617 and sponsers well developed agency network having the value of .667 so it can be said as the influencing factor In the 3rd column rating by the rating agency has the value . 36 | P a g e .638 are the two influencing factors.The final statistics comprises the communality for all 23 variables and the Eigen value of all factors which have Eigen value of 1.799 In the 7th column disclousure of scheme investment having the value of . 645 In the 5th column brand name of sponser has the value of . In the 6th column efficiect research wing having the value .824 so these two factors influenced the investors.ANALYSIS:- INTERPRETATION:My KMO value is 0. so these are the two mainly factors which influence the investors.820 is the important factor.5 and this shows that my sample is adequate.815.609. In the 4th column schemes portfolio constitution has the value of . In the 9th column reputation of the sponser firm having the value of .6 that is .657 and product with tax benefit has the value . In the 2nd column disclosure of investment objective and methods has the value . In the 8th column schemes expense ratio having the value of .773 so these are the two mportant factors.747 and announcement of net asset value every month having the value .850 is the importand factors.680 and additional service like insurance etc which is .728 and expertise in managing money has the value of . AS PER THE ROTATED COMPONENT MATRIX In the 1st column reputation of the scheme has the value higher than . which is greater than 0.
Some of them include banks deposits. 67. According to the Association of Mutual Funds in India. This regulatory board has improved the market surveillance to protect the investor's interest. mutual fund investments and corporate debentures. efficiency and easy to use. The recent trends since last 7 year clearly suggest that the average investors have lost money in equities. The total Asset Under Management popularly known as AUM has increased from Rs. An average investor has found refuge with the mutual funds. professional management. stocks of companies have high risk but the returns are also proportionately high. These benefits mainly include diversification. There have been a lot of changes in the mutual fund industry in past few years. People have now started opting for portfolio managers who have the expertise in stock markets.1. potential of returns.TREND ANALYSIS: Today there are plenty of investment avenues open. Mutual fund investments carry low risk because of their diversified nature. Second most important reason for this growth is a favorable regulatory regime which has been enforced by SEBI. bonds and corporate debentures where the risk is low and so are the returns.98 crores in April 2011. stocks. One of the major factors contributing to the growth of this industry has been the booming stock market with an optimistic domestic economy. Lots of multinational companies have bought their professional expertise to manage funds worldwide. Mutual funds in India now offer a wide range of schemes to choose. In the past few months there has been consolidation going on in the mutual fund industry. Mutual funds are turned to be the most preferred choice worldwide for both small and big investors due to their numerous advantages. Investors may invest money in banks. the growth of mutual fund industry has been exceptional. India can now boast of having dominance in this industry. 01. bonds. It is important to understand the benefits of mutual funds before investing the money you really care about.5. 565 crores in January 2007 to Rs. This industry has indeed come a very long way with only 34 players in the market and more than 480 schemes. It's all about long term financial planning. On the contrary. 601. The size of Indian mutual fund industry has grown in recent few years. 37 | P a g e . There are many institutions in India which provide wealth management services.
each backed by study.824 which is the highest among all means this factor is most seen by the investors. Ratings given by credit rating agencies cannot be denied and hence is shown as the important factor by the matrix. Out of the 23 factors offered the following as per the rotated component matrix could be considered important Reputation of the scheme is generally kept in mind while investing by the investors additional services also play an important role if the fund scheme offers like insurance scheme etc. It is important to study about the returns given by AMC Mutual Funds and perform a comparative analysis. Money management or the expertise in managing money is the important factor. The pooled money is invested in shares. every problem has several researches involved in it. Remember. In order to invest in the best mutual funds. it is important to perform a comparative study. If a company discloses the investment objective it influences the investors decision to invest in a particular fund. debentures and treasury bills and thus has high risk involved. Tax benefit is something which investors generally invest for and as per the survey has shown the value of . 38 | P a g e . Schemes portfolio constitution also plays a important role which influence the investors decision. Indian mutual funds however reveal this multi-dimensional avenue and all the intricacies in a highly fashionable manner. It provides a lot of scope to understand the scenario and make some thoughtful investments for decent returns. FINDINGS : As per the investors perception there are few important factors which they generally get influenced from.NAV is directly proportionately to the bearish trends of the market. Top mutual funds also suffer because of the fluctuations in the market.
ii) This study shall not been conducted over an extended period of time considering both market ups and downs. 39 | P a g e . The sample size may not adequately represent the national market. The study cannot capture such situations. Efficient research wing helps to develop a great portfolio on the basis of trends of market so this is importantly taken into consideration while investing. Brand name of the sponser means a lot while investing. Schemes expense ratio is also important as no investor would like to increase their expense. Sponsers well developed agency network also influence the decision.. Disclosure of scheme investment is also important. The market state has a significant influence on the buying patterns and preferences of investors. iii) The element of biasness in the study. LIMITATIONS :i) Sample size was limited to 100 investors who have invest through any of the available schemes.
1271-1275. Narasimhan M S and Vijayalakshmi S “Performance Analysis of Mutual Funds in India”. (1997). Finance India.Emerging Trends and Prospects”. Pune. paper presented in Second UTI-ICM Capital Markets Conference.REFRENCES: Kale and Uma. Vol. Ramesh Chander “Performance Appraisal of Mutual Funds in India”. Vol. pp. Vol. Gupta O P and Sehgal. 34(5). Bombay. Bansal. 85-91. “What Drives the Investors towards Mutual Funds: An Empirical Analysis”. (March 2001). New Delhi. XIV (4). (1998). Kanishka Publishers. Krishnamurthi S. 9(8). “Investment Performance of Mutual Funds: The Indian Experience”. Ashok Motilal. Agrawal. (1997). “Mutual Fund In India: A Financial Service in Capital Market”. 337-343. (November 2003). Manish “Mutual Funds: Eight Steps to nirvana”. XV (1). “Working Of Mutual Fund Organisations In India”. Interpretation and Analysis.1256-1261. X (1). Mutual Funds: Data.38-46. Tripathy. pp. “A Study On The Evaluation Of The Performance Of Mutual Funds India”. (1998). 9(12). December 23-24. (March 1996). Jaspal and Subhash Chander. Finance India. pp. Prentice Hall of India Private Limited. 34-40. National Insurance Academy. “Mutual Funds. Vol. Finance India. XIV(4) (December 2000). Sahadevan S and Thiripalraju M. (December 2003). Kumar V K. pp. Rao. pp. Vasi.155-174. Chartered Financial Analyst. pp. Vol. India (1995). The ICFAI Journal Of Applied Finance. New Delhi. (May 1999) Vol. Sanjay. “Genesis of Mutual Funds in India”. Mohana P. The Management Accountant. Vol. (December 2000) pp. 40 | P a g e . Singh. “In Search Of Turnaround Strategies For Mutual Fund Industry”. Finance India. New Delhi. Nalini Prava. Vision Books.
Chartered Financial Analyst. 41 | P a g e . pp. Vol. 35-36. “Investors Perceptions: A Survey by MARCH Marketing Consultancy & Research”.Sathis D. 2007). Sanjay Kant Khare 2007. 10(7). Yes No If yes please proceed else move to question no 11 Please rank the choices according to your preferences as indicated in example. (July 2004) pp.SEX: Male II. “Mutual Funds: A Refuge for Small Investors”. OCCUPATION Salaried Businessman Retired Please fill in SAVINGS = Rs ____________ / Year What % of your savings are invested for 5 years and above __________________ (approx. ANNEXURE: QUESTIONNAIRE We are the students of MBA Finance at LPU.INCOME:< 150000 4000000< Female 30– 40 150000-30000 40 . Do you invest? Please tick (√).50 50 and above 300000-400000 IV.) What % of your savings are invested for 3-5 years__________________ (approx. (January 15.AGE: Below 30 III. Southern Economist. Kindly fill this questionnaire for the completion of our capstone project “CUSTOMER PERCEPTION TOWARDS Mutual FUNDS” NAME______________________________________________ Email Id_________________________________________ Mobile_____________________ Please tick mark I.) What % of your savings are invested for 1-3 years___________________ (approx) What % of your savings are invested for less than one year________________ (approx) _____________________________________________________________________ _________ 1.21-24.
GIVE RANKS OUT OF 5 TO EACH OF THE ATTRIBUTES FOR THEIR IMPORTANCE WHILE MAKING A INVESTMENT DECISION. Give: 1 for Highly Important Factor 42 | P a g e . Which environmental forces influenced you the most to invest in mutual fund? Rank in order of preference from 1 to 6. What were the most important factors while selecting a mutual fund scheme? (Rank 1 to 5) Tax Benefit Capital Appreciation Dividend Safety Liquidity FACTORS AFFECTING INVESTORS PREFERENCE FOR MUTUAL FUNDS IN INDIA 4. Friends Suggestions Newspapers / Magazines Television and commercials Brokers and Agents Self evaluation and decision Direct mail / E mail 5. Which mode of communication do you prefer most for receiving updates and performance of your scheme / portfolio of mutual fund investment? Rank 1 to 4. Give Rank 2 to the next best option and so on.Give Rank 1 to the most preferred option. 2. Please Refer Example. In which schemes have you invested most till date? (Rank 1-6) Mutual Funds Postal Savings Fixed Deposits Stocks Life Insurance Provident Fund 3. Telephone E mail / Internet Direct mail Personal contact / visit.
Innovativeness of the Scheme_____________________ I. Sponsor offers a wide range of schemes with different investment objectives________ C. RANKS FUND SPONSOR’S QUALITIES A. RANKS INVESTOR SERVICES 43 | P a g e . Rating by a rating agency________________________ H. Entry and Exit load_____________________________ 7. RANKS SCHEMES QUALITIES A. Fund’s/Scheme’s brand name_____________________ C. Scheme’s expense ratio__________________________ D. Sponsor has an efficient research wing__________ F.Give: 2 for Important Factor Give: 3 for Moderately Important Unmarked Give: 4 for Less Important Give: 5 for Not at all Important. Products with tax benefits________________________ J.Reputation of the sponsoring firm________ B. Sponsor has a well developed Agency Network/Infrastructure _____ E. Fund’s/Scheme’s performance record_______________ B. Reputation of scheme(s). 6.Scheme’s portfolio constituents____________________ E. Withdrawal facilities____________________________ G. Brand name of Sponsor__________ D. portfolio manager(s) ________ F. Sponsor’s expertise in managing money_________ 8.
___________ 9. Mutual Fund Investors’ grievance redressal machinery________ G. method and periodicity of valuation in advertisement_____ B. Yes No Can’t say 44 | P a g e . Disclosure of method. free credit card. Disclosure of deviation of the investments from the expected pattern____ E. loans on collateral. tax benefits etc. Additional Services like free insurance. Disclosure of scheme’s investments on every trading day_____ F. Would you like to continue investing in mutual funds in future? Please tick (√).A. Announcement of NAV on every trading day____________ D. periodicity of scheme’s sales and repurchase in offer documents____________ C. Disclosure of investment objectives. What are the reasons/objectives of investing in Mutual Funds? (Rank them 10 being the most important) RETURNS GROWTH OF RETURNS SAFETY OF INVESTMENT CONVENIENCE TAX BENEFIT OPPURTUNITIES FOR INVESTING IN CORPORATE GROWTH SPECULATION LONG TERM INVESTMENT MEDIUM TERM INVESTMENT LESS RISK INVOLVED 10.
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