Leela Project 2018
Leela Project 2018
Leela Project 2018
INTRODUCTION
1
1(A) EXECUTIVE SUMMARY
Primary investment objective of any individual or organization is to maximize the returns and
minimizing Market risk and Credit risk through diversification
Mutual Funds (MF) have become one of the most attractive ways for the average person to invest
their money. It is said that Bank investment is the first priority of people to invest their savings
and the second place is for investment in Mutual Funds and other avenues. A Mutual Fund pools
resources from thousands of investors and then diversifies its investment into many different
holdings such as stocks, bonds, or Government securities in order to provide high relative safety
and returns.
The project includes a brief idea about the growth of MF industry (History), the broad idea about
the organization and concept of MF and SEBI Guidelines on Mutual Funds.
This project tries to explain about the history, growth, & pros and cons of investing in Mutual
Funds and the second part of it deals with the study about the opinion of investors to invest in
mutual funds.
The main objective of the project was to get an Overview of Mutual Fund Industry, its setup, its
working and to find out the opinion of investors, on various schemes available to customers.
Mutual funds pool money from different investors and invest in different investment sources like
stocks, shares, bonds etc. A professional fund manager manages these and returns are paid in form
of dividends. Some schemes assured fixed returns that are less in risk and some offer dividends
based on the market fluctuations and prices. Mutual funds have to be subscribed in units and the
purchase or sale is dependent on NAV (Net Asset Value), taking into consideration
The exit and entry load factors into account.
In this project, we collected the opinion about 50 customers and analyzed how the investor deals
with opinion regard to mutual funds that are the schemes they prefer, the plans they are opting, the
reasons behind such selections and also this project dealt with different investment options, which
people prefer along with and apart from mutual funds.
The past performance of MF is not necessarily indicative of future performance of the scheme and
no AMC guarantees returns and or safety of principal.
2
1.1 INTRODUCTION
Mutual funds are basically financial intermediaries, which collect the savings of
investors and invest them in a large and well -diversified portfolio of securities such as
money market instruments, corporate and government bonds and equity shares of joint
companies. A mutual fund is a pool of common funds invested by different investors, who have
no contact with each other.
Mutual funds are conceived as institutions for providing small investors with avenues
of investments in the capital market. Since small investors generally do not have adequate
time, knowledge, experience and resources for directly accessing the capital market, they
have to rely on an intermediary, which undertakes informed investment decisions and provides
consequential benefits of professional expertise.
The raison of mutual funds is their ability to bring down the transaction
costs. The advantages for the investors are reduction in risk expert professional management,
diversified portfolios, liquidity of investment and tax benefits.
By pooling their assets in mutual funds, investors achieve economies of scale. The
interests of the investors are protected by the SEBI.
The goal of a mutual fund is to provide an individual to make money. There are several
thousand mutual funds with different investments strategies and goals to chosen from.
Choosing one can be overwhelming, even though it need not be different mutual funds
have different risks, which differ because of the fund’s goals fund manager, and investment
style.
The fund itself will still increase in value, and in that way we may also make money
therefore the value of shares we hold in mutual fund will increase in value the holdings increases
in value capital gains and income or dividend payments are best reinvested for younger investors
retires often seeks the income from dividend distribution to augment their income with
reinvestment of dividends and capital distribution your money increase at an even greater rate.
When you redeem your share what you receive is the value of the share.
3
1.3.1 SPONSER:
A company established under the companies Act establishes a mutual fund. Thus, for
instance, Sundaram Finance Ltd, a company registered under the companies Act, and sets up the
Sundaram Mutual Fund. Sundaram Finance Ltd is the sponsor company.
1.3.2 TRUST:
The trust is headed by a Board of Trustees. The entity holds the property of the mutual
fund in trust for the benefit of the unit holders and ensures that all legal requirements in
connection with the operation and functioning of the mutual fund are met. In some, the trustee is
also established as a limited company under the companies Act. HDFC Mutual fund is an
example.
1.3.3 SEBI:
Every mutual fund must be registered with SEBI and registration is granted only where
SEBI is satisfied with the background of the fund.
4
1.4 HISTORICAL VIEW:
History and Structure of Indian Mutual Fund Industry
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India,
at the initiative of the Government of India and Reserve Bank.
The history of mutual funds in India can be broadly divided into four distinct
phases:
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in
which the first mutual fund regulations came into being, under which all mutual funds, except
UTI were to be registered and governed.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnesses several mergers and acquisitions.
5
As at the end of January 2003, there were 33 mutual funds with total assets of
Rs.1,21,805crores. The unit Trust of India with Rs.44,541crores of assets under management
was way ahead of other mutual funds.
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29, 835crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes.
The specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of the
Mutual Fund Regulations.
The second is the UTI mutual fund Ltd, sponsored by SEBI, PNB, BOB AND LIC. It is
registered with SEBI and functions under the Mutual Fund regulations.
With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,
000crores of assets under management and with the setting of a UTI Mutual Fund, conforming to
the SEBI Mutual Fund Regulations, and with recent mergers taking place among different
private sector funds, the mutual funds industry has entered its current phase of consolidation and
growth. As at the end of September, 2004, there were 29funds, which manage assets of Rs.1, 53,
108 crores under 421 schemes.
6
When the value of the mutual funds’ investments goes up, the return for the investor
increases. When the value of the investor comes down, the return for the investor comes down.
The income earned on the funds, including unrealized capital appreciation, is shared
amongst the investors (called unit holders) in proportion to the number of units owned by them.
Thus a mutual fund becomes the indirect vehicle for the investor to invest in the capital markets.
1.6.1 SEBI
Securities and Exchange Board of India (SEBI) formed under the SEBI Act, 1992 with the prime
objective of
Protecting the interests of investors in securities,
Promoting the development of, and
Regulating, the securities market and for matters connected there with or incidental
thereto.
Every mutual fund must be registered with SEBI and registration is granted only where
SEBI is satisfied with the background of the fund. It has the authority to inspect the books of
accounts, records and documents of a mutual fund, its trustees, AMC and custodian where it
deems it necessary.
7
1.7.3 Spreading Risk:
An investor with limited funds might be able to invest in only one or two
stocks/bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by
investing a number of sound stocks or bonds. A fund normally invests in companies across a
wide range of industries, so the risk is diversified.
1.7.4 Transparency:
Mutual Funds regularly provide investors with information on the value of their
investments. Mutual Funds also provide complete portfolio disclosure of the investments
made by various schemes and also the proportion invested in each asset type.
1.7.5 Choice:
The large amount of Mutual Funds offers the investor a wide variety to choose
from. An investor can pick up a scheme depending upon his risk/return profile.
1.7.6 Regulations:
All the mutual funds are registered with SEBI and they function within the
provisions of strict regulation designed to protect the interests of the investor.
8
1.9 FEATURES
The following are the crucial features of a mutual fund.
1.9.7 TAXATION:
The income of mutual fund registered with SEBI is exempt from tax under section
10(23D) of income tax act, 1961.for the unit holder, the dividends received from are free from
tax. Sale of mutual funds investment will attract capital gains tax. Investment in mutual funds is
exempt from wealth tax.
9
1.10 STRUCTURE OF MUTUAL FUNDS IN INDIA
A Mutual fund is constituted in the form of a trust. The sponsor sets up the business, the
asset management company invests the money and the trustee oversees the operations.
There are five principal constituents involved in the formation and functioning with three
market intermediaries.
A mutual fund is established under the Indian Trust Act to raise moneys through the sale
of sale of units to the units to the public for investment in the capital markets. The funds so
raised are handed over to the asset management company for investment. The mutual fund is
required to be registered with SEBI.
1.10.1 CUSTODIAN:
A custodian is “any person who has been granted a certificate of registration to
carry on the business of custodial services under the Securities and Exchange Board of
India (custodian of securities) Regulations 1996”. Custodial services means safekeeping of
10
securities of a client and providing all incidental services. These include maintaining
accounts of securities of a client and collecting the benefits or rights accruing to a client.
Mutual funds use custodians so that the AMC can focus on its area of one competence,
namely, investing and managing money.
Some of the Risk to which Mutual Funds are exposed to is given below:
11
1.11.3 Interest rate risk:
Bond prices and interest rates move in opposite directions. When interest rates rise,
bond prices fall and this decline in underlying securities affects the fund negatively.
Funds that invest in equity shares are called equity funds. They carry
the principal objective of capital appreciation of the investment over the
12
medium to long-term. They are best suited for investors who are seek ing
capital appreciation. There are different types of equity funds such as
Diversified funds, Sector specific funds and Index based funds.
These funds invest in highly liquid money market instruments. The period of investment
could be as short as a day. They provide easy liquidity. They have emerged as an alternative for
savings and short-term fixed deposit accounts with comparatively higher returns. These funds are
ideal for corporate, institutional investors and business houses that invest their funds for very short
periods.
13
1.12.1.7 Gilt Funds:
These funds invest in Central and State Government securities. Since they are Government
backed bonds they give a secured return and also ensure safety of the principal amount. They are
best suited for the medium to long-term investors who are averse to risk.
14
1.13.2 DIVIDEND REINVESTMENT PLAN:
Dividend plans of schemes carry an additional option for reinvestment of income
distribution. This is referred to as the dividend reinvestment plan. Under this plan, dividends
declared by a fund are reinvested in the scheme on behalf of the investor, thus increasing the
number of units held by the investors.
• Receive Unit certificates or statements of accounts confirming your title within 6 weeks
from the date your request for a unit certificate is received by the Mutual Fund Information
about the investment policies, investment objectives, financial position and general affairs
of the scheme.
• Receive dividend within 30 days of their declaration and receive the redemption or
repurchase proceeds within 10 days from the date of redemption or repurchase.
• The trustees shall be bound to make such disclosures to the unit holders as are essential in
order to keep them informed about any information, which may have an adverse bearing on
their investments.
• 75% of the unit holders with the prior approval of SEBI can terminate the AMC of the fund.
• 75% of the unit holders can pass a resolution to wind-up the scheme.
• An investor can send complaints to SEBI, who will take up the matter with the concerned
Mutual Funds and follow up with them till they are resolved.
• Investment objectives
• Summary of expenses
15
• Guidelines on how to invest
• Financial information
16
The returns generated by the index are the returns given by the fund. No attempt is made
to try and beat the index. Research has shown that most fund managers are unable to constantly
beat the market index year after year.
Also it is not possible to identify which fund will beat the market index. Therefore, there
is an element of going wrong in selecting a fund to invest in. This has led to a huge interest in
passively managed funds such as Index Funds where the choice of investments is not left to the
discretion of the fund manager.
Index Funds hold a diversified basket of securities which represents the index while at
the same time since there is not much active turnover of the portfolio the cost of managing the
fund also remains low. This gives a dual advantage to the investor of having a diversified portfolio
while at the same time having low expenses in fund.
By owning an ETF, you get the diversification of an index fund plus the flexibility of
a stock. Because, ETFs trade like stocks, you can short sell them, buy them on margin and purchase
as little as one share. Another advantage is that the expense ratios of most ETFs are lower than
that of the average mutual fund. When buying and selling ETFs, you pay your broker the same
commission that you’d pay on any regular trade.
1.18.2 A Systematic Transfer Plan (STP) allows you to make periodic transfers
from one fund into another managed by the same fund house. As with an SWP, you have to specify
the installment and the periodicity of the transfer. The STP can be a useful facility to re-balance
your portfolio or to phase out investments in a fund over a period. You can invest a lump sum in
17
a liquid or floating rate fund and leave instructions to transfer Rs. 1000 every month into an equity
fund.
Mutual Funds are investment vehicles that pool in the money of many investors and
professionally manage the funds so collected. They then share out the returns with the investors.
The investors can also buy and sell mutual fund units from the fund or on the stock exchanges.
Mutual funds offer various types of investment objectives like growth, income and mixed. They
open for offer through a new fund offer.
The scheme may be open or close ended. There are various types of funds/schemes based
on the objective like debt funds, sector funds, growth funds, etc. ETF is a mutual fund traded on a
stock exchange.
18
CHAPTER-2
THEORETICAL
FRAMEWORK FOR
CONSUMER BEHAVIOR
19
2.1 CONSUMER BUYING BEHAVIOR:
To Study Consumer Buying Behavior Has Become One Of The Most Important
And Complex Task For The Organizations. In Order To Gain A Competitive Advantage Over Its
Competitors Huge Amount Of Money And Time Is Devoted To Understand The Nature Of
Consumer Buying Process. This Paper Aims To Understand the Process Of Consumer Buying And
The Factors That Influences Such Decision Making Process.
Consumer Buying Behavior Focuses On How Individuals Make Decisions To
Spend Their Available Resources (Time, Money, Effort) On Consumption-Related Items That
Includes What They Buy, Why They Buy, When They Buy It, Where They Buy It, How Often
They Buy It, How Often They Use It, How They Evaluate It After The Purchase And The Impact
Of Such Evaluations On Future Purchases, And How They Dispose Of It.
Consumer Buying Decision Process:
When purchasing any product, a consumer goes through a decision process. This
process consists of up to five stages
NEED RECOGNITION
INFORMATION SEARCH
EVALUATION OF ALTERNATIVES
BUYING DECISION
20
1
21
2.2 THE 4 MARKETING P’S TO BE FOCUSED ON BY
INVESTOR
2.2.1 PEOPLE:
Find out more about the individuals responsible for running the fund, i.e. the
portfolio manager and the investment team supporting him. Focus on the manager’s
experience and his or her areas of expertise.
2.2.2 PROCESS:
This entails evaluating the investment strategy being plied on the fund. Broadly
speaking, a process which is simple, well-defined and repeatable is preferable.
2.2.3 PERFORMANCE:
Evaluate if the fund’s performance matches what one expects given the process
being plied. For instance, a valuation – conscious process is unlikely to deliver at a time
when markets are rewarding expensive stocks.
2.2.4 PRICE:
Expenses charged to the fund can do have a bearing on its long-term
performance. In debt fund categories where margins can be wafer thin, the importance of
keeping expenses low is further accentuated.
The aforesaid factors should be considered in combination (and not
individually) while forming an opinion on the fund. Lastly, investors must remember that
they are investing their monies for the future and hence the need to focus on more than
more than just the past performance
22
This classification is based on the attitudes of investors towards secondary market investments.
Let’s explain each type of investor and understand their investment psyche and behavioral patterns.
2.3.1 INTELLECTUALS:
This retail investor group forms around 17% of the total retail investment class.
They are the intelligent investors who follow an intelligent, individualist approach to
investment planning and a well- defined and deliberate strategy for stock investment.
2.3.2 CAVALIERS:
As high as 49% of the small retail equity investors are ‘cavaliers’. They are those
who have lost money in ‘fly-by –night ‘schemes. Therefore, much of their investments are driven
by the desire to recover past losses and make profits in the future. As such, they invest aggressively
into equities, mostly in volatile sectors in order to make big gains.
2.3.3 REACTIVISTS:
About 5% of the retail equity investors fall under this category. These investors’
basically short-term investors, are impulsive info addicts who are vulnerable to external
influences and as such, they have no specific investment patterns, They believe that dynamic
and ad hoc investments will result in better profits and are prompted to act on popular opinion
rather than systematic planning.
2.3.4 OPPORTUNISTS:
This class of investors account for 10% of the retail equity investor universe. This
category is defensively pessimistic and prefers to take only familiar risks. As they have a low risk
tolerance, they are wary of volatility in the equity market.
2.3.5 GAMBLERS:
19% the retail investor population is made up of not actual investors. But gamblers’
they are the typical thrill seeking traders who link profitability to personal achievement. They
experiment a lot, mostly driven by instinct and self-confidence; as such their stock selection is
more a random exercise that lacks rationale
The present marketing strategies of mutual funds can be divided into two main headings:
1. Direct marketing
2. Selling through intermediaries
3. Joint calls
23
2.4.1 DIRECT MARKETING:
This constitutes 20 percent of the total sales of mutual funds.
Some of the important tools used in this type of selling are:
2.4.1.2 TELEMARKETING:
In this case the emphasis is to inform the people about the fund. The names and phone
numbers of the people are picked at random from telephone directory.
24
2.5 ADVANTAGES:
PORTFOLIO DIVERSIFICATION:
Mutual Funds invest in a well-diversified portfolio of securities which enables
investor to hold a diversified investment portfolio (whether the amount of investment is big or
small)
PROFESSIONAL MANAGEMENT:
Fund manager undergoes through various research works and has better investment
management skills which ensure higher returns to the investor than what he can manage on his
own.
LESS RISK:
Investors acquire a diversified portfolio of securities even with a small investment in a
Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3 securities.
LIQUIDITY:
An investor may not be able to sell some of the shares held by him very easily and quickly,
whereas units of a mutual fund are far more liquid.
CHOICE OF SCHEME:
Mutual funds provide investors with various schemes with different investment objectives.
Investors have the option of investing in a scheme having a correlation between its investment
objectives and their own financial goals. These schemes further have different plans/options
TRANSPARENCY:
Funds provide investors with updated information pertaining to the markets and the
schemes. All material facts are disclosed to investors as required by the regulator. Flexibility: -
Investors also benefit from the convenience and flexibility offered by Mutual Funds. Investors
can switch their holdings from a debt scheme to an equity scheme and vice-verse. Option of
systematic (at regular intervals) investment and withdrawal is also offered to the investors in most
open-end schemes.
SAFETY:
Mutual Fund industry is part of a well-regulated investment environment where the
interests of the investors are protected by the regulator. All funds are registered with SEBI and
complete transparency is forced.
25
2.6 DISADVANTAGES:
NO CUSTOMIZED PORTFOLIO:
The portfolio of securities in which a fund invests is a decision taken by the fund
manager. Investors have no right to interfere in the decision making process of a fund manager,
which some investors find as a constraint in achieving their financial objectives.
LOAD STRUCTURE:
Load Funds Mutual Funds incur various expenses on marketing, distribution,
advertising, portfolio churning, fund manager's salary etc. Many funds recover these expenses
from the investors in the form of load. These funds are known as Load Funds.
A load fund may impose following types of loads on the investors:
1. Entry Load
Also known as Front-end load, it refers to the load charged to an investor at the time of
his entry into a scheme. Entry load is deducted from the investor's contribution amount to the fund.
2. Exit Load
Also known as Back-end load, these charges are imposed on an investor when he redeems
his units (exits from the scheme). Exit load is deducted from the redemption proceeds to an
outgoing investor.
3. Deferred Load
Deferred load is charged to the scheme over a period of time
26
In some schemes, the percentage of exit load reduces as the investor stays longer with the
fund. This type of load is known as Contingent Deferred Sales Charge. No-load Funds All those
funds that do not charge any of the above mentioned loads are known as No-load Funds.
Tax exemption:
1. TAX-EXEMPT FUNDS
Funds that invest in securities free from tax are known as Tax- exempt Funds. All
open-end equity oriented funds are exempt from distribution tax (tax for distributing income to
investors). Long term capital gains and dividend income in the hands of investors are tax- free.
2. NON-TAX-EXEMPT FUNDS
Funds that invest in taxable securities are known as Non-Tax-exempt Funds. In India,
all funds, except open-end equity oriented funds are liable to pay tax on distribution income. Profits
arising out of sale of units by an investor within 12 months of purchase are categorized as short-
term capital gains, which are taxable. Sale of units of an equity oriented fund is subject to Securities
Transaction Tax (STT). STT is deducted from the redemption proceeds to an investor.
27
CHAPTER – 3
METHODOLOGY
28
3.1 NEED FOR THE STUDY
In today's complex financial environment, investors have unique needs, which are derived
from their risk appetite and financial goals. Mutual funds (customized portfolios) recognize this,
and manage the investments professionally to achieve specific investment objectives, and not to
forget, relieving the investors from the day-to-day hassles which investment require.
It is offers professional management of equity and debt diversified investment of the investor
with an aim to deliver consistent return with an eye on risk.
Identify the key sectorial stocks in each portfolio.
The research is primarily both exploratory as well as descriptive in nature. The sources of
information are both primary & secondary. A well-structured questionnaire was prepared and to
collect the customer's perception and buying behavior, through this questionnaire
29
3.5 DATA COLLECTION
Primary data
The questionnaire was used as the data collection instrument.it is a research instrument consisting
of a series of questions for the purpose of gathering information from respondents.
Secondary data
The secondary data has been collected from online sources.
Sample Data:
Sampling Technique Initially, rough draft was prepared keeping in mind the objective of the
research. A pilot study was done in order to know the accuracy of the Questionnaire. The final
Questionnaire was arrived only after certain important Changes done thus my sampling came out
to be Judgemental and Convenient.
Sampling Unit:
The respondents who were ask to fill a Questionnaire are the sampling units. These
comprise of clients, employees, colleagues.
Sample size:
Sample size was restricted to only 53, which comprised of mainly people who are working,
studying and have knowledge about investment.
Sampling Area:
The area of the research was, Bangalore India.
Statistical tools:
For the purpose of analyzing the data factor analysis have been conducted using SPSS.
Methods of spreading the questionnaires:
Since the topic deals with Customer behavior on Investments, online questionnaire was used. A
free service website, Google Spread sheets, used for the survey and allow participants to answer
the questionnaire online. After the online questionnaire has been created, the questionnaire link
was emailed to participants. At the same time, it is also asked them to forward the questionnaire
to their cases. Secondly, the questionnaire distributed through WhatsApp and other social media
channels. The respondents could easily click on the link which directly leads them to the
30
questionnaire. The results are then recorded into an excel document by the Google Spread sheet.
The link of the questionnaire has been sent online. 53 were responded and within the responded
questionnaires .The participation to the survey were voluntary and the respondents had a chance
to stop and leave the questionnaire at any stage.
31
CHAPTER – 4
ANALYSIS OF THE STUDY
32
RESPONDENTS ANALYSIS:
RESPONDENTS DESIGNATION
business self employed student salaried employed
4%
2%
41%
53%
.
INTERPRETATION:
From the above data, 53 % of the respondents are student, 41% are salaried employees while
the others are either self-employed or have their own businesses.
RESPONDENTS AGE
13%
2%
15%
70%
33
INTERPRETATION:
From the above data, 70% of the respondents are students belong to 20-25 age group, 15 %
belongs to 25-30 a age group, 2% belong to 30 -40 age group and 13% belong to age group of
more than 40
INCOME
43%
49%
8%
less than 2 lakhs 2 lakhs - 3 lakhs more than 3 lakhs
INTERPRETATION:
From the above data, 43% of respondent income level is more than 3 lakhs, 8% respondent’s
income level belongs to 2 lakhs -3 lakhs and 49% of respondents income level is less than 2
lakhs
2%4%
15%
9%
11%
59%
34
INTERPRETATION:
From the data obtained through survey we can observe that majority of respondents are
interested to invest in mutual funds followed by securities, insurance, government bonds,
FOREX and treasury bonds
45%
55%
INTERPRETATION:
From the above data, 55% respondents invested in mutual funds and 45 % are not interested in
investing in mutual funds
17%
40%
20%
23%
35
INTERPRETATION:
From the above data, 17% of the respondents do not have trust on fund manager, 40% of
respondents do not have knowledge on mutual fund, 23% of respondents invest in other sources
and 20% of respondents feel mutual fund have less benefits
AVERAGE INVESTMENT
PERIOD
less than 6 months 6-12 months
12 months-2 years greater than 2 years
26%
34%
22%
18%
INTERPRETATION:
From the above data, 26% of respondents investment period is less than 6 months, 22% is 6-12
months,18% is 1 year-2 years and 34% is greater than 2 years.
PRIMARY SOURCE OF
INVESTMENT
television internet
newspapers friends and family
12%
45%
32%
11%
INTERPRETATION:
From the above data, 45% of respondents invest in mutual funds by recommendation of family
and friends, 32% is from internet, 11% is from newspapers and 12 is from television.
36
RISK
low moderate high
6%
39%
55%
INTERPRETATION:
From the above data, 55% of respondents take moderate risk while investing in mutual funds,
6% take high risk and 39% take low risk.
17%
8% 38%
15%
12% 10%
e
INTERPRETATION:
From the above data, 38% of investors prefer equity funds to maximize their capital, 10% prefer
income funds. 12% prefer money market funds, 15% prefer ELSS tax saver, 8% prefer balanced
funds and 17% prefer SIP
37
RETURN EXPECTATION
up to 15% 15-25% 25-35% greater than 35%
17% 21%
14%
48%
INTERPRETATION:
From the above data, 48% of respondents expect 15-25% return, 14% expect 25-35% return,21%
expect low return that is up to 15% and 17% expect greater than 35% return by investing for
long term in mutual funds
PREFERENCE OF MUTUAL
FUND
open ended closed ended
23%
77%
INTERPRETATION:
From the above data, 77% of respondents prefer open ended mutual fund the funds do not have a
fixed data of redemption, 23% prefer closed ended mutual fund.
38
INFLUENCED BY NAME OF
THE COMPANY
yes no
48% 52%
INTERPRETATION:
From the above data, 52% of the respondents invest by influencing by the name of the company.
FACTOR INFLUENCED
by NAV by return both
19%
46%
35%
INTERPRETATION:
From the above data, 46 % of investors prefer both NAV and return to invest in the mutual
funds.
39
PURCHASE MUTUAL FUNDS
FROM
directly from AMC brokers only
37%
63%
INTERPRETATION:
From the above data, 63% of investors purchase mutual funds directly from AMC because they
lack the trust on fund manager.
FEATURE ATTRACTED
diversification
professional management
reduction in risk and sansaction cost
help in achieving long term goals
28% 24%
16%
32%
INTERPRETATION:
Based on the above information we can target the customers according to the features they are
looking for.24% investors attracted to diversification, 16% investors attracted to professional
management, 32% attracted to reduction in risk and sansaction cost and 28% attracted to help in
achieving long term goals.
40
CROSS TAB: 1
featureattracted
reduction in risk
professional and transaction help in achieving
diversification maagement cost long term goals Total
age 20-25 8 5 11 10 34
25-30 2 0 4 2 8
30-40 0 0 0 1 1
more than 40 2 3 1 1 7
Total 12 8 16 14 50
INTERPRETATION:
From the above table, respondents from the category of 20-25years are more attracted towards
low risk and achieving long term goals in order to secure their savings. 25-30years are more
attracted towards low risk whereas more than 40 years category respondents are more interested
in diversification and portfolio management.
designation
salaried
business self employed student employed Total
2 lakhs - 3 lakhs 1 0 0 3 4
INTERPRETATION:
As per this survey, 26 respondent’s income level is less than 2 lakhs, in which
students(23) and one self employed
4 respondents income level is between 2 lakhs -3 lakhs, in which business(1), and self-
employed(3)
23 respondents income level is more than 3 lakhs in which one self-employed, students
41
(3) and salaried employed (19).
designation
salaried
business self employed student employed Total
age 20-25 0 1 28 8 37
25-30 1 0 0 7 8
30-40 0 0 0 1 1
more than 40 0 1 0 6 7
Total 1 2 28 22 53
INTERPRETATION:
According to the survey,
37 respondents are between 20-25 years in which students (28), one self-employed, and
salaried employed (8).
8 respondents are between 25-30 years in which salaried employed(7) and business(1)
One salaried employed is from 30-40 years group
7 respondents are more than 40 years in which salaried employed (6) and one self-
employed.
yes no Total
age 20-25 14 23 37
25-30 6 2 8
30-40 1 0 1
more than 40 3 4 7
Total 24 29 53
42
INTERPRETATION:
From the above table out of 53 respondents 24 are interested in mutual funds because they want
to diversify their savings in long term. 29 respondents are not interested because they feel that
their annual income is not sufficient for their savings.
risk
age 20-25 15 20 2 37
25-30 2 5 1 8
30-40 0 1 0 1
more than 40 4 3 0 7
Total 21 29 3 53
INTERPRETATION:
From the above table, we observe that the age group of 20-25 are low and moderate risk takers.
Between 25-40 years group are moderate risk takers. The income level more than 40 years are
moderate risk takers.
preferenceinmutualfunds
age 20-25 15 1 6 4 3
25-30 4 1 0 3 0
30-40 0 0 0 1 0
more than
1 3 0 0 1
40
Total 20 5 6 8 4
43
age * preferenceinmutualfunds Crosstabulation
Count
preferenceinmutualfunds
SIP Total
age 20-25 7 36
25-30 0 8
30-40 0 1
more than 40 2 7
Total 9 52
INTERPRETATION:
From the above table, we observe that the respondents highly prefer equity funds and SIP
because they want capital appreciation and they like to invest in a fund by way of monthly
instalments.
returnexpectation
greater than
upto 15% 15-25% 25-35% 35% Total
age 20-25 8 18 5 6 37
25-30 0 5 1 2 8
30-40 0 0 1 0 1
more than 40 3 2 0 1 6
Total 11 25 7 9 52
INTERPRETATION:
It is observed that, respondents with all age groups highly expect 15-25% return on their
investment.
44
age * preferanceofmutualfund Crosstabulation
Count
preferanceofmutualfund
age 20-25 26 7 33
25-30 6 1 7
30-40 1 0 1
more than 40 4 3 7
Total 37 11 48
INTERPRETATION:
From the above table it is observed that the respondents with all age groups prefer open ended
because the funds do not have a fixed data of redemption, they are open throughout the year.
purchasemutualfundsfrom
directly from
AMC brokers only Total
age 20-25 24 11 35
25-30 4 4 8
30-40 0 1 1
more than 40 4 3 7
Total 32 19 51
INTERPRETATION:
Because of the trust issues with the intermediators, investors want to purchase directly from
AMC. But because of the time constraint and lake of awareness about mutual funds the age
group of 20-25 years like to purchase schemes through mediators.
45
age * fractorinfluenced Crosstabulation
Count
fractorinfluenced
age 20-25 6 12 15 33
25-30 0 4 3 7
30-40 0 0 1 1
more than 40 3 1 3 7
Total 9 17 22 48
INTERPRETATION:
From the above table, it is clear that respondents are more likely to invest in schemes that give
high returns on their investment. The age group of 20-25 years they are not only expecting
returns but also invest comparing with NAV
yes no Total
2 lakhs - 3 lakhs 3 1 4
INTERPRETATION:
From the above table out of 53 respondents 24 are interested in mutual funds because they want
to diversify their savings in long term. 29 respondents are not interested because they feel that
their annual income is not sufficient for their savings.
46
income * risk Crosstabulation
Count
risk
2 lakhs - 3 lakhs 2 1 1 4
INTERPRETATION:
From the above table, we observe that Less than 2 lakhs income holders are low and moderate
risk takers. The income level between 2 lakhs-3 lakhs are low risk takers. The income level more
than 3 lakhs are moderate risk takers.
money
equity income market ELSS tax
funds funds funds saver
2 lakhs - 3
3 1 0 0
lakhs
more than 3
4 4 1 7
lakhs
Total 20 5 6 8
.
income * preferenceinmutualfunds Crosstabulation
Count
preferenceinmutualfunds
2 lakhs - 3 lakhs 0 0 4
47
INTERPRETATION::
From the above table, we observe that Less than 2 lakhs income holders are low and moderate
risk takers. The income level between 2 lakhs-3 lakhs are low risk takers. The income level more
than 3 lakhs are moderate risk takers.
income * returnexpectation Crosstabulation
Count
returnexpectation
greater than
upto 15% 15-25% 25-35% 35% Total
2 lakhs - 3 lakhs 0 3 1 0 4
more than 3 lakhs 4 12 1 5 22
Total 11 25 7 9 52
INTERPRETATION:
It is observed that, investors with different income levels highly expect 15-25% return on their
investment.
preferanceofmutualfund
2 lakhs - 3 lakhs 3 0 3
INTERPRETATION:
From the above table it is observed that the investors with different income levels prefer open
ended because the funds do not have a fixed data of redemption, they are open through out the
year.
48
income * purchasemutualfundsfrom Crosstabulation
Count
purchasemutualfundsfrom
directly from
AMC brokers only Total
2 lakhs - 3 lakhs 1 3 4
INTERPRETATION:
Because of the trust issues with the intermediators, investors want to purchase directly from
AMC.
Feature attracted
reduction in
risk and help in
professional sansaction achieving long
diversification maagement cost term goals
2 lakhs - 3 lakhs 1 0 2 1
Total
2 lakhs - 3 lakhs 4
INTERPRETATION:
From the above table, the respondents whose income is less than 3 lakhs, are more attracted
towards low risk to secure their savings, the respondents with more than 3 lakhs income level
attract to diversify their investment into various schemes.
49
income * fractorinfluenced Crosstabulation
Count
fractorinfluenced
2 lakhs - 3 lakhs 0 2 1 3
INTERPRETATION:
From the above table, it is clear that respondents influence on both the factors NAV and return
on investment.
50
CHAPTER -5
FINDINGS AND
CONCLUSION
51
FINDINGS
Usually customers give away their accounts to portfolio management services because
there is high volatility in the market and frequent analysis is required.
Most of the investors happened to be aged between 25-35 years of age.
People who had savings more than 1-2lacs have showed interest to invest in insurance and
mutual funds market.
Many investors relied on portfolio management services as they had no full knowledge
regarding the market.
Maximum of the investors demand lump sum amount at a particular time no matter if they
gain more profits or in losses.
Controlling losses is the major aspect an investor should take into consideration.
Patience and controlling emotions are the two primary things investor should have.
Economic factors, political factors, market gains and management skills are the key factors
in fund performance. These funds also concentrate on various sectors such as government
bonds, gold or technology stocks.
During these times it is very difficult to predict prices as the market does not follow a
particular trend which can be analyzed.
CONCLUSION
The large number of people invest in mutual funds by aggregating their money in stocks,
bonds and other securities. Mutual funds are easy to buy and sell. We can either buy directly
from Fund Company or through third party. The main advantage of mutual funds are
professional management, diversification, and economies of scale and wide range of offering.
There are many types of mutual funds based on asset class, investing strategies, region etc.
mutual funds have expenses that can be broken down generally into transaction fees and ongoing
fees. There is also inability of management to guarantee a superior return.one of the biggest
problem with mutual funds are there costs and fees. Investors seek to invest in mutual funds to
get more returns.
52
CHAPTER – 6
BIBLIOGRAPHY
53
BIBLIOGRAPHY
1. WWW.moneycontrol.com
2. www.investopedia.com
3. www.educba.com
4. https://www.wikipedia.org/
5. www.arihant.com
6. Book: Philip Kotler, Kevin Lane Keller, 15th edition, marketing management, Pearson
7. Book: V Pattabhi Ram, S D Bala, 4th edition, Strategic Financial Management, Prime
knowledge Series.
54
CHAPTER - 7
ANNEXURE
55
INDIVIDUAL PERCEPTION AND CONSUMER BEHAVIOR ON
MUTUAL FUNDS
The questionnaire is for the academic research purpose only, the data collected will be kept
confidential.
* Required
1. Email address *
2. Name *
3. Contact Number *
4. DESIGNATION: *.
BUSINESS
SELF – EMPLOYED
STUDENT
SALARIED EMPLOYEE
Other:
5. AGE: *
20 - 25
25 - 30
30-40
MORE THAN 40
9. If no, what is the important reason for not investing in mutual funds?
56
Lack of knowledge about mutual funds
Investing in other sources
Its benefits are not enough to drive you for investment
No trust on fund manger
11. Which is the primary source of your knowledge about mutual funds as an investment
option
Television
Internet
Newspapers
Friends and family
57
17. Do you get influenced by the name of the company promoting mutual funds?
Yes
No
18. Rank the following companies according to your investment preference (1- least
preferred
And 5 - Most preferred) *
12345
SBI
RELIANCE MUTUAL FUNDS
HDFC
UTI MUTUAL FUNDS
ICICI PRUDENTIALS
BIRLA SUN LIFE
PRINCIPAL PNB
FRANKLINE TEMPLETON
19. Do you get influenced by the return given by a fund or by the current NAV of a fund
By NAV
By return
Both
58
Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.
Alternative Proxies: