A PROJECT REPORT

ON
“INVESTOR’S PERCEPTION AND AWARENESS
TOWARDS MUTUAL FUNDS”

INSTITUTE MANAGEMENT SCIENCES

SUMMER TRAINING

SUBMITTED IN THE PARTIAL FULFILMENT OF THE DEGREE OF

MASTER’S OF BUSINESS ADMINISTRATION
SUBMITTED TO: SUBMITTED BY:
Ms. Gurshish Kour Mohit Raina
MBA-3rd Semester
University Roll No:-0414MBA18
 ACKNOWLEGMENT

Preservation, inspiration and motivation have always played a key role in the
success of any venture. In the present world of cutthroat competition project
is likely a bridge between theoretical and practical working, willingly we
have prepared this particular project. First of all, I would like to thank the
supreme power, the almighty god who is obviously the one who has always
directed us to work on the right path of our life. With this grace this grace
this project could become a reality. We feel highly delighted with the way
our dissertation report on topic “INVESTOR’S PERCEPTION AND
AWARENESS” IN MUTUAL FUND: WITH SPECIAL REFERENCE TO
SHAREKHAN PVT. LTD, SHAREKHAN ADMINSTRATIVE
OFFICE,BAKSHI NAGAR,JAMMU ” has been completed. We would like
to thanks Mr.AJAY KAPOOR to provide us the fruitful guidance to
complete the project. Finally, I would like to thanks all the faculty members
and others people who helped us in completing this project.

Date: DEPIKA HANDOO

 DECLEARATION
I hereby declare that the project work entitled “INVESTOR PERCEPTION
AND AWARENESS TOWARDS MUTUAL FUND”

A SPECIAL REFERENCE TO SHAREKHAN PVT. LTD. submitted to the

“JAMMU UNIVERSITY”, is a record of an original work done by me under
the guidance of Mr. AJAY KAPOOR, and this project work has not
performed the basis for the award of any Degree and similar project if any.

Signature:

Student Name: DEPIKA HANDOO

 PREFACE

In order to achieve the positive and concrete results, along with theoretical
concepts, the exposure of real life situation existing in corporate world is
very much needed. To fulfil this need, the practical need is required.

I took training in the “SHAREKHAN”. It was my pleasure to get training in

a healthy atmosphere. I got ample opportunity to view the overall working of
the bank.

The subject of the project was “Investor Perception &Awareness towards

Mutual Funds”.
 Contents
Sr. Chapter Page No.
1 Acknowledgment
2 Declaration
3 Preface
4 Executive summary
Chapter 1
5 Introduction
6 History of mutual funds
7 Introduction to Organisation
8 SHAREKHAN Mutual Funds
9 Types of Mutual Funds schemes
10 Competitors
11 Factors to be considered before
selecting Mutual Funds
12 Easy steps to invest in Mutual
Funds
Merits and Demerits of Mutual
Funds
13 Chapter-2
Research Methodology
14 Chapter-3
Objectives of Study
15 Chapter-4
16 Analysis and Interpretation of the
Data
17 Findings
18 Conclusion
19 Recommendations and Suggestions
20 Bibliography
 21 Annexure

EXECUTIVE SUMMARY
In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being.
Mutual Funds have not only contributed to the India growth story but have also helped
families tap into the success of Indian Industry. As information and awareness is rising
more and more people are enjoying the benefits of investing in mutual funds. The main
reason the number of retail mutual fund investors remains small is that nine in ten people
with incomes in India do not know that mutual funds exist. But once people are aware of
mutual fund investment opportunities, the number who decide to invest in mutual funds
increases to as many as one in five people. The trick for converting a person with no
knowledge of mutual funds to a new Mutual Fund customer is to understand which of the
potential investors are more likely to buy mutual funds and to use the right arguments in
the sales process that customers will accept as important and relevant to their decision.

This Project gave me a great learning experience and at the same time it gave me enough
scope to implement my analytical ability. The analysis and advice presented in this
Project Report is based on market research on the saving and investment practices of the
investors and preferences of the investors for investment in Mutual Funds.

I also took interview of many People those who were coming at the SHAREKHAN
where I done my Project. This Project covers the topic “INVESTORS PERCEPTION
AND AWARENESS TOWARDS MUTUAL FUND.” The data collected has been well
organized and presented. I hope the research findings and conclusion will be of use.
 INTRODUCTION TO THE INDUSTRY

A mutual fund is a professionally-managed form of collective investments that pools

money from many investors and invests it in stocks, bonds, short-term money market
instruments, and/or other securities. In a mutual fund, the fund manager, who is also
known as the portfolio manager, trades the fund's underlying securities, realizing capital
gains or losses, and collects the dividend or interest income. The investment proceeds are
then passed along to the individual investors. The value of a share of the mutual fund,
known as the net asset value per share (NAV) is calculated daily based on the total value
of the fund divided by the number of shares currently issued and outstanding.

Mutual fund is a trust that pools the savings of a number of investors who share a
common financial goal. This pool of money is invested in accordance with a stated
objective. The joint ownership of the fund is thus “Mutual”, i.e. the fund belongs to all
investors. The money thus collected is then invested in capital market instruments such
as shares, debentures and other securities. 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. Thus a Mutual Fund is the most suitable investment for
the common man as it offers an opportunity to invest in a diversified, professionally
managed basket of securities at a relatively low cost.

A Mutual Fund is an investment tool that allows small investors access to a well
diversified portfolio of equities, bonds and other securities. Each shareholder participates
in the gain or loss of the fund. Units are issued and can be redeemed as needed. The
fund’s Net Asset value (NAV) is determined each day. Investments in securities are
spread across a wide cross-section of industries and sectors and thus the risk is reduced.
Diversification reduces the risk because all stocks may not move in the same direction in
the same proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of mutual funds are
known as unit holders.

When an investor subscribes for the units of a mutual fund, 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). Mutual Fund investor is also known as a mutual
fund shareholder or a unit holder. Any change in the value of the investments made into
capital market instruments (such as shares, debentures etc) is reflected in the Net Asset
Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund
scheme's assets net of its liabilities. 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.
 GROWTH OF MUTUAL FUNDS IN INDIA

The Indian Mutual Fund has passed through three phases. The first phase was between
1964 and 1987 and the only player was the Unit Trust of India, which had a total asset of
Rs. 6,700 crores at the end of 1988. The second phase is between 1987 and 1993 during
which period 8 Funds were established (6 by banks and one each by LIC and GIC). The
total assets under management had grown to 61,028 crores at the end of 1994 and the
number of schemes was 167. The third phase began with the entry of private and foreign
sectors in the Mutual Fund industry in 1993. Kothari Pioneer Mutual Fund was the first
Fund to be established by the private sector in association with a foreign Fund. As at the
end of financial year 2000(31st march) 32 Funds were functioning with Rs. 1, 13,005
crores as total assets under management. As on august end 2000, there were 33 Funds
with 391 schemes and assets under management with Rs 1, 02,849 crores. The securities
and Exchange Board of India (SEBI) came out with comprehensive regulation in 1993
which defined the structure of Mutual Fund and Asset Management Companies for the
first time. Several private sectors Mutual Funds were launched in 1993 and 1994. The
share of the private players has risen rapidly since then. Currently there are 34 Mutual
Fund organizations in India managing 1,02,000 crores.

VALUATION OF MUTUAL FUND

The net asset value of the Fund is the cumulative market value of the assets Fund net of
its liabilities. In other words, if the Fund is dissolved or liquidated, by selling off all the
assets in the Fund, this is the amount that the shareholders would collectively own. This
gives rise to the concept of net asset value per unit, which is the value, represented by
the ownership of one unit in the Fund. It is calculated simply by dividing the net asset
value of the Fund by the number of units. However, most people refer loosely to the
NAV per unit as NAV, ignoring the “per unit”. We also abide by the same convention.

Calculation of NAV

The most important part of the calculation is the valuation of the assets owned by the
Fund. Once it is calculated, the NAV is simply the net value of assets divided by the
number of units outstanding. The detailed methodology for the calculation of the net
asset value is given below. The net asset value is the actual value of a unit on any
business day. NAV is the barometer of the performance of the scheme. The net asset
value is the market value of the assets of the scheme minus its liabilities and expenses.
The per unit NAV is the net asset value of the scheme divided by the number of the units
outstanding on the valuation date.
 HISTORY OF MUTUAL FUND 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. Though the growth was slow, but it accelerated
from the year 1987 when non-UTI players entered the industry. In the past decade,
Indian Mutual Fund industry had seen dramatic improvements, both quality wise as well
as quantity wise. Before, the Monopoly of the Market had seen an ending phase; the
Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund
family raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the
height of 1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into
comparison, the total of it is less than the deposits of SBI alone, constitute less than 11%
of the total deposits held by the Indian banking industry. The main reason of its poor
growth is that the Mutual Fund industry in India is new in the country. Large sections of
Indian investors are yet to be intellectuated with the concept. Hence, it is the prime
responsibility of all mutual fund companies, to market the product correctly abreast of
selling. The Mutual Fund industry can be broadly put into four phases according to the
development of the sector. Each phase is briefly described as under.

First Phase - 1964-87

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

Second Phase - 1987-1993 (Entry of Public Sector Funds)

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank
Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92).
LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47, 004 as assets under
management.

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

With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice of fund families. Also, 1993
was the year in which the first Mutual Fund Regulations came into being, under which
all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari
Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund
registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a
more comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund
houses went on increasing, with many foreign mutual funds setting up funds in India and
also the industry has witnessed several mergers and acquisitions. As at the end of
January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The
Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of
other mutual funds.

Fourth Phase - since February 2003

This phase brought bitter experience for UTI. It was bifurcated into two separate entities.
One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29, 835
crores (as on January 2003). 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 SBI, PNB, BOB and LIC. It is registered with SEBI
and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile
UTI which had in March 2000 more than Rs.76, 000 crores of AUM and with the setting
up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with
recent mergers taking place among different private sector funds, the mutual fund
industry has entered its current phase of consolidation and growth. As at the end of
September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under
421 schemes.
 COMPANY PROFILE

KEY INFORMATION OF SHAREKHAN LTD

Founded February 2000

Headquarters Mumbai, India

Country Of Origin India

CEO Kiran Kumar (Km)

Industry Financial Services

Parent BNP Paribas

Website Sharekhan.com

SHAREKHAN

Sharekhan, India’s leading stock broker is the retail arm of SSKI, an organization with
over eighty years of experience in the stock market with more than 280 share shops in
120 cities and big towns, and premier online trading destination www.sharekhan.com.
Share khan offers the trade execution facilities for cash as well as derivatives, on BSE
and NSE, depository services, commodities trading on the MCX(Multi Commodity
Exchange of India Ltd) and NCDEX^ (National Commodity and Derivative Exchange)
and most importantly, investment advice tempered by eighty years of broking
experience.

Share khan provides the facility to trade in commodities through Sharekhan

Commodities Pvt. Ltd -a wholly owned subsidiary of its parent SSKI. Sharekhan is the
member of two major commodity exchanges MCX and NCDEX.

SSKI
Apart from Sharekhan, the SSKI group also comprises of institutional broking and
corporate finance. The institutional broking division caters to domestic and foreign
institutional investors, while the corporate finance division focuses on niche areas such
as infrastructure, telecom and media. SSKI owns 56% in Sharekhan and the balance
ownership is HSBC, First Caryl and Intel Pacific. SSKI has been voted as the top
domestic brokerage house in the research category, twice by Euro money survey and four
times by Asia money survey.

Share khan, India’s leading stockbrokers the real arm of SSKI, an organization with over
eight decades of stock market experience. With more than 175 share shops in over 80
cities, and a presence on internet through www.sharekhan.com, India’s premier online
trading destination, we reach out to customers like no one else.

Share khan offers you trade execution facilities on the BSE and the NSE, for cash as well
as derivatives, depositary services and most importantly, investment advice tempered by
80 years of research and broking experience. To ensure that your trading experience with
share khan is fast, secure and hassle free. We offer a suite of products and services,
providing you with a multi-channel access to the stock markets.

SSKI group also comprises institutional broking and corporate finance. While the
institutional broking division caters to the largest domestic and foreign institutional
investors. The corporate finance division focuses on niche areas such as infrastructure.
Telecom and media. SSKI holds a sizeable portion of the market* in each of these
segments.

As the forerunner of investment research in the India market, we provide the best
research coverage amongst broking houses in India. Our research team is rated as one of
the best in the country. Voted four times as the top domestic brokerage house by Asia
money survey. SSKI is consistently ranked almagest the top domestic brokerage houses
in India.

Dematerialization in short called as “Demat is the process by which an investor can get
physical certificates converted into electronic form, Rs 20 per scrip per day (the
brokerage per scrip will be charged for the trades resulting in delivery on actual or Rs.
20 whichever is more).
(For e.g. If a customer buys 100 shares of sail, total delivery value =2200. Brokerage @
0.5% = rs 11, but the min chargeable amt per scrip per day = rs 20), so additional rs 9
will be charged as min delivery handling charges)

COMPANY BACKGROUND:

• Share khan is the retail broking arm of SSKI, securities PVT ltd. SSKI owns 56% in
share khan, balance ownership is HSBC, first caryle, and Intel pacific
• Into broking since 80 years
• Focused on providing equity solutions to every segment
• Largest ground network of 210 branded share shops in 90 cities

ONLINE ACCOUNT TYPES

Commercial Terms and Conditions to open online trading account

Account Opening Fees:

CLASSIC ACCOUNT :Rs.2999/-Life Time free( opening charges)

SPEED TRADE : 1,000/-up with 9 top banks.

(City Bank, HDFC, IDBI, Oriental Bank of Commerce,SBI, UTI, Indus Ind Bank, UBI,
Yes

Bank& ICICI)

Brokerage:

• 0.05 %( Each leg) + Turnover Tax +Stamp Duty+ GST For each leg of Intra-day
trades.
• O.50% (Each leg) +Turnover Tax +Stamp Duty+ GST For each leg of delivery
trades.
• (Minimum brokerage for shares below Rs.50,)
• 20 Paisa( Each leg) + Turnover Tax +Stamp Duty+ GST for trades resulting in
delivery.
• 10paise (Each leg) +Turnover Tax +Stamp Duty+ GST For each leg of Intra-day
trades.
• A minimum brokerage Rs.18 for DP Selling.

Exposure:
You will be given a Trading account with 25% margin i.e. 4 Times your margin With
SHARE KHAN.

CLASSIC PREPAID A/C:

Account opening Charges 750/-

5000/- Advance Brokerage cheque.

Brokerage: Delivery - 0.50%

Intraday-0.10%

SPEED TRADE PREPAID A/C:

Account Opening Charges:

2000/-Brokerage:

Delivery-0.25%

Intraday-0.05%

CLASSIC/WEBSITE FEATURES

• Facility to integrate choice of 4 banks / DP / trading account

• Instant credit for shares sold from DP
• Automatic pick-up of shares from linked DP for pay-in
• Automatic deposit of shares into linked DP after pay-out
• 4 times leverage on margin trades
• Margin trading available for entire market session
• Slab wise brokerage structure for delivery and margin trades, shortly
• Free calls for order placement on toll-free
• Trusted, professional advice of tele-brokers
• Facility to enter after market orders online & via phone
• Daily research newsletter (investor eye) via e-mail
• Access to new IPO without any paperwork
• Advanced portfolio monitoring tools
• Integrated DP account with trading account
• Option of linking additional 4 DP accounts to trading account
• Choice of linking 4 banks to trading A/C for online payments
• Cash and derivatives trading in a single account
 • E-mail confirmations for all transactions
• Choice of electronic/ physical contracts

SPEEDTRADE EXE FEATURES:

• All the features of classic

• Trade execution in 2-3 seconds
• Instant order / trade confirmations in the same window
• Hot keys similar to a broker’s terminal
• Multiple tic-by-tic intra-day charts \ with multiple indicators
• Availability of 2 ISP & 6 Servers ensuring maximum uptime
• Customized alerts based on multiple parameters
• Cancel all / square off all facility Window for top gainers, top losers, and most active
updated live.

INTRODUCTION OF PRESENT PARENT COMPANY

Key Information On Parent Company

Industry Financial Services

Traded As Euronext: BNP CAC 40 Component

Predecessor Banque National de Paris Paribas

Founded 1848: 171 years ago (BNP) 1872 (As

Paribas) 2000 (As Paribas)

Headquarters Boulevard Des Italiens, Paris, France

Areas Served Worldwide

Key People Jean Lemierre (Chairman)

Jean-Laurent Bonnafe (CEO)

Website Group.bnpparibas
Introduction

BNP Paribas S.A. is a French international banking group. It is the world’s 8 th largest
bank by total assets, and currently operates with a presence in 77 countries. It was
formed through the merger of Banque National De Paris (BNP) and Paribas in 2000, but
has a corporate identity stretching back to its first foundation in 1848 as a national bank.
It is one of three major international French banks. The group is listed on the first market
of Euronext Paris and a component of the Euro Stoxx 50 Stock market index, while it
also Included in the French CAS 40 Index. With both a retail banking section and
investment banking operation, the bank is present on five continents.

The retail banking and services division includes retail banking networks and specialized
financial services in France and abroad.

BNP Paribas corporate and institutional banking is a provider of financial solutions to

two client franchises: corporate and institutional. BNP Paribas CIB offers capital market,
securities services , financing , treasury and financial advisory bespoke solution.
 SHAREKHAN MUTUAL FUNDS
Sharekhan is a full-service stock broking company in India which began its operations in
February 2000 through its parent company S.S. Kantilal Ishwarlal securities Limited
(SSKI) but later the company was sold to BNP Paribas.

It is one of the leading stockbrokers in the space with around 5% of retail broking market
share as per the latest number and is currently ranked 4 th overall.

Sharekhan also deals with mutual fund since it was founded but at the beginning the
mutual funds trading at Sharekhan was only done through paper form but now Sharekhan
provides online trading facility related to mutual funds through Demat account

Mode of trading mutual funds in Sharekhan :

1) Conversion of physical units into Demat account : Sharekhan provides facility to

convert physical mutual funds into digital form.
a) Obtain and sign DRF : The first step, is to ask your Demat provider (like ICICI
Direct, Sharekhan, Reliance Money) for a ‘Dematerialization Request Form’ (DRF)
for conversion of mutual funds units held in physical form into Demat form. Obtain it,
duly fill it and sign it. You should be able to find the DRF form at your Demat
provider website.
B) Sign all the statement of Accounts from your Mutual Funds : You will have to
collect the statements from all the AMC’s which have the mutual funds names which
you want to convert, once you have them, you have to sign it. You will get all these
statements in your email box most probably. This step is important to make sure you
have documentary proof that you own those mutual funds and have their names, so if
you have investments in 5 different AMCs, you should collect all 5 statements.
C) Submit and Acknowledgement: Submit the duly filled and signed DRF along with
and Account Statement issued by the Mutual Fund House to the Depository
Participant. Acknowledgement will be given by the Depository Participant for the
document acceptance, subject to verification
D)Processing : The Depository Participant will process the application for conversion
of physical units into electronic form. For this, the DP would sent the request form
and Statement of Account to the Asset Management Company (AMC) / Registrar and
Transfer Agent (RTA).
E) Confirmation : The AMC / RTA will after due verification, confirm the conversion
request sent by your DP and credit the mutual fund units in your Demat account.
2) Demat account : On doing an online business ever customer has to open and Demat
account in any bank whichever he likes. Demat account is the account in which the
 trading done by the customer is mentioned. If the customer sales or purchases any
share*» the details of this sale and purchasing are in Demat account. This account
contents the name of the shares and also the number of shares held
Or sold and also the rate of the share with this Demat account. It is also compulsory
for every customer to open a saving account in the bank because the amount which is
to be received when the customers sales the shares are transferred from the Demat
account to the saving account.
It is the responsibility of the customers that the share which he purchased or sales are
properly transferred in Demat account from the stock exchange whichever he deals.
The amount of dividend whichever to be received on the shares when held for one or
more year are also transferred in this Demat account. It is compulsory for every
customer to have a PAN no. For opening a Demat account. If PAN no. Is not there is
no chance for the customer to do any trading on line. There is no limit of amount to
deal in this account.
Demat Account Holders : Existing investors of Sharekhan who already have Demat
accounts can trade in mutual funds through their existing Demat account with helpful
advice from Sharekhan brokers who have experience and knowledge related to
mutual funds.
3) INSTA MF :Sharekhan has introduced a very simple platform for only mutual funds
investors of the company
If any investor wants to invest only in mutual funds then he/she can go for Insta MF.
Insta MF is very easy platform where you can open account online within few
minutes. In Insta MF you can invest through SIP or Lump Sump whatever the
investor wants without any problem.

 EQUITY SCHEMES
The investments of these schemes will predominantly be in the stock markets and
Endeavour will be to provide investors the opportunity to benefit from the higher returns
which stock markets can provide. However they are also exposed to the volatility and
attendant risks of stock markets and hence should be chosen only by such investors who
have high risk taking capacities and are willing to think long term.
Equity Funds include :
1.Large cap:
Schemes in large cap:
Axis blue chip fund
Reliance large cap
2. Mid cap:
Schemes in mid cap:
L&t mid cap fund
 DSP Mid cap Fund
3. Large & midcap:
Schemes in large & mid cap:
Sundaram large & mid cap fund
LIC MF large and midcap fund-reg
4. Multicap
Schemes in Multi cap:
HDFC Equity Fund
Kotak standard Multicap fund
5.Small cap:
Schemes in Small cap:
Sbi Small Cap
ICICI Pru small cap fund

6. ELSS
Schemes in ELSS:
LIC MF Tax Plan
Kotak tax saver Scheme

 DEBT SCHEMES

Debt Funds invest only in debt instruments such as Corporate Bonds, Government
Securities and Money Market instruments either completely avoiding any investments in the
stock markets as in Income Funds or Gilt Funds or having a small exposure to equities as in
Monthly Income Plans or Children's Plan. Hence they are safer than equity funds. At the
same time the expected returns from debt funds would be lower. Such investments are
advisable for the risk-averse investor and as a part of the investment portfolio for other
investors.
A. Aditya Birla Sl Saving Funds
B.Magnum Gilt Fund
 Magnum Gilt Fund (Long Term)
 Magnum Gilt Fund (Short Term)
C.Magnum Income Plus Fund
 Magnum Income plus Fund (Saving Plan)
 Magnum Income plus Fund (Investment Plan)
D. Magnum Insta Cash Fund
E. SBI Debt Fund Series
 SDFS 15 Months Fund
 SDFS 90 Days Fund
 SDFS 13 Months Fund
 SDFS 18 Months Fund
 SDFS 24 Months Fund
 SDFS 30 DAYS
  SDFS 30 DAYS
 SDFS 60 Days Fund
 SDFS 180 Days Fund
 SDFS 30 DAYS
F. SBI Premier Liquid Fund

 BALANCED SCHEMES
Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they are less
risky than equity funds, but at the same time provide commensurately lower returns. They
provide a good investment opportunity to investors who do not wish to be completely
exposed to equity markets, but is looking for higher returns than those provided by debt
funds.

 Magnum Balanced Fund

 Magnum NRI Investment Fund - Flexi Asset Plan.
CONCEPT OF MUTUAL FUND
When an investor subscribes for the units of a mutual fund, 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). Mutual Fund investor is also known as a mutual
fund shareholder or a unit holder. Any change in the value of the investments made into
capital market instruments (such as shares, debentures etc) is reflected in the Net Asset
Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund
scheme's assets net of its liabilities. 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.

A 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, debentures and other securities. The income earned through
these investments and the capital appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at

a relatively low cost.

MUTUAL FUND

There are many entities involved and the diagram below illustrates the organizational set
up of a mutual fund:
 THREE-TIER STRUCTURE OF MUTUAL FUNDS

The structure of Mutual Funds in India is governed by the SEBI (Mutual Fund)
Regulations, 1996 (hereinafter referred to as SEBI Regulations). These regulations make
it mandatory for Mutual Funds to have a Three-tier Structure of Sponsor Trustee- Asset
Management Company (AMC).

Sponsor

The sponsor is the promoter of the mutual fund. The sponsor establishes the mutual fund
and registers same with SEBI. It appoints the trustees, Custodians and the AMC with
prior approval of SEBI, and in accordance with SEBI Regulations. Sponsor is required to
contribute at least 40% of the capital of the AMC.

Trustees

The Mutual Fund, which is a trust, is managed by a Trust Company or a Board of

Trustees. Board of trustees and trust companies are governed by the provisions of the
Indian Trust Act. The appointment of all the trustees has to be done with the prior
approval of SEBI. There must be at least 4 members in the board of Trustees and at least
213 of the members of the board of trustees must be independent. One of the major tasks
of the Trustees is to appoint AMC, in consultation with the Sponsor and SEBI
regulations.

Asset Management Company (AMC)

Asset Management Company, registered with SEBI, can be appointed as investment

managers of mutual funds. AMC must have a minimum net worth of 10 crore at all
times. An AMC cannot be an AMC or Trustee of another Mutual Fund. AMC appoints
the Fund Managers in consultation with trustees.
 Categories of Mutual Funds

Mutual funds can be classified as follow:

 Based on their structure:

 Open-ended funds: Investors can buy and sell the units from the fund, at
any point of time.
 Close-ended funds: These funds raise money from investors only once. Therefore, after the
offer period, fresh investments cannot be made into the fund. If the fund is listed on a stocks
exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently,
most of the New Fund Offers of close-ended funds provided liquidity window on a periodic
basis such as monthly or weekly. Redemption of units can be made during specified
intervals. Therefore, such funds have relatively low liquidity.

 Based on their investment objective:

 Equity funds: These funds invest in equities and equity related instruments. With fluctuating
share prices, such funds show volatile performance, even losses. However, short term
fluctuations in the market, generally smoothens out in the long term, thereby offering higher
returns at relatively lower volatility. At the same time, such funds can yield great capital
appreciation as, historically, equities have outperformed all asset classes in the long term.
Hence, investment in equity funds should be considered for a period of at least 3-5 years. It
can be further classified as:
 i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked.
Their portfolio mirrors the benchmark index both in terms of composition and individual
stock weight ages.
ii) Equity diversified funds- 100% of the capital is invested in equities spreading across
different sectors and stocks.
iii) Dividend yield funds- it is similar to the equity diversified funds except that they invest
in companies offering high dividend yields.
iv) Thematic funds- Invest 100% of the assets in sectors which are related through some
theme. e.g. -An infrastructure fund invests in power, construction, cements sectors etc.
v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund
will invest in banking stocks.
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

 Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the
risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal
mutual funds vehicle for investors who prefer spreading their risk across various
instruments. Following are balanced funds classes:
 Debt-oriented funds -Investment below 65% in equities.
 Equity-oriented funds -Invest at least 65% in equities, remaining in debt

 Debt fund: They invest only in debt instruments, and are a good option for investors averse
to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-
income instruments like bonds, debentures, Government of India securities; and money
market instruments such as certificates of deposit (CD), commercial paper (CP) and call
money. Put your money into any of these debt funds depending on your investment horizon
and needs.
i) Liquid funds- These funds invest 100% in money market instruments, a large portion
being invested in call money market.
ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-
bills.
iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt
instruments which have variable coupon rate.
iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-
pricing between cash market and derivatives market. Funds are allocated to equities,
derivatives and money markets. Higher proportion (around 75%) is put in money markets,
in the absence of arbitrage opportunities.
v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities
vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-
term debt papers.
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure
of 10%-30% to equities.
viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of
the fund.
 TYPES OF MUTUAL FUND SCHEMES

Wide varieties of Mutual Fund Schemes exist to cater to the needs such as financial
position, risk tolerance and return expectations etc. Since the needs and aspirations of
different individuals vary from person to person, there are absolutely different kinds of
mutual funds for investment. There could be various categories of mutual funds in India.
The governing body for these funds being the Securities Exchange Board of India
(SEBI). All varieties of mutual funds are governed by it in an all-pervasive manner.

Schemes can be differentiated by two broad parameters:

(a) Their constitution or structure.

(b) Their stated investment objective

 Differentiation on the basis of structure of schemes

Schemes are classified as Close-ended or Open-ended depending upon whether they give
the investor the option to redeem at any time (open-ended) or whether the investor has to
wait till maturity of the scheme.
 Open-Ended-Schemes
The units offered by these schemes are available for sale and repurchase on any
business day at NAV based prices. Hence, the unit capital of the schemes keeps
changing each day. Such schemes thus offer very high liquidity to investors and are
becoming increasingly popular in India. Please note that an open-ended fund is not
obliged to keep selling/issuing new units at all times, and may stop issuing further
subscription to new investors. On the other hand, an open-ended fund rarely denies to
its investor the facility to redeem existing units.
 Close-Ended-Schemes
The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed
number of units. These schemes are launched with an initial public offer (IPO) with a
stated maturity period after which the units are fully redeemed at NAV linked prices. In
the interim, investors can buy or sell units on the stock exchanges where they are
generally listed. Unlike open ended schemes, the unit capital in Close-ended schemes
usually remains unchanged. After an initial closed period, the scheme may offer direct
compared to open-ended schemes and hence trade at a discount to the NAV. This
discount tends towards the NAV closer to the maturity date of the scheme.
 Interval-Schemes:
These schemes combine the features of Open-ended and Close-ended schemes. They
may be traded on the stock exchange or may be open for sale or redemption during pre-
determined intervals at NAV based prices.
 Differentiation on the basis of investment objectives
Schemes can be classified by way of their stated investment objective such as
Growth Fund, Balanced Fund, Income Fund etc.

 Equity/Growth Schemes
These schemes, also commonly called Growth Schemes, seek to invest a majority
of their funds in equities and a small portion in money market instruments. Such
schemes have the potential to deliver superior returns over the long term. However,
because they invest in equities, these schemes are exposed to fluctuations in value
especially in the short term. Equity schemes are hence not suitable for investors
seeking regular income or needing to use their investments in the short-term. They
are ideal for investors who have a long-term investment horizon. The NAV prices
of equity fund fluctuates with market value of the underlying stock which are
influenced by external factors such as social, political as well as economic. HDFC
Equity Fund and HDFC Top200 Fund are examples of equity schemes.

 Income/Debt-Schemes
These schemes invest in money markets, bonds and debentures of corporate
companies with medium and long-term maturities. These schemes primarily target
current income instead of capital appreciation. Hence, a substantial part of the
distributable surplus is given back to the investor by way of dividend distribution.
These schemes usually declare quarterly dividends and are suitable for conservative
investors who have medium to long term investment horizon and are looking for
regular income through dividend or steady capital appreciation.
These schemes, also commonly known as Income Schemes, invest in debt
securities such as corporate bonds, debentures and government securities. The
prices of these schemes tend to be more stable compared with equity schemes and
most of the returns to the investors are generated through dividends or steady
capital appreciation. These schemes are ideal for conservative investors or those
who are not in a position to take higher equity risks. However, as compared to the
money market schemes they do have a higher price fluctuation risk and compared
to a Gilt fund they have a higher credit risk. HDFC Income Fund is an example of
bond schemes.
 Hybrid/Balanced Schemes
These schemes are also commonly called balanced schemes. These invest in both
equities as well as debt. By investing in a mix of this nature, balanced schemes seek
to attain the objective of income and moderate capital appreciation. Such schemes
are ideal for investors with a conservative, long-term orientation. HDFC Prudence
Fund and HDFC Balance Fund are perfect examples of such hybrid schemes.
Other Schemes:

 Tax-Saving-Schemes
Investors (individuals and Hindu Undivided Families ("HUFs")) are being
encouraged to invest in equity markets through Equity Linked Savings Scheme
("ELSS") by offering them a tax rebate. Units purchased cannot be assigned /
transferred/ pledged / redeemed / switched - out until completion of 3 years from the
date of allotment of the respective Units. The Scheme is subject to Securities &
Exchange Board of India (Mutual Funds) Regulations, 1996 and the notifications
issued by the Ministry of Finance (Department of Economic Affairs), Government
of India regarding ELSS. Subject to such conditions and limitations, as prescribed
under Section 88 of the Income-tax Act, 1961, subscriptions to the Units not
exceeding Rs.10,000 would be eligible to a deduction, from income tax, of an
amount equal to 20% of the amount subscribed.

Special Schemes:
 Sector-Specific-Equity-Schemes
These schemes restrict their investing to one or more pre-defined sectors, e.g.
technology sector. They depend upon the performance of these select sectors only
and are hence inherently more risky than general purpose equity schemes. These
schemes are ideally suited for informed investors who wish to take a risk on the
concerned sector.

Index-Schemes

An Index is too used as a measure of the performance of the market as a whole, or a

specific sector of the market. It also serves as a relevant benchmark to evaluate the
performance of mutual funds. Some investors are interested in investing in the
market in general rather than investing in any specific fund. Such investors are
happy to receive the returns posted by the markets. As it is not practical to invest in
each and every stock in the market in proportion to its size, these investors are
comfortable investing in a fund that they believe is a good representative of the
entire market. Index Funds are launched and managed for such investors.

RISK RETURN ANALYSIS OF THE SCHEMES

A rational investor before investing his or her money in any stock analyses the risk
associated with the particular stock. The actual return he receives from a stock may
vary from the expected one and thus a investor is always cautious about the rate of
risk associated with the particular stock. Hence it becomes very essential on the part
of investors to know the risk as the hard earned money is being invested with the view
to earn good return on the investment.

Risk mainly consists of two components

  Systematic risk
 Unsystematic risk

 Systematic risk
The systematic risk affects the entire market. The economic conditional, political
situations, sociological changes affect the entire market in turn affecting the company
and even the stock market. These situations are uncontrollable by the corporate and
investor.
 Unsystematic risk

The unsystematic risk is unique to industries. It differs from industry to industry.

Unsystematic risk stems from managerial inefficiency, technological change in
the production process, availability of raw materials, changes in the consumer
preference, and labour problems. The nature and magnitude of above mentioned
factors differ from industry to industry and company to company.

In a general view, the risk for any investor would be the probable loss for
investing money in any mutual fund. But when we look at the technical side of it, we
can’t just say that these schemes/fund carry risk without any proof. They are certain
set of formulas to say the percentage of risk associated with it.
There are certain tools or formulas used to calculate the risk associated with the
schemes. These tools help us to understand the risk associated with the schemes.
These schemes are compared with the benchmark BSE 100.
 COMPETITORS OF SHAREKHAN MUTUAL FUND

Name of Mutual Fund Company/AMC Website

Axis Asset Management Company Ltd. www.axismf.com

Birla Sun Life Asset Management www.birlasunlife.com

Company Ltd

HDFC Asset Management Company Ltd www.hdfcfund.com

ICICI Prudential Asset Management www.icicipruamc.com

Company Ltd

IDBI Asset Management Ltd. www.idbimutual.co.in

L&T Investment Management Ltd. www.lntmf.com

Reliance Capital Asset Management Ltd. www.reliancemutual.com

Sundaram Asset Management Company www.sundarammutual.com

Ltd

UTI Asset Management Company Ltd www.utimf.com

Tata Asset Management Ltd www.tatamutualfund.com

NG Investment Management (India) Pvt. www.ingim.co.in

Ltd.

Indiabulls Asset Management Company www.indiabullsmf.com

Ltd.

Edelweiss Asset Management Ltd www.edelweissmf.com

Kotak Mahindra Asset Management www.kotakmutual.com

Company Ltd.

State Bank Of INDIA www.sbi.com

5PAISA 5PAISA.com
FACTORS TO BE CONSIDERED BEFORE SELECTING A
MUTUAL FUND

1. Making Risk- adjusted returns comparison. By doing this the investor will know
whether the returns generated by the scheme have been adequately compensated for
the extra risk undertaken by the scheme.

2. The investor depending upon his risk appetite and preferences should sub-classify
the schemes on the basis of the characteristics of the schemes, which may be
defensive or aggressive in nature.

3. Portfolio concentration is also an important factor to be considered. It is always

advisable to choose a scheme, which has a well-diversified portfolio rather than a
concentrated portfolio, as it carries lesser risk.

4. Liquidity of the portfolio is also one of the critical parameters.

5. The corpus size of the scheme is also of importance. A large corpus size firstly
denotes investor’s confidence in the scheme and its fund manger abilities over the
years and, secondly it allows the fund manager to diversify the portfolio, which
reduces the overall market risk.

6. Other factors like turnover rates, low expense ratio, load structure etc of the
schemes etc should also be considered before finally zeroing down on a scheme of
your choice.

7. The rankings undertaken by ICRA are an initiative to inform the investors- who
does not have the time or the expertise to undertake the analysis on their own- about
the relative performance of the schemes. It considers all important parameters to
arrive at a comprehensive rank with a view to help investors decide the scheme
which may suit their investment profile.

8. Although much neglected, the due diligence in selection of the right mutual fund
scheme is of utmost importance as an investor cannot move in and out of a
particular scheme on a regular basis, because of the high costs involved, and
investments made into a particular scheme should be looked on a long-term basis as
a wealth creation tool.
 EASY STEPS TO INVEST IN MUTUAL FUNDS

Mutual funds are much like any other product, in that there are manufacturers who
provide the product and there are dealers who sell them. Large banks to organized
brokerage houses to Individual Financial agents get empanelled with Mutual Funds to
provide advice and assistance to customers who want to buy units. Mutual funds units
can now also be bought over the Internet. Contacting an Investment advisor in a bank or
a brokerage house or an Independent Financial Advisor is the first step to gathering
information.

1. Evaluation : choosing the right mutual fund for you Each Mutual fund offers a variety
of schemes to suit differing needs of investors. The Bank/ Brokerage house/ Individual
Financial Advisor help you make the choice based on your needs. As an investor one
may:

a) For the short term or long term want to invest.

b) Want regular income or growth.

c) Want to target lower risk or higher returns.

d) Be convinced of a particular sector and want to invest in it.

Remember, just like a salesman in a gift shop, your investment advisor can help you the
most if he knows what you are looking for.

2. Purchase : After you have decided to save, you may have to decide among the
various investment and withdrawal options that any fund offers to its investors. Most of
these schemes also offer various options to customize your operation of the fund to your
needs:

Systematic Investment Plan (SIP) : Allows you to save a part of your income regularly. It
is also used to reduce risk when investing in schemes targeting aggressive growth.

Systematic Withdrawal Plan (SWP) : Allows you to withdraw a part of your investment
regularly. Used when you want to withdraw your investment for a specific regular
payment, like insurance premium payments of monthly/quarterly frequency.

Automatic debit : Saves the hassle of writing a cheque when making an investment. Your
account is debited automatically for the amount invested.
Automatic credit : The reverse of Automatic Debit. It saves the hassle of enchasing a
cheque when withdrawing an investment. Your account is credited automatically with
the amount withdrawn.

Dividend plan : Allows you to get Tax-free dividends from your investment. (As per
current Tax laws).

Growth plan : Allows the income generated from investment to be ploughed back into the
scheme. Used by investor targeting growth in their investment.

Some funds carry an entry load, which is a percentage fee deducted from the amount
invested before investment. Thus a 2.5% entry load will mean that if you invest Rs. 1
lakh in a Rs. 10 per unit IPO, instead of getting 10,000 units, you will be allotted 9,750
units. Check for presence of such loads and other conditions before investing.

After deciding the choice of mutual fund, investment and withdrawal, you are ready to
begin your savings. You need to now fill up an application form and attach a cheque of
the value of your investment or mention your account number to have it automatically
debited from your account.

3. Post Purchase Monitoring : Once you have invested in an ongoing fund, expect a
period of two to three days before you receive an account statement on the address
mentioned by you in your application form. Your account statement indicates your
current holding in the scheme that you have invested. Please ensure that all your details
have been correctly captured in account statement. Please point out any discrepancies to
your nearest CAMS investor Service Centre or the Mutual Fund office. You can request
an account statement any time by calling up your nearest CAMS/ Mutual fund offices
usually mentioned on the back of the account statement. The transaction slip at the end
of the account statement can be used for additional purchases, redemptions or to intimate
the mutual fund on any change in bank mandates/address. The NAVs of all the open-
ended schemes are published at the fund's website, financial newspapers and AMFI
(Association of Mutual Funds) web-site www.amfiindia.com.

4. Exit: While you should periodically monitor the performance of your investments, we
recommend you do not get swayed by short term considerations in deciding your exit. If
you have invested in a long term fund, you can spare yourself undue worries by not
monitoring the NAV every day or week. Checking the performance once in a while along
with your advisor should be fine. Most mutual funds will provide you with a toll free
number that works from 9 am to 5 am and a website. For specific assistance you can also
use your financial advisors help.
 5. Redemption/ Withdrawal : Just submit your completed transaction within the
transacted time for the scheme that you are invested in and deposit the same at the
nearest CAMS Investor Service Centre or the office of the fund. You can either get a
direct credit to your bank account or you can generally collect the cheque at the CAMS
Investor Service Centre/ AMC offices. If you fail to do so then the cheque is couriered to
the address mentioned in your account statement. Most funds take 1-3 days to credit your
account with your redemption proceeds. In case an exit load is applicable to your
withdrawal and you have redeemed a fixed amount, an additional number of units
equivalent to the exit load amount will be liquidated from your investment. You can
check this amount with the mentioned exit load when you get the account statement
using a simple calculator.
 Merits and Demerits of mutual Funds

Merits of Mutual Funds

1. Diversification : Mutual funds invest in a broad range of securities. This limits

investment risk by reducing the effect of a possible decline in the value of any one
security. Mutual fund shareowners can benefit from diversification techniques usually
available only to investors wealthy enough to buy significant positions in a wide variety
of securities.

2. Convenience and Flexibility : You own just one security rather than many, yet enjoy
the benefits of a diversified portfolio and a wide range of services. Fund managers
decide what securities to trade, clip the bond coupons, collect the interest payments and
see that your dividends on portfolio securities are received and your rights exercised. It's
easy to purchase and redeem mutual fund shares, either directly online or with a phone
call.

3. Quick, Personalized Service: Most funds now offer extensive websites with a host of
shareholder services for immediate access to information about your fund account. Or a
phone call puts you in touch with a trained investment specialist at a mutual fund
company who can provide information you can use to make your own investment
choices, assist you with buying and selling your fund shares, and answer questions about
your account status.

4. Ease of Investing : You may open or add to your account and conduct transactions or
business with the fund by mail, telephone or bank wire. You can even arrange for
automatic monthly investments by authorizing electronic fund transfers from your
checking account in any amount and on a date you choose. Also, many of the companies
featured at this site allow account transactions online.

5.Total Liquidity, Easy Withdrawal : You can easily redeem your shares anytime you
need cash by letter, telephone, bank wire or check, depending on the fund. Your
proceeds are usually available within a day or two.

6. Life Cycle Planning : With no-load mutual funds, you can link your investment plans
to future individual and family needs -- and make changes as your life cycles change.
You can invest in growth funds for future college tuition needs, then move to income
funds for retirement, and adjust your investments as your needs change throughout your
life. With no-load funds, there are no commissions to pay when you change your
investments.

7. Market Cycle Planning : For investors who understand how to actively manage their
portfolio, mutual fund investments can be moved as market conditions change. You can
place your funds in equities when the market is on the upswing and move into money
market funds on the downswing or take any number of steps to ensure that your
investments are meeting your needs in changing market climates. A word of caution:
since it is impossible to predict what the market will do at any point in time, staying on
course with a long-term, diversified investment view is recommended for most investors.

8. Investor Information : Shareholders receive regular reports from the funds, including
details of transactions on a year-to-date basis. The current net asset value of your shares
(the price at which you may purchase or redeem them) appears in the mutual fund price
listings of daily newspapers. You can also obtain pricing and performance results for the
all mutual funds at this site, or it can be obtained by phone from the fund.

Demerits of Mutual Funds

1. Costs: Mutual funds don't exist solely to make your life easier - all funds are in it for
a profit. The mutual fund industry is masterful at burying costs under layers of jargon.
These costs are so complicated that in this tutorial we have devoted an entire section to
the subject.

2. Dilution : It's possible to have too much diversification. Because funds have small
holdings in so many different companies, high returns from a few investments often don't
make much difference on the overall return. Dilution is also the result of a successful
fund getting too big. When money pours into funds that have had strong success, the
manager often has trouble finding a good investment for all the new money.

3. Taxes: When making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gains
tax is triggered, which affects how profitable the individual is from the sale. It might
have been more advantageous for the individual to defer the capital gains liability.
 Research Methodology

A Market Research was performed to find out the actuality from the investors about what
they think about the various Investment Options. It was done to find out the investment
patterns and behaviour of the people i.e. how much they invest, what are the reasons
behind their investments, and where they invest. Thus a questionnaire was devised to
fetch the above mentioned information from the investors. Most of the questions in the
questionnaires were objective in nature which helped the people to fill it with utmost
ease. The sample size for the research was 100, which included all the classes of people
aged 18 and above.

Data sources : Research is totally based on primary data. Secondary data can be used only
for reference. Research has been done by primary data collection, and primary data has
been collected by interacting with various people. The secondary data has been collected
by various websites.

Sampling:

 Sampling procedure : The sampling is done in a random way, irrespective of them

being investor or not or availing the services or not. It was collected by formal
and informal talks and through filling questionnaire.

 Sample Size : The sample size of my project is 100.

Sample design : Data has been presented with the help of bar graph, pie charts and line
graphs

Research Methodology Table

Place SBI Bank, Bahu Plaza, Jammu

Sample Size 100 customer

Sample Unit Customer Visiting SBI Bank

Sample Technique Convenience Sampling

Research Design Descriptive

Collection of Data Primary data through questionnaire and
interaction with customers

Secondary data Internet

Duration 60 days
 Objective of the study
Objective of research:

 To study the awareness towards mutual funds of the investors

 To analyse investor’s interest regarding mutual funds.

 ANALYSIS AND INTERPRETATION OF THE DATA
1) Investor’s age group at Sharekhan.
S.NO RESPONSE NO. OF RESPONDENTS

1 Below 20 years 5%

2 Below 30 years 25%

3 30-40 years 35%

4 40 above 45%

TOTAL 100%

below 20 years below 30 years 30-40 years 40 above

5%

23%
41%

32%

INTERPRETATION: Out of 100 investor’s 5% investor’s are below the age of 20

years; 25% investor’s are below the age 30 years; 35% investor’s are between 30-40
years and 45% investor’s are above 40 years.
 2) Investors qualification
S.NO RESPONSE NO. OF RESPONDENTS

1 Graduation / PG 40%

2 Under Graduation 37%

3 Others 23%

TOTAL 100%

Graduation / PG Under Graduation Other

23%

40%

37%

INTERPRETATION: Out of 100 investor’s 40% are Graduates; 37% are Under
Graduates and 23% are others.
 3) Occupation of investor’s
S.NO RESPONSE NO. OF RESPONDENTS

1 Government service 30%

2 Private service 25%

3 Business 35%

4 Agriculture 10%

5 Other 0%

TOTAL 100%

Government service Private service Business

Agriculture Other

10%

30%

35%

25%

INTERPRETATION: Out of 100 investor’s 30% investor’s are from government

sector; 25% investor’s are from private sector; 35% investor’s have their own business;
10% investor’s are from agriculture sector and 0% are from any others sector.
 4) Income range of investor
S.NO RESPONSE NO. OF RESPONDENTS

1 Below 100,000 10%

2 100,000-500,000 35%

3 500,000-10,00,000 30%

4 10,00,000-20,00,000 20%

5 Above 20,00,000 5%

TOTAL 100%

Below 100,000 100,000-500,000 500,000-10,00,000

10,00,000-20,00,000 Above 20,00,000

5% 10%

20%

35%

30%

INTERPRETATION: Out of 100 investor’s 10% investor’s income range is below

100,000; 35% investor’s income range is from 100,000-500,000; 30% investor’s income
range is from 500,000-10,00,000; 20% investor’s income range is from 10,00,000-
20,00,000 and 5% investor’s income range is above 20,00,000.
 5) Which type of investment did you prefer at Sharekhan
S.NO RESPONSE NO. OF RESPONDENTS

1 Fixed Deposit 20%

2 Insurance 15%

3 Mutual Funds 20%

4 Real Estate 5%

5 Shares / Debenture 40%

TOTAL 100%

Fixed Deposit Insurance Mutual Funds

Real Estate Shares / Debenture

20%

40%

15%

5% 20%

INTERPRETATION: Out of 100 investor’s 20% invest in fixed deposit; 15% invest in
Insurance; 20% invest in mutual funds; 5% invest in real estate and 40% invest in
shares /debenture.
 6) What are the factors affecting your investment decisions
S.NO RESPONSE NO. OF RESPONDENTS

1 Liquidity 15%

2 Low Risk 40%

3 High Return 25%

4 Trust 15%

5 Any Other 5%

TOTAL 100%

Liquidity Low Risk High Return Trust Any Other

5%
15%
15%

25%
40%

INTERPRETATION: Out of 100 investor’s 15% investor’s are effected because of

liquidity; 40% because of low risk; 25% because of high returns; 15% because of trust
and 5% investor’s are effected because of other existing factors.
 7) Have you invested in mutual funds
S.NO RESPONSE NO. OF RESPONDENTS

1 Invested 30%

2 Not Invested 70%

TOTAL 100%

Invested Not Invested

30%

70%

INTERPRETATION: Out of 100 investor’s of Sharekhan 30% have invested in mutual

funds and 70% have not invested in mutual funds
 8) Which mutual funds have you invested in.
S.NO RESPONSE NO. OF RESPONDENTS

1 SBI Mutual Funds 15%

2 UTI 13%

3 Reliance 16%

4 HDFC 21%

5 Others 35%

TOTAL 100%

SBI Mutual Funds UTI Reliance HDFC Others

15%

35%
13%

16%

21%

INTERPRETATION: Out of 100 investor’s 15% have invested in SBI Mutual Funds;
13% have invested in UTI Mutual Funds; 16% have invested in Reliance; 21% have
invested in HDFC and 35% have invested in other Mutual Funds.
 9) What types of mutual funds are available at Sharekhan.
S.NO RESPONSE NO. OF
RESPONDENTS

1 Equity 30%

2 Debt 15%

3 Hybrid 15%

4 Solution Oriented 15%

5 Liquid 25%

TOTAL 100%

Equity Debt Hybrid Solution Oriented Liquid

25%
30%

15%
15%

15%

INTERPRETATION: Out of 100 investor’s 30% invest in Equity Mutual Funds at

Sharekhan; 15% invest in Debt Mutual Funds; 15% invest in Hybrid Mutual Funds; 15%
invest in Solution Oriented Mutual Funds and 25% invest in Liquid Mutual Funds.
 10) What is your preferred mode of investment
S.NO RESPONSE NO. OF RESPONDENTS

1 One Time Investment 70%

2 SIP (Systematic Investment Plan) 30%

TOTAL 100%

One Time Investment SIP (Systematic Investment Plan)

30%

70%

INTERPRETATION: Out of 100 investor’s 70% investor’s prefers one time investment
mode for investing in Mutual Funds and 30% investor’s prefers SIP mode for investing
in Mutual Funds.
 11) What are the reasons for not investing in mutual funds.
S.NO RESPONSE NO. OF RESPONDENTS

1 Not Aware Of Mutual Funds 10%

2 High Risk 20%

3 Not Any Specific Reason 38%

4 Low Income 15%

5 Less Trust 17%

TOTAL 100%

Chart Title
Not Aware Of Mutual Funds High Risk Not Any Specific Reason
Low Income Less Trust

10%
17%

20%
15%

38%

INTERPRETATION: Out of 100 investor’s 10% do not invest in Mutual Funds

because they are not aware of Mutual Funds; 20% don’t invest because of high risk; 38%
because of not any specific reason; 15% don’t invest because of low income and 17%
don’t invest because of less trust.
 12) What are the reasons for investing in mutual funds
S.NO RESPONSE NO. OF RESPONDENTS

1 High Profit 10%

2 Less Risk Then Equity 25%

3 Future Security For Children 30%

4 Liquidity 15%

5 Others 10%

TOTAL 100

High Profit Less Risk Then Equity Future Security For Children
Liquidity Others

11% 11%

17%

28%

33%

INTERPRETATION: Out of 100 investor’s 10% investor’s invest in Mutual Funds due
to High profit; 25% invest due to less risk then equity; 30% invest for future security of
childrens; 155 invest because of liquidity and 10% invest because of other reasons.
13) Would you recommend others to invest in mutual funds
S.NO RESPONSE NO. OF RESPONDENTS

1 Recommend 30%

2 Strongly Recommend 10%

3 Not Recommend 20%

4 Strongly Not Recommend 15%

5 Any Other 25%

TOTAL 100%
 Recommend Strongly Recommend Not Recommend
Strongly Not Recommend Any Other

25%
30%

15%
10%

20%

INTERPRETATION: Out of 100 investor’s 30% would recommend others to invest in

Mutual Funds; 10% would strongly recommend others to invest in Mutual Funds; 20%
would not Recommend others to invest in Mutual Funds; 15% would strongly not
recommend others to invest in Mutual Funds and 25% would be neutral or recommend
any other investment options.

14) What were the sources of knowledge/information regarding

mutual funds.
S.NO RESPONSE NO. OF RESPONDENTS

1 Newspaper 20%

2 TV Channels 25%

3 Broker 15%

4 Friends / Relatives 30%

5 Banks 10%

TOTAL 100%
 Newspaper TV Channels Broker Friends / Relatives Banks

10%
20%

30%

25%

15%

INTERPRETATION: Out of 100 investor’s 20% investor’s sources of information

regarding Mutual Funds are Newspapers; 25% investor’s sources of information are TV
Channels; 15% investor’s sources of information are Brokers; 30% investor’s sources of
information are Friends/Relatives and 10% investor’s sources of information are Banks.

15) Are you satisfied with mutual funds investment opinions given
through Sharekhan.
S.NO RESPONSE NO. OF RESPONDENTS

1 Satisfied 25%

2 Strongly Satisfied 20%

3 Dissatisfied 15%

4 Strongly Dissatisfied 10%

5 Neutral 30%

TOTAL 100%
 Chart Title
Satisfied Strongly Satisfied Dissatisfied
Strongly Dissatisfied Neutral

25%
30%

10% 20%

15%

INTERPRETATION: Out of 100 investor’s 25% investor’s are satisfied with their
Mutual Funds investments; 20% are strongly satisfied with their Mutual Funds
investments; 15% are Dissatisfied with their Mutual Funds investments; 10% are
strongly dissatisfied with their Mutual Funds investment and 30% are neutral with their
Mutual Funds investments at Sharekhan.

FINDINGS

1. According to my survey, maximum number of

investors falls under the age group of 40 above
2. Most of the investors are post graduate.
3. Only 20% of investors invest in mutual funds
4. 40% respondents have low risk factor due to which they
invest in mutual funds.
5. Due to this, only 30% investors invest in mutual funds.
6. And 70% investors have not invest in mutual funds
 Conclusion
The project that I undertook in my MUTUAL FUND provided
me a good experience of Investment Avenues like Mutual
Funds, Insurance, Fixed Deposits and related activities. It
was a good experience for me as it helped me enhance my
knowledge and gave me a good industry exposure for the
period which would definitely prove to be very useful at
the time of placements. The complete project helped me
gain knowledge and at the same time it was very beneficial
for the company.
The Market Research performed gave an insight of the
actual investors, their investment behaviour and their
investment trends which would again help the company to
make correct strategies to attract more customers and
provide them with what they are comfortable with.
Summing up, I am thankful to the Company and the Project
that gave me an opportunity where I could learn new
things, enhance my knowledge, gain some industry
exposure and at the same time, do something that could be
beneficial for the company and the investors.

Recommendations and Suggestions

1. The most vital problem spotted is of ignorance. Investors
should be made aware of the benefits. Nobody will invest
until he is not fully convinced.
2. Mutual Funds offer a lot of benefits which no other
single option could offer. So the advisors should try to
change their mindsets.
3. Mutual Fund Company needs to give the training of the
Individual Financial Advisors about the Fund/scheme and
its objective because they are the main source to influence
the investors.
4.Systematic Investment Plan(SIP) is one of the innovative
products launched by Asset Management companies in the
industry.SIP is easy for monthly salaried person as it
provides the facility of do the investment in EMI . Though
most of the prospects and potential investors are not
aware about the SIP, there is a large scope for the
companies to tap the salaried persons.

BIBLOGRAPHY

References:
a. Direct interaction with bank customers
b. www.Sharekhan.com
c. www.mutualfundsindia.com
d. www.investopedia.com
 Annexure

QUESTIONAIRE
NAME :
Please tick mark or rank the following questions as per your options or
view.

1) Investor’s age group.

I. Below 20 years
II. Below 30 years
III. 30-40 years
IV. 40 above

2) Investors qualification
I. Graduation/PG
 II. Under Graduate
III. Other

3) Occupation of investor’s
I. Government service
II. Private service
III. Business
IV. Agriculture
V. Other

4) Income range of investor

I. Below 100,000
II. 100,000-500,000
III. 500,000-10,00,000
IV. 10,00,000-20,00,000
V. Above 20,00,000

5) Which type of investment did you prefer at Sharekhan

I. Fixed Deposit
II. Insurance
III. Mutual Funds
IV. Shares/Debentures
V. Real Estate

6) What are the factors affecting your investment decisions

I. Liquidity
II. Low Risk
III. High Return
IV. Trust
V. Other

7) Have you invested in mutual funds

I. Invested
II. Not Invested
8) Which mutual funds have you invested in
I. SBI Mutual Funds
II. UTI
III. Reliance
IV. HDFC
V. Other

9) What types of mutual funds are available at Sharekhan.

I. Equity
II. Debt
III. Hybrid
IV. Solution oriented
V. Liquide

10) What is your preferred mode of investment

I. One Time Investment
II. SIP (Systematic Investment Plan)

11) What are the reasons for not investing in mutual funds.
I. Not Aware Of Mutual Funds
II. High Risk
III. Not Any Specific Reason
IV. Low Income
V. Less Trust

12) What are the reasons for investing in mutual funds

I. High Profit
II. Less Risk Than Equity
III. Future Security For Children
IV. Liquidity
 V. Other

13) Would you recommend others to invest in mutual funds

I. Recommend
II. Strongly Recommend
III. Not Recommend
IV. Strongly Not Recommend
V. Any Other

14) What were the sources of knowledge/information regarding mutual

funds.
I. Newspaper
II. TV Channels
III. Broker
IV. Friends/Relatives
V. Banks

15) Are you satisfied with mutual funds investment opinions given
through Sharekhan
I. Satisfied
II. Strongly Satisfied
III. Dissatisfied
IV. Strongly Dissatisfied
V. Neutral