PROJECT REPORT

ON
“SYSTEMATIC INVESTMENT PLAN”
(THE BETTER WAY TO INVEST IN MUTUAL FUND)
Submitted to Dr. A.P.J. Abdul Kalam Technical University, Lucknow
For the fulfillment for the Degree of
MASTER OF BUSINESS ADMINISTRATION
(2022 -2024)

Submitted By
Abhishek Kumar (sec-A)
MBA DUAL

Submitted To
Jaipuria Institute of Management, Indirapuram

Ghaziabad, India
 DECLARATION

I, Abhishek Kumar, hereby declare that the Project report entitle "Systematic Investment plan”
at SBI Mutual Funds, Delhi prepared by me under the guidance of Assistant professor Ms.
Guneet Kaur & Dr. Govind Srivastava, faculty of M.B.A Department, Jaipuria Institute of
Management and external, assistance by Mr. Nikhil Tyagi (Senior Manager), Amit Ghirdhar
(Chief Manager & branch head) & Bhrampreet Sir (assistant manager) at SBI Mutual Funds
Delhi. I also declare that this Project work is towards the partial fulfillment of the university
Regulations for the award of degree of Master of Business Administration by A.P.J. Abdul
Kalam Technical university Lucknow.

I have undergone a summer project for a period of Two months. I further declare that this
Project is based on the original study undertaken by me and has not been submitted for the
award of any degree/diploma from any other University / Institution.

Place :

Date: Signature of student

 ACKNOWLEDGEMENT

The satisfaction and excitement that accompany the successful completion of any task would
be incomplete without mention of leader, whose constant guideline and encouragement crown
all the efforts with success. I am highly obliged to Ms. Guneet Kaur for arranging the
programmer of practical training in masters of business administration in such a manner.

As the student of management, I feel proud on successfully completing the project on

“systematic investment plan (the better way to invest in mutual fund) ” under the guidance of
Mr. Nikhil Tyagi , Mr. Amit Girdhar & Bram Preet sir . I would like to thank him for his
encouragement and support during training.
 EXECUTIVE SUMMARY

Mutual funds have emerged as a strong financial intermediary and are the fastest growing
segment of the financial services sector in India. Mutual funds play a very significant role in
channelizing the saving of millions of individuals. A mutual fund is the most suitable
investment for the common person as it offers an opportunity to invest in a diversified,
professionally managed portfolio at a relatively low cost. There are wide varieties of mutual
fund schemes that fulfil to investors needs.

SIP (systematic investment plan) is a method of investing a fixed sum, regularly, in a mutual
fund. It is similar to regular saving schemes like a recurring deposit. SIP allows you to buy
units on a given date each month, so that you can device an investment plan for yourself.
Mutual Funds have not only helped family tap into the success of Indian Industry but have
also contributed to the India growth story. As information and awareness is rising more and
more people are enjoying the benefits of investing in mutual funds.
Table of Contents

S. No Contents Pages

I Acknowledgement 3

II Executive Summary 4

1 Introduction 5

1.1 About the industry

1.2 About the topic/technology

2 Literature Review 24

3 Objective of the Study

4 Research Methodology 25

5 Data Analysis & Interpretation 26

6 Findings 41

7 Suggestions/Recommendations

8 Conclusion 40

9 Bibliography 42

10 Annexure 43
 INTRODUCTION

1.1 Introduction of the industry

The financial system is a set of institutional arrangement through which financial surpluses available in the
economy are mobilized. A financial system, which is inherently strong. Functionally diverse and displays
efficiency and flexibility, is critical in creating a market-driven, productive and competitive economy. A
mature financial system has to gear up and undergo varied and comprehensive changes in order to achieve
rapid economic development.
The financial sector reforms in India in the early nineties has resulted in explosive growth of the economy,
opening up of the Indian financial market to foreign and private Indian players, large inflow of foreign ninth
AIMS international conference on management institutional investors, increased competition and better
product offering to consumers. One of the major developments of this decade has been the take-off mutual
funds. Mutual funds have emerged as a strong financial intermediary and are the fastest growing segment of
the financial service sector in India. It aims at promoting a diversified, efficient and competitive financial
sector increasing the return on investment and promoting and accelerating the growth of the economy. It is a
medium of investment suitable to the small investors, who are not able to invest in stock market directly.
Mutual funds now play a very significant role in channelizing the savings of millions of individuals. The
mutual fund industry in India over the year has seen dramatic improvement in terms of quantity as well as
quality of product and service offering in recent years. The tremendous growth of Indian mutual funds industry
is an indicator of India’s efficient financial market and the trust which investors have on the regulatory
environment. Millions of investor rely on mutual fund as their primary investments because they offer a
convenient, cost-effective and easy way to invest in financial markets. The securities exchange board of India
(SEBI) regulates this fast growing industry and it is the representee body of all mutual funds in the country.
Every mutual fund has a goal- either growing its assets (capital gains) and/or generating income (dividends) for
its investors. Distribution in the form of capital gains (short-term and long-term) and dividends may be passed
on to the shareholders as income or reinvested more shares. A mutual fund is valued daily and reports a price
known as net asset value (NAV) per share. In its simplest form, a NAV is the total value of all securities held
in a fund divided by the total no. of shares owned by its shareholders. As the price of the NAV increases or
decreases, the shareholders value will increase or decrease.
2

1.2 Introduction of the mutual funds

The global economic environment was conductive and this led to explosive growth of mutual funds in most
countries particularly since 1980‟s. this growth can be attributed to the strong emergence of the market
economy which depends more on the growth led by the stock market. Mutual funds found increasing
acceptance in the developed countries when compare to the developing countries in the early and mid 90”s but
gradually it found its place even in the developing countries because of its advantages. Gradually in number of
mutual funds increased significantly worldwide and many developed countries started designing country
specific funds to match the trend prevailing in other developed countries.

History of the 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, through 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 a dramatic improvement both qualities wise as well as
quantity wise, before, the monopoly of the market had seen an ending phase; the assets under management
(AUM) was rs67 billion. The private sector entry to the fund family raised the aum to rs.470 billion in march
1993 and till April 2004 ; it reached the height if rs.1540 billion. The mutual fund industry is obviously
growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to
the development of the sector. Each phase is briefly described as under.

 First phase:

Unit trust of India (UTI) was established on 1963 by an act of parliament by the reserve bank of India and
functioned under the regulatory and administrative control of the reserve bank of India. 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.6700 Crores of assets under management.

 Second phase – 1987-1993 (entry of public sector funds)

1987 marked the entry of non-UTI, public sector mutual funds setup by public sector banks and life insurance
corporation of India (LIC) and general insurances corporation of india (GIC). SBI mutual fund was the first
non-UTI mutual fund established in June 1987 followed by can bank mutual fund (Dec 87). Punjab national
bank mutual fund (Aug. 89). Indian bank mutual fund (nov 89). Bank of india (jun90), bank of Baroda mutual
fund (oct 92), LIC established its mutual fund in June 1989 while GIC had setup its mutual fund in December
1990. At the end of 1993, the mutual fund industry had assets under management of Rs 47,004 Crores.
3
 Third phase – 1993-2003 (entry of private sector funds)

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 regulations were substituted by a more comprehensive and revised mutual fund regulation in
1996. As at the end of January 2003. There were 33 mutual funds with total assets of Rs 1,21,805 Crores.

 Fourth phase – (since February 2003 – april 2014)

In February 2003, following the repeal of the unit trust of India act 1963 UTI was Bifurcated into two separate
entities. One is the specified undertaking of the unit trust of india with assets under management of rs.29,835
crores as at the end of January 2003, representing broadly. The assets of US 64 schemes, assured return and
certain other schemes.

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. Consolidation and growth. As at the end of September, 2004.
There were 29 funds, which manage assets of rs.153108 Crores under 421 schemes.

 Fifth phase – (since may 2014)

Taking cognizance of the lack of penetration of MFs, especially in tier ll and tier lll cities, and the need for
greater alignment of the interest of various stakeholders, SEBI introduced several progressive measures in
September 2012 to “re-energize” the indian mutual fund industry and increase MFs penetration.
MF distributers have also had a major role in popularizing systematic investment plans (SIP) over the years. In
April 2016, the no. of SIP accounts
has crossed 1 crore mark and as on 30th April, 2021 the total no. of SIP accounts are 3.80 crore.

Mutual fund

A mutual fund is a company that brings together money from many people and invest it in stocks, bonds or
other assets. The combined holdings of stocks, bonds or other assets the fund owns are known as it portfolio.
Each investor in the fund owns shares, which represent a part of these holdings. A mutual fund is a
professionally managed investment product that sells shares to investor and pools the capital it raises to
purchase investments a fund typically buys a diversified portfolio of stocks, bonds and money market
securities, or a combination of stocks and bonds, depending on the investment objectives of the fund. MF may
also hold other investments, such as derivatives. A fund makes a continuous offering of its shares to the public
and will buy any shares an investor wishes to redeem, or sell back, is known as an open-end fund. An open-end
fund trades at net asset value (NAV).
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of
investing in securities such as stocks, bonds, money market instruments and similar assets. MF operated by
money managers, who invest the funds capital and attempt to produce capital gains and income for the funds
investors. A mutual fund portfolio is structured and maintained to match the investment objectives stated in its
prospectus.

Advantages of mutual funds

- Diversification
- Professional management
- Regulatory oversite
- Liquidity
- Convenience
- Low cost
- Transparency
- Flexibility
- Choice of schemes
- Tax benefit

Classification of mutual fund

(1) By structure
- Open-ended schemes
- Close-ended scheme
(2) By investment objective
- Growth schemes
- Income schemes
- Balanced schemes
5
(1) 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.

- Interval schemes

Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or
redemption during pre-determined intervals at NAV related prices.

(2) Based on investment objective

- Growth funds

Such schemes normally invest a majority of their corpus in equities. It has been proven that returns from
stocks, have outperformed most other kind of investments held over the long term. It is ideal for investors with
long term outlook seeking growth over a period of time.

- Income funds

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest
in fixed income securities such as bonds, corporate debentures and government securities. Income funds are
ideal for capital stability and regular income.
- Balanced fund

The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute
a part of their earning and invest both in equities and fixed income securities in the proportion indicated in
their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall
equally when the market falls. These are ideal for investors looking for a combination of income and moderate
growth.

Investment strategies:

1. Systematic investment plan:

Under this a fixed sum a invested each month on a fixed date of a month. Payment is made through post dated
cheques or direct debit facilities. The investors gets fewer units when the NAV is high and more units when the
NAV is low. This is called as the benefit of rupee cost averaging.
2. Systematic transfer plan:
Under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed
interval, to an equity schemes of the same mutual fund.
3. Systematic withdrawal plan:
If someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month.
Options available to investors:

Each plan of every mutual fund has three options – growth, dividend and dividend reinvestment. Separate
NAV are calculates for each scheme.

- Growth option

Under this plan returns accure to the investor in the form of capital appreciation as reflected in the NAV. The
scheme will not declare the dividend under the growth plan and investors who opt for this plan will not receive
any income from the scheme. Instead of income earned on their units will remain invested within the scheme
and will be reflected in the NAV.

- Dividend option

Under the dividend plan dividend are usually declared on quarterly or annual basis. Mutual fund reserves the
right to change the frequency of dividend declared.

- Dividend reinvestment option

Instead of remittances of units through payouts, units holder may choose to invest the entire dividend in
additional units of the scheme at NAV related prices of the next working day after the record date. No sales or
entry load is levied on dividend reinvest.

Banks v/s mutual funds:

Mutual funds are now also competing with commersical banks in the race for retail investors savings and
corporate float money. The power shift towards mutual funds has become obvious. The coming few years will
show that the traditional saving avenues are losing out in the current scenario. Many investors are realizing that
investments in savings accounts are as good as locking up their deposits in a closet. The fund mobilization
trend by mutual funds indicates that money is going to mutual fund in a big way.

Structure of mutual fund in India

The structure of mutual fund in india is a three-tier one that comes with other substantial components. It is not
only about varying AMCs or banks creating or floating a variety of mutual fund schemes. However there are a
few other players that play a major role into the mutual fund structure. There are three
distinct entities involved in the process- the sponsor (who creates mutual fund), trustees and the asset
management company (which oversees the fund management). The structure of mutual funds has come into
existence due to SEBI mutual fund regulations, 1996 that plays the role of primary watchdog in all of the
transactions. Under these regulations, a mutual fund is created as public trust. We will look into the structure of
mutual funds in a detailed manner.
An overview

What is popular known as a mutual fund, in reality, a business type. In the mutual fund business, there are
almost 30-40 companies and firms that are reffered to as the fund houses.
These are registered and have got the allowance to operate mutual fund schemes through a government
regulatory body, known as the securities and exchange board of india (SEBI).
It is such schemes that are purchased and sold daily by investors, who are the common people. Basically, it
works as
Mutual fund > fund house > individual scheme > investors

The structure of mutual fund

The fund sponsor is the first layer in the three-tier structure of mutual funds in india. SEBI regulations say that
a fund sponsor is any person or any entity that can set up a mutual fund to earn money by fund management.
This fund management is done through an associate company which manages the investment of the fund. A
sponsor can be seen as the promoter of the associate of company. A sponsor has to approach SEBI to seek
permission for a setting up a mutual fund. However, a sponsor is not allowed to work alone. Once SEBI agrees
to the inception, a public trust is formed under the indian trust act, 1882 and is registered with SEBI. After the
successful creation of the trust, trustees are registered with SEBI and appointed to manage the trust, protect the
unit holders interest and to comply by the mutual fund regulations of SEBI. Subsequently, an asset
management company is created by the sponsor that should be complying with the companies act, 1956 to
regulate the management of funds.
Considering that sponsor is the primary entity that promotes the mutual fund company and that the mutual
funds are going to regulate public money, there are eligibility criteria given by SEBI for the fund sponsor:

 The sponsor must have experience in financial services for a minimum of five years with a positive net
worth for all the previous five years.

 The net worth of the sponsor in the immediate last year has to be grater than the
capital contribution of the AMC.

 The sponsor must show profits in at least three out of five years which includes the last year as well.

 The sponsor must have at least 40% share in the net worth of the asset management company.

As clear as it could be, the role of a sponsor is quite vital and must carry highest amount of creditability. The
strict and rigorous norms efine that the sponsor must have adequate liquidity as well as faithfulness to return
the money of investors in case there is any financial crisis or meltdown.

Trust and Trustees

Trust and trustees from the second layer of the structure of mutual funds in india. Also known as the protectors
of the fund, trustees are generally employed by the fund sponsor. Just as can be comprehended with the name,
they have a critical role to play as far as maintaining the investors trust and tracking the funds growth are
concerned.
A trust is created by the fund sponsor in favour of the trustees, through a document called a trust Deed. The
trust is managed by the trustees and they are answerable to investors. They can be seen as primary guardians of
fund and assets. The trustees can be formed by two ways
– a trustee company or a board of trustees. The trustees work to monitor the activities of the mutual fund and
check its compliance with SEBI regulations. They also monitor the systems, procedures and overall the
working of the asset management company. Without the trustees approval, AMC cannot float any scheme in
the market. The trustees have to report to SEBI every six months about the activities of the AMC. Also, SEBI
has established tightened transparency rules to avert any type of conflict of interest between the AMC and the
sponsor. Therefore it is critical for trustees to behave independently and take satisfactory measures to keep the
hard-earned money of investors protected. Even trustees have to get registered under SEBI. And furthermore,
SEBI regulates their registration by revoking or suspending the registry if any condition is found to be
breached.

Asset management companies

Asset management companies are the third layer in the structure of mutual funds. Registered under SEBI, it is
a type of company that is created under the companies act. An AMC is meant to float a variety of mutual fund
schemes that are in compliance with the requirements if investors and the nature of a market. The asset
management company acts as the fund manager or as an investment manager for the trust. A small fee is paid
to the AMC for managing the fund. the AMC is responsible for all the fund related activities. It initiates
various schemes and launches the same. Furthermore, it also creates mutual fund with the sponsor and the
trustee and regulate its development. The AMC is bound to manage funds and provide services to the investor.
It solicits these services with other elemets like brokers, auditors, bankers, registers, lawyers, etc. and works
with them by getting into an agrrement together. To ensure that there is no conflict between the AMCs, here
are certain restrictions imposed on the business acticities of the companies.

Other components in the structure of mutal funds

- Custodian

A custodian is one such entity that is responsible for the safekeeping of the securities of the mutual fund.
Registered under SEBI, they manage the investment account of the mutual fund, ensure the delivery and
transfer of the securities. Also, custodians allow investors to upgrade their holdings at a specific point of time
and assists them in monitoring their invetsments. They also collect and track the bonus issue, dividends and
interests recievd on the mutual fund invetsment.

- Register and transfer agents (RTGS)

RTAs act as an essential link between investors and fund managers. To the fund managers, they serve by
keeping them updated with the details of investors. And, to the investors, they serve by delivering the
advantages of the fund. Even they are registered under SEBI and execute a variety of tasks and responsibilities.
These are the entities who provide services to Mutual Funds. RTAs are more like the operational arm of
Mutual Funds. Since the operations of all Mutual Fund companies are similar, it is economical in scale and
cost effective for all the 44 AMCs to seek the services of RTAs. CAMS, Karvy, Sundaram, Principal,
Templeton, etc are some of the well-known RTAs in India. Their services include.

 Processing investors application

 Keeping a record of investors‟ details.

 Sending out account statements to the investors

 Sending out periodic reports

 Processing the payouts of the dividends

 Updating the investor details i.e. adding new members and removing those who have withdrawn from the
fund.

Auditors audit and scrutinize record books of accounts and annual reports of various schemes. They are known
as the independent watchdogs who have a responsibility of auditing the financials of sponsor, trustees and the
AMC. Each AMC hires an independent auditor to analyses the books so as to keep their transparency and
integrity intact.

- Brokers

Mainly, the brokers work with a responsibility to attract more investors and to disseminate the funds. AMC
uses the services of brokers to buy and sell securities on the stock market. Moreover, brokers have to study the
market and foresee the market‟s future movement. The AMCs uses research reports and recommendations
from many brokers to plan their market moves.

Example of Three-Tiered Fund House Structure

Although there are several companies and organizations that are running according to this system, however,
one of the major companies is the Aditya Birla Sun Life Mutual Fund. Its structure goes the following way:

 Sponsor A joint venture between Sun Life (India) AMC Investment Inc. and Aditya Birla Capital Limited
that is based in Canada.

 Trustee Aditya Birla Sun Life Trustee Pvt. Ltd.

 AMC Aditya Birla Sun Life AMC Limited.

TWO WAYS OF INVESTMENT IN MUTUAL

 Lump sum payment

 Systematic investment plan

Lump-sum payment

A lump sum is a single payment of money. As apposed to a series of payment made over a time (such as an
annuity) this means investing the entire sum of money at one go. For instance, if you have RS. 1 lakh which
you are willing to fully invest in stock or MFs. It is lump sum investment.
 Systematic investment plan

Introduction

A systematic investment plan (SIP) is good tool that retail investors can utilize to optimize their investment
strategy. SIP is nothing but a simple method of investing a fixed sum of money in a specific investment
scheme. On a regular basis, for a pre-determined period of time. A recurring deposit with the post office or a
recurring deposit with a bank also a SIP. Systematic investment plan was already famous and proven in mutual
fund context but now SIP has also come directly into equity stocks which is essentially individual stocks.
equity SIP is anew facility through which you can buy a script for a regular interval over a period of time for
specified amount or for a specified quantity. Investing in mutual fund is not everybody‟s cup of tea. Being
dependent on factors such as a fluctuating stock market and risking your hard-earned money for a measly
profit does not really help. If you are a disciplined investor however, and are interested in mutual funds, then
the equity systematic investment plan (SIP) would work well for you.
SIP requires you to invest a particular amount in a specific mutual fund scheme. In comparison, it functions
must like a recurring deposit. You can plan a savings scheme for yourself and commit a particular sum of
money each month on a pre-fixed date to the scheme. You can begin with as low as Rs 500 in ELSS (equity
linked saving schemes) schemes and move on to Rs 1000 a month for other diversified schemes. SIP follows a
simple mantra – buy when high and sell when low. This is a simple way to win in the stock markets.

Howevwer, the market needs to be timed well and this will take some time to figure out for the novice or busy
player. That‟s where SIP with its monthly pay scheme comes into the picture. Putting in a sum of money each
month will ensure that you have something in when the market is high, and when it is low securing your
position in an unstable market.
Geojit BNP Paribas recently launched SIP for stock investment where in investors with a regular monthly
income can invest their monthly savings in stocks of their choice or a basket of stocks. The service is a system
driven and once the process is initiated, the investor can enjoy the convenience of investing regularly into the
selected stocks in a seamless manner.

Geojit BNP Paribas provides this service on the internet, which makes it easy for investors to plan their savings
and investments at regular intervals.
The discipline associated with investing strictly on a regular basis works much better that setting aside lump
sum each month. Since you begin at a relatively younger age, the benefits of compounding are all yours. The
convenience involved too is good, since you have to submit a request for purchase of shares only once. SIPs
work for investor in the slightly long run and are useful to those who work on fixed budgets for the month,
since the pre-planning helps. SIP is very useful for a time horizon of 10-15 rears. An investor should carefully
fix the amount to be invested so that it does not impact his cash flows over this time horizon. SIP imparts
discipline to savings. On giving a post dated cheques or ECS instruction to any fund saving and investing
happens automatically.

WHAT IS SYSTEMATIC INVESTMENT PLAN

A systematic investment plan (SIP) is a vehicle offered by mutual funds to help investors save regularly. It is
just like a recurring deposit with the post office or bank where you put in a small amount every month. The
difference here is that the amount is invested in a mutual fund.

Systematic investment plan (SIP) is a method of investing in mutual funds wherein an investor chooses a
mutual fund scheme and invests the fixed amount his choice at fixed intervals.

SIP investment plan is about investing a small amount over time rather than investing one- time huge amount
resulting in a higher return.

SIP mainly helps us to get addicted to an investment principle-

Income - savings = expenditure, instead of following the principle of-

Income – expenditure = savings.

SIP helps investors to overcome the problem of „when‟ to invest in the equity markets as irrespective of the
state of the market an investor is always invested. SIP takes away the decision-making and converts it into a
mechanized one. The lowering of risk, by entering at different time periods, however has the disadvantage of
“averaging” out returns.

A very important aspect to be kept in mind is the entry and exit load charged by all mutual funds. In a normal
investment most funds either charge entry load or exit load. But in a SIP along with an entry load charged for
each installment, an exit load is charged if the program is withdrawn before a specified period. This period
could vary from six months to two years. this double whammy wil reduce the returns in the short term. This
makes SIP an inflexible investments program and expensive if withdrawn prematurely due to unforeseen
emergencies.

Finally, when considering SIP, investors should note that it does not assure a return and continue investing
without intruption as missing a few installments could lead to termination of the SIP. When an investor
chooses to invest in mutual funds via an SIP, he makes investments in smaller denominations at regular
intervals of time rather than making a single lump sum investment.
SIP allows you to invest a fixed amount regularly, so when funds NAV is more you get less units and when
funds NAV is higher you get less units, so over a longer time frame, SIP will lower the average purchase cost
of an investments.
As an investor, when you extend the investment period, you can earn profit on your current profit, and
accumulate more wealth. This reiterates the fact that investing fresh capital at periodic intervals raises the
accumulated investment.

Working of SIP

Let us take an example to understand how an SIP works. Suppose „X‟ decides to invest in mutual fund through
SIP. He commits making a monthly investments of Rs 1000 for a period of twelve months (starting 1st January
2006) in a fund named „ABC‟. The payment can be done by issuing twelve post-dated cheques of Rs 1000
each or through ECS facility (if available).
 DATE MONTHLY NAV NO.OF UNITS
INVESTMENT
1-January Rs 1000 46.29 21.603
1-Febrary Rs 1000 48.08 20.799
1-March Rs 1000 52.78 18.947
1-April Rs 1000 56.36 17.743
1-May Rs 1000 58.42 17.117
1-June Rs 1000 56.42 17.724
1-July Rs 1000 62.14 16.093
1-August Rs 1000 67.58 14.797
1-September Rs 1000 71.7 13.947
1-October Rs 1000 76.19 13.125
1-November Rs 1000 83.97 11.909
1-December Rs 1000 89.92 11.121

Brief summry

Monthly investment : 1000

Period of investment : 12 months

Total amount invested : Rs 12000

Total number of units credited to „X‟ : 194.925

Average cost/unit : Rs 61.5621

Note : entry and exit load are applicable while investing through SIP option also. However, in this example,
load has not been taken into consideration for the purpose of simplification.

Benefits to „X‟

Convenience and affordability because of an easy payment methoded payment every month.

Helps X to develop the habit of disciplined investing as he/she is compelled to fulfill his/her commitment of
making a fixed payment every month.

Rupee cost average benefit – by investing through SIP route, „X‟ receives 194.925 units at an average cost of
Rs 61.5621. however, had „X‟ invested the whole of Rs 12000 at one go, he would have received a different
number of units. Suppose „X‟ had invested Rs 12000 on:

1st jan 2006 – he would have received 259.24 units

1st july 2006 – he would have received 193.11 units

1st dec 2006 – he would have received 133.45 units

Since, it is not so simple for anybody to perfectly time the market; it makes a more sensible approach to invest
through SIP option (for long-term, say 3 to 5 years). It actually makes the volatility in the stock markets work
for investors. This example helps us to understand how SIP allows „X‟ to take benefit of all the highs and lows
of the market during this twelve months time period.

Flexibility to redeem units at any time or making a change in the monthly investment amount.

Why systematic investment plan

SIP refers to systematic investment plan which is a mode of investment in equity in a consistent way. Timing
the market is noteasy; hence a systematic investment plan worksas the best vehicle to ride through the market
volatilities.

For instance- Rs 5000 saved and invested every month for a period of 20 years would grow to Rs 30 lakhs at a
conservative rate of 8% whereas a steady return of 15% through SIP can grow upto 76 lakhs. SIP is an ideal
way for retail investors to benefit from power of compounding and create wealth long term.

SIP best works to achieve your medium and long term goals ; it may be building corpus for child‟s education
and child‟s marriage, planning for retirement, planning for home, buying a car etc. all the goals can‟t be
achieved from monthly earnings alone, one needs to build corpus over a period of time. So the best way to
realize that is systematic investment plan. Small amounts saved and invested every month over a period of time
can help create a large corpus. In a rising market the amount invested will fetch lesser units while in a falling
market the same amount will get more units thereby providing the investor a low average cost per unit.
Consequently in prevents the investor from trying to time the market. The point we want to drive home is that
no matter the state of market, stick with SIP.

SIPs tend to underperform in a consistently rising market since the basic principle of a SIP is cost averaging. If
markets are consistently rising, you would end up investing at higher markets and get lower number of units.
So SIPs lose their edge if markets are not volatile and there are no ups and downs since averaging concept will
not work. So in nutshell, you don‟t have to commit big amount in one go but small amount each month will
just be perfect. Don‟t worry about stopping and starting of SIP in rising or falling markets as this defeats
purpose of SIP. The whole point of SIP‟s is that market movement need not concern you at all.

It is important to understand that Indian capital market is one of the most attractive in terms of risk adjusted
return in the world. Sensex has yielded an average compounded annual return of 18-20 per cent over the last
thirty years. To capture these attractive returns from the market, one should start investing early in his/her
career. SIP is a good tool to go about investing a small amounts right from the beginning and reaping the
reward at the end of your career. Young people usually don’t take interest in long term investments and tend to
look for short term gains. This often leads them to riskier investments and if the investments fail then they
usually lose faith in the very concept of investments.

Starting early + investment regularly = wealth creation

Start early, be consistent, be patient – reap rich dividends in long run. When to invest in SIP
SIP investment can be started anytime ensuring minimum risk with the correct suitable scheme plan for the
investor. It is very important for the investor to choose the scheme which suits his long-term goals well. Hence,
there is no suitable time frame within which an investor should start a SIP investment paln, the sooner the
better.

Types of systematic investment plan

(1) Top-up SIP

This SIP allows you to increase your investment amount periodically giving you the flexibility to invest when
you have a higher income or available amount to be invested. This is also helps in making the most out of the
investments by investing in the best and high performing funds at regular intervals.

(2) Flexible SIP

As the name suggests this SIP plan carries flexibility of amount you want to invest.an investor can increase or
decrease the amount to be invested as per his own cash flow needs ar preferences.

(3) Perpetual SIP

This SIP plan allows you to carry on the investments without an end to the mandate date. Generally, an SIP
carries an end date after 1 year, 3 year or 5 years of investment. The investor can hence, withdraw the amount
invested whenever he wishes or as per his financial goals.

Features of SIP

(1) Small and regular investment

Systematic investment plan helps you achieve your bigger financial goals even with a small sum of amount
invested every periodic interval. SIP is lighter on your wallet. It allows you to invest a small amount as per
your wallet size with as low as Rs 500/- with periodic intervals of investments such as weekly, fortnightly,
monthly, quarterly. It is a simple and affordable way for beginners to start investing in mutual fund schemes..

(2) Disciplined investment

Investors often fail to maintain the habit of investing over the period of time. A dedicated approach and focus
is the key to any investment. As the name says, systematic investment plan is a system to invest a particular
amount regularly. This naturally brings a discipline to your investing habits. Inculcating a habit of investing
with a regular investment of a small sum is practically much easier than investing lumpsum amount every year.
It is recommended to start an SIP if you haven’t yet inculcated the discipline of investing.

(3) Ease of investing

SIP can be implemented in two ways; online and offline SIP. Traditionally, you can invest in SIP by filling up
a mandate, however, in the current digital wave, you can invest in SIP via invest online platforms. Invest
online portal avails you a paperless transactions with quicker transactions and hassle free procedures. You can
opt to link your portfolio to your bank account, so that you can enable uninterrupted automatic investments.
Usually, salaried employees choose to map their SIP accounts to their salary accounts so that the process
continues to be regular and linear. This rectifies the issues of regularity failures. You need to be a KYC
complaint to start investing.

(4) Power of compounding

The biggest force that drives investments ahead is the power of compounding. Although, systematic
investments are smaller, investors can benefit higher with the power of compounding. Starting to invest early
can build opportunities of higher returns. Simply, the small amounts that you invest every month generate
returns over the invested period and similarly the returns upon the previous investment gets added to your new
investments.

.(5) Rupee cost averaging

Nobody can time the market, not even half of the times. However, SIP does not require you to time the market.
Rupee cost averaging is an automatic market timing mechanism. Since the investments in SIP are made at
regular intervals, more units are bought in declining market and hence when the markets head upwards, the
value of your investments grows in sync. As the SIP thrives on volatility, the divergence in returns between
SIP and lump sum widens.

Advantages of SIP

- SIP can be started with a minimum investment of Rs 500/- per month or RS 1000/- per month.

- It is good and effective way of creating wealth for long term.

- ECs facility is available in case of investment through SIP.

- A small withdrawal from the account doesn‟t affect the bank balance of an individual as compared to a hefty
withdrawal.

- It can be for a year, two years, three years etc. if a person at any point of time couldn‟t
be able to continue its SIP. He may give instructions at least 25 days before to the fund house. His SIP be
discontinued.

- All type of funds except liquid funds, cash funds and other funds who invest in very short
fixed return investment offers the facility of SIP.

- Capital gains, if applicable, are taxed on a first-in-first-out basis.

- As the investment made through SIP are not at one time. Some units bought at high price and some at low
price. So chances of making gain through SIP is higher than the one time investment.

Disadvantages of SIP

(1) No downside protection

Investors should remember that despite of all the advantages that SIPs have, they are subject to market risks
and do not protect investors from making a loss or ensure them profits in falling markets.
(2) Portfolio risk remains

SIPs are also subject to security risk. Mutual fund schemes investing in portfolios that turns out to generate
negative returns are bound to make investors incur a loss even if the investment is made through SIPs.

(3) Ideal profile of investors

Investors opting to invest through an SIP option should: have a long-term investment horizon, be willing to
invest regularly, keep patience; and who cannot invest enough amount at one go before opting for SIPs.
SIP option available for all types of funds. This arises the need for investors to do a title homework in order to
get the maximum returns out of their investments.

(4) Defining the investment objective

Investors should invest with a clear objective in their mind. It helps to figure out an indicative time period for
which the investments would have to be made.

(5) Determining the investment surpluses

Investors should estimate the amount that they can afford to invest on a periodical basis. Investors should be
conservative while making this estimate as an over estimated periodical investment amount may turn out to be
a burden for investors.

(6) Selecting an appropriate scheme category

Before investing investors shold take risk-return profile of a scheme into consideration. Investors should
choose a scheme that suits their investment objective, for example: equity funds are recommended to investors
who have a high risk taking capacity, debt funds for risk averse investors and balanced funds for investors with
moderate risk taking capacity.

(7) Ignore the market savings

In the short term, sentiments drive the movements in the market. Therefore, investors should not let a short
term correction or fall in the markets to bother them. As long as the long term prospects are intact, the
investments are safe.

(8) Periodical review of investments

After selecting an appropriate scheme and making investment in it, investors should continuously monitor the
performance of similar schemes to the one in which the investment is done. This enables investors to compare
the performance of their scheme with corresponding schemes and make necessary adjustments, if required.

Time frame for mutual fund SIP

Theoretically doing a mutual fund SIP for long term will work for investors. But for practical reasons we need
to commit a mutual fund SIP for short term. That is we need to break that long term into many 6 months or 1
year periods and commit yourmutual fund SIP for first 6 month or 1 year.

Them at the end of 6 month or 1 year renew your mutual fund SIP for another 6 month or 1 year. You need to
renew like this till you complete your predetermined long term period.

You may think it is an unnecessary paperwork and waste of time. But you will be completely convinced when
you have finished reading this article.
Contribution towards mutual fund SIP changes:
How much you are contributing towards mutual fund SIP changes over a period of time.

- At the beginning of a career a person will be able to commit mutual fund SIP for small sum of amount. As he
progresses in his career. He or she will be able to increase his contribution towards mutual fund SIP.

- Similarly, when someone reaches a stage where he need to spend more on kid‟s higher education, daughter‟s
wedding, buying a house or meeting a major financial commitment, it is difficult for him to continue the same
amount of mutual fund SIP contribution.

- So whenever you renew your mutual fund SIP at the end of 6 month or 1 year, you can look at your cash flow
position and based on that you can renew the mutual fund SIP for the increased amount or the same amount or
the reduced amount.

Comparative analysis of systematic investment plan and lumpsum investment

Mutual funds over the years have gained immensely in their popularity. Apart from the many advantages that
investing in mutual funds provide like diversification, professional management, the ease of investments
process has proved to be a major enabling factor. However, with the introduction of innovative products, the
world of mutual funds nowadays has a lot to offer to its investors. With the introduction of diverse options,
investors needs to choose a mutual fund that meets his risk acceptance and his risk capacity levels and has
similar investment objectives as the investor.

Most importantly, mutual fund provide risk diversification: diversification of a portfolio is amongst the
primary tenets of portfolio structuring, and a necessary one to reduce the level of risk assumed by the portfolio
holder. Most of us are not necessarily well qualified to apply the theories of portfolio structuring to our
holdings and hence would be better off leaving that to a professional. Mutual funds represent one such option.
Lastly, evaluate past performance, look for stability and although past performance os no gurantee of future
performance, it is a useful way to assess how well or badly a fund has
performed in comparison to its stated objectives and peer group. A good way to do this would be to identify
the five best performing funds (within your selected investment objectives) over various periods, say 3 months,
6 months, one year, two years and three years. Shortlist funds that appear in the top 5 in each of these time
horizons as they would have thus demonstrated their ability to be not only good but also, consistent
performers.
SIP and lump sum are the two techniques to invest in mutual funds. Any investor can choose one out of them
and can invest their money into mutual funds. SIP is systematic investment plan which is very helpful to
salaried and middle class man. They can invest their saving into systematic investment plan and can collect
huge funds for future.
SIP is paid in monthly or quarterly as per the scheme. But lump sum is paid only one time and the whole
transactions is based on this investing money. Opting SIP, an investor can invest their saving into it and can
safe his money doing that. SIP is good because if it seems that market will goes down in few days so an
investor can safely withdraw his money and can safe money.
Good reasons to invest in SIPs

(1) Small investment amount

With SIPs, most mutual fund schemes allow you to start investing with as little as Rs 500 per month this
investments amount is considerably lower than the most popular investment option.

(2) Adjust the SIP amount the way you want

SIPs are highly flexible. For instance, if you start a Rs 1000 SIP in a mutual fund scheme of your choice, there
is no necessity to keep on investing only Rs 1000
If your savings increase in the future, you have the option to increase the SIP amount or even start a new SIP in
the same mutual fund scheme or any other scheme of your choice.

(3) Stop or skip the SIP

Moreover, there is no need to compulsorily make the SIP investment every month for any fixed duration. You
can skip the SIP for a few months or even stop the investment as and when you like.
So, in case of an emergency, if you do not have adequate funds to invest, you can skip SIP payments for a few
months.

(4) Makes you disciplined investor

The next important reason why SIP is best is its ability to make you a disciplined investor. Most investors start
investing but fail when it comes to investing regularly. Regular investment are necessary to get closer to your
financial objectives.
The very nature of SIPs is as such, that it adds more discipline to your investment journey. An amount fixed by
you automatically gets invested in the scheme of your choice, eliminating the need for you to make the
monthly investments yourself.

(5) Timing the market- what is that?

It is almost impossible to time the markets on a consistent basis accurately. But SIPs don‟t require you to time
the markets in any way. You keep on investing a fixed amount month after month irrespective of the market
conditions.you will get more fund units if the market is down and fewer units if the markets are high.

(6) Reduces the average cost of mutual funds units

Continuing from the point above, SIPs also help in reducing the average cost at which you buy the mutual fund
units. The NAV of the fund is low when the markets are falling and high when the markets outperform. So, in
the long run, when you keep investing a fixed amount through SIP, the average cost of purchasing the units
tend to be on the lower side as compared to making a lump sum investment when the markets are running high.

(7) Power of compounding

If you select the growth option at the time of starting your SIP, the returns that your investment generates
would then be added again to your investment amount. This resultsin the compounding effect, which could
generate excellent returns in the long run.
So, if you have long-term financial goals, starting a SIP in any scheme of your choice and selecting the growth
option can prove rewarding.

(8) No emotional investing

It can be challenging for an investor not to get swayed by the ups and downs of the market. The volatility of
the market often encourages people to make emotional investment decisions that generally fail to deliver
expected results.
But the working of SIPs protecs the investors from making such mistakes. All you need to do is to keep
investing a fixed amount every month without worrying about the short-term market volatility.

(9) Complete transparency

The mutual fund industry has grown by leaps and bounds in india in the last few years. To protect the interest
of the investors, AMFI and SEBI have introduced several stringent measures that every mutual fund scheme
and AMC noe needs to follow.
This is made the mutual fund industry transparent and safe for invstors who are just starting their investment
journey through SIPs.

Review of literature

1. Perceptual study of systematic investment plan (SIP) a case study of service class. Author-Dr. B.S.Hundal,
Saurabh Grover, professor department of commerce and business management GNDU Amritsar. Systematic
investment plan is a disciplined way of investing, where you make regular investments according to set
calender you create. Systematic investing is a time-tested discipline that makes it easy to invest automatically.
This paper is an attempt to study the perception of service class people towards systematic investment plan.
Factor analysis and cluster analysis have been used to study the same and found that service class have positive
attitude towards investment in these plans.

2. S. umambheswari, M. ashok kumar (2013) when one know the existence of a new thing is known as
awareness. External sources are responsible for creating, modifying and shaping investment decision of
investors. Television, radio, print media, personal consultation for expert, relatives, friends etc are responsible
for decision investment decision.
3. R. sreepriya, p. gurusamy (2013) additional income or growth in value can be achieved by investment.
Waiting for rewards is the main characteristic of investment. Investment is allocation monetary resources to get
return over given period. Surplus funds are invested with different channels by salaried class people. This
research analyses the different investment avenues.

4. J. paul sundar (2013) the study analyses the behavior of an investor. This study brings out the relationship
between risk of investment and protection of investment. Nearly
59 respondents stick to the protection of investment rather risk for good returns. Respondents have protecting
investment as a main priority.

5. M. nandhini, D. sivasakth (2013) mutual fund is the most likely investment for the common manas it
provides an opportunity to invest in a diversified professionally managed securities at a relatively low cost.
Main objective of investment is wealth accumulation for investor according to these study. Mutual funds
provides moderate rate of returns on investment with minimum risk.

6. Ashly lynn joseph, M Prakash (2014) buing of financial product or any valued item with anticipation of
positive returns will received in the future is called as investment. Study analyses the different investment
options such as bonds, cash, real estate etc.

7. Samreen lodhi (2014) the determines the influence of financial litracy, accounting information, openness to
experience on decision making of investors. Investments are categorized as risk taker or risk averter. Risk
taking preference investment in shares, risk aversion, information asymmetry and share investment.

8. Shaarma R. (2015) in his study he discover the investment objectives of selected mutual fund investors and
to identify the types of mutual fund schemes preference by elected mutual fund investors. The results presented
that the main objective behind to invest in mutual fund is good return, safety and tax benefit. The research also
suggested that the growth schemes and balanced schemes are most preferred in comparison to other schemes.
Male and female respondents do not significantally different across investment experience.

9. Sharma, S. (2015) have mentioned about the ELSS of mutual fund Equity Linked Savings Scheme (ELSS) is
a type of mutual fund, which invests the corpus in equity and the equity related products. These schemes offer
tax rebates to the investors under specific provisions of the Indian income Tax ELSS is open-ended; hence can
be subscribed to and exited from at any point of time.

Research methodology

3.1 Problem statement : Systematic Investment Plan

(The better way to invest in mutual fund)

3.2 Research Objectives :

- To study the awareness of investment towards SIP

- To study the which schemes are choosen by investor for investing money in mutual fund
- To study about preference of investors for entry into mutual fund

 Lump-sum

 Systematic investment plan

- To identify factor considered by investors while investing in mutual fund

3.3 Research design :

Descriptive research design

3.4 Sample design

For the purpose of my study I have used simple random sampling.

3.5 Sample Size

In sample size I have taken 250 samples as sample size.

3.6 Data Collection

There are two types of data

1) Primary Data
For the purpose of the study, primary data is collected by questionnaire.

2) Secondary Data
There are some secondary data collected from internet and websites to collect the proper information and the
industry details about mutual fund.

3.7 Scope of research

This project will help existing/prospective investor to understand what the various mode of investment in
mutual fund are and why systematic investment plan gives better returns than lump-sum. So that investors can
do better use of their hard earned money to earn more profit.

3.8 Tools used for data analysis

 SPSS

 MS Excel

3.9 Limitation

- The study is limit up to Surat city

- Possibility of error in data collection because many respondent may have not given actual answer of the
questionnaire.
- Responses received may be inaccurate because of internet bias by the respondents.

DATA ANALYSIS

Gender

Frequency Percent Valid Percent Cumulative Percent

Vald male 177 70.8 70.8 70.8

female 73 29.2 29.2 100.0

Total 250 100.0 100.0

 Interpretation

The above chart indicates that Out of 250 respondents 177 respondents are male and 73
respondents are female.
 Occupation

Frequency Percent Valid Percent Cumulative

Percent

Valid Salaried 48 19.2 19.2 19.2

business 84 33.6 33.6 52.8
Student 79 31.6 31.6 84.4
housewife 24 9.6 9.6 94.0
Retired 15 6.0 6.0 100.0
Total 250 100.0 100.0

Interpretation

The above chart indicates that out of 250 respondents 48 respondents are salaried, 84
respondents are business man, 79 respondents are students, 24 respondents are house wife
and 15 respondents are retired.
 income of the respondents

Frequency Percent Valid Percent Cumulative

Percent

Valid 1-2 lakhs 72 28.8 28.8 28.8

2-3 lakhs 37 14.8 14.8 43.6

3-4 lakhs 51 20.4 20.4 64.0

4-5 lakhs 33 13.2 13.2 77.2

5 lakh and above 57 22.8 22.8 100.0

Total 250 100.0 100.0

Interpretation

The above chart indicates that Out of 250 respondents 72 respondents income are 1-2 lakhs,
37 respondents respondent income are 2-3 lakhs, 51 respondent income are 3-4 lakhs, 33
respondents income are 4-5 lakhs and 57 respondent income are 5 lakh and above, majority
respondent have a 1-2 lakhs income.
 1. Do you regularly invest in mutual funds?

Frequency Percent Valid Percent Cumulative

Percent

Valid yes 180 72.0 72.0 72.0

No 70 28.0 28.0 100.0
Total 250 100.0 100.0

Interpretation

The above chart indicates that Out of 250 respondents 180 respondents are regularly invest in
mutual fund and 70 respondents are not regular to invest in mutual fund.
 2. Which way of investment in mutual fund you select?

Frequency Percent Valid Percent Cumulative

Percent

Valid lump-sum 106 42.4 42.4 42.4

systematic investment 144 57.6 57.6 100.0
plan
Total 250 100.0 100.0

Interpretation

The above chart indicates that Out of 250 respondents 106 respondent are invest in lump-sum
payment and 144 respondents are invest in systematic investment plan. Majority respondents
are choose systematic investment plan for invest money.
 3. Which are the primary sources of your knowledge about mutual funds as an
investment option?

Frequency Percent Valid Percent Cumulative

Percent

Valid Television 27 10.8 10.8 10.8

Internet 93 37.2 37.2 48.0
newspaper/journals 62 24.8 24.8 72.8
friends/relatives 51 20.4 20.4 93.2
sales representatives 17 6.8 6.8 100.0
Total 250 100.0 100.0

Interpretation

The above chart indicates that Out of 250 respondents 27 respondent primary source of
knowledge are television, 93 respondent primary source of knowledge are internet, 62
respondent primary source of knowledge are newspaper/journals, 51 respondent primary
source of knowledge are friends/relatives, 17 respondent primary source of knowledge are
sales representatives. Majority respondents are primary source is internet.
 4. Where do you find yourself as a mutual fund investor?

Frequency Percent Valid Percent Cumulative

Percent

Valid partial knowledge of 73 29.2 29.2 29.2

mutual funds
aware only of any specific
scheme in which you 130 52.0 52.0 81.2
invested

fully aware 47 18.8 18.8 100.0

Total 250 100.0 100.0

Interpretation

The above chart indicates that out of 250 respondents 73 respondents are find yourself as a
partial knowledge of mutual fund, 130 respondents are find yourself as a aware only of any
specific scheme and 47 respondents are fully aware.
 5. By structure in which type of scheme did you invested ?

Frequency Percent Valid Percent Cumulative

Percent

Valid open-ended fund 78 31.2 31.2 31.2

close-ended fund 118 47.2 47.2 78.4
interval schemes 54 21.6 21.6 100.0
Total 250 100.0 100.0

Interpretation

The above chart indicates that out of total 250 respondents 78 respondent are invest in open-
ended fund, 118 respondent are invest in close-ended fund, and 54 respondent are invest in
interval scheme. Majority respondent are invest in close ended fund.
 6. By investment objective in which type of schemes have you invested?

Frequency Percent Valid Percent Cumulative

Percent

Valid growth schemes 66 26.4 26.4 26.4

income schemes 128 51.2 51.2 77.6

Balanced schemes 56 22.4 22.4 100.0

Total 250 100.0 100.0

Interpretation

The above chart indicates that out of total 250 respondents 66 respondent are invest in growth
scheme, 128 respondent are invest in income scheme, and 56 respondent are invest in
balanced scheme. Majority respondent are invest in income scheme.
 7. What percentage of your earnings do you invest in mutual funds?

Frequency Percent Valid Percent Cumulative

Percent

Valid Upto 10% 48 19.2 19.2 19.2

Upto 25% 112 44.8 44.8 64.0

Upto 50% 65 26.0 26.0 90.0
Above 50% 25 10.0 10.0 100.0
Total 250 100.0 100.0

Interpretation

The above chart indicates that out of total 250 respondents, 48 respondent are invest upto
10% of his income, 112 respondent are invest upto 25% of his income, 65 respondent are
invest upto 50% of his income, and 25 respondents are invest above 50% of his income.
 8. According to you what is the average return from mutual fund?

Frequency Percent Valid Percent Cumulative

Percent

Valid 10-20% 39 15.6 15.6 15.6

20-30% 53 21.2 21.2 36.8
30-40% 88 35.2 35.2 72.0
40-50% 46 18.4 18.4 90.4
more than 50% 24 9.6 9.6 100.0
Total 250 100.0 100.0

Interpretation

The above chart indicates that out of total 250 respondents, 39 respondent are get 10-20% of
average return from mutual fund investment, 53 respondent are get 20-30% of average return,
88 respondent are get 30-40% of average return, 46 respondent are get 40-50% of average
return, 24 respondent are get more than 50% of average return.
 9. What is your investment horizon?

Frequency Percent Valid Percent Cumulative

Percent

Valid 1 year 29 11.6 11.6 11.6

2 year 62 24.8 24.8 36.4
3 year 89 35.6 35.6 72.0
4 year 28 11.2 11.2 83.2
more than 4 42 16.8 16.8 100.0
Total 250 100.0 100.0

Interpretation

The above chart indicates that out of total 250 respondents, 29 respondent time horizon of
investment is 1year, 62 respondent time horizon of investment is 2 year, 89 respondent time
horizon of investment is 3 year, 28 respondent time horizon of investment is 4 year, 42
respondent time horizon of investment is more than 4 year.
 10. While investing your money, how this factors affect your
decision?(strongly disagree, disagree, neutral, agree, strongly agree)
 Liquidity
 High return
 Professional management
 Diversification
 Brand image
 Risk
 Safety

Component Statement score dimension mean

1 Each mutual fund in the market is subject to a certain level 598 487 3.24
of risk
The risk profile statement gives you a clear assessment of 626 567 3.24
your risk based on all the investments you have made.
SEBI has strict rules that prevent a mutual fund operator 676 534 3.24
from converting all assets into cash and running away.
2 I invest in mutual fund because manager have investment 605 436 3.30
management skills.
I invest in mutual fund as it gives me benefit 730 655 3.30
of diversification with a small amount.
I transfer investments in my mutual fund to various 612 572 3.23
schemes.
3 I invest in mutual fund as it reduces volatility impact on 617 590 3.20
diversified portfolio.
A mutual funds value is judge every day and it has to 775 719 3.15
declare its holding every month.
4 I invest in mutual fund as it easy to switching between 553 548 3.38
funds.
One finds it difficult to take decision on investment also 742 593 3.18
investors are in confusion.
5 Experience of managing funds across market cycle of so 508 634 3.35
that I am able to get the fund manager
Brand image exercises are mostly taken up by foreign 755 609 3.20
players and big industrial houses.
6 I invest in mutual fund direct plans give higher returns 569 565 3.32
because they don‟t bill the marketing and other costs.
I invest in different scheme of mutual fund I can change 718 585 3.35
the ratio of investment at any time.
7 I invest in mutual fund as it reduces the time between when 761 652 3.60
I put the asset for sale till the time.
Bigger brand image are able to generate larger funds -535 487 3.16
through their offers.
8 I invest in mutual fund as it gives me free entry and exit. -568 569 3.26
I invest in mutual fund as it offers higher return than 591 610 3.26
recurring deposits.
Experience of managing funds across market cycle of so 531 634 3.35
that I am able to get the fund manager
Conclusion

- Majority male people are invest in mutual fund.

- Majority businessman are invest in mutual fund.
- Many people have a regular invest in mutual fund.
- Investor choose systematic investment plan rather than lump-sum for investment.
- Most People have a knowledge of a mutual fund by sources of a internet, because day
to day internet use are increase and minimum people are get knowledge of mutual
fund investment from sales representatives.
- Major people are aware only specific scheme of the mutual fund.
- Less people are invest in interval scheme and major people are invest in income
scheme.
- Major people time horizon of investment are 3 years.
- In study of this project each factors are different score, different dimension and
different mean.
Findings

The finding of the study provides some information that from the total sample of 250
systematic investment plan (the better way to invest in mutual fund).

- Study on systematic investment plan out of 250 respondents 177 respondent are
male and 73 are female.
- In study of this project majority investor are a businessman.
- In study of this project 57 respondent income are 5 lakh and above.
- Out of 250 respondent majority respondent are regularly invest in mutual fund.
- Out of 250 respondent majority respondent are invest in systematic investment plan.
- Most of people are aware source by internet. Out of 250 respondent 93 people
are source of internet.
- In this study out of 250 respondent only 47 respondent are fully aware and
other respondent are aware only specific scheme and partial knowledge of
mutual fund.
- Out of 250 respondent majority 118 respondent are invest in close-ended fund.
- Out of 250 respondent less people are invest in balanced scheme.
- Majority respondent are invest upto 25% of his income.
- out of total 250 respondents, 39 respondent are get 10-20% of average return from
mutual fund investment, and 24 respondent are get more than 50% of average
return.
- 89 respondents are investment time horizon is 3 year
- In study of this project each factors are different score, different dimension
and different mean.
Bibliography

https://www.slideshare.net

https://www.scribd.com

www.moneycontrol.com

www.valuereserch.com

www.investopedia.com
Annexure

QUESTIONAIRE :

Name :

Gender : male/female

Email Id :

Occupation: salaried, business, student, housewife, retired

Income (per annum) : 1-2 lakhs, 2-3 lakhs, 3-4 lakhs, 4-5 lakhs, 5 lakhs and above

1. Do you regularly invest in mutual fund?

 Yes
 No

2. Which way of investment in mutual fund you select?

 Lump-sum
 Systematic investment plan

3. Which are the primary sources of your knowledge about mutual funds as an
investment option?
 Television
 Internet
 Newspaper/journals
 Friends/relatives
 Sales representatives

4. Where do you find yourself as a mutual fund investor?

 Partial knowledge of mutual fund
 Aware only of any specific scheme in which you invested
 Fully aware

5. By structure in which type of scheme did you invested ?

 Open-ended fund
 Close-ended fund
 Interval schemes