1
Mutual Fund – As An Investment
Option For Middle Class People In
Mumbai
Bachelor of Management Studies
(Finance)
Semester: VI
(Academic year 2022-2023)
Submitted by
SAYYED FAZAL ABBAS
Roll No: 938
S.S. & L.S. PATKAR COLLEGE OF ARTS & SCIENCE
AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS
(AUTOMOUS- AFFILIATED TO UNIVERSITY OF MUMBAI)
S.V. ROAD, GOREGAON (WEST), MUMBAI-400062
2
Mutual Fund – As An Investment
Option For Middle Class People In
India
Bachelor of Management Studies
(Finance)
Semester: VI
(Academic year 2022-2023)
Submitted in partial fulfillment of the requirements
for the Award of Degree of B.M.S (Finance)
By
Sayyed Fazal Abbas
Roll No: 938
S.S. & L.S PATKAR COLLEGE OF ARTS & SCIENCE
AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS
(AUTONOMOUS –AFFILIATED TO UNIVERSITY OF MUMBAI)
S.V. ROAD, GOREGAON (WEST), MUMBAI-400062
3
CERTIFICATE
This is to certify that Ms./Mr. Sayyed Fazal Abbas has worked and duly
completed her/his Project Work for the degree of Bachelor of Management
Studies under the Faculty of Commerce in the subject of Finance and her/his
project is entitled, “Mutual Fund- As An Investment Option For Middle Class
People In Mumbai” under my supervision.
I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree or
Diploma of any University.
It is her/ his own work and facts reported by her/his personal findings and
investigations.
Seal of the College
Name and signature of
Guiding Teacher
Mrs. Sakshi Chogle
Date of submission:
4
DECLARATION BY LEARNER
I the undersigned Ms./Mr. Sayyed Fazal Abbas here by, declare that the work
embodied in this project work titled “Mutual Fund – As an Investment Option
For Middle Class People In Mumbai” , forms my own contribution to the
research work carried out under the guidance of Mrs. Sakshi Chogle is a result
of my own research work and has not been previously submitted to any other
University for any other Degree/ Diploma this or any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.
__________________
Mrs. Sakshi Chogle
(Internal Guide)
_________________
(External Guide)
_________________
Mrs. Swati Takkar
(Co-ordinator)
_________________
Dr. Pratibha Gaikwad
(Principal)
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ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance
to do this project.
I would like to thank my Principal, Mrs. Pratibha Gaikwad for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our Coordinator Mrs. Swati Takkar, for her
moral support and guidance.
I would also like to express my sincere gratitude towards my project guide Mrs.
Sakshi Chogle whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference
books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers who
supported me throughout my project.
_________________________
Signature
(Sayyed Fazal Abbas)
Roll No. 938
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INDEX
SR.NO.
1
2
3
4
5
6
7
8
9
10
TOPIC
ABSTRACT
INTRODUCTION
2.1 Background/History
2.2 Present Scenario
2.3 Future Plans
2.4 How To Invest In A Mutual Fund
2.5 Company Profile
LITERATURE REVIEW
OBJECTIVES OF STUDY
HYPOTHESIS
RESEARCH METHODOLOGY
6.1 Research Objective
6.2 Sampling
6.3 Data Analysis and Interpretation
6.4 Findings
EXPECTED CONTRIBUTION
CONCLUSIONS/RECOMMENDATIONS
FIELD WORK ANNEXURE
REFERENCES/BIBLIOGRAPHY
PAGE NO.
7
8-32
33-36
37
38
39-50
51-52
53-54
55
56
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ABSTRACT
Investing in mutual funds has emerged as an alternative investment plan for many investors
who want high returns with moderate risk. The purpose of this study is to find out the factors
that influence middle class people to invest in Mutual Funds. The study was conducted in
Mumbai, Maharashtra. The questionnaire is prepared using a five-point Likert scale. In the city
of Mumbai, the survey was conducted for 60 respondents. Exploratory factor analysis is used
to identify factors that influence investors' perceptions of mutual funds.
It also explains the Mutual Fund as financial product that how it is important to invest in MF
for the better investment and important to get better returns though Mutual Fund.
The project is on the Mutual fund awareness. A mutual fund is a scheme in which several
people invest their money for a common financial goal. The collected money invests in the
capital market, debt and the money market, which they earned, is dividend based on the number
of units which they hold. The mutual fund industry in India has seen dramatic improvements
in quantity as well as quality of product and service offerings in recent years. Along with this
project also touches on the aspect of Systematic Investment Plan and steps of how to invest in
Mutual Fund. A mutual fund is an investment in which more than one person invests money
for a common financial purpose.
The money raised will be invested in the capital market and the money they earn will be divided
based on the number of units they hold. This report explains the meaning of mutual fund and
the investors' awareness for investing in mutual funds with small amount of risk. It gives the
platform to their investors to be a part of mutual fund market.
It also explains the Mutual Fund as financial product that how it is important to invest in MF
for the better investment and important to get better returns though Mutual Fund.
Mutual funds are professional management, diversification, economies of scale, simplicity and
liquidity.
Basically, the project is to understand the investors, behavior & to give recommendations to
common investors on how to select mutual fund as a long-term investment option.
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CHAPTER NO:1
INTRODUCTION
INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS
` A mutual fund is a trust that pools the savings of a group of individuals with similar financial
goals. This sum of money is invested in order to achieve a specific goal. As a result, the fund's
joint ownership is "mutual," meaning that it belongs to all investors. The funds raised are
subsequently invested in capital market instruments such as stocks, bonds, and other assets.
The income generated by these assets, as well as the capital gains obtained, are distributed to
unit holders in proportion to the number of units they own. As a result, a mutual fund is the
best investment for the average person because it allows them to invest in a diversified,
professionally managed basket of securities at a reasonable cost. A mutual fund is a type of
investment vehicle that gives small investors access to a well-diversified portfolio of stocks,
bonds, and other assets. Each stakeholder shares in the fund's profit or loss. Units are given out
and can be redeemed whenever they are needed. Every day, the fund's Net Asset Value (NAV)
is calculated.
Securities investments are dispersed throughout a diverse range of companies and sectors,
which reduces risk. Because all stocks may not move in the same direction in the same
proportion at the same time, diversification decreases risk. Mutual funds issue units to investors
based on the amount of money they have invested. Unit holders are people who invest in mutual
funds.
Mutual fund industry started small in India due to his UTI Act which effectively created a small
savings sector within RBI. Over the course of 25 years, it has grown very well and provided
great returns to its investors. In 1989, therefore, the next logical step was to allow public banks
and financial institutions to establish mutual funds. Its success has led the government to allow
private sector funds to invest. Invade this area. The advantages of mutual funds are professional
management, diversification, economies of scale, simplicity and liquidity.
9
`
`
proportion as the amount he contributes to the corpus (the total amount of the fund). A mutual
fund investor, also known as a mutual fund shareholder or a unit holder, is a person who invests
in a mutual fund. The scheme's Net Asset Value (NAV) reflects any changes in the value of
investments made in capital market instruments (such as shares, debentures, and so on). The
net asset value (NAV) of a mutual fund scheme is the market value of its assets less its
liabilities. The NAV of a scheme is derived by dividing the total number of units issued to
investors by the market value of the plan's assets.
DEFINITION:
"A mutual fund is an investment that pools your money with the money of an unlimited number
of other investors. In return, you and the other investors each own shares of the fund. The fund's
assets are invested according to an investment objective into the fund's portfolio of investment.
Aggressive growth funds seek long term capital growth by investing primarily in stock of fast
growing smaller companies or market segments. Aggressive growth funds are also called
capital appreciation funds"
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CONCEPT OF MUTUAL FUND
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
equities, debentures and other securities. The income earned through these investments and the
capital appreciation realized (after deducting the expenses and profits of mutual fund
managers) is shared by its unit holders in proportion to the number of units owned by them.
Thus a Mutual Fund strives to meet the investment needs of the common man by offering him
or her opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The small savings of all the investors are put together to increase the buying
power and hire a professional manager to invest and monitor the money. Anybody with a
surplus of as little as a few thousand rupees can invest in Mutual Funds.
Direct Channel: This is suitable for investors who do not require agent advisory services.
Familiar with the fundamentals of the fund industry. This channel has the advantage of low
cost, which will significantly increase your revenue in the long run.
Indirect Channel: This channel is widely used in the fund industry. Agents are used to act as
intermediaries between funds and investors. These agents are not dedicated to mutual funds
and can trade multiple financial instruments. He has a deep knowledge of how financial
products work and can work as a financial advisor.
ADVANTAGES OF MUTUAL FUND
Mutual funds have become the investment vehicle of choice because they offer more than any
other form or investment option, especially for investors with limited capital resources and
limited ability to conduct in-depth research and market observation. Because it has its
advantages. The main advantages that mutual funds offer to all investors are:
•
Portfolio Diversification
•
Professional management.
•
Reduction/Diversification of Risk
•
Liquidity
•
Flexibility & Convenience
•
Reduction in Transaction cost
•
Safety of regulated environment
•
Choice of schemes
•
Transparency
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1. Portfolio Diversification: Each investor in the Fund is a joint owner of all of the
Fund's assets, allowing them to hold a diversified investment portfolio with a small
investment amount that requires a large amount of capital.
2. Professional Management: Even if an investor has a big amount of capital available
to him, he benefits from the professional management skills brought in by the fund in
the management of the investor's portfolio. The investment management skills, along
with the
needed research into available investment options. ensure a much better return than
what an
investor can manage own. Few investors have the skill and resources of their own to
succeed in today's fast moving, global and sophisticated markets.
3. Reduction/Diversification Of Risk: When an investor invests directly, all the risk of
potential loss is his own, whether he places a deposit with a company or a bank, or he
buys a share or debenture on his own or in any other from. While investing in the pool
of funds with investors. the potential losses are also shared with other investors. The
risk reduction is one of the most important benefits of a collective investment vehicle
like the mutual fund.
4. Reduction of Transaction Costs: What is true of risk as also true of the transaction
costs?
The investor bears all the costs of investing such as brokerage or custody of securities.
When going through a fund, he has the benefit of economies of scale; the funds pay
lesser costs because
of larger volumes, a bennet passed on to its investors
5. Liquidity: Often, investors hold shares or bonds they cannot directly, easily and
quickly sell.
When they invest in the units of a fund, they can generally cash their investments any
time, by selling their units to the fund if open-ended, or selling them in the market if
the fund is close-end.
Liquidity of investment is clearly a big benefit.
6. Convenience and Flexibility: Mutual fund management companies offer many
investor services that a direct market investor cannot get. Investors can easily transfer
their holding from one scheme to the other; get updated market information and so on.
7. Tax Benefits: Any income distributed after March 31, 2002 will be subject to tax in
the assessment of all Unit holders. However, as a measure of concession to Unit holders
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of open-ended equity-oriented funds, income distributions for the year ending March
31, 2003, will be taxed at a concessional rate of 10.5%. In case of Individuals and Hindu
Undivided Families a deduction un to Rs. 9.000 from the Total Income will be
admissible in respect of income from investments specified in Section 80L, including
income from Units of the Mutual Fund. Units of the schemes are not subject to WealthTax and Gift-Tax.
8. Choice of Schemes: Mutual Funds offer a family of schemes to suit your varying
needs over a lifetime.
9. Well Regulated: All Mutual Funds are registered with SEBI and they function within
the
provisions of strict regulations designed to protect the interests of investors. The
operations of Mutual Funds are regularly monitored by SEBI.
10. Transparency: You get regular information on the value of your investment in
addition to disclosure on the specific investments made by your scheme, the proportion
invested in each class of assets and the fund manager's investment strategy and outlook.
DISADVANTAGE OF MUTUAL FUND
•
No control over Cost in the Hands of an Investor
•
No tailor-made Portfolios
•
Managing a Portfolio Funds
•
Difficulty in selecting a Suitable Fund Scheme
1. No Control over Costs: An investor in a mutual fund has any control of the overall
costs of investing. The investor pays investment management tees as long as he
remains with the fund, albeit in return for the professional management and research.
Fees are payable even if the value of his investments is declining. A mutual fund
investor also pays fund distribution costs, which he would not incur in direct
investing. However, this shortcoming only means that there is a cost to obtain the
mutual fund services.
2. No Tailor-Made Portfolio: Investors who invest on their own can build their own
portfolios of shares and bonds and other securities. Investing through fund means he
delegates this decision to the fund managers. The very-high-net-worth individuals or
large corporate investors may find this to be a constraint in achieving their objectives.
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However, most mutual fund managers help investors overcome this constraint by
offering families of funds- a large number of different schemes- within their own
management company. An investor can
choose
from different investment plans and constructs a portfolio to his choice
3. Managing A Portfolio Of Funds: Availability of a large number of funds can actually
mean too much choice for the investor. He may again need advice on how to select a
fund to achieve his objectives, quite similar to the situation when he has individual
shares or bonds to
4. The Wisdom of Professional Management: That's right, this is not an advantage. The
average mutual fund manager is no better at picking stocks than the average
nonprofessional,
5. No Control: Unlike picking your own individual stocks, a mutual fund puts you in
the passenger seat of somebody else's car.
6. Dilution: Mutual funds generally have such small holdings of so many different
stocks that insanely great performance by a fund's top holdings still doesn't make much
of a difference in a mutual fund's total performance.
7. Buried Costs: Many mutual funds specialize in burying their costs and in hiring
salesmen who do not make those costs clear to their clients.
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2.1 BACKGROUND/HISTORY
On the initiative of the Government of India and the Reserve Bank, the mutual fund business
in India began in 1963 with the founding of Unit Trust of India. Though slow at first, growth
grew after non-UTI players entered the business in 1987.
The Indian mutual fund business has improved dramatically in the last decade, both in terms
of quality and quantity. Before the market's exclusivity came to an end, the Assets Under
Management (AUM) was Rs67 billion. The private sector's participation into the fund family
boosted Aum to Rs. 470 billion in March 1993, and it peaked at Rs. 1540 billion on April 10,
2004.
The mutual fund industry is clearly expanding at a rapid speed, and it may be divided into four
phases based on the sector's development. The following is a quick description of each phase.
First Phase-1964-87
The Reserve Bank of India formed the Unit Trust of India (UTI) in 1963 through an Act of
Parliament, and it operated under the Reserve Bank of India's regulatory and administrative
jurisdiction. UTI was de-linked from the Reserve Bank of India (RBI) in 1978, and the
Industrial Development Bank of India (IDBI) took over regulatory and administrative authority
in its place. UTI's initial scheme was the Unit Scheme of 1964. UTI had Rs.6,700 crores in
assets under control at the end of 1988.
Second Phase-1987-1993 (Entry of Public Sector Funds)
Non-UTI public sector mutual funds established by public sector banks, Life Insurance Corporation of
India (LIC), and General Insurance Corporation of India (GICI) made their debut in 1987.
(GIC). In June 1987, SBI Mutual Fund became the first non-UTI Mutual Fund, followed by
Canara bank Mutual Fund (Dee 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov 89), Bank of India (Jun 90), and Bank of Baroda Mutual Fund (Nov 90).
(Oct 92). GIC launched its mutual fund in December 1990, while LIC launched its mutual fund
15
in June 1989. The mutual fund sector had Rs.47,004 crores in assets under administration at
the end of 1993.
Third Phase-1993-2003 (Entry of Private Sector Funds)
The first Mutual Fund Regulations were enacted in 1993, requiring all mutual funds, with the
exception of UTI, to be registered and supervised. In July 1993, the former Kothari Pioneer
(since merged with Franklin Templeton) became the first private sector mutual fund to be
registered.
In 1996, a more complete and amended Mutual Fund Regulations replaced the SEBI (Mutual
Fund) Regulations of 1993. The SEBI (Mutual Fund) Regulations 1996 govern the industry
presently. There were 33 mutual funds with a total asset value of Rs. 1,21,805 crores at the end
of January 2003.
Fourth Phase-since February 2003
Following the abolition of the Unit Trust of India Act 1963 in February 2003, UTI was split
into two different corporations. One is the Unit Trust of India's Specified Undertaking, which
had Rs.29,835 crores in assets under management at the end of January 2003, representing the
assets of the US 64 plan, assured return, and various other schemes.
The second is the SBI-sponsored UTI Mutual Fund Ltd., which includes PNB, BOB, and LIC.
It is registered with SEBI and operates under the Mutual Fund Consolidation and Growth
Regulations. There were 29 funds managing Rs.153108 crores in assets in 421 programs at the
end of September 2004.
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Mutual funds can be classified as follow:
•
Based on their structure:
•
Open-ended funds allow investors to acquire and sell the fund's units at any time.
•
Funds with a limited number of investors. These funds only solicit money from
investors once. As a result, following the offer period, new investments in the fund
are not permitted. Units in a mutual fund that is listed on a stock exchange can be
•
Funds with a limited number of investors. These funds only solicit money from
investors once. As a result, following the offer period, new investments in the fund are
not permitted. Units in a mutual fund that is listed on a stock exchange can be
17
exchanged like stocks (E.g., Morgan Stanley Growth Fund). The majority of closeended fund New Fund Offers recently offered liquidity.
•
use a window on a regular basis, such as once a month or once a week. Unit redemption can be
done at predetermined intervals. As a result, such funds have limited liquidity.
•
Based on their investment objective:
Equity funds: These funds invest in stocks and other equity-related securities. Such
funds' performance is erratic, even losing, due to shifting share values. Short-term
market fluctuations, on the other hand, tend to flatten out over time, resulting in larger
returns with lesser volatility. At the same time, such funds can generate significant
financial gains, as equities have traditionally outperformed all asset types in the long
run. As a result, investing in equity funds should be considered for a minimum of 3-5
years. It can also be divided into the following categories
Index funds- In this situation, a major stock market index such as the BSE Sensex or
the Nifty is being followed. In terms of composition and individual stock weightings,
their portfolio closely resembles the benchmark dex.
Equity diversified funds- 100% of the capital is invested in equities spreading across
different sectors and stocks
i.
Dividend yield funds- it is similar to the equity diversified funds except that they invest
in companies offering high dividend yields
ii.
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.
iii.
Sector funds- Invest 100% of the capital in a specific sector. e.g.- A banking sector
fund will invest in banking stocks.
iv.
ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.
Balanced fund: They have both debt and equity in their investing portfolio. As a result,
they fall between equities and debt funds on the risk-return scale. Balanced funds are a great
option for investors who want to spread their risk across a variety of assets. The following are
the several types of balanced funds:
Debt-oriented funds- Investment below 65% in equities.
i.
Equity-oriented funds-Invest at least 65% in equities, remaining in debt.
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ii.
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 Tbills.
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 longterm debt papers.
vii.
MIP’s- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure
of 10%-30% to equities
viii.
FMP’s- fixed monthly plans invest in debt papers whose maturity is in line with that of
the fund.
INVESTMENT STRATEGIES
1.Systematic Investment Plan: This is a monthly investment plan in which a set amount is
invested on a set date each month. Post-dated cheques or direct debit facilities are used to make
payments. When the NAV is high, the investor receives fewer units; when the NAV is low, the
investor receives more units. The Rupee Cost Averaging method is used for this (RCA)
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2.Systematic Transfer Plan: in this case, an investor invests in a debt-oriented fund and
instructs a specified sum to be transferred to an equity scheme of the same mutual fund at a
predetermined interval.
3. Systematic Withdrawal Plan: If someone wants to take money out of a mutual fund, they
can do so in a set amount each month.
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2.2 HOW TO INVEST IN A MUTUAL FUND?
➢ One can invest in mutual funds by submitting a duly completed application form along
with a cheque or bank draft at the branch office or designated Investor Service Centres
(ISC) of mutual Funds or Registrar & Transfer Agents of the respective the mutual
funds.
➢ One may also choose to invest online through the websites of the respective mutual
funds.
➢ Further, one may invest with the help of / through a financial intermediary i.e., a Mutual
Fund Distributor registered with AMFI OR choose to invest directly i.e., without
involving or routing the investment through any distributor.
A Mutual Fund Distributor may be an individual or a non-individual entity, such as bank,
brokering house or on-line distribution channel provider.
Note : As per SEBI Mutual Fund Regulations, all MFDs must fulfil the following two
requirements before engaging in sale and/or distribution of mutual fund products, namely
•
•
•
•
•
Obtain the relevant certification of National Institute of Securities Management
(NISM); AND
Register with Association of Mutual Funds in India (AMFI ) and obtain AMFI
Registration Number (ARN).
Likewise, before being employed in sale and/or distribution of mutual fund products,
employees of MFDs are also required to obtain the relevant NISM certification and
register with AMFI and obtain Employee Unique Identification Number(EUIN).
One may also invest either online mode or via conventional paper based mode through
MF Utilities Pvt. Ltd. (MFU) – a technology based shared service platform for MF
transactions promoted by the mutual fund industry in respect participating mutual
funds. For more information please visit www.mfuindia.com
One can also buy mutual funds units through NSE – MFSS and BSE - StAR MF just
like a company stock. To avail this facility, one must complete a one-time online
registration with NSE or BSE, as the case may be. For more information on NSE –
MFSS and BSE - StAR MF, please visit www.nseindia.com / www.bseindia.com
KYC - A PRE-REQUISITE BEFORE INVESTING IN MUTUAL FUNDS. Before investing
in a mutual fund scheme, whether through online mode or via conventional paper based mode,
one must first complete the KYC process by filling up the prescribed KYC form. KYC stands
for "Know Your Customer" and is a term used for Customer Identification Process as a part of
account opening process with any financial entity. KYC establishes an investor’s identity &
address through relevant supporting documents such as prescribed photo id. (e.g., Passport,
Aadhaar or PAN card) and address proof. KYC compliance is mandatory under the Prevention
of Money Laundering Act, 2002 and Rules framed thereunder.
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REDEMPTION OF UNITS - USING REDEMPTION FORM In order to redeem funds through
offline mode, the unit holder needs to submit a duly signed Redemption Request form to the
AMC's or the Registrar’s designated office. In the redemption form one needs to fill in details
like unit holder’s name, folio number, scheme name including the plan details, and number of
units to redeemed (or the redemption amount desired). In addition, all the holders have to sign
the Redemption form. The proceeds from the redemption will be credited to the registered bank
account of the first named unit holder.
REDEMPTION OF UNITS - ONLINE Mutual funds can also be purchased and redeemed
online a mutual fund’s website. You simply have to log-on to the ‘Online Transaction’ page of
the desired Mutual Fund and log-in using your Folio Number and/or the PAN, select the
Scheme and the number of units (or the amount) you wish to redeem and confirm your
transaction. In addition, central service providers like CAMS (Computer Age Management
Services Pvt. Ltd.), Karvy, etc. offer the option of redeeming mutual fund bought from several
AMCs. You can download the form online or visit the nearest office. Please note that these
agencies might not service all the AMCs.
SYSTEMATIC INVESTMENT PLAN – SIP
Systematic Investment Plan (SIP) is an investment plan (methodology) offered by Mutual
Funds wherein one could invest a fixed amount in a mutual fund scheme periodically, at fixed
intervals – say once a month, instead of making a lump-sum investment.
The SIP instalment amount could be as little as ₹500 per month. SIP is similar to a recurring
deposit where you deposit a small /fixed amount every month.
SIP is a very convenient method of investing in mutual funds through standing instructions to
debit your bank account every month, without the hassle of having to write out a cheque each
time.
SIP has been gaining popularity among Indian MF investors, as it helps in Rupee Cost
Averaging and also in investing in a disciplined manner without worrying about market
volatility and timing the market. Systematic Investment Plans offered by mutual funds are
easily the best way to enter the world of investments over the long term.
Common sense suggests that “Buying low and selling high” is perhaps the best way to get good
returns on your investments. But this is easier said than done, even for the most experienced
investors. There are many factors at play when it comes to any market - debt or equity, and all
of them are inextricably linked.
SIP is a simpler approach to long term investing is disciplining and committing to a fixed sum
for a fixed period and sticking to this schedule regardless of the conditions of the market.
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RUPEE COST AVERAGING
Rupee cost averaging, as this practice is called, in a way ensures that you automatically buy
more units when the NAV is low and fewer when the NAV is high…e.g., an SIP of ₹1000 gets
you 50 units when the NAV is Rs. 20, but gets you 100 units when the NAV is Rs.10. The
average cost for buying those 150 units would be Rs. 2000/150 units i.e. ₹ 13.33.
However, please remember that the Rupee cost averaging does not assure profit, nor does it
protect one against investment losses in declining markets. It merely ensures disciplined &
regular investment in stock markets, which helps overcome the natural impulse to stop
investing in a falling or a depressed market or investing a lot, when markets are buoyant and
euphoric.
THE POWER OF COMPOUNDING
There is a great advantage with long-term investments, namely, compounding which is
considered one of the greatest mathematical discovery.
To put it in simple words, compounding is when the interest (or income) you earn is reinvested
in the original corpus and accumulated corpus continues to earn (& grow). Every time this
happens, your investment keeps growing, paving the way for a systematic accumulation of
money, multiplying over time.
To illustrate, a small amount of ₹1000 invested every month at an interest rate of 8% for 25
years would give you ₹ 9.57 Lakh! That means your investment of just ₹ 3 Lakh would have
grown three times over!
Here is a graph that represents the same for a time period of 15 years.
24
STARTING EARLY PAYS WELL
To get the best out of your investments, it is very important to invest for the long-term, which
means that you should start investing early, in order to maximize the end returns.
Let’s understand this better through an illustration –
Let's assume that two friends, both aged 25, decide to invest ₹ 2000 every month for a period
of 5 years and earn 8% p.a. on a monthly compounding basis. The only difference is that while
one starts investing promptly at the age of 25 itself, the other starts investing 10 years later at
the age of 35 years. Both decide to hold on to their investments till they turn 60. So while both
of them would accumulate principal investment of ₹1.2 Lakh over a period of 5 years, the
investment of the person who started early at the age of 25 appreciates to over ₹ 14 Lakh, the
investment of the second person who started later grows to only about ₹ 6 Lakh.
Thus, you can clearly see the difference between the two and the clear advantage of investing
early. So go ahead. Start investing through SIP today itself.
25
COMPANY PROFILE
The SBI Mutual Fund Trustee Company Private Limited was set up as a trust under the Trust
Act of 1882. This Trust controls the SBI Mutual Fund, one of India's largest and oldest MFs
The SBI Mutual Fund is a Joint Venture (JV) between one of India's largest and most profitable
banks, the State Bank of India, and Amundi, which is a French asset management company.
The SBI Mutual Fund was set up on June 29, 1987 and was incorporated on February 7, 1992,
it was India's second Mutual Fund after the Unit Trust of India started operations in 1963 In
July 2004, SBI decided to divest 37% of the
Fund and roped in Amundi as a partner Amundi is an asset management major created jointly
by Credit Agricole and Société Générale 581 MF has many firsts to its name. It was the first
Indian Mutual Fund player to launch a Contra fund, called the SBI Contra Fund, in 2013, SBI
Mutual Fund India acquired Daiwa Mutual Fund, part of the Daiwa Group of Japan Sal Mutual
Fund is the first in India to launch an ESG Fund An acronym for Environment, Social and
Governance, the and fund provides resources for sustainable investment in major markets. In
2015, the Employees Provident Fund of India invested Rs 5,000 Crore for the first time in a
Mutual Fund in India via SEIMF Senses ETFs or Exchange Traded Funds
As of March 2021, the SBI Mutual Fund manages assets worth Rs. 504455 21 crores in early
2019, it moved past Aditya Birla and HDFC Mutual Funds to emerge as the 3rd largest Mutual
Fund body in India based on Assets under Management or ALIM
The SBI ME Is registered with the Securities and Exchange Board of India or SEBI
How one can you invest in SBI Mutual Funds?
26
Mutual Fund investment not only provides a lot of benefits but can also help in reducing the
risk by investing in diverse portfolios if you are looking to invest in SBI Bank Mutual funds
such an investment can be made online as well as offline. The SBI mutual fund application via
offline mode can be done by filling up an investment application form. It you prefer to do it
online, the prerequisites of how can you invest in SBI MF online is given below
•
The applicant should be an existing SBI Bank account holder.
•
The applicant should be KYC Compliant
•
The status of the Savings Bank Account needs to be Single or Either/Survivor
•
The Account Opening Application Form needs to be signed by all the Bank Account
Holders
However, you can also invest in sbi Mutual Funds online on Groww the steps for which are
given below
How one can Invest in SBI MF on Grow
Investing in the most profitable SBI Mutual Fund online is easy and a relatively hassle-free
process. Read the process listed below to set up your account in no time at all.
step 1 First log in to your Grow account. If you do not have an account, you can register and
create a new one night
away Step 2: Upload your identification documents Valid documents made Aadhaar PAN Vote
to order Passport Using Licensed by either Central or State government
27
Step 3: Upload an address proof Any identifying document that carries your permanent address
is valid
Step 4 Determine your investment's duration
Step 5 Determine risk amount whether it is high, low or medium risk
Step 6 Select the best SBI Mutual Fund according to your criteria
Step 7 If you wish to invest a lumpsum amount, click on "invest One Time Alternatively, you
can start an SIP by clicking on "Start”
Your SBI Mutual Fund investment will reflect in your personal Grow account within 3-4
working days.
Top Fund Managers
This is the list of people who have made SBI Mutual Fund investment as an attractive
alternative in a fiercely competitive market
1. Mr. Ashwani Bhatia
Mr. Bhatia joined the State Bank of India in 1985 as a probationary officer and rose through
the ranks to become Deputy Managing Director. He has been on loan to the 581 Mutual Funds
Management Board since July 2018. He is currently the Managing Director and Chief
Executive Officer of 581 Mutual Funds.
28
Mr. Bhatia joined the State Bank of India in 1985 as a probationary officer and rose through
the ranks to become Deputy Managing Director. He has been on loan to the 581 Mutual Funds
Management Board since July 2018. He is currently the Managing Director and Chief
Executive Officer of 581 Mutual Funds.
2. Mr Nicholas Simon
Since 2015, when he was delegated from the Amundi Group of France, which owns a large
stake in the controlling business, Mr. Simon has worked as the SEI MF Group's Deputy CEO.
From 2006 to 2015, Mr Simon was the CEO of Real Estate as well as the CAAM for Real
Estate.
Mr Simon earned his postgraduate degree in law from Pans' Pantheon-Assas University. He
also holds a master's degree in business administration from the Toulouse School of Business.
On the Board, he represents the Amundi Group's interests. Mr. Simon has a broad
understanding of international banking. He has worked as the Director of Property at
From 2003 until 2005, Henderson Real Estate was based in France. From 1996 to 2002, he was
the CEO of General Real Estate. Mr Simon, as the Deputy CEO of SBI Life Insurance, has a
wealth of knowledge in market trends, inflation management, and outperforming the
competition.)
3. Mr. R.S. Srinivas Jain
Mr. Jain has approximately 20 years of experience with the State Bank of India and over 30
years in the financial services industry. At 581 Mutual Funds, he is the Executive Director and
Chiel Marketing Officer of Strategy and International Business.
M Jain, a graduate in commerce from the University of Bangalore with a background in cost
accounting, is credited with the SBI-backed MES' market dominance. The 561 M Fund was
awarded two years in a row by CNBC under his guidance.
29
The Most Preferred Brand is Avaaz. He was also instrumental in the brand being recognised
by Reader's Digest as a valuable site for investment management.
4. Me. DP. Singh
Mr Singh is the Executive Director and Chief Marketing Officer of SBI Mutual Funds'
domestic operations. He was previously the National Sales Head of SBI. Mr Singh holds a Post
Graduate Diploma in PMR and a Post Graduate Diploma in Commerce (Personnel
Management & Industrial Relations) Since 1998, he has been a member of the 581.
Mi Singh is generally credited with establishing the SBI Mutual Fund's presence in both rural
and urban client demographics. He has been in the vanguard of SBT's initiatives in Retail
Banking and Information Technology. He is quite interested in economics and politics.
5 Ms Aparna Nirgude
Ms. Nagude works at SBI Mutual Funds as the Chief Risk Officer. Since 2005, she has worked
in the Risk division: She previously worked as the Research Head at SE ME and is a graduate
of the Jamnalat Bajaj Institute of Management Studies.
She has previously overseen the investment management section of top SBI Mutual Funds as
well as the investment management section of the top SBI Mutual Funds.
6. Mr. Rahul Mayor: M Mayor works for 58 Mutual Fund as the Chief Investor Relations
Manager. He has extensive experience in retail banking analytics, business management,
investor relations, and distributor value propositions, with over 19 years of experience. He has
a PGDM in Finance and formerly worked with Franklin Templeton Asset Management and
Sundaram Asset Management Company Limited, in addition to SEIMFPL 2017. He provides
to Mutual Fund years of experience and understanding in the global Mutual Fund sector.
30
2.3 PRESENT SCENARIO
PRESENT POSITION OF MUTAL FUND
Mutual funds play a key role in resource mobilization and efficient allocation in
transition economies like India. Economic transitions are typically characterized by
changes in financial mechanisms, institutional consolidation, market regulation,
redistribution of savings and investment, and changes in inter-sectoral relationships.
These changes often have negative implications that undermine investor confidence in
capital markets. During this transition, mutual funds play a key role as resource efficient
alligators. Around the world, mutual funds have proven to be a credible vehicle for
change in financial intermediation, the development of capital markets and the growth
of the corporate sector. Mutual funds' active participation in promoting economic
development is also reflected in their overwhelming presence in financial and capital
markets. Investment funds have contributed significantly to stimulating both markets.
The spread of the equity cult has further increased the reliance of the corporate sector
on equity finance. The role of mutual funds in lending to companies has increased
significantly after the corporate sector allowed Indian mutual funds with his UTI units
to retain his 20% of public offerings. The share of illiquid assets such as LICs, PFs and
pensions increased slightly over the same period from 25.1% to 27.2%. Mutual funds
were the fastest growing institutions in the household savings sector during this period.
Households are increasingly turning to mutual funds due to increased market
complexity and increased investment risk in the high-inflation stock market.
As per data available on https://www.amfiindia.com/indian-mutual (Accessed on 5th
January 2022), the current status of mutual fund in India.
•
Average Assets Under Management (AAUM) of Indian Mutual Fund Industry
for the month of November 2021 stood at ₹ 38,45,378 crore20.
• Assets Under Management (AUM) of Indian Mutual Fund Industry as on
November 30, 2021, stood at ₹37,33,702 crore.
• The AUM of the Indian MF Industry has grown from ₹ 6.82 trillion as on
November 30, 2011, to ₹37.34 trillion as on November 30, 2021, more than 5
fold increase in a span of 10 years.
31
• The MF Industry’s AUM has grown from ₹ 16.50 trillion as on November 30,
2016, to ₹37.34 trillion as on November 30, 2021, more than 2-fold increase in
a span of 5 years
• The Industry’s AUM had crossed the milestone of ₹10 Trillion (₹10 Lakh
Crore) for the first time in May 2014 and in a short span of about three years,
the AUM size had increased more than two folds and crossed ₹ 20 trillion (₹20
Lakh Crore) for the first time in August 2017. The AUM size crossed ₹ 30
trillion (₹30 Lakh Crore) for the first time in November 2020. The Industry
AUM stood at ₹37.34 Trillion (₹ 37.34 Lakh Crore) as on November 30, 2021.
• The mutual fund industry has crossed a milestone of 10 crore folios during the
month of May 2021.2
• The total number of accounts (or folios as per mutual fund parlance) as on
November 30, 2021 stood at 11.70 crore (117 million), while the number of
folios under Equity, Hybrid and Solution Oriented Schemes, wherein the
maximum investment is from retail segment stood at about 9.52 crore (95.2
million).
32
2.4 FUTURE PLANS
Financial experts believe the future of Indian mutual funds is very bright. The Indian mutual
fund industry is estimated to reach Rs .09 crore by the end of March 2010 when considering
the total assets of Indian commercial banks. Over the next decade, the compound annual
growth rate is expected to increase by 13.4 %.
Looking at past developments and combining them with current trends, we can conclude that
the future of Indian mutual funds has many positives to offer investors.
a) Emphasis on better governance.
b) A mutual fund can penetrate into rural areas with simple and limited
products, such as the insurance sector in India.
c) Our savings rate is over 23%, the highest in the world. All that is required is
to channel these savings into the mutual fund sector.
d) We have about 29 mutual funds, which is much less than the US, which has
more than 800. There is a lot of room for expansion.
e) Class B and C cities are growing rapidly. Today, most investment funds
focus on A-class cities. Soon they will find space in the growing cities.
f) Many foreign AMCs are looking to enter the Indian market, such as USbased Fidelity Investments, which has more than US$1 trillion in assets
under management globally.
g) SEBI which allows Forex funds to set up commodity funds.
h) 100% growth in the last 6 years
i) To curb late business practices.
j) We feature financial planners who can provide need-based advice.
Net asset value is the market value of the system's assets minus its liabilities. NAV
per share is the fund's net asset value divided by the number of shares outstanding on
the valuation date.
Sales prices may include a sales commission. The selling price is the price you pay
when you invest in the program. Also called offer price.
Sales Load is a charge collected by a scheme when it sells the units. Also called as
Front-end load. Schemes that do not charge a load are called "No Load' schemes.
Repurchase Price, the price at which the Closed System will repurchase the shares,
which may include a redemption fee. This is also known as the asking price.
Buy-back or "back-end" fee, this is the fee charged by the system when buying back
shares from shareholders.
A Redemption Price is the price at which Open Schemes will redeem their shares and
Closed Schemes will redeem their shares at maturity. These prices are related to NAV
33
CHAPTER: 2
LITERATURE REVIEW
A literature review helps to understand the theoretical and conceptual framework of the
current research area. Furthermore, the literature review provides a basic basis for designing
studies, assists in study design and instrument development, and serves as a reference point
for interpreting current results.
Customers favors mutual funds because of their return potential, liquidity, and safety, but they
are uninformed of the systematic investing plan, according to Singh (2009), who conducted a
study on mutual fund awareness and acceptability. Investors will consider a number of factors
before investing in a mutual fund.
The majority of respondents are still unsure about mutual funds and have yet to establish an
opinion about them as an investment vehicle, according to the research. The majority of
respondents were unaware of the multiple purposes of mutual funds, according to the results.
Gender, income, and level of education have all had a significant impact on investors'
sentiments about mutual funds in terms of demographic concerns. Age and occupation, the
other two demographic characteristics, have not been found to influence investors' sentiments
about mutual funds.
Mr.Kohrana (2003). These three authors came to the conclusion that studies of the mutual fund
industry in 55 countries tested various hypotheses for why investors would prefer the fund
industry over two alternative asset management options: "do-it-yourself" options where
investors purchase primary assets and "opaque financial institution" options such as banking
or insurance investments. We find that countries with stronger rules, laws, and regulations have
a larger mutual fund sector, especially when mutual fund investors' rights are better
safeguarded, which is consistent with the law and economics literature.
34
Their findings, which show that certain types of regulation, such as those protecting fund
shareholder rights, contribute to a larger fund industry, call for more research. Probably in the
form of a thorough country analysis. Regulators in the European Union and others are
establishing recommendations to ensure that fund investors receive sufficient levels of
protection.
Sarish (2012) looked into mutual funds and their benefits and drawbacks. In India, the mutual
fund industry is one of the fastest growing businesses, with significant long-term growth
potential. Saving and investing with mutual funds is simple, accessible, and reasonable.
Professional management, diversification, variety, liquidity, affordability, simplicity, and ease
of recordkeeping, as well as stringent government regulation and complete transparency, are
all advantages of mutual funds.
LubosPastor and Stambhaugh(2001) found that the study constructs and implements a
framework in which pricing models and managerial talents are linked with information data to
select a mutual fund portfolio after investing in equity mutual funds. Non-benchmark assets
can help to account for regular variations in fund returns, making it possible to solve the
investment problem with a large number of funds
Transitional markets According to the author, how do mutual funds behave while investing in
emerging economies? Mutual fund flows, for one thing, aren't always predictable. Kaminsky,
Lyons, and Schmukler (1999) offer an overview of mutual fund activity in a stable
environment. Withdrawals from emerging economies were high throughout recent crises,
indicating that financial contagion was present. International mutual funds are one of the most
important sources of finance for emerging economies. Despite the fact that mutual funds have
become important actors in the integration of financial markets, little is known about their
investing strategies. allocation as well as strategy They begin by describing international
mutual funds' relative size, asset allocation, and country allocation. Second, they look at data
from both investors and fund managers to study fund behaviour during crises. They look at
data from both investors and fund managers. They discovered, for example, that equity
investment in emerging markets increased significantly in the 1990s, with mutual funds
accounting for a considerable amount of it.
35
Russ Wermers (2000) have measured the performance of the mutual fund industry from 1975
to 1994, and we decomposed fund returns and costs into various components. This
decomposition is made possible by employing a new data-base not previously available to
researchers. This database is created by merging a database of mutual fund holdings with a
database of mutual fund net returns, expenses, turnover levels, and other characteristics. With
the database, we are able to address issues that have been problematic to the study of mutual
Actively managed funds, particularly those with high turnover, face a greater tax cost. The
question of whether active fund managers create value after taxes is a hot topic right now.
Sahil is a young man from India (2012) Using CAPM, Jain looked into the performance of
equity-based mutual fund schemes in India. In the long run, private-sector businesses have
outperformed public-sector businesses. The best performers have been HDFC and ICICI. The
worst has been LIC. There hasn't been a single LIC mutual fund programme that has
outperformed the others. On the other side, ICICI's 11 out of 16 schemes and HDFC's 6 out of
9 schemes have outperformed. UTI has been a solid performer, with the bulk of its schemes
delivering the desired results. While five of the eleven UTI schemes fared averagely, four of
them outperformed. The findings clearly show that, over time, Private sector mutual fund
companies (HDFC and ICICI) have beaten public sector mutual fund companies over the last
15 years (LIC and UTI). According to a beta (risk) analysis, HDFC and ICICI mutual funds
are the least risky, while LIC is the most risky. One of the reasons for LIC's poor performance
is that 8 out of 9 schemes (89 percent) had a beta value larger than 80. In general, the private
sector mutual fund schemes have been less hazardous and more profitable than the public sector
ones, according to the data.
According to Dr. Shantanu and Charmi (2012), the financial sector and advancements in the
Indian financial markets have resulted in Mutual Funds becoming an important investment
outlet for consumers small investors. Small investors' investment habits, in particular, have
changed dramatically. A growing number of actors from both the public and commercial
sectors has joined the market with novel programs to meet the needs of Indian and international
investors. Mutual funds have provided a better choice for all sorts of investors, particularly
small investors, to receive the benefits of expertise-based equity investments. In this
circumstance, when various schemes are flooding the market, it is critical to analyze consumer
needs and determine which aspects have the greatest impact on those needs.
36
Mrs. P. Alekhya (2012) raises awareness about the value of mutual funds as an investment
option. The numerous mutual fund schemes provide investors a diverse selection of investment
options based on their risk tolerance and investment objectives. They also provide an attractive
return to investors. The study examines several schemes employed by various companies.
Mutual funds play a vital role in India. Mutual fund companies pool the savings of small
participants and invest the resulting large sums of money in many economic areas. They serve
as a conduit between small investors and the Indian capital market.
Dr. R.Narayanaswamy and V. Rathnamani (2013) investigated the performance of five largecap equity funds. It is obvious that all of the funds did well during the study period. The
performance of all the selected funds has been impacted by the decrease in the CNX nifty in
2011. In the end, all of the funds, with the exception of Reliance Vision, did well in the very
volatile market environment. In order to maintain consistent mutual fund performance,
investors must consider statistical factors such as alpha, beta, and standard deviation in addition
to NAV and total return while investing in mutual funds.
37
OBJECTIVES OF STUDY
1. To know the Preferences for the portfolios.
2. To find out the various parameters that an investor looks from an investment.
3. To know the investors level of information in open-end fund and also the various factors
that they give the impression of being from the Mutual Funds
4. Awareness about mutual fund.
5. To measure the satisfaction level of investors regarding mutual funds.
Scope of the study
A big boom has been witnessed in Mutual Fund Industry in recent times. A large
number of new players have entered the market and trying to gain market share in this
rapidly improving market.
The research was carried on in Mumbai. I had been sent at one of the branches of State
Bank of India Mumbai where I completed my Project work.
I surveyed on my Project Topic "A study of preferences of the Investors for investment
on the visiting customers of the Mutual Fund.
The study will help to know the preferences of the customers, which company. Mutual
Fund" portfolio, mode of investment, option for getting return and so on they prefer.
This project report may help the company to make further planning and strategy
38
HYPOTHESIS
For investors with surplus funds available for investment, there are many investment
opportunities in today's financial markets. You can invest in low risk but low return bank
deposits, corporate bonds and bonds. He can invest in stocks of companies with high risk and
relatively high returns. Recent stock market trends show that the average retail investor always
loses his in regular downtrends. People began choosing his portfolio his manager with
experience in the stock market to invest on their behalf. So there were wealth management
services offered by many institutions. However, it turned out to be too expensive for small
investors. These investors have found good refuge in mutual funds. The mutual fund industry
has undergone a lot of changes in recent years as multinational his companies expanded into
the country, bringing expertise in fund management from all over the world. Over the past few
months there has been a period of consolidation in the Indian mutual fund industry. Investors
now have a wide range of schemes to choose from, depending one's personal profiles.
(H0) = Equity funds outperform bonds and hybrid funds.
(H1) = Equity funds underperformed debt and hybrid funds.
39
CHAPTER: 3
RESEARCH METHODOLOGY
This research is based on both primary and secondary data, although primary data gathering
was prioritized because it is the most important aspect in attitude studies. One of the most
essential applications of research technique is that it aids in identifying the problem, gathering,
analyzing, and presenting an alternate solution to the problem. It also aids in the collection of
key information necessary by senior management in order to assist them in making better dayto-day and critical decisions.
Data sources:
The research is entirely based on original sources. Two types of data were taken into
consideration i.e. Secondary data & primary data. My major emphasis was on gathering the
primary data. Secondary data can only be used as a reference. Primary data gathering was used
in the research, and primary data was acquired via engaging with a variety of people. Secondary
data was gathered from a variety of journals and websites.
Primary Data:
Direct collection of data from the source of information, technology including personal
interviewing, survey etc.
Secondary Data:
Indirect collection of data from sources containing past or recent past information like Bank’s
Brochures, Annual publications, Books, Fact sheets of mutual funds, Newspaper & Magazines
etc.
Research Instrument:
40
constructed for my survey. Questionnaire consisting of a set of questions made to be filled by
various respondents.
Duration of Study:
The study was carried out for a period of two months, from 30th JANUARY to 02nd MARCH
2023.
41
6.1 RESEARCH OBJECTIVE
•
To assess investors’ perception regarding selection of mutual funds.
•
To evaluate customers investment pattern
•
To identify factors affecting equity mutual fund investments.
•
To study the relation between the demographic characteristics of investors (i.e., age,
gender, education, occupation, annual income, annual savings, marital status, size of
family) and individual investor’s behaviour.
•
To identify the consumer perception about mutual funds.
42
6.2 SAMPLING
❖ Sampling procedure:
The sample was drawn from customers/visitors of the State Bank of India, Boring Canal Road
Branch, regardless of whether or not they are investors or use the services. It was also gathered
through personal visits to individuals, official and informal conversations, and the completion
of a questionnaire. A mathematical/statistical tool was used to analyse the data.
❖ Sample unit:
People residing in city of Mumbai
❖ Sample size:
The sample size of my project is limited to 60 people only. Out of which only 10 people had
invested in Mutual Fund. Other 15 people did not have invested in Mutual Fund.
❖ Sample design:
Data has been presented with the help of bar graph, pic charts, line graphs etc.
Limitation:
➢ Some of the persons were not so responsive.
➢ Possibility of error in data collection because many of investors may have not given
actual answers of my questionnaire.
➢ Sample size is limited to 100 visitors of Mumbai out of these only 63.5 % had invested
in Mutual Fund.
43
➢ The sample size may not adequately represent the whole market.
➢ Some respondents were reluctant to divulge personal information which can affect the
➢ The research is confined to a certain part of Mumbai.
44
CHAPTER: 4
6.3 DATA ANALYSIS AND INTERPRETATION
45
46
47
48
.
49
Findings:
➢ In Mumbai, people in their 30s and 40s were in greater numbers. The age group of 4150 years had the second most investors, while the age group of under 30 years had the
least.
➢ In Mumbai, the majority of investors were graduates or postgraduates, with only a few
below the HSC level.
➢ The majority of investors in the Occupation group were government employees, with
private employees coming in second and agriculture coming in last.
➢ In terms of household income, those earning between Rs. 30,000 and 40,000 were the
most numerous, followed by those earning more than 35,000 and those earning less
than Rs. 10,000
➢ Approximately all respondents had a bank savings account, 76 percent invested in fixed
deposits, and just 60 percent invested in mutual funds.
➢ When it came to investment, the majority of respondents favoured High Return,
followed by Low risk, Liquidity, and Trust.
➢ Only 77.2% of respondents were aware of Mutual and its operations, while 22.8% were
unaware
➢ Only 63.5% of the 100 respondents had ever invested in a mutual fund, while 36.5%
had never done so
➢ Out of the 100 respondents, 18 percent were unaware of Mutual Funds, 50.8 percent
stated that there was no specific reason for not investing in Mutual Funds, and 31.1
stated that Mutual Funds are likely to have a higher risk.
➢ According to the respondents, the majority of investors have invested in Reliance or
SBIMF Mutual Funds, Kotak Prudential has a good brand position among investors,
and HDFC comes in second behind Others.
➢ Out of the 58 investors in SBIMF, 34.5% invested because of its link with the SBI
brand, 47.4% because of advisor advice, and 6% because of higher returns.
➢ The majority of investors who did not invest in SBIMF did so because they were
unaware of the fund, the second most due to agent advice, and the rest due to lower
returns.
➢ For future investing, the majority of respondents picked Reliance Mutual Fund, with
ICICI Prudential coming in second and SBIMF coming in third.
50
➢ Investors preferred to invest through Financial Advisors 36.7% of the time, AMC
(Direct Investment) 6.6% of the time, and Banks 56.7% of the time.
➢ Out of both types of investment modes, 44.6 percent favoured one-time investments
and 55.4 percent preferred SIPs.
➢ The most popular Portfolio was Equity, followed by Balance (a combination of both
equity and debt), while the least popular Portfolio was Debt.
➢ Maximum Number of Investors Preferred Growth Option for Returns, Dividend Payout
was second, and Dividend Reinvestment was third.
➢ The majority of investors did not wish to invest in Sectoral Funds, with only 33% of
investors wanting to do so.
51
CHAPTER: 5
EXPECTED CONTRIBUTION
Mutual fund Investing has a significant contribution when it comes to the development of the
Economy. The financial Market has seen a great upheaval in the early eighties and nineties.
Mutual Funds investment has acted as a bridge connecting the gap between the supply and
demand for funds in the financial markets. Since 2003, the Financial Sector has been on a
constant rise. The mutual fund Industry has acted on the forefront to contribute to the Indian
economy.
•
Development of Financial Sector:
The development of the financial sector strengthens the four pillars of the financial
system: efficiency, stability, transparency and inclusion. Foundation investments play
an important role in this development. They pool the resources of small investors and
thus increase participation in financial markets. Next, mutual funds provide services
to retail investors so that they can make informed decisions. Such detailed services
and analysis help reduce the risk factor for these retail investors. Hence, it helps
investors to reinvest in mutual funds. Our mutual fund sector has grown at a healthy
rate of nearly 20% per annum over the past decade.
•
Mutual Funds as a Source of Investment:
Since 2003, mutual funds have received an unprecedented boost. Indians usually save
up to 30% of our salary income which is very high. Mutual funds were a good choice
to invest salary class money. The diversification of investment systems allowed more
investors to pool and combine their assets. The total amount of savings in financial
saving is grew by a whopping 18% in 2011. Investors are now more inclined to invest
money in mutual funds than in physical assets. It has significantly increased assets
under management (AUM) over the last -5 years. AUM grew by a whopping 29%
from August 2011 to August 2015 due to introduction of new mutual funds.
Investment funds have had a positive impact on the financial sector in the form of
stable investment activity. Combined money is helpful in the development of
industry.
•
Household Savings Breakdown:
Mutual funds are pioneers in the investment field since last year. Household savings
channeled a good amount of money into mutual funds. Of the total household savings,
more than INR 50,000 was invested in stocks and bonds. Financial savings of
households grew by more than 7.5% of national income in 201
52
-2015. More than 15 million new individual investment portfolios were created last year. Net
investments in equity funds concern the amount observed earlier in 2008. Investors are
gradually moving away from the physical asset market. As real estate prices fall and
inflation-hedged asset classes like gold decline, people are moving into mutual funds. This
increases investment in financial savings. This increase in domestic mutual fund imports is
supporting stock prices.
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CONCLUSIONS/RECOMMENDATIONS
Conclusion
On the basis of survey and analysis, Mutual Funds are less risky but the people in Mumbai, as
in role of investors they are unaware about its characteristics and features like good returns,
diversification. More of the investors invest in Equity fund thinking of less risk and better
returns. Also, mutual funds are high cost because of tax consequences and inability of
management to guarantee a superior return. Their advantage is it can be easily bought or sell
as it is a professional management. Taking an initiative to make more awareness about Mutual
Fund in common people.
Running a successful Mutual Fund necessitates a thorough understanding of both the Indian
Stock Market and the psychology of small investors. This study attempted to comprehend the
financial behavior of Mutual Fund investors in relation to Brand Preferences (AMC). Products,
Channels, and so forth. Many people, I've noticed, are afraid of mutual funds. They believe
that their money will be at risk in a mutual fund. They'll need to know about mutual funds and
the phrases that go with them. Despite having money to invest, many people have not invested
in mutual funds due to a lack of information. As public knowledge and income rise, so does
the number of mutual fund investors.
The term "brand" has a significant impact on the investment. People invest in companies in
which they have faith or in which they are familiar. In Mumbai, there are numerous AMCs, but
just a few function successfully due to brand awareness. Some AMCs are underperforming,
despite the fact that some of their schemes are profitable, due to a lack of brand awareness.
Reliance, UTI, SBIMF, ICICI Prudential, and others are well-known brands that perform well
and have bigger assets under management than those with less well-known brands such as
Principle, Sundaram, and others Mutual fund distribution channels are also significant for
mutual fund investment. The most popular way to invest in mutual funds is through financial
advisors. They have the ability to persuade investors to switch from one investment option to
another. Because they do not have to pay an entry load, many investors prefer to invest their
money immediately through an AMC. Only individuals who are well-versed in mutual funds
and their operations, as well as those who have time, should invest directly
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Suggestions and Recommendations
➢ The most serious issue identified is ignorance. The advantages should be made known
to investors. Nobody will invest unless he is completely convinced. Investors should be
made aware that ignorance is no longer bliss and that they are losing money if they do
not invest.
➢ Mutual funds provide a number of advantages that no other single investment option
can match, but the majority of individuals have no idea what a mutual fund is. They
merely see it as a different way to invest. As a result, the advisors should make an effort
to adjust their views. Advisors should target a growing number of young investors, as
well as people towards the end of their careers, who would prefer to use advisors due
to a lack of competence and time.
➢ Individual Financial Advisors must be trained about the Fund/Scheme and its
objectives by the Mutual Fund Company, as they are the primary source of influence
over investors.
➢ Before making any investment, Financial Advisors should first inquire about the
investors'/customers' risk tolerance, as well as their needs and time constraints (how
long they want to invest). They can consider the customers if they examine these three
factors.
➢ Younger people under the age of 35 will be a crucial new client segment in the future,
therefore putting more effort into attracting younger customers who are interested in
investing should pay off.
➢ Customers with a graduate degree are easier to sell to, and there is a vast untapped
market for advisers to tap into. However, advisors must provide sound advice and highquality service to succeed.
➢ The Systematic Investment Plan (SIP) is one of the industry's newest creative products,
released by Asset Management firms. SIP is simple for monthly salaried people because
it allows them to invest in EMI. The majority of potential investors and prospects are
unaware of the SIP. Companies have a lot of room to tap into the salaried population.
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FIELD WORK ANNEXURE
1. Occupation:
2. What Yours Family’s Monthly income approx.?
3. What Kind of investment you have made so far?
4. While Investing Yours Money. Which Factor will you will prefer?
5. Are You aware About Mutual Funds and their Operation?
6. If yes, how did you know about Mutual Funds?
7. Have You ever invested in Mutual funds?
8. If Not Invented in Mutual funds? Then Why?
9. If yes, in which mutual fund you have invested?
10. Which channel will you prefer while investing in mutual fund?
11. When you invest in mutual fund which mode of investing will you prefer?
12. When you want to invest which type of mutual fund would you choose?
13. How would you like to receive the return every year?
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REFERENCES/BIBLIOGRAPHY
•
NEWS PAPERS
•
OUTLOOK MONEY
•
TELEVISION CHANNEL (CNBC AAWAJ)
•
MUTUAL FUND HAND BOOK
•
FACT SHEET AND STATEMENT
•
www.SBIME.COM
•
WWW.MONEYCONTROL.COM
•
www.AMFIINDIA.COM
•
WWW.ONLINERESEARCHONLINE.COM
•
www.MUTUALFUNDSINDIA.COM