SUMMER INTERNSHIP REPORT

AN ANALYSIS ON INVESTORS BEHAVIOUR REGARDING MUTUAL FUND

Submitted by

Pulkit Agarwal

A0102213049

MBA Class of 2015

Under the Supervision of

Ms. Vandana Gupta

Assistant Professor

Department of Marketing

In Partial Fulfillment of the Requirements for the Degree of

Master of Business Administration (Marketing & Sales)

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA

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DECLARATION

The title of Summer internship is

An Analysis on Investors Behavior Regarding Mutual Fund

I declare that (a) the work presented for assessment in this Summer Internship is my

original work, that it has not previously been presented for any other assessment and that

my debts (for words, data, arguments and ideas) have been appropriately acknowledged;

(b) work conforms to the guidelines laid by the University, and (c) Plagiarism for this

report has been checked using Turnitin software and is 6 %. The summary of report is

attached along with for reference.

Date: …………… Pulkit Agarwal

A0102213049

MBA – M&S (class of 2015)

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CERTIFICATE

This is to certify that Pulkit Agarwal student of Masters of Business Administration –

M&S at Amity Business School, Amity University Uttar Pradesh has completed the

Summer Internship on “An Analysis on Investors Behavior Regarding Mutual Fund”, in

Partial Fulfilment of the Requirements for the Degree of Master of Business

Administration – Marketing & Sales under my guidance.

The report has been checked for the plagiarism and it is acceptable.

Ms. Vandana Gupta

Assistant Professor

Department of Marketing

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ACKNOWLEDGEMENT

I take this opportunity to express my deep sense of gratitude to all those who have

contributed significantly by sharing their knowledge and experience in the completion of

this project work. I am greatly obliged to, for providing me with the right kind of

opportunity and facilities to complete this venture

My first word of gratitude is due to Mr. Vinayak Sharma (Industry guide), for his

valuable guidance, constant supervision and above all his continuous encouragement &

support during the tenure of this project.

I am highly thankful to Ms. Vandana Gupta (Faculty guide) for providing me with

regular inputs and shared her vast knowledge and expertise for completing this project.

Finally, I would also like to thank all my dear friends for their cooperation, advice and

encouragement during the long and arduous task of carrying out the project and preparing

this report.

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TABLE OF CONTENTS

i. Title page………………………………………,...

ii. Declaration……………………………………….ii

iii. Faculty guide Certificate………..………………..iii

iv. Certificate………………………………………...iv

v. Acknowledgment………………………………....v

vi. Table of contents……………………………........vi

vii. List of Figures…………………………………….vii

viii. Executive Summary……………………………...viii

ix. Introduction……………………………………......1

x. Company Profile………………………………......9

xi. Review of Literature………………………………17

xii. Research Methodology……………………………21

xiii. Data Analysis……………………………………...24

xiv. Findings……………………………………………39

xv. Recommendations…………………………………41

xvi. Conclusion…………………………………………43

xvii. Bibliography…………………………………….....45

xviii. Questionnaire……………………………………....47

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LIST OF FIGURES

S.No. FIGURES PAGE NO.

1 Figure 1.1 4

2 Figure 1.2 6

3 Figure 1.3 8

4 Figure 2.1 26

5 Figure 2.2 27

6 Figure 2.3 28

7 Figure 2.4 29

8 Figure 2.5 30

9 Figure 2.6 31

10 Figure 2.7 32

11 Figure 2.8 33

12 Figure 2.9 34

13 Figure 2.10 35

14 Figure 2.11 36

15 Figure 2.12 37

16 Figure 2.13 38

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EXECUTIVE SUMMARY

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(Investors Behavior Regarding Mutual Fund)

In a couple of years Mutual Fund has developed as a device for guaranteeing people’s

monetary prosperity. Mutual fund has helped the India development story as well as

helped families abuse into the accomplishment of Indian Industry. As data and

mindfulness is climbing more individuals are appreciating the profits of putting resources

into common store. The fundamental reason the amount of retail Mutual fund speculators

stays little is that eight in ten individuals in India don't have a clue about that Mutual fund

exists. Be that as it may once individuals are mindful of shared trust venture open doors,

the amount of individuals putting resources into Mutual fund will expand to upwards of

one in five individuals. The trick for changing over an individual with no learning of

shared store to another Mutual Fund client is to comprehend which of the potential

speculators are inclined to purchase Mutual fund and to utilize the right contentions

within the deals transform that clients will acknowledge as imperative and pertinent to

their choice. This venture provided for me an incredible learning background and at a

same time it provided for me enough space to actualize my explanatory capacity. The

investigation and counsel introduced in this Project report is focused around statistical

surveying on the sparing and speculation practices of the financial specialists and

inclination of the speculators for venture in common store. This report in future will help

to think about the speculator's inclination in the means of mutual fund, are they favor any

specific Asset Management Company (AMC), which kind of item they lean toward,

which choice (Growth or Dividend) they incline toward or which venture technique they

proceed(systematic financing arrangement or one time scheme). This task overall might

be isolated into two sections.

The primary section gives an understanding of Mutual Fund and its different viewpoints,

the organization profile, goals of the study, Research Methodology. One can have a short

learning about shared store and its fundamentals through the undertaking. The second

piece of the venture comprises of information and its investigation gathered through

review done on 98 individuals. For the gathering of essential information I made a survey

and studied 98 individuals. I likewise took meeting of numerous individuals the

individuals who were taking on at the Reliance Branch where I put up on a task. I went

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by different Amc’s in Meerut to get some learning identified with my subject. I

considered about the items and methodologies of different Amc’s in Meerut to know why

individuals like to put resources into those Amc’s. This task blankets the point "AN

ANALYSIS ON INVESTORS BEHAVIOR REGARDING MUTUAL FUND" The

information gathered (ippoloto, 1989)has been decently composed and introduced. I trust

the examination discoveries and conclusion will be useful

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INTRODUCTION

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A Mutual Fund is a professionally managed collective form of investment that pools

money from many investors and invests it in stocks, bonds, money market instrument and

other securities.

In a mutual fund, the fund manager, who is also known as the fund manager, trades the

funds, realizing capital gains or losses, a collects the dividend or interest income. The

investment regulated is passed along to the individual investors. The money earned

through these financing and the capital thanks acknowledged are imparted by its unit

holders in extent to the amount of units claimed by them. The major feature of the fund is

that the contributors and the beneficiaries are none other than the people who invest in

the mutual fund. The value of the share of the mutual fund, known as the net asset value

per share (NAV) is calculated on the daily basis as per the movement in the market on the

total value of the fund divided by the number of shares issued.

Since Indian economy is an open market and has started incorporation with the world

markets. Factors like increase in US interest rates, hike in crude prices, or other major

happenings in world market influences on the Indian stock market.

Although it is impossible for an individual investor to understand stock market and the

process of investing in the market consumes a lot of time. Mutual funds (whose fund

managers are paid to understand the market) provide an option of a care free investing.

Currently there are 33 mutual funds in India and a close to 400 mutual fund schemes. The

total funds under the mutual fund management in India are over Rs. 139000 crores. The

private funds accounts for around 77 percent.

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DEFINITIONS OF MUTUAL FUNDS

“Mutual fund is a corporation, which accepts money from investors and uses the same to

buy stocks, long-term bonds & short-term debt instruments used by issuers”.

-IERCE & JAMES.L

The SEBI Mutual Fund Regulations 1993 defines Mutual Fund as:

“Fund established in form of Trust by a Sponsor to raise money by the Trustees through

sale of units of the Public under one or more Schemes for investing in Securities in

accordance with these regulations”

-WESTON..J.FRED & BRIGHAM

“The mutual fund as an important vehicle for bringing wealth holders and deficit units

together indirectly”

-JAMES PIERCE

“Mutual fund as financial intermediaries which being a wide variety of securities within

the reach of the most modest of inventors”

-FRANK RELICY

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Figure 1.1

http://wealth18.com/basics-of-mutual-fund/

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The shared trust industry in India began in 1963 with the establishment of Unit Trust of

India, with the activity of the legislature of India and Reserve Bank of India. The

historical backdrop of shared finances in India is isolated into four different expressions.

Initial Phase – 1964-87:

Unit trust of India (UTI) was secured on 1963 by a show of parliament. It was organized

by the Reserve Bank of India and worked under the Regulatory and managerial control of

the Reserve Bank of India. In 1978 UTI was dislodged from the RBI and the Industrial

Bank of India (IDBI) expected control over the authoritative and managerial control set

up of RBI. The fundamental arrangement dispatched by UTI was Unit Scheme in 1964.

Prior to the end of 1988 UTI had Rs.6, 700 crores of trusts under organization.

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

In 1978 non-UTI, open segment shared trusts set up by open part banks and Life

Insurance Corporation of India (LIC) and General Corporation of India (GIC). SBI

Mutual Fund was the first non-UTI Mutual Fund built in June 1978 emulated by Canara

bank Mutual store (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct

92). LIC made its common reserve in June 1989 while GIC had set up its Mutual Fund in

December 1990.

At the end of 1993, the common trust industry had possessions under administration of

Rs. 47,004 crores.

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

With the section of Private Sector Funds in 1993, another period has begun in the Indian

common store industry, giving the Indian financial specialists a more extensive decision

of trust families. Additionally, in 1993 the first Mutual Fund Regulations was shaped,

under which each common store, with the exception of UTI were to be enlisted and

legislated. The 1993 SEBI (Mutual Fund) Regulation was substituted by a clearer and

changed Mutual Fund Regulations in 1996. The business now works under the SEBI

Regulation 1996.

The amount of common store organizations continued expanding, with numerous remote

shared stores creating in India furthermore the business has saw a few mergers and

acquisitions. By the end of January 2003, 33 Mutual Fund with composite store holdings

of Rs. 1, 21,805 crores.

Fourth Phase- February 2003

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In February 2003, after the revocation of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate substances. One was Specified Undertaking of the Unit Trust

of India with stakes under organization of Rs. 29,835 crores as by the end of January

2003, addressing exhaustively, the points of interest of 64 arrangements, ensured return

and some specific distinctive arrangements. The Specified Undertaking of Unit Trust of

India, working in guidance of a director and under the rules encompassed by organization

of India and does not go down the horizon of the Mutual Fund Regulations.

After that the UTI Mutual Fund, supported by SBI, PNB, BOB and LIC. It is enlisted

with SEBI and capacity following the Fund Regulations. With the division of the past

UTI which had in March 2000 more than Rs.76000 crores worth of benefits under

administration and with the establishment of an UTI Mutual Fund, adjusting to the SEBI

Mutual Fund Regulations, and with late mergers occurring among diverse private

division subsidizes, the shared trust industry has entered its present period of

solidification and development.

The chart demonstrates the development of advantages through the years.

Note:

Past UTI was divided into UTI Mutual Fund and the Specified Undertaking of the Unit

Trust of India viable from February 2003. The funds held by administration of the

Specified Undertaking have in this way rejected from the aggregate stakes of business in

general from February 2003 onwards.

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Figure 1.2

https://www.amfiindia.com/research-information

WORKING OF A MUTUAL FUND

:

SPONSOR:

Any individual, who is working alone or in the coordinated effort with an alternate body

corporate, builds a Mutual store.

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ASSET MANAGEMENT COMPANY:

A firm that contributes the pooled funds of retail speculators in stocks and other business

sector instrument. The speculation organization gives more than broadening, liquidity,

and expert administration, for a charge.

TRUSTEE:

The trustee organization holds the property of the common store in trust for the profit of

the unit holder.

MUTUAL FUND:

A firm begins in a manifestation of a trust to raise cash by offering the units to the

general population under one or m mineral plans for putting resources into securities,

including currency business sector instruments.

TRANSFER AGENT:

An exchange operator is selected by a common trust to keep up records of shareholder

records, ascertain and give profits, get ready and mail explanations and different notices.

CUSTODIAN:

Common subsidizes by law need to secure their portfolio securities by pacing them with

overseer. Basically all the shared stores are use banks as a caretaker.

UNIT HOLDER:

Unit holder is an individual who holds the unit in the plan of a shared st

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Figure 3

http://www.tatamutualfund.com/knowledge/mutual-fundas/overview

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COMPANY PROFILE

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Reliance Mutual Fund (RMF) has been built as a trust by the Indian Trusts Act, 1882

with the support of Reliance Capital Limited (RCL), as the Sponsor.

FOUNDER

Dhirubhai Ambani

Founder Chairman

Reliance Industries Limited, India

December 28, 1932- July 6, 2002

Major Group Companies:

Reliance Industries Limited, India’s largest private sector company.

INTRODUCTION

About Reliance Capital Asset Management Ltd:

Reliance Capital Asset Management, an organization enrolled by the Companies Act,

1956 which was selected to go about as the Investment Monitor of Reliance Mutual

Fund.

Reliance Company Asset Management Ltd. is a fully claimed alliance of Reliance Capital

Ltd. The whole invested capital (100%) of Reliance Capital Asset Management Ltd is

controlled by Reliance Capital.

“Reliance Company Asset Management Ltd. was sanction by SEBI as the Asset

Management Company vides their letter no IIMARP/1264/95 dated June 30, 1995. The

Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM

dated May 12, 1995and was corrected on August 12, 1997 in accordance with SEBI

(Mutual Fund) Regulations 1996. As per the IMA, RCAM is approved to act Investment

Manager of Reliance Mutual Fund. The total assets of Asset Management Company

incorporates inclination imparts as on March 31, 2005 is Rs.30.13 crores.”

http://reliancemutual.com/mutual/virtual/page review/

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RCAM has been enlisted as a portfolio chief vides SEBI Registration/No.inp000000423

and restored successful first August, 2003. RCAM has started these exercises. It has been

guaranteed that key faculty of the AMC, the frameworks, back office, bank and securities

records are isolated action insightful and there exists frameworks to restrict access to

inside data of different exercises. According to SEBI Regulations, it will further

guarantee that AMC meets the capital ampleness prerequisites, if any, independently for

every such movement. RCAM has been designated as the Investment Manager of

"Reliance India Power Fund", a Venture Capital Fund enrolled with SEBI vide

enrollment no. IN/VCF/05-06/062 dated June 16, 2005 yet this movement is yet to begin.

Reliance Mutual Fund was organized to dispatch diverse plans under which units are

issued to general society with a point of view to help the capital business division and to

give monetary masters the opportunity to make hypotheses in separated securities.

Reliance Mutual Fund (RMF) is one of the India's heading Mutual Fund, with Average

Assets Under Management (AAUM) of Rs.88,388 crores (AAUM for 30th April 09) and

a monetary master base of in overabundance of 71.53 Lacs. Bit of the Reliance- Anil

Dhirubhai Ambani Group, is the fastest created Mutual Funds in India. Reliance offers

money related experts an adjusted plan of things to meet contrasting theorist requirements

and has region in 118 urban groups in India. Reliance Mutual Fund dependably tries to

dispatch imaginative things and customer organization exercises to grow quality to

budgetary masters. "Reliance Mutual Fund arrangements are administered by Reliance

Capital Asset Management Limited, a sub division of Reliance capital Limited, which

holds 93.73% of the paid-up capital of RCAM, the balance paid up capital being control

by minority shareholders." Reliance Capital Limited. India's leading and snappiest

creating personal division monetary organizations associations, and rank among the

principle 3 private part budgetary in holding organization, life and general insurance,

personal quality and prohibitive hypotheses, stock broking and fiscal organizations.

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THE MAIN OBJECTIVE OF THE TRUST IS:

The fundamental target of the Trust is:

To bear on the movement of the Mutual Fund as may be allowed at law and detail

and devise different aggregate. Schemes of reserve funds and speculations for

individuals in India and abroad furthermore guarantees liquidity of ventures for

the unit holders.

To send Funds consequently rose in order to help the Unit holders gain sensible

profits for their reserve funds

To make such strides as may be fundamental every once in a while understand the

impacts without any restriction.

The Sponsors Reliance Capital Limited Corporate and Registered Office:

Reliance Capital Ltd. H Block, first Floor, Dhirubhai Ambani Knowledge City,

Koparkhairne, Navi Mumbai- 400710.tel.022-30327000, Fax.022-30327202

PRODUCTS AND SERVICES OF RELIANCE MUTUAL FUND

• Equity Schemes

Reliance Equity Fund:

(An opened – finished differentiated Equity Schemes.) The essential Investment

Objective of the plan is to look to produce capital thankfulness and give long time

development open doors by putting resources into portfolio constituted of value and value

related securities of main 100 organizations by business promotion and of organizations

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which are accessible in the subordinates section every once in a while and the optional

destination returns by putting resources into obligation and currency market securities.

Reliance Tax saver (ELSS) Fund:

(An Open-Ended Diversified Equity Scheme.) The essential destination of the plan is to

produce long haul capital gratefulness from a portfolio that is put transcendentally in

value and value related instrument.

Reliance Equity Opportunities Fund:

(An Open-Ended Diversified Equity Scheme). The essential financing destination of the

plan is to try to create capital gratefulness & giving long haul development open doors by

putting resources into a portfolio constituted of value securities & value related securities

and the optional goal is to produce predictable returns by putting resources into

obligation and currency market securities.

Reliance Vision Fund:

(An Open-Ended Diversified Equity Scheme). The essential financing target of the plan

is to attain long haul development of capital by venture in value and value related

securities through an examination based financing methodology.

Reliance Growth Fund:

(An Open-Ended Diversified Equity Scheme). The essential financing target of the plan

is to attain long haul development of capital by venture in value and value related

securities through an examination based financing methodology.

Reliance Index Fund:

(An Open-Ended Diversified Equity Scheme). The Investment objective under the Nifty

arrangement is to imitate the creation of the Nifty, with a perspective to try to create

returns, which could pretty nearly be the same as that of Nifty. The Investment target

under the Sensex arrangement is to copy the structure of the Sensex.

Reliance NRI Equity Fund:

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The essential financing destination of the plan is to produce ideal returns by putting

resources into value or value linked instruments basically taken out from the Companies

in the S&p BSE 200 Index.

Debt Schemes

Reliance Monthly Income Plan:

The essential financing target of the plan is to create normal pay with a specific end goal

to make customary profit installments to unit holders and the optional destination is

development of capital.

Reliance Medium Term Fund:

The essential financing target of the plan is to create normal pay with a specific end goal

to make customary profit installments to unit holders and the optional destination is

development of capital.

Reliance Short Term Fund:

The essential financing target of the plan is to create stable returns for speculators with a

transient financing skyline by putting resources into altered salary securities of a fleeting

development

Reliance Income Fund:

The essential financing goal of the plan is to create ideal returns reliable with moderate

level of danger. This salary may be supplemented by capital valuation for the portfolio.

Likewise, ventures might prevalently be profited Market Instruments.

Reliance Gilt Securities Fund:

The essential financing goal of the plan is to create ideal credit danger free returns by

putting resources into an arrangement of securities issued and ensured by the Central

Government and State Government

Reliance Liquid Fund:

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The essential financing goal of the plan is to create ideal returns predictable with

moderate levels of danger and high liquidity. Likewise, speculations might dominantly be

profited Market Instruments.

Reliance Fixed Maturity Fund- Series 1:

(A Closed Ended Income Scheme) The Primary financing destination of the plan is to

look to accomplish standard returns/ development of capital by putting resources into an

arrangement of altered wage securities typically developing in accordance with the time

profile of the arrangement with the goal of constraining investment rate unpredictability.

Reliance Fixed Maturity Fund-Series ll:

(A Closed Ended Income Scheme) The Primary financing destination of the plan is to

look to accomplish development of capital by putting resources into an arrangement of

settled wage securities ordinarily developing in accordance with the time profile of the

separate arrangements.

• Sector Specific Schemes

Reliance Banking Fund:

The essential financing destination of the plan is to try to create consistent returns by

energetically putting resources into value and value related securities of organizations in

the Banking Sector and organizations occupied with unified exercises identified with

Banking Sector.

Reliance Diversified Power Sector Fund:

The essential financing destination of the plan is to produce long haul capital increase by

putting dominantly in value and value related securities of organizations in the force

division.

Reliance Media & Entertainment Fund:

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The essential financing target of the plan is to create nonstop returns by putting resources

into value and value related or settled wage securities of Media & Entertainment and

other related organizations.

Reliance Pharma Fund:

The essential financing target of the plan is to look to create predictable returns by

putting resources into value and value related or altered salary securities of Pharma and

other related organizations.

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REVIEW OF LITERATURE

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In this area the writing study has been carried out by investigating the different

exploration studies done by the different analysts in this respect i.e the speculators

recognition and mindfulness in regards to the common store venture every once in a

while. In India, one of the soonest endeavors was made by NCAER in 1964 when an

overview of families was attempted to comprehend the state of mind towards and

inspiration for sparing of people. An alternate NCAER examine in 1996 broke down the

structure of the capital market and displayed the perspectives and mentality of individual

shareholders.

SEBI – NCAER Survey (2000):

It was done to gauge the amount of families and the number of inhabitants in

individual financial specialists, their monetary and demographic profile, portfolio size,

and speculation inclination for value and different investment funds instruments. This

is an exceptional and thorough investigation of Indian Investors, for; information was

gathered from 3,00,0000 geologically scattered rustic and urban families. A portion of

the applicable discoveries of the study are:

Family unit's inclination for instruments matches their danger observation; Bank

Deposit has a bid over all wage class; 43% of the non-financial specialist families

comparable to around 60 million family units (assessed) evidently need mindfulness

about stock exchanges; and, contrasted and low salary aggregates ,the higher pay

gatherings have higher offer of speculations in Mutual Funds (Mfs) implying that Mfs

have still not gotten to be genuinely the financing vehicle for little speculators. All

things considered, the study predicts that in the following two years (i.e., 2007 thus)

the speculation of families in Mfs is liable to build. (Note : Behavior is a response to a

circumstance. So as circumstance progressions, conduct gets adjusted. Consequently,

discoveries and expectations of conduct studies ought to be seen appropriately).

(Sharpe, 1966)

So as to assess the balanced danger execution of common stores presented the

measure known as prize to-variability proportion (presently Sharpe degree). This

proportion helps him to assess the reappearance of 34 open-end common subsidizes in

the period 1945-1963. It demonstrated that to a significant degree the capital business

was exceedingly proficient because of which larger part of the example performed

beneath as contrasted with the Dow Jones Index. Sharpe (1966) found that from 1954-

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1963 just 11 trusts beat the Dow- Jones Industrial Average (DJIA) while 23 stores

were beated by the DJIA. Study inferred that the common trusts were substandard

speculations amid the period. Results have additionally assessed that great store

directors prioritize on assessing hazard and giving expansion.

(Arditti, 1971):

It scrutinized the prize to-variability model proposed by Sharpe (1966) on the way that

the initial two minutes of the likelihood dissemination of returns is used. Creator

recommended that, a measure of the bearing and size of the dispersion's tail ought to

be incorporated in the investigation. It further asserted that financial specialists

favored positive skewness as higher return is suggested by the positive skewness.

Consequently stakes with generally low compensate –to-variability degrees would not

be second rate financing

Ippolito (1989):

They guided an examination to break down the suitability in capital markets when

data is absurd to acquire. Example of 143 conferred stores was demonstrated in the

1965 entry of Wiesenberger. The (Arditti, 1971) (ippoloto, 1989) (Ajay, 2007)

(Malkiel, 1995) (Sharpe, 1966) (P, 2007)dissection was carried out the time of 1965-

1984. Ippolito (1989) utilized CAPM model and made a relationship of results in the

ordinary trust industry, net of charges and costs, were basically indistinct to returns

accessible in record stores. It was exhibited that portfolio turnover and association

expenses were not essential to hold execution. The master affected that granted trusts

to higher turnover charges and costs, get rates of return sufficiently high to modify the

higher charges. Look at in addition regulated that the customary recoveries were able

in the exchanging and data social occasion works out.

(Malkiel, 1995)

They directed exploration to break down the execution of value shared stores for the

period 1971 to 1991. This study included an information set that incorporated the

comes back from all shared subsidizes in presence in every year of the period. In the

wake of analyzing the returns from all trusts he found that imparted saves neglected to

meet desires the business division. Survivorship inclination was thought to be the vital

bit of the examination. Neither considers also assessed the trust returns in the

association of the capital holding esteeming skeleton and none, of these found any

confirmation of excess return nor viewed any threat return relationship communicated

by the capital stake evaluating model. Study assumed that it was better for the

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monetary authorities to purchase a minimal effort record store than to pick an element

trust boss.

Arugaslan and Ajay (2008):

They inspected the danger balanced execution of US-based universal value stores

from 1994-2003. The dissection was ruined five-year period 1999-2003 and ten-year

period 1994-2003. For this a specimen of 50 vast US based global value trusts was

taken and another system old estimation Modigliani and Modigliani (M squared) was

connected. The execution was contrasted and both residential and worldwide

benchmarks files. The result demonstrated that the danger has great affect on the

engaging quality of stores. Higher return trusts may detach appeal because of higher

danger while lower return stores may be alluring to speculators because of the lower

hazard.

Vanniarajan T. and Gurunathan T.(2007):

They broke down a few components in their work on "Venture in Mutual stores: A

Customer Centric Analysis". It is underscored that MF associations are focusing on

adjusted things on account of hot contention. The study concentrates on critical

components prompting financing in common stores which are money related, center

item, subsidize quality, limited time measures, client desires and administration

quality

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RESEARCH METHODOLOGY

23

OBJECTIVES

The primary point of undertaking this study is to fulfill the accompanying target:

Understanding the investor perception towards Mutual Fund.

Analyzing the investment pattern of an investor.

Thoroughly understanding and assessment of Mutual Fund as an investment

alternative.

RESEARCH METHODOLOGY

Examination could be characterized as a systemized exertion to addition new

information. An exploration is done by distinctive philosophies which have their own

particular upsides and downsides. Research philosophy is an approach to tackle look into

in study and taking care of exploration issues alongside rationale behind them are

characterized through examination strategy.

We are in setting of our exploration concentrates on and clarify why it is, no doubt

utilized a specific strategy or system and why it is continuously utilized a specific

technique or method and why the others are not utilized. So research result is equipped

for being assessed either via specialist himself or by others.

Applied Context of the Research:

As the goal of the exploration concentrate on the impression of speculator's mindfulness

and desires towards Mutual store it will help the organization to expand its piece of the

pie, which is the essential target of shared trust businesses at this point. The Research

endeavors to study the conduct of financial specialists and mindfulness among the

populace of Meerut (U.p) in regards to the Mutual Fund Industry.

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Methods

Primary Data:

The example size of 98 respondents is taken and study is directed in Meerut area. Today

the shared trusts are getting to be rising speculator division. So we attempt to focus on the

individuals who have mutual fund plans furthermore who are intrigued however limited

by business sector hazard. An overview is led crosswise over different gatherings,

occupation, with distinctive salary levels. In the overview we attempt to discover the

different elements that impact the individual while putting money in the Mutual funds.

Secondary Data:

A lot of optional information has been gathered from secondary sources like :

As a piece of my venture I gathered some data from site, www.amfi.com,

www.reliancemutual.com, www.sebi.com and other related pages.

The leaflet, handouts and pamphlets supplied by dependence helped me to

assemble some data.

And likewise my task aide supplied every one of those vital information,

fundamental for the undertaking.

Research Design:

An examination outline gives the schema to be utilized as an aide within gathering and

examining information.

Descriptive Research:

Client study is one of the best illustrations of engaging exploration. This is one-shot

examination study at a given purpose of time, and comprises of a specimen of the number

of inhabitants in investment. Its focal points are that it gives a decent general picture of

the position at a given time. It can blanket numerous variable of investment, and is not

influenced by the development of components in the specimen, in light of the fact that

different components could be substituted for them

25

Statistical tool use for analyzing an investor’s behavior regarding

Mutual Fund is:

EXCEL SHEET

26

DATA ANALYSIS

27

Data Analysis

Knowing the awareness and perception of the customers is very important in any

industry. This provides insight into the customer behavior and his expectation from the

industry players. This survey attempts to know the mutual fund investor better. It

examines some interesting choices of the retail investor including the reason behind

investing in mutual funds and the risk tolerance levels of the investors. The investor’s

knowledge about the mutual fund and what according to him is the best mutual fund is

also analyzed. This Meerut city survey was conducted to know the retail investor

awareness and behavior about mutual funds. It is hoped that this survey in Meerut city

would go a long way in benefiting for Reliance Mutual Fund.

The total sample for the study was 98 across Meerut city.

28

Which Age group you belong to?

Table no 1 (a) showing age profile of respondents

S.No Age (in years) No. of Respondents Percentage

1 20-25 18 18%

2 25-40 40 41%

3 40-55 20 21%

4 55-60 15 15%

5 60-above 5 5%

Total 98 100

Figure 2.1

Interpretation:

In this survey I found out that maximum no of respondents belongs to the age group of

25-40 years.

18%

41%

21%

15% 5%

20-25

25-40

40-55

55-60

60-above

29

Which Income group you belong to?

Table No.1(c) shows the income wise profile of the respondents:

S.No Income (per anum) No. of Respondents Percentage

1 Less than 1.0 Lakh 8 8%

2 1.0-2.0 Lakh 20 20%

3 2.0-3.0 Lakh 24 25%

4 3.0-5.0 Lakh 36 37%

5 More than 5.0 Lakh 5 5%

6 No Response 5 5%

Total 98 100%

Figure 2.2

Interpretation:

In this survey I found that people with annual income between 3-5 lakh have most

number of respondents followed by income group of 2-3 lakh and 1-2 lakh. Mostly the

people with 1 lakh to 5 lakh of income group are the most no of people who incur the

benefits of mutual fund.

8% 20%

25%

37%

5%

5% less than 1.0 lakh

1.0-2.0 lakh

2.0-3.0 lakh

3.0-5.0 lakh

more than 5.0 lakh

No Response

30

What is your Qualification?

Table No.1 (e) shows qualification profile of the respondents:

S.No Qualification No. of Respondents Percentage

1 Undergraduates 6 6%

2 Graduates 38 39%

3 Postgraduates 40 41%

4 Others 1 1%

5 No Response 13 13%

98 100%

Figure 2.3

Interpretation:

The surveyed group is a well educated group with highest no. of respondent is post

graduate followed by 39% of graduates. This shows that the people with higher

qualification are aware about the mutual fund industry.

6%

39%

41%

1% 13%

Undergraduates

Graduates

Post Graduates

Others

No Response

31

How much do you understand or your knowledge about Mutual Fund?

This Table shows the knowledge of respondents about Mutual Fund

S.No. Knowledge of

Mutual Fund

No. of

Respondents

Percentage

1 Very good 4 4%

2 Good 8 8%

3 Average 32 33%

4 Poor 50 51%

5 No Response 4 4%

98 100%

Figure 2.4

Interpretation:

In this survey it was found that 51% of the respondents don’t know about mutual funds or

they just have slight idea about mutual funds while only 4% of respondents rated their

knowledge as very good. Here we can see that the knowledge about mutual funds is very

low among people.

4% 8%

33% 51%

4%

Very Good

Good

Average

Poor

No Response

32

Do you know that Mutual Fund is related to Share market?

This table shows knowledge of the respondents about Share market.

S.No. Mutual Fund related

to Share Market

No. of

Respondents

Percentage

1 Yes 32 33%

2 No 62 63%

3 Can’t say 4 4%

98 100%

Figure 2.5

Interpretation:

It was found that 63% of respondents don’t know that the mutual fund is related to share

market. They also unaware about the fact that mutual funds returns are affected by the

fluctuations in share market.

33%

63%

4%

Yes

No

Can't say

33

Which end-scheme do you prefer?

This section of survey was aimed to know the preference of investors regarding end-

schemes.

S.No. End-scheme No. of Respondents Percentage

1 Open End 68 69%

2 Closed End 30 31%

Total 98 100%

Figure 2.6

Interpretation:

In this survey I found out that 69% of investors prefer open ended scheme at as they

want to have an access of their money whenever they want this kind of liberty they

cannot have in close ended scheme which 31% of respondents prefer.

69%

31%

Open End

Closed END

34

What is your major objective or decision of investing in mutual fund?

This section of survey was aimed at understanding the main reason behind the investment

decision made by an individual. I tried to catch the factor that contributes in making of an

investment portfolio off an individual.

S.No Investment

objective

No. of Respondent Percentage

1 Capital Gain 20 21%

2 Generate Regular

Return

5 5%

3 Secure future 58 59%

4 Tax Benefits 15 15%

Total 98 100%

Figure 2.7

Interpretation:

It was found that securing the future is the major concerned of most of the respondent

which is 59% followed by capital gain at 21%, after that they consider tax benefits (14%)

and the least objective of the respondent is regular returns at 6%.

21%

5%

59%

15%

Capital Gain

Generate Regular Return

Secure Future

Tax Benefits

35

What are the factors which affect the decision making while investing in Mutual

Fund?

S.No. Factors Affecting

Decision

No of Respondents Percentage

1 Economic Scenario 18 18%

2 Company Image 44 45%

3 Fund Performance 20 21%

4 Fund manager

Image

2 2%

5 Tax Incentive 14 14%

Total 98 100%

Figure 2.8

Interpretation:

There are certain overall factors that tend to affect the investment decision of the

investor. I tried to know the respondent opinions on these macro factors that further

tend to affect their investment decision. The survey showed that company image act

as the determining factor for their investment with 44%. The second most important

factor was Fund performance at 21% followed by economic scenario at 19%.

18%

45%

21%

2% 14%

Economic Scenario

Company Image

Fund Performance

Fund Manager Image

Tax Incentive

36

What is your Investment Horizon?

In this survey I tried to know that how long an investor can hold their money in the

market before needing access to it.

S.No Investment Horizon No. of Respondents Percentage

1 Up to 2 years 15 15%

2 2-3 years 24 25%

3 3-5 years 35 36%

4 5-10 years 18 18%

5 Above 10 years 6 6%

Total 98 100%

Figure 2.9

Interpretation:

In this survey respondent are not willing to keep their money invested for a very long

period of time as 36% of respondents can keep their money invested for 3-5 years and

25% of respondents can keep their money invested for 2-3 years followed by 18% of

respondents for 5-10 years. Only 6% of people are willing to keep their money

invested for more than 10 years.

15%

25%

36%

18%

6%

Up to 2 years

2-3 years

3-5 years

5-10 years

above 10 years

37

What is your Information source regarding Mutual Funds?

S.No. Information

Sources

No. of Respondents Percentage

1 Print Media 28 29%

2 Electronic Media 20 20%

3 Friends/Relatives 6 6%

4 Financial Advisors 9 9%

5 Personal Analysis 14 14%

6 Agent 21 22%

98 100

Figure 2.10

Interpretation:

In this survey I found out that the major role of information source about mutual fund

is Print media that affect the initiative of the people toward mutual fund at 29%

followed by Agents who lay a huge impact on the investor’s decision at 22%

followed by Electronic media at 20%. These three play a major role in influencing the

decision of an investor.

29%

20% 6%

9%

14%

22% Print Media

Electronic Media

Friends/Rea=latives

Financial Advisors

Personal analysis

Agent

38

What are your Investment Avenues?

S.No. Investment

Avenues

No. of Respondents Percentage

1 Post Schemes 10 10%

2 Insurance 4 4%

3 Bank 66 68%

4 Share Market 3 3%

5 Mutual Fund 7 7%

6 Government

Securities

8 8%

98 100%

Figure 2.11

Interpretation:

In this survey, I asked the respondents to select the investment avenues they would

prefer to keep their investment portfolio. 68% of investor preferred to have bank

savings as one of the investment avenue as they believe that bank deposits are the

safest option. While 12% of the investor said that they would certainly like to have

post office schemes as one of their preferred investment avenues.

10% 4%

68%

3% 7% 8%

Post Schemes

Insurance

Bank

Share Market

Mutual Fund

Government Securities

39

How much return do you expect from Mutual Funds?

S.No. Return Expectation

From Mutual Funds

No. of Respondents Percentage

1 5-10% 5 5%

2 11-15% 24 25%

3 16-20% 30 31%

4 More than 20 15 15%

5 Can’t Say 4 4%

Total 98 100%

Figure 2.12

Interpretation:

In this survey I found out that most of the respondent expects a return of 16-20%

from the invested amount at 31% followed by the return range of 11-15% at 25% and

15% of respondents expects a return of more than 20%.

5%

25%

31%

15%

5-10%

11-15%

16-20%

More than 20

Can't Say

40

Which Investment schemes do you prefer while buying a Mutual fund?

S.No. Investment Pattern

Preferred in Mutual

Fund

No. of Respondent Percentage

1 Growth Schemes 40 41%

2 Balanced Schemes 10 10%

3 Sector Specific

Schemes

6 6%

4 Liquid Schemes 8 8%

5 ELSS 18 19%

6 Can’t Say 16 16%

Total 98 100%

Figure 2.13

Interpretation:

In this survey respondents prefer to invest in growth scheme which is an equity

scheme and a very volatile scheme.41% of respondents goes for growth scheme

followed by 19% of people who opt for tax saver scheme and 16% of respondents are

confused in selecting a scheme and only 8% of respondent prefer liquid scheme as

they consider liquid scheme as a low return investment scheme

41%

10% 6% 8%

19%

16% Growth Schemes

Balanced Schemes

Sector Specific Schemes

Liquid Schemes

ELSS(Tax Saver Scheme)

Can't Say

41

FINDINGS

42

FINDINGS

The finding is concluded after the analysis of the responses shown and received in the

questionnaire and through interview of employees.

Most of the people do not have even an average knowledge about mutual funds.

People who usually invest in a mutual fund mostly belong to the age group of 25-

40 years.

Most of the people have an impression that these funds are not safe due to high

volatility.

People are less interested in knowing about the product as they have a pre

assumption that mutual fund is always a high risk and low return investment.

Most of the people consider open ended scheme as a good option because they

need a freedom to access their investment at any time they want.

People consider banks as the safest option to invest rather than mutual fund.

The major objective of the people to invest in the mutual fund is to secure future

and capital gain out of the investment.

The major source of information about mutual fund is print media and electronic

media.

People usually like to invest in growth schemes and tax saver ELSS (Tax saver

schemes)

Most of the people expect 16-20% of the returns from a mutual fund.

Most of the people are impatient and does not like to keep their money invested

for more than 5 years.

43

RECOMMENDATIONS

44

There should be more awareness made about the Mutual Fund companies and

their services by giving more advertisement.

Mutual Fund companies should go for joint venture with the big corporate houses.

Mutual fund companies should organize some events to build their brand image in

the minds of people.

As per customer’s point of view, they feel that mutual fund companies should

open more branches for the smooth access.

Give proper training to the agents or sales person so that they can take up the

queries of the investors effectively

A seminar or programs related to mutual fund should be conducted where the

information about the product is highlighted including the risk factor associated

with the different classes of assets.

45

CONCLUSION

46

CONCLUSION

As analyzed, people are rarely aware about mutual funds as people are not properly

informed about the policies but when they made aware they shows a little interest in

getting more information about the funds. By this we can say that mutual fund is in its

initial growth stage today and soon will rise at a great level.

Mutual funds have been compared to ULIP (Unit Linked Insurance Policies), people

are more aware about insurance policies than mutual fund which takes more customer

to the insurance sector but slowly as people are getting more aware of the funds they

will surely start investing in mutual funds. Many investors preferred to invest in

mutual fund in order to have high return at low level of risk but that is not always

possible as mutual funds deals with share market as well in which market is highly

volatile but if the investors have patience then they can enjoy a good amount of return

from their investment.

As mutual funds companies are showing a huge growth and recently provided a good

amount of return to the investors and with the recent tax benefit in the union budget

people will invest more.

47

BIBLIOGRAPHY

48

Bibliography

Ajay, A. a. (2007). Evaluating large US-based equity mutual funds using risk-adjusted

performance measures.

Arditti. (1971). Another look at mutual fund performance .

ippoloto. (1989). Efficiency with costly information.

Malkiel. (1995). Returns from investing in equity Mutual fund .

P, V. T. (2007). Investing in Mf's: A customer centric Analysis".

Sharpe. (1966). Mutual Fund Performance.

Websites

www.amfindia.com

www.mutualfundsindia.com

www.sebi.gov.in

www.reliancemutual.com

www.rbi.org.in

http://www.tatamutualfund.com/knowledge/mutual-fundas/overview

http://wealth18.com/basics-of-mutual-fund/

49

QUESIONNAIRE

50

Quesionnaire

Please go through the following questionnaire and identify the appropriate responses for each of them.

There is no such thing as a correct answer, so feel free to respond. Please forward it as many people as you

can.

Disclaimer: Your response via this questionnaire will be used strictly for academic purposes. There will not

be any commercial solicitation or usage of the response in any kind / form whatsoever.

What is Your good name?

Gender?

o Male

o Female

How much do you understand about mutual fund or what is your knowledge level about mutual fund

o Very Good

o Good

o Average

o Poor

o No Response

What is your annual income?

o Less than 1 lakh

o 100000-200000

o 200000-300000

o 300000-500000

o More than 5 lakh

o No response

51

What is your Qualification?

o Undergraduates

o Graduates

o Post Graduates

o Others

o No response

How much do you understand or your knowledge about Mutual Fund?

o Very Good

o Good

o Average

o Poor

o No Response

Do you know Mutual Fund is related to Share market?

o Yes

o No

o Can't Say

Which end-scheme do you prefer?

o Open-End

o Closed End

What is your major objective of investing in Mutual Fund?

o Capital Gain

o Generate Regular Return

o Secure Future

o Tax Benefits

o Option 5

52

What are the factors which affect the decision making while investing in Mutual Fund?

o Economic Scenario

o Company Image

o Fund Performance

o Fund manager Image

o Tax Incentive

What is your Investment Horizon?

o Up to 2 years

o 2-3 years

o 3-5 years

o 5-10 years

o Above 10 years

What is your Information source regarding Mutual Funds?

o Print Media

o Electronic Media

o Friends/Relatives

o Financial Advisors

o Personal Analysis

o Agent

What are your Investment Avenues?

o Post Schemes

o Insurance

o Bank

o Share Market

o Mutual Fund

o Government Securities

53

How much Return do you expect from Mutual Funds?

o 5-10%

o 11-15%

o 16-20%

o More than 20

o Can't say

Which Investment schemes do you preferred while buying a Mutual Fund?

o Growth Schemes

o Balanced Schemes

o Sector Specific Schemes

o Liquid Schemes

o ELSS (Tax saver Scheme)

o Can't Say

Anything you would like to add about Mutual Fund

Your Welcome

Submit