mutual funds Data Analysis and Interpratation

CHAPTER-1

INTRODUCTION

1.1 GLOBAL SCENARIO OF THE MUTUAL FUND INDUSTRY:

Structural changes in the global economic environment have, over the year; led to the emerged of

a strong market economy and facilitated the growth of the mutual fund industry, particularly

since the 1980s’. A market economy depends more on growth led by the stock market than by

bank finance. Since the mutual fund industry is a strong pillar of the stock market system, it got a

boost with the emergence of a strong market economy. Mutual funds found increasing

acceptance also because they have the capacity to absorb the instability and uncertainties that

characterize the stock market system. The rise in inflation, reduction in real interest and growing

complexities in the market provide tremendous opportunities to mutual funds. For these reasons,

mutual fund industry began to thrive well particularly during the 1990s’ in not only the

developed countries, but the newly industrialized and developing countries as well. The

immediate boom to mutual fund, however, was provided by the prolonged economic boom in the

US, which fuelled dynamic growth in the stock market, and consequently in the mutual fund

industry. In India too, the growth of the stock market in the early 1990s, gave rise to

unprecedented growth in the mutual fund industry. Growth was unprecedented in the 1990s, with

the total increasing from US$4156451 million in 1993 to US$7651618 million in 1998. While

the assets of the U.S. and non-U.S. mutual funds were 49.8% and 51.2%, respectively, in 1993

they amounted to 63.9% and 36.1% respectively.

During the same period, the assets of open ended mutual funds worldwide grew by 17% p.a. The

growth of asset of non US mutualfunds, however was much lower. In terms of the open ended

mutual fund investment companies worldwide, with an unprecedented rise from 24474 in 1993

to 35424 in 1996. However the number decline marginally to 31570 in 1998.The rising trend

continued in the US though, with the number increasing from 4537 in 1993 to 6254 in 1996 and

to 7248 in 1998. Commensurately, the share of US increased from 18.5% to 77%. The top five

countries in terms of the open ended mutual funds in 1998 US, France, Japan, Spain, and UK.

1

1.2 INDIAN SCENARIO OF THE MUTUAL FUND INDUSTRY:

The Indian Mutual fund industry has witnessed considerable growth since its inception in 1963.

The assets under management (AUM) have surged to Rs 4,173 bn in Mar-09 from just Rs 250

mn in Mar-65. In a span of 10 years (from 1999 to 2009), the industry has registered a CAGR of

22.3%, albeit encompassing some shortfalls in AUM due to business cycles. The impressive

growth in the Indian Mutual fund industry in recent years can largely be attributed to various

factors such as rising household savings, comprehensive regulatory framework, favorable tax

policies, and introduction of several new products, investor education campaign and role of

distributors.

In the last few years, household’s income levels have grown significantly, leading to

commensurate increase in household’s savings. Household financial savings (at current prices)

registered growth rate of around 17.4% on an average during the period FY04-FY08 as against

11.8% on an average during the period FY99-FY03. The considerable rise in household’s

financial savings, point towards the huge market potential of the Mutual fund industry in India.

Besides, SEBI has introduced various regulatory measures in order to protect the interest of

small investors that augurs well for the long term growth of the industry. The tax benefits

allowed on mutual fund schemes (for example investment made in Equity Linked Saving

Scheme (ELSS) is qualified for tax deductions under section 80C of the Income Tax Act) also

have helped mutual funds to evolve as the preferred form of investment among the salaried

income earners. Besides, the Indian Mutual fund industry that started with traditional products

like equity fund, debt fund and balanced fund has significantly expanded its product portfolio.

Today, the industry has introduced an array of products such as liquid/money market funds,

sector-specific funds, index funds, gilt funds, capital protection oriented schemes, special

category funds, insurance linked funds, exchange traded funds, etc. It also has introduced Gold

ETF fund in 2007 with an aim to allow mutual funds to invest in gold or gold related

instruments. Further, the industry has launched special schemes to invest in foreign securities.

The wide variety of schemes offered by the Indian Mutual fund industry provides multiple

options of investment to common man.

2

PERFORMANCE OF MUTUAL FUND IN INDIA:-

Let us start the discussion of the performance of mutual funds in India from the day the concept

of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or

rather to those who believed in savings, to park their money in UTI Mutual Fund. For 30 years it

goaled without a single second player. Though the 1988 year saw some new mutual fund

companies, but UTI remained in a monopoly position. The performance of mutual funds in India

in the initial phase was not even closer to satisfactory level. People rarely understood, and of

course investing was out of question. But yes, some 24 million shareholders were accustomed

with guaranteed high returns by the beginning of liberalization of the industry in 1992. This good

record of UTI became marketing tool for new entrants. The expectations of investors touched the

sky in profitability factor. However, people were miles away from the preparedness of risks

factor after the liberalization. The Assets Under Management of UTI was Rs. 67bn. by the end of

1987. Let me concentrate about the performance of mutual funds in India through figures. From

Rs. 67bn. the Assets Under Management rose to Rs. 470 bn. In March 1993 and the figure had a

three times higher performance by April 2004. It rose as high as Rs. 1,540bn. The net asset value

(NAV) of mutual funds in India declined when stock prices started falling in the year 1992.

Those days, the market regulations did not allow portfolio shifts into alternative investments.

There was rather no choice apart from holding the cash or to further continue investing in shares.

One more thing to be noted, since only closed-end funds were floated in the market, the investors

disinvested by selling at a loss in the secondary market. The performance of mutual funds in

India suffered qualitatively. The 1992 stock market scandal, the losses by disinvestments and of

course the lack of transparent rules in the SEBI.

PHASES OF MUTUAL FUNDS:

FIRST PHASE – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was setup by

the Reserve Bank of India and functioned under the Regulatory and administrative control of

the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial

3

Development Bank of India (IDBI) took over the regulatory and administrative control in place

of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had

Rs.6,700crores of assets under management.

SECOND PHASE – 1987-93(ENTRY OF PUBLIC SECTOR FUNDS)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks

and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India

(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987

followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),

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

92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in

December 1990. At the end of 1993, the mutual fund industry had assets under management of

Rs.47,004crores.

THIRD PHASE – 1993-2003(ENTRY OF PRIVATE SECTOR FUNDS)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year

in which the first Mutual Fund Regulations came into being, under which all mutual funds,

except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged

with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The

1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised

Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund)

Regulations 1996. The number of mutual fund houses went on increasing, with many foreign

mutual funds setting up funds in India and also the industry has witnessed several mergers and

acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs.

1,21,805crores. The Unit Trust of India with Rs.44,541crores of assets under management was

way ahead of other mutual funds.

FOURTH PHASE – SINCE FEBRUARY 2003

4

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated

into two separate entities. One is the Specified Undertaking of the Unit Trust of India with

assets under management of Rs.29,835crores as at the end of January 2003, representing

broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified

Undertaking of Unit Trust of India, functioning under an administrator and under the rules

framed by Government of India and does not come under the purview of the Mutual Fund

Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.

It is registered with SEBI and functions under the Mutual Fund Regulations. With the

bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000crores of

assets under management and with the setting up of a UTI Mutual Fund, conforming to the

SEBI Mutual Fund Regulations, and with recent mergers taking place among different private

sector funds, the mutual fund industry has entered its current phase of consolidation and

growth. As at the end of March 2009, there were 35 mutual funds, which managed assets of

Rs. 4, 17,300crores under 1,001 schemes. This fast growing industry is regulated by the

Securities and Exchange Board of India (SEBI).

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated

into two separate entities. One is the Specified Undertaking of the Unit Trust of India with

assets under management of Rs.29,835crores as at the end of January 2003, representing

broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified

Undertaking of Unit Trust of India, functioning under an administrator and under the rules

framed by Government of India and does not come under the purview of the Mutual Fund

Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.It is

registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation

of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of assets under

management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual

Fund Regulations, and with recent mergers taking place among different private sector funds,

the mutual fund industry has entered its current phase of consolidation and growth. As at the

end of March 2009, there were 35 mutual funds, which managed assets of Rs. 4, 17,300crores

under 1,001 schemes.

5

1.3 COMPANY PROFILE:

ABOUT PRUDENT

Incorporated in year 2000 with a clear vision of providing financial services to individuals and

corporates to help them achieve their financial goals. It has created a niche segment over a

period to time with an excellent quality client base. Over the past few years Prudent Corporate

Advisory Services has created in-house capabilities of analyzing funds on various parameters

before suggesting them to clients.

The team approach worked wonders and in the short-span of just one decade, the Prudent

Group has emerged as a well-diversified financial services firm offering a wide range of

financial products and services such as Mutual Funds, Equities, Commodity & Derivatives,

Fixed Income Products, Life/General Insurance and Real Estate through various companies

listed below.

PRUDENT CORPORATE ADVISORY SERVICES LTD :

As the flagship company, Prudent Corporate Advisory Services remains the primary arm of

the Prudent Group. It offers financial services to individuals and corporates to help them

achieve their financial goals through Mutual Funds, Debt and Third party products.

Besides having a large pool of their own clients, the company also manages its

geographically-spread business operations through a unique platform for Channel

Partners/Business Associates which helps them to grow and expand their services & support

through sales and marketing, technology, operations, back- office support, training &

consultation.

The journey of Prudent CAS started from Ahmedabad and in a span of 13 years we are

present in 37 cities in 10 states with 47 branches.

PRUDENT BROKING SERVICES PVT. LTD.

Incorporated in 2004, Prudent Broking Services Pvt. Ltd is a Stock Broking and Depository

6

Participant service provider. Company is a member with Bombay Stock Exchange (BSE) &

National Stock exchange (NSE) & Central Depository Services (India) Limited (CDSL).

Company is in the process of creating its national presence by opening offices in various parts

of the country.

PRUDENT PROPERTIES

The Property sector is an important part of the asset class, but the effort and paperwork

involved in purchasing the same can be intimidating. Prudent Property provides real estate

solutions not only in creating an asset class but is also helping the customers in buying their

dream realty, whether it be homes or offices.

TEAM PRUDENT

Team Prudent is uniquely positioned to be a part of the client's inner trust-circle and consult

them to arrive at independent decisions related to their financial goals.

The team Prudent consists of certified professionals and Industry experts. This includes top

notch financial experts, research teams and client servicing teams. Our all branches are self-

sufficient and fully equipped to service their clients. Our professionals are trained rigorously

to our exacting standards, to understand an investor’s needs and accordingly make suggestions

to them.

OUR BACK BONE - IT, RESEARCH AND WEB

We have harnessed the potential of information technology for excellent research and

portfolio management through specialized software which works on real-time market

information and generates error-free reports.

For IT-savvy investors, we possess a secured user-friendly website that contains excellent

research and portfolio management tools to help client to access their portfolios round the

clock. The research team and the website are backed by a team of veteran IT professionals,

developers, designers, programmers and high-end Servers. The entire focus is on security of

7

information, integrity of data, and accuracy of real-time reports.

RESEARCH TEAM

We constantly endeavor to achieve optimum client & partner satisfaction and confidence

building by providing various tailor-made reports according to client needs. We possess

dedicated qualified team that research and analyze the various financial products available in

the marketplace. Apart from our own reports, we make available reports of leading research

houses on various subjects. We also provide regular reports to our clients on stock analysis

and overall market analysis with recommendations and stocks to watch.

1.4 PRODUCT PROFILE :

Prudent Channel since its inception has a strong hold in the market through its Direct Force. It

also has strong hold on the corporate channel - it now wants to have a greater reach to its

clients which it has already developed through its 2000+ certified brokers just the beginning

of the force that will grow in leaps and bounds. Know more than how much money you need

to retire - or how much you should save for your future expenses. It is about determining

short-term and long-term objectives. Prudent CAS Ltd serves you with array of financial

products and services. If financial models were food, then we could cook up anything

nourishing on the menu, from soup to steak to nuts. If financial models were clothing, we

could help produce any outfit, from making original sketches to stitching together skirts to

inventorying racks of gowns. Of course, financial models are neither food, nor clothing. For

the more technical, in a typical assignment, the Group might do any or all of the following:

Mutual Funds

Investment Consultancy

Equity and Derivatives broking

RBI Relief funds and Infrastructure Bonds

CHAPTER-2

8

OBJECTIVE OF STUDY:2.1 NEED FOR STUDY:

To understand the perception of government employees about the mutual fund

Investment. To analyze the factors which are considered by government employees

before investing in Mutual Funds. To understand the Investment Avenues of

Government Employees. To know about their awareness level of Mutual fund

Investment.

2.2 OBJECTIVE OF STUDY:

To study the government employees behavior and attitude towards

Investing in mutual funds.

To know about their risk taking willingness and to know the limits of

Their risk taking.

To study the awareness among government employees with respect to

Investing in mutual funds.

To get a clear picture about the investing pattern that is seen among

The government employees.

To know about their preferences and their expectation that they take in

To consideration while investing.

2.3 SCOPE OF THE STUDY:-

The study covers various aspects of Mutual Fund like Types of Investment, preferable period

of Investment, preference of schemes, Awareness of Tax benefits, Demat Account, Risk

bearing capacity of government employees, Ranking method followed for Investment

decision, Profitable Investment etc. This survey will bring in more awareness of Mutual fund

among the government employees .New distribution and marketing strategies can be

evaluated based on the awareness of the government employees. Through this survey, the

mutual fund companies can identify the factors that restrict the government employees in

investing in mutual fund and it will give them wider source of information to attract more

potential government employees by meeting the expectations of the government employees.

CHAPTER-3

9

3.1 THEORETICAL CONCEPTS OF MUTUAL FUND :

Mutual fund is a trust that pools money from a group of investors (sharing common financial

goals) and invest the money thus collected into asset classes that match the stated

investment objectives of the scheme. Since the stated investment objectives of a mutual fund

scheme generally form the basis for an investor's decision to contribute money to the pool, a

mutual fund can not deviate from its stated objectivesatanypointoftime.

Every Mutual Fund is managed by a fund manager, who using his investment management

skills and necessary research works ensures much better return than what an investor can

manage on his own. The capital appreciation and other incomes earned from these

investments are passed on to the investors (also known as unit holders) in proportion of the

number of units they own.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the

assets of the fund in the same proportion as his contribution amount put up with the corpus

(the total amount of the fund). Mutual Fund investor is also known as a mutual fund

shareholder or a unit holder. Any change in the value of the investments made into capital

market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV)

of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of

its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets

by the total number of units issued to the investors.

10

For example:

A. If the market value of the assets of a fund is Rs. 100,000

B. The total number of units issued to the investors is equal to 10,000.

C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00

D. Now if an investor 'X' owns 5 units of this scheme

E. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied by

the NAV of the scheme)

11

ADVANTAGES OF MUTUAL FUND:

S.NO ADVANTAGE PARTICULARS1 Portfolio Diversification Mutual Funds invest in a well-

diversified portfolio of securities which enables investor to hold a diversified investment portfolio (whether the amount of investment is big or small).

2 Professional Management Fund manager undergoes through various research works and has better investment management skills which ensure higher returns to the investor than what he can manage on his own.

3 Less Risk Investors acquire a diversified portfolio of securities even with a small investment in a Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3 securities.

4 Low Transaction Costs Due to the economies of scale (benefits of larger volumes), mutual funds pay lesser transaction costs. These benefits are passed on to the investors.

5 Liquidity An investor may not be able to sell some of the shares held by him very easily and quickly, whereas units of a mutual fund are far more liquid

12

6Choice of Schemes Mutual funds provide investors

with various schemes with different investment objectives. Investors have the option of investing in a scheme having a correlation between its investment objectives and their own financial goals. These schemes further have different plans/options

7 Transparency Funds provide investors with updated information pertaining to the markets and the schemes. All material facts are disclosed to investors as required by the regulator.

8 Flexibility Investors also benefit from the convenience and flexibility offered by Mutual Funds. Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa. Option of systematic (at regular intervals) investment and withdrawal is also offered to the investors in most open-end schemes.

Table 3.1 Advantages of Mutual Fund

13

DISADVANTAGES OF MUTUAL FUND:

S.NO DISADVANTAGE PARTICULARS

1Costs Control Not in the Hands of an Investor

Investor has to pay investment management fees and fund distribution costs as a percentage of the value of his investments (as long as he holds the units), irrespective of the performance of the fund.

2No Customized Portfolios

The portfolio of securities in which a fund invests is a decision taken by the fund manager. Investors have no right to interfere in the decision making process of a fund manager, which some investors find as a constraint in achieving their financial objectives.

3 Difficulty in Selecting a Suitable Fund Scheme

Many investors find it difficult to select one option from the plethora of funds/schemes/plans available. For this, they may have to take advice from financial planners in order to invest in the right fund to achieve their objectives.

Table 3.2 Disadvantages of Mutual Fund

14

3.2 TYPES OF MUTUAL FUND :

Mutual Fund schemes can be classified into different categories and subcategories based on their

investment objectives or their maturity periods.

CLASSIFICATION BASED ON MATURITY PERIOD:

Mutual Fund schemes can be classified into three categories based on their maturity periods.

OPEN-ENDED SCHEMES

These are mutual fund schemes which offer units for purchase and redemption subscription on a

continuous basis. In other words, the units of these schemes can be purchased or redeemed at any

point of time at Net Asset Value (NAV) based prices. Also, these schemes do not have a fixed

maturity period and an investor can redeem his units anytime.

CLOSE-ENDED SCHEMES

15

These are mutual fund schemes which have a defined maturity period e.g. 1 year / 5 years etc.

The units of close ended scheme can be bought only during a specified period at the time of

initial launch. SEBI stipulates that all close-ended schemes should provide for a liquidity

window to its investors. These schemes are either required to be listed on a recognized stock

exchange or provide periodic repurchase facility to investors.INTERVAL SCHEMES

These schemes are a cross between an open-ended and a close-ended structure. These schemes

are open for both purchase and redemption during pre-specified intervals (viz. monthly,

quarterly, annually etc.) at the prevailing NAV based prices. Interval funds are very similar to

close-ended funds, but differ on the following points.

They are not required to be listed on the stock exchanges, as they have an in-built

redemption window.

They can make fresh issue of units during the specified interval period, at the prevailing

NAV based prices.

Maturity period is not defined.

CLASSIFICATION BASED ON INVESTMENT OBJECTIVE

Apart from the above classification, mutual fund schemes can also be classified based on

their investment objectives:

EQUITY ORIENTED SCHEMES

Growth/ Equity oriented schemes are those schemes which predominantly invest in equity

and equity related instruments. The objective of such schemes is to provide capital

appreciation over the medium to long term. These types of schemes are generally meant for

investors with a long-term outlook and with a higher risk appetite.

DEBT ORIENTED SCHEMES

The main objective of debt-oriented funds is to provide regular and steady income to

investors. These schemes mainly invest in fixed income securities such as Bonds, Money

Market Instruments, Corporate Debentures, Government Securities (Gilts) etc. Debt-

oriented schemes are suitable for investors whose main objective is safety of capital along

with modest growth. These funds are not affected because of fluctuations in equity markets.

However, the NAV of such funds is affected because of change in the interest rate in the

16

country.BALANCED FUND

Balanced Funds provide the best of both worlds i.e. equity and debt. The aim of the

balanced funds is to provide both capital appreciation and stability of income in the long

run. The proportion of investment made into equities and fixed income securities is pre-

defined and mentioned in the offer document of the scheme. This type of scheme is a good

alternative for pure equity-oriented products and provides an effective asset allocation tool.

These schemes are suitable for investors looking for moderate growth. NAVs of such funds

are generally less volatile in nature compared to pure equity funds.

GILT FUNDS

These Funds invest exclusively in the dated securities issued by the government. These

funds carry a very minimal risk because they are free of any default or credit risk. However,

they do carry an interest rate risk as is the case with other debt products.MONEY MARKET/ LIQUID FUNDS

These are predominantly debt-oriented schemes, whose main objective is preservation of

capital, easy liquidity and moderate income. To achieve this objective, liquid funds invest

predominantly in safer short-term instruments like Commercial Papers, Certificate of

Deposits, Treasury Bills, G-Secs etc..

These schemes are used mainly by institutions and individuals to park their surplus funds

for short periods of time. These funds are more or less insulated from changes in the interest

rate in the economy and capture the current yields prevailing in the market.

FUND OF FUNDS

Fund of Funds (FoF) as the name suggests are schemes which invest in other mutual fund

schemes. The concept is popular in markets where there are number of mutual fund

offerings and choosing a suitable scheme according to one’s objective is tough. Just as a

mutual fund scheme invests in a portfolio of securities such as equity, debt etc, the

underlying investments for a FoF is the units of other mutual fund schemes, either from the

same fund family or from other fund houses

.

NEW PRODUCT CATEGORIESCAPITAL PROTECTION ORIENTED SCHEMES

17

The term ‘capital protection oriented scheme’ means a mutual fund scheme which is

designated as such and which endeavours to protect the capital invested therein through

suitable orientation of its portfolio structure. The orientation towards protection of capital

originates from the portfolio structure of the scheme and not from any bank guarantee,

insurance cover etc. SEBI stipulations require these type of schemes to be close-ended in

nature, listed on the stock exchange and the intended portfolio structure would have to be

mandatory rated by a credit rating agency. A typical portfolio structure could be to set aside

major portion of the assets for capital safety and could be invested in highly rated debt

instruments. The remaining portion would be invested in equity or equity related

instruments to provide capital appreciation. Capital Protection Oriented schemes are a

recent entrant in the Indian capital markets and should not be confused with ‘capital

guaranteed’ schemes.GOLD FUNDS

The objective of these funds is to track the performance of Gold. The units represent the

value of gold or gold related instruments held in the scheme. Gold Funds which are

generally in the form of an Exchange Traded Fund (ETF) are listed on the stock exchange

and offers investors an opportunity to participate in the bullion market without having to

take physical delivery of gold.

QUANTITATIVE FUNDS

A quantitative fund is an investment fund that selects securities based on quantitative

analysis. The managers of such funds build computer based models to determine whether or

not an investment is attractive. In a pure "quant shop" the final decision to buy or sell is

made by the model. However, there is a middle ground where the fund manager will use

human judgment in addition to a quantitative model. The first Quant based Mutual Fund

Scheme in India, Lotus Agile Fund opened for subscription on October 25, 2007.

FUNDS INVESTING ABROAD

With the opening up of the Indian economy, Mutual Funds have been permitted to invest in

foreign securities/ American Depository Receipts (ADRs) / Global Depository Receipts

(GDRs). Some of such schemes are dedicated funds for investment abroad while others

18

invest partly in foreign securities and partly in domestic securities. While most such

schemes invest in securities across the world there are also schemes which are country

specific in their investment approach.

REAL ESTATE MUTUAL FUNDS

Real Estate Mutual Funds or realty funds as they are popularly known are the latest addition

to the mutual fund offerings in India. SEBI recently paved way for the launch of such

products, by making amendments to its existing Regulations. However, real estate mutual

funds are yet to be introduced in India by any asset management company. These schemes

invest in real estate properties and earn income in the form of rentals, capital appreciation

from developed properties. Also some part of the fund corpus is invested in equity shares or

debentures of companies engaged in real estate assets or developing real estate development

projects. REMFs are required to be close-ended in nature and listed on a stock exchange.

INVESTMENT OPTIONS AVAILABLE TO INVESTORSGROWTH OPTIONUnder growth option, dividends are not paid out to the unit holders.Incomeattributable to

the Unit holders continues to remain invested in the Scheme and is reflected in the NAV of

units under this option. Investors can realize capital appreciation by way of an increase in

NAV of their units by redeeming them.

DIVIDEND PAYOUT OPTION

Dividends are paid out to the unit holders under this option. However, the NAV of the units

falls to the extent of the dividend paid out and applicable statutory levies.

DIVIDEND RE-INVESTMENT OPTION

The dividend that accrues on units under option is re-invested back into the scheme at ex-

dividend NAV. Hence investors receive additional units on their investments in lieu

dividends.

CHAPTER-4

RESEARCH METHODOLOGY

19

Research is a systematic method of finding solutions to problems. It is essentially an

investigation, a recording and an analysis of evidence for the purpose of gaining knowledge.

According to Clifford woody, “research comprises of defining and redefining problem,

formulating hypothesis or suggested solutions, collecting, organizing and evaluating data,

reaching conclusions, testing conclusions to determine whether they fit the formulated

hypothesis.

4.1 RESEARCH DESIGN:

A research design is not just a work plan. A work plan details what has to be done to complete

the project but the work plan will flow from the project's research design. The function of a

research design is to ensure that the evidence obtained enables us to answer the initial question

as unambiguously as possible. Obtaining relevant evidence entails specifying the type of

evidence needed to answer the research question, to test a theory, to evaluate a programme or to

accurately describe some phenomenon. In other words, when designing research we need to

ask: given this research question (or theory), what type of Evidence is needed to answer the

question (or test the theory) in a convincing way?

This project is a descriptive research as it explains about what is going on in the mutual fund

industry.

4.2 SAMPLING DESIGN:

S i n c e i t i s n o t p o s s i b l e t o s t u d y w h o l e p o p u l a t i o n , i t i s n e c e s s a r y t o

o b t a i n representative samples from the population to understand its characteristics.

Sampling Area: Chennai

Sampling Unit: Individual respondents for studying Awareness of Mutual Fund

among Government Employees are taken from different parts of Chennai.

Sampling technique Convenience sampling

Research instrument: Structured Questionnaire

Contact method: Direct Interview

20

4.3 SAMPLE SIZE:

The sample size was 250 and the survey was taken through questionnaire from different parts of

Chennai district government offices.

4.4 SOURCES OF DATA :

The data’s were collected through primary sources and secondary sources.

4.4.1 PRIMARY DATA:

Primary data are in the form of “raw material” to which statistical methods are applied

for the purpose of analysis and interpretations. The primary sources are collected

through questionnaire.

4.4.2 SECONDARY DATA:

Secondary data’s are in the form of finished products as they have already been treated

statistically in some form or other. The secondary data mainly consists of data and

information collected from records, company websites and also discussion with the

management of the organization. Secondary data was also collected from journals,

magazines and books.

4.5 DATA INSTRUMENTS:

GENERAL INFORMATION:

21

1. Gender

a) Male b) Female

2. Age

a) Below 25 b) 25-35 c) 35-45 d) Above 45

3. Annual Income

a)Below 2 lakhs b)2 to 5 lakhs c)5 to 10 lakhs d)Above 10 lakhs

4. Educational qualification

a) Graduate b) post Graduate c) others

RESEARCH QUESTIONS:

5. Are you aware about Mutual Fund?

a) Yes b) No

6. From which source you come to know about Mutual Fund?

a)Advisors b)Friends/Relatives c)TV/Newspaper d)Others

7. Have you ever invested in mutual fund of any company?

a) Yes b) No

8. Do you have a Demat Account?

a) Yes b) No

9. Do you Operate Demat Account on your own or underany advice?

If it is so, underwhoseadvice? a) Advisors b) Friends c) Relatives

22

10. Are you aware about the different ways of investing into mutual fund?

a) Yes b) No

11. If yes, which way do you like the most?

a) Lumpsum b) Systematic Investment Plan

12. What kind of Mutual Fund Schemes Would you Prefer?

a)Open Ended Fundb)Close Ended Fund c)Both

13. What kind of Mutual Fund attracts you most?

Growth Fund

Debt Fund

Balanced Fund

Liquid Fund

Blue chip Fund

14. What would be your preferable period of investment?

a)Short term b)Medium term c)Long term

15. What is your Anticipating Risk bearing capacity?

a)High b)Medium c)Low

16. What are the factors you look into before making an investment plan?

a)Safety b)Growth c)Return d) Liquidity

17. Do you think mutual fund investment is a risky investment?

a) Yes b) No

23

18. Are you aware of the tax benefits of mutual funds?

a) Yes b) No

19. Given below are a few Asset Management Company. Rank the companies based on your

awareness.

ICICI Asset Management Company

Birla Sun Life Asset Management Company

HDFC Asset Management Company

Tata Asset Management Company

Reliance Capital Asset Management Company

20. Rank Top 5 Mutual Funds according to your choice

HDFC Top 200 Fund

Reliance Growth Fund

Tata Ethical Fund

SBI Pharma

ICICI PrudentialFocusedBlue chip Fund

21.” Investing in Mutual Funds has given me “

Extremely

Satisfied

Satisfied Neutral Dissatisfied Extremely

Dissatisfied

24

Steady

Income

Growth

Prospects

Professionally

managed

Quick

Returns

Easy Exit

Option

Less Risk

Convenience

Flexibility

Customer

Service

22. Which investment you feel profitable?

a) Bank/post office deposit b) Insurance c) Mutual fund d) Others

23. Do you follow the ranking available for Investment decision?

a) Yes b) No

24. Why do you think Mutual Funds are best all time?

a) High Returns b) High Growth Prospects c) Less Risk d) Transparency

25. What is the reason for not investing in Mutual fund?

a)No Guaranteed Returns

25

b)Risky Investment

c)No Investment Knowledge

d)Less liquidity

4.6 STATISTICAL TOOLS USED:

TOOL 1: CHI-SQUARE TEST

26

• A fundamental problem is genetics is determining whether the experimentally determined

data fits the results expected from theory (i.e. Mendel’s laws as expressed in the Punnett

square).

• Goodness of Fit:Mendel has no way of solving this problem. Shortly after the

rediscovery of his work in 1900, Karl Pearson and R.A. Fisher developed the “chi-

square” test for this purpose.

• The chi-square test is a “goodness of fit” and Independence of Attribute test: it answers

the question of how well do experimental data fit expectations.

• First determine the number of each phenotype that have been observed and how many

would be expected given basic genetic theory.

• Then calculate the chi-square statistic using this formula.

• The “Χ” is the Greek letter chi; the “∑” is a sigma; it means to sum the following terms

for all phenotypes. “obs” is the number of individuals of the given phenotype observed;

“exp” is the number of that phenotype expected from the null hypothesis.

DEGREES OF FREEDOM:

• A critical factor in using the chi-square test is the “degrees of freedom”, which is

essentially the number of independent random variables involved.

• Degree of freedom is simply the number of classes of offspring minus 1.

• For our example, there are 2 classes of offspring: purple and white. Thus, degrees of

freedom (d.f.) = 2 -1 = 1.

CRITICAL CHI-SQUARE:

27

Χ2=∑ ( obs−exp)2

exp

• Critical values for chi-square are found on tables, sorted by degrees of freedom and

probability levels. Be sure to use p = 0.05.

• If your calculated chi-square value is greater than the critical value from the table, you

“reject the null hypothesis”.

• If your chi-square value is less than the critical value, you “fail to reject” the null

hypothesis (that is, you accept that your genetic theory about the expected ratio is

correct).

TOOL 2:SIMPLE CORRELATION

• The term “correlation” refers to a measure of the strength of association between two

variables.

• If the two variables increase or decrease together, they have a positive correlation.

• If, increases in one variable are associated with decreases in the other, they have a

negative correlation.

Linear Correlation (r):

• For two quantitative variables X and Y, for which n pairs of measurements (x i, yi) are

available, Pearson’s correlation coefficient (r) gives a measure of the linear association

between X and The formula is given below for reference.

LINEAR CORRELATION (R):

• If X and Y are perfectly positively correlated, r = 1.

• If there is absolutely no association, r = 0.

• If X and Y are perfectly positively correlated, r = -1

• Thus -1 < r < +1

28

• The closer r is to +1 or -1, the greater is the strength of the association.

Correlation Coefficient:

• The population correlation coefficient ρ (rho) measures the strength of the association

between the variables. The sample correlation coefficient r is an estimate of ρ and is

used to measure the strength of the linear relationship in the sample observations

Range between -1 and 1.

• The closer to -1, the stronger the negative linear relationship

• The closer to 1, the stronger the positive linear relationship. The closer to 0, the weaker

the linear relationship.

SPEARMAN'S CORRELATION METHOD:

• A nonparametric (distribution-free) rank statistic proposed by Spearman in 1904 as a

measure of the strength of the associations between two variables (Lehmann and

D'Abrera 1998). The Spearman rank correlation coefficient can be used to give an R-

estimate, and is a measure of monotone association that is used when the distribution of

the data make Pearson's correlation coefficient undesirable or misleading.

• The Spearman rank correlation coefficient is defined by

(1)

whered is the difference in statistical rank of corresponding variables, and is an

approximation to the exact correlation coefficient .

TOOL 3: ANOVAS’ TEST (ONE-WAY ANOVA):

The one-way analysis of variance is used to test the claim that three or more

population means are equal

This is an extension of the two independent samples t-test

The response variable is the variable you’re comparing

29

http://mathworld.wolfram.com/CorrelationCoefficient.html

http://mathworld.wolfram.com/StatisticalRank.html

http://mathworld.wolfram.com/CorrelationCoefficient.html

http://mathworld.wolfram.com/R-Estimate.html

http://mathworld.wolfram.com/R-Estimate.html

The factor variable is the categorical variable being used to define the groups

We will assume k samples (groups)

The one-way is because each value is classified in exactly one way

Examples include comparisons by gender, race, political party, color,etc.

CONDITIONS OR ASSUMPTIONS:

The data are randomly sampled

The variances of each sample are assumed equal

The residuals are normally distributed.

The null hypothesis is that the means are all equal

The alternative hypothesis is that at least one of the means is different

Think about the Sesame Street® game where three of these things

are kind of the same, but one of these things is not like the other.

They don’t all have to be different, just one of them.

The ANOVA doesn’t test that one mean is less than another, only whether

they’re all equal or at least one is different.

H0 :μ1 = μ2 = μ3 ···= μk

VARIATION:

Variation is the sum of the squares of the deviations between a value

and the mean of the value

Sum of Squares is abbreviated by SS and often followed by a variable

in parentheses such as SS(B) or SS(W) so we know which sum of

squares we’re talking about

There are two sources of variation:

The variation between the groups, SS(B), or the variation due to the

factor

The variation within the groups, SS(W), or the variation that can’t be

explained by the factor so it’s called the error variation.

30

GRAND MEAN:

The grand mean is the average of all the values when the factor is ignored.

It is a weighted average of the individual sample means

DEGREES OF FREEDOM, DF :A degree of freedom occurs for each value that can vary before the rest of the values are

predetermined.

VARIANCES:

The variances are also called the Mean of the Squares and abbreviated by MS, often with an

accompanying variable MS(B) or MS(W)

They are an average squared deviation from the mean and are found

by dividing the variation by the degrees of freedom

MS = SS / df

SPECIAL VARIANCES:

The MS (Within) is also known as the pooled estimate of the variance

Since it is a weighted average of the individual variances

sometimes abbreviated

The MS (Total) is the variance of the response variable.

F-TEST STATISTIC:

An F test statistic is the ratio of two sample variances

The MS(B) and MS(W) are two sample variances and that’s what we

divide to find F.

F = MS(B) / MS(W)

CHAPTER-5

DATA ANALYSIS AND INTERPRETATION

5.1 DATA ANALYSIS:

31

Table 5.1: GENDER ANALYSIS

GENDER NO OF RESPONDENTS PERCENTAGE

MALE 155 62.0FEMALE 95 38.0TOTAL 250 100.0

Source: Computed for primary Data

MALE62%

FEMALE38%

GENDER ANALYSIS

Fig.5.1 Gender Analysis

INFERENCE:

This shows that Majority of the Respondents is Male (62%) and only 38% of the Respondents

are Female (38%).

Table5.2: AGE ANALYSIS:

AGE NO OF RESPONDENTS PERCENTAGE

BELOW 25 10 4.0

32

25-35 87 34.835-45 76 30.4ABOVE 45 77 30.8TOTAL 250 100.0

Source: Computed for Primary Data

BELOW 254%

25-3535%

35-4530%

ABOVE 4531%

AGE ANALYSIS

Fig.5.2 Age Analysis

INFERENCE:

This shows that Majority of the Respondents (35%) are from the Age group of 25-35 years and

31%,30% and 4% of the Respondents are from the Age group of Above 45,35-45 and Below 25

years.

Table 5.3: ANNUAL INCOME

ANNUAL INCOME NO OF RESPONDENTS

PERCENTAGE

33

BELOW 2 LAKHS 62 24.82 TO 5LAKHS 149 59.65 TO 10 LAKHS 37 14.8ABOVE 10 LAKHS 2 .8TOTAL 250 100.0


BELOW 2LAKHS25%

2 TO 5LAKHS60%

5 TO 10 LAKHS15%

ABOVE 10 LAKHS1%

ANNUAL INCOME ANALYSIS

Fig.5.3 Annual Income Analysis

INFERENCE:

This shows that Majority of the Respondents (59%) are in the Income group of 2 to 5 Lakhs and

25%, 15% and 1% of the Respondents are in the Income group of Below 2 lakhs, 5 to 10 lakhs

and Above 10 lakhs respectively.

Table5.4: EDUCATIONAL QUALIFICATION

EDUCATIONAL QUALIFICATION NO OF RESPONDENTS

PERCENTAGE

34

GRADUATE 129 51.6

POST GRADUATE 90 36.0OTHERS 31 12.4TOTAL 250 100.0


GRADUATE52%POST GRADUATE

36%

OTHERS12%

EDUCATIONAL QUALIFICATION

Fig.5.4 Educational Qualification

INFERENCE:

This shows that Majority of the Respondents (52%) are Graduates, 36% and 12% of the

Respondents are Post Graduate and Others respectively.

Table5.5: AWARENESS OF MUTUAL FUND

AWARENESS OF MUTUAL FUND

NO OF RESPONDENTS PERCENTAGE

35

YES 180 72.0

NO 70 28.0TOTAL 250 100.0


YES72%

NO28%

AWARENESS OF MUTUAL FUND

Fig.5.5 Awareness of Mutual Fund

INFERENCE:

This shows that Majority of the Respondents (72%) are Aware about the Mutual Fund and only

28% of the respondents are not aware about the Mutual Fund.

Table 5.6: SOURCE OF AWARENESS OF MUTUAL FUND

SOURCE OF AWARENESS OF MUTUAL FUND

NO OF RESPONDENTS

PERCENTAGE

36

ADVISORS 4 2.4FRIENDS/RELATIVES 12 6.6TV/NEWSPAPER 157 87.2OTHERS 7 3.8TOTAL 180 100.0


ADVISORS2%

FRIENDS/RELATIVES7%

TV/NEWSPAPER87%

OTHERS4%

Fig.5.6 Source of Awareness of Mutual Fund

INFERENCE:

This shows that Majority of the Respondents (87%) are aware of Mutual Fund only through

TV/Newspaper and 7%,4% and 2% of the Respondents are aware through Friends/Relatives,

Others and Advisors respectively.

Table 5.7: INVESTED IN MUTUAL FUND

INVESTED IN MUTUAL FUND

NO OF RESPONDENTS

PERCENTAGE

37

YES 22 8.8

NO 228 91.2TOTAL 250 100.0


YES9%

NO91%

INVESTED IN MUTUAL FUND

Fig.5.7 Invested in Mutual Fund

INFERENCE:

This shows that Majority of the Respondents (91%) are not invested in Mutual fund and only 9%

of the Respondents are invested in Mutual Fund.

Table 5.8: DEMAT ACCOUNT

HOLDING DEMAT ACCOUNT NO OF RESPONDENTS PERCENTAGE

38

YES 5 2.0

NO 245 98.0TOTAL 250 100.0


YES2%

NO98%

HOLDING DEMAT ACCOUNT

Fig.5.8 Demat Account

INFERENCE:

This shows that Majority of the Respondents (98%) are not having Demat Account and only 2%

of the Respondents are holding Demat Account.

Table 5.9: HOLDING DEMAT ACCOUNT UNDER ADVICE

39

HOLDING DEMAT ACCOUNT UNDER ADVICE

NO OF RESPONDENTS PERCENTAGE

ADVISORS 2 40FRIENDS 3 60TOTAL 5 100.0


ADVISORS40%

FRIENDS60%

HOLDING DEMAT UNDER ADVICE

Fig.5.9 Holding Demat Account Under Advice

INFERENCE:

This shows that Majority of the Respondents (60%) are holding Demat Account under the

Advice of Friends and 40% of the Respondents are holding Demat under the Advice of Advisors.

Table 5.10: AWARENESS OF DIFFERENT WAYS OF INVESTING IN MUTUAL FUND

40

AWARENESS OF DIFFERENT WAYS OF INVESTING IN MUTUAL FUND

NO OF RESPONDENTS

PERCENTAGE

YES 65 26.0

NO 185 74.0TOTAL 250 100.0


YES26%

NO74%

AWARENESS OF DIFFERENT WAYS OF INVEST-ING IN MUTUAL FUND

Fig.5.10 Awareness of different ways of investing in Mutual Fund

INFERENCE:

This shows that Majority of the Respondents(74%) are not aware about the different ways of

investing in Mutual Fund and only 26% of the Respondents are aware about the different ways of

investment in Mutual Fund such as Lump sum and Systematic Investment Plan.

Table5. 11: PREFERENCE OF INVESTING IN MUTUAL FUND

41

PREFERENCE OF INVESTING IN MUTUAL FUND NO OF RESPONDENTS

PERCENTAGE

LUMPSUM 43 66.2SYSTEMATIC INVESTMENT PLAN 22 33.8TOTAL 65 100.0


LUMP SUM66%

SYSTEMATIC IN-VESTMENT PLAN

34%

PREFERENCE TYPE OF INVESTMENT

Fig.5.11 Preference of investing in Mutual Fund

INFERENCE:

This shows that Majority of the Respondents(66%) prefers Lump sum Investment and only 34%

of the Respondents prefers Systematic Investment Plan as they feel that the One-time Investment

is better than Systematic Investment Plan as they were not aware about the benefits of

systematic Investment Plan Investment.

Table 5.12: PREFERENCE OF MUTUAL FUND SCHEME

42

PREFERENCE OF MUTUAL FUND SCHEME

NO OF RESPONDENTS

PERCENTAGE

OPEN ENDED FUND 231 92.4CLOSE ENDED FUND 14 5.6BOTH 5 2.0TOTAL 250 100.0


OPEN ENDED FUND92%

CLOSE ENDED FUND6% BOTH

2%

PREFERENCE OF SCHEME

Fig.5.12 Preference of mutual fund scheme

INFERENCE:

This shows that Majority of the Respondents(92%) prefers Open ended fund the most as it

provides liquidity to the Investors and only 6% and 2% of the Respondents prefers close ended

fund and Both respectively.

Table5. 13: PREFERENCE OF FUND

43

PREFERENCE OF FUND NO OF RESPONDENTS

PERCENTAGE

GROWTH FUND 30 12.0DEBT FUND 176 70.4BALANCED FUND 37 14.8BLUE CHIP FUND 7 2.8TOTAL 250 100.0


GROWTH FUND12%

DEBT FUND70%

BALANCED FUND15%

BLUECHIP FUND3%

PREFERENCE OF FUND

Fig.5.13 Preference of Fund

INFERENCE:

This shows that Majority of the Respondents (70%) prefers Debt fund the most as it involves less

risk compared to other funds and 15%, 12% and 3% of the Respondents prefers Balanced fund,

Growth fund and Blue chip fund respectively.

Table 5.14: PREFERABLE PERIOD OF INVESTMENT

44

PREFERABLE PERIOD OF INVESTMENT

NO OF RESPONDENTS

PERCENTAGE

SHORT TERM 135 54.0MEDIUM TERM 25 10.0LONG TERM 90 36.0TOTAL 250 100.0


SHORT TERM54%

MEDIUM TERM10%

LONG TERM36%

PREFERABLE PERIOD OF INVESTMENT

Fig.5.14 Preferable period of investment

INFERENCE:

This shows that Majority of the Respondents (54%) prefers Short term Investment the most as

most of them were not interested in long term savings due to their insufficient Income, 36% and

10% of the Respondents prefers Long term and Medium term Investment respectively.

Table5. 15: RISK BEARING CAPACITY

45

RISK BEARING CAPACITY NO OF RESPONDENTS

PERCENTAGE

HIGH 10 4.0MEDIUM 49 19.6LOW 191 76.4TOTAL 250 100.0


HIGH4%

MEDIUM20%

LOW76%

RISK BEARING CAPACITY

Fig.5.15 Risk bearing capacity

INFERENCE:

This shows that Majority of the Respondents (76%) have very low Risk Bearing Capacity as

most of them are not willing to take risk in Investments as they were not ready to face loss ,20%

and 4% of the Respondents have Medium and Low Risk Bearing Capacity respectively.

Table5. 16: FACTORS CONSIDERED BEFORE INVESTMENT

46

FACTORS CONSIDERED BEFORE INVESTMENT

NO OF RESPONDENTS

PERCENTAGE

SAFETY 166 66.4GROWTH 49 19.6RETURN 30 12.0LIQUIDITY 5 2.0TOTAL 250 100.0


SAFETY66%

GROWTH20%

RETURN12%

LIQUIDITY2%

FACTORS CONSIDERED DURING INVESTMENT

Fig.5.16 Factors considered before investment

INFERENCE:

This shows that Majority of the Respondents (66%) prefers safety of the capital the most when

they considered during Investment,20%,12% and 2% of the Respondents prefers Growth, Return

and Liquidity respectively.

Table 5.17: IS MUTUAL FUND IS A RISKY INVESTMENT

47

IS MUTUAL FUND IS A RISKY INVESTMENT

NO OF RESPONDENTS

PERCENTAGE

YES 201 80.4NO 49 19.6TOTAL 250 100.0


YES80%

NO20%

IS MUTUAL FUND IS A RISKY INVESTMENT

Fig.5.17 Is mutual fund is a risky investment

INFERENCE:

This shows that Majority of the Respondents (80%) considers Mutual Fund as the Risky

Investment because of the reason that it is mainly related to share market and Risk involved in it

and 20% of the Respondents don’t consider Mutual Fund as the Risky Investment.

Table 5.18: AWARENESS OF TAX BENEFITS

48

AWARENESS OF TAX BENEFITS

NO OF RESPONDENTS

PERCENTAGE

YES 27 10.8NO 223 89.2TOTAL 250 100.0


YES11%

NO89%

AWARENESS OF TAX BENEFITS

Fig.5.18 Awareness of Tax benefits

INFERENCE:

This shows that Majority of the Respondents (89%) was not aware of the Tax Benefits in Mutual

fund and only 11% of the Respondents were aware about the Tax Benefits.

Table5. 19: RANKING OF ICICI ASSET MANAGEMENT COMPANY BASED ON THE

AWARENESS OF RESPONDENTS

49

RANKING OF ICICI ASSET MANAGEMENT COMPANY BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE

1ST RANK 136 54.42ND RANK 81 32.43RD RANK 21 8.44TH RANK 5 2.05TH RANK 7 2.8TOTAL 250 100.0


1ST RANK54%2ND RANK

32%

3RD RANK8%

4TH RANK2%

5TH RANK3%

RANKING OF ICICI ASSET MANAGEMENT COMPANY BY RESPONDENTS

Fig.5.19 Ranking of ICICI Asset Management Company based on the awareness of respondents

INFERENCE:

This shows that Majority of the Respondents(55%) gives 1st rank to the ICICI Asset Management

company based on their awareness and it is because of the advertisement in the media it reached

well in the minds of people,32%,8%,3% and 2% of the respondents gives 2nd rank,3rd rank,5th

rank and 4th rank respectively.

Table5. 20: RANKING OF BIRLA SUNLIFE ASSET MANAGEMENT COMPANY BASED

ON THE AWARENESS OF RESPONDENTS

50

RANKING OF BIRLA SUNLIFE ASSET MANAGEMENT COMPANY BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK4% 2ND RANK

8%

3RD RANK40%

4TH RANK 14%

5TH RANK34%

RANKING OF BIRLA SUNLIFE ASSET MAN-AGEMENT COMPANY BY RESPONDENTS

Fig.5.20 Ranking of Birla sun life Asset Management Company based on the awareness of

respondents

INFERENCE: This shows that Majority of the Respondents (40%) gives Birla Sun life asset

Management Company the third rank,34%,14%,8% and 4% of the Respondents gives 5th rank,4th

rank,2nd rank and 1st rank respectively.

Table5. 21: RANKING OF HDFC ASSET MANAGEMENT COMPANY BASED ON THE


51

RANKING OF HDFC ASSET MANAGEMENT COMPANY BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK34%

2ND RANK52%

3RD RANK10%

4TH RANK3%

5TH RANK1%

RANKING OF HDFC ASSET MANAGEMENT COMPANY BY RESPONDENTS

Fig.5.21 Ranking of HDFC Asset Management Company based on the awareness of respondents

INFERENCE:

This shows that Majority of the Respondents (52%) gives HDFC Asset Management company

the 2nd rank because of its most trusted brand,34%,10%,3% and 1% gives 1st rank,3rd rank,4th

rank and 5th rank respectively.

Table 5.22: RANKING OF TATA ASSET MANAGEMENT COMPANY BASED ON THE


52

RANKING OF TATA ASSET MANAGEMENT COMPANY BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK3%

2ND RANK4%

3RD RANK24%

4TH RANK62%

5TH RANK8%

RANKING OF TATA ASSET MANAGEMENT COMPANY BY RESPONDENTS

Fig.5.22 Ranking of Tata Asset Management Company based on the awareness of respondents

INFERENCE:

This shows that Majority of the Respondents(62%) gives 4th rank for the Tata Asset Management

company ,23%,8%,4% and 3% of the Respondents gives 3rd rank,5th rank,2nd rank and 1st rank

respectively for Tata Asset Management Company.

Table5. 23: RANKING OF RELIANCE CAPITAL ASSET MANAGEMENT COMPANY

BASED ON THE AWARENESS OF RESPONDENTS

53

RANKING OF RELIANCE CAPITAL ASSET MANAGEMENT COMPANY BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK5% 2ND RANK

4%

3RD RANK18%

4TH RANK19%

5TH RANK54%

RANKING OF RELIANCE ASSET MANAGEMENT COMPANY BY RESPONDENTS

Fig.5.23 Ranking of Reliance capital Asset Management Company based on the awareness of

respondents

INFERENCE: This shows that Majority of the Respondents (54%) gives the last rank to the

Reliance Capital Asset Management Company as they were not satisfied with the profit and

service of that company,19%,18%,5% and 4% of the Respondents gives 4th rank,3rd rank,1st rank

and 2nd rank respectively.

Table5. 24: RANKING OF HDFC TOP 200 FUND ACCORDING TO THE RESPONDENTS

54

RANKING OF TOP 200 FUND BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK12%

2ND RANK26%

3RD RANK38%

4TH RANK18%

5TH RANK5%

RANKING OF HDFC TOP 200 FUND BY RE-SPONDENTS

Fig.5.24 Ranking of HDFC top 200 fund according to the respondents

INFERENCE:

This shows that Majority of the Respondents (38%) gives HDFC Top 200 fund the 3 rd rank

because of its future growth prospects, 26%, 18%, 13% and 5% of the Respondents gives 2 nd

rank, 4th rank, 1st rank and 5th rank respectively.

Table5. 25: RANKING OF RELIANCE GROWTH FUND ACCORDING TO THE

RESPONDENTS

55

RANKING OF RELIANCE GROWTH FUND BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK4%

2ND RANK10%

3RD RANK22%

4TH RANK35%

5TH RANK29%

RANKING OF RELIANCE GROWTH FUND BY RESPONDENTS

Fig.5.25 Ranking of Reliance growth fund according to the respondents

INFERENCE:

This shows that Majority of the Respondents (35%) gives Reliance Growth Fund the 4 thrank,

29%, 22%, 10% and 4% of the Respondents gives 5th rank, 3rd rank, 2nd rank and 1st rank

respectively.

Table5. 26: RANKING OF TATA ETHICAL FUND ACCORDING TO THE RESPONDENTS

56

RANKING OF TATA ETHICAL FUND BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK5%

2ND RANK41%

3RD RANK16%

4TH RANK26%

5TH RANK12%

RANKING OF TATA ETHICAL FUND BY RE-SPONDENTS

Fig.5.26: Ranking of Tata ethical fund according to the respondents

INFERENCE:

This shows that Majority of the Respondents (41%) gives 2nd rank for the Tata Ethical Fund due

to its good return and growth prospects in the Multicap sector,26%,16%,12% and 5% of the

respondents gives 4th rank,3rd rank,5th rank and 1st rank respectively.

Table5. 27: RANKING OF SBI PHARMA ACCORDING TO THE RESPONDENTS

57

RANKING OF SBI PHARMA BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE

1ST RANK 190 76.02ND RANK 32 12.83RD RANK 12 4.84TH RANK 16 6.4TOTAL 250 100.0


1ST RANK76%

2ND RANK13%

3RD RANK5%

4TH RANK6%

RANKING OF SBI PHARMA FUND BY RE-SPONDENTS

Fig.5.27 Ranking of sbi pharma according to the respondents

INFERENCE:

This shows that Majority of the Respondents (76%) gives 1st rank to the SBI Pharma fund due to

its most trusted brand, good return and good growth prospects, 13%, 6% and 5% gives 2nd rank,

4th rank and 3rd rank respectively.

Table5. 28: RANKING OF ICICI PRUDENTIAL FOCUSED BLUECHIP FUND

ACCORDING TO THE RESPONDENTS

58

RANKING OF ICICI PRUDENTIAL FOCUSED BLUECHIP FUND BY RESPONDENTS

NO OF RESPONDENTS

PERCENTAGE



1ST RANK2% 2ND RANK

10%

3RD RANK20%

4TH RANK14%

5TH RANK54%

RANKING OF ICICI PRUDENTIAL FOCUSED BLUECHIP FUND BY RESPONDENTS

Fig.5.28 Ranking of ICICI prudential focused blue chip fund according to the respondents

INFERENCE:

This shows that Majority of the Respondents(54%) gives last rank to the ICICI prudential

focused blue chip fund when compared to the other top performing funds,20%,14%,10% and 2%

of the Respondents gives 3rd rank,4th rank,2nd rank and 1st rank respectively.

Table5. 29: STEADY INCOME

59

STEADY INCOME NO OF RESPONDENTS

PERCENTAGE

SATISFIED 6 27NEUTRAL 12 55DISSATISFIED 3 13.5EXTREMELY DISSATISFIED 1 4.5TOTAL 22 100.0


SATISFIED27%

NEUTRAL55%

DISSATISFIED14%

EXTREMELY DISSATISFIED5%

STEADY INCOME

Fig.5.29 Steady income

INFERENCE:

This shows that Majority of the Respondents (55%) are Neutral with the steady Income they earn

when invested in Mutual fund, 27%, 13.5% and 4.5% of the Respondents are satisfied,

Dissatisfied and Extremely Dissatisfied with the steady Income they got when invested in

Mutual Fund.

Table 5.30: GROWTH PROSPECTS

60

GROWTH PROSPECTS NO OF RESPONDENTS

PERCENTAGE

SATISFIED 5 23NEUTRAL 12 54.5DISSATISFIED 4 18EXTREMELY DISSATISFIED 1 4.5TOTAL 22 100.0


SATISFIED23%

NEUTRAL55%

DISSATISFIED18%


GROWTH PROSPECTS

Fig.5.30 Growth prospects

INFERENCE:

This shows that Majority of the Respondents (55%) are Neutral with the Growth

prospects,23%,18% and 4% of the Respondents are Satisfied, Dissatisfied and Extremely

Dissatisfied with the Growth Prospects of Mutual Fund.

Table5. 31: PROFESSIONALLY MANAGED

61

PROFESSIONALLY MANAGED NO OF RESPONDENTS

PERCENTAGE

SATISFIED 8 36.5NEUTRAL 11 50DISSATISFIED 2 9EXTREMELY DISSATISFIED 1 4.5TOTAL 250 100.0


SATISFIED37%

NEUTRAL50%

DISSATISFIED9%


PROFESSIONALLY MANAGED

Fig.5.31 Professionally managed

INFERENCE:

This shows that Majority of the Respondents (50%) are Neutral with the fund professionally

managed by a fund manager,36%,9% and 5% of the Respondents are Satisfied, Dissatisfied and

Extremely Dissatisfied with the professional managed of the Mutual Fund.

Table5. 32: QUICK RETURNS

62

QUICK RETURNS NO OF RESPONDENTS

PERCENTAGE



SATISFIED36%

NEUTRAL32%

DISSATISFIED27%


QUICK RETURNS

Fig.5.32 Quick Returns

INFERENCE:

This shows that Majority of the Respondents (36%) are satisfied with the quick returns provided

by the Mutual Funds,32%,27% and 5% of the respondents are Neutral, Dissatisfied and

Extremely Dissatisfied with the quick returns earned when invested in Mutual Fund .

Table 5.33: EASY EXIT OPTION

63

EASY EXIT OPTION NO OF RESPONDENTS

PERCENTAGE

SATISFIED 16 73NEUTRAL 3 13.5DISSATISFIED 2 9EXTREMELY DISSATISFIED 1 4.5TOTAL 22 100.0


SATISFIED73%

NEUTRAL13%

DISSATISFIED9%


EASY EXIT OPTION

Fig.5.33 Easy exit option

INFERENCE:

This shows that Majority of the Respondents(73%) are Satisfied with the Easy exit option

provided by the Mutual fund companies as they feel it is comfortable to quit from

investments,13%,9% and 5% of the Respondents are Neutral, Dissatisfied and Extremely

Dissatisfied with the Easy Exit Option provided by Mutual fund companies.

Table5. 34: LESS RISK

64

LESS RISK NO OF RESPONDENTS

PERCENTAGE

SATISFIED 6 27NEUTRAL 4 18DISSATISFIED 11 50EXTREMELY DISSATISFIED 1 5TOTAL 22 100.0


SATISFIED27%

NEUTRAL 18%

DISSATISFIED50%


LESS RISK

Fig.5.34 Less risk

INFERENCE:

This shows that Majority of the Respondents(50%) are Dissatisfied with the risk involved in

Mutual fund and they don’t believe that Mutual Fund has very less risk involved in it,27%,18%

and 5% of the Respondents are Satisfied, Neutral and Extremely Dissatisfied with the risk

involved in Mutual Fund.

Table5. 35: CONVENIENCE

65

CONVENIENCE NO OF RESPONDENTS

PERCENTAGE



SATISFIED 54%NEUTRAL

32%

DISSATISFIED9%


CONVENIENCE

Fig.5.35 Convenience

INFERENCE:

This shows that Majority of the Respondents (55%) are Satisfied with the Convenience provided

by Mutual fund companies, 32% respondents are Neutral, 9% and 4% of the Respondents are

Dissatisfied and Extremely Dissatisfied with the convenience of Mutual Funds.

Table 5.36: FLEXIBILITY

66

FLEXIBILITY NO OF RESPONDENTS

PERCENTAGE



SATISFIED69%

NEUTRAL18%

DISSATISFIED9%


FLEXIBILITY

Fig.5.36 Flexibility

INFERENCE:

This shows that Majority of the Respondents (68%) are satisfied with the flexibility of Mutual

fund, 18%, 9% and 5% of the Respondents are Neutral, Dissatisfied and Extremely Dissatisfied

with the flexibility provided by the Mutual fund Company.

Table 5.37: CUSTOMER SERVICE

67

CUSTOMER SERVICE NO OF RESPONDENTS

PERCENTAGE

SATISFIED 18 82NEUTRAL 3 13.5EXTREMELY DISSATISFIED 1 4.5TOTAL 22 100.0


SATISFIED82%

NEUTRAL13%


CUSTOMER SERVICE

Fig.5.37 Customer service

INFERENCE:

This shows that Majority of the Respondents (82%) are satisfied with the customer service of a

Mutual fund company, 13% and 5% of the Respondents are neutral and Extremely Dissatisfied

with the customer service of the Mutual Fund Company.

Table 5.38: PROFITABLE INVESTMENT

68

PROFITABLE INVESTMENT NO OF RESPONDENTS

PERCENTAGE

BANK/POST OFFICE DEPOSIT 118 47.2

INSURANCE 34 13.6MUTUAL FUND 10 4.0OTHERS 88 35.2TOTAL 250 100.0


BANK/POST OFFICE DEPOSIT

47%

INSURANCE14%MUTUAL FUND

4%

OTHERS35%

PROFITABLE INVESTMENT

Fig.5.38 Profitable investment

INFERENCE:

This shows that Majority of the Respondents(47%) prefers Bank/post office deposit as the

profitable investment as they feel that there is no risk involved in it with the guaranteed rate of

return,35% felt profitable investment as Gold, Share Market and Real Estate ,14% and 4%

prefers Insurance and Mutual Fund respectively.

Table 5.39: DO YOU FOLLOW THE RANKING AVAILABLE FOR INVESTMENT

DECISION

69

FOLLOW THE RANKING AVAILABLE FOR INVESTMENT DECISION

NO OF RESPONDENTS

PERCENTAGE

YES 29 11.6NO 221 88.4TOTAL 250 100.0


YES12%

NO88%

FOLLOW RANKING AVAILABLE FOR IN-VESTMENT DECISION

Fig.5.39 Do you follow the ranking available for investment decision

INFERENCE:

This shows that Majority of the Respondents (88%) were not aware of the ranking available for

investment decision of Investors and only 12% of the respondents follows the ranking available

for investment decision.

Table 5.40: MUTUAL FUNDS ARE BEST ALLTIME

70

MUTUAL FUNDS ARE BEST ALLTIME NO OF RESPONDENTS

PERCENTAGE

HIGH RETURNS 179 71.6HIGH GROWTH PROSPECTS 56 22.4LESS RISK 10 4.0TRANSPARENCY 5 2.0TOTAL 250 100.0


HIGH RETURNS72%

HIGH GROWTH PROSPECTS

22%

LESS RISK4%

TRANSPARENCY2%

MUTUAL FUND BEST ALL TIME

Fig.5.40 Mutual Funds are best all time

INFERENCE:

This shows that Majority of the Respondents (72%) considers Mutual Fund as the best all time

due to its high returns over the long run, 22%, 4% and 2% of the Respondents considers mutual

fund as best all time due to its high growth prospects, less risk and Transparency respectively.

Table 5.41: Reason for not investing in Mutual Fund

REASON FOR NOT NO OF RESPONDENTS PERCENTAGE

71

INVESTING IN MUTUAL

FUND

NO GUARANTEED

RETURNS

RISKY INVESTMENT

NO INVESTMENT

KNOWLEDGE

LESS LIQUIDITY

22

148

50

8

10

65

22

3


NO GUARANTEED RETURNS10%

RISKY IN-VESTMENT

65%

NO INVESTMENT KNOWLEDGE22%

LESS LIQUIDITY3%

REASON FOR NOT INVESTING IN MUTUAL FUND

Fig.5.41 Reason for not investing in mutual fund

INFERENCE:

This shows that Majority of the Respondents (65%) reason for not investing in Mutual fund is

they feel mutual fund as risky investment, 22%,10% and 3% of the respondents told the main

reason as No investment Knowledge, No Guaranteed Returns and Less liquidity respectively.

5.2 STATISTICAL ANALYSIS:

72

CORRELATION TEST

Table 5.42 AGE VS RESPONDENTS AWARENESS OF MUTUAL FUND

RESPONDENTS AWARENESS OF MUTUAL FUND

AGE YES NO Total

BELOW 25

25-35

35-45

Above 45

Total

7

58

52

63

180

3

29

24

14

70

10

87

76

77

250

Fig.5.42 Age vs Respondents Awareness of Mutual Fund

73

BELOW 25 25-35 35-45 ABOVE450

10

20

30

40

50

60

70

AGE VS AWARENESS OF MUTUAL FUND

YES NO

Spearman rank correlation coefficient is given by,

AGE VS AWARENESS OF MUTUAL FUND

Symmetric MeasuresValue Asymp. Std.

Errora

Approx. Tb

Approx. Sig.

Interval by Interval

Pearson's R -.125 .060 -1.990 .048c

Ordinal by Ordinal

Spearman Correlation

-.128 .060 -2.029 .043c

N of Valid Cases 250

R = -.128

INFERENCE:

Since we get a negative correlation there is no direct influence on Age and Awareness of

Mutual Fund.

Table 5.43 ANNUAL INCOME VS AWARENESS OF TAX BENEFITS

RESPONDENTS AWARENESS OF TAX BENEFITS

74

ANNUAL INCOME YES NO TOTAL

BELOW 2LAKHS

2 TO 5LAKHS

5 TO 10LAKHS

ABOVE 10LAKHS

TOTAL

1

11

14

1

27

61

138

23

1

223

62

149

37

2

250

Fig.5.43 Annual income vs Awareness of tax benefits

Spearman rank correlation coefficient is given by

ANNUAL INCOME VS AWARENESS OF TAX BENEFITS

Symmetric Measures

75

BELOW 2LAKHS 2 TO 5LAKHS 5 TO 10 LAKHS ABOVE 10 LAKHS0

20

40

60

80

100

120

140

160

ANNUAL INCOME VS AWARENESS OF TAXBENEFITS

YES NO

Value Asymp. Std. Errora

Approx. Tb

Approx. Sig.


Pearson's R -.343 .062 -5.750 .000c

Ordinal by Ordinal


-.330 .058 -5.498 .000c

N of Valid Cases 250

R = -.330

INFERENCE:

Since we get a negative correlation there is no direct influence on Annual Income and Awareness

of Tax benefits.

Table 5.44 AGE VS RESPONDENTS INVESTED

AGE YES NO TOTAL

BELOW 25 1 9 10

76

25-35

35-45

ABOVE 45

TOTAL

3

6

12

22

84

70

65

228

87

76

77

250


AGE VS RESPONDENTS INVESTED

Symmetric Measures

77

BELOW 25 25-35 35-45 ABOVE 450

10

20

30

40

50

60

70

80

90

INVESTED IN MUTUAL FUND NOT INVESTED IN MUTUAL FUND

Value Asymp. Std. Errora

Approx. Tb

Approx. Sig.


Pearson's R -.152 .063 -2.422 .016c

Ordinal by Ordinal


-.157 .062 -2.510 .013c

N of Valid Cases 250.R = -.157

INFERENCE:

Since we get a negative correlation there is no direct influence on Age and Respondents

Invested.

Table 5.45: AGE VS TYPE OF MUTUAL FUND INVESTMENT

AGE LUMPSUM SYSTEMATIC TOTAL

78

INVESTMENT

PLAN

BELOW 25

25-35

35-45

ABOVE 45

TOTAL

1

10

15

17

43

0

10

4

8

22

1

20

19

25

65

BELOW 25 25-35 35-45 ABOVE 450

2

4

6

8

10

12

14

16

18

AGE VS TYPE OF MUTUAL FUND INVESTMENT

LUMPSUM SYSTEMATIC INVESTMENT PLAN

Fig.5.45 Age vs Type of mutual fund investment


AGE VS TYPE OF MUTUAL FUND INVESTMENT

79

Symmetric MeasuresValue Asymp. Std.

Errora

Approx. Tb

Approx. Sig.


Pearson's R -.113 .127 -.903 .370c

Ordinal by Ordinal


-.116 .128 -.925 .358c

N of Valid Cases 65

R = -.116

INFERENCE:

Since we get a negative correlation there is no direct influence on Age and Type of Mutual Fund

Investment.

CHI SQUARE TEST

Table 5.46 AGEVS MODE OF INVESTMENT

80

AGE BANK/POST

OFFICE

DEPOSIT

INSURANCE MUTUALFUND OTHERS TOTAL

BELOW 25

25-35

35-45

ABOVE 45

TOTAL

6

46

28

38

118

1

6

15

12

34

1

5

2

2

10

2

30

31

25

88

10

87

76

77

250

BELOW 25 25-35 35-45 ABOVE 450

5

10

15

20

25

30

35

40

45

50

AGE VS MODE OF INVESTMENT

BANK/POST OFFICE INSURANCE MUTUAL FUND OTHERS

Fig.5.46 Age vs Mode of investment

Let h0 be the hypothesis that denotes Age and Mode of Investment are independent of each

other.

Let h1 be the hypothesis that denotes Age and Mode of Investment are dependent on each other.

Oi Ei (Oi– Ei)2 X 2

= Σ (Oi– Ei)2/Ei

6 4.72 3.24 0.686

81

1

1

2

46

6

5

30

28

15

2

31

38

12

2

25

1.36

0.4

3.52

41.064

11.382

3.48

30.624

35.872

10.336

3.04

26.752

36.344

10.472

3.08

27.104

0.1296

0.36

2.3104

24.364

34.012

2.310

0.389

61.968

21.752

1.082

18.046

2.742

2.334

1.166

4.426

0.095

0.975

0.656

0.593

2.874

0.663

0.012

1.727

2.104

0.356

0.674

0.075

0.222

0.378

0.163

AGE VS MODE OF INVESTMENT

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square

11.846a 9 .222

Likelihood Ratio 12.168 9 .204N of Valid Cases 250

LOS= 5%=0.05, df = (r-1)(c-1) = (3)(3) =9 ,Calculated value= 11.846 and Table value=16.919

INFERENCE: Since the calculated value (11.846) is less than the table value (16.919), accept

the null hypothesis. So, the variables Age and Mode of Investment are Independent of each

other.

Table 5.47 AGE VS RISK BEARING CAPACITY

AGE HIGH MEDIUM LOW TOTAL

82

BELOW 25

25-35

35-45

ABOVE 45

TOTAL

0

5

0

5

10

2

21

15

11

49

8

61

61

61

191

10

87

76

77

250

BELOW 25 25-35 35-45 ABOVE 450

10

20

30

40

50

60

70

AGE VS RISK BEARING CAPACITY

HIGH MEDIUM LOW

Fig.5.47 Age vs Risk bearing capacity

Let h0 be the hypothesis that denotes Age and Risk bearing capacity are independent of each

other.

Let h1 be the hypothesis that denotes Age and Risk bearing capacity are dependent on each

other.

WORKING:


83

= Σ (Oi– Ei)2/Ei

0

2

8

5

21

61

0

15

61

5

11

61

0.4

1.96

7.64

3.48

17.052

66.468

3.04

14.896

58.064

3.08

15.092

58.828

0.16

0.0016

0.1296

2.3104

15.5827

29.899

9.242

0.0108

8.6200

3.6864

16.744

4.717

0.4

0.0008

0.0169

0.663

0.9140

0.449

3.040

0.0001

0.1484

1.1968

1.1094

0.0801

AGE VS RISK BEARING CAPACITY

Chi-Square TestsValue df Asymp. Sig.

(2-sided)Pearson Chi-Square

8.021a 6 .237


LOS =5%=0.05, df = (r-1)(c-1) =(3)(2)=6 ,Calculated value =8.021 and Table value =12.592

INFERENCE:

Since the Calculated value (8.021) is less than the table value (12.592), accept the null

hypothesis. So, the variables Age and Risk bearing Capacity are Independent of each other.

Table 5.48: ANNUAL INCOME VS RISK BEARING CAPACITY

AGE HIGH MEDIUM LOW TOTAL

BELOW 2 LAKHS 4 13 45 62

84

2 TO 5 LAKHS

5 TO 10 LAKHS

ABOVE 10 LAKHS

TOTAL

3

3

0

10

22

12

2

49

124

22

0

191

149

37

2

250

BELOW 2 LAKHS 2 TO 5 LAKHS 5 TO 10 LAKHS ABOVE 10 LAKHS0

20

40

60

80

100

120

140

ANNUAL INCOME VS RISK BEARING CAPACITY

HIGH MEDIUM LOW

Fig.5.48 Annual income vs Risk bearing capacity

Let h0 be the hypothesis that denotes Annual Income and Risk bearing capacity are independent

of each other.

Let h1 be the hypothesis that denotes Annual Income and Risk bearing capacity are dependent on

each other.

WORKING:


85

= Σ (Oi– Ei)2/Ei

4

13

45

3

22

124

3

12

22

0

2

0

2.48

12.152

47.368

5.96

29.204

113.836

1.48

7.252

28.268

0.08

0.392

1.528

2.3104

0.7191

5.6074

8.7616

51.897

103.306

2.3104

22.543

39.287

0.0064

2.5856

2.3347

0.932

0.059

0.118

1.470

1.777

0.907

1.561

3.108

1.389

0.08

6.595

1.527

ANNUAL INCOME VS RISK BEARING CAPACITY

Chi-Square TestsValue df Asymp. Sig.

(2-sided)Pearson Chi-Square

19.527a 6 .003


LOS=5%=0.05, df =(r-1)(c-1) = (3)(2)=6 ,Calculated value =19.527 and Table value=12.592

INFERENCE:

Since the calculated value (19.527) is more than the Table value (12.592) reject the null

hypothesis. So, the variables Annual Income and Risk bearing capacity are dependent on each

other.

Table 5.49: GENDER VS PREFERABLE PERIOD OF INVESTMENT

86

GENDER SHORT TERM MEDIUM

TERM

LONG TERM TOTAL

MALE

FEMALE

TOTAL

72

63

135

22

3

25

61

29

90

155

95

250

SHORT TERM MEDIUM TERM LONG TERM0

10

20

30

40

50

60

70

80

GENDER VS PFEFERABLE PERIOD OF IN-VESTMENT

MALE FEMALE

Fig.5.49 Gender vs Preferable period of investment

Let h0 be the hypothesis that denotes Gender and Preferable period of Investment are

independent of each other.

Let h1 be the hypothesis that denotes Gender and Preferable period of Investment are dependent

on each other.

WORKING:


87

= Σ (Oi– Ei)2/Ei

72

22

61

63

3

29

83.7

15.5

55.8

51.3

9.5

34.2

136.89

42.25

27.04

136.89

42.25

27.04

1.6354

2.7258

0.4845

2.6684

4.4473

0.7906

GENDER VS PERIOD OF INVESTMENT

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square

12.752a 2 .002

Likelihood Ratio 14.001 2 .001N of Valid Cases 250.

LOS=5%=0.05, df =2, Calculated value =12.752, Table value=5.991

INFERENCE:

Since the calculated value (12.752) is more than the Table value (5.991) reject the null

hypothesis. So, the variables Gender and Preferable period of Investment are dependent on each

other.

ONE WAY ANOVA

88

Table 5.50: Age vs Period of Investment

AGE SHORT TERM MEDIUM

TERM

LONG TERM TOTAL

BELOW 25

25-35

35-45

ABOVE 45

TOTAL

8

49

35

43

135

0

9

7

9

25

2

29

34

25

90

10

87

76

77

250

BELOW 25 25-35 35-45 ABOVE 450

10

20

30

40

50

60

AGE VS PERIOD OF INVESTMENT

SHORT TERM MEDIUM TERM LONG TERM

Fig.5.50 Age vs Period of investment

Let h0=There is no significant difference between Age and Period of Investment and

h1 = There is a significant difference between Age and Period of Investment

89

ANOVArespondents period of investment

Sum of Squares

df Mean Square F Sig.

Between Groups

4.319 3 1.440 1.666 .175

Within Groups 212.581 246 .864Total 216.900 249

At LOS 5% = 0.05

df(3,246)

Calculated value = 1.666 and

The table value is F 0.05(3,246) = 2.60

INFERENCE:

Since calculated value (1.666) is lesser than the table value (2.60), accept H0.so, there is no

significant difference between the Age and the period of investment.

CHAPTER-6 FINDINGS AND SUGGESTIONS:

90

FINDINGS:

Majority of the Respondents is Male (62%) and only 38% of the Respondents are Female (38%).

[Table 5.1]

Majority of the Respondents (35%) are from the Age group of 25-35 years and 31%,30% and

4% of the Respondents are from the Age group of Above 45,35-45 and Below 25 years.[Table

5.2]

Majority of the Respondents (59%) are in the Income group of 2 to 5 Lakhs and 25%, 15% and

1% of the Respondents are in the Income group of Below 2 lakhs, 5 to 10 lakhs and Above 10

lakhs respectively.[Table 5.3]

Majority of the Respondents (52%) are Graduates, 36% and 12% of the Respondents are Post

Graduate and Others respectively.[Table 5.4]

Majority of the Respondents (72%) are Aware about the Mutual Fund and only 28% of the

respondents are not aware about the Mutual Fund.[Table 5.5]

Majority of the Respondents (87%) are aware of Mutual Fund only through TV/Newspaper and

7%,4% and 2% of the Respondents are aware through Friends/Relatives, Others and Advisors

respectively.[Table 5.6]

Majority of the Respondents (91%) are not invested in Mutual fund and only 9% of the

Respondents are invested in Mutual Fund.[Table 5.7]

Majority of the Respondents (98%) are not having Demat Account and only 2% of the

Respondents are holding Demat Account.[Table 5.8]

Majority of the Respondents (60%) are holding Demat Account under the Advice of Friends and

40% of the Respondents are holding Demat under the Advice of Advisors.[Table 5.9]

Majority of the Respondents (74%) are not aware about the different ways of investing in Mutual

Fund and only 26% of the Respondents are aware about the different ways of investment in

Mutual Fund such as Lump sum and Systematic Investment Plan.[Table 5.10]

91

Majority of the Respondents (66%) prefers Lump sum Investment and only 34% of the

Respondents prefer Systematic Investment Plan as they feel that the One-time Investment is

better than Systematic Investment Plan as they were not aware about the benefits of systematic

Investment Plan Investment.[Table 5.11]

Majority of the Respondents (92%) prefers Open ended fund the most as it provides liquidity to

the Investors and only 6% and 2% of the Respondents prefers close ended fund and both


Majority of the Respondents (70%) prefers Debt fund the most as it involves less risk compared

to other funds and 15%, 12% and 3% of the Respondents prefers balanced fund, Growth fund

and Blue chip fund respectively.[Table 5.13]

Majority of the Respondents (54%) prefers Short term Investment the most as most of them were

not interested in long term savings due to their insufficient Income, 36% and 10% of the

Respondents prefers Long term and Medium term Investment respectively.[Table 5.14]

Majority of the Respondents (76%) have very low Risk Bearing Capacity as most of them are

not willing to take risk in Investments as they were not ready to face loss ,20% and 4% of the

Respondents have Medium and Low Risk Bearing Capacity respectively.[Table 5.15]

Majority of the Respondents (66%) prefers safety of the capital the most when they considered

during Investment,20%,12% and 2% of the Respondents prefers Growth, Return and Liquidity


Majority of the Respondents (80%) considers Mutual Fund as the Risky Investment because of

the reason that it is mainly related to share market and Risk involved in it and 20% of the

Respondents don’t consider Mutual Fund as the Risky Investment.[Table 5.17]

Majority of the Respondents (89%) was not aware of the Tax Benefits in Mutual fund and only

11% of the Respondents were aware about the Tax Benefits.[Table 5.18]

Majority of the Respondents(55%) gives 1st rank to the ICICI Asset Management company based

on their awareness and it is because of the advertisement in the media it reached well in the

92

minds of people,32%,8%,3% and 2% of the respondents gives 2nd rank,3rd rank,5th rank and 4th

rank respectively.[Table 5.19]

Majority of the Respondents (40%) gives Birla Sun life asset Management Company the third

rank,34%,14%,8% and 4% of the Respondents gives 5th rank,4th rank,2nd rank and 1st rank


Majority of the Respondents (52%) gives HDFC Asset Management company the 2nd rank

because of its most trusted brand,34%,10%,3% and 1% gives 1st rank,3rd rank,4th rank and 5th


Majority of the Respondents(62%) gives 4th rank for the Tata Asset Management

company ,23%,8%,4% and 3% of the Respondents gives 3rd rank,5th rank,2nd rank and 1st rank

respectively for Tata Asset Management Company.[Table 5.22]

Majority of the Respondents (54%) gives the last rank to the Reliance Capital Asset Management

Company as they were not satisfied with the profit and service of that company,19%,18%,5%

and 4% of the Respondents gives 4th rank,3rd rank,1st rank and 2nd rank respectively.[Table 5.23]

Majority of the Respondents (38%) gives HDFC Top 200 fund the 3rd rank because of its future

growth prospects, 26%, 18%, 13% and 5% of the Respondents gives 2nd rank, 4th rank, 1st rank

and 5th rank respectively.[Table 5.24]

Majority of the Respondents (35%) gives Reliance Growth Fund the 4 th rank, 29%, 22%, 10%

and 4% of the Respondents gives 5th rank, 3rd rank, 2nd rank and 1st rank respectively. .[Table

5.25]

Majority of the Respondents (41%) gives 2nd rank for the Tata Ethical Fund due to its good

return and growth prospects in the Multicap sector,26%,16%,12% and 5% of the respondents

gives 4th rank,3rd rank,5th rank and 1st rank respectively.[Table 5.26]

Majority of the Respondents (76%) gives 1st rank to the SBI Pharma fund due to its most trusted

brand, good return and good growth prospects, 13%, 6% and 5% gives 2nd rank, 4th rank and 3rd


93

Majority of the Respondents(54%) gives last rank to the ICICI prudential focused blue chip fund

when compared to the other top performing funds,20%,14%,10% and 2% of the Respondents

gives 3rd rank,4th rank,2nd rank and 1st rank respectively.[Table 5.28]

Majority of the Respondents (55%) are Neutral with the steady Income they earn when invested

in Mutual fund, 27%, 13.5% and 4.5% of the Respondents are satisfied, Dissatisfied and

Extremely Dissatisfied with the steady Income they got when invested in Mutual Fund.[Table

5.29]

Majority of the Respondents (55%) are Neutral with the Growth prospects,23%,18% and 4% of

the Respondents are Satisfied, Dissatisfied and Extremely Dissatisfied with the Growth Prospects

of Mutual Fund.[Table 5.30]

Majority of the Respondents (50%) are Neutral with the fund professionally managed by a fund

manager, 36%, 9% and 5% of the Respondents are Satisfied, Dissatisfied and Extremely

Dissatisfied with the professional managed of the Mutual Fund.[Table 5.31]

Majority of the Respondents (36%) are satisfied with the quick returns provided by the Mutual

Funds, 32%, 27% and 5% of the respondents are Neutral, Dissatisfied and Extremely Dissatisfied

with the quick returns earned when invested in Mutual Fund.[Table 5.32]

Majority of the Respondents(73%) are Satisfied with the Easy exit option provided by the

Mutual fund companies as they feel it is comfortable to quit from investments,13%,9% and 5%

of the Respondents are Neutral, Dissatisfied and Extremely Dissatisfied with the Easy Exit

Option provided by Mutual fund companies.[Table 5.33]

Majority of the Respondents (50%) are Dissatisfied with the risk involved in Mutual fund and

they don’t believe that Mutual Fund has very less risk involved in it, 27%, 18% and 5% of the

Respondents are Satisfied, Neutral and Extremely Dissatisfied with the risk involved in Mutual

Fund.[Table 5.34]

Majority of the Respondents (55%) are Satisfied with the Convenience provided by Mutual fund

companies, 32% respondents are Neutral, 9% and 4% of the Respondents are Dissatisfied and

Extremely Dissatisfied with the convenience of Mutual Funds.[Table 5.35]

94

Majority of the Respondents (68%) are satisfied with the flexibility of Mutual fund, 18%, 9%

and 5% of the Respondents are Neutral, Dissatisfied and Extremely Dissatisfied with the

flexibility provided by the Mutual fund Company.[Table 5.36]

Majority of the Respondents (82%) are satisfied with the customer service of a Mutual fund

company, 13% and 5% of the Respondents are neutral and Extremely Dissatisfied with the

customer service of the Mutual Fund Company.[Table 5.37]

Majority of the Respondents(47%) prefers Bank/post office deposit as the profitable investment

as they feel that there is no risk involved in it with the guaranteed rate of return,35% felt

profitable investment as Gold, Share Market and Real Estate ,14% and 4% prefers Insurance and

Mutual Fund respectively.[Table 5.38]

Majority of the Respondents (88%) were not aware of the ranking available for investment

decision of Investors and only 12% of the respondents follows the ranking available for

investment decision.[Table 5.39]

Majority of the Respondents (72%) considers Mutual Fund as the best all time due to its high

returns over the long run, 22%, 4% and 2% of the Respondents considers mutual fund as best all

time due to its high growth prospects, less risk and Transparency respectively.[Table 5.40]

Majority of the Respondents (65%) reason for not investing in Mutual fund is they feel mutual

fund as risky investment, 22%,10% and 3% of the respondents told the main reason as No

investment Knowledge, No Guaranteed Returns and Less liquidity respectively.[Table 5.41]

SUGGESTIONS:

95

Mostly the investors are more interested in those schemes that can easily provide them

safety for capital invested. The suggestion makers have emphasized that the fund

managers should invest the investor’s money in secure income related Schemes so that

safety for capital invested must be ensured.

Generally the offer documents and reports of various mutual fund Companies are not free

from technicalities. So the investors opinioned that the Information contained in the offer

documents should be simple and free of Technicalities so that a lay investor can easily

understand them.

The periodical statements of mutual fund companies are considered as a very important

source of information to the investors. So it is very essential that these periodical

statements should contain all the relevant information in a compiled form and managers

must ensure that these statements should reach the investors in time.

Mostly a lay person doesn’t have enough knowledge to invest in mutual funds. So they

depend on the fund managers who are experts in managing efficient portfolios. The fund

managers should be the person of integrity and financial experts. They should have clear

cut knowledge of when to invest and in which securities to invest .They should mobilize

the investor’s savings in such a way that they can get maximum benefits out of them.

Winning the investor’s confidence and protecting their rights is the common objective of

all the mutual fund companies. In this context the AMFI and SEBI should make strict

rules and regulations for safeguarding the interests of the common investors. If these

rules are not being followed properly, a provision of Punishment should be made who

violates the same.

Steps should be taken to boost the confidence and morale of the investors. This can be

done through appropriate communication and by educating investors to invest in mutual

funds. Timely and right information should be provided to them by different

communication modes so that they come to know about the latest trends in the market.

CONCLUSION:

96

Today a lot of investment opportunities are available to the investors in the Financial markets.

Investors can invest in corporate bonds, debentures, and bank Deposits, post office schemes etc.

Today many institutions are busy in providing Wealth management services to the investors. But

these services are very costly. Thus in order to help the investor’s mutual funds provide a

protective shed to the small and big investors, The present study analyses the mutual fund

investments in Relation to investor’s behavior. All this will lead to the overall growth and

Development of the mutual fund industry by better understanding of one of the most important

segment, the government employees’ .Most of the Government employees are would like to

invest in various Investments for the Tax benefits. Most of the government employees are not

aware of Tax Benefits in Mutual fund, so the Mutual fund companies should target the

government employees by making them aware of tax benefits and should provide them a good

customer service with descent rate of return.

This report will give Prudent Corporate Advisory Services Limited a better edge over other firm

in getting more government employees as their customers and to maintain a better client

organization relationship.

97

BIBLIOGRAPHY:

Darren George and Paul Mallery, 2011, Indian Edition Published by Dorling Kindersley

Publishing, Tenth Edition,”SPSS for Windows Step by Step”.

Deepak Chawla and Neena Sondhi, 2011, Vikas Publishing House Pvt Ltd, First Edition,

” Research Methodology Concepts and Cases”.

Mohanarao, 2013, Kanishka Publishers, Distributors, Second Edition,” Working of Mutual Fund

Organizations’ in India”.

Philip Kotler and Kevin Lane Keller, 2013, Indian Edition Published by Dorling Kindersley

India Pvt Ltd, Fourth Edition, “A Framework for Marketing Management”.

Prasanna Chandra, 2013, Published by McGraw Hill Education Private Limited, Fourth Edition,

” Investment Analysis and Portfolio Management”.

TN Srivastava and Shailaja Rego, 2012, Published by McGraw Hill Education Private Limited,

Second Edition, “Statistics for Management”.

REFERENCES:

www.prudentcorporate.com

www.slideshare.net

www.moneycontrol.com

www.sharemarket.in

www.amfiindia.com

www.manimoney.com

APPENDIX:

98

http://www.manimoney.com/

http://www.amfiindia.com/

http://www.sharemarket.in/

http://www.moneycontrol.com/

http://www.slideshare.net/

AWARENESS OF MUTUAL FUND AMONG GOVERNMENT EMPLOYEES

GENERAL INFORMATION:

1. Gender

a) Male b) Female

2. Age

a) Below 25 b) 25-35 c) 35-45 d) Above 45

3. Annual Income

a)Below 2 lakhs b)2 to 5 lakhs c)5 to 10 lakhs d)Above 10 lakhs

4. Educational qualification

a) Graduate b) post Graduate c) others

RESEARCH QUESTIONS:

5. Are you aware about Mutual Fund?

a) Yes b) No

6. From which source you come to know about Mutual Fund?

a)Advisors b)Friends/Relatives c)TV/Newspaper d)Others

7. Have you ever invested in mutual fund of any company?

a) Yes b) No

8. Do you have a Demat Account?

a) Yes b) No

9. Do you Operate Demat Account on your own or under any advice?

99

If it is so, under whose advice?a)Advisors b) Friends c)Relatives

10. Are you aware about the different ways of investing into mutual fund?

a) Yes b) No

11. If yes, which way do you like the most?

a) Lump sum b) Systematic Investment Plan

12. What kind of Mutual Fund Schemes Would you Prefer?

a)Open Ended Fund b)Close Ended Fund c)Both

13. What kind of Mutual Fund attracts you most?

Growth Fund

Debt Fund

Balanced Fund

Liquid Fund

Blue chip Fund

14. What would be your preferable period of investment?

a)Short term b)Medium term c)Long term

15. What is your Anticipating Risk bearing capacity?

a)High b)Medium c)Low

16. What are the factors you look into before making an investment plan?

a)Safety b)Growth c)Return d) Liquidity

17. Do you think mutual fund investment is a risky investment?

100

a) Yes b) No

18. Are you aware of the tax benefits of mutual funds?

a) Yes b) No

19. Given below are a few Asset Management Company. Rank the companies based on your

awareness.

ICICI Asset Management Company

Birla Sun Life Asset Management Company

HDFC Asset Management Company

Tata Asset Management Company

Reliance Capital Asset Management Company

20. Rank Top 5 Mutual Funds according to your choice

HDFC Top 200 Fund

Reliance Growth Fund

Tata Ethical Fund

SBI Pharma

ICICI Prudential Focused Blue chip Fund

21.” Investing in Mutual Funds has given me “

101

Extremely

Satisfied

Satisfied Neutral Dissatisfied Extremely

Dissatisfied

Steady

Income

Growth

Prospects

Professionally

managed

Quick

Returns

Easy Exit

Option

Less Risk

Convenience

Flexibility

Customer

Service

22. Which investment you feel profitable?

a) Bank/post office deposit b) Insurance c) Mutual fund d) Others

23. Do you follow the ranking available for Investment decision? a) Yes b) No

24. Why do you think Mutual Funds are best all time?

a) High Returns b) High Growth Prospects c) Less Risk d) Transparency

25. What is the reason for not investing in Mutual fund?

102

a)No Guaranteed Returns

b)Risky Investment

c)No Investment Knowledge

d)Less liquidity

103

mutual funds Data Analysis and Interpratation

Documents

Transcript of mutual funds Data Analysis and Interpratation