Consumer Prefer on Reliance Mutual Fund

7/30/2019 Consumer Prefer on Reliance Mutual Fund

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PROJECT REPORT

ON

CONSUMER PREFERENCESUndertaken At

Submitted in partial fulfilment of the requirementsFor the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF: SUBMITTED BY:MS. PREETI SEHGAL KARNI MAAN SINGH

LECTURER Roll No.: 81005320087

CHANDIGARH BUSINESS SCHOOLAffiliated to

PUNJAB TECHNICAL UNIVERSITY

2008-2011

DECLARATION

Preference of customer in different mutal fund


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I hereby declare that this Project Report entitled

CONSUMER PREFERENCES FOR RELIANCE MUTUAL FUND

submitted by me to the PTU, is a bonafide work undertaken and it is not

submitted to any other University or Institution for the award of any

degree certificate or published any time before.

Name : Signature of the

Student :

Date :



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ACKNOWLEDGEMENT

First of all, I express my profound gratitude to the management of

CONSUMER PREFERENCES FOR RELIANCE MUTUAL FUND for



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giving me the opportunity to do my project training at their esteemed

organization. I am highly obliged to Mr. MUNISH SABARWAL (H.O.D.)

CHANDIGARH, who provided me such a training, which made me able to

gain knowledge about the field of paints and without his encouraging and

helping attitude this project could not have attained its present shape. It

was only due to his support & guidance that I am able to gain maximum

knowledge that helps me to deliver the best.

Lastly I would like to thank all the respondents who offered their opinions

and suggestions through the survey that was conducted by me. Finally

the support and encouragement to accomplish a major piece of work

comes from friends and family. To them I am indebted beyond words.

KARNI MAAN SINGH



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CONTENTS

CERTIFICATE

ACKNOWLEGEMENTS

DECLARATION

PREFACE

LIST OF TABLES

CHAPTER -1: INTRODUCTION

What is Mutual Fund

Advantages and Disadvantages

Why to invest in Mutual Fund

Other Investment Options

CHAPTER -2: COMPANY PROFILE

Profile Of RELIANCE Mutual Fund

Products Of RELIANCE Mutual Fund

Main Schemes Of RELIANCE Mutual Fund

Competitors Of RELIANCE Mutual Fund

CHAPTER 3: OBJECTIVES AND RESEARCH METHODOLGY

Objectives Of Study

Research Methodology

Limitations Of Study Respondents Profile

CHAPTER -4: DATA ANALYSIS AND INTERPRETATION

CHAPTER-5: FINDINGS AND CONCLUSIONS

CHAPTER-6: SUGGESTIONS

BIBILIOGRAPHY

ANNEXURE

QUESTIONNARIE



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CHAPTER 1

INTRODUCTION



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INTRODUCTION TO MUTUAL FUND

Mutual funds, as the name indicates is the fund where in numerous investors come together to

invest in various schemes of mutual fund.

Mutual funds are dynamic institution, which plays a crucial role in an economy by mobilizing

savings and investing them in the capital market, thus establishing a link between savings and

the capital market.

A mutual fund is an institution that invests the pooled funds of public to create a diversified

portfolio of securities. Pooling is the key to mutual fund investing. Each mutual fund has aspecific investment objective and tries to meet that objective through active portfolio

management.

Mutual fund as an investment company combines or collects money of its shareholders and

invests those funds in variety of stocks, bonds, and money market instruments. The latter

include securities, commercial papers, certificates of deposits, etc. Mutual funds provide the

investor with professional management of funds and diversification of investment.

Investors who invest in mutual funds are provided with units to participate in stock markets.

These units are investment vehicle that provide a means of participation in the stock market

for people who have neither the time, nor the money, nor perhaps the expertise to undertake

the direct investment in equities. On the other hand they also provide a route into specialist

markets where direct investment often demands both more time and more knowledge than an

investor may possess.



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Mutual fund is a trust that pools the savings of a number of investors who share a common

financial goal. This pool of money is invested in accordance with a stated objective. The joint

ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus

collected is then invested in capital market instruments such as shares, debentures and other

securities. The income earned through these investments and the capital appreciations

realized are shared by its unit holders in proportion the number of units owned by them. Thus

a Mutual Fund is the most suitable investment for the common man as it offers an

opportunity to invest in a diversified, professionally managed basket of securities at a

relatively low cost. A Mutual Fund is an investment tool that allows small investors access to

a well- diversified portfolio of equities, bonds and other securities. Each shareholder

participates in the gain or loss of the fund. Units are issued and can be redeemed as needed.

The funds Net Asset value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of industries and sectors

and thus the risk is reduced. Diversification reduces the risk because all stocks may not move

in the same direction in the same proportion at the same time. Mutual fund issues units to the

investors in accordance with quantum of money invested by them. Investors of mutual funds

are known as unit holders.

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

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


PASSED

BACK TO

POOL THEIR

MONEY WITH

GENERATES INVEST IN


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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.



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ADVANTAGES OF MUTUAL FUND

The advantages of investing in mutual fund are:

Professional Management-

The primary advantage of funds (at least theoretically) is the professional

management of your money.

Investors purchase funds because they do not have the time or the expertise to manage

their own portfolio. A mutual fund is a relatively inexpensive way for a small investor

to get a full time manager to make and monitor investments.

Diversification-

Diversification is an investing strategy that can be neatly summed up as "Don't put all

your eggs in one basket." Spreading your investments across a wide range of

companies and industry sectors can help lower your risk if a company or sector fails.

Some investors find it easier to achieve diversification through ownership of mutualfunds rather than through ownership of individual stocks or bonds.

Affordability

Some mutual funds accommodate investors who don't have a lot of money to invest

by setting relatively low dollar amounts for initial purchases, subsequent monthly

purchases, or both.

Economies of scale-Because a mutual fund buys and sells large amount of securities at a time, its

transaction costs are lower than you as an individual would pay.

Convenient Administration-

Investing in mutual fund reduces paperwork and helps you avoid many problems such

as bad deliveries, delayed payments and follow up with the brokers and companies.

Mutual funds save your time and make investing easy and convenient.

Return Potential-



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Over a medium to long term, Mutual funds have the potential to provide a higher

return as they invest in a diversified basket of selected securities.

Liquidity -

Mutual fund investors can readily redeem their shares at

the current NAV plus any fees and charges assessed on redemption at any

time.

Choice of Schemes -

Mutual funds offer a family of schemes to suit your varying needs over a lifetime.

Flexibility -

Mutual Funds offering multiple schemes allow investors to switch easily between

various schemes. This flexibility gives the investor a convenient way to change the

mix of his portfolio over time.

Transparency -

Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the

entire portfolio monthly. This level of transparency, where the investor himself sees

the underlying assets bought with his money, is unmatched by any other financial

instrument. Thus the investor is in the know of the quality of the portfolio and can

invest further or redeem depending on the kind of the portfolio that has been

constructed by the investment manager.

Well Regulated

Unlike the company fixed deposits, where there is little control with the investment

being considered as unsecured debt from the legal point of view, the Mutual Fundindustry is very well regulated. All investments have to be accounted for, decisions

judiciously taken. SEBI acts as a true watchdog in this case and can impose penalties

on the AMCs at fault. The regulations, designed to protect the investors interests are

also implemented effectively.



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DISADVANTAGES OF MUTUAL FUNDS:

The disadvantages of investing in a Mutual Fund are:

Professional Management-

Did you notice how we qualified the advantage of professional management with the word

"theoretically"? Many investors debate over whether or not the so-called professionals are

any better than you or I at picking stocks. Management is by no means infallible, and, even if

the fund loses money, the manager still takes his/her cut.

Costs

Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The

mutual fund industry is masterful at burying costs under layers of jargon.

Dilution

It's possible to have too much diversification. Because funds have small holdings in so many

different companies, high returns from a few investments often don't make much difference

on the overall return. Dilution is also the result of a successful fund getting too big. When

money pours into funds that had strong success, the manager often has trouble finding a good

investment for all the new money.

Taxes

When making decisions about your money, fund managers don't consider your personal tax

situation. For example, when a fund manager sells a security, a capital-gain tax is triggered,

which affects how profitable the individual is from the sale. It might have been more

advantageous for the individual to defer the capital gains liability.



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WHY TO INVEST IN MUTUAL FUNDS:

A proven principle of sound investment is do not put all eggs in one basket. Investment in

mutual funds is beneficial due to following reasons.

They help in pooling of funds and investing in large basket of shares of different

companies. Thus by investing in diverse companies, mutual funds can protect againstunexpected fall in value of investment.

An average investor does not have enough time and resources to develop professional

attitude towards their investment. Here professional fund managers engaged by mutual funds

take desirable investment decision on behalf of investors so as to make better utilization of

resources.

Investment in mutual funds is comparatively more liquid because investor can sell theunits in open market or can approach mutual fund to repurchase the units at net asset value

depending upon the type of scheme.

Investors can avail tax rebates by investing in different tax saving schemes floated by

these funds, approved by the government.

Operating cost is minimized per head because of large size of investible funds, there by

realizing more net income of investors.



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OTHER INVESTMENT OPTIONS

Bank Fixed Deposits (FD)

Fixed Deposit or FD is the most preferred investment option today. It yields up to 8.5%

annual return depends on the Bank and period. Minimum period is 15 days and maximum is

5 years and above. Senior citizens get special interest rates for Fixed Deposits. This is

considered to be a safe investment because all banks operated under the guidelines of Reserve

Bank of India.

National Saving Certificate (NSC)

NSC is backed by Govt. of India so it is a safe investment method. Lock in period is 6 years.

Minimum amount is Rs100 and no upper limit. You get 8% interest calculated twice a year.

NSC comes under Section 80C so you will get an income tax deduction up to Rs 1, 00,000.

From FY 2005-'06 onwards interest accrued on NSC is taxable.

Public Provident Fund (PPF)

PPF is another form of investment backed by Govt. of India. Minimum amount is Rs500 and

maximum is Rs70, 000 in a financial year. A PPF account can be opened in a head post

office, GPO and selected branches of nationalized banks. PPF also comes under Section 80C

so individuals could avail income tax deduction up to Rs 1, 00,000. Lock in period for PPF is

15 years and interest rate is 8%. Unlike NSC, PPF interest rate is calculated annually. Both

PPF and NSC considered being best investment option as it is backed by Government of

India.

Stock Market

Investing in share market is another investment option to get more returns. But share market

investment is volatile to market conditions. Before investing you should have a thorough

knowledge about its operation.

There are many investment options available like investing in Gold, Real Estate etc.



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CHAPTER 2

COMPANY PROFILE



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About company

Reliance Capital Limited (RCL)

RCL is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of

India under section 45-IA of the Reserve Bank of India Act, 1934. RCL was incorporated as a

public limited company in 1986 and is now listed on the Bombay Stock Exchange and the

National Stock Exchange (India)

With a net worth of Rs 4,123 croreand over 165,000 shareholders, RCL has established its

presence as a leading player in the financial services sector in the country. On conversion of

outstanding equity instruments, the net worth of the company will increase to over Rs 4,568

crore.

RCL ranks among the top 3 companies in the private financial services and banking sector inthe country, in terms of net worth.

Reliance Capital Asset Management Limited (RCAM), a company registered under the

Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual

Fund.

Reliance Capital Asset Management Limited is a wholly owned subsidiary of Reliance

Capital Limited, the sponsor. The entire paid-up capital (100%) of Reliance Capital Asset

Management Limited is held by Reliance Capital Limited. Reliance Mutual Fund (RMF) has

been sponsored by Reliance Capital Ltd (RCL). RCL has been promoted by Reliance

Industries Ltd., one of India's largest private sector enterprises. Reliance Industries Ltd. has a

net worth of Rs.40, 483 crores as on March 31, 2005 and currently has a large family of



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shareholders. Reliance Capital Limited is a Non Banking Finance Company engaged in

leasing, investment and other fund based activities. The net worth of Reliance Capital Ltd. is

Rs. 1,437.92 crores as on March 31, 2005.

Reliance mutual fund

Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act,

1882 with Reliance Capital Limited (RCL), as the Settler/Sponsor and Reliance Capital

Trustee Co. Limited (RCTCL), as the Trustee. Reliance Mutual Fund was formed to launch

various schemes under which units are issued to the Public with a view to contribute to the

capital market and to provide investors the opportunities to make investments in diversified

securities.

The new leader Reliance Mutual Fund has come into its own after years of

trailing the likes of Franklin Templeton, HDFC and Prudential ICICI.

According to AMFI's March-end figures, Reliance MF is the leading privateMF player in terms of corpus, and second only to UTI MF overall.

RMF is RCLs asset management company, which is amongst the top five private sector

mutual funds in the country in terms of Assets under Management. (Rs. 10,129 Crores as on

May 31, 2005). It is one of the fastest growing mutual funds in India, offering a well rounded

portfolio of products to meet varying investor requirements.

RMF was the first mutual fund in the country to launch sector specific schemes for the

banking, power, media & entertainment sectors. RMF has pioneered retail investing in the

country by reaching out to investors and distributors in more than 60 cities in the country.

They have a strong investor base which stands at more than 5, 00,000.



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Launched in 1995, Reliance MF had a tough time in the early years. Its two flagship equity

funds, Reliance Growth and Reliance Vision, showed uninspired performance till 2001. It

was only in 2002 when, after a change in fund management, the schemes started to turn

around. And so did the fund house's fortunes.

WORKING

Most of our mutual fund sales are through channel sales. The channels

being, individual distributors, banks and national distributors like BajajCapital, Anand Rathi etc. In Dehradun there are a total of about 55 active

distributors. Apart from this a few customers invest directly with us.

The individual distributors have to first pass an Association of Mutual Funds in

India AMFI test to get them registered as brokers. Thereafter they have to

get themselves empanelled with us to be entitled to get the brokerage of

the business that they give us.

The individual distributors come and hand in the applications filled in by

their investors. At the same time the applications for various schemes

from bank and national distributors have to be collected by someone in

office. This also helps us to maintain good relations with our distributors

as we constantly stay in touch with them.

The applications thus received are time stamped in the office and then

sent to Karvy for further processing. The stamping has to be done before

3 o clock every day and the same days NAV is applicable.



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The distributors are a link between us and our customers. It is thus very

crucial for us to maintain cordial relations and keep in regular touch with

them. For this we have to meet them on a daily basis and keep egging

them to increase our business, as out of sight can be out of mind.

Special features of various schemes

Dehradun branch of Reliance Mutual fund saw the inception of four New Fund Offers

(NFOs), namely Reliance Equity Opportunity, Reliance Regular Savings, RelianceTax Saver and Reliance Equity Fund. Some special features of these schemes have

been stated below

Reliance Equity Opportunity Fund

This open-ended diversified equity scheme was incepted in March 2005. This was the firstscheme ever to start the concept of flexi cap fund. That is to say that the fund

manager had the flexibility to invest in all kinds of companies ranging from large cap

companies to mid cap companies to small cap. Other mutual fund then followed the

same strategy with Franklin Templeton coming out with Franklin Templeton Flexi-

cap, HDFC with HDFC premium multi cap and RELIANCE with magnum multi cap.

Reliance Regular Savings Fund

This fund was incepted in Jan, 2005with its primary objective being to

seek capital appreciation and/or to generate consistent returns by actively

investing in equity and equity related securities. This fund was an

experiment meant for Reliance employees only. There was a facility of an

ATM card with the scheme. Thus investors had an immediate access to

the money they had invested and they no longer had to wait for T+3



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days (transaction +3 days). Another important feature of this scheme

was that one could make an investment of only Rs.500 as against Rs.5000

for any other scheme. This feature help mobilize the small investors.

This scheme was finally opened for the public on 9th June 9, 2005. Though the concept of

ATM card was a novel idea yet it had various shortcomings. Many of the investors

did not receive the cards on time, or if they did they did not get the PIN no. They also

had problems in using the ATM cards. Thus the scheme was not as big a success as it

was expected to be.

Reliance Tax Saver (ELSS) Fund

This scheme was incepted on September 22, 2005 with its primary objective being generation

of long term capital appreciation from a portfolio that is invested predominantly in

equity and equity related instruments. This scheme was the biggest AUM wise

compared to any other ELSS scheme with its AUM being 1269.56 crores. The next

biggest AUM being 824 crores for Tax Gain from RELIANCE .

Reliance Mutual Fund Makes History

With the NFO of Reliance Equity Fund, Reliance Capital AMC was set to

become the largest private sector fund house with AUM of more than

Rs.300bn

Reliance Equity Fund collected a whopping Rs57bn or $1.3bn through a New Fund Offering

(NFO).

The diversified equity fund, which also seeks to hedge its investment portfolio through

Futures & Options, eclipsed the 14-year-old record held by UTI Master Gain, which had

mopped up Rs47.83bn in 1992. RELIANCE Blue-chip fund had raised nearly Rs29bn earlier

this year.



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The Reliance Equity Fund opened for subscription on February 6 and closed on March 7.

More than 9.25 lakh applications came from 400 cities, which is also a record for a new fund

offer. The average application size was Rs60, 000.

With this NFO, Reliance Capital Asset Management Company (AMC), the Mutual Fund arm

of Reliance Capital Ltd., is all set to become the largest private sector fund house in the

country with Assets Under Management of more than Rs220bn. UTI Mutual Fund is the top

fund manager in the country with assets worth Rs276.19bn. Prudential ICICI was earlier the

top private sector Mutual Fund house, followed by HDFC Mutual Fund and Franklin

Templeton Mutual Fund.

While foreign institutional investors have pumped in over $6 billion so far into the Indianmarkets, mutual funds have been net sellers in the equity markets during the period April to

November 2004, to the tune of Rs 669 crore (Rs 6.69 billion) or $145 million (according to

the latest available official figures).

Market sources said that with Rs 1.5 lakh crore (Rs 1,500 billion) in assets,

the mutual fund industry should be playing a larger role. However the

problem is that nearly 80 per cent of the assets are in liquid and debt

assets while only a minuscule portion is in equity assets.



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Other Reliance Mutual Fund Schemes

Reliance Mutual Fund has launched twenty five Schemes till date, namely:

Reliance Vision Fund (September 1995),

Reliance Growth Fund (September 1995),

Reliance Income Fund (December 1997),

Reliance Liquid Fund (March 1998),

Reliance Medium Term Fund (August 2000),

Reliance Short Term Fund (December 2002),

Reliance Fixed Term Scheme (March 2003),

Reliance Banking Fund (May 2003),

Reliance Gilt Securities Fund (July 2003),

Reliance Monthly Income Plan (December 2003),

Reliance Diversified Power Sector Fund (March 2004),

Reliance Pharma Fund ( May 2004),

Reliance Floating Rate Fund (August 2004), Reliance Media & Entertainment Fund (September 2004),

Reliance NRI Equity Fund (October 2004),

Reliance NRI Income Fund (October 2004),

Reliance Index Fund (January 2005),

Reliance Equity Opportunities Fund (February 2005),

Reliance Fixed Maturity Fund - Series I (March 2005),

Reliance Fixed Maturity Fund - Series II (April 2005),

Reliance Regular Saving Fund (May 2005),



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Reliance Liquidity Fund (June 2005),

Reliance Tax Saver (ELSS) Fund (July 2005),

Reliance Fixed Tenor Fund (November 2005),

Reliance Equity Fund (Feb2006).



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CHAPTER 3:

OBJECTIVES OF

STUDY

&RESEARCH

METHODOLOGY



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OBJECTIVES OF THE STUDY

The objective of this report is to gain an in-depth knowledge about the components of a

Portfolio in Mutual Fund schemes and the gap that exists between the perceived concept andthe actuality of it, in order to market these products successfully.

1. To find out the Preferences of the customers or investors for Asset Management Company.

2. To know the Preferences for the portfolios.

3. To know why one has invested or not invested in RELIANCE Mutual fund.

4. To find out the most preferred channel.

5. To find out what should be done to boost Mutual Fund Industry.



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RESEARCH METHODOLOGY

The first stage included gathering information about the RELIANCE Mutual Fund in

India and getting acquainted with the working of the various Mutual Fund Schemes. The next

stage involved determining the objective of the study, knowing the target audience and

drafting a questionnaire. The questionnaire was designed keeping in mind the target audience

and objectives of the study. It was non-disguised in nature and will include a few open-ended

questions.

Research Plan

The research was exploratory in nature and the goal was to gather preliminary data to

shed light on the real nature of problems and to suggest possible solutions or new ideas. It

involved getting a feel of the situation and lays emphasis on the discovery of ideas and

possible insights.

Sample Size

The sample size of my project is limited to 200 people only. Out of which only 120 people

have invested in mutual fund. Other 80 people did not have invested in mutual fund.

Sampling Plan

The sampling unit comprised of the customers/visitors present in the office of State

Bank of India, Attawa Chandigarh Branch, irrespective of them being investors or not or

availing the services or not. The samples were chosen on the basis of convenience sampling

and these respondents belonged to middle and upper class salaried and self-employed people,

students, professionals and housewives who have invested in Mutual Funds.



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Data Sources

The research calls for gathering secondary data, primary data or both. Secondary data

is the data that is collected for another purpose and already exists somewhere. Primary data isgathered for a specific purpose and is collected by the researcher himself.

Primary Data

Primary data was collected from the existing customers of the MFs. The primary information

was collected through Questionnaire and interviews presented to the investors. It was

collected through personal visit to persons, by formal and informal talks and through fillingup the questionnaire prepared. The data has been analyzed by using Averages and

Percentages Methods.

Secondary data

Secondary Data was collected from:

a) Print articles on Mutual Funds.

b) From the websites and books.

c) Product and Service Brochures of the Mutual Funds.

Data Collection

For the purpose of this project, a questionnaire was designed to collect data. The

questionnaire was non-disguised because the objective and purpose was conveyed to the

respondents before asking for their responses. The questions were structured open for generalinformation and closed for collecting specific information.

Data Analysis Tools

Simple averages

Tabulation

Data has been presented with the help of bar graphs, pie charts, line graphs etc.



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LIMITATIONS OF STUDY

Time and resource constraints: The survey was conducted in selective areas because of

constraints of time and resources. Therefore, the findings cannot be generalized or

claimed until further research has been carried out.

Dynamic industries: As this is one of the dynamic industries today in India and many

changes are taking place in quick times. It is very important to keep an eye on this

industry very regularly. There are a lot of schemes with various objectives, so the basic

objective is used in making this report.

Sample size: The sample size taken was 200, which may not reflect a true picture of the

consumers mind. Because of these constraints, the analysis may not be accurate and may

vary, when tested in different places and time.

Some of the persons were not so responsive.

Possibility of error in data collection because many of investors may have not given

actual answers of my questionnaire.



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(3).Respondents Profile:

3(a) Age distribution of the investors of Chandigarh.

Agegroup

50

No. ofinvestors

18 30 24 20 16

Interpretation:

According to this chart out of 120 Mutual Fund investors the most are in the age group of 36-

40 yrs. i.e. 25%, the second most investors are in the age group of 41-45yrs i.e. 20% and the

least investors are in the age group of below 30 yrs.

3(b) Educational Qualification of investors.



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Interpretation:


Educational

Qualification

No. of investors

Graduate/PG 88

Under Graduate 25

Others 7

Total 120


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Out of 120 Mutual Fund investors 73% of the investors are Graduate/Post Graduate, 21% are

Under Graduate and 6% are others (under HSC).



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3(c).Occupation of the investors


Occupation No. of

investors

Government Service 30

Private Service 45

Business 35

Agriculture 4

Others 6


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Interpretation:

In occupation group out of 120 investors, 38% are private employees, 25% are Businessman,

29% are Government employees, 3% agriculture and 5% are in others.

3(d.) Monthly family income of the investors


Income Group No. of

investors

Upto10000 5

10001-15000 12

15001-20000 28

20001-30000 43

30000 and

above

32


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Interpretation:

In the income group of the investors, out of 120 investors, 36% investors that is the maximum

investors are in the monthly income group Rs.20, 001 to Rs.30, 000, Second one i.e. 27%investors are in the monthly income group of more than Rs.30, 000 and the minimum

investors i.e. 4% are in the monthly income group of below Rs.10, 000.

CHAPTER 4:

DATA ANALYSIS



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&

INTERPRETATION



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ANAYLSIS AND INTERPRETAION OF DATA

(4.1) Investors invested in different kind of investments.

Kinds of

Investments

No. of

Respondents

Saving A/C 195

Fixed Deposits 148

Insurance 152

Mutual Fund 120

Post office-NSC 75

Shares/Debentures 50

Gold/Silver 30

Real Estate 65

Interpretation:

From the above graph it can be inferred that out of 200 people, 97.5% people have invested

in Saving A/c, 76% in insurance, 74% in Fixed Deposits, 60% in Mutual Fund, 37.5% in post

office-NSC, 25% in Shares and Debentures, 15% in Gold/Silver and 32.5% in Real Estate.

(4.2)Preference of factors while investing.



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Factors a)Liquidity b) Low Risk c) Higher Return d) Trust

No. of

Respondents

40 60 64 36

Interpretation:

Out of 200 people, 32% prefer to invest where there is higher return, 30% prefer to invest

where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Trust.



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(4.3)Awareness about Mutual Fund and its Operations.

Response Yes No

No. of Respondents 135 65

Interpretation:

From the above chart it can be inferred that 67% people are aware of Mutual Fund and its

operations and 33% are not aware of Mutual Fund and its operations.



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(4.4) Source of Information for customers about Mutual

Fund.


Source of Information No. of

Respondents

Advertisement 18

Peer Group 25

Banks 30

Financial Advisors 62


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Interpretation:

From the above chart it can be inferred that Financial Advisors is the most important source

of information of Mutual Fund. Out of 135 Respondents, 46% know about Mutual Fund

through Financial Advisor, 22% through Bank, 19% through Peer Group and 13% through

Advertisement.

(4.5) Investors invested in Mutual Fund.

Response No. of Respondents

Yes 120

No 80Total 200



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Interpretation:

Out of 200 people, 60% have invested in Mutual Fund and 40% do not have invested in

Mutual Fund.

(4.6)Reasons for not invested in Mutual Fund.


Reason No. of Respondents

Not Aware 65

Higher Risk 5

Not any specific reason 10


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Interpretation:

Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund,

13% said there is likely to be higher risk and 6% do not have any specific reason.

(4.7) Investors invested in different Asset Management

Company (AMC).



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Interpretation:

In Chandigarh most of the investors preferred UTI and RELIANCE Mutual Fund. Out of 120

investors 62.5% have invested in each of them, only 46% have invested in REMF, 47% have

invested in ICICI PRU, 37.5% in Kotak and 25% in HDFC.

(4.8) Reason for invested in REMF.



Name of AMC No. of Investors

RELIANCE MF 55

UTI 75

HDFC 30

RELIANCE 75

ICICI PRU 56

KOTAK 45

OTHERS 70


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Associated with RE 35

Better Return 5

Agents Advice 15

Interpretation:

Out of 55 investors of REMF, 64% have invested because of its association with the brand

name of State Bank of India, 27% have invested on agents advice, and 9% have invested

because of better return.

(4.9) Reason for not invested in REMF.




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Not Aware 25

Less Return 18

Agents Advice 22

Interpretation:

Out of 65 people who have not invested in REMF, 38% were not aware with REMF, 28% do

not invested due to less return, and 34% due to agents advice.



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(4.10)Preference of investors for future investment in

Mutual Fund.

Name of AMC No. of Investors

REMF 76

UTI 45

HDFC 35

RELIANCE 82

ICICI PRUDENTIAL 80

KOTAK 60

OTHERS 75

Interpretation:

Out of 120 investors, 68% prefer to invest in Reliance, 67% prefer to invest in ICICI PRU,

63% in REMF, 62.5% in others, 50% in kotak, 37.5% in UTI and 29% in HDFC Mutual

Fund.



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(4.11)Channel preferred by the investors for Mutual

Fund.

Channel Financial Advisor Bank AMC

No. of Respondents 72 18 30

Interpretation:

Out of 120 investors, 60% investors prefer to invest through Financial Advisors, 25% through

Bank, and 15% investors through AMC.



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(4.12)Mode of investment preferred by the Investor.

Interpretation:

Out of 120 investors, 65% preferred One Time Investment and 35% preferred through

Systematic Investment Plan.


Mode of Investment One Time Investment Systematic Investment Plan

No. of Respondents 78 42


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(4.13) Preferred Portfolio by the Investors.

Portfolio No. of Investors

Equity 56

Debt 20

Balanced 44

Interpretation:

From the above graph 46% preferred Equity portfolio, 37% preferred Balanced and 17%

preferred Debt portfolio.



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(4.14) Option for Getting Return Preferred by the

Investors.

Option Dividend Payout Dividend Re-invest Growth

No. of Respondents 25 10 85

Interpretation:

From the above graph 71% preferred Growth option, 21% preferred Dividend Payout and 8%

preferred Dividend Reinvestment Option.



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(4.15)Preference of Investors whether to invest in

Sectorial Funds.

Response No. of Respondents

Yes 25

No 95

Interpretation:

Out of 120 investors, 79% investors do not prefer to invest in Sectorial Fund because there is

maximum risk and 21% prefer to invest in Sectorial Fund.



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Basis for analyzing the performance of

Mutual Fund

Net Asset Value (NAV) is the best parameter on which the performance of a mutual fund can

be studied. We have studied the performance of the NAV based on the compounded annual

return of the Scheme in terms of appreciation of NAV, dividend and bonus issues. WE have

compared the Annual returns of various schemes to get an idea about their relative standings.

VALUATION OF MUTUAL FUND

The net asset value of the Fund is the cumulative market value of the assets Fund net of its

liabilities. In other words, if the Fund is dissolved or liquidated, by selling off all the assets in

the Fund, this is the amount that the shareholders would collectively own. This gives rise to

the concept of net asset value per unit, which is the value, represented by the ownership of

one unit in the Fund. It is calculated simply by dividing the net asset value of the Fund by the

number of units. However, most people refer loosely to the NAV per unit as NAV, ignoring

the per unit. We also abide by the same convention.

Calculation of NAV

The most important part of the calculation is the valuation of the assets owned by the Fund.

Once it is calculated, the NAV is simply the net value of assets divided by the number of

units outstanding. The detailed methodology for the calculation of the net asset value is given

below.

The net asset value is the actual value of a unit on any business day. NAV is the barometer of

the performance of the scheme.

The net asset value is the market value of the assets of the scheme minus its liabilities and

expenses. The per unit NAV is the net asset value of the scheme divided by the number of the

units outstanding on the valuation date.



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NAV= Assets (stock held)-Liabilities (Expenses incurred)

Number of outstanding units

For e.g. if the market value of the securities of a mutual fund scheme is Rs.200 lakhs and the

mutual fund has issued 10 lakhs units at Rs.10 to the investors, then the NAV per unit of the

fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis daily or

weekly.



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CHAPTER- 5FINDINGS

AND

CONCLUSION



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Findings In Chandigarh Investors in the age group of 36-40 years were more in numbers. The

second most Investors were in the age group of 41-45 years and the least were in the

age group of below 30 years.

In Chandigarh most of the Investors were Graduate or Post Graduate and below HSC

there were very few in numbers.

In Occupation group most of the Investors were Govt. employees, the second most

Investors were Private employees and the least were associated with Agriculture.

In family Income group, between Rs.20,001- 30,000 were more in numbers, the

second most were in the Income group of more than Rs.30,000 and the least were in

the group of below Rs.10,000.

Mostly all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed

Deposits, Only 60% Respondents invested in Mutual fund.

Mostly Respondents preferred High Return while investment, the second most

preferred Low Risk then liquidity and the least preferred Trust.

Only 67% Respondents were aware about Mutual fund and its operations and 33%

were not.

Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not

have invested in Mutual fund.

Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not

any specific reason for not invested in Mutual Fund and 6% told there is likely to be

higher risk in Mutual Fund.

Most of the Investors had invested in Reliance or UTI Mutual Fund ICICI Prudential

has also good Brand Position among investors, REMF places after ICICI Prudential

according to the Respondents.

Out of 55 investors of REMF 64% have invested due to its association with the Brand

RE, 27% Invested because of Advisors Advice and 9% due to better return.

Most of the investors who did not invested in REMF due to not aware of REMF, the

second most due to Agents advice and rest due to Less Return.



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CONCLUSION

Running a successful Mutual Fund requires complete understanding of the peculiarities of the

Indian Stock Market and also the psyche of the small investors. This study has made an

attempt to understand the financial behavior of Mutual Fund investors in connection with the

preferences of Brand (AMC), Products, and Channels etc. I observed that many of people

have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They

need the knowledge of Mutual Fund and its related terms. Many of people do not have

invested in mutual fund due to lack of awareness although they have money to invest. As the

awareness and income is growing the number of mutual fund investors are also growing.

Brand plays important role for the investment. People invest in those Companies where

they have faith or they are well known with them. There are many AMCs in Chandigarh but

only some are performing well due to Brand awareness. Some AMCs are not performing

well although some of the schemes of them are giving good return because of not awarenessabout Brand. Reliance, UTI, REMF, ICICI Prudential etc. they are well known Brand, they

are performing well and their Assets Under Management is larger than others whose Brand

name are not well known like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. Financial

Advisors are the most preferred channel for the investment in mutual fund. They can change

investors mind from one investment option to others. Many of investors directly invest their

money through AMC because they do not have to pay entry load. Only those people investdirectly who know well about mutual fund and its operations and those have time to others.

Many of investors directly invest their money through AMC because they do not have to pay

entry load. Only those people invest directly who know well about mutual fund and its

operations and those have time.



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CHAPTER 6

SUGGESTIONS



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Suggestions

The most vital problem spotted is of ignorance. Investors should be made aware of the

benefits. Nobody will invest until and unless he is fully convinced. Investors should

be made to realize that ignorance is no longer bliss and what they are losing by not

investing.

Mutual Fund offers a lot of benefits which no other single option could offer. But

most of the people are not even aware of what actually a mutual fund is? They only

see it as just another investment option. So the advisors should try to change their

mindsets. The advisors should target for more and more young investors. Younginvestors as well as persons at the height of their career would like to go for advisors

due to lack of expertise and time.

Mutual Fund Company needs to give the training of the Individual Financial Advisors

about the Fund/Scheme and its objectives, because they are the main source to

influence the investors.

Before making any investment Financial Advisors should first enquire about the risk

tolerance of the investors/customers, their need and time (how long they want toinvest). By considering these three things they can take the customers into

consideration.

Younger people aged fewer than 35 will be a key new customer group into the future,

so making greater efforts with younger customers who show some interest in

investing should pay off.

Customers with graduate level education are easier to sell to and there is a large

untapped market there. To succeed however, advisors must provide sound advice andhigh quality.

Systematic Investment Plan (SIP) is one the innovative products launched by Assets

Management companies very recently in the industry. SIP is easy for monthly salaried

person as it provides the facility of do the investment in EMI. Though most of the

prospects and potential investors are not aware about the SIP. There is a large scope

for the companies to tap the salaried persons.



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BIBLIOGRAPHY

During the research process, several books and various

websites were referred for the collection of relevant

information.

Books Referred:

Kothari, C.R., Research Methodology, 2007

Websites and Links

www.amfiindia.com

www.remu.com

www.nseindia.com

www.moneycontrol.com

www.mutualfundsindia.com

Other handbooks and reports used:

Mutual Fund Handbook

Factsheet and Statement

http://www.moneycontrol.com/http://www.moneycontrol.com/


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ANNEXURE



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QUESTIONNARIE

A study of preferences of the investors for investment inmutual funds.

1. Personal Details:

(a) .Name:-

(b) .Add:- Phone:-

(c) Age:-(d) Qualification:-

Graduation/PG Under Graduate Others

(e) Occupation.Pl tick()

Govt. Service Pvt.Job Business Agriculture Others

(f) What is your monthly family income approximately? Pl tick ().

Up to Rs.10,

000

Rs.10, 001 to

15000

Rs.15, 001 to

20000

Rs.20, 001 to

30000

Rs.30, 001 and

above

2. What kind of investment you have made so far? Pl tick ().All applicable.

a. Saving account b. Fixed deposits c. Insurance d. Mutual

Fund

e. PostOffice.NSC

etc.

f.Shares/

Debentures

g. Gold/ Silver h. Real Estate

3. While investing your money, which factor will you prefer?

a. Liquidity b. Low Risk c. Higher Return d. Trust

4. Are you aware about Mutual Funds and their operations? Pl tick (). Yes No



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5. If yes, how did you know about Mutual Fund?

a. Advertisement b. Peer Group c. Banks d. Financial Advisors

6. Have you ever invested in Mutual Fund? Pl tick (). Yes No

7. If not invested in Mutual Fund then why?

a. Not aware of MF b. Higher Risk c. Not any specific reason

8. If yes, in which Mutual Fund you have invested? Pl tick ().All applicable.

9. If invested in REMF, you do so because (Pl tick (),all applicable)

a.REMF is associated with RE

b.They have a record of giving good returns year after year.

c.Agents Advice

10. If NOT invested in REMF, you do so because (Pl tick (), all applicable).

a.You are not aware of REMF

b.REMF gives less return compared to the others

c.Agents Advice

11. When you plan to invest your money in asset management co. which AMCwill you prefer?


a.REMF b.UTI c.HDFC d.Reliance e.Kotak f.Other.specify


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a.REMF

b.UTI

c.RELIANCE

d.HDFC

e.KOTAK

f.ICICI

12. Which channel will you prefer while investing in Mutual Fund?

a.Financial Advisor b.Bank c.AMC

13. When you invest in Mutual Funds which mode of investment will you prefer?Pl tick ().

a.One Time Investment b.Systematic Investment Plan(SIP)

14. When you want to invest which type of funds would you choose?

a. Having only debt portfolio b.Having debt & equityportfolio

c.Only equity portfolio

15. How would you like to receive the returns every year? Pl tick ().

a.Dividend payout b.Dividend Re-investment c.Growth in NAV

16. Instead of general Mutual Funds, would you like to invest in sectorial funds?Pl tick (). Yes No.

Date post:	14-Apr-2018
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