Dissertation On Mutual Fund

MUTUAL FUND AND INVESTORS BEHAVIOUR
A DISSERTATION REPORT ON
SUBMITTED BY Pathan Sajeed Khan
To Mr.Anshuman Dani
IN PARTIAL FULFILMENT OF THE MASTERS IN BUSINESS ADMINISTRATION (MBA) TO THE PUNJAB TECHNICAL UNIVERSITY, PUNJAB THROUGH THE GENESIS INSTITUTE OF BUSINESS MANAGEMENT PUNE 412 308 IN THE ACADEMIC YEAR 2010-11
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A DISSERTATION REPORT ON
SUBMITTED BY Pathan Sajeed Khan
To Mr.Anshuman Dani
IN PARTIAL FULFILMENT OF THE POST GRADUATE PROGRAM IN MARKETING MANAGEMENT TO THE GENESIS INSTITUTE OF BUSINESS MANAGEMENT PUNE 412 308 IN THE ACADEMIC YEAR 2010-11
CERTIFICATE
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This is to certify that Mr. Pathan Sajeed Khan is a student of the Genesis Institute of Business Management, Pune. He in the partial fulfillment of the course has submitted to us a dissertation report titled MUTUAL FUND AND INVESTORS BEHAVIOUR. This work is original to the best of my knowledge and is therefore being submitted towards the partial fulfillment of the course.
Dissertation Guide Mr.Anshuman Dani
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ACKNOWLEDGEMENT
Starting with expression of immense pleasure and joy to back and white the words of sincere and loyal gratitude, to the honorable fellows who have provided helpful towards the tasks of accomplishment of the project work under the heading of MUTUAL FUND AND INVESTORS BEHAVIOUR. No work in this world can completed successfully if it is not provided guidance in the right direction. In this regard I owe sincere thanks to my Faculty Guide Mr. Anshuman Dani. Who contributed his valuable aptitude to a practical shape in characterizing and building the features of the project. Without his help and guidance I would not have been able to complete this strenuous task. . He and other faculty members guided me throughout the project, never accepted less than my best efforts. There are special acknowledgements to my friends because they have helped me in report writing that it left to me alone, would never have been done. Of course, like any other author, I am indebted always to those people that do their best to improve on my best.
Executive Summary
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A mutual fund is a scheme in which several people invest their money for a common financial cause. The collected money invests in the capital market and the money, which they earned, is divided based on the number of units, which they hold. The mutual fund industry started in India in a small way with the UTI Act creating what was effectively a small savings division within the RBI. Over a period of 25 years this grew fairly successfully and gave investors a good return, and therefore in 1989, as the next logical step, public sector banks and financial institutions were allowed to float mutual funds and their success emboldened the government to allow the private sector to foray into this area. The advantages of mutual fund are professional management, diversification, and economies of scale, simplicity, and liquidity. The disadvantages of mutual fund are high costs, over-diversification, possible tax consequences, and the inability of management to guarantee a superior return. the biggest problems with mutual funds are their costs and fees it include Purchase fee, Redemption fee, Exchange fee, Management fee, Account fee & Transaction Costs. There are some loads which add to the cost of mutual fund. Load is a type of commission depending on the type of funds. Mutual funds are easy to buy and sell. You can either buy them directly from the fund company or through a third party. Before investing in any funds one should consider some factor like objective, risk, Fund Managers and scheme track record, Cost factor etc. There are many, many types of mutual funds. You can classify funds based Structure (openended & close-ended), Nature (equity, debt, balanced), Investment objective (growth, income, money market) etc. A code of conduct and registration structure for mutual fund intermediaries, which were subsequently mandated by SEBI. In addition, this year AMFI was involved in a number of developments and enhancements to the regulatory framework. The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by nationalized banks and smaller private sector players. Reliance Mutual Fund, UTI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund and Birla Sun Life Mutual Fund are the top five mutual fund company in India.
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Reliance mutual funding is considered to be most reliable mutual funds in India. People want to invest in this institution because they know that this institution will never dissatisfy them at any cost. You should always keep this into your mind that if particular mutual funding scheme is on larger scale then next time, you might not get the same results so being a careful investor you should take your major step diligently otherwise you will be unable to obtain the high returns.
Contents
Chapter1. Introduction Introduction of Mutual Fund..9
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Objective of Study...15 Scope.16 Methodology17 Limitations..18 Chapter2. Mutual Fund Industry History of Mutual Fund....19 Regulatory Framework.27 Legal Structure..29 Classification..31 Types...32 Chapter3. Performance Measures Investment Plans...37 Net Asset Value.44 Performance measures of Mutual Funds...46
Chapter4. Investors point of view Stages of Life Cycle..........51 Classification of Life cycle...53 Chapter5. Analysis
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Analysis of Questionnaire....54 Suggestions....67 Conclusion.....69 BIBLIOGRAPHY70 QUESTIONNAIRE..71
Chapter-1
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MUTUAL FUNDS
Introduction: Mutual fund is a pool of money collected from investors and is invested according to certain investment options. A mutual fund is a trust that pools the saving of a no. of investors who share a common financial goal. A mutual fund is created when investors put their money together. It is, therefore, a pool of investors fund. 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 to the no. of units owned by them. The most important characteristics of a fund are that the contributors and the beneficiaries of the fund are the same class of people namely the investors. The term mutual fund means the investors contribute to the pool and also benefit from the pool. The pool of funds held mutually by investors is the mutual fund. A mutual fund business is to invest the funds thus collected according to the wishes of the investors who created the pool. Usually the investors appoint professional investment managers create a product and offer it for investment to the investors. This project represents a share in the pool and pre status investment objectives. Thus, a mutual fund is the most suitable investment for a common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at relatively low cost.
[flow chart of mutual fund]

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ORGANIZATION OF MUTUAL FUNDS

There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:
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DISADVANTAGES OF MUTUAL FUNDS:

Above I have mentioned the various advantages of Mutual Funds but it also suffers from a lot of drawbacks as the market is volatile and it is ever affected by national as well as international factors, these days we can see that crude oil prices in International market has become an important factor in determining the market movement. Here are some disadvantages as cited by me and by survey:
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Fluctuating Returns: Mutual funds are like many other investments without a guaranteed return: there is always the possibility that the value of your mutual fund will depreciate. Unlike fixed-income products, such as bonds and Treasury bills, mutual funds experience price fluctuations along with the stocks that make up the fund. When deciding on a particular fund to buy, you need to research the risks involved - just because a professional manager is looking after the fund, that doesn't mean the performance will be always good. Diversification: Although diversification is one of the keys to successful investing, many mutual fund investors tend to over diversify. The idea of diversification is to reduce the risks associated with holding a single security; over diversification (also known as diversification) occurs when investors acquire many funds that are highly related and, as a result, don't get the risk reducing benefits of diversification. At the other extreme, just because you own mutual funds doesn't mean you are automatically diversified. For example, a fund that invests only in a particular industry or region is still relatively risky. For example: Sectoral Funds Cash, Cash and More Cash: As you know already, mutual funds pool money from thousands of investors, so everyday investors are putting money into the fund as well as withdrawing investments. To maintain liquidity and the capacity to accommodate withdrawals, funds typically have to keep a large portion of their portfolios as cash. Having ample cash is great for liquidity, but money sitting around as cash is not working for you and thus is not very advantageous. Costs: Mutual funds provide investors with professional management, but it comes at a cost. Funds will typically have a range of different fees that reduce the overall payout. In mutual funds, the fees are classified into two categories: shareholder fees and annual operating fees. The shareholder fees, in the forms of loads and redemption fees are paid directly by shareholders purchasing or selling the funds. The annual fund operating fees are charged as an annual percentage - usually ranging from 1-3%. These fees are assessed to mutual fund investors regardless of the performance of the fund. As you can imagine, in years when the fund doesn't make money, these fees only magnify losses.
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OBJECTIVE
The main objective of this study is: 1. To know various factors considered by the customers while going to invest in the mutual fund. 2. To study the working of mutual fund. 3. To study the characteristics of mutual fund this attracts the customers. 4. What an investors consider for safe investment and better returns.
SCOPE
1. The project will provide us the better platform to understand the history, growth and various aspects of mutual fund. 2. It will also help to understand the behavior of Indian investment towards mutual fund. 3. Also with the help of this project one can better understand the different types of mutual funds working in India.
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RESEARCH METHODOLOGY
Methodology: Marketing research is the process of collecting and analyzing marketing information and ultimately arrived at certain conclusion. Management in any organization needs information about potential marketing plans and to change the market place. Marketing Research includes all the activities that enable an organization to obtain the information. This research is very important in strategy formulation and feedback of any organizational plan. Research Design: 1. DATA:
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Primary data: Personal interaction with the respondent through questionnaire. Secondary data: Information through websites, books, fact sheet of various funds etc. 2. SOURCES: Books, Magazines, articles, Journals. 3. AREA OF STUDY: NCR region. 4. SAMPLING PROCEDURE: Random sampling method. 5. TOOLS & TECHNIQUES: Simple statistical methods.
LIMITATIONS 1. This project is limited in scope as the survey is conducted with a shortage of time constraint and also based on secondary data.2. The answer given by the respondents may be biased due to several reasons or could be attachment to a particular bank.3. Due to ignorance factor some of the respondents were not able to give correct answer.4. The respondent were not disclosing their exact portfolio because they have a fear in their mind that they can come under tax slab.
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Chapter2
HISTORY OF MUTUAL FUNDS

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The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Reserve Bank and the Government of India. The objective was to attract small investors and introduce them to market investments. Since then, the history of mutual fund in India can be broadly divided into three distinct phases. Phase 1- 1964-1987 (Unit Trust of India) An Act of Parliament established Unit Trust of India (UTI) on 1963. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964, followed by ULIP in 1971, CGGA 1986 Master share 1987. UTI was the only player in the market enjoying the monopoly. At the end of 1988 UTI had Rs.6, 700 crores of assets under management .It was huge mobilization on funds. So, Unit Trust of India was the first mutual fund set up in India in the year 1963. In early 1990s, Government allowed public sector banks and institutions to set up mutual funds. In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives of SEBI are to protect the interest of investors in securities and to promote the development of and to regulate the securities market. As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital market. The regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. There is no
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distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. The risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar type. It may be mentioned here that Unit Trust of India (UTI) is not registered with SEBI as a mutual fund (as on January 15, 2002). The total amount mobilized was 2175 crores and assets under management were 6700 crores.
Phase 2- 1987-1993(entry of public sector ) 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 Can bank 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.In phase 2 also UTI was the undisputed leader. At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores. It was the time when mindset of the consumer changed to some extent.
Phase 3- 1993-1996(emergence of private 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.
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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. Indian mutual fund industry also saw many joint ventures of foreign fund management companies with Indian promoters. Competition increased the investor servicing technique. Investor started becoming selective. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds.
Phase 4-1996(SEBI regulation for mutual funds) In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 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. 1999 marks the beginning of a new phase in the history of the mutual fund industry in India, a phase of significant in terms of both amounts mobilized from investor and asset under management. The size of the industry is growing rapidly, as seen by the figure of asset under management that has gone from over Rs. 113,005 crores, a growth of nearly 60%in just one year. Within the growing industry, by March 2000, the relative market shares of different players in terms of amount mobilized and assets management having undergone a change.
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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 June 2007 there are 33 players in the mutual fund industry.
Major Mutual Fund Companies in India
ABN AMRO Mutual Fund ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN AMRO Mutual Fund. Bank of Baroda Mutual Fund (BOB Mutual Fund) Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the custodian. HDFC Mutual Fund
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HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing Development Finance Corporation Limited and Standard Life Investments Limited. HSBC Mutual Fund HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund. State Bank of India Mutual Fund State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs spread over 18 schemes. Unit Trust of India Mutual Fund UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual Fund with the support of UTI Trustee Company Private Limited. UTI Asset Management Company presently manages a corpus of over Rs.20000 Crore. The sponsors of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, Equity Funds and Balance Funds. Franklin Templeton India Mutual Fund The group, Franklin Templeton Investments is a California (USA) based company with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial services groups in the world. Investors can buy or sell the Mutual Fund through their financial advisor or through mail or through their website. They have Open end Diversified Equity schemes, Open end Sector Equity schemes, Open end Hybrid
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schemes, Open end Tax Saving schemes, Open end Income and Liquid schemes, closed end Income schemes and Open end Fund of Funds schemes to offer.
Regulatory Framework
Regulatory Jurisdictions of SEBI: SEBI is the apex regulatory of capital markets. SEBI has enacted the SEBI (Mutual Fund) regulation 1996 which provides the scope of regulation of Mutual Fund in India. All mutual funds are required to be mandatory registered with SEBI. The structure and formation of Mutual Funds, appointment of key functionaries, operations of Mutual Funds, accounting and disclosure norms, rights and obligations of functionaries and investors, investment restrictions, compliance and penalties all are defined under the SEBI registration. Mutual Fund has to be sending half yearly compliance reports to SEBI and promote all information about their operations. Regulatory Jurisdiction of RBI: RBI is the monetary authority of the country and is also the regulatory of banking system. Earlier bank sponsored mutual fund were under the dual regulatory control of RBI and SEBI. These provisions are no longer in vogue. SEBI is the regulator of all mutual funds. The present position is that RBI is involved with the mutual fund industry only to the limited extent of being the regulator of the sponsor of bank sponsored mutual funds.
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Role of Ministry of Finance in Mutual Fund: The finance ministry is the supervisor of both RBI and SEBI. The ministry of finance is also the appellate authority under SEBI Regulation. Aggrieved parties can make appeal to the Ministry of Finance on the SEBI ruling relating the Mutual Fund. Role of Companies Act in Mutual Fund: The AMC and the Trustee Company may be structured as limited companies, which may come under the regulatory purview of the Company Law Board (CLB). The provisions of the Companies Act 1956, is applicable to these forms of organization. The company law Board is the apex regulatory authority for company. Any grievance agency the AMC or the trustee can be addressed to the company law board for redresses. Role of Stock Exchange: If a mutual fund is listed its scheme on stock exchange such listing are subject to the listing regulation of Stock Exchange. Mutual Funds have to sign the listing agreement and abide by its provisions which primarily deal with the periodic notification and disclosure of information that may impart the trading of listed units.
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Legal Structure
Mutual Fund has a unique structure not shared with other entities such as companies or the firms. It is important for the employees and agents to be aware of the special nature of the structure because it determines the rights and responsibilities of the funds constitutes viz. sponsor trustee, custodian, transfer agents and of course the AMC. The legal structure also drives the inter relationship between these constituents. Like other countries India has a legal framework within which Mutual Funds must be constituted along one unique structure as unit trust. A mutual fund in India is allowed to issue open ended and a close ended under a common legal structure. Therefore, a mutual fund may have several different schemes under it at any point of time. THE FUND SPONSOR: Sponsor is defined by the SEBI regulation as any person who acting alone or in combination with another body corporate establishes a mutual fund. The sponsor of a fund is taken as he gets the fund registered with the SEBI. The sponsor will form a trust and appoints the Board of trustee. The sponsor will also generally appoint the AMC as the fund managers. The sponsor, either directly or acting through the trustee will also appoints a custodian to hold the fund asset. All these appointments are made in accordance with the guidelines of SEBI.
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As per the existing SEBI regulations for a person to quantify as the sponsor he must contribute at least 40% of the net worth of the AMC and possess a second final track over a period of 5 years prior to registration. MUTUAL FUND AS A TRUST: A mutual fund is constituted in form of a public trust created under the INDIA TRUST ACT, 1882. The fund sponsor act as the settlers of the trust contributing to its initial capital and appoints a Trustee to hold the asset of the trust for the benefits of the unit holders who are the beneficiaries of the trust. The fund then invites investors to contribute their money in a common pool by subscribing to units issued by various schemes established by the trust unit being the evidence of their beneficial interest in the fund. TRUSTEE: The trust the mutual fund may be managed by a board of trustee a body of individuals or a trust company- a corporate body. Most of the funds in India are managed by the board of trustee while the board is governed by the provisions of the Indian Trust Act where the trustee is a corporate body, it would also be required to comply the provisions of the Companies Act 1956 the board as an independent body act as the protector of the interest of the unit holders. The trustees do not directly manage the portfolio of securities. For this specialist function, they appoint the AMC. They ensure that the fund is managed by the AMC as per the defined objective in accordance with the trust deed and regulations of SEBI. The trust is created through a document called the Trust Deed and is executed by the fund sponsor in favor of the trustee. The trust deed is required to be stamped as registered under the provisions of the Indian Regulatory Act and regulation with SEBI clause in the trust deed, inter alias, deal with the establishment of the trust, the appointment of the trustee , their powers and duties and the obligation of the trustee towards the unit holders and the AMC. These clauses also specify activity that the fund / AMC cant undertake. The third schedule of the SEBI (Mutual Fund) Regulatory Act,1996 specifies the content of the Trust Deed.
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ASSET MANAGEMENT COMPANY

Its appointment and function: The role of AMC is to act as the investment manager of the trust. The sponsor, or the trustee, if so authorized by the trust deed appoints the AMC. The AMC so appointed is required to be approved by the SEBI. Once approved, the AMC functions under the supervision of its own directors and also under the direction of the trustee and the SEBI. The trustees are empowered to terminate the appointment of the AMC by majority and appoint a new one with the prior approval of the SEBI and the unit holders. The AMC would, in the name of the trust, float and then manage the direct investment schemes as per regulations of the SEBI and as per Investment Management Agreement it signs with the trustee. Chapter IV of SEBI (MF) Regulations, 1996 describes the issue relevant to appointment, eligibility criteria and the restrictions on the business activities and obligations of the AMC. The AMC of the mutual fund have a net worth of at least Rs. 10 crores at all the time. Directors of the AMC, both independent and non independent should have adequate professional experience in the financial services and should be individuals of high moral standing, a condition also applicable to other key personnel of the AMC. The AMC cannot act as a trustee of any other mutual fund. Besides its role as advisory services and consulting, provided these activities are run independently of one another rand the AMC
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resources ( such as personnel, system etc.) are properly segregated by activity. The AMC must always act in the interest of the unit holders and report to the trustee with respect to its activities.
TYPES OF MUTUAL FUNDS
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Schemes according to Maturity Period A mutual fund scheme can be classified into openended scheme or close-ended scheme depending on its maturity period. Open-ended Fund/ Scheme: An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.
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Close-ended Fund/ Scheme: A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
Schemes according to Investment Objective

A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows: Growth / Equity Oriented Scheme: The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Income / Debt Oriented Scheme: The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in
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the short run and vice versa. However, long term investors may not bother about these fluctuations. Balanced Fund: The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds. Money Market or Liquid Fund: These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods. Gilt Fund: These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes. Index Funds: Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weight age comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. Sector specific funds/schemes: These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds.
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Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert. Tax Saving Schemes: These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme. Load or no-load Fund: A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs.10. If the entry as well as exit load charged is 1%, then the investors who buy would be required to pay Rs.10.10 and those who offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit. The investors should take the loads into consideration while making investment as these affect their yields/returns. However, the investors should also consider the performance track record and service standards of the mutual fund which are more important. Efficient funds may give higher returns in spite of loads. A no-load fund is one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.
Chapter 3
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INVESTMENT PLANS
The term investment plans generally refers to the services that the funds provide to the investors offering different ways to invest. The different investment plans are important consideration in the investment decisions because they determine the level of flexibility available to the investors. Alternate investment plans offered by the fund allow the investor freedom with respect to investing at one time or at regular intervals, making transfers to different schemes within the same fund family or receiving income at specified intervals or accumulating distributions. Some of the investment plans offered are as follows: Automatic Reinvestment Plans (ARP):
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In India many funds offered two options under the same scheme the dividend option and growth option. The dividend option or the automatic reinvestment plan a (ARP) allows the investors to reinvest in additional units the amount of dividend or other distribution made by the fund, instead of receiving them in cash. Reinvestment takes place at the ex-dividend NAV. The ARP ensures that the investors reap the benefits of compounding in his investments. Some fund allows reinvestments into reinvestments into other schemes in the fund family. By using an automatic reinvestment plan, an investor is able to easily make use of his or her investment gains to produce further gains, taking advantage of compounding. Over a period of years, the added value produced by automatic reinvestment can turn out to be worth a substantial sum. Automatic Investment Plans (AIP): These requires the investor to invest a fixed sum periodically, thereby lettering the investor save in a disciplined and phased manner. The mode of investment could be through debit to the investors salary or bank account. Such plans are also known as Systematic Investment Plans. But mutual funds do not offer this facility on all schemes. Typically they restrict it to their plain vanilla scheme like diversified equity funds, income funds and balanced funds. SIP works best in equity funds. It enforces saving discipline and helps you profit from market volatility you buy more units when the market is down and fewer when the market is up. This is one of the best ways to save money. By "paying themselves first" many people find they invest more in the long run. Their investments are treated as another part of their regular budget. It also forces a person to pay for investments automatically, which prevents them from being able to spend all of their disposable income. Systematic Withdrawal Plan: Such plans allow the investors to make systematic withdrawal from his fund investment account on a periodic basis, thereby providing the same benefit as regular income. The investor must withdraw a specific minimum amount with the facility to have withdrawal
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amounts sent to his residence by cheque or credited directly into his bank account. The amount withdrawn is treated as redemption of units at the applicable NAV as specified in the offer document. For example: the withdrawal could be at NAV on the first day of the month of payment. The investor is usually required to maintain a minimum balance in his bank account under this plan. Agents and the investors should understand that the systematic withdrawal plans are different from the monthly income plans, as the former allow investors to get back the principal amount invested while the latter only pay the income part on a regular basis. In short we can say that a systematic withdrawal plan is a financial plan that allows a shareholder to withdraw money from an existing mutual fund portfolio at predetermined intervals. The money withdrawn through a systematic withdrawal plan can be reinvested in another portfolio or used to pay for something else. Often, a systematic withdrawal plan is used to fund expenses during retirement. However, this type of plan may be used for other purposes as well. Systematic Transfer Plans (STP):These plans allow the customers to transfer on a periodic basis a specified amount from one scheme to another within the same fund family- meaning two schemes by the same AMC and belonging to the same fund. A transfer will be treated as the redemption of the units from the scheme from which the transfer is made. Such redemption or investment will be at the applicable NAV for the respective schemes as specified in the offer document. It is necessary for the investor to maintain a minimum balance in the scheme from which the transfer is made. Both UTI and other private funds now generally offer these services to the investors in India. The service allows the investors to maintain his investment actively to achieve his objectives. Many funds do not even change any transaction fees for this service.
EQUITY FUND
An open ended Equity scheme: Fund features: Who should invest?
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The scheme is suitable for investors seeking effective diversification by spreading the risks without compromising the return. Investment objective The objective is to provide investors long term capital appreciation. Liquidity Sale and repurchase on all business days. NAV calculation All business days. Redemption proceeds Will be dispatched within three business days. Tax benefits Indexation benefits, No Gift tax, No wealth tax. Minimum applicable amount New investors: Rs. 5000 Existing investors: Rs. 500
INDEX FUND
An open ended Index scheme: Fund features: Who should invest? The scheme is suitable for investors seeking capital appreciation commensurate with that of market. Investment objective
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The objective is to invest in the securities that comprise S&P CNX Nifty in the same proportion so as to attain results commensurate with the Nifty. Investment option a. Growth b. Dividend Liquidity Sale and repurchase on all business days. NAV calculation All business days. Redemption proceeds Will be dispatched within three business days. Tax benefits Indexation benefits, No Gift tax, No wealth tax Minimum applicable amount New investors: Rs. 5000
BALANCED FUND
An open ended balanced scheme: Fund features: Who should invest? The scheme is suitable for investors who seek long term growth and wish to avoid the risk if investing solely in equities. It provides a balanced exposure to both growth and income producing assets. Investment objective
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The objective is to provide periodic return and capital appreciation through a judicious equity and debt instruments, while simultaneously aiming to minimize capital erosion. Liquidity Sale and repurchase on all business days. NAV calculation All business days. Redemption proceeds Will be dispatched within three business days.
Tax benefits Indexation benefits, No Gift tax, No wealth tax Minimum applicable amount New investors: Rs. 5000 Existing investors: Rs. 500
TAX SAVING FUND

Open- ended linked saving scheme: Fund features: Who should invest? The scheme is suitable for investors seeking income tax rebate under section 88(2) of Income Tax Act along with long term appreciation from investment in equities. Investment objective
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The objective is of the scheme is to build a high quality growth oriented portfolio to provide long term capital gains to investors. The scheme aims at providing return through capital appreciation over the file of the scheme. Liquidity Sale and repurchase on all business days. NAV calculation All business days. Redemption proceeds Will be dispatched within three business days. Tax benefits Tax rebate under section 88, indexation benefits, No Gift tax, No wealth tax. Special features Personal accident insurance. Lock in period 3 years Minimum applicable amount: Rs. 500
The importance of accounting knowledge

The balance sheet of a mutual fund is different from the normal balance sheet of a bank or a company. All the fund assets belong to the investors and are held in the fiduciary capacity for them. Mutual fund employees need to be aware of the special requirement concerning accounting for the funds assets, liabilities and transactions with investors and the outsiders like banks, custodians and registrars. This knowledge will help them better understand their responsibilities and their place in the organization, by getting an overview of the functioning of the fund.
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Even the mutual fund agents need to understand the accounting for the funds transaction with investors and how the fund accounts for its assets and liabilities, as the knowledge is essential for them to perform their basic role in explaining the mutual fund performance to the investor. For example, unless the agent knows how the NAV is computed, he cannot use even simple measures such as NAV change to assess the fund performance. He also should understand the impact of dividends paid out by the fund or entry/exit loads paid by the investors on the calculation of the NAV and therefore the fund performance. The mutual funds in India are required to follow the accounting policies as laid down by the SEBI (Mutual Fund) Regulations 1996 and amendments in 1998.
NET ASSET VALUE

The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day to day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs.20. NAV
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is required to be disclosed by the mutual funds on a regular basis - daily or weekly depending on the type of scheme. 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 asset value is given below. Asset value is equal to Sum of market value of shares/debentures + Liquid assets/cash held, if any + Dividends/interest accrued Amount due on unpaid assets Expenses accrued but not paid
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For liquid shares/debentures, valuation is done on the basis of the last or closing market price on the principal For illiquid and unlisted and/or thinly traded shares/debentures, the value has to be estimated. For shares, this could be the book value per share or an estimated market price if suitable benchmarks are available. For debentures and bonds , value is estimated on the basis of yields of comparable liquid securities after adjusting for illiquidity . The value of fixed interest bearing securities moves in a direction opposite to interest rate changes. Valuation of debentures and bonds is a big problem since most of them are unlisted and thinly traded . This gives considerable leeway to the AMCs on valuation and some of the AMCs are believed to take advantage of this and adopt flexible valuation policies depending on the situation exchange where the security is traded. Interest is payable on debentures/bonds on a periodic basis say every 6 months. But, with every passing day, interest is said to be accrued, at the daily interest rate, which is calculated by dividing the periodic interest payment with the number of days in each period. Thus, accrued interest on a particular day is equal to the daily interest rate multiplied by the number of days since the last interest payment date. Usually, dividends are proposed at the time of the Annual General meeting and become due on the record date. There is a gap between the dates on which it becomes due and the actual payment date. In the intermediate period, it is deemed to be "accrued". Expenses including management fees, custody charges etc. are calculated on a daily basis.
MUTUAL FUND PERFORMANCE

THE INVESTORS PROSPECTIVE: The investor would actually be interested in tracking the value of investment, whether he invests directly in the market or indirectly through the mutual funds. He would have to make intelligent decisions on whether he gets an acceptable return on his investment in the fund selected by him or if he needs to switch to the fund. He, therefore, needs to understand the basis of appropriate performance measurement for the funds and acquire the basic
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knowledge of the different measures of evaluating the performance of a fund. Only then would he be in the position to judge correctly whether his fund is performing well or not. THE ADVISORS PROSPECTIVE: If you are an intermediary recommending a mutual fund to a potential investor, he would expect you to give him proper advice on which funds have a good performance track record. If you want to be an effective investment advisor, then you too have to know how to measure and evaluate the performance of the different funds available to the investors. The need to compare the performance of the different funds requires the advisors to have knowledge of the correct and appropriate measures of evaluating the fund performance.
Different Performance Measures

Remember that there are many ways to evaluate the performance of the fund. One must find the most suitable measure, depending upon the type of fund one is looking at, the stated investment objective of the fund and even depending on the current financial market condition. Let us discuss few common measures. Change in NAV: The most common measure. Purpose: If the investor wants to compute the return on investment between two dates, he can simply use the Per Unit Net Asset Value at the beginning and the end periods and calculate the change in the value of the NAV between the two dates in absolute and percentage terms. Formula: For NAV change in absolute terms: (NAV at the end of the period)- (NAV at the beginning of the period) For NAV change in percentage terms: (Absolute change in NAV/NAV at the beginning)*100 If period covered is less/more than one year: for annualized NAV change [{(absolute change in NAV/NAV at the beginning)/months covered)*12}*100]
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Suitability NAV change is the most commonly used by the investors to evaluate fund performance and so is also most commonly published by the mutual fund managers. The advantage of this measure is that it is easily understood and applies to virtually any type of fund.
Interpretation Whether the return in term of NAV growth is sufficient or not should be interpreted in light of the investment objective of the fund, current market condition and alternative investment returns. Thus, a long term growth fund or infrastructure fund will give lower returns when the market is in bearish phase. Limitation: However, this measure does not always give the correct picture, in case where the fund has distributed to the investors a significant amount of the dividends in the interim period. If in the above example, year end NAV was Rs.22 after declaration and payment of dividend of Re.1, the NAV change of 10% gives an incomplete picture. Therefore, it is suitable for evaluating growth funds and accumulation plans of debt and equity funds, but should be avoided for income funds and funds with withdrawal plans. Return on investment: Purpose: The short coming of the simple total return is overcome by the total return with reinvestment of the dividends in the funds itself at the NAV on the date of distribution. The appropriate measure of the growth of the investors mutual fund holding is therefore, the return on investment. Formula [(units held dividend/ex-dividend NAV)*end NAV]- begin NAV*100
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Suitability Total return with distribution s reinvested at NAV is a measure accepted by mutual fund tracking agencies such as Residence in MUMBAI and value research in New Delhi. It is appropriate for measuring performance of accumulation plans, monthly/quarterly income schemes that distribute interim dividends.
The income ratio: Formula: A funds income ratio is defined as its net investment income dividend by its net assets for this period. Purpose/suitability: This ratio is useful measure for evaluating income-oriented funds, particularly debt funds. It is not recommended for the funds that concentrate on capital appreciation. Limitation: The income ratio can not considered in isolation, it should be used only to supplement the analysis based on the expense ratio and total return.
Tracking mutual fund performance

Having identified appropriate measures and benchmarks for the mutual fund available in the market, the challenge is to track the fund performance on a regular basis. This is indeed the key towards maximizing wealth through mutual fund investing. Proper tracking allow the investor to make informed & timely decisions regarding his fund portfolio whether to acquire attractive funds, dispose off poor performers or switch between funds /plans.
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To be able to track fund performance, the first step is to find the relevant information on NAV, expenses cash flow, appropriate indices and so on. The following are the sources information in India.
Mutual Funds Annual and Periodic Reports These include data on the funds financial performance, so indicators such as income/expense ratios & total return can be computed on the basis of this data. The annual report includes a listing of the funds portfolios holding at market value, statement of revenue & expenses, unrealized appreciation/depreciation at year end and the change in the net assets. On the basis of the annual report, the investors can develop a perspective on the quality of the funds assets and portfolio concentration and risk profile, besides computing returns. He can also assess the quality of the fund management company by reviewing their entire schemes performance. The profit and loss account part of the annual report will also give details of transaction costs such as brokerage paid, custodian/registrar fees and stamp duties.
Mutual Funds Website With the increasing spread of the interest as a medium, all mutual funds have their own websites. SEBI even require funds to disclose certain types of the information on these sites- for example, the Portfolio Composition. Similarly, AMFI itself has a websites, which displays its members entire fund NAV information. Financial papers:
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Daily newspaper such as Economic Times provides daily NAV figures for the open end schemes and share prices of the close ended listed schemes. Besides, weekly supplement of the economic newspaper give more analytical information on the fund performance. For example- Business Standard the smart investor gives total returns over 3 months, 1 year and 3 years periods besides the fund size and ranking with the other funds separately for Equity, Balanced, Debt, Money Market, short term debt and tax planning funds. Similarly, Economic Times weekly supplement gives additional data on open end schemes such as Loads and Dividends besides the NAV and other information and performance data on closed end scheme.
Fund Tracking Agencies: In India, agencies such as Credence and value research are a source of information for the mutual fund performance data and evaluation. This data is available only on request and payment. Newsletters: Many stockbrokers, mutual fund agent and banks and non-ranking firms catering to retail investors publish their own newsletters, sometimes free or else for their subscribes, giving fund performance data and recommendations. Prospectus: SEBI regulations for mutual fund require the fund sponsors to disclose performance data relating to schemes being managed by the concerned AMC such as beginning and end of the year.
Chapter 4
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LIFE CYCLE STAGES
Life cycle guide to financial planning Financial goal and plans depends to a large extent on the expenses and cash flow requirements of individuals. It is well known that the age of the investors is an important determinant of financial goals. Therefore, financial planners have segmented investors according to certain stages.
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LIFE CYCLE STAGE Childhood Stage Young unmarried Taken care of by parents Immediate and short term FINANCIAL NEEDS ABILITY TO INVEST Investment of gifts Limited due to higher spending CHOICE OF INVESTNENT Long term Liquid plans and short term investment some exposure to equity and pension products
Young married stage
Short & intermediate term. Housing and insurance needs consumer finance needs Medium-long term childrens education. Holidays & consumer finance Housing
Limited due to higher spending cash flow requirement also limited Limited Financial planning needs are highest at this stage is deal for discipline spending and saving regularly Higher saving rations recommended for intermittent for intermittent cash flows higher
Medium long term investment.Ability to take risksFixed income insurance & equity Medium-long term investments. Ability to take risks Portfolio of products for growth and long term Medium term investment with high liquidity needs Portfolio of products including equity debt and pension plans Medium term investment preference for liquid and income generating products low appetite for risky investment
Young Married with children
Married with older children
Medium term needs for children
Retirement stage
Short to medium term
Lower saving ratios , Higher requirement for regular cash flows
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CHARACTERISSTION OF THE LIFE CYCLE OF INVESTORS Life cycle can be broadly classified into phases: Birth and education Earning Years Retirement On an average, the first stage lasts for 22 years, the second for 38 years and the last for 2530 years. The earning year is when income and expenses are highest. The retirement stage is when incomes are low and expenses are high. CLASSIFICATION OF INVESTORS NEEDS Needs are generically classified into protection needs and investment needs. Protection needs refer to needs that have to be primarily taken care of to protect the living standards, current requirements and survival requirement of investors. Need for retirement income and need for insurance cover are protection needs. Investment needs are additional financial needs that can be served through saving and investments. These are needs for childrens professional growth.
Chapter 5
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Analysis of Questionnaire
I visited to 65 people with my questionnaire related to awareness of mutual fund out of them 60 responds me. I have analyzed in my survey on the basis of these respondents feedback. Once the questionnaire were filled then the next work that comes up is the analysis of the data arrived. I find out that more businessmen were inclined towards investing in current account. The ladies were inclined to invest their money in Gold and jewelleries. Service class people and retired class people prefer more saving and fixed deposits. People with high income prefer to take risk for higher return. They want to invest in the mutual fund.
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Similarly, people are interested in knowing what the returns of their investment are. Similar large numbers of people are equally interested in the safety of their funds. There are the people who want easy liquidity of money and these are basically business people who have a deal in the ready cash all the time. Surprisingly, while a large number of people are aware of the tax benefit a very small number of them only 9 are interested in it. While a large number of people are area of mutual fund comparing a very less number invests into it. On asking how they get knowledge of mutual fund a large number of them attributed to print media. Even banks today follow the role of the investment advisors. Very few get any information from the e-media. Hence, AMCs must increase the awareness about their product through Electronic media (TVs, Cables, and Radios etc.) As well as and should not just constrained itself to the print advertisement. Those who do not read newspaper.
1. (A) Age distribution of the Investors.
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Analysis:
According to this chart the most mutual fund investors are in the age group of 31-40 yrs. i.e.40%.the second most are in the age group of 41-50.i.e.37%.and the least age group of investors are in 20-30 yrs.
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(b). Educational Qualification of investors.
Analysis: from the 60 respondents there are73% investors are in Graduate/post

people,Graduate,20% are under graduate and 7% are others.
c). Occupation of the investors.
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Analysis: from the 60 respondents 37% investors are pvt. Employees, 30% are
businessman, and 23% are govt. employees. that means most peoples are pvt employees.
(d). Monthly Family Income of the Investors.
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Analysis: In total respondent the higher group of investors is in the22 people

in the income group of 25000-35000 that is 37%.and second most is 35000+. and the least investors are in the income group of 1000-15000
2. Investors invested in different kind of investments.
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Analysis: Out of 60 respondent 57 are invested in saving a/c. and then the
second most are in insurance that is 51 respondent. And the least investors are invested in gold /silver.
3. Preference of factors while investing.
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Analysis: from the 60 investors 21 of investors prefer to invest where there is High
Return that is 35% of investors .29% of 60 means17 investors prefer to invest where there is Low Risk.24% prefer Liquidity and 12% prefer Trust.
4. Awareness about Mutual Fund and its Operations
Analysis: From the above chart it is clear that out of 60 respondent 68% people
means 41people are aware of Mutual Fund and 32% means 19 are not aware.
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5. Source of information for customers about Mutual Fund.
Analysis: From the chart it is clear that financial advisor is the most important
source of information about Mutual Fund. Out of 41 respondents, 41% means 17 peoples know about Mutual Fund through Financial Advisor, 27% means 11know through Bank, 20% from peer group and 12% through Advertisement
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6. Investors invested in Mutual Fund.
Analysis: Out of 60 people 67% means 40 peoples have invested in Mutual

Fund and 33% 20 do not have invested in Mutual Fund.
7. Reason for not invested in Mutual Fund
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Analysis: Out of 20 people 60% are not aware of Mutual Fund, 25% said that
there is likely to be Higher Risk in it and 15% do not have any specific reason.
8. Investors invested in different Assets Management Co. (AMC)
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Analysis: Most of the people prefer UTI and Reliance Mutual fund. out of 40
investors 50% have invested in each of them. And then 20% have invested in SBI and ICICI Prudential.7% in Kotak and 5%in HDFC.And 18% others.
9. Preference of Investors for future investment in Mutual Fund.
Analysis: out of 40 peoples 11 respondent means 27% prefer to invest in

Reliance, 18% in ICICI Prudential, 17% in SBI 12 % in UTI, 10% in Kotak and 7% in HDFC, and 8% in others.
10. Channel Preferred by the Investors for Mutual Fund Investment.
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Analysis: Out of 40, 24 Investors 60% preferred to invest through Financial

Advisors, 25% that is 10 peoples Through AMC and 15% through Bank.
11. Mode of Investment Preferred by the Investors.
Analysis: Out of 40 Investors 26 investors 65% preferred One time

Investment and14 investors that is 35 % Preferred through Systematic Investment Plan.
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12. When you want to invest which type of funds would you choose?
Analysis: From the above graph out of 40 investors 55% preferred Equity Portfolio,
28% preferred Balance and 17% preferred Debt portfolio.
13. Instead of general Mutual Funds, would you like to invest in sectorial funds?
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Analysis: Out of 40 investors, 75% investors do not prefer to invest in

Sectorial Fund because there is maximum risk and 25% prefer to invest in Sectorial Fund.
Suggestions and Recommendations

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 funds offer a lot of benefit 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. Young investors 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 objective, 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 to invest). By considering these three things they can take the customers into consideration.
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Younger people aged under 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 and high 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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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, 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 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 awareness about Brand. 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 invest directly who know well about mutual fund and its operations and those have time.
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BIBLIOGRAPHY
WWW.SBIMF.COM WWW.AMFIINDIA.COM WWW.ONLINERESEARCHONLINE.COM WWW. MUTUALFUNDSINDIA.COM WWW.GOOGLE.COM
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QUESTIONNAIRE
1. Personal Details: (a). Name:(b). Add: (c). Age:(d). Qualification:Graduation/PG (e). Occupation. Govt.serv. Pvt.serv. Business Others Under graduate Others Mobile:-
(g). What is your monthly family income approximately? 10000-15000 15000-25000 25000-35000 35000+
2. What kind of investments you have made so far? Saving account Shares /debentures F.D. Gold /Silver Insurance Real Estate Mutual Fund
3. While investing your money, which factor will you prefer? Liquidity Low Risk High Return Trust
4. Are you aware about Mutual Funds and their operations? YES NO
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5. If yes, how did you know about Mutual Fund? Advertisement Peer Group Banks Financial Advisors
6. Have you ever invested in Mutual Fund? YES NO
7. If not invested in Mutual Fund then why? Not aware of MF Higher risk Others
8. If yes, in which Mutual Fund you have invested? SBIMF ICICI UTI Kotak HDFC Other specify Reliance
9. When you plan to invest your money in asset management co. which AMC will you prefer? SBIMF ICICI UTI Kotak HDFC Other specify Reliance
10. Which Channel will you prefer while investing in Mutual Fund? Financial Advisor Bank AMC
11. When you invest in Mutual Funds which mode of investment will you prefer? One Time Investment Systematic Investment Plan (SIP)
12. When you want to invest which type of funds would you choose? Having Only equity Having only debt Having debt & equity
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portfolio. portfolio portfolio.(Balance)
13. Instead of general Mutual Funds, would you like to invest in sectorial funds? YES NO
Any suggestions. . .....
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MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

SUBMITTED BY Pathan Sajeed Khan

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

SUBMITTED BY Pathan Sajeed Khan

MUTUAL FUND AND INVESTORS BEHAVIOUR

Dissertation Guide Mr.Anshuman Dani

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

[flow chart of mutual fund]

MUTUAL FUND AND INVESTORS BEHAVIOUR

ORGANIZATION OF MUTUAL FUNDS

MUTUAL FUND AND INVESTORS BEHAVIOUR

DISADVANTAGES OF MUTUAL FUNDS:

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

HISTORY OF MUTUAL FUNDS

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

Major Mutual Fund Companies in India

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

ASSET MANAGEMENT COMPANY

MUTUAL FUND AND INVESTORS BEHAVIOUR

TYPES OF MUTUAL FUNDS

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

Schemes according to Investment Objective

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

TAX SAVING FUND

MUTUAL FUND AND INVESTORS BEHAVIOUR

The importance of accounting knowledge

MUTUAL FUND AND INVESTORS BEHAVIOUR

NET ASSET VALUE

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND PERFORMANCE

MUTUAL FUND AND INVESTORS BEHAVIOUR

Different Performance Measures

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

Tracking mutual fund performance

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR

MUTUAL FUND AND INVESTORS BEHAVIOUR