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COMPARATIVE STUDY OF MUTUAL FUNDS

IN INDIA
Synopsis For Major Research Project
Submitted towards the partial fulfillment of Master of Business Administration Awarded by Devi Ahilya Vishwa Vidhyalaya, Indore

Guided By:
Prof. Rekha melwani

Submitted By:
Prashant Banerjee MBA FT IIISemester DC/08/03946

Acropolis Technical Campus, Indore

INTRODUCTION:

There are a lot of investment avenues available today in the financial market for an investor with an investable surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where there is low risk but low return. He may invest in Stock of companies where the risk is high and the returns are also proportionately high. The recent trends in the Stock Market have shown that an average retail investor always lost with periodic bearish tends. People began opting for portfolio managers with expertise in stock markets who would invest on their behalf. Thus we had wealth management services provided by many institutions. However they proved too costly for a small investor. These investors have found a good shelter with the mutual funds.

DEFINITION Mutual funds are collective savings and investment vehicles where savings of small (or sometimes big) investors are pooled together to invest for their mutual benefit and returns distributed proportionately.

Why Select Mutual Fund?


The risk return trade-off indicates that if investor is willing to take higher risk then correspondingly he can expect higher returns and vise versa if he pertains to lower risk instruments, which would be satisfied by lower returns. For example, if an investors opt for bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in capital protected funds and the profit-bonds that give out more return which is slightly higher as compared to the bank deposits but the risk involved also increases in the same proportion. Thus investors choose mutual funds as their primary means of investing, as Mutual funds provide professional management, diversification, convenience and liquidity. That doesnt mean mutual fund investments risk free. This is because the money that is pooled in are not invested only in debts funds which are less riskier but are also invested in the stock markets which involves a higher risk but can expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the derivatives market which is considered very volatile.

RETURN RISK MATRIX

HIGHIER RISK MODERATE RETURNS

HIGHER RISK HIGHIER RETURNS

Venture Capital

Equity

Bank FD Postal Savings


LOWER RISK LOWER RETURNS

Mutual Funds

LOWER RISK HIGIER RETURNS

LITERATURE REVIEW

. Kumar Vijay
Mutual Funds have opened salutary avenues for development of capital market and mobilizing savings. For their orderly growth, it is pertinent that he investors interest should be protected. After investment, services of a high order and quality should be guaranteed. The encouraging public response to the Mutual Funds reveals the potential of mobilizing the savings of the masses for industrial finance. The securities scam and the subsequent fall in the share prices have made the public reluctant to invest their savings in the stock market and Mutual Funds can make use of this opportunity to mobilize the savings of the economy. The managers of the mutual funds have to accept the challenge to analyse the needs and investment preference of the investors and device schemes to suit their needs. Indeed, with the entry of private sector mutual funds, this industry is posed for a tremendous growth. No doubt, mutual funds will have a major role in mobilizing the savings of the household sector, in the years to come.

Dua Monika
The mutual fund industry in India is at the stage of infancy but is slowly and steadily progressing towards the stage of growth. And from the passage from growth to popularity it will be obvious to the investor in India that the industry has maximum potential and benefits to the investor. This combined with the ever-increasing players in the MF market promises to make it one of most exciting areas in the field of finance. However, in the fact of intensive competition success will come only to those MFs who prove their mettle in the market. This will include: Reliability of investment performance Understanding Investor needs while designing investment schemes. Quality of post sale service given to clients.

Singh Paramjit
The encouraging public response to the mutual funds reveals the potential of mobilizing the savings of the masses for industrial finance. The mutual fund need amendments and modifications with respect to have a uniform rules and regulations for governing mutual funds, disclosure of information, listing of mutual funds in stock exchanges, disallowing private sector in entering mutual fund business, removing urban biasness, limit of investment of a mutual fund company should be lowered.

Nayak Mahesh
The typical equity investor in India is a seasonal investor, who tends to rush into a bull market and gets carried away with the good returns from diversified schemes, says Hemant Rustagi, CEO, Wiseinvest Advisors. This is a perfect description. And when the market gets volatile, like now, or when it slides, the retail investor, trapped without an exit route, pulls out of equity altogether, opting to go with small savings, debt instruments and other assured return, low-risk avenues. Is there no middle path? For the conservative investor who would like to start flirting with equity, there are index funds. However, this option has been largely out of favour

with Indian investors. And for obvious reasons. Returns generated by diversified funds have consistently beaten those by index funds. In the past year, diversified funds have given an average return of 49 per cent compared to 37 per cent by index funds.

Kirkire Sandesh
Over the last few years, the Indian financial system has undergone sea changes. The most remarkable of them is the evolution of investor preference in favour of market-linked investment vehicles, as compared to conventional assured return instruments. The same is evident from the fact that the asset under management with mutual funds (excluding UTI) have grown from about Rs.35,000 crore in March 2000 to over Rs.2,07,000 crore in January 2007.
RESEARCH METHODOLOGY:
1) Data to be collected. Data includes facts and figures, which are required to be collected to achieve the objectives of the project. In order to determine the present position and satisfaction of customer of different network service providers.

a) Primary Data The data that is being collected for the first time or to particularly fulfill the objectives of the project is known as primary data. b) Secondary Data These types of data wereBooks, Internet web sites, Magazines, Journals etc will be used as source of secondary datacollection. 3) Sampling Sample is the small group taken under consideration from the total group. Sampling Type Non-probabilistic Convenience sampling Sampling Size Data will be collected from 100 respondents Type of research Exploratory research

Tools for Data Analysis: Appropriate statistical tools.

BIBLIOGRAPHY/REFERENCES: FINANCIAL MARKET AND SERVICES

-Gordon and Natarajan

WEBLIOGRAPHY

www.utimf.com www.reliancemutual.com www.amfiindia.com www.google.com www.altavista.com www.yahoo.com