You are on page 1of 42

CHAPTER 1 INTRODUCTION

1.1

INDUSTRY PROFILE

Investment means an asset or item that is purchased with the hope that it will generate income or appreciate in the future. In economic sense, investment is the purchase of goods that are not consumed today but are used in the future to create wealth. Investment goals vary from person to person, business to business. While some want security, others give more weightage to returns alone. There are various types of investments avenues like fixed deposits, post office schemes, bonds/debentures, Mutual funds, Insurance, hares, and !eal estate etc. Mutual "unds are financial intermediaries concerned with mobili#ing savings of those who have surplus income and channeli#ation of these savings in those avenues where there is demand of funds.

MUTUAL FUNDS
$ccording to securities and exchange board of India % &'I( regulations )Mutual "und means a fund established in the form of a trust by a sponsor to raise money by the trustee through the sale of units to the public under one or more schemes for investing of securities in accordance with the regulations. Thus, a mutual fund collects money from the investors, issues certificate to achieve mutual benefits in term of capital appreciation in such securities*.

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with ob+ectives as disclosed in offer document. The money that is 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 reali#ed are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual "und 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. MUTUAL FUND OPERATION FLOWCHART

Investments in securities are spread across a wide cross,section of industries and sectors and thus the risk is reduced. -iversification 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 .uantum of money invested by them. Investors of mutual funds are known as unit holders. $ mutual fund is re.uired to be registered with ecurities and &xchange 'oard of India % &'I(, which regulates securities markets before it can collect funds from the public.

Mutual funds have a uni.ue structure not shared with other entities such as companies or firms. India has a legal framework within which mutual funds must be constituted. $ M" in India is allowed to issue open end and close end schemes under common legal structure. Therefore, a Mutual "und may have several different schemes %open and close end( at any point of time. &'I contemplated four,tier systems for managing the affairs of Mutual "unds ensuring arms length distance between the sponsor and the fund. The four constituents were the sponsoring company, the fund, the custodians and the asset management company. They are presented in a diagram

ADVANTAGES OF MUTUAL FUNDS "or investors who have limited resources available in terms of capital and the ability to carry out detailed research and market monitoring, mutual funds offer the following ma+or advantages/ ,

Portfolio Diver ifi!"tio#$ This enables an investor to hold a diversified investment portfolio, even with a small amount of investment that would otherwise re.uire big capital. Profe io#"l M"#"%e&e#t$ $ team of professional fund managers manages them with in,depth research inputs from investment analysts. Re'(!tio# ) Diver ifi!"tio# of Ri *$ 0owever small the investment, an investor in a mutual fund directly ac.uires a diversified portfolio, which reduces the risk of loss as compared to investing directly in any other instruments. Re'(!e' Tr"# "!tio# Co t $ $n investor can reap the benefits of the 1&conomies of cale1 as funds pay lesser costs on brokerage, custodian charges etc, because of larger volumes. Co#ve#ie#!e "#' fle+i,ilit-$ Investors can easily transfer their holdings from one scheme to another2 get updated market information and so on.

TYPES OF MUTUAL FUNDS$ S!.e&e "!!or'i#% to M"t(rit- Perio'$ $ mutual fund scheme can be classified into open,ended scheme or close,ended scheme depending on its maturity period. / O0e#1e#'e' F(#') S!.e&e $n 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 3et $sset 4alue %3$4( related prices, which are declared on a daily basis. The key feature of open,end schemes is li.uidity. / Clo e1e#'e' F(#') S!.e&e $ close,ended fund or scheme has a stipulated maturity period e.g. 5,6 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. S!.e&e "!!or'i#% to I#ve t&e#t O,2e!tive$ $ scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment ob+ective. be classified mainly as follows/ uch schemes may be uch schemes may open,ended or close,ended schemes as described earlier.

/ Gro3t. ) E4(it- Orie#te' S!.e&e The aim of growth funds is to provide capital appreciation over the medium to long, term. uch schemes normally invest a ma+or part of their corpus in e.uities. uch 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. 7rowth schemes are good for investors having a long,term outlook seeking appreciation over a period of time. / I#!o&e ) De,t Orie#te' S!.e&e The aim of income funds is to provide regular and steady income to investors. uch schemes generally invest in fixed income securities such as bonds, corporate debentures, 7overnment securities and money market instruments. uch funds are less risky compared to e.uity schemes. These funds are not affected because of fluctuations in e.uity markets. 0owever, opportunities of capital appreciation are also limited in such funds. / 5"l"#!e' F(#' The aim of balanced funds is to provide both growth and regular income as such schemes invest both in e.uities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 89,:9; in e.uity and debt instruments. / Mo#e- M"r*et or Li4(i' F(#' These funds are also income funds and their aim is to provide easy li.uidity, 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. !eturns on these schemes fluctuate much less compared to other funds. / Gilt F(#' These funds invest exclusively in government securities. 7overnment securities have no default risk. 3$4<s of these schemes also fluctuate due to change in interest rates and other economic factors as are the case with income or debt oriented schemes / I#'e+ F(#' Index "unds replicate the portfolio of a particular index such as the ' & ensitive index, => 3 & 59 index %3ifty(, etc. These schemes invest in the securities in the same weightage comprising of an index. HISTORY OF INDIAN MUTUAL FUND INDUSTRY The mutual fund industry in India started in ?@:A with the formation of Bnit Trust of India, at the initiative of the 7overnment of India and !eserve 'ank the. The history of mutual funds in India can be broadly divided into four distinct phases. Fir t P." e 6 17891:;$ Bnit Trust of India %BTI( was established on ?@:A by an $ct of >arliament. It was set up by the !eserve 'ank of India and functioned under the !egulatory and administrative control of the !eserve 'ank of India. In ?@6C BTI was de,linked from the !'I and the Industrial -evelopment 'ank of India %I-'I( took over the regulatory and administrative control in place of !'I. The first scheme launched by BTI was Bnit cheme ?@:8. $t the end of ?@CC BTI had !s.:,699 Drores of assets under management.

Se!o#' P." e 6 17:;1177< =E#tr- of P(,li! Se!tor F(#' >$ The year ?@C6 marked the entry of non, BTI, public sector mutual funds set up by public sector banks and Eife Insurance Dorporation of India %EID( and 7eneral Insurance Dorporation of India %7ID(. 'I Mutual "und was the first non, BTI Mutual "und established in Fune ?@C6 followed by Danbank Mutual "und %-ec C6(, >un+ab 3ational 'ank Mutual "und %$ug C@(, Indian 'ank Mutual "und %3ov C@(, 'ank of India %Fun @9(, 'ank of 'aroda Mutual "und %Gct @H(. EID established its mutual fund in Fune ?@C@ while 7ID had set up its mutual fund in -ecember ?@@9. T.ir' P." e 6 177<1?@@< =E#tr- of Priv"te Se!tor F(#' >$ With the entry of private sector funds in ?@@A, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. $lso, ?@@A was the year in which the first Mutual "und !egulations came into being, under which all mutual funds, except BTI were to be registered and governed. The erstwhile Iothari >ioneer %now merged with "ranklin Templeton( was the first private sector mutual fund registered in Fuly ?@@A. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and ac.uisitions. Fo(rt. P." e 6 i#!e Fe,r("r- ?@@<$ In "ebruary H99A, following the repeal of the Bnit Trust of India $ct ?@:A BTI was bifurcated into two separate entities. Gne is the pecified Bndertaking of the Bnit Trust of India with assets under management of !s.H@,CA5 Drores as at the end of Fanuary H99A, representing broadly, the assets of B :8 scheme, assured return and certain other schemes. The pecified Bndertaking of Bnit Trust of India, functioning under an administrator and under the rules framed by 7overnment of India and does not come under the purview of the Mutual "und !egulations.

The second is the BTI Mutual "und Etd, sponsored by 'I, >3', 'G' and EID. It is registered with &'I and functions under the Mutual "und !egulations. With the bifurcation of the erstwhile BTI which had in March H999 more than !s.6:,999 Drores of assets under management and with the setting up of a BTI Mutual "und, conforming to the &'I Mutual "und !egulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. 1.? COMPANY PROFILE

AARVY STOCA 5ROAING LTD In ?@CH, a group of 0yderabad J based practicing Dhartered $ccountants started Iarvy Donsultants Eimited with a capital of !s.?59999 offering auditing and taxation services initially. Eater, it forayed into the !egistrar and Transfer activities and subse.uently into financial services. $ decade of commitment, professional integrity and vision helped Iarvy achieve a leadership position in its field when it handled the largest number of issues ever handled in the history of the Indian stock market in a year. Thereafter, Iarvy made inroads into a host of capital market services, corporate and retail J that proved to be a sound business synergy. Today, Iarvy has access to millions of Indian shareholders, besides companies, banks, financial institutions and regulatory agencies. Gver the past one and half decades, Iarvy has evolved as a veritable link between industry, finance and people. In Fanuary ?@@C, Iarvy became the first depository participant in $ndhra >radesh. $n I G @99H company, Iarvy<s Dommitment to .uality and retail reach has made it an integrated financial services company. hare

AARVY GROUP OF COMPANIES$ Iarvy Donsultants Eimited Iarvy tock 'roking Eimited Iarvy Investors ervices Eimited Iarvy Domputershare >vt Eimited Iarvy 7lobal ervices Eimited Iarvy Dommodities 'roking Eimited Iarvy Insurance 'roking >rivate Eimited FEATURES OF AARVY trategic alliance with $merican &xpress 'ank for marketing $mex personal banking products. The first financial intermediary to get I G @99H certification in the country. $rrangers of funds to the corporate like I-'I, IDIDI, $> tate 7ovt. Bndertakings, % 'IM", EIDM", BTI, Templeton M", >rudential IDIDI, $lliance, Iothari, >ioneer, 'irla etc(. Wide 3etwork J :6 branches across the country. The 3o.? registrar to the issues in the country since @?,@H. The 3o.? fund mobili#es from primary market for the year @6,@C. -epository participant with 3 -E. >rofessional investment $dvisory services.

A"rv- 6 A# i#te%r"te' fi#"#!i"l i#ter&e'i"r- offer t.e follo3i#% ervi!e . -epository $ccounts %& J afe = & J >rivilege( econdary trading of shares / -ebentures Mutual fund schemes

10

"ixed deposits >ublic issues of 'onds, -ebentures and &.uity shares. !'I C; relief bonds !'I :.5; tax free relief bonds 7GI C; savings bonds BTI chemes avings bank accounts of $merican &xpress 'ank "ixed deposit of $merican &xpress 'ank Dar loans / >ersonal loans from $merican &xpress 'ank mall savings schemes Dorporate advisory services !egistrar to the issues Merchant banking and underwriting $sset financial including short term debt syndication. 'onds %>rivate >lacement( IDIDI 'onds J @: IDIDI 'onds J @6 I IDIDI 'onds J @6 II IDIDI safety bonds J March @C I-'I 'onds @: I-'I flexi bonds I I-'I flexi bonds II I-'I flexi bonds III >ower finance corporation ltd.

SERVICE HANDLED 5Y AARVY It is a kind of personali#ed financial advisory service.

11

DEPOSITORY SERVICE !egistered as -> both with 3 -E = D- E ervicing over : lac investors Gnline connectivity at 0yderabad, Eucknow = 'angalore !anked among the top 5 ->s in the country 0igh synergy with registry and broking activities for higher service levels to the customer Web based customer information >rovision of service in over 65 locations.

PRINCIPAL WINGS ?. H. A. 8. Iarvy Donsultants Eimited Issue ervicing Dorporate share holder servicing -epository participant services Mutual "und investor services Iarvy ecurities Eimited -istribution of financial products Iarvy Investor ervice Eimited Investment banking = corporate advisory services Iarvy stock broking limited

ADOPTION OF TECHNOLOGY &xpertise in integrating technology = finance >ool of trained software professionals Top of the line technology partners >roactive adaptation of changes in technology

12

FINANCIAL SERVICES trong advisory = syndication strengths Wide geographical reach = all India service network !etail distribution network for investment products $ccounting, secretarial = compliance strengths $utomated retail response management 0ouse hold brands IT enabled service delivery Dontrolled = low cost structure

MABOR ACHIEVEMENTS "irst I G @99H certified registrar in India %Gver 599 issues( !egistrar to public issues J !anked 3o.? !egistrar = Transfer $gentJ!anked 3o.? %$mongst the largest in the world( >ublic issue fund mobiliser J $mong top 5 Dategory I merchant 'anking J 3o.A %$pr J Fune 99( tock 'roking J $mong top ?9 Medical Transcription J $mong top 5 -epository participant %!anked by 3- E( 3o.of investors serviced, $mong top 5. !anked among the top 59 %A@th( IT users in India by MI %-ec< @C and -ec< @@( 0andled largest ever public issue J I-'I. >layed the role of ma+or issuers as arrangers, as co,managers, as registrars to issues. outh $sia

13

CHAPTER ? O5BECTIVESC SCOPE AND LIMITATION OF THE STUDY

?.1

O5BECTIVES OF THE STUDY

Pri&"r- O,2e!tive$ To study investors< preference towards various investment avenues. Se!o#'"r- O,2e!tive $ ?. H. A. 8. To study the risk appetite of the investors. To identify the reasons for investments in Mutual fund. To estimate the customer satisfaction with investment in mutual fund. To study the choice of investment for tax benefits.

14

?.?

SCOPE OF THE STUDY This study on Kmutual funds< was important to Iarvy consultants, Tuticorin.

The marketing and sales personnel at Iarvy Donsultants wanted to know the level of awareness about various investment methods and awareness about KMutual funds< in particular. With the opening up of the capital markets in a big way to "oreign Institutional Investors %"II<s(, mutual funds are becoming an attractive avenue. Tuticorin is a >earl Dity with vast potential. Iarvy consultants experienced lack of detailed information about the investment behaviour of the population in Tuticorin. 0ence there was a need to conduct this study to gather information about the investment preferences, with particular reference to mutual funds.

15

?.<

LIMITATIONS OF THE STUDY The area of study is limited to Tuticorin only2 hence the results may not be true for other geographical areas. 4alidity = !eliability of the data obtained depend on the responses from the customer. tructured .uestionnaire is the basis for collecting the data. It may have the disadvantage of not investigating the reasons for their responses. The time at the disposal of the researcher is limited. The si#e of the sample comparing to the population is very less and hence it may not represent the whole population.

16

CHAPTER < RESEARCH METHODOLOGY

INTRODUCTION !esearch methodology is a way to systematically solve the research problems. It includes the overall research design, the sampling procedure, data collection method and analysis procedure.

<.1

RESEARCH DESIGN $ research design is the arrangement of condition for collection and

analysis of data in a manner which may result in an economy in procedure. It stands for advance planning for collection of the relevant data and the techni.ues to be used in analysis, keeping in view the ob+ectives of the research and availability of time.

De !ri0tive Re e"r!. De i%#

-escriptive research includes survey and fact,finding en.uiries of different kinds. The ma+or purpose of this research is description of state of affairs as it exits at present.

17

<.?

SAMPLING TECHNIDUES The simple random sampling techni.ue was employed in the selection of

the sample.

SAMPLE SIEE The number of items selected from the population constitutes the sample si#e. The study covers the customers in the city of Tuticorin. Total sample si#e for the study is ?99.

<.<

DATA COLLECTION METHOD While deciding about the method of data collection for the study the

researcher should keep in mind the two sources of data.

Pri&"r- '"t" Se!o#'"r- '"t"

Pri&"r- D"t"

The primary data are those which are collected afresh and for the first time and thus happens to be original in character. >re,tested tructured .uestionnaire has been used for the collection of

primary data from the respondents. >lease !efer $ppendix J I for the full version of the .uestionnaire.

18

Se!o#'"r- D"t" The secondary data has been collected from the company records and various websites.

<.9

STATISTICAL TOOLS The data are analy#ed through statistical method. There are various

statistical tools to analysis the data. Weighted average, analysis are used for analy#ing the data collected.

imple percentage

19

CHAPTER 9 DATA ANALYSIS AND INTERPRETATION


9.1 PERCENTAGE ANALYSIS OF RESPONSES The data collected through the .uestionnaire has been analysed and tabulated. The analysis is presented in the tabular form. There are eighteen tables covering

-emographic analysis of respondents. Dhoices of investment avenues. 3ature of investment in Mutual "unds. Bse of mutual funds as tax,saving devices and &xtent of satisfaction with Mutual "unds.

The reason for selection of mutual fund has been analysed through ranking method and weighted average and has also been computed. TA5LE NO. 9.1.1 GENDER OF THE RESPONDENTS S.No. ?. H. Ge#'er Male "emale Tot"l No. of Re 0o#'e#t C8 ?: 1@@ Per!e#t"%e C8.9 ?:.9 1@@.@

INFERENCE It is identified from the above table that C8.9; of the respondents are belonging to male category and ?:.9; of the respondents are belonging to female category.

20

TA5LE NO. 9.1.? AGE PROFILE OF THE RESPONDENTS S.No. ?. H. A. 8. 5. :. A%e L H9 years H? to A9 years A? to 89 years 8? to 59 years 5? to :9 years M :9 years Tot"l No. of Re 0o#'e#t 9 88 A5 ?5 : 9 1@@ Per!e#t"%e 9.9 88.9 A5.9 ?5.9 :.9 9.9 1@@.@

INFERENCE It is identified from the above table that maximum %88.9;( of the respondents belong to H?,A9 years of age group and respondents in the age group A? to 89 years from another A5; of the sample. It can be inferred that ma+ority of the investors %nearly 6@;( are in the age group of H? to 89 years.

21

TA5LE NO. 9.1.< MARITAL STATUS OF THE RESPONDENTS No. of Re 0o#'e#t A? :@ 1@@

S.No. ?. H.

M"rit"l t"t( ingle Married Tot"l

Per!e#t"%e A?.9 :@.9 1@@.@

INFERENCE

It is observed from the above table that A?.9; of the investors are unmarried and :@.9; of the respondents are married.

22

TA5LE NO. 9.1.9 OCCUPATION OF THE RESPONDENTS No. of Re 0o#'e#t 8C A: ?A ? H 1@@

S.No. ?. H. A. 8. 5.

N"t(re of e&0lo-&e#t alaried 'usiness >rofessional !etired Gthers Tot"l

Per!e#t"%e 8C.9 A:.9 ?A.9 ?.9 H.9 1@@.@

INFERENCE It is noted from the above table that maximum %8C.9;( of the investors are salaried people and A:; of the respondents are business persons.

23

TA5LE NO. 9.1.F ANNUAL INCOME OF THE RESPONDENTS No. of Re 0o#'e#t H? 59 ?@ : A ? 1@@

S.No. ?. H. A. 8. 5. :.

A##("l I#!o&e !s.59999 , !s.? lakh !s.? lakh , !s.H lakhs !s.H lakhs J !s.A lakhs !s.A lakhs J !s.8 lakhs !s.8 lakhs J !s.5 lakhs M!s.5 lakhs Tot"l

Per!e#t"%e H?.9 59.9 ?@.9 :.9 A.9 ?.9 1@@.@

INFERENCE It is known from the above table that maximum %59.9;( of the investors are earned !s. ? lakh to H lakh per annum another H?; of the respondents had an annual income between !s.59,999 to !s.?,99,999 and ?@; of the respondents had annual income between !s.H,99,999 to !s.A,99,999. Thus @9; of all respondents had an annual income Eess than !s.A,99,999. The median income of the group was !s.?,59,999.

24

TA5LE NO. 9.1.8 CHOICE OF INVESTMENTS AVENUES No. of

S.No. ?. H. A. 8. 5. :. 6. INFERENCE

Re 0o#'e#t "ixed deposits :5 >ost office avings A6 'onds / debentures ?9 Mutual funds CA Eife insurance 69 hares 5C 3ational savings certificates 8

O0i#io#

Per!e#t"%e :5.9 A6.9 ?9.9 CA.9 69.9 5C.9 8.9

ince the respondents have used more than one investment avenue, the total number of responses is more than ?99. In terms of popularity of investment avenue, the ranking can be inferred from the table above.

R"#* I II III I4

I#ve t&e#t Ave#(e Mutual "unds Eife Insurance "ixed -eposits hare -eposits

G of tot"l re 0o#'e#t CA; 69; :5; 5C;

25

TA5LE NO. 9.1.; THE REASONS FOR INVESTMENT IN MUTUAL FUND No. of Re 0o#'e#t 89 H H6 ? ?H ? :<

S.No. ?. H. A. 8. 5. :.

O0i#io# 'est returns when compared to other avenues >rofessional management Donsistency of steady returns Trade off between risks and return -iversification Ei.uidity Tot"l

Per!e#t"%e 8C.H H.8 AH.5 ?.H ?8.5 ?.H 1@@.@

INFERENCE

It is known from the above table that 8C.H; of the investors who have invested in mutual fund invested their money through mutual fund for the reason of best returns when compared to other avenues. The second most important reason in consistency of steady returns, which was the reason given by AH.5; of the respondents who had invested in mutual funds. Dombining both, it can be inferred that ma+ority %C9.6;( of the people who invest in mutual funds choose this avenue due to either better returns or steady returns.

26

TA5LE NO. 9.1.: PERIOD OF INVESTMENT IN MUTUAL FUNDS S.No. ?. H. A. 8. O0i#io# Eess than ? year ? year,A years A,5 years More than 5 years Tot"l No. of Re 0o#'e#t 6 5@ ?: ? :< Per!e#t"%e C.8 6?.? ?@.A ?.H 1@@.@

INFERENCE It is observed from the above table that maximum 6?.?; of the investors invested their money through mutual funds for the period of ? year, A years.

27

TA5LE NO. 9.1.7 TYPE OF MUTUAL FUNDS S.No. ?. H. A. T-0e of F(#' >ublic >rivate 'oth Tot"l No. of Re 0o#'e#t ?8 HA 8: :< Per!e#t"%e ?:.@ H6.6 55.8 1@@.@

INFERENCE It is identified from the above table that 55.8; of the investors invest their money through both public and private mutual funds. $nother H6.6; invested only through private mutual funds. Gnly ?:.@; of the investors inverted only in public mutual funds. ince the investors have indicated that they are seeking steady or better returns, they appear to feel that private mutual funds can meet their expectation on returns better.

28

TA5LE NO. 9.1.1@ TYPES OF MUTUAL FUND SCHEMES S.No. ?. H. A. 8. T-0e of S!.e&e &.uity -ebt 0ybrid 7ilt fund Tot"l No. of Re 0o#'e#t :: 9 ?6 9 :< Per!e#t"%e 6@.5 9.9 H9.5 9.9 1@@.@

INFERENCE It is known from the above table that most %6@.5;( of the investors selected &.uity type of schemes and H9.5; of the investors chose 0ybrid schemes. This result is also in line with the opinion expressed by the investment that they invest in mutual funds for better or steady returns. ince e.uity schemes promise better returns and hybrid schemes promise steady returns, the investors prefer only these two types of schemes. The responses are consistent with the expectation of the investors.

29

TA5LE NO. 9.1.11 PROPORTION OF INCOME INVESTED IN MUTUAL FUND S.No. ?. H. A. 8. 5. O0i#io# Eess than ?9; ??,H9; H?,A9; A?,89; $bove 89; Tot"l No. of Re 0o#'e#t 8@ AA ? 9 9 :< Per!e#t"%e 5@.9 A@.C ?.H 9.9 9.9 1@@.@

INFERENCE

It is seen from the above table that maximum %5@.9;( of the investors invest less than ?9; of their income through mutual fund. "urther A@.C; of the investors invest between ??,H9; of their income invest in mutual funds. Together nearly all investors %@@;( investment upto a maximum of H9; of then income in mutual funds.

30

TA5LE NO. 9.1.1? RISA PERCEPTION A5OUT MUTUAL FUND S.No. ?. H. A. 8. O0i#io# 0igh risk Moderate risk Eow risk 3o risk Tot"l No. of Re 0o#'e#t ? 5@ H9 A :< Per!e#t"%e ?.H 6?.? H8.? A.: 1@@.@

INFERENCE

It is identified from the above table that most %6?.?;( of the investors feel that investment in mutual funds carry moderate risk. $nother H8.?; of the respondents feel that the risk in low. Dombining the responses in table 8.?.6, this reveals that investors in mutual funds are wiling to bear moderate risk in order to obtain better returns.

31

TA5LE NO. 9.1.1< LEVEL OF SATISFACTION REGARDING THE RETURNS IN MUTUAL FUND S.No. ?. H. A. 8. 5. O0i#io# 0ighly satisfied atisfied 3eutral -issatisfied 0ighly dissatisfied Tot"l No. of Re 0o#'e#t H: 8@ C 9 9 :< Per!e#t"%e A?.A 5@.9 @.: 9.9 9.9 1@@.@

INFERENCE It is evident from the above table that maximum %5@.9;( of the respondents are satisfied regarding the returns in mutual fund investment, and another A?.A; of the respondents are highly satisfied. Taken together an overwhelming ma+ority %@9.A;( of the investors are satisfied or highly satisfied will the returns they earn through investment in mutual fund.

32

TA5LE NO. 9.1.19 CHANCES OF FUTURE INVESTMENT IN MUTUAL FUNDS S.No. ?. H. A. 8. O0i#io# -efinitely invest 4ery Eikely >robably invest -efinitely will not Tot"l No. of Re 0o#'e#t 66 ?@ 8 9 1@@ Per!e#t"%e 66.9 ?@.9 8.9 9.9 1@@.@

INFERENCE It is seen from the above table that 66.9; of the respondents will definitely invest in mutual fund schemes in the forthcoming years. $nother ?@; of the respondents said that they are very likely to invest in mutual funds in the future. 3o respondent said that he will definitely not invest in the future. This response accords well with the response in table 8.?.?A where @9.A; of the respondents indicated that they are satisfied / highly satisfied with the returns they got from their investment in mutual funds. It is natural that such satisfied customer will invest in mutual funds in the future also.

33

TA5LE NO. 9.1.1F DIFFICULTIES IN CHOOSING THE RIGHT INVESTMENT S.No. ?. H. A. O0i#io# Too much choices Eack of timely information Eack of unbiased opinion Tot"l No. of Re 0o#'e#t 5A A: ?? 1@@ Per!e#t"%e 5A.9 A:.9 ??.9 1@@.@

INFERENCE It is seen from the above table that 5A.9; of the respondents are facing too many choices and A:; feel that there is lack of timely information. ??; of the respondents feel that the lack of unbiased information is the hurdle in choosing the right investment

34

TA5LE NO. 9.1.18 MUTUAL FUNDS AS A TOOL FOR SAVING TAH S.No. ?. H. M(t("l F(#' for S"vi#% T"+ Nes 3o Tot"l No. of Re 0o#'e#t 5: 88 1@@ Per!e#t"%e 5:.9 88.9 1@@.@

INFERENCE It is evident from the above table that 5:.9; of the respondents preferred mutual funds as a tool for saving tax.

35

TA5LE NO. 9.1.1; PROPORTION INVESTED IN TAH SAVING SCHEMES S.No. ?. H. A. 8. 5. Pro0ortio# of T"+",le I#!o&e Eess than ?9; ??,H9; H?,A9; A?,89; $bove 89; Tot"l No. of Re 0o#'e#t AC ?6 ? 9 9 F8 Per!e#t"%e :6.@ A9.8 ?.C 9.9 9.9 1@@.@

INFERENCE $mong 5: respondents who said that they use mutual funds as a tax shield, :C; said that they invest less than ?9; of their taxable income in tax saving schemes. $nother A9.8; said that they invest between ?? to H9; of their taxable income in tax saving schemes.

36

TA5LE NO. 9.1.1: OTHER MODES OF TAH SAVING S.No. ?. H. A. Ot.er T"+ S"vi#% Mo'e Insurance 0ousing loans 7eneral provident fund Tot"l No. of Re 0o#'e#t H8 ?6 A 99 Per!e#t"%e 58.5 AC.: :.C 1@@.@

INFERENCE $mong the 88 respondents who did not choose mutual funds for tax saving purposes, Insurance was the primary investment tool for tax saving purposes. The second most important avenue was housing loans. $ mere 6; used general provident fund for tax saving purposes.

37

RANAING TA5LE NO. 9.1.17 REASONS FOR THE SELECTION OF MUTUAL FUNDS S.No. ?. H. A. 8. P"rti!(l"r >ast performance "inancial advisors "und manager 3$4 appreciation Wei%.t"%e !ore HAH ?68 ?A? H@A r"#* II III I4 I

INFERENCE It is identified from the above table that the factor K3$4 appreciation< is the most important reason for selection of mutual funds and it is ranked first by the respondents with score of H@A points. K"inancial advisors< with score of HAH and ?68 points. The fourth rank goes to the factor Kfund manager< with score of ?A? points. It is concluded from the above analysis that maximum of the respondents< opinion that the factor K3$4 appreciation< makes to reason for selection of invested funds. The second most important reason for choosing a mutual fund is its past performance. "inancial advisors rank as the third ma+or important factor. The reputation of the fund manager is the least important factor. It is therefore safe to infer that expectation of future performance %3$4( and record of past performance are the most important factors in the choice of mutual fund.

38

CHAPTER F SUMMARY OF FINDINGSC SUGGESTIONS AND CONCLUSION


F.1 FINDINGS

It is found from the analysis that maximum of the male respondents are invested their money through mutual funds.

It is stated from the analysis that maximum of the respondents are belong to H?,A9 years.

It is noted from the analysis that :@.9; of the investors are married and A?.9; of the investors are unmarried.

It is followed from the analysis that maximum of the investors are salaried people.

It is known from the analysis that maximum of the investors are earned !s.? lakh to H lakh per annum.

It is revealed from the analysis that CA.9; of the investors are invested through mutual funds.

It is observed from the analysis that 8C.H; of the investors are invested their money through mutual fund for the reason of best returns when compared to other avenues.

It is seen from the analysis that maximum of the investors are invested their money through mutual funds between ?,A years.

It is inferred from the analysis that maximum of the investors are invested their money through both the private and public type of mutual fund.

39

It is identified from the analysis that 6@.5; investors are selected e.uity type of schemes.

It is evident from the analysis that maximum of the investors invest less than ?9;of their income through mutual fund.

It is revealed from the analysis that maximum of the investors< opinion is moderate risk in mutual fund.

It is found from the analysis that 5@.9; of the respondents are satisfied and A?.A; of the respondents are highly satisfied regarding the returns in mutual fund investment.

It is noted from the analysis that 66.9; of the respondents are definitely invest through mutual fund in forthcoming years.

It is cleared from the analysis that maximum of the respondents are facing too much of choices as typical hurdles of choosing the right investment.

It is evident from the analysis that 5:.9; of the respondents are preferred mutual funds as a tool for saving tax.

It is stated from the analysis that maximum of the respondents are invested in tax saving scheme under mutual funds as less than ?9; of taxable income.

It is inferred from the analysis that maximum of the respondents are having insurance as the other modes of investment to save tax.

It is identified form the above analysis that maximum of the respondents is that the factor K3$4 appreciation< makes to reason for selection of mutual funds.

40

F.?

SUGGESTIONS

The popularity of debt and gilt funds is very low. &mpha#ing the fact that the risk level is low in such schemes will help in increasing investments in such schemes.

The time frame for most investors is ? to A years. 0owever investments in systematic investment plan % I>( schemes which are longer term investments can earn better returns. 0ence investors must be educated about I> schemes.

Timely information regarding various schemes should be provided to investors so as to eradicate the hurdles while choosing the right investment. o the role of financial advisors is prominent.

While most of the investors are looking for better returns, only half are using the investments in mutual funds for tax saving purposes. The investors must be educated about the tax benefits in investing in mutual fund to attract more investments.

41

F.<

CONCLUSION The main ob+ective of the study is to find out the investors preference

towards various investment avenues like fixed deposits, post,office schemes, bonds / debentures, share market, mutual funds and insurance. The study revealed that mutual fund ranks as the most popular avenue for investment followed by life insurance and fixed deposits with regard to the risk appetite of the investors, it is found that the investors perceive that investments in mutual funds carry moderate risk.

The study also reveals that better and steady returns is the main reason for investment in mutual fund. The study in dictated that the ma+orities of the investors are satisfied with their investments in mutual fund.

Investments in insurance and housing are found to be the popular avenues for saving tax in addition to mutual funds suggestions have been made to improve investments in mutual funds particular low risk schemes such as debt funds = get funds and also by highlighting the tax advantages in investors in mutual funds.

42

You might also like