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INTRODUCTION

Mutual funds are very popular all over the world and they play an important role in
the financial system of many countries. Mutual funds are an ideal medium for investment by
small investors in the stock market. Mutual fund pools together the investment of small
investors for participation in the stock market. Being institutional investors, mutual fund can
afford market analysis generally not available to individual investors. Furthermore mutual
fund can diversify the portfolio in a better way as compared to individual investors due to the
expertise and availability of funds.
Mutual funds in India were first created in 1963 when the Unit Trusts Of India (UTI),
a state sponsored entity, came into being. Until 1987 and 1993 other entities belonging to
the public sector were permitted to offer mutual fund basically state-controlled banks and
insurers. As part of financial sector reforms, mutual fund industry was opened to the private
sector in 1993 and private sector organization were permitted to enter the market and the first
mutual fund regulation were promulgated, which were subsequently replaced by the SEBI
(Mutual Fund) Regulations of 1996.These private sector organizations comprised both Indian
and foreign joint venture as well as purely Indian firm.
Since then, the expansion of mutual of mutual fund business has intensified
competition and led to product innovation. Mutual fund presently offer a variety of option to
investors such as income funds, balanced funds, liquid, gift funds, index funds, exchange
traded funds, sect oral funds etc. The deceleration in the growth of mutual funds in the 1990s
could be attributed partly to the relatively poor performance of the stock markets and partly
due to withdrawal of tax benefits under section 80M of Indian Income Tax Act,1961.Some of
the mutual funds had offered assured return schemes enabling them to mobilize large
resources. A number of mutual funds faced difficulties in meeting their redemption
obligations relating to such schemes. In several cases, the sponsors of mutual fund had to
infuse additional funds to meet the shortfall. As a result, mutual funds, by and large
discontinued the floatation of assured returns schemes, which had some dampening affect on
the resources mobilization by mutual funds.

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A mutual fund in India has the following groups.
a) Mutual funds are popular mainly with the middle and high income groups.
b) Investors are largely based in the urban centers, particularly the metropolitan cities.
c) Penetration of mutual funds in the rural areas remains small.
d) UTI and other state-owned asset management companies have lost market share, while
private sector funds have grown rapidly.
e) Asset management companies are divided into those that are predominantly owned by
the state and those that are in the private sector.
f) Mutual funds industry has to compete with attractive assured returns from government
schemes and this is possibly the single most important impediment to the growth of the
industry.
The popularity of mutual funds, and the important role they play in the financial
system of many countries, is recognized all over the world. Mutual funds are an ideal
medium for investment by small investors in the stock market. Mutual funds pool together
the investment of small investors for participation in stock market. Being institutional
investors, mutual funds can afford market analysis generally not available to individual
investors. Furthermore, mutual funds can diversify the portfolio in a better way as compared
with individual investors due to the expertise and availability of funds.
Mutual funds are essentially investment vehicles where people with similar
investment objective come together to pool their money and then invest accordingly. Each
unit of any scheme represents the proportion of owned by the unit (investor).Appreciation or
reduction in value of investment is reflected in net asset value (NAV) of the concerned
schemes are managed by respective Asset Management Companies (AMC). Different
business groups, financial institutions and banks sponsors these AMCs, either alone or in
collaboration with international firms. Several international funds are operating
independently in India and some are expected to come in the future. Mutual funds invest
according to the underlying investment objective specified at the time of launching a scheme.




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RESEARCH METHODOLOGY OF THE STUDY

Research is an original contribution to the existing stock of knowledge making for its
advancement. It is the pursuit of truth with the help of study, observation, comparison and
experiment. In short, the search for knowledge through objective and systematic method of
finding solution to a problem is research. A research method refers to the methods the
researchers use in performing research operations. Research Methodology is a way to
systematically solve the research problem. By research methodology not only the research
methods are considered but also the logic behind the methods used in the context of the
research study and explanations are given on why a particular technique is used.
RESEARCH DESIGN
The research design that is adopted in this study is descriptive design. Descriptive research
is used to obtain information concerning the current status of the phenomena to describe,
"What exists" with respect to variables or conditions in a situation. The focus of this study
was on self-reported decisions made by various investors regarding the investment patterns in
mutual funds.
SOURCES OF DATA:
Data were collected through both primary and secondary data sources. Primary data was
collected through questionnaires. The research was done in the form of direct personal
interviews and through telephone interviews.

1. PRIMARY DATA:
A primary data is a data, which is collected afresh and for the first time, and thus happen to
be original in character. The primary data with the help of questionnaire were collected from
various investors. Proper care has been taken to ensure that the information needed match the
objectives, which in turn match the data collected through the questionnaire. The basic
cardinal rules of questionnaire design like using simple and clear words, the logical and
sequential arrangement of questions.



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2. SECONDARY DATA:
Secondary data consist of information that already exists somewhere, have been collected.
Secondary data is collected from company websites, other websites, company fact sheets,
magazines and brochures.
3. SAMPLE SIZE OF THE STUDY:
Customers Age Male Female Total
20-30 2 2 4
30-40 2 2 4
40-50 2 2 4
50-60 2 2 4
60 and above 2 2 4
Total 10 10 20

4. DATA ANLYSIS: The data will be analysis using central tendency technique.




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DATA ANALYSES AND INTERPRETATION
TABLE 3.1
With which companies people invested money for mutual funds?
Particulars Male ( % ) Female ( % ) Total
HDFC 10 25 35
ICICI 5 5 10
RELIANCE 5 20 25
LIC 20 5 25
SBI 5 5 10
KOTAK 5 0 5
Source: Compiled from the primary data.
Graph 3.1

Interpretation: -
From the above table 3.1 it can be observed that there are companies E.g. HDFC,
ICICI, RELIANCE, LIC, SBI, and KOTAK which provides mutual funds. In HDFC
total 35% of people invested money for mutual fund in which male invested 10%
and female 25%. In ICICI company total people invested money for mutual fund
10% in which 5% male and 5% female. In Reliance company total people invested
money for mutual fund is 25% in which 5% male and 20% female. In LIC total
people invested money same as Reliance Company i.e. 25% but in LIC Company
20% male 5% female. In SBI 5% male and 5% in female i.e. total 10% people
invested money for mutual fund. In KOTAK Company only male is invested for
money for mutual fund. So, from the above data analyses table it can be observed
that people are interested to investee money for mutual funds. Only in HDFC
Company as compare to other company.
0%
5%
10%
15%
20%
25%
30%
35%
40%
HDFC ICICI RELIANCE LIC SBI KOTAK

R
e
s
p
o
n
s
e
s


Various companies
Male
Female
Total
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Table 3.2
What is your duration of investment?
Particular Male ( % ) Female ( % ) Total
0-1 year 5 10 15
1-2 year 5 5 10
2-4 year 20 20 40
Above 4 year 20 15 35
Source: - Compiled from the primary data.

Graph 3.2


Interpretation:-
From the above table 3.2 it can be observed that the responses of the duration of investment.
For 0-1 year of duration 15% of people invested money in mutual funds, in which 5% male
and 10% female. For 1-2 year of duration 10% of people invested money in mutual fund. For
2-4 year of duration total 40% of people invested money in mutual fund. For above 4 year of
duration total 35% of people interested to invest money in mutual fund.


0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0-1 year 1-2 year 2-4 year Above 4 year
R
e
s
p
o
n
s
e
s




Duration in mutual fund
Male
Female
Total
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Table 3.3
What is your risk profile?
Particulars Male ( % ) Female ( % ) Total
Saving 5 5 10
Return 35 25 60
Innovator Moderator 5 5 10
Risk adverse 5 15 20
Source: - Compiled from the primary data.

Graph 3.3

Interpretation:-
From the above table 3.3 it can be observed that the responses of risk profile. In which 10%
of people have saving risk profile in which 5% male and 5% female, 60% of people have
return risk profile in which 35% male and 25% female, 10% of people have innovator
moderator in which 5% male and 5% female and 20% of people have risk adverse risk
profile in which 5% male and 15% female.



0%
10%
20%
30%
40%
50%
60%
70%
Saving Return Innovator
Moderator
Risk adverce
R
e
s
p
o
n
s
e
s


Types of risk profile
Male
Female
Total
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Table 3.4
What type of funds have you invested?
Particulars Male ( % ) Female (% ) Total
Equity fund 15 20 35
Debt fund 5 5 10
Balanced fund 15 15 30
Index fund 5 5 10
Income fund 10 5 15
Source: - Compiled from the primary data.

Graph 3.4


Interpretation:
From the above table 3.4 it can be observe that people invested in various types of funds. In
equity fund 35% of people invested in which 15% male and 20% female. In debt fund 10% of
people invested in which 5% male and 5% female. In balanced fund 30% of people invested
in which 15% male and 15% female. In index fund 10% of people invested in which 5% male
and 5% female. In income fund 15% of people invested in which 10% male and 5% female.
0%
5%
10%
15%
20%
25%
30%
35%
40%
Equity fund Debt fund Balanced
fund
Index fund Incomefund
N
o
.

o
f

I
n
v
e
s
t
o
r
s


Types of fund
Male
Female
Total
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FINDINGS AND CONCLUSIONS

1. In HDFC 35% of people in interested to invest in mutual fund as compare to others bank
like ICICI, Reliance, LIC, SBI and KOTAK. So, these
2. 40% of people interested to invest in 2-4 year of duration as compared to others.
3. From the data analyses it can be found that 60% of people interested to invest in return
type of risk profile.
4. From the data analyses it can be found that majority of people i.e. 35% of people invested
to invest equity type of fund as compare to other types of fund.
In any Mutual Fund Industry investors awareness plays an important role. With the
increasing number of Mutual Fund organizations, there is a need for every company to
educate investors and the general public on various aspects concerned with the mutual fund
investments which in turn reveals their attitude towards such investments. From the study on
Investors attitude towards Mutual funds, it is found that the investors have a positive
attitude towards their investment made in Mutual funds.
The investors are satisfied with their investment in Mutual Funds. The investors also
feel that the annual reports and other publications of the concern help them anlyse the
performance of their investment. The organization can educate its investors on the risk and
return in order to make their investments more effective. The investors education
programmer can be conducted by the organization in order to educate the investors. The
study has helped the researcher gain real time knowledge and has helped to use her analytical
skills to anlyse the attitude of the investors.



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RECOMMENDATIONS

1. Prudential investment norms were prescribed to ensure that the investment portfolios of
the mutual funds are diversified to reduce the inherent risk associated with such
investments.
2. Investments in equity related instruments of a single company have been restricted to 10
per cent of the NAV of a scheme with an exception for index funds and sector/ industry
specific schemes.
3. Investment in investment grade rated debt instruments issued by a single issuer, should
not exceed 15 per cent of NAV of the scheme. This limit may be extended to 20 per cent
of the NAV of the scheme with the prior approval of the Boards of AMC and trustees. In
case of unrated debt instruments.
4. Investment in a single issuer shall not exceed 10 per cent of the NAV of the scheme and
in case of such debt instruments of all the issuers in a scheme shall not exceed 25 per cent
of NAV subject to approval of Boards of AMC and Trustee Company.
5. However, these restrictions for debt instruments will not be applicable to government
securities and money market instruments.
6. As investment in unlisted shares is less liquid, such investments have been restricted to a
maximum of 10 per cent of the NAV of a scheme in case of close ended scheme. In case
of open-ended schemes the limit is made more stringent to 5 per cent of the NAV of the
scheme as there is continuous repurchase by investors in such schemes and there is need
of liquidity.


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SUGGESTIONS

1. The companies should provide various schemes and facilities
2. In duration of investment companies should include various types of beneficial schemes
under the duration of 0-1, 2- 4 etc.
3. The companies should explain types of risk profile in positive way.
4. The companies should increase the types of fund with various facilities


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BIBLIOGRAPHY

1. Desigan et al. (2006), Women Investors Perception towards Investment: An
empirical Study, Indian Journal of Marketing. (accessed on 22nd May 2010)
2. Preeti Singh, Investment Management Security Analysis and Portfolio Management,
Himalaya Publishing House, Eleventh Edition, 2003, Pp1


WEBLIOGRAPHY


1. www.indianfoline.com.
2. www.mutualfunds.com.
3. www.investopidia.com.
4. www.amfindia.com.








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ANNEXURE 1
QUESTIONNAIRE
ANALYSE INVESTORS VIEW TOWARDS MUTUAL
FUND SCHEME IN INDIA.


PERSONAL PROFILE:

1. Name of the Investors:
2. Gender : Male Female
3. What is your age?
15-25 25-35

35-45 Above 45

4. Qualification :
Undergraduate Graduate
Post graduate Professional degree






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1. Do you invest in mutual fund?

Yes No

2. With which companies people invested money for mutual funds?
H.D.F.C I.C.I.CI

Reliance L.I.C

S.B.I Kotak


3. What is your income? (Yearly based)
1 lakh 2-4 lakh
4-5 lakh More than 5

4. Do you have complete knowledge of the mutual fund industry?

Yes Not fully Not at all

5. What do you think is the basic difference in investing in mutual funds rather than stock?

Saving Returns Diversification Risk tolerance

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6. From where you come to know about this companys mutual fund schemes?
Family members & relatives Friends & peer
Companies Employee Other

7. What is your duration of investment?
0-1 Year 1-2 Year
2-4 Year More than 4 Year
8. Which of the following provide better returns?
H.D.F.C I.C.I.C.I

9. What is your risk profile?
Saving Return
Innovator Moderator Risk adverse

10. What made you select this mutual fund company?
Reputation Provides good return
Others Experts advice

11. What type of funds have you invested in?
Equity fund Debt fund Liquid fund
Index fund balanced fund Income fund


12. What scheme have you taken?
Open ended Close ended Interval.

13. Do you seriously go through the annual report of your scheme in order to evaluate the
performance of your scheme?
Yes No