Mutual Fund Project

A PROJECT REPORT ON
A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL

FUND OF INVESTORS IN SURAT CITY DURING 2012-13
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE

DEGREE OF B.B.A. PROGRAM
PREPARED BY:
MODI JAY C.
ROLL NO.: 42
[T.Y. B.B.A., FINANCE]
UNDER THE GUIDANCE OF:

MR. MRUNAL JOSHI
SUBMITTED TO:
SARVAJANIK EDUCATION SOCIETY,
B. R. C. M. COLLEGE OF BUSINESS ADMINISTRATION,
VEER NARMAD SOUTH GUJARAT UNIVERSITY,
SURAT.
YEAR:
2012 2013
ACKNOWLEDGEMENT
A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF INVESTORS IN

SURAT CITY
II
Success is not a destination, but a journey. While I reach towards the end of this journey, I
realize I may not have come this far without the guidance, help and support of people who acted
as guides, friends and torch bearers along the way.
This research was made possible as per the requirement of the BBA course under B.R.C.M.
College of Business Administration. Many individual took interest and were supportive of my effort.
In fact, many have given me their time generously and it is not possible to mention all of them here
and there act of goodness. I take the opportunity to place and record my deep sense of gratitude
to all who have helped me in completion of my study.
This project work would have been possible because of glittering experience, guidance and
exquisite supervision of Mr. Mrunal Joshi has potentially, analytically and critically gone through all
the criteria of the subject of project. I am also very much thankful to my all friends in helping me in
completion of my project report.
B.R.C.M. College of Business Administration.
A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

INVESTORS IN SURAT CITY
3
DECLARATION
I the undersigned declare that this project report entitled A STUDY OF AN AWARENESS AND
PERCEPTION ABOUT MUTUAL FUND OF INVESTORS IN SURAT CITY is result of my own
work carried out during January to March 2012 2013 and have not been previously submitted to
any other institutions and for any other purpose by any other person.
I will not use the project in future to use as submission to any other university, institution or any
other publication without written permission of my guide.
I also promise not to give to any other person to copy from this report in any form.
If I am found or caught as defaulter of my declaration, I know that my present or future submission
may become invalid or I may not be permitted appear in the final exam.
Jay Modi

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EXECUTIVE SUMMARY
Primary objective of the project is to know about awareness and perception of investors towards
Mutual Fund and how to Mutual Fund companies deal with their functions in capital market.
The project starts with the introduction of the Mutual Fund industries in which selected companies
in the project are working. The industry profile shows the history and growth of the industry. It also
shows capability or opportunity for the company and Mutual Fund investors. Then the study
describes the organization of Mutual Fund.
Then the basic information of the Mutual Fund is given which gives the theoretical aspects of
Mutual Fund, types of Mutual Fund, Advantages and Disadvantages of Mutual Fund, List of Listed
Mutual Funds, Regulatory body of Mutual Fund in India for the understanding of the Mutual Fund
and types of Mutual Fund.
Closed-ended questionnaire was constructed to collect data from the target respondents. The
questionnaire was constructed to know awareness and perception of investors towards Mutual
Fund of Surat City.
The results of the study interpreted from the data have been presented in the form of tables,
charts, figures and statistical analysis. Data analysis of the study covers percentage, Mean, ChiSquare test.

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INDEX
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Particulars
Acknowledgement
Executive summary
Ch.1: Introduction
Ch.2: Introduction to topic
Ch.3: Objectives
Ch.4 Research methodology
Ch.5 Findings and analysis
Ch.6 Conclusion and suggestions
Bibliography / References
Annexure
Page no.
II
IV
1
9
30
34
39
83
85
87

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CH. 1
INTRODUCTION
1.1 INTRODUTION:

7
There are many investment avenues available in the financial market for an investor. Investors can
invest in bank deposits, corporate debentures and bonds, post office saving schemes etc. where,
there is low risk together with low return. They may invest in stock of companies where the risk is
high and sometimes the returns are also proportionately high.
For retail investors, who do not have the time and expertise to analyze and invest in stock, Mutual
Funds is a viable investment alternative.
This is because Mutual Funds provide the benefit of cheap access to expensive stocks.
A Mutual Fund is a collective investment vehicle formed with the specific objective of raising
money from a large number of individuals and investing it according to a pre-specified objective,
with the benefits accrued to be shared among the investors on a pro-rata basis in proportion to
their investment.
According to Encyclopedia Americana, Mutual funds are open end investment companies that
invest shareholders money in portfolio or securities. They are open ended in that they normally
offer new shares to the public on a continuing basis and promise to redeem outstanding shares on
any business day.
According to Securities and Exchange Board of India Regulations, 1996
a mutual fund means a fund established in the form of trust to raise money through the sale of
units to the public or a section of the public under one or more schemes for investing in securities,
including money market instruments.
1.2 CONCEPT OF MUTUAL FUND
A Mutual Fund is a trust registered with the Securities and Exchange Board of India (SEBI) which
pools up the money from individual/corporate investors and invests the same on behalf of the
investors/units holders, in equity shares, government securities, bonds, call money market etc. The
income earned through these investments and the capital appreciations realized are shared by its
unit holders in proportion to the number of units owned by them. This pooled income is
professionally managed on behalf the unit-holders, and each investor holds a proportion of the
portfolio.
1.3 HISTORY AND GROWTH OF MUTUAL FUND INDUSTRY:
The history of mutual funds dates support to 19th century when it was introduced in Europe, in
particular, Great Britain. Robert Fleming set up in 1868 the first investment trust called Foreign and
colonial investment trust which promised to manage the finances of the moneyed classes of
Scotland by scattering the investment over a number of different stocks. This investment trust and

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other investment trusts which were afterward set up in Britain and the U.S., resembled todays
close ended mutual funds. The first mutual fund in the U.S., Massachusetts investors trust, was
set up in March 1924. This was the open ended mutual fund.
The stock market crash in 1929, the Great Depression, and the outbreak of the Second World War
slackened the pace of growth of the mutual fund industry. Innovations in products and services
increased the popularity of mutual funds in the 1950s and 1960s. The first international stock
mutual fund was introduced in the US in 1940. In 1976, the first tax exempt municipal bond funds
emerged and in 1979, the first money market mutual funds were created. The latest additions are
the international bond fund in 1986 arm funds in 1990. This industry witnessed substantial growth
in the eighties and nineties when there was a significant increase in the number of mutual funds,
schemes, assets, and shareholders. In the US the mutual fund industry registered s ten fold
growth the eighties. Since 1996, mutual fund assets have exceeds bank deposits. The mutual fund
industry and the banking industry virtually rival each other in size.
A Mutual fund is type of Investment Company that gathers assets form investors and collectively
invests in stocks, bonds, or money market instruments. The investment company concepts date to
Europe in the late 1700s, according to K. Geert Rouwenhost in the Origins Mutual Funds, when a
Dutch Merchant and Broker Invited subscriptions from investor with limited means. The
materialization of investment Pooling in England in the 1800s brought the concept closer to U.S.
shores. The enactment of two British Laws, the Joint Stock Companies Acts of 1862 and 1867,
permitted investors to share in the profits of an investment enterprise, and limited investor liability
to the amount of investment capital devoted to the enterprise.
May be more outstandingly, the British fund model established a direct link with U.S. Securities
markets, serving finance the development of the post Civil War U.S. economy. The Scottish
American Investment Trust, Formed on February1, 1873 by fund pioneer Robert Fleming, invested
in the economic potential of the United States, Chiefly through American railroad bonds. Many
other trusts followed that not only targeted investment in America, but led to the introduction of the
fund investing concept on U.S. shores in the late 1800 and early 1900s.
Nov. 1925. All these funds were open ended having redemption feature. Similarly, they had
almost all the features of a good modern Mutual Funds like sound investment policies and
restrictions, open end ness, self liquidating features, a publicized portfolio, simple capital
structure, excellent and professional fund management and diversification etc. and hence they are
the honored grand parents of todays funds. Prior to these funds all the initial investment
companies were closed ended companies. Therefore, it can be said that although the basic
concept of diversification and professional fund management, were picked by U.S.A. from England
Investment Companies The Mutual Fund is an American Creation.

9
Because of their exclusive feature, open ended Mutual Funds rapidly became very popular. By
1929, there were 19 open ended Mutual Funds in USA with total assets of $ 140 millions. But the
1929 Stock Market crash followed by great depression of 1930 ravaged the U.S. Financial Market
as well as the Mutual Fund Industry. This necessitated stricter regulation for mutual funds and for
Financial Sectors. Hence, to protect the interest of the common investors, U.S. Government
passed various Acts, such a Securities Act 1933, Securities Exchange Act 1934 and the
Investment Companies Act 1940. A committee called the National Committee of Investment
Company (Now, Investment Company Institute), was also formed to co operate with the Federal
Regulatory Agency and to keep informed of trends in Mutual Fund Legislation.
As a result of these measure, the Mutual Fund Industry began to develop speedily and the total net
assets of the Mutual Funds Industry increased form $ 448 million in 1940 to $ 2.5 billion in 1950.
The number of shareholders accounts increased from 296000, to more than one Million during
1940 1951. As a result of renewed interest in Mutual Fund Industry they grew at 18% annual
compound rate reaching peak of their rapid growth curve in the late 1960s.
1.4 HISTORY AND GROWTH OF MUTUAL FUND INDUSTRY IN INDIA:
Growth of Mutual Fund and growth (1964-1987)
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India (UTI) at
the initiative of the Reserve Bank of India (RBI) and the Government of India. The objective then
was to attract small investors and introduce them to market investments. Since then, the history of
mutual funds in India can be broadly divided into six distinct phases.
Phase I (1964-87): Growth Of UTI:
In 1963, UTI was established by an Act of Parliament. As it was the only entity offering mutual
funds in India, it had a monopoly. Operationally, UTI was set up by the Reserve Bank of India
(RBI), but was later delinked from the RBI. The first scheme, and for long one of the largest
launched by UTI, was Unit Scheme 1964.
Later in the 1970s and 80s, UTI started innovating and offering different schemes to suit the needs
of different classes of investors. Unit Linked Insurance Plan (ULIP) was launched in 1971. The first
Indian offshore fund, India Fund was launched in August 1986. In absolute terms, the investible
funds corpus of UTI was about Rs 600 crores in 1984. By 1987-88, the assets under management
(AUM) of UTI had grown 10 times to Rs 6,700 crores.
Phase II (1987-93): Entry of Public Sector Funds:
The year 1987 marked the entry of other public sector mutual funds. With the opening up of the
economy, many public sector banks and institutions were allowed to establish mutual funds. The

10
State Bank of India established the first non-UTI Mutual Fund, SBI Mutual Fund in November
1987. This was followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund,
Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. From 1987-88 to 1992-93,
the AUM increased from Rs 6,700 crores to Rs 47,004 crores, nearly seven times. During this
period, investors showed a marked interest in mutual funds, allocating a larger part of their savings
to investments in the funds.
Phase III (1993-96): Emergence of Private Funds:
A new era in the mutual fund industry began in 1993 with the permission granted for the entry of
private sector funds. This gave the Indian investors a broader choice of 'fund families' and
increasing competition to the existing public sector funds. Quite significantly foreign fund
management companies were also allowed to operate mutual funds, most of them coming into
India through their joint ventures with Indian promoters.
The private funds have brought in with them latest product innovations, investment management
techniques and investor-servicing technologies. During the year 1993-94, five private sector fund
houses launched their schemes followed by six others in 1994-95.
Phase IV (1996-99): Growth And SEBI Regulation:
Since 1996, the mutual fund industry scaled newer heights in terms of mobilization of funds and
number of players. Deregulation and liberalization of the Indian economy had introduced
competition and provided impetus to the growth of the industry.
A comprehensive set of regulations for all mutual funds operating in India was introduced with
SEBI (Mutual Fund) Regulations, 1996. These regulations set uniform standards for all funds.
Erstwhile UTI voluntarily adopted SEBI guidelines for its new schemes. Similarly, the budget of the
Union government in 1999 took a big step in exempting all mutual fund dividends from income tax
in the hands of the investors. During this phase, both SEBI and Association of Mutual Funds of
India (AMFI) launched Investor Awareness Program aimed at educating the investors about
investing through MFs.
Phase V (1999-2004): Emergence of a Large and Uniform Industry:
The year 1999 marked the beginning of a new phase in the history of the mutual fund industry in
India, a phase of significant growth in terms of both amount mobilized from investors and assets
under management. In February 2003, the UTI Act was repealed. UTI no longer has a special legal
status as a trust established by an act of Parliament. Instead it has adopted the same structure as
any other fund in India - a trust and an AMC.

11
UTI Mutual Fund is the present name of the erstwhile Unit Trust of India (UTI). While UTI
functioned under a separate law of the Indian Parliament earlier, UTI Mutual Fund is now under the
SEBI's (Mutual Funds) Regulations, 1996 like all other mutual funds in India.
The emergence of a uniform industry with the same structure, operations and regulations make it
easier for distributors and investors to deal with any fund house. Between 1999 and 2005 the size
of the industry has doubled in terms of AUM which have gone from above Rs 68,000 crores to over
Rs 1,50,000 crores.
Phase VI (From 2004 Onwards): Consolidation and Growth:
The industry has lately witnessed a spate of mergers and acquisitions, most recent ones being the
acquisition of schemes of Allianz Mutual Fund by Birla Sun Life, PNB Mutual Fund by Principal,
among others. At the same time, more international players continue to enter India including
Fidelity, one of the largest funds in the world the need of different investors. It launched ULIP (Unit
Linked Investment plan) scheme in 1971. Six more schemes between 1981-84 childrens gift
growth fund and India fund in 1986 (Indias first off scheme fund) master share (Indias first equity
dividend scheme) (1987) and monthly income schemes during 1990s. By the end of 1987, UTI
had launched 20 schemes mobilizing net resources amounting to Rs.4564.0 crores. For these 23
long years up to 1964-87, UTI enjoyed complete monopoly.
Phase II: Entry of public sector Funds (1987-1993)
It was in 1986 that the Government of India amended banking regulations and allowed commercial
banks in the public sector to set up Mutual Funds. This led to promotion of SBI Mutual Fund by
State Bank of India in July 1987 followed by Canara Bank, Indian Bank, Bank of Baroda, Bank of
India, Punjab National Bank, and GIC Mutual Fund.
The Indian Mutual Fund industry witnessed a number of public sector players entering the market
in the year 1987. The Government of India further granted permission to Insurance corporations in
the public sector to float Mutual Funds. The year 1987 marked the entry of non - UTI, public sector
Mutual Fund set up by public sector bank, Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC). The assets under management of the industry increased
seven times to Rs.47004 crores. However UTI remained the leader with about 60% market share.
The period of 1987 1993 can be termed as the period of public sector Mutual Funds. From a
single player in 1985, the number increased to 8 players in 1993.
Phase III: Emergence of private sector funds (1993 1996)
The permission was given to the private sector funds including foreign funds management
companies (most of them entering through joint venture with Indian promoter) to enter the Mutual

12
Fund industry in 1993. With the entry of private sector funds in 1993, a new era started in Indian
Mutual Fund industry, giving the Indian investors a wider choice of fund and therefore giving rise to
more competition in the industry. Private funds introduced innovative products, investment
techniques and investors servicing technology during 1994. In 1993 the first Mutual Fund
regulation came into being under which all Mutual Funds, except UTI was to be registered. The
Kothari Pioneer (now merged with Franklin Templeton) was the first private sector Mutual Fund
registered in July 1993. The number of Mutual Fund houses went on increasing with many foreign
Mutual Funds setting up funds in India and also the industry witnessed several mergers and
acquisitions.
Phase IV: Growth and SEBI Regulation (1996 2004)
The Mutual Fund industry witnessed robust growth and strict regulations from SEBI after 1996.
The mobilization of funds and the number of players operating in the industry reached new heights
as investors started showing more interest in Mutual Funds. Investors' interests were safe guarded
by SEBI and the government offered tax benefit to the investors. In order to encourage them, SEBI
(Mutual Funds) Regulations 1996 was introduced by SEBI that set uniform standards. The union
budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various
investor awareness programmers were launched during this phase both by SEBI and Association
of Mutual Fund in India (AMFI).
Phase V: Growth and Consolidation (2004 onwards)
The industry witnessed several mergers and acquisition. Recent examples of which are acquisition
of schemes of Alliance Mutual Fund by Birla Sun Life, etc. Simultaneously more international
Mutual Fund players entered India like Fidelity, Franklin Templeton Mutual Fund etc.
There were 29 funds as at the end of March 2006. At the end of December 2006, there were 32
funds which managed assets of Rs.323597 crores under 75 schemes as compared to assets
worth Rs.47000 crores under management in March 1998. Assets under Management of mutual
funds (in all scheme) from April 2007 to December 2007 was Rs 542794.36 crores. This does not
include Net Assets of Rs.7141077 crores under exchange trade funds (ETF).
(Source: Report of Investment Management Department, SEBI) Besides, low interest rate, tax
holidays on some schemes, excellent performance of the stock market has contributed to the
growth of Mutual Fund. But the penetration of Mutual Fund in the retail investors segment is still
low at 6% of GDP against 70% in US. Active participation of the retail investor will further boost the
Mutual Fund industry in India. Today the industry is pre dominantly urban and to some extent
semi urban. Mutual Fund industry must tap the huge untapped potential in the country.
Phase VI (From 2004 Onwards): Consolidation and Growth:

13
The industry has lately witnessed a spate of mergers and acquisitions, most recent ones being the
acquisition of schemes of Allianz Mutual Fund by Birla Sun Life, PNB Mutual Fund by Principal,
among others. At the same time, more international players continue to enter India including
Fidelity, one of the largest funds in the world.

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CH. 2
INTRODUCTION OF
TOPIC

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2.1 INTRODUCTION:
The Indian financial system based on four basic components like Financial Market,
Financial Institutions, Financial Service, Financial Instruments. All are play important role for
smooth activities for the transfer of the funds and allocation of the funds. The main aim of the
Indian financial system is that providing the efficiently services to the capital market. The Indian
capital market has been increasing tremendously during the second generation reforms. The first
generation reforms started in 1991 the concept of LPG. (Liberalization, privatization, Globalization)
Then after 1997 second generation reforms was started, still the its going on, its include
reforms of industrial investment, reforms of fiscal policy, reforms of ex- imp policy, reforms of public
sector, reforms of financial sector, reforms of foreign investment through the institutional investors,
reforms banking sectors. The economic development model adopted by India in the post
independence era has been characterized by mixed economy with the public sector playing a
dominating role and the activities in private industrial sector control measures emaciated form time
to time. The last two decades have been a phenomenal expansion in the geographical coverage
and the financial spread of our financial system.
The spared of the banking system has been a major factor in promoting financial
intermediation in the economy and in the growth of financial savings with progressive liberalization
of economic policies, there has been a rapid growth of capital market, money market and financial
services industry including merchant banking, leasing and venture capital, leasing, hire
purchasing. Consistent with the growth of financial sector and second generation reforms its need
to fruition of the financial sector. It also needs to providing the efficient service to the investor
mostly if the investors are supply small amount, in that point of view the mutual fund play vital for
better service to the small investors. The main vision for the analysis for this study is to scrutinize
the performance of five star rated mutual funds, given the weight of risk, return, and assets under
management, net assets value, book value and price earnings ratio.
2.2 MUTUAL FUND MEANING:

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Mutual fund is an investment company that pools money from shareholders and invests in a
variety of securities, such as stocks, bonds and money market instruments. Most open-end Mutual
funds stand ready to buy back (redeem) its shares at their current net asset value, which depends
on the total market value of the funds investment portfolio at the time of redemption. Most openend Mutual funds continuously offer new shares to investors. Also known as an open-end
investment company, to differentiate it from a closed-end investment company. Mutual funds invest
pooled cash of many investors to meet the funds stated investment objective. Mutual asset value:
total fund assets divided by shares outstanding.
In simple words, Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as disclosed in offer
document. Investments in securities are spread across a wide cross-section of industries and
sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not
move in the same direction in the proportion at the same time. Mutual fund issues units to the
investors in accordance with quantum of money invested by them. Investors of Mutual funds are
known as unit holders. The profits or losses are shared by the investors in proportion to their
investments. The Mutual funds normally come out with a number of schemes with different
investment objectives which are launched from time to time. In India, A Mutual fund is required to
be registered with Securities and Exchange Board of India (SEBI) which regulates securities
markets before it can collect funds from the public. In short, a Mutual fund is a common pool of
money in to which investors with common investment objective place their contributions that are to
be invested in accordance with the stated investment objective of the schemes. The investment
manager would invest the money collected from the investor in to assets that are defined/permitted
by the stated objective of the schemes. For example, an equity fund would invest equity and equity
related instruments and a debt fund would invest in bonds, debentures, gifts etc. mutual fund is a
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.

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CONCEPT OF THE MUTUAL FUND:
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. 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 number of units
owned by them. Thus, a Mutual fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The flow chart below describes broadly the working of a Mutual fund:
Passed
Back to
Investors
Fund Manager
Generates
Pool their Money with
Fund Manager
Securities
Invest in
CHARACTERISTICS OF MUTUAL FUND:

The important characteristics of mutual funds are:
1. Investors purchase mutual fund shares from the fund itself (or through a broker for the fund)
instead of from other investors on a secondary market, such as the New York Stock Exchange or
Nasdaq Stock Market.
2. The price that investors pay for mutual fund shares is the fund's per share net asset value (NAV)
plus any shareholder fees that the fund imposes at the time of purchase (such as sales loads)
3. Mutual funds generally create and sell new shares to accommodate new investors. In other
words, they sell their shares on a continuous basis, although some funds stop selling when, for
example, they become too large.

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4. The investment portfolios of mutual funds typically are managed by separate entities known as
"investment advisers".
ORGANISATION OF MUTUAL FUND:
SEBI
TRUSTEE
OPERATIONS
MKT. / SALES
SPONSOR
AMC
FUND
MKT. / SALES
MUTUAL FUND
DISTRIBUTOR
SCHEMES
INVESTORS
Flow from SEBI to Investor
SPONSOR:
Sponsor is the person who acting alone or in combination with another body corporate establishes
a mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment managed
and meet eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual
Fund) Regulations, 1996. The sponsor is not responsible or liable for any loss or shortfall resulting
from the operation of the schemes beyond the initial contribution made by it towards setting up of
the Mutual Fund.
TRUST:

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The Mutual Fund is contributed as a trust in accordance with the provisions of the Indian Trusts
Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.
TRUSTEE:
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The
main responsibility of the Trustee is to safeguard the interest of the unit holders and ensure that
the AMC functions in the interest of investors and in accordance with the Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer
Documents of the respective Schemes. At least 2/3 rd directors of the Trustee are independent
directors who are not associated with the sponsor in any manner.
ASSET MANAGEMENT COMPANY (AMC):
The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is
required to be approved by the Securities and Exchange Board of India (SEBI) to acts as an asset
management company of the Mutual Fund. At least 50% of the directors of the AMC are
independent directors who are not associated with the Sponsor in any manner. The AMC must
have a net worth of at least 10 crores at all times.
REGISTER AND TRANSFER AGENT:
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the
Mutual Fund. The Registrar processes the application form, redemption requests and dispatches
account statements to the unit holders. The Registrar and Transfer agent also handles
communications with investors and updates investor records.
THE WAY AND TYPE TO INVEST IN MUTUAL FUND:
Mutual funds normally come out with an advertisement in newspapers publishing the date of
launch of the new schemes. Investors can also contact the agents and distributors of mutual funds
who are spread all over the country for necessary information and application forms. Forms can be
deposited with mutual funds through the agents and distributors who provide such services.
Nowadays, the post offices and banks also distribute the units of mutual funds. However, the
investors may please note that the mutual funds schemes being marketed by banks and post
offices should not be taken as their own schemes and no assurance of returns is given by them.
The only role of banks and post offices is to help in distribution of mutual funds schemes to the
investors. Investors should not be carried away by commission/gifts given by agents/distributors
for investing in a particular scheme. On the other hand they must consider the track record of the
mutual fund and should take objective decision.
ONE TIME INVESTMENT:

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The amount that has to be invested in one time is known as Onetime investment. The investor has
to pay the whole amount at once. The minimum amount is Rs. 5000 and maximum is as per the
investors Choice. This investment is generally preferred for the business man who is able to pay
at one time.
SYSTEMATIC INVESTMENT PLAN (SIP):
The amount that has to be invested through same monthly installment is known as Systematic
Investment Plan. The investor has to pay the minimum amount Rs. 1000 monthly for all equity and
balanced schemes like that for 6 months. And Rs. 500 monthly for Tax Saver schemes like for 12
months. The minimum amount that the investor has to invest is Rs. 6000 and maximum as per
their choice. This type of investment is generally preferred for the salaried people.
REGULATORY OF MUTUAL FUND IN INDIA:
SEBI:
The capital market regulates the mutual funds in India. SEBI requires all mutual funds to be
registered with them. SEBI issues guidelines for all mutual funds operations-investment, accounts,
expenses etc. Recently, it has been decided that Money Market Mutual Funds of registered mutual
funds will be regulated by SEBI through (Mutual Fund) Regulations 1996.
RBI:
RBI, a supervisor of the banks owned Mutual Funds-as banks in India come under the regulatory
Jurisdiction of RBI, banks owned funds to be under supervision of RBI and SEBI. RBI has
supervisory responsibility over all entities that operate in the money markets.
MINISTRY OF FINANCE (MOF):
Ministry of Finance ultimately supervises both the RBI and the SEBI and plays the role of apex
authority for any major disputes over SEBI guidelines.
COMPANY LOW BOARD:
Registrar of companies is called Company Low Board. AMCs of Mutual Funds are companies
registered under the Companies Act 1956 and therefore answerable to regulatory authorities
empowered by the Companies Act.
STOCK EXCHANGE:
Stock Exchanges are self-regulatory organizations supervises by SEBI. Many closed ended funds
of AMCs are listed as stock exchanges and are traded like schemes.

21
OFFICE OF THE PUBLIC TRUSTS:
Mutual Fund being public trust is governed by the Indian Trust Act 1882. The Board of Trustee or
the Trustees Company is accountable to the office of public trustee, which in turn reports to the
Charity commissioner.
TYPES OF MUTUAL FUND SCHEMES:
1. BY STRUCTURE
1.1 Open-ended Schemes
1.2 Close-ended Schemes
1.3 Interval Schemes
2. BY INVESTMENT OBJECTIVE
2.1 Growth Schemes
2.2 Income Schemes
2.3 Balanced Schemes
3. OTHER SCHEMES
3.1 Tax Saving Schemes
3.2 Index Schemes
3.3 Sector Specific Schemes
1. BY STRUCTURE
1.1 Open-ended Schemes:
The units offered by these schemes are available for sale and repurchase on any business day at
NAV based prices. Hence, the unit capital of the schemes keeps changing each day. Such
schemes thus offer very high liquidity to investors and are becoming increasingly popular in India.
Please note that an open-ended fund is NOT obliged to keep selling/issuing new units at all times,
and may stop issuing further subscription to new investors. On the other hand, an open-ended
fund rarely denies to its investor the facility to redeem existing units.
1.2 Close-ended Schemes:
The unit capital of a close-ended product is fixed as it makes a one-time sale or fixed number of
units. These schemes are launched with an initial public offer (IPO) with a stated maturity period

22
after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy or
sell units on the stock exchanges where they are listed. Unlike open-ended schemes, the unit
capital in closed-ended schemes usually remains unchanged. After an initial closed period, the
scheme may offer direct purchase facility to the investors. Closed-ended schemes are usually
more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV. This
discount tends towards the NAV closer to the maturity date of the scheme.
1.3 Interval Schemes:
These schemes combine the features of open-ended and closed-ended schemes. They may be
traded on the stock exchange or may be open for sale or redemption during pre-determined
intervals at NAV based prices.
2. BY INVESTMENT OBJECTIVE
2.1 Growth Schemes:
These schemes, also commonly called Equity Schemes, seek to invest a majority of their funds in
equities and a small portion in money market instruments. Such schemes have the potential to
deliver superior returns over the long term. However, because they invest in equities, these
schemes are exposed to fluctuations in value especially in the short term.
2.2 Income Schemes:
These schemes, also commonly called Debt Schemes, invest in debt securities such as corporate
bonds, debentures and government securities. The prices of these schemes tend to be more
stable compared with equity schemes and most of the returns to the investors are generated
through dividends or steady capital appreciation. These schemes are ideal for conservative
investors or those not in a position to take higher equity risks, such as retired individuals. However,
as compared to the money market schemes they do have a higher price fluctuation risk and
compared to a Gilt fund they have a higher credit risk.
2.3 Balanced Schemes:
These schemes are commonly known as Hybrid schemes. These schemes invest in both equities
as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective
of income and moderate capital appreciation and are ideal for investors with a conservative, longterm orientation.
3. OTHER SCHEMES
3.1 Tax Saving Schemes:

23
Investors are being encouraged to invest in equity markets through Equity Linked Savings
Schemes
(ELSS)
by
offering
them
tax
rebate.
Units
purchased
cannot
be
assigned/transferred/pledged/redeemed/switch-out until completion of 3 years from the date of

allotment of the respective Units.
The Scheme is subject to Securities and Exchange Board of India (Mutual Fund) Regulations,
1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs),
Government of India regarding ELSS, Subject to such conditions and limitations, as prescribed
under Section 88 of the Income Tax Act, 1961.
3.2 Index Schemes:
The primary purpose of an Index is to serve as a measure of the performance of the market as a
whole, or a specific sector of the market. An Index also serves as a relevant benchmark to
evaluate the performance of Mutual funds. Some investors are interested in investing in the market
in general rather than investing in any specific fund. Such investors are happy to receive the
returns posted by the markets. As it is not practical to invest in each and every stock in the market
in proportion to its size, these investors are comfortable investing in a fund that they believe is a
good representative of the entire market. Index Funds are launched and managed for such
investors.
3.3 Sector Specific Schemes:
Sector Specific Schemes generally invests money in some specified sectors for example: Real
Estate Specialized real estate funds would invest in real estate directly, or may fund real estate
developers or lend to them directly or buy shares of housing finance companies or may even buys
their securitized assets.
SEBI REGISTERED MUTUAL FUND:
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Name of Mutual Fund

FORTIS Mutual fund
Alliance Capital Mutual fund
ALG Global Investment Group Mutual fund
Benchmark Mutual fund
Baroda Pioneer Mutual fund
Birla Mutual fund
Bharti AXA Mutual fund
Canara Robeco Mutual fund
CRB Mutual fund (Suspended)
DBS Chola Mutual fund
Deutsche Mutual fund
DSP Blackrock Mutual fund
Edelweiss Mutual fund
Escorts Mutual fund

24
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
Franklin Templeton Mutual fund

Fidelity Mutual fund
Goldman Sachs Mutual fund
HDFC Mutual fund
HSBC Mutual fund
ICICI Securities Mutual fund
IL & FS Mutual fund
ING Mutual fund
ICICI Prudential Mutual fund
IDFC Mutual fund
JM Financial Mutual fund
JP Morgan Mutual fund
Kotak Mahindra Mutual fund
LIC Mutual fund
Morgan Stanely Mutual fund
Mirae Asset Mutual fund
Principal Mutual fund
Quuantum Mutual fund
Reliance Mutual fund
Religare AEGON Mutual fund
Sahara Mutual fund
SBI Mutual fund
Shriram Mutual fund
Sundaram BNP Paribas Mutual fund
Taurus Mutual fund
Tata Mutual fund
UTI Mutual fund
POINTERS TO MEASURE MUTUAL FUND PERFORMANCE:
MEASURES
STANDARD
DESCRIPTION
IDEAL RANGE
Standard Deviation allows evaluating the Should be near to its mean
DEVIATION
volatility
of
the
fund.
The
standard return.
deviation of a fund measures this risk by

measuring the degree to which the fund
BETA
fluctuates in relation to its mean return.

Beta is a fairly commonly used measure of Beta > 1 = High risky
risk. It basically indicates the level of Beta = 1 = Average
volatility associated with the fund as Beta < 1 = Low risky
R-SQUARE
compared to the benchmark.

R-Square measures the correlation of a R=Squared
values
range
funds movement to that of an index. R- between 0 and 1, where 0

Squared describes the level of association represents no correlation and
between the funds volatility and market 1 represents full correlation.
risk.

25
ALPHA
Alpha is the difference between the returns Alpha is positive = returns of

one would expect from a fund, given its stock are better than market
beta, and the return it actually produces. It returns.
also measures the unsystematic risk.
Alpha is negative = returns of

stock are worst than market.
Alpha is zero = returns are
SHARP
same as market.
Sharp Ration = Fund return in excess of The higher the Sharp ratio,
RATIO
risk free return/Standard deviation of Fund. the better a returns relative to

Sharp ratios are ideal for comparing funds the amount of risk taken.
that have a mixed asset classes.
MUTUAL FUND AND CAPITAL MARKET:

Indian institute of capital market (IICM) aims is to educate and develop professionals for the
securities industry in India and other developing countries, other objectives like to function on a
centre for creating investors awareness through research & turning and to provide specialized
consultancy related to the securities industry.
Capital market play vital role for the growth of Mutual fund in India, capital market divided into the
two parts one is the primary market and another is secondary market, primary market concern with
issue management, as per the mutual fund concern the primary called as the NFO New Fund
Offer, all the AMC (Assets Management Company) are issuing all the funds all the way through the
NFO, Every NFO came with particularly investment objectives, style of investment and allocation
of the funds all that thing depend on the fund manager style of investment. The other portion of the
capital market is secondary market, as we have a discussion with reference with mutual fund
secondary market means when the market bull stage the investors sole the units. Opposite when
the bear stage the investor buy or some of the investor time wait for sale.
ROLE OF AMFI (Association Of Mutual Fund In India):
The
Indian
Association
of
Mutual
Fund
Mutual
Funds
Industry
on
in
India (AMFI)
professional,
is
healthy
dedicated
and
to
ethical
developing
lines
and
the
to
enhance and maintain standards in all areas with a view to protecting and promoting the
interests of mutual funds and their unit holders.
AMFI working group on Best Practices for sales and marketing of Mutual Funds under the
Chairmanship of Shri B. G. Daga, Former Executive Director of Unit Trust of India with Shri Vivek
Reddy of Pioneer ITI, Shri Alok Vajpeyi of DSP Merrill Lynch, Shri Nikhil Khattau of Sun F & C and
Shri Chandrashekhar Sathe, Formerly of Kotak Mahindra Mutual Fund has suggested formulation

26
of guidelines and code of conduct for intermediaries and this work has been ably done by a subgroup consisting of Shri B. G. Daga and Shri Vivek Reddy.
ROLE OF SEBI:
A index fund scheme means a mutual fund scheme that invests in securities in the same
proportion as an index of securities; A mutual fund may lend and borrow securities in accordance
with the framework relating to short selling and securities lending and borrowing specified by the
Board.A mutual fund may enter into short selling transactions on a recognized stock exchange,
subject to the framework relating to short selling and securities lending and borrowing specified by
the Board. Provided that in case of an index fund scheme, the investment and advisory fees shall
not exceed three fourths of one percent (0.75%) of the weekly average net assets.
Provided further that in case of an index fund scheme, the total expenses of the scheme including
the investment and advisory fees shall not exceed one and one half percent (1.5%) of the weekly
average net assets. Every mutual fund shall buy and sell securities on the basis of deliveries and
shall in all cases of purchases, take delivery of relevant securities and in all cases of sale, deliver
the securities: Provided that a mutual fund may engage in short selling of securities in accordance
with the framework relating to short selling and securities lending and borrowing specified by the
Board: Provided further that a mutual fund may enter into derivatives transactions in a recognized
stock exchange, subject to the framework specified by the Board.
TAX PLANNING AND MUTUAL FUND:
Investors in India opt for the tax-saving mutual fund schemes for the simple reason that it helps
them to save money. The tax-saving mutual funds or the equity-linked savings schemes (ELSS)
receive certain tax exemptions under Section 88 of the Income Tax Act. That is one of the reasons
why the investors in India add the tax-saving mutual fund schemes to their portfolio. The taxsaving mutual fund schemes are one of the important types of mutual funds in India that investors
can option for. There are several companies in India that offer - tax - saving mutual fund schemes
in the country.
SEBI GUIDELINE OF MUTUAL FUND:
SEBI Regulation Act 1996
Establishment of a Mutual Fund:
In India mutual fund play the role as investment with trust, some of the formalities laid down by the
SEBI to be establishment for setting up a mutual fund. As the part of trustee sponsor the mutual
fund, under the Indian Trust Act, 1882, under the trustee company are represented by a board of
directors. Board of Directors is appoints the AMC and custodians. The board of trustees made

27
relevant agreement with AMC and custodian. The launch of each scheme involves inviting the
public to invest in it, through an offer documents.
Depending on the particular objective of scheme, it may open for further sale and repurchase of
units, again in accordance with the particular of the scheme, the scheme may be wound up after
the particular time period.
1. The sponsor has to register the mutual fund with SEBI
2. To be eligible to be a sponsor, the body corporate should have a sound track record and a
general reputation of fairness and integrity in all his business transactions.
Means of Sound Track Records
The body corporate being in the financial services business for at least five years
Having a positive net worth in the five years immediately preceding the application
of registration.
Net worth in the immediately preceding year more than its contribution to the capital of the
AMC.
Earning a profit in the three out of the five preceding years, including the fifth year.
3. The sponsor should hold at least 40% of the net worth of the AMC.
4. A party which is not eligible to be a sponsor shall not hold 40% or more of the net worth of the
AMC.
5. The sponsor has to appoint the trustees, the AMC and the custodian.
6. The trust deed and the appointment of the trustees have to be approved by SEBI.
7. An AMC or its officers or employees cannot be appointed as trustees of the mutual fund.
8. At least two thirds of the business should be independent of the
sponsor.
9. Only an independent trustee can be appointed as a trustee of more than one mutual fund, such
appointment can be made only with the prior approval of the fund of which the person is already
acting as a trustees.
LAUNCHING OF A SCHEMES
Before its launch, a scheme has to be approved by the trustees and a copy of its offer documents
filed with the SEBI.

28
Every application form for units of a scheme is to be accompanies by a memorandum
containing key information about the scheme.
The offer document needs to contain adequate information to enable the investors to make
informed investments decisions.
All advertisements for a scheme have to be submitted to SEBI within seven days from the
issue date.
The advertisements for a scheme have to disclose its investment objective.
The offer documents and advertisements should not contain any misleading information or
any incorrect statement or opinion.
The initial offering period for any mutual fund schemes should not exceed 45 days, the only
exception being the equity linked saving schemes.
No advertisements can contain information whose accuracy is dependent on assumption.
An advertisement cannot carry a comparison between two schemes unless the schemes
are comparable and all the relevant information about the schemes is given.
All advertisements need to carry the name of the sponsor, the trustees, the AMC of the
fund.
All advertisements need to disclose the risk factors.
All advertisements shall clarify that investment in mutual funds is subject to market risk and
the achievement of the funds objectives cannot be assured.
When a scheme is open for subscription, no advertisement can be issued stating that the
scheme has been subscribed or over subscription.
WHAT IS THE PROCEDURE FOR PEGISTERING A MUTUAL FUND WITH SEBI?
An applicant proposing to sponsor a Mutual fund in India must submit an application in Form A
along with a fee of Rs. 25000. The application is examined and once the sponsor satisfies certain
conditions such as being in the financial services business and possessing positive net worth for
the last five years, having net profits in three out of the last five years and possessing the general
reputation of fairness and integrity in all business transactions, it is required to complete the
remaining formalities for setting up a Mutual fund. These include inter alia, executing the trust deed
and investment management agreement, setting up a trustee company/board of trustees
comprising two-thirds independent trustees, incorporating the asset management company (AMC),

29
contributing to at least 40% of the net worth of the AMC and appointing a custodian. Upon
satisfying these conditions, the registration certificate is issued subject to the payment of
registration fees of Rs. 25 lakhs.
HOW TO REDUCE RISK WHILE INVESTING IN MUTUAL FUNDS:
Any find of investment we make is subject to risk. In fact we get return on our investment
purely and solely because at the very beginning we take the risk of parting with our funds,
for getting higher values back at a later date. Partition itself is a risk.
Well known economist and Nobel Prize recipient William Sharp tried to segregate the total
risk faced in any kind of investment into two parts systematic (Systematic) risk and
unsystematic (Unsystematic) risk.
Systematic risk is that risk which exists in the system. Some of the biggest examples of
systematic risk are inflation, recession, war, political situation etc.
Inflation erodes returns generated from all investments e.g. If return from fixed deposit is 8
per cent and if inflation is 6 per cent then real rate of return from fixed deposit is reduced by
6 per cent.
Similarly if returns generated from equity market is 18 per cent and inflation is still 6 per cent
then equity returns will be lesser by the rate of inflation. Since inflation exists in the system
there is no way one can stay away from the risk of inflation.
Economic cycles, war and political situations have effects on all forms of investments. Also
these exist in the system and there is no way to stay away from them. It is like learning to
walk.
Anyone who wants to learn to walk has to first fall; you cannot learn to walk without falling.
Similarly anyone who wants to invest has to first face systematic risk; there can never make
any kind of investment without systematic risk.
Another form is risk is unsystematic risk. This risk does not exist in the system and hence is
not applicable to all forms of investment. Unsystematic risk is associated with particular
form of investment.
Suppose we invest in stock market and the market falls, then only our investment in equity
gets affected OR if we have placed a fixed deposit in particular bank and bank goes
bankrupt, then we only lose money placed in that bank.

30
While there is no way to keep away from risk, we can always reduce the impact of risk.
Diversification helps in reducing the impact of unsystematic risk. If our investment is
distributed across various asset classes the impact of unsystematic risk is reduced.
If we have placed fixed deposit in several banks, then even if one of the banks goes
bankrupt our entire fixed deposit investment is not lost.
Similarly if our equity investment is in Tata Motors, HLL, Infosys, adverse news about
Infosys will only impact investment in Infosys, all other stocks will not have any impact.
To reduce the impact of systematic risk, we should invest regularly. By investing regularly
we average out the impact of risk.
Mutual fund, as an investment vehicle gives us benefit of both diversification and averaging.
Portfolio of mutual funds consists of multiple securities and hence adverse news about
single security will have nominal impact on overall portfolio.
By systematically investing in mutual fund we get benefit of rupee cost averaging.
Mutual fund as an investment vehicle helps reduce, both, systematic as well as
unsystematic risk.
ADVANTAGES OF MUTUAL FUNDS:
Mutual Funds are professionally managed companies or schemes that pool money from investors
and invest it in stock markets, shares, derivative markets and other securities. By investing in
Mutual funds, investors can avail of the following advantages:1.6.1 Professional Management
The investor avails of the services of experienced and skilled professionals who are backed by a
dedicated investment research team which analyses the performance and prospects of companies
and selects suitable investments to achieve the objectives of the scheme.
1.6.2 Diversification
Mutual Funds invest in a number of companies across a broad cross section of industries and
sectors. This diversification reduces the risk because seldom do all stocks decline at the same
time and in the same proportion. This diversification is achieved through a Mutual Fund.
1.6.3 Convenient Administration

31
Investing in a Mutual Fund reduces paperwork and helps to avoid many problems such as bad
deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save time
and makes investing easy and convenient.
1.6.4 Return Potential
Over medium to long-term, Mutual Funds have the potential to provide a higher return as they
invest in a diversified basket of selected securities.
1.6.5 Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing in the
capital markets because of the benefits of scale in brokerage, custodial and other fees which
translate into lower costs for investors.
1.6.6 Liquidity
In open-end schemes, an investor can get his money back promptly at net asset value. With
closed-ended schemes, an investor can sell his units on a stock exchange at the prevailing market
price or avail of the facility of direct repurchase at NAV related prices which some close-ended and
interval schemes offer periodically.
1.6.7 Transparency
Regular information can be obtained by the investors on the value of investment in addition to
disclosure on the specific investments made in the scheme, the proportion invested in each class
of assets and the fund manager's investment strategy and outlook.
1.6.8 Flexibility
Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, an investor can systematically invest or withdraw funds according to his needs
and convenience.
1.6.9 Choice of Schemes
Mutual Funds offer a family of schemes to suit an investor's varying needs over a lifetime. For e.g.
Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of
time. Income Funds are ideal for capital stability and regular income. Balanced Funds are ideal for
investors looking for a combination of income and moderate growth. Money Market Funds are
ideal for corporate and individual investors as a means to park their surplus funds for short
periods.
1.6.10 Well Regulated

32
All Mutual Funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of investors. The operations of Mutual Funds are
regularly monitored by SEBI.
1.6.11 Affordability
Mutual funds allow even small investors to indirectly reap the benefit of investment in shares of a
big company because of its large corpus, which an individual investor may not be able to do so
because of insufficient funds.
DISADVANTAGES OF MUTUAL FUNDS:
The mutual fund not just advantage of investor but also has limitations for the funds. The fund
manager not always made profits but might creates loss for not properly managed. The fund have
own strategy for investment to hold, to sell, to purchase unit at particular time period.
1.7.1 Tax issues
Although, the returns on investment are quite high, a mutual fund cannot guarantee lower tax bills.
The tax amounts are usually high, especially in case of short-term gains.
1.7.2 Investor issues
A mutual fund requires a deep and long term analysis of the amount of investment and its potential
investment areas. If the company funds manager changes regularly, it may adversely affect the
returns on investment.
1.7.3 Fluctuating Returns
Mutual funds are like many other investments where there is always the possibility that the value of
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.
1.7.4 Over 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 occurs when investors acquire many funds that are highly related and,
as a result, reduce benefits of diversification.
1.7.5 High Costs and Risks
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

33
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. Mutual funds are subjected to market risks or assets risks. If the investment is not sufficiently
diversified, it may involve huge losses.
RECENT TREND OF MUTUAL FUND:
India is at the first stage of a revolution that has already peaked in the USA. The USA boasts of an
Asset base that is much higher than its bank deposits. In India, mutual fund assets are not even
10% of the bank deposits, but this trend is beginning to change. This is forcing a large number of
banks to adopt the concept of narrow banking wherein the deposits are kept in Gilts and some
other assets which improves liquidity and reduces risk. The basic fact lies that banks cannot be
ignored and they will not close down completely. Their role as intermediaries cannot be ignored. It
is just that Mutual Funds are going to change the way banks do their business in the future.

34
CH. 3
OBJECTIVES

35
3.1 Literature review

Shashikant Uma (1993) critically examined the rationale and relevance of mutual fund operations
in Indian Money Markets. She pointed out that money market mutual funds with low-risk and low
return offered conservative investors a reliable investment avenue for short-term investment.
Ansari (1993) stressed the need for mutual funds to bring in innovative schemes suitable to the
varied needs of the small savers in order to become predominant financial service institution in the
country.
Shukla and Singh (1994) attempted to identify whether portfolio managers professional education
brought out superior performance. They found that equity mutual funds managed by professionally
qualified managers were riskier but better diversified than the others. Though the performance
differences were not statistically significant, the three professionally qualified fund managers
reviewed outperformed others.
Gavin Quill (2001) examined the evidence that investor behavior is frequently detrimental to the
achievement of investors long-term goals. The picture that emerges from this analysis is one of
investors who have lost a good portion of their potential returns because of the excessive
frequency and poor timing of their trading activities. They established that investors trade much
more than they realize and much more than is conducive to the achievement of their financial
plans. Investors think long-term in theory, but act according to short-term influences in practice.
This excessive turnover, combined with a propensity to buy relatively over-valued investments and
ignore relatively under-valued ones, has caused the average mutual fund investor to underperform
substantially over the past decade.
Gupta Amitabh (2001) evaluated the performance of 73 selected schemes with different
investment objectives, both from the public and private sector using Market Index and Fundex.
NAV of both close-end and open-end schemes from April 1994 to March 1999 were tested. They
found that sample schemes were not adequately diversified, risk and return of schemes were not
in conformity with their objectives, and there was no evidence of market timing abilities of mutual
fund industry in India.

36
Karthikeyan (2001) conducted research on Small Investors Perception on Post office Saving
Schemes and found that there was significant difference among the four age groups, in the level of
awareness for Kisan Vikas Patra (KVP), National Savings Scheme (NSS), and Deposit Scheme for
Retired Employees (DSRE). The Overall Score confirmed that the level of awareness among
investors in the old age group was higher than in those of young age group. No differences were
observed among male and female investors.
Narasimhan M S and Vijayalakshmi S (2001) analysed the top holding of 76 mutual fund schemes
from January 1998 to March 1999. The study showed that, 62 stocks were held in portfolio of
several schemes, of which only 26 companies provided positive gains. The top holdings
represented more than 90 percent of the total corpus in the case of 11 funds. The top holdings
showed higher risk levels compared to the return. The correlation between portfolio stocks and
diversification benefits was significant at one percent level for 30 pairs and at five percent level for
53 pairs.
Dwyer et. al. (2002) used data from nearly 2000 mutual fund investors and found that women take
less risk than men in their mutual fund investments. According to Prince, (1993); Lunderberg et al.,
(1994), men tend to be more confident, trade more frequently, rely less on brokers and believe that
returns are more predictable and anticipate higher returns than women. Hinz et al (1997)
conducted a study in US by using data from the Federal Governments Thrift Saving Plan. Their
findings showed women are less likely to hold risky assets and more likely to allocate assets
towards fixed income alternatives. This is also supported by Prince (1993), Lunderberg et al
(1994).According to them men are more confident than women.
Saha, Tapas Rajan (2003) identified that Prudential ICICI Balanced Fund, Zurich Equity Fund were
the best among the equity funds while Pioneer ITI Treasury scheme was the best among debt
schemes. He concluded that, the efficiency of the fund managers was the key in the success of
mutual funds.
Corter and Chen (2006) studied that investment experience is an important factor influencing
behavior. Investors with more experience have relatively high risk tolerance and they construct
portfolios of higher risk.
Mostafa Soleimanzadeh (June 2006) in his article, Learn how to invest in Mutual Funds
discussed the risk and return in mutual funds. He stated that the risk and return depend on each
other, the greater the risks, the higher the potential return; the lower the risk, the lower the
expected return. Mutual funds try to reduce their risk by investing in a diversified group of
individual stocks, bonds, or other securities. He concluded that the investment in stocks can get
more return than mutual funds but by investing in mutual funds, the risk is lower.

37
Gupta (1994) made a household investor survey with the objective to provide data on the investor
preferences on Mutual Funds and other financial assets. The findings of the study were more
appropriate, at that time, to the policy makers and mutual funds to design the financial products for
the future.
Sujit Sikidar and Amrit Pal Singh (1996) carried out a survey with an objective to understand the
behavioral aspects of the investors of the North Eastern region towards equity and mutual funds
investment portfolio. The survey revealed that the salaried and self employed formed the major
investors in mutual fund primarily due to tax concessions. UTI and SBI schemes were popular in
that part of the country then and other funds had not proved to be a big hit during the time when
survey was done.
The review of earlier studies focuses mainly on subject of performance of Mutual Funds and
Portfolio of Mutual Fund. The existing Behavioral Finance studies are very few and very little
information is available about investor perceptions, awareness, preferences, attitudes and
behavior. All efforts in this direction are fragmented. The present study is an attempt mainly to
study the awareness and perceptions of investors of Surat city.
3.2 Objectives
The objective of the research is to insight study knowledge about mutual fund and analyse the
awareness level of investors of mutual fund and various variables playing in the minds of investors
in terms of safety, liquidity, service, returns and tax saving.

38
CH. 4
RESEARCH
METHODOLOGY

39
4.1 Introduction
Research Methodology is a way to systematically solve a problem. It may be understood as a
science of study where research is done scientifically. It includes various steps that are generally
adopted by a researcher in studying his research problem.
According to J.W. Best (1999)
"Research is considered to be formal, systematic, intensive process of carrying on the scientific
method of analysis. It involves a more systematic structure of investigation usually resulting in
some of formal record of procedures and report of result or conclusions."
4.2 Research Statement
The problem studied in the present context is entitled - "Awareness and Perception about Mutual
Fund of investors of Surat City. The research work focuses on awareness and perception of
investor's towards Mutual Funds in Surat City. The study has been undertaken to find the answers
to the following questions:
1. What are the factors that influence investment in Mutual Funds?
2. What are the problems faced by investors of mutual fund?
3. Which tools of investment are popular among the investors?
4. What is the pattern of investment of Mutual Funds?
5. What are the factors that discourage investors of Mutual Funds?
Research Design
The research design is the conceptual structure within which research is conducted. It constitutes
the blueprint for collection, arrangement and analysis of data. A research design includes an

40
outline of what the researcher will do from writing the hypothesis and its operational implication to
the final analysis of the data. I have used the statistical research design in this study.
4.3.1 Objectives of study
(A) Main objective:
To study the perception of Mutual Fund investors
To study the awareness of Mutual Fund investors
(B) Subsidiary objectives of the study are:
1. To identify the problems of investors in investing their money in mutual fund scheme.
2. To analyze the investors level of fulfillment regarding mutual fund.
3. To examine the pattern of investment in Surat City.
4. To study investors preference with regards to mutual fund v/s other investment products.
4.3.2 Nature of Data and Sources of Data
Primary as well as secondary data are used for the study. Primary data is the data that is collected
for the first time and that is original in nature. This data has been collected through questionnaire.
Secondary data is the data which has been collected by someone else. Secondary data has been
collected from news papers, magazines, websites, general discussion with brokers of BSE, NSE
and published data of BSE, NSE and Mutual Fund companies.
4.3.3 Tools for data collection
The study covers both primary and secondary data. Primary data was collected with the help of
questionnaire which was distributed and collected from the respondents of Surat City. The
questionnaire has two sections; the first section relates to investors awareness and perception
about Mutual Fund and the second section relates to personal details investors of Mutual Funds.
The data has been collected directly by door to door investigation. Sample respondents were
requested to give a free and frank response.
4.3.4 Sample design
Convenience sampling method is used for data collection. Hundred respondents are taken as
sample from Surat City. A structured questionnaire was given to 100 respondents of the Surat City
which consisted of closed-ended questions.
(A) Population: - Population includes Mutual Fund investors of Surat City

41
(B) Sample element: - Individual Mutual Fund investors are the sample element.
(C) Sampling technique: - Convenience sample technique is used to select the sample.
(D) Sample size: - The sample size is 100 respondents from Surat City. Sample respondents were
asked to fill up the questionnaire.
(E) Questionnaire design: - A Structured questionnaire has been prepared and distributed among
the selected Mutual Funds investors of the Surat City to study their awareness and perception
regarding mutual funds.
4.3.5 Area of the study
The study is limited to the one city of Gujarat State. Surat city is selected for research study as it is
highly populated city in Gujarat.
4.3.7 Tools and Methods of Data Analysis
4.3.7.1 Tabulation and Classification of data
The data was collected through a questionnaire and tabulated. The data has been classified on the
basis of gender, age, marital status, and educational qualification, and occupation, number of
dependents, total monthly income and income savings ration held by the respondents. Cross
tabulation has been done according to different variables.
4.3.7.2 Frame work of data analysis
Statistical package for social science (SPSS.17) was used to analyze the data. SPSS is the one of
the most widely used of statistical software packages. It covers a broad range of statistical
procedures that allows summarizing data, determining whether the differences between groups
are statistical significant or not. SPSS also contains several tools for analyzing data, including
functions for recording data and computing new variable as well as merging and aggregating data
files. Chi-Square Test was applied for testing the hypothesis at 5% level of significance. Data was
analyzed with the help of tables, charts and diagram. Statistical technique like percentile was used
to analyze the data. Descriptive analysis has been used. Garretts Rank technique was conducted
to determine the most important factors affecting Mutual Fund investment. Likerts scale technique
was also used for analysis.
4.4 Scope of the study
The present study is an attempt to study the investors awareness and perception about Mutual
Fund of Surat City. It involves understanding the basic concept of mutual fund, various schemes of
mutual fund, investment alternatives, factors influencing investment, investors expectation

42
regarding the mutual fund and investors preference of different mutual fund schemes. Similar
studies on this line may be conducted in other cities too and for different investment products in
India. Further research can also be conducted for studying perceptions of institutional investors
towards mutual funds
4.5 Limitations of the study
For the research work, data was collected and interpreted with utmost reliability and consistency
but due to prejudices of a few respondents, certain limitations of the study are as follows:
1. The study depicts the present scenario in the selected city and hence the result may not be
applicable to another period of time.
2. The study is limited to 100 respondents of Surat City.
3. Answer to the questionnaire depends upon the beliefs and prejudices of investors.
4. It is assumed that respondents are true and honest in expressing their views and have filled the
questionnaire honestly and without any bias.
5. The present study is restricted to information collected about the Mutual Fund investors with the
help of questionnaire.

43
CH. 5

44
FINDINGS AND
ANALYSIS
Introduction
This research work focuses on the profile, awareness and perception of investors from the point
view of investment towards mutual funds in Surat. Primary data was collected with the help of a
structured questionnaire. The questionnaires were distributed among the respondents i.e. mutual
fund investors of Surat city.
The questionnaire has two sections The questionnaire has two sections; the first section relates to
investors awareness and perception about Mutual Fund and the second section relates to
personal details investors of Mutual Funds.In the first section, the respondents were asked
questions regarding preference for tools of investments, selection of schemes, their awareness
about Mutual Fund related charges, their awareness about Mutual Fund, factors discouraging
Mutual fund investment, and the level of satisfaction regarding fulfillment of their objectives.
Chi-Square test, Rank technique and Likert Scale were used to analyze data.
5.1 Demographic Profile of Respondents of Surat City:
5.1.1 Gender Wise Classification of Respondents
Gender
Female
Male
Total
No of Respondents
35
65
100
Percent
35
65
100

45
Gender
Female; 35%
Male; 65%
Table 5.1.1 and the above graph depict the gender wise classification of respondents. From 100
respondents of Surat, 35 were females and 65 were males.
5.1.2 Age Wise Classification of Respondents
Age groups
Lowest to 30
31 to 45
46 to highest
Total
No of Respondents
19
57
24
100
Age
46 to highest; 24%
Lowest to 30; 19%
31 to 45; 57%
Percent
19
57
24
100

46
Table 5.1.2 gives the age wise classification of respondents. It is found that out of 100 respondents
taken for the study, 19 respondents (19%) were in the age group lowest 30, 57 respondents (57%)
were in the age group 31 to 45 and 27 respondents (27%) were in the age group highest to 46.
5.1.3 Marital Status of Respondents
Marital
status
of No of Respondents
respondent
Married
Unmarried
Total
92
8
100
Percent
92
8
100
Marital Status
Unmarried; 8%
Married; 92%
Marital status of sample respondents in Table 5.1.3 indicates that majority i.e. 92 (92%) of the
investors in Mutual Funds were married while 8 (8%) were unmarried.
5.1.4 Occupational Status of Respondents
Occupation of respondent
Business
Professional
Salaried employee
Housewife
Retired person
Any other
Total
No of Respondents
11
7
69
3
5
5
100
Percent
11
7
69
3
5
5
100

47
Occupation of respondent
Any other; 5%
Retired person; 5%
Housewife; 3%
Business; 11%
Professional; 7%
Salaried employee; 69%
Occupation wise distribution of the respondents is given in Table 5.1.4 and it reveals that 11
respondents (11%) belong to the Business category. 7 respondents (7%) were professionals. 69
respondents (69%) were from salaried employee category. 3 respondents (3%) were housewives,
5 respondents (5%) belonged to the retired person category. 5 respondents (5%) were from any
other category.
5.1.5 Educational Qualification of Respondents
Educational qualification of respondent
Up to HSC
Graduate
Post graduate
Professional
Total
No of Respondents
3
57
32
8
100
Percent
3
57
32
8
100

48
Educational qualification
Professional; 8% Up to HSC; 3%
Post Graduate; 32%
Graduate; 57%
The Educational qualification level of the respondents is given in table 5.1.5 and it reveals that out
of 100 respondents, 3 respondents (3%) were educated up to higher secondary level i.e. H.S.C. 57
respondents (57%) were graduates. 32 respondents (32%) were Post graduates. 8 respondents
(8%) were professionals.
5.1.6 Number of dependent member in family
Number of dependent member in family
0
1
2
3
4
5
6
Total
Frequency
20
15
40
18
3
3
1
100
Percent
20
15
40
18
3
3
1
100

49
No. of Dependent members
3; 18%
4; 3%
5; 3% 6; 1%
0; 20%
1; 15%
2; 40%
Table 5.1.6 represents number of dependent members in family. 20 respondents (20%) have no
dependents in family. 15 respondents (15%) have only 1 dependent member in family. 40
respondents (40%) have 2 dependent members in family. 18 respondents (18%) have 3
dependents in family. 3 respondents (3%) have 4 dependent members in family. 3 respondents
(3%) have 5 dependent members in family. Only 1 respondent (1%) has 6 dependent members in
family.
5.1.7 Total monthly income of respondent
Total monthly income of respondent
Below Rs.10000
Rs.10000 to Rs.25000
Rs.25000 to Rs. 50000
Rs. 50000 and above
Total
Percent
13
36
49
2
100

50
Total Monthly Income

Rs. 50000 & above; 2%
Below Rs. 10000; 13%
Rs. 25000 to Rs. 50000; 49%

Rs. 10000 to Rs. 25000; 36%
The total monthly income of the respondents is given in table 5.1.7 and it reveals that out of 100
respondents, 13 respondents (13%) have monthly income below 10000. 36 respondents (36%)
belong to 10000 to 25000 monthly income group. 49 respondents (49%) have income between
25000 to 50000. Only 2 respondents (2%) have monthly income more than 50000.
5.1.8 Savings/Income percentage group
Savings/Income percentage group
Lowest to 25
26 to 50
51 to 75
75 to Highest
Total
Percent
74
21
3
2
100

51
Savings/Income Percentage
51 to 75; 3% 75 to highest; 2%
26 to 50; 21%
lowest to 25; 74%
The savings/Income ratio of the respondents is given in table 5.1.8 and it reveals that out of 100
respondents, most of the respondents mean 74 respondents (74%) have very low savings/income
ratio. It shows that they spent most of their earnings. Their savings seem very poor. 21
respondents (21%) have 26 to 50% income/savings ratio. 3 respondents have 51 to 75% income
savings ratio. It shows that they save money and spent less. Only 2 respondents (2%) out of 100
are in more than 75% ratio of savings/income ratio. It shows that they save their most of the
income.
5.1.9 Awareness of MF years group wise (Write Q.)
Awareness of MF years group wise
Lowest to 3
4 to 6
7 to Highest
Total
Percent
45
44
11
100

52
Awareness of MF years group wise

7 to Highest; 11%
Lowest to 3; 45%
4 to 6; 44%
Table 5.1.9 shows years of investors awareness about Mutual Fund. 45 respondents (45%) were
aware about Mutual Fund from less than 3 years. 44 respondents (44%) were aware about Mutual
Fund from 4 to 6 years. Only 7 respondents (7%) were aware about Mutual Fund from more than 7
years.
Interpretation of the Profile of Respondents
The profile of the respondents based on age indicates that the age group of 31 to 45 years
constitutes the largest group amongst the respondents who invest in Mutual funds. This shows that
the youth are attracted toward Mutual Funds and invest their savings in Mutual Funds.
Classification of the respondents based on gender indicates that 65 percent are males. This shows
that males dominated as Mutual fund investors. Females were not so much interested in investing
in mutual fund as compared to males. Qualification wise classification of the respondents shows
that graduates constitute the majority of mutual fund investors followed by post-graduates. This
indicates that the graduates and post graduates were attracted towards Mutual Funds
investments. Occupational wise classification of the respondents indicates that majority of the
respondents were from the salaried employees class, followed by business class and
professionals. Income wise classification of the respondents reveals that 49% of the mutual fund
investors had monthly income between Rs.25000 to Rs.50000, followed by monthly income group
10000 to 25000. Classification of the respondents based on savings/income ratio indicates that 74
percent of the respondents have this ration less than 25 percent. Classification of the respondents
based on awareness about Mutual Fund of the respondents indicates that only 11 percent
respondents were about Mutual Fund from more than 7 years.
5.2 Awareness and Perception of Investors towards Mutual Fund Investment:

53
5.2.1 Investment Preferences for Fixed Deposits:
Ranks according to preference for investment in FD

1
2
3
4
5
6
7
8
9
10
Total
Percent
14.0
6.0
12.0
14.0
21.0
10.0
2.0
10.0
6.0
5.0
100.0
Ranks according to preference for investment FD

9; 6% 10; 5% 1; 14%
8; 10%
2; 6%
7; 2%
3; 12%
6; 10%
5; 21%
4; 14%
The ranks of investment preference for Fixed Deposits are given in table 5.2.1 and it reveals that
out of 100 respondents, only 14 respondents (14%) give first preference to fixed deposits. It shows
that they are less likely to take risk. They prefer safety first. 6 respondents (6%) give second, 12
respondents (12%) give third and 14 respondents (14%) give fourth preference to invest in fixed
deposits. 21 respondents (21%) give fifth rank to fixed deposit investments. The result shows that
total 67 respondents (67%) give one to five ranks for fixed deposits investments. We can also say
that they want to take less risk in their investments.
5.2.2 Investment Preferences for Mutual Funds:
Ranks according to preference for investment MF
1
Percent
2.0

54
2
3
4
5
6
7
8
9
Total
16.0
8.0
5.0
18.0
27.0
15.0
8.0
1.0
100.0
Ranks according to preference for investment MF
7; 15%
8; 8%
9; 1% 1; 2%
2; 16%
3; 8%
4; 5%
6; 27%
5; 18%
The ranks of investment preference for Mutual Funds are given in table 5.2.2 and it reveals that
out of 100 respondents, only 2 respondents (2%) give first preference to Mutual Funds. It shows
that they are less likely to take risk. They prefer safety first. 16 respondents (16%) give second, 8
respondents (8%) give third and 5 respondents (5%) give fourth preference to invest in Mutual
Funds. 18 respondents (18%) give fifth rank to Mutual Fund investments. The result shows that
total 49 respondents (49%) give one to five ranks for fixed deposits investments. We can also say
that they want to take less risk in their investments. It may be possible that they are less aware
about different schemes of Mutual Funds.
5.2.3 Investment Preferences for Gold:
Ranks according to preference for investment Gold
1
2
3
4
Percent
12.0
12.0
20.0
33.0

55
5
7
8
Total
17.0
1.0
5.0
100.0
Ranks according to preference for investment Gold
7; 1%
8; 5% 1; 12%
5; 17%
4; 33%
2; 12%
3; 20%
The ranks of investment preference for Gold are given in table 5.2.3 and it reveals that out of 100
respondents, only 12 respondents (12%) give first preference to Gold. 12 respondents (12%) give
second, 20 respondents (20%) give third and 33 respondents (33%) give fourth preference to
invest in Gold. 17 respondents (17%) give fifth rank to Gold investments. The result shows that out
of 100 respondents total 94 respondents (94%) give one to five ranks for Gold investments. The
reason for their preference may be increasing price of Gold. We can also say that they want to
take less risk in their investments. It may be possible that they are less aware about different types
of Investment options.
5.2.4 Investment Preferences for Life Insurance:
Ranks according to preference for investment LI
1
2
3
4
5
6
7
8
Total
Percent
59.0
12.0
9.0
8.0
5.0
3.0
3.0
1.0
100.0

56
Ranks according to preference for investment LI
3; 9%4; 8%
5; 5% 6; 3%
7; 3%
8; 1%
2; 12%
1; 59%
The ranks of investment preference for Life Insurance are given in table 5.2.4 and it reveals that
out of 100 respondents, 59 respondents (59%) give first preference to Life Insurance. It shows that
they are aware about the importance of their life. They want to secure their life n future also. They
dont want that their family face any problems after their death. 12 respondents (12%) give second,
9 respondents (9%) give third and 8 respondents (8%) give fourth preference to invest in Life
Insurance. 5 respondents (5%) give fifth rank to Life Insurance investments. The result shows that
out of 100 respondents total 93 respondents (93%) give one to five ranks for Life Insurance
investments. The reason for their preference may be uncertainty of Life. We can also say that they
dont want to take risk for their life. Through this investment, they can get tax benefit also. So they
prefer this option very much.
5.2.5 Preferences for different investment options:
Ranks given to investment option
Sr.
Investment options
Score
Rank
no
1
2
3
4
5
6
7
8
9
10
214
360
418
481
508
564
611
729
777
887
1
2
3
4
5
6
7
8
9
10
Life insurance
Gold / Jewellery
PPF
FD
Mutual fund
NSC
Share
Post office deposit
Real estate
Bond

57
Table 5.2.5 shows the preferences of investors for different investment options. Most of the
investors prefer to invest in Life Insurance. According to this study, out of all these investment
options, life Insurance is very popular among investors. Gold is second most popular investment
option. Mutual Fund got fifth rank in investors preference. The study reveals that most of the
investors like Life Insurance and Gold to invest their money. We can also conclude that they are
not much ready to take risk.
5.2.6 Reasons for investment:
Rate according to reasons for investment
Sr.
Factors of investment
Score
Rank
no
1
2
3
4
5
6
7
310
336
342
345
366
380
438
1
2
3
4
5
6
7
Due to market trend

Due to more choices
High return
Diversification of risk
Easy buy & sell
Tax exemption
Safety
Table 5.2.6 shows the Reasons for investment. Most of the investors consider the safety as the
most important factor as a reason of investment. According to this study, out of all these factors
safety is the most important and tax exemption by investing in available option is also an important
factor according to investors.
5.2.7 Safety as a reason for investment:
Rate reason for investment (Safety)
Least important
Somewhat important
Neutral
Important
Most important
Total
Percent
5.0
4.0
11.0
8.0
72.0
100.0

58
Rate reason for investment (Safety)

Least important; 5% Somewhat important; 4%
Neutral; 11%
Important; 8%
Most important; 72%
Table 5.2.7 shows the Reasons for investment due to safety. Most of the investors consider the
safety as the most important factor as a reason of investment. According to this study, out of all
these factors safety is the most important and it was said by the 72% respondents.
5.2.8 Tax exemption as a reason for investment:
Rate reason for investment (Tax exemption)
Least important
Somewhat important
Neutral
Important
Most important
Total
Percent
6.0
6.0
37.0
4.0
47.0
100.0

59
Rate reason for investment (Tax exemption)

Important; 8%
Least important; 11%

Somewhat important; 11%
Neutral; 70%
Table 5.2.8 shows the Reasons for investment due to tax exemption. Most of the investors
consider the safety as the neutral factor as a reason of investment. According to this study, out of
all these factors tax exemption is the neutral factor and it was said by the 70% respondents.
5.2.9 Easy to buy & sell as a reason of investment:
Rate reason for investment (Easy buy & sell)
Least important
Somewhat important
Neutral
Important
Most important
Total
Percent
15.0
4.0
29.0
4.0
48.0
100.0

60
Rate reason for investment (Easy buy & sell)

Least important; 15%
Most important; 48%
Neutral; 29%
Important; 4%
Table 5.2.9 shows the Reasons for investment due to easy buy and sell. Most of the investors
consider the easy buy and sell as the most important factor as a reason of investment. According
to this study, out of all these factors easy buy and sell is the most important factor and it was said
by the 48% respondents.
5.2.10 Diversification of risk as a reason for investment:
Rate reason for investment (Diversification of risk)
Least important
Somewhat important
Neutral
Important
Most important
Total
Percent
9.0
8.0
45.0
5.0
33.0
100.0

61
Rate reason for investment (Diversification of risk)

Least important; 9%
Most important; 33%
Important; 5%
Neutral; 45%
Table 5.2.10 shows the Reasons for investment due to diversification of risk. Most of the investors
consider the diversification of risk as the neutral factor as a reason of investment. According to this
study, out of all these factors diversification of risk is the most important factor and it was said by
the 45% respondents.
5.2.11 Preference to the factors related to mutual fund:
Rate factors related to mutual fund
Sr.
Investment options
Score
Rank
no
1
2
3
4
5
6
7
8
9
10
306
314
354
359
363
389
390
419
420
435
1
2
3
4
5
6
7
8
9
10
Due to market trend

Due to more choices
Easy buy & sell
Diversification of risk
Low risk
Tax exemption
Liquidity
Growth
High return
Safety
Table 5.2.11 shows the preference of investment in mutual fund. Most of the investors consider the
safety as the most important factor as a reason of investment in mutual fund. According to this
study, out of all these factors safety is the most important and high return from investment in
available option is also an important factor according to investors.
5.2.12 Meaning of asked price and offering price
Meaning of asked price and offering price
Percent

62
Yes
No
Total
38.0
62.0
100.0
Meaning of asked price and offering price
Yes; 38%
No; 62%
The above table& chart shows the mutual fund investor awareness about meaning of asked and
offering price. Out of 100 respondent of survey there is only 38% means only 38 people aware
about asked price and offer price and other 62% people are not aware about asked& offer price.
So I can say that there is lack of awareness about mutual fund to investor.
5.2.13 Aware about CDSC
Aware about CDSC
Yes
No
Total
Percent
9.0
91.0
100.0

63
Aware about CDSC

Yes; 9%
No; 91%
In the above shown chart and table it is mentioned that how much awareness is there to mutual
fund investor about CDSC. There are only 9% people aware about CDSC and other 91% people
are not aware about CDSC in mutual fund so there is also lack of awareness about CDSC to
mutual fund investor.
5.2.14 Aware about CDSC
Aware about entry load & exit load
Yes
No
Total
Frequency
60
40
100
Percent
60.0
40.0
100.0
No; 40%
Yes; 60%

64
Above given chart shows investors awareness about Entry& Exit load of a mutual fund scheme.
There are 60% people aware about Entry& Exit load means 60 people out of 100 are aware about
the same and other 40% people are not aware about the Entry & Exit load.
5.2.15 Know about corpus
Know about corpus
Yes
No
Total
Percent
28.0
72.0
100.0
Know about corpus
Yes; 28%
No; 72%
Above chart shows awareness about corpus. There is only 28 people aware about corpus out of
100 & other 72 people are not aware about corpus so there is lack of awareness about corpus.
5.2.16 Objective fulfilled
Objective fulfilled
Yes
No
Total
Percent
89.0
11.0
100.0

65
Objective fulfilled
No; 11%
Yes; 89%
Above chart and table shows objectives fulfilled of investor by investing in mutual fund.
There are 89 people whose objective of investing in mutual fund is fulfilled and others 11 peoples
objective is not fulfilled.
5.2.17 Nominee mandatory
Nominee mandatory
Yes
No
Total
Percent
95.0
5.0
100.0
Nominee mandatory
No; 5%
Yes; 95%

66
Above chart and table shows the opinion of investor for nominee mandatory in mutual fund
scheme. 95% people means 95 people out of 100 surveyed say that nominee is mandatory in
mutual fund scheme and other 5 people says that nominee is not mandatory.
5.2.18 Frequency of accessing MF scheme
Frequency of accessing MF scheme
Never
Hardly sometimes
Less frequently
Frequently
Very frequently
Total
Percent
5.0
19.0
38.0
6.0
32.0
100.0
Frequency of accessing MF scheme

Never; 5%
Hardly sometimes; 19%
Very frequently; 32%
Frequently; 6%
Less frequently; 38%
Above table and chart frequency of accessing mf scheme. There are 38% people who accessing
their mf scheme less frequently, 19 people access hardly sometimes, 6 people access frequently
and other 5 people never accessing their mf scheme regularly.
5.2.19 Seek information score
Seek information score
Sr.
Seek information factor
Score
Rank
No
1
Experts
129
1
2
Friend, relatives and family
148
2
3
Electronic
178
3
4
Print media
198
4
5
Other
200
5
6
Own
200
6
Above table shows from where investor seek information about mutual fund.

67
Most of the people seek information from experts. And at next other investor seeks information
from their friends, relative, and family. And the rest of the people seek information from other
different sources.
5.2.20 Know about SIP
Know about SIP
Yes
No
Total
Percent
87.0
13.0
100.0
Know about SIP

No; 13%
Yes; 87%
Above chart and table shows the awareness about SIP. There are only 13% people means only 13
people aware about SIP and rest of the other 87 people are aware about SIP.
5.2.21 Invest in SIP
Invest in SIP
Yes
No
Total
Percent
67.0
33.0
100.0

68
Invest in SIP
No; 33%
Yes; 67%
Above given chart shows how many people make invest in SIP. There are 67 % people means 67
people make invest in SIP and other rest are not invest in SIP.
5.2.22 Know the meaning of NAV
Know the meaning of NAV
Yes
No
Total
Percent
90.0
10.0
100.0
Know the meaning of NAV

No; 10%
Yes; 90%

69
There are NAV in mutual fund scheme which shows NET asset value of scheme. There are most
of the investor means 90% people knows about NAV of schemes and other 10% are not known
about NAV.
5.2.23 Know calculation of NAV
Know calculation of NAV
Yes
No
Total
Percent
15.0
85.0
100.0
Know calculation of NAV

Yes; 15%
No; 85%
Above chart shows that how many investors know how to do calculation of NAV is done.
There are almost 85% people know how to calculate NAV and other 15% are not know how to
calculate NAV of scheme.
5.2.24 Understanding about brand
Understanding about brand
Sponsoring organisation
Rate of return in income or growth
Mutual fund name
Type of the mutual fund scheme
Total
Frequency
82
4
13
1
100
Percent
82.0
4.0
13.0
1.0
100.0

70
Understanding about brand

Type of the mutual fund scheme; 1%
Mutual fund name; 13%
Rate of return in income or growth; 4%
Sponsoring organisation; 82%
Above chart and table shows that how investor understand about brand.
Most of the people understand brand by sponsoring organization that is 82%. 13% investor
understand brand by mutual fund name. And other investor understand brand by type of scheme&
rate of return in income or growth.
5.2.25 Invested MF type
Invested MF type
Open-ended
Both
Close ended
Don't know
Total
Percent
22.0
26.0
9.0
43.0
100.0

71
Invested MF type
Open-ended; 22%
Don't know; 43%
Both; 26%
Close ended; 9%
Above given chart and table shows that in which type of MF scheme investor are invest. There are
22% investors who invest in open-ended scheme and 9% investor invests in close ended scheme.
There are 26% investors who invest in both type of scheme. Other 43% investor are dont know
that in which type of scheme they are invested
5.2.26 Known growth scheme
Known growth scheme
Yes
No
Total
Known
Yes
No
Groth
Percent
92.0
8.0
100.0
Taxsaving

72
Known growth scheme

No; 8%
Yes; 92%
Above chart shows investor awareness about growth scheme. Almost 92% investor knows about
growth scheme of mutual plan. Other only 8% investors are not known about growth scheme.
5.2.27 Known income scheme
Known income scheme
Yes
No
Total
Percent
79.0
21.0
100.0
Known income scheme
No; 21%
Yes; 79%

73
Above table and chart shows awareness about income scheme. There are 79% investors are
aware about income scheme of mutual scheme and other 21% investors are not aware about the
income scheme.
5.2.28 Known tax-saving scheme
Known tax-saving scheme
Yes
No
Total
Percent
92.0
8.0
100.0
Known tax-saving scheme

No; 8%
Yes; 92%
Above table and chart shows awareness about the tax saving scheme. There are almost 925
investor knows about the tax savings scheme and other rest of the investor are not know about the
tax savings scheme.
5.2.29 Known money market scheme
Known money market scheme
Yes
No
Total
Percent
51.0
49.0
100.0

74
Known money market scheme
No; 49%
Yes; 51%
Above charts shows awareness about money market scheme. There are 51% investor who knows
about money market scheme and other 49% investor are not aware about the money market
scheme.
5.2.30 Invested in growth scheme
Invested in growth scheme
Yes
No
Total
Percent
74.0
26.0
100.0
Invested in growth scheme
No; 26%
Yes; 74%

75
Above chart shows how many investors make investment in growth scheme. There are 74%
investors who invest in growth scheme and other 26% investor is there who not invest in growth
scheme.
5.2.31 Invested in income scheme
Invested in income scheme
Yes
No
Total
Percent
27.0
73.0
100.0
Invested in income scheme
Yes; 27%
No; 73%
Above given chart shows that how many investor invest in income scheme. Out of 100 there are
73% investor who invest in income scheme and rest of other investor are not invest in income
scheme.
5.2.32 Invested in tax-saving scheme
Invested in tax-saving scheme
Yes
No
Total
Percent
60.0
40.0
100.0

76
Invested in tax-saving scheme
No; 40%
Yes; 60%
Above chart and table shows that how many investor make invest in tax saving scheme. There are
60% investor who invested in this scheme and other 40% investor are not invest in tax savings
scheme.
5.2.33 Invested in money market scheme
Invested in money market scheme
Yes
No
Total
Percent
27.0
73.0
100.0
Invested in money market scheme
Yes; 27%
No; 73%

77
Above given chart and table shows how many investor make investment in money market scheme.
There are 73% investors who invest in money market scheme and other 27 investor are not
investing in money market scheme.
5.2.34 Study of relationship between education qualification and awareness about CDSC:
Aware about CDSC
Up to HSC
Graduate
Post graduate
Professional
Total
Yes
0.0%
12.3%
3.1%
12.5%
9.0%
No
100.0%
87.7%
96.9%
87.5%
91.0%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
Yes
40.00%
No
30.00%
20.00%
10.00%
0.00%
Up to HSC
Graduate
Post graduate
Professional
Table 5.2 shows the relationship between education qualification and awareness about CDSC.
Most of the investors are not aware about the CDSC throughout the educational qualification.
Some of the investors of graduate and post graduate qualification are aware about the CDSC in
mutual fund.
Chi-square Test
5.2.35 Study of relationship between education qualification and awareness about entry
load and exit load:
Yes
No
Total

78
Up to HSC
Graduate
Post graduate
Professional
Total
100.0%
49.1%
71.9%
75.0%
60.0%
.0%
50.9%
28.1%
25.0%
40.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.00%
90.00%
80.00%
70.00%
60.00%
Yes
50.00%
No
40.00%
30.00%
20.00%
10.00%
0.00%
Up to HSC
Graduate
Post graduate
Professional
Table 5.2 shows the relationship between education qualification and awareness about entry load
and exit load. Most of the investors are aware about the entry load and exit load throughout the
educational qualification. And HSC qualification investors are having the highest awareness
percent.
5.2.36 Study of relationship between education qualification and awareness about corpus:
Know about corpus
Up to HSC
Graduate
Post graduate
Professional
Total
Yes
0.0%
35.1%
12.5%
50.0%
28.0%
No
100.0%
64.9%
87.5%
50.0%
72.0%
Total
100.0%
100.0%
100.0%
100.0%
100.0%

79
100.00%
90.00%
80.00%
70.00%
60.00%
Yes
50.00%
No
40.00%
30.00%
20.00%
10.00%
0.00%
Up to HSC
Graduate
Post graduate
Professional
Table 5.2 shows the relationship between education qualification and awareness about corpus.
Most of the investors are not aware about the corpus throughout the educational qualification. And
investors of graduate, post graduate and professional qualification are aware about the corpus in
mutual fund.
5.2.37 Study of relationship between education qualification and awareness about SIP:
Know about SIP
Up to HSC
Graduate
Post graduate
Professional
Total
Yes
66.7%
82.5%
93.8%
100.0%
87.0%
No
33.3%
17.5%
6.3%
.0%
13.0%
Total
100.0%
100.0%
100.0%
100.0%
100.0%

80
100.00%
90.00%
80.00%
70.00%
60.00%
Yes
50.00%
No
40.00%
30.00%
20.00%
10.00%
0.00%
Up to HSC
Graduate
Post graduate
Professional
Table 5.2 shows the relationship between education qualification and awareness about SIP. Most
of the investors are aware about the SIP throughout the educational qualification. As the education
of the investor increases awareness about SIP increases as the graph indicates the same.
5.2.38 Study of relationship between education qualification and aware about the meaning
of NAV:
Know the Meaning of
NAV
Up to HSC
Graduate
Post graduate
Professional
Total
Yes
100.0%
86.0%
93.8%
100.0%
90.0%
No
0.0%
14.0%
6.3%
0.0%
10.0%
Total
100.0%
100.0%
100.0%
100.0%
100.0%

81
100.00%
90.00%
80.00%
70.00%
60.00%
Yes
50.00%
No
40.00%
30.00%
20.00%
10.00%
0.00%
Up to HSC
Graduate
Post graduate
Professional
Table 5.2 shows the relationship between education qualification and awareness about meaning of
NAV. Most of the investors are aware about the meaning of NAV throughout the educational
qualification. We can say that most of the investors knows meaning of NAV and understands what
the NAV is.
5.2.39 Study of relationship between gender and reason for investment in mutual fund of
high return:
Gender
Female
Male
Total
Rate reason for investment in MF (High return)

Lowest
Low
Neutral High
Highest
5.7%
8.6%
57.1%
.0%
28.6%
3.1%
6.2%
23.1%
4.6%
63.1%
4.0%
7.0%
35.0%
3.0%
51.0%
Total
100.0%
100.0%
100.0%

82
70.00%
60.00%
50.00%
Lowest
40.00%
Low
Neutral
30.00%
High
Highest
20.00%
10.00%
0.00%
Female
Male
Table 5.2 shows the relationship between gender and reason for investment in mutual fund of high
return. From the above data we can interpret that there is gradual change in the reason of
investment of high return in mutual fund in the gender wise description. Higher percent of female
are considering high return as a neutral factor on the reason of buying the mutual fund and male
investors considering it as a most important factor.
5.2.40 Study of relationship between age group and reason for investment in mutual fund of
diversification of risk:
Rate reason for investment in MF (Diversification of
Age groups
Lowest to 30
31 to 45
46
to
risk)
Lowest
21.1%
7.0%
20.8%
Low
.0%
1.8%
.0%
Neutral
21.1%
47.4%
41.7%
High
5.3%
.0%
12.5%
Highest
52.6%
43.9%
25.0%
Total
100.0%
100.0%
100.0%
highest
Total
13.0%
1.0%
41.0%
4.0%
41.0%
100.0%

83
60.00%
50.00%
40.00%
Lowest
Low
30.00%
Neutral
High
20.00%
Highest
10.00%
0.00%
Lowest to 30
31 to 45
46 to highest
Table 5.2 shows the relationship between age group and reason for investment in mutual fund of
diversification of risk. From the above data we can interpret that there is gradual change in the
reason of investment of diversification of risk in mutual fund in the age wise classification. As the
age of investors are increasing there is a change of behavior and they are giving low important to
the diversification of risk.
5.2.41 Study of relationship between age group and reason for investment in mutual fund of
high return:
Rate reason for investment in MF (High
Age groups
Lowest to 30
31 to 45
46 to highest
Total
return)
Lowest
10.5%
.0%
8.3%
4.0%
Low
5.3%
7.0%
8.3%
7.0%
Neutral
15.8%
38.6%
41.7%
35.0%
High
.0%
3.5%
4.2%
3.0%
Highest
68.4%
50.9%
37.5%
51.0%
Total
100.0%
100.0%
100.0%
100.0%

84
70.00%
60.00%
50.00%
Lowest
40.00%
Low
Neutral
30.00%
High
Highest
20.00%
10.00%
0.00%
Lowest to 30
31 to 45
46 to highest
Table 5.2 shows the relationship between age group and reason for investment in mutual fund of
high return. From the above data we can interpret that there is gradual change in the reason of
investment of high return in mutual fund in the age wise classification. As the age of investors are
increasing there is a change of behavior and they are giving low important to the high return.
Investors in the age group of till 30 years are giving the priority to the high return.
Conclusion:
From the above analysis and interpretation we can conclude that the different factors of investors
affect the buying of them towards the mutual fund investment schemes.

85
CH. 6
CONCLUSION AND
SUGGESTIONS

86
Conclusion
A Mutual Fund is a collective investment vehicle formed with the specific objective of raising
money from a large number of individuals and investing it according to a pre-specified objective,
with the benefits accrued to be shared among the investors on a pro-rata basis in proportion to
their investment.
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. 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 number of units
owned by them.
The questionnaire has two sections The questionnaire has two sections; the first section relates to
investors awareness and perception about Mutual Fund and the second section relates to
personal details investors of Mutual Funds.In the first section, the respondents were asked
questions regarding preference for tools of investments, selection of schemes, their awareness
about Mutual Fund related charges, their awareness about Mutual Fund, factors discouraging
Mutual fund investment, and the level of satisfaction regarding fulfillment of their objectives.
Occupational wise classification of the respondents indicates that majority of the respondents were
from the salaried employees class, followed by business class and professionals. Income wise
classification of the respondents reveals that 49% of the mutual fund investors had monthly
income between Rs.25000 to Rs.50000, followed by monthly income group 10000 to 25000.
Classification of the respondents based on savings/income ratio indicates that 74 percent of the
respondents have this ration less than 25 percent. Classification of the respondents based on
awareness about Mutual Fund of the respondents indicates that only 11 percent respondents were
about Mutual Fund from more than 7 years.
From the analysis and interpretation of data collected, through questionnaire filled up by investors
of mutual fund we can conclude that there is a relationship between the factors related to mutual
fund and the buying behavior of the respondents. The awareness of the mutual fund among the
investors is differing from the occupation of respondent and the education level. From the analysis
we have seen different data collection methods of the investors of the mutual fund
The analysis can help the mutual fund companies to decide their strategies and other
advertisement and marketing campaign to aware more investors about the mutual fund.

87
Bibliography / References:
1. Agrawal G D (1992) Mutual Funds and Investors Interest The Journal for Corporate
Professionals Vol. XXII (1), January, pp. 23-24.
2. Dr. Shantanu Mehta, Charmi Shah (2012) Preference of Investors for Indian Mutual Funds
and its Performance Evaluation, Pacific Business Review International, Vol. X, Issue III.
3. Agrawal, Ashok Motilal (2000) Mutual Funds- Emerging Trends and Prospects, Finance
India, Vol. XIV (4), December pp.1271-1275.
4. Anand, S. and Murugaiah, V. (2007) Analysis of Components of Investment Performance
An Empirical study of Mutual funds in India.
5. Ananil Kumar Sinha (1991) Growth of Mutual Funds: An appraisal The Management
Accountant, Vol.26 No.3 March pp.186-88.
6. Ansari (1993) Mutual Funds in India: Emerging Trends, The Chartered Accountant, Vol.42
(2), August pp.88-93.
7. Atmaramani K. N. (2001) Mutual Funds: The Best Avenue for Investment, Chartered
Secretary, Vol. XXXI (1), January pp. 9-11.
8. Avadhani.V.A. (2003) Investment and Securities Market in India Himalaya Publishing
House, Mumbai.
9. Sanjay Das, Small Investors perceptions on Mutual Funds in Assam: An Empirical Analysis
10. Satyajit Dhar (1994) Mutual Funds in India A Close Look, Finance India, September, Vol.
VIII, No.3, pp.674-79.
11. Sinha, Anil Kumar (1991) Growth of Mutual Funds: An Appraisal, The Management
Accountant, March, pp.186-88.
12. Sudhkar A and Sasikumar K (2005) Performance Evaluation of Mutual Funds: A Case
Study, Southern Economist, Vol. 44 (13), (November
13. Yadav R A and Mishra, Biswadeep (1996) Investment Pattern of Household Sector in
Financial Assets: An Empirical Investigation, MDI Management Journal, Vol. 9(1), January,
pp.65 -75.

88
Websites:
www.mutualfundindia.com
www.mututalfunds.com
www.sebi.com
www.moneycontrol.com
www.rbi.org.in
www.capitalmarket.com
www.shamdham.org
www.cybersurat.com
www.amfi.com
www.bseindia.com
www.sebi.gov.in/faq/mf_faq.html
www.sebi.gov.in

89
Annexure
Questionnaire
I am conducting the survey for studying the awareness and the perception of people
of Surat city about the mutual fund. I assure you that the study is for academic
purpose only and the anonymity of the respondent will be strictly followed and used
for academic purpose only.
Thank you.
Jay Modi.
1. Rank following investment awareness on the basis of your preference for
investment.
(
) FD (all types)
(
) Share
(
) Real estate
(
) Bond
(
) Gold / Jewellery
(
) PPF
(
) Mutual fund
(
) Life insurance
(
) NSC
(
) Post office
deposit.
2. Rate all the following reasons for investment (1 = Least important to 5 = Most
important)
Reasons to invest
1
2
3
4
5
A. Safety
B. High return
C. Tax exemption
D. Diversification of risk
E. Due to more choices
F. Easy buy & sell
G. Due to market trend
Please answer the following questions related to Mutual fund:
3. Rate following factors related to Mutual fund (1 = Lowest to 5 = Highest)

Reasons to invest in mutual fund
1
2
3
4
A. Safety
B. High return
C. Tax exemption
D. Diversification of risk
E. Due to more choices
F. Easy buy & sell
G. Due to market trend
H. Growth
I. Liquidity
J. Low risk
Yes
4. Do you know the meaning of Asked Price and Offering Price?
No

90
5.
6.
7.
8.
9.
Are you aware about CDSC charge?

Are you aware about entry load & exit load charges?
Do you know about the corpus of the mutual fund you invested?
Do you think that your investment objective is being fulfilled?
Do you think nominee is a mandatory part of mutual fund?
10. Rate how frequently you access your mutual fund scheme? (1 = Never to 5 =
Very frequently)
1
2
3
4
5
11.
12.
From whom do you seek information about investing in mutual fund?

Experts
Friends, relatives and family
Other
Electronic media
Print media
Own
Do you know about SIP?
If yes, Do you invest in SIP?
Yes
Yes
13. Do you know the meaning of

NAV?
If yes, Do you the calculation of
NAV?
Yes
No
No
No
Yes
No
14.
From how long you are aware about mutual fund?
15.
What do you understand by the term Brand in a mutual fund?

Sponsoring organisation
Rate of return in income or growth
Mutual fund name
Type (specification) of the mutual fund
scheme
16.
Which type of mutual fund did you invest in?

Open-ended
Close-ended
Both
Dont know
Years ___________
17. What is your pattern of investment in the different mutual funds schemes and
known schemes to you?
Different schemes
Known to
Invested in
you
it
A. Growth scheme
B. Income scheme
C. Tax saving scheme
D. Money market scheme
18. Do you think bank account is required to buy mutual
fund?
If yes, which account is required
Savings account
Current account
Yes
Demat account
Any other
Personal details
Gender
Male
No
Female

91
Age
: _______Years
Marital status
Educational
qualification
Occupation
Married
Unmarried
Graduate
:
Professional
:
Salaried
employee
Professional
Housewife
No. of dependent member in your family : _____________
Total monthly
income
Savings/Income
Up to HSC
Post graduate
Business
Below Rs.10000
Rs.25000 to Rs.50000
_____________%
Retired person
Any other
Rs.10000 to Rs.25000
Rs.50000 and above
Terminologies:
Asked or offering price: The price at which a mutual fund's shares can be purchased. The asked
or offering price means the current net asset value (NAV) per share plus sales charge, if any. For a
no-load fund, the asked price is the same as the nav.
CDSC: Contingent Deferred Sales Charge (CDSC), a charge imposed when the units are
redeemed within the first four years of unit ownership. The SEBI (Mutual Funds) Regulations,
1996, direct that a CDSC may be charged only for the first four years after purchase and mandates
the maximum amount that can be charged in each year.
Corpus: The total amount of money invested by all the investors in a scheme.
Closed-ended Mutual Fund: They are schemes that have a pre-specified maturity period
generally ranging from 2 to 15 years. One can invest directly in the scheme at the time for the
initial issue and thereafter transact (buy or sell) the units of the scheme on the stock exchanges
where they are listed. The market price at the stock exchanges could vary from the scheme's net
asset value (NAV) on account of demand and supply situation, unit holders' expectations and other
market factors. Some close-ended schemes provide an additional option of selling the units
directly to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations
ensure that at least one of the two exit routes is provided to the investor.

92
Diversification: Diversification is the concept of spreading your money across different types of
investments and/or issuers to potentially moderate your investment risk.
Entry Load: It is the load charged by the fund when one invests into the fund. It increases the
price of the units to more than the NAV and is expressed as a percentage of NAV.
Exit Load: It is the load charged by the fund when one redeems the units from the fund. It reduces
the price of the units to less than the NAV and is expressed as a percentage of NAV.
Growth Fund: A mutual fund whose primary investment objective is long-term growth of capital. It
invests principally in common stocks with significant growth potential. Growth Stocks of companies
that have shown or are expected to show rapid earnings and revenue growth. Growth stocks have
relatively more risk than other conventional forms of investment.
Income Fund: A mutual fund that primarily seeks current income rather than growth of capital. It
will tend to invest in stocks and bonds that normally pay high dividends and interest.
NAV: Net Asset Value of the Units in each plan of the Scheme is calculated in the manner provided
in this Offer Document or as may be prescribed by Regulations from time to time. The NAV will be
computed up to four decimal places.
NAV Formula:
+
Accrued Income
Other Liabilities
Payables
Accrued Expenses
MarketFair Valueof Scheme' s investments

NAV =
Open-ended Schemes/ Funds: Scheme of a mutual fund where purchase or sale of units is
allowed on a continued basis. Funds that do not have any fixed maturity and are continuously
open for subscription and redemption are called open-ended fund. The key feature is liquidity. One
can conveniently buy and sell the units held at the NAV related price.
Money Market Fund: A mutual fund that aims to pay money market interest rates. This is
accomplished by investing in safe, highly liquid securities, including certificates of deposit,
commercial paper, and Government securities. Money funds make these high interest securities
available to the average investor seeking immediate income and high investment safety.

93
Systematic Investment Plan (SIP): A program that allows an investor to provide post-dated
cheques to the mutual fund to allot fresh units at specified intervals (usually monthly or quarterly).
On the specified dates, the cheques are realized by the mutual fund and additional units at the
prevailing NAV are allotted to the investor. This enables him to invest as little as Rs 1000 a month
and take advantage of rupee cost averaging.

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A PROJECT REPORT ON

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE

UNDER THE GUIDANCE OF:

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF INVESTORS IN

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B.R.C.M. College of Business Administration.

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B.R.C.M. College of Business Administration.

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

B.R.C.M. College of Business Administration.

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

B.R.C.M. College of Business Administration.

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B.R.C.M. College of Business Administration.

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

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compared to the benchmark.

funds movement to that of an index. R- between 0 and 1, where 0

A STUDY OF AN AWARENESS AND PERCEPTION ABOUT MUTUAL FUND OF

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