A Synopsis

On
Evaluation of Mutual Fund as an Investment Tool
Analysis of Perception of Individual Investor.

For the Award of Degree in

Master of Business Administration 2011 - 2012

Submitted By

NEHA V. SALWANKR
MBA 2ND YEAR
SPECIALIZATION IN FINANCE

GUIDED BY

Prof. PARIKA BHUTANI

ITM INSTITUTE FOR MANAGEMENT AND RESEARCH, KAMPTEE, NAGPUR-441002 1. Topic Evaluation of Mutual Fund as an Investment Tool Analysis of Perception of Individual Investor. 2. Introduction Mutual Fund (MF) is a investment company that pool money from shareholders & invest in a variety of securities, such as stocks, bonds, & money market investment. Most open end mutual fund stand ready to buy back(redeem) its shares at their current net asset value(NAV), 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. Mutual funds stand ready to sell & redeem their shares at any time at the funds current net asset value (NAV) : total fund asset is divided by shares outstanding. In simple words, MF is a mechanism for pooling the resources by issuing units to the investors & investing funds in a securities in accordance with objectives as disclosed in offer documents. In India, MF is a required to be registered with Securities & Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. For example, an equity fund would invest equity & equity related instruments & a debt fund would invest in bonds, debentures, 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. The comparison done in the project is dependent upon the changes in the NAV of the funds and returns generated by those funds over a

period of time. The comparison is based on the performance of the fund, for Last 1 year, 3years and since inception, and also on the basis of absolute and percentage changes in NAV.

For the purpose of comparison, the schemes of 4 different sectors mutual funds are taken into consideration.
1 Bank sponsor 2 Indian Private sector 3 Predominantly India Joint Ventures 4 Predominantly Foreign Joint Ventures The project gives a detail view about the Balance Mutual Funds portfolio composition of the schemes along with the returns generated by the schemes, which will help the investors to define the criteria of comparison between the schemes. From the portfolio composition presented in the project, one can easily come to know about the view adopted by the fund manager while allocating the assets i.e. moderate or conservative. UNIT TRUST OF INDIA is the first mutual fund set up under a separate Act, UTI Act in 1963 and started its operation in 1964 with the issue of unit under the scheme US-64. Currently public sector banks like SBI, Canara bank, Bank of India, and Institution like IDBI, GIC, and LIC HDFC Foreign institution like Alliance Morgan Stanley, Templeton, Principle HSBC and private financial Co. like first India mutual fund DSP Merrill Lynch, Sundaram, Kotak etc. have floated their own mutual funds.

Presently there are 33 mutual funds in India and close to 400 mutual fund schemes. Currently the total fund under the mutual fund management in India are a little over Rs. 139000 crores. The private funds account for around 77 percent. 3. Objectives of the Study The broad objectives of the present study are:

To understand the concept of mutual fund.

To understand working and growth of mutual funds in India.

To compare the top mutual funds according to their performance.

To compare the mutual fund with financial products or different investment options available to the investors.

To know the structure of mutual funds in India. To know the future of mutual funds in India.

To evaluate individual investors perception about mutual fund as an investment tool.

3.1 Research Methodology

Market research is for discovering what people want, need, or believe. It can also involve discovering how they act. Once that research is completed, it can be used to determine how to market your product.

3.2 Collection of Data: The data used for the project is primary as well as secondary data, as follows: Sources of primary data : Personal Interview Observation Sources of secondary : Web sites Magazines Books 3.3 Sampling : A sample is the representative of the population which will predict the behavior of the whole universe. The sampling size put under two categories: Probability sampling and non probability sampling. 3.4 Limitations: Every work has its own limitation. Limitations are extent to which the process should not exceed. Limitations of this project are:-

Duration of Project was not enough to make a conclusion on such a vast subject time Constraint has become a big limitation. 2. The Sample Size being taken for drawing a conclusion was small to get an accurate result. 3. To know the mindset of people for investing in a particular Financial Product is a very difficult task.
1. 4.

Data collection and analysis

Data will be collected through above said method. The collected data will be analyzed on the basis of different parameters and will be presented in different bar charts. 5.Conclusion & Recommendation Conclusions of the study will be produced in Executive Summary. Plan of work Types of work

Duration 2 week 1 week 15 days 1 week 15 days

Collection of secondary data Typing manuscript Proof reading Development of analysis Drawing conclusions and recommendations

Total time available for the project

2 weeks

Chapter SchemeExecutive Summary

1.

Introduction of topic

2. Research Methodology
2.1 Objective 2.2 Collection

of data 2.3 Sampling 2.4 Limitation 3. Data Collection and Analysis 4. Conclusion and Recommendations Bibliography Annexure

Bibliography The list of all used reference material will be produced here, like-

 Name of the Books Name of the Magazines Name of the Websites, etc.