A STUDY ON THE INVESTMENT BEHAVIOUR AND LIFE STYLE CHARACTERISTICS OF MUTUAL FUND INVESTORS IN VIJAYAWADA CITY

WORK CARRIED FOR

ACADAMIC GUIDE : Dr. R.KASILINGAM

ORGANISATIONAL GUIDE : R.SATYANARAYANA

CONTENTS Objective and Research Methodology

Analysis and Interpretation Suggestions & conclusion

OBJECTIVE & RESEARCH METHODOLOGY

OBJECTIVE OF THE STUDY

To

find out the profile of mutual fund investors in Vijayawada city find out the investment behavior of mutual fund investors such as avenues invested, frequency of the investment, source of influence and factors considered find out the life style characteristics of mutual fund investor by using AIO scale

To

To

RESEARCH METHODOLOGY
Design:

Descriptive approach sampling method is used for this study

Convenience

Study

is based on primary data

size is 110 investors consists of close-ended and 5-point

Sample

Questionnaire

scale

Statistical tools used for the analysis are

Frequency Analysis Chi-square Test Correspondence Analysis Factor Analysis One-way ANOVA

ANALYSIS & INTERPRETATION

FREQUENCY ANALYSIS ON DEMOGRAPHICS

Age Below 25 25-35 35-45 45-55 Above 55 Total

Frequency 22 49 22 15 2 110

Percent 20.0 44.5 20.0 13.6 1.8 100.0

Occupation Service Business Retired Professional Others Total Monthly Income

Frequency 53 12 9 26 10 110 Frequency 49 36 17 8 110

Percent 48.2 10.9 8.2 23.6 9.1 100.0 Percent 44.5 32.7 15.5 7.3 100.0

Gender Male Female Total

Frequency 95 15 110

Percent 86.4 13.6 100.0

Below 15000 15000-25000 25000-45000 45000-55000 Total

Frequency Analysis for other variables

Investment Objective High return Regular Income Tax saving Capital Appreciation Frequency 41 32 11 16 Percent 37.3 29.1 10.0 14.5 Investment frequency Monthly Quarterly Half yearly Annually Total Frequency 59 17 20 14 110 Percent 53.6 15.5 18.2 12.7 100.0

Safety
Total

10
110

9.1
100.0

Purpose of saving Wealth Creation Future Needs Children's Education House Building Marriage Purpose Total

Frequency 26 62 12 5 5 110

Percent

Duration
23.6 56.4 10.9 4.5 4.5 Total 100.0

Frequency 35
50 25 110

Percent 31.8
45.5 22.7 100.0

Long term
Medium term Short term

Frequency analysis on Investment schemes

Investment Schemes Growth Schemes Income Schemes Balanced Schemes Money Market Scheme Tax Saving Schemes Index Schemes Sector Specific Schemes Total Frequency 56 22 10 3 10 4 5 110 Percent 50.9 20.0 9.1 2.7 9.1 3.6 4.5 100.0

Around 51 percent of the respondents invest in growth schemes and 20 percent respondents invest in income schemes. The respondents invest in other schemes are of less percent. By this we can infer majority of respondents invest for high return.

Chi-square test between Demographics and Investment schemes

Asymp. Sig. (2-sided) .029 .002 .011

Pearson Chi-Square Age Occupation Monthly income

Value 38.697a 49.707a 34.579a

Df 24 24 18

low significance value (typically below 0.05) indicates that the Null Hypothesis is rejected and there is association between the investment schemes of respondents and demographic variables

Correspondence analysis between age and Investment schemes

Most of the respondents 25-35 age group prefer to invest in growth schemes and respondents of 35-45 age group prefer to invest in income schemes and balanced sche

Lifestyle characteristics of Mutual Fund Investors

lifestyle characteristics of mutual fund investors is analyzed bas three variables. They are Activities

Interest
opinion

KMO and Bartletts test on Activities

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Approx. Chi-Square Bartlett's Test of Sphericity Df Sig. .389 87.307 28 .000

The value of KMO more than .05 indicates that factor analysis is useful Present data. Here, the significant value is 0.000 which indicates that th exist significant relationships among the variables

Total variance explained on activities

Initial Eigenvalues
Compon ent 1 Total 1.606 % of Variance 20.074 Cumulative % 20.074 Total 1.529 % of Variance 19.118 Cumulative % 19.118

Rotation Sums of Squared Loadings

2
3 4 5 6 7

1.507
1.173 1.033 .914 .831 .618

18.842
14.668 12.916 11.423 10.383 7.725

38.916
53.585 66.501 77.924 88.307 96.032

1.492
1.265

18.655
15.812

37.773
53.585

8 total variance .317 3.968 by all 100.000 The accounted the three factors is 53.585 percent. This means that significant amount of variance is explained by the reduced three factors alone. Therefore it is better to take three variables alone for further analysis. Among the three factors, the first factor accounts for around 19 percent of variance

Rotated component Matrix on Activities

Activities 1 Component 2 3

My vacation plans are perfect.

I seldom participate in social activities. Im a spender than a saver. I spend a lot in shopping I like to try new and different things I spend most of time in work. I would rather spend a quiet

.863 .816
.743 .681 .496 .769

evening at home than go out to a

party.

.559

Factor Analysis on Activities

Based on the statements included into the factors are named. The reduced three factors can be as shown below Perfect planners High rollers

Task performers

Perfect planners
Influence of occupation on perfect planner Occupation F 2.849 Sig. .027

Perfect
planners

From the above Table it can be inferred that the significant values is below 0.05, which implies that null hypothesis is rejected .This means that there is significant difference between occupation of the respondents depending on the factor perfect planner.

Duncan Occupation and Perfect planners

Subset for alpha = 0.05 Occupation N 1 2

Others
Service Professional

10
53 26

3.0000
3.1604 3.3462

Retired
Business Sig.

9
12

3.3889

3.3889
4.0000

.264

.054

The Duncan table shows that the opinions of the respondents belonging to the Business fall in the second group while the other category employee falls in the first group. This means that though there is a difference of opinion in the respondents, By this we can infer that business group people are perfect planners.

Means plot occupation & perfect planners

Perfect planners
Influence of age, income and investment objective on perfect planners
ANOVA Age Monthly income Investment objective F .519 .676 1.060 Sig. .722 .569 .380

From the above Table, it can be inferred that the significant values are above 0.05, which implies that null hypothesis is accepted. This means that there is no significant difference between age categories, monthly income groups and investment objective on perfect planners.

Cont...
Same analysis has been carried for other factors High rollers task performers

other lifestyle characteristics based on interest opinion

SUGGESTIONS & CONCLUSION

suggestions
As found in the study, AMCs should concentrate investors from business and professional occupational groups AMCs should aggressively promote their systematic investment plan among lower and middle income groups AMCs should promote long term schemes that should fulfill investors future needs

Higher income groups must be attracted according to their investment objective

Investors should be made aware of different investment schemes because they make their own investment

CONT
Schemes should be targeted in such a way they should correlate with age, occupation and income of investors Investors should be educated about investment schemes that most suits their purpose

The distribution service must be effectively and efficiently managed to gain more investors
More awareness program should be done in banks to gain more market It is imperative to be innovative a head of market trends

Conclusion
The present study has important implications regarding the profile of mutual fund investors and it has come out with certain interesting facet of mutual fund investor. The mutual fund investors prefer to invest in different mutual funds according to their investment objective. This confirms that mutual fund investor behavior has a significant relation towards their demographic profile and investments schemes they choose. The investment schemes should be designed and promoted in such a way it should fulfill investors investment objective. The schemes can be effectively marketed by using different promotional strategies.

Chaithanyakumar s