1.1 General Introduction: Investors Preferences Towards Mutual Funds of Kotak

Investors preferences towards Mutual Funds of Kotak
1.1 GENERAL INTRODUCTION
Mutual fund is a pool of funds which is divided into units of equal value and sold to investing public and the funds so collected are utilized for collective investments in various capitals and money market instrument. In todays market people invest money to gain more. So when they take into account, they mostly look out for Investment ompany where they can get more income.
Investment companies can be classified into closed!end and open!end investment companies. losed!end is when it is readily transferable in the market. "pen!end funds sell their own shares to investors and ready to buy back their old shares. If we talk about the investment options today, in India we have so many investment companies like #$I, %I etc, all have their own special ways of servicing the customers. $he investors also feel that they are worth to be the part of that company. $hese days people mainly look for avoiding ta& so normally they look out for some investments which can help them in doing so. 'hen it comes to this point of view, people mainly look out for mutual fund.
Mutual fund is a trust at law( it is a special type of managed, pooled portfolio financial company or financial service organization that sells shares)units)stocks in itself, to the public to obtain its resources and it invests the savings so mobilized or pooled in a large, diversified, * sound portfolio of equity shares, bonds, money market instruments etc., +edeemable trust certificates are sold to investors at net asset value ,-./0 plus a small commission. .ll interest)dividend and principal repayments are distributed to the holders of the certificates.
+./. Institute of Management
1.2 THEORETICAL BACKGROUND
Meaning of Mutual Fun !
Mutual fund is a pool of funds which is divided into units of equal value and sold to investing public and the funds so collected are utilized for collective investment in various capital and money market instrument. Investment is a commitment of a persons funds to derive future income in the form of interest, dividends, rent, premiums, pension benefits or the appreciation of the value of their principal capital. Investments have a return but there can be no return without risk.
Definition! 2ifferent persons in different words have defined mutual fund. $he S34I ,M50 +egulations, 1667 defines mutual fund as 8. fund established in the form of a trust by a sponsor to raise money by the trustees through the sale of units to the public under one or more schemes for investing in securities in accordance with these regulations.9 Investment is the allocation of monetary resources to assets that are e&pected to yield some gain or positive return over a given period of time. $hese assets range from safe investments to risky investments. Investments in this form are also called :5inancial Investments.
C"a#a$te#i!ti$! of MF
. mutual fund actually belongs to the investors who have pooled their funds. $he ownership of the M5 is in the hands of the investors. . M5 is managed by investment professionals and other service providers, who earn a fee for their services from the fund. $he pool of funds is invested in a portfolio of marketable investment. $he value of the portfolio is updated every day. $he investors share in the fund is denominated by units. $he value of the units changes with change in the portfolios value, every day. $he value of one unit of investment is called as the net assets value or -./. $he investment portfolio of the Mutual fund is vested according to the stated Investment ob<ectives of the fund.
In%e!t&ent Co&'an( . company or trust that uses its capital to invest in other companies. $here are two principal types = closed!ended and the open!ended. Shares in closed!ended investment companies, some of which are listed on the -ew >ork Stock 3&change are readily transferable in the open market and are bought and sold like other shares. "pen!ended funds sell their own shares to investors, stand ready to buy back their old shares and are not listed. $hese funds are so called because their capitalization is not fi&ed( they issue more shares as people want them.
Fig.1.1 Con$e't of Mutual Fun In u!t#(
'hen an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus ,the total amount of the fund0. Mutual 5und investor is also known as a mutual fund shareholder or a unit holder. .ny change in the value of the investments made into capital market instruments ,such as shares, debentures etc0 is reflected in the -et .sset /alue ,-./0 of the scheme. -./ is defined as the market value of the Mutual 5und scheme?s assets net of its liabilities. -./ of a scheme is calculated by dividing the market value of scheme?s assets by the total number of units issued to the investors.
CON)TITUENT) OF MUTUAL FUND $here are many entities involved and the diagram below illustrates the constitut ion of a mutual fundA 5ig.1.; onstituents of Mutual 5und Industry
5ormation process starts from sponsor Bthe investment advisor or managerC. Sponsor selects * appoints the 4oard of $rustees. $rustees again hire or contract a separate .M that is run by professional managers. $he .M conducts the necessary research * based on it, manages the fund or portfolio. It is responsible for floating, managing, redeeming the schemes( it also handles the administrative chares. It receives the fees for the services rendered by it. $he custodian is responsible for co!ordination with brokers, the actual transfer * storage of stocks, * handling the property of the trust.
5inally the unit holders are investors from who a pool of money is collected * invested according to the stated investment ob<ectives. Mutual fund investors are like share holders * they own the fund. $hey are neither lenders nor the deposit holders in the fund. #nlike a holder of stock of company, unit holders have no voting rights.
O#gani*ation of a Mutual Fun .ll mutual funds comprise four constituents = Sponsors, $rustees, .sset Management ompany ,.M 0 and ustodians. 1. )'on!o#!+ $he sponsors initiate the idea to set up a mutual fund. It could be a registered company, scheduled bank or financial institution. . sponsor has to satisfy certain conditions, such as capital, record ,at least five years operation in financial services0, de!fault free dealings and general reputation of fairness. $he sponsors appoint the $rustee, .M stakeholder. and ustodian. "nce the .M is formed, the sponsor is <ust a
2. T#u!t, Boa# of T#u!tee!+ $rustees hold a fiduciary responsibility towards unit holders by protecting their interests. $rustees float and market schemes, and secure necessary approvals. $hey check if the .M s investments are within well!defined limits, whether the funds assets are protected, and also ensure that unit holders get their due returns. $hey also review any due diligence by the .M . 5or ma<or decisions concerning the fund, they have to take the unit holders consent. $hey submit reports every si& months to S34I( investors get an annual report. $rustees are paid annually out of the funds assets = E.D percent of the weekly net asset value.
-. Fun Manage#!, AMC+ $hey are the ones who manage money of the investors. .n .M takes decisions,
compensates investors through dividends, maintains proper accounting and information for pricing of units, calculates the -./, and provides information on listed schemes. It also e&ercises due diligence on investments, and submits quarterly reports to the trustees. . funds .M can neither act for any other fund nor undertake any business other than asset management. Its net worth should not fall below +s. 1E crore. .nd, its fee should not e&ceed 1.;D percent if collections are below +s. 1EE crore and 1 percent if collections are above +s. 1EE crore. S34I can pull up an .M if it deviates from its prescribed role.
.. Cu!to ian+ "ften an independent organization, it takes custody of securities and other assets of mutual fund. Its responsibilities include receipt and delivery of securities, collecting income!distributing dividends, safekeeping of the units and segregating assets and settlements between schemes. $heir charges range between E.1D!E.;E percent of the net value of the holding. ustodians can service more than one fund.
In%e!t&ent Alte#nati%e! I. 2irect Investment .lternatives .. 5i&ed Hrincipal Investments i. ii. iii. iv. v. ash Savings account Savings ertificate Iovernment 4onds orporate 4onds and 2ebentures
4. /ariable Hrinciple Securities i. ii. 3quity Shares onvertible 2ebentures or Hreference Securities
. -on!Security Investments i. ii. iii. iv. v. +eal 3state Mortgages ommodities 4usiness /entures .rt, .ntiques and "ther /aluables
II. Indirect Investment .lternatives

.. Hension 5und 4. Hrovident 5und . Insurance 2. Investment ompanies 3. #nit $rust of India and "ther $rust 5unds 5. Mutual 5unds
1.- A $o&'a#i!on of
iffe#ent in%e!t&ent o'tion! /it" #e!'e$t to t"ei#
0e#fo#&an$e i! a! !"o/n in t"e follo/ing ta1le.
"ptions 3quity 5I 4ond 2ebentures ompany 52 HH5 %I Iold +eal 3state Mutual 5und
+eturns Kigh
Safety %ow
/olatility Kigh Moderate Moderate %ow %ow %ow Moderate Kigh Moderate
%iquidity
onvenience
Kigh)%ow Moderate Moderate %ow %ow Moderate %ow Moderate %ow Kigh Kigh %ow Moderate Kigh Moderate %ow %ow Kigh
6
Moderate Kigh Moderate Moderate Moderate %ow Moderate Kigh %ow Kigh
Moderate Kigh Kigh Kigh Moderate Kigh

4ank 2eposit %ow Kigh %ow Kigh Kigh
Finan$ial In!titution!+
5inancial institutions are business organizations that act as mobilizes * depositors of savings * purveyors of credit or finance. 5inancial Institutions are engaged in these activities
5inancing by way of loans, advances, and so on any activity e&cept its own. .cquisition of shares) stocks) bonds) debentures) securities Kire! purchase .ny class of insurance, stock! broking, etc.
1E

hit funds and ollection of money by way of subscription) sale of units or other instruments) any other manner and their disbursement.
Fig 1... T('i$al Finan$ial )(!te&
5inancial System
Financial Institutions
Financial Services
Financial Markets
5inancial Instruments , laims, assets,
Intermediaries Non+egulator intermediaries y +./. Institute of Management Banking Nonbanking
Others
a!ital Primary "rganized Market
Secondary 11 Money Medium "ong Short Secondary Unorganized Market term term term
Primary
LEGAL 2 REGULATOR3 FRAME 4ORK+
Mutual funds are regulated by the S34I ,Mutual 5und0 +egulations 166F. S34I is the regulator of all funds e&cept off share funds. 'here as 4ank!sponsored mutual funds are <ointly regulated <ointly by S34I * +4I.
+4I also regulates money market * Iovernment. Securities Markets, in which mutual funds invest. Since the .M * $rustee ompany is ompanies, they are
1;

regulated by the department of ompany affairs. $hey have to send periodic reports to the +egistrar of the ompany ,+" 0 * the ompany %aw 4oard , %40.
Regulato#( in!titution!+ $hese institutions regulate Indian financial system. $he ma<or regulatory arms of the Iovernment of India are L +eserve 4ank of India ,+4I0 Securities 3&change 4oard of India ,S34I0 and .ssociation of Mutual 5und Industry ,.M5I0
5ig.1.D. $he Structure of Mutual 5und Industry
$egulatory Bodies
S#BI
$BI
.M5I
Mutual Funds
17

S!onsor &rustee %M ustodian Investor
Public Sector Funds
Private Sector Funds
U&I
Bank S!onsored
Financial Institutions S!onsored Schemes
'omestic
O((shore
O!en ended
losed ended
)ro*th Funds
Income Funds
Balanced Funds
Sect oral Funds
S!ecial !ur!ose Funds
&a+ saving Funds
THE RE)ER5E BANK OF INDIA 6RBI7+
$he +4I as the central bank of the country is the center of the Indian financial and monetary system. .s the ape& institution it has been guiding monitoring, regulating controlling and promoting the destiny of the Indian 5inancial System since its inception. It started functioning from .pril 1, 167D on the terms of the reserve 4ank of India .ct 167@. It was a shareholders institution till Manuary 16@6, after which it become a state!owned institution under the reserve 4ank ,transfer to public ownership0 of India .ct, 16@J.
1@
5#- $I"-S "5 +4I
F U N & I O N S
entral banking (unctions
Su!ervisory (unctions Promotional (unctions Monetary !lanning and control system
)ECURITIE) AND E8CHANGE BOARD OF INDIA 6)EBI7
$he S34I was established on .pril.1;.16J; through an administrative order, but it became a statutory and really powerful organization only since 166;. S34I was set up on ;1st 5ebruary.166; through an ordinance issued on 7Eth Manuary.166;. $he S34I .ct on @th .pril.166; replaced the ordinance. $he S34I is under the overall control of the ministry of 5inance, and it has head office at Mumbai. It has now become a very important constituent of the financial regulatory framework in India.
1D
OB9ECTI5E)+
$o regulate stock e&changes * securities industry to promote their orderly functioning. $o protect the interest of investors so that there is a steady flow of savings in to the capital market and educating individual investors. $o prevent trading malpractices and aims at achieving a balance between self! regulation by securities industry and its statutory regulation.
A))OCIATION OF MUTUAL FUND INDU)TR3 6AMFI7 .M5I is an Industry .ssociation. .M5I is not yet the Self +egulatory "rganization ,S+"0, though S34I consults .M5I on a number of issues. .M5I can only issue guidelines. $he ob<ectives of .M5I are! $o define and maintain high professional and ethical standards in all areas of operation of mutual fund industry
1F

$o interact with the Securities and 3&change 4oard of India ,S34I0 and to represent to S34I on all matters concerning the mutual fund industry. $o represent to the Iovernment, +eserve 4ank of India and other bodies on all matters relating to the Mutual 5und Industry. $o undertake nation wide investor awareness programme so as to promote proper understanding of the concept and working of mutual funds. $o disseminate information on Mutual 5und Industry and to undertake studies and research directly and)or in association with other bodies.
INDIAN MUTUAL FUND INDU)TR3 )t#u$tu#e Of T"e In ian Mutual Fun In u!t#( Structure wise Mutual fund Industry can be classified in to three categoriesA Unit T#u!t of In ia $he Indian Mutual 5und industry is dominated by the #nit $rust of India, which has a total corpus of +s.D1,1EE crore collected from over ;E million investors. $he #$I has many funds) schemes in all categories i.e. 3quity, 4alanced, 2ebt, Money Market etc.
1G

'ith some being open ended and some being closed ended. $he #nit scheme 16F@ commonly referred to as #S F@, which is a balanced fund, it is the biggest scheme with a corpus of about 1E,EEE crore. 0u1li$ )e$to# Mutual Fun ! $he second largest categories of mutual funds are the ones floated by nationalized banks. anbank asset management floated by anara 4ank and S4I 5unds Management floated by State 4ank of India are the largest of these. II .M floated by Ieneral Insurance orporation and Meevan 4ima Sahayog .M floated by the %I are some of the other prominent ones. $he aggregate corpus of the funds managed by this category of .M s is around +s. J,7EE crore. 0#i%ate )e$to# Mutual fun $he third largest categories of mutual funds are the ones floated by the Hrivate Sector 2omestic Mutual funds and the Hrivate Sector 5oreign Mutual 5unds. $he largest of these in Hrivate Sector 2omestic Mutual funds are Management o.%td., M.M apital Management holamandalam .sset o. %td., 3scort .sset Management
%td., 4irla Sun %ife .sset Management Hvt.%td., and in Hrivate Sector 5oreign Mutual 5unds these are .lliance I I I Management apital .sset Management Hvt.%td., Hrudential o. %td. $he aggregate corpus of the assets managed by this
category of .M s is about +s. @;,;EE crore .
Hi!to#( of t"e In ian Mutual Fun In u!t#( $he mutual fund industry in India started in 16F7 with the formation of #nit $rust of India, at the initiative of the Iovernment of India and +eserve 4ank the. $he history of mutual funds in India can be broadly divided into four distinct phases
1J

Fi#!t 0"a!e : 1;<.=>? .n .ct of Harliament established #nit $rust of India ,#$I0 on 16F7. It was set up by the +eserve 4ank of India and functioned under the +egulatory and administrative control of the +eserve 4ank of India. In 16GJ #$I was de!linked from the +4I and the Industrial 2evelopment 4ank of India ,I24I0 took over the regulatory and administrative control in place of +4I. $he first scheme launched by #$I was #nit Scheme 16F@. .t the end of 16JJ #$I had +s.F, GEE crores of assets under management.
)e$on 0"a!e : 1;>?=1;;- 6Ent#( of 0u1li$ )e$to# Fun !7 16JG marked the entry of non! #$I, public sector mutual funds set up by public sector banks and %ife Insurance orporation of India ,%I 0 and Ieneral Insurance an bank Mutual 5und ,2ec JG0, Hun<ab orporation of India ,II 0. S4I Mutual 5und was the first non! #$I Mutual 5und established in Mune 16JG followed by -ational 4ank Mutual 5und ,.ug J60, Indian 4ank Mutual 5und ,-ov J60, 4ank of India ,Mun 6E0, 4ank of 4aroda Mutual 5und ,"ct 6;0. %I established its mutual fund in Mune 16J6 while II had set up its mutual fund in 2ecember 166E. .t the end of 1667, the mutual fund industry had assets under management of +s.@G, EE@ crores.
Mobilis ation as .mount Mobilised 166;! 67 .ssets #nder Management N gross 2omest ic Savings of
16

11,EDG #$I Hublic Sector $otal 7J,;@G D.;N
1,6F@
J,GDG
E.6N
17,E;1
@G,EE@
F.1N
T"i# 0"a!e : 1;;-=2@@- 6Ent#( of 0#i%ate )e$to# Fun !7 'ith the entry of private sector funds in 1667, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. .lso, 1667 was the year in which the first Mutual 5und +egulations came into being, under which all mutual funds, e&cept #$I were to be registered and governed. $he erstwhile Oothari Hioneer ,now merged with 5ranklin $empleton0 was the first private sector mutual fund registered in Muly 1667. $he 1667 S34I ,Mutual 5und0 +egulations were substituted by a more comprehensive and revised Mutual 5und +egulations in 166F. $he industry now functions under the S34I ,Mutual 5und0 +egulations 166F. $he number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. .s at the end of Manuary ;EE7, there were 77 mutual funds with total assets of +s. 1,;1,JED crores. $he #nit $rust of India with +s.@@, D@1 crores of assets under management was way ahead of other mutual funds.
Fou#t" 0"a!e : !in$e Fe1#ua#( 2@@-
;E

In 5ebruary ;EE7, following the repeal of the #nit $rust of India .ct 16F7 #$I was bifurcated into two separate entities. "ne is the Specified #ndertaking of the #nit $rust of India with assets under management of +s.;6,J7D crores as at the end of Manuary ;EE7, representing broadly, the assets of #S F@ scheme, assured return and certain other schemes. $he Specified #ndertaking of #nit $rust of India, functioning under an administrator and under the rules framed by Iovernment of India and does not come under the purview of the Mutual 5und +egulations.
$he second is the #$I Mutual 5und %td, sponsored by S4I, H-4, 4"4 and %I . It is registered with S34I and functions under the Mutual 5und +egulations. 'ith the bifurcation of the erstwhile #$I which had in March ;EEE more than +s.GF,EEE crores of assets under management and with the setting up of a #$I Mutual 5und, conforming to the S34I Mutual 5und +egulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. .s at the end of "ctober 71, ;EE7, there were 71 funds, which manage assets of +s.1;FG;F crores under 7JF schemes.
$he graph indicates the growth of assets over the years.
;1

I+"'$K I- .SS3$S #-23+ M.-.I3M3-$
Futu#e of Mutual Fun ! in In ia

;;
4y 2ecember ;EE@, Indian mutual fund industry reached +s 1,DE,D7G crore. It is estimated that by ;E1E March!end, the total assets of all scheduled commercial banks should be +s @E,6E,EEE crore.
$he annual composite rate of growth is e&pected 17.@N during the rest of the decade. In the last D years we have seen annual growth rate of 6N. .ccording to the current growth rate, by year ;E1E, mutual fund assets will be double.
%et us discuss with the following tableA $able 1.F
.ggregate deposits of Scheduled 4anks in India ,+s. rore0 Mar! E@ !
Month)>ear
Mar!6J Mar!EE Mar!E1 Mar!E;
Mar!E7
Sep!E@
@!2ec
2eposits hange in N over last yr Source RBI
FED@1E JD1D67 6J61@1 11711JJ
1;JEJD7
1DFG;D1
1F;;DG6
1D
1@
17
1;
1J
Mutual 5und .#Ms Irowth Month)>ear Mar!6J Mar!EE Mar!E1 Mar!E; Mar!E7 Mar!E@ Sep!E@ @!2ec 17GF; F @D 1D11@ 1 6
M5 .#M?s
FJ6J@
67G1G
J7171
6@E1G
GD7EF
1@67EE
hange in N over last yr
;F
17
1;
;D
;7

Source - AMFI
)o&e fa$t! fo# t"e g#o/t" of &utual fun ! in In ia A
1EEN growth in the last F years. -umber of foreign .M ?s are in the que to enter the Indian markets like 5idelity Investments, #S based, with over #SP1trillion assets under management worldwide.
"ur saving rate is over ;7N, highest in the world. "nly channelizing these savings in mutual funds sector is required.
'e have appro&imately ;6 mutual funds which is much less than #S having more than JEE. $here is a big scope for e&pansion.
?4? and ? ? class cities are growing rapidly. $oday most of the mutual funds are concentrating on the ?.? class cities. Soon they will find scope in the growing cities.
Mutual fund can penetrate rurals like the Indian insurance industry with simple and limited products.
S34I allowing the M5?s to launch commodity mutual funds. 3mphasis on better corporate governance. $rying to curb the late trading practices.
;@

Introduction of 5inancial Hlanners who can provide need based advice.
Glo1al )$ena#io Of Mutual Fun In u!t#(
$he money market mutual fund segment has a total corpus of P 1.@J trillion in the #.S. "ut of the top 1E mutual funds worldwide, eight are bank! sponsored. "nly 5idelity and apital are non!bank mutual funds in this group. In the #.S. the total number of schemes is higher than that of the listed companies. Internationally, mutual funds are allowed to go short. In India fund managers do not have such leeway. In the #.S. about 6.G million households will manage their assets on! line by the year ;EE7, such a facility is not yet of avail in India. "n! line trading is a great idea to reduce management e&penses from the current ; N of total assets to about E.GD N of the total assets.
;D

G;N of the core customer base of mutual funds in the top DE!broking firms in the #.S. is e&pected to trade on!line by ;EE7.
AD5ANTAGE) OF MUTUAL FUND)+ = If mutual funds are emerging as the favorite investment vehicle, it is because of the many advantages they have over other forms and avenues of investing, particularly for the investor who has limited resources available in terms of capital and ability to carry out detailed research and market monitoring. $he following are the ma<or advantages offered by mutual funds to all investorsA
0o#tfolio i%e#!ifi$ation+ Mutual 5unds normally invest in a well!diversified portfolio or securities. 3ach investor in a fund is a part owner of all of the funds assets. $his enables him to hold a diversified investment portfolio even with a small amount of investment that would otherwise require big capital.
;F
0#ofe!!ional Manage&ent+ 3ven if and investor has a big amount of capital available to him, he benefits from the professional management skills brought in the management of the investors portfolio. $he investment management skills, along with the needed research into available investment options, ensure a much better return than what an investor can manage on his own. 5ew investors have the skills and resources of their own to succeed in todays fast moving, global and sophisticated markets.
Re u$tion,Di%e#!ifi$ation of Ri!A+ .n investor in a mutual fund acquires a diversified portfolio, no matter how small his investment. 2iversification reduces the risk of loss, as compared to investing directly in one or two shares or debentures or other instruments. 'hen and investor invests directly, all in the pool of funds with other investors, any loss on one or two securities is also shared with other investors. $his risk reduction is one of the most important benefits of a collective investment vehicle like the mutual fund.
Re u$tion of t#an!a$tion $o!t+ 'hat is true of risk is also true of the transaction costs. . direct investor bears all the costs of investing such as brokerage or custody of securities. 'hen
;G

going through a fund. Ke has the benefit of economies of scale( the funds pay lesser costs because of larger volumes, a benefit passed on to its investors.
LiBui it(+ "ften, investors hold shares or bonds they cannot directly, easily and quickly sell. Investment in a mutual fund, on the other hand, is more liquid. .n investor can liquidate the investment, by selling the units to the fund if open! end or selling them in the market if the fund is closed!end, and collect funds at the end of a period specified by the mutual fund or the stock market.
Con%enien$e an FleCi1ilit(A Mutual 5und management companies offer many investor services that a direct market investor cannot get. Investors can easily transfer their holdings from one scheme to the other( get updated market information, and so on.
RI)K FACTOR) A))OCIATED 4ITH MUTUAL FUND)
;J

Mutual funds * securities investments are sub<ect to market risks and there is no assurance or guarantee that the ob<ectives of the Scheme will be achieved. Hast performance of the Sponsor or that of e&isting Schemes of the 5und does not indicate the future performance of the Schemes. .s with any securities investment, the -./ of the #nits issued under the scheme can go up or down depending on the factors and forces affecting the capital and money market. $a& laws may change, affecting the return on investment in #nits.
T30E) OF MUTUAL FUND )CHEME)
I. )$"e&e! a$$o# ing to Matu#it( 0e#io + . mutual fund scheme can be classified into open!ended scheme or ended scheme depending on its maturity period. close!
i.
O'en=en e Fun , )$"e&e

;6

.n open!ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. $hese schemes do not have a fi&ed maturity period. Investors can conveniently buy and sell units at -et .sset /alue ,-./0 related prices which are declared on a daily basis. $he key feature of open!end schemes is liquidity.
ii.
Clo!e=en e Fun , )$"e&e
. close!ended fund or scheme has a stipulated maturity period e.g. D!G years. $he fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock e&changes where the units are listed. In order to provide an e&it route to the investors, some close!ended funds give an option of selling back the units to the mutual funds -./ related prices. S34I +egulations stipulate that at least one of the two e&it routes is provided to the investor i.e. either repurchase facility or through listing on stock e&changes. $hese mutual funds schemes disclose -./ generally on weekly basis.
II. )$"e&e! a$$o# ing to In%e!t&ent O1De$ti%e+ . scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment ob<ective. Such schemes may be open!ended or close!ended schemes as described earlier. Such schemes may be classified mainly as followsA
i.
G#o/t" , EBuit( O#iente )$"e&e
7E

$he aim of Irowth funds is to provide capital appreciation over the medium to long!term. Such schemes normally invest a ma<or part of their corpus in equities. Such funds have comparatively high risks. $hese schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. $he investors must indicate the option in the application form. $he mutual funds also allow the investors to change the options at a later date. Irowth schemes are good for investors having a long!term outlook seeking appreciation over a period of time.
ii.
In$o&e , De1t O#iente )$"e&e $he aim of the income funds is to provide regular and steady investors. Such scheme generally invests in fi&ed income securities such as bonds, corporate debentures, Iovernment securities and money market instruments. Such funds are less risky compared to equity schemes. $hese funds are not affected because of fluctuations in equity markets. $he -./s of such funds are affected because of change in interest rates in the country.
iii.
Balan$e Fun $he aim of balance funds is to provide both growth and regular income as such schemes invest both in equities and fi&ed income securities in the proportion indicated in their offer documents. $hese are appropriate for investors looking for moderate growth. $hey generally invest @E!FEN in equity and debt instruments. $hese funds are also affected because of fluctuations in share prices in the stock markets. Kowever, -./s of such funds are likely to be less volatile compared to pure equity funds.
71

i%. Gilt Fun $hese funds invest e&clusively in government securities. Iovernment securities have no default risk. -./s of these schemes also fluctuate due to change in interest rates and other economic factors as are the case with income or debt oriented schemes.
%.
In eC Fun ! Inde& 5unds replicate the portfolio of a particular inde& such as the 4S3 Sensitive inde&, S*H -S3 DE inde& ,-ifty0, etc. $hese schemes invest in the securities in the same weight age comprising of an inde&. -./s of such schemes would rise or fall in accordance with the rise or fall in the inde&, though not e&actly by the same percentage due to some factors known as 8tracking error9 in technical terms.
%i.
Mone(=Ma#Aet Mutual Fun ! $hese funds invest in highly liquid and safe securities like commercial paper, bankers acceptances, and certificates of deposits. $reasury billsQ etc., which are called money market instruments.
%ii.
TaC )a%ing )$"e&e!
7;

$his schemes offer ta& rebates to the investors under specific provisions of the Indian Income $a& laws as the Iovernment. "ffers ta& incentives for investment in specified avenues. Investment made in 3quity %inked Saving Schemes ,3%SS0 and Hension Schemes are allowed as deduction u)s JJ of the Income $a& .ct 16F1.
2.1 OB9ECTI5E) OF THE )TUD3
1.
$o track investors attitude, performance and behavior with respect to financial institutions and financial products.
;.
$o find new and more effective ways of ensuring investor satisfaction and to find efficient ways of communicating it.
77

7. $o conduct the study with references to Ootak Mahindra products and the competitive scenario in which Ootak Mahindra operates. @. $o study the structure of investment opportunities.
2.2 )CO0E OF THE )TUD3
$he study includes investors, financial institutions, investors who are interested in Ootak Mahindra .sset Management ompanys mutual fund and also the individuals who are interested in the investment on the mutual fund. $he individuals without investment are also included in the scope of the study.
2.- )TATEMENT OF THE 0ROBLEM
$he investment ob<ective of Ootak Mahindra .sset Management
o is 8to generate
capital appreciation from a diversified portfolio of predominantly equity and equity related securities or securities issued by central and state government9. 2espite this ob<ective, the reasons like mutual fund investments are sub<ect to market risk, there is no assurance or guarantee that the ob<ective of the scheme can be achieved and also
7@

the -et .sset /alue ,-./0 of the units can go up or down depending on factors affecting the capital and money market, many of the investors tend not to invest in the mutual fund investment.
2.. O0ERATIONAL DEFINITION) OF CONCE0T)
NET A))ET 5ALUE 6NA57+ =
-et .sset /alue ,-./0 denotes the performance of particular scheme of a mutual fund Mutual 5unds invest he money collected from the investors in securities markets. In simple words, -et .sset /alue is the market value of the securities held by the scheme. Since market value of securities changes every day, -./ of a scheme also varies on day!to!day basis. $he -./ per unit is market value of securities of scheme divided by the total number of units of the scheme on any particular date.
Fo#&ula of t"e $al$ulation of Net A!!et 5alue+
Market /alue of Investments ! %iabilities -et .sset /alue R !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! -o. of units "utstanding
+./. Institute of Management 7D
Kowever, most people refer loosely to the -./ per unit as -./, ignoring the Sper unitS.
A!!et Manage&ent Co&'an( 6AMC7

Hrofessional managers run an .M . $he .M conducts the necessary research *
based on it, manages the fund or portfolio. It is responsible for floating, managing, redeeming the schemes( it also handles the administrative chares. It receives the fees for the services rendered by it.
Ri!A
+isk may relate to loss of capital, delay in repayment of capital, non!payment of interest, or variability of returns.
2.E RE)EARCH METHODOLOG3
Hrimary .nalytical +esearch Method was used for the study. Tuestionnaire was prepared and used for collecting the data about individual investors preference towards various investment avenues, their portfolio behaviors. $he research required primary and secondary source of data. $he primary data is obtained through
7F

structured questionnaires which were collected from Investors in Mayanagar 4anks and 4rokerage "ffices such as .&is 4ank, +eliance Money, 4a<a< apital etc,. Secondary 2atas are the one which is collected from web site of Ootak Mahindra, investors and company records.
)a&'ling De!ign $he Sampling technique used in this research is onvenient Mudgment Sampling
Method. Mudgment +andom Sampling, which by using the available information, concerning the population, attempts to design a more efficient sample. $he study includes investors, financial institutions, investors who are interested in Ootak Mahindra .sset Management ompanys mutual fund and also the individuals who are interested in the investment on the mutual fund. $he individuals without investment are also included in the study.
)a&'le )i*e . sample size of 1EE people was selected for the study. $he sample for data collection was within the geographical boundaries of 4angalore ity, Mayanagar.
)ou#$e! of Data 0#i&a#( ata /a! $olle$te 1( Tuestionnaires Tuestion schedules
7G

Interviews
)e$on a#( ata /a! $olle$te f#o& 5act Sheets of the ompany 'ebsites, newspapers and <ournals.
0e#io of )tu ( $he study was made during 1st Manuary ;EEJ to 71st Manuary ;EEJ.
2.< LIMITATION) OF THE )TUD3
7J

1. . descriptive research was undertaken for the purpose of pro<ect. 4ut descriptive research has its own limitations regarding the selection of sample size of sample unit. ;. Some of the data gathered from the mutual fund holders may not be reliable. 7. $ime limit was also a constraint while conducting the study. So, the study does not give a picture of the whole market. @. $ime factor, as a period of one month, for gathering data is inadequate gamut of information needs to be synchronized to give much more view of the problems and prospects. D. 2etailed and depth research was not conducted due to financial factors. F. $he study curtails comparison as it was done only in one city i.e. 4angalore. G. $he information provided by the organizations was limited to a far e&tent due to drawbacks like competition. as the
comprehensive
2.? O5ER5IE4 OF THE RE0ORT
76

In hapter 1 this report bring out the Ieneral Introduction and e&plains the theoretical background of the organization
hapter ; includes the 2esign of the study. It covers the ob<ectives, scope, statement of the problem, +eview of literature, operational definitions, +esearch Methodology, statement of hypothesis, sampling methods, 2ata .nalysis tool, overview of the +eport and the limitations.
hapter 7 includes the profile of the organization, profile of the study unit, organizational chart and functional department of the organization.
hapter @ includes the analysis. It covers the .nalysis * Interpretation
hapter D includes the summary, which covers findings, contribution of the study, Suggestions, onclusion, Tuestionnaire and 4ibliography.
-.1 0ROFILE OF THE ORGANI)ATION
@E

Co#'o#ate 0#ofile Ootak Mahindra is one of India?s leading financial institutions, offering complete financial solutions that encompass every sphere of life. 5rom commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates.
Ootak Mahindra .sset Management ompany %imited ,OM.M 0, a wholly owned subsidiary of OM4%, is the .sset Manager for Ootak Mahindra Mutual 5und ,OMM50. OM.M started operations in 2ecember 166J and has over @ %ac investors in various schemes. OMM5 offers schemes catering to investors with varying risk ! return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. OMM5 has been registered with S34I vide registration number M5)E7J)6J)1 dated ;7rd Mune 166J.
$he sponsor company, Ootak Mahindra 5inance %imited ,OM5%0, was converted into Ootak Mahindra 4ank %imited ,Ootak 4ank0 in March ;EE7 their being granted a 4anking %icense by +eserve 4ank of India. OM5% promoted by Mr. #day S Ootak, Mr. S.....Hinto and Ootak * o., was incorporated on -ovember ;1, 16JD, under the name Ootak apital Management 5inance %imited.
In early 16JF, the promoters were <oined by %ate Mr.Karish Mahindra and Mr. .nand I Mahindra and the %imited. Ootak * ompanys name was changed to Ootak Mahindra 5inance o is a highly respected trading company of Mumbai, with
international business. OM5% started with a capital base of +s.7E.JJ lakhs. 5rom
@1

being a provider of a single financial product, OM5% grew substantially during the seventeen years of its e&istence into a highly diversified financial services company and has now converted into a 4ank. .s on September 7E, ;EED, the net worth of Ootak 4ank is around +s. JEE crore and combined with its subsidiaries, the Iroup net worth ,before minority interest0 is around +s. ;,EEE crore. $here are over @G,EEE shareholders of Ootak 4ank.
$he Sponsor and its subsidiaries ) associates offer wide ranging financial services such as loans, lease and hire purchase, consumer finance, home loans, commercial vehicles and car finance, investment banking, stock broking, primary market distribution of equity and debt products and life insurance. $he group has offices in over JJ Indian cities and also present internationally in Mauritius, %ondon, 2ubai and -ew >ork. Ootak Mahindra ,#O0 %imited, an ultimate subsidiary of Ootak 4ank, is the first company owned from India to be registered with the 5inancial Services .uthority in #O. Ootak Mahindra "ld Mutual %ife Insurance %imited is a <oint venture between Ootak 4ank and "ld Mutual Hlc based in the #O and with large presence in the South .frican insurance market.
Some of the other subsidiaries of Ootak 4ank are Ootak Mahindra Securities %imited, Ootak Mahindra Hrime %imited, Ootak Mahindra International %imited, Ootak Mahindra Hrivate!3quity $rustee %imited, Ootak Mahindra Investments %imited, Ootak Mahindra Inc., and Ootak 5ore& 4rokerage %imited.$he Sponsor has been consistently profitable and dividend paying company since inception. .ll group companies are professionally run companies, employing over D,EEE professional staff including .s, M4.s and 3ngineers.
C#e it #e$ognition! an a/a# ! +
@;

-2$/ .'.+2S, ;EEF %IHH3+ 5#-2 .'.+2S, ;EEF I +. .'.+2S, ;EEF I +. M5+ 1 ,2ecember ;EE@ * 2ecember ;EED0 "#$%""O M"-3> 43S$ '3.%$K +3.$"+ 234$ ;EE7 +ISI% 43S$ 5#-2 .'.+2 ;EE7
-.2 KOTAK MAHINDRA GROU0
@7

Ootak Mahindra is one of India?s leading financial conglomerates, offering complete financial solutions that encompass every sphere of life. 5rom commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the diverse financial needs of individuals and corporate. $he group has a net worth of over +s. D,FE6 crore, employs around 1G,1EE people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 7@@ cities and towns in India and offices in -ew >ork, %ondon, 2ubai, Mauritius and Singapore. $he Iroup services around 7.F million customer accounts. $he <ourney so far
Ke( g#ou' $o&'anie! an t"ei# 1u!ine!!e!
@@
Ootak Mahindra 4ank $he Ootak Mahindra Iroup?s flagship company, Ootak Mahindra 5inance %td which was established in 16JD, was converted into a bank! Ootak Mahindra 4ank %td in March ;EE7 becoming the first Indian company to convert into a 4ank. Its banking operations offer a central platform for customer relationships across the group?s various businesses. $he bank has presence in ommercial /ehicles, +etail 5inance, orporate 4anking, $reasury and Kousing 5inance.
Ootak Mahindra apital ompany Ootak Mahindra apital ompany %imited ,OM 0 is India?s premier Investment 4ank. OM ?s core business areas include 3quity Issuances, Mergers * .cquisitions, Structured 5inance and .dvisory Services.
Ootak Securities Ootak Securities %td. is one of India?s largest brokerage and securities distribution houses. "ver the years, Ootak Securities has been one of the leading investment broking houses catering to the needs of both institutional and non!institutional investor categories with presence all over the country through franchisees and coordinators. Ootak Securities %td. offers online ,through www.kotaksecurities.com0 and offline services based on well! researched e&pertise and financial products to non!institutional investors.
Ootak Mahindra Hrime Ootak Mahindra Hrime %imited ,OMH0 ,formerly known as Ootak Mahindra Hrimus %imited0 has been formed with the
@D

ob<ective of financing the retail and wholesale trade of passenger and multi utility vehicles in India. OMH offers customers retail finance for both new as well as used cars and wholesale finance to dealers in the automobile trade. OMH continues to be among the leading car finance companies in India.
Ootak Mahindra .sset Management Management
ompany Ootak Mahindra .sset ompany
ompany Ootak Mahindra .sset Management
,OM.M 0, a subsidiary of Ootak Mahindra 4ank, is the asset manager for Ootak Mahindra Mutual 5und ,OMM50. OMM5 manages funds in e&cess of +s ;E,JEE crore and offers schemes catering to investors with varying risk! return profiles. It was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.
Ootak Mahindra "ld Mutual %ife Insurance %imited Ootak Mahindra "ld Mutual %ife Insurance %imited is a <oint venture between Ootak Mahindra 4ank %td. and "ld Mutual plc. Ootak %ife Insurance helps customers to take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent.
DIRECTOR) TRU)TEE COM0AN3
@F

#day S. Ootak 4. om, MMS has been an 3&ecutive /ice hairman and Managing 2irector of Ootak Mahindra 4ank %imited ,5ormerly known as Ootak Mahindra 5inance %imited0 since .ugust 1, ;EE;. Mr. Ootak is the principal founder and promoter of Ootak Mahindra 5inance %td. Ke is responsible for the growth of Ootak Mahindra from a fledgling finance company in 16JD to a financial institution providing the full basket of financial services today. Ke serves as hairman of the 4oard.
Mr. .mit 2esai is a graduate in
ommerce and %aw from the
4ombay #niversity. Ke is an advocate and has about ;E years of e&perience in criminal, economic and revenue laws. Mr. 2esai is associated with the Sponsor.
Mr. Iirish Sharedalal is a graduate in ommerce and .rts and also a 5ellow of the Institute of hartered .ccountants of India. 5ormerly a Senior Hartner of Messrs 2alal, 2esai and Oumana, a firm of hartered .ccountants, he has about @@ years of e&perience in the field of audit, ta&ation and management consultancy.
Mr. $ushar Mavani is a graduate in raigie 4lunt * legal field.
ommerce and %aw from the
4ombay #niversity. Ke is a partner with Messrs Mulla * Mulla * aroe and has about 1@ years of e&perience in the
@G

Mr. .nirudha 4arwe is a postgraduate in Mathematics and also a ertified .ssociate of Indian Institute of 4ankers,Mumbai. Mr. 4arwe has about @7 years of e&perience in the field of banking and financial services. Mr. 4arwe was actively associated with and responsible to a great e&tent for the success of the +esurgent India 4ond issue of S4I. Mr. 4arwe retired as the Managing 2irector of S4I I25 as hief 5inancial "fficer for 7 years. apital Markets %imited in "ctober 166J. .fter retirement, Mr. 4arwe worked with
Mr.
handrashekhar Sathe is a graduate with 4. $ech., hemical
3ngineering0 from II$, Mumbai. Ke has over ;G years? e&perience in 4anking and 5inance. Ke has been a part of the Senior Management team of the Ootak Mahindra Iroup since 166; and was responsible for setting up the 5i&ed Income Securities capability of Ootak Mahindra apital ompany. Mr. Sathe is a widely consulted e&pert on 5oreign 3&change and Money Markets in India and is a frequent contributor to financial newspapers, magazines and $/ -ews channels. Mr. Sathe was the hief 3&ecutive "fficer of the .M for the period, 1st .pril, 166J to 7Eth -ovember, ;EE1 and currently heads the +isk Management function at Ootak Mahindra 4ank %imited. Mr. Sathe is associated with the Sponsor.
@J
Investors preferences towards Mutual Funds of Kotak -.- )CHEME DETAIL) OF KOTAK MAHINDRA
1. KOTAK -@
"b<ectiveA ! $he investment ob<ective is to generate capital appreciation from a portfolio of predominantly equity and equity related securities with investment in, generally not more than 7E stock. Structure A! "pen 3nded 3quity Irowth Scheme
Minimum investmentA! +s D,EEE
2. KOTAK TECH
"b<ectiveA ! $he investment ob<ective is to generate capital appreciation from a predominantly equity and equity related securities issued by multinational companies. StructureA ! "pen 3nded 3quity Irowth Scheme. Minimum investmentA! +s D,EEE
@6

-. KOTAK MNC
"b<ectiveA ! $he investment ob<ective is to generate capital appreciation from a portfolio of predominantly equity and equity related securities issued by multinational companies. StructureA ! "pen 3nded 3quity Irowth Scheme
Minimum investmentA ! +s D,EEE
.. KOTAK BALANCE
"b<ectiveA !
$he investment ob<ective is to achieve growth by investing in 3quity
and equity related instruments, balanced with income generation by Investing in debt and money market instruments Structure A! "pen 3nded 4alanced Scheme.
Minimum investmentA! +s D,EEE
DE

E. KOTAK INCOME 0LU)
"b<ectiveA ! $o enhance returns over a portfolio of debt instruments with a moderate e&posure in 3quity * 3quity related instruments StructureA! "pen 3nded Income Scheme Minimum InvestmentA ! +s D,EEE
<. KOTAK GILT
"b<ectiveA ! $o generate risk free returns through investments in sovereign Securities issued by the central government and ) or a state in such securities StructureA ! "pen 3nded 2edicated Iilt Scheme government and ) or reverse repos
Minimum InvestmentA ! Savings * investment Hlan( +s D,EEE Serial Hlans( +s 1E lakhs
D1

?. KOTAK BOND
"b<ectiveA !
$o create a portfolio of debt and money market instruments of
different maturities so as to spread the risk across a wide maturity Korizon * different kinds of issuers in the debt market Ootak 4ond Short $erm Hlan $o provide reasonable returns and high level of liquidity by investing in debt * money market instruments of different maturities, So as to spread the risk across different kinds of issuers in the debt market.
StructureA !
"pen 3nded 2ebt Scheme
Minimum InvestmentA ! 2eposit Hlan +s D,EEE 'holesale HlanA +s 1 lakh Short $erm HlanA +sD, EEE Institutional Hlan( +s 1 crore
D;

>. KOTAK LIFUID
"b<ective( ! $o provide reasonable returns and high level of liquidity by across different kinds of Issuers in the debt markets Structure( ! "pen 3nded 2ebt Scheme Minimum InvestmentA ! +s D,EEE Institutional planA +s 1 crore Institutional Hremium HlanA +s ;E crores
Investing in
debt and money market instruments of different Maturities so as to spread the risk
;. KOTAK FLOATER
"b<ectiveA ! $o reduce the interest rate risk associated with investments in fi&ed rate instruments by investing predominantly in floating rate securities, money market Instruments and using appropriate derivatives StructureA "pen 3nded 2ebt Scheme
Minimum InvestmentA +s D,EEE.
D7

1@. KOTAK D3NAMIC INCOME
"b<ectiveA $o ma&imize returns through an active management of a portfolio of debt and securities. StructureA "pen 3nded 2ebt Scheme
Minimum InvestmentA +s D,EEE
11. KOTAK GLOBAL INDIA "b<ectiveA $o generate capital appreciation from a diversified portfolio of
predominantly equity and equity related securities issued by globally competitive Indian ompanies.
Hig"lig"t! Investment in a diversified equity portfolio of Ilobally ompanies. $a& advantage +ecurring Investment 5acility available during continuous offer. +edemption on all 'orking days. ompetitive Indian
D@
Investors preferences towards Mutual Funds of Kotak -.. FACILITIE) 0RO5IDED B3 KOTAK MAHINDRA
1. )(!te&ati$ In%e!t&ent 0lan 6)I07+
Management of one?s finances to attain a defined goal calls for a lot of discipline, many a times self!imposed. "ur Systematic Investment Hlan is a tool, which can help you, in<ect this discipline in your financial management efforts. "ur Systematic Investment Hlan ,SIH0 provides you the facility to periodically invest a fi&ed sum over any defined period of time ,F months or more0 in a disciplined manner. SIHs help in arresting uncertainties associated with trying to time the market and thus, in the long term tends to iron out market fluctuations. It brings down your average cost of acquisition of units. .s you would allocate a fi&ed sum every month, you would buy more units when the prices of our units are lower than when they are higher.
2. )(!te&ati$ 4it" #a/al 0lan 6)407+
"ur Systematic 'ithdrawal Hlan ,S'H0 is designed receive a regular stream of payouts in a defined frequency and to book profits periodically $hrough our S'H you can redeem defined sums at a pre!defined frequency by giving a one!time instruction to us. >ou may choose to regularly withdraw either a fi&ed sum or <ust the appreciation on your investments.
$his facility caters to two segments of investor needsA 10 Investors wanting defined, regular funds inflow from their investments. ;0 Investors interested in booking gains at a regular interval.
DD

-. )(!te&ati$ T#an!fe# 0lan 6)T07+
Systematic $ransfer Hlan ,S'H0 caters a phased entry into the 3quity markets rather than putting in all your money at one trench and to book profits from your equity holdings. $hrough our S$H you can choose to switch your investments from one Ootak Mutual scheme to another at a predefined frequency by giving a one!time instruction to us. >ou also have a choice between switching a fi&ed sum or only the appreciation on your investments. >ou can choose to transfer either a fi&ed sum every defined period or only the appreciation on your investments over that period from one scheme to another. $he later is helpful, where you do not want the transfer to disturb your capital contribution.
.. Di#e$t C#e it Fa$ilit(+ "ur 2irect redit 5acility comes automatically to you ,unless you
choose otherwise0 if you hold an account with any of the 1; banks listed belowA .4- .M+" 4ank iti 4ank enturion 4ank of Hun<ab 2eutsche 4ank 2irect KS4 K25 I I I I24I 4ank Indusind 4ank Ootak Mahindra 4ank Standard hartered #$I 4ank
redit is safer, faster and convenient compared to the conventional cheque
payout mechanism.
DF
E. EC) of Di%i en !+ 3 S ,3lectronic account. 3 S as a mechanism for payout of 2ividends is faster, convenient, cost!effective and hassle!free. 4esides, you don?t run the risk of loss of dividend instruments in transit and the associated delays in obtaining a duplicate instrument. $his facility is currently offered across all banks in over @J locations. learing Service0 is a +eserve 4ank of India offering to facilitate,
among others, faster and seamless payout of dividends directly into your bank
<. Online T#an!a$tion! Fa$ilit(+ "ur "nline $ransactions 5acility allows you to have instant access to your investments at any time from anywhere <ust at the click of a button. Kere?s a list of all facilities you can avail by signing in for our "nline $ransactions 5acilityA !+edemption. !Switch "ver. !.ccount Statement.
DG
?. E&ail Co&&uni$ation+ $he world over, e!mail has been revolutionizing communication. -o more need to have paper trails( e!mail makes communication real!time, easy to store and retrieve and cost!effective. >ou can now opt to receive all your communication from us over e!mailA ! .ccount Statement for your investments !$ransaction onfirmations !2aily -./s and 2ividend #pdates !Market +eviews !Information on product launches, service initiatives, dividends, etc. !.nnual +eports !"ther Statutory ommunication
>. )M) )e#%i$e!+ 'ith cell phones fast qualifying for an assured parking in every pocket, we could not resist allowing you that e&tra convenience to be in touch with your investments whenever you wish, wherever you are. $ry our SMS facility to A !.ccess the latest -./s and 2ividends for our various schemes on SMS.
!+eceive information on product launches, service initiatives, dividends, etc. on SMS. !Host your queries to our 2edicated Services 2esk.
DJ
;. U' ate! f#o& Ma#Aet!+ Market +eview!'eekly Market +eview Uended ;6th 5ebruary ;EEJV Herformance!Monthly Herformance Snapshot Uas on 71)1;);EEGV Kalf >early .ccounts and Hortfolio! March ;EEG*September ;EEG 5act Sheet! urrent Month, >early 5act Sheet OM.M .nnual +eport!;EEF ! ;EEG redit Holicy for ;EEG!EJ
D6
..1 ANAL3)I) AND INTER0RETATION
$.4%3 -" ;.1 = $" S33 $K3 +3SH"-23-$ IS .- I- "M3 $.W .SS3SS33.
Sl. -o. 1 ;
.ttributes >es -o $otal
-o. of respondents GF ;@ 1EE
Hercentage GF ;@ 1EE
SourceA Hrimary 2ata InterpretationA It is clear from the table that out of 1EE respondents, GFN of the respondents say that they are income ta& assesses and the rest ;@N say that they are not.
$his is illustrated in the following graph.
FE
I+.HK -".1 = $" S33 $K3 +3SH"-23-$ IS .- I- "M3 $.W .SS3SS33.
10 Percentage -0 /0 .0 0
,-
./
2es Attributes
No
SourceA ! $able -oA ;.1
F1
$.4%3 -" ;.;. $" S33 'K3$K3+ +3H"-23-$S I-/3S$ 5"+ $.W 3W3MH$I"- "+ $.W S./I-IS
Sl. -o. 1 ;
-o. of respondents GE 7E 1EE
Hercentage GE 7E 1EE
SourceA Hrimary 2ata InterpretationA It is clear from the table that out of 1EE respondents, GEN of the respondents say that they invest for ta& e&emption and the rest 7EN say that they do not.
F;
I+.HK -" ;. $" S33 'K3$K3+ +3H"-23-$S I-/3S$ 5"+ $.W 3W3MH$I"- "+ $.W S./I-IS
10 Percentage -0 /0 .0 0
,0
30
2es Attributes
SourceA $able -oA ;.;
No
F7
$.4%3 -" ;.7. I-/3S$M3-$ H+353+3- 3 "5 +3SH"-23-$S
Sl. -o. 1 ; 7 @ D
.ttributes 5i&ed 2eposits +eal 3state Insurance Mutual 5und Iold $otal
-o. of respondents 77 ;G ;1 6 6 1EE
Hercentage 77 ;G ;1 6 6 1EE
SourceA Hrimary 2ata
InterpretationA It is clear from the table that out of 1EE respondents, 77N of the respondents invest in fi&ed deposits, ;GN invest in +eal 3state, ;1N in Insurance, 6N in Mutual 5und and the rest 6N say that they invest in gold.
F@

I+.HK -" 7. I-/3S$M3-$ H+353+3- 3 "5 +3SH"-23-$S
36 30 .6 .0 46 40 6 0
33 ., .4 5 5
Percentage
In su ra nc e M ut ua lF un d
e! os its
st at e
Fi +e d
ea l#
'
Attributes
) ol d
FD

SourceA $able -oA ;.7
$.4%3
-"
;.@
+3.S"-S
"5
I-/3S$M3-$
H+353+3- 3
"5
+3SH"-23-$S
Sl. -o. 1 ; 7 @ D
.ttributes %ess +isk Iood +eturns %iquidity .ssured +eturns "ther +easons $otal
-o. of respondents ;J ;1 1; 7F 7 1EE
Hercentage ;J ;1 1; 7F 7 1EE
SourceA Hrimary 2ata InterpretationA It is clear from the table that out of 1EE respondents, ;JN of the respondents prefer investment due to less risk, ;1N due to good returns, 1;N due to liquidity, 7FN due to assured returns and the rest 7N do it due to other reasons.
FF

I+.HK
-"
@.
+3.S"-S
"5
I-/3S$M3-$
H+353+3- 3
"5
+3SH"-23-$S
/0 36 30 .6 .0 46 40 6 0
3.1 .4 4. 3
"ess $isk )ood $eturns "i7uidity %ssured $eturns Other $easons
Percentage
Attribute
SourceA $able -oA ;.@
FG
$.4%3 -" ;.D. #++3-$ I-/3S$M3-$ H"+$5"%I" "5 +3SH"-23-$S
Sl. -o. 1 ; 7
.ttributes Iovt securities and bonds Mutual funds * company 52s 3quity Shares $otal
-o. of respondents F1 1J ;1 1EE
Hercentage F1 1J ;1 1EE
InterpretationA It is clear from the table that out of 1EE respondents, F1N of the respondents invest in Iovt securities and bonds, 1JN in Mutual funds and company fi&ed deposits and the rest ;1N in equity shares.
FJ

$his is illustrated in the following graphA
I+.HK -" D. #++3-$ I-/3S$M3-$ H"+$5"%I" "5 +3SH"-23-$S
,0 -0 60 /0 30 .0 40 0
-4
Percentage
41
.4
)ovt securities Mutual (unds 8 #7uity Shares and bonds com!any F'9s Attributes
SourceA $able -oA ;.D
F6
$.4%3 -" ;.F. -.$#+3 "5 I-/3S$M3-$ $K.$ $K3 +3SH"-23-$S %IO3
Sl. -o. 1 ; 7
.ttributes Steadily .t average rate 5ast $otal
-o. of respondents F1 ;G 1; 1EE
Hercentage F1 ;G 1; 1EE
InterpretationA It is clear from the table that out of 1EE respondents, F1N of the respondents like their investment to grow steadily, ;GN in an average rate and the rest 1;N in a fast rate.
GE

I+.HK -" F. -.$#+3 "5 I-/3S$M3-$ $K.$ $K3 +3SH"-23-$S %IO3
,0 -0 60 /0 30 .0 40 0
-4
Percentage
., 4.
Steadily
%t average rate Attributes
Fast
SourceA $able -oA ;.F
G1
$.4%3 -" ;.G H3+ 3-$.I3 "5 I- "M3 $K.$ $K3 +3SH"-23-$S I-/3S$
Sl. -o. 1 ; 7
.ttributes DN DN ! 1EN More than 1EN $otal
-o. of respondents ;@ 7G 76 1EE
Hercentage ;@ 7G 76 1EE
InterpretationA It is clear from the table that out of 1EE respondents, ;@N of the respondents invest DN of their total income, 7GN invests D!1EN and the rest 76N invest more than 1EN.
G;
I+.HK -" G. H3+ 3-$.I3 "5 I- "M3 $K.$ $K3 +3SH"-23-$S I-/3S$
/6 /0 36 30 .6 .0 46 40 6 0
3,
35
Percentage
./
6:
6: - 40: Attribute
More than 40:
G7

SourceA $able -oA ;.G
$.4%3 -" ;.J $" S33 'K3$K3+ $K3 +3SH"-23-$ IS .- I-/3S$"+ "5 M#$#.% 5#-2
Sl. -o. 1 ;
-o. of respondents ;G G7 1EE
Hercentage ;G G7 1EE
InterpretationA It is clear from the table that out of 1EE respondents, only ;GN of the respondents are investors of mutual funds and the rest G7N are not.
G@

I+.HK -" J. $" S33 'K3$K3+ $K3 +3SH"-23-$ IS .- I-/3S$"+ "5 M#$#.% 5#-2
10 ,0 -0 Percentage 60 /0 30 .0 40 0 2es Attribute .,
,3
No
GD

SourceA $ableA ;.J.
$.4%3 -" ;.6 +3.S"-S 5"+ -"$ I-/3S$I-I I- M#$#.% 5#-2S
Sl. -o. 1 ; 7
.ttributes .wareness +isky +eturns not assured $otal
-o. of respondents 1D DJ ;G 1EE
Hercentage 1D DJ ;G 1EE
InterpretationA It is clear from the table that out of 1EE respondents, 1DN of the respondents do not invest in mutual funds because of lack of awareness, DJN as it is risky and the rest ;GN as the returns are not assured.
GF

I+.HK -" 6. +3.S"-S 5"+ -"$ I-/3S$I-I I- M#$#.% 5#-2S
,0 -0 Percentage 60 /0 30 .0 40 0 %*areness $isky Attribute $eturns not assured 46 ., 61
GG

$.4%3 -" ;.1E +3.S"-S 5"+ I-/3S$I-I I- M#$#.% 5#-2S
Sl. -o. 1 ; 7 @
.ttributes %ess +isky %iquidity Hrofessional Mgmt 5ast .ppreciation $otal
-o. of respondents ;1 7E ;@ ;D 1EE
Hercentage ;1 7E ;@ ;D 1EE
InterpretationA
GJ

It is clear from the table that out of 1EE respondents, ;1N of the respondents feel that investing in mutual funds are less risky and hence they invest, 7EN invest due to liquidity, ;@N due to Hrofessional management and the rest ;DN due to fast appreciation.
I+.HK -" 1E. +3.S"-S 5"+ I-/3S$I-I I- M#$#.% 5#-2S
36 30 .6 .0 46 40 6 0
30 .4 ./
Percentage
.6
"e ss
Pr o( es si
Attribute
Fa st %
!! re ci at io n
G6
$ isk y
di ty
"i 7u i
on al M
gm t

SourceA $able -oA ;.1E
$.4%3 -" ;.11 OI-2 "5 M#$#.% 5#-2 $K.$ $K3 +3SH"-23-$S H+353+
Sl. -o. 1 ;
.ttributes "pen!ended losed!ended $otal
-o. of respondents DG @7 1EE
Hercentage DG @7 1EE
InterpretationA
JE

It is clear from the table that out of 1EE respondents, DGN of the respondents prefer open!ended mutual funds and the rest @7N closed!ended ones.
I+.HK -" 11. H+353+
OI-2 "5 M#$#.% 5#-2 $K.$ $K3 +3SH"-23-$S
J1
-0 60 Percentage /0 30 .0 40 0
6, /3
O!en-ended Attributes
losed-ended
$.4%3 -" ;.1; $>H3 "5 S K3M3 $K3 +3SH"-23-$S H+353+
Sl. -o. 1
.ttributes 3quity
-o. of respondents @6
Hercentage @6
J;

; 7 2ebit 4alance $otal @; 6 1EE @; 6 1EE
InterpretationA It is clear from the table that out of 1EE respondents, @6N of the respondents prefer equity type of scheme, @;N prefer debit type of scheme and the rest 6N due to balance type of scheme.
I+.HK -" 1;. $>H3 "5 S K3M3 $K3 +3SH"-23-$S H+353+
J7
-0 60 Percentage /0 30 .0 40 0 #7uity 'ebit Attributes

SourceA $able -oA ;.1;
/5 /.
Balance
$.4%3 -" ;.17. $K3 H+353+3- 3 .M"-I 2I553+3-$ M#$#.% 5#-2S
J@

Sl. -o. 1 ; 7 @ D .ttributes #$I Ootak K25 4irla Sun %ife %I $otal -o. of respondents ;D 1D ;7 ;E 1G 1EE Hercentage ;D 1D ;7 ;E 1G 1EE
InterpretationA It is clear from the table that out of 1EE respondents, 1DN of the respondents prefer #$I mutual funds, 1DN prefer Ootak, 7EN prefer K25 , 16N $empleton and the rest ;1N prefer %I .
I+.HK -" 17. $K3 H+353+3- 3 .M"-I 2I553+3-$ M#$#.% 5#-2S

+./. Institute of Management JD
30 .6 Percentage .0 46 40 6 0 U&I ;otak <'F Birla Sun li(e "I 46 .6 .3 .0 4,
Attributes
$.4%3 -" ;.1@ $" .-.%>S3 'K3$K3+ $K3 +3SH"-23-$ S33S $K3 4+.-2 -.M3 'KI%3 I-/3S$I-I
JF
Sl. -o. 1 ;
-o. of respondents 6@ EF 1EE
Hercentage 6@ EF 1EE
InterpretationA It is clear from the table that out of 1EE respondents, 6@N of the respondents see brand name while investing and the rest FN are not.
JG

I+.HK -" 1@. $" .-.%>S3 'K3$K3+ $K3 +3SH"-23-$ S33S $K3 4+.-2 -.M3 'KI%3 I-/3S$I-I
400 50 10 ,0 -0 60 /0 30 .0 40 0
5/
Percentage
2es Attribute No
SourceA $ableA ;.1@
JJ

$.4%3 -" ;.1D IMM32I.$3 +3. $I"-S IS$" O M.+O3$ .S3 "5 S#223- 2IH I-
Sl. -o. 1 ; 7
.ttributes 'ould withdraw the investment 'ould wait and watch 'ould invest more in it $otal
-o. of respondents 76 DD F 1EE
Hercentage 76 DD F 1EE
InterpretationA It is clear from the table that out of 1EE respondents, 76N of the respondents would withdraw the investment, DDN would wait and watch the show and the rest FN say that they would invest more.
J6
I+.HK -" 1D. IMM32I.$3 +3. $I"- I- .S3 "5 S#223- 2IH I- S$" O M.+O3$
-0 60 Percentage /0 30 .0 40 0 35
66
=ould =ould *ait and =ould invest *ithdra* the *atch more in it investment Attributes
SourceA $able -oA ;.1D
6E
$.4%3 -" ;.1F $" O-"' $K.$ $K3 +3SH"-23-$S K./3 K3.+2 "5 O"$.O M#$#.% 5#-2
Sl. -o. 1 ;
-o. of respondents 1EE EE 1EE
Hercentage 1EE EE 1EE
InterpretationA It is clear from the table that out of 1EE respondents, all 1EE respondents have heard of Ootak Mutual 5und.
61
I+.HK -" 1F. $" O-"' $K.$ $K3 +3SH"-23-$S K./3 K3.+2 "5 O"$.O M#$#.% 5#-2
4.0 400 Percentage 10 -0 /0 .0 0 2es Attribute

SourceA $ableA ;.1F
400
400
0 No
6;
$.4%3 -" ;.1G /I3'S "- O"$.O M5 .-2 I$S S K3M3S
Sl. -o. 1 ; 7
.ttributes Iood Moderate -ot aware $otal
-o. of respondents ;D @6 ;F 1EE
Hercentage ;D @6 ;F 1EE
InterpretationA It is clear from the table that out of 1EE respondents, 1DN of the respondents view that Ootak M5 is good, 7FN feel that it is moderate and the rest @6N say that they are not aware.
67
I+.HK -" 1G. /I3'S "- O"$.O M5 .-2 I$S S K3M3S
-0 60 Percentage /0 30 .0 40 0 )ood Moderate Attributes Not a*are .6 ./5
SourceA $able -oA ;.1G
6@
E.1 FINDING)
Ma<ority of the respondents are income ta& assesses and invest for the purpose of $a& e&emption or savings.. Most of the respondents prefer to invest in 5i&ed 2eposits, +eal 3state and Insurance because of less risk and assured returns. $he investment portfolio of ma<ority of the respondents is in govt securities and bonds. $hough mutual funds e&ist in the market, the people who tend to invest in it is very low compared to other investments. $he reason behind is the high risk factor involved with Mutual 5unds. Ma<ority of the people prefer open!ended equity scheme. Ma<ority of Investors prefer brand name of the company and then invest in their schemes so #$I as gained more investors as risk is less and there is an assured return. If there is a sudden dip in Stock Market ma<ority of Investors doesnt withdraw their money instead wait for some time. .mong the surveyed Investors everyone has heard Ootak Mutual 5und and ma<ority of them have rated Ootak Mutual 5und schemes as Moderate.
6D
E.2 CONTRIBUTION OF THE )TUD3
5rom this study the financial institutions)4anks can improve in some of the following fields of services and communicationsA !
1.
Kelp the financial institutions ,OM0 to provide goods and services in private
sector and convenience factor offered by the public sector. ;. Kelp local banks)small institutions to have big market share ,i.e. banks or institutions which are mot easily accessible gets more preference even if it is a local bank with out much brand image.0 7. Kelps the bank and institutions to provide 3!banking facility more effective
and accurate towards investors or customers. @. money. D. Kelp OM to find out, is OM users are considering OM as one stop shop most of the time. Kelp OM to find out, in Ootak Mahindra product perceived as being value for
6F
E.- )UGGE)TION)
1.
Hroper care should be taken to give the correct guidance to the investors so
that they will invest more. ;. Iood campaigns can be arranged so that people will know more about Mutual
5unds and will tend to invest in it. 7. -ice advertisements can be entertained so that people will get interest in
Mutual 5unds. @. D. Ootak can come up with good, attractive schemes for its investors. -owadays Indian Mutual fund Industry is attracting more and more retail
investors because of economic stability and increasing growth rate, it leads to gradual increase in the stock market indices. F. Interest rates are falling gradually and mutual fund industry is booming
because of this reason investors can move from 4ank deposits to mutual funds so mutual fund organizations should bring new schemes to satisfy the investors. G. Mutual fund schemes have not gained importance as there is a lack of
awareness about Mutual fund schemes so the e&ecutives of the organization should take certain steps to educate the investors.
6G
E.. CONCLU)ION
$he study 8Investors preferences towards Mutual 5unds9 was carried out on behalf of Mutual 5unds of Ootak Mahindra .sset Management ompany %td. $he data was collected from various sources and also through the tools like questionnaires and relevant interactions with concerned persons. $he needs were identified in the form of findings and suitable suggestions were put forth in the form of recommendations to the concerned authorities for further discussions. . few recommendations have been considered for implementation. Mutual fund schemes are sub<ect to market risk. "n the basis of above statements it has proved higher the risk higher the return and lower the risk lower the return. -owadays Mutual 5und schemes are increasing because of falling interest rates so the organization can provide further new schemes and attract the new customers. Investment in Mutual fund schemes gives diversified portfolio to investors. -owadays Indian Mutual 5und industry is attracting more and more retail investors because of economic stability and increasing growth rate, it leads to gradual increase in the stock market Indices.
6J
FUE)TIONNAIRE ON IN5E)TOR) 0REFERENCE) TO4ARD) MUTUAL FUND) 4ITH REFERENCE TO KOTAK MUTUAL FUND
2ear Sir)Madam, IG He&ant".)G student of R.5.I.MG would like your kind attention for a few minutes to answer this questionnaire. $his is part of a survey on HIn%e!to#! '#efe#en$e to/a# ! Mutual Fun ! /it" #efe#en$e to KotaA 6KMAMC7I as a partial fulfillment of BBM course. $herefore, I kindly request you to fill the following questionnaire. $he information provided by you will be used for academic purpose only * will be kept confidential.
1. -ame ;. .ge 7. Iender @. "ccupation
A A A A Male 4usiness Kousewife Service ,0 ,0 ,0 5emale Hrofession Students ,0 "thers ,0 ,0 ,0
,0 D. .nnual Income A 4elow 1EE,EEE ,0 1EE,EE1 to ;EE,EEE ,0
66

;EE,EE1 to 7EE,EEE DEE,EE1 * above F. -umber of dependentsA ,0 ,0 7EE,EE1 to DEE,EEE ,0
0lea!e 'ut ti$A on (ou# an!/e#! fo# t"e follo/ing Bue!tion!
1. .re you an Income $a& .ssesseX >es -o -o
;. .re you investing for ta& e&emption or ta& savingsX >es -o 7. 'hat kind of invest options you preferX 5i&ed 2eposit +eal 3state Insurance Mutual 5und Iold @. 'hy you prefer the above optionX %ess +isk Iood +eturns %iquidity .ssured +eturns "ther +easons
1EE

D. >our current investment portfolio includes ma<ority of Iovt. securities and 4onds Mutual funds * company fi&ed deposits 3quity shares F. >ou would like your investment to grow Steadily .t average rate 5ast
G. 'hat percentage of your income do you investX #p to D N DN!!! 1EN More than 1EN J. .re you an investor in mutual fundX >es -o 6. If answer is -o, why you are not investing in mutual fundX .wareness +isky +eturns not assured 1E. If answer is >es, why do you prefer mutual fundX %ess risky %iquidity Hrofessional mgt. 5ast appreciation 11. 'hat kind of mutual fund you preferX "pen! ended losed!ended
+./. Institute of Management 1E1

1;. 'hat type of scheme do you preferX 3quity 2ebt 4alance
17. If you are an investor of M5, which ompany you preferX #$I Ootak K25 4irla Sun %ife %I 1@. 'hile buying a Mutual 5und scheme do you see brand nameX >es -o 1D. Kow would you react if the Stock Market immediately dipsX I would withdraw my money I would wait * watch I I would invest more in it.
1F. Kave you heard of Ootak mutual fund and its schemeX >es -o 1G. >our views on Ootak mutual fund and its schemeX Iood Moderate
+./. Institute of Management 1E;

-ot aware $hank you very much for your valuable time * co!operation.
1E7
BIBLIOGRA0H3 BooA! Aut"o# +onald M Mordan / O 4halla 4y I.M. Handey % M 4hole Hreethi Singh 9ou#nal! an Ne/!'a'e#! 4usiness 'orld Mint 5inancial 3&press 4e1!ite! www.kotakmutual.com www.google.com www.sebi.com www.mutualfundsindia.com www.amfiindia.com www.wikipedia.org
+./. Institute of Management 1E@
BooA Management Investment Management 5inancial Management Gth 3dition 5inancial Institutions and Markets Hortfolio Management

1.1 General Introduction: Investors Preferences Towards Mutual Funds of Kotak

Uploaded by

Copyright:

Available Formats

You might also like

1.1 General Introduction: Investors Preferences Towards Mutual Funds of Kotak

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

1.1 General Introduction: Investors Preferences Towards Mutual Funds of Kotak

Uploaded by

Copyright:

Available Formats

Investors preferences towards Mutual Funds of Kotak