A Dissertation Report on

“A Study on Recent Trends of Mutual Fund With

Respect to Asset Under Management”

Submitted in partial fulfillment of the requirements for the

degree of
Master of Business Administration (MBA)

To
Savitribai Phule Pune University

By
Shimpi Dinesh Anil

Under the guidance of

Prof. M.N.Fulwani

Academic Year 2017-18

Through
S.N.J.B’s Late Sau. K. B. Jain College of Engineering,
Neminagar,
Tal. Chandwad, Dist. Nashik

1
 STUDENT’S DECLARATION

I hereby declare that this Dissertation Report entitled “A Study on Recent Trends of
Mutual Fund With Respect to Asset Under Management ” has been submitted by me is
based on actual work carried out by me under the guidance and supervision of Prof.
M.N.Fulwani. Any reference to work done by any other person or institution or any
material obtained from other sources have been duly cited and referenced. It is further to
state that this work is not submitted anywhere else for any examination.

Place: Chandwad Signature of the

Student

Date:

2
 ACKNOWLEDGEMENT
I take this opportunity to place my sincere gratitude to SNJB’s Late K.B. Jain College
of Engineering, Department of MBA and Savitribai Phule Pune University for
providing me with the wonderful opportunity of pursuing Dissertation Work as a Desk
Research Activity.

I wish to extend my gratitude to all the researchers, authors and various Editors of
Journal and Magazine for providing intellectual information at ease. This dissertation
project would not have been possible without their valuable inputs. I am grateful to them
for sparing their precious time in order to help me with the research report. I would also
like to thank the entire hub of online resource providers who was kind enough to lend
with valuable inputs related to area of my interest and supported me to put the same in
this work.

I am also grateful to my guide Prof. M.N.Fulwani for her able guidance and
constant motivation, which was instrumental in the timely completion of the project.

Dinesh Anil Shimpi

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 CERTIFICATE FROM THE GUIDE
This is to certify that Mr. Shimpi Dinesh Anil has completed the Project Report on “A
Study on Recent Trends of Mutual Fund With Respect to Asset Under
Management” under my guidance and supervision, and submitted the Report according
to the norms laid down by the Savitribai Phule Pune University. The material that has
been obtained from other sources is duly acknowledged in the report. It is further
certified that the work or its part has not been submitted to any other University for
examination under my supervision. I consider this work worthy for the award of the
degree of Master of Business Administration.

Signature of the
Guide
Place: Chandwad

Date:

4
 INDEX

Sr. No. Particulars Page No.

1. Introduction

2. Objectives of Study

3. Literature Review

4. Theoretical Background

5. Research Methodology

6. Data Analysis and Interpretation

7. Findings and Conclusions

8. Key Learning

9. Bibliography

10. Appendices

5
 1. INTRODUCTION

HISTORY OF MUTUAL FUND

The origin of mutual fund industry in India is with the introduction of the concept
of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated
from the year 1987 when non-UTI players entered the industry.

In the past decade, Indian mutual fund industry had seen a dramatic improvement, both
quality wise as well as quantity wise. Before, the monopoly of the market had seen an
ending phase, the Assets Under Management (AUM) was Rs. 67bn. The private sector
entry to the fund family rose the AUM to Rs. 470 billion in March 1993 and till April
2004, it reached the height of 1,540 billion. Putting the AUM of the Indian Mutual Funds
Industry into comparison, the total of it is less than the deposits of SBI alone, constitute
less than 11% of the total deposits held by the Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new in the
country. Large sections of Indian investors are yet to be intellectual with the concept.
Hence, it is the prime responsibility of all mutual fund companies, to market the product
correctly abreast of selling.

2.1 History – The Landmarks

1963: UTI is India’s first mutual fund.

1964: UTI launches US-64.

1971: UTI’s ULIP (Unit-Linked Insurance Plan) is second scheme to be Launched.

1986: UTI Master share, India’s first true ‘mutual fund’ scheme, launched.

1987: PSU banks and insurers allowed floating mutual funds; State Bank of India (SBI)
first off the blocks.

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1992: The Harshad Mehta-fuelled bull market arouses middle-class interest in shares and
mutual funds.

1993: Private sector and foreign players allowed; Kothari Pioneer first private fund house
to start operations; SEBI set up to regulate industry.

1994: Morgan Stanley is the first foreign player.

1996: SEBI’s mutual fund rules and regulations, which forms the basis of most current
laws, come into force.

1998: UTI Master Index Fund is the country’s first index fund.

1999: The takeover of 20th Century AMC by Zurich Mutual Fund is the first acquisition
in the mutual fund industry.

2000: The industry’s assets under management crosses Rs 1, 00,000 crore.

2001: US-64 scam leads to UTI overhaul.

2002: UTI bifurcated, comes under SEBI purview; mutual fund distributors banned from
giving commissions to investors; floating rate funds and Foreign debt funds debut.

2003: AMFI certification made compulsory for new agents; fund of funds launched.

The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank. The history of
mutual funds in India can be broadly divided into four distinct phases.

1. First Phase - 1964-87(UTI MONOPOLY)

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up
by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the
end of 1988 UTI had Rs.6,700 crores of assets under management.

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2. Second Phase - 1987-1993 (Entry of Public Sector Funds)

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Can bank
Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92).
LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under
management.

3. Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer
(now merged with Franklin Templeton) was the first private sector mutual fund registered
in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.The 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. As at the end of January
2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust
of India with Rs.44,541 crores of assets under management was way ahead of other
mutual funds.

4. Fourth Phase - since February 2003

This phase had bitter experience for UTI. It was bifurcated into two separate entities. One
is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as
on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the

8
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of
AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector
funds, the mutual fund industry has entered its current phase of consolidation and growth.
As at the end of September, 2004, there were 29 funds, which manage assets of
Rs.153108 crores under 421 schemes.

UTI was re-organized two parts:

1. The Specified Undertaking,

2. The UTI Mutual Fund

5. Fifth Phase - since 2004

The industry has also witnessed several mergers and acquisition recently, examples of
which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life. Sun F&C
Mutual Fund and PNB Mutual Fund by principal Mutual Fund. Simultaneously, more
international mutual fund players have entered India like Fidelity, Franklin Templeton
Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing
phase of growth of the industry through consolidated and entry of new international and
private sector players.

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 2. OBJECTIVES OF STUDY
 To Compare schemes return and risk with benchmark i.e. BSE and NSE

 To measure the risk-return relationship and market volatility, of the selected

Mutual Fund

 To study recent trends in growth of Mutual Funds industry

 To analyze the performance of various Mutual Fund under AUM schemes.

 To study most preferred Investment Avenue of the investors of AUM.

3. LITERATURE REVIEW
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1. Journal of Indian Research (ISSN: 2321-4155) Vol.1, No.4, October-
December, 2013, 115-131. Investor’s preference towards mutual fund in
comparison to other investment avenues

In today’s competitive environment, different kinds of investment avenues are

available to the investors. All investment modes have advantages & disadvantages. An
investor tries to balance these benefits and shortcomings of different investment modes
before investing in them. Among various investment modes, Mutual Fund is the most
suitable investment mode for the common man, as it offers an opportunity to invest in a
diversified and professionally managed portfolio at a relatively low cost. In this paper, an
attempt is made to study mainly the investment avenue preferred by the investors of
Mathura, and we have tried to analyze the investor’s preference towards investment in
mutual funds when other investment avenues are also available in the market.

2. IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-

487X, p-ISSN: 2319-7668 PP 86-93 A Study on Performance of Indian
Mutual Fund Schemes Investing in Overseas Securities

This paper studies various mutual fund schemes making investment in Overseas
Securities. Paper categorizes overseas mutual fund schemes on the basis of their
investment portfolio. Paper compares the returns on Overseas Mutual Fund Schemes in
comparison to similar portfolio schemes and return on them generated in US and China.
Paper also compares the returns of Mutual Fund Schemes investing abroad with average
returns generated in similar broad portfolio schemes in India.

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3. Volume 5, Issue 5 (May, 2016) Online ISSN-2277-1166 Abhinav
National Monthly Refereed Journal of Research in Commerce &
Management A Study Of Performance Evaluation Of Mutual Fund And
Reliance Mutual Fund

In this paper the researcher tried to evaluate the performance of Reliance open-
ended equity schemes with growth option. The period of the study spans from 1st April
2007 to 31st March 2016.To evaluate the performance of the selected mutual fund
schemes, monthly returns are compared with Benchmark BSE National 100 and
SENSEX returns.

4. IJIRST–International Journal for Innovative Research in Science &

Technology| Volume 2 | Issue 11 | April 2016 ISSN (online): 2349-6010 A
Study on Performance Evaluation of Mutual Funds Schemes in India

The present paper investigates the performance of open-ended, growth-oriented

equity schemes for the period from April 2011 to March 2015 of transition economy.
Daily closing NAV of different schemes have been used to calculate the returns from the
fund schemes. BSE-sensex has been used for market portfolio. The historical
performance of the selected schemes were evaluated on the basis of Sharpe, Treynor, and
Jensen’s measure whose results will be useful for investors for taking better investment
decisions. The study revealed that 14 out of 30 mutual fund schemes had outperformed
the benchmark return. The results also showed that some of the schemes had
underperformed; these schemes were facing the diversification problem.

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5. International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395 -0056 Volume: 04 Issue: 04 | Apr -2017 www.irjet.net p-
ISSN: 2395-0072 2017, IRJET | Impact Factor value: 5.181 | ISO 9001:2008
Certified Journal | Page 3581 A study of recent trends in Indian Mutual
Fund Industry Mital Bhayani

The papers aims to study the recent trends in mutual fund industry in India. It is
observed that mutual funds have become an important part of investment matrix.
Investment industry in India has gone through huge pace of reinventions, given changes
in monetary and political policies of government. In the same line the study attempts to
identify the major changes which can be marked for mutual funds as an investment
options.

6. Volume 3, Issue 2, February 2015 ISSN: 2327782 (Online) International

Journal of Advance Research in Computer Science and Management Studies
Growth and Performance of Indian Mutual Fund Industry during Past
Decades
The Mutual Fund Industry is a fast growing sector of the Indian Financial
Markets. They have become major vehicle for mobilization of savings, especially from
the small and household savers for investment in the capital market. Mutual Funds
entered the Indian Capital Market in 1964 with a view to provide the benefit of
diversification of risk, assured returns, and professional management. A mutual fund is a
special type of investment institution that acts as an investment conduit. It pools the
savings, particularly of the relatively small investors, and invests them in a well
diversified portfolio of sound investment. Mutual fund issue securities to the investors in
accordance with the quantum of money invested by them.

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 4. RESEARCH METHODOLOGY
Research refers to search for knowledge. One can also define research as a scientific and
systematic search for pertinent information on a specific topic. It is an art of scientific
investigation.

Research Methodology:-

It is the way to systematically solve a problem. The methodology adopted in this

study is explained below:-

 Research Design

A. Problem Defining:
In a competitive situation with multiple mutual funds operating in Indian market, it is
necessary to know about the performance of different mutual funds as the
performance of mutual fund decides about the future of Mutual Fund Company. In
this study my focus is upon performance of investors regarding various mutual fund
schemes and performance of this is my problem to be studied for research.

B. Literature Survey:
I have used newspapers, magazines related to business & finance & apart from
websites

C. Type of research:
The research is qualitative & descriptive in nature. Qualitative research is that talk
about the quality of the subject to be researched and Descriptive research is one that
describes things as exists in present.

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D. Data collection Design:

I. Sources of data :
 Primary Sources – I have used observation as primary source for
collecting data for my study.
 Secondary sources – I had collected my secondary data from websites
& journals.
II. Tools :
I have used column chart.

III. Data Interpretation :

Data interpretation is that in which we analysis the whole collected data
& tries to give it in simple words to be understandable.

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 RESEARCH DESIGN USED

1) Research Type Descriptive Research

2) Population Various loan proposal

3) Sample Frame Car loan

4) Sample Size 5 Applicant
5) Sampling Technique Stratified Random Sampling

6) Data
Primary Observation

7) Data Analysis/Technique Interpretation of Graph and

5. THEORETICALBACKGROUND

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4.1 MUTUAL FUND

A mutual fund is a financial intermediary that pools the savings of investors for
collective investment in a diversified portfolio of securities. A fund is “mutual” as all of
its returns, minus its expenses, are shared by the fund’s investors. Investors invest money
and get the units as per the unit value, which we called as NAV (net assets value). Mutual
fund is the most suitable investment for the common person as it offers an opportunity to
invest in diversified portfolio management, good research team, professionally managed
Indian stock, as well as the foreign market.

DEFINITION

A mutual fund is a kind of investment that uses money from many investors to
invest in stocks, bonds or other types of investment. A fund manager (or "portfolio
manager") decides how to invest the money, and for this he is paid a fee, which comes
from the money in the fund. Mutual funds are usually "open ended", meaning that new
investors can join into the fund at any time. When this happens, new units, which are like
shares, are given to the new investors. There are thousands of different kinds of mutual
funds, specializing in investing in different countries, different types of businesses, and
different investment styles. There are even some funds that only invest in other funds.

History of Mutual Funds in India and role of SEBI

Unit Trust of India was the first Mutual Fund set up in India in the year 1963. In early
1990s, Government allowed public sector banks and institutions to set up Mutual Funds.
In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The
objectives of SEBI are - to protect the interest of investors in securities, to promote the
development of, and to regulate the securities market.

As far as Mutual Funds are concerned, SEBI formulates policies and regulates the Mutual
Funds to protect the interest of the investors. SEBI notified regulations for the Mutual
Funds in 1993. Thereafter, Mutual Funds sponsored by private sector entities were
allowed to enter the capital market. The regulations were fully revised in 1996 and have

17
been amended thereafter from time to time. SEBI has also issued guidelines to the Mutual
Funds from time to time to protect the interests of investors.

How is a Mutual Fund set up?

A Mutual Fund is set up in the form of a trust, which has a sponsor, trustees, and asset
management company (AMC) and custodian. The trust is established by a sponsor or
more than one sponsor who is like a promoter of a company. The trustees of the Mutual
Fund hold its property for the benefit of the unit holders. Asset Management Company
(AMC) approved by SEBI manages the funds by making investments in various types of
securities. Custodian, who is registered with SEBI, holds the securities of various
schemes of the fund in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance and compliance
of SEBI regulations by the Mutual Fund.

Major Mutual Fund Companies in India

1. HDFC Mutual Fund

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 2. Kotak Mutual Fund

3. Bank Of Baroda Mutual Fund

4. SBI Mutual Fund

5. Share khan Broker

6. IDBI Mutual Fund

7. HSBC Mutual fund

8. Angel Broking

9. Indiabulls Services

10. Reliance Mutual Fund

11. LIC Mutual Fund

12. Birla Sun Life Mutual Fund

13. Unit Trust of India Mutual Fund

14. Escort Mutual Fund

15. Prudential ICICI Mutual Fund

16. Tata Mutual Fund

17. Can bank Mutual Fund

18. Benchmark Mutual Fund

19. Morgan Stanley Mutual Fund India

20. Franklin Templeton India Mutual Fund

MUTUAL FUND OPERATION FLOW CHART

19
Investors
 Pass back to Pool their money
with

Returns Fund
Manager

Securities
Generates Invest in

TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. thus mutual funds has variety of
flavors, being a collection of many stocks, an investors can go for picking a mutual fund
might be easy. There are over hundred of mutual find schemes to choose from. It is easier
to think of mutual fund in categories, mentioned below.

 TYPES OF MUTUAL FUND SCHEMES

Types of mutual fund

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 By Structure By Nature By Investment Other
Objectives Schemes

Open-ended Equity Funds Growth Tax Saving

Schemes Schemes Schemes

Close-ended Debt Funds Income Index Schemes

Schemes Schemes

Interval Balanced Funds Balanced Sector Specific

Schemes Schemes Schemes

Money Market
Schemes

1.BY STRUCTURE

1. Open-ended schemes:

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In case of open-ended schemes, the mutual fund continuously offers to sell and
repurchase its units at net asset value or NAV-related prices. Unlike close-ended
schemes, open-ended ones do not have to be listed on the stock exchange and can offer
repurchase soon after allotment. Investors can enter and exit the scheme any time during
the life of the fund. There is no fixed redemption period in open-ended schemes, which
can be terminated whenever the need arises. The fund offers a redemption price at which
the holder can sell units to the fund and exit. Besides, an investor can enter the fund again
by buying units from the fund at its offer price. Such funds announce sale and repurchase
prices from time-to-time. The investors can develop their income or saving plan due to
free entry and exit frame of funds. Open-ended schemes usually come as a family of
schemes, which enable the investors to switch over from one scheme to another of same
family.

2. Close-ended schemes:
Close-ended schemes have a fixed corpus and a stipulated maturity period ranging
between 2 to 5 years. Investors can invest in the scheme when it is launched. The scheme
remains open for a period not exceeding 45 days. Investors in close-ended schemes can
buy units only from the market, once initial subscriptions are over and thereafter the units
are listed on the stock exchanges where they dm be bought and sold. If an investor sells
units directly to the fund, he cannot enter the fund again, as units bought back by the fund
cannot be reissued. The close-ended scheme can be converted into an open-ended one.
The units can be rolled over by the passing of a resolution by a majority of the unit-
holders.
3. Interval scheme:
Interval scheme combines the features of open-ended and close-ended schemes. They are
open for sale or redemption during predetermined intervals at NAV related prices.

2. BY NATURE

1. Debt Mutual Fund Schemes :

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Liquid Funds invest in highly liquid money market instruments. They invest in securities
with a residual maturity of not more than 91 days. Investors can park money in them for a
few days to few months.
2. Ultra Short-Term :
Funds invest mostly in very short-term debt securities and a small portion in longer-term
debt securities. Investors can park their short-term surplus for a few months to a year in
these funds.
Fixed Maturity Plans are closed-ended debt mutual funds that work almost like fixed
deposits. They invest in debt instruments with less than or equal to the maturity date of
the scheme. Securities are redeemed on or before maturity and proceeds are paid to the
investors. FMPs are a good alternative to fixed deposits for investors in the higher tax
bracket.
3. Short-Term Funds :
invest mostly in debt securities with an average maturity of one to three years. They
perform well when short term interest rates are high. They are suitable to invest with a
horizon of a few years.
4. Dynamic Bond Funds :
invest across all classes of debt and money market instruments with varying maturities.
These funds have an actively-managed portfolio that varies dynamically with the interest
rate view of the fund manager. They are ideal for investors who want to leave the job of
taking call on interest rates to the fund manager.
5. Income Funds :
invest in corporate bonds, government bonds and money market instruments with long
maturities. They are highly vulnerable to the changes in interest rates. They are suitable
for investors who are ready to take high risk and have a long term investment horizon.
The right time to invest in these funds is when the interest rates are likely to fall.

6. Gilt Funds :
invest in government securities. They do not have the default risk because the bonds are
issued by the government. However, they are highly vulnerable to the changes in interest

23
rates and other economic factors. These funds have high interest rate risk. Invest with a
long-term horizon.
7. Debt-oriented hybrid funds :
as the name suggests, invest mostly in debt and a small part of the corpus in equity. The
equity part of the portfolio would provide extra returns, but the exposure also makes them
a little risky. Invest with a horizon of three years or more.
8. Equity Funds :
Arbitrage funds don’t invest in equity, but they are treated as equity schemes for taxation
purpose. They look to exploit price difference between the cash and derivatives markets
to generate returns. In fact, favorable taxation is their biggest USP as investments held
over a year in them qualify for long term capital gains tax which is zero at the moment.
These funds are ideal for investors in the highest tax bracket looking to park money for a
short period.

3. INVESTMENT OBJECTIVES

1. Money Market Funds :

The money market consists of safe ( risk-free ) short-term debt instruments, mostly
government Treasury bills . This is a safe place to park your money. You won't get
substantial returns, but you won't have to worry about losing your principal. A typical
return is a little more than the amount you would earn in a regular checking or savings
account and a little less than the average certificate of deposit (CD) . While money
market funds invest in ultra-safe assets, during the 2008 financial crisis, some money
market funds did experience losses after the share price of these funds, typically pegged
at $1, fell below that level and broke the buck .

2. Income Funds :

24
Income funds are named for their purpose: to provide current income on a steady basis.
These funds invest primarily in government and high-quality corporate debt, holding
these bonds until maturity in order to provide interest streams. While fund holdings may
appreciate in value, the primary objective of these funds is to provide a steady cash flow
to investors. As such, the audience for these funds consists of conservative investors and
retirees. Because they produce regular income, tax conscious investors may want to avoid
these funds.

3. Bond Funds :

Bond funds invest and actively trade in various types of bonds. Bond funds are often
actively managed and seek to buy relatively undervalued bonds in order to sell them at a
profit. These mutual funds are likely to pay higher returns than certificates of deposit and
money market investments, but bond funds aren't without risk. Because there are many
different types of bonds, bond funds can vary dramatically depending on where they
invest. For example, a fund specializing in high-yield junk bonds is much more risky than
a fund that invests in government securities. Furthermore, nearly all bond funds are
subject to interest rate risk , which means that if rates go up the value of the fund goes
down.

4. Balanced Funds :

The objective of these funds is to provide a balanced mixture of safety, income and
capital appreciation. The strategy of balanced funds is to invest in a portfolio of both
fixed income and equities. A typical balanced fund will have a weighting of 60% equity
and 40% fixed income. The weighting might also be restricted to a specified maximum or
minimum for each asset class, so that if stock values increase much more than bonds, the
portfolio manager will automatically rebalance the portfolio back to 60/40. A similar type
of fund is known as an asset allocation fund. Objectives are similar to those of a balanced
fund, but these kinds of funds typically do not have to hold a specified percentage of any
asset class. The portfolio manager is therefore given freedom to switch the ratio of asset
classes as the economy moves through the business.

4. OTHER SCHEMES

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1. Tax Saving Schemes :

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time
to time. Under Sec.88 of the Income Tax Act, Contribution made to any Equity Linked
Savings Scheme ( ELSS ) are eligible for rebate.

2.Index Schemes :

Index schemes attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks
that constitute the index. The percentage of each stock to the total holding will be
identical to the stocks index weight age. And hence, the returns from such schemes
would be more or less equivalent to those of the index.

3. Sector Specific Schemes :

These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. e.g., Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are
dependent on the performance of the respective sectors/industries. While these funds may
give higher returns, they are more risky compared to diversified funds. Investors need to
keep a watch o the performance of those sectors/industries and must exit at an appropriate
time.

4.2 ADVANTAGES OF MUTUAL FUNDS

Mutual funds have designed to provide maximum benefits to investors, and fund manager
have research team to achieve schemes objective. Assets Management Company has
different type of sector funds, which need to proper planning for strategic investment and
to achieve the market return.

Portfolio Diversification

26
Mutual Funds invest in a well-diversified portfolio of securities, which enables investor
to hold a diversified investment portfolio (whether the amount of investment is big or
small).

Professional Management

Fund manager undergoes through various research works and has better investment
management skills, which ensure higher returns to the investor than what he can manage
on his own.

Less Risk

Investors acquire a diversified portfolio of securities even with a small investment in a

Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3
securities.

Low Transaction Costs

Due to the economies of scale (benefits of larger volumes), mutual funds pay lesser
transaction costs. These benefits are passed on to the investors.

Liquidity

An investor may not be able to sell some of the shares held by him very easily and
quickly, whereas units of a mutual fund are far more liquid.

Choice of Schemes

Mutual funds provide investors with various schemes with different investment
objectives. Investors have the option of investing in a scheme having a correlation
between its investment objectives and their own financial goals. These schemes further
have different plans/options

Transparency

27
Funds provide investors with updated information pertaining to the markets and the
schemes. All material facts are disclosed to investors as required by the regulator.

Flexibility

Investors also benefit from the convenience and flexibility offered by Mutual Funds.
Investors can switch their holdings from a debt scheme to an equity scheme and vice-
versa. Option of systematic (at regular intervals) investment and withdrawal is also
offered to the investors in most open-end schemes.

Safety

Mutual Fund industry is part of a well-regulated investment environment where the

interests of the investors are protected by the regulator. All funds are registered with
SEBI and complete transparency is forced.

4.3 DISADVANTAGES OF MUTUAL FUNDS

28
The mutual fund not just advantage of investor but also has disadvantages 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.

Costs Control Not in the Hands of an Investor

Investor has to pay investment management fees and fund distribution costs as a
percentage of the value of his investments (as long as he holds the units), irrespective of
the performance of the fund.

No Customized Portfolios

The portfolio of securities in which a fund invests is a decision taken by the fund
manager. Investors have no right to interfere in the decision making process of a fund
manager, which some investors find as a constraint in achieving their financial objectives.

Difficulty in Selecting a Suitable Fund Scheme

Many investors find it difficult to select one option from the plethora of
funds/schemes/plans available. For this, they may have to take advice from financial
planners in order to invest in the right fund to achieve their objectives.

Asset Under Management

29
What is AUM

In finance, assets under management ( AUM ), sometimes called funds under

management ( FUM), measures the total market value of all the financial assets which a
financial institution such as a mutual fund , venture capital firm, or brokerage house
manages on behalf of its clients and themselves.

Overview

Assets under management (AUM) is very popular within the financial industry as a
measure of size and success of an investment management firm, compared with its
history of assets under management in previous periods, and compared with the firm's
competitors. Methods of calculating AUM vary between firms. Investment management
companies generally charge their clients fees as a proportion of assets under
management, so assets under management, combined with the firm's average fee rate, are
the key factors indicating an investment management company's top line revenue. The
fee structure depends on the contract between each client and the firm or fund.

Assets under management rise and fall. They may increase when investment performance
is positive, or when new customers and new assets are brought into the firm. Rising
AUM normally increases the fees which the firm generates.

Conversely, AUM are reduced by negative investment performance, as well as

redemptions or withdrawals, including fund closures, client defections and other
generally adverse events. Lower AUM tend to result in lower fees generated.

6. DATA ANALYSIS AND

INTERPRETATION
30
 Asset Under Management And Folios -Category Wise - Aggregate - As On
December 31, 2015-16-17
Liquid/Money Market
Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.
Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

Liquid/Money Corporate 201036.57 268841.74 288256.63
Banks/FIs 9319.93 13065.36 9603.31
Market FIIs 432.26 82.64 49.75
High Net worth 18294.62 21327.09 30864.11
Individuals
Retail 3886.67 5413.75 7530.53

1200
1000
800
600
400
200
0
2015
te Is s ls il
ra /F FII ua ta 2016
p o nk
s
vid Re
r di 2017
Co Ba In
th
wor
t
Ne
gh
Hi

Investor Classification

Interpretation

31
Liquid/Money Market Scheme under five classification of head namely Corporate,
Bank/FIs, FIIS, High Net worth Individuals and Retail Sector. Investor invest in that
corporate amounted to Rs.288256.63 in the year 2017 and HNWI amounted to Rs
30864.11 in the year 2017 is high invest as compare to other investor classification in the
year 2015.

Gilt

Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.

Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

Gilt Corporate 10349.56 10301.31 9519.04
Banks/FIs 140.48 630.2 195.12
FIIs 504.66 186.28 331.35
High Net worth 5487.74 4231.41 3214.43
Individuals
Retail 980.72 1588.2 1332.86

32
 1200
1000
800
600
400
200
0 2015
te Is s als il 2016
ra s/F FII u eta
r po nk vi d R 2017
Co Ba di
In
r th
t wo
Ne
gh
Hi

Investor Classification

Interpretation

Gilt Scheme under five classification of head namely Corporate, Bank/FIs, FIIS, High
Net worth Individuals and Retail Sector. Investor invest in that corporate amounted to Rs.
10349.56 in the year 2017 and HNWI amounted to Rs 5487.74 in the year 2017 is high
invest as compare to other investor classification in the year 2015.

33
 Debt Oriented

Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.

Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

Debt Oriented Corporate 318212.3 437871.56 466778.37
Banks/FIs 9777.14 23061.79 15976.79
FIIs 8374.04 8355.64 7296.21
High Net worth 174886.34 216967.9 244216.67
Individuals
Retail 45613.7 63670.31 76260.15

34
 1200
1000
800
600
400
200
0
2015
2016
2017

Investor Classification

Interpretation

Debt Oriented Scheme under five classification of head namely Corporate, Bank/FIs,
FIIS, High Net worth Individuals and Retail Sector. Investor invest in that corporate

amounted to Rs. 466778.37in the year 2017 and HNWI amounted to Rs 244216.67in
the year 2017 is high invest as compare to other investor classification in the year 2015.

Equity Oriented

Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.

Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

Equity Corporate 61656.36 72245.92 116346.36
Banks/FIs 1550.74 1141.81 1005.79
Oriented
FIIs 4164.14 2644.16 4977.03
High Net worth 130338.41 151059.73 260390.4

35
 Individuals
Retail 207952.64 242582.42 388414.93

1200
1000
800
600
400
200
0 2015
il 2016
ra
te FIs FII
s
ua
ls ta
o ks/ id Re 2017
r p n v
Co Ba di
In
th
wor
t
Ne
gh
Hi

Investor Classification

Interpretation

Equity Oriented Scheme under five classification of head namely Corporate, Bank/FIs,
FIIS, High Net worth Individuals and Retail Sector. Investor invest in that Retail

amounted to Rs.388414.93 in the year 2016 and HNWI amounted to Rs 151059.73 in

the year 2017 is high invest as compare to other investor classification in the year 2015.

36
 Balanced

Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.

Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

Balanced Corporate 7476.69 8606.45 20407.3
Banks/FIs 43.88 173.04 195.32
FIIs 35.65 41.22 911.12
High Net worth 20310.57 32409.98 88416.87
Individuals
Retail 14325.89 23723.65 57454.4

1200
1000
800
600
400
200
0 2015
e Is s ls il 2016
at /F FII ua ta
por nk
s
vid Re 2017
r di
Co Ba In
th
wor
t
Ne
gh
Hi

Investor Classification

37
Interpretation

Balanced Scheme under five classification of head namely Corporate, Bank/FIs, FIIS,
High Net worth Individuals and Retail Sector. Investor invest in that Retail amounted to

Rs. 57454.4in the year 2017 and HNWI amounted to Rs 88416.87in the year 2017 is
high invest as compare to other investor classification in the year 2015.

Gold ETF

Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.

Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

Gold ETF Corporate 2811.82 2585.66 1690.62
Banks/FIs 3.07 12.36 1.34
FIIs 2.76 0.77 0.79
High Net worth 866.92 1043.89 999.62
Individuals
Retail 2088.81 1876.64 2162.93

38
 1200
1000
800
600
400
200
0 2015
il 2016
ra
te FIs FII
s
ua
ls ta
o ks/ id Re 2017
rp n
di
v
Co Ba In
th
wor
t
Ne
gh
Hi

Investor Classification

Interpretation

Gold ETF Scheme under five classification of head namely Corporate, Bank/FIs, FIIS,
High Net worth Individuals and Retail Sector. Investor invest in that Retail amounted to

Rs. 2162.93in the year 2017 and HNWI amounted to Rs 1043.89 in the year 2017 is
high invest as compare to other investor classification in the year 2015.

39
 ETFs(other than Gold)

Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.

Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

ETFs(other Corporate 7899.63 23784.98 61771.09
Banks/FIs 2221.77 2620.88 1376.28
than Gold)
FIIs 139.76 34.11 1912.66
High Net worth 969.89 1547.52 1920.35
Individuals
Retail 655.89 846.43 3372.27

1200
1000
800
600
400
200
0 2015
il 2016
ra
te FIs FII
s
ua
ls ta
o ks/ d Re 2017
rp n vi
Co Ba di
In
orth
tw
Ne
gh
Hi

Investor Classification

Interpretation

40
ETF Other than Gold Scheme under five classification of head namely Corporate,
Bank/FIs, FIIS, High Net worth Individuals and Retail Sector. Investor invest in that

Retail amounted to Rs. 3372.27 in the year 2017 and HNWI amounted to Rs 1920.35
in the year 2017 is high invest as compare to other investor classification in the year
2015.

Fund of Funds investing Overseas

Types of Investor AUM (Rs. AUM (Rs. AUM (Rs.

Cr) Cr) Cr)
Schemes Classification

2015 2016 2017

Fund of Funds Corporate 394.84 337.03 354.02
Banks/FIs 0.01 0.01 0
investing
FIIs 0 0 0
Overseas High Net worth 1113.59 811.23 625.85
Individuals
Retail 514.06 611.77 531.97

1200
1000
800
600
400
200
0 2015
Is s ls il 2016
te /F FII ta
ora s dua Re 2017
r p nk vi
Co Ba di
In
r th
t wo
Ne
gh
Hi

Investor Classification

41
Interpretation

Fund of Fund Investing Overseas Scheme under five classification of head namely
Corporate, Bank/FIs, FIIS, High Net worth Individuals and Retail Sector. Investor invest

in that Retail amounted to Rs. 531.97 in the year 2017 and HNWI amounted to Rs

1113.59 in the year 2017 is high invest as compare to other investor classification in the
year 2015.

Objective
1. To study most preferred Investment Avenue of the investors of AUM.

2. To analyze the investor’s preference towards investment in mutual funds when other
investment avenues are also available in the market.

3. To find the main bases of different investment avenues, an investor thinks before
investing.

4. To find out the overall criterion of investors regarding investment.

42
 7. FINDINGS AND CONCLUSIONS

After analyzing & interpreting the data received from the investment , it may be
concluded that maximum investors are aware about Corporate & High net individual
investment avenues only. More than 80% investors are aware about Mutual Funds, Real
Estate, and investment avenues.

it is observed that even though mutual fund industry seems to grow in India the
growth is concentrated both with respect to investor category and place.

43
1. Overall investor accounts has been increase from 3.95 Cr. in Dec-2014 to 5.28 Cr.
approximately in Dec-2016

2. There are 99% of accounts in the Mutual Fund industry as at the end of Dec-2016 is
accounted by only individual investors whereas only 1% accounts of institutional
investors.

3. Almost 80% of individual investor accounts are invests in Equity Oriented Scheme.

4. Current total assets of Mutual Fund industry has increased from 11.28 trillion in Dec-
14 to 17.9 trillion in Feb-17.

5. Equity Oriented Scheme proportionate share is 30.9% of the industry assets in Dec-16
down from Dec-15 and Debt Oriented Scheme proportionate share is 46.7% of industry
assets in Dec-2016, up from 43.3% in Dec-2015.

6. 17% of assets of Mutual Fund industry comes from B-15 locations in Feb-2017. The
assets which is comes from B-15 locations have increased from 2.13 trillion to 3.7 trillion
in Feb-2017.

7. 25% Individual investors assets Comes from B-15 locations while only 10% of
institutional assets come from B-15 locations.

44
8. KEY LEARNING

45
9. BIBLIOGRAPHY

46
 10.APPENDICES
https://www.google.co.in/search?
dcr=0&ei=tj9CWuXMNofgvgTDlqvoCQ&q=mutual+fund+research+paper+2017&oq=
mutual+fund+research+paper+2017

47
Max – 02 Pages

 Introduction on Topic (Summary)

 Background & reasons for selection of topic

10. OBJECTIVES OF STUDY

Max – 01 Page
 Objectives of Study
 Hypotheses (if any)

11. LITERATURE REVIEW

(Minimum – 06 to 07 Research Papers)
Max – 05 Pages
Format:
1. ASCI Journal of Management, Vol. 41 (2), pp. 107-12. ‘Net FII Flows into
India: A Cause and Effect Study’ Shrikanth, M. and Kishore B. (2012) has
identified the relationship between cause and effect between FIIand Indian capital
market. They observed that FIIs carried the institutional flavor in terms of market
expertise and fund management by way of pooling small savings from retail

48
 investors. They concluded that net FII inflows had a positive impact on the Indian
stock market and foreign exchange reserves.
2. International Journal of Marketing, Financial Services & Management
Research Vol.1 Issue 7. ‘Do FIIs Impact Volatility of Indian Stock
Market?’Loomba, J. (2012), attempted to study the behavior of FII trading and
its effect on Indian stock market.He observed thatliberalization policy has led to
increase the foreign capital as a significant source of finance and institutional
investors are growing their influence in developing markets. He concluded that
the Indian stock markets have shown constant growth and development in the last
15 years make the markets at par.

12. RESEARCH METHODOLOGY

Max – 02 Pages

 Same format followed in Summer Internship Project.

13. THEORETICALBACKGROUND
Max – 03 Pages
1) Concepts
2) Definitions

14. DATA ANALYSIS AND INTERPRETATION

Max – 10 - 12 Pages

 Same format followed in Summer Internship Project.

15. FINDINGS AND CONCLUSIONS

Max – 02 Pages

 Same format followed in Summer Internship Project.

49
 16. KEY LEARNING
Max – 02 Pages

 This chapter should cover the understanding of students from dissertation work

17. BIBLIOGRAPHY
Max – 01 Page
10. APPENDICES

 Appendices if any (e.g. questionnaire, interview, photo gallery, subject index,

name index, excerpts etc.

50