A SUMMER TRAINING PROJECT REPORT

On
A study on Factors Influencing Investors to Invest in
Mutual Fund

In Partial fulfillment of the requirement for the award

of the degree of
Master of Business Administration.
Submitted By:
Fatima Siddiqui
November 18, 2022

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Ms. Fatima Siddiqui has successfully completed her
internship at HDFC Asset Management Company Limited, Prayagraj from
September 12, 2022 to October 15, 2022.

We wish her all the best for her future endeavors.

For HDFC Asset Management Company Limited

Varsha Rohira

Manager - Human Resources

 Student’s Declaration

I undersigned Fatima Siddiqui a student of SIET/SIM MBA 3rd

semester, declare that summer internship project titled “A
study on Factors Influencing Investors to Invest in Mutual Fund” is
a result of my own work and my indebtedness to other work
publications, references, if any, have been duly acknowledged. If I found
guilty of copying any other report or published information and showing
as my original work, I understand that I shall be liable and punishable by
Institute or University, which may include ‘Fail’ in examination, ‘Repeat
study & re- submission of the report’ or any other punishment that
Institute or University may decide.

Name of Student Signature

Roll Number:
 Table of Contents
S.no Topic Page No .

1 Executive Summary

2 Company Profile

3 Industry Profile

 Introduction

 History of Mutual funds

 Regulatory Framework

 Concept Of Mutual Funds

 Types Of Mutual Funds

 Advantages Of Mutual Fund

 Terms Used In Mutual Funds

 Fund management

 Risk

 Basis Of Comparisons

 How to pick right fund

4 Review of Literature (ROL)

5 Research Methodology

 Statement of the Problem

 Scope of the Study

 Objectives of the Study

 Design of the study

  Data collection

 Primary Data collection

 Secondary Data Collection

 Samples for the study

 Sample Size

6 Findings

7 Limitations

8 Conclusion

9 References

10 Questionnaire
 ACKNOWLEDGEMENT
I have put my sincere efforts in completion of this project. However, it
would have not been possible without the kind support and help of many
individuals and organizations. I would like to extend my sincere thanks
to all of them. I would like to express my gratitude towards my family
members, my classmates and my friends for their kind co-operation and
encouragement which helped me in completion of this project.
My thanks and appreciation also goes to all the people who have
willingly helped me.
 EXECUTIVE SUMMARY
This study examines the factors that influence investment in mutual
fund. The objective behind this study is to identify various factors that
influence investment in mutual fund and to prioritize those factors that
investor consider important while making investment in mutual fund.
This study is based on exploratory research design and both primary and
secondary data have been collected. The primary data is collected
through structured questionnaire and secondary data were collected
through websites, journals, etc. 120 responses were collected in this
study. The results of the study discovered that investors have their
primary objective of Tax saving, maximizing returns and minimizing
their risk in mutual fund. The investors always prefer high returns as
their first priority followed by low risk, liquidity and safety of money as
factors that influence them to make investment in mutual fund. The
results of the study also indicate the underlying factors of importance
that were extracted namely company related factors and personal factors.
The relationship of these factors with the demographic details of
investors is ascertained. The study concludes that mutual funds are good
investment tool & the factors and investors perception plays a very vital
role in the investment of mutual fund.

INTRODUCTION
Indian financial institutions are playing dominant role in capital
formation and intermediation and contribute substantially in macro-
economic development. The Indian MF brings stability in the financial
systems and efficiency in resource allocation. They have opened new
opportunities for investors and imparted much needed liquidity in the
financial system. The active involvement of MFS in promoting
economic development can be seen not only in terms of their
participation in the saving market but also in their dominant presence in
the money and capital market. A developed Financial market is
inextricably related to Overall economic development and MES play an
active role in promoting a healthy capital market. Indian economy is one
of the fastest growing economies of the world. He saving of the country
is now around 29 %. Because of high growth potential, To reign
investors are investing in inland market. Inala is next emerging economy
Arter the us and China. And hence sound financial market is of utmost
importance. it is the financial market which channelizes savings of the
people into the investment. several international Funds are operating
independently in India and some are expected to come in future. As
such, foreign investors, local institutions and mutual funds are now
playing a bigger role. The mutual funds route has unique characteristics
that make it significant to investors. Small investors Take a lot or
problems in stock markets due to limited resources, lack or professional
advice, lack or information etc. Mutual funds come With a much-needed
help Tor these investors.
It is a specialized type of institutional advice or investment vehicle
through which investors pool their savings that are to be invested under
the guidance of a team of experts. While ensuring the safety and steady
returns on investment they form an important part of the capital market,
providing the benefits of diversified portfolio and expert management to
a large number of small investors. With this concept, the author has tried
to explore the factors that motivate them to invest in mutual funds.

MUTUAL FUND INDUSTRY IN INDIA

HDFC Asset Management Company Ltd (AMC) was incorporated under
the Companies Act, 1956, on December1 0,1999, and was approved to
artisan Asset Management Company for the HDFC Mutual Fund by
SEBI vide its letter dated Julys, 2000.
The registered office of the AMC is situated at Ramon House, 3 rd Floor,
H.T Parekh Mar 169 Back bay Reclamation , Church gate , Mumbai-
400020.In terms of the Investment Management Agreement, the Trustee
has appointed the HDFC Asset Management Company Limited to
manage the Mutual Fund. The paid up capital of the AMC is
Rs.25.161crore. Zurich insurance Company (ZIC), the Sponsor of
Zurich India Mutual Fund, following a review of its overall strategy, had
decided to divest its Asset Management business in India. The AMC had
entered into an agreement with ZIC to acquire the said business, subject
to necessary regulatory approvals.

Following the decision by Zurich Insurance Company (ZIC), the sponsor

of Zurich India Mutual Fund, to divest its Asset Management Business I
India , HDFC AMC acquired the schemes of Zurich India Mutual Fund
effective from June19,2003. HDFC AMC has a strong parentage-CO
Sponsored by Housing Development Finance Corporation Limited
(HDFC Ltd.) and Standard Life Investment Limited, the investment arm
of The Standard Life Group, UK.
The Present quit share holding pattern of the AMC is as follows:
Housing Development Finance Corporation Limited was incorporated in
1977 as the first specialized Mortgage Company in India, its activities
include housing finance, and property related services (property
identification, valuation etc.), training and consultancy. HDFC Ltd.
contributes the 60% of the paid-up equity capital of the AMC.
Standard Life Insurance Limited is a leading Asset management
company with approximately US$ 282 billion of asset under
management as on June 30, 2007. The company operates in UK,
Canada, Hong Kong, China, Korea, Ireland and USA to ensure it is able
to form a truly global investment view. SLI Ltd. contributes the 40 %of
the paid-up equity capital of the AMC.

The AMC is managing 24 open-ended schemes of the Mutual Fund viz.

HDFC Growth Fund (HGF), HDFC Balanced Fund (HBF), HDFC
Income Fund (HIF), HDFC Liquid Fund (HLF), HDFC Long Term
Advantage Fund (HLTAF), HDFC Children's Gift Fund (HDFC CGF),
HDFC Gilt Fund (HGILT), HDFC Short Term Plan (HSTP), HDFC
Index Fund, HDFC Floating Rate Income Fund (HFRIF), HDFC Equity
Fund (HEF),HDFC Top 200 Fund (HT200), HDFC Capital Builder
Fund (HCBF), HDFC Tax Saver (HTS), HDFC Prudence Fund (HPF),
HDFC High Interest Fund (HHIF), HDFC Cash Management Fund
(HCMF), HDFC MF Monthly Income Plan (HMIP), HDFC Core
&Satellite Fund (HCSF), HDFC Multiple Yield Fund (HMYF), HDFC
Premier Multi-Cap Fund (HPMCF), HDFC Multiple Yield Fund. Plan
2005 (HMYF-Plan 2005), HDFC Quarterly Interval Fund (HQIF) and
HDFC Arbitrage Fund (HAF).The AMC is alsomanaging11 closed
ended Schemes of the HDFC Mutual Fund viz. HDFC Long-term Equity
Fund, HDFC Mid-Cap Opportunities Fund, HDFC Infrastructure Fund,
HDFC Fixed Maturity Plans, HDFC Fixed Maturity Plans - Series I,
HDFC Fixed Maturity Plans - Series , HDFC Fixed Maturity Plans -
Series IV, HDFC Fixed Maturity Plans - Series V, HDFC Fixed
Maturity Plans- Series V, HFDC Fixed Series V, HDFC Fixed Maturity
Plans - Series VI, HFDC Fixed Maturity Plans-
Series V and HFDC Fixed Maturity Plans-Series V. The AMC is also
providing portfolio management / advisory services and such activities
are not in conflict with the activities of the Mutual Fund. The AMC has
renewed its registration from SABI vide Registration No. - PM/
INPOO0000506 dated December 8, 2006 to act as a Portfolio Manager
under the SEBI (Portfolio Managers) Regulation , 1993.

Industry Profile

I. Introduction
The Indian mutual fund industry has witnessed significant growth in the
past few years driven by several favorable economic and demographic
factors such as rising income levels, and the increasing reach of Asset
Management Companies and distributors. However, after several years
of relentless growth the industry witnessed a fall of 8% in the assets
under management in the financial year 2008-2009 that has impacted
revenues and profitability. Where as in 2009-10 the industry is on the
road of recovery.

I. History of Mutual Funds

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 of India. The history of mutual funds in India can be
broadly divided into four distinct phases.

FirstPhase-1964-87
Unit Trust of India (UT) was established on 1 963byanActof Parliament.
It was setup by the Reserve Bank of India and functioned under the
Regulatory and administrative control of the Reserve Bank of India.
In1978UTiwasde-linkedfrom the R Bland the industrial Development
Bank of India (|DB) 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.

SecondPhase-1987-1993(Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by
public sector banks and Life Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC). SBI Mutual Fund was the
first non- UTI Mutual Fund established in June 1987 followed by Can
bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug
89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun90), Bank of
Baroda Mutual Fund(Oct92).LIC established its mutual fund in
June1989 while GIC had setup its mutual fund in December1990.At the
end of 1993, the mutual fund industry had assets under management of
Rs.47,004Crores.

ThirdPhase-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
Regulation scamming to 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 July1993.
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 to
reign mutual funds setting up funds in India and also the industry has
witness sidereal mergers and acquisitions. As at the end of January 2003,
there were 33 mutual funds with total assets ofRs.1,21,805 Crores. The
Unit Trust of India with Rs.44,541 Crores of assets under management
was way head of other mutual funds
FourthPhase-sinceFebruary2003

In February 2003, following the repeal of the Unit Trust of India Act
1963 UTI was bifurcated into two separate entities. One is the Specified
Undertaking of the Unit Trust of India with assets under
managementofRs.29,835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and
certain other schemes. 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.

Regulatory Framework

Securities and Exchange Board of India

The regulator for markets in India , SEBI (Securities and Exchange

Board of India), works for the protection of investors' interest in
securities while regulating and promoting the securities' market. The
Organisation has created guidelines for investors to gain awareness
regarding the manner in which mutual funds function by offering the
required information. The regulator aims to simplify the wide variety of
schemes that tend to confuse investors due to their complexity. The
guidelines regarding the consolidation and merger of MF schemes are
created in an effort to make it easier for investors to compare different
schemes made available by mutual fund companies.

Guidelines Regarding Structure

The guidelines regarding the structure of schemes define a Guarantor as
someone who introduces a mutual fund. The guarantor's role is to
generate revenue through the launch of a mutual fund. The fund is then
handed to a fund manager.
A sponsor, according to the guidelines, is defined as someone who sets
up schemes in keeping with the regulations of the Indian Trust Act,
1882. Sponsors primarily have the role of listing the schemes with the
Securities and Exchange Board of India.
The Securities and Exchange Board of India is responsible for making
policies related to mutual funds. It also has the responsibility of
regulating the industry and laying down the law so that investors'
interest is safeguarded. So far as 'asset allocation' and 'investment
strategy' are concerned, mutual funds can be very different from one
another. The new guidelines have focused on uniformity so far as the
functioning of schemes is concerned. Investors will, therefore, find it
easier to make investment decisions. To make things standard and to
introduce uniformity in schemes that are similar to one another, the
following is the manner in which mutual funds are categorized
 Equity funds
 Debt funds
 Balanced or hybrid funds
 Solution-oriented funds
 Other funds
Association of Mutual Funds in India (AMFI)
The Association of Mutual Funds in India (AMFI) is dedicated to
developing the Indian Mutual Fund Industry on professional, healthy
and ethical lines and to enhance and maintain standards in all areas with
a view to protecting and promoting the interests of mutual funds and
their unit holders.
AMFI, the association of all the Asset Management Companies of SEBI
registered mutual funds in India, was incorporated on August 22, 1995,
as a non-profit organization. As of now, 43 Asset Management
Companies that are registered with SEBI, are its members. 

The AMFI is a non-profit government organization that acts as the

primary regulator under the SEBI. One of its major functions is to keep
the investors informed about the Mutual Fund market and protect the
interest of investors.
Currently, it comprises 43-member Asset Management Companies
(AMC) that are registered with SEBI.
We have seen many cases where investors’ money is misused. In the
case where the AMC does not follow transparency norms or if the
investor is facing trouble in dealing with his fund house the next step
would be to inform the AMFI which has been set up for the protection of
investors’ interest.
The AMFI maintains high standards of operation and ensures that
investors are well informed. One of the important means through which
AMFI does this is by updating their website with important information
pertaining to mutual funds. Even the advertisements put forth by AMFI
ensure that the investors are informed about the risks associated with
mutual funds.
Since its formation, it has set various regulations in order to ensure that
ethics and transparency are maintained in the mutual fund industry.
 Objectives of the AMFI
The Association of Mutual Funds in India (AMFI) has several
objectives. Some of them are mentioned below:
 Ensures that mutual funds operate under a uniform set of ethical and
professional standards.
 Once the standards are defined, AMFI also encourages and ensures that
AMC’s and mutual funds follow and maintain them in the due course of
business. 
 They also assist all the parties involved like distributors, advisories,
agents, asset management companies, and other bodies to comply with
their guidelines. 
 AMFI receives guidance from SEBI and works closely with them on
matters concerning mutual funds.
 They represent the government, Finance ministry, RBI, and SEBI on all
matters that relate to the mutual fund industry.
 It also distributes information on mutual funds as investments and also
conducts research, workshops on different funds. They also conduct
the nationwide investor awareness program.
 It also takes disciplinary action in the case of a violation of the code of
conduct.
 They safeguard the interests of investors. AMFI has introduced a facility
through which investors can put forth grievances or register complaints
against fund managers or any fund houses.
 They also safeguard the interests of AMCs.

Concept of Mutual Fund

A mutual fund is an investment vehicle that pools investors’ money and
invests it in stock market-linked financial instruments such as stocks and
bonds to generate returns. The combined holding of the fund is known as
its portfolio.
Imagine a non-stop bus called V1, which travels across India, going
from one city to another, along a specific route. V1, just like every other
bus, has a driver and many passengers. During the journey, some
passengers board the bus if its route includes their desired destination
and some passengers alight once their destination has been reached.
If we relate this to a mutual fund, the bus will be a mutual fund scheme;
the travel route is the fund objective; the bus driver is the fund manager
and investors’ money would be passengers.
V1 would travel through various places and on its journey, it would get
stuck in traffic at times. There will be times when it traverses empty
roads, enabling it to reach great speed. There is also the possibility that
the tyres get punctured.
Now, in spite of all this, V1 will not stop. It will continue to follow its
path and make sure that it reaches various cities sooner or later. The
experiences encountered by V1 are similar to volatility in the stock
market. There will be times when the market goes down but it will
eventually reach the highway. V1 is an example of just one fund. Like
we have multiple buses travelling across the nation, there are many
different mutual funds as well, whose aim and route could be different.

Structure of Mutual Funds

The structure of mutual funds in India is very unique and robust. All the
constituent entities involved function based on rules and regulations laid
down by the Securities and Exchange Board of India (SEBI). In the year
1992, SEBI was formed with the objective to protect the interest of the
investors and to regulate and promote the development of the securities
market. With respect to mutual funds, SEBI controls and manages the
functioning of mutual funds.

There are various stakeholders involved in a mutual fund but the core
structure is three-tiered:

 Sponsor
 Trustee

 Asset Management Company (AMC)

 This three-tier structure has been framed by SEBI.

Sponsor – The Sponsor is the promoter of the mutual fund. When the
Sponsor decides to start a mutual fund business, it must first approach
SEBI. The eligibility of the sponsor is vetted and verified by SEBI,
based on the criteria which are laid down.

Trust and Trustees – A mutual fund is formed as a Trust, which

comprises – the sponsor(s), Trustees and an asset management company
(AMC). The Trustees are the guardians of mutual fund investors. Their
role is to ensure that all the funds are managed as per the defined
objective and that the investors’ interest is protected. They appoint an
asset management company (AMC) to manage the funds of the
investors.

Asset Management Company (AMC)– The third major entity is

the AMC. The AMC is the money manager/investment manager/fund
manager, which manages the money of the investors and charges a fee
for its service. The day-to-day operations are handled by the AMC. The
AMC launches various mutual fund schemes in the market as per the
needs of the investors and the nature of the market and also oversees the
development of these funds.

The design for a mutual fund scheme is initially given to SEBI for
verification and final approval. Only after SEBI’s approval, the AMC
can roll out the scheme. In order to maintain integrity and trust and
prevent misuse of investor money, SEBI has strict rules, regulations and
guidelines for running the business and the AMC has to function based
on these. Along with this, the AMC also undertakes operational
activities like customer services, accounting, marketing and sales
functions for the schemes.
 Other Entities in the Mutual Fund Industry:

Custodian – Custodians are responsible for maintaining the investment

account of the mutual fund and for the transfer and delivery of units and
securities. Third-party financial institutions role involves safeguarding
the assets of the mutual fund. It also keeps a record of corporate actions
like dividend, bonus and rights declared by the companies in which the
mutual fund has invested. Custodians are also regulated by SEBI.

RTA – Registrar and Transfer Agents (RTA) help mutual fund

companies to maintain records of all their transactions. The RTAs
perform many administrative tasks, like processing of investors
applications, creating units when new investments are made, removing
units when investors make redemptions, keeping a full record of
investors transactions, processing dividend pay-outs, etc.

The RTA also gives investors a single- place reference for all
information about new offers, maturity dates, etc. and does all the
processing of mails that need to be sent to the investors. RTAs have to
govern under guidelines issued by SEBI for them.

Distributors – The distributors bridge the gap between the AMC and
the investors. The AMC is already involved in Fund Management and its
legalities, but along with this they also need someone who can market
the products, provide requisite knowledge to the investors, solve
investors’ queries, etc. This is where the distributors come into the
picture and provide their services for a smooth transaction between the
AMC and the investors. The distributor community is the sales force of
the industry, driving it forward.

Investor – With the presence of regulatory bodies, like SEBI and the
Association of Mutual Funds in India (AMFI), investment in mutual
funds has become very reliable for all retail investors. If any investor has
any discrepancy regarding mutual fund investment, they can contact the
AMC.

If the mutual fund company is not able to solve the investor’s grievances,
then the investor can reach out to SEBI to solve the issue. SEBI has
launched ‘SEBI Complaint Redress System’ (SCORES) to address
investor complaints.
Types of Mutual Funds

Mutual Fund are popular investments because of their ease, flexibility

and diversification benefits. The best part of mutual funds is that they
provide investment opportunities for all kinds of investors. Currently,
there are over 44 registered mutual funds in India, offering different
schemes to satisfy the dynamic needs of diverse investors.
The different types of mutual funds available can be classified broadly
based on structure, asset class, and investment goals. Going a step
further, funds can also be categorized based on risk.

1. Structure of Mutual Funds

Based on the ease of investment, mutual funds can be:
• Open-ended funds:
These funds do not limit when or how many units can be purchased.
Investors can enter or exit throughout the year at the current net asset
value. Open-ended funds are ideal for investors seeking liquidity.
• Close-ended funds:
Close-ended funds have a pre-decided unit capital amount and also
allow purchase only during a specified period. Here, redemption is
bound by the maturity date. However, to facilitate liquidity, schemes
trade on stock exchanges.
• Interval funds:
A cross between open-ended and close-ended funds, interval mutual
funds permit transactions at specific periods. Investors can choose to
purchase or redeem their units when the trading window opens up.  

2. Mutual Fund Asset Class

Depending on the assets they invest in, mutual funds are categorized
under:
• Equity funds:
Equity funds invest money in company shares, and their returns depend
on how the stock market performs. Though these funds can give high
returns, they are also considered risky. They can be categorized further
based on their features, like Large-Cap Funds, Mid-Cap Funds, Small-
Cap Funds, Focused Funds, or ELSS, among others. Invest in equity
funds if you have a long-term horizon and a high-risk appetite.
• Debt funds:
Debt funds invest money into fixed-income securities such as corporate
bonds, government securities, and treasury bills. Debt funds can offer
stability and a regular income with relatively minimum risk. These
schemes can be split further into categories based on duration, like low-
duration funds, liquid funds, overnight funds, credit risk funds, gilt
funds, among others.
• Hybrid funds:
Hybrid funds invest in both debt and equity instruments so as to balance
out debt and equity. The ratio of investment can be fixed or varied,
depending on the fund house. The broad types of hybrid funds are
balanced or aggressive funds. There are multi asset allocation funds
which invest in at least 3 asset classes.
• Solution-oriented funds:
These mutual fund schemes are for specific goals like building funds for
children’s education or marriage, or for your own retirement. They come
with a lock-in period of at least five years.
• Other funds:
Index funds invest based on certain stock indices and fund of funds are
categorized under this head.

Benefits of Investing in Mutual Funds

Diversification – One of the main advantages of investing in mutual
funds is the kind of diversification it gives to the investor’s portfolio at a
low cost. By investing in only one fund, an investor can get an exposure
to at least 30-40 stocks with an investment amount of as low as INR 500.

Professional Management – For every investor, especially retail

investors who do not have much knowledge about the capital market,
mutual funds can be a boon. Every scheme has an expert who manages
the allocation of funds to financial instruments. Mutual fund companies
hire experts that have vast experience and spend dedicated time in the
capital market to manage the money of the investors.
Transparency – Mutual funds are the only instrument which disclose all
the details on a regular basis. Portfolio disclosure enables investors to
understand exactly what proportion of fund money is investment in
which particular instruments. Also, the portfolios are updated on a
monthly basis. This makes investing in mutual funds reliable and
transparent.

How to Transact in a Scheme of a Mutual Fund?

Buying and selling mutual fund units takes place at the net asset value
(NAV) of the scheme, which is simply the price of a single unit of that
mutual fund scheme. It is calculated by dividing the total value of all the
cash and securities in a fund’s portfolio, minus any liabilities, by the
number of outstanding units.

Following are the ways through which an investor can transact in

schemes of a mutual fund:

Lump Sum: Also called a one-time investment, this format involves

the investor depositing their entire desired investment amount at one go.

SIP and STP: A Systematic Investment Plan (SIP) is an investment

mode wherein one can invest a fixed set of amounts periodically. This
can be monthly, quarterly or semi-annually, etc. Investors can start their
SIP with a small amount of as low as INR 500. Using the technological
benefit of the auto-debit service of banks, the money can be invested
automatically every month from the investor’s registered bank account.
In a Systematic Transfer Plan (STP), one can mandate the
transfer of a fixed amount from one’s balance in a particular scheme to
another destination/target scheme of the same AMC on a periodic basis.

Redemption and SWP: Redemption is a process where an investor

can withdraw their investments by selling their mutual fund units from
the invested scheme. One can initiate redemption by specifying the
number of mutual fund units or amount. The redeemed amount is
directly credited to an investor’s bank account.

In a Systematic Withdrawal Plan (SWP), one can withdraw a regular

income (fixed amount) on a periodic basis from the invested scheme.

Switch: In this, one can transfer one’s entire balance in a particular

scheme, or part of it, to another scheme of the same AMC.

Options for Investment in Mutual Fund

There are primarily 3 options in which one can invest in a scheme of a
mutual fund:

Growth: In this, all the profits made by the scheme are reinvested in the
scheme.

Income Distribution and Capital Withdrawal (IDCW): By selecting

this option, one can get income at the discretion of the scheme.
Income Distribution & Capital Withdrawal – Reinvestment
(IDCW-R): In this option, the declared income by the scheme is
reinvested in the same scheme instead of being disbursed to the investor.
 Fund Management
The main benefit of investing in a fund is trusting the investment
management decisions to the professionals. That's why fund managers
play an important role in the investment and financial world. They
provide investors with peace of mind, knowing their money is in the
hands of an expert.

While a fund's performance may have a lot to do with market forces, the
manager's skills are also a contributing factor. A highly trained manager
can lead their fund to beat its competitors and their benchmark indexes.
This kind of fund manager is known as an active or alpha manager,
while those who take a backseat approach are called passive fund
managers.

Fund managers generally oversee mutual funds or pensions and manage

their direction. They are also responsible for managing a team
of investment analysts. This means the fund manager must have great
business, math, and people skills. The fund manager's main duties
include meeting with their team, as well as existing and potential
clients. Since the fund manager is responsible for the success of the
fund, they must also research companies, and study the financial
industry and the economy. Keeping up to date on trends in the industry
help the fund manager make key decisions that are consistent with the
fund's goals.
 Responsibilities of Fund Managers
Fund managers primarily research and determine the best stocks, bonds,
or other securities to fit the strategy of the fund as outlined in the
prospectus, then buy and sell them.

At larger funds, the fund manager typically has a support staff

of analysts and traders who perform some of these activities. Multiple
managers at some investment companies oversee client money, and
each may be responsible for a portion or make decisions via committee.

Some other responsibilities of the fund manager include preparing

reports on how well the fund is performing for clients, developing
reports for potential clients to know the risks and objectives of the fund,
and identifying clients and companies who may make good fits as
clients.

 A fund manager is responsible for implementing a

fund's investment strategy and managing its trading activities.
 They oversee mutual funds or pensions, manage analysts, conduct
research, and make important investment decisions.
 Most fund managers are highly educated, have professional
credentials, and possess management experience.
 Fund managers fall into two categories: active managers and
passive managers.
Active vs. Passive Managers
Active fund managers try to outperform their peers and the
benchmark indexes. Managers who engage in active fund management
study trends in the market, analyze economic data, and stay current on
company news.

Based on this research, they buy and sell securities —stocks, bonds, and
other assets—to rake in greater returns. These fund managers generally
charge higher fees because they take on a more proactive role in their
funds by constantly changing their holdings. Many mutual funds are
actively managed, which explains why their fees are generally high.

Passive fund managers, on the other hand, trade securities that are
held in a benchmark index. This kind of fund manager applies the same
weighting in their portfolio as the underlying index. Rather than trying
to outperform the index, passive fund managers normally try to mirror
its returns. Many exchange-traded funds (ETFs) and index mutual funds
are considered passively managed. Fees for these investments are
generally much lower because there isn't a lot of expertise involved on
the part of the fund manager.
 RISK
Individuals invest money to make profits. But no investment is risk-
free. Though mutual funds offer broader diversification and value-for-
money to an individual, there are a few risks associated with investing
in mutual funds. Let’s have a look at some of these risks.

Why is mutual fund investment risky?

Risk arises in mutual funds owing to the reason that mutual funds invest
in a variety of financial instruments such as equities, debt, corporate
bonds, government securities and many more. The price of these
instruments keeps fluctuating owing to a lot of factors which may result
in losses. Hence, it is essential to identify the risk profile and invest in
the most appropriate fund.

Due to price fluctuation or volatility, a person ’s Net Asset Value comes

down, resulting in a loss. In simple terms, NAV is the market value of
all the schemes a person has invested in per unit after negating the
liabilities. Hence, it becomes essential to identify the risk profile and
invest in the most appropriate fund.
Types of risks associated with mutual funds

Market Risk
We all would have seen that one-liner in all advertisements that mutual
funds are subject to market risk.

Market risk is a risk which may result in losses for any investor due to
the poor performance of the market. There are a lot of factors that affect
the market. A few examples are a natural disaster, inflation, recession,
political unrest, fluctuation of interest rates, and so on. Market risk is
also known as systematic risk. Diversifying a person ’s portfolio won ’t
help in these scenarios. The only thing that an investor can do is to wait
for the things to fall in place.

Concentration Risk
Concentration generally means focusing on just one thing.
Concentrating a considerable amount of a persons investment in one
particular scheme is never a good option. Profits will be huge if lucky,
but the losses will be pronounced at times. The best way to minimize
this risk is by diversifying your portfolio. Concentrating and investing
heavily in one sector is also risky. The more diverse the portfolio, the
lesser the risk is.

Interest Rate Risk

Interest rate changes depending on the credit available with lenders and
the demand from borrowers. They are inversely related to each other.
Increase in the interest rates during the investment period may result in
a reduction of the price of securities.

For example, an individual decides to invest Rs.100 with a rate of 5%

for a period of x years. If the interest rate changes for some reason and
it becomes 6%, the individual will no longer be able to get back the
Rs.100 he invested because the rate is fixed. The only option here is
reducing the market value of the bond. If the interest rate reduces to 4%
on the other hand, the investor can sell it at a price above the invested
amount.

Liquidity Risk
Liquidity risk refers to the difficulty to redeem an investment without
incurring a loss in the value of the instrument. It can also occur when a
seller is unable to find a buyer for the security. In mutual funds, like
ELSS, the lock-in period may result in liquidity risk. Nothing can be
done during the lock-in period. In yet another case, exchange-traded
funds (ETFs) might suffer from liquidity risk.

As you may know, ETFs can be bought and sold on the stock exchanges
like shares. Sometimes due to lack of buyers in the market, you might
be unable to redeem your investments when you need them the most.
The best way to avoid this is to have a very diverse portfolio and to
select the fund diligently.

Credit Risk
Credit risk means that the issuer of the scheme is unable to pay what
was promised as interest. Usually, agencies which handle investments
are rated by rating agencies on these criteria. So, a person will always
see that a firm with a high rating will pay less and vice-versa. Mutual
Funds, particularly debt funds, also suffer from credit risk.

In debt funds, the fund manager has to incorporate only investment-

grade securities. But sometimes it might happen that to earn higher
returns, the fund manager may include lower credit-rated securities.
This would increase the credit risk of the portfolio. Before investing in a
debt fund, have a look at the credit ratings of the portfolio composition.

So, right now, you are aware of the risks that are linked with mutual
funds. Head to Clear Tax Invest where you can invest in mutual funds.
You can either grow your wealth or save taxes with us.
How to Pick the Right Mutual Fund
Mutual funds are a preferred choice among investors today owing to
their attractive returns and diversified portfolio. However, as an investor
one must remember that no single scheme or set of schemes is suitable
for everyone. A suitable mutual fund scheme for an investor is the one
which suits his/her investment objective and risk appetite among other
factors.

1) Investment Objective
Investment objective refers to an investors financial goal which he/she
aims to accomplish with the mutual fund investment. The investment
objective can be any short-term or long-term financial aspiration of the
investor – buying a house/car, financing children’s higher education,
going on a vacation, retirement, etc.

2) Time Horizon
Time horizon refers to the time period for which an investor wishes to
keep his/her money invested in a mutual fund scheme. It can be either as
short as 1 day or as long as more than 5 years. Different fund categories
work best for different time horizons. This is because some funds invest
in shorter dated debt and others invest in longer dated debt. Equity funds
should ideally be chosen if the investment horizon is more than 5 years.

3) Risk tolerance
Risk tolerance refers to the amount of risk an investor is willing to take
with his/her invested money. SEBI in 2015 made it mandatory for all
mutual fund houses to display a riskometer which consists of 5 levels of
risk associated with the invested principal amount. The 5 risk levels are
– low, moderately low, moderate, moderately high, and high. The table
below gives you the fund categories that are most suitable to different
risk levels and time horizons.
Factors for Choosing Best Mutual Fund Scheme
After selecting the mutual fund category on the basis of investment
objective, time horizon and risk tolerance, choose a mutual fund scheme
within that category on the basis of the following factors:

1) Performance Against Benchmark

A benchmark index of a mutual fund scheme is a standard against which
its performance and stock allocation are compared. The benchmark
index guide the investment philosophy of the scheme. Thus, the asset
allocation of a benchmark index should match the investment objective
of the scheme. For instance, the benchmark index of a large cap mutual
fund should be an index of large cap stocks and the benchmark of a
mutual fund focussed on banking stocks should be a banking index.

SEBI has also mandated that mutual funds use the Total Returns Index
(TRI) variant of indices as their benchmarks. TRIs are built on the
assumption that dividends are reinvested in mutual funds as and when
they are declared. In other words, the account for the fact that companies
declare and pay out dividends. This makes them better benchmarks than
ordinary Price Indices (PI).

2) Performance Against Category

Another factor which is equally important to assess while selecting a
mutual fund scheme is its performance in comparison to its active peer
group. This helps in getting a holistic understanding of the fund’s
performance. This comparison should only be among the same type of
mutual fund schemes. For instance, a large cap equity mutual fund can
only be compared with other large cap mutual funds and not against mid
cap funds or debt funds.
3) Consistency of Performance
A good mutual fund is one which is able to generate good returns for its
investors consistently over a period of time and not just whirlwind
returns. The fund should be capable of providing consistent returns in
both bullish and bearish periods of the stock market.

4) Fund Managers Experience

Another important factor to be considered while selecting a mutual fund
is the performance of its fund manager and how long he/she has been at
its helm. For this, an investor should look at the fund manager’s
experience with the fund in question and with other funds currently
managed or managed in the past by him/her.

5) AMC Track Record

An Asset Management Company (AMC), also known as fund house, is
the company which manages a mutual fund scheme. For example,
HDFC Mutual Fund is the name of the AMC which manages schemes
like HDFC Equity, HDFC Top 100 or HDFC Small Cap Fund. Many
decisions are made at AMC level by the Chief Investment Officer (CIO)
of the AMC. A poorly selected stock is often present in several schemes
owned by an AMC, because the selection has been made at AMC level.
Thus, it is important to check the track record of an AMC while
selecting a mutual fund scheme.

6) Schemes Assets Under Management (AUM)

The AUM of a mutual fund scheme refers to the value of assets under its
management. In other words, it simply means how many subscriptions
the scheme has received. In the equity category, especially in small cap
funds, a large AUM can make it hard for the fund to enter and exit
companies. On the other hand, larger sizes of AUM is favourable in case
of liquid and short term debt funds as it makes the fund less vulnerable
to redemptions made by large investors.
7) Expense Ratio
The expense ratio of a fund reflects the fee charged by a AMC for the
administration, management, promotion and distribution of a mutual
fund. All expenses incurred in the running of the fund are included in
this figure. This figure is capped at 2.25% of the total fund assets by
capital markets regulator SEBI (Securities and Exchange Board of
India). Direct plans of mutual fund schemes have lower expense ratio
than the regular plans because no distribution commission is paid in the
case of direct plans. In general, lower the expense ratio, the higher are
the net returns of a mutual fund scheme.

LITERATURE REVIEW

Literature Review: 1
Author: (Varun Sagar Singal, 2018)
Title: “Factors Affecting Investment in Mutual Fund”

Objectives:

- To find out the factors affecting investment decision on mutual funds

and the impact of behavioural

factors on an investor.

- To finding about the factors that prevent the people to invest in mutual
funds.

Sample design: In this study both exploratory as well as descriptive

research design has been used.

And data are collected through self-administered structured

questionnaire is used as survey for primary data collection.

Sample methodology: The study is done on the proportionate quota

sampling technique.

Sample size: The sample size in this study was 226 citizens of SDMC.

Conclusion: The study integrates constructs from the factors affecting

investment in mutual funds into an insightful investment model [IM] for
adoption. The results indicate that the fundamental factors and investor
perception play a very vital role in the investment decision making
process.

Literature Review: 2
Author: (Selim Aren, 2015)

Title: “The Factors Influencing Given Investment Choices of

Individuals”
Objectives:

- To examine the effects of several factors such as demographic,

investment decision criteria & financial literacy on more preferred
investment alternatives in Turkey.

Sample methodology: In this study the data are analyzed through

hypothesis, validity and reliability testes.

Sample Size: The sample of 112 respondent’s response was taken in this
study.

Conclusion: this study provides considerable findings regarding the

determinants of given investment instruments (i.e., foreign currency,
bank deposit, bond, stock and mutual fund). Besides, it can be suggested
for future research to include some notable psychological factors such as
personality traits

and emotional intelligence into their research models.

Literature Review: 3
Author: (Rajesh Kumar, 2014)

Topic: “Factors Affecting Perception of Investors Towards Mutual

Funds”

Objectives:

-Purpose behind making investment in mutual funds.

-Sources of information relied upon by investors

-Investors’ perception regarding benefits offered.

Sample design: The researcher used primary data for data collection
through structured questionnaire.

Sample methodology: The methods used in the research were

tabulation, percentage, ranking, scoring and weight average score, and
coefficient of concordance etc.

Sample size: 200 respondents were taken from all over the Punjab state,
50 respondents from each districts were taken.

Conclusion: Majority of the investors were satisfied with the

performance of their mutual funds and majority of them want to invest
private sector mutual funds and growth and diversified schemes in
future. A very bright future has been expected of private sector mutual
fund industry as against bright future expected of public sector.

Literature Review: 4
Author: (T. Velmurugan, 2015)

Topic: “A Study on Factor Influencing Mutual Fund Investment -

Special Reference to Investor in Pharmaceutical Sector at Chennai
Metro City”

Objectives:

-To identify the factors influencing mutual fund investment decision

-To prioritize the various factors and analyze the major factors which
influence investment decision in mutual fund.

Sample design: The researcher used primary data and collected data
through structured questionnaire from doctors, engineers and IT
professionals.

Sample methodology: The analysis has done through various statistical

techniques such as cronbach’s alpha for reliability, regression, factor
analysis etc.

Sample size: Researcher has collected data from 105 respondents of

Chennai metro city.

Conclusion: It was concluded that in the analysis there were various

factors that has been identified for taking investment decision making in
mutual funds. The most important factors are fund size, rating by rating
agency, redemption facility of funds, prompt settlement, and fund
sustainability playing crucial role in investor taking investment decision
in mutual fund.

Literature Review: 5
Author: (Chawla, 2014)

Topic: “An Empirical Analysis of Factors Influencing Investment in

Mutual Funds in India”

Objectives:

-To understand the mutual fund buying behavior of individual investors.

-To identify the various attributes which investors consider important
while investing in mutual funds.

-To extract the underlying factors of importance and their relative

considerations for investors.

-To examine whether these extracted factors vary with demographic

variables.

Sample design: The researcher has done exploratory research and

conducted unstructured interviews

along with structured questionnaire.

Sample methodology: The researcher used reliability test using

Cronbach’s alpha, scoring & one-way

ANOVA.

Sample size: This analysis includes sample of 431 responses from online
and personally contacted investors.

Conclusion: It has been found that past performance of the issuing

company, tax-saving funds and growth funds with capital appreciation
are the important considerations for investors in a mutual fund.

It is surprising to know from our study that more than 54 per cent of
investors want a capital appreciation and higher return along with tax
savings and low risk.

Literature Review: 6
Author: (Dr. V. Ramanujam, 2014)

Topic: “A Study on Factors Influencing for Investment in Mutual Fund

among the Investors With Reference to Madurai District”

Objectives:

-To study the mutual fund investment decision among the investors;

-To reveal the important factors among the different customer segments
in mutual funds market

Sample design: Both primary as well as secondary data was used in the
research and pre structured interview was scheduled.

Sample methodology: The researcher used T-Test, One-way Analysis

of Variance, factor analysis, & multiple regression analysis was used for
data analysis.

Findings: The highly considered factors to select the mutual fund

scheme among the individual investors are performance and nature of
fund. The factors considered for selecting the mutual fund identified by
the factor analysis are the nature of fund, performance, company
services, fund manager and personal factor.
 RESEARCH METHODOLOGY

1) Problem Statement:
“A Study on Factors Influencing Investment in Mutual Fund”

2) Objectives:
i. Primary Objective:

•To examine factors that influence investment in mutual fund

ii. Secondary Objectives:

•To identify the factors that influence mutual fund investment decision.

•To identify various attributes which investors consider important while

investing in mutual fund.

3) Variables of the study:

• Source of information

• Experience of investors

• Mutual fund schemes

• Security

• Objective of investors

• Investors choice

• Investors interest towards mutual fund

4) Research Design:
The study is based on exploratory research design in nature. A detail
about present situation can be found out by the exploratory study.

5) Sources of Data collection:

This project Primary & secondary data will be used for data collection.
Primary data will be collected through structured questionnaire &
secondary data will be collected from websites, various research papers
etc.

6) Sample size:
For this research the sample size of 120 respondents will be collected.

7) Data collection instrument:

In this research study structured questionnaire is used as data collection
instrument.

8) Limitations of the study:

The present study is based upon the results of survey conducted on 120
mutual fund investors.

The implications of the study are subject to the limitations of sample

size, psychological and emotional characteristics of surveyed population.
 Objectives of the Study
 To study the mutual fund investment decision among the
investors;

 To reveal the important discriminate factors among the different

customer segments in mutual funds market;

 To offer valuable recommendations.

 Research Design
A research design helps to decide upon issues like what, when, where,
how much, by what means etc., with regard to an enquiry or a research
study. It is an arrangement of conditions for collection and analysis of
data in a manner that aims to combine relevance to the research purpose
with economy in procedure. In fact, the research design is the conceptual
structures within which research is conducted; it constitutes the blue
print for the collection, measurement and analysis of data.
 Nature of Data and Data Collection
Both primary and secondary data have been used for the present study.
The secondary data are collected from the books journals and various
reports related to mutualfunds market in India. The data related to
investors’ behaviour in mutual fund market have been collected from the
pre structured interview schedule.
 Tools for Analysis
T-Test The ‘t’ test has been used to find out the significant difference
among the two means. It is calculated by 1 2 1 2 2 2 2 `1 2 1 1 2 n 1 n 1
n n 2 n( )1 s n( )1 s x x t χ + + − − σ + − σ − = With the degree of
freedom of (n1+n2-2) (chow, et al., 1995) One-Way Analysis Of
Variance The one-way analysis of variance is used to find out the
significant difference among the more than two groups regarding a
particular criterion which is measured in interval scale. (Sanjeev and
Rust, 1997) SmallerVariance GreaterVariance F= Factor Analysis The
factor analysis is a multi-variate method. It is a statistical technique to
identify the underlying factors among a large number of interdependent
variables. It seeks to extract common factor variance from a given set of
observations. It splits a number of attributes or variables into a smaller
group of uncorrelated factors. It determines which variables belong
together. This method is suitable for the cases with a number of
variables having a high degree of correlation. (Aaker, 1997)4 . Multiple
Regression Analysis The multiple regression analysis has been
administered to find out the impact of independent variables on the
dependent variable when both variables are in interval scale. The
ordinary least square (OLS) has been followed to fit the regression
model (Jacques, 1997) 5. The fitted regression model is Y=
a+b1X1+b2X2+…….bnXn+e Discriminate Analysis The objective of
discriminate analysis is to separate a population into two distinct groups
or two distinct conditional ties. After such a separation is made, it should
be able to discriminate one group against the other. For this purpose, a
function called ‘Discriminant function’ is constructed. It is a linear
function and it is used to describe the difference between two groups. If
it is applied to identify the importance of discriminate variables among
the two groups, it is called as ‘two group discriminate analysis. If the
groups aremore than two, it is called as multi discriminate analysis. The
un-standardized procedure has been followed to establish the two group
discriminate function. It is Z= a+b1X1 + b2X2+…..bnXn.

Mean Difference and Discriminant Power of the factors among the

individual and institutional Investors

The following the table shows that the factors influencing to invest on
mutual funds by the respondents it consists of safety, easy liquidity
stability income, capital growth, transferability, tax planning, status,
flexibility, speculative value, diversification, low cost of investment,
regular saving, higher return, risk bearing, future planning, friends and
relatives, financial advisors brokers & agents and company reputations.

statistics are significant at five per cent level. The significantly

associating profile variables with the perception on performance factor
are:

Mean Difference and Discriminant Power of the factors

among the individual and institutional Investors:

S . Factors IDI ILI Mean ‘t’ Wilks

N Differenc Statistic Lambd
o e s a

1 Nature of 3.482 3.571 -0.3527 -2.5738 0.8265

fund 4 8
2 Performanc 3.467 3.672 -0.8149 -0.6729 0.7371
e 6 5

3 Company 3.864 3.813 -0.8364 -2.7616 0.8236

Services 6 6

4 Fund 3.487 4.113 -0.7824 -2.9136 0.2458

Manager 5 7

5 Personal 3.257 3.741 -0.8159 -1.6284 0.7419

Factor 3 8

Significant at five percent level

The higher mean difference among the two group of investors have been
noticed in the case of fund manager, company service and personal
factors since their respective mean differences are -0.7089, -0.6711 and
0.4924.The higher discriminant power is identified in the case of fund
manager and nature of fund since their respective Wilks Lambda co-
efficient are 0.1093 and 0.1862. the significant mean difference is
noticed in the case of factors namely nature of fund, company service,
fund manager and personal factor.
Association between profile investors and their perception
on factors influencing to mutual funds
The following the table 6 shows that the association between profile
investors and their perception on factors influencing to invest in mutual
funds it consists of age, sex, level of education, occupation, personal
income, family size, Number of earning members per family, Family
income, Monthly savings, Risk orientation, Knowledge on financial
market, Scientific orientation, Years of experience and Proportion of
investment on to total investment. Regarding the perception on nature of
fund, the significantly associating profile variables are level of
education, personal income, family size, number of earning members per
family, family income, monthly savings, risk orientation, and knowledge
on financial market, since their respective ‘F’ statistics are significant at
five per cent level. The significantly associating profile variables with
the perception on performance factor are level of education, occupation,
personal income, family size, family income, monthly savings, risk
orientation, knowledge on financial market, scientific orientation, years
of experience and the proportion of investment on mutual funds to total
investment. Regarding the perception on company services factor, the
significant difference among the investors have been identified when
they classified on the basis of family income, monthly savings,
knowledge on financial market and proportion of investment on mutual
funds to total investment. The significantly associating profile variables
regarding the perception on fund manager factor are age, occupation,
personal income, number of earning members per family, family
income, knowledge on financial market, and years of experience.

FINDINGS
 The highly considered factors to select the mutual fund scheme
among the individual investors are performance and nature of fund.
Whereas among the institutional investors, these are fund manager
and nature of fund. The important discriminant factors among the
individual and institutional investors are fund manager and nature
of fund

 The factors considered for selecting the mutual fund identified by

the factor analysis are the nature of fund, performance, company
services, fund manager andpersonal factor. The important variables
in the ‘nature of fund’ factor are fund objectives and credibility of
sponsors whereas the important variables in the performance factor
are dividend and expenses charges.

 The significantly associating profile variables with the perception

on factors leading to select the mutual funds are knowledge on
financial market, level of education and family income. Regarding
the perception on performance factor the significant associating
profile variables are level of education, personal income, family
size, family income, monthly savings, risk orientation, knowledge
on financial market, scientific orientation, years of experience and
the proportion of investment on mutual funds to total investment.

 The important decision variables to invest on mutual funds

among the individual investors are liquidity factors, risk involved
in mutual fund and current market conditions. Among the
institutional investors, these are reputation of fund manager, type
of fund and past performance of the fund.

 The significantly associating profile variables with the perception

on decision variables among the investors are monthly savings,
risk orientation, family income, personal income and occupation.
Quality of the Fund Manager
Quality of the Fund Manager is the key to good performance of any
AMC. A very good performing scheme may suddenly start
underperforming because of the change in the managers.

Promotional techniques
The mutual funds companies should increase their advertisement
budget. They should distribute the pamphlets and brochures among
walk in the banks. Since, proper counseling by banks, AMCs and
agents will motivate the investors, the companies should train their
relevant people to promote the investment on financial market.

Differentiated product
The individual investors and institutional investors vary according to
their level of expectation and perception on mutual funds. The factors
leading to invest on mutual funds and selection of mutual fund
scheme are also differing from each other. The mutual funds
company should analyze the need of various investors and design the
mutual funds according to the need of various segments.
 CONCLUSION
The present study concludes that the institutional investors are well
versed than the individual investors in the mutual fund market. The
important factors leading to invest on mutual funds are level of
education, occupation, personal income, family size, family income,
monthly savings, risk orientation, knowledge on financial market,
scientificorientation, and years of experience and the proportion of
investment on mutual funds to total investment. The factors
considered to select the mutual fund schemes are the natural of funds,
performance, company services, fund manager and personal factor.
The important decision variables influencing the investment on
mutual funds are liquidity factors, risks involved and current market
conditions. The higher gaps are identified among the individual
investors than the institutional investors. The important reasons for
switching from one found to another are consistency in performance,
pest performance and found managers efficiency. The important
problems identified by the investors are performance, fund
management, company, service and market. The profile of the
investors plays its own role in the investors’ behavior. Since the
scope of mutual fund market is very under in India, the company
realizes the needs of the different class investors and designs the
product according to their needs. The service quality of the mutual
fund company is the only way to wider their market base.

ANNEXURE
1. Kapil Sharma (2006) “Mutual fund purchases by High Net worth
Individuals in India” Journal of Management research,6 (2), August,
pp. 59-71.

2. Uppal, R.K. and Rimi Kaur, (2007), “Mutual funds in Indian

Banking –an Emerging some of investment in the competition era”,
Technical Journal of Management Studies, 2(1), April-September,
pp.35-36.

3. Jain, Roshan (1996) “Mutual funds: Evaluating the performance”

Charted Financial Analyst, April, pp. 45-46.
 4. S.Baskaran and Ashokkumar (1996) “Mutual funds: Evaluating
the performance” Charted Financial Analyst, April, pp. 90-91.

5. Saijeev varki and Rowland, T.Rust, (1997), “satisfaction is

relative”. Marketing research: a magazine of management
applications, 9(2), pp.14.19.

6. Steven, A., Sinclair and Edward c.stalling (1990), “how to

identify differences between market segments with attitude analysis”,
industrial marketing management, 19(February), pp.31-40

7. Zafar khan, sudhir K.chanola and S.thomas A.Cianciolo (1995),

“Multiple discriminant analysis: tool for effective marketing of
computer information systems to small business clients”, journal of
professional services marketing, 12(2), pp.153-162.

QUESTIONNAIR
Dear Respondent,

I am Fatima Siddiqui a student of final year currently pursuing my Masters of

Business Administration (MBA) from Shambhunath Institute of Engineering and
Technology. I am conducting a research on “A Study on Factors Influencing
investors to Invest in Mutual fund”. This research project is taken as a study
purpose and it is not related with any other purpose. I kindly request you to
complete the questionnaire with the honest answers which would take
approximately 10-15 minutes of your valuable time. Your responses will be
kept “Highly Confidential”.