SUMMER TRAINING PROJECT REPORT ON A STUDY ON AWARENESS AND PERCEPTION OF MUTUAL FUNDS AT

DEHRADUN

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE MASTERS DEGREE IN BUSINESS ADMINISTRATION OF

UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN

SUBMITTED TO: INTERNAL GUIDE Prof.N.N.Pandey Asst. Professor IMS DEHRADUN EXTERNAL GUIDE Mr. RAJEEV SHANKAR Sr.EXECUTIVE NJ INDIAINVEST PVT.LTD DEHRADUN SUBMITTED BY: RICHA YADAV MB10B50

INSTITUTE OF MANAGEMENT STUDIES-DEHRADUN

BATCH 2010-12

ACKNOWLEDGMENTS

With regard to my project on mutual fund I would like to thank each and every one who offered help, guidance and support whenever requires. First and foremost I am exuberantly thankful to Mr. RAJEEV SHANKAR (Sr. Executive) of NJ INDIA INVEST PRIVATE LTD for their support and guidance in the project work. Further I want to thank to Mr. N.N PANDEY faculty at IMS, Dehradun for their timely suggestions and for acting as a Guiding star for me, who helped me in their own way to complete this interim report. My sincere apologies to those who helped me in a variety of ways and whose name could not be individually acknowledged. I sincerely believe that the road of improvement is never ending. Hence I shall forward to end gratefully acknowledge all suggestions received and I further welcome inspiration and suggestion to make it best.

RICHA YADAV

CERTIFICATE

I have the pleasure in certifying that Ms. Richa Yadav is a bonafide student of IInd Semester of the Masters Degree in Business Administration (Batch 2010-12), of Institute of Management Studies, Dehradun under Uttarakhand Technical University Roll No 010140500110.

She has completed his/her project work entitled A STUDY ON AWARENESS AND PERCEPTION OF MUTUAL FUNDS under my guidance.

I certify that this is his/her original effort & has not been copied from any other source. This project has also not been submitted in any other Institute / University for the purpose of award of any Degree.

This project fulfills the requirement of the curriculum prescribed by this Institute for the said course. I recommend this project work for evaluation & consideration for the award of Degree to the student.

Signature

Name of the Guide : Mr. N.N.Padney Designation Date : Asst. Professor :

Executive Summary

Probably nothing can define the spirit of being mutual better than this verse. And who else to understand it better than the mutual fund industry. It seems the mutual fund industry in India is slowly but surely beginning to recognize this aspect for the better. Today, there is greater emphasis on the role of the industry, the regulator. Securities and Exchange board of India (SEBI) and industry body, Association of Mutual Funds in India (AMFI) on creating awareness among investors and improving investor services. In fact, the efforts of both the regulator as well as AMFI are laudable for promoting the cause of investor education religiously. The one product caters to all needs approach has given way to offering products which suite the specific needs of investors and product innovation. There is also increased emphasis on convenience in terms of comfortable transaction services to investors by using delivery or distribution platforms like the Internet, ATMs, Corporate brokers, etc. Infact, distribution innovation has come to play a key role in the growth of the industry. Industry players are using different distribution channels to increase their market penetration. However, that is not to say that the Indian Mutual Fund Industry is completely problem-free. Issues such as low penetration in both semi urban as well rural areas (mutual funds have so far been largely an urban affair that too in big cities), poor investor awareness and exploitation of this fact by industry players are some of the issues that industry needs to address. With the increase in domestic saving s and improvement in deployment of investment through markets, the need and scope for mutual fund operation has increased tremendously. Mutual funds are not only best suited for the purpose but also are capable of meeting this challenge effectively. Professionals who manage mutual funds are considered to have a better knowledge of market behavior. Mutual funds also create awareness among the urban and rural middle-class about the benefits of investments in capital markets through profitable and safe avenues. Within short span of time mutual fund operation has become an integral part of the Indian financial scene and is balanced for rapid growth in the near future. Today, numerous schemes, tailored to meet the diversified needs of savers, are being offered by many institutions. In this project an attempt has been made to evaluate the awareness and perception of mutual fund on different parameters.

TABLE OF CONTENTS

Sr. No. 1

Name

Page No.

CHAPTER I.. Objective Scope 8 9

CHAPTER IICompany profile Introduction 10

CHAPTER IIIndustry profile History and organization of Mutual Fund in India Mutual Fund companies in India 27 30

CHAPTER IIIIntroduction about Mutual Funds 4 Mutual fund : why? Mutual fund: what is it? Mutual fund: what is it made of? Different type of MF 5 CHAPTER IV Methodology Limitation 42 44 33 35 36 38

CHAPTER V Analysis and interpretation of Mutual of data 45

CHAPTER VII Findings 61

CHAPTER VIII Recommendation 62

CHAPTER IX Conclusion 64

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CHAPTER X Bibliography 65 66

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ANNEXURE.

CHAPTER I OBJECTIVES

The main aim of undertaking this study is to accomplish the following objective: Conducting a market survey and understanding the customer perception about mutual funds. Analyzing the market survey and thereby finding out the investment pattern of the customer. Proper understanding and evaluation of mutual funds as an investment option. Analysis customer awareness about Mutual fund. Proper understanding and analysis of the perspective investor about this financial product in terms of safety, liquidity, service, returns and tax saving.

SCOPE OF THE STUDY A boom has been witnessed in mutual fund industry in recent times. A large number Of new players have entered the market and trying to gain market share in this rapidly Improving market. This research was carried in Dehradun .I was sent to one of the branches of NJ India Invest private limited situated in Dehradun from 10th June 2011 to 8th August 2011 where I conducted a market survey as well as completed my project work titled A study on awareness and perception of Mutual fund This study will help to know the preferences of the investors regarding Company profile, portfolio, mode of investment, option for getting return and so on they prefer. This project report may help the company to make further planning and strategy.

COMPANY OVERVIEW

1. INTRODUCTION:-

Success is a journey, not a destination. If we look for examples to prove this quote then we can find many but there is none like that of NJ India Invest Pvt. Ltd. Back in the year 1994, two people created history by establishing NJ India Invest Pvt. Ltd leading advisors and distributors of financial products and services in India. NJ has over a decade of rich exposure in financial investments space and portfolio advisory services. From a humble beginning, NJ over the years has evolved out to be a professionally managed, quality conscious and customer focussed financial / investment advisory & distribution firm. NJ prides in being a professionally managed, quality focused and customer centric organisation. The strength of NJ lies in the strong domain knowledge in investment consultancy and the delivery of sustainable value to clients with support from cutting-edge technology platform, developed in-house by NJ. At NJ we believe in Having single window, multiple solutions that are integrated for simplicity and sapience. Making innovations, accessions, value-additions, a constant process. Providing customers with solutions for tomorrow which will keep them above the curve. Today NJ has over INR 60 billion* of mutual fund assets under advice with a wide presence in over 96 locations* in 18 states* and 500+ employees in India. The numbers are reflections of the trust, commitment and value that NJ shares with its clients NJ Wealth Advisors, a division of NJ, focuses on providing financial planning and portfolio advisory services to premium clients of high net-worth. At NJ Wealth Advisors, we have developed processes that focus on providing the best in terms of the advice and the on-going management of your portfolio and financial plans. At NJ, our experience, knowledge and understanding enables us to provide you with the expected value, in an enhanced way. As a leading player in the industry, we continue to successfully meet the expectations of our clients, through meaningful and comprehensive solutions offered by NJ Wealth Advisors.

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2. VISION & MISSION OF NJ India Invest:Vision To be the leader in our field of business through, Mission Ensure creation of the desired value for our customers, employees and associates, through constant improvement, innovation and commitment to service & quality. To provide solutions which meet expectations and maintain high professional & ethical standards along with the adherence to the service commitments? 3. PHILOSOPHY:At NJ our Service and Investing philosophy inspire and shape the thoughts, beliefs, attitude, actions and decisions of our employees. If NJ would resemble a body, our philosophy would be our spirit which drives our body. Service Philosophy: Our primary measure of success is customer satisfaction We are committed to provide our customers with continuous, long-term improvements and value-additions to meet the needs in an exceptional way. In our efforts to consistently deliver the best service possible to our customers, all employees of NJ will make every effort to: Think of the customer first, take responsibility, and make prompt service to the customer a priority Deliver upon the commitments & promises made on time Anticipate, visualize, understand, meet, exceed our customers needs. Bring energy, passion & excellence in everything we do. Be honest and ethical, in action & attitude, and keep the customers interest supreme. Total Customer Satisfaction Commitment to Excellence Determination to Succeed with strict adherence to compliance Successful Wealth Creation of our Customers

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Strengthen customer relationships by providing service in a thoughtful & proactive manner and meet the expectations, effectively.

Investing Philosophy: We aim to provide Need-based solutions for long-term wealth creation. We aim to provide all customers of NJ, directly or indirectly, with true, unbiased, needbased solutions and advice that best meets their stated & un-stated needs. In our efforts to provide quality financial & investment advice, we believe that Clients want need-based solutions, which fits them. Long-term wealth creation is simple and straight.t Asset-Allocation is the ideal & the best way for long-term wealth creation. Educating and disclosing all the important facets which the customer needs to be aware of, is important. The solutions must be unbiased, feasible, practical, executable, measurable and flexible. Constant monitoring and proper after-sales service is critical to complete the ongoing process.

At NJ our aim is to earn the trust and respect of the employees, customers, partners, regulators, industry members and the community at large by following our service and investing philosophy with commitment and without exceptions. 4. MANAGEMENT:The management at NJ brings together a team of people with wide experience and knowledge in the financial services domain. The management provides direction and guidance to the whole organization. The management has strong visions for NJ as a globally respected company providing comprehensive services in financial sector. The 'Customer First' philosophy is deeply ingrained in the management at NJ. The aim of the management is to bring the best to the customers in terms of Range of products and services offered Quality Customer Service

All the key members of the organization put in great focus on the processes & systems under the diverse functions of business. The management also focuses on utilizing technology as the key enabler for all the activities and to leverage the technology for enhancing overall customer experience.

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The key members of the management are: Mr. Neeraj Choksi Mr. Jignesh Desai Key Sales Team: Mr. Misbah Baxamusa National Head Mr. Naveen Rathod V.P. (Sales) Mr. Kulbhushan Nandwani A.V.P. (Marketing) Mr. Prashant Kakkad A.V.P. (Sales) Key Executive Team: Mr. Shirish Patel Mr. Abhishek Dubey Mr. Vinayak Rajput Mr. Dhaval Desai Mr. Col. Dixit Mr. Tejas Soni Mr. Viral Shah Mr. Rakesh Tokarkar Information Technology Business Process Operations Human Resources Administration Finance Research Compliance Jt. Managing Director Jt. Managing Director

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5. People & culture:People: Enthusiasm, Enterprise, Education and Ethics form the four pillars at NJ. At NJ one can witness the vibrant energy, enthusiasm and the enterprising drive to excel flowing freely throughout the organization. At NJ can also experience the creativity, one-to-one responsiveness, collaborative approach and passion for delivering value. At NJ people evolve to be more effective, efficient, and result oriented. Knowledge is inherent due to the education-centric approach and the experience in handling different clients groups across diverse product profiles. NJ understands that the people are the most important assets of the company and it is not the company that grows but the people. NJ hence undertakes rigorous training and educational activities for enhancing the entire team at NJ. NJ also believes in the Learning through Responsibility concept for its employees. For people at NJ success is not a new word, but is a regular stepping stone to realizing the one vision that everyone shares. Culture :At NJ we believe in transforming the lives of our customers. We exist to create a difference a change towards a better life. The culture at NJ reflects this responsibility, this dream of transforming lives. And we at NJ are always excited and enthused in doing so. We believe in keeping You First, providing you with products and services that meet youre stated and unstated needs. Client satisfaction and client service is the Mantra we constantly recite. This service oriented philosophy runs throughout the organization, from top to bottom. Employees are given ample freedom in their work. The objective is to keep an open, healthy environment with ample scope for enterprise, improvement, innovations and outof-the box solutions. Our efforts are constantly engaged in improving our existing services, offering new and innovative solutions that go beyond your expectations. This focus has made us one of the most respected and preferred service providers, especially in the mutual fund industry. 6. SERVICE STANDARDS:Service in words, service in action, Service is the key to unlocking customer satisfaction, which again is key for sustainability Business. At NJ we understand this very well. NJ has set strict processes in place to delivered service to customers. AT NJ strict quality service standards are set and a well defined established and followed religiously by our quality customer service team. Performance evaluated on a frequent basis and glitches are iron out.

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But quality service also involves quality people in addition to processes. NJ gives Significant the proper training and development of the people involved in the service delivery chain. Further Us: Have well-defined Privacy Policy to keep clients information confidential & internal done on the same at regular intervals. Receive various statistics which are analyzed on an ongoing basis to improve the standards. We are committed to improve and enhance our services and undertake new Services initiative and other services differentiate us with other services providers in the industry. Our service commitment.. The service commitments are to guide the actions of the people at NJ. Clearly stated Customers can freely communicate any such action /events wherein they feel that any Of the commitments have been breached/ compromised . At NJ we desire to honors Our commitments all points of the time and to all our customers without any bias. To provide customer-focused need-based valued services. To provide reliable, accurate and timely information. To maintain all records in privacy. To optimize services/benefits at least justifiable cost. To develop and grow the customers business. To provide constructive after sales service. To honor our service commitments. As NJ Wealth Advisors Global Private Client, you get comprehensive set of services that ensure you stay informed, insightful, in command, of your investments at all times.

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7. PRODUCTS:-

Life Vista Life is counted not in years, but in moments. Moments of truth, joy, achievement and satisfaction, peace, tranquillity, and freedom. At NJ, we bring such moments to life. How we can help you? We will do a detailed study of your goals and objectives in life and would help you by devising a comprehensive plan to help you achieve them. We would also regularly monitor your plans to make sure that you are always on track to achieve your goals.

Asset Vista Wealth is not an end. Neither is it a beginning. Wealth is a process, a journey. A journey of power, achievement and responsibility. At NJ we ensure that this journey continues and grows. How we can help you? We will seek to manage and monitor your portfolio as per your objectives and your risk profile. We would manage your portfolio the Asset Allocation way which is the most effective & ideal way to manage investments. You would also have access to consolidated portfolio reports that enable you to see all your investments into multiple avenues at a single place.

8. SERVICES PROVIDED TO CLIENT:As NJ Wealth Advisors Global Private Client, you get comprehensive set of services that ensure you stay informed, insightful, in command, of your investments at all times.

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Comprehensive Financial Planning:We all have many responsibilities and goals in our lives. We have dreams and aspirations for a better future. But quite often we are not sure as to how we will fulfil these goals and aspirations. Life changes over time. We may never be sure what today holds for us tomorrow. What if something goes wrong? How do we make sure that we get what we wish? A comprehensive Financial Plan is what you need. At NJ Wealth Advisors we offer you with Comprehensive Financial Planning solutions which would involve A detailed study of your goals Preparation of a comprehensive Financial Plan Monitoring of the Financial Plan on an on-going basis At NJ Wealth Advisors we offer you with comprehensive Financial Planning Services under the product Life Vista.

Quality Portfolio Advisory:Making money is easy. Managing money is difficult. And managing money in todays complex financial markets with multiple products on an ongoing basis becomes even more difficult.

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As investors we often may feel the lack of time and energy to undertake monitoring and managing of our investments in multiple avenues. This requires both dedicated efforts and skills in portfolio management. At NJ Wealth Advisors we realise the need for quality, unbiased portfolio advisory services. At NJ we would aim to manage your portfolio with a superior, time tested and much effective way of Asset Allocation keeping in mind your risk profile. At NJ Wealth Advisors we offer you with quality Portfolio Advisory Services under the product Asset Vista. Consolidated Reporting:Quality online Wealth Account: As a premium client you would have access to one of the best online investment accounts that offer comprehensive reports, many of which are unique in nature and give valuable insights on our investments Our online Wealth Account covers almost all the investment avenues that you may have: Mutual Funds All AMCs, All Schemes Direct Equity Life Insurance Physical Assets Gold and Property Private Equity Business Debt Products Bank Deposits and Company Deposits RBI / Infrastructure Bonds Postal Savings KVP, MIS, NSC Debentures Small Savings PPF, NSS

You would have access to Consolidated Net Asset Reports which would give you a single view of all your investments into different avenues as given above. Further, within each of the Asset class we have many more reports and utilities. Some of the reports covered are

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Consolidated: Consolidated Asset Allocation, Consolidated Net Asset, Interest Income, Profit & Loss Mutual Funds: Valuation, Transaction, Profit & Loss, Performance, Portfolio reports like - AMC / Sector / Equity / Credit / Debt Exposure, Weighted Average Maturity, Dividend history, etc Direct Equity: Demat accounts, Transaction, Valuation, and Profit & Loss Life Insurance: Policy Report, Premium Reminder, Cash Flow Debt: Transaction, Interest Income, Maturity reports for different Asset Dedicated Team: At NJ Wealth Advisors, we work in a team concept to provide quality, effective and timely service to our clients. The team is designed keeping you at the beginning or the end of the flow as the originator and the end receiver of any request or service. The team handling you consists of the Relationship Manager and the Account Manager who would be in direct touch with you. This would be supported by the Centralized Research Team, the Chief Portfolio Manager and the Service Team. All the important investment decisions and/or plans recommended to you are actually prepared and /or approved by the Chief Portfolio Manager with inputs from the Research Team. The structure ensures that all the Plans and recommendations that you receive are unbiased, based on true research & detailed study, and suited to your needs.

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Quality Customer Service NJ realizes the true importance of quality customer service. The service commitments are to guide the actions taken at NJ. Clearly stated, customers can freely communicate any such actions/events wherein they feel that the following commitments have been breached. At NJ we desire to honors our commitments at all points of time and to all customers without any bias. Quality Service: HighlightsYou will receive regular portfolio reports in hard copies to serve as record All records are maintained for the plans and recommendations and minutes of all the meetings are kept. Dedicated Account Manager directly oversees the operational support to you Quality Advisory. True, unbiased recommendations. Each plan is unique in nature to suit your needs and profile. Defined Process followed in investment consultancy / portfolio management. All the plans are prepared and/or approved in line with the set process by Chief Portfolio Manager with inputs from the Research Team.

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Quality Communications support: Daily market updates Daily MF tracker-for short term debt fund Weekly performance report Hard copy Comprehensive monthly fact sheet Research articles and reports Hardcopy 9. 360 ADVISORY PLATFORM:Email Email Email/ Hardcopy Email /

With this philosophy, we try to offer all possible products, services and support which an Advisor would need in his business. The support functions are generally in the following areas

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Business Planning and Strategy Training and Development Self and of employees Products and Service Offerings Business Branding Marketing Sales and Development Technology Advisors Resources - Tools, Calculators, etc.. Research Communications With this comprehensive supporting platform, the NJ Funds Partners stays ahead of the curve in each respect compared to other Advisors/competitors in the market. Recognitions Some of the awards & recognitions that we have received in past Year 2000: For Outstanding Performance presented by Chairman, Prudential Plc. at London. Year 2002: For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London. Year 2003: For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London. Year 2004: Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh, Scotland. Year 2005: For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia. Year 2006: Award for mobilizing the Highest Number of SIPs at National Level by Fidelity Mutual Fund Plc at Mumbai. Year 2007: Award Vietnam

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WHY INSURANCE AGENTS SHOULD SELL MUTUAL FUND? Reason 1: Easy to make more clients The Penetration of Mutual Funds is very low Whereas relatively, The Penetration of Insurance is very high . Opportunity for you to acquire more clients Now no call of yours should get waste Reason 2: LOW COMPETITION OF MUTUAL FUND ADVISORS Lack of competition represents a very big opportunity to grow your business anywhere in India. > 22 Lakhs Insurance Advisors V/s < 70,000 Mutual Fund Advisors (Very Few Financial Advisors) (>35 Insurance Advisors V/s 1 Mutual Fund Advisor) A huge DEMAND of Quality Mutual Fund Agents There is a genuine need for more than 2 lakh mutual fund advisors in India (our estimates) Reason 3: More satisfaction to your clients If you are not selling mutual funds then you must not be aware of what they truly are and the possibilities that they offer in providing solutions that meet the diverse needs of different clients. With mutual funds in your offering, you are in a much better position to fully meet the clients financial and investment needs. Your client would ideally like you to do that and will be happy once to offer him multiple solutions.

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Reason 4: Additional source of income Mutual fund is one product today that potentially has no limits to the volumes that you can generate. The important differentiation here with insurance is that you income is not based on the premium you collect but on the entire AUM (assets under management) that you have mobilized to counter the low rates. An agents AUM running into corers in quite common in the industry. The income from mutual funds can complement your earnings from insurance and may even substitute them in future Reason 5: Leveraging existing clientele base How to get more out of what you already have? Well, mutual fund is just the perfect answer to that question. The truth is that there is a lot of potential to generate further income from your existing clientele base. Much of the investment needs of clients are unexplored and unfulfilled that you can satisfy. Reason 6: Strong industry growth ahead There is a very strong growth of mutual funds ahead The reasons are many good product, low penetration, huge market, growing income, changing mindset, lack of other attractive investment products, etc. In US, almost every third household invests in mutual funds. The US MF industry size is about 67% of the US GDP and is 1.5 times of the bank deposits in US. The situation is though almost opposite in India with the MF industry size here equal to 6% of GDP and bank deposits are 10.50 times of the total industry size. The potential is huge and India is expected to follow in on the lines of the more developed countries. Reason 7: Retention and loyalty of clients The underlying logic can be found in the growth of multiplexes, shopping malls, after all the human nature is basically the same People today look for easy, fast, and single service point that provides them with solutions that meets their multiple needs. your client would probably invest in mutual funds some day or later Why not you do the same before anyone else gets to your client?

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Reason 8: Greater choice of products Till now we havent really talked about what choices you can offer to your clients In fact, you can offer cash-flow management, to long-term goal oriented planning to your clients. Your basket would include pure equity funds (Diversified / Sectoral / Index Funds) to pure debt funds (Gilt / Income / Short Term Plans / Floating / Liquid Funds) to hybrid funds (MIPs / Balance / Arbitrage Funds) to the tax saving ELSS. With a vast range of Fund houses and many more schemes the choices are virtually endless, and one is sure to find what one needs. Reason 9: Be a Complete Financial Advisor What next to Insurance? There is an opportunity for you to transcend to the next level and offer real solutions that will truly add value to your clients. You should develop yourself and grow more as a Financial advisor rather than just Insurance agent. The learnings can extend beyond products to markets, to equities, debt, economy, etc. to understanding real financial planning, funds management, etc. Reason 10: Helps in selling ULIPs If your focus is also selling ULIPS then, dealing in mutual funds should also help you in better understanding and helping communicate the same to your clients. It is a general observation in western countries that as an economy progresses, term plans and ULIPs have increasing % of fresh investments from clients as far as insurance is considered.

Your presence in mutual funds would be an advantage to you going forward.

Reason 11: Market potential of mutual funds. Low Penetration of Mutual Funds in INDIA Few people have been exposed to the idea & advantages of mutual funds and even fewer actually invest in mutual funds, because of lack of adequate no. of advisors 25

Measure Rupees invested in Mutual Funds out of 100 MF Industry size as % size of economy (GDP) Total size / value of MF industry (Rs. Lac Crores)
Opportunity to offer such products to clients Every person can be a customer!! Reason12: EXCELLENT PAST PERFORMANCE Mutual Fund Equity schemes have delivered very attractive returns in last 5 years, giving over 51% returns annually

US

> 30

83%

> 469

Sch e Na 3 Years 20.98 23.7 5 Years 35.10 29.19 7 Years 31.92 23.4 10 Years 27.79 12.69

Aver e of BSE (Sen

NSE

Opportunity for you to offer your clients with such equity-related products for long-term wealth creation.

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Industry Profile
HISTORY AND ORGANIZATION OF MUTUAL FUNDS IN INDIA 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 the Reserve Bank. The history of mutual funds in India can be broadly divided into four distinct phases First Phase 1964-87: 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. Second Phase 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 Canbank 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 established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004 crores 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

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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. Fourth Phase since February 2003: 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 management of Rs. 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. 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 bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management 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. The graph indicates the growth of assets over the years.

Graph 1: The graph showing Growth in assets under management through Mutual Funds

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RECENT TRENDS IN MUTUAL FUND INDUSTRY The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by nationalized banks and smaller private sector players. Many nationalized banks got into the mutual fund business in the early nineties and got off to a good start due to the stock market boom prevailing then. These banks did not really understand the mutual fund business and they just viewed it as another kind of banking activity. Few hired specialized staff and generally chose to transfer staff from the parent organizations. The performance of most of the schemes floated by these funds was not good. Some schemes had offered guaranteed returns and their parent organizations had to safekeeping out these AMCs by paying large amounts of money as the difference between the guaranteed and actual returns. The service levels were also very bad. Most of these AMCs have not been able to retain staff, float new schemes etc. and it is doubtful whether, barring a few exceptions, they have serious plans of continuing the activity in a major way. The experience of some of the AMCs floated by private sector Indian companies was also very similar. They quickly realized that the AMC business is a business, which makes money in the long term and requires deep-pocketed support in the intermediate years. Some have sold out to foreign owned companies, some have merged with others and there is general restructuring going on The foreign owned companies have deep pockets and have come in here with the expectation of a long pull. They can be credited with introducing many new practices such as new product innovation, sharp improvement in service standards and disclosure, usage of technology, broker education and support etc. In fact, they have forced the industry to upgrade itself and service levels of organizations like UTI have improved dramatically in the last few years in response to the competition provided by these.

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MUTUAL FUND COMPANIES IN INDIA List of Some of the AMCs Operating in India Name of the AMC Alliance Capital Asset Management (I) Private Limited Birla Sun Life Asset Management Company Limited Bank of Baroda Asset Management Company Limited Bank of India Asset Management Company Limited Canbank Investment Management Services Limited Cholamandalam Cazenove Asset Management Company Limited Dundee Asset Management Company Limited DSP Merrill Lynch Asset Management Company Limited Escorts Asset Management Limited First India Asset Management Limited GIC Asset Management Company Limited IDBI Investment Management Company Limited Indfund Management Limited ING Investment Asset Management Company Private Limited J M Capital Management Limited Jardine Fleming (I) Asset Management Limited Kotak Mahindra Asset Management Company Limited Kothari Pioneer Asset Management Company Limited Jeevan Bima Sahayog Asset Management Company Limited Morgan Stanley Asset Management Company Private Limited Nature of ownership Private Foreign Private Indian Banks Banks Banks Private Foreign Private Foreign Private Foreign Private Indian Private Indian Institutions Institutions Banks Private Foreign Private Indian Private Foreign Private Indian Private Indian Institutions Private Foreign

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Punjab National Bank Asset Management Company Limited Reliance Capital Asset Management Company Limited State Bank of India Funds Management Limited Shriram Asset Management Company Limited Sun F and C Asset Management (I) Private Limited Sundaram Newton Asset Management Company Limited Tata Asset Management Company Limited Credit Capital Asset Management Company Limited Templeton Asset Management (India) Private Limited Unit Trust of India Zurich Asset Management Company (I) Limited

Banks Private Indian Banks Private Indian Private Foreign Private Foreign Private Indian Private Indian Private Foreign Institutions Private Foreign

The sponsorers of Association of Mutual Funds in India

Bank Sponsored: SBI Fund Management Ltd. BOB Asset Management Co. Ltd. Canbank Investment Management Services Ltd. UTI Asset Management Company Pvt. Ltd.

Institutions: GIC Asset Management Co. Ltd. Jeevan Bima Sahayog Asset Management Co. Ltd. Private Sector

Indian: BenchMark Asset Management Co. Pvt. Ltd. Cholamandalam Asset Management Co. Ltd. Credit Capital Asset Management Co. Ltd.

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Escorts Asset Management Ltd. JM Financial Mutual Fund Kotak Mahindra Asset Management Co. Ltd. Reliance Capital Asset Management Ltd. Sahara Asset Management Co. Pvt. Ltd Sundaram Asset Management Company Ltd. Tata Asset Management Private Ltd.

Predominantly India Joint Ventures: Birla Sun Life Asset Management Co. Ltd. DSP Merrill Lynch Fund Managers Limited HDFC Asset Management Company Ltd

Predominantly Foreign Joint Ventures:

ABN AMRO Asset Management (I) Ltd. Alliance Capital Asset Management (India) Pvt. Ltd. Deutsche Asset Management (India) Pvt. Ltd. Fidelity Fund Management Private Limited Franklin Templeton Asset Mgmt. (India) Pvt. Ltd. HSBC Asset Management (India) Private Ltd. ING Investment Management (India) Pvt. Ltd. Morgan Stanley Investment Management Pvt. Ltd. Principal Asset Management Co. Pvt. Ltd. Prudential ICICI Asset Management Co. Ltd. Standard Chartered Asset Mgmt Co. Pvt. Ltd.

Association of Mutual Funds in India Publications AMFI publishes mainly two types of bulletin. One is on the monthly basis and the other is quarterly. These publications are of great support for the investors to get intimation of the know-how of their parked money.

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CHAPTER-III Introduction about Mutual Fund

Mutual Funds: Why?

Professional management Diversification and Lowered risks Low costs Liquidity Transparency Flexibility Choice of schemes Tax benefits Regulation

The advantages of investing in a Mutual Fund are: Professional Management Mutual funds hire full-time, high-level investment professionals. Funds can afford to do so as they manage large pools of money. The managers have real-time access to crucial market information and are able to execute trades on the largest and most costeffective scale.

Diversification :

Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund

33

unit-holders can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities. Low Costs : A mutual fund let's you participate in a diversified portfolio for as little as Rs.5,000/-, and sometimes less. And with a no-load fund, you pay little or no sales charges to own them. Liquidity :

In open-ended schemes, you can get your money back promptly at net asset value related prices from the mutual fund itself. Transparency :

You get regular information on the value of your investment in addition to disclosure on the specific investments made by the mutual fund scheme. Convenience and Flexibility :

You own just one security rather than many; yet enjoy the benefits of a diversified portfolio and a wide range of services. Fund managers decide what securities to trade collect the interest payments and see that your dividends on portfolio securities are received and your rights exercised. It also uses the services of a high quality custodian and registrar in order to make sure that your convenience remains at the top of our mind. Personal Service :

One call puts you in touch with a specialist who can provide you with information you can use to make your own investment choices. They will provide you personal assistance in buying and selling your fund units, provide fund information and answer questions about your account status. Our Customer service centers are at your service and our Marketing team would be eager to hear your comments on our schemes.

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Mutual Funds: What is it?

Mutual Fund Operation Flow Chart

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:

35

Mutual Fund: What is it made of?

Investors: Every investor, given his financial position and personal disposition, has a certain tendency preference to take risk (risk profile / risk appetite). The hypothesis is that by taking an incremental risk (of losing capital, wholly or partly), it would be possible for the investor to earn an incremental return. But assuming risk without regularly monitoring it is foolhardy. Therefore, it would be prudent for investors who take a risk to be able to manage this risk. MF is a solution for investors who lack the time, or the inclination or the skills to actively manage their investment risk in individual securities. They can delegate this role to the MF, while retaining the right and the obligation to monitor their investments in the scheme (which, in turn, invests in individual securities). In the absence of a MF option, the moneys of such passive these investors would lie either in bank deposits or other safe investment options, thus depriving the investors of the possibility of earning a better return. Investing through a MF would make economic sense for an investor if his investment, over the medium to long term, fetches a return (net of all costs and expenses) that is higher than

36

what she would otherwise have earned by investing directly. Because the goal of investing is to accumulate real wealth an enhanced ability to pay for goods and services the ultimate focus of the long-term investor must be on real, not nominal, returns.

Trustees: Trustees are the people within the mutual fund organization, who are responsible to ensure for ensuring that investors interests are properly taken care of In return for their services, they are paid trustee fees, which is normally charged to the scheme.

Asset Management Company (AMC): AMCs manage the investment portfolios of schemes. An AMCs Income for an AMC comes through from the management fees that are it charges to the schemes. The

management fee is calculated as a percentage of net assets managed. Some countries provide for performance based management fees as well.

Distributors : Distributors earn a commission for bringing investors into the schemes of a MF. This commission is an expense for the scheme, although there are occasions when the AMC chooses to bear the cost, wholly or partly. Depending on the financial and physical resources at their disposal, they distributors could be: Tier 1 distributors (having an owned or franchised network reaching out to investors all across the country); or Tier 2 distributors (regional players with some reach within their region); or Tier 3 distributors (marginal players).

It is paradoxical that distributors earn a commission from the AMC, but are expected to safeguard the financial health of investors from whom they do not earn a fee. It is almost like a doctor earning a commission from the pharmaceutical company, but expected to safeguard the physical health of the patient who does not pay him anything.

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Registrars The investors holding in various schemes is typically tracked by the schemes Registrar and Transfer agent (R&T). Some AMCs prefer to handle this role in-house. The registrar / AMC maintains an account of the investors investments in and dis-investment from the scheme. Requests to invest more money into a scheme or to recover moneys against existing investments in the scheme are processed by the R&T.

Custodian / Depository The custodian maintains custody of the securities in which the scheme invests (as distinct from the registrar who tracks the

Investment by investors in the scheme). This ensures an ongoing independent record of the investments of the scheme. The custodian also follows up on various corporate actions, such as rights, bonus and dividends declared by invested companies. In a situation where securities are increasingly being dematerialized, the role of the depository for such independent record of investments is increasing growing. Different types of Mutual Funds:

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry.

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TYPES OF MUTUAL FUND SCHEMES By Structure: Open - Ended Schemes: An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. Close - Ended Schemes: A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. Interval Schemes: Interval funds combine the features of open-ended and closeended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices. By Investment Objective : Growth Schemes: The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a majority of their corpus in equities. It has been proven that returns from stocks, have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time. Income Schemes: The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income.

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Balanced Schemes: The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth. Money Market Schemes: The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods. Load Funds: A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history. No-Load Funds: A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work. Other Schemes: Tax Saving Schemes: These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the amount is invested before September 30, 2000.

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Special Schemes : Industry Specific Schemes: Industry Specific Schemes invest only in the industries specified in the offer document. The investment of these funds is limited to specific industries like InfoTech, FMCG, and Pharmaceuticals etc. Index Schemes: Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50 Sector Specific Schemes: Sectorial Funds are those, which invest exclusively in a specified industry or a group of industries or various segments such as 'A' Group shares or initial public offerings

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CHAPTER IV

RESEARCH METHODOLOGY
The objective of the present study can be accomplished by conducting a systematic market survey. Market Research is a systematic design, collection, analysis and reporting of data and finding that are relevant to different market situation facing by the company. The marketing research process that will be adopted in the present study consist of the following stages: 1. Defining the problem and research objective: The research objective state that what information is needed to solve the problem. Here the objective of other research is awareness and perception of Mutual fund as an Investment option and what are the benefits that the investor will get by investing in Mutual funds. 2. Developing research plan: Once the problem is defined, the next step is to prepare a plan for getting the information needed for the research. The present study will adopt exploratory approach where in there is a need to gather a large amount of information before making a conclusion if required. The descriptive and casual approaches may also be used. 3. Collection and Sources of Data: To collect the data, relevant information is necessary as regards to the project; as a result data was collected by using two ways: Primary Data Secondary Data. Primary Data: In this the information is being possessed with first hand information, which is new and fresh. The tools used by us for the primary data are: Questionnaire

42

Face-to-Face Interview Observation Secondary data:

The information that is received with the help of Journals, Magazines, Financial reports or which is already present with the company. References used from management books Gathered information through World Wide Web (www). Support and knowledge provided by Faculty and Company guide.

4. Sampling Plan: Sampling unit: The customers will be stratified and segmented according to their age, income, cultural background, gender, education, etc. (Demography). Sampling size: A survey was conducted for one hundred respondents.

5. Analyze the collected information: This involves converting raw material in to useful information. It involves tabulation of data and using statically measures on them for developing frequency distribution and calculating the averages and dispersions. 6. Report research findings: This phase will mark the culmination of the marketing research efforts. The report with the research finding is a formal written document.

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LIMITATIONS

Though the present study aimed to achieve the above-mentioned objectives in full earnest and accuracy, it was in a weak position due to certain limitations. Some of the limitations of this study may be summarized as follows: Getting accurate responses from the respondents due to their inherent problems was difficult. They were partial, and refused to cooperate.
Very few people have knowledge about Mutual funds and the other products of the Mutual fund.

Locating the target respondents was very time consuming. Sample size was limited due to the limited period of days allocated for the survey. The selection of respondents to cover the various strata of the society was tedious and time consuming.

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ANALYSIS OF FINDINGS AN OVERVIEW: This section shows a simple overview of respondents like their age, gender, income profile, saving habits and qualification (a) Age-profile: Table No. I (a) showing age profile of respondents: S. No 1. 2. 3. 4. 5. Age 20-25 25-40 40-55 55-60 60-Above Total No .of respondents 19 40 21 15 5 100 Percentage 19% 40% 21% 15% 5% 100%

Age Profile
15% 5% 19% 20-25 21% 40% 25-40 40-45 55-60 60-abve

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INTERPRETATION: In this survey I found the maximum number of respondents belongs to the age group of 25-40 years, followed by 40-55 years of age category. (b) Gender-wise: Table No. I (b) showing gender wise profile of respondents: S. No 1. 2. Gender Male Female Total No. of respondents 92 8 100 Percentage 92% 8% 100%

Gender-wise respondent
8

Male 92 Female

INTERPRETATION: Table No. I (b) represents the gender ratio of the respondents in this survey.92%of the covered respondents were male and remaining 8% were female

(c)Income Profile: Table No. I(c) showing income wise profile of respondents:

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S. No 1. 2. 3. 4. 5. 6.

Income Less than 1.0 Lakh 1.0-2.0 Lakh 2.0-3.0 Lakh 3.0-5.0 Lakh More than 5.0 Lakh No response Total

No. of respondents 34 38 30 6 4 5 100

Percentage 17% 38% 30% 6% 4% 5% 100%

Income Profile
40% 35% 30% 25% 20% 15% 10% 5% 0% Less than 1.0 Lakh 1.0-2.0 Lakh 2.0-3.0 Lakh 3.0-5.0 Lakh More No than 5.0 response Lakh Income Profile

INTERPRETATION: In this survey I found the breakup of the respondents. Around 38%of the respondents have an income between of Rs.1.0-2.0 Lakhs per annum and 30% of respondents in between 2.0-3.0 Lakhs .it display the income profile of respondents. (d) Saving Habits: . Table No. I (d) showing saving habits profile of respondents: S. No 1. 2. 3. Savings Up to Rs. 2000 Rs.2001-5000 Rs.500110000 No. of respondents 31 33 16 Percentage 31% 33% 16%

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4. 5. 6.

Rs.1000120000 Above Rs.20001 No Response Total

3 1 16 100

3% 1% 16% 100%

Saving Habits of respondents

Rs.10001-20000 3% aboveRs.20001 1% No response 16% up to Rs.2000 31% up to Rs.2000 Rs. 2001-5000 Rs.5001-10000 Rs.10001-20000 aboveRs.20001 Rs.5001-10000 16% Rs. 2001-5000 33% No response

INTERPRETATION: In this survey around 33% of the respondents reported to have a saving in the range of Rs.2001-5000 per month .only 1% of the respondents reported having in higher bracket i.e. more than 20001 per month. (e) Qualification: Table No. I (e) showing Qualification profile of respondents: S.No 1. 2. 3. 4. 5. Qualification Undergraduates Graduates Postgraduates Others No response Total No. of respondents 6 39 40 1 14 100 Percentage 6% 39% 40% 1% 14% 100%

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39%

40%

40% 30% 6% 20% 10% 0% No. of respondents 1% 14%

Undergraduates Graduates Postgraduates Others No response

INTERPRETATION: The surveyed groups are well educated group with 40%being post graduates and 39%being graduates. Around 6% of the samples collected were undergraduates.

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KNOWLEDGE OF MUTUAL FUNDS: In the survey, I attempted to understand from the investors their knowledge of Mutual fund. (a)Knowledge of Mutual Fund: Table No. II (a) showing knowledge of mutual fund of respondents: S.n No 1. 2. 3. 4. 5. Knowledge of Mutual Funds Very good Good Average Poor No response Total No. of respondents 4 9 19 64 4 100 Percentage 4 9 19 64 4 100%

Knowledge of Mutual Fund

Average 19% Poor 64% Very good Good Other 68% Good 9% Very good 4% No response 4% Average Poor No response

INTERPRETATION: In this survey it was found that 64% of the respondents dont know or their knowledge is very poor about Mutual funds. they ,while 4% respondents rated their understanding as very good about Mutual funds. it shows knowledge of Mutual funds are very low..

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(b) Knowledge related to share market:

Table No. II (b) showing knowledge related to share market of respondents: S. No Knowledge related to share market Yes No Cant say Total No. of respondents 32 64 4 100 Percentage

1. 2. 3.

32% 64% 4% 100%

Knowledge related to share market:

Can't say 4%

Yes 32%

Yes No Can't say No 64%

INTERPRETATION : It was found that 64% of the respondents dont know that the Mutual fund is related to share market. They also dont know that a Mutual funds return is affected by the fluctuation in share market.

III. Investment objective/decisions: This section of survey was aimed at understanding the main reason behind the investment decision made by an individual. I tried to catch the factor that contributes to making of an investment portfolio off an individual.

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(a)Investment objective: S. No 1. 2. 3. 4. Investment objective Capital Gain Generate Regular return Secure Future Tax benefits Total No. of respondents 21 6 59 14 100 Percentage 21% 6% 59% 14% 100%

Investment Objective of Investor

tax benefits 14% capital gain 21% generate reguar return 6% secure future 59%

capital gain generate reguar return secure future tax benefits

INTERPRETATION : Total number of 100 responses was generated for this question and multiple response were sought for the various investment objectives. the analysis brings out the fact that investor were more concerned about the secure future(59%) and capital gains(21%), and after that they considered tax benefits(14%) and regular return(6%) as their main investment objectives.

(b)Decision affecting Factors: S. No Decision affecting Factors Economic scenario Company image Fund performance Fund manager image No. of respondents 19 44 21 2 Percentage

1. 2. 3. 4.

19% 44% 21% 2%

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5.

Tax incentive Total

14 100

14% 100%

DECISION AFFECTING FACTORS

90 80 70 60 50 40 30 20 10 0 No. of Respondents 4 38 42 28 Economic scenario Company image Fund performance Fund manager image Tax incentive 88

INTERPRETATION: There are certain overall factors that tend to affect the investment decision decision of the investor, such as economic scenario. I tried to know the respondents opinion on these macro factors that further tend to affect their investment decisions. This survey showed that company image acts as the determining factor for their investment with 44%.the second most important factor was fund performance (21%) and economic scenario (19%). (c)Information sources regarding Mutual Funds: S. No 1. 2. 3. 4. 5. 6. Information sources Print media Electronic media Friends/Relative Financial advisors Personal analysis Agents Total No. of respondents 29 21 6 19 4 21 100 Percentage 29% 21% 6% 19% 4% 21% 100%

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Information sources regarding Mutual Funds

Print media 21% 4% 19% 29% Electronic media Friends/Relative Financial advisors 6% 21% Personal analysis Agents

INTERPRETATION: In this survey I asked from the respondents about the kind of media that affect their investment decision.29% of the respondents said that the print media is the major influencer in making their investment decisions, electronic media(21%) and agents(21%) were the second major influencer in investment decision making. (d)Priority of reason for investment: S. No 1. 2. 3. 4. 5. 6. Priority for investment Saving for future Tax incentive Returns Future outlook Brand value Risk factors Total No. of respondents 51 14 23 7 2 3 100 Percentage 51% 14% 23% 7% 2% 3% 100%

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Brand value 2% Future outlook 7%

Priority of reason for investment

Risk factors 3% Saving for future 51% Saving for future Tax incentive Returns Future outlook Brand value

Returns 23%

Tax incentive 14%

Risk factors

INTERPRETATION: In this survey I found that saving for the future was the foremost important criteria for investment in the minds of investors (51%), while 23%respondents said that they considered the returns before making investment decisions. IV. Risk-Return profile: In my study I also tried to understand the risk and return matrix of an individual investor. this was done in order to obtain information on the relationship between the kind of funds an individual investor opts to invest in and the relative expectation he has on the return front. (a)Investment Avenues: S. No 1. 2. 3. 4. 5. 6. Investment Avenues Post office schemes Insurance Banks Share market Mutual funds Govt. securities Total No. of respondents 12 4 66 3 7 8 100 Percentage 12% 4% 66% 3% 7% 8% 100%

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Investment Avenues Insurance

Mutual funds 7% Govt. securities 8% Post office schemes 12% 4% Post office schemes Insurance Banks Share market 3% Share market Mutual funds Govt. securities

Banks 66%

INTERPRETATION: The risk return matrix of an individual is the key factor in framing his investment portfolio. I asked the respondents to select the investment avenues they would prefer to keep their investment portfolio. 66% of investor preferred to have banks savings as one of the investment avenue. While 12% of the investor said that they would certainly would like to have post office schemes as one of their preferred investment avenue. (b)Return expectation from Mutual funds: S. No Return expectation from Mutual funds 5%-10% 11%-15% 16%-20% More than 20% Cant say Total No. of respondents Percentage

1. 2. 3. 4. 5.

5 24 31 16 24 100

5% 24% 31% 16% 24% 100%

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Return expectation from Mutual funds

16%-20% 31% Other 40% Cant say 24% 5%-10% 11%-15% 16%-20% More then 20% 11%-15% 24% 5%-10% 5% Cant say

More then 20% 16%

INTERPRETATION: In this survey when I came to return expected, I found that 31% of the investor are expecting a return in range of 16%-20%, while 24%of the investor are expecting 11%15% rate of return but 24% of investor cant said about return expectation.

(c) Investment pattern preferred in Mutual fund by investor:

S. No

1. 2. 3. 4. 5. 6.

Investment pattern preferred in Mutual fund Growth schemes Balanced schemes ELSS Sector specific schemes Liquid schemes Cant say Total

No. of respondents

Percentage

41 11 18 6 7 17 100

41% 11% 18% 6% 7% 17% 100%

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45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Investment pattern preferred in Mutual fund by investor 41%

Growth schemes Balanced schemes ELSS 18% 11% 6% 7% Liquid schemes Cant say No. of respondents 17% Sector specific schemes

INTERPRETATION: The type of schemes selected for investment depends largely on the risk return matrix of an individual and the time horizon of his investment. My findings demonstrate that 41% of investors prefer to invest in growth schemes, 18% of investor in ELSS schemes. (d) Return in diversified schemes in Mutual fund:

S. No

1. 2.

Return in diversified schemes in Mutual fund Yes No Total

No. of respondents

Percentage

23 77 100

23% 77% 100%

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Return in diversified schemes in Mutual fund

No 77%

Yes 23%

Yes

No

INTERPRETATION: In this survey I tried to know the knowledge of investors about the return on diversified schemes .I found that 77%of surveyed people dont know that the return on diversified mutual fund schemes is more than other schemes. so, it shows that vary lake of awareness about mutual funds. (e) Sources of product information : S. No Sources of product information Company brochures Company websites Investment advisor Newspaper Friends and relatives Total No. of respondents 39 3 14 37 7 100 Percentage

1. 2. 3. 4. 5.

39% 3% 14% 37% 7% 100%

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Sources of product information

40% 35% 30% 25% 20% 15% 10% 5% 0% No. of respondents 3% 14% 7% Company brochures Company websites Investment advisor Newspaper Friends and relatives 39% 37%

INTERPRETATION: This chart represents the different sources of product information, through which investor generally tend to know regarding the mutual funds new schemes and products.39% of the respondents said that they receive the product information from the company brochures and 37% respondents said that they get it from newspaper.

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FINDINGS

Out of 100 people being surveyed to know the awareness and perception among people about mutual funds, I found that 14% knew about mutual funds who mostly invest in these funds while 86% where not at all aware about the product and its investments

Some People were less interested in knowing about the product. They have the impression that these funds are not safe, as the money is locked in for a particular period, which is known as the lock in period. Mutual funds, in a country like India is in its growth stage and it would take some time to enter into the maturity stage. People investing into mutual funds basically invest at the financial year-end. They invest into these funds mostly for tax saving purposes other than investment or return purposes.

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RECOMMENDATIONS There should be more awareness made about the Mutual Fund and their services by giving more advertisement. The Mutual Fund should go for tie-ups with the corporate to invest in MF. Mutual Fund should organize some events to build its Brand Image in the minds of the people. As per customers point of view, they feel that Mutual Fund should open more number of branches for the convenience of people.

SUGGESTIONS: The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time.

Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors. Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration. Younger people aged under 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off. Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality.

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 Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. Though most of the prospects and potential investors are not aware about the SIP. There is a large scope for the companies to tap the salaried persons. Most leads complain about its fees that are Rs. 8000/Rs.6900. they said that it is too much amount to complete AMFI exam and become NJ partner. I know it is nothing in spite of our company gives them. Consideration can be made to reduce the fee to stop de motivating from taking our services. NJ has almost 25% market stake of mutual fund advisor (almost 15,000 MF advisors are partner of NJ. whereas total MF advisors are 75,000 in India.) but NJ is lacking somewhere in its marketing. NJ needs to advertise its brand to gain the image of a mutual fund distributer in the minds of insurance advisors who are more concern with RR and other mutual fund distributors.

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CHAPTER IX CONCLUSION After making the whole report I am concluding that this project measures the awareness of Mutual Funds and its service. As Mutual Funds having good options and schemes, so we can grow it with creating the awareness among the people. It is also good for those who want to make their future in it. For that the only thing you need is to give time to your money to grow, they will surely give good returns and the other thing is the knowledge of the all product and schemes. As there is lesser no. of people investing in the Mutual Fund in comparison with other investments like L.I.C, post, savings a/c etc. so there is a good chance of its growing.

As been analyzed people are very rarely aware about mutual funds because they are not properly educated about the policies but when made aware they wanted to get more information about the funds by this we can say that mutual fund is in its infant stage today but it will reach its growth stage within no time.

Mutual fund has been compared to Unit linked polices, people are more aware of ULIP than Mutual fund which takes more customer to the insurance sector but slowly as people are getting more aware of the funds they will surely start investing in these funds as some of the mutual fund companies have already started giving more than 30% returns which is really a huge amount being 6% minimum and 10% maximum guidelines given a company.

Mutual funds in this competitive world is very helpful for the people who are interested into investments as this particular fund can take less investment but give u hefty.

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Bibliography WEB SITES VISITED:

www.amfiindia.com www.mutualfundsindia.com www.sebi.gov.in www.wikipedia.com www.njindia.com

BOOK REFERRED:

MARKETING MANAGEMENT BY PHILIP KOTLER, PEARSON EDUCATION 2ND ED. CONSUMER BEHAVIOR BY LEON G.SCHIFFMAN, PRENTICEHALL INDIA 8TH ED. NJ INDIA INVEST FACT FILE

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Annexure Questionnaire
Age profile Gender Income profile Saving habits Qualification : : : : :

Q1. Do you know about the Mutual Funds? (a) Very good (c)Average (e)No response (b) Good (d) Poor

Q2. What is your objective /motive behind investment? (a)Capital gain (c)Secure future Q3. Where do you generally invest/save? (a)Post office schemes (b)Insurance (c)Banks (d)Share market (e)Mutual funds (f)Govt. securities Q4. How do you prioritize the reason for investment? [rank from 1-5,1 being highest priority] Saving for future __________ Tax incentives __________ Returns __________ Future outlook __________ Brand value __________
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(b) Generate regular (d) Tax benefits

Risk factor

__________

Q5. How did you come to know about mutual fund? (a)Print media (b)Electronic media (c)Friend/relative (d)Financial advisor/C.A (c)Personal analysis (f)Agents Q6. What factors affect your decision for investment in Mutual Fund? (a)Economic scenario (b)Company image (c)Fund performance (d)Fund manager image (e)Tax incentive Q7. How much return you expect from Mutual Fund? (a) 5%-10% (b) 11% -15% (c) 16%-20% (d) More than 20% (e) Cant say Q8. What kind of investment pattern you prefer in Mutual Fund? (a)Growth schemes (b)Balanced schemes (c)ELSS (d)Sector specific schemes (e)Income schemes (f)Liquid schemes

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Q9. What are the sources of information gathering for you regarding mutual fund? (a)Company brochures (b)Company websites (c)Investment advisor (d)Newspaper (e)Friends and relatives

Q10. Are you aware that by investing in diversified investment avenues the average rate of return would considerable go up? (a)Yes (b) No Q11. Do you know that mutual fund is related to share market? (a) Yes (b) No (c) Cant say

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