Black Book Sanjana Recovered

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Black book sanjana (Recovered)
Financial markets (Modern College of Arts, Science and Commerce)
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A PROJECT REPORT
ON
STUDY OF MUTUAL FUND WITH RESPECT TO
SYSTEMATIC INVESTMENT PLAN (SIP)
A Project Submitted to
University of Mumbai for partial completion of the degree of

Bachelor in Commerce (Accounting and Finance)
Under the Faculty of Commerce
By
SANJANA R. NAIR
Under the Guidance of
Asst. Prof. SUNITA SAINI
&
Dr ABIDA KHAN
MAHATMA EDUCATION SOCIETY’S
PILLAI COLLEGE OF ARTS, COMMERCE & SCIENCE, AUTONOMOUS
AFFILIATED TO UNIVERSITY OF MUMBAI
PLOT NO 10, SECTOR-16, NEW PANVEL – 410206
2019-2020

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A PROJECT REPORT
ON
STUDY OF MUTUAL FUND WITH RESPECT TO
SYSTEMATIC INVESTMENT PLAN (SIP)
A Project Submitted to
University of Mumbai for partial completion of the degree of

Bachelor in Commerce (Accounting and Finance)
Under the Faculty of Commerce
By
SANJANA R. NAIR
Under the Guidance of
Asst. Prof. SUNITA SAINI
&
Dr ABIDA KHAN
MAHATMA EDUCATION SOCIETY’S
PILLAI COLLEGE OF ARTS, COMMERCE & SCIENCE, AUTONOMOUS
AFFILIATED TO UNIVERSITY OF MUMBAI
PLOT NO 10, SECTOR-16, NEW PANVEL – 410206
2019-2020

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Declaration by learner
I the undersigned Miss SANJANA NAIR hereby, declare that the work
embodied in this project work titled < STUDY OF MUTUAL FUND
WITH RESPECT TO SYSTEMATIC INVESTMENT PLAN (SIP)=,
forms my own contribution to the research work carried out under the
guidance of Asst. PROF. SUNITA SAINI is a result of my own research
work and has and has not been previously submitted to any other Degree
/Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical
conduct.
Name and Signature of the Learner
Certified by
Name and Signature of the Guiding Teacher

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Acknowledgement
To list who all have helped me is difficult because they are so numerous
and the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and

fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.
I would like to thank my Principal, Dr (C.A) GAJANAN WADER for

providing the necessary facilities required for completion of this project.
I take this opportunity to thank our Coordinator Mrs. ABIDA KHAN, for
her moral support and guidance.
I would also like to express my sincere gratitude towards my Project Guide

Asst. Prof. SUNITA SAINI whose guidance and care made the project
successful.
I would like to thank my College Library, for having provided various

reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my Parents
and Peers who supported me throughout my project.

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Index
Chapters Particulars Page
number
1 Introduction 1-32
1.1 Introduction To Mutual Funds 1
1.1.1 History Of Mutual Funds 3
1.1.2 Primary Structure Of Mutual Funds 5
1.1.3 Definition Of Key Terms Of Mutual 11
Funds
1.1.4 Benefits Of Investing In Mutual Funds 14
1.1.4a. Advantages To Investors 15
1.1.5 Drawback Of Investing In Mutual fund 16
1.1.5b. Disadvantages To Investors 18
1.1.6 Investment Objectives Of Mutual Funds 19
1.2 Introduction To Systematic Investment Plan 21
1.2.1 How SIP Works ? 22
1.2.2 Categories Of SIP Mutual Funds 23
1.2.3 Why Should One Invest In An SIP? 25
1.2.4 Advantages Of SIP 26
1.2.5 Disadvantages Of SIP 27
1.3 Investment 28
1.4 SIP Through Apps 29
2 Research Methodology 33-37

2.1 Introduction 33
2.2 Objectives 33
2.3 Scope Of The Subject 34
2.4 Sampling 34
2.5 Tools & Techniques 34
2.6 Sources Of Data Collection 35
2.7 Primary Data 35
2.7a Questionnaire 35
2.7b Observation Method 35

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2.8 Secondary Data 36

2.9 Limitation Of The Study 37
2.10 Hypothesis 37
3 Literature Review 37-43
4 Data Analysis And Interpretation 44-62
5 Findings, Conclusion And Suggestion 63-71

5.1 Findings 63
5.2 Suggestion 65
5.3 Conclusion 69
5.4 bibliography 71
Annexure 72-77

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1. INTRODUCTION
1.1 INTRODUCTION OF MUTUAL FUNDS
A mutual fund is a type of financial vehicle made up of a pool of money collected from
many investors to invest in securities like stocks, bonds, money market instruments,
and other assets. Mutual funds are operated by professional money managers, who
allocate the fund's assets and attempt to produce capital gains or income for the fund's
investors. A mutual fund's portfolio is structured and maintained to match the
investment objectives stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed

portfolios of equities, bonds, and other securities. Each shareholder, therefore,
participates proportionally in the gains or losses of the fund. Mutual funds invest in a
vast number of securities, and performance is usually tracked as the change in the
total market cap of the fund4derived by the aggregating performance of the underlying
investments.
• A mutual fund is a type of investment vehicle consisting of a portfolio of stocks,

bonds, or other securities.
• Mutual funds give small or individual investors access to diversified,
professionally managed portfolios at a low price.
• Mutual funds are divided into several kinds of categories, representing the kinds
of securities they invest in, their investment objectives, and the type of returns
they seek.
• Mutual funds charge annual fees (called expense ratios) and, in some cases,
commissions, which can affect their overall returns.
• The overwhelming majority of money in employer-sponsored retirement plans
goes into mutual funds.
Mutual funds pool money from the investing public and use that money to buy other
securities, usually stocks and bonds. The value of the mutual fund company depends
on the performance of the securities it decides to buy. So, when you buy a unit or share
of a mutual fund, you are buying the performance of its portfolio or, more precisely, a
part of the portfolio's value. Investing in a share of a mutual fund is different from
investing in shares of stock. Unlike stock, mutual fund shares do not give its holders

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any voting rights. A share of a mutual fund represents investments in many different
stocks (or other securities) instead of just one holding. That's why the price of a mutual
fund share is referred to as the net asset value (NAV) per share, sometimes expressed
as NAVPS. A fund's NAV is derived by dividing the total value of the securities in the
portfolio by the total amount of shares outstanding. Outstanding shares are those held
by all shareholders, institutional investors, and company officers or insiders. Mutual
fund shares can typically be purchased or redeemed as needed at the fund's current
NAV, which unlike a stock price doesn't fluctuate during market hours, but it is settled
at the end of each trading day.
The average mutual fund holds hundreds of different securities, which means mutual
fund shareholders gain important diversification at a low price. Consider an investor
who buys only Google stock before the company has a bad quarter. He stands to lose a
great deal of value because all of his dollars are tied to one company. On the other hand,
a different investor may buy shares of a mutual fund that happens to own some Google
stock. When Google has a bad quarter, she loses significantly less because Google is
just a small part of the fund's portfolio
Mutual funds also have inherent traits that follow investment principles such as asset
allocation and diversification. Another commonly faced challenge is the indecision on
investing, which has been addressed by Systematic Investment Plan (SIP) which instils
the discipline to invest regularly and over different market cycles. By opting for our
Smart SIP, you could mix your investments with financial protection by way of life
insurance embedded. This serves the dual purpose of life protection and wealth
creation.
Income tax is yet another challenge faced by investors for which also mutual funds have
optimum solutions. For instance, there is a unique mutual fund category known as ELSS
(equity-linked savings scheme), which not only can work towards wealth creation, but
also act as a tax saver. ELSS fund, qualify for tax benefits under Section 80C up to Rs.
1.5 lakh in a financial year and come with a three year lock-in. The overall taxation on
mutual fund redemptions is also straightforward, making it easy for individuals to
manage.

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1.1.1 History Of Mutual Funds
The first modern investment funds (the precursor of today's mutual funds) were
established in the Dutch Republic. In response to the financial crisis of 177231773,
Amsterdam-based businessman Abraham (or Adriaan) van Ketwich formed a trust
named Eendragt Maakt Magt ("unity creates strength"). His aim was to provide small
investors with an opportunity to diversify.
Mutual funds were introduced to the United States in the 1890s. Early U.S. funds were
generally closed-end funds with a fixed number of shares that often traded at prices
above the portfolio net asset value. The first open-end mutual fund with redeemable
shares was established on March 21, 1924 as the Massachusetts Investors Trust (it is
still in existence today and is now managed by MFS Investment Management).
In the United States, closed-end funds remained more popular than open-end funds
throughout the 1920s. In 1929, open-end funds accounted for only 5% of the industry's
$27 billion in total assets.
After the Wall Street Crash of 1929, the United States Congress passed a series of acts
regulating the securities markets in general and mutual funds in particular.
• The Securities Act of 1933 requires that all investments sold to the public, including
mutual funds, be registered with the SEC and that they provide prospective
investors with a prospectus that discloses essential facts about the investment.
• The Securities and Exchange Act of 1934 requires that issuers of securities,
including mutual funds, report regularly to their investors. This act also created the
Securities and Exchange Commission, which is the principal regulator of mutual
funds.
• The Revenue Act of 1936 established guidelines for the taxation of mutual funds.
• The Investment Company Act of 1940 established rules specifically governing
mutual funds.
These new regulations encouraged the development of open-end mutual funds (as
opposed to closed-end funds).

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Growth in the U.S. mutual fund industry remained limited until the 1950s, when
confidence in the stock market returned. By 1970, there were approximately 360 funds
with $48 billion in assets.
The introduction of money market funds in the high interest rate environment of the
late 1970s boosted industry growth dramatically. The first retail index fund, First Index
Investment Trust, was formed in 1976 by The Vanguard Group, headed by John Bogle;
it is now called the "Vanguard 500 Index Fund" and is one of the world's largest mutual
funds. Fund industry growth continued into the 1980s and 1990s.
According to Robert Pozen and Theresa Hamacher, growth was the result of three
factors:
1. A bull market for both stocks and bonds,

2. New product introductions (including funds based on municipal bonds, various
industry sectors, international funds, and target date funds) and
3. Wider distribution of fund shares. Among the new distribution channels were
retirement plans. Mutual funds are now the preferred investment option in
certain types of fast-growing retirement plans, specifically in 401(k), other
defined contribution plans and in individual retirement accounts (IRAs), all of
which surged in popularity in the 1980s.
In 2003, the mutual fund industry was involved in a scandal involving unequal
treatment of fund shareholders. Some fund management companies allowed favoured
investors to engage in late trading, which is illegal, or market timing, which is a practice
prohibited by fund policy. The scandal was initially discovered by former New York
Attorney General Eliot Spitzer and led to a significant increase in regulation. In a study
about German mutual funds Gomolka (2007) found statistical evidence of illegal time
zone arbitrage in trading of German mutual funds. Though reported to regulators BaFin
never commented on these results.

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1.1.2 Primary Structure Of Mutual Funds
Primary structures of mutual funds include open-end funds, unit investment trusts, and
closed-end funds. Exchange-traded funds (ETFs) are open-end funds or unit investment
trusts that trade on an exchange. Some close- ended funds also resemble exchange
traded funds as they are traded on stock exchanges to improve their liquidity. Mutual
funds are also classified by their principal investments as money market funds, bond or
fixed income funds, stock or equity funds, hybrid funds or other. Funds may also be
categorized as index funds, which are passively managed funds that match the
performance of an index, or actively managed funds. Hedge funds are not mutual funds;
hedge funds cannot be sold to the general public as they require huge investments.
a) Types of Mutual Funds based on structure
• Open-Ended Funds: These are funds in which units are open for purchase or
redemption through the year. All purchases/redemption of these fund units are done
at prevailing NAVs. Basically these funds will allow investors to keep invest as long
as they want. There are no limits on how much can be invested in the fund. They also
tend to be actively managed which means that there is a fund manager who picks the
places where investments will be made. These funds also charge a fee which can be
higher than passively managed funds because of the active management. They are an
ideal investment for those who want investment along with liquidity because they are
not bound to any specific maturity periods. Which means that investors can withdraw
their funds at any time they want thus giving them the liquidity they need.
• Close-Ended Funds: These are funds in which units can be purchased only during
the initial offer period. Units can be redeemed at a specified maturity date. To provide
for liquidity, these schemes are often listed for trade on a stock exchange. Unlike
open ended mutual funds, once the units or stocks are bought, they cannot be sold
back to the mutual fund, instead they need to be sold through the stock market at the
prevailing price of the shares.
• Interval Funds: These are funds that have the features of open-ended and close-
ended funds in that they are opened for repurchase of shares at different intervals
during the fund tenure. The fund management company offers to repurchase units
from existing unitholders during these intervals. If unitholders wish to they can
offload shares in favour of the fund.

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b) Types of Mutual Funds based on asset class
• Equity Funds: These are funds that invest in equity stocks/shares of companies.
These are considered high-risk funds but also tend to provide high returns. Equity
funds can include specialty funds like infrastructure, fast moving consumer goods
and banking to name a few.
• Debt Funds: These are funds that invest in debt instruments e.g. company
debentures, government bonds and other fixed income assets. They are considered
safe investments and provide fixed returns. These funds do not deduct tax at source
so if the earning from the investment is more than Rs. 10,000 then the investor is
liable to pay the tax on it himself.
• Money Market Funds: These are funds that invest in liquid instruments e.g. T-Bills,
CPs etc. They are considered safe investments for those looking to park surplus funds
for immediate but moderate returns. Money markets are also referred to as cash
markets and come with risks in terms of interest risk, reinvestment risk and credit
risks.
• Balanced or Hybrid Funds: These are funds that invest in a mix of asset classes. In
some cases, the proportion of equity is higher than debt while in others it is the other
way round. Risk and returns are balanced out this way. An example of a hybrid fund
would be Franklin India Balanced Fund-DP (G) because in this fund, 65% to 80% of
the investment is made in equities and the remaining 20% to 35% is invested in the
debt market. This is so because the debt markets offer a lower risk than the equity
market.

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c) Types of Mutual Funds based on investment objective
• Growth funds: Under these schemes, money is invested primarily in equity stocks
with the purpose of providing capital appreciation. They are considered to be risky
funds ideal for investors with a long-term investment timeline. Since they are risky
funds they are also ideal for those who are looking for higher returns on their
investments.
• Income funds: Under these schemes, money is invested primarily in fixed-income
instruments e.g. bonds, debentures etc. with the purpose of providing capital
protection and regular income to investors.
• Liquid funds: Under these schemes, money is invested primarily in short-term or
very short-term instruments e.g. T-Bills, CPs etc. with the purpose of providing
liquidity. They are considered to be low on risk with moderate returns and are ideal
for investors with short-term investment timelines.
• Tax-Saving Funds (ELSS): These are funds that invest primarily in equity shares.
Investments made in these funds qualify for deductions under the Income Tax Act.
They are considered high on risk but also offer high returns if the fund performs well.
• Capital Protection Funds: These are funds where funds are are split between
investment in fixed income instruments and equity markets. This is done to ensure
protection of the principal that has been invested.
• Fixed Maturity Funds: Fixed maturity funds are those in which the assets are
invested in debt and money market instruments where the maturity date is either the
same as that of the fund or earlier than it.
• Pension Funds: Pension funds are mutual funds that are invested in with a really
long term goal in mind. They are primarily meant to provide regular returns around
the time that the investor is ready to retire. The investments in such a fund may be
split between equities and debt markets where equities act as the risky part of the
investment providing higher return and debt markets balance the risk and provide
lower but steady returns. The returns from these funds can be taken in lump sums, as
a pension or a combination of the two.

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d) Types of Mutual Funds based on specialty
• Sector Funds: These are funds that invest in a particular sector of the market e.g.
Infrastructure funds invest only in those instruments or companies that relate to the
infrastructure sector. Returns are tied to the performance of the chosen sector. The
risk involved in these schemes depends on the nature of the sector.
• Index Funds: These are funds that invest in instruments that represent a particular
index on an exchange so as to mirror the movement and returns of the index e.g.
buying shares representative of the BSE Sensex
• Fund of funds: These are funds that invest in other mutual funds and returns depend
on the performance of the target fund. These funds can also be referred to as multi
manager funds. These investments can be considered relatively safe because the
funds that investors invest in actually hold other funds under them thereby adjusting
for risk from any one fund.
• Emerging market funds: These are funds where investments are made in
developing countries that show good prospects for the future. They do come with
higher risks as a result of the dynamic political and economic situations prevailing in
the country.
• International funds: These are also known as foreign funds and offer investments
in companies located in other parts of the world. These companies could also be
located in emerging economies. The only companies that won9t be invested in will
be those located in the investor9s own country.
• Global funds: These are funds where the investment made by the fund can be in a
company in any part of the world. They are different from international/foreign funds
because in global funds, investments can be made even the investor's own country.
• Real estate funds: These are the funds that invest in companies that operate in the
real estate sectors. These funds can invest in realtors, builders, property management
companies and even in companies providing loans. The investment in the real estate
can be made at any stage, including projects that are in the planning phase, partially
completed and are actually completed.
• Commodity focused stock funds: These funds don9t invest directly in the
commodities. They invest in companies that are working in the commodities market,
such as mining companies or producers of commodities. These funds can, at times,

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perform the same way the commodity is as a result of their association with their
production.
• Market neutral funds: The reason that these funds are called market neutral is that
they don9t invest in the markets directly. They invest in treasury bills, ETFs and
securities and try to target a fixed and steady growth.
• Inverse/leveraged funds: These are funds that operate unlike traditional mutual
funds. The earnings from these funds happen when the markets fall and when markets
do well these funds tend to go into loss. These are generally meant only for those
who are willing to incur massive losses but at the same time can provide huge returns
as well, as a result of the higher risk they carry.
• Asset allocation funds: The asset allocation fund comes in two variants, the target
date fund and the target allocation funds. In these funds, the portfolio managers can
adjust the allocated assets to achieve results. These funds split the invested amounts
and invest it in various instruments like bonds and equity.
• Gilt Funds: Gilt funds are mutual funds where the funds are invested in government
securities for a long term. Since they are invested in government securities, they are
virtually risk free and can be the ideal investment to those who don9t want to take
risks.
• Exchange traded funds: These are funds that are a mix of both open and close ended
mutual funds and are traded on the stock markets. These funds are not actively
managed, they are managed passively and can offer a lot of liquidity. As a result of
their being managed passively, they tend to have lower service charges (entry/exit
load) associated with them.

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e) Types of Mutual Funds based on risk
• Low risk: These are the mutual funds where the investments made are by those who
do not want to take a risk with their money. The investment in such cases are made
in places like the debt market and tend to be long term investments. As a result of
them being low risk, the returns on these investments is also low. One example of a
low risk fund would be gilt funds where investments are made in government
securities.
• Medium risk: These are the investments that come with a medium amount of risk to
the investor. They are ideal for those who are willing to take some risk with the
investment and tends to offer higher returns. These funds can be used as an
investment to build wealth over a longer period of time.
• High risk: These are those mutual funds that are ideal for those who are willing to
take higher risks with their money and are looking to build their wealth. One example
of high risk funds would be inverse mutual funds. Even though the risks are high
with these funds, they also offer higher returns.
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1.1.3 Definition Of Key Terms Of Mutual Funds
• Average annual total return
Mutual funds in the United States are required to report the average annual compounded
rates of return for one-, five-and ten year-periods using the following formula:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of ₹1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical ₹1,000 payment made at the

beginning of the one, five, or ten year periods at the end of the one, five, or ten year
periods (or fractional portion).
• Market capitalization
Market capitalization equals the number of a company's shares outstanding multiplied

by the market price of the stock. Market capitalization is an indication of the size of a
company. Typical ranges of market capitalizations are:
 Mega cap - companies worth ₹14000 billion or more

 Big/large cap - companies worth between ₹700 billion and ₹14000 billion
 Mid cap - companies worth between ₹140 billion and ₹700 billion
 Small cap - companies worth between ₹21000 million and ₹140 billion
 Micro cap - companies worth between ₹3500 million and ₹21000 million
 Nano cap - companies worth less than ₹50 million
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• Net asset value
A fund's net asset value (NAV) equals the current market value of a fund's holdings
minus the fund's liabilities (this figure may also be referred to as the fund's "net assets").
It is usually expressed as a per-share amount, computed by dividing net assets by the
number of fund shares outstanding. Funds must compute their net asset value according
to the rules set forth in their prospectuses. Most compute their NAV at the end of each
business day.
Valuing the securities held in a fund's portfolio is often the most difficult part of
calculating net asset value. The fund's board typically oversees security valuation.
• Share classes
A single mutual fund may give investors a choice of different combinations of front-
end loads, back-end loads and distribution and services fee, by offering several different
types of shares, known as share classes. All of them invest in the same portfolio of
securities, but each has different expenses and, therefore, a different net asset value and
different performance results. Some of these share classes may be available only to
certain types of investors.
Typical share classes for funds sold through brokers or other intermediaries in the
United States are:
 Class A shares usually charge a front-end sales load together with a small
distribution and services fee.
 Class B shares usually do not have a front-end sales load; rather, they have a
high contingent deferred sales charge (CDSC) that gradually declines over
several years, combined with a high 12b-1 fee. Class B shares usually convert
automatically to Class A shares after they have been held for a certain period.
 Class C shares usually have a high distribution and services fee and a modest
contingent deferred sales charge that is discontinued after one or two years.
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Class C shares usually do not convert to another class. They are often called
"level load" shares.
 Class I are usually subject to very high minimum investment requirements and
are, therefore, known as "institutional" shares. They are no-load shares.
 Class R are usually for use in retirement plans such as 401(k) plans. They
typically do not charge loads, but do charge a small distribution and services
fee.
• Portfolio Turnover
Portfolio Turnover is a measure of the volume of a fund's securities trading. It is

expressed as a percentage of average market value of the portfolio's long-term
securities. Turnover is the lesser of a fund's purchases or sales during a given year
divided by average long-term securities market value for the same period. If the period
is less than a year, turnover is generally annualized.
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1.1.4 Benefits Of Investing In Mutual Funds
1. Professional Management : <Portfolio Manager= invests money on investor9s

behalf with the responsibility of growing it and making profits for unitholders. So
investors don9t need to be an expert on stock fundamentals or market technicalities.
Portfolio manager performs research to unveil new profitable stock ideas. He keeps a
tab on economic activities in regions/countries and accordingly decides his investment
exposures.
2. Diversification : A mutual fund provides diversification by investing in a variety

of stocks. Imagine you want to buy a Google stock which will cost you ~$800 for
one stock so it is expensive. Now think of investing $800 in an MF, that holds
Google stock along with many other stocks. This is a very important advantage in
investing through an MF. A typical portfolio holds between 40-100 stocks
depending on the manager9s objective. A manager invests in stocks of various
industries or countries to reduce the risk of losing the money.
3. Liquidity : Investing in a mutual fund can be considered as closer to holding cash

as investors can sell the units anytime and receive cash. Portfolio manager always
keeps cash handy for redemption requirements. So if you place a sell order today,
you will get cash in next one or two days. The fund documents generally mention
the settlement period e.g. T+2 means 2 days from a trading day (T). A portfolio
manager also invests a portion of money in stocks which he can easily sell to meet
redemption requests.
4. Ease of Investing & Affordability : Investing in an MF has become less painful

over the years with the help of technology. Anyone can buy a fund by simply
visiting the fund or broker website. One can buy and sell an MF and perform tasks
like generating a statement, making incremental investments at a click of a button.
Investing in a mutual fund is not very expensive. To open an account minimum amount
could be a $1000 or less. For incremental purchases, the minimum amount is $100.
Also, investors have a choice of investing in a fund through options like systematic
investment or withdrawal which could be used for regular saving or to meet expenses
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1.1.4a. Advantages To Investors
1. Increased diversification
Mutual funds spread their holdings across a number of different
investment vehicles, which reduces the effect any single security or class
of securities will have on the overall portfolio. Because mutual funds can
contain hundreds or thousands of securities, investors aren9t likely to be
fazed if one of the securities doesn9t do well.
2. Daily liquidity
Mutual funds, unlike some of the individual investments they may hold,
can be traded daily. Though not as liquid as stocks, which can be traded
intraday, buy and sell orders are filled after market close.
3. Professional investment management

Open-and closed-end funds hire portfolio managers to supervise the fund's
investments.
4. Reinvestment of Income
Another benefit of mutual funds is that they allow you to reinvest your
dividends and interest in additional fund shares. In effect, this allows you
to take advantage of the opportunity to grow your portfolio without paying
regular transaction fees for purchasing additional mutual fund shares.
5. Service and convenience

Funds often provide services such as check writing.
6. Government oversight
Mutual funds are regulated by a governmental body.
7. Transparency and ease of comparison

Not All mutual funds are required to report the same information to
investors, which makes them easier to compare to each other.
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1.1.5 Drawback Of Investing In Mutual Funds
Liquidity, diversification, and professional management all make mutual funds

attractive options for younger, novice, and other individual investors who don't want to
actively manage their money. However, no asset is perfect, and mutual funds have
drawbacks too.
1. Fluctuating Returns
Like many other investments without a guaranteed return, there is always the possibility
that the value of your mutual fund will depreciate. Equity mutual funds experience price
fluctuations, along with the stocks that make up the fund. The Federal Deposit
Insurance Corporation (FDIC) does not back up mutual fund investments, and there is
no guarantee of performance with any fund. Of course, almost every investment carries
risk. It is especially important for investors in money market funds to know that, unlike
their bank counterparts, these will not be insured by the FDIC.
2. Cash Drag
Mutual funds pool money from thousands of investors, so every day people are putting
money into the fund as well as withdrawing it. To maintain the capacity to
accommodate withdrawals, funds typically have to keep a large portion of their
portfolios in cash. Having ample cash is excellent for liquidity, but money that is sitting
around as cash and not working for you is not very advantageous. Mutual funds require
a significant amount of their portfolios to be held in cash in order to satisfy share
redemptions each day. To maintain liquidity and the capacity to accommodate
withdrawals, funds typically have to keep a larger portion of their portfolio as cash than
a typical investor might. Because cash earns no return, it is often referred to as a "cash
drag."
3. High Costs
Mutual funds provide investors with professional management, but it comes at a cost4
those expense ratios mentioned earlier. These fees reduce the fund's overall payout, and
they're assessed to mutual fund investors regardless of the performance of the fund. As
you can imagine, in years when the fund doesn't make money, these fees only magnify
losses. Creating, distributing, and running a mutual fund is an expensive undertaking.
Everything from the portfolio manager's salary to the investors' quarterly statements
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cost money. Those expenses are passed on to the investors. Since fees vary widely from
fund to fund, failing to pay attention to the fees can have negative long-term
consequences. Actively managed funds incur transaction costs that accumulate over
each year. Remember, every dollar spent on fees is a dollar that is not invested to grow
over time.
4. Diversification and Dilution

"Diversification"4a play on words4is an investment or portfolio strategy that implies
too much complexity can lead to worse results. Many mutual fund investors tend to
overcomplicate matters. That is, they acquire too many funds that are highly related
and, as a result, don't get the risk-reducing benefits of diversification. These investors
may have made their portfolio more exposed. At the other extreme, just because you
own mutual funds doesn't mean you are automatically diversified. For example, a fund
that invests only in a particular industry sector or region is still relatively risky.
5. Active Fund Management

Many investors debate whether or not the professionals are any better than you or I at
picking stocks. Management is by no means infallible, and even if the fund loses
money, the manager still gets paid. Actively managed funds incur higher fees, but
increasingly passive index funds have gained popularity. These funds track an index
such as the S&P 500 and are much less costly to hold. Actively managed funds over
several time periods have failed to outperform their benchmark indices, especially after
accounting for taxes and fees.
6. Lack of Liquidity
A mutual fund allows you to request that your shares be converted into cash at any time,
however, unlike stock that trades throughout the day, many mutual fund redemptions
take place only at the end of each trading day.
7. Taxes
When a fund manager sells a security, a capital-gains tax is triggered. Investors who
are concerned about the impact of taxes need to keep those concerns in mind when
investing in mutual funds. Taxes can be mitigated by investing in tax-sensitive funds
or by holding non-tax sensitive mutual funds in a tax-deferred account, such as a 401(k)
or IRA.
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8. Evaluating Funds
Researching and comparing funds can be difficult. Unlike stocks, mutual funds do not
offer investors the opportunity to juxtapose the price to earnings (P/E) ratio, sales
growth, earnings per share (EPS), or other important data. A mutual fund's net asset
value can offer some basis for comparison, but given the diversity of portfolios,
comparing the proverbial apples to apples can be difficult, even among funds with
similar names or stated objectives. Only index funds tracking the same markets tend to
be genuinely comparable.
1.1.5a Disadvantages To Investors
1. No Control Over Portfolio

If you invest in a fund, you give up all control of your portfolio to the mutual
fund money managers who run it.
2. Capital Gains
Anytime you sell stock, you9re taxed on your gains. However, in a mutual
fund, you9re taxed when the fund distributes gains it made from selling
individual holdings 3 even if you haven9t sold your shares.
3. Fees and Expenses
Some mutual funds may assess a sales charge on all purchases, also known as
a <load= 3 this is what it costs to get into the fund. Plus, all mutual funds charge
annual expenses, which are conveniently expressed as an annual expense ratio
3 this is basically the cost of doing business.
4. Over-diversification
Although there are many benefits of diversification, there are pitfalls of being
over-diversified. Think of it like a sliding scale: The more securities you hold,
the less likely you are to feel their individual returns on your overall portfolio.
5. Cash Drag
Mutual funds need to maintain assets in cash to satisfy investor redemptions
and to maintain liquidity for purchases. However, investors still pay to have
funds sitting in cash because annual expenses are assessed on all fund assets,
regardless of whether they9re invested or not.
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1.1.6 Investment Objectives Of The Mutual Fund
Kid9s college education or marriage, retirement planning or medical expenses are some
of the things many of us are planning through our working lives. I would like to list a
few investment objectives of Mutual funds below that may help readers in making an
investment decision.
• Goal-Based Investing : This is the top investment objective of Mutual fund. As

mentioned above, one can plan future expenses and invest accordingly. Many
fund complexes offer <Target Date Funds= or customized <Fund of Fund=
which basically allocates the assets to equity and bond MF9s. Difference
between two is target date funds are non-discretionary i.e. investor can only
invest in one of the available plans and can9t choose the exposure according to
his/her needs. Fund of Funds could be dynamic and invests according to target
asset mix suitable for investors after looking at his/her risk profile and liabilities
etc. However, the mix will be rebalanced as the holder is approaching the target
date. The basic rule is to invest more money in equities and as a holder grows
old; allocate more money to debt mutual fund e.g. at 30 years old investor
should invest a 30% in debt and a 70% in equities (this is a thumb rule).
• Investment Growth : Many mutual funds investment objectives nclude

Investment Growth model. Investors who are retirement ready and looking for
aggressive returns can do so by taking some extra risk. Mutual Fund sufficing
this objective invests money in fast-growing companies like small caps or
companies with positive trends in stock price (price momentum) etc.
• Tax Savings : Tax Savings is also one of the popular investment objectives of
Mutual fund. Mostly wealthy clients, Institutional investors, and corporates
have an objective to minimize the tax outlays. Taxes can eat into returns making
it negative or trivial. Citing the importance of after-tax returns, few products
can help investors gaining the 8tax alpha9. These products are built by
combinations of MFs, Index funds or ETF9s and stocks or bonds. Typically
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individual account is handled by an investment manager who knows the long

and short-term tax implications. Buying and selling is driven by tax alpha gains.
Suppose you are holding fund A and Fund B then
• If you have capital gains in both A&B, you will be taxed for both at applicable
income tax.
• If you have a capital gain in A and loss in B, then you can set off the losses
against the gains of A and thus reduce the tax liability.
Thus by taking appropriate exposures, tax outgo can be optimized to produce overall
gains in An account.
• Marketability/Liquidity : Many of the investments we have discussed are

reasonably illiquid, which means they cannot be immediately sold and easily
converted into cash. Achieving a degree of liquidity, however, requires the
sacrifice of a certain level of income or potential for capital gains.
• Income :The safest investments are those likely to have the lowest rate of
income return or yield. Investors must inevitably sacrifice a degree of safety if
they want to increase their yields. As yield increases, so does the risk.
• Fund Types : There are three basic types of mutual funds. Equity funds invest
exclusively in stock. Fixed-income funds invest in bonds, and money market
funds invest in Treasury bills and short-term, liquid, high-quality securities. All
mutual funds are made up of one or more of these three asset classes. Funds are
sometimes named, ostensibly, for their objective and have catchy names such
as Global, International, Growth and Overseas. Evaluate the prospectus rather
than drawing a conclusion from the fund's title.
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1.2 INTRODUCTION OF SYSTEMATIC INVESTMENT PLAN (SIP)
Systematic Investment Plan (SIP) is a hassle-free method of investment that helps you
achieve your financial goals by investing small sums of money on a periodic basis. It
allows you to smartly invest in a Mutual Fund by making smaller periodic investments
(monthly or quarterly) in place of a heavy one-time investment. It is a great alternative
to long term commitments like PPF or Insurance plans. Starting early and investing
regularly is advisable to minimize the investment amount needed to achieve your goals.
In SIPs, a fixed amount of money is debited by the investors in bank accounts

periodically and invested in a specified mutual fund. The investor is allocated a number
of units according to the current Net asset value. Every time a sum is invested, more
units are added to the investors account.
The strategy claims to free the investors from speculating in volatile markets by dollar
cost averaging. As the investor is getting more units when the price is low and fewer
units when the price is high, in the long run, the average cost per unit is supposed to be
lower. SIP claims to encourage disciplined investment. SIPs are flexible; the investors
may stop investing a plan anytime or may choose to increase or decrease the investment
amount. SIP is usually recommended to retail investors who do not have the resources
to pursue the active investment.
In India, a recurring payment can be set for SIP using Electronic Clearing Services
(ECS). Some mutual funds allow tax benefits under equity-linked savings schemes.
This, however, has a lock-in period of three years. When it comes to mutual funds there
is a general misconception that investing in mutual funds means investing in stocks.
The same is felt about SIPs. SIP can be made in an equity, debt or hybrid scheme. This
entirely depends on the investment horizon and risk taking capacity of an individual.
SIPs generally work best for equity and equity-oriented hybrid funds given that these
are prone to market fluctuations. However, for investment discipline, one can also
invest in debt funds also. With auto-debit feature, firstly you don9t need to remember
the debit dates as the bank account will get debited automatically on the date which you
have selected for SIP. However, just in case for whatever reason the funds are not
available in the bank account, you will miss one SIP. There is no penalty or any fee.
Your SIP account remains active even if you miss one SIP date but after multiple
misses, it gets cancelled
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1.2.1 Sip Works
With UTI SIP, your amount to be invested will be periodically auto-debited from your
bank account and will be invested into a specific mutual fund scheme. You will be
allocated a particular number of units accordingly, based on the current market rate (net
asset value or NAV in short) for the day.
You also have the option to choose from direct and regular plans. Direct plans are
bought directly from the mutual fund company, whereas a Regular plan is bought
through an intermediary (advisor, broker or distributor).
You can calculate the expected returns on your investment using our easy SIP calculator
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1.2.2 Categories Of Sip Mutual Funds
• Plain vanilla regular SIP

This is the simplest form of SIP investing. You typically set up a date for
contributing to the SIP each month. Set a date when you are confident that
your salary or commission will be credited into your bank account. The
SIP can be of the amount of your choice and technically can be as small as
Rs500 per month. In case you set 10 th as the date for the SIP, then on that
date the amount gets debited and equivalent units of the fund are allotted
to you. The actual date is not too relevant as long as you maintain the
discipline.
• Stepped up SIP or Top-up SIP

One of the realities of professional life is that your income tends to grow
over a period of time. So, you cannot be sticking to the old savings year
after year. One way is to review your SIP requirements each year and add
new SIPs based on your surplus. A more automated way is to opt for a
Stepped up SIP. In this SIP, you commit to increase the SIP contribution by
a certain amount each year and then that SIP amount continues for a full
year. This step-up can be fixed in rupee terms or in percentage terms, but
the idea is that there is an automated solution to invest more as you earn
more.
• Balloon SIP for interim payments

When you are in a job or a profession, there are two components to your
income; fixed income and variable flows based on performance. How do
you ensure that you do not splurge your bonuses and incentives? The answer
could be a balloon SIP. In a balloon SIP, you build an annual bullet payment
around the time of your bonus. So the SIP continues for the full year and in
the month you get the bonus you structure a lump-sum balloon contribution.
Of course, you can also do this manually, but a balloon structure ensures
discipline since you will only spend the balance amount.
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• Solution based SIP for planning

Quite a few mutual funds also customize SIPs in such a way that you can
have a SIP solution where the allocation is done by the fund based on your
long term goal requirements. Normally, you define your goals and then
structure SIPs accordingly based on tenure of goal and tag these SIPs to
goals. Now if your equity / debt / cash mix is 60:35:5, then you can have a
solution based fund and structure a SIP on that solution accordingly. The
only risk is that such solution funds are structured as Fund-of-Funds (FOF)
and entail higher costs.
• SIPs with in-built withdrawal facility

This facility is very useful to combine the benefits of SIPs both ways.
Broadly, there are two such combinations. Firstly, if you receive a lump-
sum, you can invest the sum in a liquid fund and swipe a fixed sum into
equity funds each month. The liquid fund gives you better returns than a
Bank and the SIP ensures lower average cost.
The second way is to combine a systematic withdrawal plan (SWP) with an
SIP. You run equity SIP for 15 years and then from the 16 th to 20th year
withdraw systematically from this corpus. This withdrawal is done by
shifting the corpus to a liquid fund. The SWP is more tax efficient and also
does not entail exit loads. That is like hitting two birds with one stone. SIPs
offer a really wide platter and the choice is yours to make.
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1.2.3 Investment In An Sip
One of the prime reasons why you should invest in an SIP is because it brings a sense
of discipline in your investments and cultivates regular saving habits. Saving small and
regularly is the philosophy that an SIP revolves around. It enables the investor to build
wealth over a long-term.
• Rupee Cost Averaging

SIPs can aid in averaging the cost return ratio. The equity market being volatile in
nature will enable the investor to purchase more units when the price of shares are
low and lesser units when the shares are priced higher.
• Power of Compounding
According to the principle of compound interest, any small amount of money when
invested for a longer period of time can get compounded and fetch you good returns.
As a result, the investor will be able to accumulate a large corpus and achieve long-
term financial goals by investing small but at regular intervals.
• Is not heavy on the wallet
Investment made through an SIP can be as low as Rs.500. Such a low amount will
not burden your budget and over a period of time, this amount will grow to fetch you
substantial returns.
• Automated Payments
Even if you are someone who is regular when it comes to making investments, you
may sometimes miss out on making the payments. An SIP eliminates this by
automating the payments which means that every month, a predetermined amount
will automatically be deducted from your bank account. So, there is no way that you
would miss out on making the payments.
• Funds can be used for emergencies
An SIP offers a one-click withdrawal option where you can withdraw the amount
anytime you want. This fund can be used to meet any contingencies such as job loss,
accidents, illnesses, etc.
• Eliminates the need for timing the market
Since SIPs are regular investments, you do not have to worry about if the market is
performing good or bad. Over time, even if there have been highs and lows, the
performance of the fund will even out. This will ensure that irrespective of the market
volatility, you will be able to enjoy good returns.
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1.2.4 Advantages Of Sip
Systematic Investment Plan (SIP) is a method to invest in mutual funds through which
you invest a fixed sum periodically in a fund. There are numerous benefits of SIP and
in this article we will discuss about them
1. Stress-Free : The investors who choose to enter or deal with mutual funds
through SIP route do not have to worry about payment or timing the market.
A SIP is set in such a way that the fixed amount and time are set in the
beginning and the process happens automatically. However, the investor
should review the whole process on a periodic basis to stay updated.
2. Discipline : This is the most important advantage of SIP9s. The investor

who plans to redeem a decent gain from the mutual fund will automatically
save his earnings for SIP monthly payments. This makes it easier for him/her
to manage the fund in long run.
3. Compounding : The major advantage of SIP is its compounding power.

The investor has to pay only a small amount each month for a fixed period
of time. Eventually, the invested amount keeps on growing each month and
the investor does not feel the pain of paying. It is just like a piggy bank, in
the end, you will have a huge amount invested in the mutual fund.
4. Convenience : Normal mutual funds require huge funds from the investors,
but in SIP the investor has to pay only a feasible amount each month for a
fixed time period according to the investor9s convenience.
5. Easy to Invest : SIP amounts can be as less as INR 500 per month. Investing
in a SIP is one of the hassle free processes that automatically deduct the
amount from the assigned bank account. The monthly payments are so less
that the investor will not have a guilt feeling.
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1.2.5 Disadvantages Of Sip

Although they can help an investor maintain a steady savings program, formal
systematic investment plans have several stipulations. While investors are allowed to
quit the plan before the end date, they may incur a hefty sales charges4sometimes as
much as 50% of the initial investment if within the first year. Missing a payment can
lead to plan termination. Systematic investment plans can also be costly to establish. A
creation and sales charge can run up to half of the first 12 months' investments.
1. Does not suit people with unpredictable cash flows
SIP route can opt only if the investor is sure that he/she can pay the fixed amount
every month without fail. If the investor is a person with unpredictable cash
flow, paying the SIP can be messy. He/she might not be able to pay the SIP
monthly.
2. Stopping the payment in between is a nightmare
SIP amounts are automatically deducted from the bank account assigned. If in
case the investor has an emergency and wants to skip the payment a month SIP
does not allow such provisions. If the bank account has the amount, the amount
will be deducted and the only way to stop it is to cancel the SIP. But, remember
once you cancel the SIP you will have to go through a lot of formalities to restart
the SIP and apart from this to cancel the SIP you will have to inform the
institution 2 weeks in advance.
3. Fixed amount
Once the SIP is started a fixed amount has to be paid each month. This amount,
however, is chosen by the investor in the beginning. But, the key disadvantage
is that the amount fixed in the beginning should be paid every month without
fail and the amount cannot be changed or modified under any circumstances.
4. Dates and time period are fixed and cannot be changed
Once the date and period is fixed on a SIP payment. The date and period cannot
be changed. The bank account should have the amount on the date assigned in
the beginning without fail.
5. Ups or downs investment is uniform
No matter of ups and downs in the market the investor has to pay the fixed
monthly amounts. He/she cannot change the amount or periods.
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1.3 INVESTMENT
• Investment Horizon
Even though SIPs are flexible, it doesn9t mean that the investment horizon can
be shortened. It all depends upon your investment goals and the type of funds
in the SIP portfolio. SIPs with longer investment horizons generally have better
wealth accumulation.
• Risk Appetite
Before investing in SIP, it is very important to understand your risk appetite. It
will be determined based on various factors - age, liquidity needs, nature of
employment, investment horizon and investment goals. Knowing your risk
appetite will help you choose the right SIP to match your goals.
• Exit Load
In SIP, each instalment is taken as a new investment and, hence, you will be
charged an exit load on the NAV, if you withdraw your investment within the
predefined time.
• Volatility
Like all Mutual Funds, SIP is also subject to market risks. However, it is also
one of the best vehicles to counter market volatility due to rupee cost averaging
and long investment horizons. It is highly advisable to read the offer document
carefully before investing.
There are two ways in which one can invest in mutual funds.
 Lump sum payment 3 It is a one shot investment. If one invests the entire
amount he wishes to invest in a single go, it is known as lump sum investment.
 SIP 3 SIP or systematic investment plan is an arrangement in which a pre-
determined small sums of amount is to be invested at a regular interval say daily,
weekly, monthly, quarterly, etc. it is a more systematic approach to investment.
However with the mobile on hand, many mutual fund AMCs and agents have come up
with mutual fund mobile apps to ease the process of investing and to make investors
feel, <mutual funds sahi hai=.
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1.4 SIP THROUGH APPS
To purchase any Mutual Funds unit from any AMC, all you need to do is to verify your
KYC from any RTA only once. Although you can invest in any AMC up to
Rs.50000/AMC/Year by completing paperless eKYC (Aadhaar OTP based KYC) from
any mutual fund house. (Updates: After the recent Supreme Court verdict on Aadhaar,
OTP based eKYC for the opening of new Mutual Fund folios has temporarily been
discontinued by the Fund Houses. As per the latest updates, Government may grant
permission to Private Fintech firms to access the Aadhaar Database for eKYC.)
1. myCAMS Mutual Fund App
myCAMS is a single gateway to invest in multiple Mutual Funds schemes. The app
facilitates faster, easier and smarter ways to transact in the direct funds. There are
various features of myCAMS which include mobile PIN & Pattern login, one view of
your MF portfolio, open new folios, purchase, redeem, switch, set up SIP and more. It
also helps in scheduling the transaction option which allows investors to set up future
Mutual Fund transactions.
2. KFinKart- Investor Mutual Funds
The core objective of this app is to simplify the journey of the customer in mutual funds.
It is a one-touch login app that empowers you to invest across a host of mutual funds
and provides a new way of investing your money. It also emphasizes on a single view
of your investments, manage profile, make decisions and transact instantly without
needing multiple apps offered by different fund houses.
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3. Zerodha Coin
As per my opinion, Zerodha coin is one of the best apps to invest in direct mutual funds.
They offer investment services in over 3,000 commission-free direct mutual funds
across 34 fund houses. This can help in saving up to 1-1.5% more per annum compared
to regular mutual funds. With over 1,50,000 investors who have invested over 2500
crores and collectively saved 30+ crores in commissions, Zerodha Coin has already
built a big brand and customer base. Key features of the app include: Search, filter, and
buy from over 3,000 commission-free direct mutual funds across 34 AMC9s, a single
capital gain statement, P&L visualizations, and Annualized (XIRR) and absolute
returns, Mutual funds are held in Demat form, and thus easier to pledge as collateral for
loan against securities.
4. ETMONEY Mutual Fund App
ETMONEY was founded by a group of passionate Entrepreneurs, IITians and

Designers with deep expertise in technology, mobile & financial services. Associated
with a big brand of Economic times, this Mutual Fund app is a one-stop destination for
all things investment which helps to track & manage expenses using expense manager,
Invest in Mutual Funds through SIP or Lumpsum, Save tax with SIPs in ELSS mutual
funds, etc.
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5. Groww- Mutual Funds App
Groww app is one of the fastest-growing apps in the Indian mutual fund industry. And
the credit goes to its clean user-interface. This app helps in investing in mutual funds
free of cost and is pretty simple to use with minimum paperwork and no hassles. All
mutual funds information are available in just one investment app. Similar to the apps
listed above in this article, Groww app also allows everyone to invest in direct mutual
funds with zero commission and offers an additional saving up to 1.5%+ compared to
regular plans. Key features include: Simple design, built with beginners and experts in
mind, Dashboard to track all your investments, annualized returns, and total returns,
Top mutual funds list for different categories with the latest finance news and insights.
6. Paytm Money Mutual Funds App
Paytm Money, offered by the Paytm group, is turning out to be one of the most trusted
platforms in India which provide up to 1% higher returns by investing in Direct Plans
of Mutual Fund Schemes with no commissions or any charges on buying and selling of
direct mutual fund plans. It offers many features to the customer which includes fully
Transparent Tracking, Data Privacy & Protection, Switch from Regular to Direct Plans,
Track, Manage & Automate SIP Investments, etc.
7. KTrack mobile app by Karvy
The primary objective of KTrack mobile app by Karvy is to manage the investments
of its customer in mutual funds. This app offers new ways of investing your money.
With just one-touch login that powers you to invest across thousands of mutual funds.
It provides a single view of your manage profile, investments, make decisions and
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transact instantly without needing multiple apps. The app has Enriched UI and many
features like One-touch login or Log In through Facebook/Google account, Enriched
Navigation, provides Portfolio Dashboard, helps in tracking of your transaction, NAV
Tracker, etc
List of a few other Mutual Fund Apps for Direct Investment:
• IPRU TOUCH by ICICI Prudential Mutual Fund
• InvesTap by SBI Mutual Fund
• FinGo by Aditya Birla SunLife MF
• HDFC MFMobile app by HDFC MF
• EasyApp by Axis Mutual Fund
• Funds India Mobile App
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2. RESEARCH METHODOLOGY
2.1 INTRODUCTION
<A research is a careful investigation or enquiry, especially through search foe new
facts in any branch of knowledge. It is a systemized effort to gain more knowledge.=
<Research Methodology is a way to systematically solve the research problem. It

includes not only the research methods, but also the logic behind using the methods.=
The methods of research used in this project were as follows:-
2.2 OBJECTIVES OF THE STUDY
➢ To study and understand parameters for investment in Mutual Fund investment.
➢ To study the fund management process of mutual funds.
➢ To study about the regulations governing mutual funds.
➢ To study the factors affecting Mutual fund choice of Investor.
➢ To analyze and determine the market position of companies for investment
purpose.
➢ To understand and analyze the investment pattern which exists among investors
in mutual funds from customer perspective.
➢ To study the characteristics of mutual fund which attracts the investor.
➢ What an investor should consider for safe investment and better returns.
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2.3 SCOPE OF THE STUDY
➢ To make people aware about concept of mutual fund.
➢ To provide information regarding advantages and demerits of mutual fund.
➢ To advice where to invest or not to invest.
➢ To provide information regarding types of mutual fund this is beneficial for
whom.
➢ The survey was conducted on investors/customers having or not having mutual
fund share covering the area of Navi Mumbai
2.4 SAMPLING
➢ Sampling unit: The sampling unit for research is Navi Mumbai.
➢ Sample size: The sample size taken for survey is 100 respondents
➢ Sampling procedure: Random sampling technique is used in the research.
2.5 TOOLS AND TECHNIQUES
Different types of graphs and charts are used to present the data collected through
questionnaire
Pie charts: Pie charts display data and statistics in an easy-to-understand pie slice format
and illustrate numerical proportion.
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2.6 SOURCES OF DATA COLLECTION
SOURCE OF DATA COLLECTION
PRIMARY DATA SECONDARY DATA
2 .7 PRIMARY DATA
Data used in research originally obtained through the direct efforts of the researcher
through surveys, interviews and direct observation. Primary data is more costly to
obtain than secondary data, which is obtained through published sources, but it is also
more current and more relevant to the research project.
1. Structured questionnaire is used as the research instrument and shared to 100 people
2. Observation method is used for collecting primary data. Observation of market
fluctuation and behaviour of investors is used as a source of collection of data.
3. Respondent characteristics used in this analysis include: name, gender, age,
occupation, investment options, etc.
4. Questionnaire was send through different social medias.
2.7a Questionnaire:
The questionnaire contained questions regarding the general and socio-economic

characteristics of the respondents such as age, educational qualification, etc. And
various questions asking about the Awareness about mutual fund, SIPs and apps.
On the basis, of responses from respondents some of the Questions were modified and
modified questionnaire was used to responses from 100 respondents. A sample size of
100 respondents was used for detailed study because it is not possible to cover whole
city for the collecting responses from respondents. This is type of questionnaire which
is segmented to collected relevant and accurate information relating to the title of
research.
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2.7b Observation Method:
The collection of primary data was also done by Observation of the investors/customers
of mutual fund. Observation Research is of various types and has various types and has
various strengths and weakness. This type of research is mostly done in social science
and marketing sector. This is social research techniques that involve the direct
observation of phenomena
2.8 SECONDARY DATA
Secondary data analysis can save time that would otherwise be spent collecting data
and, particularly in the case of quantitative data, can provide larger and higher-quality
databases that would be unfeasible for any individual researcher to collect on their
own. In addition, analysts of social and economic change consider secondary data
essential, since it is impossible to conduct a new survey that can adequately capture
past change and/or developments. However, secondary data analysis can be less useful
in marketing research, as data may be outdated or inaccurate.
• Qualitative method : Content analysis, Thematic analysis, Discourse analysis

• Quantitative method : Sampling method, existing data
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2.9 LIMITATIONS OF THE STUDY
• Research cannot be taken for entire population.

• The data collection was strictly confined to secondary sources. Primary
data was associated with only the survey conducted on the investors.
• Collecting historical NAV is very difficult.
• Selection of schemes for study is very difficult because lot of Varieties
in equity Schemes
• To get an insight in the process of risk and return and deployment of
funds by fund manager is difficult.
• The project is unable to analyse each and every equity scheme of mutual
funds to create awareness about risk and return. The risk and return of
mutual fund equity schemes can change according to the market
conditions.
• Questionnaire method which is adopted for collecting data has its own
limitations.
• It may be hard for participants to recall information or to tell the truth
about a controversial question.
• Sample size is also the limited.
• Some of the respondents of the survey were unwilling to share
information.
• Some of the respondents could not answer the questions due to lack of
knowledge.
2.10 HYPOTHESIS
• H0- Investor should consider mutual fund safe for investment
• H1- Investor should consider mutual fund is not safe for investment
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3. LITERATURE REVIEW
A large number of studies on the growth and financial performance of Mutual Fund
have been carried out during the past, in the developed and developing countries. Brief
reviews of the following research works reveal the wealth of contributions towards the
performance evaluation of Mutual Fund systematic investment plan.
1. Malkiel, B.J. (1995) says in his study utilizes a unique data set including
returns from all equity mutual funds existing each year. These data enable us
more precisely to examine performance and the extent of survivorship bias. In
the aggregate, funds have underperformed benchmark portfolios both after
management expenses and even gross of expenses. Survivorship bias appears to
be more important than other studies have estimated. Moreover, while
considerable performance persistence existed during the 1970s, there was no
consistency in fund returns during the 1980s.
2. Louis, K.C and Lakonishok, C.C. (1999) have discussed <they provide an
exploratory investigation of mutual funds9 investment styles. Funds9 styles tend
to cluster around a broad market benchmark. When funds deviate from the
benchmark they are more likely to favour growth stocks with good past
performance. There is some consistency in styles, although funds with poor past
performance are more likely to change styles. Some evidence suggests that
growth funds have better style-adjusted performance than value funds. The
results are not sensitive to style identification procedure, but an approach based
on fund portfolio characteristics performs better in predicting future fund
returns.2.
3. Carhart,M.M. , Carpenter , J.N. LynchW.A. and Musto.K.D. (2000) they

have estimates of the returns to different mutual fund portfolios for 3-year, 5-
year and 10-year holding period intervals. Finally explained that how the
relation between performance and fund characteristics can be affected by the
use of a survivor-only sample and show that the magnitudes of the biases in the
slope coefficients are large for fund size, expenses, turnover and load fees in
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our sample. Because survivorship issues are relevant for many data sets used in
finance, the analysis in this paper has potential applications in areas of financial
economics beyond just mutual fund research.
4. Redman, A.L. and Manakyan,H. (2001) have given information the risk-
adjusted returns using Sharpe9s Index, Treynor9s Index, and Jensen9s. The
results show that for 1985 through 1994 the portfolios of international mutual
funds outperformed the U. S. market and the portfolio of U. S. mutual funds
under Sharpe9s and Treynor9s indices. During 1985-1989, the international fund
portfolio outperformed both the U. S. market and the domestic fund portfolio,
while the portfolio of Pacific Rim funds outperformed both benchmark
portfolios. Returns declined below the stock market and domestic mutual funds
during 1990-1994.
5. Bullen.& Busse,J.A.(2004) they have given the information that investor cash
flows can distort inference in mutual fund performance. The impact of cash flow
on performance can be controlled for using conditional methods, as in Edelen
(1999).
6. Sindhu,K.P.& Kumar,S.R(2008) have discussed that <the stock market

provides higher returns than any of the investment options available in the
financial market. A prudent investor can earn a lot from the stock market
operations. But there is a chance of high risk and uncertainty. As we know,
higher the return, higher will be the risk. Those investors with lack of knowledge
and expertise may lose their money while investing in financial assets,
especially in securities. This is where mutual funds come into picture. Mutual
Fund is the most suitable investment for a common man as it offers an
opportunity to invest in a diversified professionally managed basket of
securities at a relatively low cost. A mutual fund is an investment company or
a trust that pools the resources of a large number of its9 shareholders and invest
on behalf of them in diversified portfolios to attain the objectives of the
investors which in return achieve income or growth or both. Thus mutual funds
become a major investment vehicle for mobilization of savings particularly
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from small and household sectors for the investment in security market. At
present the importance of mutual funds in India has been increasing in the
capital market by expanding the investors9 base. At the same time, investment
in mutual fund is to be considered as a long term investment. Hence, it is
important to know their investment horizon. The present paper tries to
understand the investment horizon by analyzing their periodical investment
plans and investment duration.=
7. Sharma P. (2010) In this paper they found that Mutual Funds markets are
constantly becoming more efficient by providing more promising solutions to
the investors. Mutual funds industry is responding at a good pace and
understanding the investor9s perception ,still they are continuously following
this race in their attempt to differentiate their products responding to sudden
changes in the economy.
8. Singhal’s .& Goel, M .(July, 2011) : The Empirical result reported that SIP
Plans has performed better than the one time investment .
9. Shelly Singhal (2011) have stated that Systematic Investment Plans (SIP) is
among the most successful financial innovations grown at a fairly rapid pace in
emerging markets and India is no exception to it .
10. Dr. Ravi Visa, (2012) says that mutual funds were not that much known to
investors, still investor rely upon bank and post office deposits, most of the
investor used to invest in mutual fund for not more than 3 years and they used
to quit from the fund which were not giving desired results. Equity option and
SIP mode of investment were on top priority in investors9 list. It was also found
that maximum number of investors did not analyze risk in their investment and
they were depend upon their broker and agent for this work.
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11. Paul .T. (July 2012) have observed Mutual funds have evolved over the years,
in keeping with the changes in the economic and financial systems, as well as
the legal environment of the country. New products have launched according to
the requirements and changes in the investors‟ perceptions and expectations.
Understanding the investors‟ expectations and meeting those expectations are
the key area of interest of marketing experts.
12. Amarnath , Dr. .Reddy, R.S. & Krishna,K.T (2012), have observed that if
there is broad agreement that appropriately regulated Mutual Fund activity can
play a large part in financial development in all its dimensions, these barriers
can surely be addressed in a collaborative way between the three stakeholders
3 the investors, the fund managers and the regulators.
13. Tahseen, A.A and Narayana. (2012) have discussed consumer attitudes
towards financial investments have always been a challenge for the finance
companies due to limited risk appetite of consumers which are largely attributed
to both cognitive and affective components of attitude.
14. Kandpa .V & Kavidayal, P.C. (2013) have given the information for
restriction of mutual fund investment in top cities or Urban areas is the lack of
awareness level in the rural and semi urban areas. The absence of product
diversification and confusion in the market has been enlarged by the lack of
marketing initiatives for Mutual Funds. The role of mutual fund agents or
distributors is to educate the investor community. Therefore the spread of
Mutual Fund market has been limited.
15. Vyas, R. (2013) have mentioned in his study that mutual fund companies
should come forward with full support for the investors in terms of advisory
services, participation of investor in portfolio design, ensure full disclosure of
related information to investor, proper consultancy should be given by mutual
fund companies to the investors in understanding terms and conditions of
different mutual fund schemes, such type of fund designing should be promoted
that will ensure to satisfy needs of investors, mutual fund information should be
published in investor friendly language and style, proper system to educate
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investors should be developed by mutual fund companies to analyze risk in

investments made by them, etc.
16. Juwairiya, P.P(2014) says systematic investment plan is the best option
planned for small investors who wish to invest small amounts regularly to build
wealth over a long period of time.
17. Kumar, S.& Kumar. (2014) in their study it is mention that <Mutual fund is
a kind of investment that uses money from many investors to invest in stocks,
bonds or other types of investment and the fund manager decides how to invest
the money.
18. Goswami, A.G.(2014) have observed mutual fund investment is a diversified

portfolio of securities, which can include equity securities (such as common and
preferred shares), debt securities (such as bonds and debentures) and other
financial instruments issued by corporation and government, according to the
stated investment objectives of fund. The benefit to investor in buying shares of
mutual fund comes primarily from diversification, professional money
management and capital gain and dividend reinvestment at relatively low cost.
19. Azzheurova, K.E. & Bessonova, E.A. (2015): says management of regional
investment projects is the analysis and estimation of their efficiency. It
influences the pace of development, as well as solving regional socio-economic
problems. The paper substantiates the necessity to complement the evaluation
algorithm of regional investment projects with functional units of analysis of
social, innovative, environmental consequences of projects.
20. Joseph G., Telma, M. & Romeo. A. (Feb 2015): have observed that
Systematic Investment Plan (SIP) will reduce risk when the market is volatile
And SIP works more advantageously only on bearish market whereas, Lump
sum gives high returns in bullish market .From this study it can be concluded
that in order to get better results from SIP, invest for a minimum period of 5
years is necessary.
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21. Prabhakaran. (Sep 2015) Says stock market is one of the economic indicators
of growth of country9s economic development. The bullish trend of stock
market attracts many equity investors in the recent past days. Though many
investors trade on their own, they require the experts help as investment tips to
trade. The investors risk taking ability is one of the important think that must
have to know by the fund manager to allocate the investors fund accordingly.
22. Sharma,R. (2015) In his study he discover the investment objectives of

selected mutual fund investors and to identify the types of mutual fund schemes
preference by elected mutual fund investors. The results presented that the main
objective behind to invest in mutual fund is good return, safety and tax benefit.
The research also suggested that the growth schemes and balanced schemes are
most preferred in comparison to other schemes. Male and female respondents
do not significantly different across investment experience. Graduate
respondent are less experienced as compare to other academic qualified
respondents. If investment experience is analyzed on the base of occupation
than it is found that servicemen and professionals are less experienced in
compare to other occupational groups.
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4. DATA ANALYSIS AND INTERPRETATION
1. Gender
Answers % Count
Male 33.2% 33
Female 66.8% 67
33.2
66.8
Female Male Prefer not to say
Interpretation:
According to this among people respondents males are 33.2% and females are 66.8%.
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2. Age
Answers % Count
Above 18 32.2% 32
25 years 3 40 years 24% 24

41 years 3 60 years 33.8% 34
Above 60 years 9.2% 9
9.2
32.2
33.8
24
Above 18 25-40 41 - 60 Above 60
Interpretation:
Majority of the people responded is belongs to above 18 years i.e. 32.20%. 24% people
respondents are belongs to 25 years 3 40 years, 33.8% people respondents are belongs
to 41 years 3 60 years and 9.2% belongs to above 60 years category of age group.
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3. Occupation
Answers % Units
Salaried 66.2% 66
Business 9.2% 9
Student 16.9% 17
Homemaker 4.6% 5
Retired 3.1% 3
3.1
4.6
16.9
9.2
66.2
salaried Business Student Homemaker Retired
Interpretation:
According to this diagram among people respondents 66.2% are Salaried, 9.2% are
Business, 16.9% students, 4.6% are home maker and 8.1% are Retired.
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4. Which income group do you belong (per annum)?
Answers % Units
Below 2 Lakhs 38.5% 38
2- 10 Lakhs 40% 40
11- 20 Lakhs 10.8% 11
Above 20 Lakhs 10.8% 11
10.8
10.8
38.5
40
Below 2 Lakhs 2-10 Lakhs 11 - 20 Lakhs Above 20 Lakhs
Interpretation:
According to this diagram among people respondents 38.5% are earning below
2,00,000 , 40% are earning 2,00,000 3 11,00,000 , 10.8 % are earning 11,00,000 3
20,00,000 and 10.8% are earning above 20 lakhs.
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5. What is the percentage of savings from your total

income ?
Answer % Units
<=25% 60 60
<=50% 30.8 31
<=75% 9.2 9
9.2
30.8
60
<=25% <=50% <=75%
Interpretation
According to this diagram among people respondents 60% are saving more
than or equal to 25% of their income , 30.8% are saving more than or equal
to 50 of their income and 9.2% are saving more than or equal to 75% of
their income
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6. Do you invest in Mutual funds ?
Answer % Units
Yes 47.7 48
No 52.3 52
47.7
52.3
Yes No
Interpretation:
According to this diagram, among people respondents 47.7% said yes and 52.30% said
no.
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7. Do you follow SIP?
Answer % Units
Yes 43.1 43
No 35.4 35
Maybe 21.5 22
21.5
43.1
35.4
Yes No Maybe
Interpretation
According to this diagram among people respondents 43.1% people follow

sip , 35.4% people do not follow sip , 21.5% people follow it or not.
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8. While investing your money, which factor do you prefer

the most ?
Answer % Units
Liquidity 31.3 32
Company Reputation 25 25
High Risk 2 2
Low risk 40.6 41
31.3
40.6
2 25
Liquidity Company reputation High risk Low risk
Interpretation
According to this diagram among people respondents 31.3% people prefer
liquidity factor for investing money, 25% people prefer company reputation
factor for investing money, 2% people prefer high risk factor for investing
money,40.6% people prefer low risk factor for investing money.
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9. In which mutual fund would you like to invest ?
Answer % Units
Private 50.8 51
Public 49.2 49
49.2
50.8
Public Private
Interpretation

public sector for investing money and 49.2% people prefer private company
for investing money.
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10.Which factor do you consider before investing?
Answer % Units
Safety of principal 44.4 45
Low risk 31.7 32
High risk 2 2
Maturity period 20.6 21
20.6
2 44.4
31.7
Safety of principal Low risk High risk Maturity period
Interpretation
safety of principal factor before investing money, 31.7% people prefer low
risk factor before investing money investing money, 2% people prefer high
risk factor before investing money investing money, 20.6% people prefer
maturity factor before investing money investing money.
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11.What is the satisfaction level with your investment made

in stock market?
Answer % Units
Highly satisfied 29.5 30
Satisfied 45.9 46
Not satisfied 24.6 25
24.6
29.5
45.9
Highly satisfied Satisfied Not satisfied
Interpretation
According to this diagram among people respondents 29.5% people are

highly satisfied with the investment made in stock market, 45.9% people
are satisfied with the investment made in stock market and 24.6% people
are highly satisfied with the investment made in stock market.
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12. How often do you invest?
Answer % Units
Daily 6.6 7
Weekly 6.6 7
Monthly 41 41
Occasionally 45.9 46
6.6
6.6
45.9
41
Daily Weekly Monthly Ocassionaly
Interpretation
According to this diagram among people respondents 6.6% people
invest daily, 6.6% people invest weekly, 41% people invest
monthly, 45.9% people invest occasionally.
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13. What is the time period you prefer to invest?
Answer % Units
Short term 23.3 23
Medium term 46.7 47
Long term 30 30
23.3
30
46.7
Short term Medium term Long term
Interpretation

invest in short term period, 46.7% people invest in medium term
period and 30% people invest in long term period.
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14. Do you use app to invest in sip ?
Answer % Units
Yes 35.5 36
No 64.5 65
35.5
64.5
Yes No
Interpretation

use app for sip, 64.50% people do not use app for sip.
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15. Which application do you use ?
Answer % Units
Groww 9.5 10
MyCAMS 7.9 8
KFinKart 4.8 5
ETMONEY 4.8 5
PayTM 6.3 6
KTrack 4.8 5
Other 61.9 62
9.5
7.9
4.8
4.8
61.9 6.3
4.8
Groww myCAMS KFinKart ETMONEY

PayTM KTrack Other
Interpretation

use grow,7.9% people use myCAMS, 4.8% people use KFinKart,
4.8% people use ETMONEY, 6.3% people use Paytm, 4.8% people
use KTrack, 61.9 use other apps.
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16. Rate the customer services of the Apps
Answer % Units
Great 11.9 12
Good 45.8 46
Ok 35.6 36
Poor 1.7 2
Terrible 5.1 5
1.7
5.1
11.9
35.6
45.8
Great Good Ok Poor Teribble
Interpretation
According to this diagram among people respondents rated the app service 11.9%
people rated great, 45.8% people rated good, 35.6% people rated ok, 1.7% people
rated as poor, 5.1% people rated terrible.
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17. How would you describe SIP Mutual Funds ?
Answer % Units
Fine 36.7 37
Great 35 35
Life saving 21.7 22
Worst 6.7 7
6.7
21.7 36.7
35
Fine, But has some issues Great Life saving Worst
Interpretation
According to this diagram among people respondents 36.7% people described SIP
Mutual Funds as Fine, but has some issues, 35% described SIP Mutual Funds as
great, 21.7% described SIP Mutual Funds as lifesaving, 6.7% described SIP Mutual
Funds Fine as worst
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18. Which 2 features of the Apps are the most valuable to

you ?
Answer % Units
Customer satisfaction 42.60 24
Easy market survey 26.20 15
Best investment option 31.10 18
Easy access to money 23 13
Paperless transaction 14.80 8
Time saving 39.30 22
39.30% 42.60%
14.80%
26.20%
23%
31.10%
Customer Satisfaction Easy market survey

Best Investment Option Easy access to money
Paperless transactiom Time saving
Interpretation:
According to the above diagram people respondents 42.60% of people like feature of
customer satisfaction, 26.20% of respondent like features of easy market survey,
31.10% of people respondent like feature of best investment option, 23% of people like
feature of easy access to money, 14.80% people respondents like features of paperless
transaction, 39.30% respondent like the features of time saving.
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19. Which mode of operation do you prefer?
Answer % Units
60.3 60
Through apps
39.7 38
Through agents
39.7
60.3
Through agents Through apps
Interpretation
According to this diagram among people respondents 39.7% peoples mode of

operation is through agents, 60% peoples mode of operation is through apps.
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5.FINDINGS, CONCLUSION AND SUGGESTIONS
5.1 FINDINGS
➢ 33.2% are males respondent and 66.8% are female respondent.

➢ 32.20% are above the age 18 respondents, 24% people respondents are
belonging to 25 years to 40 years, 33.8% people respondents are
belonging to 41 years to 60 years and 9.2% belongs to above 60 years
category of age group.
➢ 38.5% of the respondents belong to the income group of below 2
Lakhs and 40% of the respondents belong to the income group of
2-11 lakhs. The respondents which belong to 11-20 Lakhs is
10.8% and 10.8% of the respondents belong to the income group
of above 20 Lakhs.
➢ 66.2% of the respondents belong to Salaried group, 9.2% of the
respondents belong to Business, 16.9% of the respondents belong to
students category, 4.6% of the respondents are home maker and 8.1% of
the respondents are Retired personals.
➢ 60% respondent are saving more than or equal to 25% of their income ,
30.8% respondent are saving more than or equal to 50 of their income
and 9.2% respondent are saving more than or equal to 75% of their
income
➢ 47.7% respondent invest in mutual funds and 52.30% respondent do not
invest in mutual funds.
➢ 43.1% people follow sip , 35.4% people do not follow sip , 21.5% people
may follow it or not.
➢ 31.3% people prefer liquidity factor for investing money, 25% people
prefer company reputation factor for investing money, 2% people prefer
high risk factor for investing money,40.6% people prefer low risk factor
for investing money.
➢ 50.8% people prefer public sector for investing money and 49.2%
people prefer private company for investing money.
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➢ 44.4% people prefer safety of principal factor before investing money,

31.7% people prefer low risk factor before investing money investing
money, 2% people prefer high risk factor before investing money
investing money, 20.6% people prefer maturity factor before investing
money investing money.
➢ 29.5% people are highly satisfied with the investment made in stock
market, 45.9% people are satisfied with the investment made in stock
market and 24.6% people are highly satisfied with the investment made
in stock market.
➢ 6.6% people invest daily, 6.6% people invest weekly, 41% people
invest monthly, 45.9% people invest occasionally.
➢ 23.3% people invest in short term period, 46.7% people invest in
medium term period and 30% people invest in long term period.
➢ 35.5% people use app for sip, 64.50% people do not use app for sip.
➢ 11.9% people rated great, 45.8% people rated good, 35.6% people
rated ok, 1.7% people rated as poor, 5.1% people rated terrible.
➢ 9.5% people use grow,7.9% people use myCAMS, 4.8% people use
KFinKart, 4.8% people use ETMONEY, 6.3% people use Paytm,
4.8% people use KTrack, 61.9 use other apps.
➢ 36.7% people described SIP Mutual Funds as Fine, but has some
issues, 35% described SIP Mutual Funds as great, 21.7% described
SIP Mutual Funds as lifesaving, 6.7% described SIP Mutual Funds
Fine as worst.
➢ 42.60% of people like feature of customer satisfaction, 26.20% of
respondent like features of easy market survey, 31.10% of people
respondent like feature of best investment option, 23% of people like
feature of easy access to money, 14.80% people respondents like
features of paperless transaction, 39.30% respondent like the features of
time saving.
➢ 39.7% peoples mode of operation is through agents, 60% peoples mode
of operation is through apps.
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5.2 SUGGESTION
• Mutual fund is one of the best securities in the capital market.
• It provides good returns in mutual fund securities.
• Mutual fund is also one of the taxes saving scheme.
• There is lack of awareness among people about mutual funds so there should be
more advertising and other promotional campaigns to make them aware.
• People are more interested in investing in equity funds rather than debt funds
because companies are promoting more for equity funds.
• Companies should equally promote debt funds also as the provide security to
customers.
• Companies should give knowledge to its customer about its computerized

operations to save their time and to make the operations more easy.
• Identify your investment needs. Your financial goals will vary, based on your
age lifestyle, financial independence, family commitments, level of income and
expenses many other factors.
• There is a need of regular income or need to buy a home or finance a wedding

or educate children or a combination of all these needs.
• How much risk willing to take? only take a minimum amount of risk or I am
willing to accept the fact that my investment values may fluctuate or that there
may be a short term loss in order to achieve a long term potential gain.
• What are my cash flow requirements? There should be a regular cash flow or I
need a lump sum amount to meet a specific need after a certain period or By
going through such an exercise, you will know what you want out of your
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investment and can set the foundation for a sound mutual fund investment
strategy.
• Choose the right mutual fund. Once you have clear strategy in mind, you now
have to choose which mutual fund and scheme you want to invest in. The offer
document of the scheme tell you its objectives and provided supplementary
details like the track record of other schemes managed by the same fund manger.
• Select the ideal mix of schemes Investing in just one Mutual Fund scheme may
not meet all your investment needs. You may consider investing in a
combination of schemes to achieve your specific goals. The following charts
could prove useful in selecting a combination of schemes that satisfy your
needs.
• Invest Regularly this approach that works best is to invest a fixed amount at
specific intervals, say every month. By investing a fixed sum each month, you
buy fewer units when the price is higher and more units when the price is low,
thus bringing down your average cost per unit. This is called rupee cost
averaging and is a disciplined investment strategy followed by investors all over
the world. With many open ended schemes offering systematic investors
strategy followed by investors9 plans, this regular investing habit is made easy
for you.
• Keep your taxes in mind As per the current tax laws, dividends/ income
distribution made by mutual fund is exempt from income tax in the hands of
investors. Further, there are other benefits available for investment in Mutual
Fund under the provisions of prevailing tax laws. An investor therefore should
consult their chartered accountant or tax advisor for specific advice to achieve
maximum tax efficiency by investing in Mutual Funds.
• Start early It is desirable to start investing early and stick to a regular investment
plan. If you start now you will make more than if you wait and invest later. The
power of compounding lets your earn income on income and your money
multiplies at a compounded rate of return
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• Financial goals vary, based on Investors age, lifestyle, financial independence,

family commitment and level of Income and expenses among many other
factors. Therefore, it is necessary for Mutual Funds Companies to assess the
consumer9s need.
• They should begin by defining their investment objectives and needs which
could be regular income, buying a home or finance a wedding or education of
children or a combination of all these needs, the quantum of risk, they are
willing to take and their cash flow requirements.
• Mutual Investors should choose the right Mutual Fund Scheme which suits their
requirements. The offer document of the Mutual Fund Scheme should be
thoroughly read and scrutinized. Some factors to evaluate before choosing a
particular Mutual Fund are the track record of the performance of the fund over
the last few years in relation to the appropriate yard stick and similar funds in
the same category.
• Other factors could be the portfolio allocation, the dividend yield and the
degree of transparency as reflected in the frequency and quality of their
communications. Investing in one Mutual Fund scheme may not meet all the
investment needs of an investor. They should consider investing in a
combination of schemes to achieve their specific goals.
• It is suggested that the investors should not consider only one or two factors for
investing in mutual fund but they should consider other factors such as higher
return, degree of transparency, efficient service, fund management and
Reputation of mutual fund in selection of mutual funds. The best approach for
an investor is to invest a fixed amount at specific intervals, say every month. By
investing a fixed sum each month, they can buy fewer units when the price is
higher and more units when the price is low, thus bringing down the average
cost per unit. This is called rupee cost averaging.
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• Systematic investment plan facility is one such plan, incorporating these

features. It is desirable to start investing early and stick to a regular investment
plan. The power of compounding lets one earn income on income and also the
money multiplies at a compounded rate of return. A Mutual fund investor should
be aware of his rights. The agents or financial advisors should make investors
aware of their rights as per the SEBI (Mutual Funds) Regulations & Regarding
AMFI.
• A unit holder in a Mutual Fund scheme governed by the SEBI (Mutual Funds)
Regulations is entitled to:
a) Receive unit certificates of statements of accounts confirming the title within 6

weeks from the date of closure of the subscription or within 6 weeks from the
date of request for a unit certificate is received by the Mutual Fund.
b) Receive information about the investment policies, investment objectives,
financial position and general affairs of the scheme.
c) Receive dividend within 42 days of their declaration and receive the
redemption or repurchase proceeds within 10 days from the date of
redemption or repurchase.
d) Vote in accordance with the Regulations to:
i. Approve or disapprove any change in the fundamental investment policies of
the scheme, which are likely to modify the scheme or affect the interest of the
unit holder.
ii. The dissenting unit holder has a right to redeem the investment.
iii. Change the Asset Management Company.
iv. Wind up the schemes.
e) Inspect the documents of the Mutual Funds specified in the scheme9s offer
document.
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5.3 CONCLUSION
On the basis of this study, I can conclude that Mutual Fund SIP is a monthly based
investment plan through which an investor could invest a fixed sum into mutual funds
every month at pre-decided dates. This hedges the investor from market instability and
derives maximum benefit as the investment is done at regular basis irrespective of
market conditions. SIP is a feature especially designed for investors who wish to invest
small amounts on a regular basis to build wealth over a long term. It inculcates the habit
of regular savings and does not encourage timing and speculation in the markets. The
study would be helpful for the small investors by entering into capital market by using
the Systematic investment plan. Like every investment avenue, SIP also suffers from
various disadvantages but it still seems to be one of the best investment option available
to a long term investor especially First-time investors, Salaried people etc.
Mutual Fund is good concept of investment which collects the savings and invests in
different sector and different market in such a way that investment get highest return.
This return will be paid back to Unit holder. The perception of Independent Financial
Advisor is that insurance is a best investment option for life cover and safety from future
threats and Mutual Funds are for investment purpose. Most Advisors are now
suggesting mutual fund.
Today Advisors are keeping full of knowledge of all investment instruments. And their
researches allow them to suggest Mutual Fund as Investment Avenue. Still some
advisers have not suggested the Mutual funds as investment instrument. The basic
reason behind that is, lack of knowledge about mutual funds, which is followed by high
risk and unasserted returns. Safety is at the peak of all attributes list of investment
products in the mindset of Advisors, which is followed by tax benefit, returns, maturity
and liquidity. Advisors are highly providing pre-investment advisory services and
doorstep collection services. Some of the Advisers follow their clients and provide post-
investment advisory services too. Sharing of brokerage and online valuation report
providing is very less in a practice.
All investments whether in shares, debentures or deposits involve risk; share value may
go down depending upon the performance of the company, the industry, state of capital
markets and the economy; generally, however, longer the term, lessen the risk;
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companies may default in payment of interest /principal on their

debentures/bonds/deposits; the rate of interest on an investment may fall short of the
rate of inflation reducing the purchasing power.
While risk cannot be eliminated, skilful management can minimize risk. Mutual Funds
help to reduce risk through diversification and professional management. The
experience and expertise of Mutual Fund managers in selecting fundamentally sound
securities and timing their purchases and sales help them to build a diversified portfolio
that minimizes risk and maximizes returns. In case of selecting between SIP and lump
sum, its better to conclude that people should consider before investing money in
mutual fund and invest in good AMC. It does not matter that SIP or lump sum will give
better return. It all depends on fund managers and AMC.
According to survey, more than 50% people say that they will choose SIP to invest in
Mutual fund. So trends say that SIP is good investment alternative in mutual fund. But
apart from that people also depend on the market value and they take advice from some
experts of this field.
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5.4 BIBLIOGRAPHY
1. Joseph, G., Telma, M., and Romeo, A.(2015): “A study of sip & lip of
selected large cap stocks listed in NSE=. International Journal of Management
Research & Review,Vol.5, No.2, Art.No8,pp117-136
2. Juwairiya, P.P. (2014): <Systematic investment plan-the way to invest in
mutual funds=. Sai Om Journal of Commerce & Management, Vol.9,No1,pp.
2347-7563 3. Paul, T.(2012).
3. Sharma, S.(2015): <ELSS Mutual Funds in India: Investor Perception and
Satisfaction=, International Journal of Finance and Accounting , 4(2): 131-139
4. Sindhu, K.P.,& Kumar, S. R.(2014): <Investment horizon of mutual fund
investors=, Geinternational journal of management research,Vol.2, No.8
5. Soni, P., Khan, I. (2012): <Systematic investment plan v/s other investment
avenues in individual portfolio management 3 A comparative study=,
International Journal in Multidisciplinary and Academic Research, Vol. 1, No.3.
6. Vyas, R.(2013): <Factors influencing investment decision in mutual funds=
ZENITH International Journal of Business Economics & Management
Research, Vol.3, No.7. pp-2249- 8826
7. Zenti, R.(2014): <Are lump sum investments riskier than systematic investment
plans?=
8. www.amfiindia.com
9. www.indianresearchjournals.com
10. www.wikipedia.com
11. www.investopedia.com
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Annexure
SIP Questionnaire
*Required
1. Name *
2. Gender *
Female
Male
Prefer not to say
3. Age *
Above 18
25-40
41 - 60
Above 60
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4. Occupation *
salaried
Business
Student
Homemaker
Retired
5. Which income group do you belong (per annum)? *
Below 2 Lakhs
2-10 lakhs
11-20 lakhs
Above 20 lakhs
6. What is the percentage of savings from your total income ? *
<=25 %
<= 50 %
<= 75 %
7. Do you invest in Mutual funds ? *
Yes
No
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8. Do you follow SIP? *
Yes
No
Maybe
9. While investing your money, which factor do you prefer the most ?
Liquidity
Company Reputation
High risk
Low risk
10.In which mutual fund would you like to invest ?
Private
Public
11. Which factor do you consider before investing?
Safety of principal
Low risk
High risk
Maturity period
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12. What is the satisfaction level with your investment made in stock market ?
Highly satisfied
Satisfied
Not satisfied
13. How often do you invest?
Daily
Weekly
Monthly
Occasionally
14. What is the time period you prefer to invest?
Short term (0-1 yr)
Medium term (1-5 yrs)
Long term ( > 5 yrs)
15. Do you use app to invest in sip ?
Yes
No
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16. Which application do you use ?
Groww
myCAMs mutual
KFinKart- Investor Mutual Fund
ETMONEY Mutual Fund App
Paytm Money Mutual Funds App
KTrack mobile app by Karvy
Other
17. Rate the customer services of the Apps
Great
Good
Ok
Poor
Terrible
18. How would you describe SIP Mutual Funds ?
Fine, But has

some issues
Great life Saving
Worst
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19. Which 2 features of the Apps are the most valuable to you ?
Customer satisfaction
Easy market survey
Best investment option
Easy access to money
Paperless
Time Saving
20. Which mode of operation do you prefer?
Through agent
Through apps
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Black book sanjana (Recovered)

Financial markets (Modern College of Arts, Science and Commerce)

Studocu is not sponsored or endorsed by any college or university

STUDY OF MUTUAL FUND WITH RESPECT TO

SYSTEMATIC INVESTMENT PLAN (SIP)

University of Mumbai for partial completion of the degree of

Under the Faculty of Commerce

Under the Guidance of

Asst. Prof. SUNITA SAINI

PILLAI COLLEGE OF ARTS, COMMERCE & SCIENCE, AUTONOMOUS

AFFILIATED TO UNIVERSITY OF MUMBAI

PLOT NO 10, SECTOR-16, NEW PANVEL – 410206

Downloaded by ADITYA NAGDA (a.nagda@somaiya.edu)

STUDY OF MUTUAL FUND WITH RESPECT TO

SYSTEMATIC INVESTMENT PLAN (SIP)

University of Mumbai for partial completion of the degree of

Under the Faculty of Commerce

Under the Guidance of

Asst. Prof. SUNITA SAINI

PILLAI COLLEGE OF ARTS, COMMERCE & SCIENCE, AUTONOMOUS

AFFILIATED TO UNIVERSITY OF MUMBAI

PLOT NO 10, SECTOR-16, NEW PANVEL – 410206

Downloaded by ADITYA NAGDA (a.nagda@somaiya.edu)

Name and Signature of the Learner

Name and Signature of the Guiding Teacher

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I would like to acknowledge the following as being idealistic channels and

I take this opportunity to thank the University of Mumbai for giving me

I would like to thank my Principal, Dr (C.A) GAJANAN WADER for

I would also like to express my sincere gratitude towards my Project Guide

I would like to thank my College Library, for having provided various

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1.4 SIP Through Apps 29

2 Research Methodology 33-37

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2.8 Secondary Data 36

5 Findings, Conclusion And Suggestion 63-71

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1.1 INTRODUCTION OF MUTUAL FUNDS

Mutual funds give small or individual investors access to professionally managed

• A mutual fund is a type of investment vehicle consisting of a portfolio of stocks,

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1.1.1 History Of Mutual Funds

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1. A bull market for both stocks and bonds,

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1.1.2 Primary Structure Of Mutual Funds

a) Types of Mutual Funds based on structure

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b) Types of Mutual Funds based on asset class

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c) Types of Mutual Funds based on investment objective

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d) Types of Mutual Funds based on specialty

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e) Types of Mutual Funds based on risk

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1.1.3 Definition Of Key Terms Of Mutual Funds

• Average annual total return