CHAPTER 7

INVESTORS’ PERCEPTION REGARDING MUTUAL FUNDS

The following chapter is an attempt to study the perception of mutual fund investors.
This has been done with the help of data collected from two hundred respondents
from Punjab. For analysis of data, the respondents have been categorized on the basis
of various age, occupational, savings and investment experience categories. The
various dimensions studied are knowledge of the respondents regarding mutual funds,
risk tolerance of the respondents, source of information used by the respondents,
importance attached to various factors by the respondents while making mutual fund
investments, popularity of mutual funds among the respondents, respondents’
preference for various financial assets, investment behaviour of the respondents regarding
mutual funds, performance monitoring pattern of the respondents, respondents’ awareness,
satisfaction and perception about quality of fund manager, respondents’ future plan in
mutual fund investments, respondents’ opinion with regard to various aspects of
mutual funds, respondents’ opinion regarding regulatory framework governing mutual
funds in India, respondents’ perception regarding effectiveness of advertising media in
relation to mutual funds and respondents’ perception regarding future of mutual funds in
India.

7.1 KNOWLEDGE OF THE RESPONDENTS REGARDING

MUTUAL FUNDS

To know the knowledge of investors regarding mutual funds they were asked to rate
their knowledge on a five point scale. Their responses have been given in Table 7.1.
The table shows that 63 per cent of the respondents have good knowledge of mutual
funds. It is followed by the respondents (36%) who have average knowledge in this
regard. Only 2 respondents (1%) have poor knowledge regarding this.

Category-wise majority of the respondents irrespective of their age, occupational,

savings and experience categories (except E1) have good knowledge of mutual funds
followed by those (except E1) who have average knowledge of mutual funds. In case
of category E1 56.72 per cent of the respondents have average knowledge of mutual
funds followed by those who have good knowledge of mutual funds (40.3%).

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 Table 7.1

Knowledge of the Respondents Regarding Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Knowledge
0 0 0 0 0 0 0 0 0 0 0 0 0
Very Poor
(0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0)

Poor 2 0 0 2 0 0 1 1 0 2 0 0 2
(2.02) (0) (0) (2.17) (0) (0) (0.84) (2.13) (0) (2.99) (0) (0) (1)
34 23 15 28 25 19 45 14 13 38 22 12 72
Average
(34.34) (38.98) (35.71) (30.43) (40.32) (41.30) (37.82) (29.79) (38.24) (56.72) (31.88) (18.75) (36.00)

Good 61 35 27 60 37 26 71 32 20 27 45 51 123
(61.62) (59.32) (64.29) (65.22) (59.68) (56.52) (59.66) (68.09) (58.82) (40.30) (65.22) (79.69) (61.50)

Very Good 2 1 0 2 0 1 2 0 1 0 2 1 3
(2.02) (1.69) (0) (2.17) (0) (2.17) (1.68) (0) (2.94) (0) (2.90) (1.56) (1.50)
N 99.00 59 42 92 62 46 119 47 34 67 69 64 200
AWS 3.64 3.63 3.64 3.67 3.60 3.61 3.62 3.66 3.65 3.37 3.71 3.83

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Average weighted scores (AWS) have been calculated category-wise by assigning
weights as 5,4,3,2,1 to very good, good, average, poor, very poor respectively.
Category-wise average weighted scores reveals no major differences within age,
occupational and savings categories. However experience-wise, the respondents from
category E3 are more knowledgeable (AWS=3.83) followed by the respondents from
categories E2 (AWS=3.71) and E1 (AWS=3.37). This indicates a positive correlation
between experience and knowledge of the respondents as indicated by average
weighted scores.

7.2 RISK TOLERANCE OF THE RESPONDENTS

Table 7.2 reveals how the respondents place themselves on the risk tolerance scale
while investing in mutual funds. As is evident from the table, 58.5 per cent of the
respondents consider themselves as moderate risk taker followed by those who are
risk averse (27%) and high risk taker (14.5).

Category-wise, majority of the respondents irrespective of their categories are

moderate risk takers followed by risk averse (except category A3). High risk taking on
the risk tolerance scale has been given least preference by the respondents irrespective
of their age (except A3 category), occupational, savings and experience categories. In
case of category A3, 14.29 per cent of the respondents have shown their inclination
towards high risk taking followed by those who are risk averse (9.52%). Chi-Square
value at 5 per cent level of significance reveals that no significant differences exist
among various occupational, savings and experience categories with respect to risk
tolerance level while making investment in mutual funds. However, significant
differences have been found among the respondents belonging to various age
categories in this regard.

7.3 SOURCE OF INFORMATION USED BY THE RESPONDENTS

Generally, most of the investors do not invest on their own in a particular mutual
fund. Investor’s decision to invest in a particular mutual fund is affected by different
sources from where information about working of that fund becomes available. They
require information not only for subscribing to new schemes of mutual funds but also
for evaluating the performance of existing schemes.

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 Table 7.2

Respondents’ Perception Regarding their Risk Tolerance in Mutual Fund Investments

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Risk Tolerance
12 11 6 14 8 7 18 6 5 14 6 9 29
High Risk Taker
(12.12) (18.64) (14.29) (15.22) (12.90) (15.22) (15.13) (12.77) (14.71) (20.90) (8.70) (14.06) (14.50)
Moderate Risk 55 30 32 48 38 31 63 30 24 37 46 34 117
Taker (55.56) (50.85) (76.19) (52.17) (61.29) (67.39) (52.94) (63.83) (70.59) (55.22) (66.67) (53.13) (58.50)
Risk Averse 32 18 4 30 16 8 38 11 5 16 17 21 54
(32.32) (30.51) (9.52) (32.61) (25.81) (17.39) (31.93) (23.40) (14.71) (23.88) (24.64) (32.81) (27.00)
N 99 59 42 92 62 46 119 47 34 67 69 64 200
Chi-square value 10.13* df=4 4.17 df=4 5.04 df=4 5.91 df=4
Note: * denotes significant at 5% level of Significance

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Table 7.3 shows the information sources used by the respondents regarding mutual
funds investments. The table shows that 43 per cent of the respondents have come to
know about mutual funds from their friends and relatives followed by financial
professionals (27.5%), broker/sub-broker (26.5%) and finance journals/newspaper
(6%).

Category wise maximum number of the respondents irrespective of their age,

occupational, savings and experience categories (except S2) base their investment
decision on the advice of their friends and relatives. In case of S2 category, maximum
number of investors seeks the advice of broker/sub-broker. Further, brokers/sub-
brokers and financial professionals are the other two dominant sources of information
among the respondents of various age, occupational, savings and experience
categories. Finance journals/newspapers as a source of information have a low impact
in this regard.

7.4 IMPORTANCE ATTACHED TO VARIOUS FACTORS BY

THE RESPONDENTS WHILE MAKING MUTUAL FUNDS
INVESTMENTS

To ascertain the importance of various factors while investing in mutual funds the
respondents were asked to express their views on a five point scale (ranging from
highly important to highly unimportant) regarding return, liquidity, risk, safety,
diversification, tax saving, promoter’s name, past performance, rating, sector where
investment will be made, size of corpus, advertisements, lock in period and exit load.

Table 7.4 shows the distribution of their preferences in this regard. The table shows
that vast majority of the respondents have rated ‘Return’ (98%), ‘Liquidity’ (97%),
‘Safety’ (96%), ‘Risk’ (90.5%), ‘Tax Saving’ (88.5%), ‘Diversification’ (85.5%),
‘Exit Load’ (71%), ‘Lock in Period’ (65.5%), ‘Past Performance’ (62%), ‘Rating’
(58%) and ‘Sector where investment will be made’ (57.5%) as important. 43 per cent
of the respondents are indifferent with regard to ‘Promoter’s Name’ while making
investment in mutual funds. It is followed by those who consider it as important
(40%) and unimportant (17%).

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 Table 7.3

Sources of Information used by the Respondents about Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Sources
Broker/Sub-Broker 24 14 15 22 16 15 30 17 6 23 21 9 53
(24.24) (23.73) (35.71) (23.91) (25.81) (32.61) (25.21) (36.17) (17.65) (34.33) (30.43) (14.06) (26.50)

Friends & Relatives 39 28 19 34 30 22 55 15 16 29 27 30 86

(39.39) (47.46) (45.24) (36.96) (48.39) (47.83) (46.22) (31.91) (47.06) (43.28) (39.13) (46.88) (43.00)
Financial 30 15 10 30 18 7 30 13 12 9 19 27 55
Professionals (30.30) (25.42) (23.81) (32.61) (29.03) (15.22) (25.21) (27.66) (35.29) (13.43) (27.54) (42.19) (27.50)
Finance Journals/ 9 2 1 8 1 3 6 6 0 8 3 1 12
Newspapers (9.09) (3.39) (2.38) (8.70) (1.61) (6.52) (5.04) (12.77) (0) (11.94) (4.35) (1.56) (6.00)

N 99 59 42 92 62 46 119 47 34 67 69 64 200

Note: Percentages are more than 100 because of multiple choices.

182
It is worth mentioning here that sizeable number of the respondents have shown their
indifference with regard to ‘Rating’ (30.5%), ‘Lock in Period’ (28.5%), ‘Sector where
investment will be made’ (28%) and ‘Past Performance’ (26%) while making
investment in mutual funds. Regarding ‘Size of Corpus’, 43 per cent of the
respondents consider it important followed by the respondents who are indifferent
(38%) and consider it unimportant (19%). 36 per cent of the respondents are
indifferent with regard to ‘Advertisements’ while making investment in mutual funds.
It is followed by those who consider it as unimportant (35%) and important (29%).

Table 7.4
Importance Attached to Various Factors by the Respondents while making Mutual
Funds Investments
Highly Un- Highly
Important
Factors important Neutral important Unimportant
162 34 2 2 0
Return
(81) (17) (1) (1) (0)
115 79 4 2 0
Liquidity
(57.5) (39.5) (2) (1) (0)
74 107 15 4 0
Risk
(37) (53.5) (7.5) (2) (0)
116 76 6 2 0
Safety
(58) (38) (3) (1) (0)
86 85 16 13 0
Diversification
(43) (42.5) (8) (6.5) (0)
116 61 12 9 2
Tax Saving
(58) (30.5) (6) (4.5) (1)
32 48 86 25 9
Promoter's Name
(16) (24) (43) (12.5) (4.5)
31 93 52 18 6
Past Performance
(15.5) (46.5) (26) (9) (3)
14 102 61 15 8
Rating
(7) (51) (30.5) (7.5) (4)
Sector where
32 83 56 26 3
investment will be
(16) (41.5) (28) (13) (1.5)
made
10 76 76 34 4
Size of Corpus
(5) (38) (38) (17) (2)
2 56 72 48 22
Advertisements
(1) (28) (36) (24) (11)
52 79 57 10 2
Lock in Period
(26) (39.5) (28.5) (5) (1)
79 63 29 25 4
Exit Load
(39.5) (31.5) (14.5) (12.5) (2)

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Table 7.5 shows that the respondents have rated ‘Return’ (AWS=4.78), ‘Liquidity’
(AWS=4.54), ‘Safety’ (AWS=4.53), ‘Tax Saving’ (AWS=4.40), ‘Risk’ (AWS=4.26),
‘Diversification’ (AWS=4.22), ‘Exit Load’ (AWS=3.94), ‘Lock in Period’
(AWS=3.85), ‘ Past Performance’ (AWS=3.63), ‘Sector where investment will be
made’ (AWS=3.58), ‘Rating’ (AWS=3.50), ‘Promoter’s Name’ (AWS=3.35), ‘Size
of Corpus’ (AWS=3.27) as important or highly important. However, the respondents
have considered ‘Advertisements’ (AWS=2.84) as unimportant.

Age-wise, the table reveals that respondents irrespective of their categories have
rated ‘Return’, ‘Liquidity’ , ‘Safety’, ‘Tax Saving’ , ‘Risk’ , ‘Diversification’ , ‘Exit
Load’ , ‘Lock in Period’, ‘ Past Performance’, ‘Sector where investment will be
made’ , ‘Rating’ , ‘Promoter’s Name’ , ‘Size of Corpus’ as important or highly
important. Further, respondents from categories A1 and A2 have rated
‘Advertisements’ as unimportant (AWS being 2.74 and 2.86 respectively). However,
the respondents from category A3 seem to be indifferent (AWS being slightly above
3) in this regard. Kendall’s coefficient of concordance reveals that there exists
significant concurrence of rankings (W=0.964) among the respondents from various
age categories with regard to preference given by the respondents to various factors
while investing in mutual funds.

Occupation-wise, the table reveals that respondents irrespective of their categories

have rated ‘Return’, ‘Liquidity’ , ‘Safety’, ‘Tax Saving’ , ‘Risk’ , ‘Diversification’ ,
‘Exit Load’ , ‘Lock in Period’, ‘ Past Performance’, ‘Sector where investment will be
made’ , ‘Rating’ , ‘Promoter’s Name’ , ‘Size of Corpus’ as important or highly
important. Further, the respondents from category O1 have rated ‘Advertisements’ as
unimportant (AWS = 2.64). However, the respondents from categories O2 and O3
seem to be indifferent in this regard (AWS being 3 or slightly above 3.00). Kendall’s
coefficient of concordance reveals that there exists significant concurrence of
rankings (W=0.951) among the respondents from various occupational categories
with regard to preference given by the respondents to various factors while investing
in mutual funds.

Savings-wise, the table reveals that respondents irrespective of their categories have
rated ‘Return’, ‘Liquidity’ , ‘Safety’, ‘Tax Saving’ , ‘Risk’ , ‘Diversification’ , ‘Exit
Load’ , ‘Lock in Period’, ‘ Past Performance’, ‘Sector where investment will be

184
made’, ‘Rating’, ‘Promoter’s Name’, ‘Size of Corpus’ as important or highly
important. However, the respondents in all the savings categories have rated
‘Advertisements’ as unimportant (AWS being 2.89, 2.83 and 2.68 for categories S1,
S2, and S3 respectively). This also indicates the decreasing importance of this factor
with advancement of savings. Kendall’s coefficient of concordance reveals that there
exists significant concurrence of rankings (W=0.962) among the respondents from
various savings categories with regard to preference given by the respondents to
various factors while investing in mutual funds.

Experience-wise, the table reveals that respondents irrespective of their categories

have rated ‘Return’, ‘Liquidity’ , ‘Safety’, ‘Tax Saving’ , ‘Risk’ , ‘Diversification’ ,
‘Exit Load’ , ‘Lock in Period’, ‘ Past Performance’, ‘Sector where investment will be
made’ , ‘Rating’ , ‘Promoter’s Name’ , ‘Size of Corpus’ as important or highly
important. Further, the respondents from categories E1 (AWS=2.73) and E2
(AWS=2.64) have rated ‘Advertisements’ as unimportant. However, the respondents
from category E3 (AWS=3.17) consider it as important or are indifferent. Kendall’s
coefficient of concordance reveals that there exists significant concurrence of
rankings (W=0.888) among the respondents from various experience categories with
regard to preference given by the respondents to various factors while investing in
mutual funds.

7.5 POPULARITY OF MUTUAL FUNDS AMONG THE

RESPONDENTS

In order to know the comparative popularity of mutual funds studied, the respondents
were asked to rank (1-10) the ten selected mutual funds. Rank 1 was assigned to most
popular mutual fund and rank 10 was given to least popular mutual fund. To calculate
the weighted scores weights 10 to 1 were assigned to ranks 1 to 10 respectively. The
scores so obtained were divided by number of respondents to obtain the average
weighted scores. These have been depicted in table 7.6
The table shows that HDFC Mutual Fund has been the most popular mutual fund
among the respondents (AWS=8.79) followed by ICICI Prudential (AWS=7.86),
Franklin Templeton Mutual Fund (AWS=6.47), Birla Sunlife Mutual Fund
(AWS=6.33), SBI Mutual Fund (AWS=6.24), UTI Mutual Fund (AWS=6.09),

185
 Table 7.5

Average Weighted Scores Showing Importance Assigned to Various Factors by the Respondents while Investing in Mutual Funds
(N= 200)
Age–wise Occupational Experience-wise
Factors Savings–wise categories
categories categories categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 AWS
Return 4.89 4.76 4.55 4.80 4.81 4.72 4.71 4.94 4.79 4.63 4.93 4.78 4.78
Liquidity 4.49 4.61 4.52 4.48 4.66 4.48 4.53 4.55 4.53 4.31 4.57 4.73 4.54
Risk 4.24 4.31 4.21 4.24 4.31 4.22 4.24 4.43 4.09 4.12 4.39 4.25 4.26
Safety 4.46 4.54 4.67 4.49 4.55 4.59 4.53 4.60 4.44 4.48 4.45 4.67 4.53
Diversification 4.29 4.27 3.98 4.14 4.44 4.07 4.32 4.11 4.03 3.97 4.25 4.45 4.22
Tax Saving 4.35 4.44 4.45 4.33 4.66 4.17 4.30 4.47 4.65 4.00 4.55 4.66 4.40
Promoter's Name 3.32 3.29 3.48 3.24 3.31 3.61 3.34 3.36 3.32 3.21 3.23 3.61 3.35
Past Performance 3.63 3.58 3.69 3.70 3.56 3.54 3.54 3.81 3.68 3.37 3.55 3.97 3.63
Rating 3.48 3.56 3.43 3.51 3.50 3.48 3.39 3.57 3.74 3.19 3.48 3.83 3.50
Sector where investment
3.66 3.42 3.60 3.60 3.52 3.59 3.66 3.40 3.53 3.48 3.43 3.83 3.58
will be made
Size of Corpus 3.34 3.20 3.19 3.19 3.39 3.28 3.32 3.23 3.15 3.10 3.12 3.61 3.27
Advertisements 2.74 2.86 3.05 2.64 3.00 3.02 2.89 2.83 2.68 2.73 2.64 3.17 2.84
Lock in Period 4.05 3.71 3.55 3.93 3.92 3.54 3.70 4.04 4.09 3.72 4.20 3.59 3.85
Exit Load 4.14 3.86 3.57 4.13 3.87 3.63 3.72 4.23 4.29 3.97 4.43 3.38 3.94
Kendall’s coefficient of
0.964 0.951 0.962 0.888
concordance (W)
Chi-Square value 37.59*, d.f.= 13 37.09*, d.f.= 13 37.53*, d.f.= 13 34.62*, d.f.= 13

186
 Table 7.6

Average Weighted Scores Representing Popularity of Mutual Funds among the Respondents
(N= 200)
Experience -wise
Age – wise categories Occupational categories Savings –wise categories Total
Mutual Funds categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 AWS

UTI 6.37 5.88 5.69 5.98 5.90 6.54 5.90 6.70 5.88 6.63 6.32 5.27 6.09

SBI 6.30 6.61 5.57 6.30 5.84 6.65 6.10 7.11 5.53 7.09 5.97 5.64 6.24

HDFC 9.05 8.44 8.67 8.98 8.56 8.72 8.83 8.83 8.59 8.87 8.78 8.72 8.79

Franklin Templeton 6.01 6.81 7.05 6.25 6.85 6.37 6.72 5.57 6.79 5.72 6.54 7.17 6.47

Tata 3.86 4.36 4.95 4.21 4.15 4.41 4.52 3.72 3.94 4.43 4.01 4.27 4.24

Principal 2.39 3.15 2.93 2.54 2.82 2.98 2.93 2.51 2.32 2.97 2.16 3.09 2.73

Taurus 1.62 1.83 1.45 1.59 1.65 1.76 1.77 1.43 1.50 1.85 1.51 1.58 1.65

Birla Sunlife 6.37 6.19 6.43 6.33 6.58 6.00 6.17 6.45 6.74 6.00 6.41 6.59 6.33

ICICI Prudential 8.32 7.56 7.19 8.33 7.74 7.09 7.71 8.02 8.15 7.37 8.41 7.78 7.86
Sundram BNP
4.68 4.47 4.67 4.39 4.95 4.61 4.48 4.57 5.14 4.04 4.64 5.19 4.62
Paribas
Kendall’s coefficient of
0.945 0.943 0.941 0.941
concordance (W)
Chi-Square value 25.51*, d.f.= 9 25.47*, d.f.= 9 25.40*, d.f.= 9 25.40*, d.f.= 9
Note: * denotes significant at 5 per cent level of significance

187
Sundaram BNP Paribas Mutual Fund (AWS=4.62), Tata Mutual Fund (AWS=4.24),
Principal Mutual Fund (AWS=2.73) and Taurus Mutual Fund (AWS=1.65).

Category-wise the table reveals that HDFC Mutual Fund followed by Prudential
ICICI are the two most popular mutual funds among the respondents of various age,
occupational, savings and experience categories. Further, Taurus Mutual Fund
followed by Principal Mutual Fund have been least popular mutual funds among the
respondents irrespective of their age, occupational, savings and experience categories.
Kendall’s coefficient of concordance reveals that there exists significant concurrence
of rankings among the respondents regarding the popularity of mutual funds of
various age, occupational, savings and experience categories.

7.6 RESPONDENTS’ PREFERENCES FOR VARIOUS

FINANCIAL ASSETS

With a view to know the comparative ranking of various financial assets from return,
tax benefit, liquidity and safety point of view, the respondents were asked to rank 12
financial assets from (1-12) giving rank 1 to the most preferred asset. Ranks so
obtained were assigned weights 12 to 1 for ranks 1 to 12 respectively. The scores so
obtained were divided by the number of respondents to obtain the average weighted
scores. These scores have been shown in Table 7.7 to 7.11. Table 7.7 reveals that
Mutual Funds (AWS=9.96) rank number 1 among listed financial assets from return
point of view followed by Equity Shares (AWS=9.67), Real Estate (AWS=9.61) and
Gold (AWS=9.39). However from tax benefit point of view Mutual Funds are at rank
4 (AWS=8.64) after Public Provident Fund (PPF)(AWS=10.43), LIC Policy
(AWS=10.16) and National Saving Certificates (AWS=8.92). Further, from liquidity
point of view Mutual Funds are at rank 2 (AWS=9.92) after Equity Shares
(AWS=10.28). From safety point of view Mutual Funds have rank 9 (AWS=5.22)
after Bank Deposits (AWS=9.72), Public Provident Fund (AWS=9.41), National
Saving Certificates (AWS=8.33), Kisan Vikas Patra (AWS=7.70), Post-Office Time
Deposits (AWS=7.48), LIC Policy (AWS=7.00), Gold (AWS=6.73) and Real Estate
(AWS=6.10). Kendall’s co-efficient of concordance reveals that there is no significant
concurrence of rankings among the respondents with regard to respondents’ preference for
financial assets from return, tax benefit, liquidity and safety point of view.

188
 Table 7.7

Average Weighted Scores Representing Preferences of Respondents for Various Financial Assets
(N= 200)
Returns Tax Benefits Liquidity Safety point
Financial Assets
point of view point of view point of view of view
Equity Shares 9.67 6.24 10.28 2.99
Mutual Funds 9.96 8.64 9.92 5.22
Debentures/Bonds 5.44 5.12 6.64 4.57
Bank Deposits 6.75 6.12 8.54 9.72
Company Deposits 5.25 3.96 5.91 4.06
LIC Policy 6.22 10.16 5.45 7.00
Real Estate 9.61 3.75 6.37 6.10
Gold 9.39 3.03 9.32 6.73
Public Provident Fund(PPF) 5.24 10.43 3.86 9.41
National Saving Certificate 4.52 8.92 4.50 8.33
Kisan Vikas Patra 3.85 6.14 4.27 7.70
Post-Office Time Deposits 3.38 6.38 4.07 7.48
Kendall’s coefficient of concordance (W) = 0.185, Chi-Square value = 8.15, Not Significant at 5
per cent level of significance.

Table 7.8 reveals that irrespective of age, occupational, savings and experience
categories Mutual Funds have ranked at number 1, 2 or 3 from return point of view. It
is further noted that Equity Share, Real Estate and Gold are the other preferred
financial assets from returns point of view. Kendall’s coefficient of concordance
reveals that there exists significant concurrence of rankings among the respondents
from various age, occupational, savings and experience categories with regard to
respondents’ preference for financial assets from return point of view.

Table 7.9 reveals that irrespective of age, occupational, savings and experience
categories, Mutual Funds have ranked number 3 or 4 from tax point of view. It is
further noted that LIC Policy, Public Provident Fund (PPF) and National Saving
Certificates are the other preferred financial assets among the respondents from tax
point of view. Kendall’s coefficient of concordance reveals that there exists
significant concurrence of rankings among the respondents from various age,
occupational, savings and experience categories with regard to respondents’
preference for financial assets from tax point of view.

189
 Table 7.8
Average Weighted Scores Representing Preferences of Respondents for Various Financial Assets
from Returns Point of View
(N= 200)
Experience –wise
Age – wise categories Occupational categories Savings –wise categories Total
Financial Assets categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 AWS
Equity Shares 9.54 10.00 9.50 9.93 9.65 9.15 9.70 9.28 10.09 8.33 10.36 10.31 9.67
Mutual Funds 9.87 10.41 9.52 9.88 10.08 9.93 10.14 9.43 10.03 9.30 10.19 10.39 9.96
Debentures/Bonds 5.28 5.83 5.24 5.58 5.87 4.57 5.08 6.49 5.21 4.78 6.17 5.33 5.44
Bank Deposits 6.45 7.07 6.98 6.47 6.87 7.13 6.37 6.81 7.97 7.34 6.78 6.08 6.75
Company Deposits 5.15 5.07 5.74 5.16 5.58 4.98 4.80 5.64 6.29 4.42 5.72 5.61 5.25
LIC Policy 5.88 6.20 7.02 6.00 6.27 6.57 6.46 5.87 5.82 6.78 5.33 6.58 6.22
Real Estate 10.15 9.64 8.29 9.92 9.47 9.17 9.67 10.00 8.85 9.55 9.88 9.38 9.61
Gold 9.87 9.02 8.79 9.58 9.16 9.33 9.25 9.77 9.35 9.39 9.74 9.02 9.39
Public Provident
4.94 4.98 6.29 5.01 5.32 5.57 5.71 4.72 4.29 5.54 4.36 5.86 5.24
Fund (PPF)
National Saving
4.75 4.02 4.69 4.83 3.81 4.87 4.30 4.81 4.88 4.94 4.33 4.28 4.52
Certificate
Kisan Vikas Patra 4.15 3.73 3.31 4.54 3.00 3.61 3.97 3.36 4.09 4.22 4.23 3.05 3.85
Post-Office Time
3.68 2.71 3.60 3.62 2.95 3.46 3.55 3.51 2.56 4.75 2.64 2.73 3.38
Deposits
Kendall’s coefficient
0.958 0.953 0.925 0.905
of concordance (W)
Chi-Square value 31.61*, d.f.=11 31.46*, d.f.=11 30.54*, d.f.=11 29.87*, d.f.=11
Note: * denotes significant at 5 per cent level of significance

190
 Table 7.9
Average Weighted Scores Representing Preferences of Respondents for Various Financial Assets
from Tax Point of View
(N= 200)
Experience-wise
Age – wise categories Occupational categories Savings–wise categories Total
Financial Assets categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 AWS
Equity Shares 6.07 7.12 5.38 6.17 6.55 5.93 6.05 5.91 7.32 5.52 6.70 6.48 6.24
Mutual Funds 8.36 8.90 8.90 8.62 8.37 9.02 9.07 8.30 7.59 8.63 8.33 8.97 8.64
Debentures/Bonds 4.92 5.42 5.14 5.28 5.21 4.65 5.27 5.19 4.47 5.34 4.45 5.59 5.12
Bank Deposits 6.03 6.08 6.36 5.98 6.03 6.50 6.27 5.94 5.82 6.51 5.72 6.13 6.12
Company Deposits 3.54 4.10 4.76 3.87 3.98 4.11 3.99 3.49 4.50 3.96 3.48 4.48 3.96
LIC Policy 9.96 10.05 10.79 10.18 10.24 10.00 10.39 9.55 10.18 10.31 9.87 10.31 10.16
Real Estate 4.06 2.92 4.17 3.85 3.15 4.35 3.82 4.15 2.91 3.96 3.46 3.83 3.75
Gold 3.20 2.51 3.33 2.91 2.92 3.39 3.00 3.06 3.06 3.39 2.58 3.13 3.03
Public Provident
10.46 10.47 10.29 10.64 10.44 10.00 10.29 10.60 10.71 9.88 10.78 10.63 10.43
Fund (PPF)
National Saving
9.11 9.07 8.26 8.90 9.11 8.70 8.61 9.51 9.21 8.42 9.48 8.84 8.92
Certificate
Kisan Vikas Patra 6.59 5.75 5.64 6.37 6.11 5.72 5.77 6.26 7.26 5.99 7.04 5.33 6.14
Post-Office Time
6.84 5.95 5.88 6.92 5.85 5.98 6.02 7.45 6.15 6.73 7.39 4.91 6.38
Deposits
Kendall’s coefficient of
0.958 0.959 0.947 0.940
concordance (W)
Chi-Square value 31.61*, d.f.=11 31.64*, d.f.=11 31.26*, d.f.=11 31.02*, d.f.=11
Note: * denotes significant at 5 per cent level of significance

191
Table 7.10 reveals that irrespective of age, occupational, savings and experience
categories, Mutual Funds have ranked number 2 or 3 from liquidity point of view.
Equity Shares and Gold seem to be the other preferred financial assets among the
respondents from liquidity point of view. Kendall’s coefficient of concordance reveals
that there exists significant concurrence of rankings among the respondents from
various age, occupational, savings and experience categories with regard to
respondents’ preference for financial assets from liquidity point of view.

Table 7.11 reveals that irrespective of age, occupational, savings and experience
categories (except A3 and S3), Mutual Funds have ranked at number 9 from safety
point of view. In case of category A3, Mutual Funds have ranked number 11
(AWS=3.95) and in case of category S3, Mutual Funds have ranked number 8
(AWS=5.29). Thus it seems that Mutual Funds have ranked very low among the
respondents from safety point of view. This may be due to wide fluctuations in NAV
generally noticed in case of various mutual fund schemes. Bank Deposits and PPF
seem to be more preferred financial assets among the respondents from safety point of
view. Kendall’s coefficient of concordance reveals that there exists significant
concurrence of rankings among the respondents from various age, occupational,
savings and experience categories with regard to respondents’ preference for financial
assets from safety point of view.

7.7 INVESTMENT BEHAVIOUR OF THE RESPONDENTS

REGARDING MUTUAL FUNDS
Investment pattern of the respondents has been studied on the basis of nature-wise,
sector-wise and scheme-wise investments made by them, timing of their investments
based on individual and market related factors and time horizon of their investments
in mutual funds.

On the basis of nature, mutual funds schemes are either open-ended or close-ended.
Table 7.12 reveals that 52.5 per cent of the respondents have invested in open-ended
mutual funds schemes. Further, 39.5 per cent of the respondents have invested in both
open ended and close-ended schemes followed by those (8%) who have invested in
close-ended schemes only.

192
 Table 7.10
Average Weighted Scores Representing Preferences of Respondents for Various Financial Assets
from Liquidity Point of View
(N= 200)
Experience-wise
Age–wise categories Occupational categories Savings–wise categories Total
Financial Assets categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 AWS
Equity Shares 10.52 9.98 10.12 10.38 10.13 10.26 10.55 9.94 9.76 10.07 10.33 10.42 10.28
Mutual Funds 10.00 9.69 10.05 9.79 10.06 9.98 10.02 9.70 9.88 9.60 10.07 10.09 9.92
Debentures/Bonds 6.46 6.88 6.71 6.58 6.90 6.41 6.82 6.62 6.06 5.46 6.94 7.55 6.64
Bank Deposits 8.54 8.17 9.05 8.74 8.05 8.78 8.78 8.19 8.15 9.13 8.01 8.47 8.54
Company Deposits 5.97 6.10 5.50 5.99 6.00 5.63 5.91 5.96 5.85 5.70 6.35 5.66 5.91
LIC Policy 5.57 5.31 5.38 5.61 5.26 5.39 5.29 5.64 5.74 5.84 6.01 4.44 5.45
Real Estate 6.31 6.86 5.79 6.63 6.69 5.39 5.66 6.64 8.44 5.99 7.29 5.77 6.37
Gold 9.91 9.58 7.57 9.80 8.85 8.98 8.90 9.40 10.68 9.88 10.43 7.53 9.32
Public Provident
3.80 4.05 3.71 4.14 3.56 3.67 3.80 3.91 3.97 4.01 3.32 4.27 3.86
Fund (PPF)
National Saving
4.40 3.83 5.67 4.41 4.10 5.22 4.71 4.68 3.53 4.85 4.00 4.67 4.50
Certificate
Kisan Vikas Patra 4.23 4.27 4.33 4.37 4.35 3.93 4.77 3.60 3.41 4.19 3.55 5.11 4.27
Post-Office Time
3.68 4.12 4.93 3.71 4.15 4.70 4.24 4.34 3.12 4.94 2.72 4.61 4.07
Deposits
Kendall’s coefficient of
0.952 0.967 0.944 0.901
concordance (W)
Chi-Square value 31.41*, d.f.=11 31.92*, d.f.=11 31.15*, d.f.=11 29.72*, d.f.=11
Note: * denotes significant at 5 per cent level of significance

193
 Table 7.11
Average Weighted Scores Representing Preferences of Respondents for Various Financial Assets
from Safety Point of View
(N= 200)
Experience-wise
Age–wise categories Occupational categories Savings–wise categories Total
Financial Assets categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 AWS
Equity Shares 3.22 2.97 2.48 3.11 3.05 2.67 2.66 3.17 3.91 3.63 3.06 2.25 2.99
Mutual Funds 5.49 5.66 3.95 5.60 5.24 4.43 5.33 4.89 5.29 5.19 5.90 4.52 5.22
Debentures/Bonds 5.12 4.02 4.05 5.16 4.18 3.91 4.92 4.55 3.38 5.16 4.59 3.92 4.57
Bank Deposits 9.20 10.44 9.93 9.42 9.95 10.00 9.96 9.26 9.53 9.01 9.62 10.56 9.72
Company Deposits 3.98 4.22 4.02 4.39 4.21 3.20 4.03 4.02 4.24 4.21 4.30 3.64 4.06
LIC Policy 6.65 7.68 6.88 6.68 7.47 7.00 6.66 6.89 8.32 6.75 7.42 6.81 7.00
Real Estate 6.06 6.47 5.64 6.29 6.40 5.28 5.82 5.70 7.59 6.22 6.35 5.69 6.10
Gold 6.85 6.59 6.64 6.99 6.89 6.00 6.15 7.02 8.35 6.51 7.51 6.13 6.73
Public Provident
9.41 8.93 10.07 9.24 9.24 9.98 9.66 9.09 8.97 8.96 9.07 10.25 9.41
Fund (PPF)
National Saving
8.55 7.68 8.74 8.12 7.82 9.43 8.61 8.38 7.26 8.46 7.64 8.94 8.33
Certificate
Kisan Vikas Patra 7.84 7.19 8.10 7.71 7.26 8.28 7.92 7.62 7.03 7.57 7.41 8.16 7.70
Post-Office Time
7.68 6.78 8.00 7.54 6.74 8.35 7.92 7.98 5.24 8.06 6.48 7.95 7.48
Deposits
Kendall’s coefficient of
0.964 0.972 0.886 0.969
concordance (W)
Chi-Square value 31.82*, d.f.=11 32.08*, d.f.=11 29.25*, d.f.=11 31.97*, d.f.=11
Note: * denotes significant at 5 per cent level of significance

194
Category-wise the table reveals that a large number of the respondents irrespective of
their age, occupational, savings and experience categories have either invested in
open-ended mutual fund schemes or both in open-ended and close-ended mutual fund
schemes. The proportion of the respondents investing only in close-ended mutual
funds schemes has been very less irrespective of their age, occupational, savings and
experience categories. Chi-Square value at 5 per cent level of significance reveals that
significant differences exist among various age and occupational categories with
respect to respondents’ nature-wise investment pattern in mutual funds. Further, no
significant differences have been found among the respondents belonging to various
savings categories in this regard.

Sector-wise, the respondents can invest in public sector and private sector mutual funds.
Table 7.13 shows that 58.5 per cent of the respondents have invested only in private
sector mutual funds followed by the respondents who have invested only in public
sector mutual funds (35%) and both type of mutual funds (6.5%).

Category-wise, majority of the respondents irrespective of their age, occupational,

savings and experience categories have invested in private sector mutual funds
(except S2 and E1). In case of category S2, 55.32 per cent of the respondents have
invested in public sector mutual funds followed by those who have invested in private
sector mutual funds (40.43%). 44.78 per cent of the respondents from category E1
have invested in private sector mutual funds followed by those (43.28%) who have
invested in public sector mutual fund. A small proportion of the respondents from all
the categories have invested in both public sector and private sector mutual funds.
Chi-Square value at 5 per cent level of significance reveals that significant differences
exist among various savings and experience categories with respect to the
respondents’ sector-wise investment pattern in mutual funds. Further, no significant
differences have been found among the respondents belonging to various occupational
categories with regard to sector-wise investment pattern in mutual funds.

195
 Table 7.12

Respondents’ Nature-Wise Investment Pattern in Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Nature
Open-Ended 62 25 18 63 24 18 68 22 15 40 42 23 105
(62.63) (42.37) (42.86) (68.48) (38.71) (39.13) (57.14) (46.81) (44.12) (59.70) (60.87) (35.94) (52.50)
Closed-Ended 9 3 4 7 5 4 6 8 2 7 9 0 16
(9.09) (5.08) (9.52) (7.61) (8.06) (8.70) (5.04) (17.02) (5.88) (10.45) (13.04) (0) (8.00)
Both 28 31 20 22 33 24 45 17 17 20 18 41 79
(28.28) (52.54) (47.62) (23.91) (53.23) (52.17) (37.82) (36.17) (50) (29.85) (26.09) (64.06) (39.50)
N 99 59 42 92 62 46 119 47 34 67 69 64 200
Chi-Square
Value 11.12*, df=4 18.82* df=4 8.67 df=4 N.A.
Note: * denotes significant at 5% level of Significance

196
 Table 7.13
Respondents’ Sector-Wise Investment Pattern in Mutual Funds
(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Sector
56 34 27 54 37 26 74 19 24 30 42 45 117
Private Sector (56.57) (57.63) (64.29) (58.70) (59.68) (56.52) (62.18) (40.43) (70.59) (44.78) (60.87) (70.31) (58.50)
39 16 15 36 18 16 37 26 7 29 24 17 70
Public Sector (39.39) (27.12) (35.71) (39.13) (29.03) (34.78) (31.09) (55.32) (20.59) (43.28) (34.78) (26.56) (35.00)
4 9 0 2 7 4 8 2 3 8 3 2 13
Both (4.04) (15.25) (0) (2.17) (11.29) (8.70) (6.72) (4.26) (8.82) (11.94) (4.35) (3.13) (6.50)
N 99 59 42 92 62 46 119 47 34 67 69 64 200
Chi-Square
N.A. 6.3 df=4 12.49* df=4 11.03* df=4
Value
Note: * denotes significant at 5% level of Significance

197
Scheme-wise, Table 7.14 reveals that most of the respondents irrespective of their age,
occupational, savings and experience categories have invested in equity schemes. Tax
saving schemes and balanced schemes seem to be other preferred schemes among the
respondents.

To know the timing pattern of the respondents they were asked to state the timing of
their investments in mutual funds. Table 7.15 shows that 55 per cent of the respondents
invest through a systematic investment plan (SIP) followed by those who invest when
money is available (28%), with a gap of few months (15.5%), at birthday (4%) and after
a year (3.5%). None of the respondents have invested at festivals.

Irrespective of their age, occupational, savings and experience categories, majority of

the respondents (45.16% in case of category O2 and 47.76% in case of category E1)
have invested in mutual funds through a systematic investment plan (SIP). Further,
more than 23 per cent of the respondents irrespective of their categories have invested
in mutual funds when money is available. Moreover more than 15 per cent of the
respondents from categories A1, O1, O3, S2, S3, E1 and E2 have invested in mutual funds
with a gap of few months. Surprisingly 14.29 per cent of the respondents from category
A3 have invested in mutual funds at their birthdays.

Table 7.16 highlights that 61.48 per cent of the respondents invest in mutual funds
when correction takes place in the market. It is followed by the respondents who invest
in mutual funds when market is range bound (19.67%) and when market is booming
(18.85%).

Category-wise majority of the respondents irrespective of their age, occupational,

savings and experience categories invest in mutual funds when correction takes place.
Booming market seems to be a pushing force for investment in mutual funds for
categories A1, O1, S1, E1 and E2. Further analysis shows that at least 20 per cent of the
respondents from categories A2, O2, S1, S3 and E3 give due weightage to range bound
market while investing in mutual funds. Further Chi-Square value at 5 per cent level of
significance reveals that significant differences exist with regard to timing of
investments in mutual funds based on market conditions with regard to age,
occupational and experience categories. However the differences are not significant in
case of savings category.

198
 Table 7.14

Respondents’ Scheme-Wise Investment Pattern in Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Schemes
Growth/Equity/
Diversified 84 44 32 72 46 42 104 39 17 57 50 53 160
Schemes (84.85) (74.58) (76.19) (78.26) (74.19) (91.30) (87.39) (82.98) (50) (85.07) (72.46) (82.81) (80)
Income/Debt 15 8 5 13 11 4 16 7 5 7 11 10 28
Schemes (15.15) (13.56) (11.90) (14.13) (17.74) (8.70) (13.45) (14.89) (14.71) (10.45) (15.94) (15.63) (14.00)

Balanced Schemes 29 22 6 30 21 6 25 18 14 11 32 14 57
(29.29) (37.29) (14.29) (32.61) (33.87) (13.04) (21.01) (38.30) (41.18) (16.42) (46.38) (21.88) (28.50)
Sector Specific
(IT/Pharma/ 3 1 5 2 6 1 6 3 0 3 3 3 9
FMCG/ Oil & Gas (3.03) (1.69) (11.90) (2.17) (9.68) (2.17) (5.04) (6.38) (0) (4.48) (4.35) (4.69) (4.50)
etc.)
Tax Saving 37 30 23 35 37 18 57 21 12 18 29 43 90
Schemes (37.37) (50.85) (54.76) (38.04) (59.68) (39.13) (47.90) (44.68) (35.29) (26.87) (42.03) (67.19) (45.00)
Exchange Traded
5 2 3 6 2 2 6 3 1 3 4 3 10
Funds (Gold/
(5.05) (3.39) (7.14) (6.52) (3.23) (4.35) (5.04) (6.38) (2.94) (4.48) (5.80) (4.69) (5.00)
Banking ETF)
Index Funds 0 1 1 2 0 0 1 0 1 1 1 0 2
(0) (1.69) (2.38) (2.17) (0) (0) (0.84) (0) (2.94) (1.49) (1.45) (0) (1.00)

N 99 59 42 92 62 46 119 47 34 67 69 64 200

Note: Percentages are more than 100 because of multiple choices.

199
 Table 7.15

Respondents’ Timing of Investments in Mutual Funds based on Individual Factors

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Timing
27 17 12 24 20 12 35 12 9 24 17 15 56
Money Available
(27.27) (28.81) (28.57) (26.09) (32.26) (26.09) (29.41) (25.53) (26.47) (35.82) (24.64) (23.44) (28.00)
21 7 3 15 9 7 13 12 6 11 15 5 31
Gap of few Months
(21.21) (11.86) (7.14) (16.30) (14.52) (15.22) (10.92) (25.53) (17.65) (16.42) (21.74) (7.81) (15.50)
2 3 2 4 2 1 5 1 1 2 3 2 7
After a Year
(2.02) (5.08) (4.76) (4.35) (3.23) (2.17) (4.20) (2.13) (2.94) (2.99) (4.35) (3.13) (3.50)
53 35 22 56 28 26 62 27 21 32 36 42 110
Through a SIP
(53.54) (59.32) (52.38) (60.87) (45.16) (56.52) (52.10) (57.45) (61.76) (47.76) (52.17) (65.63) (55.00)
0 0 0 0 0 0 0 0 0 0 0 0 0
At Festivals
(0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0)
1 1 6 1 5 2 8 0 0 0 2 6 8
At Birthdays
(1.01) (1.69) (14.29) (1.09) (8.06) (4.35) (6.72) (0) (0) (0) (2.90) (9.38) (4.00)

N 99 59 42 92 62 46 119 47 34 67 69 64 200

Note: Percentages are more than 100 because of multiple choices.

200
 Table 7.16

Respondents’ Timing of Investments in Mutual Funds based on Market Factors

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Market
Conditions
Booming 15 4 4 12 3 8 17 4 2 11 7 5 23
Market (26.79) (11.77) (12.5) (23.53) (10.71) (18.60) (20.99) (15.38) (13.33) (25.57) (21.875) (10.64) (18.85)
Correcting 34 18 23 32 14 29 47 19 9 26 23 26 75
Market (60.71) (52.94) (71.87) (62.75) (50) (67.45) (58.02) (73.08) (60) (60.47) (71.875) (55.32) (61.48)
Range bound 7 12 5 7 11 6 17 3 4 6 2 16 24
Market (12.5) (35.29) (15.63) (13.72) (39.29) (13.95) (20.99) (11.54) (26.67) (13.95) (6.25) (34.04) (19.67)
N 56 34 32 51 28 43 81 26 15 43 32 47 122
Chi-square
value 10.38* df=4 9.54* df=4 2.66 df=4 12.29* df=4
Note: * denotes significant at 5% level of Significance

201
Table 7.17 shows the average time horizon for which the respondents have made their
investments in mutual funds. The table highlights that 41 per cent of the respondents
have invested in mutual funds for 3 to 5 years. It is followed by the respondents who
have invested in mutual funds for above 5 years (30.5%) and for less than 3 years
(28.5%). This means that 71.5 per cent of the respondents have average time horizon
of more than 3 years while making investments in mutual funds.

Category-wise a vast majority of the respondents irrespective of their age,

occupational, savings and experience categories have invested in mutual funds for
more than 3 years. Chi-Square value at 5 per cent level of significance reveals that
significant differences exist among various age, occupational and experience
categories with respect to average time horizon of the respondents’ investments.
Further, no significant differences have been found among the respondents belonging
to various savings categories in this regard.

7.8 PERFORMANCE MONITORING PATTERN OF THE

RESPONDENTS

Table 7.18 reveals how the respondents evaluate the performance of mutual funds
where they have invested. As is evident from the table, 41.62 per cent of the
respondents compare the returns of mutual funds with the benchmark index. It is
followed by the respondents who compare the performance of mutual funds with the
performance of similar schemes (39.09%) and on the basis of absolute return
(19.29%). Absolute return as a measure of performance has been given least
preference by the respondents irrespective of their age, occupational, savings and
experience categories. Other two performance measures seem to be more popular
among the respondents belonging to various age, occupational, savings and
experience categories as more than 68 per cent of the respondents of these categories
have preferred either of the two criteria i.e. comparison with the benchmark index or
comparison with the performance of similar schemes. Chi-Square value at 5 per cent
level of significance reveals that no significant differences exist among the
respondents from various ages, occupational, savings and experience categories with
respect to criteria to measure the performance of mutual funds.

202
 Table 7.17

Respondents’ Average Time Horizon of Investments in Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Time Horizon
34 13 10 28 17 12 38 12 7 29 22 6 57
Up to 3 years
(34.34) (22.03) (23.81) (30.43) (27.42) (26.09) (31.93) (25.53) (20.59) (43.28) (31.88) (9.38) (28.50)
44 25 13 46 18 18 43 23 16 32 38 12 82
3-5 years
(44.44) (42.37) (30.95) (50) (29.03) (39.13) (36.13) (48.94) (47.06) (47.76) (55.07) (18.75) (41.00)
21 21 19 18 27 16 38 12 11 6 9 46 61
Above 5 years
(21.21) (35.59) (45.24) (19.57) (43.55) (34.78) (31.93) (25.53) (32.35) (8.96) (13.04) (71.88) (30.50)
N 99 59 42 92 62 46 119 47 34 67 69 64 200

Chi-square value 10.02* df=4 11.68* df=4 3.6 df=4 78.46* df=4
Note: * denotes significant at 5% level of Significance

203
 Table 7.18

Respondents’ Criteria to Measure the Performance of Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Criteria

Absolute Return 15 10 13 14 16 8 23 10 5 18 11 9 38
(15.15) (17.54) (31.71) (15.22) (27.12) (17.39) (19.66) (21.74) (14.71) (26.87) (15.94) (14.75) (19.29)
Comparison with
Benchmark Index 40 28 14 38 21 23 47 20 15 23 32 27 82
(40.40) (49.12) (34.15) (41.30) (35.60) (50.00) (40.17) (43.48) (44.12) (34.33) (46.38) (44.26) (41.62)
Comparison with
the Performance of 44 19 14 40 22 15 47 16 14 26 26 25 77
Similar Schemes (44.44) (33.33) (34.15) (43.48) (37.29) (32.61) (40.17) (34.78) (41.18) (38.81) (37.68) (40.98) (39.09)
N 99 57 41 92 59 46 117 46 34 67 69 61 197
Chi-square value 7.07 df=4 5.04 df=4 0.96 df=4 4.48 df=4
Note: * denotes Significant at 5% level of Significance

204
Table 7.19 reveals the time interval used by the respondents to monitor the
performance of mutual funds. The table reveals that 31 per cent of the respondents
monitor the performance of mutual funds fortnightly followed by those who do it
weekly (27%), monthly (24%) and daily (18%).

Category-wise majority of the respondents irrespective of their age, occupational,

savings and experience categories monitor their investments weekly or fortnightly
(except categories S1 and E1). It is further noted that monthly mode of monitoring
seems to be more popular in case of categories A3, O3, S1, E1 and E3 . Daily mode of
monitoring seems to be less popular among the respondents irrespective of their age,
occupational, savings and experience categories. Chi-Square value at 5 per cent level
of significance reveals that significant differences exist among various occupational,
savings and experience categories with respect to time interval used by the
respondents for monitoring mutual fund investments. Further, no significant
differences have been found among the respondents belonging to various age
categories in this regard.

7.9 RESPONDENTS’ AWARENESS, SATISFACTION AND

PERCEPTION ABOUT QUALITIES OF FUND MANAGER

Table 7.20 highlights that 56 per cent of the respondents are unaware about fund
manager of their mutual funds schemes. Category-wise, majority of the respondents
irrespective of their age (except A3), occupational and savings categories are not
aware about the name of the fund manager. In case of category A3, an equal number
of respondents (50% each) are aware and unaware about name of fund manager.
Experience-wise, majority of the respondents from category E1 (68.67%) and E2
(68.12%) are unaware about the name of fund manager. However, 70.31 per cent of
the respondents from category E3 are aware about it. Chi-Square value at 5 per cent
level of significance reveals that no significant differences exist in the responses of
respondents belonging to various age, occupational and savings categories in this
regard. However, the differences are significant in case of experience categories.

205
 Table 7.19

Time Interval used by the Respondents for Monitoring Mutual Fund Investments
(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Time Interval
19 9 8 20 13 3 22 6 8 12 12 12 36
Daily (19.19) (15.25) (19.05) (21.74) (20.97) (6.52) (18.49) (12.77) (23.53) (17.91) (17.39) (18.75) (18.00)
28 15 11 19 20 15 25 20 9 17 19 18 54
Weekly (28.28) (25.42) (26.19) (20.65) (32.26) (32.61) (21.01) (42.55) (26.47) (25.37) (27.54) (28.13) (27.000
29 22 11 32 21 9 33 17 12 16 30 16 62
Fortnightly (29.29) (37.29) (26.19) (34.78) (33.87) (19.57) (27.73) (36.17) (35.29) (23.88) (43.48) (25.00) (31.00)
23 13 12 21 8 19 39 4 5 22 8 18 48
Monthly (23.23) (22.03) (28.57) (22.82) (12.90) (41.30) (32.77) (8.51) (14.70) (32.83) (11.60) (28.13) (24.00)
N 99 59 42 92 62 46 119 47 34 67 69 64 200
Chi-square
value 2.12 df=6 18.43* df=6 17.86* df=6 19.88* df=6
Note: * denotes significant at 5% level of Significance

206
 Table 7.20

Respondents’ Awareness about the Name of Fund Manager of Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Awareness
43 24 21 42 27 19 55 22 11 21 22 45 88
Yes (43.43) (40.68) (50) (45.65) (43.55) (41.30) (46.22) (46.81) (32.35) (31.34) (31.88) (70.31) (44.00)
56 35 21 50 35 27 64 25 23 46 47 19 112
No (56.57) (59.32) (50) (54.35) (56.45) (58.70) (53.78) (53.19) (67.65) (68.66) (68.12) (29.69) (56.00)
N 99 59 42 92 62 46 119 47 34 67 69 64 200
Chi-square
value 0.89 df=2 0.24 df=2 2.26 df=2 26.45* df=2
Note: * denotes significant at 5% level of Significance

207
To know the satisfaction of the respondents, they were asked whether they were
satisfied with their mutual fund manager. Their responses have been shown in table
7.21. The table reveals that vast majority of the respondents irrespective of their age,
occupational, savings and experience categories are satisfied with their mutual fund
manager. There seems to be negative correlation between savings of the respondents
and their satisfaction with regard to mutual fund manager. However, this correlation
seems to be positive with experience of the respondents. Further, chi-square value at 5
per cent level of significance depicts that no significant differences exist in the
responses of respondents belonging to various age, savings and experience categories
with regard to the above query.

Respondents were asked to list important attributes of a successful fund manager in

relation to mutual funds. Their responses have been given in Table 7.22. The table
highlights that 42.5 per cent of the respondents have suggested fund manager’s
‘Investment Track Record’ as the most important attribute followed by ‘Experience’
(32.5%), ‘Investment Philosophy/Methodology’ (13%) and ‘Qualification’ (12%).

Category-wise the table reveals that the respondents irrespective of their age,
occupational, savings and experience categories have listed ‘Investment Track
Record’ and ‘Experience’ (except category S2) as the most important attributes of a
successful fund manager. In case of category S2 ‘Investment Philosophy and
Methodology’ has been listed as the second most important attribute in this regard.
‘Qualification’ and ‘Investment Philosophy/Methodology’ from various age,
occupational, savings (except category S2) and experience categories have not been
given much importance by the respondents in this regard. Chi-Square value at 5 per
cent level of significance reveals that significant differences exist among various
occupational, savings and experience categories with respect to the respondent’s
opinion regarding most important attribute of a successful fund manager. Further, no
significant differences have been found among the respondents belonging to various
age categories in this regard.

208
 Table 7.21

Respondents’ Satisfaction with Fund Manager

Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Satisfaction
31 22 18 32 20 19 47 17 7 15 18 38 71
Satisfied (72.09) (91.67) (85.71) (76.19) (74.07) (100) (85.45) (77.27) (63.64) (71.43) (81.82) (84.44) (80.68)
12 2 3 10 7 0 8 5 4 6 4 7 17
Not Satisfied (27.91) (8.33) (14.29) (23.81) (25.93) (0) (14.55) (22.73) (36.36) (28.57) (18.18) (15.56) (19.32)
N 43 24 21 42 27 19 55 22 11 21 22 45 88
Chi-square
value 4.24, df=2 N.A. 3.02, df=2 1.57, df=2

209
 Table 7.22

Respondents’ Opinion Regarding Most Important Attribute of a Successful Fund Manager

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Attributes
17 4 3 18 3 3 12 9 3 11 12 1 24
Qualification (17.17) (6.78) (7.14) (19.57) (4.84) (6.52) (10.08) (19.15) (8.82) (16.42) (17.39) (1.56) (12.00)
35 20 10 32 17 16 45 7 13 20 30 15 65
Experience (35.35) (33.90) (23.81) (34.78) (27.42) (34.78) (37.82) (14.89) (38.24) (29.85) (43.48) (23.44) (32.50)
36 28 21 31 34 20 51 18 16 29 21 35 85
Investment Track Record (36.36) (47.46) (50) (33.70) (54.84) (43.48) (42.86) (38.30) (47.06) (43.28) (30.43) (54.69) (42.50)
Investment 11 7 8 11 8 7 11 13 2 7 6 13 26
Philosophy/Methodology (11.11) (11.86) (19.05) (11.96) (12.90) (15.22) (9.24) (27.66) (5.88) (10.45) (8.70) (20.31) (13.00)
N 99 59 42 92 62 46 119 47 34 67 69 64 200

Chi-square value 8.92 df=6 13.06* df=6 19.26* df=6 21.45* df=6
Note: * denotes significant at 5 per cent level of significance

210
7.10 RESPONDENTS’ FUTURE PLAN IN MUTUAL FUND
INVESTMENTS

To know the future intention of the respondents, they were asked whether they
intended to make mutual funds investments in future. Their responses have been
shown in Table 7.23.

The table reveals that vast majority of the respondents irrespective of their age,
occupational, savings and experience categories intend to invest in mutual funds in
future. Further, chi-square value at 5 per cent level of significance depicts that no
significant differences exist in the responses of respondents belonging to various age,
occupational, savings and experience categories in this regard.

In response to a query regarding future investment plans of the respondents, Table

7.24 reveals that 36.52 per cent of the respondents intend to invest in equity schemes
followed by tax saving schemes (34.83%) and balanced schemes (14.61%). Most of
the respondents irrespective of their age, occupational, savings (except S2) and
experience categories have shown their intention to invest either in equity schemes or
tax saving schemes. In case of category S2 most of the respondents have shown their
intention to invest either in tax saving scheme or income scheme.

Table 7.25 shows that 73.03 per cent of the respondents prefer private sector for their
future investments in mutual funds. It is followed by the respondents who prefer
public sector (20.22%) and who intend to invest in both sectors (6.74%). Category-
wise vast majority of the respondents irrespective of their age, occupational, savings
and experience categories have shown their inclination to invest in private sector
mutual funds. Chi-Square value at 5 per cent level of significance reveals that
significant differences exist among the respondents from various occupational and
experience categories with respect to their sector-wise intentions for future
investments in mutual funds. Further, no significant differences in this regard have
been found among the responses of the respondents belonging to various age and
savings categories.

211
 Table 7.23

Respondents’ Intention to Make Investment in Mutual Funds in Future

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Intention to Invest
Yes
91 52 35 79 55 44 109 38 31 62 59 57 178
(91.92) (88.14) (83.33) (85.87) (88.71) (95.65) (91.60) (80.85) (91.18) (92.54) (85.51) (89.06) (89.00)
No 8 7 7 13 7 2 10 9 3 5 10 7 22
(8.08) (11.86) (16.67) (14.13) (11.29) (4.35) (8.40) (19.15) (8.82) (7.46) (14.49) (10.94) (11.00)
N 99 59 42 92 62 46 119 47 34 67 69 64 200
Chi-square value 2.28 df=2 3.01 df=2 4.17 df=2 1.72 df=2

212
 Table7. 24

Respondents’ Scheme-Wise Intention for Future Investments in Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Schemes
Growth/ Equity/ 34 17 14 25 16 24 48 8 9 30 18 17 65
Diversified Schemes (37.36) (32.69) (40) (31.65) (29.09) (54.55) (44.04) (21.05) (29.03) (48.39) (30.51) (29.82) (36.52)
Income/Debt 11 2 1 4 6 4 4 9 1 6 4 4 14
Schemes (12.09) (3.85) (2.86) (5.06) (10.91) (9.09) (3.67) (23.68) (3.23) (9.68) (6.78) (7.02) (7.87)
Balanced Schemes 13 11 2 14 9 3 21 1 4 6 13 7 26
(14.29) (21.15) (5.71) (17.72) (16.36) (6.82) (19.27) (2.63) (12.90) (9.68) (22.03) (12.28) (14.61)
Sector Specific
(IT/Pharma/ FMCG/ 2 1 0 1 2 0 0 2 1 2 0 1 3
Oil & Gas etc.) (2.20) (1.92) (0) (1.27) (3.64) (0) (0) (5.26) (3.23) (3.23) (0) (1.75) (1.69)
Tax Saving
Schemes 26 19 17 30 19 13 31 17 14 18 19 25 62
(28.57) (36.54) (48.57) (37.97) (34.55) (29.55) (28.44) (44.74) (45.16) (29.03) (32.20) (43.86) (34.83)
Exchange Traded
Fund(Gold/Banking 5 2 1 5 3 0 5 1 2 0 5 3 8
ETF) (5.49) (3.85) (2.86) (6.33) (5.45) (0) (4.59) (2.63) (6.45) (0) (8.47) (5.26) (4.49)
N 91 52 35 79 55 44 109 38 31 62 59 57 178

213
 Table 7.25

Respondents’ Sector-Wise Intention for Future Investments in Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Sector
69 35 26 57 43 30 83 25 22 38 46 46 130
Private Sector (75.82) (67.31) (74.29) (72.15) (78.18) (68.18) (76.15) (65.79) (70.97) (61.29) (77.97) (80.70) (73.03)
18 13 5 19 11 6 17 12 7 15 12 9 36
Public Sector (19.78) (25.00) (14.29) (24.05) (20) (13.64) (15.60) (31.58) (22.58) (24.19) (20.34) (15.79) (20.22)
4 4 4 3 1 8 9 1 2 9 1 2 12
Both (4.40) (7.69) (11.42) (3.80) (1.82) (18.18) (8.26) (2.63) (6.45) (14.52) (1.69) (3.51) (6.74)
N 91 52 35 79 55 44 109 38 31 62 59 57 178
Chi-square
value 3.49 df=4 13.38* df=4 5.41 df=4 11.54* df=4
Note: * denotes Significant at 5% level of Significance

214
7.11 RESPONDENTS’ OPINION WITH REGARD TO VARIOUS
ASPECTS OF MUTUAL FUNDS

The respondents were asked to express their opinion on ten statements concerning
mutual funds on a five-point scale (Strongly agree, Agree, Neither agree nor disagree,
Disagree, Strongly disagree). Their responses have been shown in Table 7.26.
The table shows that majority of the respondents have expressed their agreement with
regard to the statements ‘Mutual Funds are useful for small investors’ (97%), ‘Mutual
Funds have better professional expertise than individual investors’ (93.5%), ‘Tax
incentives on mutual fund investments should be increased’ (90%), ‘Mutual Funds are
more suitable for Indian investors’ (89.5%), ‘Mutual Fund products are desirable for
the growth of the capital market’ (83%), ‘Mutual Funds give higher return than other
investments’(83%) ‘Private sector mutual funds perform better than public sector
mutual funds’ (76%) and ‘Mutual Fund investments is like owning any other asset’
(54.5%). 39.5 per cent of the respondents are indifferent with the statement ‘Public
sector mutual funds are more secured than private sector mutual funds’. It is followed
by those who have expressed their disagreement (31.5%) and agreement (29%) with
this statement. 50 per cent of the respondents agree with the statement ‘Mutual Funds
with large corpus perform better than mutual funds with small corpus’. It is followed
by those who are indifferent (39.5%) and disagree (10.5%) with this statement. It is
worth mentioning that 28.5 per cent of the respondents are indifferent with the
statement ‘Mutual Fund investment is like owning any other asset’. However, 17 per
cent of the respondents have expressed their disagreement with this statement.

Table 7.27 shows that the respondents have high level of agreement on the statements
‘Mutual Funds are useful for small investors’(AWS=4.72), ‘Mutual Funds have better
professional expertise than individual investor’ (AWS=4.54), ‘Tax incentives on
mutual fund investments should be increased’ (AWS=4.46), ‘Mutual Funds are more
suitable for Indian investors’ (AWS=4.26), ‘Mutual Fund products are desirable for
the growth of the capital market’ (AWS=4.21), ‘Mutual Funds give higher returns
than other investments’ (AWS=4.18), ‘Private sector mutual funds perform better than
public sector mutual funds’ (AWS=4.02), ‘Mutual Fund investment is like owning
any other asset’ (AWS=3.65), and ‘Mutual Funds with large corpus perform better

215
 than mutual funds with small corpus’ (AWS=3.59). However, the respondents seem
to be indifferent (AWS=3.01) with regard to the statement ‘Public sector mutual
funds are more secured than private sector mutual funds’.

Table 7.26
Respondents’ Opinion with Regard to Mutual Funds
(N= 200)
Statements SA A NANDA DA SDA
Mutual Funds are useful for small investors 152 42 4 2 0
(76) (21) (2) (1) (0)
Private sector mutual funds perform better than public 68 84 35 10 3
sector mutual funds (34) (42) (17.5) (5) (1.5)
Mutual Funds with large corpus perform better than 38 62 79 21 0
mutual funds with small corpus (19) (31) (39.5) (10.5) (0)
Mutual Funds give higher returns than other 84 82 19 15 0
investments (42) (41) (9.5) (7.5) (0)
Public sector mutual funds are more secured than 17 41 79 53 10
private sector mutual funds (8.5) (20.5) (39.5) (26.5) (5)
Mutual Funds have better professional expertise than 121 66 12 1 0
individual investor (60.5) (33) (6) (0.5) (0)
Mutual Fund products are desirable for the growth of 84 82 26 8 0
the capital market (42) (41) (13) (4) (0)
Tax incentives on mutual fund investments should be 115 65 17 3 0
increased (57.5) (32.5) (8.5) (1.5) (0)
Mutual Funds investment is like owning any other asset 56 53 57 32 2
(28) (26.5) (28.5) (16) (1)
Mutual Funds are more suitable for Indian investors 78 101 16 5 0
(39) (50.5) (8) (2.5) (0)

Age-wise, the table reveals that the respondents irrespective of their age categories
have high level of agreement with the statements ‘Mutual Funds are useful for small
investors’, ‘Mutual Funds have better professional expertise than individual investor’,
‘Tax incentives on mutual fund investments should be increased’, ‘Mutual Funds are
more suitable for Indian investors’, ‘Mutual Fund products are desirable for the
growth of the capital market’, ‘Mutual Funds give higher returns than other
investments’, ‘Private sector mutual funds perform better than public sector mutual
funds’, ‘Mutual Fund investment is like owning any other asset’, and ‘Mutual Funds
with large corpus perform better than mutual funds with small corpus’. However, the
respondents in all the age categories seem to be indifferent with regard to statement
‘Public sector mutual funds are more secured than private sector mutual funds’ (AWS

216
being slightly below or above 3). Kendall’s coefficient of concordance reveals that
there exists significant concurrence of rankings (W=0.968) among the respondents
from different age categories with respect to various statements relating to mutual
funds.

Occupation-wise, the table reveals that the respondents irrespective of their

occupational categories have high level of agreement with the statements ‘Mutual
Funds are useful for small investors’, ‘Mutual Funds have better professional
expertise than individual investor’, ‘Tax incentives on mutual fund investments
should be increased’, ‘Mutual Funds are more suitable for Indian investors’, ‘Mutual
Fund products are desirable for the growth of the capital market’, ‘Mutual Funds give
higher returns than other investments’, ‘Private sector mutual funds perform better
than public sector mutual funds’, ‘Mutual Fund investment is like owning any other
asset’, and ‘Mutual Funds with large corpus perform better than mutual funds with
small corpus’. However, the respondents in all the occupational categories seem to be
indifferent with regard to statement ‘Public sector mutual funds are more secured than
private sector mutual funds’ (AWS being slightly below or above 3). Kendall’s
coefficient of concordance reveals that there exists significant concurrence of
rankings (W=0.981) among the respondents from different occupational categories
with respect to various statements relating to mutual funds.

Savings-wise, the table reveals that the respondents irrespective of their categories
have high level of agreement with the statements ‘Mutual Funds are useful for small
investors’, ‘Mutual Funds have better professional expertise than individual investor’,
‘Tax incentives on mutual fund investments should be increased’, ‘Mutual Funds are
more suitable for Indian investors’, ‘Mutual Fund products are desirable for the
growth of the capital market’, ‘Mutual Funds give higher returns than other
investments’, ‘Private sector mutual funds perform better than public sector mutual
funds’, ‘Mutual Fund investment is like owning any other asset’, and ‘Mutual Funds
with large corpus perform better than mutual funds with small corpus’. The
respondents from categories S1 and S2 seems to be indifferent with the statement
‘Public sector mutual funds are more secured than private sector mutual funds’ (AWS
being slightly below 3). However, the respondents from category S3 (AWS=3.29)
seem to have agreement with the above statement.

217
 Table 7.27

Average Weighted Score Showing Respondents’ Opinion with Regard to Mutual Funds
(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
(N= 200)
Statements Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 AWS

Mutual Funds are useful for small investors. 4.68 4.85 4.64 4.64 4.84 4.72 4.72 4.62 4.85 4.42 4.87 4.88 4.72
Private sector mutual funds perform better than public
3.90 4.14 4.14 3.97 4.10 4.02 4.02 4.09 3.94 3.78 3.99 4.31 4.02
sector mutual funds
Mutual Funds with large corpus perform better than
3.62 3.63 3.45 3.52 3.77 3.46 3.53 3.59 3.76 3.58 3.64 3.53 3.59
mutual funds with small corpus
Mutual Funds give higher returns than other
4.06 4.31 4.26 4.04 4.40 4.13 4.23 4.00 4.24 3.81 4.26 4.47 4.18
investments
Public sector mutual funds are more secured than
2.99 3.12 2.90 3.05 2.87 3.11 2.96 2.93 3.29 3.25 3.12 2.64 3.01
private sector mutual funds
Mutual Funds have better professional expertise than
4.54 4.56 4.50 4.55 4.56 4.46 4.56 4.40 4.62 4.49 4.48 4.64 4.54
individual investor
Mutual Fund products are desirable for the growth of
4.06 4.44 4.24 4.10 4.40 4.17 4.21 4.06 4.41 3.94 4.19 4.52 4.21
the capital market
Tax incentives on mutual fund investments should be
4.38 4.64 4.38 4.40 4.65 4.33 4.37 4.47 4.76 4.16 4.52 4.70 4.46
increased

Mutual Fund investment is like owning any other asset 3.46 3.73 3.95 3.50 3.74 3.80 3.73 3.53 3.50 3.51 3.38 4.08 3.65
Mutual Funds are more suitable for Indian investors 4.19 4.41 4.21 4.20 4.44 4.15 4.22 4.21 4.47 3.97 4.42 4.39 4.26
Kendall’s coefficient of concordance (W) 0.968 0.981 0.957 0.957
Chi-Square value 26.13* d.f.= 9 26.49* d.f.= 9 25.84* d.f.= 9 25.84* d.f.= 9
Note: * denotes significant at 5 per cent level of significance

218
Kendall’s coefficient of concordance reveals that there exists significant concurrence
of rankings (W=0.957) among the respondents from different savings categories with
respect to various statements relating to mutual funds. Experience-wise, the table
reveals that the respondents irrespective of their categories have high level of
agreement with the statements ‘Mutual Funds are useful for small investors’, ‘Mutual
Funds have better professional expertise than individual investor’, ‘Tax incentives on
mutual fund investments should be increased’, ‘Mutual Funds are more suitable for
Indian investors’, ‘Mutual Fund products are desirable for the growth of the capital
market’, ‘Mutual Funds give higher returns than other investments’, ‘Private sector
mutual funds perform better than public sector mutual funds’, ‘Mutual Fund
investment is like owning any other asset’, and ‘Mutual Funds with large corpus
perform better than mutual funds with small corpus’. The respondents from category
E1 have shown their agreement with this statement ‘Public sector mutual funds are
more secured than private sector mutual funds’(AWS=3.25). However , the
respondents from category E2 seem to be indifferent (AWS being slightly above 3).
Moreover, the respondents from category E3 have shown disagreement in this regard
(AWS=2.96). Kendall’s coefficient of concordance reveals that there exists
significant concurrence of rankings (W=0.957) among the respondents from various
experience categories with respect to various statements relating to mutual funds.

7.12 RESPONDENTS’ OPINION REGARDING REGULATORY

FRAMEWORK GOVERNING MUTUAL FUNDS IN INDIA

Table 7.28 shows the opinion of the respondents regarding regulatory framework governing
mutual funds in India. The table highlights that 62 per cent of the respondents have shown
their satisfaction in this regard.

Category-wise majority of the respondents belonging to various age, occupational, saving

(except S3) and experience categories (except E2) are satisfied with regulatory framework.
Further, 53.62 per cent of the respondents from category E2 are not satisfied in this regard.
Moreover, an equal number of the respondents from category S3 (50% each) are satisfied
and not satisfied. Chi-Square value at 5 per cent level of significance reveals that no
significant differences exist in the responses of respondents belonging to various age,
occupational and savings categories with respect to regulatory framework concerning

219
 Table 7.28

Opinion of Respondents Regarding Regulatory Framework Concerning Mutual Funds in India

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Satisfaction

63 35 26 56 41 27 72 35 17 38 32 54 124
Satisfied (63.64) (59.32) (61.90) (60.87) (66.13) (58.70) (60.50) (74.47) (50) (56.72) (46.38) (84.38) (62.00)
36 24 16 36 21 19 47 12 17 29 37 10 76
Not – Satisfied (36.36) (40.68) (38.10) (39.13) (33.87) (41.30) (39.50) (25.53) (50) (43.28) (53.62) (15.63) (38.00)
N 99 59 42 92 62 46 119 47 34 67 69 64 200
Chi-square
value 0.29 df=2 0.71 df=2 5.29 df=2 21.54* df=2
Note: * denotes significant at 5% level of Significance

220
mutual funds in India. However, the differences are significant in case
of experience categories.

7 .13 RESPONDENTS’ PERCEPTION REGARDING

EFFECTIVENESS OF ADVERTISING MEDIA IN
RELATION TO MUTUAL FUNDS

Respondents were asked to suggest an advertising media which they thought would be
most effective in relation to mutual funds. Their responses have been given in Table
7.29. The table highlights that 60 per cent of the respondents have preferred ‘TV’ as
an advertising media followed by those who prefer ‘Internet’ (16%), ‘Newspapers’
(15.5%) and ‘Professional Magazines/Journals’ (8.5%).

Category-wise majority of the respondents irrespective of their age, occupational,

savings and experience categories have suggested ‘TV’ media for advertising of
mutual funds. More than 20 per cent of the respondents for categories A2, A3, O3 and
E3 have suggested ‘Newspapers’ for this purpose. Further 25.53 per cent and 22.22 of
the respondents from categories S2 and A1 respectively have suggested use of
‘Internet’ in this regard. Chi-Square value at 5 per cent level of significance reveals
that significant differences exist among various age and experience categories with
respect to the respondents’ perception regarding effectiveness of advertising media in
relation to mutual funds. Further, no significant differences have been found among
the respondents belonging to various occupational and savings categories in this
regard.

7.14 RESPONDENTS’ PERCEPTION REGARDING

FUTURE OF MUTUAL FUNDS IN INDIA

Table 7.30 reveals that in response to a quer y regarding perception of

the respondents regarding future of mutual funds in India more than 80
per cent of the respondents have considered it bright for both public
and private sector mutual funds.

221
 Table 7.29

Respondent’s Perception Regarding Effectiveness of Advertising Media in Relation to Mutual Funds

(Age-wise, Occupation-wise, Savings-wise and Experience-wise Distribution)
Categories
A1 A2 A3 O1 O2 O3 S1 S2 S3 E1 E2 E3 Total
Media Source
TV 61 35 24 56 42 22 72 25 23 40 47 33 120
(61.62) (59.32) (57.14) (60.87) (67.74) (47.83) (60.50) (53.19) (67.65) (59.70) (68.12) (51.56) (60)
Newspapers 5 16 10 11 10 10 20 7 4 5 9 17 31
(5.05) (27.12) (23.81) (11.96) (16.13) (21.74) (16.81) (14.89) (11.76) (7.46) (13.04) (26.56) (15.50)
Professional
Mgazines/ Journals 11 4 2 7 3 7 13 3 1 10 1 6 17
(11.11) (6.78) (4.76) (7.61) (4.84) (15.22) (10.92) (6.38) (2.94) (14.93) (1.45) (9.38) (8.50)
22 4 6 18 7 7 14 12 6 12 12 8 32
Internet (22.22) (6.78) (14.29) (19.57) (11.29) (15.22) (11.76) (25.53) (17.65) (17.91) (17.39) (12.50) (16.00)
N 99 59 42 92 62 46 119 47 34 67 69 64 200

Chi-square value 21.39* df=6 11.12 df=6 7.52 df=6 17.71* df=6
Note: * denotes Significant at 5 per cent level of significance

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 Table No - 7.30

Perception of Respondents’ Regarding Future of Mutual Funds in India

Future Public Sector Private Sector
0 0
Very Dark
(0) (0)
1 0
Dark
(0.50) (0)
33 17
Can't Say
(16.50) (8.50)
115 51
Bright
(57.50) (25.50)
51 132
Very Bright
(25.50) (66.00)

In a query regarding the deficiencies observed by the respondents in the working of

mutual funds, the respondents have highlighted lack of transparency, non dispatch of
periodical statement, procedural complexities and high cost to the investors as the
major deficiencies. They have also highlighted a need to create awareness about
mutual funds among general public.

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