A PROJECT REPORT ON A STUDY ON INVESTMENT BEHAVIOR OF CUSTOMER WITH SPECIAL REFERANCE OF MUTUAL FUND.

FOR BIRLA SUNLIFE MUTUAL FUND

SUBMITTED BY

ABHISHEK UDAY DESHPANDE

SUBMITTED TO

UNIVERSITY OF PUNE

IN PARTIAL FULFILLMENT OF THE DEGREE OF

MASTER IN FINANCE MANAGEMENT

LEXICON INSTITUTE OF MANAGEMENT UNIVERSITY OF PUNE PUNE -: 412207 2010 - 2012

ACKNOWLEDGEMENT
The summer project at BIRLA SUNLIFE MUTUAL FUND has been an enriching experience. The learning of the project will go a long way enabling me to achieve my future endeavors. The satisfaction and euphoria that accompany the successful completion of the work would be incomplete unless we mention the People, as an expression of gratitude who made it possible and whose constant guidance and encouragement served as a beacon of light and crowned our efforts with success. The project report is the outcome of the backing and encouragement of the number of persons whom I have been associated during the past two months Firstly I would like to thank Mr. Pradyumna Patil, (RELATIONSHIP MANAGER) who provides me the opportunity to do my summer project in his organization. I am also thankful to Mr. Chandan Kumar (RELATIONSHIP MANAGER) for guide and help me throughout the whole period of my project. His suggestions were helpful at every aspect of project. I also extend special thanks to Mr. AVANEESH JUMDE (Director LIME, Wagholi ), Last but not the least I extend sincere thanks to all those who have helped me directly or indirectly in this project.

ABHISHEK DESHPANDE

DECLARATION

I, ABHISEK DESHPANDE, hereby declare that this project is the record of authentic work carried out by me, in well reputed company BIRLA SUNLIFE MUTUAL FUND, during the academic year 2011-2012, under the guidance of Prof. AVANEESH JUMDE, at LEXICON INSTITUTE OF MANAGEMENT WAGHOLI, PUNE . This is my real work and has not been submitted to any other university or institute towards the award of any degree.

Date: Place: - Pune

(Student Name) ABHISHEK DESHPANDE

INDEX

Chapter No.
1 2 3 4 5 6 7 8 9 10

Description
Introduction & Executive Summary Company Profile Research methodology Theoretical Background Data Analysis and Interpretation Observation & Findings Conclusion Suggestion Bibliography Annexure

Page No.

INTRODUCTION

INTRODUCTION
Company Training is an integral part of the MBA (Finance) programmed which commences in the first week of June and extends to about two months. For a young managements student the two months of summer training is the most wonderful experience. The objective of this exercise is to get a first hand exposure to the realties of business world and gain an insight into the working of the corporate world and develop our managerial skills. The summer training gives us opportunity. To apply management theory in to practical life. To understand the complexities of organization life. To become aware of our strengths and weakness as required for potential managers. To necessary skills of complete leader. To understand coordination process.

There are certain things which are not too secret to be disclosed but disclosure of those things prove successful. The summer trainees are being fresh and unbiased to the organization, thus the origination expects some unbiased suggestions and opinions from them because we will come to know about extant and would be remarked. We are required to compile the projects to the fullest satisfaction of organization concerned and submit detailed report to the top management. I personally feel that company training is very important aspect for a complete finance graduate and the two months of company training have been a quality experience of mine. On the whole, it has been a challenging job.

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Mutual funds as an investment option have become very demanding in todays world. There are so many risks around in the market but still people have shown tremendous increase in sharing their savings with the mutual fund companies. The investors have got a chance to invest in a pool of funds where their risks can be reduced. Mutual fund industry today with 36 players and more than five hundred schemes, is one of the most preferred investment avenues in India.

TITLE: A STUDY ON INVESTMENT BEHAVIOR OF CUSTOMER WITH SPECIAL REFERANCE OF MUTUAL FUND. PROJECT CARRIED AT: BIRLA SUNLIFE MUTUAL FUND PROJECT GUIDED BY: MR.PRADYUMNA PATIL PORJECT GUIDED BY: Prof. AVINISH ZUMDE MAIN OBJECTIVE:
To evaluate the customers Behavior & their investment patterns for Birla mutual funds.

SCOPE:
This project has been carried out at various BANKS in Pune to understand the investment preference for the investors to invest in mutual fund. It also included studying the perception of investors. The scope of the project also contained the factor which tells the criteria to investment in Mutual fund.

RESERCH METHODOLOGY:
Research is a careful investigation or inquiry especially through search for new fact in any branch of knowledge. Research methodology is systematic gathering, recording and analysis of data about a particular problem. In our research we applied following tools of research methodology.

MAIN FINDING:
By this project I find that since the market is very volatile investors are hesitating to invest in the mutual fund so investment in fixed deposit has been increased.

SUGGESTION:
I Found in my project that maximum number of investors are salaried people who invest through out the year, so steps should be taken to attract those customers by providing good investment scheme which is tailor made for theme.

COMPANY PROFILE

COMPANY PROFILE
Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers of Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the Sun Life Financial Services Inc. of Canada. The joint venture brings together the Aditya Birla Group's experience in the Indian market and Sun Life's global experience. Since its inception in 1994, Birla Sun Life Mutual fund has emerged as one of India's leading Mutual Funds managing assets of a large investor base. The fund offers a range of investment options, which include diversified and sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. BSLAMC follows a long-term, fundamental research based approach to investment. The approach is to identify companies, which have excellent growth prospects and strong fundamentals. The fundamentals include the quality of the companys management, sustainability of its business model and its competitive position, amongst other factors. Birla Sun Life Asset Management Company has one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to invest in. Birla Sun Life AMC strives to provide transparent, ethical and research-based investments and wealth management services.

VISION
To be the most trusted name in investment and wealth management, to be the preferred employer in the industry and to be a catalyst for growth and excellence of the asset management business in India.

MISSION
To consistently pursue investor's wealth optimization by: Achieving superior and consistent investment results Creating a conducive environment to hone and retain talent Providing customer delight. Institutionalizing system-approach in all aspects of functioning. Upholding highest standards of ethical values at all times.

SHAREHOLDERS Aditya Birla Group

The Aditya Birla Group is India's first truly multinational corporation. Global in vision, rooted in Indian values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. The Aditya Birla Groups products and services offer distinctive customer solutions worldwide. The Group has operations in 20 countries - India, Thailand, Laos, Indonesia, Philippines, Egypt, China, Canada, Australia, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Malaysia and Korea. A US $28 billion corporation with a market cap. Of US $31.5 billion and in the League of Fortune 500, the Aditya Birla Group is anchored by an extraordinary force of 100,000

employees, belonging to 25 different nationalities. Over 50 per cent of its revenues flow from its operations across the world. Its 66 state-of-the-art manufacturing units and sectoral services span India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China. The Aditya Birla Group is a dominant player in all of the sectors in which it operates. These sectors include viscose staple fiber, non-ferrous metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators and financial services. The Group has also made successful forays into the IT and BPO sectors. In India, the Group has been adjudged The Best Employer in India and among the top 20 in Asia by the Hewitt-Economic Times and Wall Street Journal Study 2007.

SUN LIFE FINANCIAL INC.

Sun Life Financial Inc. is a leading financial services organization headquartered in Toronto, Canada, operating in key markets around the world. The Sun Life Financial group of companies and their joint ventures offer individuals and corporate customers a diverse range of financial products and services that fall into two principal business areas: wealth management and protection. Throughout its international operations, Sun Life Financial has an employee base of approximately 13,800 people plus an extensive global distribution network of career sales forces, independent agents, investment dealers and financial planners. Tracing its roots back to 1865, Sun Life Financial Inc. and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Indonesia, India and China. As on 30th June 2007, Sun Life Financial Inc. manages assets worth CDN $435 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol "SLF".

WHY BIRLA MUTUAL FUNDS

Heritage Track Record Innovations Geographical Reach Investment Philosophy Product Offerings

Birla Sun Life Mutual Fund was set up in the year 1994. It provides a range of investment products on equity and fixed income asset classes. It is one of the leading Mutual Funds in India and has been recipient of various awards for its investment performance.

HERITAGE:

Birla Sun Life Mutual Fund is a joint venture between the Aditya Birla Group and Sun Life Financial Inc. of Canada. Birla Sun Life Mutual Fund offers a wide range of top quality financial services solutions for resident and non-resident Indians.

The Aditya Birla Group

The Aditya Birla Group is one of India's largest business houses. Global in vision, rooted in Indian values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. The Group's operations span 66 state of the art, straddling India, Thailand, Malaysia, Indonesia, Egypt, Philippines, Canada, Australia and China. A US $28 billion corporation with a market cap. of US $31.5 billion and in the League of Fortune 500, the Aditya Birla Group is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. Over 50 per cent of its revenues flow from its operations across the world. The Aditya Birla Group is a dominant player in all its areas of operations viz; Aluminium, Copper, Cement, Viscose Staple Fiber, Carbon Black, Viscose Filament Yarn, Fertilizers, Insulators, Sponge Iron, Chemicals, Branded Apparels, Insurance, Mutual Funds, Software and Telecom. The Group has strategic joint ventures with global majors such as Sun Life (Canada), AT&T (USA), the Tata Group and NGK Insulators (Japan), and has ventured into the BPO sector with the acquisition of TransWorks, a leading ITES/BPO company.

Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda.As of 30 June 2007, the Sun Life Financial group of companies had total assets under management of CDN $ 435 billion.

Track Record

With a proven track record of 12 years, Birla Sun Life Mutual Fund has been a catalyst towards the growth of the private sector asset management business

Innovations
Birla Sun Life Mutual Fund was the first to launch Birla Dividend Yield Plus which is a dividend yield fund. Birla Bond Index Fund (a debt index fund) which replicates the Crisil Composite Bond Fund Index has been assigned AAAF rating by Crisil.

Investment Philosophy
Birla Sun Life Mutual Fund follows a long-term, fundamental research based approach to investment. The approach is to identify companies, which have excellent credit-worthiness and strong fundamentals. The fundamentals include the quality of the company's management, sustainability of its business model and its competitive position, amongst other factors. Birla Sun Life Asset Management Company (BSLAMC) has one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to invest in. BSLAMC will always strive to provide transparent, ethical and research-based investments and wealth management services.

Geographical Reach
Today, BSLAMC is present in 111 locations, including 74 branches.

Product Offerings
Birla Sun Life Mutual Fund offers a range of investment options, which include diversified and sector specific equity schemes, fund-of-fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. BSLAMC also provides Private Wealth Management services.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
Market research is a systematic gathering, recording and analyzing of data about relating to the marketing of goods and service, the marketing research process is carried out according to a designated series of step, which are required to be taken in a chronological order. Market research is a careful investigation or inquiry specially through search for new fact in any branch of knowledge.

The major marketing research step is shown in figure as bellow:-

RESEARCH PROCESS:
1. Formulating the research problem 2. Extensive literature survey. 3. Development of working hypotheses. 4. Preparing the research design. 5. Data collection. 6. Data analysis & interpretation. 7. Report.

1. Formulating the research problem :

The formulation of a general topic into a specific research problem thus constitutes the first step in a scientific enquiry. Essentially two steps are involved in formulating the research problem, viz. understanding the problem thoroughly, and rephrasing the same into meaningful terms from an analytical point of view.Here our research problem is undersanding the investment behavior of investors. Objective of the research The objective of this report is to find how mutual fund helps in investment from the investors point of view for Birla mutual fund. This report is prepared to find out that: To know which age group of investors invest more. To know their investment preference. To know their source of income &their risk taking capacity. To know their time patter n of investment. Their eagerness of being invested in volatile market. To know dependency on their investment. To know the customers awareness about the financial instrument

To educate about Mutual funds to the investors For fulfilling these above mentioned objectives I have made a Questionnaire, collected the data of various people who likely to invest in mutual fund.

2. Extensive literature survey: Once the problem is formulated, a brief summary of it should be written down. At this juncture the researcher should undertake extensive literature survey connected with the problem. For this purpose, the abstracting and indexing journals and published or unpublished bibliographies are the first place to go to.I took the the heip of several magazines,&boks.
3. Development of working hypothesis:

Working hypothesis is tentative assumption made in order to draw out and test its logical or empirical consequences. As such manner in which research hypotheses are developed in particularly important since they provide the focal point for research . Thus working hypotheses are arise as result of a priori thinking about the subject , examination of the available data and material including related studies related studies and the counsel of experts and interested parties. 4. preparing the research design: The research problem having been formulated in clear cut terms, the researcher will required to prepare a research design, ie., he will have to state the conceptual structure with in which research would be conducted. The preparation of such a design facilitates research to be as efficient as possible yielding maximal information .

The design selected was descriptive type. The major purpose of descriptive research is description of the state affaires as it exist at present.

5. Collection

of data:

A) Collection of Primary Data Primary data is defined as data generated in a study specifically designed to accommodate data needs of the problems at hand. Those data which are collected at first hand by the researcher especially for the purpose of study is known as primary data. The primary data can be collected mainly by two ways. 1) Questionnaire Method 2) Personal interview I collected Primary Data by interview method with the help of close ended questions,from hdfc Nigadi branch.

(B) Collection of Secondary Data :

Beside the methods stated earlier ,Secondary data was collected from Magazies,Books and other documents provided by the organization (C) Research instrument A structured question was used with Questionnaire..

6.Data analysis & interpretation: After the the data have been collected the researcher turns to task of analyzing them . it requires a number of closely related operation such as establishment of categories, the applications of this category to raw data through coding , tabulation and then drawing statistical inferences.

7. Prepration of report : Finally the researcher has to prepare the report of what has been done by while research work.

IN THIS RESEARCH SAMPLE IS SELECTED THROUGH FOLLOWING PROCESS:

1) Decide the data need: Before sampling it is require defining and identifying the

requirement of data. This research requires the data of customer investing pattern, market awareness and expectation from their investment.
2) Decide the area: Geographical boundaries of the area to survey are clearly

defined. The area for this survey is Nigdi Pune.

3) Decide the Population: Group of customers of the HDFC Bank Nigdi Branch

is our population.
4) Sampling Unit: Customers which were coming for the investment purpose are

sample unit.
5) Sampling Method: Non random sampling method.

6) Selection of Sample Size:110

7) Select the sample: It mean the final selection of sample from a well defined population by suitable method and suitable size.

OBJECTIVES
The objective of this report is to find how mutual fund helps in investment from the investors point of view for Birla mutual fund. This report is prepared to find out that:

To know which age group of investors invest more. To know their investment preference. To know their source of income &their risk taking capacity. To know their time patter n of investment. Their eagerness of being invested in volatile market. To know dependency on their investment. To know the customers awareness about the financial instrument

To educate about Mutual funds to the investors For fulfilling these above mentioned objectives I have made a Questionnaire, collected the data of various people who likely to invest in mutual fund.

SCOPE OF WORK
The main scope of this research is ascertaining the various methods to increase the sales volume and distribution activity of concerned company (Birla mutual fund). The methods include regular measures to make the position in the market and taking measures to confirm the brand position. One of the most important aspects of this study is to increase the market segment for the products.

Understanding the customer behavior will help the organization to understand the customer need.

Company can fulfill the expectation of customer by recognizing their need. Target market segmentation can be done by company.

Identification of potential market Evaluating the customer need with company product. Collecting suggestions for product improvement. Company can improve its distribution channel. Company can improve promotional activities. Sales of the product can be increased Company cans emphasis on services improvement.

LIMITATION
Though the study is based on the data collected from various direct sources and direct personal interviews, still it is not free from limitations like: Limited information access because of lack of informed investors. Unwillingness on the part of investors to spare time for the survey.

Reluctance to share information regarding income, investments and future plans etc. The area study was limited there for the Accuracy Was limited. The study was confined to Ngdi Pune city only. Some customers were not available at given time for interview. Time schedule was confined to 2 months only. Some respondents given biased opinion.

THEORETICAL BACKGROUND

SIGNIFICANCE OF MUTUAL FUNDS

Mutual funds act as an investment conduit between the ultimate savers (householders) and the corporate sector. As non-banking financial intermediaries, they perform the function of

bringing together the saving and investment opportunities. Mutual fund pools the savings of small and medium investors and invests in financial intermediaries, opportunities. Mutual funds pool the savings of small and medium investors and invest the funds in a fairly large and well diversified portfolio of sound in investment by employing professional, qualified and well experienced investment consultants and fund managers with the objective of minimizing investment risk by diversification and maximizing return/income on investments. Mutual funds have become immensely popular mainly because they are perceived by the investor as providing guaranteed returns with minimum of botheration of them, the investor, particularly the small ones, but have the expert knowledge required carrying our portfolio analyze and management. Moreover, the investors would like to be relived of the botheration of handing the immense paperwork involved in applying for various issues and in receipt of refunds increases of non allotment, when issues are over-subscribed. Thus a small investor has a preference for mutual funds because they may not have the necessary expertise require to manage his portfolio of capital market securities, prename a postpone top afford prevocational advice promise his risk by sp reading his funds over different industry groups due to limited resources. He may also not have access to the up to date information about developments taking place in the corporate circle and the capital market. Most important of al, a big chunk of the Indian investor's population is conservative, having a preference for safely and surety of returns and convenience. Mutual funds not only cats to the above needs, they also ensure conformed allotment in fundamentally strong companies, thus improving their own NAV and providing better returns to their clients.

THE STRUCTURE CONSISTS OF:

Sponsor
Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment Managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund.

Trust
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.

Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and inter alias ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are independent directors who are not associated with the Sponsor in any manner.

Asset management company (amc): The Trustee as the Investment Manager of the Mutual Fund appoints the AMC. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the Mutual Fund. At least 50% of the directors of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of at least 10 crore at all times.

Registrar and transfer agent: The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form; redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.

BENEFITS OF INVESTING THROUGH MUTUAL FUNDS

Diversification is one of the best ways to reduce risk (to understand why, read The need to Diversify). Mutual funds offer investors an opportunity to diversify across assets depending on their investment needs.

Liquidity
Investors can sell their mutual fund units on any business day and receive the current market value on their investments within a short time period (normally three- to five-days).

Affordability
The minimum initial investment for a mutual fund is fairly low for most funds (as low as Rs500 for some schemes).

Convenience
Most private sector funds provide you the convenience of periodic purchase plans, automatic withdrawal plans and the automatic reinvestment of interest and dividends. Mutual funds also provide you with detailed reports and statements that make recordkeeping simple. You can easily monitor the performance of your mutual funds simply by

DISADVANTAGES OF INVESTING THROUGH MUTUAL FUNDS

While the benefits of investing through mutual funds far outweigh the disadvantages, an investor and his advisor will do well to be aware of a few shortcomings of using the mutual funds as investment vehicles.

No control over costs

An investor in a mutual fund has no control over the overall cost of investing. He pays investment management fees as long as he remains with the fund, albeit in return for the professional's management and research. Fees are usually payable as a percentage of the value of investments, whether the fund value is rising or declining. A mutual fund investor also pays fund distribution costs, which he would not incur in direct investing. However, this shortcoming only means that there is a cost of obtain the benefits of mutual fund services. However, the is cost is often less than the cost of direct investing by the investors.

No tailor-made portfolios
Investors who invest in their own can build their own portfolios of shares, bonds and other securities. Investing through funds means he delegates this cession of the fund managers. The very high-net-worth individuals of large corporate investors may find this to be a constraint in achieving their objectives. However, most mutual large number of different schemes- within same funds. An investors can choose from different investment plans and construct a portfolio of his choice.

TYPES OF MUTUAL FUND SCHEME

BY STRUCTURE: Open-ended schemes Close-ended Scheme Interval schemes

BY INVESTMENT OBJECTIVE: OTHER SCHEME:

Growth Schemes Income Schemes Balanced Schemes Money Market Schemes

Tax Saving Schemes Special Schemes Index Schemes Sector Specific schemes

Debt funds
Invest predominantly in debt instruments, government securities and money market instrument. Hence they are relatively safer than equity funds. At the same time the expected returns from debt funds would be lower.

Gilt funds
Are debt funds, which invest only in Government Securities and hence have zero credit risk. However it does involve interest rate risk.

Liquid funds
Are debt funds, which invest in short term papers, with maturities usually not exceeding 180 days and hence are safe from interest rate risk.

Income funds
The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long-term investors may not bother about these fluctuations.

Equity funds
Invest predominantly in the stock markets and attempt to provide investor the opportunity to benefits from the higher returns that stock market can provide. However they are also exposed to the volatility and attendant risks of stock market investments and hence should be chosen by investors who have risk taking capabilities.

Sector specfic funds

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

Balanced funds
Invest in a mix of equity and debt investments normal 60 to 40 in either equity or debt and vice-versa. Hence, they are less risky than equity funds, but at the same time provide commensurately lower returns. They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets, but is looking for higher returns than those provided by debt funds.

Index funds
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weight age comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds, which are traded on the stock exchanges.

Tax saving schemes

these schemes offer tax rebate to the investors under specific provision of the Income Tax Act, 1960 as the Government offers tax incentives for investment in specified avenues. E.g. Equity linked Saving schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest pre- dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme.

Open end funds

An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. An open-end mutual fund is a fund that does not have a set number of shares. It continues to sell shares to investors and will buy back shares when investors wish to sell. Units are bought and sold at their current net asset value. Open-end funds keep some portion of their assets in short-term and money market securities to provide available funds for redemptions. A large portion of most open mutual funds is invested in highly liquid securities, which enables the fund to raise money by selling securities at prices very close to those used for valuations.

Closed-end funds
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. A closed-end mutual fund has a set number of shares issued to the public through an initial public

offering. These funds have a stipulated maturity period generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed.

RISK IN MUTUAL FUNDS

The risk returns trade- off:

The most important relationship to understand is the risk-return trade-off. Higher the risk greater the returns/loss and lower the risk lesser the returns/loss. Hence it is up to you, the investor to decide how much risk you are willing to take. In order to do this you must first be aware of the different types of risks involved with your investment decision.

Market risk: Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting the market in general lead to this. This is true, may it be big corporations or smaller mid-sized companies. This is known as Market Risk. A Systematic Investment Plan (SIP) that works on the concept of Rupee Cost Averaging (RCA) might help mitigate this risk.

Credit risk: The debt servicing ability (may it be interest payments or repayment of principal) of a company through its cash flows determines the Credit Risk faced by you. This credit risk is measured by independent rating agencies like CRISIL who rate companies and their paper. A AAA rating is considered the safest whereas a D rating is considered poor credit quality. A well-diversified portfolio might help mitigate this risk.

Inflation risk: -

Things you hear people talk about: Rs. 100 today is worth more than Rs. 100 tomorrow. Remember the time when a bus ride costed 50 paisa? Mehangai Ka Jamana Hai. The root cause, Inflation is the loss of purchasing power over time. A lot of times people make conservative investment decisions to protect their capital but end up with a sum of money that can buy less than what the principal could at the time of the investment. This happens when inflation grows faster than the return on your investment. A well-diversified portfolio with some investment in equities might help mitigate this risk.

Interest rate risk: In a free market economy interest rates are difficult if not impossible to predict. Changes in interest rates affect the prices of bonds as well as equities. If interest rates rise the prices of bonds fall and vice versa. Equity might be negatively affected as well in a rising interest rate environment. A well-diversified portfolio might help mitigate this risk.

Political/government policy risk: Changes in government policy and political decision can change the investment environment. They can create a favorable environment for investment or vice versa.

Flexiblity and variety

You can pick from conservative, blue-chip stock funds, sectoral funds, funds that aim to provide income with modest growth or those that take big risks in the search for returns. You can even buy balanced funds, or those that combine stocks and bonds in the same fund.

TAX BENEFITS ON INVESTMENT IN MUTUAL FUNDS

1) 100% Income Tax exemption on all Mutual Fund dividends 2) Capital Gains Tax to be lower of 10% on the capital gains without factoring indexation benefit and 20% on the capital gains after factoring indexation benefit. 3) Open-end funds with equity exposure of more than 50% are exempt from the payment of dividend tax for a period of 3 years from 1999-2000.

DATA ANALYSIS &

INTERPRETATION

DATA ANALYSIS & INTERPRETATAION

1.Age Group wise bifurcation Of Investor Age Group Less Than 20 20-30 30-40 40-60 60 Above Total No. Of Investor 5 24 40 28 13 110 Percentage (%) 4.5 21.8 36.3 25.4 12 100

INTERPRETATION 36.5% of the population who belongs to age group of 30-40 invest their money because this age bands of people earn more. 25.4% of population of age group 40-60 invest because they have started earning 21.8%of the population of age group invests. 11.2% of the people 0f age group of 60 invest 4.5%of the people of age group of 20 invest

2. What is Your Primary Source of income? A) Business B) Salary C) Pension

D) Other Source of Income

Source of Income Business Salary Pension Other Total

No. Of Respondent 32 58 15 5 110

Percentage 29 53 14 4 100

INTERPRETATION

53% of the people are salaried 29% of the people are businessman 14% of the People are Pensioner

3. Do You know About Different Financial Products? A) Yes

B) No

Knowledge product Yes No Total

Of

Financial No. of Respondent 82 28 110

Percentage 74.5 25.5 100

No 25%

Yes 75%

INTERPRETATION 75% of the people are aware about different financial product because most of them are well educated.

Only 25% of then are not aware about the different financial product..

4. Where You want to Invest Your Money.

A) Govt.Bond B) Fix Deposit C) Share Market D) Mutual fund E) Gold Instrument Govt.Bond Fix Deposit Share Market Mutual fund Gold Total No. Of Investors 5 43 17 31 14 110 Percentage 4.5 39 15.4 28.1 13 100

INTERPRETATION 39% of the people invest in fix deposit 28.1% of the people invest in mutual fund

 15.4% of the people invest in share market 13% of the people invest in gold

5.If You are a businessman where you generally prefer to invest? A)Share market B)Mutual fund C)Fix deposit
D)Gold

Investment Preference Share market Mutual Fund Fix Deposit Gold Total

No.Of Respondent 14 9 6 3 32

Percentage 43.8 28.2 18.8 9.2 100

INTERPRETATION

44% Businessman want to invest in share market because they want more return,they are ready to take risk. 28% in Mutual fund 19% of the businessman invest in Fix deposit 9%of them invest in Gold

6.If You are salaried Person Where You Prefer to invest. A) Share market B) Mutual fund C) fix deposit D)GOLD Investment Preferance Share market Mutual Fund Fix deposit Gold Total No.Of Respondent 14 18 22 4 58 Percentage 24.2 31 37.9 6.9 100

INTERPRETATION

38% of the salaried person invest in fix deposit because they are not willing to take risk. 24%of them invest in share market

7. Indicate the importance of the following factors in your investment. A)safety B)Return C)Liquidity D)Brand E)Intermediary

Factors in Investment

No. Of Respondent

Percentage

Safety Return Liquidity Brand Intermediary Total

35 32 21 17 5 110

31.8 29 19 15.5 4.7 100

INTERPRETATION
Maximum number of customer(31.8%) gives first priority to Safety of their capital,then they seek return. Liquidity, Brand name also play key role in investment.

8. Through which channels have you invest in Mutual Fund? A) Bank B) Agent C) Broker

D) Online Channel of Investment Bank Agent Broker Online Total No. Of Respondent 52 32 21 5 110 Percentage 47.2 29 19 4.8 100

INTERPRETATION
Banks are the most convenient & popular channel of investment maximum number of people(47%) wants to invest through this channel,Agents,Brokers also play key role in this.

9. When do You Generally Invest. A) Through out the year B) At The end of year

C) At the Beginning of the year Time of Investment Through Out Year At The end Of Year At The Beginning Total No. Of Respondent 65 30 15 110 Percentage 59 27 14 100

INTERPRETATION

59%of the people invest through out the year 27%of the people invest at the end of the year
14%of the people invest at the beginning of year

10. What Level of Risk Are You Willing to Accept On Your Investment. A) I Want To Protect My Capital

B) Small Degree of Risk C) I am Comfortable Accepting the Fact that investment could Decline. Risk Acceptance Want To Protect Capital Small Degree Of Risk Investment Could Decline Total No. Of Respondent 70 32 8 110 Percentage 63.6 29 7.4 100

INTERPRATION 63.6% of the want security of their capital 29% of them are ready to take small degree of risk 7.4% of them accept that their investment may decline

11. How long You Are Planning To Stay Invested. A) Long Term>5 Year B) Medium Term>2-4 C) Short Term>1-2 Year

Time Span Long Term Medium Term Short Term Total

No. Of Respondent 16 40 64 110

Percentage 14.5 36.3 59.2 100

INTERPRETATION 59.2% of the people are egger to invest for short term 36.3%of them are medium term investor 14.5% of them are long term investor

12. How likely are you Stay Invested during Volatile Times? A) Unlikely Stay Invested B) Likely Stay Invested C) Highly Likely To Stay Invested Invested Times Unlikely Likely Highly Likely Total During Volatile No. Of Respondent 69 30 11 110 Percentage 62.7 27.2 10.1 100

INTERPRETATION

62.7% of the investors are unlikely to be invested during volatile time. 27.2% of the investors are likely to be invested during volatile time period. 10.1% of the investors are highly likely to be invested during volatile time.

OBSERVATION & FINDINGS

OBSERVATION & FINDING

Mutual Funds were the most popular investment product across al people irrespective of industry, size, objective, and tenure of investment. Fixed Deposits were preferred primarily by small investors who invested for short periods of time and valued safety and liquidity higher than return. Equity and GOI Securities were popular with large investors who invested both for the long and short term, and valued return at least as much as, if not higher than, safety and liquidity Mutual funds have been doing very well in past 2 years and more and more people are shifting to investing in Mutual Funds as opposed to investing in Post Office Schemes and Fixed Deposits because for the past two years Mutual Funds are giving a consistent return 25% and above annualized due to stock markets performing well and strong and heavy inflow of Foreign money.
1. People of age group 30-40 invest more because they earn more.

2. in

43% Of Investor wants to invest in Fixed Deposit, 28.1% in Mutual Fund and 15.4% Share Market, 13% in Gold.

3.Business generally prefer to invest in share market because want more return even thou it contain some risk. 4.salaried people give preference to fix deposit because their capital is safe there. 5. Some people are willing to take risk on their investment, because they want more returns.

6. People gives capital security more preference than returns. People prefer less Liquidity, Portfolio and Tax benefit. 7. 75% of the people are aware about different financial product. 8.Banks are the popular channel of investment,mostly investor prefer to invest though it.

According to the analyst, the Mutual Fund Industry will become even stronger in the times to come as the Foreign Investors still see a lot of value in the Indian markets and also with retail participation coming in this Industry is expected to do very well in the times to come. Still our Indian Investors are a bit skeptical of investing into Mutual Funds due to scams that have taken place. But the investors are getting more and more educated and we see from our study that more people want to invest now as opposed to the earlier days because the Investors feel that the Indian Stock Market Regulator in strong enough to protect them.

RECOMENDATION

RECOMMENDATION
Most of people want good returns so company should concentrate on Equity Fund. There is need for increasing awareness about the company to reach out more number of customers. More number of Financial Advisor should be there to serve the customer and increase the revenue. It is observed that maximum customers are not aware about schemes of mutual fund. So steps should be taken by salesman to properly educate the customer of various schemes. From the survey it was found that respondents want different schemes With good Return of Mutual Fund. Company should understand the Expectation of the Customer &Try to Fulfill That. There is huge potential in This Industry Which Company can utilize by providing the Innovative Product& Good return. Company should Take care of the Behavior Of The customer Act according To That.

CONCLUSION

CONCLUSION
The research has been done to find out the investment preference and criteria of investor in mutual fund. From the research it is concluded that mutual fund is gaining popularity day by day in comparison to other investment tools. From the research it is found that most preferred criteria for investment is saving and return. Television and Newspaper is the best medium for advertisement. Since the product is financial, firm should the care to deliver it service with reliability and commitment. Upper middle class and High net worth individual generally invest in mutual fund. Most of the people surveyed have investment criteria of return and portfolio. Investment objective of most of respondents are both growth and income. Balanced fund is the most favored scheme for investing in mutual fund. There is great need of financial planner to facilitate the investor in their investment decision by making tailor made plans. Mutual funds have been a growing industry, and more and more investors have become mutual fund owners over the years. This report that analyses all sides of the issue and take a more objective approach to one of the most important decisions many people make during their lifetimehow to invest their money appropriately, both the funds they will depend on when they retire and those funds that are used to build wealth across time. On the basis of

the analysis of data collected it has been found that investor preferred to invest in mutual fund mainly because of high liquidity, tax benefits, & for satisfactory services, saving. Since the concept of mutual fund is not new. Most of the investors have general awareness about it. The investor of Burlap mutual fund have great reliability on it they dont want to switch their investment in to other brand of mutual funds means to say that the company has a good brand image. But for maintaining it from the existing competitors regular promotion of the product & well-planned investor contact program must be performed.At last it can do conclude that mutual fund is an ideal investment vehicle for todays complex and modern scenario.

BIBLIOGRAPHY

Bibliography: Marketing Management By Philip Kotler Basic Book on Mutual Fund by AMFI

Websites: www.amfi.com

www.sbimf.com www.sebi.gov.in www.moneycontrol.com

Magazines: India Today

ANNEXURE

QUESTIONNAIRE
This Questionnaire is for the purely academic purpose, relating to our summer training project, so please answer the following question as per the instruction.

INDIVIDUAL PROFILE NAME: AGE:

GENDER: OCCUPATION:

COMPANY:

1. Age Group wise bifurcation Of Investor

A)Less Than 20 B)20-30 C)30-40 D)40-60 E)60 Above B) Salary C) Pension D) Other Source of Income

2. What is Your Primary Source of income? A) Business

3. Do You know About Different Financial Products? A) Yes B) No

4. Where You Want to Invest Your Money? A) Govt.Bond B) Fix Deposit C) Share Market D) Mutual fund

E) Gold

5.If You are a businessman where you generally prefer to invest? A)Share market B)Mutual fund C)Fix deposit
D)Gold

6.If You are salaried Person Where You Prefer to invest. A) Share market B) Mutual fund C) fix deposit D)GOLD

7. Through which channels have you invest in Mutual Fund? A) Bank B) Agent

C) Broker D) Online

8. When do you generally invest? A) Through Out the Year B) At The end of Year C) At the Beginning of the Year

9. What Level of Risk Are You Willing to Accept On Your Investment? A) I Want To Protect My Capital B) Small Degree Of Risk C) I am Comfortable Accepting the Fact that investment could Decline. 10. How long you are planning To Stay Invested? A) Long Term>5 Year B) Medium Term>2-4 C) Short Term>1-2 Year

11. How likely are you Stay Invested during Volatile Times? A) Unlikely Stay Invested B) Likely Stay Invested C) Highly Likely To Stay Invested

12. How Dependent You Are on These Funds To Meet Unforeseen Expenses? A) Not At all B) May Require These Funds C) Definitely Require These Funds in emergency