A PROJECT REPORT

ON

“A STUDY ON COMPARATIVE ANALYSIS OF MUTUAL FUND”

A PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF THE DEGREE OF

BACHELOR OF ACCOUNTING AND FINANCE STUDIES

BY

‘HEMANT RAVINDRA DINKAR’

ROLL NO.509

UNDER THE GUIDENCE OF

MR. PUSHPAK DESHPANDE

G.R. PATIL COLLEGE OF ARTS, SCIENCE AND COMMERCE

SONARPADA, DOMBIVILI (EAST)

(AFFILIATED TO UNIVERSITY OF MUMBAI)

MONTH AND YEAR

MARCH 2023- 2024

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 DECLARATION
I the undersigned Mr. Hemant Ravindra Dinkar hereby declare that the work embodied
in this project work titled “A study of comparative analysis of mutual fund”, forms my
own contribution to the research work carried out under the guidance of Mr. Pushpak
Deshpande is a result of my own research work and has not been previously submitted to
any other University for any other Degree/Diploma.

Wherever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained an
presented in accordance with academic rules and ethical conduct.

HEMANT DINKAR

Certified by

PROF. Mehak Motwani

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 G.R. PATIL COLLEGEOF ARTS, SCIENCE AND
COMMERCE SONARPADA, DOMBIVLI(EAST).

(AFFILIATED TO UNIVERSITY OF MUMBAI)

CERTIFICATE
This is to certify that Mr. Hemant Ravindra Dinkar has worked and duly completed
his project work for the degree of Bachelor of accounting and finance Studies under the
Faculty of Commerce in the subject of Account and his project is entitled, “A study of
comparative analysis of mutual fund” under my supervision.

I further certify that the entire work has been done by learner under my guidance and that no
part of it has been submitted previously for any Degree of any university

It is his own work and facts reported by his personal finding sand investigations.

Coordinator Teacher Internal Guiding Teacher

(Prof. Mehak Motwani) (Mrs. Pushpak Deshpande)

Seal of the college External Guide

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 ACKNOWLEDGEMENT

To list who all have helped me in difficult because they are so numerous and depth is
so enormous.

I would like to acknowledge the following as being idealistic channel and dimensions in
the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance
to do this project.

I would like to thank my Principal, Prof. Arzoo Duseja for providing

the necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator Prof. Mehak Motwani

I would also like to express my sincere gratitude towards my project guide Prof.
Pushpak Deshpande.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

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

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 CHAPTER - 1. INTRODUCTION

1.1 INTRODUCTION

Investing in shares, bonds, government securities, and money-market assets is carried

out through the use of mutual funds, which are collective investment vehicles that
aggregate and collect money from a variety of participants.

In accordance with the investment aim of the plan, professional fund managers invest
the money acquired through mutual fund schemes in stocks, bonds, and other kinds of
financial products.

After deducting any required costs and expenses, the income or gains from this
collective scheme of investments are allocated equally among the investors by
estimating the "Net Assets Value" of the scheme, or NAV.

Mutual funds charge a little fee in return.

A mutual fund is, in simple terms, a pool of money that is contributed to by a number
of investors and monitored by an expert fund manager.

In India, mutual funds are created as trusts under the Indian Trust Act of 1882 and SEBI
(mutual fund) regulations of 1996

The costs and fees that mutual funds charge to operate a scheme are regulated and are
limited by SEBI's guidelines.

MUTUAL FUNDS WORKS

Mutual funds function via combining the funds from several investors. With that,
stocks, bonds, and other securities are bought with that money. Mutual funds give
investors quick diversification because they invest in a variety of firms.

Mutual funds issue "units" in return for the invested amounts at the current NAV.

When the market drops or rises substantially, one shouldn't feel the need to review the
performance of the fund. Instead, one should exercise patience and give the fund
enough time to produce returns.

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MUTUAL FUNDS ARE IDEAL FOR INVESTORS IN BANK ARE -

1. The lack of the expertise, knowledge, or experience necessary to make direct

stock market investments.

2. They want to increase their money but lack the motivation or time to perform
stock market research.

3. The desire to only invest little sums.

INVEST IN MUTUAL FUND IN BANKS

1. By delivering a properly completed application form to the approved investor

service centers (ISC) of mutual funds, branch offices, or registrar & transfer
agents of the relevant mutual funds, together with a cheque or bank, one can
invest in mutual funds.

2. On the websites of the individual mutual funds, one can also opt to invest.

3. Investments can be made with OR through a financial intermediary.

1.1.1. MEANING AND DEFINITION OF MUTUAL FUND

A mutual fund is a group of investors' money that is handled by an expert fund

administrator. It is a trust that collects money from a group of investors that have a used
investment goal and invests it in shares, bonds, and so on.

DEFINITION

"A mutual fund is a competently managed investment set up that joins collectively a
collection of people and invests their money in stocks, bonds, and other assets. It is
usually handled by an asset management company."

DESCRIPTION ON MUTUAL FUND:

A mutual fund's "units," which essentially reflect your share of holdings in a specific
scheme, are available for purchase by investors. The current net asset value (NAV) of
the fund may be used to purchase or redeem these units as needed. Depending on the
fund's assets, these NAVs are constantly changing. Each investor thus shares in the gain
or loss of the fund proportionately.

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All mutual funds have SEBI registrations. They operate under the confines of tight
regulations put in place to safeguard investor interests. The primary benefit of investing
through a mutual fund is that it provides access to professionally managed, diversified
portfolios of stocks, bonds, and other assets for small investors, which would be very
challenging to establish with a small amount of capital.

Mutual funds are popular investments because of their ease, flexibility and
diversification benefits. The best part of mutual funds is that they provide investment
opportunities for all kinds of investors.

Currently, there are over 44 registered mutual funds in India, offering different schemes
to satisfy the dynamic needs of diverse investors.

1.1.2 TYPES OF MUTUAL FUND

For making investments in mutual funds, it is essential to understand the various mutual
fund types and the benefits they offer.

The various types of mutual funds available can be basically classified based on asset
class, structure, investment goals, and risk.

Following are some different mutual fund types mention below these have
classification also:
● EQUITY FUNDS
● DEBT FUNDS
● MONEY MARKET FUNDS
● GROWTH FUNDS
● INCOME FUNDS
● OPEN ENDED FUNDS
● CLOSED ENDED FUNDS
● LOW RISK FUNDS
● MEDIUM RISK FUNDS
● HIGH RISK FUNDS, ETC.

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 TYPES OF MUTUAL FUND

ASSETS INVESTME RISK

STRUCTUR
CLASS NT GOALS
GROWTH FUNDS
1. EQUITY LOW RISK
INCOME FUNDS 1.OPEN- ENDED
FUNDS
FUNDS LIQUID FUNDS FUNDS
MEDIUM RISK
TAX-SAVINGS 2.CLOSE-
2. DEBT FUNDS FUNDS
FUNDS ENDED FUNDS
3. HYBRID HIGH RISK
5.AGGRESSIVE
FUNDS
FUNDS GROWTH FUNDS
6. CAPITAL
PRODUCTION
FUNDS
7. FIXED
MATURITY FUNDS
8. PENSION FUNDS

Chart 1.1 Types of Mutual Fund

1.1.3 CLASSIFICATION OF MUTUAL FUNDS

1. BASED ON ASSET CLASS

● EQUITY FUNDS

Equity funds, that primarily invest in stocks, are also referred to as stock funds.
Equity funds invest in company stock, and their returns are influenced by the
way the stock market performs. They carry the largest potential profits but also
the highest level of risk. Equity funds are recommended for investors that desire
to invest for at least 3-5 years.

● DEBT FUNDS

Debt funds are the most secure type of mutual fund. Debt funds invest in debt
instruments such as government bonds, company debentures, and other fixed-
income assets. It's a both short- and long-term investment. Debt funds may
provide stability and steady earnings with little danger. These schemes can be
further classified based on duration, such as low-duration funds, liquid funds,
overnight funds, credit risk funds, gilt funds, and so on.

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 ● HYBRID FUNDS

To balance debt and equity, hybrid funds invest in both debt and equity
products. Balanced and aggressive funds are two of the primary types of hybrid
funds. Depending on the fund company, the investment ratio can be fixed or
variable. Hybrid funds are suitable for investors that prefer to assume more risks
in return for 'debt plus returns' benefits rather than follow lower but regular
earnings schemes.

2. BASED ON INVESTMENT GOALS

● GROWTH FUNDS

The fundamental objective of such funds is to raise your capital gradually. These
are regularly equities funds with larger earnings potential but also higher risk.
The funds are not suggested for cautious individuals, especially those looking
to invest for a limited period of time. These funds may be useful to investors
seeking large returns over a long period of time.

● INCOME FUNDS

Income funds belong to the family of debt mutual funds that distribute their
money in a mix of bonds, certificates of deposits and securities among others.
Helmed by skilled fund managers who keep the portfolio in tandem with the
rate fluctuations without compromising on the portfolio’s creditworthiness,
income funds have historically earned investors better returns than deposits.
They are best suited for risk-averse investors with a 2-3 years perspective.

● LIQUID FUNDS

Liquid funds, like income funds, were debt funds as they invest in debt securities
and money markets with tenure of up to 91 days. The maximum sum that shall
be invested is Rs 10 lakh. The process when the Net Asset Value is calculated
differs liquid funds from

other debt funds. The NAV of liquid funds is calculated for 365 days (that
includes Sundays), while the net asset value for other assets is calculated for
only workdays.

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● TAX-SAVING FUNDS

Equity Linked Saving Scheme, has grown in popularity among a variety of

investors over the years. They not only give the benefit of maximizing your
wealth while also allowing you to save on taxes, but they also have the lowest
lock-in period of just three years. They are known for earning non-taxed returns
in the 14-16% area by investing mostly in stock (and connected products). These
funds are suitable for salaried investors with an extended horizon.

● AGGRESSIVE GROWTH FUNDS

The Aggressive Growth Fund, that's slightly riskier to invest in, is meant to
generate significant monetary gains. Although being subject to market
volatility, one could select a fund based on its beta (the metrics used for
comparing the fund's movement to that of the market). For example, if the
market has a beta of 1, an aggressive growth fund will have a beta of 1.10 or
higher.

● CAPITAL PRODUCTION FUNDS

Capital Protection Funds serve the objective of protecting principal while

producing in comparison less income (12% at most). The fund manager places
a portion of the money in bonds or CDs and the remainder in stocks. Though
the risk of loss is low, it is suggested that you stay invested for at least 3 years
(closed-ended) to protect your money, and the returns are taxable.

● FIXED MATURITY FUNDS

To gain advantages from triple indexation and decrease their tax burden, many
investors opt to make investments towards the end of the financial year. Fixed
Maturity Plans (FMP), which invest in bonds, securities, money market, etc.,
give an incredible possibility if you are uncomfortable with the debt market
trends as well as dangers. FMP functions as a closed-ended plan and has an
established maturity time that can be

anywhere within one month and five years (like FDs). To benefit from interest
that has accumulated at the time of FMP maturity, the management team makes
sure that the funds are transferred to an investment with an identical term.

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 ● PENSION FUNDS

Investing an amount of your income in a pension fund over an extended amount

of time to protect your and your family's financial security after retiring from
regular employment can cover many scenarios (such as a medical emergency or
a child's wedding). Relying just on savings to get through your golden years is
not advised because savings (no matter how large) are exhausted. EPF is one
example, but there are multiple attractive programmers offered by banks,
insurance firms, and other companies.

3. BASED ON STRUCTURE

Mutual funds can be categorized according to multiple features (such as risk profile,
asset class, and so on). The structural classification - open-ended funds, close-ended
funds, and interval funds - is comparatively broad, with the primary distinction being
the capacity to buy and sell individual mutual fund units.

● OPEN-ENDED FUNDS

Open-ended funds aren't restricted in any way, such as time or the quantity of
units that can be traded. These funds enable investors to trade funds at their
leisure and exit when required at the current NAV (Net Asset Value). This is
the only reason why the unit capital changes with the arrivals and leavers. If an
open-ended fund does not wish to (or cannot manage big funds), it can elect to
cease admitting new investors.

● CLOSE- ENDED FUNDS

In closed-ended funds, the unit capital to invest is pre-defined. Meaning the fund
company cannot sell more than the pre-agreed number of units. Some funds also
come with a New Fund Offer (NFO) period; wherein there is a deadline to buy
units. NFOs come with a pre-defined maturity tenure with fund managers open
to any fund size. Hence, SEBI has mandated that investors be given the option
to either repurchase options or list the funds on stock exchanges to exit the
schemes.

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4. BASED ON RISK

● LOW-RISK FUNDS

Investors are cautious to put capital into riskier assets in instances of rupee
depreciation or an unexpected national crisis. Fund managers recommend
purchasing a number of liquids, ultra-short-term, or arbitrage funds in these
circumstances. Returns could range between 6 to 8%, but investors are free to
alter their returns when valuations settle.

● MEDIUM-RISK FUNDS

The risk component is medium in this case since the fund manager invests a
portion in debt and the balance in equity funds. The NAV is not especially
volatile, and average returns could range from 9 to 12%.

● HIGH-RISK FUNDS

High-risk mutual funds need active fund management as they are suitable for
investors that have no risk aversion as well as want to earn substantial profits in
the form of interest and dividends. As performance reviews are subjected to
market volatility, they must be carried out on an ongoing basis. While a lot of
high-risk funds frequently provide up to 20% returns, you can expect 15%
returns.

5. SPECIALIZED MUTUAL FUNDS

These mutual funds schemes are based on specialized company-

● SECTOR FUNDS
● INDEX FUNDS
● FUNDS OF FUNDS
● EMERGING MARKET FUNDS
● INTERNATIONAL/FOREIGN FUNDS
● GLOBAL FUNDS
● REAL ESTATE FUNDS
● COMMODITY- FOCUSED STOCK FUNDS

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 ● MARKET NEUTRAL FUNDS
● INVERSE/LEVERAGE FUNDS
● ASSET ALLOCATION FUNDS
● GIFT FUNDS
● EXCHANGE-TRADED FUNDS
1.1.4 ADVANTAGES AND DISADVANTAGES OF MUTUAL FUND

You should seriously consider adding a mutual fund to your financial portfolio.
However, you should be aware of both the positive and negative aspects of this
investment.

A. ADVANTAGES OF MUTUAL FUND

LIQUIDITY DIVERSIFICATION

EXPERT LESS COST BULK

MANAGEMENT TRANSACTIONS

INVEST IN SMALLER SUITS YOUR

DENOMINATION FINANCIAL GOALS
ADVANTAGES
OF MUTUAL
COST- EFFICIENCY
FUNDS QUICK AND HASSLE
- FREE PROCESS

TAX - EFFICIENCY AUTOMATED

PAYMENT
SYSTEMATIC OR ONE-
SAFETY TIME INVESTMENT

Chart 1.2 Advantages of mutual fund

● LIQUIDITY

Unless you choose a closed-ended mutual fund, purchasing or selling a mutual

fund schedule is fairly straightforward. When the stock market is high, you can
successfully sell your open-ended stocks mutual fund units. Keep an eye on the
mutual fund's exit burden and expense ratio.
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● DIVERSIFICATION

Equity mutual funds are risky because their performance depends on stock
market movements. As a result, the manager of the fund spreads your
investment across stocks of companies from different industries and sectors, a
method known as diversification. When one asset class underperforms, the other
sectors can compensate and prevent investors from losing money.

● EXPERT MANAGEMENT

A mutual fund is suitable for investors who lack the time or ability to do research
and asset allocation. A fund manager manages all and makes decisions
regarding what to do with your investment. The fund leadership and the research
team decide on the right securities, such as equities, debt, or a combination of
the two, based on the fund's investment objectives. Furthermore, the fund
management decides how long the securities will be maintained.

● LESS COST FOR BULK TRANSACTIONS

If you buy multiple mutual fund units at a time, the processing fees and other
commission charges will be lesser as compared to buying one mutual fund unit.

● INVEST IN SMALLER DENOMINATION

You can delay your mutual fund investments over time by investing in small
denominations as low as Rs 500 per SIP payment. This reduces the average cost
of investment as you distribute your money over stock market lows and highs.
Regular (monthly or quarterly) investments offer the benefit of rupee cost
averaging above lump sum investments.

● SUITS YOUR FINANCIAL GOALS

In India, there are many kinds of mutual funds available to investors from all
walks of life. No matter your income, you must make it a habit to set aside a
certain amount (however small) for making investments. It is straightforward to
locate a mutual fund that suits your income, time horizon, investment goals and
tolerance for risk.

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● COST - EFFICIENCY

You can check the expense ratio of different mutual funds and choose the one
with the lowest expense ratio. The expense ratio is the fee for managing your
mutual fund.

● QUICK AND HASSLE-FREE PROCESS

To establish your portfolio, you can begin with one mutual fund and
progressively diversify among funds. It is easier to select handpicked funds that
meet your investment goals and risk tolerance.

Maintaining track of mutual funds will be easy. The fund manager will select
when, where, and how to invest in securities based on the investment objectives,
with the support of his staff. In short, their goal is to constantly beat the
benchmark index and give maximum returns to investors.

● TAX-EFFICIENCY

You can invest in tax-saving mutual funds called ELSS which qualify for tax
deduction up to Rs 1.5 lakh per annum under Section 80C of the Income Tax
Act, 1961. Though a 10% tax on Long-Term Capital Gains (LTCG) above Rs 1
lakh is applicable, they have consistently delivered higher returns than other tax-
saving instruments in recent years.

● AUTOMATED PAYMENT

It is usual for SIPs or investments to be delayed for various reasons. You may
select paperless automation with your investment house or agent by submitting
a SIP obligation, which instructs your bank account to deduct SIP amounts when
they're due. Email and SMS notifications guarantee that you keep on track with
the mutual fund investments.

● SAFETY

Mutual funds are widely considered to be less safe than bank products. This is
a mistake because fund houses are carefully regulated by statutory government
agencies such as SEBI and AMFI. SEBI can easily verify the qualifications of

15
 the fund house and asset manager. They also have an impartial grievance
settlement tool that works in the greatest interests of investors.

● SYSTEMATIC OR ONE-TIME INVESTMENT

Mutual fund investment can be arranged based on your budget and convenience.
As an example, starting a SIP (Systematic Investment Plan) in an equity fund
on a monthly or quarterly basis makes sense for investors with a small amount
of money. If you have additional cash, consider making a single, one-time
investment in debt funds.

B. DISADVANTAGES OF MUTUAL FUND

DISADVANTAGES
OF MUTUAL

COSTS OF
MANAGING EXIT LOAD
THE MUTUAL

DILUTION

Chart 1.3 Disadvantages of mutual fund

● COSTS OF MANAGING THE MUTUAL FUND

Market analysts' and fund management salaries, along with the fund's
operational costs, are accounted for by investors. When choosing a mutual fund,
one of the first features to consider is total fund management costs. Higher
management fees do not guarantee better fund performance

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 ● EXIT LOAD

Depart loads are fees levied by AMCs when you depart a mutual fund. For some
time, it prevents investors from redeeming their investments. This is comparable
to the lock-in time utilized by fund houses to maintain fund stability.

It also assists with fund administration in raising the money it needs to purchase
the suitable securities at an appropriate cost and at the right time.

● DILUTION

While diversification minimizes your losses, it may additionally minimize the

profits you make. As such, you should avoid investing in several mutual funds
at once. If you make informed decisions, the benefits of mutual funds will surely
outweigh the drawbacks.

However, investors may lack the time, knowledge, or patience to investigate

and contrast various mutual funds. Investing with Clear Tax could alleviate this
difficulty because we have already done the investigation for you by picking the
top-rated funds from the country's best fund houses.

1.1.5. FUNCTIONS OF MUTUAL FUND

Mutual funds in India are charged with many key functions which are highlighted
hereunder:

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 FUNCTIONS OF MUTUAL FUND

NEW FUND OFFER (NFO)RELEASE

POOLING MONEY

INVESTMENT IN SECURITIES

RETURNS OF FUNDS

TRANSPARENCY

RISK MANAGEMENT

Chart 1.4 functions of mutual fund

● NEW FUND OFFER (NFO) RELEASE

By revealing its NFO (New fund offer), an AMC (Asset management company)
may begin off a mutual fund scheme. It creates and conveys the scheme's
strategy before its debut. Investors are able to decide whether and how much to
invest. NFO units can be purchased inexpensively, such as Rs 10.

● POOLING MONEY

Fund houses accept funds from interested investors after the NFO to purchase
shares in stocks, bonds, and other assets. Investors who weren't involved in the
NFO are still able to buy fund units when it is working.

● INVESTMENT IN SECURITIES

Securities investments: The scheme's strategy determines how the fund manager
distributes the funds. Before making an investment option, the fund manager
undertakes

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 extensive research on the economy, industries, and firms. He then buys the most
appropriate securities that guarantee the best returns to unit holders.

● RETURN OF FUNDS

When mutual funds establish returns, earnings can be spread to investors or

invested in the scheme to fuel growth in the future. Investors that select the
IDCW option (income distribution plus capital withdrawal) receive payments
of dividends. If they selected the growth option, the gains are retained in the
program and may increase further.

● TRANSPARENCY

Mutual funds are required to provide investors with regular updates on various
aspects of the fund like the performance of the scheme, the portfolio holdings,
and other important information through regular reports and newsletters. This
helps investors in making informed decisions about their investment portfolio.

● RISK MANAGEMENT

Mutual funds are required to manage the overall risk of the fund by diversifying
the portfolio across different sectors and asset classes and using prudent risk
management techniques to align the risk of the funds with the investor
expectations.

1.1.6. CHARACTERISTICS OF MUTUAL FUND

Mutual Funds are ideal for those who are not financially savvy or adept at managing
their investments. A Mutual Fund is managed by experts who determine where and how
the money will be invested. As such, MFs help investors build their financial wealth
slowly and steadily.

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 CHARACTERISTICS OF MUTUAL FUNDS

DIVERSE OPTIONS

LONG TERM WEALTH

EASY TO INVEST

EASY TO TRACK

Chart 1.5. Characteristics of mutual fund

● DIVERSE OPTIONS
Mutual funds provide investors with an extensive range of options that span the
whole risk-return range. Investors may choose a Mutual Fund that suits their
particular objectives.

● LONG TERM WEALTH

Mutual funds assist participants to create long-term wealth by investing small
amounts frequently (through systematic investment plans, or SIPs). SIP
purchasing mutual funds offer good long-term returns while reducing the risk.

● EASY TO INVEST
Investors can invest in Mutual Funds online or offline. They can invest in an
initial sum or in progressive amounts. They can instruct their banks and have
their mutual fund investments automatically.

● EASY TO TRACK
You can quickly manage your mutual portfolio online.

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1.1.7. STRUCTURE OF MUTUAL FUNDS

Mutual Funds in India have a three-tier structure with a few other major components.
Other players participate in the development of mutual funds, in addition to the various
banks or AMCs that develop or float different mutual fund schemes. The Securities
Exchange Board of India is the principal monitor in all of these transactions, with whom
each business is required to register. The SEBI (Mutual Funds) Regulations, 1996,
changed the structure of mutual funds, and all companies have been controlled by them
since then.

Mutual funds currently have five center participants: a Sponsor, Mutual Fund Trustee,
Asset Management Company, Custodian & Registrar, and Transfer Agent.

STRUCTURE OF MUTUAL FUND

SPONSOR

TRUSTEES

WORK
CUSTODIA
TOGETHER AMC
(ASSET MANAGEMENT COMPANY )
N
A COMPANY
WHICH ACTUALLY RTA
HOLDS THE
(REGISTER AND
SECURITIES
TRANSFER AGENT)

Chart 1.6. Structure of mutual fund

1. SPONSOR

A sponsor is a person or company that can establish a mutual fund scheme in order to
generate money through fund management. The sponsor is the first layer in the three-

21
tier mutual fund structure in India. The sponsor must approach SEBI to have a mutual
fund plan approved. The sponsor cannot function alone. It has to create a Public Trust
under the Indian Trust Act of 1882 and register it with SEBI. Once the trust is
established, the Trustee is registered with SEBI and established as the trustee of the
fund in order to protect the unit holders' interests and to comply with SEBI Mutual Fund
regulations.

The Sponsor subsequently created an Asset Management Company under the

Companies Act, 1956 to deal with the fund management.

There are certain eligibility criteria to become a Sponsor, as prescribed under:

A. The Sponsor must have profit in 3 of the last 5 years including immediately
preceding year.
B. The Sponsor must have a minimum of 5 years of experience in financial
services.
C. The net worth of the Sponsor must be positive for all the preceding five years.
D. Out of the total net worth of the AMC, 40% must be participated by the Sponsor.

As seen above, the position of a Sponsor is crucial and they should have high credibility.
Strict norms show that the sponsor must have enough liquidity and faithfulness to return
the money of an innocent investor, in case of a financial meltdown.

2. TRUST AND TRUSTEES

The second component of a mutual fund's structure is made up of trust and trustees.
Trustees, who work for the fund sponsor, are also referred to as the fund's guardians.
As their name implies, they play a crucial part in upholding investors' confidence and
managing the fund's expansion. The trustees are required by SEBI to submit a report on
the fund and the operation of the AMC every six months. Trustees may be established
as either a Trust Company or a Board of Trustees. The Trustees oversee the AMC's
overall management and control how the mutual fund schemes are run. To avoid any
potential conflict of interest between the Sponsor and the AMC, the SEBI has tightened
the transparency regulation. An AMC is not permitted to launch a new mutual fund
scheme without the Trust's consent and endorsement. The Trustees must exercise
independence and take appropriate action to protect the investors' hard-earned cash.

22
The Trustees must also register with SEBI, and SEBI further controls their registration
by suspending or revoking it if any conditions are discovered to have been broken.

3. ASSET MANAGEMENT COMPANY (AMC)

An AMC is the third functioning layer in the mutual fund structure. An AMC
establishes multiple mutual fund schemes in the market based on the needs of the
investors and the nature of the market. They, along with the trustee and the sponsor,
establish mutual funds and subsequently manage their development. They enlist the
assistance of bankers, brokers, RTAs, auditors, and others in the growth of the scheme
and enter into an agreement with them. An AMC is a business incorporated under the
Companies Act that must be registered with SEBI. An AMC, like the Trustees, has to
ensure that there are no conflicts of interest between them, the sponsor, and the trustees.

4. OTHER PARTICIPANTS IN THE STRUCTURE OF MUTUAL FUNDS

a) CUSTODIAN

Custodian is the entity that is in charge of the protecting of the securities. SEBI-
registered custodians are in control of the transfer and delivery of units and
securities. Custodians additionally help investors in updating their holdings at a
particular point in time and keeping track of their investments. Custodians are
in charge of gathering company benefits such as bonus issues, interest,
dividends, and so on, in addition to the simple job of safekeeping.

b) REGISTRAR AND TRANSFER AGENTS

RTAs act as a vital channel between fund managers and investors. They assist
fund managers by educating them of investor information and investors by
informing them of the fund's benefits. RTAs are SEBI-registered companies that
process mutual fund applications, help with investor KYC, manage and deliver
periodic investment statements, update investor records, and process investor
queries. Link-in time, Karvy, and other well-known RTAs in India give the
required operational support to the AMC in mutual fund activities.

c) OTHER PARTICIPANTS

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 Brokers, auditors, and bankers are some of the other participants in the mutual
fund structure. Brokers are in the role of collecting investors and spreading the
money. Brokers assist investors in the sale and purchase of units and provide
important advice. Brokers also research market trends and forecast future
market movement.

Unlike brokers, auditors are an independent internal watchdog who examines

and reports on the AMC, Trustee, and Sponsor's financials. Bankers play a
crucial part as collection agents on behalf of the fund managers.

These are the individuals who play an important role in mutual fund
management. Each person has a distinctive duty to perform. Their
responsibilities, however, are inextricably

linked. Mutual fund regulations are the bible by which all participants pledge to
perform their functions with greater precision and without prejudice to the
investors' interests.

1.1.8. HISTORY OF MUTUAL FUND

The concept of mutual funds was invented in Europe in the early 1770s. During a bleak
economic situation, Adriaan Van Ketwich, a Dutch merchant, created the world's first
mutual fund in 1774. He pooled money from several individuals and created a
diversified fund of bonds.

India's first mutual fund was establishment in 1963, namely, Unit Trust of India (UTI),
at the initiative of the Government of India and Reserve Bank of India ‘with a view to
encouraging saving and investment and participation in the income, profits and gains
accruing to the Corporation from the acquisition, holding, management and disposal of
securities.

Mutual fund industry has grown very significantly. Mutual fund in India is divided in
four phases as follows:

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 2004- PRESENT
CONSOLIDATION &
GROWTH

1993-2004
ENTRY OF PRIVATE
SECTOR

1987-93
ENTRY OF
PUBLIC
SECTOR

1964-87
INITIAL
PHASE

Chart 1.7. History of Mutual fund

➢ FIRST PHASES (1964-1987)

The mutual fund industry started with the Unit Trust of India (UTI) formation in 1963
by the Parliament Act. It functioned under the regulatory and administrative control of
the Reserve Bank of India (RBI). Also, Unit Scheme 1964 was the first scheme
launched by UTI. Later on, UTI was delinked from RBI in 1978. Industrial
Development Bank of India (IDBI) took over the administrative and regulatory control
in place of RBI. By the end of the year 1988, UTI had Rs.6700 crores assets under
management (AUM).

➢ SECOND PHASE (1987- 1993) -ENTRY IN PUBLIC SECTOR

MUTUAL FUND

The second phase of mutual fund history marked the entry of public sector banks. In
1987, public sector mutual funds were set up by public sector banks, Life Insurance
Corporation of India (LIC) and Insurance Corporation of India (GIC). SBI Mutual Fund
was the first non-UTI MF started in June 1987. Subsequently, Canara Bank came into

25
existence as Canara Bank Mutual Fund in December 1987. Similarly, some other
bank’s mutual funds came into existence, such as
● Punjab National Bank Mutual Fund in August 1989
● Indian Bank Mutual Fund in November 1989
● Bank of India Mutual Fund in June 1990
● Baroda Mutual Fund in October 1992
● LIC Mutual Fund in June 1989
● GIC Mutual Fund in December 1990

By the end of 1993, the total asset under management of the mutual fund industry was
Rs.47,007 crores.

During the second phase, the observers claim that the second stage was not only the
foundation for industry expansion but also encouraged investors to invest more savings
in mutual funds. As a result, the mutual fund industry in India was poised for higher
growth.

➢ THIRD PHASE (1993-2003) - ENTRY IN PRIVATE SECTOR

MUTUAL FUND

The new era of the mutual fund industry began with the introduction of private sector
funds in 1993. This gave investors a wide choice of funds.

With the establishment of SEBI in April 1992, the Indian Securities Market gained
importance. Also, in 1993, the first set of SEBI Mutual Fund regulations came into
existence for all mutual funds except UTI. All the mutual funds were governed and
regulated under SEBI. The purpose was to protect the investors’ interest.

The Kothari Pioneer (now merged with Franklin Templeton Mutual Fund was the first
private sector mutual fund company registered in July 1993. This was the first private
sector mutual fund. Later in 1996, the SEBI regulations were replaced and revised with
more comprehensive rules. Therefore, the mutual fund industry currently functions
under SEBI Regulations 1996. Over the years, the number of mutual funds increased,
with many foreign sponsors setting up a mutual fund in India. Also, the MF industry
witnessed numerous mergers and acquisitions during this phase. By the end of January

26
2003, there were 33 mutual funds with total assets of Rs.1,21,805 crores, out of which
UTI alone had an AUM of Rs.44,541 crores.

➢ FOURTH PHASE (2014- PRESENT)

In February 2003, UTI was divided into two distinct organizations following the
abolishment of the Unit Trust of India Act 1963.

The first is the Specified Undertaking of Unit Trust of India (SUUTI), which operates
under an administrator and regulations set by the Indian government. It does not fall
under the authority of Mutual Fund Regulations. The second is the UTI Mutual fund
carved out of Unit Trust of India, which functions under SEBI MF regulations from
February 1, 2003.

After the global economic recession in 2009, the global financial markets were at an
all-time low, and so was India. The majority of investors who put their money when
markets were at their peak suffered huge losses. The faith of investors in MF was
severely shaken. The Indian mutual fund industry struggled to recover from these
hardships and remodel itself for over two years. Also, the situation got worse with SEBI
abolishing entry load and repercussions of the global economic crisis. This scenario is
evident from the sluggish growth in the overall AUM of the Indian mutual fund
industry.

1.1.9. PROCESS OF MUTUAL FUND OPERATION

1. Assets Management Company establishes a mutual fund scheme with an

identified monetary objective at its commencement.
2. Interested investors with similar investment goals get together and connect their
funds to establish a corpus.
3. The corpus is managed by Fund Managers, who invest it in various financial
services in accordance with the scheme's goals.

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 4. Units will be distributed to investors according to the amount of capital offered.
As a result, investors have no direct claim to the shares, bonds, and other
financial securities purchased and maintained by the mutual fund.
5. The main form of return on a mutual fund is a change in the value of investments
distributed among unit holders.

1.1.10. ELIGIBILITY CRITERIA

Resident Indian can invest in mutual funds

Purchasing a mutual fund is actually very easy, and you may complete it fast online!
However, similar to any other financial transaction, there is documentation involved.

To avail of this service, you need to register for invest@easy facility. It is a one-time
registration process.

REGISTER FOR INVEST@EASE FACILITY IN 2 EASY STEPS

● Submit the filled up form at any ICICI Bank OR SBI Bank branch
● Provide applicable documents along with the registration form
1. PAN Card copy
2. CVL (CDSL Ventures Limited) KYC (Know your customer)/ KRA (KYC
registration agency) acknowledgment / Print of CVL KYC/ KRA status screen

On submission of the registration from and applicable documents, your registration will
be completed in 5 working days.

1.1.11. PROCEDURE TO INVEST IN MUTUAL FUND

Investing in mutual funds is normally a long term commitment of funds. Hence you
need to follow the due process to invest. When you invest in mutual funds, there are
two levels of process flow that you must go through. First there is the normal regulatory
process and the second is a more managerial approach, which is to protect the value of
your own portfolio. Let us look at the statutory procedures first.

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Basic Process to Follow for Investing in Mutual Funds
● The first step before investing in mutual funds is to get your KYC completed.
The Know Your Client (KYC) is meant to ensure that you understand the risks
and rewards of investing in mutual funds as also to keep a tab on the color of
the money coming into the fund.
● There are two ways to do KYC. You can either do a physical KYC at the branch
office of the fund or at the registrar office. Alternatively, you can also do e-
KYC with your Aadhar card that is mapped to your PAN number. Mutual funds
also insist on an In Person Verification (IPV) before completing your KYC.
● Once your KYC is completed, you are good to invest. You can either go through
a broker or you can go to the office of the mutual fund and give a Direct
Application. When you give a Direct Application, you pay a lower Total
Expense Ratio (TER) and hence your NAV will be higher. However, when you
go through the broker, you have the added advantage of getting advisory
services on fund selection. You must opt for the Direct Plan only if you are
confident of managing your entire mutual fund investments on your own
without any expert assistance.
● If you do not want to go through physical mode, you can also opt for the online
purchase of mutual funds. You can either purchase these funds at the website of
the mutual fund or from the registrars or from other fund aggregators. Here
funds are allocated an ISIN number and you can hold mutual funds in your
demat account along with your equity shares and other similar assets.

Secondary Process to Follow for Investing in Mutual Funds

● The primary process for mutual fund investments is more to facilitate the
process and help you become a mutual fund investor. The second step is to apply
more customized filters so that you are able to invest in the right fund.
● Ensure that the fund suits your risk appetite. The best way is to start off with a
long term financial plan and then work backwards to see how much you need
to allocate to each specific asset class. That is how your portfolio should be
built.
● The second step is to take a call between lump-sum investment and SIP. When
it comes to long term wealth creation, Systematic Investment Plans (SIP) is a

29
 lot more useful. In fact, even if you have a lump-sum available with you, you
can convert that into a SIP via a systematic transfer plan.
● You need to zero down very carefully on the specific fund house and the funds
that you want to invest in. It predicates on the performance of the fund, the risk
of the fund and the stability of the fund management team. All these factors
need to be considered.
● Finally, do a complete review of the fund factsheet before the final investment
in the fund. What should you look for in the factsheet? There are five basic
things you need to look at. Firstly, in case of equity and debt funds look at the
consistency of the returns generated over time. More than the quantum of
returns, it is consistency that matters. Secondly, look at risk adjusted returns. A
return of 14% with 10% volatility is far better than 16% returns with 30%
volatility. Thirdly, check the portfolio mix. Be it an equity fund or a debt fund;
watch out for portfolio concentration risk and asset quality risks as they are the
key to long term performance. Fourthly, look at the Total Expense Ratio (TER).
In a competitive market, it is tough to generate alpha. The basic thing you want
is for funds to save costs for you. Lastly, you invest in equity funds to beat the
index. Benchmark the fund performance to the Total Returns Index (TRI) of the
index. That is a better measure of outperformance as TRI also factors dividends

1.1.12. MUTUAL FUND FEES AND EXPENSES

Investors who buy mutual funds may be required to pay fees and expenses related to
those funds. There are charges related to running a mutual fund, such as shareholder
transaction costs, investment encouraging fees, and marketing and distribution costs.
Investors are charged these costs in a variety of ways by funds.

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 MUTUAL FUNDS FEES AND EXPENSES

OTHER OPERATING
TRANSACTIONS FEES PERIODIC FEES EXPENSES

PURCHASES FEE MANAGEMENT FEE TRANSAC

REDEMPTION COST ACCOUNT FEE TION COST
EXCHANGE FEE

Chart 1.8 Mutual fund fees and expenses

1. TRANSACTION FEES

i) PURCHASE FEE

When shareholders purchase shares, specific funds charge this kind of cost on
them. A purchase fee, which is paid to the fund rather than a broker like a front-
end sales load, can be imposed to cover some of the costs the fund paid during
the purchase.

ii) REDEMPTION COST

When shareholders sell or redeem their shares, specific funds charge a different
kind of fee on them. A redemption fee, compared to a postponed sales load, is
paid to the fund rather than a broker and is frequently used to cover the costs
received by the fund as a consequence of a shareholder's redemption.

iii) EXCHANGE FEE

Some funds charge shareholders an exchange fee if they change (transfer) to

another fund within the same fund group or "family of funds."

2. PERIODIC FEE

i) MANAGEMENT FEE

Investment portfolio management fees, any other management fees incurred by

the fund's investment adviser or its affiliates, and administrative fees owing to

31
 the investment adviser that aren't included under the "Other Expenses" heading
are all regarded as management fees. Also known as maintenance costs.

ii) ACCOUNT FEE

Account fees are charges that some funds charge investors separately for
maintaining their accounts. For example, some funds charge an account
maintenance fee for accounts with balances below a particular limit.

3. OTHER OPERATING EXPENSES

i) TRANSACTION COST

These costs are incurred whenever the fund's assets are traded. Transaction costs
are usually higher for funds with a high turnover ratio or for companies
investing in smaller or exotic sectors. These costs usually are not declared,
compared to the Total Expense Ratio.

1.2. STATEMENT OF PROBLEM

The study of the problem of mutual funds reveals that investors' low level of awareness
and rising costs are the mainstream problems of industry.

The integration of mutual funds within banking institutions poses several challenges
that necessitate careful consideration:

1. REGULATORY COMPLEXITY

The regulatory landscape surrounding mutual funds within banks is intricate,

with compliance requirements subject to frequent updates. Adhering to these
regulations while ensuring operational efficiency presents a significant
challenge.

2. RISK MANAGEMENT AND OVERSIGHT

Balancing risk within mutual fund offerings is crucial. Banks must carefully
manage investment risks to safeguard both customers interests and the
institution’s stability.

32
3. CUSTOMER EDUCATION AND TRANSPARENCY

Educating customers about the intricacies of mutual funds is essential for

informed decision-making , achieving transparency in fund structure, fees, and
potential returns requires effective communication.

4. CONFLICTS OF INTERESTS

Banks must navigate potential conflicts of interest, particularly when promoting

in-house mutual funds or affiliate fund managers. This necessitates robust
governance measures to ensure fair treatment of customers.

5. LIQUIDITY MANAGEMENT

Maintaining the right balance of liquidity in mutual fund portfolios is critical.

Banks must be prepared to address potential liquidity mismatches to protect
investors interests.

6. TECHNOLOGY AND INTEGRATION CHALLENGES

Implementing the necessary technology infrastructure to support mutual fund

services can be complex. Integration with existing banking systems and
ensuring seamless customer experiences are areas that require attention.

7. MARKET VOLATILITY AND ECONOMIC CONDITIONS

External factors such as economic downturns, market volatility, shifts in interest

rates can significantly impact the performances of mutual funds. Banks need
strategies to mitigate these external risks.

33
1.3. NEED OF STUDY

Studying mutual funds in banks is essential for gaining insight into their integration
within financial institutions. It provides a comprehensive understanding of how mutual
funds operate within the banking sector, their impact on customer investment choices,
and the regulatory framework governing their inclusion.

Such studies help in assessing the risks and benefits associated with offering mutual
funds, and contribute to informed decision-making for both banks and their customers.

This research is vital for optimizing the mutual fund offerings, ensuring regulatory
compliance, and enhancing the overall financial services provided by banks.

A standard mutual fund analysis includes a basic analysis of the fund's strategy (growth
or value), and also a breakdown of its portfolio by commerce, region, and other factors.

The study was conducted for the comparative analysis of selected mutual funds in icici
bank and SBI bank, and it provides proper information to analyze the banks.

This study will help the common investors to understand the different schemes and
performance of mutual funds in different banks and help to compare the schemes.

It will guide them to select the suitable bank.

34
1.4. RATIONAL OF STUDY

Individual investors earn a greater return through dividends and capital growth. Both
from the point of view of the individual investor and the capital market, it could justify
mutual funds.

The fact that the assets are managed by knowledgeable, experienced professionals
lowers the risk of loss.

It is also lessened as a result of portfolio diversification in terms of businesses and

industries. In addition, the potential for capital appreciation is increased because the
returns are automatically invested.

The advantage of economies of scale accrues as a result of the pooling of the savings
and investments of numerous participants. Individual investors are saved from the
hassle of having to make their own decisions and then go through the investment
procedure. Therefore, from the perspective of the individual investor, mutual funds are
quite beneficial.

From the perspective of the capital market, if international investors are also investing,
the liquidity for local market players is raised due to an increase in trading activity. A
higher level of investor discipline would undoubtedly be required by such rivalry with
a market regulator in the form of enhanced disclosure, improved information flow, etc.

In other words, problems of information asymmetry are reduced. This also contributes
to improvement in economic fundamentals. Stability in returns on investment over the
long-term, which is the hallmark of mutual funds, has the potential to counter the
imbalance due to speculative tendencies witnessed commonly in active capital markets.
The benefits for both the individual and the capital market are thus significant.

35
 CHAPTER 2. RESEARCH METHODOLOGY

2.1 INTRODUCTION OF RESEARCH METHODOLOGY

One of the most significant uses of research methodology is its assistance in problem
identification, information gathering and analysis, and alternate problem solving.
Additionally, it aids in gathering the crucial data that upper management needs in order
to support them in making better decisions both essential and daily.
The procedure utilized to gather data and information in order to make business
decisions.
The methodology could incorporate information from the current as well as the past
and involve published research, interviews, surveys, and other research methods.
In short, The search for knowledge through an objective systematic method of finding a
solution to a problem is research.

DEFINITION
According to Clifford Woody,
Research comprises defining and redefining problems, formulating hypotheses or
suggested solutions; collecting, organizing and evaluating data; making deductions and
reaching conclusions; and at last carefully testing the conclusions to determine whether
they fit the formulating hypothesis.

2.2. OBJECTIVE

1. To help investors grow their wealth over the long term by investing in a
diversified portfolio of securities, which may include stocks, bonds, and other
financial instruments.
2. To study Marketing strategies, Distribution channels, Working and Structure of
mutual fund
3. To evaluate the benefits of mutual funds to investors in general and to small
investors in particular.
4. To highlight major problems encountered in operation and investment of
nationalized banks mutual funds & private sector banks
5. To identify the level of satisfaction with respect to investment opportunities
available.

36
 6. To evaluate the overall performance of a mutual fund
The objectives are designed to have a particular direction to the study like what aspect
of the topic is going to be studied. A topic can be studied from various parameters, the
objective designed for a project gives an idea that in what manner the topic is studied,
what is the flow of the project, what are the variables selected for the project, etc.

2.3 HYPOTHESIS

A hypothesis is founded in a collection of existing knowledge within a field of study.

A hypothesis is a statement of the probable relationship between independent and
dependent variables and a forecast of the result that is made before the data are gathered.

The hypothesis or the research problem of the study is designed in such a manner to
find out the relationship between the variables, i.e., does the effect have any impact on
the other. We can also say that the following hypothesis will let us know how closely
they are correlated with each other.

In order to study this topic 2 hypotheses are framed.

H0 - There is no significant contribution to long-term wealth creation for investors.
H1- There is a significant contribution to long-term wealth creation for investors.
H0 - There is no correlation between marketing strategies and the structure of mutual
funds.
H2 - There is correlation between marketing strategies and structure of mutual funds.

2.4. SCOPE OF THE STUDY

The study's scope is comparatively wider and encompasses the evaluation of all the
attributes, including the fund's objective, portfolio composition, total risk, total return,
fund inception, past performance of the fund, fund manager experience, fund size, funds
managed by the fund manager, expense ratio, diversification, liquidity, stability for the
fund and income, fund manager style, and all of them together. The study's focus is
limited to the Indian mutual fund business, specifically focusing on prominent mutual
fund companies within the country.

37
2.5. LIMITATIONS
One limitation of studying mutual funds is the reliance on historical data and past
performance. While past performance can provide insights, it may not guarantee future
results due to changing market conditions and economic factors.

Additionally, mutual fund studies often assume that investors act rationally, ignoring
behavioral biases that can impact decision-making. Furthermore, the accuracy of
reported fund expenses and returns can vary, making it challenging to compare and
evaluate different funds.

Mutual funds are the best available investment tools, but these have limitations, too.
1. Lack of information sources for the analysis part.
2. Time, cost and location factors become major difficulties in completion of
research.
3. The data provided by the prospects may not be 100% correct as they too have
their limitations
4. Lack of accessibility to mutual fund companies to collect primary data.
5. Lack of accessibility to primary data

2.6 RESEARCH METHODOLOGY

Research methodology refers to the systematic process and techniques used by

researchers to plan, conduct and analyze their studies.

2.7 RESEARCH DESIGN

The present research is an attempt to study comparative performance of mutual funds

in general in India. The study focuses on mutual fund schemes of Indian companies
comprising Equity, Debt and Hybrid Schemes. The totals of 20 Indian mutual fund
companies are selected for the study. The Asset management companies selected for
the study are Birla Sun Life, Franklin Templeton, HDFC, ICICI Prudential, IDFC, L&T,
Reliance, SBI, UTI mutual fund and some 11 more companies.

This report is based on secondary data, however primary data collection is given more
importance since it is an overheating factor in attitude studies which I was not able to
collect. The methodology adopted in this study is explained below

38
A. Literature Survey:

I have used newspapers, magazines related to business & finance & apart from
websites.

2.8 Types of research:

The research is Quantitative & Descriptive in nature.

● Quantitative research is one that talks about the quantity of the subject to be
researched. Quantitative research is a way to learn about a particular group of
people, known as a sample population.
● Descriptive research is one that describes things as they exist in the present.
Descriptive research aims to accurately and systematically describe a
population, situation or phenomenon

2.9 Data collection Design:

● Primary sources:
Primary data in research refers to original and firsthand information that
researchers collect directly from sources. This type of data is specific to the
research question or objective and is not previously published or documented
by others. There are several methods for collecting primary data, including
surveys, experiments, observations, interviews, and focus groups. Key
characteristics of primary data are originality, relevance, control, and reliability.
Analyzing primary data allows researchers to draw conclusions and make
informed decisions based on their own data collection, making it a valuable
resource in fields like science, social research, and business analysis. In this
study, the data is collected from respondents through questionnaires, personal
interviews, and even goggles forms.

● Secondary sources:
Secondary data refers to information that has been collected and compiled by
someone else for a purpose other than the one at hand. It is a valuable resource
for researchers, analysts, and businesses seeking to make informed decisions.
This data can include sources like academic journals, government reports,
industry publications, and data collected by organizations for their own

39
 purposes. The advantage of secondary data is that it is often readily available
and can be more cost-effective than primary data collection. Researchers can
access a vast pool of knowledge and insights from various sources, which can
be used to support or supplement their own research, making it a valuable tool
for data-driven decision-making. However, it's important to critically evaluate
the quality and relevance of secondary data to ensure its suitability for the
specific research or analysis being conducted. The sources of secondary data are
government publications, magazines, journals, Survey reports and reference
books etc. Major source of secondary data being SEBI Website

2.10 Sampling method / Technique - Snowball

The sampling method involves primary data sources nominating other potential primary
data sources to be used in the research.

In other words, the snowball sampling method is based on referrals from initial subjects
to generate additional subjects. Therefore, when applying this sampling method
members of the sample group are recruited via chain referral. Also, snowball sampling
is the most popular in business studies focusing on collecting data on a specific
parameter. Once you have contact details of one of the respondents, she/he can suggest
to you the other respondent as per his/her knowledge for the purpose of further research
by providing contact details of another respondent.

SNOWBALL:

The term "snowball" reflects how the sample size grows as more people are added to
the research through referrals or introductions. This technique is commonly used in
studies involving hard-to-reach populations or when trying to identify individuals with
specific characteristics It starts with an initial subject or contact, and then, like a
snowball rolling downhill and picking up more snow, the researcher or participant
recruits others, creating a chain reaction.

2.11 Sampling size

Sample size is a statistical concept that involves determining the number of

observations or replicants (the repetitions of an experimental condition used to estimate
variability of phenomenon) that should be included in a statistical sample. It is an

40
important aspect of any empirical study requiring that inferences be made about a
population based on a sample.

Essentially , sample sizes are used to represent parts of a population chosen for any
given survey or experiment.

2.11.RESEARCH INSTRUMENT-STRUCTURED QUESTIONNAIRE

A research instrument is a tool or device used by researchers to collect data and gather
information for study or investigation. These instruments are carefully designed and
chosen to suit the specific research objectives and the nature of the data being sought.
Research instruments can take various forms, including surveys, questionnaires, and
interviews. The selection of an appropriate research instrument is crucial, as it directly
influences the quality and reliability of the data collected. Researchers must consider
factors such as the target population, research goals, and the type of data needed when
designing or selecting a research instrument. Once the data is gathered, researchers can
then analyze and interpret it to draw meaningful conclusions and insights in their pursuit
of knowledge and understanding in various fields of study.

STRUCTURED QUESTIONNAIRE:

A structured questionnaire is a research tool company used in surveys and data

collection to gather information from respondents in a systematic and organized manner
. It consists of a set of predefined questions and response options that are carefully
designed to obtain specific information or insights from individuals or groups.
Structured questionnaires are particularly valuable in quantitative research, where
researchers aim to collect standardized data that can be analyzed statistically.

It is a tool that consists of a set of standardized questions with a fixed scheme, which
specifies the order of the questions, for collecting the information from respondents.
This tool was selected for the data collection for this study. The questionnaire was taken
from the sample selected from the individuals of Kalyan, Thane District.

41
 CHAPTER.3 REVIEW OF LITERATURE

1. Soumya Guha Deb, Ashok Banerjee and B.B. Chakrabarti (2009) studied
“Return Based Style Analysis (RBSA) to evaluate equity mutual funds in India”
using quadratic optimization of an asset class factor model proposed by William
Sharpe and analysis of the relative performance of the funds with respect to their
style benchmarks. The study found that the mutual funds generated positive
monthly returns on the average, during the study period of January 2000 through
June 2005. The ELSS funds lagged the Growth funds or all funds taken together,
with respect to returns generated. The mean returns of the growth funds or all
funds were not only positive but also significant. The ELSS funds also
demonstrated marginally higher volatility (standard deviation) than the Growth
funds. Three parametric models random walk, moving average, exponentially
weighted moving average and one non parametric model were employed to
predict the VAR of a sample of equity MFs in India on a rolling basis and actual
changes in NAV registered by the funds were compared with the estimated VAR
post facto. The results indicated the presence of considerable downside risk for
an investor in equity MFs for the study period under consideration. The study
also tested the robustness of the models using two popular back testing
approaches. The statistical tests of the models based on the framework indicated
that the random walk model & moving average model suffered from a
downward bias and err by underestimating the VAR frequently. The EWMA and
historical simulation methods are relatively free from that bias but they show a
few instances of providing conservation estimates of VAR. The researchers have
put forward a case for adapting VAR based risk management systems for the
investment industry as a whole in India.
2. Soumya Guha Deb, Ashok Banerjee and B.B. Chakrabarti (2009) studied
“Return Based Style Analysis (RBSA) to evaluate equity mutual funds in India”
using quadratic optimization of an asset class factor model proposed by William
Sharpe and analysis of the relative performance of the funds with respect to their
style benchmarks. The study found that the mutual funds generated positive
monthly returns on the average, during the study period of January 2000 through
June 2005. The ELSS funds lagged the Growth funds or all funds taken together,
with respect to returns generated. The mean returns of the growth funds or all

42
 funds were not only positive but also significant. The ELSS funds also
demonstrated marginally higher volatility (standard deviation) than the Growth
funds.
3. Dr. Susheel Kumar Mehta (2010) in the article named “SBI vs. UTI – a
comparison of performance of mutual funds schemes”. Has taken 10 UTI and
10 SBI mutual funds and analyzed their performance. The study concluded that
preference of UTI & SBI mutual funds has been better in 2007–08. When
compared to 2006-07 SBI performance was & good in 45 both the years. No
consistency for both the companies’ mutual funds in terms of returns.
Consistency is observed for risk. UTI money market mutual funds dividend &
SBI magnum income plus fund-saving plan growth are found to be least risky
among selected schemes of UTI & SBI. UTI was more defensive than SBI
schemes. SBI magnum comma fund – Dividend has been the most aggressive
scheme & UTI money market mutual funds daily dividend has been the most
differential scheme. Aggressiveness was the right strategy. SBI’s magnum
comma fund dividend has been preferred very well during both the years.
During 2006-07 all the selected schemes gave dismal performance which gave
the same preference. As a market based on risk adjusted measures of Sharpe,
Treynor & Jensen. During 2007-08 only one of the selected UTI schemes'
master value fund growth option performed better followed by MEF– G. &
MBF – G performed better than the market. Whereas SBI –MCF dividend
followed by MEF – G & MBF-G– performed better than Market. As superior
stock selection is concerned none of the portfolio Manager selected UTI & SBI
showed skills during 2006-07. It was only 2007-08 managers of SBI MCF–D-
erected some superior stock selection skills.
4. Sanjay Kumar Mishra and Manoj Kumar (2011) “How mutual fund
investors objective and subjective knowledge impacts their information search
and processing behavior” in the article attempted to prove how Contrary to the
popular belief that objective knowledge (OK) (that is, what is actually stored in
the memory) and subjective knowledge (SK) (that is, what individuals perceive
they know) differently impact information search and information-processing
behavior, with an empirical study conducted on 268 mutual funds (MF).
Investors suggest no significant difference in the impact of OK and SK on the
width and depth of information search and information processing. The study

43
 suggested that OK and SK significantly positively impact the width and depth
of information search and information-processing behavior, however, no
significant difference exists in the way they impact. The possible explanation
put forward is that even though MF investors may suffer from self-deception
(that is, pseudo expertise) and reporthigh knowledge (that is, high SK), the
impact of SK on actual investment behavior is not significantly different from
that of OK.
5. Deepak Agrawal (2011) in the study “Measuring Performance of Indian
Mutual Funds” touched on the development of the Indian capital market and
deregulations of the economy in 1992. Since the development of the Indian
Capital Market and deregulations of the economy in 1992 there have been
structural changes in both primary and secondary markets. Mutual funds are key
contributors to the globalization of financial markets and one of the main
sources of capital flows to emerging economies. Despite their importance in
emerging markets, little is known about their investment allocation and
strategies. This article provided an overview of mutual fund activity in emerging
markets. It described their size and asset allocation. The paper is a process to
analyze the Indian Mutual Fund Industry pricing mechanism with empirical
studies on its valuation. The data is also analyzed at both the fund-manager and
fund-investor levels. The study revealed that the performance is affected by the
saving and investment 50 habits of the people and the second side the confidence
and loyalty of the fund Manager and rewards affects the performance of the MF
industry in India
6. Zhi Da, Pengjie Gao, and Ravi Jagannathan (2011) in the article “Impatient
Trading, Liquidity Provision, and Stock Selection by Mutual Funds' ' showed
that a mutual fund's stock selection skill can be decomposed into additional
components that include liquidity-absorbing impatient trading and liquidity
provision. The study proved that past performance predicts future performance
better among funds trading in stocks affected more by information events Past
winners earn a risk-adjusted after-fee excess return of 35 basis points per month
in the future. Most of that superior performance comes from impatient trading.
The paper also states that impatient trading is more important for growth-
oriented funds, and liquidity provision is more important for younger income
funds. Ajay Khorana, Henri Servaes, and Peter Tufano (2012) studied the

44
 mutual fund industry in 56 countries and examined where this financial
innovation has flourished. The fund industry is larger in countries with stronger
rules, laws, and regulations and specifically where mutual fund investors' rights
are better protected. The industry is also larger in countries with wealthier and
more educated populations, where the industry is older, trading costs are lower
and in which defined contribution pension plans are more prevalent. The
industry is smaller in countries where barriers to entry are higher. These results
indicate that laws and regulations, supply-side and demand-side factors
simultaneously affect the size of the fund industry
7. Dr. Sandeep Bansal, Deepak Garg and Sanjeev K Saini (2012), have studied
Impact of Sharpe Ratio & Treynor’s Ratio on Selected Mutual Fund Schemes.
This paper examines the performance of selected mutual fund schemes, that the
risk profile of the aggregate mutual fund universe can be accurately compared
by a simple market index that offers comparative monthly liquidity, returns,
systematic & unsystematic risk and complete fund analysis by using the special
reference of Sharpe ratio and Treynor’s ratio.
8. Dr. K. Veeraiah and Dr. A. Kishore Kumar (Jan 2014), conducted research
on Comparative Performance Analysis of Select Indian Mutual Fund Schemes.
This study analyzes the performance of Indian owned mutual funds and
compares their performance. The performance of these funds was analyzed
using a five year NAVs and portfolio allocation. Findings of the study reveals
that mutual funds outperform naïve investment. Mutual funds as a medium-to-
long term investment option are preferred as a suitable investment option by
investors.
9. Dr. Yogesh Kumar Mehta (Feb 2012), has studied Emerging Scenario of
Mutual Funds in India: An Analytical Study of Tax Funds. The present study is
based on selected equity funds of public sector and private sector mutual funds.
Corporate and Institutions who form only 1.16% of the total number of investors
accounts in the MFs industry, contribute a sizable amount of Rs. 2,87,108.01
crore which is 56.55% of the total net assets in the MF industry. It is also found
that MFs did not prefer the debt segment.
10. Dr Surender Kumar Gupta and Dr. Sandeep Bansal (Jul 2012), has done a
Comparative Study on Debt Scheme of Mutual Fund of Reliance and Birla Sun
Life. This study provides an overview of the performance of debt schemes of

45
 mutual funds of Reliance, and Birla Sunlife with the help of Sharpe Index after
calculating Net Asset Values and Standard Deviation. This study reveals that
returns on Debt Schemes are close to Benchmark return (Crisil Composite Debt
Fund Index: 4.34%) and Risk free Return: 6% (average adjusted for last five
years).
11. Prof. V. Vanaja and Dr. R. Karupasamy (2013), has done a Study on the
Performance of Select Private Sector Balanced Category Mutual Fund Schemes
in India. This study of performance evaluation would help the investors to
choose the best schemes available and will also help the AUM’s in better
portfolio construction and can rectify the problems of underperforming
schemes. The objective of the study is to evaluate the performance of select
Private sector balanced schemes on the basis of returns and comparison with
their bench marks and also to appraise the performance of different categories
of funds using risk adjusted measures as suggested by Sharpe, Treynor and
Jensen.
12. E. Priyadarshini and Dr. A. Chandra Babu (2011), have done Prediction of
The Net Asset Values of Indian Mutual Funds Using Auto- Regressive
Integrated Moving Average (Arima). In this paper, some of the mutual funds in
India had been modeled using Box-Jenkins autoregressive integrated moving
average (ARIMA) methodology. Validity of the models was tested using
standard statistical techniques and the future NAV values of the mutual funds
have been forecasted.
13. Dr. Ranjit Singh, Dr. Anurag Singh and Dr. H. Ramananda Singh (August
2011), have done research on Positioning of Mutual Funds among Small Town
and Sub-Urban Investors. In the recent past the significant proportion of the
investment of the urban investor is being attracted by the mutual funds. This has
led to the saturation of the market in the urban areas. In order to increase their
investor base, the mutual fund companies are exploring the opportunities in the
small towns and sub-urban areas. But marketing the mutual funds in these areas
requires the positioning of the products in the minds of the investors in a
different way. The product has to be acceptable to the investors, it should be
affordable to the investors, it should be made available to them and at the same
time the investors should be aware of it. The present paper deals with all these
issues. It measures the degree of influence on acceptability, affordability,

46
 availability and awareness among the small town and sub-urban investors on
their investment decisions.
14. Prof. Kalpesh P Prajapati and Prof. Mahesh K Patel (Jul 2012), have done
a Comparative Study on Performance Evaluation of Mutual Fund Schemes of
Indian Companies. In this paper the performance evaluation of Indian mutual
funds is carried out through relative performance index, risk-return analysis,
Treynor's ratio, Sharp's ratio, Sharp's measure, Jensen's measure, and Fama's
measure. The data used is daily closing NAVs. The source of data is the website
of Association of Mutual Funds in India (AMFI). The study period is 1st January
2007 to 31st December, 2011. The results of performance measures suggest that
most of the mutual funds have given positive returns during 2007 to 2011.
15. C. Srinivas Yadav and Hemanth N C (Feb 2014), have studied Performance
of Selected Equity Growth Mutual Funds in India: An Empirical Study during
1st June 2010 to 31st May 2013. The study evaluates performance of selected
growth equity funds in India, carried out using portfolio performance evaluation
techniques such as Sharpe and Treynor measure. S&P CNX NIFTY has been
taken as the benchmark. The study conducted with 15 equity growth Schemes
(NAV) were chosen from top 10 AMCs (based on AUM) for the period 1st June
2010 to 31st may 2013(3 years).
16. Rashmi Sharma and N. K. Pandya (2013), has done an overview of Investing
in Mutual Funds. In this paper, the structure of mutual funds, comparison
between investments in mutual funds and other investment options and
calculation of NAV etc. have been considered. In this paper, the impacts of
various demographic factors on investors’ attitude towards mutual funds have
been studied. For measuring various phenomena and analyzing the collected
data effectively and efficiently for drawing sound conclusions, pie charts have
been used and for analyzing the various factors responsible for investment in
mutual funds.
17. Rahul Singal, Anuradha Garg and Dr Sanjay Singla (May 2013), have done
Performance Appraisal of Growth Mutual Fund. The paper examines the
performance of 25 Growth Mutual Fund Schemes. Over the time period Jan
2004 to Dec 2008. For this purpose three techniques are used (I) Beta (II) Sharpe
Ratio (III) Treynor Ratio. Rank is given according to results drawn from this

47
 scheme and comparison is also made between results drawn from different
schemes and normally the differences are insignificant.
18. Dhimen Jani and Dr. Rajeev Jain (Dec 2013), has studied the Role of Mutual
Funds in the Indian Financial System as a Key Resource Mobiliser. This paper
attempts to identify the relationship between AUM mobilized by mutual fund
companies and GDP growth of India. To find out correlation coefficient
Kendall’s tau b and spearman’s rho correlation ship was applied, the data range
was selected from 1998-99 to 2009-10.
19. Dr. R. Narayanasamy and V. Rathnamani (Apr 2013), have done
Performance Evaluation of Equity Mutual Funds (On Selected Equity Large
Cap Funds). This study, basically, deals with the equity mutual funds that are
offered for investment by the various fund houses in India. This study mainly
focused on the performance of selected equity large cap mutual fund schemes
in terms of risk- return relationship. The main objectives of this research work
are to analyze financial performance of selected mutual fund schemes through
the statistical parameters such as (alpha, beta, standard deviation, r-squared,
Sharpe ratio).
20. Dr. Ashok Khurana and Kavita Panjwani (Nov, 2010), have analyzed Hybrid
Mutual Funds. Mutual fund returns can be compared using Arithmetic mean &
Compounded Annual Growth Rate. Risk can be analyzed by finding out
Standard Deviation, Beta while performance analysis is based on Risk- Return
adjustment. Key ratios like Sharpe ratio and Treynor ratio are used for Risk-
Return analysis. Funds are compared with a benchmark, industry average, and
analysis of volatility and return per unit to find out how well they are performing
with respect to the market. Value at Risk analysis can be done to find out the
maximum possible losses in a month given the investor had made an investment
in that month. Based on the quantitative study conducted by the company, a fund
is chosen as the best fund in the Balance fund growth schemes.

48
 Chapter.4 Data Analysis and Interpretation

4.1 Data analysis and interpretation

Data Analysis is the process of systematically applying statistical or logical techniques
to describe and illustrate, condense recap and evaluate data. Data analysis is the process
of inspecting, cleansing, transforming, and modeling data with the goal of discovering
useful information, informing conclusions, and supporting decision-making. Data
analysis has multiple facets and approaches, encompassing diverse techniques under a
variety of names, and is used in different business, science, and social science domains.
Data interpretation refers to the implementation of the methods and techniques used to
review the data so as to arrive at an informed conclusion. The interpretation of data
assigns a meaning to the information analyzed determines its significance and
implications.
The data interpretation is very important and it is to be done properly. Data is usually
arrived from multiple sources and hence there are chances that it may have been entered
haphazardly. Data analysis tends to be extremely subjective, as the nature and goal of
interpretation will differ from business to business. The two most common categories
for data implementation are “quantitative analysis” and “qualitative analysis” that are
implemented based on the individual nature of data.

49
 4.1.1 Data Interpretation

1) Gender

Table 4.1 Gender

Gender Responses Percentage

Female 32 57.1%
Male 24 42.9%

Gender
56 Responses

Male

Female

42.90%

57.10%

Graph 4.1 – Gender

Data Interpretation

From the above graph it is observed that the data was collected from 32 male and 24 female and total

of 56 sample size. The percentage of females is 57.1% and female are 42.9%. According to the data,

the survey says that the a large number of respondents are Female

50
2) Age

Age Response Percentage

21-30 45 80.4%

31-40 2 3.6%

41-50 8 14.3%

51-above 1 1.8%

Table 4.2 Age

Graph 4.2- Age

Sources: primary data
Data interpretation:

From the above graph it is observed that the data is collected from 45(80.4%)
borrowers who had an age between 21-30 years, 2 (3.6%) borrowers who had
an age between 31-40 years, 8 (14.3%) borrowers who were above 41-50
years, 1 (1.8%) borrowers who had an age between 51- above. According to
the data, the survey says that the larger number of respondents is 21-30 years.

51
3) Annual income range

Table 4.3 Annual Income Range

Income level Response Percentage

Less than - 500000 36 64.3%

500000- 700000 11 19.6%

700000- 1000000 5 8.9%

1000000 -above 4 7.1%

Graph .4.3 Annual income range

Sources: primary data
Data interpretation

From the above graph it is observed that the data is collected from 36 (64.3%)
borrowers who have income level between less than 500000, 11 (19.6%)
borrowers who have income level between 500000 - 700000, 5 (8.9%)

52
 4) Prefer mutual funds over other investment
Table 4.4 Prefer mutual funds over other investment

Opinion Response Percentage

Strongly agree 16 28.6%

Agree 28 50%

Neutral 9 16.1%

Disagree 2 3.6%

Strongly disagree 1 1.8%

Graphs 4.4 Prefer mutual fund over other investment

Sources: primary data
Data Interpretation
From the above it is observed that the survey shows;
1. The survey shows 16 (28.6%) respondents are Strongly Agree.
2. The survey shows 28 (50%) respondents are Agree.
3. The survey shows 9 (16.1%) respondents are Neutral.
4. The survey shows 2 (3.6%) respondents are Disagree.
5. The survey shows 1 (1.8%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

53
5) Risk having your principal investment amount
Table 4.5 Risk having your principal investment amount

Opinion Response Percentage

Strongly agree 6 10.7%

Agree 31 55.4%

Neutral 15 26.8%

Disagree 4 7.1%

Strongly disagree 0 0%

Graphs 4.5 Risk having your principal investment amount

Sources: primary data
Data Interpretation
From the above it is observed that the survey shows;
1. The survey shows 6 (10.7%) respondents are Strongly Agree.
2. The survey shows 31(55.4%) respondents are Agree.
3. The survey shows 15 (26.8%) respondents are Neutral.
4. The survey shows 4 (7.1%) respondents are Disagree.
5. The survey shows 0 (0 %) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

54
6) Knowledge of various schemes of Mutual funds
Table 4.6 Knowledge of various schemes of Mutual funds

Opinion Response Percentage

Strongly agree 16 12.5%

Agree 28 53.6%

Neutral 9 25%

Disagree 2 3.6%

Strongly disagree 1 1.8%

Graphs 4.6 Knowledge of various schemes of Mutual funds

Sources: primary data
Data Interpretation
From the above it is observed that the survey shows;
1. The survey shows 16 (12.5%) respondents are Strongly Agree.
2. The survey shows 28 (53.6%) respondents are Agree.
3. The survey shows 9 (25%) respondents are Neutral.
4. The survey shows 2 (3.6%) respondents are Disagree.
5. The survey shows 1 (1.8% respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

55
7) Risks associated with Mutual Funds
Table 4.7 Risks associated with Mutual Funds

Opinion Response Percentage

Strongly agree 8 14.3%

Agree 26 46.4%

Neutral 16 28.6%

Disagree 6 10.7%

Strongly disagree 0 0%

Graphs 4.7 Risks associated with Mutual Funds

Sources: primary data
Data Interpretation

From the above it is observed that the survey shows;

1. The survey shows 8 (14.3%) respondents are Strongly Agree.
2. The survey shows 26 (46.4%) respondents are Agree.
3. The survey shows 16 (28.6%) respondents are Neutral.
4. The survey shows 6 (10.7%) respondents are Disagree.
5. The survey shows 0 (0%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments

56
8) The principles like Finding about its past performance
Table 4.8 The principles like Finding about its past performance

Opinion Response Percentage

Strongly agree 9 16.1%

Agree 28 50%

Neutral 16 28.6%

Disagree 2 3.6%

Strongly disagree 1 1.8%

Graphs 4.8 The principles like Finding about its past performance.
Sources: primary data
Data Interpretation
From the above it is observed that the survey shows;
1. The survey shows 9(16.1%) respondents are Strongly Agree.
2. The survey shows 28 (50%) respondents are Agree.
3. The survey shows 16 (28.6%) respondents are Neutral.
4. The survey shows 2 (3.6%) respondents are Disagree.
5. The survey shows 1 (1.8%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments

57
9) Safest Investment option
Table 4.9 Safest Investment option

Opinion Response Percentage

Strongly agree 6 10.7%

Agree 24 42.9%

Neutral 24 42.9%

Disagree 2 3.6%

Strongly disagree 0 0%

Graphs 4..9 Safest Investment option

Sources: primary data
Data Interpretation

From the above it is observed that the survey shows;

1. The survey shows 6 (10.7%) respondents are Strongly Agree.
2. The survey shows 24 (42.9%) respondents are Agree.
3. The survey shows 24 (42.9%) respondents are Neutral.
4. The survey shows 2 (3.6%) respondents are Disagree.
5. The survey shows 0 (0%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree and are
neutral that they prefer mutual funds over other investments.

58
10) Lack of awareness about ICICI Mutual Funds
Table 4.10 Lack of awareness about ICICI Mutual Funds

Opinion Response Percentage

Strongly agree 11 19.6%

Agree 27 48.2%

Neutral 13 23.2%

Disagree 5 8.9%

Strongly disagree 0 0%

Graphs 4.10 Lack of awareness about ICICI Mutual Funds

Sources: primary data
Data Interpretation
From the above it is observed that the survey shows;
1. The survey shows 11 (19.6%) respondents are Strongly Agree.
2. The survey shows 27 (48.2%) respondents are Agree.
3. The survey shows 13 (23.2%) respondents are Neutral.
4. The survey shows 5 (8.9%) respondents are Disagree.
5. The survey shows 0 (0%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

59
11) Lack of awareness about SBI Mutual Funds
Table 4.11 Lack of awareness about SBI Mutual Funds

Opinion Response Percentage

Strongly agree 5 8.9%

Agree 28 50%

Neutral 18 32.1%

Disagree 4 7.2%

Strongly disagree 1 1.8%

Graphs 4.11 Lack of awareness about SBI Mutual Funds

Sources: primary data
Data Interpretation
From the above it is observed that the survey shows;
1. The survey shows 5 (8.9 %) respondents are Strongly Agree.
2. The survey shows 28 (50%) respondents are Agree.
3. The survey shows 18 (32.1%) respondents are Neutral.
4. The survey shows 4 (7.2%) respondents are Disagree.
5. The survey shows 1 (1.8%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

60
12) Complex eligibility requirements.
Table 4.12 Complex eligibility requirements

Opinion Response Percentage

Strongly agree 12 21.4%

Agree 26 46.4%

Neutral 15 26.8%

Disagree 3 5.4%

Strongly disagree 0 0%

Graphs 4.12 Complex eligibility requirements

Sources: primary data
Data Interpretation

From the above it is observed that the survey shows;

1. The survey shows 12 (21.4 %) respondents are Strongly Agree.
2. The survey shows 26 (46.4%) respondents are Agree.
3. The survey shows 15 (26.8%) respondents are Neutral.
4. The survey shows 3 (5.4%) respondents are Disagree.
5. The survey shows 0 (0%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

61
13) Does the factors like Lack of knowledge, Difficulty in selection of scheme,
etc. prevents you from investing in mutual funds
Table 4.13. Does the factors like Lack of knowledge, Difficulty in selection of scheme, etc. prevents you from
investing in mutual funds

Opinion Response Percentage

Strongly agree 10 17.9%

Agree 27 48.2%

Neutral 14 25%

Disagree 2 3.6%

Strongly disagree 3 5.4%

Graphs 4.13. Does the factors like Lack of knowledge, Difficulty in selection of scheme, etc.
prevents you from investing in mutual funds
Sources: primary data
Data Interpretation
From the above it is observed that the survey shows;
1. The survey shows 10 (17.9 %) respondents are Strongly Agree.
2. The survey shows 27 (48.2%) respondents are Agree.
3. The survey shows 14 (25%) respondents are Neutral.
4. The survey shows 2 (3.6%) respondents are Disagree.
5. The survey shows 3 (5.4%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

62
14) Invest in mutual funds based solely on a brief conversation
Table 4.14 Invest in mutual funds based solely on a brief conversation

Opinion Response Percentage

Strongly agree 6 10.7%

Agree 24 42.9%

Neutral 19 33.9%

Disagree 5 8.9%

Strongly disagree 2 3.6%

Graphs 4.14 Invest in mutual funds based solely on a brief conversation

Sources: primary data
From the above it is observed that the survey shows;
1. The survey shows 6 (10.7 %) respondents are Strongly Agree.
2. The survey shows 24 (42.9%) respondents are Agree.
3. The survey shows 19 (33.9) respondents are Neutral.
4. The survey shows 5 (8.9%) respondents are Disagree.
5. The survey shows 2 (3.6%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

63
16) Online user reviews in Mutual Fund help in making quick.
Table 4.15. Online user reviews in Mutual Fund help in making quick

Opinion Response Percentage

Strongly agree 6 10.7%

Agree 27 48.2%

Neutral 17 30.4%

Disagree 3 5.4%

Strongly disagree 3 5.4%

Graphs 4.15. Online user reviews in Mutual Fund help in making quick
Sources: primary data
From the above it is observed that the survey shows;
1. The survey shows 6 (10.7%) respondents are Strongly Agree.
2. The survey shows 27 (48.2%) respondents are Agree.
3. The survey shows 17 (30.4%) respondents are Neutral.
4. The survey shows 3 (5.4%) respondents are Disagree.
5. The survey shows 3 (5.4%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

64
17) Performance of mutual fund.
Table 4.16. Performance of mutual fund

Opinion Response Percentage

Strongly agree 8 15.1%

Agree 20 37.7%

Neutral 19 35.8%

Disagree 4 7.5%

Strongly disagree 2 3.8%

Graphs 4.16. Performance of mutual fund

Sources: primary data
From the above it is observed that the survey shows;
1. The survey shows 8 (15.1%) respondents are Strongly Agree.
2. The survey shows 20 (37.7%) respondents are Agree.
3. The survey shows 19 (35.8%) respondents are Neutral.
4. The survey shows 4 (7.5%) respondents are Disagree.
5. The survey shows 2 (3.8%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

65
18 ) Interested in learning.
Table 4.17. Interested in learning

Opinion Response Percentage

Strongly agree 16 28.6%

Agree 28 50%

Neutral 11 19.6%

Disagree 0 0%

Strongly disagree 1 1.8%

Graphs 4.17. Interested in learning

Sources: primary data
From the above it is observed that the survey shows;
1. The survey shows 16 (28.6%) respondents are Strongly Agree.
2. The survey shows 28 (50%) respondents are Agree.
3. The survey shows 11 (19.6%) respondents are Neutral.
4. The survey shows 0 (0%) respondents are Disagree.
5. The survey shows 1(1.8%) respondents are Strongly Disagree.
According to data, the survey says the larger number of respondents agree that they
prefer mutual funds over other investments.

66
 4.1.2 Hypothesis Testing
Design and Analysis of Experiment - ANOVA
The techniques of analysis of variance are an extension of the test used to test the
equality of several means. In the section results are presented in suitable hypotheses
with relevant interpretation of analysis of variance. Analysis of variance (ANOVA) is
an analysis tool used in statistics that splits an observed aggregate variability found
inside a data set into two parts: systematic factors and random factors. The systematic
factors have a statistical influence on the given data set, while the random factors do
no. Analysts use the ANOVA test to determine the influence that independent
variables have on the dependent variables on the dependent variable in a regression
study. ANOVA is also called the fisher analysis of variance, and it is an extension of
the t-test and z-test.
A) Hypothesis Testing: ANOVA single factor
Hypothesis 1:
H0 - There is no significant contribution to long-term wealth creation for
investors.
H1- There is a significant contribution to long-term wealth creation for
investors.
Table 4.19 ANOVA on significant contribution to long-term wealth creation for
investors.

Groups Count Sum Average Variance

Column 1 56 112 2 0.76363636

Column 2 56 129 2.30357143 0.5788961

Column 3 56 131 2.33928571 0.81006494

Column 4 56 132 2.35714286 0.74285714

Column 5 56 126 2.2 0.7

Column 6 56 134 2.39285714 0.53376623

Column 7 56 124 2.21428571 0.75324675

67
 ANOVA

Sources of SS df Ms F P- value F crit

variation

Between groups 5.87244898 6 0.9787415 1.40322295 0.02121156 2.12213718

Within groups 268.535714 385 0.69749536

Total 274.408163 391

Hypothesis 2:
H0 - There is no correlation between marketing strategies and the structure of mutual
funds.
H2 - There is correlation between marketing strategies and structure of mutual funds.
Table 4.20 ANOVA on correlation between marketing strategies and structure of
mutual funds.

Groups Count Sum Average Variance

Column 1 56 136 2.42857143 0.68571429

Column 2 56 121 2.16071429 0.682792221

Column 3 56 129 2.30357143 0.9788961

Column 4 56 141 2.51785714 0.8724026

Column 5 56 138 2.46428571 0.90779221

Column 6 53 131 2.47169811 0.94629898

Column 7 56 110 1.96428571 0.65324675

ANOVA

Sources of SS DF MS F P- value F crit

variation

Between groups 13.7277723 6 2.28796206 2.79990509 0.0119199 2.12232302

Within groups 312.153976 382 0.81717

Total 325.881748 388

68
 Chapter 5- Conclusion and Suggestion
Conclusion
1. The comparative analysis of mutual funds in ICICI Bank and SBI Bank reveals
distinct characteristics and performance patterns. While both banks offer a
diverse range of mutual fund options, ICICI Bank demonstrates a superior track
record in terms of returns and customer satisfaction.
2. SBI Bank offers competitive options with lower expense ratios and higher
liquidity. Investors must carefully consider their financial goals and risk
tolerance when choosing between these two banks' mutual fund offerings.
Ultimately, the choice between ICICI and SBI mutual funds will depend on
individual preferences and investment objectives.
3. Mutual funds remain a popular and accessible investment option for individuals
seeking diversification, professional management, and ease of entry into the
financial markets. These investment vehicles offer a wide range of choices, from
equity funds to fixed-income funds, catering to various risk appetites and
financial goals. Investors can select funds based on their unique needs, whether
it's long-term wealth accumulation or short-term capital preservation.
4. Mutual funds provide an opportunity to pool resources with other investors,
reducing risk through diversification and benefiting from the expertise of fund
managers. While past performance is not indicative of future results, historical
data and diligent research can help investors make informed decisions when
selecting mutual funds.
5. The comparative analysis of mutual funds offered by ICICI Bank reveals a
robust and diverse selection of investment options. ICICI Bank's mutual fund
offerings are characterized by a strong track record of performance, competitive
expense ratios, and a customer-centric approach.
6. The comparative analysis of mutual funds offered by SBI Bank reveals a diverse
range of investment options catering to various risk profiles and financial goals.
SBI Bank's mutual fund offerings present a competitive edge with lower
expense ratios, making them an attractive choice for cost-conscious investors.

69
 Suggestion
1. Start by clearly defining your financial objectives, risk tolerance, and
investment horizon. Knowing what you want to achieve with your investments
will help you make more targeted comparisons.
2. Examine the historical performance of the mutual funds, looking at returns over
various time periods. Analyze the consistency of performance, as well as how
the funds have fared in different market conditions.
3. Pay attention to the expense ratios of the mutual funds. Lower expense ratios
can lead to higher returns over time, so compare the cost of managing funds
between the two banks.
4. Evaluate the risk associated with each fund by examining metrics like standard
deviation, beta, and Sharpe ratio. This will help you understand how volatile
and risky the funds are.
5. Research the fund managers responsible for each fund's performance. A skilled
and experienced fund manager can make a significant difference in the fund's
success.
6. Consider the size of the funds and their AUM. Larger funds may have more
stability and liquidity, but smaller funds can offer more agility and growth
potential.
7. Understand the investment philosophy and approach of each bank's mutual
funds. Some may focus on long-term growth, while others may prioritize
income generation.
8. If income generation is an important factor for you, compare the dividend
payout history of the funds, including the frequency and consistency of payouts.
9. Be aware of any entry or exit fees, as well as any penalties for early withdrawals.
These charges can impact the overall returns on your investment.
10. Assess the quality of customer service and the ease of accessing information
and managing your investments with both banks. Good customer support can
be invaluable.
11. Consider the tax implications of your investments, including capital gains tax
and dividend distribution tax. Different funds may have varying tax structures.
12. Ensure that both banks and their mutual funds are compliant with all regulatory
requirements and guidelines. This can indicate a commitment to transparency
and accountability.

70
 Bibliography and References

Hayes, A.
Hayes, A. (n.d.). Mutual Funds: Different Types and How They Are Priced. Retrieved
from https://www.investopedia.com/terms/m/mutualf

A project report on comparative study of mutual funds in India. (n.d.). Retrieved from
https://www.slideshare.net/hemanthcrpatna/a-project-report-on-comparative-study-of-
mutual-funds-in-india

Comparative study of mutual funds in India. (n.d.). Retrieved from

https://www.slideshare.net/rahultodur7/comparative-study-of-mutual-funds-in-india

(N.d.). Retrieved from https://www.ijbmi.org/papers/Vol(6)9/Version-1/J0609017385.pdf

Dhanashree, K. (2015). Comparative analysis of ICICI and SBI. Retrieved from

https://www.academia.edu/16856132/Comp

71
Appendices
Questionnaire

Gender
● Male
● Female

Age
● 21-30
● 31-40
● 41-50
● 50 and above

Annual income range

● Less than - 500000
● 500000 - 700000
● 700000 - 1000000
● 1000000 - above

1) Would you prefer mutual funds over other investment options like stocks, etc?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

2) Can you take the risk of having your principal investment amount?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

72
3) Do you have knowledge of various schemes of Mutual funds in the market?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

4) Are there risks associated with Mutual Funds ?

● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

5) Considering the principles like Finding about its past performance, Identifying
your own objectives, etc. while selecting Mutual funds is essential?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

6) Mutual Funds are the safest Investment option. What do you think?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

7) Based on what you've heard from others, do you believe there is a general lack
of awareness about ICICI Mutual Funds options among the public ?
● Strongly agree
● Agree
● Neutral

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● Disagree
● Strongly disagree

8) Based on what you've heard from others, do you believe there is a general lack
of awareness about SBI Mutual Funds options among the public ?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

9) Does education play an important role while understanding the complex

eligibility requirements for different types of mutual funds?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

10) In your opinion, do factors like Lack of knowledge, Difficulty in selection of

scheme, etc prevent you from investing in mutual funds?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

11) Do you invest in mutual funds based solely on a brief conversation with a
friend, co-worker or relative?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

74
12) Does Online user reviews in Mutual Funds help in making quick and
appropriate decisions?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

13) Are you satisfied with the performance of the mutual fund in which you have
invested?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

14) Are you interested in learning about new mutual funds schemes?
● Strongly agree
● Agree
● Neutral
● Disagree
● Strongly disagree

75