A

PROJECT REPORT
ON
A STUDY TO ASSSESS THE PERCEPTION OF
MUTUAL FUND INVESTORS w.s.r to BAJAJ CAPITAL

Department of Management Studies

Submitted in Partial Fulfillment of the Requirement for the Degree of

Bachelor of Business Administration
SUBMITTED TO: SUBMITTED BY:
DR SMRITI TANDON STUDENT NAME: Anubhav Dawer
PROFESSOR Enrollment Number: GE-21243573
GEU Semester: 5

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2
 DECLARATION

I, Anubhav Dawer undersigned solemnly declare that the report of the project
work entitled “STUDY TO ACCESS THE PERCEPTION OF MUTUAL
FUND INVESTORS” is based on own work carried out during my study
under the supervision of DR SMRITI TANDON

These statements and conclusion are a direct result of the project’s work. I
further declare that to the best of knowledge and belief that the project report
does not contain any part of any work which has been submitted for the award
of any other degree/diploma/certificate in this University or any other
University.

DATE: ANUBHAV DAWER

BBA (2021-24)
PLACE: Dehradun

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 GUIDE CERTIFICATE

This is to certify that the topic entitled “Perception of mutual fud investors with
respect to Bajaj capital”

is a record of research work carried out by Anubhav Dawer, during the period
of his

study under my guidance and supervision. The Research Project Report has
reached

the standard of fulfilling the requirements of the regulations relating to the

Bachelor of Business Administration (BBA) degree at Graphic Era (Deemed to

be University).

Place: Dehradun Signature of Guide

Date: DR.SMRITI TANDON

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 ACKNOWLEDGEMENT

This project report would not have been possible without the direction and
assistance of several persons, who in one way or other, contributed and
prolonged their appreciated support in the preparation and accomplishment of
this study. It is a pleasure to express my thankfulness to them all in my humble
acknowledgement.

First and foremost, I offer my extreme gratitude to my guide DR. SMRITI

TANDON, for her excellent guidance and support from the very early stages of
this study as well as giving me amazing experience during the work. Her
supportive nature motivated me and helped me all the time during the research
and writing this project report.

I would also like to thank the librarian and staff members of GRAPHIC ERA
DEEMED TO BE UNIVERSITY, Dehradun for providing me the required
books in this field and my friend who were always there to assist me at odd
hours.

ANUBHAV DAWER

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 EXECUTIVE SUMMARY

India’s economy is highly developing. The development is taken place due to the growth in
the financial system. This financial system provides the background to various investors
regarding varied options to invest. Thus, development of the economy depends on how these
investors invest for the well being in long run.

As financial markets become more sophisticated and complex, investors need a financial
intermediary who provides the required knowledge and professional expertise on successful
investing. Mutual Funds represent perhaps the most appropriate investment opportunity for
investors. No wonder the concept of Mutual Fund was initially developed in the U.S. market,
but the entry of the concept in the Indian Financial Market was in the year 1964 with the
formulation of the UTI, at the initiative of the RBI and Govt. of India.

For most people, money is a delicate matter and when it comes to investing they are wary.
Simply because there are many investment options out there, each out promising the other.
An important question facing many investors is whether to invest in Banks, National
Savings, Post office, Non-banking finance companies, Fixed deposits, Shares etc. or to invest
distinctively in Mutual Funds.

It has been perceived that there is huge potential market in the region of Dehradun. Thus an
exploratory research with the hypothesis “The region of Dehradun being progressively
industrializing & developing should provide a large & wider market share for Mutual Fund”
has been done.

Thus the purpose of this research was to find why people do not actively invest in mutual
fund in spite of various benefits like Professional management, Diversification, Convenience

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liquidity, Flexibility, Tax benefits etc. as well as to find out potential of business of BAJAJ
CAPITAL in distribution of Mutual Fund in Dehradun.

After performing the detailed exploratory research by interviewing different persons who act
as investment advisor like Insurance advisor and Post office advisor etc. with the help of
questionnaire, certain facts were revealed regarding the view about Mutual Funds in the mind
of investors.

I have observed that approximately 60% of the people are unaware of Mutual Funds but most
of them are interested to know about Mutual Funds and ready to attend seminar arranged by
BAJAJ CAPITAL. They are also interested to work with BAJAJ CAPITAL if sufficient
information is provided to them about Mutual Fund and BAJAJ CAPITAL.

People from service class prefers safety of income plus the regular income as well as tax
benefits while on the other hand Professional and Businessman focus on high return with
some risk.

For growth and development of the Mutual Fund Industry, the misconception regarding
Mutual Fund should be removed & the awareness for the same should be made.

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 TABLE OF CONTENTS

TITLE

Company Certificate

Executive Summary

Table of Contents
Chapter 1: INTRODUCTION TO TOPIC

Chapter 2: COMPANY PROFILE

Chapter 3: RESEARCH OBJECTIVE AND METHODOLOGY

Chapter 4: DATA ANALYSIS AND INTERPRETATION

Chapter 5: FINDINGS, RECOMMANDATIONS,

CONCLUSION
Annexure:
a) Questionnaire
b) Bibliography

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 INTRODUCTION

MUTUAL FUND INDUSTRY ANALYSIS

Investment is a commitment of funds in real assets or financial assets. Investment involves
risk and gain. In the present dynamic global environment, exploring investment avenues are
of great relevance. The success of an investment activity depends on the knowledge and
ability of investors to invest, the right amount, in the right type of investment, at the right
time .
The knowledge of financial investment and the art of its management are the basic
requirements for a successful investor. The pre-requisite for a successful investment also lies
in its liquidity, apart from risk and return on investment. Liquidity through easy marketability
of investments demands the existence of a well-organized Government regulated financial
system. Financial services sector is the nucleus of the growth model designed for the
economic development of a country. Over the years, the financial services in India have
undergone revolutionary changes and had become more sophisticated, in response to the
varied needs of the economy.
The process of financial sector reforms, economic liberalization and globalization of Indian
Capital Market had generated and augmented the interest of the investors in equity. But, due
to inadequate knowledge of the capital market and lack of professional expertise, the
common investors are still hesitant to invest their hard earned money in the corporate
securities. The advent of mutual funds has helped in garnering the investible funds of this
category of investors in a significant way. As professional experts manage mutual funds,
investment in them relieves investors from the emotional stress involved in buying and
selling of securities.
The Indian capital market having a long history spanning over a century had passed through
the most radical phase. The Indian Capital Market witnessed unprecedented developments
and innovations during the eighties and nineties. One such development was the increased
role the mutual fund industry played in financial intermediation. Mutual fund, as an
institutional device, pools investor’s funds for investment in the capital market under the
direction of an investment manager. Mutual funds bridge the gap between the supply and
demand for funds in the financial market.

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India has become the world’s fourth largest economy besides U.S.A., China, and Japan.
Although the Indian capital market witnessed some significant changes during the eighties,
both the primary and the secondary segments continued to suffer from some serious
deficiencies. Many unhealthy practices prevailed in the primary market to attract retail
investors.
It was not a particularly easy year for the mutual fund industry. Regulatory changes at a
frequency that was hard to keep pace with, fund manager churns, big ticket takeover and the
constant uncertainty on the interest rate front that kept debt managers guessing, all caused
plenty of anxious moments for the investor community as well. Yet, focus on performance
helped funds garner market-beating returns, thanks to the bounce back in the equity market
and the price rally in some debt instruments in 2012.

MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors who
share a common financial goal. The money thus collected is invested by the fund manager in
different types of securities depending upon the objective of the scheme.

These could range from shares to debentures to money market instruments. The
income earned through these investments and the capital appreciation realized by the scheme
are shared by its unit holders in proportion to the number of units owned by them (pro rata).

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Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed portfolio at a relatively low
cost. Anybody with an investible surplus of as little as a few thousand rupees can invest in
Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.
Mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real estate,
derivatives and other assets have become mature and information driven. Price changes in
these assets are driven by global events occurring in faraway places.
A typical individual is unlikely to have the knowledge, skills, inclination and time to
keep track of events, understand their implications and act speedily. An individual also finds
it difficult to keep track of ownership of his assets, investments, brokerage dues and
bank transactions etc. Draft offer document is to be prepared at the time of launching the
fund. Typically, it pre specifies the investment objectives of the fund, the risk associated,
the costs involved in the process and the broad rules for entry into and exit from the fund
and other areas of operation. In India, as in most countries, these sponsors need approval
from a regulator, SEBI (Securities exchange Board of India) in our case.

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SEBI looks at track records of the sponsor and its financial strength in granting approval to
the fund for commencing operations.
A sponsor then hires an asset management company to invest the funds according to the
investment objective. It also hires another entity to be the custodian of the assets of the fund
and perhaps a third one to handle registry work for the unit holders (subscribers) of the fund.
In the Indian context, the sponsors promote the Asset Management Company
also, in which it holds a majority stake. In many cases a sponsor can hold a 100% stake in the
Asset Management Company (AMC). E.g. Birla Global Finance is the sponsor of the Birla
Sun Life Asset Management Company Ltd., which has floated different mutual funds
schemes and also acts as an asset manager for the funds collected under the schemes.
ORGANIZATION OF A MUTUAL FUND
A Mutual Fund is set up in the form of trust, which has sponsor, trustees,
asset management company (AMC), and custodian. The trust is established by
sponsor or more than one sponsor who is like a promoter of company. The trustee of mutual
fund holds its property for the benefit of unit holders. Asset Management Company (AMC)
approved by SEBI manages the funds by making investments in various types of securities.
Custodian, who registered with SEBI, holds the securities of the fund in its custody. The
trustees are vested with the general power of superintendence and direction over AMC. They
monitor the performance and compliance of SEBI regulations by mutual fund.
SEBI regulations required that at least two thirds of the directors of trustee
company or board of trustees must be independent i.e. they should not be
associated with sponsors. Also, 50% of the directors of the AMC must be
independent. All mutual funds are required to be registered with SEBI before they launch
their schemes.
MUTUAL FUND STRUCTURE
The structure of mutual funds in India is governed by the SEBI Regulations,
1996. These regulations make it mandatory for mutual funds to have a 3-tier structure of
Sponsors- Trustee-AMC (Asset Management Company). The Sponsor is the
promoter of mutual fund, and appoints the Trustee. The Trustees are responsible to the
investors in the mutual funds, and appoint the AMC for managing the investment portfolio.

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The AMC is the business face of the mutual funds, as it manages all the affairs of mutual
funds. The mutual funds and AMC have to be registered by the SEBI.
Sponsor
A sponsor is a body corporate who establishes a mutual fund. It may be one person acting
alone or together with another body corporate. Sponsor must contribute at least 40% of the
net worth of the Investment Managed and meet the eligibility criteria prescribed under the
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is
not responsible or liable for any loss or shortfall resulting from the operation of the Schemes
beyond the initial contribution made by it towards setting up of the Mutual Fund
Board of Trustee:
Mutual fund requires to have an independent board of Trustee, where two third of the trustees
should be independent person who are not associated with the sponsor in any manner. The
board of trustees of the trustee company holds the property of the mutual fund in trust for the
benefit of the unit holders. The board of trustees is responsible for protecting the unit
holder’s interest.
Asset Management Company (AMC)
The role of asset Management Company is highly significant in the mutual fund operation.
The AMC is appointed by the Trustee. They are the fund managers i.e. they invest the
investors money in various securities ( equity, debt and money market instruments) after
proper research of market conditions and the financial performance of individual
companies and specific securities in the efforts to meet or beat average market
return and analysis. The AMC is required to be approved by the Securities and
Exchange Board of India (SEBI) to act as an asset management company of the Mutual
Fund. At least 50% of the directors of the AMC are independent directors who are not
associated with theSponsor in any manner. The AMC must have a net worth of at least 10
crores at all times. They also look after the administrative functions of a mutual fund for
which they charge management fee.
Registrar and Transfer Agent
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to
the Mutual Fund. The Registrar processes the application form, redemption requests and
dispatches account statements to the unit holders.

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Custodian
Mutual fund is required by law to protect their portfolio securities by splacing them with a
custodian. Nearly all mutual funds use qualified bank custodians. Only a registered custodian
under the SEBI regulation can act as a custodian to a mutual fund.A custodian handles the
investment back office of a mutual fund.
Fee structure:-
Custodian charges range between 0.15% to 0.20% on the net value of the customer’s holding
for custodian services space is one important factor which has fixed cost element.
RESPONSIBILITY OF CUSTODIANS: -
 Receipt and delivery of securities
 Holding of securities.
 Collecting income
 Holding and processing cost
 Corporate actions etc

RATE OF RETURN ON MUTUAL FUNDS:-

An investor in mutual fund earns return from two sources:
 Income from dividend paid by the mutual fund.
 Capital gains arising out of selling the units at a price higher than the acquisition
price.

Formation and regulations:

 Mutual funds are to be established in the form of trusts under the Indian trusts act and
are to be operated by separate asset management companies (AMC s)
 AMC’s shall have a minimum Net worth of Rs. 5 crores;
 AMC’s and Trustees of Mutual Funds are to be two separate legal entities and that an
AMC or its affiliate cannot act as a manager in any other fund;
 Mutual funds dealing exclusively with money market instruments are to be regulated
by the Reserve Bank Of India.
 Mutual fund dealing primarily in the capital market and also partly money market
 instruments are to be regulated by the Securities Exchange Board Of India (SEBI)
 All schemes floated by Mutual funds are to be registered with SEBI

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CHARACTERISTICS:
 Professional management
 Diversification
 Convenient Administration
 Return potential
 Low cost
 Liquidity
 Transparency
 Flexibility
 Choice in scheme selection
 Well regulated
 Tax benefits

ADVANTAGES OF MUTUAL FUND

 Portfolio Diversification
Mutual Funds invest in a well-diversified portfolio of securities which enables investor to
hold a diversified investment portfolio (whether the amount of investment is big or
small).

 Professional Management
Fund manager undergoes through various research works and has better
investment management skills which ensure higher returns to the investor than what
he can manage on his own.
 Less Risk
Investors acquire a diversified portfolio of securities even with a small investment in a
Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3
securities.

 Low Transaction Costs

Due to the economies of scale (benefits of larger volumes), mutual funds pay lesser
transaction costs. These benefits are passed on to the investors.
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 Liquidity
An investor may not be able to sell some of the shares held by him very easily and
quickly, whereas units of a mutual fund are far more liquid.

 Choice of Schemes
Mutual fund provide investors with various schemes with different investment
objectives. Investors have the option of investing in a scheme having a correlation
between its investment objectives and their own financial goals. These schemes further
have different plans/options.

 Transparency
Funds provide investors with updated information pertaining to the markets and
the schemes. All material facts are disclosed to investors as required by the regulator.

 Flexibility
Investor also benefit from the convenience and flexibility offered by Mutual
Funds. Investors can switch their holdings from a debt scheme to an equity scheme and
vice-versa. Option of systematic (at regular intervals) investment and withdrawal is also
offered to the investors in most open-end scheme

 Safety
Mutual Fund industry is part of a well-regulated investment environment where
the interests of the investors are protected by the regulator. All funds are registered with
SEBI and complete transparency is forced.

DISADVANTAGES OF MUTUAL FUND

 Costs Control Not in the Hands of an Investor

Investor has to pay investment management fees and fund distribution costs as
a percentage of the value of his investments (as long as he holds the units), irrespective
of the performance of the fund.
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 No Customized Portfolios

The portfolio of securities in which a fund invests is a decision taken by the fund
manager. Investors have no right to interfere in the decision making process of a fund
manager, which some investors find as a constraint in achieving their financial objectives.
 Difficulty in Selecting a Suitable Fund Scheme

Many investors find it difficult to select one option from the plethora
of funds / schemes / plans available. For this, they may have to take advice from
financial planners in order to invest in the right fund to achieve their objectives.

TYPES OF MUTUAL FUNDS

Schemes according to maturity period :

A mutual fund scheme can be classified into open-ended scheme or close

ended scheme depending on its maturity period.

 Open ended fund/scheme:

An open-ended fund or scheme is one that is available for subscription and
repurchase on a continuous basis. These schemes not have a fixed maturity period.
Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices
which are on a daily basis. The key feature of open-end schemes is liquidity.

 Close ended Fund/scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The
fund is open for subscription only during a specified period at the time of launch of
the scheme. Investors can invest in the scheme at the time of the initial public issue
and thereafter they can buy or sell the units of the scheme on the stock exchanges
where the units are listed. In order to provide an exit route to the investors some close
ended funds give an option of selling back the units to the mutual fund through
periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least
one of the two exit routes is provided to the investors i.e. either repurchase facility or

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 through listing on stock exchanges. These mutual funds schemes disclose NAV
generally a weekly basis.

Schemes according to investment objective :

A scheme can also be classified as growth scheme, income scheme, or balance
scheme considering its investment objective. Such schemes may be open-ended or close-
ended scheme as described earlier. Such schemes may be classified mainly as follows:

 Equity funds: These funds invest in equities and equity related instruments. With
fluctuating share prices, such funds show volatile performance, even losses.

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However, short term fluctuations in the market, generally smoothens out in the long term,
thereby offering higher returns at relatively lower volatility. At the same time, such funds can
yield great capital appreciation as, historically, equities have outperformed all asset classes in
the long term. Hence, investment in equity funds should be considered for a period of at least
3-5 years. It can be further classified as:

 Growth Fund:Aim to provide capital appreciations over the medium to long term.
These schemes normally invest a majority of their funds in equities and are willing to
bear short term decline in value for possible future appreciation. These schemes are
not for investors seeking regular income or needing their money back in the short
term.

 Diversified Equity Fund:Diversified equity funds are the most popular

among investors. They invest in many stocks across many sectors, and because they
have the freedom to chop and churn their portfolios as they like, diversified equity
funds are a good proxy to the stock market. If a general exposure to equities is what
you want, they are a good option. They can invest in all listed stocks, and even in
unlisted stocks. They can invest in which ever sector they like, in whatever ratio they
like.

 Equity – Linked Savings Schemes (ELSS): Equity – linked savings schemes

(ELSS) are diversified equity funds that additionally offer income tax benefits to
individuals. ELSS is one of the many section 80c instruments, along with the more
popular debt options like the PPF, NSC and infrastructure bonds. In this Section 80c
grouping. ELSS is unique. Being the only instrument to offer a total equity exposure.

 Index Fund: An index fund is a diversified equity fund; with a difference- a fund
manager has absolutely no say in stock selection. At all times, the portfolio of an
index fund mirrors an index, both in its choice of stocks and their percentage holding.
As of March 2004, equity index funds tracked either the sensex or the Nifty. So, an

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 index fund that mirrors the Sensex will invest only in the 30 sensex stocks, which too
in the same proportion as their weight age in the index.

 Sector Fund: Sector funds invest in stocks from only one sector, or a handful of
sectors. The objective is to capitalize on the story in the sectors, and offer investors a
window to profit from such opportunities. It’s a very narrow focus, because of which
sector funds are considered the riskiest among all equity funds.

 Mid – Cap Fund: These are diversified funds that target companies on the fast –
growth trajectory. In the long run, share prices are driven by growth in a company’s
turnover and profits. Market players refer to them as ‘mid-sized companies’ and
‘mid-cap stocks’ with size in this context being benchmarked to a company’s market
value. So, while a typical large cap stock would have a market capitalization of
over Rs 1,000 crores, a mid-cap stock would have a market value of Rs 250-2,000
crores.

DEBT FUNDS:-These Funds invest a major portion of their corpus in debt

papers. Government authorities, private companies, banks and financial institutions are
some of the major issuers of debt papers. By investing in debt instruments, these funds
ensure low risk and provide stable income to the investors.

Debt funds are further classified as:

 Gilt Funds: Invest their corpus in securities issued by Government,

popularly known as GOI debt papers. These Funds carry zero Default risk but are
associated with Interest Rate risk. These schemes are safer as they invest
in papers backed by Government.

 Income Funds: Income funds aim to maximize debt returns for the medium to longer
term. Invest a major portion into various debt instruments such as
bonds, corporate debentures and Government securities.

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  MIPs: Invests around 80% of their total corpus in debt instruments while the rest of
the portion is invested in equities. It gets benefit of both equity and debt market.
These scheme ranks slightly high on the risk-return matrix when compared with other
debt schemes.

 Short Term Plans (STPs): Meant for investors with an investment horizon of 3-6
months. These funds primarily invest in short term papers like Certificate of
Deposits (CDs) and Commercial Papers (CPs). Some portion of the
corpus is also invested in corporate debentures.

 Liquid Funds: Also known as Money Market Schemes, These funds are meant to
provide easy liquidity and preservation of capital. These schemes invest in shortterm
instruments like Treasury Bills, inter-bank call money market etc. These
funds are meant for short-term cash management of corporate houses and
are meant for an investment horizon of 1day to 3 months. These schemes rank
low on risk-return matrix and are considered to be the safest amongst all categories of
mutual funds.

 Floating Rate Funds: These income funds are more insulated from interest rate than
their conventional peers. In other words, interest rate changes, which cause the NAV
of a conventional debt fund to go up or down, have little, or no, impact on NAVs of
floating rate funds.

HYBRID FUNDS:-
 BALANCED FUNDS:-These funds, as the name suggests, are a mix of
both equity and debt funds. The aim of balanced funds is to provide both growth and
regular income as such schemes invest both in equities and fixed income
securities in the proportion indicated in their offer documents. These are
appropriate for investors looking for moderate growth. They generally
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 invest 40-60% in equity and debt instruments. These funds are also affected
because of fluctuations in shares prices in the stock markets. However, NAVs of such
funds are likely to be less volatile compared to pure equity funds. Following are
balanced funds classes:-
a. Debt-oriented funds -Investment below 65% in equities.
b. Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

 Growth and Income Fund: Funds that combine features of growth funds and
income funds are known as Growth-and-Income Funds. These funds invest in
companies having potential for capital appreciation and those known for issuing
high dividends. The level of risks involved in these funds is lower than
growth funds and higher than income funds.
 Commodity Funds
Those funds that focus on investing in different commodities (like metals, food
grains, crude oil etc.) or commodity companies or commodity futures contracts
are termed as Commodity Funds. A commodity fund that invests in a single
commodity or a group of commodities is a specialized commodity fund and a
commodity fund that invests in all available commodities is a diversified
commodity fund and bears less risk than a specialized commodity fund.
"Precious Metals Fund" and Gold Funds (that invest in gold, gold futures or shares of
gold mines) are common examples of commodity funds.

 Real Estate Funds

Funds that invest directly in real estate or lend to real estate developers or
invest in shares/securitized assets of housing finance companies, are known as
Specialized Real Estate Funds. The objective of these funds may be to generate
regular income for investors or capital appreciation.
 Exchange Traded Funds (ETF)
Exchange Traded Funds provide investors with combined benefits of a closed-end
and an open-end mutual fund. Exchange Traded Funds follow stock market indices
and are traded on stock exchanges like a single stock at index linked prices. The
biggest advantage offered by these funds is that they offer diversification, flexibility
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 of holding a single share (tradable at index linked prices) at the same time. Recently
introduced in India, these funds are quite popular abroad.
 Fund of Funds
Mutual funds that do not invest in financial or physical assets, but do invest in other
mutual fund schemes offered by different AMCs, are known as Fund of Funds.
Fund of Funds maintain a portfolio comprising of units of other mutual
fund schemes, just like conventional mutual funds maintain a portfolio
comprising of equity/debt/money market instruments or non financial assets. Fund
of Funds provide investors with an added advantage of diversifying into different
mutual fund schemes with even a small amount of investment, which further helps in
diversification of risks. However, the expenses of Fund of Funds are quite high on
account of compounding expenses of investments into different mutual fund schemes.

INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of money is invested in accordance with a stated objective. The joint
ownership of the fund is thus “Mutual”, i.e. the fund belongs to all investors. The money thus
collected is then invested in capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital appreciations
realized are shared by its unit holders in proportion the number of units owned by them. Thus
a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. A Mutual Fund is an investment tool that allows small investors access to
a well-diversified portfolio of equities, bonds and other securities. Each shareholder
participates in the gain or loss of the fund. Units are issued and can be redeemed as needed.
The funds Net Asset value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of industries and sectors and
thus the risk is reduced. Diversification reduces the risk because all stocks may not move in
the same direction in the same proportion at the same time. Mutual fund issues units to the

23
investors in accordance with quantum of money invested by them. Investors of mutual funds
are known as unit holders.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the
assets of the fund in the same proportion as his contribution amount put up with the corpus
(the total amount of the fund). Mutual Fund investor is also known as a mutual fund
shareholder or a unit holder.

Any change in the value of the investments made into capital market instruments (such as
shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is
defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of
a scheme is calculated by dividing the market value of scheme's assets by the total number of
units issued to the investors.

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ADVANTAGES OF MUTUAL FUND

 Portfolio Diversification
 Professional management
 Reduction / Diversification of Risk
 Liquidity
 Flexibility & Convenience
 Reduction in Transaction cost
 Safety of regulated environment
 Choice of schemes
 Transparency

DISADVANTAGE OF MUTUAL FUND

 No control over Cost in the Hands of an Investor

 No tailor-made Portfolios
 Managing a Portfolio Funds
 Difficulty in selecting a Suitable Fund Scheme

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at
the initiative of the Government of India and Reserve Bank. Though the growth was slow,
but it accelerated from the year 1987 when non-UTI players entered the Industry.

In the past decade, Indian mutual fund industry had seen a dramatic improvement, both
qualities wise as well as quantity wise. Before, the monopoly of the market had seen an
ending phase; the Assets Under Management (AUM) was Rs67 billion. The private sector
entry to the fund family raised the Aum to Rs. 470 billion in March 1993 and till April 2004;
it reached the height if Rs. 1540 billion.

25
The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund
industry can be broadly put into four phases according to the development of the sector. Each
phase is briefly described as under.

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve
Bank of India and functioned under the Regulatory and administrative control of the Reserve
Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development
Bank of India (IDBI) took over the regulatory and administrative control in place of RBI.
The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had
Rs.6,700crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). BC Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund
(Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund
in December 1990.At the end of 1993, the mutual fund industry had assets under
management of Rs.47,004crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

1993 was the year in which the first Mutual Fund Regulations came into being, under which
all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari
Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund
registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI

26
(Mutual Fund) Regulations 1996. As at the end of January 2003, there were 33 mutual funds
with total assets of Rs. 1,21,805crores.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29,835crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other schemes

The second is the UTI Mutual Fund Ltd, sponsored by BC, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. consolidation and
growth. As at the end of September, 2004, there were 29 funds, which manage assets of
Rs.153108 crores under 421 schemes.

CATEGORIES OF MUTUAL FUND:

27
Mutual funds can be classified as follow:

 Based on their structure:

 Open-ended funds: Investors can buy and sell the units from the fund, at any point
of time.
 Close-ended funds: These funds raise money from investors only once. Therefore,
after the offer period, fresh investments can not be made into the fund. If the fund is
listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley
Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided
liquidity window on a periodic basis such as monthly or weekly. Redemption of units
can be made during specified intervals. Therefore, such funds have relatively low
liquidity.

 Based on their investment objective:

Equity funds: These funds invest in equities and equity related instruments. With
fluctuating share prices, such funds show volatile performance, even losses.
However, short term fluctuations in the market, generally smoothens out in the long
term, thereby offering higher returns at relatively lower volatility. At the same time,
such funds can yield great capital appreciation as, historically, equities have
outperformed all asset classes in the long term. Hence, investment in equity funds
should be considered for a period of at least 3-5 years. It can be further classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is
tracked. Their portfolio mirrors the benchmark index both in terms of composition
and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading
across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that
they invest in companies offering high dividend yields.
28
 iv) Thematic funds- Invest 100% of the assets in sectors which are related through
some theme.
e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking
sector fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the
risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds
vehicle for investors who prefer spreading their risk across various instruments. Following are
balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund: They invest only in debt instruments, and are a good option for investors averse
to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-
income instruments like bonds, debentures, Government of India securities; and money
market instruments such as certificates of deposit (CD), commercial paper (CP) and call
money. Put your money into any of these debt funds depending on your investment horizon
and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large
portion being invested in call money market.

ii)Gilt funds ST- They invest 100% of their portfolio in government securities of
and T-bills.

iii)Floating rate funds - Invest in short-term debt papers. Floaters invest in debt
instruments which have variable coupon rate.

29
 iv)Arbitrage fund- They generate income through arbitrage opportunities due to
mis-pricing between cash market and derivatives market. Funds are allocated to
equities, derivatives and money markets. Higher proportion (around 75%) is put in
money markets, in the absence of arbitrage opportunities.

v)Gilt funds LT- They invest 100% of their portfolio in long-term government
securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio
in long-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an
exposure of 10%-30% to equities.

viii)FMPs- fixed monthly plans invest in debt papers whose maturity is in line with
that of the fund.

INVESTMENT STRATEGIES

1. Systematic Investment Plan: under this a fixed sum is invested each

month on a fixed date of a month. Payment is made through post datedcheques
or direct debit facilities. The investor gets fewer units when the NAV is high
and more units when the NAV is low. This is called as the benefit of Rupee
Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt oriented

fund and give instructions to transfer a fixed sum, at a fixed interval, to an
equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a

mutual fund then he can withdraw a fixed amount each month.

30
RISK V/S. RETURN:

31
 COMPANY PROFILE
Bajaj Capital Limited (“Bajaj Capital”) is India’s premier “Investment Services” Company
with nearly 50 years of experience in helping people protect and grow their wealth. We’ve
helped to create more millionaires than any other firm in India. But it’s our deep personal
relationship with clients that truly sets us apart.
No other firm can match the depth of our experience and our dedication to personal service.
The markets may fluctuate, but our dependability never does.
Bajaj Capital has been granted the Certificate of Registration (“CoR”) by the Securities and
Exchange Board of India to carry on the business of Merchant Bankers, Underwriter, Stock
broker, as trading member of BSE Ltd, Depository participant of NSDL. Further, Bajaj Capital
has been granted the CoR by AMFI to carry on the business of distribution of mutual funds and
has also been granted the CoR to act as Point of Presence by the Pension Fund Regulatory
Authority for the NPS schemes.

Our Bouquet of services includes:

Personalized Investment Services: Requires creating a customizes ‘snapshot’ using our
proprietary 360 degree financial assessment tool, at no extra charge.
360 Degree Financial Assessment Tool is a unique scientific method that takes an all round
view of investments using 3 steps:
a) Need Analysis:
“Know Your Client” principle is at the heart of our business. We believe that we need to
know our clients risk profile, basic financial situation, to present them the right selection of
investment products/schemes.
b) Scheme Selection:
We will use our best judgement and ability to present you with the best of the breed
investment schemes, for you to choose from.
c) Efficient Execution:
Our service really begins when you have completed your first transaction through us. Our
aim is to be continuously in touch with you with new offerings.

32
 Bajaj Capital is a distributor of financial products and is remunerated by the product
providers. Bajaj Capital is not an investment adviser or financial planners.
Incredible range of Financial Products
As distributors of financial products, we are truly unbiased in scheme selection and help in
efficient execution of transactions
Hassle-free Administration
Timely updates, regular portfolio reviews and 24*7 online call centre support to keep your
investments on track.
Pan-India Presence:
With over 120 offices in 70 cities across India, We strive to maintain a constituency of
relationship and experience, So if you happen to relocate there will be a nearby Bajaj Capital
Office with the same standard of service.

WHY BAJAJ CAPITAL

 SEBI Licensed category, Merchant Banker, ARN Holder, DP of NSDL
 Nearly 50 years of experience in helping people protect and grow their wealth.
 We help in need analysis, scheme selection and efficient execution through our
proprietary 360 Degree Financial Assessment Tool.
 We offer an incredibly diverse range of financial products and personalized services.
 Over 120 offices in 70 cities across India, to maintain a consistency of relationship and
experience.
 Strong team of Qualified and experienced professionals including CA’s , MBA’s ,
MBE’s , CFP’s , CS’s , Legal Experts and Others.
 Our group company(ies) include Bajaj Capital Insurance Broking Limited is an IRDA-
licensed composite insurance broker, Just Trade Securities Limited, member of NSE and BSE,
Bajaj Capital Investment Centre Limited, which facilitates realty solutions.
 Serving over 10 lakh client.

33
 MISSION, VISSION & AIMS
MISSION STATEMENT
Bajaj Capital aims to be the most useful, reliable and efficient provider of Financial services.
It is our continuous endeavour to be a trustworthy partner to our clients, helping them
protect and grow their wealth, and achieve their life goals.

AIM
 To serve our clients with utmost dedication and integrity so that we exceed their expectations
and build enduring relationships.
 To offer unparalleled quality of service through complete knowledge of products, constant
innovation in services and use of the latest technology.
 To always give honest and unbiased financial solutions and earn our client’s everlasting trust.
 To serve the community by educating individuals on the merits of investments and in turn
help shape a financially responsible citizen.
 To create value for all stake holders by ensuring profitable growth.
 To build an amicable environment that accords respect to every individual and permits their
personal growth.
 To utilize the power of teamwork to function as a family and bulid a seamless organisation

VISION STATEMENT
Our vision is to be the most preferred investment services company in India by providing
clients with informed choices of lasting value, protect and grow wealth for them, to make their
tomorrow better than today.

What does the logo of Bajaj Capital depicts?

The logo of Bajaj capital depicts Lord Ganesha who is the source of all their value
and ethics in business.

34
  The large ears of Lord Ganesha remind us to hear more. We listen carefully to our
clients to understand their needs.
 The weight of the trunk on the mouth symbolises silence. We work silently, without
blowing our own trumpet.
 The long trunk symbolises continuous exploration. We explore all avenues to provide
the best investment opportunities for our clients.
 The heavy posture of Ganeshasymbolises stability. We help our clients to attain
financial stability through wise investments.
 Lord Ganesha is known as the remover of obstacles and bestower of prosperity. We
emulate his example and try our best to help our clients attain prosperity by proper need
analysis, scheme selection and efficient execution.
 Our logo has a yellow background. Yellow is the colour of gold, which symbolises
wealth. According to vedic lore, it is also the colour associated with Brihaspati, the guru and
counsellor of the Gods. We offer our clients sage counsel to make their wealth grow.
 The letters are in red colour- symbolising power and incessant activity. It symbolises
our aggressive quest for your well-being and happiness.
 The white streak represents the trunk of Lord Ganesha. White is the colour of
satvaguna, and implies our selfless commitment to your life long happiness

WHO’S WHO AT BAJAJ CAPITAL

Mr. K.K. Bajaj (Chairman)
A visionary par excellence, a pioneer and a leader, Mr K.K. Bajaj has been instrumental in
shaping Bajaj Capital’s emergence as one of India’s largest Investment Advisory companies.

He is a highly respected figure in the field of institutional and personal finance and Company
FDs. His emphasis on honesty, ethics and values are the guiding principles of the
organisation.
Mr Bajaj is also a prolific writer and has written over 200 articles on diverse issues such as
Personal Finance, Economic Affairs, and Health.

35
Mr. Rajiv Deep Bajaj (Vice Chairman & Managing Director)

A qualified Financial Planner, Mr Rajiv Deep Bajaj was the first to introduce the concept of
Financial Planning in India. In fact, he is the Founding Chairman of the Association of
Financial Planners (AFP). He is also amongst the first batch of 25 Certified Financial
Planners (CFP tm) designation holders in India. A Post-graduate in Management and holder
of an International Certificate for Financial Advisors from the Chartered Insurance Institute,
London, Mr Rajiv Deep Bajaj has played a pivotal role in expanding Bajaj Capital's reach
across the country. He has recently pursued an Executive MBA in International Wealth
Management under an exchange program between University of Geneva, Switzerland and
Carnegie Mellon University, Pittsburgh, USA.

His youthful energy, dynamic leadership, vision and 16 years strategicmanagement

experience in Banking, Financial Advisory, Insurance Broking and Financial Planning have
strengthened Bajaj Capital.

The Media and Industry honchos have regularly acclaimed Mr. Rajiv Deep Bajaj for his
strengths as a powerful orator and writer. His views on various Investment Strategy and
Financial Planning-related issues are regularly flashed in some of the leading media entities
like The Economic Times, Business Today, Star TV, CNBC and AajTak. His personal life
goal is to spread ‘Financial Education’ amongst the Indian masses in order to increase their
knowledge base and shift their perspective from ‘Saving to Investing’.

Mr. Sanjiv Bajaj (Joint Managing Director)

Mr. Sanjiv Bajaj started his career in 1995 as managerial trainee, worked on various projects
which included developments at alternate channel of
distribution like Broker's associations...etc. From here, he moved on to
Investment Advisory services, which included understanding the client's needs, and by using
various tools of financial planning to offer them a solution to meet his requirements.
MrSanjiv Bajaj is versatile personality with diverse areas of interest. He is a Post-graduate in

36
Business Management with specialisation in Finance, and holds an International Certificate
for Financial Advisors from the Chartered Insurance Institute, London. Thanks to him, Bajaj
Capital is today the largest individual agent for LIC. MrSanjiv Bajaj has a keen interest in IT,
and has played a major role in implementing the ERP software and Ecommerce activities in
the company.

Mr. Anil Chopra (CEO & Director)

Mr. Anil Chopra is the Chief Executive Officer & Director of Bajaj Capital Limited, He
joined the Company in 1984. Mr. Chopra has been instrumental in expanding the branch
network of Bajaj Capital Ltd. all over India. A Chartered Accountant and a Certified
Financial Planner, Mr Chopra is credited with introducing international accounting and HR
practices in the organisation. His most valuable contribution, however, has been in building
up a financially literate society and making Bajaj Capital a strong retail brand. He is
considered an authority, and is widely sought after by the media for quotes on key
developments in the industry.

37
 SWOT ANALYSIS

Strength
 Having a huge of financial products.
 Having expert financial planning scenario so that the goals and dreams of a client is
properly visualised.
 Having transparent business strategies.
 Having a trust of more than 40 years.
 Having large number of branches across the country with a large number of employee
and clients.

Weakness
 Lack of branches in small cities.
 Lack of publicity.
 Lack of awareness among the mindset of the people in small towns.
 Lack of knowledge among the employees

Opportunity
 To introduce more segments of financial products.
 To penetrate in the rural market and create awareness in the mind set of the people of
rural area.
 To create more forms of publicity.
 To upgrade the process of financial planning

Threat
 Entry of new competitors.

38
  The market risk that a client have in investing.
RESEARCH METHODOLOGY

1. Research Design:
A research design is a pattern or an outline of a research project’s working. It is a statement
of only the essential elements of a study, those that provide the basic guidelines for the
details of the project. It comprises a series of prior decision that taken together provide
BACHELOR plans for executing a research projects.
A research design serves as a bridge between what has been established i.e., the research
objectives and what is to be done, in conduct of the study to relish those objectives. If there
were no research design, the research would have only foggy notions as about what is to be
done.
I have used ‘Exploratory Type’. The research is of both qualitative as well as quantitative
type.

2. Objectives of the Study

Any activity done without an objective in a mind cannot turn fruitful. An objective provides a
specific direction to an activity. Objectives may range from very general to very specific, but
they should be clear enough to point out with reasonable accuracy what researcher wants to
achieve through the study and how it will be helpful to the decision maker in solving the
problem.
The objective of any research is basically divided into two categories.
 The main objective of this project is to make the Comparative Analysis of the Bajaj
Capital Mutual Fund with other companies mutual funds and getting the opinion of
peopleregarding Bajaj Capital Mutual Fund.
 To study the Investment procedure in Mutual funds.
 I have tried to explore the general opinion about mutual funds.
 To study the Mutual fund in detail.
 To find out market potential of Bajaj Capital.
 To assess an awareness of mutual funds in Dehradun.

39
  To find out how many people are interested in dealing of mutual fund.

3. Unit of Analysis:

Middle class, Upper Middle class and HNIs people.

Characteristics of interest:

 People’s knowledge about Mutual Fund

 People’s knowledge about Bajaj Capital
 People’s interest in getting knowledge of Mutual Fund
 People’s willingness to deal in Mutual Fund with Bajaj Capital

3. Sources of Data:

a. Primary Source:
The primary data is collected using sampling method and by survey using questionnaire.

b. Secondary Source:
Secondary data includes information regarding present market scenario, Information
regarding Mutual Funds and competitors are collected by Internet, Magazines and News
papers and books.

4. Sample Planning:

Sample Size: 50
Sample Extent: Dehradun

Sampling Design:
A Sample Design is a definite plan for obtaining a sample from a given population. It refers
to the technique or method the researcher would adopt in selecting items for the sample.

40
I have used both ‘Convenience Sampling Method’.

5. Data Collection Method:

I have used ‘Survey Method’ to collect data. I have collected data using questionnaire.

Questionnaire Plan

I have used ‘Structured Questionnaire’ for gathering the required data through contacting
respondent personally.

Type of Information:

I have collected Fact, Awareness, Attitude, Future action plan and reason using
questionnaire.

Type of Questions:

‘Close-ended questions’ of ‘Dichotomous’ and ‘Multiple Choice’ type are asked in the
questionnaire for data collection.

6. Data Analysis & Interpretation:

Data Analysis is based on the data collected by way of Questionnaires. From the collected
data findings are extracted. The data is tabulated and frequency distribution chart is prepared.

41
 DATA ANALYSIS AND INTERPRETATION

1. a) Age distribution of the Investors of Dehradun

Age Group <= 30 31-35 36-40 41-45 46-50 >50

No. of 12 18 30 24 20 16
Investors

35
Investors invested in Mutual Fund

30

25

20

15 30
24
10 18 20
16
5 12

0
<=30 31-35 36-40 41-45 46-50 >50

Age group of the Investors

Interpretation:
According to this chart out of 120 Mutual Fund investors of Dehradun the most are in the
age group of 36-40 yrs. i.e. 25%, the second most investors are in the age group of 41-45yrs
i.e. 20% and the least investors are in the age group of below 30 yrs.

42
(b). Educational Qualification of investors ofDehradun

Educational Qualification Number of Investors

Graduate/ Post Graduate 88

Under Graduate 25

Others 7

Total 120

23% 6%

71%

Graduate/Post Graduate Under Graduate Others

Interpretation
:

Out of 120 Mutual Fund investors 71% of the investors in Dehradun are Graduate/Post
Graduate, 23% are Under Graduate and 6% are others (under HSC).

43
c). Occupation of the investors of Dehradun

Occupation No. of Investors

Govt. Service 30
.
Pvt. Service 45
Business 35
Agriculture 4
Others 6
No. of Investors

50
40
30
20 45
35 30
10
4 6
0
Govt. Pvt. Service Business Agriculture Others
Service

Occupation of the customers

Interpretation:

In Occupation group out of 120 investors, 38% are Pvt. Employees, 25% are Businessman,
29% are Govt. Employees, 3% are in Agriculture and 5% are in others.

44
(d). Monthly Family Income of the Investors of Dehradun.

Income Group No. of Investors

<=10,000 5
10,001-15,000 12
15,001-20,000 28
20,001-30,000 43
>30,000 32
50
45
40
No. of Investors

35
30
25
20 43
15 32
28
10
5 12
5
0
<=10 10-15 15-20 20-30 >30

Income Group of the Investorsn (Rs. in Th.)

Inter
pretation:

In the Income Group of the investors of Dehradun, out of 120 investors, 36% investors that is
the maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second
one i.e. 27% investors are in the monthly income group of more than Rs. 30,000 and the
minimum investors i.e. 4% are in the monthly income group of below Rs. 10,000

45
(2) Investors invested in different kind of investments.

Kind of Investments No. of Respondents

Saving A/C 195
Fixed deposits 148
Insurance 152
Mutual Fund 120
Post office (NSC) 75
Shares/Debentures 50
Gold/Silver 30
Real Estate 65

te 65
sta r 30
E
eal ilv e
Kinds of Investment

R /S res 50
ld u
Go ent SC) 75
D eb e(N d 120
/ c n
r es Offi l Fu e 152
a t a c
S h o s u t u r an s 148
P M su sit
In po c 195
De g A/
d
e in 0 50 100 150 200 250
Fix Sav

No.of Respondents

Interpretation: From the above graph it can be inferred that out of 200 people, 97.5%
people have invested in Saving A/c, 76% in Insurance, 74% in Fixed Deposits, 60% in
Mutual Fund, 37.5% in Post Office, 25% in Shares or Debentures, 15% in Gold/Silver and
32.5% in Real Estate.

46
3. Preference of factors while investing

Factors (a) Liquidity (b) Low (c) High Return (d) Trust
Risk

No. of 40 60 64 36
Respondents

18% 20%

32% 30%

Liquidity Low Risk High Return Trust

Interpretation:

Out of 200 People, 32% People prefer to invest where there is High Return, 30% prefer to
invest where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Trust

47
4.Awareness about Mutual Fund and its Operations

Response Yes No
No. of Respondents 135 65

33%

68%

Yes No

Interpretation:

From the above chart it is inferred that 67% People are aware of Mutual Fund and its
operations and 33% are not aware of Mutual Fund and its operations.

48
5.Source of information for customers about Mutual Fund

Source of information No. of Respondents

Advertisement 18
Peer Group 25
Bank 30
Financial Advisors 62
No. of Respondents

70
60
50
40 62
30 30
20 18 25
10
0
Advertisement Peer Group Bank Financial Advisors

Source of Information

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the most important
source of information about Mutual Fund. Out of 135 Respondents, 46% know about Mutual
fund Through Financial Advisor, 22% through Bank, 19% through Peer Group and 13%
through Advertisement.

49
6.Investors invested in Mutual Fund

Response No. of Respondents

YES 120
NO 80
Total 200

No
40%

Yes
60%

Interpretation:

Out of 200 People, 60% have invested in Mutual Fund and 40% do not have invested in
Mutual Fund.

50
7.Reason for not invested in Mutual Fund

Reason No. of Respondents

Not Aware 65
Higher Risk 5
Not any Specific Reason 10

13%
6%

81%

Not Aware Higher Risk Not Any

Interpretation:

Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund,
13% said there is likely to be higher risk and 6% do not have any specific reason.

51
8. Investors invested in different Assets Management Co. (AMC)

Name of AMC No. of Investors

BCMF 55
UTI 75
HDFC 30
Reliance 75
ICICI Prudential 56
Kotak 45
Others 70

Others
70
HDFC
30
Name of AMC

Kotak
45
BCMF
55
ICICI
56
Reliance
75
UTI
75
0 10 20 30 40 50 60 70 80

No. of Investors

Interpretation:

In Dehradun most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120
Investors 62.5% have invested in each of them, only 46% have invested in BCMF, 47% in
ICICI Prudential, 37.5% in Kotak and 25% in HDFC.

9. Reason for invested in BCMF

52
 Reason No. of Respondents
Associated with BC 35
Better Return 5
Agents Advice 15

27%

9% 64%

Associated with BC Better Return Agents Advice

Interpretation:

Out of 55 investors of BCMF 64% have invested because of its association with Brand BC,
27% invested on Agent’s Advice, 9% invested because of better return.

53
10. Reason for not invested in BCMF

Reason No. of Respondents

Not Aware 25
Less Return 18
Agent’s Advice 22

34%
38%

28%

Not Aware Less Return Agent's Advice

Interpretation:

Out of 65 people who have not invested in BCMF, 38% were not aware with BCMF, 28% do
not have invested due to less return and 34% due to Agent’s Advice.

54
11. Preference of Investors for future investment in Mutual Fund

Name of AMC No. of Investors

BCMF 76
UTI 45
HDFC 35
Reliance 82
ICICI Prudential 80
Kotak 60
Others 75

Others 75

Kotak 60

ICICI Prudential 80
Name of AMC

Reliance 82

HDFC 35

UTI 45

BCMF 76

0 10 20 30 40 50 60 70 80 90
No. of Investors

Interpretation:

Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential, 63% in
BCMF, 62.5% in Others, 50% in Kotak, 37.5% in UTI and 29% in HDFC Mutual Fund.

55
12. Channel Preferred by the Investors for Mutual Fund Investment

Channel Financial Advisor Bank AMC

No. of Respondents 72 18 30

25%

60%
15%

Financial Advisor Bank AMC

Interpretation:

Out of 120 Investors 60% preferred to invest through Financial Advisors, 25% through AMC
and 15% through Bank.

56
13. Mode of Investment Preferred by the Investors

Mode of Investment One time Investment Systematic Investment Plan

(SIP)
No. of Respondents 78 42

35%

65%

One time Investment SIP

Interpretation:

Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through
Systematic Investment Plan.

57
14. Preferred Portfolios by the Investors

Portfolio No. of Investors

Equity 56
Debt 20
Balanced 44

37%

47%

17%

Equity Debt Balance

Interpretation:

From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17%
preferred Debt portfolio

58
15. Option for getting Return Preferred by the Investors

Option Dividend Payout Dividend Growth

Reinvestment
No. of Respondents 25 10 85

21%

8%

71%

Dividend Payout Dividend Reinvestment Growth

Interpretation:

From the above graph 71% preferred Growth Option, 21% preferred Dividend Payout and
8% preferred Dividend Reinvestment Option.

59
16. Preference of Investors whether to invest in Sectoral Funds

Response No. of Respondents

Yes 25
No 95

21%

79%

Yes No

Interpretation:

Out of 120 investors, 79% investors do not prefer to invest in Sectoral Fund because there is
maximum risk and 21% prefer to invest in Sectoral Fund.

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 FINDINGS

 In Dehradun in the Age Group of 36-40 years were more in numbers. The
second most Investors were in the age group of 41-45 years and the least were
in the age group of below 30 years.
 In Dehradun most of the Investors were Graduate or Post Graduate and below
HSC there were very few in numbers.
 In Occupation group most of the Investors were Govt. employees, the second
most Investors were Private employees and the least were associated with
Agriculture.
 In family Income group, between Rs. 20,001- 30,000 were more in numbers,
the second most were in the Income group of more than Rs.30,000 and the
least were in the group of below Rs. 10,000.
 About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed
Deposits, Only 60% Respondents invested in Mutual fund.
 Mostly Respondents preferred High Return while investment, the second most
preferred Low Risk then liquidity and the least preferred Trust.
 Only 67% Respondents were aware about Mutual fund and its operations and
33% were not.
 Among 200 Respondents only 60% had invested in Mutual Fund and 40% did
not have invested in Mutual fund.
 Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is
not any specific reason for not invested in Mutual Fund and 6% told there is
likely to be higher risk in Mutual Fund.
 Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI
Prudential has also good Brand Position among investors, BCMF places after
ICICI Prudential according to the Respondents.
 Out of 55 investors of BCMF 64% have invested due to its association with
the Brand BC, 27% Invested because of Advisor’s Advice and 9% due to
better return.

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 Most of the investors who did not invested in BCMF due to not Aware of
BCMF, the second most due to Agent’s advice and rest due to Less Return.
 For Future investment the maximum Respondents preferred Reliance Mutual
Fund, the second most preferred ICICI Prudential, BCMF has been preferred
after them.
 60% Investors preferred to Invest through Financial Advisors, 25% through
AMC (means Direct Investment) and 15% through Bank.
 65% preferred One Time Investment and 35% preferred SIP out of both type
of Mode of Investment.
 The most preferred Portfolio was Equity, the second most was Balance
(mixture of both equity and debt), and the least preferred Portfolio was Debt
portfolio.
 Maximum Number of Investors Preferred Growth Option for returns, the
second most preferred Dividend Payout and then Dividend Reinvestment.
 Most of the Investors did not want to invest in Sectoral Fund, only 21%
wanted to invest in Sectoral Fund.

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 Conclusion

Running a successful Mutual Fund requires complete understanding of the peculiarities

of the Indian Stock Market and also the psyche of the small investors. This study has
made an attempt to understand the financial behavior of Mutual Fund investors in
connection with the preferences of Brand (AMC), Products, Channels etc. I observed
that many of people have fear of Mutual Fund. They think their money will not be
secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms.
Many of people do not have invested in mutual fund due to lack of awareness although
they have money to invest. As the awareness and income is growing the number of
mutual fund investors are also growing.

“Brand” plays important role for the investment. People invest in those Companies
where they have faith or they are well known with them. There are many AMCs in
Dehradun but only some are performing well due to Brand awareness. Some AMCs are
not performing well although some of the schemes of them are giving good return
because of not awareness about Brand. Reliance, UTI, BCMF, ICICI Prudential etc.
they are well known Brand, they are performing well and their Assets Under
Management is larger than others whose Brand name are not well known like Principle,
Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. Financial
Advisors are the most preferred channel for the investment in mutual fund. They can
change investors’ mind from one investment option to others. Many of investors
directly invest their money through AMC because they do not have to pay entry load.
Only those people invest directly who know well about mutual fund and its operations
and those have time.

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 Suggestions

 The most vital problem spotted is of ignorance. Investors should be made aware
of the benefits. Nobody will invest until and unless he is fully convinced.
Investors should be made to realize that ignorance is no longer bliss and what
they are losing by not investing.
 Mutual funds offer a lot of benefit which no other single option could offer. But
most of the people are not even aware of what actually a mutual fund is? They
only see it as just another investment option. So the advisors should try to
change their mindsets. The advisors should target for more and more young
investors. Young investors as well as persons at the height of their career would
like to go for advisors due to lack of expertise and time.
 Mutual Fund Company needs to give the training of the Individual Financial
Advisors about the Fund/Scheme and its objective, because they are the main
source to influence the investors.
 Before making any investment Financial Advisors should first enquire about the
risk tolerance of the investors/customers, their need and time (how long they
want to invest). By considering these three things they can take the customers
into consideration.
 Younger people aged under 35 will be a key new customer group into the
future, so making greater efforts with younger customers who show some
interest in investing should pay off.
 Customers with graduate level education are easier to sell to and there is a large
untapped market there. To succeed however, advisors must provide sound
advice and high quality.
 Systematic Investment Plan (SIP) is one the innovative products launched by
Assets Management companies very recently in the industry. SIP is easy for
monthly salaried person as it provides the facility of do the investment in EMI.
Though most of the prospects and potential investors are not aware about the
SIP. There is a large scope for the companies to tap the salaried persons.

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 BIBLIOGRAPHY

 Books:

 Gupta S.P., Statistical Methods-Sultan chand publications, 30th edition.

 Fisher & Jordan: security analysis & investment management.
 Kothari C.R.- Business Research Methodology

 WEBSITE:
www.axisbank.co.in
www.quickmba.com
www.mutualfundindia.com

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 Questionnaire

1. Which are the investment tools you invest in?

[ ] Bank Fixed Deposit
[ ] RBI Bonds
[ ] Mutual Funds
[ ] Equities
[ ] others (Please specify)

Re2. You primarily invest for (Rank according to your preference)

[ ] Returns
[ ] Liquidity
[ ] Savings
[ ] Tax Benefits

4. Rank the investments options according to you preference of

Investment.
[ ] Bank Fixed Deposit
[ ] RBI Bonds
[ ] Mutual Funds
[ ] Equities
[ ] Any other (Please specify)

5. What is the frequency of you investments?

[ ] Once a Month
[ ] Once in 6 Months
[ ] Once a Year

6. Do you invest in Mutual Funds?

[ ] Yes
[ ] No
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7. If the answer to question 9 is "Yes"

a.)Are you aware of the various schemes offered by Mutual Funds?

[ ] Yes
[ ] No
[ ] Few

b.)Do you know that you can get Tax Advantages by investing in Mutual Funds?
[ ] Yes
[ ] No
[] Not Sure

c.)On whose external advice do you invest?

[ ] Bank
[ ] Distributor
[ ] Agents
[ ] Direct investments
[ ] C.A.
d.)Which types of Mutual Fund do you invest in?
[ ] Debt
[ ] Equities
[ ] Balanced

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8.If the answer to question 9 is "No"

You do not invest in Mutual Fund because of (you may give multiple answers)

[ ] Bitter past experience

[ ] Lack of Knowledge
[ ] Lack of confidence in service being provided
[ ] Difficulty in selection of schemes
[ ] In-efficient investment advisors

9. If Mutual Fund offer you Steady Returns, Tax Benefits, Liquidity, Diversification of
Portfolio, Lesser Risk would consider it as an investment option in the future for you?
[ ] Yes
[ ] No
[ ] May be

10. Would you be interested to know more about Mutual Funds?

[ ] Yes
[ ] No

Name : ……………..……………….

Age :……………………………….

Occupation:………………………………

Mobile No. :……………………………...

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