Mutual Funds Project

1. INTRODUCTION

A Mutual Fund is a trust that pools the savings of a number of investors who share a common

financial goal. It offers an opportunity to invest in a diversified, professionally managed basket

of securities at a relatively low cost. The flow chart below describes broadly the working of a

mutual fund:

“Mutual Funds are popular among all income levels. With a mutual fund, we get a

diversified basket of stocks managed by professionals”

These Trusts are run by experienced Investment Managers who use their knowledge and

expertise to select individual securities, which are classified to form portfolios that meet

predetermined objectives and criteria.

These portfolios are then sold to the public. They offer the investors the following main services:

Portfolio Diversification

Marketability: A new financial asset is created that may be more easily marketable than

the underlying securities in the portfolio.

Pool their money with

Investors Fund managers

Invest in

Passed back to

Returns Securities

1.1 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

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.6,700 crores 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).

SBI 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 (Jun90), 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.

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

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.29,835 crores 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 SBI, PNB, BOB and LIC. It is registered with SEBI and functions MFR.

1.2 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 fund’s Net Asset value (NAV) is determined each

day. Diversification reduces the risk because all stocks may not move in the same direction in the

same proportion at the same time. Investors of mutual funds are known as unit holders.

INVESTMENT ALTERNATIVES IN INDIA:-

Non marketable financial assets: These are such financial assets which gives

moderately high return but cannot be traded in market.

Bank Deposits

Post Office Schemes

Company FDs

PPF

Equity shares: These are shares of company and can be traded in secondary market.

Investors get benefit by change in price of share and dividend given by companies.

Equity shares represent ownership capital. As an equity shareholder, a person has an

ownership stake in the company. This essentially means that the person has a residual

interest in income and wealth of the company. These can be classified into following

broad categories as per stock market:

Blue chip shares Growth shares

Income shares Cyclic shares

Speculative shares

Bonds: Bonds are the instruments that are considered as a relatively safer investment

avenues.

Govt. sec bonds

GOI relief funds

Govt. agency funds

PSU Bonds

RBI BOND

Debenture of private sector co.

Money market instrument: By convention, the term "money market" refers to the

market for short-term requirement and deployment of funds. Money market instruments

are those instruments, which have a maturity period of less than one year.

T-Bills Commercial Paper

Certificate of Deposit

Mutual Funds- A mutual fund is a trust that pools together the savings of a number of

investors who share a common financial goal. The fund manager invests this pool of

money in securities, ranging the scheme. The different types of schemes are

Balanced Funds

Index Funds

Sector Fund

Equity Oriented Funds

Life insurance: Now-a-days life insurance is also being considered as an investment

avenue. Insurance premiums represent the sacrifice and the assured sum the benefit.

Under it different schemes are:

Endowment assurance policy

Money back policy

Whole life policy

Term assurance policy

Real estate: One of the most important assets in portfolio of investors is a residential

house. In addition to a residential house, the more affluent investors are likely to be

interested in the following types of real estate:

Agricultural land

Semi urban land

Farm House

Precious objects: Investors can also invest in the objects which have value. These

comprises of:

Gold

Silver

Precious stones

Art objects

Financial Derivatives: These are such instruments which derive their value from some

other underlying assets. It may be viewed as a side bet on the asset. The most important

financial derivatives from the point of view of investors are:

Options

Futures

1.3 ADVANTAGES OF MUTUAL FUNDS

There are numerous benefits of investing in mutual funds and one of the key reasons for its

phenomenal success in the developed markets like US and UK is the range of benefits they offer,

The benefits have been broadly split into universal benefits, applicable to all schemes and

benefits applicable specifically to open-ended schemes. Universal Benefits

Affordability:

A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the

investment objective of the scheme. An investor can buy in to a portfolio of equities, which

would otherwise be extremely expensive. Each unit holder thus gets an exposure to such

portfolios with an investment as modest as Rs.500/-. This amount today would get you less than

quarter of an Infosys share! Thus it would be affordable for an investor to build a portfolio of

investments through a mutual fund rather than investing directly in the stock market. It simply

means that you must spread your investment across different securities (stocks, bonds, money

market instruments, real estate, fixed deposits etc.) and different sectors (auto, textile,

information technology etc.). This kind of a diversification may add to the stability of your

returns.

Professional Management:

Qualified investment professionals who seek to maximize returns and minimize risk monitor

investor's money. When you buy in to a mutual fund, you are handing your money to an

investment professional that has experience in making investment decisions. It is the Fund

Manager's job to (a) find the best securities for the fund, given the fund's stated investment

objectives; and (b) keep track of investments and changes in market conditions and adjust the

mix of the portfolio, as and when required.

Tax Benefits:

Any income distributed after March 31, 2002 will be subject to tax in the assessment of all

Unit holders. However, as a measure of concession to Unit holders of open-ended equity-

oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a

concessional rate of 10.5%. In case of Individuals and Hindu Undivided Families a deduction

upto Rs. 9,000 from the Total Income will be admissible in respect of income from investments

specified in Section 80L, including income from Units of the Mutual Fund.

1.4 DRAWBACKS FROM MUTUAL FUND

Fluctuating Returns:

Mutual funds are like many other investments without a guaranteed return: there is always

the possibility that the value of your mutual fund will depreciate. Unlike fixed-income products,

such as bonds and Treasury bills, mutual funds experience price fluctuations along with the

stocks that make up the fund. When deciding on a particular fund to buy, you need to research

the risks involved - just because a professional manager is looking after the fund, that doesn't

mean the performance will be stellar.

Cash, Cash and More Cash:

As you know already, mutual funds pool money from thousands of investors, so everyday

investors are putting money into the fund as well as withdrawing investments. To maintain

liquidity and the capacity to accommodate withdrawals, funds typically have to keep a large

portion of their portfolios as cash. Having ample cash is great for liquidity, but money sitting

around as cash is not working for you and thus is not very advantageous.

Costs:

Mutual funds provide investors with professional management, but it comes at a cost. Funds

will typically have a range of different fees that reduce the overall payout. In mutual funds, the

fees are classified into two categories: shareholder fees and annual operating fees.

The shareholder fees, in the forms of loads and redemption fees are paid directly by shareholders

purchasing or selling the funds. The annual fund operating fees are charged as an annual

percentage - usually ranging from 1-3%. These fees are assessed to mutual fund investors

regardless of the performance of the fund. As you can imagine, in years when the fund doesn't

make money, these fees only magnify losses.

Misleading Advertisements:

The misleading advertisements of different funds can guide investors down the wrong path.

Some funds may be incorrectly labelled as growth funds, while others are classified as small cap

or income funds. The Securities and Exchange Commission (SEC) requires that funds have at

least 80% of assets in the particular type of investment implied in their names. How the

remaining assets are invested is up to the fund manager.

Evaluating Funds:

Another disadvantage of mutual funds is the difficulty they pose for investors interested in

researching and evaluating the different funds. Unlike stocks, mutual funds do not offer investors

the opportunity to compare the P/E ratio, sales growth, earnings per share, etc. A mutual fund's

net asset value gives investors the total value of the fund's portfolio less liabilities, but how do

you know if one fund is better than another?

Furthermore, advertisements, rankings and ratings issued by fund companies only describe

past performance. Always note that mutual fund descriptions/advertisements always include the

tagline "past results are not indicative of future returns". Be sure not to pick funds only because

they have performed well in the past - yesterday's big winners may be today's big losers.

RISK HIERARCHY OF MUTUAL FUNDS

1.5 CATEGORIES OF MUTUAL FUND

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 cannot 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. 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.

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.

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.

Liquid funds- These funds invest 100% in money market instruments, a large portion being

invested in call money market.

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

Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which

have variable coupon rate.

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

Income funds LT- Typically, such funds invest a major portion of the portfolio inlong-term debt

papers.

MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and anexposure of 10%-

30% to equities.

FMPs- fixed monthly plans invest in debt papers whose maturity is in line withthat 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 dated cheques 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.

RISK V/S. RETURN:

1.6 STRUCTURE OF MUTUAL FUND

In developed countries like the UK and the US, the mutual funds industry is highly regulated

with a view of imparting operational transparency and protecting investors’ interest. Since there

is a clear distinction between open ended schemes and close ended schemes, usually two

different types of structural and management approaches are followed. Open-ended funds (unit-

trusts) in the UK follow the ‘trust approach’, while close-ended schemes follow (investment

trusts) follow the ‘corporate approach’. The management and operations of the two types of

funds, are, therefore, guided by separate regulatory mechanisms, and the rules are laid down by

separate controlling authorities. However, no such distinctions exist in India and both

approaches (Trust and Corporate) have been integrated by SEBI. The formation and operations

of mutual funds in India are guided solely by the SEBI regulations. The figure below gives an

idea of the structure of the Indian mutual funds. A mutual fund consists of four separate entities

– sponsor, mutual fund trust, AMC and custodian. These are, of course, assisted by other

independent administrative entities, such as banks, registrars and transfer agents.

Sponsor Company Establishes MF as a Trust

Registers MF with SEBI

Mutual Fund

Asset Management Company

Custodian

Holds unit holders’ fund in MFEnsures compliance to SEBIEnters into agreement with AMC

Floats MF fundsManages funds as per SEBI guidelines andAMC agreement

Provides necessary custodian services

Managed by a Board of Trustees

Bankers

Registrars and Transfer Agents

Provide Banking Services

Provide registrar services and act as transfer agents

Appointed by BOT

Appointed by Trustees

Appointed by AMC

Appointed by AMC

STRUCTURE OF THE INDIAN MUTUAL FUNDS

The sponsor for a mutual fund can be any person who, acting alone or in combination with

another corporate body, establishes the mutual fund and gets it registered with SEBI. The

sponsor is required to contribute at least 40% of the minimum net worth (Rs 10 crore) of the

AMC. He must have a sound track record and a reputation for fairness and integrity in all his

business transactions.

As per the 1996 regulations, ‘A mutual fund shall be constituted in the form of a trust and the

instrument of trust shall be in the form of a deed, duly registered under the provisions of the

Indian Registration Act, 1908, executed by the sponsor in favor of trustees named in such an

instrument. The mutual fund is managed by the board of trustees or Trustee Company, and the

sponsor executes the trust deeds in favor of the trustees. The mutual fund raises money through

the sale of units under one or more schemes for investment in securities, in accordance with

SEBI guidelines. The trustees must see to it that the schemes floated and managed by the AMC

are in accordance with the trust deeds and SEBI guidelines. It is also their responsibility to

control the capital property of the mutual fund schemes.

The trustees have the right to obtain relevant information from the AMC, as well as a

quarterly report on its activities. They can also dismiss the AMC under certain conditions, as per

SEBI regulations. At least half the trustees have the right to obtain relevant information from the

AMC or its employees cannot act as trustees. The trustee of a particular mutual fund cannot be

appointed as a trustee of any other mutual fund unless he is an independent trustee and obtains

prior permission from the mutual fund in which he is a trustee. The trustees are required to

submit half-yearly reports to SEBI on the activities of the mutual fund. They appoint a

custodian, whose activities they supervise. A trustee can be removed only with the prior

approval of SEBI.

The trustees appoint the AMC, which must act as per the SEBI guidelines, the trust deeds,

and the management agreement it has made with the trustees.

The AMC should be registered with SEBI. Its net worth should be in the form of cash and all

assets should be held in its name. In case it wants to carry out other fund management business,

it should satisfy the capital adequacy requirement for each such business independently. The

AMC cannot give or guarantee loans, and is prohibited from acquiring any assets (out of the

scheme property) which would involve the assumption of unlimited liability. It is required to

disclose the scheme particulars and the base calculation of the NAV. It must submit quarterly

reports to the mutual fund. The director of the AMC should be a person of repute and high

standing, with at least five years experience in the relevant field. The appointment of the AMC

can be terminated by a decision of 75% of unit-holders or a majority of trustees.

Mutual funds are also allowed to diversify their activities in the following areas.

Portfolio management services Management of money market funds

Management of offshore funds Management of real estate funds

Providing advice to offshore funds

Management of pension or provident funds

Management of venture capital funds

The regulations deal with various issues relating to launching, advertising and listing of

mutual funds schemes. All the schemes to be launched by an AMC need to be approved by the

trustees. Copies of the offer document of such schemes are to be filed with SEBI, and should

contain adequate disclosures to enable investors to make informed decisions. Advertisements in

respect of schemes should be in conformity with the prescribed advertisement code of SEBI.

provides for periodic repurchase facilities to all unit-holders, or

provides for monthly income or caters to special classes of persons, or

discloses details of repurchase in the offer document, or

opens for repurchase within six months of the closure of subscription

Considering the various irregularities and sharp deterioration in the performance of many

mutual funds, it was decided to fix certain responsibilities for the trustees to ensure that they

remained vigilant and played a more active role. The SEBI appointed a committee under the

chairmanship of P.K. Kaul to examine the issue of responsibilities of trustees. The committee’s

report was accepted by SEBI and the following measures were decided upon, among others.

The manner in which the trustees are to fulfill their responsibilities has been spelt out.

They are required to meet at least once in three months.

Trustees can appoint independent auditors.

Several other measures, like revision of the codes of conduct, were taken to promote

integrity, diligence, and fairness among the trustees as well as the AMCs. All this, together with

the standardization of several provisions relating to operations, has increased the level of

transparency and strengthened the mechanism of investor protection.

1.8 MUTUAL FUNDS STUDIES

EQUITY DIVERSIFIED FUNDS

These are the funds in the market which have investment across the sectors, asset classes and

financial instruments to provide optimal benefit of diversification of portfolio to investors.

EQUITY LINKED SAVING SCHEME (ELSS)

These are the open ended saving schemes which generally have lock-in-period of three years

which means that once you have invested certain amount in your fund, you can’t withdraw any

amount from your account. These scheme are most popular among retail investors(also see in

Appendices) due to its three-in-one feature which means these schemes are able to satisfy three

different investment objectives simultaneously which are mentioned as follows:

Tax Benefit

Good Return

Capital Appreciation

EQUITY MID AND SMALL CAP

These are the equity funds which invest primarily in mid cap and small cap stocks, the stocks

which have growth potentials and also have high risk when compared to large cap.

EQUITY LARGE CAP

These are the funds which have investments predominantly in large cap stock. These are the

stocks which has a solid track record and sound fundamentals. These are the less risky stocks and

hence generally have low growth rates when compared to small and mid-cap stocks.

LIC NOMURA MUTUAL FUND

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and contributed

Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in

accordance with the provisions of the Indian Trust Act, 1882. The settlor is not responsible for

the management of the Trust. The settler is also not responsible or liable for any loss or shortfall

resulting in any of the schemes of LIC Mutual Fund. The Trustees of the LIC Mutual Fund have

exclusive ownership of Trust Fund and are vested with general power of superintendence,

discretion and management of the affairs of the Trust. LIC Mutal Fund Asset Management

Company Ltd. was formed on 20th April 1994 in compliance with the Securities and Exchange

Board of India (Mutual Funds) Regulations, 1993.

2. REVIEW OF LITERATUREThe existing “Behavioural Finance” studies are very few and very little information is available

about investor perceptions, preferences, attitudes and behaviour. All efforts in this direction are

fragmented.

SEBI –In 1964 NCAER Survey of households was undertaken to understand the attitude towards

and motivation for saving of individuals. Another NCAER study in 1996 analysed the structure

of the capital market and presented the views and attitudes of individual shareholders was carried

out to estimate the number of households and the population of individual investors, their

economic and demographic profile, portfolio size, investment preference for equity as well as

other savings instruments. This was a unique and comprehensive study of Indian Investors, for,

data was collected from 3,00,0000 geographically dispersed rural and urban households. Some of

the relevant findings of the study are : Households preference for instruments match their risk

perception; Bank Deposit has an appeal across all income class; 43% of the non-investor

households equivalent to around 60 million households (estimated) apparently lack awareness

about stock markets; and, compared with low income groups, the higher income groups have

higher share of investments in Mutual Funds (MFs) signifying that MFs have still not become

truly the investment vehicle for small investors. Nevertheless, the study predicted that in the next

two years (i.e., 2000 hence) the investment of households in MFs is likely to increase. We have

to wait and watch the investors’ reaction to the July 2nd 2001, great fall of the Big Brother, UTI.

De Bondt and Thaler (1985) investigated the possible psychological basis for investor

behaviour, argued that mean reversion in stock prices was an evidence of investor over reaction

where investors overemphasise recent firm performance in forming future expectations.

Ippolito (1992) said that fund/scheme selection by investors was based on past performance of

the funds and money flows into winning funds more rapidly than they flow out of losing funds.

Gupta (1994) made a household investor survey with the objective to provide data on the

investor preferences on MFs and other financial assets. The findings of the study were more

appropriate, at that time, to the policy makers and mutual funds to design the financial products

for the future.

Madhusudhan V Jambodekar (1996) conducted a study to assess the awareness of MFs among

investors, to identify the information sources influencing the buying decision and the factors

influencing the choice of a particular fund. The study revealed among other things that Income

Schemes and Open Ended Schemes were more preferred than Growth Schemes and Close Ended

Schemes during the then prevalent market conditions. Investors look for safety of Principal,

Liquidity and Capital appreciation in the order of importance; Newspapers and Magazines were

the first source of information through which investors get to know about MFs/Schemes and

investor service was a major differentiating factor in the selection of Mutual Fund Schemes.

Shankar (1996) pointed out that the Indian investors do view Mutual Funds as commodity

products and AMCs, to capture the market should follow the consumer product distribution

model. Since 1986, a number of articles and brief essays had been published in financial dailies,

periodicals, professional and research journals, explaining the basic concept of Mutual Funds and

highlight their importance in the Indian capital market environment. They touch upon varied

aspects like Regulation of Mutual Funds, Investor expectations, Investor protection, Trend in

growth of Mutual Funds and some were critical views on the performance and functioning of

Mutual Funds.

Sujit Sikidar and Amrit Pal Singh (1996) carried out a survey with an objective to understand

the behavioural aspects of the investors of the North Eastern region towards equity and mutual

funds investment portfolio. The survey revealed that the salaried and self employed formed the

major investors in mutural fund primarily due to tax concessions. UTI and SBI schemes were

popular in that part of the country then and other funds had not proved to be a big hit during the

time when survey was done.

Syama Sunder (1998) conducted a survey to get an insight into the mutual fund operations of

private institutions with special reference to Kothari Pioneer. The survey revealed that awareness

about Mutual Fund concept was poor during that time in small cities like Visakapatnam. Agents

play a vital role in spreading the Mutual Fund culture; open-end schemes were much preferred

then; age and income are the two important determinants in the selection of the fund/scheme;

brand image and return are the prime considerations while investing in any Mutual Fund.

Anjan Chakarabarti and Harsh Rungta (2000) stressed the importance of brand effect in

determining the competitive position of the AMCs. Their study revealed that brand image factor,

though cannot be easily captured by computable performance measures, influences the investor’s

perception and hence his fund/scheme slection.

Shanmugham (2000) conducted a survey of 201 individual investors to study the information

sourcing by investors, their perceptions of various investment strategy dimensions and the

factors motivating share investment decisions, and reports that among the various factors,

psychological and sociological factors dominated the economic factors in share investment

decisions.

A few among them were Samir K. Barua et al., (1991) investigated the segmentation of

investors on the basis of their characteristics. Investor’s characteristics on the basis of their

investment size Raja Rajan (1997), and the relationship between stage in life cycle of the

investors and their investment pattern was studied Raja Rajan (1998).

From the above review it can be inferred that Mutual Fund as an investment vehicle is capturing

the attention of various segments of the society, like academicians, industrialists, financial

intermediaries, investors and regulators for varied reasons and deserves an in depth study.

COMPANY PROFILES

PUBLIC SECTOR MUTUAL FUNDS

SBI MUTUAL FUND

With 25 years of rich experience in fund management, we at SBI

Funds Management Pvt. Ltd. bring forward our expertise by consistently delivering value to our

investors. We have a strong and proud lineage that traces back to the State Bank of India (SBI) -

India's largest bank. We are a Joint Venture between SBI and AMUNDI (France), one of the

world's leading fund management companies. With our network of over 222 points of acceptance

across India, we deliver value and nurture the trust of our vast and varied family of

investors.Excellence has no substitute. And to ensure excellence right from the first stage of

product development to the post-investment stage, we are ably guided by our philosophy of

‘growth through innovation’ and our stable investment policies. This dedication is what helps our

customers achieve their financial objectives.

VISION

“To be the most preferred and the largest fund house for all asset classes, with a consistent track

record of excellent returns and best standards in customer service, product innovation,

technology and HR practices.”

SERVICES

Mutual Funds :-Investors are our priority. Our mission has been to establish Mutual Funds as a

viable investment option to the masses in the country. Working towards it, we developed

innovative, need-specific products and educated the investors about the added benefits of

investing in capital markets via Mutual Funds.Today, we have been actively managing our

investor's assets not only through our investment expertise in domestic mutual funds, but also

offshore funds and portfolio management advisory services for institutional investors.

PORTFOLIO MANAGEMENT AND ADVISORY SERVICES

SBI Funds Management has emerged as one of the largest player in India advising various

financial institutions, pension funds, and local and international asset management

companies.We have excelled by understanding our investor's requirements and terms of risk /

return expectations, based on which we suggest customized asset portfolio recommendations.

We also provide an integrated end-to-end customized asset management solution for institutions

in terms of advisory service, discretionary and non-discretionary portfolio management services.

Offshore Funds :-SBI Funds Management has been successfully managing and advising India's

dedicated offshore funds since 1988. SBI Funds Management was the 1st bank sponsored asset

management company fund to launch an offshore fund called 'SBI Resurgent India Opportunities

Fund' with an objective to provide our investors with opportunities for long-term growth in

capital, through well-researched investments in a diversified basket of stocks of Indian

Companies.

FUND HOUSE EXPERTISE :- Investment Expertise

The best investment strategies put together by the best minds, our Fund Managers. With a sharp

eye to monitor, gauge and understand the changes in the market, our fund managers and analysts

gear up to meet new challenging environments. Their ability to capture the growth potential of

Indian securities and manage complex portfolios as well as the drive to deliver optimum results

is their forte. With superior securities selection, incisive research, intensive coverage including

internal forecasts, active monitoring and regular tracking, our dedicated team ensures

minimization of risks while protecting our investor's interest. Always.

Investment Philosophy:-Growth through innovation.

Our expert team of experienced and market savvy researchers prepare comprehensive analytical

and informative reports on diverse sectors and identify stocks that promise high performance in

the future. What is innovation? Innovation is the process of turning ideas into concrete plans for

progressive growth. We always seek to provide our investors with opportunities for progressive

growth through our innovative products, superior stock selection and active portfolio

management. Accordingly, we also enhance and optimize asset allocation and stock selection

based on internal and external research. Derivatives are used to hedge and rebalance portfolios to

keep the risk factors at reasonable levels, The three main phrases, which act as a guiding force

for the investment performance, are as follows:

Long-term capital appreciation for the investor: Our fund manager's view is not guided

by any momentum play but by the objective of generating sustainable performance for

the investor.

Superior stock selection: Our team is encouraged to be ahead of the rest of the industry in

terms of identifying new ideas & opportunities.

Active fund management: While the performance of all the funds is benchmarked against

a specific index, we do not encourage our investment team to replicate the index

composition with the fund portfolio.

Optimal Risk Management:

Risk Management is an inherent part of any business. As one of the core focus areas, each of our strategies is subject to close scrutiny on a continuous basis. Regulatory agencies around the world are placing increasing pressure on institutions to measure and manage risk better. At SBI Funds Management, we follow enterprise wide approach to risk management with a dedicated, experienced and professional risk management team covering significant functions of the organization. Risk Management focuses on:

Identifying actual and potential areas of risk

Assessing the adequacy of internal controls

Proposing risk mitigating measures and

Safeguarding investor interest through ongoing analysis and monitoring

Investment Objective:- Setting benchmarks time and again. For our

investors.:Our objective is to endeavor to outperform our benchmarks through well

researched investments in Indian equities. This is achieved by implementing an active

management style based on fundamental analysis, leading to the construction of a

portfolio. It could be blended, large cap, mid cap, or specific sector oriented - which aims

at capturing the growth potential of Indian equities.

BOARD OF DIRECTORS - AMC

Mr. Pratip Chaudhuri

Chairman & Associate Director

Mr. Deepak Kumar Chatterjee

Managing Director & CEO

Mr. Shishir Joshipura

Independent Director

Dr. H. Sadhak


Mrs. Madhu Dubhashi


Dr. H. K. Pradhan


Mr. Jashvant Raval


Mr. Fathi Jerfel

Associate Director

Mr. Thierry Raymond Mequillet

Associate Director

Mr. Philippe Batchevitch

Alternate Director to Mr. Jerfel

MANAGEMENT TEAM

Mr. Deepak Kumar Chatterjee

MD & CEO

Mr. Philippe Batchevitch

Deputy CEO

Mr. K. T. Ravindran

Executive Director & Chief Operating Officer

Mr. Navneet Munot

Executive Director & Chief Investment

Officer

Mr. R. S. Srinivas Jain

Executive Director & Chief Marketing

Officer (Strategy and International Business)

Mr. D. P. Singh

Executive Director & Chief Marketing

Officer (Domestic Business)

Ms. Aparna Nirgude

Chief Risk Officer

Mr. Rakesh Kaushik

Senior Vice President (Accounts &

Administration)

LIC MUTUAL FUND

Life Insurance Corporation of India (LIC) (Hindi: भा�रती�य जी�वन बी�मा� निनगमा) is the largest

insurance group and investment company in India. Its a state-owned where Government of India

has 100%stake. LIC also funds close to 24.6% of the Indian Government's expenses. It has assets

estimated of 13.25 trillion (US$240 billion). It was founded in 1956 with the merger of 243

insurance companies and provident societies.

Type State-owned

Industry Financial services

Founded 1 September 1956

Headquarters Mumbai, India

Key people D. K. Mehrotra, (Chairman)

Products Life and health insurance, investment management, mutual fund

Total assets 13.25 trillion (US$240 billion) (2010)

Owner(s) Government of India

Employees 115,966 (2010)

Subsidiaries LIC Housing FinanceLIC Cards ServicesLIC Nomura Mutual Fund

Website www.licindia.in

Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance

Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different

http://www.licindia.in/

http://en.wikipedia.org/wiki/Indian_rupee

http://en.wikipedia.org/wiki/File:LIC_Logo.svg


parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25

Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns

of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral

Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from

the public.The slogan of LIC is "Yogakshemam Vahamyaham" which translates from Sanskrit to

"Your welfare is our responsibility". The slogan is derived from the Ancient Hindu text, the

Bhagavad Gita's 9th Chapter, 22nd verse. The literal translation from Sanskrit to English is "I

carry what you require". The slogan can be seen in the logo, written in Devanagiri script.

History:- The Oriental Life Insurance Company, the first corporate entity in I ndia

offering life insurance coverage, was established in Calcutta in 1818 by Bipin Behari

Dasgupta and others. Europeans in India were its primary target market, and it

charged Indians heftier premiums. The Bombay Mutual Life Assurance Society,

formed in 1870, was the first native insurance provider. Other insurance companies

established in the pre-independence era included

Bharat Insurance Company (1956)

United India (1906)

National Indian (1906)

National Insurance (1906)

Co-operative Assurance (1906)

Hindustan Co-operatives (1907)

Indian Mercantile

General Assurance

Swadeshi Life (later Bombay Life)

Sahyadri Insurance (Merged into LIC, 1956)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's

First War of Independence, adverse effects of the World War I and World War II on the

economy of India, and in between them the period of world wide economic crises triggered by

the Great depression. The first half of the 20th century also saw a heightened struggle for India's

independence. The aggregate effect of these events led to a high rate of bankruptcies .

http://en.wikipedia.org/wiki/Devanagiri

http://en.wikipedia.org/wiki/Bhagavad_Gita

Nationalization:- In 1955, parliamentarian Amol Barate raised the matter of insurance

fraud by owners of private insurance companies. In the ensuing investigations, one of

India's wealthiest businessmen, Ram Kishan Dalmia, owner of the Times of India

newspaper, was sent to prison for two years. Eventually, the Parliament of India passed

the Life Insurance of India Act on 1956-06-19, and the Life Insurance Corporation of

India was created on 1956-09-01, by consolidating the life insurance business of 245

private life insurers and other entities offering life insurance services. Nationalization of

the life insurance business in India was a result of the Industrial Policy Resolution of

1956, which had created a policy framework for extending state control over at least

seventeen sectors of the economy, including the life insurance.

Current status

Over its existence of around 57 years (upto 2013), Life Insurance Corporation of India, which

commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses,

and contributed around 7% of India's GDP in 2006. The Corporation, which started its business

with around 300 offices, 5.7 million policies and a corpus of INR 459 million (US$ 92 million as

per the 1959 exchange rate of roughly Rs. 5 for a US $, has grown to 25000 servicing around

350 million policies and a corpus of over 8 trillion (US$150 billion). ₡==Awards and

recognition== The Economic Times Brand Equity Survey 2010 rated LIC as the No. 5Service

Brand of the Country. Though in the year 2010 is ranked at 4, the organization is consistently

among the top rated service company of the India. From the year 2006, LIC is continuously

winning the Readers' Digest Trusted brand award. According to The Brand Trust Report 2012,

LIC is the 8th most trusted brand of India.Golden Jubilee Foundation: LIC Golden Jubilee

Foundation was established in 2006 as a charity organization. This entity has the aim of

promoting education, alleviation of poverty, and providing better living conditions for the under

privileged. Out of all the activities conducted by the organization, Golden Jubilee Scholarship

awards is the best known. Each year, this award is given to the meritorious students in standard

XII of school education or equivalent, who wish to continue their studies and have a parental

income less than 60,000 Rupees.


4. RESEARCH METHODOLOGY

Research Design- Descriptive Study:-A study that tries to reveal patterns associated with performance analysis of mutual funds.

Sources – The sources are:

Types of data-

Secondary Data was collected from various bank brochures, journals, books, magazines and internet.

Sample Size:- 100 Investors

Two Public Sector Mutual fund Mutual Funds

SAMPLING TECHNIQUE:-Convenience sampling technique was used to select Mutual Funds

Funds in

Public Sector Mutual Funds

SBI mutual fund

LIC mutual fund

4.1 NEED OF THE STUDY

Finance & its functions are the part of economic activity. Finance is very essentially needed for

all types of organizations viz; small, medium, large-scale industries & service sector. Hence the

role of finance manager & the subject finance accounting gained maximum importance.

Liberalization, globalization & privatization created new challengers to entrepreneur & corporate

in carrying they’re day to day activities. So, “finance is regarded as the life blood of a business

organization.” Data pertaining to Public and Private mutual funds and was analysed with the

performance to accomplish the objectives of the study. Source of the data was secondary. For

better consolidation of results data templates was provided to all the concerned sites. These data

templates was framed in a way that desirable information is obtained easily and is readily

accessible for quick interpretations.

4.2 OBJECTIVES OF THE STUDY

Main objectives of the study are:

1. To study mutual funds of public sector and their product portfolio.

2. To study the performance analysis of public sector mutual funds on the basis of equity

diversified funds, balanced funds, tax saving funds and equity linked saving schemes.

3. To study the performance analysis of public sector mutual funds on the basis of equity mid

and small cap and equity large cap.

4. To find out the Preferences of the investors for Asset Management Company.

5. To know the Preferences for the portfolios.

6. To study the comparative analysis of equity diversified funds, equity linked saving schemes,

equity large-mid-small cap and equity thematic funds.

7. To know why one has invested or not invested in Reliance Mutual fund

8. To find out the most preferred channel.

9. To find out what should do to boost Mutual Fund Industry in India.

5.1 PERFORMANCE ANALYSIS OF PUBLIC SECTOR MUTUAL FUNDS1. SBI MUTUAL FUNDS

1) EQUITY DIVERSIFIED FUNDS:

Meaning: These are the funds in the market which have investment across the sectors,

asset classes and financial instruments to provide optimal benefit of diversification of

portfolio to investors.The following are the funds in the market in this category as per the

recently held survey:

a) SBI MAGNUM CONTRA

b) SBI MAGNUM EQUITY

ANALYSIS:

FUNDS RETURNS:As per this criterion funds are compared from 2009 to 2012 years time.

Latest returns are shown in the analysis.

Years SBI Magnum Contra

Return (in Rs ‘000 cr.)

SBI Magnum Equity

Return(inRs ‘000 cr.)

2010 -10.6 -4.5

2011 -4.8 2.0

2012 14.4 20.6

2013 5.6 8.2

FINDINGS: Since two funds SBI Magnum Contra and SBI magnum Equity, that’s shows how

well the portfolios are managed by the concerned Fund Managers.

Hit by global recession, from 2010 perspective also both funds from SBI are showing

negative returns.

Last, but not the least from 2012 both funds, the horizon which is considered to be very

important from investors point of view, both funds from SBI, especially Magnum Equity

outperformed in the category. It is giving highest return of 20.6% and 14.4% return in

2012 time periods and even in the 2013 time period it gives low return of 5.6% as

compared to high return of 8.2% of SBI Magnum Equity.

RISK PROFILE:

SBI Magnum Contra SBI Magnum Equity

Standard Deviation 27.37 25.45

Sharpe Ratio 0.63 0.90

Beta 0.97 0.90

FINDINGS:

Since Standard Deviation is the measure which shows variability in the returns from the

mean return, therefore it is considered to be the direct measure of risk. As Both SBI

Magnum Contra funds have higher Standard Deviation, it shows that these funds are

more aggressive in nature than other funds.

Sharpe ratio, which means returns per unit of risk that a fund is able to generate.

Therefore, higher the ratio the better it is. Accordingly, Magnum Contra is not a winner

as per this criterion.

Beta, which shows the co-movement of funds return with Market rate of returns, is again

measure of volatility or risk. Since Magnum Contra is having highest Beta which is

closed to one and also Magnum Equity which is second highest shows that they are tend

to be aggressive or volatile in nature.

PORTFOLIO ANALYSIS:

SBI Magnum Contra SBI Magnum Equity

P/E ratio 26.41 23.16

Fund Size(in Rs. cr.) 2770.86 518.13

Portfolio Turnover (in %) 144.00 127

FINDINGS:

P/E RATIO is a measure of investors’ confidence in the fund/stock. High P/E ratio

means that investors are paying higher prices for stock when compared to its earnings.

Generally, P/E ratio is high for young/growth funds/stock. Since Magnum Contra is

having a highest P/E ratio in the category, it shows that investors have a lot of confidence

in funds. On the contrary, Magnum Equity is slowly losing its contrarian approach which

reflects in its lowest P/E ratio in the category.

The Magnum Contra has highest fund size in the category.

Portfolio Turnover which measures the extent to which the fund is active in terms of its

dealings in the markets. However, high turnover also implies that high transaction cost

are charged to fund. Since SBI Magnum Equity of the funds from SBI have very low

turnover, it means that funds were not required to be changed in recent period which

ultimately results in greater efficiency.

NAV DETAILS OF FUNDS AS ON Mar-30-2013

FUND NAV (in Rs ‘000 cr.)

SBI Magnum Contra 51.23

SBI Magnum Equity 42.32

2) EQUITY LINKED SAVING SCHEME :(ELSS)

The following are the top five performing funds in ELSS category:

a) SBI MAGNUM TAX GAIN 93

ANALYSIS:

FUNDS RETURN:

As per this criterion funds are compared from 2010 to 2013 years time. Latest returns are shown

in the analysis. Returns of less than one year are on absolute basis and for more than one year are

on compounded basis:

Years SBI Magnum Tax Gain 93 Return (in Rs ‘000

cr.)2010 -5.6

2011 -5.0

2012 17.8

2013 5.2

FINDINGS: In 2010and 2011 year category, fund has not performed well as it is showing return

of -5.6 and -5.0 respectively.

Last but not the least, it is good news that fund has outperformed in 2012 giving returns

of 17.8% with the average performance 5.2% in the 2013.

RISK PROFILE:SBI Magnum Tax gain 93

Standard Deviation 3.66

Sharpe Ratio 0.04

Beta 0.87

FINDINGS :- Standard Deviation is the measure which shows variability in the returns from

the mean return, therefore it is considered to be the direct and primary measure of risk. In case of

Magnum Tax Gain 93, it has the lowest standard deviation in the category which means that the

fund has not much risky portfolio.

Sharpe ratio, which means returns per unit of risk that a fund is able to generate. Therefore,

higher the ratio the better it is. Accordingly, Magnum Tax Gain is having lowest ratio in the

category.


measure of volatility or risk. Magnum TAX Gain 93 which is having one of the lowest beta

0.87 in the category shows that the fund is actually very less sensitive to stock market

movement.

PORTFOLIO ANALYSIS:

SBI Magnum Tax gain 93

P/E R 24.08

Fund Size(in Rs. Cr.) 4697.46

Portfolio Turnover(in %) 40

FINDINGS:From the above table it can be concluded that:



Generally, P/E ratio is high for young/growth funds or stock. In this case Investors have

faith in SBI Magnum Taxgain 93 as it is having highest P/E ratio(24.08).

Again Magnum Tax gain has largest fund size as a result of strong distribution network,

strong brand, and the message of faith that SBI name itself give to masses of investors.

Therefore, SBI Mutual Funds in particular should build on strength of its Sponsor.



are charged to fund. As it is clearly visible from the table that Magnum Tax Gain93

(40%) has high ratio.

NAV DETAILS OF FUNDS AS ON 30 Mar,2013


SBI Magnum Tax Gain 93 58.08

EQUITY MID AND SMALL CAP:

The following are the top five performing funds in this category as on date:

a) MAGNUM GLOBAL 94

b) MAGNUM MULTIPIER PLUS 93

ANALYSIS:

FUNDS’ RETURN:

Years Magnum Global 94

(in Rs’000cr.)

Magnum Multiplier Plus 93

(in Rs’000cr.) 2011 1.4 -7.3

2012 31.7 18.6

2013 6.0 7.2

FINDINGS:

Since two funds Magnum Global 94 and Magnum multiplier, that’s shows how well the

portfolios are managed by the concerned Fund Managers.

In 2011 category is Magnum Multiplier Plus 93 giving the -7.3% return.

In 2012 category which is one of the preferred choice of a retail investor Magnum Global

94 is giving the highest return of 31.7%.

But in 2013 category, Multiplier plus is giving a return of 7.2% and Magnum Global is

giving a return of 6.0% which is not a bad return.

RISK ANALYSIS:

Magnum Global 94 Magnum Multiplier Plus 93



Beta 0.95 0.83

FINDINGS:

The primary measure of risk i.e. Magnum Global 94 having Standard Deviation of

4.14%.Fund having lowest Standard Deviation is also from Magnum Multiplier Plus 93 is

having 3.57% as Standard Deviation.

All funds in this category are showing positive ratio which indicates that funds are able to

justify well whatever it hac investments in risky assets. Now, highest return per unit of risk in

the category is from Magnum Multiplier Plus 93 is having a Sharpe Ratio of 0.05 which

justify its not risk.

Magnum Multiplier Plus 93 is having lowest Beta of 0.83which means that it is less

sensitive to the market and hence less risky.

PORTFOLIO ANALYSIS:

Magnum Global 94 Magnum Multiplier Plus 93

P/E Ratio 29.51 23.85

Turnover(in %) 76 68

Fund size(in Rs.cr) 946.71 1126.37

FINDINGS:



Generally, P/E ratio is high for young/growth funds or stock. Magnum Multiplier Plus 93

is having highest P/E ratio of 29.51 in the category.



are charged to fund. As it is clearly visible from the table that Magnum Multiplier Plus 93

is having lowest turnover ratio of 68% compared to 76% in case of Magnum Global 94, it

shows that the fund is well managed and is having a lowest transaction costs.

Fund Size, as visible from table itself that Magnum Global 94 (Rs.946.71 Cr) and

Magnum Multiplier Plus (Rs.1126.37Cr) which shows popularity of these funds in the

market.



MAGNUM GLOBAL 94 57.49

MAGNUM MULTIPIER PLUS 93 77.18

2) EQUITY LARGE CAP:The following are the top performing funds in the category:

A) MAGNUM EQUITY

ANALYSIS:

FUNDS RETURN

In 2011category, Magnum Equity, giving the negative return of -4.8%.

In 2012 category Magnum Equity giving a good return of 20.6%.

In 2013 category Magnum Equity giving the average return of 8.1%.

RISK PROFILE:

Magnum Equity

Standard Deviation 3.76

Sharpe Ratio 0.06

Beta 0.88

FINDINGS:

As per the Standard Deviation, Magnum Equity is having the highest risk in the

category (3.76%).

Years Magnum Equity (in Rs ‘000cr.)

2011 -4.8

2012 20.6

2013 8.1

The return per unit of risk is nil in case of Magnum Equity (0.06) it is risky.

Magnum Equity is having highest Beta (0.88) in the category signifying its less risky

nature. therefore whenever Stock Market will fall or rise fund will fall or rise more than

the market.

PORTFOLIO ANALYSIS:

Magnum Equity

P/E Ratio 23.16

Portfolio Turnover(in %) 127

Fund Size(in Rs.cr.) 518.13(30-03-13)

FINDINGS: As per P/E Ratio Magnum Equity is the winner in the category, it is having highest

ratio of 23.16 i.e. Investors are really confident about the fund and they are paying much higher

than the earnings.


dealings in the markets. Magnum Equity is having the highest Portfolio Turnover Ratio

of (127),thus incurring the highest transaction cost.

As per the Fund Size, Magnum Equity is having the 518.13 minimum Fund Size

indicating the not much popularity of the fund in the market.


2. LIC NOMURA MUTUAL FUND

FUND NAV (in Rs‘000 cr.)

Magnum Equity 42.32

1.Best performing “Balanced funds” are:

LIC NOMURA BOND Fund

LIC NOMURA Balanced Fund

ANALYSIS:

FUNDS RETURNS: As per this criterion funds are compared from 2011 to 2013 years time.


Years LIC NOMURA Bond

Return(in Rs ‘000 cr.)

LIC NOMURA Balanced


2011 10.0 10.0

2012 5.6 6.4

2013 8.6 8.6

FINDINGS:

Since two funds LIC NOMURA Bond and LIC NOMURA Balanced, that’s shows how well

the portfolios are managed by the concerned Fund Managers.

In 2011 LIC NOMURA Balanced fund are showing same returns 10.0%

In 2012 LIC NOMURA Balanced shows positive return 6.4% it is good return on the other

hand LIC NOMURA Bond decrease the return.

In last 2013 both these funds performed average return.

RISK PROFILE:LIC NOMURA Bond LIC NOMURA Balanced



Beta 1.28 0.89

FINDINGS:


mean return, therefore it is considered to be the direct measure of risk. LIC NOMURA

Balanced have higher Standard Deviation, it shows that these funds are more aggressive

in nature than other funds.


Therefore, higher the ratio the better it is. Accordingly, LIC NOMURA Balanced has

high sharpe ratio.


measure of volatility or risk. Since LIC NOMURA Bond is having highest Beta which is

closed to one and also LIC NOMURA Balanced which is lowest shows that they are not

tend to be aggressive or volatile in nature.

PORTFOLIO ANALYSIS:

LIC NOMURA Bond LIC NOMURA Balanced

P/E ratio NA 18.28

Fund Size(in Rs. cr.) 81.61 20.15

Portfolio Turnover (in %) NA 31

FINDINGS:



Generally, P/E ratio is high for young/growth funds/stock. Since LIC NOMURA

Balanced is having a highest P/E ratio in the category, it shows that investors have a lot

of confidence in funds. On the contrary, LIC NOMURA Bond is losing its contrarian

approach which reflects in its not attempted P/E ratio in the category.

The fund size of LIC NOMURA has no problem when it comes to raising funds. Like

LIC NOMURA Bond has highest fund size in balanced funds..



are charged to fund. Since LIC NOMURA Balanced funds very high turnover, it means

that funds were required to be changed in recent period which ultimately results in

greater efficiency.

NAV DETAILS OF FUNDS As ON Mar-30-2013:


LIC NOMURA BOND 30.33

LIC NOMURA Balanced 10.49

2. Best performing “Equity Funds” are:

LIC NOMURA EQUITY FUND

LIC NOMURA ULI SCHEME

ANALYSIS:

FUNDS’ RETURN: As per this criterion funds are compared from 2010 to 2012years time.


Years LIC NOMURA Equity


LIC NOMURA ULI Scheme


2011 -12.7 -7.6

2012 12.8 6.7

2013 2.8 1.5

FINDINGS:

In 2011 year category, both these funds has not performed well as it is showing negative

return of -12.7% and -7.6% respectively.

In 2012 LIC NOMURA Equity has performed well with positive return 12.8%.

Last but not the least, in 2013 both these funds giving average returns.

RISK PROFILE:

LIC NOMURA Equity LIC NOMURA ULI Scheme


Sharpe Ratio 0.02 NA

Beta 0.94 0.86

FINDINGS:


mean return, therefore it is considered to be the direct and primary measure of risk. In

case of LIC NOMURA ULI Scheme, it has the lowest standard deviation in the category

which means that the fund has not much risky portfolio.


Therefore, higher the ratio the better it is. Accordingly, LIC NOMURA Equity is having

lowest ratio in the category.


measure of volatility or risk. LIC NOMURA ULI Scheme which is having one of the lowest

beta in the category shows that the fund is actually very less sensitive to stock market

movement.

PORTFOLIO ANALYSIS:

LIC NOMURA Equity LIC NOMURA ULI Scheme

P/E ratio 21.61 18.43


Portfolio Turnover (in %) 10 124

FINDINGS:



Generally, P/E ratio is high for young/growth funds/stock. Since LIC NOMURA Equity

is having a highest P/E ratio in the category, it shows that investors have a lot of

confidence in funds. On the contrary, LIC NOMURA ULI Scheme is which reflects in

its lowest P/E ratio in the category.

The LIC NOMURA ULI Scheme has highest fund size in the equity funds. This it has no

problem when it comes to raising funds.



are charged to fund. Since LIC NOMURA Equity fund have very low turnover, it means

that funds were not required to be changed in recent period which ultimately results in

greater efficiency.



LIC NOMURA Equity 23.97

LIC NOMURA ULI Scheme 9.36

3. Best performing “Tax Saving Funds” are

LIC LONG TERM FUND

LIC TAX SAVER PLAN FUND

ANALYSIS:

FUNDS RETURNS: As per this criterion funds are compared from 2011 to 2013 years time.


Years LIC Long Term


LIC Tax Saver Plan


2011 -15.0 -12.4

2012 16.3 11.9

2013 0.5 0.4

FINDINGS:

In 2011 year category, both these funds has not performed well as it is showing negative

return of -15.0% and -12.4% respectively.

In 2012 LIC Long Term Fund performed well with positive return 16.3% on the other

hand LIC Tax Saver Plan positive return 11.9%.

Last but not the least, in 2013 both these funds giving very much low return.

RISK PROFILE:

LIC Long Term LIC Tax Saver Plan



Beta 1.06 0.92

FINDINGS:


mean return, therefore it is considered to be the direct and primary measure of risk. In case

of LIC Tax Saver Plan, it has the lowest standard deviation in the category which means that

the fund has not much risky portfolio.

Sharpe ratio, which means returns per unit of risk that a fund is able to generate. Therefore,

higher the ratio the better it is. Accordingly, LIC Tax Saver Plan is having lowest ratio in

the category.


measure of volatility or risk. LIC Tax Saver Plan which is having one of the lowest beta in

the category shows that the fund is actually very less sensitive to stock market movement.

PORTFOLIO ANALYSIS:

LIC Long Term LIC Tax Saver Plan

P/E ratio 20.42 21.42


Portfolio Turnover (in %) 9 13

FINDINGS:



Generally, P/E ratio is high for young/growth funds/stock. LIC Tax Saver Plan is having

a highest P/E ratio in the category, it shows that investors have a lot of confidence in

funds. On the contrary, LIC Long Term is slowly losing its contrarian approach which

reflects in its lowest P/E ratio in the category.

LIC Tax Saver Plan has highest fund size in the category .The LIC tax saver plan has no

problem when it comes to raising funds.



are charged to fund. Since LIC Long Term fund have very low turnover, it means that

funds were not required to be changed in recent period which ultimately results in greater

efficiency.



LIC Long Term 18.39

LIC Tax Saver Plan 26.69

6. ANALYSIS AND FINDINGSPersonal Details

(1). Qualification:-

Table:

Graduation/PG Under Graduate Others

77 36 7

Graph:

64%

30%

6%

INTERPRETATION: According to 120 respondents 64% of them had done gratuation/PG,

30% of them are undergratuate and rest 6% of them are others.

(b). Occupation. Pl tick (√)

Table:

Govt. Sec Pvt. Sec Business Agriculture Others

21 15 26 33 39

Graph:


21 15 26 33 39

INTERPRETATION: According to the graph of 120 respondents depict that 21 of them are in

govt sector, 15 of them are in pvt. Sector, 26 of them are in business, 33 of them are in

agriculture and rest 39 of them are in other profession.

(c). What is your monthly family income approximately? Pl tick (√).

Table:

Up to Rs.10,000 Rs. 10,001 to

15000

Rs. 15,001 to

20,000

Rs. 20,001 to

30,000

Rs. 30,001

and above

7 15 26 33 39

Graph:

6%13%

22%

28%

33%

Up to Rs.10,000 Rs. 10,001 to 15000 Rs. 15,001 to 20,000Rs. 20,001 to 30,000 Rs. 30,001 and above

INTERPRETATION: The following graph depict that 6% of their income is Up to Rs.10,000,

12% of their income is Rs. 10,001 to 15000, 22% of their income is Rs. 15,001 to 20,000, 27%

of their income is Rs. 20,001 to 30,000 and rest 33% of their income is Rs. 30,001 and above.

1. What kind of investments you prefer most?

Table:1

Saving account 100

Fixed deposits 87

Insurance 100

Mutual Fund 100

Post Office-NSC, etc 69

Shares/Debentures 89

Gold/ Silver 85

Real Estate 72

PPF 33

PF 43

Graph:1

Savi

ng ac

count

Fixe

d dep

osits

Insu

rance

Mutu

al F

und

Post O

ffice

-NSC

, etc

Shar

es/D

eben

ture

s

Gold/ S

ilver

Real E

stat

e

PPFPF

100 87 100 100 69 89 85 72 33 43

INTERPRETATION: According to 120 respondents 100 of them are having saving account, 87

of them are having fixed deposits, 100 of them are ahaving insurance, 69 of them are having post

office-NSC, etc, 89 of them are are having shares/deentures, 85 of them are having gold/silver,

72 of them are having real estate, 33 of them are having PPF and rest 43 ofthem are having PF.

2. While investing your money, which factor you prefermost? Any one

Table:2

Liquidity Low Risk High Return Company

reputation

33 31 35 21

Graph:2

28%

26%

29%

18%Liquidity Low RiskHigh Return Company reputation

INTERPRETATION: According to the graph of 120 respondents depict that 18% of them are

investing in liquidity, 27% of them are in low risk, 26% of them are investing in high return,

29% of them are investing in company reputaion.

3. In this highly volatile market, do you think Mutual Funds are a destination for

Investments?

Table:3

Yes 100

No 20

Graph:3

83%

17%Yes No

INTERPRETATION: The following graph depict that 83% of them are YES highly volatile in

market for Mutual Funds are a destination for Investments and rest 17% of them are not highly

volatile in market for Mutual Funds are a destination for Investments.

4. Have you ever invested your money in mutual fund?

Table:4

Yes 100

No 20

Graph:4

83%

17%Yes No

INTERPRETATION: According to 120 respondents 83% of them say yes they have invested

money in mutual funds, and rest 17% of them say no they have not invested money in mutual

funds.

If yes,

a) Where do you find yourself as a mutual fund investor?

Table:

Totally ignorant 12

Partial knowledge of mutual funds 32

Aware only of any specific scheme in which you invested 20

Fully aware 36

Graph:

12%

32%

20%

36%

Totally ignorantPartial knowledge of mutual fundsAware only of any specific scheme in which you investedFully aware

INTERPRETATION: According to the graph of 100 respondents depict that 12% of them are

totally ignorant themself as a mutual fund investor, 32% of them are partial knowlege of mutual

funds themself as a mutual fund investor, 20% of them are aware only of any specific in which

they invested themself as a mutual fund investor and rest 36% of them are fully aware themself

as a mutual fund investor.

b) In which kind of mutual you would like to invest?

Table:

Public 37

Private 63

Graph:

37%

63%

Public Private

sINTERPRETATION: According to 100 respondents 37% of them like to invest in public

sector and rest 63% of them say that they would like to invest private sector,

c) how do you come to know about Mutual Fund?

Table:

Advertisement Peer Group Banks Financial

Advisors

22 17 31 30

Graph:

22%

17%

31%

30%

Advertisement Peer Group Banks Financial Advisors

INTERPRETATION: According to the graph of 100 respondents depict that 22% of them say

that they got to know about Mutual Funds by advertisement, 17% of them say that they got to

know about Mutual Funds by peer group, 31% of them say that they got to know about Mutual

Funds by banks and rest 30% of them say that they got to know about Mutual Funds by financial

advisors.

5. Which feature of the mutual funds allure you most?

Table:5

Diversification 11

Better return and safety 39

Reduction in risk and transaction cost 13

Regular Income 22

Tax benefit 15

Graph:5

11%

39%

13%

22%

15%

Diversification Better return and safety Reduction in risk and transaction cost

Regular Income Tax benefit

INTERPRETATION: According to 100 respondents 11% of them are Diversification feature of

the mutual funds allure them most, 39% of them are Better return and safety feature of the

mutual funds allure them most, 13% of them are Reduction in risk and transaction cost feature of

the mutual funds allure them most, 22% of them are Regular Income feature of the mutual funds

allure them most and rest 15% of them are Tax benefit feature of the mutual funds allure them

most

6. Which Mutual Fund Plan do you consider the best? Table:6

Balanced Plan 30

Equity Plans 25

Income Plans 31

Other: 14

Graph:6

30%

25%

31%

14%Balanced Plan Equity Plans Income Plans Other:


that balanced plan is the best, 25% of them say that equity plans are the best, 31% of them say

that income plans are the best and rest 14% of them say that others plans are the best.

7. How long would you like to hold your Mutual Funds' Investments?

Table:7

1 to 3 Years 39

4 to 6 Years 28

7 to 10 Years 33

More than 10 Years 0

Graph:7

39%

28%

33%

1 to 3 Years 4 to 6 Years 7 to 10 Years More than 10 Years

INTERPRETATION: The following graph depict that 39% of them say that they would like to

hold their mutual funds for 1 to 3 Years, 28% of them say that they would like to hold their

mutual funds for 4 to 6 Years, ans rest 33% of them say that they would like to hold their mutual

funds for 7 to 10 Years

8. How do you rate the risks associated with Mutual Funds? Table:8

Low 21

Moderate 43

High 36

Graph:8

21%

43%

36%

Low Moderate High

INTERPRETATION: According to 100 respondents 21% of them say that there is low risks

associated with Mutual Funds, 43% of them say that there is moderate risks associated with

Mutual Funds and rest 36% of them say that there is high risks associated with Mutual Funds.

9. Which among the following principles do you consider while selecting a Mutual Fund?

Table:9

Enquiring about the Fund Manager 31

Finding about its past performance 45

Identifying your own objectives 24

Graph:9

31%

45%

24%

Enquiring about the Fund Manager Finding about its past performance

Identifying your own objectives


that Enquiring about the Fund Manager could be considered while selecting mutual funds, 45%

of them say that Finding about its past performance could be considered while selecting mutual

funds and rest 24%of them say that Identifying your own objectives could be considered while

selecting mutual funds.

10. Which end-scheme do you feel is good? * Open end type of mutual fund are those that

does not have restrictions on the amount of shares the fund will issue and Closed end fund

is a publicly traded investment company that raises a fixed amount of capital through an

initial public offering (IPO).

Table:10

Open End 73

Closed End 27

Graph:10

73%

27%

Open End Closed End

INTERPRETATION: The following graph depict that 73% of them say that open end schemes

are good and rest 27% of them say that closed end shemes are good.

11. What do you think which risks usually affects Mutual Funds? * Systematic risk is the

risks inherent to the entire market segment as interest rates and unsystematic risks are

specific risks as NEWS that affects specific stock.

Table:11

Systematic Risk 69

Unsystematic Risk 31

Graph:11

69%

31%Systematic Risk Unsystematic Risk

INTERPRETATION: According to 100 respondents 69% of them say syatematic risk usually

affects Mutual Funds and rest 31% of them say that unsystematic risk usually affects Mutual

Funds

12. Which are the primary sources of your knowledge about Mutual Funds as an

investment option?

Table:12

Television 69

Internet 32

Newspaper / Journals 41

Friends / Relatives 57

Sales Representatives 42

Graph:12

Television

Inte

rnet

Newspaper /

Journ

als

Friends /

Relative

s

Sales R

eprese

ntative

s

69 32 41 57 42

INTERPRETATION: According to the graph of 100 respondents depict that 69 of them say

that Television is the primary sources of their knowledge about Mutual Funds as an investment

option, 32 of them say that Internet Television is the primary sources of their knowledge about

Mutual Funds as an investment option, 41 of them say that Newspaper / Journals Television is

the primary sources of their knowledge about Mutual Funds as an investment option, 57 of them

say that Friends / Relatives Television is the primary sources of their knowledge about Mutual

Funds as an investment option and rest 42 of them say that Sales Representatives Television is

the primary sources of their knowledge about Mutual Funds as an investment option.

13. Which among the following is the safest Investment option?

Table:13

Mutual Funds 31

Stock Markets 26

Bank Deposits 43

Graph:13

31%

26%

43%

Mutual Funds Stock Markets Bank Deposits

INTERPRETATION: The following graph depict that 31% of them say that mutual funds is the

safest Investment option, 26% of them say that stock market is the safest Investment option and

rest 43% of them say that bank deposits is the safest Investment option.

14. Which factors prevent you to invest in mutual fund ?

Table:14

Bitter Past Experience 31

Lack of Knowledge 23

Lack of confidence in service being provided 15

Difficulty in selection of schemes 24

Inefficient investment advisors 7

Graph:14

31%

23%15%

24%

7%

Bitter Past Experience Lack of Knowledge

Lack of confidence in service being provided Difficulty in selection of schemes

Inefficient investment advisors

INTERPRETATION: According to 100 respondents 31% of them say that Bitter Past

Experience is one of the factor to prevent them to invest in mutual fund, 23% of them say that

Lack of Knowledge is one of the factor to prevent them to invest in mutual fund, 15% of them

say that Lack of confidence in service being provided is one of the factor to prevent them to

invest in mutual fund, 24% of them say that Difficulty in selection of schemes is one of the

factor to prevent them to invest in mutual fund and rest 7% of them say that Inefficient

investment advisors is one of the factor to prevent them to invest in mutual fund.

15. In which Mutual Fund you have invested?

Table:15

SBIMF 19

UTI 15

HDFC 22

Reliance 15

ICICI prudential funds 21

JM mutual fund 5

Other. Specify 3

Graph: 15

19%

15%

22%15%

21%

5%3%

SBIMF UTI HDFC RelianceICICI prudential funds JM mutual fund Other. Specify


that they invest in SBIMF, 15% of them say that they invest in UTI, 22% of them say that they

invest in HDFC, 15% of them say that they invest in Reliance, 21% of them say that they invest

in ICICI prudential funds, 5% of them say that they invest in JM mutual fund and rest 3% of

them say that they invest in Other field.

16. When you invest in Mutual Funds which mode of investment will you prefer?

Table:16

One Time Investment 53

Systematic Investment Plan (SIP) 47

Graph:16

53%

47%

One Time Investment Systematic Investment Plan (SIP)

INTERPRETATION: The following graph depict that 53% of them say that they invest as one

time investment and rest 47% of them say that they invest ads systematic investment plan (SIP).

17. Where from you purchase mutual funds?

Table:17

Directly from the AMCs 23

Brokers only 26

Brokers/ sub-brokers 38

Other sources 13

Graph:17

23%

26%

38%

13%

Directly from the AMCs Brokers only Brokers/ sub-brokers Other sources

INTERPRETATION: According to 100 respondents 23% of them purchase mutual funds

directly from the AMCs, 26% of them purchase mutuial funds by brokers only, 38% of them

purchase mutual funds by brokers/sub brokers and rest 13% of them purchase mutual funds by

other sources.

18. Which sector are you investing in mutual fund sector?

Table:18

General 1st 21Oil and petroleum 12Gold fund 22Diversified equity fund 17Power sector 3Debt fund 9Banking fund 6Real estate fund 10

Graph:18

21%

12%

22%17%

3%9%

6% 10%

General 1st Oil and petroleum Gold fund Diversified equity fundPower sector Debt fund Banking fund Real estate fund

INTERPRETATION: According to the graph of 100 respondents depict that 21% of them

invest in general 1st in mutual fund sector, 12% of them invest in oil and petroleum in mutual

fund sector, 22% of them invest in gold fund in mutual fund sector, 17% of them invest in

diversified equity fund in mutual fund sector, 3% of them invest in power sector in mutual fund

sector, 9% of them invest in debt fund in mutual fund sector, 6% of them invest in banking funds

in mutual fund sector and rest 10% of them invest in real estate in mutual fund sector.

19. How would you like to receive the returns every year?

Table:19

Dividend payout 35

Dividend re-investment 23

Growth in NAV 42

Graph:19

35%

23%

42%

Dividend payout Dividend re-investment Growth in NAV

INTERPRETATION: The following graph depict that 35% of them would like to recieve their

return by dividend payout every year, 23% of them would like to receive their return by dividend

re-investment every year and rest 42% of them would like to receive their return by growth in

NAV every year.

20. Preferred portfolios by the Investors

Portfolio No. of Investors

Equity 56

Debt 20

Balanced 24

56%

20%

24%Equity Debt Balanced

Interpretation:-

From the above graph it can be seen that 46% preferred equity portfolio 37% preferred

Balance and 17% preferred Debt portfolio.

21. Option for getting Return preferred by the Investors

Option Dividend payout Dividend

Reinvestment

Growth

No. of

Respondents25 10 65

25%

10%

65%

Dividend payout Dividend Reinvestment Growth

Interpretation:-

Out of 120 investors 71% preferred Growth option, 21% preferred Dividend option and

Remaining 8% preferred Reinvestment option.

22. Preference of Investors whether to invest in Sectoral Funds

Response No. of Respondents

Yes 25

No 75

25

75

YesNo

Interpretation:-

Out of 120 investor 75% do not prefer to invest in sectoral fund because there is maximum

risk and remaining 25% of investors prefer to invest in sectoral fund.

CONCLUSION

Running a successful Mutual Fund requires complete understanding of the peculiarities of the

Indian Stock Market and also the awareness 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, and 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. They have to be made aware

of what is mutual fund and how does it operates. What are its advantages and how it may lead to

losses? 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 for this small investors. People invest in those

Companies where they have faith or they are well known with them. There are many AMCs in

Patiala 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, SBIMF, 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, Sundaram, 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’ mindset 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.

After considering all three parameters (Standard Deviation, Sharpe Ratio, Beta) it can be

concluded that MAGNUM CONTRA is the best fund in the equity diversified funds

because unlike a typical contrarian fund that focus on out of stocks, this fund considers

the underlying company’s valuations and compares that with what it believes the

company’s true valuations should be and then decide whether to invest in it or not.

Mutual funds should have to focus on equity diversified funds because unlike a typical

fund and believes the company’s true valuations should be and then decide whether to

invest in it or not.

BSE has set various guidelines and forms that need to be adhered to and submitted by

the companies. These guidelines will help companies to expedite the fulfilment of the

various formalities and disclosure requirements that are required at various stages.

Mutual funds should consider the underlying company’s valuations and compares that

with what it believes the company’s true valuations.

Equity funds are more risky than others. Therefore, its important to know what the

risks are and what your risk capacity is. Generally speaking, equity funds are the most

risky. Debt funds are safer and money market funds are the safest. However, there is a

relationship between risk and returns. Money market funds give you the lowest return

because of their low risk. Equity funds will give you the chance of highest return to

match their high risk.

You should invest for at least 3-5 year time horizon, if investing in an equity fund,

otherwise you will not enjoy the full benefit of your equity exposure. Don't make the

mistake of selling all your equity funds if the market corrects. By waiting for a 3 year

period you will give yourself enough time to not only recover your losses, but also

increase your returns.

For money market funds, these are funds that you should invest in for short-term

liquidity or cash needs.

Like other investments, mutual funds also have tax implications. Each time you sell

your units or receive dividends, there could be a tax liability associated with such

transactions.

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 less than 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.

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.

Divide the spectrum of Mutual Funds depending on major asset classes invested in.

Presently there are only two.

• Equity Funds investing in stocks.

• Debt Funds investing in interest paying securities issued by government, semi-

government bodies, public sector units and corporate.

a) Categorizing equities

• Diversified – invest in large capitalized stocks belonging to multiple sectors.

• Sectoral – Invest in specific sectors like technology, FMCG, Pharma, etc.

• Liquid – Invest in money market, other short term paper, and cash. Highly liquid.

Average maturity is three months.

BIBLIOGRAPHY

BOOKS AND JOURNALS

Anjan Chakrabarti and Harsh Rungta, 2000, “Mutual Funds Industry in India : An indepth

look into the problems of credibility, Risk and Brand”, The ICFAI Journal of Applied

Finance, Vol.6, No.2, April, 27-45.

De Bondt, W.F.M. and Thaler, R, 1985, “Does the stock market over react?” Journal of

Finance, 40, 793-805.

Gupta, L.C., 1994, Mutual Funds and Asset Preference, Society for Capital Market Research

and Development, Delhi.

Madhusudan V. Jambodekar, 1996, Marketing Strategies of Mutual Funds – Current

Practices and Future Directions, Working Paper, UTI – IIMB Centre for Capital Markets

Education and Research, Bangalore.

Raja Rajan V., 1997, “Chennai Investor is conservative”, Business Line, Feb. 23.

Raja Rajan, 1997, “Investment size based segmentation of individual investors”,

Management Researcher, 3 (3 & 4), 21-28.

.

INTERNET RESOURCES

http://www.moneycontrol.com/mutual-funds/

http://www.morningstar.in/mutualfunds/

http://www.moneycontrol.com/mutual-funds

QUESTIONNAIRE

Personal Details:

(a). Name:-

(b). Add: - Contact No:-

(c). Age:-

(d). Qualification:-

Graduation/PG Under Graduate Others

(e). Occupation. Pl tick (√)


(g). what is your monthly family income approximately? Pl tick (√).

Up to

Rs.10,000

Rs. 10,001 to

15000

Rs. 15,001 to

20,000

Rs. 20,001 to

30,000

Rs. 30,001 and

above

1. What kind of investments you prefer most? Pl tick (√). All applicable

a. Saving account b. Fixed deposits c. Insurance d. Mutual Fund

e. Post Office-NSC, etc f. Shares/Debentures g. Gold/ Silver h. Real Estate

I. PPF j. PF

2. While investing your money, which factor you prefermost? Any one

Liquidity Low Risk High Return Company reputation

3. In this highly volatile market, do you think Mutual Funds are a destination for

Investments? *

Yes

No

4. Have you ever invested your money in mutual fund?

Yes

No

If yes,

a) Where do you find yourself as a mutual fund investor?

Totally ignorant [ ]

Partial knowledge of mutual funds [ ]

Aware only of any specific scheme in which you invested [ ]

Fully aware [ ]

b) In which kind of mutual you would like to invest?

Public [ ] Private [ ]

c) If not invested in Mutual Fund then why?

Not aware of MF Higher risk Not any specific reason

D) Which among the following is the safest Investment option?

Mutual Funds

Stock Markets

Bank Deposits

5. which feature of the mutual funds allure you most?

Diversification [ ]

Better return and safety [ ]

Reduction in risk and transaction cost [ ]

Regular Income [ ]

Tax benefit [ ]

6. Which Mutual Fund Plan do you consider the best?

Balanced Plan

Equity Plans

Income Plans

Other:

7. How long would you like to hold your Mutual Funds' Investments?

1 to 3 Years

4 to 6 Years

7 to 10 Years

More than 10 Years

8. How do you rate the risks associated with Mutual Funds?

Low

Moderate

High

9. Which among the following principles do you consider while selecting a Mutual Fund?

Enquiring about the Fund Manager

Finding about its past performance

Identifying your own objectives

10. Which end-scheme do you feel is good? * Open end type of mutual fund are those that

does not have restrictions on the amount of shares the fund will issue and Closed end fund

is a publicly traded investment company that raises a fixed amount of capital through an

initial public offering (IPO).

Open End

Closed End

11. Which are the primary sources of your knowledge about Mutual Funds as an

investment option?

Television

Internet

Newspaper / Journals

Friends / Relatives

Sales Representatives

14. Which factors prevent you to invest in mutual fund ?

Bitter Past Experience

Lack of Knowledge

Lack of confidence in service being provided

Difficulty in selection of schemes

Inefficient investment advisors

15. In which Mutual Fund you have invested? Please tick (√). All applicable.

a. SBIMF

b. UTI

c. HDFC

d. Reliance

e. ICICI prudential funds

f. JM mutual fund

g. Other. Specify

16. When you invest in Mutual Funds which mode of investment will you prefer?

a. One Time Investment b. Systematic Investment Plan (SIP)

17. Where from you purchase mutual funds?

Directly from the AMCs [ ]

Brokers only [ ]

Brokers/ sub-brokers [ ]

Other sources [ ]

19. How would you like to receive the returns every year?

a. Dividend payout b. Dividend re-investment c. Growth in NAV

20. Preferred portfolios by the Investors

Portfolio No. of Investors

Equity

Debt

Balanced

Mutual Funds Project

Documents

canbank mutual fund

sbi mutual fund

introductiona mutual

mutual fund regulations

non uti mutual fund

indian bank mutual fund

bank of baroda mutual

private sector mutual