A PROJECT REPORT ON

Mutual Fund as a Future Investment.

AT
ARIHANT CAPITAL MARKET LTD.

In partial fulfillment of the requirements of Summer Internship

Programmed in the Masters in Business Administration programmed by Gls
University

SUBMITTED TO:
PROF. HETAL PANDYA

SUBMITTED BY:
JAYDIP PATEL

(ENROLL NO - 201500601010108)

NR INSTITUTE OF BUSINESS
ADMINISTRATION
(NRIBM)
BATCH: 2015-17

PREFACE
Only theoretical knowledge is not enough in MBA along with one need some practical
exposure in the corporate worldalso.MBA provides this opportunity through the medium of
summer internship project. This project has made one thing clear that there are two pillars
forgetting success in business is efficiency and effectiveness; it means not only doing right
things but also doing things rightly.
This project report gives practical knowledge of the subject. This training has brought
positive changes in our life & career. The project gave us a lot exposure which will be
helpful to us for the rest of the MBA curriculum.
According to the above reviews, our GLS University has included practical training of any
industry. I have prepared Report on at Arihant Capital Pvt Ltd. It was really a nice experience
for me to do work on this project.

III

ACKNOWLEDGEMENT
It is glad to inform express our profound sentiments of gratitude to all who rendered their
valuable help for the successful completion of this project titled on Mutual Funds as A
Future Investment. Also thank to our Director Sir Dr. Hitesh Ruparel for giving us a
peaceful and calm full atmosphere to help in our study, and to make this project.
A special thanks to our instructor and project in charge Prof. Hetal Vyas who assisted in every
step of summer internship. She has played a vital role in making our project successful.
Thanks to Mr.Miral Shah who is a Business Development Manager, whose constant help,
thoughtful suggestion and deep interest have enabled us to complete this work.
Our genuine sense of gratitude goes to GLS University that gave us a chance to brighten your
academic qualification that provided us this opportunity to have a practical knowledge of the
subject.

EXECUTIVE SUMMARY
Mutual Funds have become a widely popular and effective way for investors to participate
in financial markets in an easy, low-cost fashion, while muting risk characteristics by
spreading the investment across different types of securities, also known as diversification.
It can play a central role in an individual's investment strategy. They offer the potential for
capital growth and income through investment performance, dividends and distributions
under the guidance of a portfolio manager who makes investment decisions on behalf of
mutual fund unit holders. Over the past decade, mutual funds have increasingly become the
investors vehicle of choice for long-term investment. It becomes pertinent to study the
performance of the mutual fund. The relation between risk-return determines the
performance of a mutual fund scheme. As risk is commensurate with return, therefore,
providing maximum return on the investment made within the acceptable associated risk
level helps in segregating the better performers from the laggards. Many asset management
companies are working in India, so it is necessary to study the performance of it which
may be useful for the investors to select the right mutual fund.
A mutual fund is a common pool of money into which investors with common investment
objectives place their contributions that are to be invested, in accordance with the stated
objective of the scheme. The investment manager invests the money collected into assets
that are defined by the stated objective of the scheme. For example, an Equity fund would
invest in Equity and Equity related instruments and a Debt fund would invest in Bonds,
Debentures and Gilts etc.
The most important variable that decides whether you will meet your target or not is the
nature of the actual investments. The first step in getting this right is to decide what kind of
asset class

TAB
Sr. No.
1
1.1

LE OF CONTENTS
Particulars
Research Methodology
Problem Statement
V
I

Page No.
9
10

1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
2
2.1
2.2
2.3
2.4
2.5
2.6
3
3.1
3.2
3.3
3.4
3.5
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
5
6
7
8
9

Research Objective
Hypothesis
Literature Review
Importance of the Study
Research Design
Data Collection Method
Sampling
Nature/Form
Limitations
Industrial Profile
Introduction
BSE
NSE
OTCEI
Service given by stock exchange to investors
Service given by stock exchange to company
Company profile
About the Company
History
Overview
Product
Services
Scenario of Mutual Fund
Introduction of Mutual fund
History
Mutual Fund Structure
Schemes of Mutual Funds
Mutual Fund base on Assets Investment
Segment of Mutual Funds
Growth of Mutual Funds
Benefits of Mutual Funds
Disadvantage of Mutual Funds
Mutual Fund Investors
Data Analysis
Finding & Recommendation
Conclusion
Bibliography
Annexure

TABLE OF CHARTS
ONE VARIABLE

V
II

11
12
13
19
20
21
22
23
24
25
26
27
28
29
31
32
33
34
35
38
44
44
45
46
47
48
49
52
53
54
57
58
60
61
91
94
96
99

SR NO.

PARTICULAR

PAGE NO.

Table 5.1 Marital Status

62

Table 5.2 Age

63

3
4
5
6

Table no 5.3 Gender

Table no 5.4 Occupation
Table no 5.5 Invest from Savings
Table no 5.6 Segment

65
66
67
68

Table no 5.7 Percentage of investment

70

Table no 5.8 Rate of return

72

Table no 5.9 Type of investment

74

10

Table no 5.10 Frequently

75

11

Table no 5.11 Segment

76

12

Table no 5.12 Bases

77

13

Table no 5.13 Source

78

14

Table no 5.14 Factore

79

15

Table no 5.15 Positive return

81

16

Table no 5.16 Risk

82

PARTICULAR

PAGE NO.

17

Hypo. 1 Occupation & Frequency of Investment

85

18

Hypo. 2 Occupations & Consideration Factore

86

TWO VARIABLES
SR NO.

V
II

19

Hypo. 3 Annual income & Frequency of Investment

87

20

Hypo. 4 Annual income & Segment of Mutual Fund

88

21

Hypo. 5 Segment & Positive return

89

22

Hypo. 6 Segment & Risk

90

I
X

CHAPTER: 1 RESEARCH METHODOLOGY

10

1.1 STATEMENT OF THE PROBLEM

The present study aims at to answer a few questions in this respect. What is the scope of the mutual
fund in India incurred 0during the study? Whether the mutual fund have outperformed the market
or not. What is the position of mutual funds performance among the different scheme? Which types
of mutual funds are performing well? What is the attitude of the investor towards mutual funds? Is
the present form of fund performance information dissemination adequate? To know the current
scenario of Mutual market in Indian economy. To know how the mutual fund will be beneficial in
future.

11

1.2 OBJECTIVE OF THE STUDY

Primary objectives
To analyze investors perspective towards investment in Mutual Fund.

Secondary Objectives
To present different qualitative aspects which are essential for investors before
investing in Mutual Funds.
To find out the criterion most preferred by people for selection of mutual funds.
To know what kind of schemes/plans investors like to invest in.
To know the various services provided by AMCs to its investors.

12

1.3. HYPOTHESIS
1. H0: Occupation & Frequency of Investment are not related
H1: Occupation & Frequency of Investment are related
2. H0: Occupations & Factor consideration before investing in share market are not related
H1: Occupations & Factor consideration before investing in share market are related
3. H0: Annual income & Frequency of Investment are not related
H1: Annual income & Frequency of Investment are related
4. H0: Annual income & Segment of Mutual Fund Investment are not related
H1: Annual income & Segment of Mutual Fund Investment are related
5. H0: Segment & Positive return are not related
H1: Segment & Positive return are related
6. H0: Segment & Risk are not related
H1: Segment & Risk are related

13

1.4 LITERATURE REVIEW

(1) A Mutual fund is a pure intermediary which performs a basic function of buying and selling
securities on behalf of its unit holders, which the latter also can perform but not as easily,
conventionally, economically and profitably. The aim of this article is to review the existing
literature on Mutual Funds. I have reviewed the studies conducted on various aspects of
mutual funds. I have summarized the conclusions of all the studies so that the reader will
get the idea on what studies has been conducted on mutual funds. I have categorized the
studies into different sub topics. All the related studies are presented under one head. Due to
tremendous growth of Mutual fund Industry it has gained the interest of investors as well as
researchers. Lots of studies have been conducted on various areas of mutual funds. The
objective of this article is to throw a light on the existing literature on mutual funds.
(2) Sarish, (2012) studied mutual funds and the benefits of investing in mutual fund, its
drawbacks and have done detailed study on various aspects of mutual fund. This paper
aims at exploring the potential of mutual funds in India with all problems, complexities and
variables, and suggesting the means and ways of meeting the challenges for developing
the mutual funds in tandem with its potential of economic growth. This study relied on
secondary data in order to identify and analyze the challenges and opportunities for mutual
funds.
(3) Bansal and Kumar,( 2012) attempted to study the performance of selected mutual funds
schemes based on risk-return relationship models, and return on mutual funds also
compared with return on equity shares of different sectors of Indian economy. The analysis
has been made on the basis of mean return, intercept, beta, Sharpe ratio, Treynor ratio, and
Jensen Alpha. The overall Analysis finds UTI schemes being best performers and others
showing below average performance.
(4) Bhaskar Biswas, (2013), investigated out performance and under performance of
diversified funds. It involved studying the performance of some ten best and ten worst
performing diversified equity mutual funds for the period of last three years (2009 -2012).
In this paper of selected diversified equity funds have been analyzed by analyzing their
14

arithmetic mean return, risk can be analyzed by standard deviation , beta measures market
sensitivity, alpha measures the risk return relationship and Sharpe ratio measures the risk
premium of portfolio
(5) Rao, D.N.& Rao, S.B, (2010) carried out a study, on the investment patterns of the five
investor groups in eight different fund categories; studied the portfolios of the investor
groups and identified the dominant investor groups as per investment size and folios.
Important findings are (a) Corporates are the dominant investor group with a share of
almost 48% of the total investment (AUM) in the industry and prefer non-equity funds
which offer high security & liquidity while the next dominant investor group was the Retail
investors group with 24% of the total investment.
(6) Alekhya, (2012), studied performance evaluation of Public & Private Sector Mutual Funds
in India and comparative performance of public and private sector mutual fund schemes the
Indian Mutual fund Industry has witnessed a structural transformation during the past few
years. This paper has evaluated the performance of Indian Mutual fund equity scheme of 3
years past data from 2009 to 2011. To appraise investment performance of mutual funds
with risk adjustment the theoretical parameters as suggested by Sharpe, Treynor and Jensen.
(7) Tarak Paul, (2012), assesses the Gap between Expectations and Experiences of Mutual
Fund of around 260 Investors in Guwahati city and has found out that there is a significant
gap between the mutual fund investors expectations and experiences
(8) Palanisamy, Sengottaiyan, and Palaniappan, (2012) studied Investment Pattern in Debt
Scheme of Mutual Funds. Data collected through interview schedule and statistical tools
used such as percentage analysis, weighted ranking analysis and Chi-square analysis. The
study concludes that debt scheme are suitable for genuine investors as there exists a variety
of investors needs depending on purpose, expectations and risk taking abilities.
(9) Jain and Gangopadhyay, (2012) analysis of Equity Based Mutual Funds in India attempted
to analyze the performance of equity based mutual funds. The analysis has been made using
the risk-return relationship and Capital Asset Pricing Model (CAPM). The overall analysis
15

finds that HDFC and ICICI have been the best performers, UTI an average performer and
LIC the worst performer which gave below- expected returns on the risk-return relationship.

(10) A company that collected money from a group of people with common investment
objectives to buy different securities is called mutual fund. The collected holding of these
securities was known as its portfolio Mark (2007). According to Teri (2007) mutual fund is
a professional investment company which managed collection of stocks, bonds, or other
securities owned by a group of investor. Each mutual fund had a fund manager who
purchased and sold the funds investment according to the fund goals. Fund managers were
responsible to analyze the economic conditions, industry trends, government regulations
and the impact on stocks before selecting the securities for investment.

(11)

The mutual fund provides opportunity for investors to invest in diversified portfolios and
get the benefit of betters along with professional management. However, the poor
awareness along with conservative mindset has restricted the growth of mutual funds. The
exit of two leading foreign mutual fund is an indication that all is not well in Indian mutual
fund industry. communication technology
(Sharma, et al, International Journal on Applied Financial Management Perspectives,2014)

(12) The Indian mutual fund industry is one of the fastest growing sectors in the Indian capital
and financial markets. The Indian mutual fund industry has grown several folds in terms of
size and operations during the past five decades of its existence. The common investors are
facing the problem in choosing the suitable product from among the multiple institutions
offering variety of products and multiple options attached with each product.
(Suvarna, et al, International Journal of Applied Financial Management Perspective,2014)

(13) Mutual funds have emerged as an intermediary for wealth creation for investors with varied
objectives and varied risk -return appetites, without having to go through the rigmarole of
direct investments in equity, which are more volatile, need professional and technical knowhow. public sector mutual funds have been better performers than their private sector counter
16

parts.
(Bhavsar, et al, 2014)

(14)

Mutual fund is one of the best investment options among various available investment
options. It is also attracting the rural people in recent years. Investors usually perceive that
all capital market investment avenues are risky. Based on objectives and risk bearing
capacities, investors go for different investment alternatives.
(John,et al ,International Journal of Arts ,Management and Humanities 2014)

(15) Measures have been applied to measure the risk-adjusted performance and along with these,
different coefficients have been estimated to examine the selectivity, market-timing and
diversification performances of the open-ended gilt schemes offered by Indian public &
private sector mutual fund companies as well as the firms belonging to foreign private
sector.
(Joy et al, International Journal of Financial Management 2012)

(16) Mutual funds are collective investment vehicles that pool money from investors to buy a
bunch of securities. The popularity of these schemes is mainly due to the benefits of
professional management and reduction of risks through portfolio diversification.
(Bhatt et al,Journal of Accounting ,Finance and Management,2011)

(17) The Indian mutual fund industry is one of the fastest growing sectors in the Indian capital and
financial markets. The mutual fund industry in India has seen dramatic improvements in
quantity as well as quality of product and service offerings in recent years. Mutual funds
assets under management grew by 96% between the end of 1997 and June 2003 and as a
result it rose from 8% of GDP to 15%. The industry has grown in size and manages total
assets of more than $30351 million. Of the various sectors, the private sector accounts for
nearly 91% of the resources mobilised showing their overwhelming dominance in the
market. Individuals constitute 98.04% of the total number of investors and contribute US
17

$12062 million, which is 55.16% of the net assets under management.

(18)

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. India has a burgeoning population of middle class now estimated around
300 million. A typical Indian middle class family can have liquid savings ranging from Rs.2
to Rs.10 Lacs today. Investments in Banks are liquid and safe, but with the falling rate of
interest offered by Banks on Deposits, it is no longer attractive. At best a part can be saved in
bank deposits, but what is the other sources of investment for the common man? Mutual
Fund is the ready answer. Viewed in this sense globally India is one of the best markets for
Mutual Fund Business, so also for Insurance business. This is the reason that foreign
companies compete with one another in setting up insurance and mutual fund business units
in India. The sheer magnitude of the population of educated white collar employees provides
unlimited scope for development of Mutual Fund Business in India.

(19)

Dr.Deepak Agrawal(2011) Since the development of the Indian Capital Market and
deregulations of the economy in 1992 there have been structural changes in both primary
and secondary markets. Mutual funds are key contributors to the globalization of financial
markets and one of the main sources of capital flows to emerging economies. Despite their
importance in emerging markets, little is known about their investment allocation and
strategies. This article provides an overview of mutual fund activity in emerging markets. It
describes about their size and asset allocation. This paper is a process to analyze the Indian
Mutual Fund Industry pricing mechanism with empirical studies on its valuation. It also
analyzes data at both the fund-manager and fund-investor levels. The study reveled that the
performance is affected by the saving and investment habits of the people and the second
side the confidence and loyalty of the fund Manager and rewards affects the performance of
the MF industry in India.

(20)

Shivani Gupta (2011) The concept of mutual funds is not new in India. UTI started India's
first mutual fund in 1964 to mobilize household savings and investing the funds in capital
markets. There are many type of mutual funds like equity, debt, balanced etc. SEBI has
issued guidelines for the working of mutual funds. There are various risks associated with
them but the returns are also high. The growth which accrues by investing in mutual funds is
adding to the importance of mutual funds. Association of Mutual Funds (AMFI)has been
18

created in 1995 to maintain professional and healthy environment in the market. Many
companies like ABN AMRO, HDFC,UTI,TATA, ICICI are operating in this field. The Indian
mutual fund industry has evolved from a single player monopoly in 1964 to a fast growing,
competitive market on the back of a strong regulatory framework. The growth in this sector
is tremendous and in future it has great prospects. Though, there are certain obstacles in the
growth of mutual funds yet, regulatory framework and global competition will certainly
improve upon. I Hope that this analysis will definitely contribute to the research by
academicians,industry practitioners and students on the topic.

19

1.5 IMPORTANCE OF THE STUDY

1. To Brokers
Brokers will be having proper information of investor needs and wants. So accordingly they will
plan the offers for investors.
2. To Investors
Investors can come to know the risk return involved in MUTUAL FUND services.
3. Financial Institutions
Financial institution providing these mutual funds schemes have chances to make improvements
and innovative schemes for investors, sub brokers and small clients.

20

1.6 RESEARCH DESIGN

Here we used some primary and secondary both data collection method. So I used
descriptive type of research design and also used some calculation matrix for data analysis so we
used quantitative types of research design.
TYPE OF RESEARCH

Descriptive research
Descriptive research is conducted because here literature review and some other
information should be taken by other journal, article or conference not so I use descriptive type of
research.
APPLIED

CONCLUSIVE

DESCRIPTIVE

21

1.7 DATA COLLECTION METHOD

1. Primary Data
The data required for this stage was regarding the detail study of existing activation charges, brokerage
rates, and services of various competitors of the Arihant Capital Market And to know the behavior
and perception of the customers towards the products and services provided by the Arihant Capital
market. The data have been collected in the form of questionnaires that was prepared. Though the
primary source was not enough for the study but it did give some accurate conclusions.
The questionnaire is attached at the end as Annexure.
The above questions were really helpful in the conclusion part of the study. Some customers were very
cooperative but some didn't even bother to give a look. Overall, the study was a success as far as
primary source was concerned.

2. Secondary Data
The secondary data was collected with the help of various book, websites, bank journals, broachers and
employees of the bank. The data collected from the websites and book was good enough to be
included in the study analyzed and concluded but the data got from the employees of the
companies was most accurate and reliable. Various newspapers, magazines, websites, bank
journals, etc were checked out for information regarding the comparative analysis of various
players in stock market.
The second, source didn't provide any personal views of the customers on the existing activation
charges, brokerage rate, and services but were a great help in completing the report and getting the
details.

22

1.8 SAMPLING
SAMPLING UNIT
Customer of ACMPL and other stock broking firms
SAMPLE SIZE
100 Customer from different firm

DATA ANALYSIS TOOLS

Questionnaire, SPSS Software

SAMPLING METHOD
Non-Probability sampling method, convenience sample is selected as there is very less
possibilities to segregate the respondents on different parameters.

23

1.9 NATURE/FORM
The nature and form of our research type is applied as because we are not the first one to doing this
research. Many researchers have done research on this already. Applied research refers to that
research in which a researcher innovates and brings some change in previous research.

24

1.10 LIMITATIONS OF THE STUDY

1. One of the limitations is time constraint. 6weeks were not enough to study the problem in
depth.
2. Sample size is only 100
3. This research is restricted to Ahmedabad are only.
4. Some of the people were not be able to clearly understand the questions as language was a
problem.
5. Returns on a mutual fund are by no means guaranteed. In fact, on average, around 75% of
all mutual funds fail to beat the major market indexes, like the S&P 500, and a growing
number of critics now question whether or not professional money managers have better
stock-picking capabilities than the average investor.
6. Some mutual funds are too big to find enough good investments. This is especially true of
funds that focus on small companies, given that there are strict rules about how much of a
single company a fund may own. If a mutual fund has $5 billion to invest and is only able
to invest an average of $50 million in each, then it needs to find at least 100 such companies
to invest in; as a result, the fund might be forced to lower its standards when selecting
companies to invest in.

25

CHAPTER 2:
INDUSTRIAL PROFILE

2.1 INTRODUCTION
Stock Exchange is the place where the buyers and sellers meet to trade. This is the place
where exactly trading takes place and it is under control of the Securities Board of that
respective country.
To a company in quest of finance, it provides the platform to raise the long-term funds. No
company is allowed to raise long-term funds through IPO or FPO unless it has listing
agreement (s) with the stock exchanges, where its securities will be tradable.

2.2 Bombay Stock Exchange BSE

BSE is the leading and the oldest stock exchange in India as well as in Asia. It was
established in 1887 with the formation of "The Native Share and Stock Brokers'
Association". BSE is a very active stock exchange with highest number of listed securities
in India. Nearly 70% to 80% of all transactions in the India are done alone in BSE.
Companies traded on BSE were 3,049 by March, 2006. BSE is now a national stock
exchange as the BSE has started allowing its members to set-up computer terminals outside
the city of Mumbai (former Bombay). It is the only stock exchange in India which is given
permanent recognition by the government. At present, (Since 1980) BSE is located in the
"Phiroze Jeejeebhoy Towers" (28 storey building) located at Dalal Street, Fort, Mumbai.
Pin code - 400021.

In 2005, BSE was given the status of a full fledged public limited company along with a
new name as "Bombay Stock Exchange Limited". The BSE has computerized its trading
system by introducing BOLT (Bombay On Line Trading) since March 1995. BSE is
operating BOLT at 275 cities with 5 lakh (0.5 million) traders a day. Average daily turnover
of BSE is near Rs. 200 crores.

2.3 National Stock Exchange NSE

Formation of National Stock Exchange of India Limited (NSE) in 1992 is one important
development in the Indian capital market. The need was felt by the industry and investing
community since 1991. The NSE is slowly becoming the leading stock exchange in terms
of technology, systems and practices in due course of time. NSE is the largest and most
modern stock exchange in India. In addition, it is the third largest exchange in the world
next to two exchanges operating in the USA.

The NSE boasts of screen based trading system. In the NSE, the available system provides
complete market transparency of trading operations to both trading members and the
participates and finds a suitable match. The NSE does not have trading floors as in
conventional stock exchanges. The trading is entirely screen based with automated order
machine. The screen provides entire market information at the press of a button. At the
same time, the system provides for concealment of the identify of market operations. The
screen gives all information which is dynamically updated. As the market participants sit in
their own offices, they have all the advantages of back office support, and facility to get in
touch with their constituents.
1. Wholesale debt market segment,
2. Futures & options trading , and

3. Capital market segment

2.4 Over the Counter Exchange of India OTCEI

The OTCEI was incorporated in October, 1990 as a Company under the Companies Act
1956. It became fully operational in 1992 with opening of a counter at Mumbai. It is
recognized by the Government of India as a recognized stock exchange under the Securities
Control and Regulation Act 1956. It was promoted jointly by the financial institutions like
UTI, ICICI, IDBI, LIC, GIC, SBI, IFCI, etc.

The Features of OTCEI are :1. OTCEI is a floorless exchange where all the activities are fully computerized.
2. Its promoters have been designated as sponsor members and they alone are entitled
to sponsor a company for listing there.
3. A Company which is listed on any other recognized stock exchange in India is not
permitted simultaneously for listing on OTCEI.
4. Trading on the OTCEI takes place through a network of computers or OTC dealers
located at different places within the same city and even across the cities. These

computers allow dealers to quote, query & transact through a central OTC computer
using the telecommunication links.
5. OTCEI deals in equity shares, preference shares, bonds, debentures and warrants.
6. The Participants of OTCEI are :i.

Members and dealers appointed by OTCEI,

ii.

Companies whose securities are listed,

iii.

Investors who trade in the OTCEI,

iv.

Registrar who keeps custody of scrip certificates,

v.

Settlement Bank which clears the payment between counters, and

vi.

SEBI and Government who supervise and regulate the working.

2.5 Services given by Stock Exchange to Investors

1. Provides liquidity to investment: Stock exchange provides liquidity (i.e easy
convertibility to cash) to investment in securities. An investor can sell his securities
at any time because of the ready market provided by the stock exchange. Stock
exchange provides easy marketability to corporate securities.
2. Provides collateral value to securities: Stock exchange provides better value to
securities as collateral for a loan. This facilitates borrowing from a bank against
securities on easy terms.
3. Offers opportunity to participate in the industrial growth: Stock exchange
provides capital for industrial growth. It enables an investor to participate in the
industrial development of the country.
4. Estimates the worth of securities: Stock exchange provides the facility of
knowing the worth (i.e true market value) of investment due to quotations (i.e price
list) and reports published regularly by the exchange. This type of information
guides investors as regards their future investments. They can purchase or sell
securities as per the price trends (i.e latest price value) in the market.
5. Offers safety in corporate investment: An investor can invest his surplus money
(i.e extra money) in the listed securities with reasonable safety. The risk in such
investment is reduced considerably due to the supervision of stock exchange
authorities on listed companies. Moreover, securities are listed only when the
exchange authorities are satisfied as regards legality and solvency of company
concerned. Such scrutiny (detailed checking) avoids listing, of securities of unsound
companies (i.e companies with bad financial status).

2.6 Services given by Stock Exchange to Companies

1. Widens market for securities: Stock exchange widens the market for the listed
securities and enables the companies to collect capital for promotion, expansion and
modernization purpose. It indirectly provides financial support to companies /
corporations.
2. Creates goodwill and reputation: Stock exchange enhances the goodwill and the
reputation of the companies whose securities are listed. Listing acts as a charter
certificate given to a company. It gives prestigious position to company.
3. Facilitates fair pricing of listed securities: The market price of listed securities
tends to be slightly higher in relation to earnings and property values.
4. Provides better response from investors: Listed securities get better response
from the investor due to safety and security. Listing of securities is a unique service
which stock exchanges offer to companies. It is a moral support given to stable
companies.
5. Facilitates quick selling of securities: Stock exchange enables companies to sell
their securities easily and quickly. This is natural as investors always prefer to
invest money in listed securities.

CHAPTER 3:
COMPANY PROFILE

3.1 ABOUT THE COMPANY

Arihant Capital Markets Limited, is one of the leading financial services companies in
India. They provide a gamut of products and services including securities and commodities
broking, investment planning, financial planning, wealth management and merchant
banking to a substantial and diversified clientele that includes individuals, corporations and
financial institutions.
They Are committed to giving their customers the best services and holding to their core
values which always place their client's interests first. These values are reflected in their
Business Principles, which emphasize integrity, commitment to excellence, innovation and
teamwork. They have presence in 110 cities with over 620 offices across the nation. Clients
turn to Arihant for its complete platform of financial services combined with excellent
execution.
They have a dedicated institutional team, which caters to mutual fund houses, insurance
companies and almost all the banks active in the capital market segment. Their goal is to
create wealth for their retail and corporate customers through sound financial advice and
appropriate investment strategies.

Philosophy of the Arihant Capital Market LTD.

Integrity and transparency in all transactions.

Providing investment solutions based on quality and unbiased research.
Providing personalized services to all investors, institutions, business associates.
Achieving success through client's growth.
Making financial services more affordable, understandable and available to all.

What Arihant aspires?

To be the pre-eminent and most trusted provider of financial services.The values to which

company aspire can be summarized in 5 principles:

Integrity
Client commitment
Strive for profitability
Excellence

3.2 HISTORY
Arihant Capital Markets Limited was established in 1994 by Mr. Ashok Kumar
Jain, a Chartered Accountant. Arihant has followed a consistent growth path and has
established itself as one of the leading broking houses of the country with the support and
confidence of its clients, investors, employees and associates. ACML pride themselves on
their independence and continuous service since inception.

1
2
9
0
9
0
2
0
1
2
0
0
2
4
5
2
0
0
6
7
5

2
0
0
1
9
1
2

2
1

0
3
5

Arihant Capital Markets Limited is listed on the Bombay Stock Exchange since 1993 and
since then the company has grown in leaps and bounds.
ACML is members of the leading stock exchanges of India:
National Stock Exchange (NSE)
Bombay Stock Exchange Limited (BSE)
ACML is a depository participant with:
National Securities Depositories Limited (NSDL)
Central Depository Services Ltd. (CDSL)
ACML is members of leading commodities and currency exchanges in India:

National Commodities Exchange (NCDEX)

Multi Commodities Exchange (MCX)
MCX Stock Exchange Ltd (MCX-SX)
NSE FX (Currency Derivatives segment of NSE)

ACML is AMFI Certified Mutual Fund Distributor, are registered with the SEBI for
Portfolio Management Services (PMS) and are a Category - I Merchant Banker.

3.3 OVERVIEW
Our success is defined by the success of our clients
Arihant has developed a diverse and robust portfolio of financial services to help their
customers manage their money in the way that benefits its most.

Services Offered By ACMPL

Merchant
and
Investment
Banking
Capital Market Service
Corporate Finance
Strategic Services

Broking
Equity
Commodity
Currency
Derivatives

Research
Equity & Derivatives
Mutual Fund & IPO

Distribution

Wealth Management

Depository

Advisory Service
Portfolio Management Service
(PMS)

Mutual fund
Initial Public Offering (IPO)

Shares
Commodities

With more than 500 professionals and staff working in 90 plus cities, Company has the
resources and nationwide reach to ensure the highest level of personalized service.
Companys fundamental mission is to provide their clients everything they need to do
better as realizing their strategic visions is their shared objective.Our service achieves
these goals by putting clients at the center of everything it do. Companys client-centric
approach, ethical and transparent business practices, research-based advice, implementation
of cutting-edge technology and keeping up-to-date to the ever changing world of finance
has helped their clients grow with the surging Indian economy over the years.

Broking
Arihant is one of the leading providers of broking services to individuals and
institutions in the equity, derivatives and commodities segment in India.
ACML proactively deliver the full depth and breadth of their broking services to
clients through a network of more than 300 branches and franchises across India. Excellent
research support, state-of-the-art tools, smart risk management, capital requirements,
excellent order routing and efficient operational practices are key components of their
offerings.
Distribution
With the objective of meeting all the investment needs of their clients, it provides
distribution services of mutual funds and IPOs. It is an AMFI registered mutual fund
distributor and are also registered with all the AMCs in India to sell the schemes offered by
them. Their distribution network is backed by in-depth & comprehensive research and a
strong team for marketing and sales support.
We have a dedicated team exclusively for research on mutual funds and IPO.
Company

provides

monthly

publications

on

mutual

fund

activity

and

fund

recommendations and also furnishes reports on New Fund Offers (NFO) and forthcoming
IPOsrecommendations. Their recommendations are objective and unbiased. For us, the
clients growth is the top priority.
Consistent delivery of high quality advice on mutual funds and IPO investment has

established us as a competent and reliable distributor across the country. It are also amongst
the few investment firms that offer the facility to invest in mutual funds and IPO online,
giving their clients freedom from paperwork and making investing convenient for them.
Depository
Companys Depository business helps us in providing integrated financial solutions
to their clients. It is led by a team of professionals and the latest technological expertise,
dedicated exclusively for the depository services. This creates a seamless transaction
platform for clients to execute trades through Arihant Broking Business and settle them
through Arihant Depository Services.
Wealth Management
Their wealth management business provides tailored, impartial and regulated
financial planning advice on life, retirement and investment products.
Companys services to high net worth individuals and corporate clients include:

Asset management
Stock broking
Wealth structuring
Financial planning

Companys disciplined investment process

Arihant has a philosophy of investing in quality businesses with a strong
management at reasonable prices. Company follows both a bottom-up approach and topdown approach to investing with an intensive research process for screening potential
investments.
Research
Companys research team supplements their broking, wealth management and
distribution business. Their research team comprises expert investment professionals for
fundamental and technical research covering equity, derivatives, mutual funds and IPOs. It
draws upon their experience and depth of resources, to provide the financial and strategic
advice necessary for successful asset management.
From day one, their focus has been to offer investors a platform to make informed
investment decisions based on thorough research and discipline. Company has therefore
established a research team to offer complete support and the right guidance to their clients.
Their research issued only for their personal and institutional clients.
Companys research extends into every corner of their equities business, supplying
in valuable analysis, information, and advice to their clients. It employs a disciplined and
rigorous research process. Starting with a top down analysis, it looks closely at the
megatrends and industry drivers that create opportunities for innovative companies.
Company identifies and affiliate themselves with the fastest growing and fundamentally
strong companies and provides their investors with the best investment opportunities.
Merchant banking and investment banking
Company deliver high-quality strategic advice and creative financing solutions to
corporate with the help of qualified professionals who have a combined experience of over
50 years in investment banking, corporate advisory and corporate finance.

The primary activities of Merchant Banking Business are:

Capital Market Services
Corporate Finance
Strategic Services

The comprehensive experience and knowledge of their team enables us to offer a host of
financial services covering capital raising, mergers and acquisitions, advisory, debt
syndication, qualified institutional placements, private placements, financial restructuring
among others.

Your investment options

Build a diversified portfolio from their wide array of investment products and
services. Whatever your investment objective, company have the right solution for you.

3.4 PRODUCT

 Equity and Derivatives

Get excellent research tools, investment advice, fast trading and excellent execution
service.
Mutual Fund
Give your portfolio an instant shot of diversification. Access hundreds of mutual
funds at Arihant.
Commodities
Get the right advice and a service that will empower your trades. Arihant
commodities diversity with simplicity
IPO
Invest in the primary market to maximize your returns with an easy and quick
service.

3.5 Services
Online Trading
Experience the convenience of online trading with I-Trade, Arihant's powerful online
trading platform.

Depository
Hold shares electronically with Arihant. A quick, convenient and efficient service

Portfolio Management Services

Your own share portfolio, professionally managed by a team of experts
Advisory Services
Have your portfolio managed on your own terms. Get the investment advice tailored to

your needs.

CHAPTER 4
SCENARIO OF MUTUAL FUND

4.1 INTRODUCTION OF MUTUAL FUND

Different investment avenues are available to investors. Mutual funds also offer good
investment opportunities to the investors. Like all investments, they also carry certain risks.
The investors should compare the risks and expected yields after adjustment of tax on
various instruments while taking investment decisions. The investors may seek advice from
experts and consultants including agents and distributors of mutual funds schemes while
making investment decisions.
With an objective to make the investors aware of functioning of mutual funds, an attempt
has been made to provide information in question-answer format which may help the
investors in taking investment decisions.
Mutual fund is a mechanism for pooling the resources by issuing units to the investors and
investing funds in securities in accordance with objectives as disclosed in offer document.
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 investors in accordance with quantum of money invested by them. Investors of
mutual funds are known as unit holders.
The profits or losses are shared by the investors in proportion to their investments. The
mutual funds normally come out with a number of schemes with different investment
objectives which are launched from time to time. A mutual fund is required to be registered
with Securities and Exchange Board of India (SEBI) which regulates securities markets
before it can collect funds from the public.

4.2 HISTORY:
Unit Trust of India was the first mutual fund set up in India in the year 1963. In early
1990s, Government allowed public sector banks and institutions to set up mutual funds.
In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The
objectives of SEBI are to protect the interest of investors in securities and to promote the
development of and to regulate the securities market.
As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual
funds to protect the interest of the investors. SEBI notified regulations for the mutual funds
in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter
the capital market. The regulations were fully revised in 1996 and have been amended
thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time
to time to protect the interests of investors.
All mutual funds whether promoted by public sector or private sector entities including
those promoted by foreign entities are governed by the same set of Regulations. There is no
distinction in regulatory requirements for these mutual funds and all are subject to
monitoring and inspections by SEBI. The risks associated with the schemes launched by
the mutual funds sponsored by these entities are of similar type.

4.3 MUTUAL FUND STRUCTURE

http://ourfinancialmarket.50webs.com/structureofMF.jpg
A mutual fund is set up in the form of a trust, which has sponsor,
trustees, asset management company (AMC) and custodian. The trust is established by a
sponsor or more than one sponsor who is like promoter of a company. The trustees of the
mutual fund hold its property for the benefit of the unitholders. Asset Management
Company (AMC) approved by SEBI manages the funds by making investments in various
types of securities. Custodian, who is registered with SEBI, holds the securities of various
schemes 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 the mutual fund.
SEBI Regulations require 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 the sponsors.
Also, 50% of the directors of AMC must be independent. All mutual funds are required to
be registered with SEBI before they launch any scheme.

4.4 SCHEMES OF MUTUAL FUNDS

Various types of mutual funds categories are designed to allow investors to choose a
scheme based on the risk they are willing to take, the investable amount, their goals, the
investment term, etc.
Figure: 1

http://timesofindia.indiatimes.com/photo/45869669.cms
Let us have a look at some important mutual fund schemes under the following three
categories based on maturity period of investment:

I. Open-Ended - This scheme allows investors to buy or sell units at any point in time.
This does not have a fixed maturity date.
1. Debt/ Income - In a debt/income scheme, a major part of the investable fund are
channelized towards debentures, government securities, and other debt instruments.
Although capital appreciation is low (compared to the equity mutual funds), this is a
relatively low risk-low return investment avenue which is ideal for investors seeing a
steady income.
2. Money Market/ Liquid - This is ideal for investors looking to utilize their surplus funds
in short term instruments while awaiting better options. These schemes invest in short-term
debt instruments and seek to provide reasonable returns for the investors.
3. Equity/ Growth - Equities are a popular mutual fund category amongst retail investors.
Although it could be a high-risk investment in the short term, investors can expect capital
appreciation in the long run. If you are at your prime earning stage and looking for longterm benefits, growth schemes could be an ideal investment.
3i. Index Scheme - Index schemes is a widely popular concept in the west. These follow a
passive investment strategy where your investments replicate the movements of benchmark
indices like Nifty, Sensex, etc.
3ii. Sectoral Scheme - Sectoral funds are invested in a specific sector like infrastructure,
IT, pharmaceuticals, etc. or segments of the capital market like large caps, mid caps, etc.
This scheme provides a relatively high risk-high return opportunity within the equity space.
3.iii. Tax Saving - As the name suggests, this scheme offers tax benefits to its investors.
The funds are invested in equities thereby offering long-term growth opportunities. Tax
saving mutual funds (called Equity Linked Savings Schemes) has a 3-year lock-in period.
4. Balanced - This scheme allows investors to enjoy growth and income at regular
intervals. Funds are invested in both equities and fixed income securities; the proportion is

pre-determined and disclosed in the scheme related offer document. These are ideal for the
cautiously aggressive investors.
II. Closed-Ended - In India, this type of scheme has a stipulated maturity period and
investors can invest only during the initial launch period known as the NFO (New Fund
Offer) period.
1. Capital Protection - The primary objective of this scheme is to safeguard the principal
amount while trying to deliver reasonable returns. These invest in high-quality fixed
income securities with marginal exposure to equities and mature along with the maturity
period of the scheme.
2. Fixed Maturity Plans (FMPs) - FMPs, as the name suggests, are mutual fund schemes
with a defined maturity period. These schemes normally comprise of debt instruments
which mature in line with the maturity of the scheme, thereby earning through the interest
component (also called coupons) of the securities in the portfolio. FMPs are normally
passively managed, i.e. there is no active trading of debt instruments in the portfolio. The
expenses which are charged to the scheme, are hence, generally lower than actively
managed schemes.
III. Interval - Operating as a combination of open and closed ended schemes, it allows
investors to trade units at pre-defined intervals.

4.5 MUTUAL FUNDS BASED ON ASSETS INVESTED IN:

There three kinds of mutual funds based on the assets invested in. These are as
follows:

EQUITY FUNDS:

These are funds that invest only in stocks. As a result, they are usually considered high risk,
high return funds. Most growth funds the ones that promise high returns over a long-term
are equity funds.
These funds have less tax liability in the long-run as compared to debt funds. Equity funds
can be further classified into types based on the investment objective into index funds,
sector funds, tax-saving schemes and so on. We shall go through these in detail later.

HYBRID FUNDS:

These are funds which invest in both equities as well as debt instruments. For this reason,
they are less risky than equity funds, but more than debt funds. Similarly, they are likely to
give you higher returns than debt funds, but lower than equity funds. As a result, they are
often called balanced funds.

DEBT FUNDS:

These funds invest in debt-market instruments like bonds, government securities,

debentures and so on. These are called debt instruments because they are a kind of

borrowing mechanism for companies, banks as well as the government.

Simply put, you give them money, which the company returns with interest over a period of
time. After which, it matures. Since the interest payments are fixed as well as the return of
the principle amount, debt instruments are considered low-risk, low-return financial assets.
For the same reason, debt funds are relatively safer.
They are usually preferred for the regular interest payments. Debt funds are further
classified on the basis of the maturity period of the underlying assets long-term and shortterm. Some debt funds also invest in just a single type of debt instrument. Gilt funds are an
example of such a fund.

4.6 SEGMENTS OF MUTUAL FUND:

1) SIP (Systematic Investment Plan)
A systematic investment plan (SIP) comes handy in such a situation. It helps you spread
your investment over time through fixed payments either on a monthly or quarterly basis.
This also helps inject discipline into your investment habit, as many who wish to invest
regularly forget to do so. Thus, you may end up spending more than you should, and not
investing enough. SIPs help you avoid this.
Under SIP, you automate your monthly mutual fund investment activities. You, thus, invest
small sums at regular intervals to buy mutual fund units. Many prefer an SIP over investing
in lump sum in mutual funds.

2) LUMPSUM
A lump sum amount is defined as a single complete sum of money. A lump sum investment
is of the entire amount at one go
Definition: A lump sum amount is defined as a single complete sum of money. A lump sum
investment is of the entire amount at one go.

Description: Lump sum investment is considered as one way of investing into mutual
funds. The other method being that of systematic investment plan, popularly known as SIP.
Usually lump sum investments are undertaken by big players and investors, in stocks
especially those related to assets that are likely to appreciate in the long term, making the
investment profitable except in cases of high volatility.

4.7 GROWTH OF MUTUAL FUND INDUSTRY IN INDIA:

This year seems to have really kicked off for Mutual Funds. Especially Equity Mutual
Funds, which have recorded a Rs. 86,816 cr. worth of inflows for the current Financial Year
till November end. This includes inflows into already existing Mutual Funds, as well as
new entrants.
All the data used here was taken from AMFIs webite
In the 8 months of FY15 till the end of November, the amount of inflows into Equity
Mutual Funds are at an all-time high. For the same period in previous years, the inflows
pale in comparison to this years collection. In fact, till now, Inflows (Gross) have been
greater than the last five full years!

http://capitalmind.in/wp-content/uploads/2014/12/Mutual-Funds-November-14.jpg
Before this year, FY 2008 was the best year for Equity Mutual Funds, with a near Rs. 1.2
lakh crores in inflows for the whole year. On a comparison, even for that year, until
November the inflows were Rs. 68,752 cr. Since FY 2008 onwards, inflows were on the
down.
Lowest Inflows Since May, Though
However, for the month of November this year, Net Inflows into Equity MFs (gross inflows
less redemptions) was lower than in September and October.

http://capitalmind.in/wp-content/uploads/2014/12/Mutual-Funds-November-14_NetInflows.jpg
In fact, Net Inflows into Equity MFs had touched a near 7-year high in July this year with
Rs. 10,815 cr. The last time it scaled such heights was in January 2008, where Net Inflows
was Rs, 12,717 cr. As we can see, Net Inflows have been consistently positive the whole of
FY15, but it has been reducing over the last few months.

Assets Under Management (AUM)

http://capitalmind.in/wp-content/uploads/2014/12/Mutual-Funds-November-14_AUM.jpg
Assets Under Management for Equity Mutual Funds at the end of November, are at Rs.
2.79 lakh crores, which again is the highest at the same point in the year, in over 8 years.
It definitely does look like investors are pumping more money into Equity MFs this year.
With AUMs touching new highs, and a positive trend in Net Inflows this year, it could
mark the return of retail investors into the market.

4.8 BENEFITS OF MUTUAL FUNDS

An investor can invest directly in individual securities or indirectly through a financial

intermediary. Globally, mutual funds have established themselves as the means of

investment for the retail investor.
1. Professional management: An average investor lacks the knowledge of capital market
operations and does not have large resources to reap the benefits of investment. Hence, he
requires the help of an expert. It, is not only expensive to hire the services of an expert but
it is more difficult to identify a real expert. Mutual funds are managed by professional
managers who have the requisite skills and experience to analyze the performance and
prospects of companies. They make possible an organized investment strategy, which is
hardly possible for an individual investor.
2. Portfolio diversification: An investor undertakes risk if he invests all his funds in a
single scrip. Mutual funds invest in a number of companies across various industries and
sectors. This diversification reduces the riskiness of the investments.
3. Reduction in transaction costs: Compared to direct investing in the capital market,
investing through the funds is relatively less expensive as the benefit of economies of scale
is passed on to the investors.
4. Liquidity: Often, investors cannot sell the securities held easily, while in case of mutual
funds, they can easily encash their investment by selling their units to the fund if it is an
open-ended scheme or selling them on a stock exchange if it is a close-ended scheme.
5. Convenience: Investing in mutual fund reduces paperwork, saves time and makes
investment easy.
6. Flexibility: Mutual funds offer a family of schemes, and investors have the option of
transferring their holdings from one scheme to the other.
7. Tax benefits: Mutual fund investors now enjoy income-tax benefits. Dividends received
from mutual funds debt schemes are tax exempt to the overall limit of Rs 9,000 allowed
under section 80L of the Income Tax Act.
8. Transparency: Mutual funds transparently declare their portfolio every month. Thus an
investor knows where his/her money is being deployed and in case they are not happy with
the portfolio they can withdraw at a short notice.
9. Stability to the stock market: Mutual funds have a large amount of funds which
provide them economies of scale by which they can absorb any losses in the stock market
and continue investing in the stock market. In addition, mutual funds increase liquidity in
the money and capital market.

10. Equity research: Mutual funds can afford information and data required for
investments as they have large amount of funds and equity research teams available with
them.

4.9 Disadvantages of Investing in Mutual Funds:

There are certainly some benefits to mutual fund investing, but you should also be aware of
the drawbacks associated with mutual funds.
1. No Insurance: Mutual funds although regulated by the government, are not insured
against losses. The Federal Deposit Insurance Corporation (FDIC) only insures against
certain losses at banks, credit unions, and savings and loans, not mutual funds.
That means that despite the risk-reducing diversification benefits provided by mutual
funds, losses can occur, and it is possible (although extremely unlikely) that you could even
lose your entire investment.
2. Dilution: Although diversification reduces the amount of risk involved in investing in
mutual funds, it can also be a disadvantage due to dilution. For example, if a single security
held by a mutual fund doubles in value, the mutual fund itself would not double in value
because that security is only one small part of the fund's holdings. By holding a large
number of different investments, mutual funds tend to do neither exceptionally well nor
exceptionally poorly.
3. Fees and Expenses: Most mutual funds charge management and operating fees that pay
for the fund's management expenses (usually around 1.0% to 1.5% per year for actively
managed funds). In addition, some mutual funds charge high sales commissions, 12b-1
fees, and redemption fees. And some funds buy and trade shares so often that the
transaction costs add up significantly. Some of these expenses are charged on an ongoing
basis, unlike stock investments, for which a commission is paid only when you buy and sell
.
4. Poor Performance: Returns on a mutual fund are by no means guaranteed. In fact, on
average, around 75% of all mutual funds fail to beat the major market indexes, like the
S&P 500, and a growing number of critics now question whether or not professional money
managers have better stock-picking capabilities than the average investor.

5. Loss of Control: The managers of mutual funds make all of the decisions about which
securities to buy and sell and when to do so. This can make it difficult for you when trying
to manage your portfolio. For example, the tax consequences of a decision by the manager
to buy or sell an asset at a certain time might not be optimal for you. You also should
remember that you trust someone else with your money when you invest in a mutual fund.
6. Trading Limitations: Although mutual funds are highly liquid in general, most mutual
funds (called open-ended funds) cannot be bought or sold in the middle of the trading
day.You can only buy and sell them at the end of the day, after they've calculated the
current value of their holdings.
7. Size: Some mutual funds are too big to find enough good investments. This is especially
true of funds that focus on small companies, given that there are strict rules about how
much of a single company a fund may own. If a mutual fund has $5 billion to invest and is
only able to invest an average of $50 million in each, then it needs to find at least 100 such
companies to invest in; as a result, the fund might be forced to lower its standards when
selecting companies to invest in.
8. Inefficiency of Cash Reserves: Mutual funds usually maintain large cash reserves as
protection against a large number of simultaneous withdrawals. Although this provides
investors with liquidity, it means that some of the fund's money is invested in cash instead
of assets, which tends to lower the investor's potential return.
9. Too Many Choices: The advantages and disadvantages listed above apply to mutual
funds in general. However, there are over 10,000 mutual funds in operation, and these
funds vary greatly according to investment objective, size, strategy, and style. Mutual funds
are available for virtually every investment strategy (e.g. value, growth), every sector (e.g.
biotech, internet), and every country or region of the world. So, even the process of
selecting a fund can be tedious.

4.10 MUTUAL FUNDS INVESTORS

Mutual funds in India are open to investment by

a. Residents including Resident Indian Individuals, including high net worth individuals
and

the retail or small investors. Indian Companies Indian Trusts/Charitable

Institutions Banks Non-Banking Finance Companies Insurance Companies Provident

Funds
b. Non-Residents, including Non-Resident Indians Other Corporate Bodies (OCBs)
c. Foreign entities, namely, Foreign Institutional Investors (FIIs) registered with SEBI.
Foreign citizens/ entities are however not allowed to invest in mutual funds in India.

CHAPTER 5
DATA ANALYSIS

Table 5.1 What is your Marital Status ?

Frequen

Percent

cy
Married
Valid Unmarried
Total

49
51
100

49.0
51.0
100.0

Valid
Percent
49.0
51.0
100.0

Cumulative
Percent
49.0
100.0

INTERPRETATION
The above chart shows that the marital status of investors. The 49% of investors are
married and other remaining 51% of investors are not married.
Table 5.2 What is your Age ?

Frequency Percent
Below
18
18 - 25
Valid 25 - 35
35 - 45
45 - 55
Total

Valid

Cumulative

Percent

Percent

3.0

3.0

3.0

44
33
13
7
100

44.0
33.0
13.0
7.0
100.0

44.0
33.0
13.0
7.0
100.0

47.0
80.0
93.0
100.0

INTERPRETATION
The above chart shows that age of investors who invests in mutual fund. The 44% of
investors are from the age group of 18-25. The 33% of investors are from the age group of
25-35. The 13% of investors are from the age group of 35-45.The 7 % of investors are from

the age group of 45-55. The remaining 3% are from the Below 18 group.

Table 5.3 What is your Gender ?

Frequency Percent

Valid

Cumulative

Percent

Percent

Male
Valid Female
Total

78
22
100

78.0
22.0
100.0

78.0
22.0
100.0

78.0
100.0

INTERPRETATION
In the above chart shows that the proportion of the gender investing in mutual fund . The
78% of males are investing in mutual fund and remaining 22% of females are investing in
mutual fund.
Table 5.4 What is your occupation ?
Frequency Percent
Service
Professional
Valid Business
Others
Total

24
23
21
32
100

24.0
23.0
21.0
32.0
100.0

Valid
Percent
24.0
23.0
21.0
32.0
100.0

Cumulative
Percent
24.0
47.0
68.0
100.0

INTERPRETATION
The above chart shows the occupation of investors of mutual fund. The 24% of investors of
mutual fund are from service sector. The 21% of investors are from the business sector. The
23% of investors are from the professional occupation. The remaining 32% of investors are
from the other sector.
Table 5.5 Do you invest from your savings?
Frequency Percent
Valid
Yes
Valid No
Total

77
23
100

77.0
23.0
100.0

Percent
77.0
23.0
100.0

Cumulative
Percent
77.0
100.0

INTERPRETATION
The above chart shows the investors Investment from their savings. 77% of investors

invest from their Savings. The remaining 23% of investors not investing from their
Savings.
Table 5.6 In which segment do you invest along with mutual fund?
Frequency Percent Valid Percent
Cumulative Percent
Equity
73
73.0
73.0
73.0
Commodity
13
13.0
13.0
86.0
Valid Currency
4
4.0
4.0
90.0
Other
10
10.0
10.0
100.0
Total
100 100.0
100.0

INTERPRETATION
The above chart shows that the along with mutual fund Investors invets in different
segments like 73 %people invest in others section and 10 % invests in equity and 13% and
4% for commodity and currency respectively.

Table 5.7 What percentage of your income do you invest in share

market?
Frequency Percent
Up to 10%
10-15%
15-20%
Valid More than
20%
Total

Valid

Cumulative

50
35
14

50.0
35.0
14.0

Percent
50.0
35.0
14.0

1.0

1.0

100

100.0

100.0

Percent
50.0
85.0
99.0
100.0

INTERPRETATION
The above chart shows that what percentage of income investors invest in share market.

The 50% of investors invests up to 10% of their annual income in the share market. The
35% of investors invests up to 10-15% of their investment in the share market .And other
14% of investors invests 15-20% of their annual income in share market. And remaining
1% of investors invests more than 20% of annual income in share market.

Table 5.8 How much rate of return do you except from investment?

Frequency Percent
0%-10%
10%-20%
Valid 20% and
above
Total

Valid

22
56

22.0
56.0

Percent
22.0
56.0

22

22.0

22.0

100

100.0

100.0

Cumulative
Percent
22.0
78.0
100.0

INTERPRETATION
The above chart shows how much return people except from investment 56 % people

except 10 to 20 % retuen and 22% peoplefor the other two options which are 0 to 10% and
20 % and more .

Table 5.9 Which type of investment plan would you like to invest?

Frequency Percent
Low risk low return
High risk high return
Valid Moderate Risk
moderate return
Total

Valid

38
30

38.0
30.0

Percent
38.0
30.0

32

32.0

32.0

100

100.0

100.0

Cumulative
Percent
38.0
68.0
100.0

INTERPRETATION
The above chart shows that 38 % investors like to invest inlow risk and low return while
30% will go for high risk high return and the rest will like to invest in moderate risk
moderate return .
Table 5.10 How frequently do you invest?

Frequency Percent

Valid

Cumulative

41
19

41.0
19.0

Percent
41.0
19.0

27

27.0

27.0

87.0

13
100

13.0
100.0

13.0
100.0

100.0

Monthly
Quarterly
Half
yearly
Yearly
Total

Valid

Percent
41.0
60.0

INTERPRETATION
The above chart shows that hoe frequently the investors invest in mutual fund in that there
are high numbers of investors who invest there money monthly are 43 % and rest are 19% ,
27% ,and 13% for quarterly , half yearly and yearly .
Table 5.11 In which segment do you invest?
Frequency Percent
Valid
Valid Eqiuty
Debt
Hybrid

43
36
21

43.0
36.0
21.0

Percent
43.0
36.0
21.0

Cumulative
Percent
43.0
79.0
100.0

Total

100

100.0

100.0

INTERPRETATION
The above chart shows that investors invests in which segment .The 36% of investors
invests in debt and other 21% of investors invests in hybrid and remaining 43% of investors
invests in equity segment.
Table 5.12 On which bases do you invest in the mutual fund?
Frequency Percent
Valid
Cumulative
Valid Agent advisory
Friend
suggestion
By own
Other

38

38.0

Percent
38.0

Percent
38.0

23

23.0

23.0

61.0

37
2

37.0
2.0

37.0
2.0

98.0
100.0

Total

100

100.0

100.0

INTERPRETATION
The above chart show the on the bases they invest in mutual fund and the percentage are
given . 38% invest through agents 23% invest by friends suggestions 37% invest by own
and 2% invest by other base .

Table 5.13 By which source of information you came to know about mutual
fund?
Frequency Percent
Valid Self
Friends and Relatives
Service providers and
Consultants
Newspaper,Magazine
and Advertisements

Valid

Cumulative

26
27

26.0
27.0

Percent
26.0
27.0

Percent
26.0
53.0

7.0

7.0

60.0

18

18.0

18.0

78.0

Agents
Total

22
100

22.0
100.0

22.0
100.0

100.0

INTERPRETATION
The above chart shows that investors come to know about mutual fund like self or friends
or consultants or newspapers and agents. Huge number of people come to now aboute
mutual fund by friends and relatives and by them self very few people know about mutual
fund through service providers.
Table 5.14 Which factore do you consider before investing in share
market?
Frequency Percent

Valid

Maturity period
Safety of principle
Risk
Return on
investment
Tax benefits
Liquidity
Total

Valid

Cumulative

6
18
17

6.0
18.0
17.0

Percent
6.0
18.0
17.0

Percent

45

45.0

45.0

86.0

12
2
100

12.0
2.0
100.0

12.0
2.0
100.0

98.0
100.0

6.0
24.0
41.0

INTERPRETATION
The above chart shows that the factors considered by investors in share market. The 6% of
investors consider Maturity period before investing in share market. The 18% of investors
consider Safety of principal before making investment .The 17% of investors consider risk
as the factor of investment. The 45% of investors consider Return on investment before
making investment. The 12% of investors consider Tax Benefits as the factor of investment.
The 2% of investors consider liquidity as the factor of the investment.

Table 5.15 Mutual fund investing gives a definite positive

return?
Frequency Percent
Yes
Valid No
Total

84
16
100

84.0
16.0
100.0

Valid
Percent
84.0
16.0
100.0

Cumulative
Percent
84.0
100.0

INTERPRETATION
The above chart shows that the investors are getting definite positive return or not. The
84% of investors are getting definite positive return and 16% of investors are not getting
definite positive return.
Table 5.16 What do you rate the risks associated with mutual fund?
Frequency Percent
Valid
Cumulative
Low risk
Moderate
Valid risk
High risk
Total

22

22.0

Percent
22.0

Percent
22.0

57

57.0

57.0

79.0

21
100

21.0
100.0

21.0
100.0

100.0

INTERPRETATION
The above chart shows that the rate of risk associated with mutual fund by investors. The
57% of investors rate the mutual fund as the moderate risk investment and other 22% of
investors rate the mutual fund as the low risk investment. The remaining 21% of investors
rate mutual fund investment as high risk investment.

TWO VARIABLES
&
HYPOTHESIS

Hyp:1
occupation * How frequently do you invest? Crosstabulation
Count
How frequently do you invest?
Monthly Quarterl
Half
Yearly
y
Service
Professional
occupation
Business
Others

12
8
9
12

Total

yearly
3
7
5
4

5
7
5
10

4
1
2
6

24
23
21
32

Total

41

19

Chi-Square Tests
Value
df
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear

7.201
7.475

27

13

100

Asymp. Sig.
9
9

(2-sided)
.616
.588

.839
1
.360
Association
N of Valid Cases
100
a. 7 cells (43.8%) have expected count less than 5. The
minimum expected count is 2.73.
Chi sq sig (.616) > Assump sig (.05)
So, the null hypothesis is accepted.
Occupation & Frequency of investing are related.

Hyp:2
occupation * Which factore do you consider before investing in share market? Crosstabulation
Count
Which factore do you consider before investing in share market?
Maturity Safety of
Risk
Return on Tax benefits Liquidity
period
Occupation
Total

Service
Professional
Business
Others

3
0
0
3
6

principle
7
5
1
5
18

Chi-Square Tests

5
2
3
7
17

investment
6
13
13
13
45

3
2
4
3
12

0
1
0
1
2

Total

24
23
21
32
100

Value

Df
a

Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear

17.888
21.614

Asymp. Sig.
(2-sided)
.269
.118

15
15

1.328
1
.249
Association
N of Valid Cases
100
a. 18 cells (75.0%) have expected count less than 5. The
minimum expected count is .42.
Chi sq sig (.269) > Assump sig (.05)
So, the null hypothesis is accepted.
Occupation and considering factore are related.

Hyp:3
What percentage of your income do you invest in share market? * How frequently do
you invest? Crosstabulation
Count
How frequently do you invest?
Monthly Quarterl
Half
Yearly
y
What percentage of
your income do you
invest in share market?

Up to 10%
10-15%
15-20%
More than
20%

Total

Chi-Square Tests
Value
df
Pearson Chi-Square
Likelihood Ratio

18.417
20.004

18
11
11

6
11
2

yearly
16
10
1

41

19

27

13

100

Asymp. Sig.
9
9

Total

(2-sided)
.031
.018

10
3
0

50
35
14

Linear-by-Linear

9.940
1
.002
Association
N of Valid Cases
100
a. 8 cells (50.0%) have expected count less than 5. The
minimum expected count is .13.
Chi sq sig (.031) < Assump sig (.05)
So, the null hypothesis is rejected.
Annual income & Frequency of Investment are not related.
.
Hyp:4
What percentage of your income do you invest in share market? * In which
segment do you invest? Crosstabulation
Count
In which segment do you

What percentage of
your income do you
invest in share market?

Up to 10%
10-15%
15-20%
More than

invest?
Eqiuty
Debt
Hybrid
19
22
9
15
12
8
8
2
4

20%
Total

Chi-Square Tests
Value
df
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear

5.673
6.446

43

36

21

100

Asymp. Sig.
6
6

50
35
14

(2-sided)
.461
.375

.359
1
.549
Association
N of Valid Cases
100
a. 4 cells (33.3%) have expected count less than 5. The
minimum expected count is .21.

Total

Chi sq sig (.461) < Assump sig (.05)

So, the null hypothesis is accepted.
Annual income & Segment are related
Hyp:5
In which segment do you invest? * Mutual fund investing gives a
definite positive return? Crosstabulation
Count
Mutual fund investing gives

In which segment do
you invest?

Eqiuty
Debt
Hybrid

Total

a definite positive return?

Yes
No
38
5
30
6
16
5
84
16

Chi-Square Tests
Value
df
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear

1.576a
1.529

Asymp. Sig.
2
2

(2-sided)
.455
.466

1.543
1
.214
Association
N of Valid Cases
100
a. 1 cells (16.7%) have expected count less than 5. The
minimum expected count is 3.36.
Chi sq sig (.455) < Assump sig (.05)
So, the null hypothesis is accepted.
Segment & Positive return are related

Hyp:6

Total

43
36
21
100

In which segment do you invest along with mutual fund? * What do you rate the risks
associated with mutual fund? Crosstabulation
Count
What do you rate the risks associated with
mutual fund?
Moderate

Low risk

Total

High risk

risk
Equity
Commodit

In which segment do
you invest along with
mutual fund?

y
Currency
Other

Total

Chi-Square Tests
Value
df
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear

2.318
3.162

17

39

17

73

13

1
2
22

3
6
57

0
2
21

4
10
100

Asymp. Sig.
6
6

(2-sided)
.888
.788

.055
1
.815
Association
N of Valid Cases
100
a. 7 cells (58.3%) have expected count less than 5. The
minimum expected count is .84.
Chi sq sig (.888) < Assump sig (.05)
So, the null hypothesis is accepted.
Segment & Risk are related

CHAPTER 6
FINDINGS & SUGGESTIONS

6.1 FINDINGS

According to the survey, the investors of mutual fund are 44% from the age group
of 18-25 years. The 38% investors rate the mutual fund as the moderate risk
investment, while 84% of investors are getting positive return from the mutual fund

investment.
The most popular medium of investing in mutual fund is through SIP and moreover

people like to invest.

When asked about the reason for selecting the respective product for investing then
the preference given by the investor was secure and safe point of investment and

return on investment.
Different investors had their requirement like regular income and most of investors

go through agents advisory.

Most of investors from the sample go for the debt fund and they got positive return

from the mutual fund investment.

The most of the investor like to invest in debt segment.
The investors consider safety of the principal and return of investment as the

investment factor.
Investors dont invest in a single avenue.
They prefer different avenues and maximum investors prefer to invest in equity and
fixed deposits.

6.2 SUGGESTIONS

The most vital problem spotted is of ignorance. So, investors should be made aware

about the investment option called MUTUAL FUND

Mutual Fund offers a lot of benefit which no other single option could offer.
Mutual Fund Company needs to give the training about the fund and the scheme
and its objective as they are the major source of the influence among prospective

customer.
The Agent should provide the investor the data and the comparative analysis of the

mutual fund scheme in which he invested and not invested.

The Financial service providers should target the rural areas because there is so
much competition in urban area. The rural areas dont have this kind of financial

facilities.
The Arihant capital should focus on risk and return associated with the investment

products.
The company should focus and create awareness of the other investment products
among individual of occupations and different income segment.

The company should aware the investor about the different between Fixed deposit and
Mutual fund investment and advantages of the Mutual fund.

CHAPTER 7: CONCLUSION

The study at Arihant Capital Market gave a vast learning experience to us and has helped
us to enhance our knowledge during the study we learnt how the theoretical marketing
aspects used in particularly in business.
Mostly mutual fund investors are from the young age group and the investment is
increasing continuously and they are getting positive return from the mutual fund
investment. So, there is good future and growth of mutual fund industry in India.
The Indian mutual fund industry has transformed totally for good since last few years and
has shown growth and potential. The Asset Management and the number of scheme have
increased, but it is yet to be a household product.
After doing the study, it is concluded that yes mutual funds are much better investment
option.
As future is uncertain they might get good return, no matter whether it is equity or mutual
fund. Investor can minimized their risk through research on their own before investing in
the market.

CHAPTER 8
BIBLIOGRPAHY

Bibliography
Agrawal, D. (2011). Social Science Research Network. Retrieved from
http://papers.ssrn.com: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1311761
Alekhya. (2012). Retrieved from http://www.worldwidejournals.com:
http://www.worldwidejournals.com/indian-journal-of-applied-research-(IJAR)/file.php?
val=January_2015_1421737901__79.pdf
Bhatt. (2011). Research ideas. Retrieved from http://www.sachdevajk.in:
http://www.sachdevajk.in/2016/02/10/literature-review-performance-of-mutual-funds/
Bhavsar. (2014). Research ideas. Retrieved from http://www.sachdevajk.in:
http://www.sachdevajk.in/2016/02/10/literature-review-performance-of-mutual-funds/
Biswas, B. (2013). Retrieved from http://www.worldwidejournals.com:
http://www.worldwidejournals.com/indian-journal-of-applied-research-(IJAR)/file.php?
val=January_2015_1421737901__79.pdf
Gupta, S. (2011). LAMBERT Acadamic publishing. Retrieved from https://www.lappublishing.com: https://www.lap-publishing.com/catalog/details/store/gb/book/978-3-84439279-1/mutual-fund-industry-growth-and-future-prospects
inderscienceonline. (n.d.). Retrieved from http://www.inderscienceonline.com:
http://www.inderscienceonline.com/doi/abs/10.1504/GBER.2006.010138?
journalCode=gber&
Jain and Gangopadhyay. (2012). Retrieved from http://www.worldwidejournals.com:
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val=January_2015_1421737901__79.pdf
John. (2014). Research ideas. Retrieved from http://www.sachdevajk.in:
http://www.sachdevajk.in/2016/02/10/literature-review-performance-of-mutual-funds/
Joy. (2012). Research ideas. Retrieved from http://www.sachdevajk.in:
http://www.sachdevajk.in/2016/02/10/literature-review-performance-of-mutual-funds/
kumar, B. a. (2012). Retrieved from http://www.worldwidejournals.com:
http://www.worldwidejournals.com/indian-journal-of-applied-research-(IJAR)/file.php?
val=January_2015_1421737901__79.pdf
Palanisamy, Sengottaiyan, and Palaniappan. (2012). Retrieved from
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Paul, T. (2012). Retrieved from http://www.worldwidejournals.com:
http://www.worldwidejournals.com/indian-journal-of-applied-research-(IJAR)/file.php?
val=January_2015_1421737901__79.pdf

Personal website of R.kannan. (n.d.). Retrieved from http://kannanpersonal.com:

http://kannanpersonal.com/content/mutual-fund/index.html
Rao, D. R. (2010). Retrieved from http://www.worldwidejournals.com:
http://www.worldwidejournals.com/indian-journal-of-applied-research-(IJAR)/file.php?
val=January_2015_1421737901__79.pdf
saini, M. (2013). i-scholar. Retrieved from http://www.i-scholar.in: http://www.ischolar.in/index.php/Sajmmr/article/view/45262
Sarish. (2012). Retrieved from http://www.worldwidejournals.com:
http://www.worldwidejournals.com/indian-journal-of-applied-research-(IJAR)/file.php?
val=January_2015_1421737901__79.pdf
Sharma. (2014). Research ideas. Retrieved from http://www.sachdevajk.in:
http://www.sachdevajk.in/2016/02/10/literature-review-performance-of-mutual-funds/
Suvarna. (2014). Research ideas. Retrieved from http://www.sachdevajk.in:
http://www.sachdevajk.in/2016/02/10/literature-review-performance-of-mutual-funds/
Teri. (2007). MBA posts. Retrieved from http://mba-posts.blogspot.in: http://mbaposts.blogspot.in/2012/07/literature-review-on-mutual-funds.html

http://www.ischolar.in/index.php/Sajmmr/article/view/45262
http://www.worldwidejournals.com/indian-journal-of-applied-research(IJAR)/file.php?val=January_2015_1421737901__79.pdf

http://mbaposts.blogspot.in/2012/07/literaturereviewonmutualfunds.html
http://www.sachdevajk.in/2016/02/10/literaturereviewperformanceofmutualfunds/
http://www.inderscienceonline.com/doi/abs/10.1504/GBER.2006.010138?
journalCode=gber
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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1311761
https://www.lap-publishing.com/catalog/details/store/gb/book/978-3-84439279-1/mutual-fund-industry-growth-and-future-prospects

www.arihantcapital.com
www.sebi.gov.org
www.utimf.com/Pages/default.aspx
www.sebi.gov.in/sebiweb/home/list/3/39/01/Mutual-Funds
https://www.kotaksecurities.com/ksweb/Research/Investment-knowledge-Bank/differenttypes-of-mutual-funds
http://www.arihantcapital.com/about-us/about-arihant#ourhistory

http://www.sebi.gov.in/faq/mf_faq.html
http://kalyan-city.blogspot.com/2010/11/services-of-stock-exchange-to-investors.html
http://economictimes.indiatimes.com/definition/lumpsum
https://www.kotaksecurities.com/ksweb/Research/Investment-knowledge-Bank/differenttypes-of-mutual-funds
http://www.preservearticles.com/2013081433343/the-services-provided-by-stockexchange-700-words.html

CHAPTER 9

ANNEXURE

QUESTIONNAIRE
We, Jaydip Patel and Harshit Patel, student of NRIBM , We are undertaking summer
internship in Arihant Capital Market in Ahmedabad and making Project on Mutual Fund
as a Future Investment . As a part of it, this questionnaire has been designed for finding
out the future scope of Mutual Fund investment in Indian market. We assure you that the
information provided by you will be kept confidential.

PERSONAL DETAILS:

Name: _______________________________________________
Marital Status :- Married / Unmarried
Age-Group:
Below 18
35-45

18-25
45-55

25-35

Above 55

Gender:
Male

Female

Occupation:
Service Professional Business

Others

1) Do you invest from your Savings ?

a) Yes
b) no
2) In which segment do you invest along with mutual fund?

a) Equity

c) Currency

b) Commodity

d) Other ______________

3) What percentage of your annual income do you invest in share market?

a) Up to 10%

b) 10-15%

c) 15-20%

d) More than 20%

4) How much Rate of Return do you except from investment?

a) 0% - 10%

b) 10% - 20%

c) 20% and above

5) Which type of investment plan would you like to invest?

a) Low risk low return
b) High risk high return
c) Moderate risk Moderate return
6) How frequently do you invest?
a) Monthly

b) Quarterly

c) Half Yearly

d) Yearly

7) In which segment do you invest?

a) Equity

b) Debt

c) Hybrid

8) On which bases do you invest in the mutual fund?

a) Agent advisory
b) Friend suggestion

c) By own
d) Other_______________

9) By which source of information you came to know about Mutual Fund ?

a) Self
b) Friends and Relatives
c) Service providers and Consultants
d) Newspapers, Magazines and Advertisements

e) Agents
f) Workshops & Seminars

10) Which factor do you consider before investing in share market?

a) Maturity Period
b) Safety of Principal
c) Risk
d) Return on investment
e) Tax benefits
f) Liquidity
g) Any Other____________
11) Mutual Fund investing gives a definite positive return?
a) Yes

b) No

12) What do you rate the risks associated with Mutual Fund?
a) Low risk

b) Moderate risk

c) High risk

13) Any Suggestions / Remarks

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

-: Thank You :-