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Faculty of Commerce
Banaras Hindu University
Varanasi - 221005
Certificate
Date: …………………
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DECLERATION
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PREFACE
“Give a man a fish, he will eat it.
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ACKNOWLEDGEMENT
This successful project report has been made possible through the
direct co-operation and guidance of various people for whom I wish to
express my appreciation and gratitude.
THANKING YOU
Manali Rana
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EXECUTIVE SUMMARY
In few years Mutual Fund has emerged as a tool for ensuring one’s
financial well being. Mutual Funds have not only contributed to the
India’s growth story but have also helped families tap into the success
of Indian Industry As information and awareness is rising more and
more people are enjoying the benefits of investing in mutual funds The
main reason the number of retail mutual fund investors remains small
is that nine in ten people with income in India do not know the benefits
of mutual funds. But once, people are aware of mutual fund investment
opportunities and benefits, the number of people who decide to invest
in mutual funds increase to as man as one in five people. The trick for
converting a person with no knowledge of mutual funds to a new
mutual fund customer is to understand which of the potential investors
are more likely to buy mutual funds and to use the right arguments and
the sales process that Customers will accept as important and relevant
to their decision.
This Project gave me a great learning experience and at the same time
it gave me enough scope to implement my analytical ability. The
analysis and advice presented in this Project Report is based on market
research on the saving and investment practices of the investors and
preferences of the investors for investment in Mutual Funds. This
Report will help to know about the investors’ Preferences in Mutual
Fund means Are they prefer any particular Asset Management
Company (AMC), Which type of Product they prefer, Which Option
(Growth or Dividend) they prefer or Which investment strategy they
follow (Systematic Investment Plan or One Time Plan).
Also on June 20, 2019 came new funding offer that is an addition to
schemes as name of NFO (PHARMA AND HEALTH CARE FUND) and that
has also to be carried along with other plans in stipulated time of
period.
Along with this I came to know about some minute things such as How
to fill the applicant’s form, Method to correction, How to check KYC
(Know Your Customer) etc.
To meet our objectives we have been provided with the secondary data
on Mutual Fund and PSU Channel through the fact sheet of Aditya Birla
and we interacted one to one with each branch and its customers that
comes under PSU Channel for the primary data.
The data collected has been well organized and presented and I hope
the research findings and conclusion will be of use.
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CONTENTS
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Consumer Behavior on 48 – 55
Mutual Funds
Literature Review 49 – 51
Objective of Study 52
Methodology 52
Findings of Study 53 – 55
Conclusion 56 - 57
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ABOUT ADITYA BIRLA CAPITAL
Aditya Birla Capital Limited (ABCL) is the financial services platform of
the Aditya Birla Group.
Formerly known as Aditya Birla Financial Services Limited, ABCL has a
strong presence across the life insurance, asset management, private
equity, corporate lending, structured finance, project finance, general
insurance broking, wealth management, equity, currency and
commodity broking, online personal finance management, housing
finance, pension fund management, health insurance and asset
reconstruction business.
Anchored by more than 17,000 employees, ABCL has a nationwide
reach and more than 2, 00,000 agents / channel partners, ABCL is
committed to serving the end-to-end financial services needs of its
retail and corporate customers under a unified brand — Aditya Birla
Capital.
As of December 31st, 2018, Aditya Birla Capital manages aggregate
assets worth Rs. 3,000 billion and has a consolidated lending book of
over Rs. 600 billion, through its subsidiaries and joint ventures.
Aditya Birla Capital is a part of the Aditya Birla Group, a US$ 44.3 billion
Indian multinational, in the league of Fortune 500. Anchored by an
extraordinary force of over 120,000 employees, belonging to 42
nationalities, the Aditya Birla Group operates in 35 countries across the
globe.
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History
Originally incorporated in October 2007 under the Companies Act
1956, Aditya Birla Financial Services Private Limited received the
certificate of registration from the Reserve Bank of India in May 2009 to
commence the business as non-deposit taking NBFC.
In December 2014, the company was converted from a private limited
company to a public limited company, and was renamed as ‘Aditya Birla
Financial Services Limited’.
During past one decade since its incorporation, the Company has come
a long way to become one of the largest financial services players in
India. Year 2017 marks a milestone, with the Company becoming a pure
play listed holding company of all the financial services businesses of
the Aditya Birla Group.
To mark this new phase in its journey, and in line with its new unified
brand identity, the Company was rechristened as ‘Aditya Birla Capital
Limited’ in June 2017. The synopsis of its journey over past 12 years
from 2007-2019 is as follows:
From 5 business lines to a well diversified portfolio of 13 business
lines
Aggregate AUM1 has grown to Rs. 3,000 billion
Lending book (including Housing Finance) has grown to Rs. 601
billion
Aggregate revenues have grown to Rs. 115 billion
From Investment phase to aggregate2 earnings before tax of Rs.
12.9 billion
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Aditya Birla Capital is a part of the Aditya Birla Group, a USD 44.3 billion
Indian multinational in the league of Fortune 500. Anchored by an
extraordinary force of over 1, 20,000 employees, belonging to 42
nationalities, the Aditya Birla Group operates in 35 countries across the
globe. About 50 percent of its revenues flow from its overseas
operations.
Achievements
In pursuit of leadership vision
They are among the Top 5 Private Diversified NBFCs in India
They are one of the largest Private Life Insurance Companies in
India
They are one of the largest Asset Management Companies in India
They are one of the largest General Insurance Brokers in the
country
In pursuit of desire to be a role model
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They are renowned for risk management, people practices, sales
management, investor education, product innovation & fund
management capabilities
They are among the best 3 financial services players to work for
[As per a study by Great Place to Work Institute, 2016]
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Businesses
Aditya Birla Health Insurance Company Limited
ABSLAMC is the investment manager for the 4th largest fund house in
India, Aditya Birla Sun Life Mutual Fund
Aditya Birla Sun Life AMC Limited (formerly known as Birla Sun Life
Asset Management Company Limited), the investment manager of
Aditya Birla Sun Life Mutual Fund (formerly known as Birla Sun Life
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Mutual Fund), is a joint venture between the Aditya Birla Group and the
Sun Life Financial Inc. of Canada. The joint venture brings together the
Aditya Birla Group's experience in the Indian market and Sun Life's
global experience.
Established in 1994, Aditya Birla Sun Life Mutual Fund (ABSLMF), is co-
sponsored by Aditya Birla Capital Limited (ABCL) and Sun Life (India)
AMC Investments Inc. ABSLMF is India's second largest mutual fund
house.
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ABMU offers the best deals on Personal Loans, Credit Cards, Home
Loans, etc. & allows you to transact in a range of mutual funds.
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INTRODUCTION
Mutual funds are financial intermediaries, which collect the savings of
investors and invest them in a large and well-diversified portfolio of
securities such as money market instruments, corporate and
government bonds and equity shares of joint stock companies. A
mutual fund is a pool of common funds invested by different
investors, who have no contact with each other. Mutual funds are
conceived as institutions for providing small investors with avenues of
investments in the capital market. Since small investors generally do
not have adequate time, knowledge, experience and resources for
directly accessing the capital market, they have to rely on an
intermediary, which undertakes informed investment decisions and
provides consequential benefits of professional expertise. The raison
d’être of mutual funds is their ability to bring down the transaction
costs.
The advantages for the investors are reduction in risk, expert
professional management, diversified portfolios, and liquidity of
investment and tax benefits. By pooling their assets through mutual
funds, investors achieve economies of scale. The interests of the
investors are protected by the SEBI, which acts as a watchdog. Mutual
funds are governed by the SEBI (Mutual Funds) Regulations, 1993.
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Mutual Fund Operations Flow Chart
The flow chart below describes broadly the working of a Mutual Fund:
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The Goal Of Mutual Fund
The fund itself will still increase in value, and in that way you may also
make money therefore the value of shares you hold in mutual fund will
increase in value when the holdings increases in value capital gains and
income or dividend payments are best reinvested for younger investors
Retires often seek the income from dividend distribution to augment
their income with reinvestment of dividends and capital distribution
your money increase at an even greater rate. When you redeem your
shares what you receive is the value of the share.
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Organization Of Mutual Fund
There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund:
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Background
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. The history of mutual funds in India can be broadly
divided into four distinct phases:
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Third Phase — 1993-2003 ( Entry ot Private Sector funds)
With the entry of private sector funds in 1993, a new era started in the
Indian mutual fund industry, giving the Indian investors a wider choice
of fund families. Also, 1993 was the year in which the first Mutual Fund
Regulations came into being, under which all mutual funds, except UTI
were to be registered and governed. The erstwhile Kothari Pioneer
(now merged with Franklin Templeton) was the first private sector
mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund)
Regulations were substituted by a more comprehensive and revised
Mutual Fund Regulations in 1996. The industry now functions under the
SEB1 (Mutual Fund) Regulations 1996. The number of mutual fund
houses went on increasing, with many foreign mutual funds setting up
funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds
with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with
Rs.44. 541 crores of assets under management was way ahead of other
mutual funds.
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management and with the setting up of a UTI Mutual Fund, conforming
to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry
has entered its current phase of consolidation and growth. As at the
end of September, 2004, there were 29 funds, which manage assets of
Rs. 153108 crores under 421 schemes.
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Classification Of Mutual Funds Schemes:
Any mutual fund has an objective of earning income for the investors
and/or getting increased value of their investments. To achieve these
objectives mutual funds adopt different strategies and accordingly offer
different schemes of investments. On this basis the simplest way to
categorize schemes would be to group these into two broad
classifications:
Operational Classification:
(A) Open Ended Schemes: As the name implies the size of the scheme
(Fund) is open — i.e., not specified or pre-determined. Entry to the
fund is always open to the investor who can subscribe at any time. Such
fund stands ready to buy or sell its securities at any time. It implies that
the capitalization of the fund is constantly changing as investors sell or
buy their shares. Further, the shares or units are normally not traded
on the stock exchange hut arc repurchased by the fund at announced
rates. Open-ended schemes have comparatively better liquidity despite
the fact that these are not listed. The reason is that investors can any
time approach mutual fund for sale of such units. No intermediaries are
required. Moreover, the realizable amount is certain since repurchase
is at a price based on declared net asset value (NAV). No minute to
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minute fluctuations in rates haunt the investors. The portfolio mix of
such schemes has to be investments, which are actively traded in the
market. Otherwise, it will not be possible to calculate NAV. This is the
reason that generally open-ended schemes are equity based.
Moreover, desiring frequently traded securities, open-ended schemes
hardly have in their portfolio shares of comparatively new and smaller
companies since these are not generally traded. In such funds, option
to reinvest its dividend is also available. Since there is always a
possibility of withdrawals, the management of such funds becomes
more tedious as managers
have to work from crisis to crisis. Crisis may he on two fronts, one is,
that unexpected withdrawals require funds to maintain a high level of
cash available every time implying thereby idle cash. Fund managers
have to face questions like ‘what to sell’. He could very well have to sell
his most liquid assets. Second, by virtue of this situation such funds may
fail to grab favourable opportunities. Further, to match quick cash
payments, funds cannot have matching realization from their portfolio
due to intricacies of the stock market. Thus, success of the open- ended
schemes to a great extent depends on the efficiency of the capital
market and the selection and quality of the portfolio.
(B) Close Funded Schemes: Such schemes have a definite period after
which their shares/ units are redeemed. Unlike open-ended funds,
these funds have fixed capitalization, i.e., their corpus normally does
not change throughout its life period. Close ended fund units trade
among the investors in the secondary market since these are o he
quoted on the stock exchanges. Their price is determined on the basis
of demand and supply in the market. Their liquidity depends on the
efficiency and understanding of the engaged broker. Their price is free
to deviate from NAV, i.e., there is every possibility that the market price
may be above or below its NAV. If one takes into account the issue
expenses, conceptually close ended fund units cannot be traded at a
premium or over NAV because the price of’ a package of investments.
i.e., cannot exceed the sum of the prices of the investments
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constituting the package. Whatever premium exists that may exist only
on account of speculative activities. In India as per SEBI (MF)
Regulations every mutual fund is free to launch any or both types of
schemes.
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issue offer document announcing objectives as: (i) To provide a
reasonable rate of return, (ii) To protect the value of investment and.
(iii) To achieve capital appreciation consistent with the fulfillment of the
first two objectives. Such funds which offer a blend of immediate
average return and reasonable capital appreciation are known as
“middle of the road” funds. Such funds divide their portfolio in common
stocks and bonds in a way to achieve the desired objectives. Such funds
have been most popular and appeal to the investors who want both
growth and income.
1. Equity Fund: Such funds, as the name implies, invest most of their
investible shares in equity shares of companies and undertake the risk
associated with the investment in equity shares. Such funds are clearly
expected to outdo other funds in rising market, because these have
almost all their capital in equity. Equity funds again can be of different
categories varying from those that invest exclusively in high quality
‘blue chip companies to those that invest solely in the new,
unestablished companies. The strength of these funds is the expected
capital appreciation. Naturally, they have a higher degree of risk.
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3. Balanced Fund: The funds, which have in their portfolio a reasonable
mix of equity and bonds, are known as balanced funds. Such funds will
put more emphasis on equity share investments when the outlook is
bright and will tend to switch to debentures when the future is
expected to be poor for shares.
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Mutual Funds For Whom?
These funds can survive and thrive only if they can live up to the hopes
and trusts of their individual members. These hopes and trusts echo the
peculiarities which support the emergence and growth of such
insecurity of such investors who come to the rescue of such investors
who face following constraints while making direct investments:
(a) Limited resources in the hands of investors quite often take them
away from stock market transactions.
(d) To buy shares, investors have to engage share brokers who are the
members of stock exchange and have to pay their brokerage.
(f) It is difficult for them to know the development taking place in share
market and corporate sector.
(g) Firm allotments are not possible for small investors on when there is
a trend of over subscription to public issues.
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Why Mutual Funds?
Mutual Funds are becoming a very popular form of investment
characterized by many advantages that they share with other forms of
investments and what they possess uniquely themselves. The primary
objectives of an investment proposal would fit into one or combination
of the two broad categories i.e., Income and Capital gains. How mutual
fund is expected to be over and above an individual in achieving the
two said objectives, is what attracts investors to opt for mutual funds.
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course, depends on the quality of fund managers employed.
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at their disposal avail economies of scale. The brokerage fee or trading
commission may be reduced substantially. The reduced operating costs
obviously increase the income available for investors.
Investing in securities through mutual funds has many advantages like
— option to reinvest dividends, strong possibility of capital
appreciation, regular returns, etc. Mutual funds are also relevant in
national interest. The test of their economic efficiency as financial
intermediary lies in the extent to which they are able to mobilize
additional savings and channeling to more productive sectors of the
economy.
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AN INDIVIDUAL PERCEPTION ON MUTUAL
FUNDS
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inclusive financial products trying innovations in designing mutual funds
portfolio but these changes need fusion in association with investor’s
expectations. Thus, it has become crucial to study mutual funds from a
different angle, which is to focus on investor’s perception and
expectations and disclose the incognito parameters that are attributed
for their disapproval. This paper makes an attempt to identify various
factors affecting perception of investors regarding investment in
Mutual funds. The findings will help mutual fund companies to identify
the areas required for improvement in order to create greater
awareness among investors regarding investment in mutual funds.
Literature Review
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Shanmugham (2000) worked a survey of individual investors with the
object to study on what information source does investor depends. The
results explained that they are an economical, sociological and
psychological factor which controls investment decisions.
Madhusudhan V Jambodekar (1996) conducted his study to size-up the
direction of mutual funds in investors and to identify factors influence
mutual fund investment decision. The study tells that open-ended
scheme is most favored among other things that income schemes and
open-ended schemes and income schemes are preferred over closed-
ended and growth schemes.
News papers are used as information source, safety of principal amount
and investor services are priority points for investing in mutual funds.
Sujit Sikidar and Amrit Pal Singh (1996) conducted a survey to peep in to
the behavioral aspects of the investors of the North-Eastern region in
direction of equity and mutual fund investment. The survey resulted
that because of tax benefits mutual funds are preferred by the salaried
and self-employed individuals. UTI and SBI schemes were catch on in
that region of the country over any other fund and the other fund had
been proved archaic during the time of survey.
Syama Sunder (1998) conducted a survey with an objective to get an in-
depth view into the operations of private sector mutual fund with
special reference to Kothari Pioneer. The survey tells that knowledge
about mutual fund concept was unsatisfactory during that time in small
cities like Visakapatanam. It also suggested that agents can help to
catalyze mutual fund culture, open-ended options are much popular
than any other schemes, asset management company’s
brand is chief consideration to invest in mutual fund.
Anjan Chakarabarti and Harsh Rungta (2000) emphasized to the importance
of brand in ascertaining competence of asset management companies.
Shankar (1996) suggested that for penetrating mutual fund culture deep
in to society asset management companies must have to work and
steer the consumer product distribution model.
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Raja Rajan (1997) underlined segmentation of investors and mutual fund
products to increase popularity of mutual funds.
Objectives of Study
Methodology
Locale of the Study
The place where the study is being conducted is the “ICICI SECURITIES”
at Ludhiana City Branch. The securities branch deals with the customers
in various aspects such as it provides financial planning services.
Sampling Size: 230 customers
Sources of Data
1. Primary Data: The primary data is gathered from the following
methods:
(a) Through Interview method: Personal interviews, depth interviews
(b) Through Questionnaire: Structured questionnaires
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2. Secondary Data: The secondary data is gathered from the
organization’s website, research reports, other public reports.
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Business Person 35
Self Employed 46
Others 0
2. Age Group
Table 2: Age Group of the Respondents
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Figure 2: Age group of Respondents
Interpretation: From the above graph, it is interpreted that most of the
investors i.e. 59% belong to the age group of less than 30 years which
lies in between 21-30 years followed by 17% belonging to the age group
of 31 to 40 years. Further, 13% of the respondents lie in the age group
of 41-50 years and 11% belongs to the age group of 51 and above.
According to the first objective, there is a relationship between the age
of the respondent and their level of awareness for mutual funds.
3. Gender
Table 3: Gender of the Respondents
Particulars No. of Respondents
Male 154
Female 76
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Interpretation: Out of the 230 respondents, 154 respondents are male
and 76 are female which means that 67% are male and 33% are female.
This chart shows that male gender dominates the investment pattern
by 67%. This shows that male gender takes the majority of the
decisions related to investment pattern. The intern also get to know
that most of the male respondents operate and manage the demat
account on the name of their wife or daughter. And the intern also
analyzed that most of the female respondents are hesitant to share
their investment pattern. Moreover, most of the female respondents
are unaware of the meaning or concept of mutual funds.
4. Annual Income
Table 4: Annual Income Range of Respondents
Between 3 – 5 Lakhs 70
Above 5 Lakhs 34
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Interpretation: It is analyzed that 85% of investors are aware about
mutual funds as an investment option. This shows that awareness level
for mutual funds is quite high. It only means that respondents knew
that mutual funds are an investment tool but they do not how to invest
in it and what actually mutual funds means. So in other words, it can be
said that as an investment option, respondents know about mutual
funds but still they are not fully aware about it. It is analyzed by the
intern that respondents are quite enthusiastic to know about the
concept of mutual funds as they have shown keen interest for the
same.
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Figure 6: Preference of Respondents towards various Investment
Alternatives
7. Investment Purpose
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High Returns 110
Others 14
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Particulars No. of Respondents
Lack of knowledge 66
Misguiding by brokers 25
Lack of interest 17
High risk involved 44
High brokerage charges 12
Others 65
Interpretation: The chart shows that 39% of investors are not aware
about the equity as an investment option whereas 25% of the
respondents believe that there is involvement of risk factor in equity
due to which they are hesitant to invest in mutual funds. Whereas 20%
of investors don’t invest because of misguiding by brokers.
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Less brokerage charges 5
Aware with current state of affairs 12
and upcoming changes
Switching facility 9
Better services 6
All mentioned above 17
Others 31
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Table 10: Satisfaction level of respondents towards Mutual Fund
Investment
Particulars No. of Respondents
Highly Satisfied 20
Satisfied 61
Neutral 11
Dissatisfied 5
Highly Dissatisfied 3
Interpretation: The chart shows that maximum investors i.e. 61% are
satisfied by choosing equity as an investment option. It should be noted
that there is no link between satisfaction level of the services provided
by brokers and satisfaction level of choosing equity as an investment
option. Sometimes it may happen that investors is satisfied by equity
but not with the services provided by its brokers.
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CONSUMER BEHAVIOUR ON MUTUAL FUNDS
The Indian capital market has been growing tremendously with the
reforms of the industrial policy, reforms of public sector and financial
sector and new economic policies of liberalization, deregulation and
restructuring. The Indian economy has opened up and many
developments have been taking place in the Indian capital market and
money market with the help of financial system and financial
institutions or intermediaries which foster savings and channels them
to their most efficient use. One such financial intermediary who has
played a significant role in the development and growth of capital
markets are Mutual Fund (MF).The launching of innovative schemes in
India has been rather slow due to prevailing investment psychology and
infrastructural inadequacies. Risk adverse investors are interested in
schemes with tolerable capital risk and return over bank deposit, which
has restricted the launching of more risky products in the Indian Capital
market. But this objective of the MF industry has changed over the
decades. For many years funds were more of a service than a product,
the service being professional money management. In the last 15 years
MFs have evolved to be a product. The term ‘product’ is used because
MF is not merely to park investor’s savings but schemes are ‘tailor
made’ to cater to investor’s needs, whatever their age, financial
position, risk tolerance and return expectations.
This issue of combining service and product will be an important one
for the next decade. Mutual funds have opened new vistas to millions
of small investors by virtually taking investment to their doorstep. In
India, a small investor generally goes for bank deposits, which do not
provide hedge against inflation and often have negative real returns. He
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has limited access to price sensitive information and if available, may
not be able to comprehend publicly available information couched in
technical and legal jargons. He finds himself to be an odd man out in
the investment game. Mutual funds have come, as a much needed help
to these investors. This study attempts to evaluate manager investor
behaviour and understand their needs and expectations, to gear up the
performance to meet investor requirements.
Literature Review
MFs have attracted a lot of attention and kindled the interest of both
academic and practitioner communities. Compared to the developed
markets, very few studies on MFs are done in India. This literature
review reveals Investor behaviour studies which can be grouped under
two themes.
1. In addition to what you own, you have been given Rs. 1000. You are
now asked to choose between
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A. A sure gain of Rs. 500.
B. A 50% chance to gain Rs. 1,000 and a 50% chance to gain nothing.
2. In addition to whatever you own, you have been given Rs. 2000.
You are now asked to choose between:
B. A 50% chance to lose Rs. 1,000 and 50% chance to lose nothing.
In the first group 84% chose A. In the second group 69% chose B. The
two problems are identical in terms of net cash to the subject; however
the phrasing of the question causes the problem to be interpreted
differently.
Many investors do not have data analysis and interpretation skills. This
is because, data from the market supports the merits of index investing,
passive investors are more likely to base their investment choices on
information received from objective or scientific sources. It is further
studied that a serious national campaign to promote savings through
education and information could have a measurable impact on financial
behaviour.
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Investor fund selection Behaviour influences marketing decisions of
fund management. It is studied that income schemes and open-ended
schemes are preferred over growth schemes and close-ended schemes
during the prevalent market conditions. Investors look for Safety of
Principal, Liquidity and Capital Appreciation in order of importance.
Newspapers and Magazines are the first source of information through
which investors get to know about. MFs / Schemes and the investor
service is the major differentiating factor in the selection of MFs. It is
also seen that the salaried and self-employed formed the major
investors in MFs primarily due to tax concessions. UTI and SBI schemes
were popular. It is also seen that Agents play a vital role in spreading
the MF culture; open-end schemes were much preferred; age and
income are the two important determinants in the selection of fund /
scheme; brand image and return are their prime considerations. An
attempt was made by the NCAER in 1964 to understand the attitude
and motivation for the savings of individuals, for which a survey of
households was undertaken. It was seen that psychological and
sociological factors dominated economic factors in share investment
decisions. An article by Personal Fn (http://www.personalfn.com) for
Business India August 2, 2004 with the title, “The Golden Nest Egg”,
reported that, investor’s age could be used as a benchmark to
determine the nature of the portfolio.
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Objectives of the study
The study has the following objectives
Methodology
Data & Data Sources
The study mainly deals with the financial behaviour of Individual
Investors towards Mutual funds. The required data was collected
through a pretested questionnaire administered on a combination of
simple random and judgment sample of 83 educated individual
investors. Judgment sample selection is due to the time and financial
constraints. Respondents were screened and inclusion was purely on
the basis of their knowledge about Financial Markets, MFs in particular.
The purpose of the survey was to understand the behavioral aspects of
individual investors, mainly their fund selection behaviour, various
factors influencing this behaviour and also the conceptual awareness
level among individual investors.
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Findings of the Study
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CONCLUSION
Salaried person's savings are most often deposited in mutual funds; the
theory behind this is that by pooling together a huge aggregation of
individual savings and investing them, using the professional judgment
of the fund manager, one spreads risk, takes advantage of volume
buying and scientific data analysis, expertise and so on. Therefore it is
seen as the ideal option for an individual who does not have the time,
knowledge or experience to make a succession of judgments involving
his hard-earned savings. MF industry in India has a large untapped
market in urban areas besides the virgin markets in semi-urban and
rural areas. This market potential can be tapped by scrutinizing investor
behaviour to identify their expectations and articulate investor's own
situation and risk preference and then apply to an investment strategy
that combines the usual four:
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Equity
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