Study of Different Avenues of Investments and Analysis of Investors Behavior

Abhey Rawat 11FN-123

About Master Trust

It is financial services provider Company. Financial Services include Stock broking, Depository Participants, distribution of financial products- mutual fund, bonds, commodity broking, equities, insurance broking etc.

Project
Study of different avenues of investments Collection of primary data about investors preference of different investment avenues Analysis of investors Behavior

Different Avenues of Investment

Safe/Low Risk Avenues: Savings Account Bank Fixed Deposits Public Provident fund National savings certificates. Government Securities. Moderate Risk Avenues: Mutual Funds Life Insurance Debentures Bonds.

Different Avenues of Investment

High Risk Avenues: Equity Share Market Commodity Market FOREX Market.

Traditional Avenues: Real Estate (property) Gold/Silver Emerging Avenues: Hedge Funds Art and passion

Commodity Arbitrage

Features of Commodity Arbitrage

No price risk for the entire lock-in period Prices for both maturities (delivery periods) are available on the trading terminals Maturity of 25th day Settlement period may go up to 33 days Exchange provides counter guarantee in respect of quality of goods, weight and counter party risk no mark to market requirements no link with futures contracts delivery based buying and delivery based selling of commodity

Questions
Where surplus fund is invested Which investment avenue is best according to them Do they know about Commodity Arbitrage Factors considered before investment

Surplus fund Allocation

Surplus Fund

Mutual fund 9%

Current Account 91%

Preferred way of Investment

Preferred way of investment
Bond

Equity

Column2 Commodity Column1 Series 1

Mutual Funds

Fixed Deposit

10

12

14

16

18

Most Important factor while investing

Factors While Investing

High Return 35%

Safety of principal 39%

Low risk 26%

Interested in Commodity Arbitrage

No

Yes

10

15

20

25

30

35

40

Analysis based on Survey

Surplus funds parked in : Current account Preferred Way of Investment : Fixed Deposits Factor Considered for Investment : Safety of Principal Interest in Commodity Arbitrage : Very low

Conclusion
Surplus funds are used for future financial requirements Investors prefer avenues which are safe There is a lack of knowledge about commodity arbitrage Financial products that give risk free return are preferred

Limitations of Study
Large number of financial instruments Reluctance to provide complete information about organizations investment The information can be biased due to use of questionnaire

Value Addition to the Company

Understanding customers problems Strengthening of customer intimacy Learn about customer preferences New service initiatives Customized financial services based on customer needs

Recommendation
Need to create awareness about various financial products other than banks fixed deposit Investment in liquid funds Target High Net Individuals for commodity arbitrage Master Trust should follow those companies which have high amount of surplus money

Thank You