Ppt on

INVESTORS BEHAVIOUR TOWARDS

MUTUAL FUND

Presented by: Satyam Gupta

M.B.A. Sem.3rd
 COMPANY PROFILE
 Established in 1984, The Kotak Mahindra Group has long been
one of India ‘s most reputed financial organizations. In Feb 2003,
Kotak Mahindra Finance Ltd., the group ‘s flagship company was
given the license to carry on banking business by the Reserve
Bank of India (RBI). This approval creates banking history since
Kotak Mahindra Finance Ltd is the first company in India to
convert to a bank. The license authorizing the bank to carry on
banking business has been obtained from the RBI in tune with
Section 22 of the Banking Regulation Act 1949.
Chairman Shankar Acharya

Executive Vice Chairman &

Uday Kotak
MD

Non-Executive Director C Jayaram

Joint Managing Director Dipak Gupta
Company Secretary Bina Chand Arana
Director Prakash Apte, Amit Desai, N P Sarda
S Mahendra Dev, Farida Kham Bata, Mark Edwin Newman, Uday
Chander
Additional Director
Khanna
OBJECTIVES
 To analyse the trends in returns of selected
Mutual funds.
 To Understand the functions of an asset
Management Company.
 To Understand the performances of various
schemes using various tools to measure the
performances.
 To measures and compares the performances of
selected mutual funds Schemes of different
mutual fund companies and other assets
Management Comapanies.
RESEARCH METHODOLOGY
 This report is based on primary as well secondary
data; however primary data collection was given
more importance since it is overhearing factor in
attitude studies. One of the most important users
of research methodology is that it helps in
identifying the problem, collecting, analysing the
required information data and providing an
alternative solution to the problem. It also helps
in collecting the vital information that is required
by the top management to assist them for the
better decision making both day to day decision
and critical ones.
 FOLLOWING ARE THE CONTENTS OF MY
PRESENTATION

• Meaning of Mutual Fund

• Flow chart of Mutual Fund
• Types of Mutual Funds
• 7 Investment tips to investors behavior
towards mutual funds
• Findings
• Suggestion
• Conclusion
WHAT IS MUTUAL FUND?

• A Mutual Fund is a trust that pools together the

savings of a number of investors who share a
common financial goal.

The money thus collected is then invested in

capital market instruments such as shares,
debentures and other securities.
The flow chart below describes the
working of a mutual fund:
 TYPES OF MUTUAL FUNDs

Mutual
Funds

By Maturity By Investment
Period Objective

Open Close Equity Balance Gilt

fund fund
ended ended

Income Money Index

market fund
 Schemes according to Maturity
Period
A mutual fund scheme can be classified into open-ended
scheme or close-ended scheme depending on its
maturity period.
Open-ended
Fund
An open-ended Mutual fund is one that is available for subscription
and repurchase on a continuous basis. These Funds do not have a
fixed maturity period.

close-ended
Fund
A close-ended Mutual fund has a stipulated maturity period e.g. 5-
7 years. The fund is open for subscription only during a specified
period at the time of launch of the scheme.
7 INVESTMENT TIPS TO INVESTORS
BEHAVIOUR TOWARDS FUNDS
1.Know your risk profile
Before you take a decision to invest in equity funds, it is important to assess
your risk tolerance. Risk tolerance depends on certain factors like emotional
temperament, attitude and investment experience. Remember, while
ascertaining the risk tolerance, it is crucial to consider one's desire to assume
risk as the capacity to assume the risk.
It helps to understand different categories of overall risk tolerance, i.e.
Conservative, moderate or aggressive. While a conservative investor will
accept lower returns to minimize price volatility, a moderate investor would
be all right with greater price volatility than conservative risk tolerances to
pursue higher returns.
2.Don't have too many schemes in your portfolio
While it is true that diversification helps in earning better returns with a lower
level of fluctuations, it becomes counterproductive when one has too many
funds in the portfolio.
For example, if you have 15 funds in your portfolio, it does not necessarily
mean that your portfolio is adequately diversified. To determine the right level
of diversification, one has to consider factors like size of the portfolio, type of
funds and allocation to different asset classes. Therefore, itis possible that a
portfolio having 5 schemes may be adequately diversified whereas another
one with 10 schemes may have very little diversification.

3.Longer time horizon provides protection from volatility

As an equity fund investor, you need to understand that volatility is an
integral part of the stock market. However, if you remain focused on the long-
term objectives and follow a disciplined approach to investing, you can not
only handle volatility properly but also turn it to your advantage.
4.Understand and analyze 'Good Performance'
‘Good performance' is a subjective thing. Ideally, to analyze performance,
one should consider returns as well as the risk taken to achieve those
returns. Besides, consistency in terms of performance as well as portfolio
selection is another factor that should play an important part while analyzing
the performance.

5.Sell your fund, if you need to

There is no standard formula to determine the right time to sell an investment
in Mutual fund or for that matter any investment. However, you can definitely
benefit by following certain guidelines while deciding to sell an investment in
a Mutual fund scheme. Here are some of them:
You may consider selling a fund when your investment plan calls for a sale
rather than doing so for emotional reasons.
You need to hold a fund long enough to evaluate its performance over a
complete market cycle, i.e. around three years or so. Many of us make the
mistake of either holding on to funds for too long or exit in a hurry.
6.Diversified vs. Concentrated Portfolio
The choice between funds that have a diversified and a concentrated portfolio
largely depends upon your risk profile. As discussed earlier, a well- diversified
portfolio helps in spreading the investments across different sectors and
segments of the market. The idea is that if one or more stocks do badly, the
portfolio won't be affected as much.
At the same time, if one stock does very well, the portfolio won't reap all the
benefits. A diversified fund, therefore, is an ideal choice for someone who is
looking for steady returns over the longer term.
A concentrated portfolio works exactly in the opposite manner. While a fund
with a concentrated portfolio has a better chance of providing higher returns,
it also increases your chances of underperforming or losing a large portion of
your portfolio in a market downturn. Thus, a concentrated portfolio is ideally
suited for those investors who have the capacity to shoulder higher risk in
order to improve the chances of getting better returns.
7.Review your portfolio periodically
It is always a good idea to review your portfolio periodically. For example,
you may begin reviewing your portfolio on a half-yearly basis. Besides, you
may be required to review your portfolio in greater detail when your
investments goals or financial circumstances change.
FINDINGS
Through this Project the results that was derived are-

 People who lie under the age group of 36-40 have more experience and are more
interested in investing in Mutual Funds.
 There was a lot of lack of awareness or ignorance, that’s why out of 150 people,
100 people have invested in Mutual Fund and 50 people is unaware of investing in
Mutual Funds.
 Generally, People employed in Private sectors and Businessman are more likely to
invest in Mutual Funds, than other people working in other professions.
 Generally, investors whose monthly income is above Rs. 20000-30000 are more
likely to invest their income in Mutual Fund, to preserve their savings of at least
more than 20%.
 People generally like to save their savings in Mutual Fund, Fixed Deposits and
Savings Account.
 Many people came to know about Mutual Fund from Financial Advisors,
Advertisement as well as from their Peer group, and they generally invest in the
Mutual Fund by taking advices from their Legal Advisors.
 Investors generally like to invest in Large Cap Companies like Reliance, SBI, etc.
to minimize their risk.
 The most popular medium of investing in Mutual Fund is through SIP and moreover
people like to invest in Equity Fund though it is a risky game.

The main Objective of most of the Investors is to preserve their Income.

SUGGESTION

There are some suggestions for better investing for investors that they should
keep their investment for long time keeping in mind the level of risk involve
and saving pattern, they should take help of private financial consultants‘ to
have investment portfolio so as to reduce risk in investment, they should not
invest in high volatile funds, they should collect all possible information before
investment, periodical review should be done for investment and risk analysis
should be done regularly and properly, maintain proper records for each
transaction. A careful and reasonable diversification of investment in mutual
fund should also be there on investor ‘s part to balance the risk involved in
investment. It is also suggested that investor should have a habit of regular
saving to earn some more extra consistently through changing market scenario
since small savings will grow into bigger capital base. One of the strong
suggestions is that to invest a reasonable part of investment in to liquid security
so that to meet any contingency
 CONCLUSION
Running a successful Mutual Fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the psyche of the small investors. This study has made an
attempt to understand the financial behaviour of Mutual Fund investors in connection with
the preferences of Brand (AMC), Products, Channels etc. I observed that many of people
have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They
need the knowledge of Mutual Fund and its related terms. Many of people do not have
invested in mutual fund due to lack of awareness although they have money to invest. As the
awareness and income is growing the number of mutual fund investors are also growing.

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

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