analyse investors' view toward mutual fund schme in india (2)

8/11/2019 Analyse Investors' View Toward Mutual Fund Schme in India (2)

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INTRODUCTION

Mutual funds are very popular all over the world and they play an important role in

the financial system of many countries. Mutual funds are an ideal medium for investment by

small investors in the stock market. Mutual fund pools together the investment of small

investors for participation in the stock market. Being institutional investors, mutual fund can

afford market analysis generally not available to individual investors. Furthermore mutual

fund can diversify the portfolio in a better way as compared to individual investors due to the

expertise and availability of funds.

Mutual funds in India were first created in 1963 when the Unit Trusts Of India (UTI),

a statesponsored entity, came into being. Until 1987 and 1993 other entities belonging to

the public sector were permitted to offer mutual fund basically state-controlled banks and

insurers. As part of financial sector reforms, mutual fund industry was opened to the private

sector in 1993 and private sector organization were permitted to enter the market and the first

mutual fund regulation were promulgated, which were subsequently replaced by the SEBI

(Mutual Fund) Regulations of 1996.These private sector organizations comprised both Indian

and foreign joint venture as well as purely Indian firm.

Since then, the expansion of mutual of mutual fund business has intensified

competition and led to product innovation. Mutual fund presently offer a variety of option to

investors such as income funds, balanced funds, liquid, gift funds, index funds, exchange

traded funds, sect oral funds etc. The deceleration in the growth of mutual funds in the 1990s

could be attributed partly to the relatively poor performance of the stock markets and partly

due to withdrawal of tax benefits under section 80M of Indian Income Tax Act,1961.Some of

the mutual funds had offered assured return schemes enabling them to mobilize large

resources. A number of mutual funds faced difficulties in meeting their redemption

obligations relating to such schemes. In several cases, the sponsors of mutual fund had to

infuse additional funds to meet the shortfall. As a result, mutual funds, by and large

discontinued the floatation of assured returns schemes, which had some dampening affect on

the resources mobilization by mutual funds.


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A mutual fund in India has the following groups.

a) Mutual funds are popular mainly with the middle and highincome groups.

b) Investors are largely based in the urban centers, particularly the metropolitan cities.

c)

Penetration of mutual funds in the rural areas remains small.

d) UTI and other state-owned asset management companies have lost market share, while

private sector funds have grown rapidly.

e) Asset management companies are divided into those that are predominantly owned by

the state and those that are in the private sector.

f) Mutual funds industry has to compete with attractive assured returns from government

schemes and this is possibly the single most important impediment to the growth of the

industry.

The popularity of mutual funds, and the important role they play in the financial

system of many countries, is recognized all over the world. Mutual funds are an ideal

medium for investment by small investors in the stock market. Mutual funds pool together

the investment of small investors for participation in stock market. Being institutional

investors, mutual funds can afford market analysis generally not available to individual

investors. Furthermore, mutual funds can diversify the portfolio in a better way as compared

with individual investors due to the expertise and availability of funds.

Mutual funds are essentially investment vehicles where people with similar

investment objective come together to pool their money and then invest accordingly. Each

unit of any scheme represents the proportion of owned by the unit (investor).Appreciation or

reduction in value of investment is reflected in net asset value (NAV) of the concerned

schemes are managed by respective Asset Management Companies (AMC). Different

business groups, financial institutions and banks sponsors these AMCs, either alone or in

collaboration with international firms. Several international funds are operating

independently in India and some are expected to come in the future. Mutual funds invest

according to the underlying investment objective specified at the time of launching a scheme.


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RESEARCH METHODOLOGY OF THE STUDY

Research is an original contribution to the existing stock of knowledge making for itsadvancement. It is the pursuit of truth with the help of study, observation, comparison and

experiment. In short, the search for knowledge through objective and systematic method of

finding solution to a problem is research. A research method refers to the methods the

researchers use in performing research operations. Research Methodology is a way to

systematically solve the research problem. By research methodology not only the research

methods are considered but also the logic behind the methods used in the context of the

research study and explanations are given on why a particular technique is used.

RESEARCH DESIGN

The research design that is adopted in this study is descriptive design. Descriptive research

is used to obtain information concerning the current status of the phenomena to describe,

"What exists" with respect to variables or conditions in a situation. The focus of this study

was on self-reported decisions made by various investors regarding the investment patterns in

mutual funds.

SOURCES OF DATA:

Data were collected through both primary and secondary data sources. Primary data was

collected through questionnaires. The research was done in the form of direct personal

interviews and through telephone interviews.

1. PRIMARY DATA:

A primary data is a data, which is collected afresh and for the first time, and thus happen tobe original in character. The primary data with the help of questionnaire were collected from

various investors. Proper care has been taken to ensure that the information needed match the

objectives, which in turn match the data collected through the questionnaire. The basic

cardinal rules of questionnaire design like using simple and clear words, the logical and

sequential arrangement of questions.


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2. SECONDARY DATA:

Secondary data consist of information that already exists somewhere, have been collected.

Secondary data is collected from company websites, other websites, company fact sheets,

magazines and brochures.

3. SAMPLE SIZE OF THE STUDY:

Customers Age Male Female Total

20-30 2 2 4

30-40 2 2 4

40-50 2 2 4

50-60 2 2 4

60 and above 2 2 4

Total 10 10 20

4. DATA ANLYSIS: The data will be analysis using central tendency technique.


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DATA ANALYSES AND INTERPRETATION

TABLE 3.1

With which companies people invested money for mutual funds?

Particulars Male ( % ) Female ( % ) Total

HDFC 10 25 35

ICICI 5 5 10

RELIANCE 5 20 25

LIC 20 5 25

SBI 5 5 10

KOTAK 5 0 5

Source: Compiled from the primary data.

Graph 3.1

Interpretation: -

From the above table 3.1 it can be observed that there are companies E.g. HDFC,

ICICI, RELIANCE, LIC, SBI, and KOTAK which provides mutual funds. In HDFC

total 35% of people invested money for mutual fund in which male invested 10%

and female 25%. In ICICI company total people invested money for mutual fund

10% in which 5% male and 5% female. In Reliance company total people invested

money for mutual fund is 25% in which 5% male and 20% female. In LIC total

people invested money same as Reliance Company i.e. 25% but in LIC Company

20% male 5% female. In SBI 5% male and 5% in female i.e. total 10% people

invested money for mutual fund. In KOTAK Company only male is invested for

money for mutual fund. So, from the above data analyses table it can be observed

that people are interested to investee money for mutual funds. Only in HDFCCompany as compare to other company.

0%

5%

10%

15%

20%

25%

30%

35%

40%

HDFC ICICI RELIANCE LIC SBI KOTAK

Responses

Various companies

Male

Female

Total


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Table 3.2

What is your duration of investment?

Particular Male ( % ) Female ( % ) Total

0-1 year 5 10 15

1-2 year 5 5 10

2-4 year 20 20 40

Above 4 year 20 15 35

Source: - Compiled from the primary data.

Graph 3.2

Interpretation:-

From the above table 3.2 it can be observed that the responses of the duration of investment.

For 0-1 year of duration 15% of people invested money in mutual funds, in which 5% male

and 10% female. For 1-2 year of duration 10% of people invested money in mutual fund. For

2-4 year of duration total 40% of people invested money in mutual fund. For above 4 year of

duration total 35% of people interested to invest money in mutual fund.

0%

5%10%

15%

20%

25%

30%

35%

40%

45%

0-1 year 1-2 year 2-4 year Above 4 year

Responses

Duration in mutual fund

Male

Female

Total


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Table 3.3

What is your risk profile?

Particulars Male ( % ) Female ( % ) Total

Saving 5 5 10

Return 35 25 60

Innovator Moderator 5 5 10

Risk adverse 5 15 20


Graph 3.3

Interpretation:-

From the above table 3.3 it can be observed that the responses of risk profile. In which 10%

of people have saving risk profile in which 5% male and 5% female, 60% of people have

return risk profile in which 35% male and 25% female, 10% of people have innovator

moderator in which 5% male and 5% female and 20% of people have risk adverse risk

profile in which 5% male and 15% female.

0%

10%

20%

30%

40%

50%

60%

70%

Saving Return Innovator

Moderator

Risk adverce

Responses

Types of risk profile

Male

Female

Total


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Table 3.4

What type of funds have you invested?

Particulars Male ( % ) Female (% ) Total

Equity fund 15 20 35

Debt fund 5 5 10

Balanced fund 15 15 30

Index fund 5 5 10

Income fund 10 5 15


Graph 3.4

Interpretation:

From the above table 3.4 it can be observe that people invested in various types of funds. In

equity fund 35% of people invested in which 15% male and 20% female. In debt fund 10% of

people invested in which 5% male and 5% female. In balanced fund 30% of people invested

in which 15% male and 15% female. In index fund 10% of people invested in which 5% male

and 5% female. In income fund 15% of people invested in which 10% male and 5% female.

0%

5%

10%

15%20%

25%

30%

35%

40%

Equity fund Debt fund Balancedfund

Index fund Incomefund

No.ofInvestors

Types of fund

Male

Female

Total


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FINDINGS AND CONCLUSIONS

1.

In HDFC 35% of people in interested to invest in mutual fund as compare to others bank

like ICICI, Reliance, LIC, SBI and KOTAK. So, these

2. 40% of people interested to invest in 2-4 year of duration as compared to others.

3. From the data analyses it can be found that 60% of people interested to invest in return

type of risk profile.

4. From the data analyses it can be found that majority of people i.e. 35% of people invested

to invest equity type of fund as compare to other types of fund.

In any Mutual Fund Industry investors awareness plays an important role. With the

increasing number of Mutual Fund organizations, there is a need for every company to

educate investors and the general public on various aspects concerned with the mutual fund

investments which in turn reveals their attitude towards such investments. From the study on

Investors attitude towards Mutual funds, it is found that the investors have a positive

attitude towards their investment made in Mutual funds.

The investors are satisfied with their investment in Mutual Funds. The investors also

feel that the annual reports and other publications of the concern help them anlyse the

performance of their investment. The organization can educate its investors on the risk and

return in order to make their investments more effective. The investors education

programmer can be conducted by the organization in order to educate the investors. The

study has helped the researcher gain real time knowledge and has helped to use her analytical

skills to anlyse the attitude of the investors.


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RECOMMENDATIONS

1.

Prudential investment norms were prescribed to ensure that the investment portfolios of

the mutual funds are diversified to reduce the inherent risk associated with such

investments.

2. Investments in equity related instruments of a single company have been restricted to 10

per cent of the NAV of a scheme with an exception for index funds and sector/ industry

specific schemes.

3. Investment in investment grade rated debt instruments issued by a single issuer, should

not exceed 15 per cent of NAV of the scheme. This limit may be extended to 20 per centof the NAV of the scheme with the prior approval of the Boards of AMC and trustees. In

case of unrated debt instruments.

4. Investment in a single issuer shall not exceed 10 per cent of the NAV of the scheme and

in case of such debt instruments of all the issuers in a scheme shall not exceed 25 per cent

of NAV subject to approval of Boards of AMC and Trustee Company.

5. However, these restrictions for debt instruments will not be applicable to government

securities and money market instruments.

6. As investment in unlisted shares is less liquid, such investments have been restricted to a

maximum of 10 per cent of the NAV of a scheme in case of close ended scheme. In case

of open-ended schemes the limit is made more stringent to 5 per cent of the NAV of the

scheme as there is continuous repurchase by investors in such schemes and there is need

of liquidity.


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SUGGESTIONS

1.

The companies should provide various schemes and facilities

2. In duration of investment companies should include various types of beneficial schemes

under the duration of 0-1, 2- 4 etc.

3. The companies should explain types of risk profile in positive way.

4. The companies should increase the types of fund with various facilities


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BIBLIOGRAPHY

1. Desigan et al. (2006), Women Investors Perception towards Investment: An

empirical Study, Indian Journal of Marketing. (accessed on 22nd May 2010)

2. Preeti Singh, Investment Management Security Analysis and Portfolio Management,

Himalaya Publishing House, Eleventh Edition, 2003, Pp1

WEBLIOGRAPHY

1. www.indianfoline.com.

2.

www.mutualfunds.com.

3. www.investopidia.com.

4. www.amfindia.com.
http://www.indianfoline.com/http://www.mutualfunds.com/http://www.investopidia.com/http://www.amfindia.com/http://www.amfindia.com/http://www.investopidia.com/http://www.mutualfunds.com/http://www.indianfoline.com/


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ANNEXURE1

QUESTIONNAIRE

ANALYSE INVESTORS VIEW TOWARDS MUTUAL

FUND SCHEME IN INDIA.

PERSONAL PROFILE:

1.

Name of the Investors:

2. Gender : Male Female

3. What is your age?

15-25 25-35

35-45 Above 45

4. Qualification :

Undergraduate Graduate

Post graduate Professional degree


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1. Do you invest in mutual fund?

Yes No

2. With which companies people invested money for mutual funds?

H.D.F.C I.C.I.CI

Reliance L.I.C

S.B.I Kotak

3. What is your income? (Yearly based)

1 lakh 2-4 lakh

4-5 lakh More than 5

4. Do you have complete knowledge of the mutual fund industry?

Yes Not fully Not at all

5.

What do you think is the basic difference in investing in mutual funds rather than stock?

Saving Returns Diversification Risk tolerance


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6. From where you come to know about this companys mutual fund schemes?

Family members & relatives Friends & peer

Companies Employee Other

7. What is your duration of investment?

0-1 Year 1-2 Year

2-4 Year More than 4 Year

8. Which of the following provide better returns?

H.D.F.C I.C.I.C.I

9. What is your risk profile?

Saving Return

Innovator Moderator Risk adverse

10.

What made you select this mutual fund company?

Reputation Provides good return

Others Experts advice

11. What type of funds have you invested in?

Equity fund Debt fund Liquid fund

Index fund balanced fund Income fund

12. What scheme have you taken?

Open ended Close ended Interval.

13.Do you seriously go through the annual report of your scheme in order to evaluate the

performance of your scheme?

Yes No

analyse investors' view toward mutual fund schme in india (2)

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