Demand Analysis of Mutual Funds in India

By:

Group-

Ankish Kedia 57(C)

Chirag Modi 42(C)

Naveen Lathar 63(C)

Shibumi 22(C)

Silky Gori

Vaibhav Agarwal 21(C)

FLOW OF PRESENTATION

• INTRODUCTION• HISTORY OF INDUSTRY• TYPES OF FUNDS• MARKETSHARE OF DIFFERENT FUNDS• METHODOLOGY OF SURVEY• OBJECTIVE• FINDINGS• COMPANY ANALYSIS

What is mutual fund? A mutual fund is a pool of money A mutual fund is a pool of money

collected from investors and is collected from investors and is invested according to stated invested according to stated investment objectives. Mutual fund investment objectives. Mutual fund investors are like shareholders and investors are like shareholders and they own the fund.they own the fund.

What it means?

InvestorsInvestors

MarketsMarkets(volatile, has fluctuation)(volatile, has fluctuation)

Trust Trust (pool of money)(pool of money)

Contribute Contribute moneymoney

Invest in Invest in marketsmarkets

Receive Receive interest, interest,

dividend or dividend or capital growthcapital growth

Receive Receive

dividend/capitaldividend/capital

appreciationappreciation

History of Mutual FundsHistory of Mutual Funds

• Birthplace of Mutual Funds – Birthplace of Mutual Funds – USAUSA• History in India:History in India:

– 1964-19871964-1987 (Phase I) – Growth of Unit Trust of (Phase I) – Growth of Unit Trust of IndiaIndia

– 1987-19931987-1993 (Phase II) – Entry of Public Sector (Phase II) – Entry of Public Sector FundsFunds

– 1993-2003 1993-2003 (Phase III) – Emergence of Private (Phase III) – Emergence of Private FundsFunds

– 2004 onwards2004 onwards (Phase IV) – Consolidation and (Phase IV) – Consolidation and Growth.Growth.

Types of Funds

• Open-ended (OEF) Open-ended (OEF)

• Close-ended (CEF)Close-ended (CEF)

• Equity, Debt and BalanceEquity, Debt and Balance

• Tax-exempt & Non tax-exemptTax-exempt & Non tax-exempt

• Commodity fundCommodity fund

• Real Estate fundReal Estate fund

• Exchange-traded fundExchange-traded fund

Advantages of Mutual Fund

• Professional Management • Diversification • Convenient Administration • Return Potential • Low Costs• Flexibility • Choice of schemes • Tax benefits • Well regulated

Market Share of Different MF Companies

Reliance15%

ICICI Prudential 10%

HDFC10%

UTI9%

Birla Sun Life7%

SBI6%

Franklin Templeton5%

Tata4%

DSP Merrill Lynch4%

 Kotak Mahindra4%

LIC3%

Other Funds23%

MF offerings of top players

ICICI MF

ICICI Pru Infrastructure

ICICI Pru Dynamic Plan

ICICI Pru Tax Plan

ICICI Pru Flexible Income

HDFC MF

HDFC Balanced Fund

HDFC Long Term Advantage

HDFC Cash Mgmt Fund

HDFC Liquid Fund

RELIANCE MF

RELIANCE RSF-Equity

RELIANCE MIP

RELIANCE Power

Diversified RELIANCE Natural Resource Fund

Growth in Assets Under Management in recent years

Methodology of Survey

Sampling Technique: Judgmental sampling and convenient sampling techniques were used during survey (Delhi region).

Sample Size: A total sample size of over 70 comprises of individuals from working class.

Sample Description: The questionnaire were administered to the individuals.

Objective

To study the investor preference about different mutual fund schemes.

To undertake a generic analysis of some players in the Indian scenario on the basis of their performance.

28%

11%

14%

29%

18%

Tax Saving

RetirementPlanning

Growth ofInvestment

Insurance

Others

Purpose of Investment

Broker consultation?

Yes58%

No42%

Type of MF investment

Open Ended

58%

Closed Ended

42%

74%

13%4%

9%

<1

1 to 3

3 to 5

>5

Lock-in Period

Risk taking capability

Low risk - Low Return

17%

Medium risk - Medium Return

70%

High risk - High Return

13%

13%9%

17%

61%

Equity

Gold ETFS

Liquid

Debt

Types of MF’s

Findings

• Awareness about MF as an investment option is low.• Most of the people were reluctant in investing in MF due

to current market scenario.• Youngsters were more enthusiastic in investing directly

in the equity market.

20.522.49.911.3

160.6179.7

12 12.8

43 46.9

0

20

40

60

80

100

120

140

160

180

Reliance RegularSaving Fund

UTI Contra Fund(G)

HDFC EquityFund (G)

Tata Contra Fund(G)

SBI MagnumContra Fund (G)

2008

2009

Change in NAV’s of Equity Based MF’s

Demand Forecasting of SBI

Standard Deviation Method

YEAR AUM (In Lacs)

2004 616448

2005 718622

2006 1407860.78

2007 2587846.81

2008 2915111.74

Standard Deviation 1057637.354

2009 3972749.094

SOURCE: http://www.sbimf.com

Standard Deviation Method contd..

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

2004 2005 2006 2007 2008 2009

Demand Forecasting of Birla Sun Life

Time Series Method

-40

-30

-20

-10

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2009

SOURCE:Moneycontrol.com

Comparison of SBI CF with Sensex

Limitations

There was difficulty in gathering data as information on income and investments are of confidential nature.

The sample size may not be a representation of the entire population.

References

Secondary Data was taken from following Websites:http://www.sbimf.comhttp://www.amfiindia.comhttp://www.sebi.comhttp://www.myiris.comhttp://www.mutialfunfindia.comhttp://www.moneycontrol.com

Thank you!