A STUDY ON
³CONSUMER PERCEPTION ON INVESTMENT IN MUTUAL FUNDS´ A PROJECT REPORT
Submitted by
Miss. RAJIA SULTHANA (REG. NO. 088CO104) In
partial fulfillment of requirement for the award of degree Of
MASTER OF COMMERCE (COMPUTER ORIENTED BUSINESS APPLICATION) AP PLICATION)
DEPARTMENT OF COMMERCE (SELF- FINANCED) MADRAS CHRISTIAN COLLEGE (AUTONOMOUS) TAMBARAM, CHENNAI-600059 APRIL 2010
CERTIFICATE
This is certify that the project work entitled ³Consumer Perception on investment in Mutual Fund´ submitted by Miss. RAJIA SULTHANA in partial
fulfillment for the post graduate degree in Commerce during 2008-2010 under the guidance of Mrs. NIRMALA MOHAN M.Com,
M.Phil,
Head of the Department,
Department of Commerce (Self ± Finance), Madras Christian College, Tambaram.
Signature Mrs. Nirmala Mohan M.Com, M.Phil Project guide & Head of the Department Departments of Commerce (Self- Finance) Madras Christian College (Autonomous)
ACKNOWLEDGEMENT
With regard to my Project with Mutual Fund I would like to thank each and every one who offered help, guideline and support whenever required. First and foremost I would like to express gratitude to Dr. R.W. Alexander Jesudasan Principal & Secretary for their support and guidance in the Project work.. I am extremely grateful to my guide, Mrs. Nirmala Mohan Head of the Department for their valuable guidance and timely suggestions. I would like to thank all faculty members of department of Commerce for the valuable guidance & support. I am also thankful to my parents and friends for providing me with the conceptual base and secondary data and for their timely and valuable suggestion. Above all, I thank god Almighty who showed his infinite wisdom and grace and mercy upon me for accomplishing this this project.
(RAJIA SULTHANA)
Table of Content Chapter No.
Title
Page No.
1
Introduction
1
2
Review of Literature
11
3
Objective & Methodology
15
4
Data Analysis & Interpretation
17
5
Summary & conclusion
59
Appendix
66
LIST OF TABLES Table No
Table Name
Page
4.1
Table representing number of respondents on the basis of gender
No. 17
4.2
Table representing number of respondents on the basis of age group
18
4.3
Table representing number of respondents on the basis of marital status
19
4.4
Table representing number of dependents in respondents family
20
4.5
Table representing occupation of the respondents
21
4.6
Table representing income level per annum of the respondents
22
4.7
Table representing saving of the respondents-gender wise
23
4.8
Table representing savings mode of the respondents-gender wise
24
4.9
25
4.10
Table representing current value of investment per annum of the respondentsIncome level per annum Table representing current investment portfolio of the respondents-Gender wise
4.11
Table representing investment objective of the respondents Gender wise
27
4.12
Table representing investment term period of the respondents
28
4.13
Table representing factor to be consider most important before choosing an investment by the respondents Table representing most preferred form of investment by the respondents-age group Table representing reason for most preferred form of investment by the respondents Table representing type of Mutual Fund aware of by the respondents
29
4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24
26
30-31 32 33-34
Table representing ranking of respondents on the source of information while investing in Mutual Fund -age group Table representing aware of the various schemed offered by the Asset Management companies (AMC) by the respondents- age group Table representing way of known about Mutual Fund by the respondents
35
Table representing number of respondents on the basis of Mutual Fund schemes they prefer to invest-gender wise Table representing number of respondents on primary investment focus
37
35 36
38
Table representing consult while making an investment choice by the 39 respondents Table representing on the basis of making investment decision decision and execute them 40 Table representing number of respondents like to invest more in future 41
LIST OF CHARTS AND TABLES
Chart & Table No. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13
4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22
Chart & Table Name Chart showing number of respondents on the basis of age Chart showing number of respondents on the basis of gender Chart showing number of respondents on the basis of marital status Chart showing number of respondents on the basis of no. of dependents in the family Chart showing number of respondents on the basis of occupation Chart showing number of respondents on the basis of income level per annum Table showing number of respondents on the basis of savings Table showing number of respondents on the basis of mode of savings Table showing number of respondents on the basis of current value investment Table showing number of respondents on the basis of current investment portfoli po rtfolio o Table showing number of respondents on the basis of objective of investment Chart showing number of respondents on the basis of term of investment Chart showing number of respondents on the basis of consider most important factor before choosing an investment Table showing number of respondents on the basis of most preferred form of investment Chart showing number of respondents on the basis of reason in most preferred form of investment Table showing number of respondents on the basis of aware of type of Mutual Fund Chart showing ranking of respondents on the source of information while investing in Mutual Fund Table showing number of respondents on the basis of aware of various schemes offered by AMC Chart showing number of respondents on the basis of know about Mutual fund Table showing number of respondents on the basis of prefer to invest in Mutual Fund schemes Chart showing number of respondents on the basis of primary investment focus Chart showing number of respondents
Page No. 17 18 19 20 21 22 23 24 25 26 27 28 29
30-31 32 33 34 35 36 37 38 39
4.23
4.24 4.7 4.8 4.9 4.10 4.11 4.14 4.16 4.18 4.20
on the basis of consult while making an a n investment choice40 Chart showing number of respondents 41 on the basis of making investment decision and execute them Chart showing number of respondents on the basis of Basis of like to invest in future Mean & ANOVA table of savings ±Gender wise Mean & ANOVA table of mode of savings ±Gender wise Mean & ANOVA table of current value of investment-income level Mean & ANOVA table of current investment portfolio-Gender wise Mean & ANOVA table of investment objective ± Gender wise Mean & ANOVA table of form of investment ± age group wise wise Mean & ANOVA table of aware of type of Mutual Fund Mean & ANOVA table of various schemes offered by AMC ± Age group Mean & ANOVA table of schemes to invest ± gender wise
40
41 42 43-44 45-46 47-48 49-50 51-52 53-54 55-56 57-58
Chapter -1 Introduction
INTRODUCTION The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry In the past decade, Indian mutual fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of 1,540 bn.
Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry The main reason of its poor growth is that the mutual fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling.
1
The mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under. u nder.
First Phase - 1964-87
. Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management
Second Phase - 1987-1993 (Entry of Public Sector Funds)
Entry of non-UTI mutual funds, SBI Mutual Fund was the first followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under management.
Third Phase-1993-2003 (Entry of 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.
2
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 SEBI (Mutual fund) Regulation 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 Fourth Phase - since February 2003
This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the preview of the Mutual Fund regulations regu lations.. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of AUM 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 o f Rs 153108 crores under 421 schemes.
3
The major players in the Indian Mutual Fund Industry are: GROWTH IN ASSETS UNDER MANAGEMENT
4
Mutual Funds: Definition
A mutual fund is nothing more than a collection of stocks and/or bonds. We can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund. Mutual Fund can make money in three ways: y
Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all of the income it receives over o ver the year to fund owners in the form of a distribution.
y
If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution.
y
If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price then mutual fund can be sell shares for making profit.
Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares.
Advantages of Mutual Funds
Professional Management - The primary advantage of funds (at least theoretically) is the professional management of money. Investors purchase funds because they do not have the time or the expertise to manage their own portfolios. A mutual fund is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor investments.
Diversification - By owning shares in a mutual fund instead of owning individual stocks or bonds, the risk will spread out. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others. Large mutual funds typically own hundreds of different stocks in many different industries. It would not be possible for an investor to build this kind of a portfolio with a small amount of money. 5
Economies of Scale - Because a mutual fund buys and sells large amounts of securities at a time, its transaction costs are lower than what an individual would pay for securities transactions. Liquidity - Just like an individual stock, a mutual fund allows you to request that your shares be converted into cash at any time. Simplicity - Buying a mutual fund is easy! Pretty well, any bank has its own line of mutual funds, and the minimum investment is small. small. Most companies co mpanies also have automatic purchase plans whereby as little as $100 can be invested on a monthly basis.
Disadvantages of Mutual Funds:
Professional Management - Many investors debate whether the so-called professionals are any better than at picking stocks. Management is by no means infallible, and, even if the fund loses money, the manager still takes cut.
Costs - Mutual funds do not exist solely to make life easier - all funds are in it for a profit. The mutual fund industry is masterful at burying costs under layers of jargon. These costs are so complicated
that
in
this
tutorial
devoted
an
entire
section
to
the
subject.
Dilution - It's possible to have too much diversification. Because funds have smallholdings in so many different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money.
6
Taxes - When making decisions about money, fund managers do not consider personal tax situation. For example, when a fund manager sells a security, a capital gains tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous
for
the
individual
to
defer
the
capital
gains
liability.
Different Types of Mutual of Mutual Funds
. At the fundamental level, there t here are three varieties of mutual funds: 1) Equity funds (stocks) 2) Fixed-income funds (bonds) 3) Money market funds
All mutual funds are variations of these three asset classes. Money Market Funds
The money market consists of short-term debt instruments, mostly Treasury bills this is a safe place to park the money. It will not get great returns A typical return is twice the amount earn in a regular checking/savings account and a little less than the average certificate of deposit (CD).
Bond/Income Funds
The money market consists of short-term debt instruments, mostly Treasury bills this is a safe place to park the money. It will not get great returns A typical return is twice the amount earn in a regular checking/savings account and a little less than the average certificate of deposit (CD). Income funds are named appropriately: their purpose is to provide current income on a steady basis. When referring to mutual funds, the terms "fixed-income," "bond," and "income" are synonymous. These terms denote funds that invest primarily in government and corporate debt. While fund holdings may appreciate, the primary objective of these funds is to provide a steady 7
cash flow to investors. As such, the audience for these funds consists of conservative investors and retires. Bond funds are likely to pay higher returns than certificates of deposit and money market investments, but bond funds are not without risk. Because there are many different types of bonds, bond funds can vary dramatically depending on where they invest Furthermore, nearly all bond funds are subject to interest rate risk, which means that if rates go up the value of the funds goes down Balanced Funds
The objective of o f these funds is to provide a balanced mixture of safety, income and a nd capital appreciation. The strategy of balanced funds is to invest in a combination of fixed income and equities. A typical balanced fund might have a weighting of 60% equity and 40% fixed income. The weighting might also be restricted to a specified maximum or minimum for each asset class. A similar type of fund is known as an asset allocation fund. Objectives are similar to those of a balanced fund, but these kinds of funds typically do not have to hold a specified percentage of any asset class. The portfolio manager is therefore given freedom to switch the ratio of asset classes as the economy moves through thro ugh the business cycle.
Equity Funds
Funds that invest in stocks represent the largest category of mutual funds. Generally, the investment objective of this class of funds is long-term capital growth with some income. There are, however, many different types of equity funds because there are many different types of equities.
8
Global/International Funds
An international fund (or foreign fund) invests only outside your home country. Global funds invest
anywhere
around
the
world,
including
the
home
country.
It is tough to classify these funds as either riskier or safer than domestic investments. They do tend to be more volatile and have unique country and/or political risks. However, on the other side, they can, as part of a well-balanced portfolio, actually reduce risk by increasing diversification. Although the world's economies are becoming more inter-related, it is likely that another economy somewhere is outperforming the economy of the home country. Specialty Funds
This classification of mutual funds is more of an all-encompassing category that consists of funds that have proved to be popular but don't necessarily belong to the categories we've described so far. This type of mutual fund forgoes broad diversification to concentrate on a certain segment of the
economy
Sector funds are
extremely volatile. Regional funds make it easier to focus on a specific
area of the world. This may mean focusing on a region (say Latin America) or an individual country (for example, only Brazil). An advantage of these funds is that they make it easier to buy stock in foreign countries, which is otherwise difficult and expensive. Just like for sector funds, we have to accept the high risk of loss, which occurs if the region goes into a bad recession. Socially responsible funds (or ethical funds) invest only in companies that meet the criteria of certain guidelines or beliefs. Most socially responsible funds don't invest in industries such as tobacco, alcoholic beverages, weapons or nuclear power. The idea is to get a competitive performance while still maintaining a healthy conscience. Index Funds
This type of mutual fund replicates the performance of a broad market index such as the S & P 500 or Dow Jones Industrial Average (DJIA) (DJIA)
An investor in an index fund figures figures that most
managers can't beat the market. An index fund merely replicates the market return and benefits investors in the form of low fees. 9
Types of mutual 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 maturity period.
Open-ended Fund
An open-ended Mutual fund fu nd is one that is available ava ilable for subscription and a nd repurchase repurc hase o n a continuous basis. These Funds do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV)related prices which are declared on a daily basis. The key feature of o f open-end schemes is liquidity.
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. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
10
Chapter ± 2 Review of Literature
REVIEW OF LITERATURE
William fung and David a. hsieh (1988) explored the investment styles in mutual fund hedge
funds. The results indicated that there were 39 dominants mutual fund styles that were mixes or specialized subsets of 9 broadly define user classes. There was little little evidence of market timing of asset class rotation in these dominants mutual fund styles. Thus, a 12 factor model with 9 asset classes and three dynamic trading strategies provided a good first step in a unified approach for performance attributions and style analysis of mutual funds and hedge funds.
Jaidev (1996) evaluated the performance of two growth oriented mutual funds (master gain and
magnum express) on the basis of monthly returns compared in benchmark returns. For that purpose, risk adjusted performance measures suggested by jenson, treynor and hsarpe were employed. It was found that, Mastergain had performed better according to jenson and treynor measures and on the basis of Sharpe ratio it¶s performance was not upto the benchmark. The performance of Magnum Express was poor on the basis of all these three measures. However, Magnum Express was well diversified and had reduced it¶s unique risk where as Master gain did not. It can be concluded that, the two growth oriented funds had not performed better in terms of total risk and the funds were not offering advantages of diversification and professionalism to the investors.
Hanumantha Rao and Vijay Kr. Mishra found mutual funds have emerged as an important
segment of financial market of India, especially as a result of the initiatives taken by the govt. of India for resolving problems relating to UTP¶s US-64 and to liberalized tax liabilities on the incomes earned by the mutual funds. They now play a very significant role in channelizing the savings of millions of individuals into the investment in equity and debt instruments. This paper aims at making a critical study of the role performed by mutual funds as a financial service in Indian financial market. 11
Sotiris Zontos, Skiadas Christos and Yiannis Valvis developed strategies that enabled
portfolio managers to improve market timing by learning to recognize leading indications of forthcoming changes. They aimed to test, in a Mutual fund series, of the predicting ability of a long term moving averages were made, for the same time series for different values of short term and long term moving averages and the profitability of this method was calculated. The method was proved profitable if no buy and sell cost was counted.
Mark Grinblatt (1989) empirically examined the Jensen Measures, the positive period
weighting measures, developed in Grinblatt and titman (1987a), measures developed from the Treynor Mazuy (1966) quadratic regression on a sample 179 mutual funds, using a variety of benchmark portfolios. They found that the measures generally yield similar inference when using the same benchmark and those inferences could vary, even from the same measures, when using different benchmarks. benchmarks. Several benchmark, developed developed there, appeared in improve improve upon traditional benchmark for assessment of fund performance. This superior benchmark consisted of sets of portfolio formed on the basis of securities characteristics. Tests of fund performance that employed fund characteristics, such as ne asset value, load, expenses, portfolio turnover, management fee, and past performance were also reported. Those potentially more powerful tests suggested that past performance and turnover turno ver were positively related to fund performance.
th
The Week, March 18 2007: Money«The route to take; Best options in a changing market.
A study conducted on o n various investment options and its importance. Major findings of the study are as follows: Bank deposit: the demand for credit has led to an increase in different for deposits to banks.
With the demand for deposits increasing, internet rates are not expected to come down in the nearer future. Banks are given g iven better returns than post office deposits to stem any flow there, too .
12
Real estate: An increase in interest rates by banks has made investment in real estate dearer for
the common man. There will be 17 million new households needing a residual space of 16 billion sq. ft. by 2010. Debt market: debt market is all set to come out of their cocoon because of the international
turmoil. The year 2007 has been cited as the year of debt. Gold: it has greater stability than any other asset. Though the prices are on a correction mode,
prices will increase by 20-30 percent in 2007. Short term investment is not recommended. reco mmended. Equity market: volatility in the stock prices will continue. The expectation is that a healthy
corporate earnings of 15-20 percent on the back of an 8-9 percent GDP will reinforce the faith in the market. Mutual funds: equity oriented funds remain the favorites. Debt funds are making a comeback.
After the budget, liquid funds or fixed maturity plans are also in demand. Insurance: The budget (2007) raised the tax exempted limit on medical insurance premium to
rs.15000 and Rs. 20000 to senior citizens. This will motivate individuals to purchase health care products at a younger age. With public spending on health care limited and health care cost increasing this will also help older people. peo ple. Michael C. Jensen (1968) developed an absolute measure based upon the capital asset pricing
model in his classic study. ³The performance of mutual funds in the period 1945-1964´ and reported that mutual funds did not appear in achieve abnormal performance when transaction costs were taken into account. It estimated how much a manager forecasting ability contributes to the fund¶s returns. The measure was based on the theory of the pricing of capital assets by Sharpe (1964), Lintner (1965) and Treynor (Undated). It applied the measures to estimate the predictive ability of 115 mutual funds managers in the period 1945-1964.
13
Lubos Pastor and Robert F. Stambaugh (2000) developed and applied a framework in which
believed about pricing models and managerial skill play roles in both performance evaluation and investment decisions. They analyzed non- benchmark passive assets provides additional information about mutual funds¶ performance measures and expected returns and in additions, non benchmark assets help account for common variation in fund returns, making the investment problem feasible with a large universe of funds. A mutual fund¶s performance measures, alpha, was defined relative to a set of passive benchmarks.
Kozup, John C., Elizabeth Howlett and Michael Pagano (2008), choosing how to best invest
for retirement is one of the most important decisions a consumer can make. Unfortunately, this can be an especially challenging task given the current financial information disclosure environment. The objective of this research is to explore whether a single page supplemental information disclosure impacts investors¶ fund evaluations and investment intentions. Results indicate that while investors continue to place too much emphasis on prior performance, the provision of supplemental information, particularly in a graphical format, interacts with performance and investment knowledge to influence perceptions and evaluations of mutual funds.
14
Chapter ± 3 Objectives & Methodology
OBJECTIVES AND METHODOLOGY
The objective of the study is to y
Explore the recent development process p rocess in Mutual Fund in India.
y
To find out the reason for investment in Mutual Funds.
y
To find out the investment perception percept ion of individual.
y
To find out what steps to be taken to boost Mutual Fund industry.
y
To recommend and promote best business practices and code of conduct to be followed by members and other engaged in the activities of Mutual Fund agencies involved in he field of capital markets and financial services.
MEHTODOLOGY OF THE STUDY Comparative Mean study
is done here. It includes surveys of different kinds. The major purpose of
descriptive research is description of the state of affairs as it exists at present. The problem identified was ³The study on Consumer Co nsumer Perception on Investment in Mutual Funds.´
SAMPLING TECHNIQUES
The sample population for research was the investors who have invested in Mutual Fund through different financial Mutual Fund companies in Chennai, Bangalore and Port Blair. Blair. Sample size is 100. Data has been presented with the help of bar graph, pie charts, etc.
15
RESEARCH INSTRUMENTS
Questionnaire method is used. The structured and straight forward questionnaire was used
so that valid and accurate data can be collected.
SPSS software package were used for graphical representation and analysis of data.
Simple percentage, Ranking, Mean values va lues (scores) and Analysis of Variance (ANOVA) method were used to interpret various data collected through questionnaire.
DURATION OF THE STUDY
The study was carried out for a period of two months, from 1st December 2009 to 31st January 2010.
DATA SOURCE
Primary Data- Primary data was collected through questionnaire giving directly to respondents and also through by mail. Secondary Data- Secondary Secondar y data was collected from various websites, reports, brochure and articles from various journals, newspapers and magazines, et c.
LIMITATIONS OF THE STUDY
The study was restricted to Chennai, Bangalore and a nd Port Blair only.
The Mutual fund industry is unpredictable and kee ps on varying from time to time it is difficult difficult to collect accurate data.
Some respondents were reluctant to divulge d ivulge personal information which can affect the validity of all responses.
Sample size was limited to 100 educated investors in urban and semi urban areas o nly. 16
Chapter ± 4 Data Analysis & Interpretation
Table No.4.1- TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF GENDER
Gender
Number of Respondents
Percentage (%)
Male
59
59
Female
41
41
Total
100
100
INTERPRETATION
.
The table shows that 59% 5 9% of the respondents are male and 41% of the respondents
are female from the total population of o f 100.
Figure No.4.1 ± CHART SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF GENDER
male , 41 female, 59
17
Table No.4.2- TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF AGE GROUP
Age group
Number of Respondents
Percentage (%)
18-30
28
28
31-45
35
35
46-65
32
32
Above 66
5
5
Total
100
100
INTERPRETATION
The table indicates that 35% of the respondents belong to the age group 31-45 and 5% of the respondents belong to the age group of above 66.
Figure No.4.2 ± CHART SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF AGE GROUP
Above 66
5
46-65
32
31-45
35
18-30
28
0
5
10
15
20
18
25
30
35
40
Table No.4.3- TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF MARITAL STATUS
Marital Status
Number of Respondents
Percentage (%)
Married
59
64
Unmarried
36
36
Total
100
100
INTERPRETATION
The above table shows that t hat 64% of the respondents are married and 36% of the respondents are unmarried.
Figure No.4.3 ± CHART SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF MARITAL STATUS
Unmarried 38% Married 62%
19
Table No.4.4- TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF NUMBER OF DEPENDENTS No. of Dependents
Number of Respondents
Percentage (%)
0-3
61
61
3-5
32
32
Above 5
7
7
Total
100
100
INTERPRETATION
The above table shows that 61% of the respondents have 0-3 no. of dependents in their family and 7% of the respondents have above 5 no. of dependents.
Figure 4.4 CHART SHOWING NUMBER OF DEPENDENTS
above 5 7%
3 to 5 32% 0 to 3 61%
20
Table No.4.5- TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF OCCUPATION
Occupation
Number of Respondents
Percentage (%)
Salaried
54
54
Non salaried
Total
46
46
100
100
INTERPRETATION
The table shows that 54% of o f the respondents are salaried and 46% of o f the respondents are non salaried. Figure No.4.5 ± CHART SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF OCCUPATION
54 52 50
54
48 46
46
44 42 Salaried
Non salaried
21
Table No.4.6 - TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF INCOME LEVEL Income Level
Number of Respondents
Percentage (%)
Below 3 Lacs
33
33
3 Lacs ± 5 Lacs
52
52
Above 5 lacs
15
15
Total
100
100
INTERPRETATION
The table shows that 52% of o f the respondents belong to the income level of 3 lacs ± 5 lacs and 15% of the respondents belong to the income level of above 5 lacs.
Figure No.4.6 ± CHART SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF INCOME LEVEL
Above 5 lacs 15%
Below 3 lacs
33%
3-5 lacs 52%
22
Table 4.7 TABLE REPRESENTING SAVINGS BY GENDER WISE
Savings
Gender
No of respondents
Yes
Male
57
Female
39
Total
96
Total
No
Male
2
Female
2
Total
4
Male
59
Female
41
Total
100
INTERPRETATION
The above table interpret that 57 of the Male respondents and 39 of the respondents female do savings
23
Table 4.8 TABLE REPRESENTING MODE OF SAVINGS BY GENDER WISE
Mode of savings
Gender
No of respondents
Fixed deposits
Male
24
Female
13
Total
37
Male
20
Female
16
Total
36
Male
15
Female
12
Total
27
Male
59
Female
41
Total
100
Investment
Others
Total
INTERPRETATION
The above table tab le shows that 24 of Male the respondents¶ mode of o f savings is Fixed Deposits and 16 of the Female respondents¶ mode of savings is investment.
24
Table 4.9 TABLE REPRESENTING CURRENT VALUE OF INVESTMENT BY INCOME LEVEL WISE
Current value of investment
Income level per annum
No of respondents
10000-30000
Below 300000
20
300000-500000
20
Above 500000
4
Total
44
Below 300000
6
300000-500000
23
Above 500000
5
Total
34
Below 300000
7
300000-500000
9
Above 500000
6
Total
22
Below300000
33
300000-500000
52
Above 500000
15
Total
100
30000-50000
Above 50000
Total
INTERPRETATION
The above table tab le shows that the income level of below belo w 300000 (20) respondents¶ current investment is 10000-30000, the income level of 300000-500000 respondents¶ (23) current investment is 30000+50000 and the income level of above 500000 respondents¶(6) current investment is above 50000.
25
Table 4.10 TABLE REPRESENTING CURRENT INBESTMENT PORTFOLIO BY GENDER WISE
Current investment portfolio
Gender
No of respondents
Mutual fund
Male
17
Female
10
Total
27
Male
7
Female
3
Total
10
Male
18
Female
7
Total
25
Male
5
Female
10
Total
15
Male
12
Female
11
Total
23
Male
59
Female
41
Total
100
Equity trading
Fixed deposits/Bank savings
Investment (UL/IP)
Post office savings
Total
INTERPRETATION
The above table tab le shows that current investment portfolio portfolio of o f Male respondents¶ (18) and female respondents¶ (11) is Fixed Deposits and Post Po st office Savings respectively.
26
Table 4.11 TABLE REPRESENTING OCJECTIVE OF INVESTMENT BY GENDER WISE
Objective of investment
Gender
No of respondents
To build a corpus of retirement
Male
5
Female
4
Total
9
Male
10
Female
7
Total
17
Male
13
Female
7
Total
20
Male
13
Female
12
Total
25
Male
18
Female
11
Total
29
Male
59
Female
41
Total
100
To save for children education/marriage
To provide medical emergencies
To provide for family financial security
All of the above
Total
INTERPRETATION
The above table tab le shows that investment of Male respondents (18) is all of the above a nd Female respondents (12) investment objective is to provide p rovide financial security to family.
27
Table No 4.12 TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF TERM OF INVESTMENT Term of Investment
Number of respondents
Percentage (%)
Under 2 yrs
24
24
2-5 yrs
37
37
6-10 yrs
21
21
11-15 yrs
18
18
total
100
100
INTERPRETATION
The table shows that 37% of the respondents wants to invest 2-5 yrs and 18% of the respondents term of investment is 11-15 yrs.
Figure 4.12 CHART SHOWING NUMNBER OF REPRESENTING ON THE BASIS OF TERM OF INVESTMENT
100
37 24
Under 2 yrs
21
2-5 yrs
6-10 yrs
28
18
11-15 yrs
total
Table No 4.13 TABLE REPRESENITNG NUMBER OF RESPONDENTS ON THE BASIS OF IMPORTANT FACTOR CONSIDER BEFORE CHOOSING AN INVEATMENT Important factor
Number of respondents
Percentage (%)
Quickly increase wealth
16
16
Steady growth
32
32
Monthly income
21
21
Safety of investment principal
31
31
total
100
100
INTERPRETATION
The table shows that 32% of the respondents consider steady growth an important factor and 16 % of the respondents consider increasing wealth wealth quickly q uickly as important before choosing choo sing as investment.
Figure 4.13 CHART SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF IMPORTANT FACTOR CONSIDER BEFORE CHOOSING AN INVEATMENT Q uickly uickly increase
wealth, 16
Safety of investment principal, 31
Steady growth, 32 Monthly income, 21
29
Table 4.14 TABLE REPRESENTING FORM OF INVESTMENT BY AGE WISE
FORM OF INVESTMENT
AGE
UL/IP
18-30
1.60
5
.548
31-45
1.50
6
.548
46-65
1.75
4
.500
Total
1.60
15
.507
18-30
1.30
10
.483
31-45
1.15
13
.376
46-65
1.09
11
.302
ABOVE 66
1.00
2
.000
Total
1.17
36
.378
18-30
2.00
2
.000
31-45
1.50
2
.707
46-65
1.33
6
.516
Total
1.50
10
.527
18-30
1.50
6
.548
31-45
1.43
7
.535
46-65
1.00
5
.000
ABOVE 66
2.00
3
.000
Total
1.43
21
.507
18-30
1.80
5
.447
31-45
1.57
7
.535
46-65
1.67
6
.516
Total
1.67
18
.485
18-30
1.54
28
.508
31-45
1.37
35
.490
46-65
1.31
32
.471
ABOVE 66
1.60
5
.548
Total
1.41
100
.494
MUTUAL FUND
EQUITY TRADING
FIXED DEPOSITS
BANK SAVINGS
Total
Mean
N
30
Std. Deviation
INTERPRETATION
The above table shows that age group of 18-30 (10), age group of 31-45 (13) and age group of 46-65 (11) respondents preferred Mutual Fund for investment and age group of above 66 (3) respondents Fixed Deposits as most preferred form of investment.
31
Table no 4.15 TABLE REPRESENTING REASON FOR MOST PREFERRED FORM OF INVESTMENT Reasons
Number of respondents
Percentage (%)
Tax Savings
36
36
To create wealth
33
33
Other future emergencies
31
31
total
100
100
INTERPRETATION
The table shows that 36% of the respondents preferred investment to save tax and 31% of the respondents preferred investment for other future emergencies.
Figure no 4.15 CHART SHOWING REASON FOR MOST PREFFERD FORM OF INVESTMENT
Other future emergencies
31
To create wealth
33
Tax Savings
36
28
29
30
31
32
32
33
34
35
36
37
Table No 4.16 TABLE REPRESENTING AWARE OF TYPE OF MUTUTAL FUND BY AGE GROUP WISE
Aware of type of Mutual Fund
Age
Number of respondents
Growth Fund
18-30
6
31-45
9
46-65
8
Total
23
18-30
10
31-45
11
46-65
8
ABOVE 66
2
Total
31
18-30
11
31-45
13
46-65
10
ABOVE 66
1
Total
35
18-30
1
31-45
2
46-65
6
ABOVE 66
2
Total
11
18-30
28
31-45
35
46-65
32
ABOVE 66
5
Total
100
Money Market
Equity Fund
Other
Total
33
INTERPRETATION
The above shows that age group of 18-30 (11) respondents, age group of 31-45 (13) respondents and age group of 46-65 (10) are aware of Growth Fund type of Mutual fund and age group of above 66 (2) respondents aware of other type of Mutual fund.
34
Table No 4.18 TABLE REPRESENTING NUMBER OF RESPONDENTS AWARE OF VARIOUS SCHEMES OFFERED BY THE AMC
Various schemes offered by AMC
Most
Some
Few
Total
Age
Number of respondents
18-30
6
31-45
9
46-65
9
Above 66
2
Total
26
18-30
14
31-45
15
46-65
7
Above 66
2
Total
38
18-30
8
31-45
11
46-65
16
Above 66
1
Total
36
18-30
28
31-45
35
46-65
32
Above 66
5
Total
100
INTERPRETATION
The above table shows that age group of 46-65 (16) respondents aware of few few schemes offered by AMC, age group of 18-30 respondents (14), age group of 31-45 respondents (15) and age group of above 66 (2) respondents aware of some schemes offered by AMC and age group of above 66 (2) respondents aware of most of the schemes offered by AMC. 35
Table No 4.19 TABLE REPRESENITNG KNOWN ABOUT MUTUAL FUND Way of know
Number of respondents
Percentage (%)
Advertisement
40
40
friends
30
30
Brokers
14
14
Other
16
16
Total
100
100
INTERPRETATION
The table shows that 40% of the respondents know about Mutual Fund through advertisement and 14% of the respondents came to know about Mutual Fund through brokers. Figure No 4.19 CHART SHOWING NUMBER OF RESPONDENTS KNOW ABOUT MUTUAL FUND
100% 90% 80% 70% 60% 50%
40
30
14
16
40% 30% 20% 10% 0% Advertisement
friends
Brokers
Number of respondents
36
Other
Table No. 4.20 TABLE REPRESENITNG SCHEMES TO INVEST BY GENDER WISE
Schemes to invest
Gender
Number of respondents
Open Ended
Male
31
Female
20
Total
51
Male
19
Female
16
Total
35
Male
9
Female
5
Total
14
Male
59
Female
41
Total
100
Close Ended
Interval
Total
INTERPRETATION
The table shows that 31 male respondents and 20 of the female respondents prefer to invest in open ended schemes.
37
Table No 4.21 TABLE REPRESENTING NUMBER OF RESPONDENTS PRIMARY INVESTMENT FOCUS. Investment focus
Number of respondents
Percentage (%)
Retirement
19
19
Wealth generation
33
33
Capital preservation
14
14
Income generation
34
34
Total
100
100
INTERPRETATION
The table shows that 34% of the respondents primary investment focus is to generate income and 14% of the respondents primary pr imary investment focus is to preserve capital Figure No 4.21 FIGURE SHOWING NUMBER OF RESPONDENTS PRIMARY INVESTMENT FOCUS .
Retirement
Wealth generation Capital preservation
Income generation
38
Table No 4.22 TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF CONSULT WHLE MAKING AN INVESTMENT CHOICE. Choice
Number of respondents
Percentage (%)
Every time
34
34
Often
35
35
Sometimes
24
24
Never
Total
7
100
7 100
INTERPRETATION
The table shows that 35% of the respondents consult every time t ime while making an investment choice and 7% of o f the respondents never consult while making an investment choice.
Figure No 4.22 FIGURE SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF CONSULT WHLE MAKING AN INVESTMENT CHOICE
Never
Sometimes
7
24
35
Often
34
Every time
39
Table no 4.23 TABLE REPRESENTING NUMBER OF RESPONDENTS ON THE BASIS OF MAKING INVESTMENT DECISION AND EXECUTE THEM.
Period
Number of respondents
Percentage (%)
Once a month
23
23
Once in 3 month
32
32
Once in 6 month
18
18
Once a year
27
27
Total
100
100
INTERPRETATION
The table shows that the t he 32% of the respondents once in 3 months making investment decision and execute them and 18% of the respondents making investment decision and execute them in once in a 6 months.
Figure No 4.23 FIGURE SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF MAKING INVESTMENT DECISION AND EXECUTE THEM.
35 30 25 20 15
32
27
23
18
10 5 0 Once a mon month
Once Once in 3 mon month
Once Once in 6 mon month
40
Onc Once a yea year
Table no 4.24 YABLE SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF INVEST MORE IN FUTURE Option
Number of respondents
Percentage (%)
Yes
73
73
Total
No
27
100
27 100
INTERPRETATION
The table shows that the t he 73% of the respondents want s to invest in future and 27% of the respondents don¶t want to invest in future.
Figure No. 4.FIGURE SHOWING NUMBER OF RESPONDENTS ON THE BASIS OF INVEST MORE IN FUTURE.
No , 27
Yes , 73
41
Table 4.7 MEAN VALUE OF SAVIGS - GENDER WISE
SAVINGS GENDER
Mean
N
Std. Deviation
YES
MALE
1.28
57
.453
FEMALE
1.41
39
.498
Total
1.33
96
.474
Total
NO
MALE
2.00
2
.000
FEMALE
2.00
2
.000
Total
2.00
4
.000
MALE
1.31
59
.464
FEMALE
1.44
41
.502
Total
1.36
100
.482
ANOVA Table Source of
Sum of
Mean
variance
Squares
df
Square
F
Sig.
1.707
1
1.707
7.840
.006
Within Groups
21.333
98
.218
Total
23.040
99
Between groups (combined)
Level of significance = 0.05 INFERENCE
The level of significance is more thus it is concluded that there is a relationship re lationship between savings of male and female.
42
Table 4.8 MEAN VALUE OF MODE OF SAVINGS ± GENDER WISE
MODE OF SAVINGS
GENDER
Mean
N
Std. Deviation
FIXED DEPOSIT
MALE
2.12
24
.741
FEMALE
2.46
13
.967
Total
2.24
37
.830
MALE
2.25
20
.910
FEMALE
1.56
16
.727
Total
1.94
36
.893
MALE
2.33
15
.900
FEMALE
2.17
12
1.030
Total
2.26
27
.944
MALE
2.22
59
.832
FEMALE
2.02
41
.961
Total
2.14
100
.888
INVESTMENT
OTHERS
Total
43
ANOVA Table Source of
Sum of
Mean
variance
Squares
df
Square
F
2.155
2
1.078
1.377 .257
Within Groups
75.885
97
.782
Total
78.040
99
Sig.
Between Group (Combined)
Level of significance =0.05 INFERENCE
The level of significance is less thus it is concluded that there is no relationship between modes of saving in male and female.
44
Table 4.9 MEAN VALUE OF CURRENT VALUE OF INVESTMENT ± INCOME LEVEL PER ANNUM
CURRENT VALUE OF INVESTMENT
INCOME LEVEL
PER ANNUM
PER ANNUM
Mean
N
Std. Deviation
10000-30000
BELOW 300000
2.10
20
1.021
300000-500000
2.30
20
.733
ABOVE 500000
2.25
4
.957
Total
2.20
44
.878
BELOW 300000
2.33
6
1.211
300000-500000
1.91
23
.793
ABOVE 500000
1.80
5
1.095
Total
1.97
34
.904
BELOW 300000
2.43
7
.787
300000-500000
2.11
9
.782
ABOVE 500000
2.33
6
1.211
Total
2.27
22
.883
BELOW 300000
2.21
33
.992
300000-500000
2.10
52
.774
ABOVE 500000
2.13
15
1.060
Total
2.14
100
.888
30000-50000
ABOVE 50000
Total
45
ANOVA Table Source of
Sum of
Mean
variance
Squares
df
Square
F
Sig.
1.547
2
.773
.981
.379
Within Groups
76.493
97
.789
Total
78.040
99
Between Groups (combined)
Level of significance = 0.05 INFERENCE
The level of significance is less thus it is concluded that there is a difference d ifference between income level and current investment value of o f the respondents.
46
Table 4.10 MEAN VALUE OF CURRENT INVESTMEN PORTFOLIO - GENDER
CURRENT INVESTMENT PORTFOLIO
GENDER
Mean
N
Std. Deviation
MUTUAL FUND
MALE
1.24
17
.437
FEMALE
1.40
10
.516
Total
1.30
27
.465
MALE
1.43
7
.535
FEMALE
1.67
3
.577
Total
1.50
10
.527
FIXED DEPOSITS/BANK
MALE
1.17
18
.383
SAVINGS
FEMALE
1.57
7
.535
Total
1.28
25
.458
MALE
1.20
5
.447
FEMALE
1.40
10
.516
Total
1.33
15
.488
MALE
1.58
12
.515
FEMALE
1.36
11
.505
Total
1.48
23
.511
MALE
1.31
59
.464
FEMALE
1.44
41
.502
Total
1.36
100
.482
EQUITY TRADING
INVESTMENTS (UL/IP)
POST OFFICE SAVINGS
Total
47
ANOVA Table
Source of variance
Sum of
Mean
Squares
df
Square
F
Sig.
.798
4
.199
.852
.496
Within Groups
22.242
95
.234
Total
23.040
99
Between Groups (combined)
Level of significance = 0.05 INFERENCE
The level of significance is less thus it is concluded that the current investment portfolio portfolio of o f male and female is independent.
48
Table 4.11 MEAN VALUE OF INVESTMENT OBJECTIVE ± GENDER WISE
OBJECTIVE OF INVESTMENT
GENDER
Mean
N
Std. Deviation
TO BUILD A CORPUS FOR
MALE
1.20
5
.447
RETIREMENT
FEMALE
1.25
4
.500
Total
1.22
9
.441
TO SAVE FOR CHILDREN
MALE
1.00
10
.000
EDUCATION/MARRIAGE
FEMALE
1.14
7
.378
Total
1.06
17
.243
TO PROVIDE MEDICAL
MALE
1.38
13
.506
EMERGENCIES
FEMALE
1.71
7
.488
Total
1.50
20
.513
TO PROVIDE FOR FAMILY
MALE
1.23
13
.439
FINANCIAL SECURITY
FEMALE
1.50
12
.522
Total
1.36
25
.490
MALE
1.50
18
.514
FEMALE
1.45
11
.522
Total
1.48
29
.509
MALE
1.31
59
.464
FEMALE
1.44
41
.502
Total
1.36
100
.482
ALL OF THE ABOVE
Total
49
ANOVA Table Source of variance
Sum of
Mean
Squares
df
Square
F
Sig.
2.542
4
.635
2.945
.024
Within Groups
20.498
95
.216
Total
23.040
99
Between
(Combined)
Groups
Level of significance = 0.05 INFERENCE
The level of significance is more thus it is concluded that there is a relationship re lationship between investment objectives of male and female.
50
Table 4.14 MEAN VALUE OF FORM OF INVESTMENT ± AGE GROUP FORM OF INVESTMENT
AGE
UL/IP
18-30
1.60
5
.548
31-45
1.50
6
.548
46-65
1.75
4
.500
Total
1.60
15
.507
18-30
1.30
10
.483
31-45
1.15
13
.376
46-65
1.09
11
.302
ABOVE 66
1.00
2
.000
Total
1.17
36
.378
18-30
2.00
2
.000
31-45
1.50
2
.707
46-65
1.33
6
.516
Total
1.50
10
.527
18-30
1.50
6
.548
31-45
1.43
7
.535
46-65
1.00
5
.000
ABOVE 66
2.00
3
.000
Total
1.43
21
.507
18-30
1.80
5
.447
31-45
1.57
7
.535
46-65
1.67
6
.516
Total
1.67
18
.485
18-30
1.54
28
.508
31-45
1.37
35
.490
46-65
1.31
32
.471
ABOVE 66
1.60
5
.548
Total
1.41
100
.494
MUTUAL FUND
EQUITY TRADING
FIXED DEPOSITS
BANK SAVINGS
Total
Mean
51
N
Std. Deviation Deviation
ANOVA Table
Source of variance
Sum of
Mean
Squares
df
Square
F
Sig.
3.947
4
.987
4.631
.002
Within Groups
20.243
95
.213
Total
24.190
99
Between
(Combined)
Groups
Level of significance = 0.05 INFERENCE
The level of significance is more thus it is concluded that the most preferred form of investment among different age group gro up of peoples is different.
52
Table 4.16 MEAN VALUE OF AWARE OF TYPE OF MUTUAL FUND ± AGE GROUP WISE MUTUAL FUND AWARENESS
AGE
GROWTH FUND
18-30
1.67
6
.516
31-45
1.44
9
.527
46-65
1.38
8
.518
Total
1.48
23
.511
18-30
1.50
10
.527
31-45
1.45
11
.522
46-65
1.12
8
.354
ABOVE 66
1.00
2
.000
Total
1.35
31
.486
18-30
1.55
11
.522
31-45
1.31
13
.480
46-65
1.30
10
.483
ABOVE 66
2.00
1
.
Total
1.40
35
.497
18-30
1.00
1
.
31-45
1.00
2
.000
46-65
1.50
6
.548
ABOVE 66
2.00
2
.000
Total
1.45
11
.522
18-30
1.54
28
.508
31-45
1.37
35
.490
46-65
1.31
32
.471
ABOVE 66
1.60
5
.548
Total
1.41
100
.494
MONEY MARKET
EQUITY FUND
OTHER
Total
Mean
53
N
Std. Deviation Deviation
ANOVA Table Source of variance
Sum of
Mean
Squares
df
Square
F
Sig.
.227
3
.076
.303
.823
Within Groups
23.963
96
.250
Total
24.190
99
Between
(Combined
Groups
)
Level of significance = 0.05
INFERENCE
The level of significance is less thus it is concluded that the different age group of people is not aware of different type of Mutual Mutua l Fund.
54
Table 4.18 ± MEAN ± MEAN VALUE OF VARIOUS SCHEMES OFFERED BY AMC ± AGE GROUP
VARIOU S SCHEM E OFFERE D BY AMC
AGE
MOST
18-30
1.83
6
.408
31-45
1.33
9
.500
46-65
1.22
9
.441
ABOVE 66
2.00
2
.000
Total
1.46
26
.508
18-30
1.50
14
.519
31-45
1.47
15
.516
46-65
1.57
7
.535
ABOVE 66
1.00
2
.000
Total
1.47
38
.506
18-30
1.38
8
.518
31-45
1.27
11
.467
46-65
1.25
16
.447
ABOVE 66
2.00
1
.
Total
1.31
36
.467
18-30
1.54
28
.508
31-45
1.37
35
.490
46-65
1.31
32
.471
ABOVE 66
1.60
5
.548
Total
1.41
100
.494
SOME
FEW
Total
Mean
N
55
Std. Deviation Deviation
ANOVA Table
Source of variance
Sum of
Mean
Squares
df
Square
F
Sig.
.616
2
.308
1.267
.286
Within Groups
23.574
97
.243
Total
24.190
99
Between
(Combined)
Groups
Level of significance =0.05
INFERENCE
The level of significance is less thus it is concluded that the different age group of respondents not aware of the various schemes offered o ffered by AMC
56
Table 4.20 MEAN VALUE OF SCHEMES TO INVEST ± GENDER WISE
SCHEMES TO INVEST
GENDER
OPEN ENDED
MALE
2.13
31
.846
FEMALE
1.90
20
1.021
Total
2.04
51
.916
MALE
2.11
19
.809
FEMALE
2.00
16
.816
Total
2.06
35
.802
MALE
2.78
9
.667
FEMALE
2.60
5
1.140
Total
2.71
14
.825
MALE
2.22
59
.832
FEMALE
2.02
41
.961
Total
2.14
100
.888
CLOSE ENDED
INTERVAL
Total
Mean
57
N
Std. Deviation
ANOVA Table
Source of variance
Sum of
Mean
Squares
df
Square
F
Sig.
5.376
2
2.688
3.588
.031
Within Groups
72.664
97
.749
Total
78.040
99
Between
(Combined
Groups
)
Level of significance = 0.05 INFERENCE
The level of significance is more thus it is concluded that the male and female preferred to invest more in open ended mutual fund schemes.
58
Chapter - 5 Summary & Conclusion
SUMMARY Introduction
A mutual fund is nothing more than a collection of stocks and/or bonds as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund.
Mutual fund can make money in three ways:
1) Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all of the income it receives rece ives over the year to fund owners in the form of a distribution.
2) If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution.
3) If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price then it can be sell for a profit .
Types of mutual 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 maturity period.
59
Open-ended Fund
An open-ended Mutual fund fu nd is one that is available ava ilable for subscription and a nd repurchase repurc hase o n a continuous basis. These Funds do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of o f open-end schemes is liquidity.
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. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis. The objective of the study is to y
Explore the recent development process p rocess in Mutual Fund in India.
y
To find out the reason for investment in Mutual Funds.
y
To find out the investment perception percept ion of individual.
y
To find out what steps to be taken to boost Mutual Fund industry.
y
To recommend and promote best business practices and code of conduct to be followed by members and other engaged in the activities of Mutual Fund agencies involved in the field of capital markets and financial services.
60
FINDINGS
OF THE STUDY
y
Most of the respondents (35%) are from the age group gr oup of 31-45.
y
Most of the respondents (59%) are male and (41%) are female.
y
Around (59%) of the respondents married married and (36%) are unmarried.
y
Among the respondents 54% are salaried salaried and 46% are non salaried.
y
From the study it is found that 52% are belong to 3 lacs-5 lacs of income level.
y
From the study it is found that 96% of the respondents are savings.
y
As per the study the 37% of o f the respondents¶ investment is the mode of o f savings.
y
The study shows that the 44% of the respondents invests around 10000 to 30000.
y
y
Nearly (27%) of the respondent¶s current investment portfolio is Mutual Fund. The study reveals that the 29% of the respondent¶s investment objective is to build corpus for retirement, save for children education /marriage, for medical emergencies and family financial security.
y
The study shows that term of investment period p eriod of 37% is 2-5 yrs.
y
As per the study 32% has consider opportunity for steady growth is important before choosing an investment.
y
According to the study 36% investors preferred to invest in Mutual Fund than other form of investment.
y
Study shows that about 36% of Mutual Fund investors investing to save tax. t ax.
y
According to the study investors preferred equity fund type of Mutual Fund (35%) than other type of Mutual Fund.
y
Study reveals that safety is extremely important at70% other than the sources of information.
y
Being a Mutual Fund investor investo r 38% are aware of some various schemes offered o ffered by AMC.
y
From the study it is found that Advertisement introduces Mutual Fund (40%) other than friends and brokers.
y
Study shows that 51% of Mutual Mutua l Fund investors prefer open ended schemes. 61
y
About 34% of the respondent¶s respo ndent¶s primary investment focuses on to generate income.
y
Around 35% of investor¶s consult while making an investment choice.
y
From the study it is found that 32% of the investors often make investment decisions and execute them.
y
The Mutual Fund industry influences Mutual Fund investors at 73% in such that investors like to invest more in future.
62
SUGGESTIONS y
As lack of awareness and Choice of other alternatives stand s the main reasons for not taking a Mutual Fund Schemes, companies should concentrate more on creating awareness among the public about the t he benefits of Mutual fund schemes.
y
As reliability stand as the main reason for selecting Mutual Funds, the companies should promote Mutual Funds as a reliable investment a lternative.
y
As investors are unaware of Mutual Funds as tax savings instrument, the AMC¶s should highlight ³Mutual Funds as a tax t ax savings instrument´.
y
As many investors feel lack of security on investing in Mutual Funds companies should make the customer aware about the existence of SEBI as a safety regulation to safeguard the interests of investors through effective public relations.
y
In the present scenario success without brand awareness among investors is found to be very sensitive, they always look for safe investments. For effective brand building the AMC¶s should position the company as a safe investment vehicle. This will help the sales force to a great extent.
y
The mutual Fund companies should offer documents more comprehensive by making disclosures more simple and easy to understand and fund structure more distinctive to the common man.
y
The disclosures regarding the Mutual Fund expenses more transparent especially distributor expenses which form a major chunk of entry loads.
y
The fund managers should be accountable to unit holders. This can be done by organizing Annual General Meetings of unit holders where performance pe rformance of the fund can be reviewed.
y
As the regulator of financial services in the country, SEBI should initiate programs that give investor knowledge about financial products in the country. Further investors should be able to make decisions after knowing how Mutual Funds can be used for financial planning. This could be done in association with AMC¶s AMFI and others participants in financial sectors.
63
y
The survey reveals that the investors are basically influenced by the intrinsic qualities of the product flowed by efficiency fund management and general image of the fund/scheme in their selection of fund schemes. Hence it is suggested that AMC¶s should design products consciously to meet the investor¶s needs and should be alert to capture the changing ,market moods and sentiments can be innovative. Continuous product development and introduction of innovative products are a must to attract and retain this market segment.
y
The parameters which need to be kept in mind before taking as investments decision are 1) return of competing funs 2) object of the fund 3) promoters brand name and image 4) total return given by the fund on o n different schemes.
y
By analyzing the current scenario it can be concluded that the mutual fund industry in India has a very bright future. Thus the study in ³consumer Perception on investment in Mutual Fund ³ shows that there is a lot of scope exits for making Mutual Fund as a effective investment tools. too ls.
64
CONCLUSION
With penetration levels at close to 7% great scope exists for the growth of mutual fund in India. Mutual funds have to compete with insurance and bank deposits for a share of consumer savings. This requires the regulator and the AMC in increase the creditability of Mutual Fund and develop a trust among the average investors. In order to make Mutual Funds more acceptable to the investor mutual fund industry has to mature to offering comprehensive life cycle financial planning and not products alone. These would include products catering to specific life cycle need like buying a house; funding college admission etc. with increase in investor awareness many new products would be introduced. introdu ced. As a savings of Indians increase and the range of financial products available to meet people¶s needs expand, the need for financial advice will increase. Mutual fund distribution-Advisors should provide sound financial advice recording to investors risk profile and stage in life cycle. Main merits by way of investing in mutual funds are 1) cheap access to expensive stocks 2) Many baskets of assets diversifying the assets 3) a team of professional fund manages the funds from in-depth research inputs from investment analysis. 4) MF industry has good bargaining power in markets, MF have access to crucial corporate information which individuals, investors¶ cannot access. A study of the previous financial year 2007-08 shows nearly 1 300% growth in the mutual fund industry. Even recently when the share prices were down, mutual funds have escaped without much loss. It surely states that mutual funds are regarded as a less risk investment. During 2007 around 40 NFO¶s were made. Almost 840 schemes were offered by the more than 32 companies up to Dec 2007 even with foreign collaborations.
65
Annexure
BIBLOGRAPHY
Books: y
Association of Mutual Fund in India ³AMFI work wo rk book´ Mumbai 2006.
y
Fredman Albert j & Wiles Russ, ³How Mutual Fund work´, Prentice Hall of India, New Delhi, 1997
y
Kothari, C.R. ³Research Methodology, Methods & Techniques´
y
Magazine- Charted Financial Analyst July 2006
y
Journal- Financial of India
y
Journal- Marketing Funds
WEBSITES www.amfiindia.com www.google.com www.wikipedia.com www.mutualfundsinindia.com www.scribd.com www.managementparadise.com www.utimutualfund.com www.icicidirect.com
66
QUESTIONNAIRE
1. Age i) 18-30
ii) 30-40
iii) 45-65
iv) Above 65
2. Gender
i) Male
ii) Female
3. Marital Status
i) Married ii) ii) Unmarried
iii) others
4. No. of Dependents
i) 1-3
ii) 3-5
iii) Above 5
5. Occupation
i) Salaried
ii) Non-salaried
67
iii) others (Specify)
6. Income level Per Annum
I) Below 100000 ii) 100000-500000
iii) Above 500000
7. Do you save?
i) Yes
ii) No
8. Specify your mode of o f saving.
i) Fixed Deposit
ii) Investment Investment
iii) others (Specify)
9. Current Value of your investment Per annum
i) 10000-30000
ii) 30000-50000
iii) Above 50000
10. Current investment portfolio portfolio
i) Mutual Fund
ii) Equity Trading
iv) Investment (UL/IP)
iii) Fixed Deposit, Post Office savings
v) Bank Savings
68
11. Objective of your investment
a. To build a corpus corp us for retirement b. To save for children education/ educat ion/ marriage c. To provide for medical emergencies d. To provide for family financial security e. All of the above
12. Specify your term of investment.
i) under 2 yrs
ii) 2-5 yrs
iii) 6-10 yrs
iv) 11-15 yrs
13. What factor would you consider co nsider most important before choosing an investment?
a. How quickly I will be able to increase my wealth. b. The opportunity for steady growth c. The amount of monthly income the investment will generate d. The safety of my investment principle
14. Most preferred form of investment.
i) UL/IP
ii) Mutual Fund
iv) Fixed Deposit/ Post Office Office
iii) Equity Trading
v) Bank Savings 69
15. And, why?
i) Tax savings
ii) To create wealth
iii) Others future emergencies
16. Which type of Mutual Fund you are aware?
i)
Growth Fund
ii) Money Market fund iii) Equity Fund
iv) Other (specify)
17. Do you you view following factors sources sources of information information while while
Rank (1.
investing in in Mutual Fund? Fund?
Extremely I mporta mportant 2. I mporta mportant 3. Neutral 4. U nimportant)
Safety Liquidity Returned Earned Tax Savings Performance of Past Schemes Rating of Mutual Fund by Agencies Advertisements Recommendations of friends & Relatives
70
18. Being a Mutual fund Investor, are you aware of the various scheme offered by the asset management companies (AMC)?
i)
Most
ii) Some So me
iii) Very few
19. How did you know about Mutual Fund?
i)
Advertisements
ii) Friends
iii) Brokers iv) Other (specify)
20. In which Mutual Fund scheme you prefer to invest.
i) Open Ended
ii) ii) Close Ended
iii) interval
21. What is your primary investment focus?
i) Retirement
ii) ii) Wealth generation
iii) Capital preservation
iv) Income Generation
22. Do you consult while making an investment choice?
i) Every time
ii) Often
iii) Sometimes iv) Never 71
23. How often do you make investment decisions and execute them?
i) Once a month ii) Once On ce in 3 months
iii) Once in 6 month iv) Once a year
24. Would you like to invest more in future?
i) Yes
ii) No
25. Any Suggestion about investing in Mutual Fund?
Thank you
72
