A

SUMMER INTERNSHIP REPORT

ON
“PERFORMANCE ANAKYSIS OF MUTUAL FUND”
UNDER
“SHAREKHAN MUTUAL FUND”

SUBMITED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

IN THE PARTIAL FULFILLMENT OF THE COURSE
MASTER OF BUSINESS ADMINISTRATION
SUBMITED BY

MS. KALYANI TULSIRAM PAWAR

UNDER THE GUIDENCE OF
DR. D.K.MUKHEDKAR

MVP’S
INSTITUE OF MANAGEMENT RESEARCH ANDTECHNOLOGY
NASHIK
2018-2019

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 DECLARATION

I hereby declare that the project report entitled “PERFORMANCE ANALYSIS OF

MUTUAL FUND” is an independent analysis work carried out by me to the Savitribai Phule
University of PUNE in partial fulfillment of the requirement for the award of Master of Business
Administration under the guidance of Prof. Mr. Dr. D.K. MUKHEDKAR is my original work and
the conclusions drawn there in are based on material collected by myself.

PLACE: IMRT NASHIK NAME: Kalyani Pawar

DATE:

2
 ACKNOWLEDGEMENT

I take this opportunity of submitting this report to express our regards towards those who
offered their valuable guidance in the hour of need.
I sincerely acknowledge with deep sense of gratitude and indebtedness to my Director, Dr.
D.K. Mukhedkar who has guided me with valuable inputs throughout the project. He gave
knowledgeable insights abot the topic, Which helped me throughout the project.
I also would like to thank Mr. Rahul Jadhav( Branch manager, Sharekhan Mutual Fund
Ltd.) for giving me this opportunity to work on this topic it was really wonderful and challenging to
work on this topic it was really wonderful and challenging to work on this project. It surely has
given me insights with you in this report.
This project was really worthwhile to work on because it encompassed all the learning for a
management student. Thus it provided a ground to implement what is learned and also depicted the
real tasks that have to be undertaken in the nitty-gritty’s involved in a system.

PLACE: IMRT NASHIK NAME:KALYANI PAWAR

DATE:

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 INDEX

CHAPTE Page
R NO. TOPIC NAME No.
1. INTRODUCTION
1.1 OBJECT OF THE PROJECT
1.2 ORGANIZATIONAL PROFILE
1.3 OBJECTIVES OF STUDY
1.4 SCOPE OF STUDY
1.5 RATIONALE OF THE STUDY
1.6 LIMITATION
2. RESEARCH DESIGN & METHODOLOGY
2.1 RESEARCH DESIGN
2.2 SAMPLING DESIGN
2.3 COLLECTION OF DATA
2.4 PRESENTATION OF DATA ANALYSIS &
INTERPRETATION OF DATA
3. COMPANY PROFILE
3.1 HISTORY OF THE ORGANIZATION
3.2 ORGANIZATIONAL STRUCTURE
3.3 PRODUCT PROFILE
3.4 CORPORATE & FUNCTIONAL PRACTICES
4. LITERATURE REVIEW
4.1 MEANING & CONCEPT OF THE TOPIC
4.2 BASIC THEORIES OF THE TOPIC
4.3 REVIEW OF RESEARCH ON THE SELECTED
TOPIC
5 ANALYSIS OF DATA 1
6 ANALYSIS OF DATA 2
7 7.1 CONCLUSION & FINDINGS
7.2 SUGGESTION& RECOMMENDATION
7.3 BIBLIOGRAPHY
7.4 ANNEXURE

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 CHAPTER-1

INTRODUCTION
1.1) Object of the Dissertation
1.2) Selection of the Topic
1.3) Objective of the Study
1.4) Scope of the Study
1.5) Rational of the Study
1.6) Limitation of the Study

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Object of the Project

The main object of carrying out this project is to know and gain practical knowledge about the
organization’s work culture. Also accourding to pune university circular every student has to
undergo project in organization.
the purpose behind the project work can be summerised as follows:-

1) To enable the MBA students to test their theoretical knowledge in practical.

2) It gives the students their first exposure to an organizational set up.
3) It is the best opportunity to communicate with the people working at different levels in
the organization & to get acquainted with the hierarchy of employees.
4) It creates awareness in student about the real organizational problems & challenges
faced by business.
5) It gives an about carrer opportunities available in future for students.

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1.2 Introduction and Selection of the Topic.

Topic selection is one of the important aspects of project. The topic for researcher projects
was “Performance Analysis of Mutual Fund” . The Mutual Fund in india started in 1963 with the
formation of unit Trust of India, at the initiative of the Reserve Bank & Government of India. The
objective then was to attract the small investors & introduce them to market investment.
Today there are nearly about 33 Mutual Fund Companies Existed in the Market Offerimg of
over schemes to the Investors.
The systematic study & scientific approach towards the inveatment in the section the Mutual
Funds can yields smart rate of return. Now a days, investors are becoming more conscious about the
safety of their Investment at the same time they are more concern about the returns, so investors tent
to consistently compare the investment option.
The study of Mutual Funds proved to be good eye opener for a students seeking the future
in the world of stock market. So the topic selected is “Performance Analysis of Mutual Funds.”
The study, which I pursue from the Mutual Funds, gives a proper direction; one could get
from the study of this project.

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1.3 Objectives of the study.

The Main objective of the Project is to study the status of Mutual Funds in the investment
sector, which can be fulfilled with the below scope

 To understand the meaning & importance of Mutual Fund.

 To study how the investment should be made so as to ensure the safety as well as best
possible returns on it.

 To take an insight into changing concept of Investment sector from view point of
individual investor as well as the means of investment as a whole.

 To evaluate the pros & Cons of the investment in the fields of Mutual Fund.

 To make the comparative analysis of the three option available in the field of mutual
Funds Namely HDFC Top 200, Birla Advantage Fund, UTI Growth & Value Fund.

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1.4 Scope of the study

The study taken into consideration Three Lending fund AMC’s of private Sector Namely
HDFC mutual fund, UTI mutual fund, BIRLA Mutual fund.
Last three months data & performance is taken into consideration as the bases of the
comparison.
Basically schemes are selected in such manner whose main objective is to invest into blue-
chip Equity Company to give a comparative base to the study.
Comparison is made on the basis of the return given by each scheme. As well as its
performance is also compared against benchmark.

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1.5 Rational/Contribution of the study
In America every second household has entrusted some saving to mutual fund in fact retail
investors have parked in more money in mutual fund then banks & other Financial institution.
Rational of the study refers to the worth, benefits and utility from future point of view.
The study of the field work has helped to learn and gain practical knowledge and insight of
its significance. The field work will help us in our future job prospective as it will guide us to
improve our skill, knowledge and attitude and also help me to develop my attitude and capabilities
to organize and arrange various activities.
Rational of the study means who will get benefited from this project or study. So benefit to
customers, to suppliers, to company, to student & also to the society.

Following are rational of the researcher:-

Utility to researcher:-
1. Researcher got exposure to the industrial finance sector and real organizational environment.
2. Researcher got an opportunity to work with the organization “kamat hotel indialtd”being a
student of MBA-Finance,
3. Researcher got an opportunity to work in finance department so their methods and
techniques like their cost techniques, cost controlling process and reduction in cost
understand.

Utility to organization:-
1. It helps the organization to understand minimum cost saving of product.
2. It can help the organization to give cheper product price to customer.
3. Works as a feedback mechanism

Utility for customer:-

1. Customer gets an opportunity toi express their views towards Mutual Fund.
2. Customer is assured of quality food as per his requirement as the improves offering
considering feedback.

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 1.6 Limitation of the topic:

1. The time span for the project was very short which was of two days, which itself act as
constraint.

2. Generally company does not allow outsiders to conduct any study or research work in
industry. Therefore, to get the project done in hotel industry it was very difficult.

3. Due to confidentiality some important information, which is important for the project,
could not be collected.

4. Some of the information lack in accuracy, due to which approximate values were used for
the analysis. Hence, the result also reveal approximate values.

5. As per the company policy the original details of the cost sheet and any other data cannot
be displayed to the general public.

6. The study is done on only one organization so it does not provide any scope of comparison
with other branch of the organization.

7. The people to be interviewed at Sharekhan ltd were working employees & somewhere
responsible person & hence it was difficult to get their time.

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 CHAPTER-2

RESEARCH METHODOLOGY
2.1) Method of Study
2.2) Sampling
2.3) Data Collection
2.4) Presentation of Data, Tools of analysis & Interpretation

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13

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2.1 METHOD OF STUDY

Methodology is the analysis of the principles or procedure of inquiry on a particular field. It is

particular method or procedure with rules in research. In today business world there is rapid growth
in business organization. All the business activities are integrated with human, social, politically and
other factors.

So, research becomes very necessary. As any mistake can lead to increase in cost will directly
adverse effect on business. Research is an activity which helps to gain fresh inside into something.
It is an investigation process to find answers to question.

Research is commonly known as for knowledge. It is scientific and systematic search for
information on the specific topic. Research is composed of two words ‘Re’ and ‘search’ which
means to search again. It is the movement from the unknown. Research is result oriented. Research
is Important for personal life as well as development of society.

2.1.1. RESEARCH DEFINITATION

In the Random House Dictionary of the English language, research is defined as, “a diligent and
systematic inquiry or investigation into a subject in order to discover or revise facts, theories,
applications, etc.”

2.1.2. CHARACTRISTICS OF RESEARCH

4. Research is directed toward the solution of a problem.

5. Research emphasizes the development of generalization of principles of theories that will
help in predicting future occurrence.
6. Research is based upon observable experience or empirical evidence.
7. Research demand accurate observation and description.
8. Research involves gathering new data from primary or firsthand sources or using existing
data for a new purpose.
9. Research activities are more often characterized by carefully designed procedures, always
applying rigorous analysis.
10. Research requires expertise i.e. skill necessary to carry out investigation, search the related
literature and to understand and analyzed the data gathered.

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2.1.3. TYPS OF RESEARCH

RESEARCH

On the basis on the basis on the basis On the basis of

Of Application of Objectives of Extent to Theory Methodology

Theoretical Empirical
Pure Applied

Exploratory Descriptive Causal Qualitative Quantitative

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2.1.3.1 On the basis of Application –
Based on application, research can be classified in two types:
3. Basic Pure Research–Pure research is also known as “basic research” or “fundamental
research”. It is the most basic form of research. The objective of this research is to provide
models and theories regarding some phenomenon. This type of research seeks to obtain
knowledge about a particular subject rather than its practical usage, testing of theories.
4. Applied Research – Applied research is also called as “practical research”, “action based
research”. While basic research emphasizes on enhancing the exiting knowledge without
any practical application, applied research on the other hand, applies the existing
knowledge, theories, and methods to solve particular issues.

2.1.3.2 On the basis of Objective –

Following research can be conducted on the basis of objective:
8. Exploratory Research - Exploratory research is also known as “formulation research”.
The basic objective of this research is to explore the unknown facts or phenomena that are
not previously defined. In this research, research seek to gain better knowledge about a
situation, and formulate new concepts are theories by developing and testing hypotheses.
9. Descriptive Research – This research is based on the concept of ‘reflective thinking’ that
discusses about the objectives and assumptions and regarding research study. Descriptive
research is concerned with answering the questions like who, what, when, where, and how
regarding a phenomenon or situation.
10. Experimental Research – It is also called “causal research”, is carried out to identify the
causes behind any effect. It determines the effects on dependent variable due to changes in
independent variable.

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2.1.3.3 On the basis of Extent of Theory –
On the basis of extent of theory research can be classified two types:
1 Theoretical Research – This research seek to add new knowledge by discovering new ideas
and theories with the help of existing theories and explanations.
2 Empirical Research – This research is data oriented. This kind of research provides in insights
through observation of experiences. In this research the primary data are collected, analyzed and
test to prove some hypotheses. Empirical research can be conducted through both the qualitative
and quantitative approaches.

2.1.3.4 On the basis of Methodology –

Based on methodology adopted, research can be of two types:
 Qualitative Research – This is conducted to study and analyses the human behavior.
It is considered as a preliminary stage of quantitative research. Qualitative research is
carried out when there is a need to develop new ideas and theories that can be test and
analyze after wards using quantitative measures.
 Quantitative Research – It is contrary to qualitative research. It is scientific
techniques that attempts to analyze the data using statistical measured for concluding
the outcomes a research problem. Various researches on science, social science,
education etc. are conducted with the help ho quantitative research.

After studying classification of research based on various parameters and comparing those
with this study’s objectives I could understand that this study is Descriptive research

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2.2) Sampling
Introduction of Sampling:
Sampling is a process used in statistical analysis in which a predetermined number of observations
are taken from a larger population. Sampling is a process in which the fixed numbers of
observations are taken randomly from a larger population. A technique which is fundamental for
behavioral research is known as sampling and without using it, research work is not possible. It is
impracticable and impossible to study the whole population due to practical limitations of cost, time
and other factors that are indispensable and operative in studying the whole population. For the sole
reason of making the research findings economical and accurate, the concept of sampling has been
introduced.

Sampling Methods:

The plan, method, or technique through which a researcher identifies and selects the potential
sampling units from the sampling frame or the target population, to form a relevant sample for
the study is termed as "sample design". Sample designing is the working principle of any
research process. Without proper designing of sample it is not possible to start a survey, as it is
the base which provides the responses of relevant members of the population. The designing of
sample may be simple or complex depending on the method used for it.
The two factors namely, the element selection technique and the representation basis are
responsible for different types of sample technique. The sample, based on representation, may
be either probability sampling (random sampling) or non-probability sampling (non-random
sampling). On the basis of element selection the sample can be restrictive or unrestrictive
sampling. When each sample element is selected individually from the large population then it
is termed as `unrestrictive sample' and all the other types of sampling are termed as 'restrictive
sampling'.
Thus, sample designs are basically of two types, viz., probability sampling and non-probability
sampling as shown in figure below:

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 Types of Sampling

Probability Sampling Non-Probability Sampling

A] Probability Sampling:

Probability samples are selected in such a way as to be representative of the

population. They provide the most valid or credible results because they reflect the
characteristics of the population from which they are selected (e.g., residents of a
particular community, students at an elementary school, etc.). There are two types of
probability samples: random and stratified.

 A simple random sample (SRS):-The most widely known type of a random sample
is the simple random sample (SRS). This is characterized by the fact that the probability
of selection is the same for every case in the population. Simple random sampling is a
method of selecting n units from a population of size N such that every possible sample of
size an has equal chance of being drawn.

 Stratified Random Sampling:-Divide the population into “strata”. There can be any
number of these. Then choose a simple random sample from each stratum. Combine those
into the overall sample. That is a stratified random sample. (Example: Church A has 600
women and 400 women as members. One way to get a stratified random sample of size 30
is to take a SRS of 18 women from the 600 women and another SRS of 12 men from the
400 men.)

 Multi-Stage Sampling:-Sometimes the population is too large and scattered for it to

be practical to make a list of the entire population from which to draw a SRS. For
instance, when the a polling organization samples US voters, they do not do a SRS. Since
voter lists are compiled by counties, they might first do a sample of the counties and then
sample within the selected counties. This illustrates two stages. In some instances, they
might use even more stages. At each stage, they might do a stratified random sample on
sex, race, income level, or any other useful variable on which they could get information
before sampling.

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 B] Non-probability Sampling
Social research is often conducted in situations where a researcher cannot select the kinds of
probability samples used in large-scale social surveys.
For example, say you wanted to study homelessness – there is no list of homeless
individuals nor are you likely to create such a list. However, you need to get some kind of a sample
of respondents in order to conduct your research. To gather such a sample, you would likely use
some form of non-probability sampling.
To reiterate, the primary difference between probability methods of sampling and non-
probability methods is that in the latter you do not know the likelihood that any population will be
selected for study.There are four primary types of non-probability sampling methods.

 Quota Sampling
Quota sampling is designed to overcome the most obvious flaw of availability sampling.
Rather than taking just anyone, you set quotas to ensure that the sample you get represents certain
characteristics in proportion to their prevalence in the population.
Note that for this method, you have to know something about the characteristics of the
population ahead of time. Say you want to make sure you have a sample proportional to the
population in terms of gender
you have to know what percentage of the population is male and female, then collect sample
until yours matches. Marketing studies are particularly fond of this form of research design.

 Snowball Sampling

Snowball sampling is a method in which a researcher identifies one member of some

population of interest, speaks to him/her, then asks that person to identify others in the population
that the researcher might speak to. This person is then asked to refer the researcher to yet another
person, and so on.
Snowball sampling is very good for cases where members of a special population are
difficult to locate. For example, several studies of Mexican migrants in Los Angeles have used
snowball sampling to get respondents.

 Purposive Sampling
Purposive sampling is a sampling method in which elements are chosen based on purpose of
the study. Purposive sampling may involve studying the entire population of some limited group
As with other non-probability sampling methods, purposive sampling does not produce a
sample that is representative of a larger population, but it can be exactly what is needed in some
cases – study of organization, community, or some other clearly defined and relatively limited
group.

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  Convenience sample

Aconvenience sample is a matter of taking what you can get. It is an accidental sample.
Although selection may be unguided, it probably is not random, using the correct definition of
everyone in the population having an equal chance of being selected. Volunteers would
constitute a convenience sample.

 Sampling Technique: To study the project, a Simple Random Sampling Technique.

Simple Random Sampling:- A simple random sample of size n Is produced by a scheme which
ensure that each subgroup of the population of size n has an equal probabilityof being chosen as the
sample.
Sample Size:- Cases of client
PROJECT REPORT ON SHAREKHAN LTD

Types of Research Exploratory Research

Sampling Method Simple Random Sampling

Sample Size 3 Cases of Client

Primary Data In Form of Interviews

Secondary Data By Web &Jounrnals

Analysis of Data Percentage, Average

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 4.3 collection of data:-

BASIS FOR COMPARISON PRIMARY DATA SECONDARY DATA

Meaning Primary data refers to the first Secondary data means data
hand data gathered by the collected by someone else earlier.
researcher himself.

Data Real time data Past data

Process Very involved Quick and easy

Source Surveys, observations, Government publications,

experiments, questionnaire, websites, books, journal articles,
personal interview, etc. internal records etc.

Cost effectiveness Expensive Economical

Collection time Long Short

Specific Always specific to the May or may not be specific to the

researcher’s needs. researcher’s need.

Available in Crude form Refined form

Accuracy and Reliability More Relatively less

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  Primary data

Primary data is data originated for the first time by the researcher through direct efforts and
experience, specifically for the purpose of addressing his research problem. Also known as the first
hand or raw data. Primary data collection is quite expensive, as the research is conducted by the
organisation or agency itself, which requires resources like investment and manpower

The data can be collected through various methods like surveys, observations, physical
testing, mailed questionnaires, questionnaire filled and sent by enumerators, personal interviews,
telephonic interviews, focus groups, case studies, etc.
Primary data means original data that has been ‘’’collected’’’ specially for the purpose in mind. It
means someone collected the data from the original source first hand. Data collected this way is
called primary data.

The people who gather primary data may be an authorized organization, investigator, enumerator or
they may be just someone with a clipboard. Those who gather primary data may have knowledge
of the study and may be motivated to make the study a success. These people are acting as a
witness so primary data is only considered as reliable as the people who gathered it.

 Secondary Data

Secondary data implies second-hand information which is already collected and recorded by
any person other than the user for a purpose, not relating to the current research problem. It is the
readily available form of data collected from various sources like censuses, government
publications, internal records of the organisation, reports, books, journal articles, websites and so
on.
Secondary data offer several advantages as it is easily available, saves time and cost of the
researcher. But there are some disadvantages associated with this, as the data is gathered for the
purposes other than the problem in mind, so the usefulness of the data may be limited in a number
of ways like relevance and accuracy.

Secondary data is data that has been ‘’’collected’’’ for another purpose. When we use Statistical
Method with Primary Data from another purpose for our purpose we refer to it as Secondary Data.
It means that one purpose’s Primary Data is another purpose’s Secondary Data. Secondary data is
data that is being reused. Usually in a different context.

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 2.4) Presentation of Data, Tools of analysis & Interpretation

SHAREKHAN
PROJECT REPORT ON

EXPLORATORY RESEARCH
TYPE OF RESEARCH

SIMPLE RANDOM SAMPLING

SAMPLING METHOD

CASES OF CLIENTS
SAMPLING SIZE

PRIMARY DATA
IN THE FORM OF INTERVIEWS

SECONDARY DATA
Y WEB & JOURNALS

ANALYSIS DATA
PERCENTAGE, AVERAGE DATA

ANALYSIS AND DATA INTERPRITATION

In the above flow chart the project report on “The study of efficiency of project finance
(CMA) in sharekhan ltd model colony, Nashik. The type of research was exploratory
research and sampling method was simple random sampling and simple random sampling
and sample size cases of client. Data collected through by web and journals. The data is
been analyzed by percentage and average method.
.

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 CHAPTER-3
PROFILE OF SHAREKHAN LIMITED
3.1) History & Milestone of the Organization
3.2) Organization Chart/Structure
3.3) Product/Activity/Service of Organisation
3.4) Vision and Mission of the Organization

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 3.1 History Of the Organization

Mutual Fund Sharekhan Mutual Fund

Setup Date Feb-05-2000
Incorporation Date Jul-27-1994
Sponsor Sharekhan BNP Paribas Group
Trustee Board of Trustees
Chairman N.A
CEO / MD Mr. Jaideep Arora
CIO N.A
Compliance Officer Mr. TanmoySengupta
Investor Service Officer Mrs. SnehaJaiswal
Assets Managed Rs. 42.85 crore (Dec-31-2017)

3.1) History & Milestone of the Organization

Sharekhan is the largest standalone retail brokerage in the country and the third
largest in terms of customer base after ICICI Direct and HDFC Securities. Sharekhan
is one of the pioneers of online trading in India.It offers a broad range of financial
products and services including securities brokerage, mutual fund distribution, loan
against shares, ESOP financing, IPO financing and wealth management..

Sharekhan was founded by Mumbai-based entrepreneur Shripal Morakhia in 2000

Sharekhan pioneered the online retail broking industry and leveraged on the first
wave of digitization, when dematerialization (demat) of securities came into effect
and electronic trading was introduced in the stock exchanges

In India, Sharekhan has over 4800+ employees, and is present in over 575 cities
through 153 branches, more than 2,500 business partners. The company has 1.4
million customer base and on an average, executes more than 4 lakh trades per day.

26
26
Founded in 2000 and a subsidiary of BNP Paribas since November 2016, Sharekhan
was one of the first brokers to offer online trading in India. With 16 lakh customers,
153 branches and more than 2400 business partners spread across over 575 locations,
Sharekhan is one of the largest brokers in India. Sharekhan offers a wide range of
savings & investment solutions including equities, futures and options. currency
trading, portfolio management, research and mutual funds and investor education. On
an average, Sharekhan executes more than 400,000 trades daily

3.2) Organization structure / chart

Managing Director/CEO

(jaideep Arora)

Cluster Head

(Rajiv Purohit)

Area Manager

(Rohit Jadhav)

Branch Manager

Relationship Manager

NakulGhodke DevidasYeola DishankNirbhavne Sham Shinde

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3.3) Product / Services of the Organisation

What is Sharekhan Equity and Debt Opportunities Fund?

Aggressive Hybrid Fund ( An open ended hybrid scheme investing predominently in Equity and
Equiity related instruments). The scheme automatically spreads your money across a diversified
portfolio of stocks and bonds to provide investor the best of both worlds.

What is the Investment Objective?

The investment objective of the Scheme would be to generate long term Capital appreciation and
current income with reduced volatility by investing in a judicious mix of a diversified portfolio of
equity and equity related investments, debt and money market instruments.

What is the suitability of this scheme?

The scheme is suitable for investors with an objective to build long term wealth with a time
horizon of 3 to 5 years.

What is the asset allocation?

The scheme shall invest a minimum of 65% and a maximum of 80% in equity and equity related
instruments. The balance would stay put in debt securities including money market instruments
between 35% to 20%.

What is the Fund management process & investment style?

The Fund follows a robust investment process that encapsulates profitability, business
attractiveness, competitive positioning, balance sheet strength, management track record,
corporate governance, valuations etc. The investment style is a combination of top down and
bottom up approach. For instance, we use the top down approach to focus on a particular industry
which we believe is likely to outperform. Once we decide on a sector, we use the bottom up
approach to decide the company that is likely to give better value for money.

Who is the Fund Manager of the scheme?

The scheme is managed by Mr.KartikSoral and Ms.Gargi Bhattacharyya Banerjee. years in the
banking industry.

How has the fund performed?

The scheme has so far declared 24.50% dividend since inception under dividend plan.
Performance under growth plan regular – December quarter 2017
Period Scheme BenchMark
Calendar year 2014 07.69 % 08.43 %
Calendar year 2015 11.76 % 13.27 %
Calendar year 2016 23.62 % 21.15 %
Since Inception - CAGR 12.38 % 12.79 %
CAGR refers to compounded annualized growth return

What is the minimum investment amount?

Minimum investment amount is Rs 5000.00 and therein multiples of Re.1. Under systematic
investment plan, the minimum amount is Rs 1000 monthly and Rs 3000 quarterly.

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 CHAPTER-4
REVIEW OF LITERATURE
4.1) Meaning & Concept of the topic
4.2) Application, Practices, Process, all tools &
Techniques under the topic of the study
4.3) Literature Review

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4.1) CONCEPT OF MUTUAL FUND

A mutual fund is a professionally managed investment fund that pools money from many
investors to purchase securities. These investors may be retail or institutional in nature.
Mutual funds have advantages and disadvantages compared to direct investing in individual
securities. The primary advantages of mutual funds are that they provide economies of scale, a
higher level of diversification, they provide liquidity, and they are managed by professional
investors. On the negative side, investors in a mutual fund must pay various fees and expenses.
Primary structures of mutual funds include open-end funds, unit investment trusts,
and closed-end funds. Exchange-traded funds (ETFs) are open-end funds or unit investment trusts
that trade on an exchange. Mutual funds are also classified by their principal investments as money
market funds, bond or fixed income funds, stock or equity funds, hybrid funds or other. Funds may
also be categorized as index funds, which are passively managed funds that match the performance
of an index, or actively managed funds. Hedge funds are not mutual funds; hedge funds cannot be
sold to the general public and are subject to different government regulations

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 4.2) Application, Practices, Process, all tools & Techniques of Mutual fund

Mutual funds have advantages and disadvantages compared to investing directly in individual
securities:
Advantages

 Increased diversification: A fund diversifies holding many securities;

this diversification decreases risk.

 Daily liquidity: Shareholders of open-end funds and unit investment trusts may sell their
holdings back to the fund at regular intervals at a price equal to the net asset value of the fund's
holdings. Most funds allow investors to redeem in this way at the close of every trading day.

 Professional investment management: Open-and closed-end funds hire portfolio managers to

supervise the fund's investments.

 Ability to participate in investments that may be available only to larger investors. For
example, individual investors often find it difficult to invest directly in foreign markets.

 Service and convenience: Funds often provide services such as check writing.

 Government oversight: Mutual funds are regulated by a governmental body

 Transparency and ease of comparison: All mutual funds are required to report the same
information to investors, which makes them easier to compare.

Disadvantages
Mutual funds have disadvantages as well, which include:

 Fees

 Less control over timing of recognition of gains

 Less predictable income

 No opportunity to customize.

31
VARIOUS TYPES OF SCHEMES OF MUTUAL FUND

There are three primary structures of mutual funds:

Open-end funds
Unit investment trusts
Closed-end funds.

 Open-end funds
Open-end mutual funds must be willing to buy back ("redeem") their shares from their
investors at the netasset value (NAV) computed that day based upon the prices of the securities
owned by the fund. In the United States, open-end funds must be willing to buy back shares at the
end of every business day. In other jurisdictions, open-funds may only be required to buy back
shares at longer intervals. For example, UCITS funds in Europe are only required to accept
redemptions twice each month (though most UCITS accept redemptions daily).
Most open-end funds also sell shares to the public every business day; these shares are
priced at NAV.
Most mutual funds are open-end funds. In the United States at the end of 2016, there were
8,066 open-end mutual funds with combined assets of $16.3 trillion, accounting for 86% of the U.S.
industry.

32
  Closed-end funds
Closed-end funds generally issue shares to the public only once, when they are created through
an initial public offering. Their shares are then listed for trading on a stock exchange. Investors who
want to sell their shares must sell their shares to another investor in the market; they cannot sell
their shares back to the fund. The price that investors receive for their shares may be significantly
different from NAV; it may be at a "premium" to NAV (i.e., higher than NAV) or, more commonly,
at a "discount" to NAV (i.e., lower than NAV).
In the United States at the end of 2016, there were 530 closed-end mutual funds with combined
assets of $0.3 trillion, accounting for 1% of the U.S. industry.

 Unit investment trusts

Unit investment trusts (UITs) are issued to the public only once, when they are created. UITs
generally have a limited life span, established at creation. Investors can redeem shares directly with
the fund at any time (similar to an open-end fund) or wait to redeem them upon the trust's
termination. Less commonly, they can sell their shares in the open market.
Unlike other types of mutual funds, unit investment trusts do not have a professional investment
manager. Their portfolio of securities is established at the creation of the UIT.
In the United States at the end of 2016, there were 5,103 UITs with combined assets of less than
$0.1 trillion.
 Exchange-traded funds
Exchange-traded funds (ETFs) are structured as open-end investment companies or UITs. ETFs
combine characteristics of both closed-end funds and open-end funds. ETFs are traded throughout
the day on a stock exchange. An arbitrage mechanism is used to keep the trading price close to net
asset value of the ETF holdings.
In the United States at the end of 2016, there were 1,716 ETFs in the United States with
combined assets of $2.5 trillion, accounting for 13% of the U.S. industry.

33
 4.3) REVIEW OF LITERATURE

 Classification of funds by types of underlying investments

Mutual funds are normally classified by their principal investments, as described in the
prospectus and investment objective. The four main categories of funds are money market funds,
bond or fixed income funds, stock or equity funds, and hybrid funds. Within these categories, funds
may be sub classified by investment objective, investment approach or specific focus.
The types of securities that a particular fund may invest in are set forth in the fund's prospectus,
a legal document which describes the fund's investment objective, investment approach and
permitted investments. The investment objective describes the type of income that the fund seeks.
For example, a capital appreciation fund generally looks to earn most of its returns from increases
in the prices of the securities it holds, rather than from dividend or interest income. The investment
approach describes the criteria that the fund manager uses to select investments for the fund.
Bond, stock, and hybrid funds may be classified as either index (or passively-managed) funds or
actively managed funds.

 Money market funds

Money market funds invest in money market instruments, which are fixed income securities
with a very short time to maturity and high credit quality. Investors often use money market funds
as a substitute for bank savings accounts, though money market funds are not insured by the
government, unlike bank savings accounts.
In the United States, money market funds sold to retail investors and those investing in
government securities may maintain a stable net asset value of $1 per share, when they comply with
certain conditions. (Other money market funds must compute a net asset value based on the value of
the securities held in the funds.)
In the United States at the end of 2016, assets in money market funds were $2.7 trillion,
representing 14% of the industry.

 Bond funds
Bond funds invest in fixed income or debt securities. Bond funds can be sub-classified
according to:

 The specific types of bonds owned (such as high-yield or junk bonds, investment-
grade corporate bonds, government bonds or municipal bonds)

 The maturity of the bonds held (i.e., short-, intermediate- or long-term)

 The country of issuance of the bonds (such as U.S., emerging market or global)

 The tax treatment of the interest received (taxable or tax-exempt)

In the United States at the end of 2016, assets in bond funds were $4.1 trillion, representing 22% of
the industry.

34
  Stock funds
Stock, or equity, funds invest in common stocks. Stock funds may focus on a particular area of
the stock market, such as

 Stocks from only a certain industry

 Stocks from a specified country or region

 Stocks of companies experiencing strong growth

 Stocks that the portfolio managers deem to be a good value relative to the value of the
company's business

 Stocks paying high dividends that provide income

 Stocks within a certain market capitalization range

In the United States at the end of 2016, assets in Stock funds were $10.6 trillion, representing
56% of the industry.

 Hybrid funds
Hybrid funds invest in both bonds and stocks or in convertible securities. Balanced funds, asset
allocation funds, target date or target risk funds, and lifecycle or lifestyle funds are all types of
hybrid funds.
Hybrid funds may be structured as funds of funds, meaning that they invest by buying shares in
other mutual funds that invest in securities. Many funds of funds invest in affiliated funds (meaning
mutual funds managed by the same fund sponsor), although some invest in unaffiliated funds (i.e.,
managed by other fund sponsors) or some combination of the two.
In the United States at the end of 2016, assets in hybrid funds were $1.4 trillion, representing
7% of the industry.

 Other funds
Funds may invest in commodities or other investments.

 Expenses
Investors in a mutual fund pay the fund's expenses. Some of these expenses reduce the value of an
investor's account; others are paid by the fund and reduce net asset value.
These expenses fall into five categories:

35
  Management fee
The management fee is paid by the fund to the Management Company or sponsor that
organizes the fund, provides the portfolio management or investment advisory services and
normally lends its brand to the fund. The fund manager may also provide other administrative
services. The management fee often has breakpoints, which means that it declines as assets (in
either the specific fund or in the fund family as a whole) increase. The fund's board reviews the
management fee annually. Fund shareholders must vote on any proposed increase, but the fund
manager or sponsor can agree to waive some or all of the management fee in order to lower the
fund's expense ratio.
Index funds generally charge a lower management fee than actively-managed funds.

 Distribution charges
Distribution charges pay for marketing, distribution of the fund's shares as well as services to
investors. There are three types of distribution charges.

 Front-end load or sales charge. A front-end load or sales charge is a commission paid to
a broker by a mutual fund when shares are purchased. It is expressed as a percentage of the total
amount invested or the "public offering price", which equals the net asset value plus the front-
end load per share. The front-end load often declines as the amount invested increases,
through breakpoints. The front-end load is paid by the investor; it is deducted from the amount
invested.

 Back-end load. Some funds have a back-end load, which is paid by the investor when shares
are redeemed. If the back-end load declines the longer the investor holds shares, it is called a
contingent deferred sales charges (CDSC). Like the front-end load, the back-end load is paid by
the investor; it is deducted from the redemption proceeds.

 Securities transaction fees incurred by the fund

A mutual fund pays expenses related to buying or selling the securities in its portfolio. These
expenses may include brokerage commissions. These costs are normally positively correlated with
turnover.

 Shareholder transaction fees

Shareholders may be required to pay fees for certain transactions, such as buying or selling
shares of the fund. For example, a fund may charge a flat fee for maintaining an individual
retirement account for an investor. Some funds charge redemption fees when an investor sells fund
shares shortly after buying them (usually defined as within 30, 60 or 90 days of purchase);
redemption fees are computed as a percentage of the sale amount. Shareholder transaction fees are
not part of the expense ratio.

36
  Fund services charges
A mutual fund may pay for other services including:

 Board of directors or trustees fees and expenses

 Custody fee: paid to a custodian bank for holding the fund's portfolio in safekeeping and
collecting income owed on the securities

 Fund administration fee: for overseeing all administrative affairs such as preparing financial
statements and shareholder reports, SEC filings, monitoring compliance, computing total
returns and other performance information, preparing/filing tax returns and all expenses of
maintaining compliance with state blue sky laws

 Fund accounting fee: for performing investment or securities accounting services and
computing the net asset value (usually every day the New York Stock Exchange is open)

 Professional services fees: legal and auditing fees

 Registration fees: paid to the SEC and state securities regulators

 Shareholder communications expenses: printing and mailing required documents to

shareholders such as shareholder reports and prospectuses
The fund manager or sponsor may agree to subsidize some of these charges.

 Expense ratio
The expense ratio equals recurring fees and expenses charged to the fund during the year
divided by average net assets. The management fee and fund services charges are ordinarily
included in the expense ratio; front-end and back-end loads, securities transaction fees and
shareholder transaction fees are normally excluded.
.
 No-load fund
In the United States, a fund that calls itself "no-load"cannot charge a front-end load or back-
end load under any circumstances and cannot charge a distribution and services fee greater than
0.25% of fund assets
 Controversy regarding fees and expenses
Critics of the fund industry argue that fund expenses are too high. They believe that the
market for mutual funds is not competitive and that there are many hidden fees, so that it is difficult
for investors to reduce the fees that they pay. They argue that the most effective way for investors to
raise the returns they earn from mutual funds is to invest in funds with low expense ratios.
Fund managers counter that fees are determined by a highly competitive market and,
therefore, reflect the value that investors attribute to the service provided. They also note that fees
are clearly disclosed.

37
4.3 REVIEW OF RESEARCH ON SELECTED TOPIC

1. Name of article: - A Study on Factors Influencing

Mutual Investment in India

Author :- Stephen D'Silva, Bernadette D'Silva, RoshniBhuptani

Abstract

There has been growing importance of Mutual Fund Investment in India. When compared with
other financial instruments, investments in Mutual funds are safer and also yields more returns on
the portfolio investment. The focus of the study is to explore the factors that are responsible in
increasing the Mutual Fund investment in India. The study also helps to understand the role of
demographics in Mutual funds in India. This enables the fund managers to understand investment
pattern and preferences of investor’s behind investing in Mutual Funds. Further analysis of the
study reveals that financial literacy of respondents is very important for making investment in
Mutual funds. Therefore Mutual fund companies should promote financial awareness amongst the
respondents so as to channelize their income and savings towards Mutual Funds.

2 Name of article: - A Study on the Factors Influencing The Selection of

Mutual Fund Company

Author :- R Vijayalakshmi& R Jayasathya

Abstract Mutual fund in Indian context is a challengeable phenomenon. It has attained

commanding heights in the financial scenario of India. The main focus of this study is, on the
factors influencing the respondents on their choice of Mutual Fund Company. The most important
factors consider before investing in the mutual fund are objective of the scheme, past performance
of a research team, services provided by the company etc,. The best way of surviving and
prospering in the competitive environment is through providing prompt,

38
Relevant and efficient information about Asset under Management, Net Asset Value and
information about the scheme.

3] Name of article: -Influence Of Characteristics Of Mutual Funds On Investment

Decisions

Author: -Dr. S.RAJITHA KUMAR

Abstract

savings, they will never come forward to invest their funds in the financial market The success of an
investment activity depends on the knowledge and ability of investors to invest the right amount, in
the right type of investment, and at the right time. A well-planned investment alone can ensure
regular income, capital appreciation and can meet the financial requirements of the investors. An
investor has to use his discretion in appropriate decision making for the selection of investment
avenues, which is an art acquired by learning and practical experience. Those investors with lack of
knowledge and expertise about the operation of the financial market may lose their money while
investing in financial securities. So, they need professional advice for the selection of the right type
of investment; otherwise, due to fear of losing their hard-earned

4 Name of article: - Mutual Fund Industry in India: Recent trends &

progress

Author: - Anand Singh

Abstract

Mutual Fund is an institutional arrangement wherein savings of millions of investors are pooled
together for investment in a diversified portfolio of securities to spread risk and to ensure steady
returns. These funds bring a wide variety of securities within the reach of the most modest of
investors. It is essentially a mechanism of pooling together savings of large number of investors for
collective investment with an approved objective of attractive yield and appreciation in value. The
Mutual Funds offers different investment objectives such as growth, income and Tax planning. In
the recent times the Indian Capital Market has witnessed new trends, one of them being the
spectacular growth of Mutual Funds. There are more than 600 schemes offered by Mutual Funds,
39
and these funds have mobilized substantial amount of the household savings. The present paper
focuses on the growth of Mutual Fund Industry in India over the past few years.

5 Name of article: - Investors’ Awareness and perception About

Mutual Funds

Author: - SimranSaini; DrBimalAnjum

ABSTRACT

Indian mutual fund has gained a lot of popularity from the past few years. Earlier
only UTI enjoyed the monopoly in this industry but with the passage of time
many new players entered the market, due to which the UTI monopoly breaks
down and the industry faces a severe competition. As the time passes this
industry has become a buzz word in the Indian financial system. So it is very
important to know the investor’s perception about this industry. The present
study analyses the mutual fund investments in relation to investor’s behavior.
Investors’ opinion and perception has been studied relating to various issues
like type of mutual fund scheme,main objective behind investing in mutual
fund scheme, role of financial advisors and brokers,investors’ opinion relating
to factors that attract them to invest in mutual funds, sources of information,
deficiencies in the services provided by the mutual fund managers, challenges
before the Indian mutual fund industry etc.

40
 CHAPTER-5
ANALYSIS OF DATA
5.1) Application/ caselates or Practices of the topic umder study
5.2) Application/ Practices or caselates of the topic in indian content
5.3) Applicatin / Practices of the topic of performance Analysis of mutual fund

41
5.1) Application/ caselates or Practices of the Mutual Fund

HDFC Asset management company ltd (AMC) was incorporated under the Companies Act,
1956, on December 10, 1999. And was approved to act as an Asset Management Company for the
HDFC Mutual Fund by SEBI vide its letter dated June 30, 2000.

HISTORY OF AMC
Zurich Insurance Company (ZIC). The Sponsor of Zurich India Mutual Fund, following a
review of its overall strategy, had decided to divest its Asset Management business in India. The
AMC had entered into an agreement with Z1C to acquire the said business, subject to necessary
regulatory approvals.
On obtaining the regulatory approvals, the following Schemes of Zurich India Mutual Fund have
migrated to T1DFC Mutual Fund on June 19 2003.
On obtaining the regulatory approvals, the following Schemes of Zurich India Mutual Fund have
migrated to HDFC Mutual Fund on June 19, 2003.
The AMC is also providing portfolio management / advisory services and such activities are not in
conflict with the activities of the Mutual Fund.
HDFC Top 200 Scheme

Fund Manager: Mr. Prashant Jain

The investment objective is to generate long-term capital appreciation from a portfolio of
equity and equity-linked instruments. The investment portfolio for equity and equity-linked
instruments will be primarily drawn from the companies in the BSE 200 Index. Further, the Scheme
may also invest in listed companies that would qualify to be in the top 200 by market capitalization
on the BSE even though they may not be listed on the BSE This includes Participation in large IPOs
where in the market capitalization of the company based on issue price would make the company a
part of the top 200 companies listed on the BSE based on .2 market capitalization.

Nature Of The Scheme

Open-ended growth Scheme
Inception date
September, 1996
Entry Load

42
Less than 5 crore;
More than 5 crore;

2.25%
Nil
Exit Load
1
Nav (Rs)
123.9020
Assets value under management
(31-07-08)
2264cr
Total returns since launch (%)
28.60
Fund Rating
****

 Rating is as per Value research rating agency

43
SECTORIAL INVESTMENT OF HDFC Top 200

Sector Value (Rs. Cr) Asset (%)

Banking / Finance 159.72 6.54

Technology 119.81 4.91

Oil & Gas 117.66 4.82

Engineering 98.55 4.04

Oil & Gas 89.72 3.68

Engineering 80.86 3.31

Telecom 80.17 3.28

Banking / Finance 74.83 3.07

Engineering 73.48 3.01

Banking / Finance 70.31 2.88

Banking / Finance
Technology
7%
8% 17% Oil & Gas

8% Engineering
12% Oil & Gas
8% Engineering
Telecom
8% 12%
Banking / Finance
9% 10%
Engineering
Banking / Finance

44
5.2 UNIT 'MUST OF INDIA Asset Management Company Private Limited

UTI Mutual Fund is managed by UTI Asset Management Company Private Limited (Estb: Jan
14, 2003) who has been appointed by the MI Trustee Company Private Limited for managing the
schemes of UTI Mutual Fund and the schemes transferred I migrated from UTI Mutual Fund.

UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers) Regulations, 1993
on February 3 2004, for undertaking portfolio management services and also acts as the manager
and marketer to offshore funds through its 100 % subsidiary, UTI International Limited, registered
in Guernsey, Channel Island.

UTI Mutual Fund has come into existence with effect from 1st February 2003. UTI Asset
Management Company presently manages a corpus of over Rs.20000 Crore.

UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of
every class of citizenry. It has a nationwide network consisting 56 UTI Financial Centres (UFCs)
and representative offices in Dubai and London. With a view to reach to common investors at
district level, 11 satellite offices have also been opened in select towns and districts. It has well-
qualified, professional fund management teams, who have been highly empowered to manage funds
with greater efficiency and accountability in the sole interest of unit holders. The fund managers are
also ably supported with a strong in-house equity research department. To ensure better
management of funds, a risk management department is also in operation.

It has reset and upgraded transparency standards for the mutual funds industry.

All the branches, UFCs and registrar offices are connected on a robust IT network to
Ensure cost-effective' quick and efficient service. All these have evolved UTI Mutual Fund to
position as a dynamic, responsive, restructured, efficient, and transparent and SEIM compliant
Entity.

UTI AMC is currently headed by Shri U K Sinha Previously, he had stints at theMinistry of
Finance, as Joint Secretary (at different points) in charge of the Capital Markets, and the Banking
Division.

UTI Growth & Value

45
 Nature of the scheme Open-ended equity scheme
Inception date October, 1999
Entry Load
Less than 5 crore; 2.25%
More than 5 crore; Nil
Fund
Exit load Nil Manager:
Mr.
NAV (Rs) 45.87
Asset value under management 153.71 cr
(31-07-06)
Total returns since launch (%) 25.27
Fund Raising ****

ChandraprakashPadiya

Objectives:
The investment objective is to generate long-term capital appreciation from a portfolio of
Equity and equity-linked instruments. To seek capital appreciation through opportunities arising out
of listed growth and undervalued stock.

*Rating is as per value research rating agency

46
SECTORIAL INVESTMENT OF UTI GROWTH & VALUE FUND

Market % to
Sector Investment Value Net Asset
Industrial Capital Goods 1494.49 9.82
Software 1454 9.54
Pharmaceuticals 1083.62 6.58
Consumer Non- Durables 1081.61 7.1
Telecom Services 1014.68 6.66
Cement 960.31 6.31
Media & Entertainment 888.75 5.84
Construction 791.37 5.19
Fertilizers 755.99 4.96
Power 744.25 4.89
Banks 737.2 4.84

Oil 720.23 4.73

Minerals/Mining 628.74 4.13

Pesticides 501.39 3.29

Auto 427.26 2.8
Consumer Durables 274.74 1.8
Auto Ancilliaries 221.47 1.45
Non-Ferrous Metals 37.38 0.25

47
 Sector Investment Industrial Capital Goods
Software Pharmaceuticals
4%
2% 2% 0% 11%Consumer Non- Durables
3%11% Telecom Services
5%
Cement Media & Entertainment
5% 7%
8% Construction Fertilizers
5%
6% Power Banks
7%
5% 6% 7% Oil Minerals/Mining
5% Pesticides Auto
Consumer Durables Auto Ancilliaries
Non-Ferrous Metals

5.3 MLA SUNLIFE ASSET MANAGEMENT COMPANY LTD

A joint venture between Sun Life Assurance Company, the Canada-based financial service
organization and the Indian industrial house of Aditya Birla, this AMC was launched in the mid-
90s.

Both the partners are well known in all areas that they operate in. While Aditya Birla is a household
name in India and has renowned brands in businesses spread across industries as wide ranging as
Aluminums (Hind Alco), Textiles (Grasim), Fertilizers (Indo-Gulf), Finance (Birla Global Finance
Ltd.) and Rayon (India Rayon), Sun Life is a leading financial service organization in North
America. Sun Life provides services related to risk management, money management and wealth
management across globe. Having established itself at Toronto in 1871, it has now spread its wings
across Asia Pacific, U.S.A. and U.K. It also has a significant presence through MFS Investment
Management in U.S. and Spectrum United Mutual Funds in Canada.

The major strengths of the group are its expertise drawn from managing assets over the globe, a big
agent network and an ability to cater to the need of people. Drawing on the expertise of a worldwide
staff of over 10,000 people and a network of more than 65,000 agents and distributors, Sun Life is
committed to providing not just products and services, but solutions for clients financial &risk
management needs.

48
B1RLA ADVANTAGE FUND

Fund Manager: Mr. AnkitSancheti, Mr. Ajay Argal

OBJECTIVE:

The investment objective is to generate long-term capital appreciation from a portfolio of equity
and equity-linked instruments. Fund is major focus on up coming sector for better & faster capital
appreciation.

Nature of the scheme Open-ended diversified equity scheme

Inception date Febuary,1995
Entry load
Less than 5 crore; 2.25
More than 5 crore Nil
Exit load Nil
NAV (Rs) 114.20
Assets value under management(31-07- 371.45cr
08)
Total returns since launch (%) 728.60
Fund Rating ****

* rating is as per value research rating age

Company Percentage
Diversified 12.0
Computers – Software 8.0
Telecommunication – Service 8.0
Finance – Banks – Private Sectore 7.0
Pharmaceuticals 6.0
Finance – investment 5.0
Finance – Banks - Public Sector 5.0
Refineries 4.0
49
 Finance – Housing 4.0
Beverages – Alcoholic – Distilleries 3.0

GRAPHICAL REPRESANTATION

Diversified
Computers – Software
5% Telecommunication –
6% 19% Service
6%
Finance – Banks – Private
Sectore
8%
Pharmaceuticals
13% Finance – investment
8% Finance – Banks - Public
Sector
10% 13% Refineries
11% Finance – Housing
Beverages – Alcoholic –
Distilleries

50
6.CONCLUSION, RECOMMENDATION & SUGGESTION

6.1) Finding Of the Study

6.2) Conclusion of the Study.
6.3) Recommendation of the Study

51
6.1) Finding of the Study

 World Saving Scenario in Financial Assets in drastically improving compared to Physical

and debt assets.
 The increase of household saving was even shaper for the rural sector also. Economy picked
up very well by showing 33.7% gross domestic saving as a percentage of GDP. Growth rate
in GSDP A.P. also increased from 30% to 85.8% in the past 10 years.
 Assets of mutual funds in India constituted less than 5% of GDP which is still low compared
to other Asian and global countries.
 AUM of all the Mutual funds decreased to 5,92,249 crores at the end of
31.3.2011 from Rs6, 13,980 crores in the previous year due to continuous bearish
Trend of stock market.
 When sector funds returns are compared to the related benchmark of the stock
index, mutual funds are performing better, especially when the period of
investment is more than one year.
 When Standard Deviation of some funds are compared to the stock index standard
Deviation, risk is lesser in case of funds.
Similarly when Sharpe ratio is compared (which gives relative measure of
return/risk) performance of funds is superior to benchmark index.

findings of demographic profile:

 The demographic profile of the study is representative of major demographic features like
gender, age, income, occupation, marital status, nationality, number of children, economic
status, etc. Distribution of retail mutual fund investors in the present study 67.2% are males,
which lead the researcher to suppose that male investors may not hesitate to invest in
innovative instruments like mutual funds.
 There are 49.8% respondents out of 500 belong to the age group of 25-35 years. Hence it
can be inferred that more number of investors belonging to the age group of 25-35 years
consider investing in mutual funds as a better option than other age groups. There are 38.4%
graduates.
 Most of the Mutual fund investors’ are qualified at least till graduation. Undergraduates and
others are less in number who understood about Mutual funds.
 Majority of respondents belong to moderate income group of 1.5-2.5 lakhs rupees
representing 54% of the sample size.
 Perhaps this may indicate that middle income group is moving away from traditional
investments and experimenting with new instruments like mutual funds because of the fall
in interest rates of fixed deposits in banks.

52
 6.2) Conclusion of the Study

 The critical gaps identified in the study also provide the key information input regarding
the discrepancies in existing framework of mutual funds which can be extremely beneficial
to AMCs in designing more lucrative solutions to suit investor’s expectations.

 CII – KPMG conducted a “Voice of customers” survey to help understand the buying
behavior of existing and potential investors in mutual funds and to obtain feed back on
their wish list from various stakeholders including fund houses, distributors, service
providers and the regulation factors found for mutual fund investment are that the number
or types of schemes availability is very much with which investors are becoming confused
and a complex decision.

 Also the KYC norms are complicated which is restricting the potential customers and also
lack of professional or quality advice.

 Drivers of purchase of Mutual funds were found to be tax benefits, consistency in fund
performance and brand equity.

 With majority of the countries in the grip of financial crisis and economic slowdowns,
countries with largely savings orientation have weathered these phenomena.

 This safe side stance by these countries however is changing with the country’s own
economic conditions as inflation and depreciating currency value forcing radical measures
and policies.

 The uncertain future with global finance and economic crisis combined with growing
needs of investors with low risk seeking nature, Mutual Funds certainly are making their
way into the next generation’s preferred investment.

53
 6.3) Suggestion & Recommendation of the Study

Suggestions to Mutual Fund Companies:

 Disclosure of Risk
 Educating the agents
 Simple Terminology
 Regional Languages
 Customer Care Divisions
 Educating the public and the investors
 Understanding the Psychology of the Investors
 Simple words in annual reports
 Lack of Awareness and information

Suggestions to the investors:

 Understand the purpose of investment:

 Low risk tolerance
 Period of Investment
 Cost Factor
 Points to be considered while investing in NFOs
 Points to be considered while departing from the scheme
 Awareness of fund manager
 Number of Funds to be held

Suggestions to the Government:

 Unclaimed mutual fund dividend:

As per the survey conducted in the year 2011 by AMFI, total unclaimed dividend and
redemptions lying with mutual funds was Rs 496 crores. It has requested the
Government to utilize income earned on unclaimed dividend funds for Investors education.
Government accepted the suggestion and the funds were made available.

 Future:

The number of Indian listed mutual funds may substantially exceed the number of Indian
listed stocks, with more mutual funds being added every month. It has already happened in
the United States of America. The investors are bewildered by the choice of funds that they
have-it has becoming a tough to fathom and analyze which fund one ought to invest in as it
is difficult to figure out which stock he wants to invest in.

54
7. BIBLIOGRAPHY

WWW.MUTUALFUNDS.COM
WWW.SHODHGANAGA.COM
WWW.VLAUERESEARCH.COM
WWW.AMFI.COM
ASSOCIATION OF MUTUAL FUND IN INDIA WORKBOOK
MONEY OUTLOOK (MAGAZINE)
INDIAN GUIDE TO MUTUAL FUND

55