a study on mutual funds with reference to icici direct (systematic investment plan)

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1 CHAPTER 1 INTRODUCTION 1.1 Objectives of Study 1.2 Methodology 1.2.1 Research Design 1.2.2 Data collection sources 1.2.3 Sampling 1.2.4 Limitation 1.2.5 Research Design 1.2.6 Data collection 1.3 Profile of customer

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Page 1: A STUDY ON MUTUAL FUNDS WITH REFERENCE TO ICICI DIRECT (SYSTEMATIC INVESTMENT PLAN)

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CHAPTER – 1

INTRODUCTION 1.1 Objectives of Study

1.2 Methodology

1.2.1 Research Design

1.2.2 Data collection sources

1.2.3 Sampling

1.2.4 Limitation

1.2.5 Research Design

1.2.6 Data collection

1.3 Profile of customer

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1.1 OBJECTIVES OF STUDY

The objectives of this study are as follows:-

PRIMARY OBJECTIVE:

To create awareness among the customers of ICICI about various MUTUAL FUNDS and their

benefits through the online portal of ICICI.

To understand the concept of mutual fund.

To analyze the growth path of mutual fund sector in India.

To know why one has invested or not invested in preferred Mutual fund.

SECONDARY OBJECTIVE:

To get a general feedback from the customers about ICICI Mutual Fund investment and the online

portal.

To conduct survey about Mutual Fund investments from existing customers of ICICI Securities

(Customers who have an ICICI Direct.com account).

To make the customers understand that it is always better to invest or purchase Mutual Funds online than offline.

To make customer user friendly with the website of ICICI Direct.com

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1.2 RESEARCH METHODOLOGY

RESEARCH & METHODOLOGY

This report is based on primary as well secondary data, however primary data collection was given more

importance since it is overhearing factor in attitude studies. One of the most important users of research

methodology is that it helps in identifying the problem, collecting, analyzing the required information data

and providing an alternative solution to the problem .It also helps in collecting the vital information that is

required by the top management to assist them for the better decision making both day to day decision and

critical ones.

DATA SOURCES

Research is based on primary data as well as secondary data. Secondary data can be used only for the

reference. Research has been done by primary data collection, and primary data has been collected

personally. The secondary data has been collected through various journals and websites

SAMPLING

SAMPLING PROCEDURE

The sample was selected randomly irrespective of them being investors or not or availing the services or

not. It was also collected through personal, by formal and informal talks and through filling up the

questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.

SAMPLE SIZE

The sample size of my project is limited to 650 people only

SAMPLE DESIGN

Data has been presented with the help of bar graph, pie charts, line graphs etc.

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LIMITATION

Some of the persons were not so responsive. Sample size is limited to 650 people including students,

working people, business man and others. The sample size may not adequately represent the whole

market. Some respondents were reluctant to divulge personal information which can affect the validity of

all responses. The research is confined to a certain part of Delhi NCR.

RESEARCH DESIGN

A research design is the master plan or model for the conduct of formal investigation and survey. It is a

specification of methods and procedures for acquiring the information needs for solving the problem. It

decides the source of information and methods for gathering the data. A questionnaire and other forms are

tested to use the collection of data. A sampling design is to be selected.

Good research design ensures that the information obtained is relevant to the research question and that it

was collected by objectives. Since research design is simply the framework of plan for a study, it is used

as a guide in collecting and analyzing the data. It is a blueprint that is followed in completing the research

study. My approach to research is descriptive. The major objective of the descriptive research is to

describe something – usually market features or functions.

DATA COLLECTION

Primary data will be collected through feedback form filled by the customer. Secondary data will be

obtained through company sources and other various internet sites.

PROFILE OF THE CUSTOMERS

Customers were the investor who mostly likely to invest in Equity or Fixed deposit or there were

customers who had stopped investing in the market.

Customers mostly prefer investing through online channels as mode of investment.

The customers were already existing customers of ICICI company weather insurance, so this

database was used for cross sealing.

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CHAPTER – 2

ORGANIZATION

PROFILE

2.1 Introduction to ICICI Securities.

2.2 Stock Exchanges

2.3 ICICI Direct

2.3.1 ICICI Trading platform

2.3.2 ICICI Cash Brokerage

2.3.3 How to open a ICICI Direct A/c

2.3.4 Advantages & Disadvantages of ICICI Direct

2.4 SWOT Analysis

2.5 Taxation aspect of company

2.6 Achievements

2.7 Current market position

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2.1 INTRODUCTION TO ICICI SECURITIES.

The ICICI Securities is mainly dealing in the security market. The security market of India is very widely

spreaded and still it is growing at a good rate. The major institutions which are involved in the security

market are performing the role of the intermediaries for Buyers and Sellers in the market. The service

provided by the mediator is easy transaction between two parties. Before 1998 the security market was

dealing in physical format. There were share brokers who performed the job of the intermediaries between

the two parties. The main markets were the stock exchanges situated in different parts of the country. The

brokers were purchasing and selling the securities on behalf of the investors.

The stock broking industry is a service-oriented industry where brokers act as agents for investors when a

security is bought or sold and are compensated with a commission. Investors would not hesitate to switch

to alternative brokerage houses if they do not obtain satisfaction. Providing quality service and hence

customer satisfaction should thus be recognized as a key strategy and a crucial element of long-run

success and profitability for stock broking businesses.

ICICI Securities Limited provides various products and services to corporate, financial institutions, and

retail investors INDIA and internationally. It provides corporate finance services to corporations, financial

institutions, financial sponsors, and government, which include equity capital market products, such as

initial public offerings (IPO), further public offerings, rights offerings, convertible offerings, qualified

institutional placements, non-convertible debentures, buyback, delisting, and open offers and international

offerings for unlisted and listed entities. The company also offers mergers and acquisitions advisory

services; and private equity advisor.

ICICI Securities - Private Wealth Management

At ICICI Securities, we base our services on a simple yet powerful philosophy – we believe in building

long term relationships and partnering with them in legacies for generations to follow.

ICICI Securities - Retail

ICICI Securities empowers over 2 million Indians to seamlessly access the capital market with ICICI

Direct.com, an award winning and pioneering online broking platform.

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2.2 STOCK EXCHANGES

NATIONAL STOCK EXCHANGE {N.S.E.}:

NSE was set up in 1993 at Delhi to encourage stock exchange reforms through the system modernization

and competition. The NSE was following the screen based trading system. The system through which the

NSE is trading is known as the NEAT [National Exchange for Automated Trading.]. It allows members

across the country to trade simultaneously and with full efficiency. As on December 1996 there were

around 1200 companies traded on NSE. Out of 1200 companies only 535 companies were listed and rest

were permitted companies. The market capitalization as on January was 4.2 trillion. The total turnover of

the NSE as on January was around Rs. 2,16,000 crores. This was more than nine times than the turnover

of 1995, which was Rs. 27,000 crores.

BOMBAY STOCK EXCHANGE {B.S.E.}:-

The BSE is situated at Mumbai more popularly known as the ―DALAL STREET. As the Mumbai is the

trading capital of the nation, most of the companies prefer to list their shares in the BSE. The BSE had an

extra age over the NSE in number of the companies listed. As on December 1996, only 1200 companies

were traded on the NSE where as on BSE on the same day 5999 companies were traded. But since

November 1995 trading volumes on NSE is more than the BSE. The BSE is also a major party who has

contributed to the development of security market in India.

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2.3 ICICI DIRECT

ICICI direct is an online trading and investment platform on ICICI Securities, the largest stock broker

firm in India providing a wide range of investment options to the retail and institutional customers. ICICI

Securities is part of ICICI Group, India's top financial service provider offering banking and other

financial services.

ICICI Securities (I-Sec) is the top equity house in India with over 20 lakh customers. ICICI Direct.com is

the most visited investment portal in India and by NRI's living across countries. It is one website which

provides options to invest in over 20 financial products including Equity, Derivatives, Currency Futures,

IPO, Mutual Funds, ETF, Fixed Deposits, Loans, Tax Services, New Pension Systems and Insurance.

ICICI direct also provide current stock market information which includes stock prices, news, market

research reports, stocks tips, events, IPO News and company results. Its 'Centre for Financial Learning'

initiative offers number of online and classroom programs for investors. The 3-in-1 account, which

includes ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account, is the best

offering for retail investors in India as it provides easiest way to invest in stock market and other financial

instruments. The customers can visit any of the over 1500 ICICI Bank branches to get help on financial

products which are sold through ICICI direct.

ICICI Direct.com is the largest equity house in the country providing end-to-end solutions (including web-

based services) through the largest non-banking distribution channel so as to fulfill all the diverse needs of

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retail and corporate customers. ICICI Direct.com has a dominant position in its core segments of its

operations – Corporate Finance including Equity Capital Markets Advisory Services, Institutional

Equities, Retail and Financial Product Distribution. With a full-service portfolio, a roster of blue-chip

clients and performance second to none, we have a formidable reputation within the industry. Today ICICI

Securities is among the leading Financial Institutions both on the institutional as well as retail side .ICICI

Direct.com, the step down wholly owned US subsidiary of the company is a member of the National

Association of Securities Dealers, Inc. (NASD). As a result of this membership, ICICI Securities Inc. can

engage in permitted activities in the U.S. securities markets. These activities include Dealing in Securities

and Corporate Advisory Services in the United States and providing research and investment advice to US

investors. ICICI Direct.com is also registered with the Financial Services Authority, UK (FSA) and the

Monetary Authority of Singapore (MAS).

ICICI DIRECT TRADING PLATFORMS

ICICI Direct offers 2 trading platforms to its customers:

1. Share Trading Account (Website Based Trading)

Website based online Share Trading Account by ICICI Direct is primarily for buying and selling of stocks

The ICICI Direct website allows Cash Trading, Margin Trading, Margin PLUS Trading, Spot Trading,

Buy Today Sell Tomorrow, IPO Investment, Mutual Fund Investment etc.

ICICI Direct.com website is the primary Investment vehicle of ICICI Limited.

2. Trade Racer (Trading Terminal)

Trade Racer is a power packed Trading platform which provides an investor with Live streaming quotes &

Research Calls, integrated fund transfer system along with multiple watch list facility. Investor can also do

technical analysis with the help advance charting tools. Single Order entry page for Equities and

Derivatives, Technical Analysis, Integrated Fund Transfer System, Customized Interface, Intra-day and

EOD Charts and Shortcut keys for faster access to markets are some of the key features of Trade Racer

Terminal.

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ICICI DIRECT CASH BROKERAGE

I - Saver Plan I - Secure Plan

Total Eligible

Turnover (Per

calendar Quarter)

Brokerage

(%)

Effective Brokerage on

Intraday Square

off

Total Eligible

Turnover (Per

calendar Quarter)

Brokerage

(%)

Effective Brokerage on

Intraday Square

off

Above Rs. 5 Crores 0.25 0.125% Irrespective of turnover

0.55 0.275%

Rs.2 Crores to 5 Crores

0.30 0.150%

Rs.1 Crores to 2 Crores

0.35 0.175%

Rs.50 Lakhs to 1 Crores

0.45 0.225%

Rs.25 Lakhs to 50 Lakhs

0.55 0.275%

Rs.10 Lakhs to 25 Lakhs

0.70 0.350%

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HOW TO OPEN ACCOUNT WITH ICICI SECURITIES PVT LTD.?

For Online Stock Trading with ICICI, investor needs to open 3 accounts...ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account (DP Account).All 3 accounts are essential for tradin

Note: If you already have a bank account or demat account with ICICI, you could link it with new ICICI Direct trading account. All the features of new account will be separated with old account a/c to plan

taken. Opening trading account with ICICI is easy. You could use one of the following options to open account

with ICICI Direct.

Visit ICICI Direct.com and fill the "Open an Account" form. Call ICICI and tell them that you are interested in opening an account with them.

In both the cases ICICI representative contact you in a day or two and tell you about the procedure to open

the account. They usually send somebody to your home to collect documents, signature and for demo if required.

Contact ICICI Direct / Request Call Back

Name:

Phone #:

Email:

City, State:

Are you a day trader?

ICICI DIRECT ADVANTAGES

1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI

and very well integrated. This feature makes ICICI the most interesting player in online trading

facility. There is absolutely no manual interfere require. This is truly online trading environment.

2. Unlike most of the online trading companies in India which require transferring money to the

broker's pool or towards deposits, at ICICI Direct you can manage your own demat and bank

accounts through ICICI Direct.com. Money from selling stock is available in ICICI bank account

as soon as the ICICI Direct receive it.

3. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one

website. General Insurance is also available from ICICI Lombard.

4. Trading is available in both BSE and NSE.

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5. Low bandwidth website is available for slow internet connection or for trading from mobile

devices.

6. Through myGTC feature, you can place buy and sell limit orders in equity scripts of your choice;

specifying the period for which you want the order instruction to be valid.

ICICI DIRECT DISADVANTAGES

1. ICICI Direct brokerage is high and not negotiable.

2. ICICI Direct doesn't offer commodity trading. With ICICI Trading account you cannot trade at

MCX or NCDEX.

3. With ICICI Direct.com e-Invest account(3-IN-1 concept), the Demat Account has to be opened

with ICICI Bank Ltd as the Depository Participant (DP) and the Bank Account has to be opened

with ICICI Bank Ltd. as the Banker.

4. ICICI minimum brokerage change is Rs 35 per trade which is very high for traders who does small

trades.

BOARD OF DIRECTORS

ICICI Securities Limited.

Ms. Chanda D. Kochhar,Chairperson

Mr. Uday Chitale, Independent Director

Mr. Vinod Kumar Dhall, Independent Director

Ms. Zarin Daruwala

Ms. Shilpa Kumar

Mr. Anup Bagchi, Managing Director & CEO

Mr. Ajay Saraf, Executive Director

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2.4 SWOT ANALYSIS

SWOT analysis is done by all the companies to be aware about the competitor and new changes in the

market. The SWOT analysis leads the company to take strategic decisions. Company always highlight its

strength, try to hide own weakness and in the same way try to find out strength and weakness of the

competitors.

S - Strength

Strength of the ICICI Securities is the main feature of the service. As it gives 3 in 1account to the

customer, the ease to trade at your convenient time is the main strength of the ICICI Direct. Following are

some of the strong points of the company. Convenience of time to trade Faster transaction Paperless

work 3 in 1 account facility so all work done at one place. The bank has strength of the latest technologies

and the most modern banking channels as net banking and the schemes such as young saver accounts also.

The young and energetic staff of the bank is also one of the strengths.

W- Weaknesses

Weakness of company is fond out to remove it and then make the product or service better than current

status. Each and every product and service has weakness. It is just like two side of the coin, if you have

strength then you have weakness. The weakness of the ICICI Direct.com can be said its high charges

compared to other companies.

O - Opportunity

Opportunity of the company is with the growth of volume of share trading and if company decides to

reduce the prices to some extent then a new market segment will come up as a customer of the service.

Jetpur, being the big industrial city of Saurashtra region the Bank has enough of opportunities to flourish

its business here. ICICI Bank can also grab the opportunity of establishing its market in then ear by towns

and villages by keeping their ATM machines and also by sending their marketing executives to these

remote places on some specific days.

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T - Threat

Threat for the company can be considered as following. Growing competition Change in government rules

which is negative for stock market Low prices of local brokers Low awareness of computer in public. The

other threat of the new entrants in the market will take up the share from them. Now a days many of the

financing companies are entering the Jetpur‘s market, which is one of the biggest threat for the Banks as

they provide the finance to the customers at very less rates and also at the quickest.

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2.5 TAXATION ASPECT OF COMPANY

ICICIDrect Tax services

In today's busy world assessing one's tax well in advance and investing in right tax saving products with

optimum returns seems to be a difficult task., with this also comes the pain of standing in long queues for

filing the tax returns timely.

You are Just 5 steps away from easing your Income Tax Worries:

1. Register for ICICI Direct TAX Services

2. Assess Tax Estimator and estimate your tax payable amount

3. Get your tax optimising investment options customised as per your life profile

4. Submit income & investment details and prepare your ITR instantly

5. File returns

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2.6 ACHEIVEMENTS OF THE COMPANY

Retail

ICICI Direct.com, won the Outlook Money ' Best e- Brokerage Award' for 10th time in a row

in 2014. Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009, 2010, 2011, 2012

and 2013.

ICICI Direct won the Franchisor of the year award 2014

ICICI Direct won the BSE - D&B Equity Broking Awards 2014

ICICI Securities won the Award for Outstanding Social Impacts at the Global Sustainability

Leadership Awards 2014 These awards recognize institutions for their contribution to the society

in their domain as well as businesses that deliver products and services in ways that takes full

account of their responsibility towards the communities they touch.

Ranked 2 at the THOMSON REUTERS STARMINE ANALYST AWARDS 2014 - TOP

BROKERS

ICICI Securities was awarded the "MOST ADMIRED SERVICE PROVIDER IN FINANCIAL

SECTOR" at the BANKING FINANCIAL SERVICES & INSURANCE AWARDS 2014

presented by ABP News.

ICICI Direct.com won the Mobbys award for the "Best Mobile application in Mobile

Trading".

ICICI Securities Business Partners has been conferred the Franchise India Awards 2013, for

being the 'Franchisor of the year' in the Financial Services category.

ICICI Direct.com, won the award for Innovation at Banking Frontiers Finnoviti Awards 2013.

The award was conferred on ICICI Direct's for its `Valid Till Cancel Order' (VTC ) facility, which

was awarded amongst the top 3 innovations in BFSI industry by 'Peer Voting'.

ICICI Securities won the Outlook Smart use Technology eRetailer of the year 2013 conferred

by FIHL in association with HomeShop18.com.

ICICI Direct.com won the 'Stock Broker of the Year' award at the Money Today FPCIL

Awards 2012

ICICI Securities Business Partners (Sub Broker channel) won the 'Franchisor of the Year' at the

Franchise Awards 2012 for the fourth time in a row.

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ICICI Securities won the 'BSE IPF D&B Equity Broking Awards 2012' under two categories:

o Best Equity Broking House - Cash Segment

o Largest E-Broking House

ICICI Securities won the Chief Learning Officer Award from World HRD Congress for

Innovation in learning category.

ICICI Securities won the Grand Jury Award for 'Commendable performance by National

Financial Advisor (Retail) - Online' at the CNBC TV 18 - Financial Advisor Awards 2011. The

award recognises India's best Financial Advisors.

ICICI Securities Business Partners (Sub Broker channel) won the 'Franchisor of the Year at the

Franchise Awards 2011', third time in a row.

ICICI Securities was the winner of the 'Smart use Technology eRetailer of the year' 2012 award

conferred by Franchise India in association with UTV Bloomberg for the first time.

ICICI Direct.com, won the Outlook Money ' Best e- Brokerage Award' seventh time in a row.

Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009 and 2010.

ICICI Securities' Business Partners (Sub Broker channel) won the 'Franchisor of the Year 2011'

for the third consecutive year.

Anup Bagchi, MD & CEO has been honoured with the Zee Business 'Industry Newsmaker

Award 2010' for his tremendous and unmatched contribution in the field of Finance

Pankaj Pandey, Head- Research - ICICI Direct has won the Zee Business Best Market Analyst

2010 award in the Equities Fundamental Category

CMO Asia Awards for Excellence in Branding and Marketing 2010:

o Brand Leadership Award (overall)

o 'Campaign of the Year' for the Trade Racer Campaign

o Brand Excellence in Banking and Financial Services for the store format

o Award for Brand Excellence in the Internet Business

Franchisor of the year award 2009

Retail concept of the year awards 2009

Frost and Sullivan 2009 Award for Customer Service Leadership

ICICI Direct, the neighborhood financial superstore won the prestigious Franchise India `Service

Retailer of the Year 2008 award.

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ICICI Direct has also won the CNBC AWAAZ 2007 Consumer Award for the Most Preferred

Brand of Financial Advisory Services.

Best Broker - Web 18 Genius of the Web Awards 2007

Institutional

ICICI Securities awarded the Asiamoney `Best Domestic Equity House' for 2012

Vikash Mantri tops The Wall Street Journal's Asia's Best Analysts survey in the media sector

for 2010

ICICI Securities has awarded as the Best Investment Bank 2008 by Global Finance Magazine

The Corporate Finance group also was awarded a runner-up Best Merchant Banker by Outlook

Money in 2007.

ICICI Securities topped the Prime Database League Tables 2007 for money raised through

IPOs/FPOs.

The equities team was adjudged the 'Best Indian Brokerage House-2003' by Asiamoney.

Technology

ICICI Securities Ltd was awarded the The Indian Merchants Chamber - IT Awards 2015 for the

category "End Users of IT" by the Indian Merchants? Chamber under the BFSI domain.

ICICI Securities recently won the Innovation Award for Oracle Fusion Middleware.ICICI

Securities has consistently demonstrated the best usage of Oracle Tuxedo as an OLTP engine.

These Asia-Pacific awards honor customers for their optimum and innovative solutions using

Oracle Fusion Middleware.

Fairfax Business Media has recognized ICICI Securities as a recipient of CIO 100 Asia award in

2013.

ICICI Securities has been awarded the NASSCOM IT Innovation Awards 2013.

CIO Masters for Collaboration and Cloud was awarded by Biztech2 (Network 18) in 2013.

ICICI Securities has been conferred by Dataquest in 2012

o Business Technology Excellence award

o Business Technology Innovation award

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IDG India has recognized ICICI Securities as a recipient of CIO 100 award in 2009, 2010, 2011

and 2012, four times in a row.

IDG India has conferred the CIO Hall of Fame award in 2012.

EMC Transformers Award was presented for best use of IT to transform business in 2012

CIO Masters for Virtualization was awarded by Biztech2 (Network 18) in 2012

ICICI Securities was the Bloomberg UTV CXO Awards Finalist for Best Utilization of IT to

Transform Business in 2011

ICICI Securities was conferred the Gold CIO award jointly by CIOL and Dataquest at the

Enterprise Awards 2010

ICICI Securities was the NASSCOM CNBC IT User Awards Finalist in 2009 and 2010

Indian Bank's Association Business Technology Awards was presented for Best Online Trading

Platform in 2006 and 2007

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2.7 CURRENT MARKET POSITION OF THE INDUSTRY

Following is the information on the stock price history of the stocks of ICICI group. These prices are

filtered out for the past 1 year w.e.f 1st April, 2016

Prices

Date Open High Low Close Avg Vol Adj Close*

1 Apr, 2016 236.00 239.45 232.70 238.30 28,504,200 238.30

1 Mar, 2016 195.25 241.35 195.25 236.65 17,671,600 236.65

1 Feb, 2016 227.00 227.35 180.75 190.05 27,768,100 190.05

1 Jan, 2016 261.30 263.60 217.80 230.15 17,160,400 230.15

1 Dec, 2015 275.05 276.75 243.05 261.35 10,516,200 261.35

2 Nov, 2015 277.00 282.70 256.00 274.75 9,610,200 274.75

1 Oct, 2015 273.45 292.70 266.05 277.00 8,784,000 277.00

1 Sep, 2015 275.00 285.35 247.70 270.35 14,248,200 270.35

3 Aug, 2015 304.45 319.80 267.15 277.90 14,319,000 277.90

1 Jul, 2015 308.70 321.00 282.70 302.40 13,321,300 302.40

04-Jun-2015 5.00 Dividend

1 Jun, 2015 317.00 320.40 280.35 308.00 15,722,300 308.00

1 May, 2015 331.15 338.00 300.60 317.25 11,267,400 311.89

1 Apr, 2015 315.00 334.80 296.70 331.15 11,932,300 325.55

According to the above table the stock prices are showing the upward trend in last few months after

recovering from major fall in September last year (2015). The average volume of the stocks has been

continuously increasing from 10,516 to 28,504 from January 2016 to April 2016.

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As far as competitors are concerned following is the table which shows the comparison between stock

price of ICICI group and its competitors.

According to it ICICI has maintained its competitive position in the past over most its competitors and is

projected to maintain so in near future.

Competition Name Last Price Market Cap.

(Rs. cr.) Net Interest Income

Net Profit Total Assets

HDFC Bank 1,092.15 276,115.89 48,469.91 10,215.92 590,503.07

ICICI Bank 252.00 146,541.61 49,091.14 11,175.35 646,129.29

Kotak Mahindra 676.10 124,023.83 9,719.87 1,865.98 106,012.08

Axis Bank 475.85 113,440.02 35,478.60 7,357.82 461,932.39

IndusInd Bank 981.50 58,400.15 11,580.66 2,286.45 109,115.92

Yes Bank 875.75 36,847.60 11,572.00 2,005.36 136,170.42

ING Vysya Bank 1,027.00 19,719.13 5,205.22 657.85 60,413.23

IDFC Bank 53.80 18,264.28 -- -2.58 0.05

Federal Bank 47.40 8,148.42 7,419.46 1,005.75 82,850.47

City Union Bank 94.80 5,680.88 2,698.86 395.02 27,871.13

Karur Vysya 464.75 5,663.65 5,395.87 464.28 53,152.49

JK Bank 72.85 3,531.61 7,061.13 508.60 76,085.46

DCB Bank 98.00 2,788.58 1,422.42 191.18 16,132.30

South Ind Bk 18.25 2,464.31 5,286.22 307.20 59,116.32

Karnataka Bank 112.90 2,127.86 4,698.42 451.45 51,836.60

Lakshmi Vilas 81.90 1,469.79 2,214.53 132.29 24,705.43

StanChart IDR 52.50 630.00 - - 131,000.95

Dhanlaxmi Bank 20.00 354.88 1,283.59 -241.47 14,351.90

Goldman BEES 2,669.80 273.93 -- -- -

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CHAPTER – 3

LITERATURE

REVIEW

3.1 A study on Mutual Funds

3.1.1 Introduction

3.1.2 How do Mutual Funds Work?

3.1.3 Advantages & Disadvantages of Mutual Funds

3.1.4 Majors mutual funds in India

3.2 ICICI Direct and its product line

3.3 Competitors and ICICI Direct

3.4 Current status of industry

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3.1 A STUDY ON MUTUAL FUND

In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being. Mutual Funds

have not only contributed to the India growth story but have also helped families tap into the success of

Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of

investing in Mutual Funds.

The main reason the number of retail mutual fund investors remains small is that nine out of ten people

with incomes in India do not know that mutual funds exist. But once people will be aware of mutual fund

investment opportunities, the number who decide to invest in mutual funds increases may increase to as

many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new

Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual

funds and to use the right arguments in the sales process that customers will accept as important and

relevant to their decision.

This Project gave me a great learning experience and at the same time it gave me enough scope to

implement my analytical ability. The analysis and advice presented in this Project Report is based on

market research on the awareness of mutual funds among ICICI customers and preferences of the

investors for investment in Mutual Funds. This Report will help to know about the investors’ Preferences

in Mutual Fund means Are they prefer any particular Asset Management Company (AMC), Which type of

Product they prefer, Which Option (Growth or Dividend) they prefer or Which Investment Strategy they

follow (Systematic Investment Plan or One time Plan). This Project as a whole can be divided into two

parts.

The first part gives an insight about Mutual Fund and its various aspects, the Company Profile, Objectives

of the study, Research Methodology. One can have a brief knowledge about Mutual Fund and its basics

through the Project.The second part of the Project consists of data and its analysis collected through

survey done on 98 peoples. For the collection of secondary data I made a questionnaire and surveyed of 98

peoples. The data collected has been well organized and presented. I hope the research findings and

conclusion will be of use.

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MUTUAL FUNDS: DEFINITION

An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of

investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds

are operated by money managers, who invest the fund's capital and attempt to produce capital gains and

income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the

investment objectives stated in its prospectus.

MUTUAL FUNDS: AN INTRODUCTION

A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of

equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are

issued and can be redeemed as needed. The fund's Net Asset Value (NAV) is determined each day. The

income earned through these investments and the capital appreciations realized are shared by its unit

holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable

investment for the common man as it offers an opportunity to invest in a diversified, professionally

managed basket of securities at a relatively low cost.

FIG 1.1

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3.1.2 HOW DOES A MUTUAL FUND WORK

Mutual funds are financial intermediaries, which collect the savings of investors and invest them in a large

and well-diversified portfolio of securities such as money market instruments, corporate and government

bonds and equity shares of joint stock companies.

Mutual funds are conceived as institutions for providing small investors with avenues of investments in

the capital market.

Since small investors generally do not have adequate time, knowledge, experience and resources for

directly accessing the capital market, they have to rely on an intermediary, which undertakes informed

investment decisions and provides consequential benefits of professional expertise.

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3.1.3 TYPE OF MUTUAL FUND SCHEMES

Open Ended Schemes:

An open-end fund is one that is available for subscription all through the year and is not listed on the stock

exchanges. The majority of mutual funds are open-end funds. Investors have the flexibility to buy or sell

any part of their investment at any time at a price linked to the fund's Net Asset Value.

Close Ended Schemes:

A closed-end fund has a fixed number of shares outstanding and operates for a fixed duration (generally

ranging from 3 to 15 years). The fund would be open for subscription only during a specified period and

there is an even balance of buyers and sellers, so someone would have to be selling in order for you to be

able to buy it. Closed-end funds are also listed on the stock exchange so it is traded just like other stocks

on an exchange or over the counter. Usually the redemption is also specified which means that they

terminate on specified dates when the investors can redeem their units.

Interval Schemes:

Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes.

The units may be traded on the stock exchange or may be open for sale or redemption during pre-

determined intervals at NAV related prices.

Based on their investment objective:

Equity Funds:

Equity schemes endeavor to provide potential for high growth and returns with a moderate to high risk by

investing in shares. Such schemes are either actively or passively (replicate indices) managed, and are best

suited for investors with a long term investment horizon

These funds invest in equities and equity related instruments. With fluctuating share prices, such funds

show volatile performance, even losses. However, short term fluctuations in the market, generally

smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same

time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset

classes in the long term.

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Balanced fund:

A mutual fund that buys a combination of common stock, preferred stock, bonds, and short-term bonds, to

provide both income and capital appreciation while avoiding excessive risk. The purpose of balanced

funds (also sometimes called hybrid funds) is to provide investors with a single mutual fund that combines

both growth and income objectives, by investing in both stocks (for growth) and bonds (for income). Such

diversified holdings ensure that these funds will manage downturns in the stock market without too much

of a loss; the flip side, of course, is that balanced funds will usually increase less than an all-stock fund

during a bull market .

Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across

various instruments.

Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equity.

ii) Equity-oriented funds-Invest at least 65% in equities, remaining in debt

Debt fund:

This fund invests in fixed income instruments such as debentures (bonds), Treasury Bills etc. Preferred by

investors who want steady income and not willing to take much of risk. They invest only in debt

instruments, and are a good option for investors averse to idea of taking risk associated with equities.

Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of

India securities; and money market instruments such as certificates of deposit (CD), commercial paper

(CP) and call money. Put your money into any of these debt funds depending on your investment horizon

and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in

call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have

variable coupon rate.

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iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash

market and derivatives market. Funds are allocated to equities, and money markets. Higher proportion

(around 75%) is put in money markets, in the absence of arbitrage opportunities.

ADVANTAGES & DISADVANTAGES OF INVESTING IN MUTUAL FUNDS:

For investments in mutual fund, one must keep in mind about the Pros and cons of investments in mutual

fund.

ADVANTAGES OF INVESTING MUTUAL FUNDS:

Affordability: As mutual funds are available in units, one can initially opt for a regular investment

plan contributing few hundred rupees per month

Professional Management: A mutual fund offers the expertise of professional fund managers who,

with their skills and knowledge, are able to understand market trends and invest accordingly

o Diversification: Rather than investing in one or a few instruments, a mutual fund invests in

a basket of instruments which matches its investment objective. For instance, in case of an

equity diversified fund, the investment is spread across multiple industries / sectors and

companies. As a mutual fund investor, you are able to access a diversified investment

portfolio with a sum of as little as Rs. 500, which would otherwise not be possible

Convenience and Flexibility: Mutual fund operations like purchase, redemptions, switching

between funds of the same fund house, etc. are relatively simple. Moreover, Mutual funds offer

you the flexibility of tailoring your investment program with facilities like Systematic Investment

Plans (SIPs), Systematic Transfer Plans (STPs) and Systematic Withdrawal Plans (SWPs)

explained later.

Cost Effectiveness: Economies of scale, achieved by pooling of investors' funds, lowers the costs

of investing for an investor. Such lower costs make a huge impact cumulatively over longer time

horizons.

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Liquidity: Mutual fund units are highly liquid, since open ended funds may be redeemed with the

Mutual fund on any working day and closed ended funds may be sold in the market at the

prevailing prices. Only tax saving and some close ended funds have lock in periods.

Tax Efficient: Mutual funds offer better tax benefits as compared to many other investment

avenues.

Transparency: Mutual Funds are legally bound to disclose their portfolios at periodical intervals

which keep the investor fully informed of where his money has been invested. Moreover, all the

mutual funds are registered with SEBI, a regulatory body which ensures that the investors' interests

are protected.

BENEFITS OF MUTUAL FUNDS

DISADVANTAGES OF INVESTING MUTUAL FUNDS:

Professional Management- Some funds doesn’t perform in neither the market, as their management is

not dynamic enough to explore the available opportunity in the market, thus many investors debate over

whether or not the so-called professionals are any better than mutual fund or investor himself, for picking

up stocks.

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Costs – The biggest source of AMC income, is generally from the entry & exit load which they charge

from an investors, at the time of purchase. The mutual fund industries are thus charging extra cost under

layers of jargon.

Dilution - Because funds have small holdings across 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.

Taxes - when making decisions about your money, fund managers don't consider your personal tax

situation. For example, when a fund manager sells a security, a capital-gain 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.

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MAJOR MUTUAL FUND COMPANIES IN INDIA

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life

Financial is a global organization evolved in 1871 and is being represented in Canada, the US, the

Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a

conservative long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores.

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the sponsorship

of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was

incorporated on November 5, 1992.

HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing Development

Finance Corporation Limited and Standard Life Investment Limited.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the largest life

insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of October, 1993

with two sponsors, Prudential Plc. and ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust

Ltd. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of

June, 1993.

Sahara Mutual Fund:

Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation Ltd. the

sponsor. Sahara Asset Management Company Private Limited incorporated on August 31, 1995 works as

the AMC of Sahara Mutual Fund. The paid-up capital of the AMC stands at Rs 25.8crore.

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State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund, the

India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored

Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded

handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM.

Now it has an investor base Of over 8 Lakhs spread over 18 schemes.

Tata Mutual Fund :

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsors for Tata Mutual Fund

are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata Asset

Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is

one of the fastest in the country with more than Rs. 7,703 crores (as on April 30,2005) of AUM.

Kotak Mahindra Mutual Fund

Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having

more than 1,99,818 investors in its various schemes. KMAMC started its operations in December 1998.

Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk - return profiles. It

was the first company to launch dedicated gilt scheme investing only in government sector

Unit Trust of India Mutual

UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual

Fund with the support of UTI Trustee Company Private Limited. UTI Asset Management Company

presently manages a corpus of over Rs.20000 Crore. The sponsors of UTI Mutual Fund are Bank of

Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation

of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management

Funds, Index Funds, equity and Balance Funds.

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COMPANIES PROVING MUTUAL FUNDS

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3.2 ICICI DIRECT AND ITS PRODUCT LINE

PRODUCTS LINE

ICICI Securities is mainly dealing with share, stock, government bond, mutual fund and IPO (initial

public offer). ICICI Securities is providing mainly three type of product with different facilities. The core

product of ICICI Securities is demat account. ICICI Securities is providing the core product with extra

service of online share trading to its customer as per their requirement. There are three type of account in

ICICI Securities. They are as follow:

1. Simple demat account

2. Wise investment

3. Direct.com

1. Simple Demat Account

The simple demat account is the most simple form of ICICI Securities product. It gives a demat account to

account holder. The customer can purchase and sell the share, government bond, and debenture. In this

account the customer is suppose to deal in share market with the help of broker. Following are the

regulatory aspects of simple demat account. Customer can deal only with help of broker. No online share

trading is allowed. Account opining charge is Rs. 750If customer does not have saving account in ICICI

Bank then he or she has to deposit Rs.5000 in the bank. Statement of demat account is given free of cost to

the customer per quarter and if he or she wants monthly statement than Rs. 200 is charge per annum

Charges:

Account opening charge is Rs. 750Per purchase customer has to pay 0.02% of the amount of purchase.

Minimum Rs. 20Per sale customer has to pay 0.04% of the amount of sale. Minimum Rs.20Maintains

charge of demat account is Rs. 350 per annum. Script maintains charge 0.75 paisa per script per month.

Trade rejection charge is Rs. 50 per transaction rejected.

Limitation:

Online share trading is not available. Transaction speed is very low compare to online share trading. Other

competitors are providing the same service at lower rate.

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2. Wise Investment Account

The Wise Investment Account is somewhat advanced version of simple demat account. This account gives

the customer the freedom of doing online trading in Government bonds, Initial Public Offers and Mutual

funds. Again here the main trading system is through the broker only.

Charges:

Account opining charge is Rs. 500Per purchase customer has to pay 0.02% of the amount of purchase.

Minimum Rs. 20 Per sale customer has to pay 0.04% of the amount of sale. Minimum Rs.20 Maintains

charge of demat account is Rs. 350 per annum. Script maintains charge 0.75 paisa per script per month.

Trade rejection charge is Rs. 50 per transaction rejected. A saving account in ICICI BANK is necessary.

Limitation:

Online trading in equity is not allowed. Transaction time is longer than online trading. Portfolio is

managed by broker, not by our self. Unnecessary investment of Rs 5000 as balance in saving account.

3. Direct.com

The most advanced version of share trading is ―Direct.com‖. It allows the trading through internet and

gives totally paperless work. It is the most effective way of doing the share trading. ―Direct.com‖

allows the customer to work at his own. Means it removes the broker and a terminal is given in hand of

customer.

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3.3 ICICI DIRECT AND ITS COMPETETORS

ICICI Securities is providing share trading facilities. The ICICI was the 1st in India to introduce concept

of online share trading. Now in the market there are few players who are providing the share trading

facilities. Some of them are mentioned below who are providing some competition in the market.

1. HDFC Securities:-

HDFC bank is also one of the growing bank in India. It has also given new definition to banking services

with providing extra services than the traditional banking services. HDFC was in housing finance initially

but in last few years it has widen its scope of working area. It has entered in almost all the sectors in which

ICICI is dealing. HDFC is providing the demat account to its customers. The HDFC is not providing the

online share trading like ICICI. Here it stays slightly behind the ICICI bank.

2. Kotak Street :-

Kotak Street is also emerging as a good competitor to all the share trading service providing company. It

is also entering in the all the financial services like the ICICI and HDFC bank. The Kotak Street is

relatively new compared to ICICI and HDFC inthe field of share trading. Initially when the Kotak group

had not entered in banking field it had collaboration with HDFC for the saving accounts of the customers

who had or wanted to open the share trading account with the Kotak street. But now as the Kotak group

has its own bank, all the saving accounts are opened in the Kotak bank. The Kotak group has also entered

in the field of insurance with name―OM KOTAK MAHINDRA LIFE INSURANCE‖. The Kotak group

has also entered in the MUTUAL FUND sector also.

3. India bulls

India bulls are also one of the companies which is providing the share trading facility. It is a company

which is providing the share trading facility only. It does not provide any saving account facility to its

customer.

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4. Motilal Oswal

MotilalOswal is also one of the competitiors of ICICI direct.com. This Company is also providing online

trading facilities with which customer can save their time and they will operate the programme on their

computer.

5. Marwadi

This unit has paved their feet in each and every town because of the cheaper rate of its brokerage. They

are not providing unlimited facility for trading.

6. 5paisa.com

5Paisa is the trade mane of India Info line Securities Private Limited (5paisa), member of National Stock

Exchange and The Stock Exchange, Mumbai. 5paisa is a wholly owned subsidiary of India Info line Ltd.

India‘s leading and most popular finance and investment portal. 5paisa has emerged as one of leading

players in e-broking space in India

7. Sharekhan

Sharekhan, India‘s leading stock broker is the retail arm of SSKI , and offers you depository services and

trade execution facilities for equities, derivatives and commodities backed with investment advice

tempered by decades of broking experience.

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COMPETITORS AND COMPARISON

This is the side-by-side comparison of ICICI Securities Pvt Ltd. and India Infoline Limited stock brokers

in India. The comparison below highlights the similarities and differences between ICICI Direct and India

Infoline (IIFL)'s brokerage, customer service, maintenance fees, tools and investment options provided to

India Stock Market investors. If you are confused in choosing the best broking site, this page is to help

you find which is the best broker among ICICI Direct and India Infoline (IIFL).

About the

Broker

ICICI Direct is an online trading and investment platform on ICICI

Securities, the largest stock broker firm in India providing a wide range of investment options to the retail

and institutional customers.

Incorporated in 1995, India Infoline (IIFL) is the brokerage firm of India Infoline

Group, a fastest growing financial services solution provider in India. India Infoline is listed on BSE (532636) and NSE

(INDIAINFO) for securities trading.

Type of Broker

Full Service Broker

Full Service Broker

Account Type

3-in-1 Account (I-Secure Plan)

Standard Account

Trading

Account

Opening Fees

Rs 975

Rs 750

Trading

Account AMC

Nil

Demat Account

Opening Fees

Nil

Rs 555

Demat Account

AM

Rs 450

Rs 300

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The comparison below highlights the similarities and differences between ICICI Direct and Angel Trade's

brokerage, customer service, maintenance fees, tools and investment options provided to India Stock

Market investors.

About the

Broker

ICICI Direct is an online trading and investment platform on ICICI

Securities, the largest stock broker firm in India providing a wide range of investment options to the retail

and institutional customers.

Angel Group has emerged as one of the top 3 retail broking houses in India.

Incorporated in 1987, it has memberships on BSE, NSE and the two leading commodity exchanges in India i.e.

NCDEX & MCX.

Type of Broker

Full Service Broker

Full Service Broker

Supported

Exchnage

BSE, NSE

BSE, NSE, MCX

Account Type

3-in-1 Account (I-Secure Plan)

Angel Diet

Trading

Account

Opening Fees

Rs 975

Rs 0

Trading

Account AMC

Nil

Rs 347

Demat Account

Opening Fees

Nil

Rs 0

Demat Account

AM

Rs 450

Rs 0

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The comparison below highlights the similarities and differences between ICICI Direct and HDFC

securities's brokerage, customer service, maintenance fees, tools and investment options provided to India

Stock Market investors.

About the

Broker

ICICI Direct is an online trading and investment platform on ICICI

Securities, the largest stock broker firm in India providing a wide range of investment options to the

retail and institutional customers.

HDFC Securities(HDFCsec) is Equity Trading Company of HDFC Bank.

HDFC Securities provide both online trading and trading on phone. The HDFC Securities trading account has a

unique 3-in-1 feature that integrates your HDFC Securities

Type of Broker

Full Service Broker

Full Service Broker

Supported

Exchnage

BSE, NSE

BSE, NSE

Account Type

3-in-1 Account (I-Secure Plan)

Online Trading

Trading

Account

Opening Fees

Rs 975

Rs 999

Trading

Account AMC

Nil

Demat

Account

Opening Fees

Nil

Nil

Demat

Account AM

Rs 450

Rs. 750

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The comparison below highlights the similarities and differences between ICICI Direct and Indiabulls's

brokerage, customer service, maintenance fees, tools and investment options provided to India Stock

Market investors.

About the

Broker

ICICI Direct is an online trading and

investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range

of investment options to the retail and institutional customers.

Indiabulls Securities (ISL) is the India-

based Stock Broker. ISL is part of Indiabulls Group, a leading business house in India with businesses spread

across many sectors including Infrastructure, Power, Real Estate and

Financial Services

Type of Broker

Full Service Broker

Full Service Broker

Supported

Exchnage

BSE, NSE

BSE, NSE,

MCX, NCDEX

Account Type

3-in-1 Account (I-Secure Plan)

Power Indiabulls

Trading

Account

Opening Fees

Rs 975

Rs 950

Trading

Account AMC

Nil

Nil

Demat Account

Opening Fees

Nil

Nil

Demat Account

AM

Rs 450

Rs. 450

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The comparison below highlights the similarities and differences between ICICI Direct and sharekhan's

brokerage, customer service, maintenance fees, tools and investment options provided to India Stock

Market investors.

About the

Broker

ICICI Direct is an online trading and

investment platform on ICICI Securities, the largest stock broker

firm in India providing a wide range of investment options to the retail and institutional customers.

Incorporated in February 2000, Sharekhan

is India's 2nd largest stock broker providing brokerage services through its

online trading website Sharekhan.com and 1950 Share shops which includes branches & Franchises in more than 575 cities

across India.

Type of Broker

Full Service Broker

Full Service Broker

Supported

Exchnage

BSE, NSE

BSE, NSE, MCX, NCDEX, NSEL

Account Type

3-in-1 Account (I-Secure Plan)

Classic Account

Trading

Account

Opening Fees

Rs 975

Rs. 750

Trading

Account AMC

Nil

Rs. 400

Demat Account

Opening Fees

Nil

Rs. 0

Demat Account

AM

Rs 450

Rs. 400

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The comparison below highlights the similarities and differences between ICICI Direct and KotakSecurities's brokerage, customer service, maintenance fees, tools and investment options provided to

India Stock Market investors. If you are confused in choosing the best broking site, this page is to help you find which is the best broker among ICICI Direct and Kotak Securities.

About the

Broker

ICICI Direct is an online trading and investment platform on ICICI

Securities, the largest stock broker firm in India providing a wide range

of investment options to the retail and institutional customers.

Incorporated in 1994, Kotak Securities is a full services broker part of popular India

based Kotak Mahindra Bank. The bank has over 1400 branches across India

servicing more than 8 lakh customers

Type of Broker

Full Service Broker

Full Service Broker

Supported

Exchnage

BSE, NSE

BSE, NSE, MCX-SX, MCX, NCDEX

Account Type

3-in-1 Account (I-Secure Plan)

Kotak Gateway

Trading

Account

Opening Fees

Rs 975

Rs. 750

Trading

Account AMC

Nil

Nil

Demat Account

Opening Fees

Nil

Nil

Demat Account

AM

Rs. 450

Rs. 600

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3.4 CURRENT POSITION OF INDUSTRY

The security market in India has developed a lot in last 5 to 7 years. The developments due to the

increasing awareness among the people; developing communication almedia and most importantly change

in the way of transaction i.e. on line trading of securities. BSE Online Share Trading ―B.O.L.T.‖ has

brought revolution in the security market. Introduction of private banks in security market dealing and real

estate business have brought the efficiency and competition in the market. Mutual funds are also one of

the major elements which have influenced the growth of security market. Foreign Investment Institution

[F.I.I.] and Foreign Direct Investment [F.D.I.] has also contributed in the growth of the security market in

India. Currently in the security market following securities are been traded by the investors, institutional

buyers and foreign investors. Shares [Equity shares & preference shares ] Debentures Government Bonds

Mutual Funds Commercial papers

The main feature of today‘s market is the Dematerialized form of almost all securities.

Previously the securities were available in materialized form i.e. in papers but now it is available in

Dematerialized form. It means securities are not given in paper format but in ELECTRONIC format it is

been directly credited in purchaser‘s demat account.

RECENT TRENDS IB MUTUAL FUNDS MARKET

The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned

mutual fund companies and the decline of the companies floated by nationalized banks and smaller private

sector players.

Many nationalized banks got into the mutual fund business in the early nineties and got off to a good start

due to the stock market boom prevailing then. These banks did not really understand the mutual fund

business and they just viewed it as another kind of banking activity. Few hired specialized staff and

generally chose to transfer staff from the parent organizations. The performance of most of the schemes

floated by these funds was not good. Some schemes had offered guaranteed returns and their parent

organizations had to bail out these AMCs by paying large amounts of money as the difference between the

guaranteed and actual returns. The service levels were also very bad. Most of these AMCs have not been

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able to retain staff, float new schemes etc. and it is doubtful whether, barring a few exceptions, they have

serious plans of continuing the activity in a major way.

The experience of some of the AMCs floated by private sector Indian companies was also very similar.

They quickly realized that the AMC business is a business, which makes money in the long term and

requires deep-pocketed support in the intermediate years. Some have sold out to foreign owned

companies, some have merged with others and there is general restructuring going on.

They can be credited with introducing many new practices such as new product innovation, sharp

improvement in service standards and disclosure, usage of technology, broker education and support etc.

In fact, they have forced the industry to upgrade itself and service levels of organizations like UTI have

improved dramatically in the last few years in response to the competition provided by these.

PERFORMANCE(MF’S)

Let us start the discussion of the performance of mutual funds in India from the day the concept of mutual

fund took birth in India. The year was 1963. Unit Trust of India invited investors or rather to those who

believed in savings, to park their money in UTI Mutual Fund. The performance of mutual funds in India in

the initial phase was not even closer to satisfactory level. People rarely understood, and of course

investing was out of question. But yes, some 24 million shareholders were accustomed with guaranteed

high returns by the beginning of liberalization of the industry in 1992. This good record of UTI became

marketing tool for new entrants. The expectations of investors touched the sky in profitability factor.

However, people were miles away from the preparedness of risks factor after the liberalization.

The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the

performance of mutual funds in India through figures. From Rs. 67bn. the Assets Under Management rose

to Rs. 470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as

high as Rs. 1,540bn. The net asset value (NAV) of mutual funds in India declined when stock prices

started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into

alternative investments. There was rather no choice apart from holding the cash or to further continue

investing in shares. One more thing to be noted, since only closed-end funds were floated in the market,

the investors disinvested by selling at a loss in the secondary market.

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The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the

losses by disinvestments and of course the lack of transparent rules in the whereabouts rocked confidence

among the investors. Partly owing to a relatively weak stock market performance, mutual funds have not

yet recovered, with funds trading at an average discount of 1020 percent of their net asset value. The

measure was taken to make mutual funds the key instrument for long-term saving. The more the variety

offered, the quantitative will be investors. At last to mention, as long as mutual fund companies are

performing with lower risks and higher profitability within a short span of time, more and more people

will be inclined to invest until and unless they are fully educated with the dos and don'ts of mutual funds.

MARKET TRENDS

A lone UTI with just one scheme in 1964 now competes with as many as 400 odd products and 34 players

in the market. In spite of the stiff competition and losing market share, Last six years have been the most

turbulent as well as exiting ones for the industry. New players have come in, while others have decided to

close shop by either selling off or merging with others. Product innovation is now passé with the game

shifting to performance delivery in fund management as well as service. Those directly associated with the

fund management industry like distributors, registrars and transfer agents, and even the regulators have

become more mature and responsible.

The industry is also having a profound impact on financial markets. While UTI has always been a

dominant player on the bourses as well as the debt markets, the new generations of private funds, which

have gained substantial mass, are now flexing their muscles. Fund managers, by their selection criteria for

stocks have forced corporate governance on the industry. Rewarding honest and transparent management

with higher valuations has created a system of risk-reward created where the corporate sector is more

transparent then before.

Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG and technology

sector. Funds performances are improving. Funds collection, which averaged at less than Rs100bn per

annum over five-year period spanning 1993-98 doubled to Rs210bn in 1998-99. In the current year

mobilization till now have exceeded Rs300bn. Total collection for the current financial year ending March

2000 is expected to reach Rs450bn. What is particularly noteworthy is that bulk of the mobilization has

been by the private sector mutual funds rather than public sector mutual funds. Indeed private MFs saw a

net inflow of Rs. 7819.34 Crore during the first nine months of the year as against a net inflow of

Rs.604.40 Crore in the case of public sector funds.

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CHAPTER – 4

DATA ANALYSIS &

INTERPRETATIONS 4.1 Data analysis and interpretations

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Following is the data analysis of the questionnaire which were given to basically working professionals to

analysis the pattern and preferences of their investments in last 12 months. This analysis is done w.r.t to

ICICI Direct and its competetors.

Ques. 1Have you invested in any of the following in the last 12 months?

Equity 32

Mutual Funds 14

Corporate Fixed Deposits 7

Insurance 1

Public Provident Fund 6

Future And Options 2

None 3

Interpretation - From the above stats it can be clarified that most of the people have invested in Equity

and also some of them are invested in mutual funds which means public mainly like to invest in Equity

and Mutual Funds. Peoples invest more in Equities because they get higher potential returns and less risk.

59%13%2%

11%

4% 5% 6%

Have you invested in any of the following in the last 12 months

Equity

Mutual Funds

Corporate Fixed Deposits

Insurance

Public Providend Fund

Future And Options

None

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Ques. 2 what is your preferred mode of investment?

Online 88

Offline 10

Interpretation - From the above stats it can be clarified that most of the people having their preferred

mode of investment in online. Its means peoples are adopting and getting attract towards the online

platform for Trading and Investment

0 20 40 60 80 100

Online

Offline

What is Your Preferred Mode of Investment

What is Your Preferred Mode of

Investment

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Ques. 3 Have you invested in any of the following through ICICI Direct.com in the last 12 months?

Equity 50

Mutual Funds 6

Corporate Fixed Deposits 4

Future And Options 5

Insurance 4

None of these 29

Interpretation - From the above stats it can be clarified that most of the peoples have invested in Equity

and Mutual funds in Last 12 months. Peoples are Getting Good returns and benefits that’s why they

invested more in equities and mutual funds.

51%

6%4%

5%

4%

30%

Have you invested in any of the following through ICICIdirect.com in the last 12 months

Equity

MutualFunds

Corporate Fixed Deposits

Future and Options

Insurance

None Of These

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Ques. 4 How do you /would you prefer to make your investments in Equity?

ICICI Direct

55

Other Broker

30

NA

13

Interpretation -From the above stats it can be clarified that most of the people preferred to make their

investment in Equity its 56% with ICICI Direct.com because the return is high and more of the liquidity.

56%31%

13%

How do you /would you prefer to make your investments in Equity

ICICI Direct

Other Broker

NA

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Ques. 5 How do you /would you prefer to make your investments in Mutual Funds?

ICICI Direct

24

Agents

25

Other Broker

30

Banks

9

NA

10

Interpretation -From the above stats it can be clarified that most of the people want to make their

investment in mutual funds through others brokers but not from the ICICI Direct.com because ICICI

Direct don’t give the full services to the customers. They just open the account and then leave the

customers alone.

24%

26%31%

9%10%

How do you /would you prefer to make your investments in Mutual Funds

ICICI Direct

Agents

Other Broker

Banks

NA

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Ques. 6 How do you /would you prefer to make your investments in Insurance?

ICICI Direct

10

Agents

45

Banks

30

Other Brokers

13

Interpretation -From the above stats it can be clarified that most of the people want to make their

investment in Insurance through Agents because Agents are trustworthy. They give the good n fixed

returns. Most of the customers are invested in LIC through LIC Agents.

10%

46%

31%

13%

How do you /would you prefer to make your investments in Insurance

ICICI Direct

Agents

Banks

Other Brokers

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Ques. 7 How do you /would you prefer to make your investments in Corporate Fixed Deposit?

ICICI Direct

13

Directly With The Company

25

Other Broker

20

NA 40

Interpretation -From the above stats it can be clarified that most of the people prefer to make their

investment in Fixed deposits through other brokers because in Fixed deposits have the assurance that it

will give fixed returns and peoples more want to invest in FD because they don’t want to take the risk.

13%

26%

20%

41%

How do you /would you prefer to make your investments in Corporate Fixed Deposit?

ICICI Direct

Directly With The Company

Other Broker

NA

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Ques. 8 How do you /would you prefer to make your investments in Debentures / Bonds?

ICICI Direct

13

Directly With Company

25

NA

60

Interpretation -From the above stats it can be clarified that most of the people don’t want to make their

investment in Debentures/bonds because customers don’t have the knowledge about the debentures and

bonds. They don’t have the finance to invest in the debentures and bonds.

13%

26%

61%

How do you /would you prefer to make your investments in Debentures / Bonds ?

ICICI Direct

Directly With Company

NA

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Ques. 9 Before the demo, were you aware that you can invest in Mutual ?

Yes 80

No 18

Interpretation -From the above stats it can be clarified that most of the people around 90% peoples are

already aware about that they can invest in Mutual funds through ICICI Direct.com because the ICICI

Direct tell the customers at the time of when customers open their account with ICICI Direct.com and

also tell them about their online portal and you can invest in mutual funds directly online thorugh ICICI

Direct.com

0 20 40 60 80 100

Yes

No

Before the demo, were you aware that you can invest in Mutual funds through ICICI

Direct

Before the demo, were you

aware that you can invest in

Mutual funds through ICICI

Direct

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Ques. 10 If yes, what are the reasons for not investing in Mutual Funds through ICICI Direct.com?

I am not interested as I Invest through other brokers or distributors

22

I need more knowledge on Mutual Funds before I invest

24

I need assistance to invest in MF through ICICI Direct.com

12

I do not invest in Mutual Fund

40

Interpretation -From the above stats it can be clarified that most of the people are not to invest in the

Mutual Funds through ICICI Direct.com and majority is 41%. It is because of the customers’ expectations

will not meet with the ICICI Direct.com and the customers not have good relationship with ICICI Direct

Relationship Manager’s.

22%

25%

12%

41%

If yes, what are the reasons for not investing in Mutual Funds through ICICIdirect.com

I am not interested as I Invest

through other brokers or

distributors

I need more knowledge on

Mutual Funds before I invest

I need assistance to invest in

MF through ICICIdirect.com

I do not invest in Mutual Fund

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Ques. 11 Which of the following online transactions have you done in the past?

I buy movie tickets online

30

I book flights or Train online

25

I buy merchandise online

15

I use Internet or Online Banking

24

I do not do any online transactions

4

Interpretation -From the above stats it can be clarified that most of the people shifted towards to online

baking and 46% peoples are using online baking for their online transactions. Peoples are using the best of

the online banking and it helps customers in to save their time.

13%

23%

14%

46%

4%

Which of the following online transactions have you done in the past

I buy movie tickets online

I book flights or Train online

I buy merchandise online

I use Internet or Online Banking

I do not do any online

transactions

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Ques. 12 How often do you transact online in any of the above mentioned transactions?

Monthly

50

Once in a Quarter

40

Once in a Six Months

3

Once in a Year

5

Interpretation -From the above stats it can be clarified that most of the people transact online 51% in the

monthly basis. Because they have the account with bank and securities and for the trading they also have

to do online trading.

51%41%

3%

5%

How often do you transact online in any of the above mentioned transactions

Monthly

Once in a Quarter

Once in a Six Months

Once in a Year

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Ques. 13 Which medium of news information and analysis do you use to keep yourself informed on

investment products? I discuss with my friends, family and or colleagues

20

I prefer to do my own research

40

I have a financial advisor or broker or MF distributor who updates me

13

I use financial websites for comparisons and news

15

I read media reports

10

Interpretation -From the above stats it can be clarified that most of the people are discuss with their

family and friends to keep the information about investment products and it is because the Family play as

the role of trustee like Agent.

45%

23%

15%

17%

0%0%

Which medium of news information and analysis do you use to keep yourself

informed on investment products

I discuss with my friends, family

and or colleagues

I prefer to do my own research

I have a financial advisor or

broker or MF distributor who

updates me

I use financial websites for

comparisons and news

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Ques. 14 How do you check the performance of all/any of your investments?

I ask my financial advisor

28

broker or MF distributor to send me information

25

I update investment details on a third party portfolio website and check regularly

21

My bank provides me the information

10

Other - SELF

14

Interpretation -From the above stats it can be clarified that most of the people check the performance of

all of their investments through Financial Advisor Because the Financial Advisor is the person who have

the perfect knowledge about the stock market and having experience in the stock market. On the other side

the broker also play the important role in to provide the information to customers for their investments

10%

29%

26%

21%

14%

How do you check the performance of all/any of your investments

My bank provides me the

information

I ask my financial advisor

broker or MF distributor to send

me information

I update investment details on a

third party portfolio website and

check regularly

Other - SELF

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Ques. 15 would you consider switching your investment relationship to ICICI Direct.com?

Yes 42

No 65

Interpretation -From the above stats it can be clarified that most of the people are not to keep their

Investment relationship with ICICI Direct.com because of the past experience of ICICI direct customers

was not good. They do not trade through their Present Account. They do not have adequate knowledge

about Stock market or maybe they are in investment relationship with other Company.

0

10

20

30

40

50

60

Yes No

Would you consider switching your investment relationship to ICICIdirect.com

Would you consider switching

your investment relationship to

ICICIdirect.com

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Ques. 16 Which of the following site features did you find useful in the demo?

Capital Gains Statement

19

Ease of purchase or redemption

27

Portfolio Monitoring

21

Personalized research recommendations against holdings

21

Others

10

Interpretation -From the above stats it can be clarified that the demo which I gave to the customers of

ICICI it is very beneficial for them and they can easily manage their portfolio and it is easy for customers

to easy of purchase and redemption of shares.

19%

28%

22%

21%

10%

0%

Which of the following site features did you find useful in the demo

Capital Gains Statement

Ease of purchase or redemption

Portfolio Monitoring

Personalized research

recommendations against

holdings

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Ques. 17 How would you rate the presentation and demonstration by our representative?

Good 90

Bad 1

Neutral 3

Needs Improvement 4

Interpretation -From the above stats it can be clarified that most of the people find that the Presentation

and demonstration which Is given by me to the Customers of ICICI Direct was very good. They

understand very well that they can become a user-friendly with the website of ICICI Direct.com and they

also find that it is a good online portal where they can easily do the trading of shares.

92%

1%3%

4%

How would you rate the presentation and demonstration by our representative

Good

Bad

Neutral

Needs Improvement

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CHAPTER – 4

FINDINGS &

CONCLUSIONS

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FINDINGS

Most of the clients are not aware with concept of mutual fund and its advantages.

Customers past habits of investment is being recognized.

Clients who know about mutual fund are not investing their money into it because of lack

of knowledge about mutual fund.

Customer’s problems are solved as soon as possible.

Mostly customers want to invest in fixed deposit only.

In Delhi-NCR in the Age Group of 36-40 years were more in numbers. The second most

Investors were in the age group of 41-48 years and the least were in the age group of below

30 years.

In Delhi-NCR most of the Investors were Graduate or Post Graduate or Retired persons.

In Occupation group most of the Investors were Govt. employees, the second most

Investors were Private employees and the least were associated with Agriculture.

About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits,

Only 60% Respondents invested in Equity

Only 47% Respondents were aware about Mutual fund and its operations and 53% were

not.

Among 98 Respondents only 30% had invested in Mutual Fund and 70% did not have

invested in Mutual fund.

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SUGGESTIONS & RECOMMENDATIONS

1. The most vital problem spotted is of ignorance. Investors should be made aware of the

benefits. Nobody will invest until and unless he is fully convinced. Investors should be made

to realize that ignorance is no longer bliss and what they are losing by not investing.

Mutual funds offer a lot of benefit which no other single option could offer. But most of the

people are not even aware of what actually a mutual fund is? They only see it as just another

investment option. So the advisors should try to change their mindsets. The advisors should

target for more and more young investors. Young investors as well as persons at the height of

their career would like to go for advisors due to lack of expertise and time .

2. Mutual Fund Company needs to give the training of the Individual Financial Advisors about

the Fund/Scheme and its objective, because they are the main source to influence the

investors.

3. Before making any investment Financial Advisors should first Enquire about the risk

tolerance of the investors/customers, their need and time (how long they want to invest). By

considering these three things they can take the customers into consideration.

4. Younger people aged under 35 will be a key new customer group into the future, so making

greater efforts with younger customers who show some interest in investing should pay off.

Customers with graduate level education are easier to sell to and there is a large untapped

market there. To succeed however, advisors must provide sound advice and high quality .

5. Systematic Investment Plan (SIP) is one the innovative products launched by Assets

Management companies very recently in the industry. SIP is easy for monthly salaried person

as it provides the facility of do the investment in EMI. Though most of the pr ospects and

potential investors are not aware about the SIP. There is a large scope for the companies to

tap the salaried persons

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CONCLUSION

Running a successful Mutual Fund requires complete understanding of the peculiarities of the

Indian Stock Market and also the psyche of the small investors. This study has made an attempt to

understand the financial behavior of Mutual Fund investors in connection with the preferences of

Brand (AMC), Products, and Channels etc. I observed that many of people have fear of Mutual Fund.

They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund

and its related terms. Many of people do not have invested in mutual fund due to lack of awareness

although they have money to invest. As the awareness and income is growing the number of mutual

fund investors are also growing.

“Brand” plays important role for the investment. People invest in those Companies where they have

faith or they are well known with them. There are many AMCs in Delhi-NCR but only some are

performing well due to Brand awareness. Some AMCs are not performing well although some of the

schemes of them are giving good return because of not awareness about Brand. Reliance, UTI,

SBIMF, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets

Under Management is larger than others whose Brand name are not well known like Principle etc.

Distribution channels are also important for the investment in mutual fund. Financial Advisors are

the most preferred channel for the investment in mutual fund. They can change investors’ mind

from one investment option to others. Many of investors directly invest their money through AMC

because they do not have to pay entry load. Only those people invest directly wh o know well about

mutual fund and its operations and those have time.

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