A Study on perspective of investors about mutual fund investmentsPREPARED BY: RATAN GOHEL

ROLL NO: 11

Brief introduction about Angle Broking•The 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.

•Angel is also registered as a depository participant with CDSL.

•The group is promoted by Mr. Dinesh Thakkar and professionally managed by a team of 1843+ directemployees.

•It has wide network comprising 12 Regional Centers, 60 branches, 2400+ registered sub brokers andbusiness associates and 6232+ Active trading terminals which cater to the requirements of 204146+retail clients.

•Angel has always believed in offering the best of services to their customers.

•Be it in form of focused research or state of the art technology or customized product offering orpersonalized touch to our services.

•Angel is the only 100% retail stock broking house offering a gamut of retail centric services.

Angel’s Organization Structure

Products of Angel Broking

products

Equities

Commodities

Portfolio management

services

Mutual funds

InsurancePersonal

loans

IPO

Depository services

Investment advisory

What is Mutual Fund?

Types of Mutual Funds•Open-ended

•Closed-ended Funds

•Interval Funds

•Growth Funds

•Income Funds

•Balanced Funds

•Money Market Funds

•Load Funds

•No-Load Funds

•Equity fund

•Debt funds

•Gilt Funds

Regulatory Authorities•SEBI is an Apex regulator of all entities that either raise funds in the capital market or invest in capital market securitiessuch as shares & debentures listed on the stock exchange.

•The Assets Management Company is introducing the various schemes for the investors. The investor is investing orsaving in mutual fund and he gets the units for his investment. He will get the return on his investment in the form offund value.

•To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It notified regulationsin 1993 (fully revised in 1996) and issues guidelines from time to time. MF either promoted by public or by private sectorentities including one promoted by foreign entities is governed by these regulations.

•SEBI approved Asset Management Company (AMC) manages the funds by making investments in various types ofsecurities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody.

•According to SEBI Regulations, two thirds of the directors of Trustee Company or board of trustees must be independent.

•The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual funds that the mutual fundsfunction within the strict regulatory framework. Its objective is to increase public awareness of the mutual fundIndustry.

•AMFI also is engaged in upgrading professional standards and in promoting best industry practices in diverse areas suchas valuation, disclosure, transparency etc.

Net Asset Value (NAV)•The net asset value of the fund is the cumulative market value of the assets fund net of itsliabilities.

•In other words, if the fund is dissolved or liquidated, by selling off all the assets in the fund, thisis the amount that the shareholders would collectively own.

•This gives rise to the concept of net asset value per unit, which is the value, represented by theownership of one unit in the fund.

•It is calculated simply by dividing the net asset value of the fund by the number of units.However, most people refer loosely to the NAV per unit as NAV, ignoring the "per unit".

Advantages of Mutual Fund•Professional Management

•Diversification

•Time saved

•Return Potential

•Low Cost

•Liquidity

•Transparency

•Flexibility

•Affordability

•Choice of schemes

•Well Regulated

Drawbacks of Investing In Mutual Fund•Potential loss

•The Diversification Penalty

•Risks and Costs

•No Guarantees

•Costs

•Expenses

Who can invest in Mutual Funds in INDIA?A) Residents Including:-

1. Resident Indian Individuals

2. Indian Companies

3. Indian Trusts / Charitable Institutions

4. Banks

5. Non-Banking Finance Companies

6. Insurance Companies

7. Provident Funds

Conti….

B) Non Residents including:-

1. Non-Resident Indians

2. Other Corporate Bodies (OCBs)

C) Foreign Entities:-

1. Foreign Institutional Investors (FIIs) registered with SEBI

2. Foreign citizens and other foreign entities are not allowed to invest in mutual funds in India.

RESEARCH METHODOLOGY

Objectives of the Study•To understand Mutual Fund industry & its problems.

•To study the level of awareness amongst investors.

•To assess the reasons for reduced investment in Mutual Funds.

•To know in which types of Funds & Schemes the investors’ are investing.

•To know how they will select the investment options.

Type of Research Design Descriptive Research

The type of research design used in this research is descriptive in nature.

A descriptive research is a type of conclusive research that has as its major objective thedescription of something – usually market characteristics or functions.

Sampling PlanPopulation

Investors using services of Angel Broking Limited

Sampling

METHOD OF SAMPLING: - Simple Random Sampling

Simple Random Sampling: - A probability sampling technique in which each element in the population has a known and equal probability of selection. Every element is selected independently of every other element and the sample is drawn by a random procedure from a sampling frame.

Sample Size: - 87

Sample Unit: - Investors using services of Angle Broking limited

Method of Data CollectionDATA COLLECTION SOURCES

In this project work primary and secondary data sources has been used.

1. PRIMARY DATA

For this report primary data was collected through Questionnaires by Interview and Personal meeting.

2. SECONDARY DATA

Company Brochures

Internet

DATA ANALYSIS TOOLS

MS EXCEL & SPSS - Analysis was done with the help of MS Excel’s Data Analysis functions & SPSS.

Instrument for data collection: Questionnaire

Limitations•Since the sample size is small it cannot give the exact perception of whole population.

•The sample is taken from the one broking company.

•The answer of the client may be differed as the time period change. It may happen that theclient has not given the right answer of all the questions.

•Many customers even though they had invested in mutual funds were hesitant to respond toquestionnaire due to lack of interest.

•Some people though they invested in mutual funds did not possess any knowledge of mutualfunds; they were totally dependent on their bank investment advisor or their friends and familyadvice

DATA ANALYSIS

While investing your money, which factor you prefer most?

Have you ever made investment in Mutual Funds in past?

Where do you find yourself as a mutual fund investor?

In which kind of mutual you would like to invest?

How did you come to know about Mutual Fund?

When you invest in Mutual Funds which mode of investment will you prefer?

Where do you purchase mutual funds from?

Have you earned profit from Mutual Fund investment in past?

When have you last invested in Mutual Fund?

Have Mutual Funds given better returns than your other investments?

Have you made redemption of your Mutual Fund investments?

If yes to above question than answer below question otherwise ignoreWhen were the redemption made?

If not invested in Mutual Fund then why?

Do you think investments in Mutual Funds are decreasing?

Will you make investment in Mutual Funds in future?

Do you think Mutual Funds will give better returns than other investment in future?

FINDINGS AND RECOMMENDATIONS

Findings•Most of the investors want to invest in financial instruments which have low risk and high return.

•Investors don’t have much knowledge about Mutual Fund investments.

•Investors prefer private Mutual Funds over public.

•Most of the investors come to know about Mutual Fund investments through financial advisors andadvertisements.

•Investors prefer Systematic Investment Plan over one time investment.

•Most of the investors buy Mutual Funds from either brokers or sub-brokers.

•Many Investors have earned profit from Mutual funds but many have also lost money in it.

•Many investors think that investments in Mutual Funds are decreasing.

•Investors think that Mutual fund returns are not better as compared to other investment options so this may alsobe the reason that many investors have made redemptions.

•As investors think that Mutual funds are not giving better returns and also investors are thinking that it is notgoing to give better returns in the near future so may be because of these reasons investors are not willing toinvest in Mutual fund in future.

RecommendationsAwareness

Conference or seminars on “mutual funds” can be conducted on regular basis. This will no doubtincrease the awareness of mutual fund in the minds of the investors.

Customer education

Government intermediation

Confidence building activities

As the common person has blind faith in all the government institutions, hence they have to comeforward and convey the message that investing in mutual fund is not that risky.

The performance of the mutual funds can be published in the local and other newspapers andmagazines, journals. This will no doubt induce the investors towards investing in mutual funds.

Case study of the investors who have been benefited in investing in mutual funds can be published inthe newspapers, magazines and journals.

Conti….Handsome incentive

Handsome incentives and commission will no doubt motivate agents to push sell the mutual funds.

Attractive schemes

For opening of new savings bank account, certain units of mutual funds of a company (strategicalliance company) can be given at free of cost to the account holder. This will no doubt make thepeople more familiar with the concept of mutual funds.

On buying of one or some life insurance policies, again certain units of mutual fund can be given atfree of cost to the policy holders. These will ultimate lead to the mutual fund buying habit of thecommon people.

Again each car loan or other kind loan of a certain amount will get the loan taker certain units ofmutual funds absolutely free of cost.

Sponsorship of management events

BIBLIOGRAPHYBooks:

C.R. Kothari : Research Methodology

Pamphlets of various products of ANGEL BROKING Ltd

Websites:

www.amfi.com

http://www.sebi.gov.in/sebiweb/

www.valueresearchonlineIndia.com

www.mutualfundIndia.com

www.angel brokingindiaonline.com