CUSTOMER’S PERCEPTION AND THEIR BUYING PATTERN OF MUTUAL FUND

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Jyoti Bhawnani

Enrolment no: 0202101048

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ACKNOWLEDGEMENT

With regard to my Project with Mutual Fund I would like to thank each and every one who offered help, guideline and support whenever required.

This project report and the learning process behind it would not have been possible without guidance of Mr. Vinod Agrawal (Branch Manager N.J India invest, Ajmer). He imparted me right approach that my training required for its successful practical implementation and introduced me the idea of Mutual Funds.

I was involved with N.J India Invest for three months, and I came across a lot of people who put in their time and effort towards acclimatizing me to the workings of their organization. I express my thanks to Mr. Vinod Agrawal under whose guidance and leadership I was able to enhance my financial as well as inter-personal skills. I also express my gratitude to Ms. Vinita Joshi for her constant support and guidance. She helped me to understand NJ and its services.

I am also grateful to our teacher Ms PALLAVI MITTAL for the help and guidance provided to make me learn, and understand the concepts and complete my project work. Without her help I would not have been able to complete my work in the present form.

I thank GBS-A and its management team, CRP for their co operation, help and guidance and the opportunity.

I am grateful for each and every valuable interaction that brought me to a better understanding of the workings of the Mutual Fund industry.

These three months were of utmost importance as they added value towards my path of knowledge. I would like to end this acknowledgement by thanking the customers, clients, investors, and people at large with whom I have interacted during the course of my training.

APROVAL FROM GUIDE

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This is to certify that Ms. Jyoti Bhawnani student of GLOBSYN BUSINESS SCHOOL AHEMDABAD has completed project work on “customer perception &their buying pattern of mutual fund” under my guidance and supervision.

I certify that this is an original work and has not been copied from any source.

Signature of Guide

DATE:

Name of Project Guide

Mr.Vinod Agrawal

DECLARATION

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I hereby declare that this Project Report entitled “CUSTOMER PERCEPTION &THEIR BUYING PATTERN OF MUTUAL FUND IN N.J INDIA INVEST” submitted in the partial fulfillment of the requirement of PGDM of GLOBSYN BUSINESS SCHOOL AHEMDABAD is based on primary & secondary data found by me in various departments, books, magazines and websites & Collected by me in under guidance of Mr. Vinod Agrawal

DATE: JYOTI BHAWNANI

Enrollment No.020101048

EXECUTIVE SUMMARY

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In last 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 in ten people with incomes in India do not know that mutual funds exist. But once people are aware of mutual fund investment opportunities, the number of people who will decide to invest in mutual funds will increases 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 saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. This Report will help to know about the investors’ Preferences in Mutual Fund means Do 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 150 people. For the collection of Primary data I made a questionnaire and surveyed of 150 people. I have also taken interview of many People those who were coming at the NJ Ajmer Branch where I have done my Project.

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TABLE OF CONTENT

1. Introduction………………………………………………………….09

2. Company Profile and History………………………………………..25

3. Objective of research………………………………………………..36

4. Research Methodology………………………………………………38

5. Analysis and Interpretations………………………………………...40

6. Conclusion…………………………………………………………..61

7. Limitations …………………………………………………………64

8. Recommendations………………………………………………….65

9. Bibliography………………………………………………………..67

10. Annexure………………………………………………………...….68

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LIST OF FIGURES

1. Concept of Mutual Funds……………………………………………………..09

2. Working of Mutual Funds……………………………………………………..10

3. Growth of AUM of Mutual Funds…………………………………………….17

4. Categories of Mutual Funds…………………………………………………..20

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INTRODUCTION

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Introduction TO MUTUAL FUNDS AND ITS ASPECTS

MUTUAL FUND

A mutual fund, as defined in the regulations is a fund established in the form of a trust to raise money through the sale of units to the public or a selection of the public under one or more schemes for investing in securities, including money market instruments .The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them.

Thus it is clear that a mutual fund is a collection of investments. It is a pool of money, the combined contributions of a number of individuals. The working of the mutual fund has been shown with the help of the following diagram.

Investors have their individual preferences on how they would like their money invested and how much risk they are willing to take. An individual investor could choose to hire a professional manager to manage her/his money as per investment and risk preference. Such personal treatment often referred to as Portfolio Management Scheme (PMS) in India, entails significant demands on the time of the managers.PMS is therefore economically feasible only for investment portfolios above a particular value.

It is possible to balance the time and cost required to manage investments by grouping investors together based on their preferences. In this manner, the focus of the investment activity can be shifted from a single investor (as in the case of PMS) to group of investors having similar expectations .This is what mutual

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funds do, thus a mutual fund is a vehicle to pool money from the investors ,with a promise that the money would be invested in a particular manner by professional managers who are expected to honour the promise.

LEGAL STRUCTURE AND REGULATORY BODY

Mutual Funds in India have a 3 tier structure of Sponsor ,Trustee AMC and is governed by SEBI (Mutual funds) regulations 1996 and it is mandatory for mutual funds to have three tier structure is as follows.

SPONSOR

TRUSTEE

ASSEST MANAGEMENT COMPANY(AMC)

SEBI approved Asset Management Company (AMC) manages the funds by making the investments in various types of securities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody. The general power of superintendence and direction over AMC is vested with the trustees.

SPONSOR

Any project need to have a promoter, who initiates, establishes and promote the project and work towards achieving the goals. In case of the mutual fund, promoter is known as sponsor. They have to meet and satisfy SEBI requirements. Sponsor appoints the trustee, custodian and the AMC with the prior approval of SEBI, and in accordance with SEBI regulations.

Sponsor must have sound track record and a good reputation at businesses in financial services for a period of minimum of five years and should have made profit in at least 3 out of 5 years. Sponsor has to contribute at least 40% net worth of the AMC.

TRUSTEE

Trustees are people within a mutual fund organization who are responsible for ensuring that investor’s interests in a scheme are properly taken care of. In return for their services they are paid trustee fees, which are normally charged to scheme. The appointment of all trustees has to be done with prior approval of SEBI.

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REGULATORY REQUIRMENT OF TRUSTEE

The mutual fund which is a trust is managed either by a Trust Company or a Board of Trustee and trust companies are governed by the provisions of the Indian Trust Acts. If the trust is a company, it is also subjected to provisions of the Indian Companies Act. It is the responsibility of the trustees to promote the interest of investors, whose fund is managed by AMC.

The sponsor executes and registers a trust deed in favor of the trustees. The appointments of all trustees are to be done with prior approval of SEBI. There must be at least 4 members in the Board of Trustees and at least 2/3 of the trustees need to be independent.

Trustee of one mutual fund cannot be a trustee of another mutual fund unless he is an independent trustee in both the cases, and has the approvals of both the boards.

RIGHTS OF TRUSTEES

The trustee has the right to obtain from the AMC, such information as they consider necessary to fulfill their obligations.

A majority of trustees have the right to terminate the appointment of an AMC. Any change in the appointment of the AMC is however, subject to prior approval of SEBI and the unit holders.

The trustees shall not be held liable for acts done in good faith if they have exercised adequate due diligence honestly.

OBLIGATION OF THE TRUSTEES

Trustees must ensure that the transactions of the mutual fund are in accordance with the trust deed.

Trustees must ensure that the AMC has systems and procedures in place, and that all the fund constituents are appointed.

Trustees must furnish to SEBI, on half-yearly basis, a report on the activities of the AMC.

Trustees must ensure that the activities of the mutual fund are in compliance with SEBI regulations.

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TRUST DEED

It has to contain certain clauses prescribed by SEBI and duly registered under the provisions of the Indian Registration Act, 1908 and has to be executed by the sponsor in favor of the trustees named in the deed. It cannot contain any clause which limits or extinguishes the obligations and liabilities of the trust with respect to the mutual fund or its investors

ASSEST MANAGEMENT COMPANY (AMC)

It is obligatory for every mutual fund to have an AMC to manage the mutual fund and operate its schemes. The actual appointment could be made either by the sponsor or, if so authorized by the trust deed, the trustees.

The AMC is usually a private limited company, in which the sponsors and their associated or joint venture partners are shareholders.

REGULATORY REQUITREMENTS OF AMC

Only SEBI registered AMC ’s can be appointed as investments managers of mutual funds

AMC must have a minimum net worth of Rs.10 crores at all times.

An AMC cannot be an AMC or trustee of another mutual fund.

AMC’s cannot indulge in any other business other than that of asset management.

At least 50% of the members of an AMC have to be independent.

OBLIGATIONS OF AMC

The investments made by the AMC have to be in accordance with the investment management agreement and SEBI regulations. The AMC shall be responsible for acts of commission or omission of its employees and its other service providers.

It shall issue or publish offer document of a scheme, key information memorandum, abridged half yearly results and annual results only after prior written approval of the trustees. The AMC has to maintain proper books of accounts, records and documents for each scheme. It shall maintain and preserve these for a period of eight years.

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OTHER FUNCTIONARIES OF MUTUAL FUNDS

Apart from Sponsor, trustee and AMC, other important functionaries include:

1. Registrars and Transfer Agents

2. Broker

3. Custodians

4. Depository Participants (DP)

5. Distributors

6. Legal Advisor and Auditor

REGISTRARS & TRANSFER AGENTS

The R&T agents are responsible for the investor servicing functions as they maintain the record of investors in mutual funds. They process investor applications ,record details provided by the investor on application forms, send out to investors details regarding their investments in the mutual funds, periodical information on the performance of the mutual fund, process dividend payout investors, incorporate changes in information as communicated by investors and removing new investors and removing investors who have withdrawn their fund.

BROKERS

Brokers support the investment management function of the mutual fund, by enabling the investment managers to buy and sell securities. Brokers are registered members of the stock exchanges. They charge a commission for their services. In many cases, brokers also provide investment managers with research reports on the performance of various companies and industrial sectors, and investment recommendations .Brokers also are an important source of market information to fund managers.

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CUSTODIANS

Custodians are responsible for the securities held in the mutual fund’s portfolio. They discharge important back office function by ensuring that securities that are bought are delivered and transferred to the books of the mutual funds. They keep the investment account of the mutual fund and also collect the dividends and interest payments due on the mutual fund investments.

Custodians also track corporate actions like bonuses issues, right offers, offer for sale, buy back and open offers for acquisition .On the advice of the fund managers they act on these corporate actions.

DEPOSITORY PARTICIPANT (DP)

DP holds the securities of mutual funds in dematerialized form. They work with the custodians and handle the operational aspects of actually making/receiving delivery of securities into the account of mutual fund. On instructions from the custodian, they deliver /receive securities from the company /stock exchanges in dematerialized form. They also communicate the custodian’s instructions on corporate actions to the company.

DISTRIBUTORS

Mutual funds products are reached to investors across the country through selling agents called distributors. They bring in the investor’s fund for a commission. Distributors are institutions that appoint agents and other mechanisms to mobilize funds from investors.

Most agents and distributors are paid commission on the funds they mobilize from investors’ .These commissions are split into initial commission which is paid on mobilization of funds, and transaction commission, which is paid depending on the length of stay of the investor in the mutual fund. Some agents also pass on the commission they receive, to the investors as incentive.

LEGAL ADVISORS AND AUDITORS

Legal advisors advise mutual funds on regulatory and taxation issues. Every mutual fund has an employee designated as compliance officer, who works under the advice of the legal advisors.

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Each mutual fund scheme created by an AMC has to maintain a separate book of accounts and draw up its annual report. These two sets of accounts are required to be statutorily audited. SEBI Regulations stipulate that auditors of the fund cannot be also be the auditors of the AMC. The two sets of accounts have to be audited by two separate auditing firms .Auditors charge a fee from the mutual fund for these services. The AMC pays the auditors out of its incomes, for auditing its book.

REGULATORY BODY

Securities and Exchange Board of India (SEBI) is the apex regulator of capital market instruments and the regulation of capital market intermediaries is under the purview of SEBI.SEBI is the primary regulator of mutual funds in India.

SEBI has enacted the SEBI (Mutual funds) Regulations 1996, (hereinafter referred to as SEBI Regulations) which provides the scope of the regulations of Mutual funds in India. All mutual funds are required to be mandatorily registered with SEBI. The structure and formation of Mutual funds appointment of key functionaries, operation of the Mutual funds, accounting and disclosures norms right and obligations and functionaries of investments, investment restrictions, compliance and penalties are all defined under the SEBI regulation. Mutual funds have to send half-yearly compliance reports to SEBI and SEBI also is empowered to periodically inspect mutual fund organization to ensure compliance with SEBI Regulations.

REGULATORY JURISDICTION OF RBI over Mutual Funds

RBI is the monetary authority of the country and also the regulatory of the banking system. Earlier bank sponsored mutual funds were under the dual regulatory control of RBI and SEBI, and Money market mutual funds, which invested in short term instruments were regulated by RBI. These provisions are no longer in place. Now SEBI is the regulator of all mutual funds.

The present position is that RBI is involved with the Mutual fund industry, only to the limited extent of being the regulator of the sponsors of bank –sponsored Mutual funds. If the sponsor has made any financial commitment to the investors of the Mutual Funds, in the form of guaranteeing assured returns, such guarantees can no longer be made without the prior approval of RBI.RBI will review financial condition and capital adequacy of the sponsoring bank, before permitting it to make such guarantees

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HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the Industry.

GROWTH OF ASSET UNDER MANAGEMENT OF MUTUAL FUNDS

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PHASES OF MUTUAL FUND INDUSTRY

Mutual fund industry can be broadly put into four phases according to the development of the sector:-

  First Phase – 1964-87

This phase began with the inception of the Unit Trust of India (UTI). It remained the only mutual fund player in the country till 1987. UTI started its operations in July 1964. it was set up by the Indian Government with a view to augment small savings in the country and to channelize these savings to the capital markets. UTI witnessed a slow and steady growth over the 1970s and the 1980s. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canra bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores. the total number of schemes increasing to about 167 by the end of 1994.

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Third Phase – 1993-2003 (Entry of Private Sector Funds)

This phase marked the entry of private sector funds. The phase also signaled the intensification of the competition. Both domestic and foreign players entered the market, offering a wide variety of schemes to investors. Kothari Pioneer Mutual Fund was the first private sector fund to be established in association with a foreign fund. The opening up of the market to private players saw international players like Morgan Stanley, Jardine Fleming, JP Morgan, George Soros and Capital International entering the market. The 1993

SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores

Fourth Phase – since February 2003

This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered With SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of March, 2008 there were 35 funds, which manage assets of Rs 505152 crores.

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CATEGORIES OF MUTUAL FUND:

Type of Mutual Fund

Schemes

Structure

Open Ended Funds

Close Ended Funds

Interval Funds

Investment Objective

Growth Funds

Income Funds

Balanced Funds

Money Market Funds

Special Schemes

Industry Specific Schemes

Index Schemes

Sectoral Schemes

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OPEN ENDED SCHEME

An open ended fund is one that is available for subscription all through the year. These do not have fixed maturity. Investors can conveniently buy and sell units at Net Assets Value (NAV) related prices. The key feature of open ended schemes is liquidity.

CLOSE ENDED SCHEME

A close ended fund has a stipulated maturity period which generally ranges from 3 to 15 years. The fund is open for subscription only during a specified period .Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy and sell the units of the scheme on the stock exchange where they are listed. In the order to provide the exit route to the investors, some close ended funds give an option of selling back the units to the Mutual fund through periodic repurchase at NAV related prices.

INTERVAL FUNDS

Interval funds combine the features of open ended and close ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.

GROWTH FUNDS

The aim of growth funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of corpus in equity. Growth schemes are ideal for investors having a long term outlook seeking growth over a period of time.

INCOME FUNDS

The aim of the income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and government securities. Income funds are ideal for capital stability and regular income.

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BALANCED FUNDS

The aim of the balanced fund is to provide both growth and regular income. Such schemes periodically distribute a part of their earnings and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth.

MONEY MARKET FUNDS

The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in short term instruments such as treasury bills, certificates of deposits, commercial papers and interbank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for corporate and individuals investors as a means to park their surplus funds for short periods.

INDUSTRY SPECIFIC SCHEMES

Industry specific schemes invest only in the industries specified in the offer document. the investment of these funds is limited to specific industries like Infotech, FMCG, Pharmaceuticals.

INDEX SCHEMES

Index funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50.Such a position can be created through either of the two methods:

It can either be done by maintaining an investment portfolio that replicates the composition of the chosen index. Thus, the stocks in such a fund’s portfolio would be same as are used in calculating the index. The proportion of each stock in the portfolio too would be the same as the weight of the stock in the calculation of the index. This replicating style of investment is called passive investing.

Alternatively, a mutual fund, through its research can identify a basket of securities and /or derivatives whose movement is similar to that of the index. Schemes that invest in such baskets can be viewed as active index funds.

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SECTORAL SCHEMES

Sect oral Schemes are those, which invest exclusively in a specified industry or a group of industries or a various segments such as ‘A’ Group shares or initial public offerings

Mutual funds in order to cater to a range of investors have various investment plans. Some of the important plans include:

GROWTH PLAN

Under the growth plan, the investor realizes only the capital appreciation on the investment (by an increase in NAV) and doesn’t get any income in the form of dividend.

INCOME PLAN

Under the Income plan, the investor realizes income in the form of dividend. However his NAV will fall to the extent of the dividend.

DIVIDEND REINVESTMENT PLAN

Here the dividend accrued on mutual funds is automatically re-invested in purchasing, additional units in open ended funds. In most cases mutual funds offer the investor an option of collecting dividends or reinvesting the same.

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SYSTEMATIC INVESTMENT PLAN (SIP)

SIP involves investing a fixed sum of money in a specific investment scheme, on a regular basis, for a pre-determined number of periods. It is very similar to regular saving schemes like a recurring deposit.

SYSTEMATIC WITHDRAWAL PLAN

As opposed to the Systematic Investment Plan, the Systematic Withdrawal plan allows the investor the facility to withdraw predetermined amount/units from his fund at a pre-determined interval. The investor’s units will be redeemed at the existing NAV as on that day.

SYSTEMATIC TRANSFER PLAN

Investors’ exposure to different types of securities, whether debt or equity should flow from their risk profile or risk appetite. For instance, an investor may start with a 40:60 mix of debt and equity, as determined by her risk profile. But if equity markets boom and debt securities lose value, then the 40:60 mix could get significantly distorted towards equity. In such a situation, it would be prudent to sell some equity and re-invest the redeemed amount in debt to re-balance the mix of debt and equity. In mutual funds such re-balancing can be achieved by systematically moving moneys between schemes. This can be achieved by systematic transfer plan.

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COMPANY PROFILE AND HISTORY

NJ India Invest is one of the leading advisors and distributors of financial products and services in India. It was established in year 1994, by Mr. Neeraj and Mr. Jignesh. NJ has over a decade of rich exposure in financial investments space and portfolio advisory services. From the beginning NJ over the years has evolved out to be a professionally managed, quality conscious and costumer focused financial/investment advisory & distribution firm.

The strength of NJ lies in the strong domain knowledge in investment consultancy and the delivery of sustainable value to clients with support from cutting-edge technology platform, developed in-house by NJ.

NJ believes and practice successful wealth creation for customers, SUCCESSFUL WEALTH CREATION is the mission of NJ. With such a mission NJ is evolved in making right product accessions and services in all offerings. NJ provide a 360 degree comprehensive business platform with unmatched IT solutions to its partners, empowering them to set the best practice standards so as they deliver real value to their customers. With this passion NJ has grown and expanded rapidly, setting new benchmarks. NJ works only for betterment of people and believes in transforming their lives by providing right kind of information regarding their investments.

NJ had over INR 5,050* crores of mutual fund assets under advice with a wide presence in over 130 locations in 22 states in India.

These numbers reflects the trust, commitment and value that NJ shares with its clients.

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PHILOSOPHY

Mission and Vision

DIVISIONS

VISION

Like all NJ’s vision is off course to be leader in the field and this they want and are achieving through:

Total customer satisfaction Commitment to excellence Successful wealth creation of customers.

MISION

To ensure creation of the desired value for customers, employees and associates, through constant improvement, innovation and commitment to service & quality.

To provide solutions which meet expectations and maintain high professional & ethical standards along with the adherence to the service commitments.

At NJ what inspire and shape the thoughts, beliefs, attitude, actions and decisions of employees is NJ’s service and investing philosophy…

SERVICE PHILOSOPHY:

NJ believes that success of a company lies in customer satisfaction.

NJ is committed to provide its customers with continuous, long term improvements and value-additions to meet their needs. The company aims to deliver the best service possible to customers.

INVESTING PHILOSOPHY

At NJ providing need based solution is first and foremost aim for long-term wealth creation of customers. NJ believes in providing customers with true, unbiased; need based solutions and advice that best meets their stated and unstated needs.

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DIVISIONS

NJ Fundz Network, started in 2003, it is a dedicated channel for providing independent financial advisors or IFA's with a complete business platform for the strengthening and development of their advisory practice. NJ offers advisors under its network with all the products; support and services that enables them to add considerable value to their business emerge as a 'new age professional financial advisor' and compete confidently in the industry. 

NJ Wealth Advisors Pvt. Ltd. established as a distinct entity, it seeks to offer comprehensive financial planning and portfolio advisory services to premium clients. With NJ Wealth Advisors, NJ seeks to leverage the strong financial advisory and portfolio management skills gained in over a decade of experience in the industry. NJ Wealth Advisors offers its clients with quality, unbiased, need-based advisory services & investment solutions.

NJ India Invest has distinct divisions of business as follows of which 2 are major i.e. fundz network and wealth advisors

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This sporadic growth in terms of need of performers in financial advisory services has lead to the crunch of available performers. Though lots of youngsters are getting into financial advisory services, but the greatest challenge is of RIGHT SELLING, for which adequate Training is a prerequisite. Advisory function demands updated knowledge, backed up by honed skills to fetch effective business. Building long term relationship with clients depends upon possessing clear edge over others in the field. Hence continuous people development has an important role in building this fraternity. 

Technology has traditionally been NJ's key strength. NJ’s offering on the technological front is unmatched, vibrant, and comprehensive in nature. The focus & commitment on technology can be gauged from the fact that NJ have set-up distinct entity with a very strong, talented work-force for the sole purpose of providing the best to NJ in terms of technology and support. Finlogic Technologies (India) Pvt. Ltd. does all the development & support work in-house on a continuous basis. It has successfully developed & implemented a powerful support system for the mutual fund distribution business at NJ with a provision for integrating the same with other investment products as well as the financial accounting system.

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PRODUCTS

RECOGNITIONS

NJ offers advisory and distribution services on the following products.

1. Mutual funds – covering all AMCs & all schemes,2. Life insurance – Prudential ICICI3. Fixed deposits of companies,4. Government/RBI bonds,5. Infrastructure Bonds,6. Approved securities for charitable trusts, etc

Year 2003:For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London

Year 2004:Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh, Scotland

Year 2004:For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia

Year 2006:Award for mobilizing the Highest Number of SIPs at National Level by Fidelity Mutual Fund Plc at Mumbai

Year 2006:Award – Vietnam 

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MANAGMENT

The key members of the management are:Mr. Neeraj Choksi   Jt. Managing DirectorMr. Jignesh Desai   Jt. Managing Director

Key Sales Team:Mr. Misbah Baxamusa   National HeadMr. Naveen Rathod   V.P. (Sales)Mr.Kulbhushan Nandwani   A.V.P. (Marketing)Mr. Prashant Kakkad   A.V.P. (Sales)

Key Executive Team :Mr. Shirish Patel   Information TechnologyMr. Abhishek Dubey   Business ProcessMr. Vinayak Rajput   OperationsMr. Dhaval Desai   Human ResourcesMr. Col. Dixit   AdministrationMr. Tejas Soni   FinanceMr. Viral Shah    ResearchMr. Rakesh Tokarkar   Compliance

The management at NJ brings together a team of people with wide experience and knowledge in the financial services domain. The management provides direction and guidance to the whole organization. The management has strong visions for NJ as a globally respected company providing comprehensive services in financial sector.

The 'Customer First' philosophy is deeply ingrained in the management at NJ. The aim of the management is to bring the best to the customers in terms of 

  Range of products and services offered  Quality Customer Service

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SERVICE STANDARDS

But quality service also involves quality people in addition to processes. NJ gives significant focus to the proper training and development of the people involved in the service delivery chain.

Further NJ

  Have well-defined "Privacy Policy" to keep clients’ information

confidential & internal audits done on the same at regular intervals

  Receive various statistics which are analyzed on an ongoing basis to

improve the service standards

Service Commitments …The service commitments are to guide the actions of the people at NJ. Clearly stated, customers can freely communicate any such actions/events wherein they feel that any of the following commitments have been breached / compromised. NJ desire to honour commitments at all points of time and to all customers without any bias.

  To provide customer-focused need-based valued services  To provide reliable, accurate and timely information  To maintain all records in privacy  To optimize services/benefits at least justifiable cost  To develop and grow the customers ’ business  To provide constructive after sales service

Service is the key to unlocking customer satisfaction, which again is key for sustainability of any business. NJ has set strict processes in place to deliver quality services to customers. At NJ strict quality service standards are set and a well-defined process is established and followed religiously by all quality customer service teams. Performance is evaluated on a frequent basis and glitches are ironed out.

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COMPETITORS OF NJ

Anand Rathi-

Anand Rathi is one of the major competitors of NJ India Invest. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan India presence as well as an international presence through offices in Dubai and Bangkok. AR provides a breadth of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and insurance, structured products - all of which are supported by powerful research teams.

Karvy-

The karvy group was formed in 1983 at Hyderabad, India, karvy ranks among the top player fields in almost all the fields it operates. Karvy computer share limited is India’s largest registrar and transfer agent with a client base of nearly 500 blue chip corporate, managing over 2 crores accounts, Karvy stock brokers limited. Karvy also works as distribution house of some AMCs.

India Infoline

The India Infoline group, comprising the holding company, India Infoline Limited and its wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading Portfolio management services, Mutual Funds, Life Insurance, Fixed deposits, Gov. Bonds and other small savings instruments to loan products and investment banking. The company has a network of 758 business locations (branches and sub-brokers) spread across 346 cities and towns. It has more than 800,00 customers.

Bajaj capital

The Bajaj Capital Group is one of India’s leading Investment Advisory and Financial Planning companies. Bajaj Capital is also SEBI-approved Category I Merchant Bankers. Bajaj Capital offers Personalized investment Advisory and Financial Planning services to individual investors, corporate houses, institutional investors, Non-Residents Indians (NRIs) and High Net worth Clients, among others. Bajaj Capital offers a wide range of investment products such as mutual funds, life

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and general insurance, bonds, post office schemes, etc. offered by public and private and government organizations.

BONANZA-

Bonanza is a leading Financial Services & Brokerage House. It also distributes mutual funds of various AMCs.

ALL BANKS AND OTHER FINANCIAL INSTITUTIONS-

In India many banks also distributes Mutual funds of various AMCs such as Karnataka bank distributes mutual funds of Franklin Templeton. So these banks and other financial institutions are also major competitor of NJ India invest. Though these organizations are engaged in distribution of mutual funds bud most of them have a different concept from NJ India invest they are selling Mutual funds directly to the investors whereas NJ India invest distributes Mutual funds of all the AMCs indirectly (through its channel partners) except of four cities

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S.W.O.T. Analysis of NJ INDIA INVEST

STRENGTHS

The biggest strength of the organization is the;

Money power, which makes them ignorant about gestation period. Brand image, business experience and innovative products. The agents are very selectively chosen have excellent

communication skills. Service quality which is the crux of their mission.

WEAKNESS

High target for financial advisor and sales departments. Many competitors in market offer same products by the little

difference in the offering. Sustainable to risk associated with investments in money market.

OPPORTUNITY

Huge market is literally untapped; out of estimated 320 million only 20% of population has investment in mutual fund industry.

Equity and ELSS schemes, contribute an estimated market potential of approximately $15 billion.

THREATS

Entry of many other private player companies with equally strong experience and financial strength of foreign partners making the competition difficult and saturating the urban market.

Current govt. policies which do not encourage gross domestic saving. If the tax liability of service class rises the customer will have little money to invest.

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OBJECTIVE OF STUDY

1. To find out the Preferences of the investors for Asset Management Company.

2. To know the Preferences for the portfolios.

3. To find out the most preferred channel.

4. To find out preferred option for getting returns.

5. To find out investments objective.

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SCOPE OF STUDY

A big boom has been witnessed in Mutual Fund Industry in recent times. A large number of new players have entered the market and trying to gain market share in this rapidly improving market.

The research was carried on in Ajmer. I had been sent at one of the branch of NJ INDIA INVEST in Ajmer where I completed my Project work. I surveyed on my Project Topic “A study of preferences of the Investors for investment in Mutual Fund” on the visiting customers of NJ INDIA and advisors office.

The study will help to know the preferences of the customers, which company, portfolio, mode of investment, and option for getting return and so on they prefer. This project report may help the company to make further planning and strategy.

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RESARCH 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 totally based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various journals and websites.

DURATION OF STUDY:

The study was carried out for a period of three months, from 2nd April to 2nd July 2009.

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SAMPLING:

SAMPLING PROCEDURE:

The sample was selected from people who are the customers/visitors of NJ India invest Ajmer branch, irrespective of them being investors or not or availing the services or not. It was also collected through personal visits to Ajmer railway office and to some govt. schools, 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 150 people only. Out of which only 140 people had invested in Mutual Fund. Other 10 people did not have invested in Mutual Fund.

SAMPLE DESIGN:

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

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DATA ANALYSIS AND

INTERPRETATION

a)AGE DISTRIBUTION OF INVESTORS OF NJ INDIA:

AGE GROUP NO. OF INVESTORS20-30 3830-40 5540-50 43above 50 14

20-30 30-40 40-50 above 500

10

20

30

40

50

60

38

55

43

14

AGE GROUP OF INVESTOR'S

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

According to this chart out of 150 respondents who visited NJ office maximum 55 respondents are in age group of 30-40 that is they constitute approx 37 %,the second most investors i.e. 43 respondents are in age group of 40-50 and this constitute 29 % and people above 50 yrs of age are the one who invest least.

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b)EDUCATIONAL QUALIFICATION OF INVESTORS

EDUCATIONAL QUALIFICATION NO. OF INVESTORSGraduate 76Undergraduate 25post graduate and above 49

graduate undergraduate post graduate and above0

10

20

30

40

50

60

70

80 76

25

49

EDUCATIONAL QUALIFICATION

NO

.OF

RE

SP

ON

DE

NT

S

INTERPRETATION

Out of 150 investors 51% of investors are graduate and 32% are post graduate and above rest constitute undergraduates.

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c)OCCUPATION OF INVESTORS

OCCUPATION NO.OF INVESTORSgovernment job 35private job 43entrepreneur 17Others 10

33%

41%

16%

10%

government job private jobenterpruener others

INTERPRETATION

From the chart above out of 150 respondents’ maximum no. of investors for NJ India are in private job i.e. 41%. After that 33% people are entrepreneur 16% in government job rest constitute students, house wives and others.

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d)YEARLY FAMILY INCOME OF INVESTORS

INCOME GROUP NO.OF INVESTORS60000-1lakh 91lakh-2lakh 392lakh-3lakh 53above 3lakh 49

60000-1lakh 1lakh-2lakh 2lakh-3lakh above 3lakh0

10

20

30

40

50

60

9

39

5349

INCOME GROUP OF INVESTORS

NO

OF

IN

VE

ST

OR

S

INTERPRETATION

According to income group of investors maximum no. of investors are in income group of 2lakh-3lakh i.e. they constitute approx 38% after that investors of income group more than 3lakh invest which constitute around 32% and rest 26% are in income group of 1lakh-2lakh and remaining are in age group of 60000-1lakh

e)PERCENTAGE OF INCOME INVESTORS INVEST

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%AGE OF INCOME INVESTED NO. OF INVESTORS5%-10% 5510%-20% 5220% and above 43

5%-10% 10%-20% 20% and above0

10

20

30

40

50

60 5552

43

%AGE OF INCOME INVESTORS INVEST

NO

. OF

RE

SP

ON

DE

NT

S

INTERPRETATION:

From the graph it is seen that investors invest maximum of 5-10% of their income and this group constitute around 37% of investors after that it is 34% of people who invest 10-20% of their income rest 29% people invest more than 20% of their income.

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f) MODES OF DIFFERENT INVESTMENT PREFERRED BY INVESTORS

MODE OF INVESTMENTNO. OF INVESTORS

FD 29RD 13Insurance 93Share market 42Real estate 11Mutual Funds 140FD + RD 13FD +insurance 2FD+ share market 0FD+ MF 14RD+insurance 2RD+share market 7RD+real estate 1RD+MF 4Insurance+share market 2insurance+real estate 49insurance+MF 26Share market+real estate 31share market+MF 110real estate+MF 3

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FD

Insu

rance

Real e

state

FD + R

D

FD+ share

mark

et

RD+insur

ance

RD+real e

state

Insu

rance

+share

mark

et

insur

ance

+MF

share

mark

et+M

F

0

20

40

60

80

100

120

140

160

29

13

93

42

11

140

132 0

142 7 1 4 2

49

26 31

110

3

PREFERED MODE OF INVESTMENTS

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 150 investors 140 of them invest in MF in NJ India invest, after which there are investors who invest in MF as well as share market, after that there are investors who invest in insurance, and then in insurance as well as real estate.

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g) Investor’s preference while investing IN A PARTICULAR MODE

INVESTORS PREFRENCE WHILE INVESTING

NO.OF INVESTORS

Trust 43good returns 53Security 51Others 3

trust good returns security others0

10

20

30

40

50

60

43

5351

3

INVESTORS PREFRENCES

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 150 respondents 37% i.e. maximum no. of respondents prefer good returns while investing in a mode of investments while 34% investors prefer security while investing and rest 28% prefer to have trust in the mode of investment they are investing.

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h) Respondents who invested in MUTUAL FUND

INVEST IN MF NO.OF INVESTORSyes 140No 10

93%

7%

yes no

INTERPRETATION

Out of 150 investors 140 i.e. 93% of investors do invest in mutual funds and rest 7% don’t invest in mutual funds.

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i) Reason for not investing in mutual funds

REASON FOR NOT INVESTING NO. OF INVESTORSnot aware 3high risk 4not any specific reason 3

not aware high risk not any specific reason0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

3

4

3

REASON FOR NOT INVESTING IN MF

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 10 investors who don’t invest in mutual funds 4 of them consider MF as risky mode for investment, other 3 are not aware about MF and rest 3 have no specific reason for not investing in MF.

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j) AWARENESS ABOUT Mf and its operations

AWARNESS ABOT MF NO. OF INVESTORSBank AMC 29Television/newspaper advertisement 35Peer group 15MF advisor 61

Bank A

MC

Newsp

aper/

TV addvert

isem

ent

Peer g

roup

MF ad

visor

010203040506070

2935

15

61

AWARENESS SOURCE

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 140 respondents maximum of investors i.e.43% were made aware about MF through their financial advisors. Rest 25% came to know about MF through TV and newspaper advertisement and 20% through bank AMC.

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k) TIME PERIOD from now INVESTING IN MUTUAL FUNDS

FOR HOW MANY YEARS INVESTING IN MF NO. OF INVESTORSless than 6 months 39last 1 year 36last 2 year 36more than 2 years 29

less than 6 months

last 1 year last 2 year more than 2 years

0

5

10

15

20

25

30

35

40

45

3936 36

29

TIME PERIOD

NO

. OF

RE

SP

ON

DE

NT

S

INTERPRETATION

Out of 140 respondents it is 28% of investors who have invested in MF since last 6 months, rest 25% investors are already in MF since last 2 or 1 years and there are only 17% investors who are in MF for more than 2 years.

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L) INVESTORS OBJECCTIVE BEHIND INVESTING IN MUTUAL FUNDS

OBJECTIVE FOR INVESTMENTNO. OF

INVESTORSonly retirement 86retirement + future commitments 97future commitments 113regular income 65regular income + retirement + future commitments 84regular income + future commitments 73

only

rei

rem

ent

retir

emen

t + f

utur

e co

mm

itmen

ts

futu

re c

omm

itmen

ts

regu

lar

inco

me

regu

lar

inco

me

+ r

etir

emen

t + f

u-tu

re

regu

lar

inco

me+

futu

re 0

20406080

100120

86 97113

6584 73

INVESTMENT OBJECTIVE

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 140 investors maximum no. of investors invest in MF to fulfill their future commitments i.e. child’s education and child’s marriage, after which investors invest in order to fulfill their needs for both future commitments and their secured retirement period, while there are still investors who invest for safe retirement period, some invest for future commitments as well as safe retirement period as well as source of regular income, while there are very few investors who invest only for regular income

M) PREFRENCE OF AMC FOR INVESTMENTS IN MF

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AMC

NO. OF INVESTOR

SUTI 1SBI 73reliance 21HDFC 15TATA 7sundaram 8ICICI 13others 2

uti sbi

reliance

HDFCTATA

sundaram

ICICI

others0

10

20

30

40

50

60

70

80

1

73

2115

7 813

2

AMC

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 35 AMC under NJ India in Ajmer branch maximum no. of investor prefer SBI as their preference for investments as out of 140 investors 53% investors invest in SBI’s fund, after that investor prefer reliance and HDFC and ICICI

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n) REASON FOR INVESTING IN A PARTICULAR amc

REASON NO. OF INVESTORSBrand 20company product 28advisors recommendation 64market trend 28

bran

d

compa

ny pr

oduc

t

advis

ors r

ecom

anda

tion

market

trend

0

10

20

30

40

50

60

70

2028

64

28

REASON

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

From the graph it is seen that out of 140 investors 64 of them that is 46% of investors select that AMC which their advisor recommend them rest either see the market trend or company product

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o) MODE OF INVESTMENT PREFERRED BY INVESTOR

MODE OF INVESTMENT

NO. OF INVESTOR

S lump sump 51SIP 89

36%

64%

lumpsump SIP

INTERPRETATION

Most of the investors prefer to invest in SIP mode which constitute of 64% while only 36% investors prefer to invest in a lump sum mode.

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p) OPTION FOR GETTING RETURNS PREFERRED BY INVESTORS

OPTION PREFERED NO. OF INVESTORSgrowth 73dividend reinvest 24dividend-payout 38

growth dividend reinvest d-payout0

10

20

30

40

50

60

70

8073

24

38

PREFERED OPTION

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 140 investors 73 of them i.e.53% of investors prefer to get growth option while rest of them i.e. 27% prefer dividend payout and remaining prefer dividend reinvest.

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q) TENURE PREFERRED BY INVESTORS FOR INVESTMENT

TENURE PREFERED NO. OF INVESTORSshort term 40medium term 47long term 53

short term medium term long term0

10

20

30

40

50

60

40

47

53

PREFERED TENURE

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 140 people 53 people prefer to invest for long term and rest 33% prefer for medium term and 28% prefer to invest for short duration.

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r) PREFERE PORTFOLIO FOR INVESTMENT BY INVESTORS

PREFERRED PORTFOLIO NO. OF INVESTORSDEBT 24EQUITY 47BALANCED 69

DEBT EQUITY BALANCED0

10

20

30

40

50

60

70

80

24

47

69

PREFERED PORTFOLIO

NO

. OF

IN

VE

ST

OR

S

INTERPRETATION

Out of 140 investors 49% investors prefer to invest in balanced portfolio, 33% prefer equity and remaining 17% prefer debt funds.

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s) INVESTORS PREFERENCE FOR SECTORAL FUNDS

PREFRENCE FOR SECTORAL FUND

NO. OF INVESTORS

No 123Yes 17

72%

28%

respondents

no yes

INTERPRETATION

72% of investors don’t prefer to invest in sectoral funds while only 28% of investors prefer sectoral funds.

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t) INVESTORS REACTION IF MARKET CRASHES

INVESTORS REACTION ON MARKET CRASH

NO. OF INVESTORS

Withdraw money 46Invest more money 23Take advisors advice 52wait for market to recover 19

withdraw invest advisors advice wait for market to recover

0

10

20

30

40

50

60

46

23

52

19

INVESTORS REACTION

NO

. OF

IN

VE

ST

OR

S

INERPRETATION

If market crash out of 140 investors maximum of them i.e.37% will take their financial advisors advice, 33% of investors will withdraw their money, 16% will still invest in such situation and rest investors will wait for market to recover.

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FINDINGS AND CONCLUSIONS

Investors who invested in NJ Ajmer branch are maximum in age group of 30-40 and least in age group of above 50.

According to educational qualification maximum investors in NJ are graduate and very few of them are undergraduate

According to occupation maximum no. of investors are in private job and very few of them are others i.e. either students or house wives.

According to yearly family income of investors majority of investors are in income group of 2lakh-3lakh and very few of investors are in income group of 60000-1lakh

According to %age of income which investors invest maximum no. of investors invest 5-10% of their income while very few of them invest 20% and more of their income

When investors invest maximum of them prefer to have good returns on their investments.

Out of 150 respondents taken into consideration of NJ India 140 of them invest in Mutual Funds

Respondents who don’t invest in mutual fund consider it risky or are not aware about it.

Investors who invest in mutual funds maximum of them got information about mutual fund through their advisors and very few of them came to know about mutual funds through their friends.

Maximum no. of Investors who are associated with mutual funds are investing in MF since last 6 months and very few of them are investing since last 2 years or more.

In preference for AMC investors prefer SBI as most preferred and least preferred AMC are kotak, shara and others.

Reason behind preferring a particular AMC given by maximum investors is that their advisors advice for that particular AMC while very few of investors consider a particular AMC due to its brand name.

According to mode of investment majority of investors prefer to invest systematically through SIP while very few prefer to invest as a lump sum.

In preference to get a return on their investment majority of investors prefer to choose growth option for their returns while very few of them prefer dividend reinvest.

According to tenure for which investors prefer to invest in a particular fund maximum investor prefer to invest for long term i.e. for more than 3 years and very few of investors prefer to invest for short duration.

According to investment portfolio maximum of investors prefer to have balanced portfolio and very few prefer debt funds.

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For a investment option in sectoral funds maximum of investors don’t prefer to invest in sectoral funds

When there is a market crash situation majority of investors prefer to take their financial advisors advice. And very few of investors prefer to wait for market to recover

According to investors objective for investment maximum no. of investors prefer to invest for their future commitments of life i.e. child’s marriage and child’s education while very few consider investments as mode of getting regular income.

Conclusion

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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, 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 Ajmer 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, HDFC, 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, Sundaram, 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.

Limitation

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Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not

given actual answers of my questionnaire Sample size is limited to 150 visitors of N J India invest Ajmer branch out of

these only 140 had invested in Mutual Fund. 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 Ajmer

Suggestions and Recommendations

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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.

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.

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.

Younger people under 35 age group 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.

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 prospects 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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BIBLIOGRAPHY

Page

NEWS PAPERS

OUTLOOK MONEY

TELEVISION CHANNEL (CNBC AAWAJ)

MUTUAL FUND HAND BOOK

FACT SHEET AND STATEMENT

WWW.MONEYCONTROL.COM

WWW.AMFIINDIA.COM

WWW.ONLINERESEARCHONLINE.COM

WWW. MUTUALFUNDSINDIA.COM

Questionnaire

Page

1. Name----------

2. Age group

a) 25-35 b) 35-45 c) 45-55 d) Above 55

3. Occupation

a) Business b) Private Job c) Government Job d) student

4. Education qualification

a) Graduate b) post graduate and above c) under graduate

5. Income level (yearly)

a) 60,000 – 1, 00,000 b) 2, 00,000 – 3, 00,000 c) 1, 00,000 – 2, 00,000

d) Above 3, 00,000

6. What percentage of your income do you invest?

a) 5% to 10% b) 10% to 20% c) 20% and above

7. Which is your mode of investment?

a) Bank b) FD c) stock market d) mutual funds

e) Real estate f) RD g) insurance

8. Which factor you see while investing in that mode?

a) Security b) trust c) good returns d) other

9. Do you prefer to invest in Mutual funds?

a) Yes b) no

If no

10. Why you have not invested in mutual fund?

a) Not aware b) high risk c) not any specific reasons

If yes

11. From where did you get awareness about MF?

a) News paper/TV advertisement b) peer group c)MF advisor

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d) Through bank of that AMC

12. From how many years you are investing in MF?

a) Less than 6 months b) From last 1 yr c) Last 2 yr

d) More than 2 yr

13. While investing what are your investment objectives?

a) To receive regular income b) To plan for future commitment (child education, marriage etc.) c) To have safe retirement period

14. In which AMC you invest?

a) Reliance b) SBI c) HDFC d) sundaram e) ICICI

f) UTI g) others

15. What affects your decision while selecting AMC for investment?

a) Brand name b) company product c) advisors recommendation

d) Market trend

16. What is your mode of investment?

a) One time investment (lump sum) b) SIP

17. What is your preferred portfolio of investment?

a) Equity b) Debt c) Balanced

18. What tenure of investments do you prefer?

a) Short term (up to 1 year) b) Medium term (1 to 3 years)

c) Long term (above 3 years)

19. What is your preferred option for getting returns?

a) Growth b) dividend reinvests c) dividend payout

20. Do you prefer to invest in sectoral funds?

a) Yes b) no

21. How will you react if market goes down?

a) Take advisors advice b) withdraw c) will wait for market to recover

d) Invest

GLOSSARY

Asset Allocation

Page

Diversifying investments in different assets such as stocks, bonds, real estate, and cash in order to optimize risk.

Fund Manager

The individual responsible for making portfolio decision for a mutual fund, in line with fund’s objective.

Fund Offer Document

Document with investment objectives, risk factors, expenses summary, how to invest etc.

Dividend

Profits given to the investor from time to time.

Growth

Profits ploughed back into scheme. This causes the NAV to rise.

NAV

Market value of assets of scheme minus its liabilities.

Per unit NAV = Net Asset Value

No. of Units Outstanding on Valuation date

Entry Load/Front-End Load (0-2.25%)

The commission charged at the time of buying the fund.

To cover costs for selling, processing

Exit Load/Back- End Load (0.25-2.25%)

The commission or charge paid when an investor exits from a mutual fund. Imposed to discourage withdrawals

May reduce to zero as holding period increases.

Sale Price/ Offer Price

Price you pay to invest in a scheme. May include a sales load. (In this case, sale price is higher than NAV)

Re-Purchase Price/ Bid Price

Price at which close-ended scheme repurchases its units

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Redemption Price

Price at which open-ended scheme sales its units.

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MUTUAL FUND IN NEWS SINCE JUNE 1ST

Fidelity MF announces merger of two of its schemes Reliance MF first to cross Rs 1lakh average AUM in MAY Equity funds gain 31% in May; best in 17 years

MF industry’s assets zoom, cross 6 lakh crores mark; an all time high

The combined average assets under management of mutual funds crossed the Rs 6 trillion-mark (Rs 6 lakh crores) in May

Average AUM of 34 out of 35 mutual funds rose 16% to Rs 6, 37,609 crores in May.

Kotak Mahindra MF ties up with BoB Corporate, banks and foreign institutional investors collectively control more

than half the assets of Indian mutual fund industry, data compiled by the Association of Mutual Funds in India (AMFI) show

After launching an infrastructure fund in collaboration with Macquaire and IFC, State Bank of India is in the process of setting up 'several' other funds to cash in on the area, which is gaining importance as an alternate asset class

Shinsei to enter AMC space in India

Baroda Pioneer AMC on Wednesday launched Baroda Pioneer Treasury Advantage Fund, an open-ended debt fund, which aims to provide optimal returns and liquidity by investing in a portfolio comprising of debt securities and money market instruments.

Buoyed by the pickup in insurance venture with Daiichi, Union Bank of India will soon foray into mutual funds business by setting up an asset management company along with its Belgium partner-KBC Group.

The capital market regulator, the Securities and Exchange Board of India (SEBI) will shortly revise its rules to introduce variable entry loads for mutual funds (MFs) and make disclosure of commissions mandatory for fund houses.

Birla Sun Life Mutual fund (BSLMF) on Tuesday launched iSIP or internet based systematic investment plan, a mode of transaction facility that will enable investors to start their SIP investments online

The government is set to exempt an annual investment of Rs 50,000 or less by investors in MFs from the requirement of submitting details of their PAN at the time of investment

Union Bank of India would make a foray into the mutual fund business by December, a top bank official said Union Bank of India would make a foray into the mutual fund business by December, a top bank official said

SEBI removes entry load on MF schemes   

There may be no signs of the monsoon as yet, but it is raining dividends in the mutual fund (MF) arena. And investors are really pleased with it.

SEBI's move to ban entry fees for investments into MFs will lead to a jump in long-term inflows

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Birla Sun Life Mutual Fund has declared 50 per cent dividend in the Birla Sun Life Basic Industries Fund-dividend option.

The new regulations will hurt MF distributors badly, and to some extent, the industry too, says expert.

 NEW RULES OF SEBI REGARDING MUTUAL FUND

The government is set to exempt an annual investment of Rs 50,000 or less by investors in MFs from the requirement of submitting details of their PAN at the time of investment

SEBI removes entry load on MF schemes