shikha internship
TRANSCRIPT
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To study various factors considered by investor
while going for investment in mutual fund
Prepared by:
Shikha Sambyal
2008MBE24
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Concept of Mutual Funds
A mutual fund is a professionally managed type of collectiveinvestment scheme that pools money from many investors and
invests it in stocks, bonds, short-term money market
instruments, and/or other securities. The mutual fund will have a
fund manager that trades the pooled money on a regular basis.
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Mutual Fund Operation Flow Chart
INVESTORS (Pooltheir money)
FUNDMANAGER(invests
in)
SECURITIES(generates)
RETURNS(passedback to investors)
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Future of Mutual Funds in India
By December 2004, Indian mutual fund industry reached Rs
1,50,537 crore. It is estimated that by 2010 March-end, the
total assets of all scheduled commercial banks should be Rs40,90,000 crore.
The annual composite rate of growth is expected 13.4%
during the rest of the decade. In the last 5 years we have seen
annual growth rate of 9%.
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Some facts for the growth of mutual funds in
India Number of foreign AMC's are in the queue to enter the Indian markets like
Fidelity Investments, US based, with over US$1trillion assets undermanagement worldwide.
Our saving rate is over 23%, highest in the world. Only channelizing thesesavings in mutual funds sector is required.
We have approximately 29 mutual funds which is much less than UShaving more than 800. There is a big scope for expansion.
Mutual fund can penetrate rural like the Indian insurance industry withsimple and limited products.
SEBI allowing the MF's to launch commodity mutual funds.
Emphasis on better corporate governance. Trying to curb the late trading practices.
Introduction of Financial Planners who can provide need based advice.
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TYPES OF SCHEMES
Schemes according to Structure:
1) Open-ended Fund/Scheme
2) Close-Ended Fund/Scheme
3) Interval Fund
Schemes according to Investment Objectives:
1) Growth/Equity oriented scheme
2) Income/Debt oriented scheme 3) Balanced Fund
4) Money Market or Liquid Fund
5) Gilt Fund
6) Load Fund
7) No-load Fund
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Other Schemes:
Tax saving Schemes
Special Scheme:
1) Industry specific Schemes
2) Sector Specific Schemes
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COMPANY PROFILE
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INTRODUCTION TO SBI MUTUAL
FUNDS SBI Mutual Fund is a fully owned subsidiary of the State Bank ofIndia,
India's premier and highly respected bank with largest banking operationin the country.
SBI Funds Management Pvt. Ltd. is one of the leading fund houses in thecountry with an investor base of over 4.6 million and over 20 years of richexperience in fund management consistently delivering value to itsinvestors. SBI Funds Management Pvt. Ltd. is a joint venture between 'TheState Bank ofIndia' one ofIndia's largest banking enterprises, and SocitGnrale Asset Management (France), one of the world's leading fundmanagement companies that manages over US$ 500 Billion worldwide.
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PRODUCTS OF SBI MUTUAL FUND
Equity schemes
Debt schemes
Balanced schemes
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RESEARCH METHODOLOGY
OBJECTIVES:
To study various factors considered by
investor while going for investment in mutualfund
To study the type of funds
To study the type of mutual fund schemes
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RESEARCHDESIGN: -
DESCRIPTIVE RESEARCH
METHOD OF ACCESSING THE DATA: -
PRIMARY: - Through the structured questionnaire and the personalinterview which are interviewer administrated.
SECONDARY: - It will be from the websites, books.
DATA COLLECTION FORM: -
STRUCTURED form will be used in which close ended questions are used.CLOSE ENDED QUESTION: - Multiple choice questions is used.
SAMPLE SIZE: - 100
SAMPLE AREA: Jammu
TARGET POPULATION: Mutual fund holder
SAMPLING FRAME: Records from brokers of Jammu region.
SAMPLING USED: Convenience Sampling
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DATA ANALYSIS
1. Source of information while investing in mutual funds
Frequency Percent
1.00 28 28.0
2.00 4 4.0
3.00 12 12.0
4.00 28 28.05.00 1 1.0
6.00 14 14.0
7.00 13 13.0
Total 100 100.0
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1
2
3
4
5
6
7
1 stands for internet, 2 stands for magazine, 3 stands fornewspaper, 4 stands for financial advisor, 5 stands for spouse, 6stands for friends, 7 stands for advertisementOut of the total respondents, 28% relied on Internet and 28%relied on financial advisor as the source of information whileinvesting in mutual funds .Thus, it can be concluded that thesource of Internet and financial advisor is relatively an importantfactor affecting the sale of Mutual Funds.
Out of the total respondents, 14% said yes that they took theinformation from their friends while investing in mutual funds andrest 86% said no to the same and 13% said yes that they tookthe information from advertisement.
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2. Are you a regular or new investor in mutual fund
Frequency Percent1.00 57 57.0
2.00 43 43.0
Total 100 100.0
1 stands for regular, 2
stands for new
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3. Your investment portfolio consist of
Frequency Percent
1.00 18 18.02.00 4 4.0
3.00 32 32.04.00 2 2.0
5.00 21 21.06.00 23 23.0Total 100 100.0
1-realestate
2- postoffice
schemes
3-mutualfunds
4 debt
5- shares
6-fixeddeposits
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4. Type of fund you prefer the most
Frequency Percent
1.00 15 15.0
3.00 10 10.0
4.00 58 58.0
5.00 17 17.0
Total 100 100.0
1- moneymkt.funds(red)3-debtfunds(blue)4-equityfunds(purple)5- balancedfunds(green)
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5. Features that attract most while choosing a specific
Mutual fund
Frequency Percent
1.00 7 7.02.00 76 76.0
3.00 6 6.04.00 8 8.05.00 3 3.0
Total 100 100.0
1
2
3
4
5
1- Flexibility
2- Return
3- Managed by
professional
people4- Risk diversion
5- Less expenses
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6. Type of mutual fund you prefer
Frequency Percent
1.00 69 69.0
2.00 31 31.0
Total 100 100.0
1-openendedscheme
2-closeendedscheme
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7. Type of return expect
Frequency Percent
1.00 16 16.0
2.00 19 19.0
3.00 10 10.0
4.00 55 55.0Total 100 100.0
1
2
3
4
1- monthly
2-quartely
3-semi-annual4-annual
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8. Investment horizon
Frequency Percent
1.00 9 9.02.00 15 15.0
3.00 10 10.04.00 29 29.0
5.00 28 28.06.00 9 9.0
Total 100 100.0 1-upto 6
months
2-upto 1
year
3- upto 2
years4- upto 3
years
5- upto 5
years
6- upto 10
years
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9. Near future liabilities
Frequency Percent1.00 23 23.0
2.00 66 66.0
3.00 11 11.0Total 100 100.0
1-childmarriage
2-education
3- anyother
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10. Relationship between regular or new investor and features attract you
most
FEATURES Total
1.00 2.00 3.00 4.00 5.00 1.00
REGULAR
NEW
1.00 3 46 3 3 2 57
5.3% 80.7% 5.3% 5.3% 3.5% 100.0%
2.00 4 30 3 5 1 43
9.3% 69.8% 7.0% 11.6% 2.3% 100.0%
Total 7 76 6 8 3 100
7.0% 76.0% 6.0% 8.0% 3.0% 100.0%
This table tells us that maximum number of investors i.e. 76% investbecause of return they get from the mutual fund schemes. It also tells
us that the regular investors i.e. 80.7% invest on the basis of returns
they get and the new ones i.e. 69.8% are investing because of returns.
7% invest because it is managed by professional people. New investors
also invest because of risk diversion
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11. Relationship between regular or new investor and type of return they
expect .
TYPE OF RETURN Total
1.00 2.00 3.00 4.00 1.00
REGULAR
NEW
1.00 7 11 5 34 57
12.3% 19.3% 8.8% 59.6% 100.0%
2.00 9 8 5 21 4320.9% 18.6% 11.6% 48.8% 100.0%
Total 16 19 10 55 100
16.0% 19.0% 10.0% 55.0% 100.0%
Alargenumberoftheinvestors59.6%oftheregularinvestorsexpectannualreturns.48.8%ofthenewinvestorsexpectearlyannualreturns.
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12. Relationship between a regular or new investor and their investment
horizon
INVESTMENT HORIZON Total
1.00 2.00 3.00 4.00 5.00 6.00 1.00
REGULAR
NEW
1.00 8 7 8 14 16 4 57
14.0% 12.3% 14.0% 24.6% 28.1% 7.0% 100.0%
2.00 1 8 2 15 12 5 43
2.3% 18.6% 4.7% 34.9% 27.9% 11.6% 100.0%
Total 9 15 10 29 28 9 100
9.0% 15.0% 10.0% 29.0% 28.0% 9.0% 100.0%
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13. Relationship between a regular or new investor
and mutual fund scheme they prefer
VAR00006 Total
1.00 2.00 1.00
REGULAR
NEW
1.00 42 15 57
73.7% 26.3% 100.0%2.00 27 16 43
62.8% 37.2% 100.0%
Total 69 31 100
69.0% 31.0% 100.0%
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FINDINGS:-
The significant finding of the project is that investors are lured by thereturns MFs are showing. However at the same time they also want tominimize their risk.
Investors desire or opt open-ended schemes than close-ended schemes.This means that they want flexibility in the inflow and outflow of their
funds. The investment horizon, which is most liked by the investors, is 3-5 yrs.
The source of information the investors most rely is on internet. Howeverthey also require the detailed information, which they take from FinancialAdvisors. On other sources the investors are quite apprehensive.
Investors mostly prefer equity funds than other funds.
Another finding was that they were more committed towards childeducation.
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Investors are mostly relied upon annual returns.
There is no difference between the new and regular investors incontext of their preference in features which attract them the most.
There is no difference between the new and regular investors asthey both prefer annual returns.
There is difference between the new and regular investorspreference as new investors prefer for 3 years and regular investorprefer for 5 years. Regular investors have propensity to invest forgreater periods.
There is difference between the new and regular investors
preference as new investors prefer for close-ended schemes andregular investor prefer open-ended schemes.
There is no difference between the new and regular investor incontext of type of fund they prefer as they both prefer equity fundsand no prefer gilt funds.
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RECOMMENDATIONS
There is lack of awareness among customers regarding mutual funds inJammu region. Therefore, it becomes very important for the AMCs toeducate their customers. It can possible throughadvertisement, personal selling, risk, motivate the investors.
With the help of personal selling, agents should directly contact with
customers and solve queries of the customers. Advertising should be done through local channels such as jk
channel, take one.
There is risk involved in investing mutual funds. Thatis why people arenot investing in mutual funds. Risk can be reduced by conveying themabout the various schemes.
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THANK YOU