study on equity based mutual funds

A Study on consumer preferences on equity mutual fund with special reference to centurion bank of Punjab

Major project 2007-08

SUBMITTED BY : A.Juzar

05BBM521

Under the guidance of

Mrs Rashida,MBA

Under the coordination of Mrs.Akilandeshwari

Submitted in partial fulfillment of the requirement

For the award of of the degree of

Bachelor of Business Management.

of Bharathiar University.

DEPARTMENT OF MANAGEMENT SCIENCE

P.S.G COLLEGE OF ARTS & SCIENCE

“College with Potential for Excellence”

ACCREDITED AT THE FIVE STAR LEVEL BY NAAC

ISO 9001 CERTIFIED INSTITUTION

COIMBATORE-6410

ACKNOWLEDGEMENT

I am greatly indebted to a multitude of personalities for the completion of

the project. I am extremely grateful to the management having provided the facility

and opportunity to study in this esteemed institution.

I express my sincere gratitude to my Principal Mrs. Sheela Ramachandran,

MSC, PHDF, PHD for giving me this opportunity to learn and experience important

aspects in this training.

I thank the Head of the Department Mr. S. Gopalakrishnan, MA, MBA for

his constant support in making this training a successful one.

I thank my coordinator. Mrs.Akilandeshwari, MBA and the other faculty

members of the department for the constant motivation, encouragement,

continuous assessment and the kind suggestion, received in every step throughout

my project.

I am extremely grateful to my project guide, Mrs.Rashida,MBA for his

continuous guidance, timely suggestions and the help rendered to make this

project a successful one.

LIST OF TABLESS.NO PARTICULARS PAGE: NO

1 Table showing awareness on mutual fund industry

2 Table showing Source of awareness of mutual fund industries

3 Table showing Preference of investing money

4 Table showing Amount (%) of money saved from income

5 Table showing Preferred mode of saving

6 Table showing Which mode of savings give better return

7 Table showing Whether ever invested in MF

8 Table showing company in which MF is invested

9 Table showing Source of investment the respondent is planning to

invest in MF.

10 Table showing Whether investing in MF on regular basis

11 Table showing Frequency of investment in MF

12 Table showing Expectation from MF

13 Table showing Reason for preferring MF

14 Table showing investor’s expectation from MF

15 Table showing nature of MF according to respondents

16 Table showing kind of fund the respondent will invest in

17 Table showing preference to which equity fund.

18 Table showing Opinion about fund that is giving more return

19 Table showing Opinion about fund that involves high risk

20 Table showing which fund will be appropriate For new investor

21 Table showing Whether invested in MF through the bank

22 Table showing Whether the bank has invested the money

safely and wisely

23 Table showing If trying to buy and sell units in MF preference

will be

24 Table showing the Kind of plan the bank recommends

25 Table showing Whether the bank charges for the services

26 Table showing Whether the bank charges for the services

27 Table showing Whether incurred loss while investing MF

28 Table showing Prime reason for incurring loss, if so

29 Table showing Whether the banker is broker for the equity MF

30 Table showing Whether the banker suggest to invest in their

deposits rather than investing in MF

LIST OF CHARTSS.NO PATICULARS PAGE: NO

1 Chart showing awareness on mutual fund industry

2 Chart showing Source of awareness of mutual fund industries

3 Chart showing Preference of investing money

4 Chart showing Amount (%) of money saved from income

5 Chart showing Preferred mode of saving

6 Chart showing Which mode of savings give better return

7 Chart showing Whether ever invested in MF

8 Chart showing company in which MF is invested

9 Chart showing Source of investment the respondent is planning to

invest in MF.

10 Chart showing Whether investing in MF on regular basis

11 Chart showing Frequency of investment in MF

12 Chart showing Expectation from MF

13 Chart showing Reason for preferring MF

14 Chart showing investor’s expectation from MF

15 Chart showing nature of MF according to respondents

16 Chart showing kind of fund the respondent will invest in

17 Chart showing preference to which equity fund.

18 Chart showing Opinion about fund that is giving more return

19 Chart showing Opinion about fund that involves high risk

20 Chart showing which fund will be appropriate For new investor

21 Chart showing Whether invested in MF through the bank

22 Chart showing Whether the bank has invested the money

safely and wisely

23 Chart showing If trying to buy and sell units in MF preference

will be

24 Chart showing the Kind of plan the bank recommends

25 Chart showing Whether the bank charges for the services

26 Chart showing Whether the bank charges for the services

27 Chart showing Whether incurred loss while investing MF

28 Chart showing Prime reason for incurring loss, if so

29 Chart showing Whether the banker is broker for the equity MF

30 Chart showing Whether the banker suggest to invest in their

deposits rather than investing in MF

INTRODUCTION ON MUTUAL FUNDS:

Mutual Fund is a form of collective investment that pools money from many investors and invest their money in stocks, bonds, short-term money market instruments, and/or other securities. In a mutual fund, the fund manager trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income.

Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (you don't have to figure out which stocks or bonds to buy) .By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is Diversification.

Diversification is the idea of spreading out your money across many different types of investments. When one investment is down another might be up. Choosing to diversify your investment holdings reduces your risk tremendously.

Thus mutual fund is the most suitable for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

Mutual fund is an investment company that pools money from shareholders and invests in a diversified portfolio of securities. An estimated 82.8 million individual Americans in 48.4million U.S. households own mutual fund shares. This brochure provides an overview of the types of mutual funds and how they operate. However, each mutual fund is different; and investors should read the prospectus and learn more about a particular fund before investing.

Four Basic Types of Mutual Funds

There are four basic types of mutual funds: stock (also called equity), bond, hybrid—which invest in mix of stocks and bonds—and money market. Money market funds are referred to as short-term funds because they invest insecurities that

generally mature in about one year or less, whereas stock, bond, and hybrid funds are known as long-term funds.

Key Features of Mutual Funds

Professional Management

The money accumulated in a mutual fund is managed by professionals who decide on behalf of shareholders on investment strategy. These professionals choose investments that best match the fund’s objectives as described in the prospectus. Their investment decisions are based on extensive knowledge and research of market conditions and the financial performance of individual companies and specific Securities. As economic conditions change, the fund may adjust the mix of its investments to adopt a more aggressive or a more defensive posture to meet its investment objective.

Diversification

Fund managers typically invest in a variety of securities, seeking portfolio diversification. A diversified portfolio helps reduce risk by offsetting losses from some securities with gains in others. The average investor would find it expensive and difficult to construct a portfolio as diversified as that of a mutual fund. Mutual funds provide an economical way for average investors to obtain the same kind of professional money management and diversification of investments that is available to large institutions and wealthy investors.

Variety

There are about 7,800 mutual funds representing a wide variety of investment objectives, from conservative to aggressive and investing in a wide range of securities. The Investment Company Institute classifies mutual funds into 33 broad categories according to their basic investment objective. (See p.18, “Types of

Mutual Funds.”) There are also specialties or sector funds that invest primarily in a specialized segment of the securities markets.

Specialty funds include biotechnology funds, small-company growth funds, index funds, funds that invest in other mutual funds, and social criteria funds. The broad selection of funds arose over the years to meet consumer demand for fund products that help meet a variety of financial objectives.

Daily Pricing

Mutual funds must calculate the price of their shares every business day. Investors can sell (redeem) some or all of their shares anytime and receive the current share price, which may be more or less than the price originally paid. The share price, called net asset value, or NAV, is the market value of all the fund’s securities, minus expenses, divided by the total number of shares outstanding. The NAV changes as the values of the underlying securities rise or fall, and as the fund changes its portfolio by buying new securities or selling existing ones. Daily NAVs appear in the financial pages of most major newspapers.

When a fund earns money on its portfolio securities, it distributes the earnings to shareholders as dividends or, if the securities are sold for a profit, as capital gains. Shareholders also may elect to reinvest their dividends and capital gains in the purchase of additional fund shares. If the overall value of the securities held by a Fund increases, the value of the fund’s portfolio increases as well. Dividends and capital gains are paid out to the fund’s shareholders in proportion to the number of shares owned. Thus, investors who put $1,000 in the fund get the same investment return per dollar as those who invest $100,000.

Regulation and Disclosure

All U.S. funds are subject to strict regulation and oversight by the Securities and Exchange Commission (SEC). As part of this regulation, all funds must provide investors with full and complete disclosure about the fund in a written prospectus. This document describes, among other things, the fund’s investment objective, itsInvestment methods, information on how to purchase and redeem shares, information about the investment adviser, the level of risk the fund is willing to assume in pursuit of its objective, and fund fees and expenses. All funds are required to provide their shareholders with annual and semiannual reports that contain recent information on the fund’s portfolio, performance, and investment goals and policies.

Mutual funds are regulated under four federal laws designed to protect investors. The Investment Company Act of 1940 requires all funds to register with the SEC and to meet certain operating standards; the Securities Act of 1933 mandates specific disclosures; the Securities Exchange Act of 1934 sets out antifraud rules covering the purchase and sale of fund shares; and the Investment Advisers Act of 1940 regulates fund advisers.

Shareholder Services

Mutual funds offer a wide variety of services to meet shareholders’ needs. These services may include toll-free and 24-hour telephone access, consolidated account statements, tax information, exchanges among funds, automatic investments and withdrawals, and check writing privileges for some funds. Mutual funds also provide extensive investor education and shareholder communications, including websites, newsletters, brochures, and retirement and other planning guides.

Accessibility

Mutual fund shares are easy to buy. Investors (outside retirement plans) may purchase fund shares with the help of an investment professional (e.g., a broker, financial planner, bank representative, or insurance agent) or directly, based on the investor’s own research and knowledge. Investment professionals provide services to investors—analyzing the client’s financial needs and objectives and recommending appropriate funds. They are compensated for those services, generally through a fee for service, a sales commission, or through 12b-1 fees deducted from the fund’s assets.

Direct-marketed funds are sold through the mail, by telephone, or at office locations. They typically offer fund shares to the public with a low sales charge or none at all. Funds that do not charge a sales commission are known as “no-loads.” Because direct-marketed funds do not usually offer specific investment

advice, investors are required to do their own research and determine which funds meet their needs.

Other Considerations

Fees and ExpensesAll mutual funds have fees and expenses that are paid by investors. These costs are important because they affect the return on your investment, particularly over the long term. Before investing in a mutual fund, you should decide if the fund’s costs are acceptable to you. One way to learn about fees is to read the fund’s prospectus (the document describing the fund, available free for the asking directly from the fund company or from a broker or financial planner). Every prospectus contains a fee table, which must include an example showing the dollar amount of expenses you would pay on a hypothetical $10,000 investment that earns five percent annually over 1-, 3-, 5- and 10-year periods. While the amount you invest and your rate of return are unlikely to match the example, this standardized measure can be a useful way to compare the effect of fees for different fund. Fees generally fall into two categories—“shareholder fees” and “annual operating expenses.” Shareholder fees include any commission paid to brokers when you buy or sell your shares. These commissions are often described as “front-end loads” (sales charges when you buy) or “back-end loads” (sales charges when you sell). “No-load” funds, as the name implies, do not have front-end or back-end sales charges. Annual operating expenses pay for the ongoing costs of running a fund—for the services of the fund manager, for example, who selects and oversees the fund’s portfolio of securities—and for various fund services, such as recordkeeping and printing and mailing. Both shareholder fees and annual operating expenses are shown in the fee table in the fund’s prospectus.

Remember, however, that fees don’t tell the whole story. A fund with lower expenses may perform better than a fund with higher expenses—and the opposite may also be true. Perhaps most importantly, you should consider the fund’s investment objectives, policies, and risks to make sure they mesh with your own outlook and goals. Here again, the prospectus is an important source of information. Finally, you should remember that when a fund’s returns are reported (including those in mutual fund advertisements), fees and expenses have already been deducted.

Taxes

In order to avoid the imposition of federal tax at the fund level, a mutual fund must meet IRS requirements for sources of income and diversification of portfolio holdings, and must distribute substantially all of its income and capital gains to shareholders annually. Generally, shareholders of mutual funds must pay income taxes on the dividends and capital gains distributed to them. Each fund will provide an IRS Form 1099 to its shareholders annually that summarizes the fund’s dividends and distributions. When a shareholder sells shares of a fund, the shareholder will realize either a taxable gain or a loss.

NEED FOR THE STUDY:

To create an awareness among the consumers about mutual funds. To understand what is mutual fund with reference to equity based fund. To understand how mutual fund works with reference to equity based funds. To know more about consumer preference for equity based funds.

SCOPE OF THE STUDY:

The first step in the scope of the study is ensuring success and building up investor’s confidence in the new instrument. The investor will now be able to invest in the mutual fund as he’ll be aware of the equity based fund. Mutual funds in India have a significant and center-stage role to pay in spreading equity cult. To know that banks such as centurion bank of Punjab play a major role in the investments’ of equity based fund.

OBJECTIVES OF THE STUDY:

PRIMARY OBJECTIVE:i. To know more about the trend of equity based investment pattern in

centurion bank of Punjab.

SECONDARY OBJECTIVE:ii. To analyze the returns which the investors/consumers expect from the equity

based fund.iii. To identify the best preferred equity based fund among the

investors/consumers.

Journal of Financial and Strategic DecisionsVolume 13 Number 1 Spring 2000

THE PERFORMANCE OF GLOBAL AND INTERNATIONAL MUTUAL FUNDS

Arnold L. Redman*, N.S. Gullett* and Herman Manakyan**

Abstract

This study examines the risk-adjusted returns using Sharpe’s Index, Treynor’s Index, and Jensen’s Alpha for five portfolios of international mutual funds and for three time periods: 1985 through 1994, 1985-1989, and 1990-1994. The benchmarks for comparison were the U. S. market proxied by the Vanguard Index 500 mutual fund and a portfolio of funds that invest solely in U. S. stocks. The results show that for 1985 through 1994 the portfolios of international mutual funds outperformed the U. S. market and the portfolio of U. S. mutual funds under Sharpe’s and Treynor’s indices. During 1985-1989, the international fund portfoliooutperformed both the U. S. market and the domestic fund portfolio, while the portfolio of Pacific Rim funds outperformed both benchmark portfolios. Returns declined below the stock market and domestic mutual funds during 1990-1994.

Private Equity Performance

Do Private Equity Funds Beat the Market?

Research by Steven N. Kaplan

Using newly available data on individual fund returns, University of Chicago Graduate School of Business professor Steven N. Kaplan and Antoinette Schoar of MIT's Sloan School of Management analyze the fundamentals of private equity partnerships in the recent study "Private Equity Performance: Returns, Persistence, and Capital Flows."

The study addresses three main questions:

1) What are the average returns on private equity funds, and do these returns beat the market?

2) Is there "persistence" in private equity returns, i.e. a relationship between a fund's past performance and its future performance?

3) How does performance affect fund survival and future capital raising?

These questions have already been answered for other asset classes, particularly mutual funds. In contrast to private equity, mutual funds hold public equities and information about mutual fund performance is readily available. It has been well documented that the net returns of mutual funds, on average, do not beat the overall market. There is also very little evidence of persistence in mutual fund performance. In those cases where persistence has been detected, mutual funds tend to underperform rather than outperform the market.

Kaplan and Schoar find that (net of fees) the average returns on private equity funds for the sample period 1980 to 2001 approximately equaled those of the market. For this study, the market is represented by the Standard and Poor's (S&P) 500. Before deducting fees, returns for both types of private equity partnerships exceeded those of the S&P 500, with venture capital funds performing slightly better than leveraged buyout funds.

While Kaplan and Schoar find that average returns are approximately equal to the overall market, they also find that some funds consistently outperform the market.

"Our key finding is that there is a great deal of persistence in private equity performance," says Kaplan. "This persistence suggests that well-managed private equity partnerships exist. If you invest in a partnership that has done well in the past, the odds are it will do well in the future."

In regard to fund survival and future capital raising, the authors find evidence of a boom and bust cycle where capital appears to chase returns. When the private equity industry does well in general, money flows into the industry, and many new funds enter the market. Returns then decline and the cycle begins anew.

RESEARCH METHODOLOGY:

RESEARCH DESIGN:The research design of this study is descriptive design.

DESCRIPTIVE RESEARCH DESIGN:When the purpose of research is to get more information regarding a particular subject i.e. through filling up questionnaires.

SAMPLE DESIGN:A sample design is a definite plan determined before any data is actually collected for obtaining a sample from the given population.

POPULATION:

The universe or population is a specific group of people, firms, condition, activities, which form the

pivotal point of the project. The population used in this study general public.

SAMPLING TECHNIQUES:

Sampling Techniques is a definite plan for obtaining a sample from the

given population . It refers to the procedure that the researcher would adopt for

selecting the items in a sample. The researcher must select or prepare a sampling

technique, which is reliable and appropriate for this research. This is classified in

to probability and non-probability sampling. The sampling technique used in this

study is non – probability sampling.

NON – PROBABIILTY SAMPLING:

Non-probability sampling is used when chance of any particular unit

in the population being selected is unknown. Under this sampling, the technique

selected is CONVENINCE SAMPLING. In convenience sampling, the researcher

can choose the fraction of population, which has to be investigated according to

his/ her own convenience.

SAMPLE SIZE:

The sample size for this project is 50 and they are students and general public of Coimbatore city.

TYPES OF DATA USED:

The data collected can be classified into:

PRIMARY DATA :Primary data is generated when the researcher investigates a study

by employing a questionnaire , interviews , etc. This data is collected by the

researcher himself and is collected from the sources.

SECONDARY DATAThis data is collected from the magazines, newspaper, internet or

from the earlier work of a researcher.

TOOLS FOR DATA COLLECTION :

Primary data can be collected through questionnaires. Questionnaires to a

self administered process where by the respondent responds to the questions

and answers without the assistance of the interviewer.

Secondary data can be collected through related articles on the internet,

newspaper, magazines, etc.

TOOLS FOR DATA ANALYSIS

Tools used for data analysis are

Percentage analysis

Chi Square test

Tools for percentage analysis

The frequency of a particular observation is the

number of times the observation occurs in the data. The

distribution of a variable is the pattern of frequencies of the

observation. Frequency distributions are portrayed as frequency

tables.

Frequency distributions can show either the actual number

of observations falling in each range or the percentage of

observations. In the latter instance, the distribution is called a

relative frequency distribution.

http://www.statcan.ca/english/edu/power/glossary/gloss.htm#freqdist

http://www.statcan.ca/english/edu/power/glossary/gloss.htm#freqdist

A frequency table is a way of organizing the data by

listing every possible score (including those not actually obtained

in the sample) as a column of numbers and the frequency of

occurrence of each score as another. Computing the frequency of

a score is simply a matter of counting the number of times that

score appears in the set of data. It is necessary to include scores

with zero frequency in order to draw the frequency polygons

correctly.

Frequency distribution

The information contained in the frequency table

may be transformed to a graphical or pictorial form. No

information is gained or lost in this transformation, but the human

information processing system often finds the graphical or

pictorial presentation easier to comprehend. There are two major

means of drawing a graph, histograms and frequency polygons.

The choice of method is often a matter of convention, although

there are times when one or the other is clearly the appropriate

choice.

Chi Square Test of Independence

For a contingency table that has r rows and c columns, the chi square test can be

thought of as a test of independence. In a test of independence the null and

alternative hypotheses are:

Null Hypothesis Ho: The two categorical variables are independent.

Alternative Hypothesis Ha: The two categorical variables are related.

We can use the equation Chi Square = the sum of all the(Oi - Ei)2 / Ei

Here Oi denotes the frequency of the observed data and Ei is the frequency of the

expected values. The general table would look something like the one below:

Category

I

Category

II

Category

IIIRow Totals

Sample

Aa b c a+b+c

Sample

Bd e f d+e+f

Sample

Cg h i g+h+I

Column

Totalsa+d+g b+e+h c+f+i a+b+c+d+e+f+g+h+i=N

Now we need to calculate the expected values for each cell in the table and we can

do that using the the row total times the column total divided by the grand total

(N). For example, for cell a the expected value would be (a+b+c)(a+d+g)/N.

Once the expected values have been calculated for each cell, we can use the same procedure are

before for a simple 2 x 2 table.

Observed Expected |O - (O — E)2 (O — E)2/

E| E

Chi Square = (Oi — Ei)2/ Ei

in this example, Degrees of Freedom = (c - 1)(r - 1) = 2(2) =4

If chi square observed value is less than the expected value we accept the null

hypothesis and say that the attributes are associated. Otherwise if chi square

observed value is greater than expected value, we reject the null hypothesis and say

that there is an association between the two factors.

LIMITATIONS OF THE STUDY:

o The sample size being small cannot be considered as a representative

of the entire population.

o The responses could be biased, as the consumers may not be willing

to give correct information.

Table 1 : Whether aware of mutual fund industry

SNo. Response No. of respondents % of respondents

1 Yes 45 90

2 No 5 10

Total 50 100

Interpretation

From the above given table it is inferred that 90% of the respondents are aware of the mutual fund industry and 10% are not aware of it.

GRAPH:

Table 2 : Source of awareness of mutual fund industries

SNo. Source of awareness No. of respondents % of respondents

1 Newspapers 6 12

2 TV 11 22

3 Advt. 8 16

4 Radio 1 2

5 Friends/family 16 32

6 Magazines 4 8

7 Others 7 14

Interpretation

From the above given table it is inferred that 12% of respondents got information through news papers,22% through TV,16% through advt,2% through radio,32% through family/friends,8% through magazines and 14% through other sources.

GRAPH:

Table 3 : Preference of investing money

SNo. Preference No. of respondents % of respondents

1 Directly 10 20

2 Through agency 40 80

Total 50 100

Interpretation

From the above given table it is inferred that 20% prefer investing money directly and 80% through agency.

GRAPH:

Table 4 : Amount (%) of money saved from income

SNo. Percentage No. of respondents % of respondents

1 Up to 80% 2 4

2 50-80% 8 16

3 40-50% 15 30

4 20-40% 20 40

5 <20% 5 10

Total 50 100

Interpretation

From the above given table it is inferred that 4% of respondents save up to 80% of their income,16% of the respondents save 50-80% ,30% save up to 40-50%, 40% save 20-40% and 10% save <20%.

GRAPH:

Table 5 : Preferred mode of saving

SNo. Preferred mode No. of respondents % of respondents

1 Insurance 8 16

2 Mutual Funds 29 58

3 Banks/Savings A/c 12 24

4 Deposits 1 2

Total 50 100

Interpretation

From the above given table it is inferred that 16% of the respondents saving mode is Insurance,58% saving mode is Mutual funds,24% saving mode is Banks/Savings A/c and 2% save through Deposits.

GRAPH:

Table 6 : Which mode of savings give better return

SNo. Mode of saving give better return No. of respondents % of respondents

1 Stock exchange 9 18

2 MF 35 70

3 Bank deposits 6 12

Total 50 100

Interpretation

From the above given table it is inferred that 18% of respondents get better returns on stock exchange,70% get on MF and 12% get on Bank deposits.

GRAPH:

Table 7 : Whether ever invested in MF


1 Yes 49 98

2 No 1 2

Total 50 100

Interpretation

From the above given table it is inferred that 98% of respondents have invested in MF and 2% haven’t invested in MF.

GRAPH:

Table 8 : If so, the company invested in MF

SNo. Indian No. % Foreign No. %

1 FT 7 14 ABN Amro 2 4

2 ICICI 17 34 DSP 2 4

3 HDFC 15 30 Fidelity 6 12

4 UTI 3 6 Others 5 10

5 Reliance 5 10

6 LIC 6 12

7 Birla 2 4

Interpretation

From the above given table it is inferred that in Indian companies 14% of the respondents have invested in FT,34% in ICICI,30% in HDFC,6% in UTI,10% in reliance,12% in LIC,4% in Birla and in foreign companies 4% have invested in ABN Amro , 4% inDSP,12% in fidelity and 10% in others.

GRAPH:

Table 9 : Source of investment the respondent is planning to invest in MF

SNo. Source of investment No. of respondents % of respondents

1 Banks 28 56

2 MF agency 21 42

3 Broker/agent 3 6

4 Direct - -

5 Others 2 4

Interpretation

From the above given table it is inferred that 56% of the respondents are planning to invest through banks,42% through MF agency,6% through Broker/agent and 4% through other sources.

GRAPH:

Table 10: Whether investing in MF on regular basis


1 Yes 33 66

2 No 17 34

Total 50 100

Interpretation

From the above given table it is inferred that 66% of the respondents invest on a regular basis and 34% does not invest on a regular basis.

GRAPH:

Table 11 : Frequency of investment in MF

SNo. Frequency No. of respondents % of respondents

1 Monthly basis 8 16

2 Quarterly basis 23 46

3 Half yearly basis 10 20

4 Yearly basis 9 18

5 Other mode 8 16

Total 50 100

Interpretation

From the above given table it is inferred that 16% invest on monthly basis,46% invest on a quarterly basis,20% invest on a Half yearly basis,18% invest on a yearly basis and 16% invest through other modes.

GRAPH:

Table 12: Expectation from MF

SNo. Expectation No. of respondents % of respondents

1 Capital appreciation 9 18

2 Good returns 32 64

3 Principal protection 12 24

4 Analysis of market 1 2

Interpretation

From the above given table it is inferred that 18% of the respondents expect Capital appreciation,64% expect good returns,24% expect principal protection and 2% expect Analysis of the market.

GRAPH:

Table 13: Reason for preferring MF

SNo. Reason No. of respondents % of respondents

1 Saving time 11 22

2 No knowledge of market 19 38

3 Happy as experts handle money 20 40

Total 50 100

Interpretation

From the above given table it is inferred that 22% of respondents prefer MF as saving time,38% prefer because they have no knowledge of the market and 40% are Happy as experts handle their money.

GRAPH:

Table 14 : As an investor expectation from MF

SNo. Expectation as investor No. of respondents % of respondents

1 High risks, high return 8 16

2 Medium risk, medium return 25 50

3 Low risk, low return 5 10


5 Others - -

Total 50 100

Interpretation

From the above given table it is inferred that 16% expect MF has High risks, high return,50% expect MF has Medium risk, medium return,10% expect MF has Low risk, low return and 24% expect MF has Principal protection.

GRAPH:

Table 15 : According to the respondents opinion MF has


1 High risk 5 10

2 Low risk 18 36

3 Good return 21 42


Interpretation

From the above given table it is inferred that According to 10% of respondents MF has high risk,36% of respondents MF has low risk,42% of respondents MF has good return and 14% of respondents MF has principal protection.

GRAPH:

Table 16 : What kind of fund the respondent will invest in

SNo. Kind of fund No. of respondents % of respondents

1 Equity fund 43 86

2 Debt/income fund 6 12

3 Balanced fund ELSS fund 4 8

4 Index fund - -

5 Liquid fund 1 2

Interpretation

From the above given table it is inferred that 86% of respondents will invest in Equity fund,12% will invest in Debt/income fund,8% will invest in Balanced fund ELSS fund and 2% will invest in liquid fund.

GRAPH:

Table 17 : If invested in equity fund preference will be


1 Large capital fund 35 70

2 Medium capital fund 8 16

3 Small capital fund 1 2

4 Medium & small capital fund 5 10

5Large, medium & small capital

fund- -

Interpretation

From the above given table it is inferred that 70% equity investors will invest in large capital fund,16% in medium capital fund,2% in small capital fund, 10% in medium & small capital fund.

GRAPH:

Table 18 : Opinion about fund that is giving more return


1 Equity fund 44 88

2 Debt/income fund - -

3 Balanced fund 5 10

4 ELSS fund - -

5 Index fund - -

6 Liquid fund 1 2

Total 50 100

Interpretation

From the above given table it is inferred that 88% prefer Equity fund giving more return,10% prefer Balanced fund and 2% prefer liquid fund.

GRAPH:

Table 19 : Opinion about fund that involves high risk


1 Equity fund 40 80

2 Debt/income fund -

3 Balanced fund 4 8

4 ELSS fund 3 6

5 Index fund 3 6

6 Liquid fund - -

Total 50 100

Interpretation

From the above given table it is inferred that 80% Opinion about equity fund that involves high risk,8% opinion on Balanced fund,6% opinion on ELSS fund and 6% opinion on index fund.

GRAPH:

Table 20 : For a new investor which fund will be more appropriate


1 Equity fund 44 88

2 Debt/income fund 1 2

3 Balanced fund 3 6

4 ELSS fund -

5 Index fund -

6 Liquid fund 2 4

Total 50 100

Interpretation

From the above given table it is inferred that 88% of the respondents prefer new investors to buy equity fund,2% prefer Debt/income fund,6% prefer Balanced fund and 4% prefer liquid fund.

GRAPH:

Table 21: Whether invested in MF through the bank


1 Yes 43 86

2 No 7 14

Total 50 100

Interpretation

From the above given table it is inferred that 86% of respondents have invested through banks and 14% haven’t.

GRAPH:

Table 22: Whether have an opinion that the bank has invested the money safely and wisely


1 Yes 44 88

2 No 6 12

Total 50 100

Interpretation

From the above given table it is inferred that 88% have an opinion that the bank has invested the

money safely and wisely and 12% do not.

GRAPH:

Table 23: If trying to buy and sell units in MF preference will be


1 Directly to MF office 7 14

2 Instruction to bank 27 54

3 Completely trust the bank 16 32

Total 50 100

Interpretation

From the above given table it is inferred that 14% of the respondents will buy and sell units in MF Directly through MF office,54% of respondents will give instruction to the bank and 32% will completely trust the bank.

GRAPH:

Table 24: Kind of plan the bank recommends

SNo. Kind of plan No. of respondents % of respondents

1 Equity based 27 54

2 Income based 22 44

3 Others 1 2

Total 50 100

Interpretation

From the above given table it is inferred that 54% of the banks recommend equity based fund,44% recommend income based and 2% recommend others.

GRAPH:

Table 25: Whether the bank charges for the services


1 Yes 24 48

2 No 26 52

Total 50 100

Interpretation

From the above given table it is inferred that 48% of the banks charges for the services and 52 doesn’t charge.

GRAPH:

Table 26: Prefer investing in equity based MF for


1 High return 20 40

2 Good dividend 29 58

3 Any other 1 2

Total 50 100

Interpretation

From the above given table it is inferred that 40% of respondents prefer equity based fund for high return,58% for good dividend and 2 % for any other reason.

GRAPH:

Table 27: Whether incurred loss while investing MF based funds


1 Yes 24 48

2 No 26 52

Total 50 100

Interpretation

From the above given table it is inferred that 48% have incurred loss while investing in mutual funds and 52% have not.

GRAPH:

Table 28 Prime reason for incurring loss, if so

SNo. Reason No. of respondents % of respondents

1 Market dip 13 26

2 Fund manager not performing well 16 32

3 Banker didn’t inform 10 20

4 Not aware 2 4

Total 50 100

Interpretation

From the above given table it is inferred that 26% of the respondents will blame the market dip for incurring loss,32% will blame the fund managers for not performing well,20% will tell that the bankers did not inform on time and 4% say that they were not aware themselves.

GRAPH:

Table 29: Whether the banker is broker for the equity MF


1 Yes 38 76

2 No 7 14

3 Not aware 5 10

Total 50 100

Interpretation

From the above given table it is inferred that for 76% of the respondents the bankers are the brokers, for 14% bankers are not and 10% are not aware about it.

GRAPH:

Table 30: Whether the banker suggest to invest in their deposits rather than investing in MF


1 Yes 19 38

2 No 27 54

3 Can’t say 4 8

Total 50 100

Interpretation

From the above given table it is inferred that 38% of bankers suggest to invest the respondents in their deposits rather that investing in MF, 54% don’t and 8% doesn’t know.

GRAPH:

q21 * Q22 Crosstabulation

Count

2 5 74 39 436 44 50

01

q21

Total

0 1Q22

Total

Factor1 Factor22

observed value

2

xpected value

df Prob.Significant

or not significant

Q21 Q22 2.117 3.84 1 0.146 NS

Aim

To find there is a significant relation between investment in mutual fund through bank and an opinion that the bank has invested the money safely and wisely.

Hypothesis

There is no significant relationship between investment in mutual fund through bank and an opinion that the bank has invested the money safely and wisely.

Interpretation

CHI square test applied to find whether there is significant relationship between

investment in mutual fund through bank and an opinion that the bank has invested

the money safely and wisely. hence the observed value is less than the expected

value ,It is interpreted that there is no significant relationship between investment

in mutual fund through bank and an opinion that the bank has invested the money

safely and wisely. Hence the hypothesis is accepted.

Crosstab

Count

2 14 163 21 24

10 105 45 50

123

agegroup

Total

0 1Q1

Total

Factor1 Factor22

observed value

2

xpected value

df Prob.Significant

or not significant

AGE Q1 1.389 5.991 2 0.499 NS

Aim

To find there is a significant relation between the age of an individual and his awareness on mutual fund industry.

Hypothesis

There is no significant relationship between the age of an individual and his awareness on mutual fund industry.

Interpretation


the age of an individual and his awareness on mutual fund industry. hence the

observed value is less than the expected value ,It is interpreted that there is no

significant relationship between age of an individual and his awareness on mutual

fund industry Hence the hypothesis is accepted.

OCC * Q4 Crosstabulation

Count

1 1 1 32 4 11 3 20

1 5 11 9 1 272 8 15 20 5 50

123

OCC

Total

1 2 3 4 5Q4

Total

Factor1 Factor22

observed value

2

expected value

df Prob.Significant

or not significant

OCCUPATION Q4 16.813 15.51 8 0.032 *

Aim

To find there is a significant relation between the age group and the amount of money saved from the income.

Hypothesis

There is no significant relationship between the age group and the amount of money saved from the income.

Interpretation


the age group and the amount of money saved from the income. hence the

observed value is less than the expected value ,It is interpreted that there is

significant relationship between age of an individual and his awareness on mutual

fund industry Hence the hypothesis is rejected

.

Q1 * Q3 Crosstabulation

Count

5 510 35 4510 40 50

01

Q1

Total

1 2Q3

Total

Factor1 Factor22

observed value

2

xpected value

df Prob.Significant

or not significant

Q1 Q3 1.389 3.84 1 0.239 NS

Aim

To find there is a significant relation between the awareness on mutual fund industry and the preference of investing the money.

Hypothesis

There is no significant relationship between the awareness on mutual fund industry and the preference of investing the money.

Interpretation


the awareness on mutual fund industry and the preference of investing the money

hence the observed value is less than the expected value ,It is interpreted that there

is no significant relationship between the awareness on mutual fund industry and

the preference of investing the money Hence the hypothesis is accepted.

FINDINGS:

It is found that 90% of respondents are aware of mutual fund industry.

It is found that 80% of respondents prefer to invest through agencies.

It is found that 58% of respondents prefer to invest their savings in Mutual Funds.

It is found that 70% of respondents feel that MF gives better savings.

It is found that 66% of respondents invest in MF on a regular basis.

It is concluded that 88% of respondents feel equity fund gives more return.

It is concluded that 80% of respondents feel equity fund has high risk.

It is concluded that 86% of respondents invest in MF through banks.

It is concluded that 54% of respondents prefer to buy & sell through banks.

It is concluded that 42% of respondents feel that MF gives high return.

SUGGESTIONS:

People invest in equity based fund to get higher return.

People also prefer to invest in mutual funds through agencies.

People prefer to buy and sell MF through banks.

study on equity based mutual funds

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