DR.

VS KRISHNA GOVERNMENT DEGREE AND PG COLLEGE

(A) (A NAAC REACCREDITED BY GRADE INSTITUTION)
MADDILAPALEM, VISAKHAPATNAM
(2018-2021)

A STUDY ON
“MUTUAL FUNDS”
with Reference to
SBI MUTUAL FUNDS

Under the Guidance of

Dr. CH. VISHNU MURTHY, M.Com., M.Phil., Ph.D

Lecturer in Commerce

Submitted to
DEPARTMENT OF COMMERCE

Submitted by

TELLA. PAVAN KUMAR

Regd. No. E18331050
 CERTIFICATE

This is to certify that the project title “A STUDY ON MUTUAL FUNDS with

reference to SBI MUTUAL FUNDS” a bonafide work by TELLA. PAVAN

KUMAR., Regd. No. E18331050 student of Final Year B.Com, Programme in

2018 – 2021 under my guidance and submitted to the Department of UG Studies, DR.

VS KRISHNA GOVT. DEGREE & PG COLLEGE (A) in partial fulfillment of the

requirements for the award of the Bachelor of Commerce.

Sri. R. RAMARAO Dr. CH. VISHNU MURTHY

Head of the Department Project Guide
 DECLARATION

I, TELLA. PAVAN KUMAR Hereby declare that this Project report entitled “A

STUDY ON MUTUAL FUNDS with reference to SBI MUTUAL FUNDS”

submitted by us to DR. VS KRISHNA GOVT. DEGREE & PG COLLEGE (A),

Visakhapatnam (affiliated to ANDHRA UNIVERSITY) in partial fulfillment for the

award o the Degree of Bachelor of Commerce. This is bonafide work done by us under

the guidance of Dr. CH. VISHNU MURTHY, Asst. Professor, DR. VS KRISHNA

GOVT. DEGREE & PG COLLEGE (A) and has not been submitted to any other

University or Institute published earlier.

TELLA. PAVAN KUMAR

Regd. No.E18331050
Date:
Place: Visakhapatnam
 ACKNOWLEDGEMENT

We here to take the opportunity to express our sincere gratitude to the

following eminent personalities, without whose aid advice, the successful completion

of our project work would have remained a dream.

We would like express our sincere gratitude to the Principal Dr. V.

CHANDRA SEKHAR, M.Sc., Ph.D., for giving permission to do our project work.

We are deeply obliged the Head of the Department, Sri. R. RAMARAO, M.com,

M.A.(litt), M.phil., B.Ed. Lecturer in commerce., our Project Guide Dr. CH.

VISHNU MURTHY, Asst. Professor ,Dr. VS. Krishna Govt. Degree and PG(A)

College, for his valuable guidance and encouragement throughout our projectwork.

We would like to express our sincere gratitude to the management and staff of

SBI MUTUAL FUNDS for giving their permission to do our project work in their

organization and helping our meticulously in all of our project.

TELLA. PAVAN KUMAR

Regd. No. E18331050

 INDEX

Page No.

CHAPTER – 1 1 – 18

INTRODUCTION

CHAPTER – 2 19 – 25

COMPANY PROFILE

CHAPTER – 3 26 – 30

THEORETICAL FRAMEWORK

CHAPTER – 4 31 – 34

DATA ANALYSIS AND INTERPRETATION

CHAPTER – 5 35 – 39

FINDINGS AND CONCLUSION

CHAPTER – 6 40 – 42

SUGGESTIONS AND RECOMMENDATION

BIBLIOGRAPHY 43
 1

CHAPTER–1

INTRODUCTION
 2

Contents :

 Meaning
 Definition
 Aspects of Mutual Funds
 Objective of the study
 Advantages
 Disadvantages
 History of Indian Mutual fund Industry
 Types of Mutual fund Investment
Strategies
 3

WHAT IS MUTUAL FUND?

Meaning Of Mutual Fund:

An open-ended fund operated by an investment company

which raises money from shareholders and invests in a group of

assets, in accordance with a stated set of objectives.

Mutual Fund Definition:

‘‘A mutual fund is an investment security type that enables

investors to pool their money together into one professionally managed

investment. Mutual funds can invest in stocks, bonds, cash and/or other

assets. These underlying security types, called holdings combine to form

one mutual fund, also called a Portfolio.’’

Mutual Fund is Subject to Market Risk:

This is the standard disclosure of the Mutual Fund. Which means

Mutual Fund is totally based on the current market position. The Mutual

Fund Investors invests money in the mutual fund at market risk

 4

INTRODUCTION TO MUTUAL FUND AND

ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of

investors who share a common financial goal. This pool of money is

invested in accordance with a stated objective. The joint ownership of the

fund is thus “Mutual”, i.e. the fund belongs to all investors. The money

thus collected is then invested in capital market instruments such as

shares, debentures and other securities. The income earned through these

investments and capital the capital appreciations realized are shared by its

unit holders in proportion the number of units owned by them. Thus, a

Mutual Fund is the most suitable investment for the common man as it

offers an opportunity to invest in a diversified, professionally managed

basket of securities at a relatively low cost. A Mutual Fund is an

investment tool that allows small investors access to a well-diversified

portfolio of equities, bonds and other securities. Each shareholder

participates in the gain or loss of the fund. Units are issued and can be

redeemed as needed. The Net Asset Value (NAV) of Funds is determined

each day. Investments in the securities are spread across a wide cross-

section of industries and sectors and thus the risk is reduced.

Diversification reduces the risk because all stocks may not move in the

same direction in the same proportion at the same time. Mutual fund
 5

issues units to the investors in accordance with quantum of money

invested by them. Investors of mutual funds are known as unit holders.

OBJECTIVES OF THE STUDY

1) To find out the preferences of the investors for Asset

Management Company.

2) To know the preferences for the portfolios.

3) To know why one has invested or not invested in SBI

Mutual fund.

4) To find out the most preferred channel.

5) To find out what should do to boost Mutual Fund Industry.

SCOPE OF THE 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 Nakodar. I had been sent at one of

the branches of State Bank of India Nakodar where I completed my

project work. I’ve surveyed on my project Topic “A study of preferences

of the investors for investment in mutual fund “on the visited customers

of the SBI Nakodar @ Terminal 81.

 6

The study will help to know the preferences of the customers,

which company, portfolio, mode of investment, option for getting return

and so on they prefer. This project report may help the company to make

Further planning and strategy

CONCEPT OF MUTUAL FUND

Many investors with common financial objectives pool their

money, Investors on a proportionate basis, get mutual fund units for the

sum contributed to the pool the money collected from investors is

invested into shares. Debentures and other securities by the fund manager

realize gains or losses, and collects dividend or interest income Any

capital gains or losses from such investments are passed on to the

investors in proportion of the number of units held them When an

investor subscribes for the units of a mutual fund, he becomes part owner

the assets of the fund in the same proportion as his contribution amount

put up with the corpus (the total amount of the). Mutual Fund investor is

also known as a mutual fund shareholder or a unit holder. Any change in

the value of the investments made into capital market instruments (such

as shares, debentures, etc.) is reflected in the Net Asset Value (NAV) of

the scheme.NAV is defined as the market value of the mutual fund

scheme’s assets net of its liabilities. NAV of a scheme is calculated by

 7

dividing the market value of scheme’s assets by the total number of units

issued to the investor.

ADVANTAGES OF MUTUAL FUND

1. Portfolio Diversification

2. Professional Management

3. Reduction / Diversification of Risk

4. Liquidity

5. Flexibility &Convenience

6. Reduction in Transaction Cost

7. Safety of regulated environment

8. Choice of schemes

9. Transparency

DISADVANTAGES OF MUTUAL FUND

1. No control over Cost in the Hands of Investor

 8

2. No tailor-made Portfolios

3. Managing a Portfolio Funds Difficulty in selecting a suitable

fund scheme
 9

HISTORY OF THE INDIAN MUTUALFUND

INDUSTRY

The mutual fund 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.

In the past decade, Indian mutual fund industry had seen a dramatic

improvement, both qualities wise as well as quantity wise. Before, the

monopoly of the market had seen an ending phase; the Assets Under

Management (AUM) was Rs.67 billion. The private sector entry to the

fund family raised the AUM to Rs.470 billion in March 1993 and till

April 2004; it reached the height if Rs.1640billion.

The Mutual Fund Industry is obviously growing at a tremendous

space with the mutual fund industry can be broadly put into four phases

according to the development of the sector.

Each phase is described as under:

 10

First Phase – 1964-87

Unit Trust Of India (UTI) was established on 1963 by an Act of

Parliament by the Reserve Bank Of India and functioned under the

Regulatory and administrative control of reserve Bank Of India. In 1978

UTI was de- linked from the RBI and the Industrial Bank Of India (IDBI)

took over the regulatory and administrative control in place of RBI. The

first scheme launched by UTI was Unit Scheme1964. At the end of 1988

UTI had Rs.6,700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public

Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds

set up by public 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 Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund

(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank Of India (June 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
 11

Third Phase – 1993-2003(Entry of Private

Sector Funds)
1993 was the year in which the first Mutual Fund Regulations

Came into being, under which all mutual funds, except UTI were to be

registered and governed. The erstwhile Kothari Pioneer (now merged

with Franklin Templeton) was the first private sector mutual fund

registered in July 1993.

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.

As at the end of January 2003, there were 33 mutual funds with total

assets of Rs.1,21,805 crores.

 12

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust Of India

Act 1963 UTI was bifurcated into two separate entities. One is the

Specified Undertaking Of the Unit Trust Of India with assets under

management of Rs.29,835 crores as at the end of January 2003,

representing broadly, the assets of YS 64 scheme, assured return and

certain other schemes. 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, consolidation and growth.

As at the end of September, 2004, there was 29 funds, which manage

assets of Rs.15,31,108 crores under 421 schemes.

 13

CATEGORIES OF MUTUAL FUND

BASED ON THEIRSTRUCTURE
MUTUAL FUNDS CAN BE CLASSIFIED AS FOLLOW :

1) Open-ended funds

2) Close-ended funds

OPEN-ENDED FUNDS:-Investment can buy and sell the units from the

fund , at any point of time.

CLOSE-ENDED FUNDS:-These funds raise money from investors only

once.

BASED ON INVESTMENTOBJECTIVES

1) Equity funds

2) Balanced funds

3) Debt funds

1) Equity funds :- These funds invest in equities and equity

related instruments. With fluctuating share prices, such funds

show volatile performance, even losses. However, short term

fluctuation in the market. Generaly smoothens out in the long

term, thereby offering higher returns at relatively lower

 14

volatility.

a) Index funds:- In this case a key stock market index ,

like BSE Sensex or Nifty is tracked . Their portfolio

mirrors the benchmark index both in terms of

composition and individual stock weightage.

b) Equity diversified funds:-100% of the capital is

invested in equities spreading across different sectors

and stocks.

c) Dividend yield funds:-It is similar to the equity

diversified funds except that they invest in companies

offering high dividend yields.

d) Thematic funds:-Invest 100% of the asset in sectors

which are related through some theme. e.g.:-An

infrastructure fund invest in power , construction ,

cements sectors etc.

e) Sectors funds :-Invest 100%of the capital in a

specific sector. e.g,:- A banking sector fund will invest

in banking stocks.

f) ELSS:-Equity Linked Saving Scheme provides tax

benefit to the investors.

 15

2) Balanced fund:-Their investment portfolio includes both

debt and equity. As a result, on the risk- return ladder, they fall

between equity and debt funds. Balanced funds are the ideal

mutual funds vehicle for investors who prefer spreading their

risk across various instruments.

following are balanced funds classes:-

a) Debt-oriented funds:- Investment below 65%

inequities.

b) Equity-oriented funds:- Investment atleast 65 % in

equities, remaining indebt.

3) DEBT FUND :- They invest only debt instruments, and

are a good option averse to idea taking risk associated with

equities. Therefore, they invest exclusively in fixed- income

instruments like bonds. Debentures. Govt. of India securities;

and market instruments such as certificates of deposits (CD),

commercial paper (CP) and call money. Put your money into

any of these debt funds depending on your investment horizon

and needs.

a) liquid funds:- These funds invest 100%in money

market instrument , a large portion being invested in

 16

call money market.

b) Gilt funds ST :- They invest 100% of their portfolio in

govt. securities of and T-bills.

c) Floating rate funds:-Invest in short–term debt papers.

Floaters invest in debt instruments which have variable

coupon rate.

d) Arbitrage fund:- They generate income through

arbitrage opportunities due to mis-pricing between

cash market and derivatives market. Funds are

allocated to equities, derivatives and money market

.Higher proportion is put in money markets.

In the absence of arbitrage opportunities.

e) Gift funds LT:- They invest 100% of their portfolio

in long term government securities.

f)Income funds LT:-Typically , such funds invest a major

portion of the portfolio in long- term debt papers.

g) MIPs:- Monthly income plans have an exposure of

70%-90% to debt and an exposure of 10%-30% to

equities.

h) FMPs:-fixed monthly plans invest in debt papers

 17

whose maturity is in line with that of the fund.

 18

INVESTMENT STRATGIES

1) Systematic Investment Plan:-Under this a fixed sun is

invested each month on a fixed date of a month. Payment is

made through postdated cheques of direct debit facilities. The

investor gets units fewer units when the NAV is high and

more units when the NAV is low. This is called as the benefit

of rupee cost averaging (RCA).

2) Systematic Transfer Plan :- Under this an invest in debt

oriented fund and give instructions to transfer a fixed sum, at

a fixed interval, to an equity scheme of the same mutual fund.

3) Systematic Withdrawal Plan:- If someone wishes to

withdrawal from a mutual fund then he can withdraw a fixed

amount each month.

 19

KEY PLAYERS OF MUTUAL FUNDS :-

Mutual Fund is formed by a trust body. The business is set up by

the sponsor, the money invested by the asset management company and

the operations monitored by the trustee. There are five principal

constituents and three market intermediaries in the formation and

functioning of mutual fund. The five constituents are:

1. Sponsor: A company established under the Companies Act forms a

mutual fund.

2. Asset Management Company: An entity registered under the

Companies Act to manage the money invested in the mutual fund

and to operate the schemes of the mutual fund as per regulations. It

carries the responsibility of investing and managing the investors’

money.

3. Trustee: The trust is headed by Board of Trustees. The trustee

holds the property of the mutual fund in trust for the benefit of unit

holders and looks into the legal requirements of operating and

functioning of the mutual fund. The trustee may also form a limited

company under the Companies Act in some situations.

 20

4. Unit Holder: A person/entity holding an undivided share in the

assets of a mutual fund scheme.

5. Mutual Fund: A mutual fund established under the Indian Trust

Act to raise money through, the sale of units to the public for

investing in the capital market. The funds thus collected are passed

on to the Asset Management Company for investment. The mutual

fund has to be registered with SEBI. The three market intermediaries

are: (l) Custodian (2) Transfer Agents (3) Depository.

a) Custodian: A custodian is a person who has been granted a

Certificate of Registration to conduct the business of custodial

services under the SEBI (Custodian of Securities) Regulations

1996. Custodial services include safeguarding clients’

securities along with incidental services provided.

Maintenance of accounts of clients’ securities together with

the collection of benefits / rights accruing to a client falls

within the purview of custodial service. Mutual funds require

custodians so that AMC can concentrate on areas such as

investment and management of money.

 21

b) Transfer Agents : A transfer agent is a person who has been

granted a Certificate of Registration to conduct the business of

transfer agent under SEBI (Registrars to an Issue and Share

Transfer Agents) Regulations Act 1993. Transfer agents’

services include issue and redemption of mutual fund units,

preparation of transfer documents and maintenance of updated

investment records. They also record transfer of units between

investors where depository does not function.

c) Depository : Under the Depositories 1996, a depository is

body corporate who carries out the transfer of units to the unit

holder in dematerialized form and maintain records thereof

 22

CHAPTER-2
COMPANY PROFILE
 23

Contents :

 Introduction
 Products
 Competitors
 24

INTRODUCTION TO SBI MUTUAL FUND

SBI Funds Management Pvt. Ltd. Is one of the leading fund houses

in the country with an investor base of over 4.6 million and over 20 years

of rich experience in fund management consistently value to its investors.

SBI Funds Management Pvt. Ltd. Is a joint venture between ‘The State

Bank Of India’ one of India’s largest banking enterprises, and Societe

Generale Asset Management (France), one of the world’s leading fund

management companies that manage over US$ 500 Billion worldwide.

Today the fund house manages over Rs.28,500 crores of assets and

has a diverse profile of investors actively parking their investments

across 36 active schemes. In 20 years of operation, the fund has launched

38 schemes and successfully redeemed 15 of them, and in the process,

has rewarded our investors with consistent returns. Schemes of the

Mutual Fund have time after time outperformed benchmark indices,

honored us with15awards of performance and have emerged as the

preferred investment for millions of investors. The trust reposed on us by

over 4.6 million investors is a genuine tribute to our expertise in fund

management. SBI Funds Management Pvt. Ltd. serves its vast family of

investors through a network of over 130 points of acceptance, 28 Investor

Service Center, 46 Investor Service Desks and 56 District Organizers.

 25

SBI Mutual is the first bank sponsored fund to launch an offshore fund-

Resurgent India Opportunities Fund Growth through innovation and

stable investment policies is the SBI MF credo

PRODUCTS OF SBI MUTUAL FUND

1. Equity Schemes:-

The investments of these schemes will predominantly

be in the stock markets and endeavor will be to provide

investors the opportunity to benefit from the higher returns

which stock markets can provide. Equity funds include

diversified Equity Funds, Sectoral Funds and Index Funds.

 Magnum COMMA Fund

 Magnum Equity Fund

 Magnum Global Fund

 Magnum Index Fund

 Magnum Midcap Fund

 Magnum Multicap Fund

 Magnum Multiplier Fund plus1993

 Magnum Sectoral Funds Umbrella

 MSFU - Emerging Business Fund

 26

 MSFU - IT Fund

 MSFU - Pharma Fund

 MSFU – Contra Fund

 MSFU- FMCG Fund

# SBI Arbitrage Opportunities Fund

# SBI Blue Chip Fund

# SBI Infrastructure Fund – Series 1

# SBI Magnum Tax gain Scheme 1993

# SBI One India Fund

# SBI Tax Advantage fund – Series 1

2. Debt Schemes:-

Debt Funds invest only in debt instruments such as

corporate bonds, Government Securities and Money Market

instruments either completely avoiding any investments in

stock markets as in Income Funds or Gilt Funds or having a

small exposure to equities as in monthly Income Plans or

Children’s plan. Hence, they are safer than equity funds. At

the same time the expected returns from debt funds would be

lower. Such investments are advisable for the risk-averse

investor and as a part of the investment portfolio for other

 27

investors.

 Magnum Children’s Benefit Plan

 Magnum Gilt Fund

 Magnum Income Fund

 Magnum Insta Cash Fund

 Magnum Income Fund –Floating Rate Plan

 Magnum Income Plus Fund

 Magnum Insta Cash Fund –Liquid Floater Plan

 Magnum Monthly Income Plan

 Magnum MIP -Floater

 Magnum NRI Investment Fund

 SBI Premier Liquid Fund

3. Balanced Schemes:-

Magnum Balanced Fund invests in a mix of equity and

debt investments. Hence, they are less risky than equity funds,

but at the same time provide commensurately lower returns.

They provide a good investment opportunity to investors who

do not wish to be completely exposed to equity markets, but is

looking for higher returns than those provided BT debt funds.

 Magnum Balanced Fund

 28

COMPETITORS OF SBI MUTUAL FUND

Some of the main competitors of SBI Mutual Fund in Nakodar &

Jalandhar, PUNJAB are as follows:

i. ICICI Mutual Fund

ii. Reliance Mutual Fund

iii. Birla Mutual Fund

iv. Kotak Mutual Fund

v. HDFC Mutual Fund

vi. LIC Mutual Fund

 29

CHAPTER– 3

THEORETICAL FRAMEWORK
 30

Contents :

 Data Source
 Duration of Study
 Sampling
 Limitation
 31

This report is based on primary as well secondary data, however

primary data collection was given more important 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, collection,

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 asset 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 journals

and websites.

Duration of Study

The study was carried out for a period of 3 weeks, from 10th July to 31st

July 2014.
 32

Sampling:

Sampling Procedure:

The sample was selected of them who are the

customers / visitors of State Bank Of India, Nakodar

(Jalandhar Road) Branch, irrespective of them being

investors or not or availing the services or not. It was

also collected through personal visits to persons, by

formal and informal talks and through filling up the

questionnaire prepared. The data has been analyzed by

using mathematical / statistical tool.

Sampling Size:

The sample size of my project is limited to 35

people only. Out of which only 21 people had invested

in Mutual Fund. Other 14 people did not have invested

in Mutual Fund.

Sampling design:

Data has been presented with the help of bar graph,

pie charts, line graphs etc.

 33

LIMITATION:

i) Some of the persons were not so respective.

ii) Possibility of error in data collection because many of investors

may have not given actual answers of my questionnaire.

iii) Sample size is limited to 80 visitors of SBI Nakodar Main

Branch, of these only 30had invested in Mutual Fund. The

sample size may not adequately represent the whole market.

iv) Some respondents were reluctant to divulge personal information

which can affect the validity of all responses.

v) The research is confined to a certain part of Nakodar

 34

CHAPTER - 4

DATAANALYSIS
AND INTERPRETATION
 35

ANALYSIS & INETRPRETATION

OF THE DATA

(a) Age distribution of the Investors of Nakodar

A < = 30 36 - 40 46 - 50
ge
G
ro
u
ps
N
o.
of
In
ve
st
or
s

According to this collected data out of 50

Mutual Fund investors of Nakodar the most are in the

age group of 31-35 yrs. i.e., 7%, the second most

investors are in the age group of below 30 yrs. i.e., 5%

and the least investors are in the age of 46-50 yrs.

(b) Educational qualification of investors of Nakodar

Educational qualification No. of

investors
 36

Graduate / post graduate 11

Under graduate 6
Others 3
Total 20

Interpretation:
Outof20 Mutual Fund investors 55% of the

Nakodar are Graduate / Post Graduate, 30% are Under

Graduate and 15% are others

(c) Occupation of the investors of Nakodar

Occupation No. of investors

Govt. service 11

Pvt. service 7

Business 2

Agriculture 0

Others 1

Interpretation:

Out of 20 Mutual Fund investors 11 are of Govt.

sector in service, 7 are in Pvt. Service, 2 in Business

 37

and 1 in others.

(d) Monthly Family Income of the Investors of Nakodar

Income Group No. of Investors

10,000 – 20,000 1

20,000 – 30,000 3

30,000 – 40,000 4

40,000 – 50,000 7

More than 50,000 5

Interpretation:

Most and more 35% of investors who invested

in Mutual Fund are the income group of 40,000 -

50,000; second one i.e., 20% investors are in the

monthly income group of more than 50,000 and

minimum investors 5% are in the monthly income

 38

group of 10,000 - 20,000.

 39

CHAPTER- 5

FINDINGS AND
CONCLUSION
 40

Contents :

 Findings

 Conclusion
 41

FINDINGS

1) In Nakodar in the age group of 36- 40 years were more in

numbers. The second most investors were in the age group of 41-

45 years and the least were in the age group of below 30years.

2) In Nakodar most of the investors were graduate or post graduate

and below HSC there were very few in numbers.

3) Most of the investors had invested in reliance of UTI Mutual

Fund, ICICI Prudential has also good brand position among

investors, SBI MF places after ICICI Prudential according to the

respondents.

4) Out of 55 investors of SBI MF64% have invested due to its

associated with the brand SBI, 27%invested because of Advisor’s

Advice and 9%due to better return.

5) Most of the investor who did not invested in SBI MF due to not

aware of SBI MF, the second most due to Agent’s advice and rest

due to less return.

6) For future investment the maximum respondents preferred

Reliance Mutual Fund, the second most preferred ICICI

 42

Prudential, SBI MF has been preferred after them.

7) 60% investors preferred to invest through financial

advisors,25%through AMC and 15% through bank.

8) 65% preferred one time investment and 35% preferred SIP out of

both type of mode of investment.

9) The most preferred portfolio was equity, the second most was

balance, and the least preferred portfolio was debt portfolio.

10) Maximum number of investors preferred growth

option for returns, the second most preferred dividend payout and

then dividend Reinvestment.

11) Most of the investors did not want to invest in Sectoral

Fund, only 21% of investors wanted to invest in Sectoral Fund.

CONCLUSION

Running a successful Mutual Fund requires complete

understanding of the peculiarities of the Indian Stock Market and also the

psyche of the small investors. This study has made an attempt to

 43

understand the financial behavior mutual fund investors in connection

with preference 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

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 Nakodar but only some are performing well

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

some of the schemes of them are giving good return because of not

awareness about Brand.

Reliance, UTI, SBI MF, ICICI Prudential etc. they are well known

Brand they are performing well and their assets. Under Management is

larger than others whose Brand are not well known like Principle,

Sunderem, 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 investors mind from one investment

option others. Many of investors directly invest their money through

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AMC because they do not have to pay entry load. Only those people invest

directly who know well about mutual fund and its operations and those

have time.
 45

CHAPTER-6
SUGGESTIONS
&
RECOMMENDATION
 46

SUGGESTIONS
&RECOMMENDATIONS

1) The most vital problem spotted if of ignorance. Investors should be

made aware of the benefits. Nobody will until and unless he is

fully convinced. Investors should be made to realize that ignorance

is no longer bliss and what they losing by not investing.

2) Mutual fund offers a lot of benefit which no other single option

could offer. But most of the people are not even of what actually a

mutual fund is? They only see it as just another investment option.

So, 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 expertise and time.

3) Mutual fund company needs to give the training of the individual

Financial Advisors about the fund/scheme and its objectives,

because they are the main source to influence the investors.

4) Younger people aged under 35 will be a key new customer group

into the future, so making greater efforts with younger customers

who show some interest in investing should pay off.

5) Customers with graduate level education are easier to sell to and

 47

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 but

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. There is a large scope for the companies to top

the salaried persons.

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BIBLIOGRAPHY

 NEWSPAPERS
 TELEVISION CHANNELS(CNBC AAWAJ)
 MUTUAL FUND HANDBOOK
 FACT SHEET ANDSTATEMENT
 WWW.SBIMF.COM
 WWW.MONEYCONTROL.COM
 WWW.ONLINERESEARCHONLINE.COM
 WWW.MUTUALFINDSINDIA.COM