CHAPTER I

INTRODUCTION

1.1) WHAT IS MUTUAL FUND

A Mutual Fund is a common pool of money into which investors place their
contributors that are to be invested in different types of securities in accordance
with the stated objective. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. The smallest
portion of ownership in a mutual fund is called a Unit, Mutual Fund unit holder is
a portion owner of the fund’s asset.

Mutual Fund Operational Flow

A mutual fund is simply a financial intermediary that allows a group of investors

to pool their money together with a predetermined investment objective. The
mutual fund will have a fund manager who is responsible for investing the pooled
money into specific securities. When you invest in a mutual fund, you are buying
shares of the mutual fund and become a shareholder of the fund.
1.2) DEFINITION:

SEBI (Mutual Funds) Regulations 1993 define

Mutual Fund (MF) as a fund established in the form of a trust by a sponsor to

raise monies by the Trustees through the sale of units to the public under one or
more schemes for investing in securities in accordance with these regulations.

As per business dictionary

A mutual fund is an investment vehicle that is made up of a pool of funds

collected from many investors for the purpose of investing in securities such as
stocks, bonds, money market instruments and similar assets. Mutual Funds are
operated by money managers, who invest the funds capital and attempt to
produce capital gains and income for the fund’s investors. A mutual funds
portfolio is structured and maintained to match the investment objectives stated in
its prospectus.
1.3) THE MUTUAL FUND INDUSTRY IN INDIA:

The mutual fund industry in India started in 1963 with the formation of Unit
Trust of India (UTI) at the initiative of the Reserve Bank of India (RBI) and the
Government of India. The objective then was to attract small investors and
introduce them to market investments. Since then, the history of mutual funds in
India can be broadly divided into six distinct phases.

Phase I (1964-87): Growth of UTI

 Establishment of Unit Trust of India (UTI) by an Act of Parliament.

 The first scheme launched by UTI was Unit Scheme 1964 i.e. US 64, which was a
balanced fund and a biggest scheme with a corpus of about Rs. 200bn.

 It was setup by Reserve Bank of India, functioned under the regulatory and
administrative control of RBI.

 In 1987 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.

 At end of 1998 UTI had Rs.6,700 crores of assets under management.

 UTI had a monopoly for almost 2 decades.

Phase II (1987-93): Entry of Public Sector Funds

 SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 by
State Bank of India. The first public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC).

 Followed by Canbank Mutual Fund establish in Dec, 1987 by Canara Bank.

 Punjab National Bank Mutual Fund in Aug, 1989.

 Indian Bank Mutual Fund in Nov, 1989.

 Bank of India in June, 1990.

 Bank of Baroda Mutual Fund in Oct, 1992.

 LIC established Jeevan Bima Sahayog AMC in June 1989 while GIC had setup
GIC AMC in Dec, 1990.

 By the end of 1993, the mutual fund industry had assets under management of
Rs.470004 crores.

Phase III (1993-2003): Emergence of Private Funds

 Kothari Pioneer (now merged with Franklin Templeton) was the first private
sector mutual fund registered in July 1993. With the entry of private sector funds,
a new era started in the Indian mutual fund industry giving the Indian investors a
wider choice of fund families.

 1993 also was the year in which the first Mutual Fund Regulations came into
being, under which all mutual funds, expect UTI were to be registered and
governed.

 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 Funds) 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 the industry expanded, a non-profit organization, the
Association of Mutual Funds in India (AMFI), was established on 1995.

Phase IV: since February 2003

 In February 2003, following the repeal of the Unit Trust of India Act 1963. UTI
was bifurcated into two separate entities.

1. The Specified Undertaking of the Unit Trust of India functioning under and
administrator and rule framed by Government of India, with assets under
management of Rs.29,835 crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes.

2. 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 recent mergers taking place among different private sector funds, the mutual
fund industry has entered its current phase of consolidation and growth.

 At the end of October 31, 2003, there were 31 funds, which manage assets of
Rs.126726 crores under 386 schemes.

The Indian Mutual Fund industry has witnessed significant growth in the past few
years driven by favourable economic and demographic factors such as rising
income, rising saving rate, rising income earning-spending activity etc.
1.4) STRUCTURE OF MUTUAL FUNDS IN INDIA:

The SEBI (Mutual Funds) Regulations 1993 define a mutual fund as a fund
established in the form of a trust by a sponsor to raise monies (money) by the Trustees
through the sale of units to the public under one or more schemes for investing in
securities in accordance with these regulations.

These regulations have since been replaced by the SEBI (Mutual Funds) Regulations,
1996. The structure indicated by the new regulations is indicated as under.

Organization of a Mutual Fund:

Three key players namely sponsor, mutual fund trust, and asset management company
(AMC) are involved in setting up a mutual fund. They are assisted by other
independent administrative entities like banks, registrars, transfer agent, and
custodians (depository participants).

Structure of Mutual Funds

Regulatory Aspects

Regulatory bodies governing Mutual Fund industry in India are as follows:

 Governed by SEBI (Mutual Fund) Regulation 1996: All mutual funds registered
with it, constituted as trusts (under Indian Trusts Act, 1882).

 Bank operated mutual funds supervised by RBI too.

 AMC registered as Companies registered under Companies Act, 1956.

 SEBI: Very detailed guidelines for disclosures in offer document, offer period,
investment guidelines etc.

a. NAV to be declared every day for open-ended, every week for closed ended.

b. Disclose on website, AMFI, newspaper.

c. Half-yearly results, annual reports.

d. Select Benchmark depending on scheme and compare.

 AMFI: The AMFI is dedicated to developing the Indian mutual fund industry on
professional, health, and ethical lines and to enhance and maintain standards in all
areas with a view to protecting and promoting the interests of mutual funds and
their unit-holders. SEBI has made AMFI certification mandatory for all those
engaged in selling or marketing mutual fund products.

1. Sponsor: Sponsor can be any person or corporate body that establishes the
mutual fund and registers it with SEBI, at least 40% (₹ 10 crore) to the net worth
of the asset management company should be invested by the sponsor as per SEBI
guidelines. The sponsor is expected to have a sound track record and experience
in financial services for a minimum period of 5 years and should ensure various
formalities required in establishing a mutual fund.
2. Trustees: Sponsor appoints trustees, who are authorized to act on behalf of the
Trust. They hold the property of mutual fund. The Trustees role is not to manage
the money but their job is only to see, whether the money is being managed as
per stated objectives. Trustees may be seen as the internal regulators of a mutual
fund. A minimum of 75% or 2/3 of the trustees must be independent person and
shall not be associated with the sponsor, to ensure fair dealings and protect the
unit holders’ interests.

3. Asset Management Company: Trustees appoint the Asset Management

Company (AMC), to manage investor’s money. AMC Acts as an investment
manager of the Trust under the Board Supervision and direction of the Trustees
which is approved and registered with SEBI.

4. Registrar and Transfer Agents: The registrar and transfer agents are appointed
by the AMC. AMC pay compensation to these agents for their services. They
carry out the following functions -

 Receiving and processing the application forms of investors

 Issuing unit certificates

 Sending refund orders

 Giving approval for all transfers of unit and maintaining records

 Repurchasing the units and redemption of units

 Issuing dividend or income warrants

5. Custodian: The mutual fund is required by law to protect their portfolio

securities by placing them with a custodian. Nearly all mutual funds use qualified
bank custodians. Only a registered custodian under the SEBI regulation can act as
a custodian to a mutual fund.
1.5) CLASSIFICATION OF MUTUAL FUND:

When considering Investment opportunities, the first challenge that almost every
investor faces is an abundance option. From stocks, bonds, shares, money market
securities, to the right combination of two or more of these, however, every option
presents its own set of challenges and benefits.

Classification of Mutual Fund

Based on the maturity period structured funds:

a. Open-ended Fund: An open-ended fund is a fund that is available for

subscription and can be redeemed on a continuous basis. The majority of
mutual funds are open-end funds. Investors have the flexibility to buy or sell
any part of their investment at any time at a price linked to the fund’s Net
Asset Value from the mutual fund itself. Therefore, these funds are not listed
on stock exchange.
 b. Close-ended Fund: A close-ended fund is a fund that has a defined maturity
period (generally ranging from 3 to 15 years). These funds are open for
subscription for a specified period at the time of initial launch known as NFO
(New Fund Offer) and have a fixed number of shares outstanding. These funds
are listed on a recognized stock exchange, so it is traded just like other stocks
on an exchange or over the counter. Hence provided liquidity to the investor.

Based on investment objectives:

a. Equity/ Growth Funds: Equity/Growth funds invest a major part of its

corpus in stocks and the investment objective of these funds is long-term
capital growth. Equity funds invest minimum 65% of its corpus in equity and
equity related securities. These funds may invest in wide range of industries or
focus on one or more industry sectors. These types of funds are suitable for
investors with a long-term investment and higher risk appetite. Aggressive
investor invests in Equity funds. E.g. SBI Blue Chip Fund, Franklin India Blue
Chip Fund.

b. Debt/Income Funds: Debt/Income funds generally invest in securities such as

bonds, corporate debentures, government securities (gilts) and money market
instruments. These funds invest minimum 65% of its corpus in fixed income
securities. By investing in debt instruments, these funds provide low risk and
stable income to investors with preservation of capital. These funds tend to be
less volatile than equity funds and produce regular income. These funds are
suitable for cautious investors whose main objective is safety of capital with
moderate growth. E.g. Tata Dynamic Bond, HDFC High Interest Fund –
Dynamic Plan.

c. Balance Funds: Balance Funds is also known as Diversified find. Balances

funds invest in both equities and debt instruments as per the pre-determined
investment objective of the scheme. They generally have distribution of
 investment as 60:46 i.e. around 60% in Equity and 40% in Debt instruments.
These funds provide benefits of both stability of returns and capital
appreciation to investors. These funds are ideal for investors looking for a
combination of income and moderate growth. E.g. Franklin India Balanced
Fund, HDFC Balanced Fund.

d. Money Market Mutual Funds: Money market funds are also known as
Liquid Funds, which invest in safer short-term instruments such as treasury
Bills, Certificates of Deposit and Commercial paper for a period of less than
91 days. The main purpose of money Market Funds is to provide easy
liquidity, preservation of capital and moderate income. These funds are ideal
for corporate and individual investors looking for moderate returns on their
surplus funds. E.g. Indiabulls Liquid Fund, UTI Money Market Fund.

Other Funds or Schemes:

a. Tax-Saving (Equity linked Savings Schemes) Funds: Tax-saving schemes

offer tax rebates to investors under specific provisions of Income Tax Act,
1961 as prescribe from time to time and promote long term investment in
equities. Eligible for deduction under section 80C and has a lock in period
three years. These are growth-oriented schemes and invest primarily in
equities. Like an equity scheme, they largely suit investors having a higher
risk appetite and aim to generate capital appreciation over medium to long
term. E.g. L&T Tax Saver, Escorts Tax Plan.

b. Index Funds: Index schemes reflex the performance of a particular index

such as the BSE Sensex or the S&P CNX Nifty. The portfolio of these
schemes consists of only those stocks that represents the index and the
weightage assigned to each stock is aligned to the stock’s weightage in the
index. Hence, the returns from these funds are more or less similar to those
 generated by the index. E.g. ICICI Prudential Nifty ETF, Reliance Index Fund
– Nifty Plan.

c. Sector- Specific Funds: Sector-specific funds invest in the securities of only

those sectors of industries as specified in the Scheme Information Document.
The returns in these funds are dependent on the performance of the respective
sector/industries For Example FMCG, Pharma, IT, etc. The funds enable
investors to diversify holdings among many companies within an industry.
Sector funds are riskier as the performance is dependent on particular sector
although this also results in higher returns generated by these funds.

d. Exchange Traded Funds (ETF): ETF is a fund whose units trade like a
stock on the stock exchange. These could be based on a stock index or any
other underlying asset such as Gold. These can be bought and sold only in the
stock market at real time prices which could be different from its unit NAV.
These have lower expense ratios when compared to index funds and other
equity funds. Investor need to have a Demat account to invest in these funds.
These funds aim to closely reflect the returns generated by the underlying
asset.

e. Fund of Funds (FoF): FoFs invest in the other mutual funds either of the
same fund house or others. There are funds that invest in units of debt, equity
and gold too. It is easy to achieve diversification and lower risk through FoF.
However, Investor will have to bear higher management expense.

f. Gilt Funds: Gilt funds invest exclusively in government securities. Although

these funds carry no credit risk, they are associated with interest rate risk.
These funds are safer as they invest in government securities. E.g. L&T Gilt,
SBI Magnum Fund – Long Term
1.6) ADVANTAGES OF MUTUAL FUND:

Mutual fund investments in stocks, bonds and other instruments require considerable
expertise and constant supervision, to allow an investor to take the right decisions.
Small investors usually do not have the necessary expertise and time to undertake any
study that can facilitate informed decisions. While this is the predominant reason for
the popularity of mutual funds, there are many other benefits that make mutual funds
appealing.

Advantages of Mutual Funds

1. Diversification Benefits: Diversified investment improves the risk return

profile of the portfolio. Optimal diversification has limitations due to low
liquidity among small investors. The large corpus of a mutual fund as
compared to individual investments makes optimal diversification possible.
Due to the pooling of capital, individual investors can derive benefits of
diversification.
2. Low Transaction Costs: Mutual fund transactions are generally very large.
These large volumes attract lower brokerage commissions and other costs as
compared to smaller volumes of the transactions that individual investors enter
into. The brokers quote a lower rate of commission due to two reasons. The
first is competition for the institutional investors business. The second reason
is that the overhead cost of executing a trade does not differ much for large
and small orders. Hence for a large order these costs spread over a large
volume enabling the broker to quote a lower commission rate.

3. Availability of Various Schemes: There are four basic types of mutual funds:
equity, bond, hybrid and money market. Equity funds concentrate their
investments in stocks. Similarly, bond funds primarily invest in bonds and
other securities. Equity, bond and hybrid funds are called long-term funds.
Money market funds are referred to as short-term funds because they invest in
securities that generally mature in about one year or less. Mutual funds
generally offer a number of schemes to suit the requirement of the investors.

4. Professional Management: Management of a portfolio involves continuous

monitoring of various securities and innumerable economic variables that may
affect a portfolio's performance. This requires a lot of time and effort on part
of the investors along with in-depth knowledge of the functioning of the
financial markets. Mutual funds are managed by fund managers generally with
knowledge and experience whose time is solely devoted to tracking and
updating the portfolio. Thus, investment in a mutual fund not only saves time
and effort for the investor but is also likely to produce better results.

5. Liquidity: Liquidating a portfolio is not always easy. There may not be a

liquid market for all securities held. In case only a part of the portfolio is
required to be liquidated, it may not be possible to see all the securities
 forming a part of the portfolio in the same proportion as they are represented
in the portfolio; investing in mutual funds can solve these problems.

6. Returns: In India dividend received by investors is tax-free. This enhances the

yield on mutual funds marginally as compared to income from other
investment options. Also, in case of long-term capital gains, the investor
benefits from indexation and lower capital gain tax.

7. Flexibility: Features of a MF scheme such as regular investment plan, regular

withdrawal plans and dividend reinvestment plan allows investors to
systematically invest or withdraw funds according to the needs and
convenience.

8. Well Regulated: All mutual funds are registered with SEBI and they function
within the provisions of strict regulations designed to protect the interest of
investors. The SEBI regularly monitors the operations of an AMC.
1.7) DISADVANTAGES OF MUTUAL FUND:

1. No Insurance / Risk: Mutual Funds, although regulated by the government,

are not insured against losses. Mutual Fund investments are subject to market
risk involved. This caution can be checked with the offer document where it is
clearly mentioned as follows: “Mutual Fund investments are subject to market
risk. Please read the offer document carefully before investing.”

2. Dilution: Although diversification reduces the amount of risk involved in

mutual funds, it can also be a disadvantage due to dilution. For example, if a
single security held by mutual fund doubles in value, the mutual fund itself
would not double in value because that security is only one small part of the
fund’s holdings.

3. Fees and Expenses: Most mutual funds charge management and operating
fees that pay for the fund’s management expenses. In addition, some mutual
funds charge high sales commissions and redemption fees. Mutual Fund
managers are one of the highest-paid executives in the finance domain.

4. Poor Performance: Mutual Fund helps to diversify the portfolio. However,

though the diversification of portfolio helps in minimization of risk, these do
not result in maximization of returns to the investors. More over there is no
guaranteed returns from the investments made in its various schemes.

5. Loss of Control: The managers of mutual funds make all of the decisions
about which securities to buy and sell and when to do so. Thus, an investor has
to rely on fund manager’s capabilities for managing their investment portfolio.
For example, the tax consequences of a decision by the manager to buy or sell
an asset at a certain time might not be optional for an investor.
6. Trading Limitations: Although mutual funds are highly liquid in general,
most mutual funds such as open-ended funds, cannot be bought or sold in the
middle of the trading day. Investor can only buy and sell them at the end of the
day, after they’ve calculated the current value of their holdings.

7. Inefficiency of Cash Reserves: Mutual Fund usually maintain large cash

reserves as protection against a large number of simultaneous withdrawals.
Although this provides investors with liquidity, it means that some of the
fund’s money is invested in cash instead of assets, which tends to lower the
investors potential return.

8. Unethical practices: Mutual Fund manager may follow unethical (corrupt)

practices to boost the performance of the various fund-related schemes.
 CHAPTER II

RESEARCH METHODOLOGY

2.1) OBJECTIVES:

 To analyse the perception of investors towards mutual funds.

 To study the level of awareness of mutual funds.

 To determine the type of mutual fund investor prefers the most.

 To determine the factors influencing selection of mutual funds as an investment

option.

2.2) HYPOTHESIS:

H0: Consumer do not invest in mutual funds through banks.

H1: Consumer invest in mutual fund through banks.

2.3) RESEARCH METHODOLOGY:

The study mainly deals with the financial behaviour of Individual Investor
towards mutual funds in Mumbai city. The required data was collected through a
pretested questionnaire administrated on a combination of simple random and
judgement sample of 100 educated individual investors. Judgement sample
selection is due to the time constraints. Respondents were screened and inclusion
was purely on the basis of their knowledge about financial markets, MFs in
particular. This was necessary because the questionnaire presumed awareness of
some basic terminology about mutual funds. The purpose of the survey was to
understand the behavioural aspects of individual investors mainly their fund
selection behaviour, various factors influencing this behaviour and also the
conceptual awareness level among individual investors. This survey was
conducted during February-March 2019, among 100 educated geographically
dispersed individual investors of Mumbai city.

 Primary Method of Data Collection:

For the purpose of this study, the survey method is adopted for collection of data.
The data collection instrument used is structured questionnaire. The sampling
technique used is Simple Random and Judgement Sampling Method and the
sample size is 100 investors and sampling units include businessmen,
professionals and salaried employees.

 Secondary Method of Data Collection:

Secondary data was collected from thesis repots, conference papers, articles,
websites, published books, journals, etc.
2.4) SIGNIFICANCE OF THE STUDY:

The impressive growth of mutual funds in India has attracted the attention of
Indian researchers, individuals and institutional investors during past years. A
number of empirical studies have been conducted to examine the growth,
competition, performance and regulation of mutual funds in India. The Indian
mutual fund industry is currently in the phase of consolidation and growth stage
of the product life cycle.

The study attempts to find out the awareness of people about such a growing
financial asset and provide recommendations / suggestions which can be used for
knowing the preferences of investors and making the mutual fund investment
popular among the investors.

The investors are now very much aware and make the choice of investments by
studying it from all the angles. The present study also attempts to the preference
of investment, considerations of investors while investing in mutual Funds, which
can help the mutual fund companies while launching the new schemes. This can
turn the potential investors into investors and channelize the flow of saving
towards the mutual fund investment.

2.4) LIMITATIONS OF THE STUDY:

 The findings of the study were applicable only to the limited area of Mumbai.
A relevant study of wide area was not possible for travelling reasons.
 Sample size is limited to 100 educated individual investors in the city of
Mumbai. The sample size may not adequately represent the national market.
 Simple Random and Judgement Sampling Techniques is due to time, cost and
physical limitations.
 The perception of respondents towards mutual funds may vary/ differ
according to their personal experiences and achievements.

Besides, this few respondents hesitated to fill up the questionnaire inspite of this
survey being anonymous. Also, many respondents were hesitant to even fill up
their designation.
 CHAPTER III
REVIEW OF LITERATURE

 Dr. Sandeep Bansal, Deepak Garg and Sanjeev K Saini (2012), have
studied Impact of Sharpe Ratio & Treynor’s Ratio on Selected Mutual Fund
Schemes. This paper examines the performance of selected mutual fund
schemes, that the risk profile of the aggregate mutual fund universe can be
accurately compared by a simple market index that offers comparative
monthly liquidity, returns, systematic & unsystematic risk and complete fund
analysis by using the special reference of Sharpe ratio and Treynor’s ratio.

 Dr. K. Veeraiah and Dr. A. Kishore Kumar (Jan 2014), conducted a

research on Comparative Performance Analysis of Select Indian Mutual
Fund Schemes. This study analyses the performance of Indian owned
mutual funds and compares their performance. The performance of these
funds was analysed using a five-year NAVs and portfolio allocation.
Findings of the study reveals that, mutual funds out perform naïve
investment. Mutual funds as a medium-to-long term investment option are
preferred as a suitable investment option by investors.

 Dr. Yogesh Kumar Mehta (Feb 2012), has studied Emerging Scenario of
Mutual Funds in India: An Analytical Study of Tax Funds. The present
study is based on selected equity funds of public sector and private sector
mutual fund. Corporate and Institutions who form only 1.16% of the total
number of investors accounts in the MFs industry, contribute a sizeable
amount of Rs. 2,87,108.01 crore which is 56.55% of the total net assets in
the MF industry. It is also found that MFs did not prefer debt segment.
 Dr Surender Kumar Gupta and Dr. Sandeep Bansal (Jul 2012), have
done a Comparative Study on Debt Scheme of Mutual Fund of Reliance
and Birla Sunlife. This study provides an overview of the performance of
debt scheme of mutual fund of Reliance, and Birla Sunlife with the help of
Sharpe Index after calculating Net Asset Values and Standard Deviation.
This study reveals that returns on Debt Schemes are close to Benchmark
return (Crisil Composite Debt Fund Index: 4.34%) and Risk-Free Return:
6% (average adjusted for last five year).

 Prof. V. Vanaja and Dr. R. Karrupasamy (2013), have done a Study on

the Performance of select Private Sector Balanced Category Mutual Fund
Schemes in India. This study of performance evaluation would help the
investors to choose the best schemes available and will also help the
AUM’s in better portfolio construction and can rectify the problems of
underperforming schemes. The objective of the study is to evaluate the
performance of select Private sector balanced schemes on the basis of
returns and comparison with their bench marks and also to appraise the
performance of different category of funds using risk adjusted measures as
suggested by Sharpe, Treynor and Jensen.

 E. Priyadarshini and Dr. A. Chandra Babu (2011), have done

Prediction of the Net Asset Values of Indian Mutual Funds Using Auto-
Regressive Integrated Moving Average (Arima). In this paper, some of the
mutual funds in India had been modelled using Box-Jenkins autoregressive
integrated moving average (ARIMA) methodology. Validity of the models
was tested using standard statistical techniques and the future NAV values
of the mutual funds have been forecasted.
 Dr. Ranjit Singh, Dr. Anurag Singh and Dr. H. Ramananda Singh
(August 2011), have done research on Positioning of Mutual Funds among
Small Town and Sub-Urban Investors. In the recent past the significant
proportion of the investment of the urban investor is being attracted by the
mutual funds. This has led to the saturation of the market in the urban
areas. In order to increase their investor base, the mutual fund companies
are exploring the opportunities in the small towns and sub-urban areas. But
marketing the mutual funds in these areas requires the positioning of the
products in the minds of the investors in a different way. The product has
to be acceptable to the investors, it should be affordable to the investors, it
should be made available to them and at the same time the investors
should be aware of it. The present paper deals with all these issues. It
measures the degree of influence on acceptability, affordability,
availability and awareness among the small town and sub-urban investors
on their investment decisions.

 Prof. Kalpesh P Prajapati and Prof. Mahesh K Patel (Jul 2012), have
done a Comparative Study on Performance Evaluation of Mutual Fund
Schemes of Indian Companies. In this paper the performance evaluation of
Indian mutual funds is carried out through relative performance index,
risk-return analysis, Treynor's ratio, Sharp's ratio, Sharp's measure,
Jensen's measure, and Fama's measure. The data used is daily closing
NAVs. The source of data is website of Association of Mutual Funds in
India (AMFI). The study period is 1st January 2007 to 31st December,
2011. The results of performance measures suggest that most of the mutual
fund have given positive return during 2007 to 2011.

 C.Srinivas Yadav and Hemanth N C (Feb 2014), have studied

Performance of Selected Equity Growth Mutual Funds in India: An
Empirical Study during 1st June 2010 to 31st May 2013. The study
evaluates performance of selected growth equity funds in India, carried out
using portfolio performance evaluation techniques such as Sharpe and
 Treynor measure. S&P CNX NIFTY has been taken as the benchmark.
The study conducted with 15 equity growth Schemes (NAV) were chosen
from top 10 AMCs (based on AUM) for the period 1st June 2010 to 31st
may 2013(3 years).

 Rashmi Sharma and N. K. Pandya (2013), have done an overview of

Investing in Mutual Fund. In this paper, structure of mutual fund,
comparison between investments in mutual fund and other investment
options and calculation of NAV etc. have been considered. In this paper,
the impacts of various demographic factors on investors’ attitude towards
mutual fund have been studied. For measuring various phenomena and
analysing the collected data effectively and efficiently for drawing sound
conclusions, drawing pie charts has been used and for analysing the
various factors responsible for investment in mutual funds.

 Rahul Singal, Anuradha Garg and Dr Sanjay Singla (May 2013), have
done Performance Appraisal of Growth Mutual Fund. The paper examines
the performance of 25 Growth Mutual Fund Schemes. Over the time
period Jan 2004 to Dec 2008. For this purpose, three techniques are used
(I) Beta (II) Sharpe Ratio (III) Treynor Ratio. Rank is given according to
result drawn from this scheme and comparison is also made between
results drawn from different schemes and normally the different are
insignificant.

 Dhiman Jani and Dr. Rajeev Jain (Dec 2013), have studied Role of
Mutual Funds in Indian Financial System as a Key Resource Mobiliser.
This paper attempts to identify, the relationship between AUM mobilized
by mutual fund companies and GDP growth of the India. To find out
correlation coefficient Kendall’s tau b and spearman’s rho correlation ship
was applied, the data range was selected from 1998-99 to 2009-10.
 Dr. R. Narayanasamy and V. Rathnamani (Apr 2013), have done
Performance Evaluation of Equity Mutual Funds (On Selected Equity
Large Cap Funds). This study, basically, deals with the equity mutual
funds that are offered for investment by the various fund houses in India.
This study mainly focused on the performance of selected equity large cap
mutual fund schemes in terms of risk- return relationship. The main
objectives of this research work are to analysis financial performance of
selected mutual fund schemes through the statistical parameters such as
(alpha, beta, standard deviation, r-squared, Sharpe ratio).

 Dr. Ashok Khurana and Kavita Panjwani (Nov, 2010), have analysed
Hybrid Mutual Funds. Mutual fund returns can be compared using
Arithmetic mean & Compounded Annual Growth Rate. Risk can be
analysed by finding out Standard Deviation, Beta while performance
analysis is based on Risk-Return adjustment. Key ratios like Sharpe ratio
and Treynor ratio are used for Risk-Return analysis. Funds are compared
with a benchmark, industry average, and analysis of volatility and return
per unit to find out how well they are performing with respect to the
market Value at Risk analysis can be done to find out the maximum
possible losses in a month given the investor had made an investment in
that month. Based on the quantitative study conducted company a fund is
chosen as the best fund in the Balance fund growth schemes.

 Dr. D. Rajasekar (Sep 2013), has done a Study on Investor`s Preference

Towards Mutual Funds with Reference to Reliance Private Limited,
Chennai - An Empirical Analysis. The data was analysed using the
statistical tools like percentage analysis, chi square, weighted average. The
report was concluded with findings and suggestions and summary. From
the findings, it was inferred overall that the investor is highly concerned
about safety and growth and benefits and the service rendered by the
Reliance mutual funds.
 Dr. Mamata Shah (Dec 2012) has done research on Marketing Practices
of Mutual Funds. Development of an economy necessarily depends upon
its financial system and the rate of new capital formation which can be
achieved by mobilizing savings and adopting an investment pattern, be its
self-financing (i.e. direct or indirect) where financial intermediaries like
banks, insurance and other financial companies come in the picture and
mediate between savers and borrowers of funds. In the same way there are
different types of investors and each category of investors differs in its
objectives and hence it is imperative for investment managers to choose an
appropriate investment policy for the group they are dealing with, further
managing the investment is a dynamic and an ongoing process.

 Rajiv G. Sharma (Aug 2013) has done a Comparative Study on Public

and Private Sector Mutual Funds in India. The study at first tests whether
there is any relation between demographic profile of the investor and
selection of mutual fund alternative from among public sector and private
sector. For the purpose of analysis perceptions of selected investors from
public and private sector mutual funds are taken into consideration. The
major factors influencing the investors of public and private sectors mutual
funds are identified. The factors under consideration to compare between
perceptions of public and private sector mutual fund investors are
Liquidity, Security, Flexibility, Management fee, Service Quality,
Transparency, Returns and Tax benefits.

 Dr. E. Priyadarshini (2013), has done Analysis of the Performance of

Artificial Neural Network Technique for Forecasting Mutual Fund Net
Asset Values. In this paper, the Net Asset Values of four Indian Mutual
Funds were predicted using Artificial Neural Network after eliminating the
redundant variables using PCA and the performance was evaluated using
standard statistical measures such as MAPE, RMSE, etc.
 Vibha Lamba (Feb 2014), has done an analysis of Portfolio Management
in India. The purpose of present study is to analyse the scope and
importance of portfolio management in India. This paper also focuses on
the types and steps of portfolio management which a portfolio manager
should take to provide maximum returns and minimum risk to his clients
for their investments.

 Dr. N. K. Sathya Pal Sharma and Ravikumar. R (2013), have done the
Analysis of the Risk and Return Relationship of Equity Based Mutual
Fund in India. In this paper an attempt has been made to analyse the
performance of equity based mutual funds. A total of 15 schemes offered
by 2 private sector companies and 2 public sector companies, have been
studied over the period April 1999 to April 2013 (15years). The analysis
has been made using the risk-return relationship and Capital Asset Pricing
model (CAPM).

 Abhishek Kumar (October 2012), have studied Trend in Behavioural

Finance and Asset Mobilization in Mutual Fund Industry of India. This
paper tries to analyse some of the key issues noted below:

1. To understand the growth and the potential of Mutual Fund industry and
analyse its success.
2. An exhaustive cross performance study of Mutual fund industry by
analysing around 1025 mutual fund schemes of India.
3. Performance analyses of various mutual fund schemes and its
contributions to assets management during the study period (2002-2009).
4. Insight about the performance of the mutual fund under short term and
long-term period and Investor’s behaviour in allocating their investments
among various assets available in the market compared to Mutual funds in
the changing economic Scenario.
 B. Raja Manner and Dr. B. Ramachandra Reddy (Oct 2012), Review
and Performance of Select Mutual Funds Operated by Private Sector
Banks: Axis Equity and Kotak 50 Funds – Growth Option. The two mutual
funds (i) Axis Equity (G) and (ii) Kotak 50 (G) are reviewed in detail with
a brief introduction of the fund houses itself. The funds are then
statistically evaluated by correlation with the benchmark. S&P CNX Nifty,
standard deviation, Sharpe’s Index. Treynor’s Ratio, Jenson’s alpha,
Fama’s Measure and M . 2

 Mrs.V. Sasikala and Dr. A. Lakshmi (Jan 2014) have studied The
Mutual Fund Performance Between 2008 And 2010: Comparative
Analysis. The paper entitled “comparative analysis of mutual fund
performance between 2008 & 2010. The paper was undertaken to know
the after-meltdown period risks and returns of 2008 top hundred mutual
funds and compare with 2010 top hundred mutual funds published in
Business today. The analysis of alpha, beta, standard deviation, Sharpe
ratio and R-squared are declare high, low, average, above average and
below average of risks and return of funds.

 S. Palani and P. Chilar Mohamed (Dec 2013) have done study of Public
and Private Sector Mutual Fund in India. Development of capital market in
a country is an important prerequisite which only would enable industrial
development, Business growth and there by contribution towards
economic development. Without any doubt it could be stated that
economic development, measured in the form of growth in GDP or NNP is
one of the objectives of every country in the world. A well-integrated
Financial System alone could hasten economic growth which it does
through channelizing productive resources towards industrial growth and
development.
 Jafri Arshad Hasan, (2013), has studied The Performance Evaluation of
Indian Mutual Fund Industry past, Present and Future. This article will
discuss the past performance of the Indian mutual fund industry and the
pace of growth it achieved after being succumbed to regulatory changes by
SEBI, international factors and its non-performance that affected the
industry and its sentiments. It will also analyse the future implications of
the current changes that are being implemented by the regulator.

 Dr.S. Vasantha, Uma Maheshwari and K. Subhashini, (Sep 2013),

Evaluating the Performance of some selected open-ended equity
diversified Mutual fund in Indian mutual fund Industry. The main
objective of this research paper is to evaluate the performance of selective
open-ended equity diversified Mutual fund in the Indian equity market.
For the purpose of conducting this study HDFC top 200 fund(g). Reliance
top 200(g). ICICI Prudential top 200(g). Canara Robeco equity diversified
fund(g). Birla Sun Life frontline equity (g) mutual funds have been studied
over the period of 60 months data which is from January 2008 to
December 2012.The analysis has been made on the basis of Sharpe ratio,
Treynor ratio and Jenson.

 Dr. K. Mallikarjun Rao and H. Ranjeet Rani, (Jul 2013), have studied
Risk Adjusted Performance Evaluation of Selected Balanced Mutual Fund
Schemes in India. In this paper, an attempt has been made to study the
performance of selected balanced schemes of mutual funds based on risk-
return relationship models and various measures. Balanced schemes of
mutual funds are the ones which are mostly preferred by Indian investors
because of their balanced portfolio in equity and debt. A total of 10
schemes offered by various mutual funds have been studied over the time
period April, 2010 to March, 2013 (3 years).
 Sowmiya. G, (Jan 2014), has studied Performance Evaluation of Mutual
Funds in India. The objectives of this are to know the basic concepts and
terminologies of the mutual funds in public limited companies and private
limited companies. To analyse performance and growth of selected mutual
funds schemes with their NAV and their returns. To identify the return
variance and to provide suggestions based on the analysis.

 Ms. Shalini Goyal and Ms. Dauly Bansal (2013) have done A Study on
Mutual Funds in India. This paper focuses on the entire journey of mutual
fund industry in India. Its origin, its fall and rise throughout all these years
and tried to predict what the future may hold for the Mutual Fund
Investors in the long run. This study was conducted to analyse and
compare the performance of different types of mutual funds in India and
concluded that equity funds outperform income funds.

 Megha Pandey, (2013) has done Comparative Study of Performance of

Actively Managed Funds and Index Funds in INDIA. Actively Managed
funds always overlapped passively managed funds or Index Funds this
research deals with a comparative analysis between the performance of
both of the funds, actively managed and passively managed. T test is
applied to compare their means and by this research the derived results
shows that though actively managed funds gives more returns.

 Sarita Bahl and Meenakshi Rani, (Jul 2012) have done A Comparative
Analysis of Mutual Fund Schemes in India. The present paper investigates
the performance of 29 open-ended Growth - oriented equity schemes for
the period from April 2005 to March 2011 (six years) of transition
economy. Monthly NAV of different schemes have been used to calculate
the returns from the fund schemes. BSE- Sensex has been used for market
 portfolio. Historical performance of select schemes were evaluated on the
basis of Sharpe, Treynor and Jensen’s measure whose results will be
useful for investors for taking better investment decisions.

 Dr. R. Karrupasamy and Professor V. Vanaja, (Jul. 2013), A Study on

the Performance of Selected Large Cap and Small & Mid Cap Mutual
Fund Schemes in India. The objective of the study is to evaluate the
performance of different mutual fund schemes (Large Cap, Small & Mid
cap Equity Schemes) on the basis of returns and comparison with their
bench marks and also to appraise the performance of different category of
funds using risk adjusted measures as suggested by Sharpe, Treynor and
Jensen. The study revealed the investors for investment below 2 years can
choose large cap schemes and investment beyond 3 years can be made in
Small & mid cap schemes.

 G. Pratap and Dr. A. Raja Mohan (Dec 2013), have done A Study on
Status of Awareness among Mutual Fund Investors in Tamilnadu. Mutual
funds have become an important intermediary between households and
financial markets, particularly the equity market. Mutual funds have
enabled an increasing number of households to enter financial markets and
the diversified investment structure of mutual funds and diversified risk
contributed tremendously in the growth of mutual funds. It is important to
study the awareness of mutual fund among the investors.

 Dr. Naila Iqbal (Jul 2013) has studied Market Penetration and Investment
Pattern of Mutual Fund Industry in India. Market penetration is a term that
indicates how deeply a product or service has become entrenched with a
given consumer market. The degree of penetration is often measured by
the amount of sales that are generated within the market itself. A product
that generates twenty percent of the sales made within a given market
 would be said to have a higher rate of market penetration that a similar
product that realizes ten percent of the total sales within that same market.
 Dr. Binod Kumar Singh, (Mar 2012) has done A Study on Investors’
Attitude towards Mutual Funds as an Investment Option. In this paper,
structure of mutual fund, operations of mutual fund, comparison between
investment in mutual fund and bank and calculation of NAV etc. have
been considered. In this paper the impacts of various demographic factors
on investors’ attitude towards mutual fund have been studied. For
measuring various phenomena and analysing the collected data effectively
and efficiently for drawing sound conclusions.

 Dr. B. Saritha, (Feb 2012) has studied Mutual Fund Investment Decisions
by Using Fama Decomposition Models. Mutual Funds are dynamic
Financial Institutions (FI) which play a crucial role in an economy by
mobilizing savings and investing them in the capital market. Thus,
establishing a link between savings and capital market. Therefore, the
activities of mutual funds have both short- and long-term impact on the
savings & capital markets and the national economy.

 Dr. S.M. Tariq Zafar, Dr. D.S. Choubey and Syed Imran Nawab Ali,
(Feb 2012), have done An Empirical Study on Indian Mutual Funds
Equity Diversified Growth Schemes and Their Performance Evaluation.
This paper aims to know how the performance of mutual funds is assessed
and ranked after analysing the NAV and their respective returns so as to
measure investment avenues. For the purpose thirteen most preferred
public and private sector equity diversified growth schemes over a period
of one year viz.2007-08 have been taken through judgment sampling and
Yield on 10 yr. govt. bond has been taken as the surrogate for the risk-free
rate of return viz.7.56% p.a.
 Dr. Sandeep Bansal, Sanjeev Kumar, Dr. Surender Kumar Gupta and
Sachin Singla (Jun 2012) have done a Study of Selected Dividend Mutual
Fund Schemes with Jenson’s Alpha Model. In this present paper we apply
a risk-adjusted measure known as Jensen's Alpha Model on ten randomly
selected dividend mutual fund schemes that estimates how much a
manager's forecasting ability contributes to the fund's returns. We use a
sample of 10 mutual fund schemes (dividend) for the period of 4 years
from May 2005 to April 2009 on monthly basis and calculated their NAV.

 Dr. Sandeep Bansal and Sanjeev Kumar, (Feb 2012), have done an
Evaluation of Risk-Adjusted Performance of Mutual Funds in India. In this
paper an attempt has been made to study the performance of selected
mutual funds schemes based on risk-return relationship models and return
on mutual funds are also compared with return on equity shares of
different sectors of Indian economy. Return on ten mutual funds schemes
and return on equity shares of three sectors namely Fast-Moving Capital
Goods, Information Technology and Power sectors have been studied over
the time period Jan.2006 to Jan 2009 (3 years).

 Mr. Jay R. Joshi, (Mar 2013), Mutual Funds: An Investment Option

from Investors’ Point of View. This study is of descriptive type research.
The target population will be individual investor in Anand – Vidyanagar
area of relatively affluent western State of Gujarat (India). The survey will
be based on convenience sampling having 100 investors as sample size.
The study will try to identify the consumers’ preference for various mutual
funds and the main reasons for investment in mutual fund schemes. The
study will also try to investigate various factors that investor is thinking
before selecting a mutual fund company. Overall, the study is focusing on
the behaviour of individual investors and hence form a part of behavioural
finance area.
 N. Geetha and M. Ramesh, (2011), have studied Investors’ Perception on
Mutual Funds with Reference to Chidambaram Town. The main objective
of the study is to elucidate the perceptions and behaviours of the small
investors located in the town of Chidambaram, Tamil Nadu, South India
towards the mutual funds and also suggest some measures to increase the
quantum of investors and investments as well.

 C.Vijendra and D. Sakriya, (June 2013) have done a Study of Investor

Behaviour regarding Investment Decisions in Mutual Funds. A survey was
conducted among 384 mutual funds investors from the twin cities of
Hyderabad & Secundrabad to study the factors influencing the
fund/scheme selection behaviour of these investors. It is hoped that this
survey will underpin the AMCs with regards to planning and
implementation of designing, marketing and selling of innovative
products.

 Ms. Archana Patro and Prof. A. Kanagaraj (Jun 2012), have done
Exploring the Herding Behaviour in Indian Mutual Fund Industry. The
study analyses the trading activity of Indian mutual funds and investigates
whether Indian mutual fund managers are engaged in herding behaviour.
Results are compared with previous studies in mature as well as
developing markets to determine the level of maturity of the Indian capital
market. Measure of herding developed by Lakonishok et al. (1992) has
been used.

 Ms. K. HemaDivya (Apr 2012), has done A Comparative study on

Evaluation of Selected Mutual Funds in India. Mutual Funds industry has
grown up by leaps & bounds, particularly during the last 2 decades of the
20th century. Proper assessment of fund performance would facilitate the
peer comparison among investment managers, help average investors
successfully identify skilled managers. Further the growing competition in
 the market forces the fund managers to work hard to satisfy investors &
management. Therefore, regular performance evaluation of mutual funds is
essential for investors and fund managers also. The present study is
confined to evaluate the performance of mutual funds on the basis of
yearly returns compared with BSE Indices.
 Deepika Sharma, Poonam Loothra and Ashish Sharma (May 2011),
Comparative Study of Selected Equity diversified Mutual Fund Schemes.
The present investigation is aimed to examine the performance of safest
investment instrument in the security market in the eyes of investors i.e.,
mutual funds by specially focusing on equity-diversified schemes. Eight
mutual fund schemes have been selected for this purpose. The examination
is achieved by assessing various financial tests like Sharpe Ratio, Standard
Deviation and Alpha.

 Dr. Nishi Sharma (Aug 2012), has done research on Indian Investor’s
Perception towards Mutual Funds. This paper attempts to investigate the
reasons responsible for lesser recognition of mutual fund as a prime
investment option. It examines the investor’s perception with reference to
distinct features provided by mutual fund companies to attract them for
investing in specific funds/schemes. The study uses principal component
analysis as a tool for factor reduction. The paper explored three factors
named as fund/scheme related attributes, monetary benefits and sponsor’s
related attributes (having respectively six, four and four variables) which
may be offered to investors for securing their patronage. The results are
expected to provide fruitful insight to mutual fund companies for tailoring
their offers suitable to cater the needs and expectations of Indian investors.

 Singh B K (2012) in an article “A study on investors’ attitude towards mutual

funds as an investment option” from International Journal of Research in
Management has reiterated the need for spreading the awareness about Mutual
Funds among common masses. There is a strong need to make people
understand the unique features of investment in Mutual Funds. From the
existing investors point of view the benefits provided by mutual funds like
return potential and liquidity have been perceived to be most attractive by the
invertors’ followed by flexibility, transparency and affordability.
 Divya K. (2012) in the article “A Comparative study on evaluation of Selected
Mutual Funds in India” from International Journal of Marketing and
Technology has suggested that the investment managers whose performance is
below benchmark index should have a relook at their investment strategy and
asset allocation. Investing styles should be redesigned according to up & down
swings of the market to generate superior performance. To increase the
efficiency and popularity of mutual funds, the regulator should set the standard
criteria of benchmarks which will be helpful to asset management companies.

 Vanaja V. and Karrupasamy R (2013) in the article “A study on the

performance of select Private Sector Balanced Category Mutual Fund
Schemes in India” from International Journal of Management Sciences and
Business Research have mentioned that Out of five private sector balanced
category mutual funds (under study) two earned a return above the average
returns. Two have made negative returns. All the private sector balanced
category funds selected for the study have a positive Sharpe ratio. The range
of excess returns over risk free return per unit of total risk is wide. All the
funds selected for the study have a positive Treynor ratio. All the funds
selected for the study has positive Jensen’s alpha indicating superior
performance.

 Narayanasamy R. and Rathnamani V (2013) in an article “Performance

Evaluation of Equity Mutual Funds (on selected Equity Large Cap Funds)”
from International Journal of Business and Management Invention have
mentioned that all funds performed well during the period under study despite
volatility in the market. The fall in NIFTY during the year 2011 impacted the
performance of all selected mutual funds. In order to ensure consistent
performance of mutual funds, investors should also consider statistical
parameters like alpha, beta, standard deviation besides considering NAV and
total return.
 Santhi N.S. and Gurunathan K. (2013) in the article “The growth of Mutual
Funds and Regulatory Challenges” from Indian Journal of Applied Research
have mentioned that as mutual fund industry has grown tremendously over
past few years, Regulators are keeping close watch on any potential impact of
mutual fund products on financial stability and market volatility. The growth
of mutual funds has been accompanied by innovative products and servicing
methods. Regulators will have to do balancing act by carefully managing risks
and not imposing unnecessary regulation.

 Iqbal N (2013) in an article titled, “Market Penetration and Investment Pattern

of Mutual Fund Industry” from International Journal of Advanced Research in
Management and Social Sciences has mentioned that although mutual funds
are predominantly present in urban areas but have started capturing rural
markets also through new range of products, new strategies adopted for Rural
Market Penetration and with new awareness programs. As rural market
integrates more and more with urban, there will be huge inflow of investors.
The responsibility of various intermediaries’ especially mutual funds will
increase manifold.

 Sharma R and Pandya N K (2013) in the article “Investing in Mutual Fund:

An overview” from Asian Research Journal of Business Management
mentioned that still number of people are not clear about functioning of
Mutual Funds, as a result so far, they have not made a firm opinion about
investment in mutual funds. As far existing investors, return potential and
liquidity have been perceived to be most attractive. There is a lot of scope for
the growth of mutual funds in India. People should take decision based on
performance of Mutual fund rather than considering whether it is private
sector or public sector.
 Sharma N. and Ravikumar R (2013) in an article “Analysis of the Risk and
Return relationship of Equity based Mutual Fund in India” from International
Journal of Advancements in Research & Technology have mentioned that
their study investigated the performance of Equity based mutual fund schemes
using Capital Asset Pricing Model (CAPM). In the long run private and public
sector mutual funds have performed well. But while comparing the
performance over last 15 years it is found that private sector mutual funds
have outperformed the Public Sector mutual funds. The schemes of private
sector mutual funds not only performed better than those of public sector
mutual funds but were also found to be less risky.

 Vasantha S. et al (2013) in an article “Evaluating the Performance of some

selected open-ended equity diversified Mutual fund in Indian mutual fund
Industry” from International Journal of Innovative Research in Science,
Engineering and Technology have stated that risk appetite of an investor plays
an important role in selection of mutual fund. While deciding their investment
in mutual funds investor should take decision based on their investment
objective and analyse the fund based on various criteria such as risk prevailing
in the market, variations on the return and deviations in the return etc.

Jani D and Jain R (2013) in an article “Role of Mutual Funds in Indian

Financial System as a Key Resource Mobilizer” from Abhinav Journal
(International Monthly Referred Journal of Research in Management &
Technology) have reiterated that since fundamentals of Indian economy are
relatively strong, the economy will be on a successful path in the coming year.
As economy grows, Mutual Funds are going to be key resource mobilizer for
Indian financial system. Indian Mutual Fund industry is going to observe good
growth rate in near Future.

 Nair R K (2014) in the article “Indian Mutual Fund Market – A tool to

stabilize Indian Economy” from International Journal of Scientific and
 Research Publications has reiterated that a Mutual fund is a powerful tool to
stabilize Indian economy. The products of mutual funds are playing a vital
role in mobilizing scattered savings among investors and channelize these
funds to infrastructural development of the country. The banks and Financial
Institutions are also playing a crucial role by promoting mutual fund business
in the country.

 Sehdev R and Ranjan P (2014) in the article “A study on Investor’s

perception towards mutual fund investment” from Scholars Journal of
Economics, Business and Management have mentioned that mostly people are
preferring balanced funds and debt funds. After that people look for Equity
diversified and Sector funds. The factors responsible for investors’ preference
for mutual funds as an investment option are benefits and transparency,
returns, redemption period, Liquidity and Institutional Investor’s activity. For
information on mutual funds people are mostly depending on internet rather
than any other media channel.
 CHAPTER IV

DATA COLLECTION AND ANALYSIS

Analysis is a crucial aspect of research. Analysis is a form of description of data

gathered in a systematic and scientific way. Statistical analysis acts as a quantitative
link for communication of results. This chapter reflects the research approach of data
collection for the present study.

The data is analysed and interpreted so as to get the information based on the
objectives and hypothesis of the study. The information collected from the
respondents within the study area was tabulated, analysed and conclusions were
drawn with the help of independent variables like gender, age, occupations and
average monthly income.
Analysis & Interpretation of Data

Awareness of Mutual Funds

Table 4.01

YES NO

67% 33%

33%

67%

YES NO

Fig 4.01

According to the study and looking at the sample size, most of the people are aware
about the mutual fund. Almost 67% of the people know about Mutual funds. Only
33% of people are unaware of that. Mutual Fund are very popular amongst people as
it is getting promoted very effectively and fulfilling investors’ expectations.

Source of Knowledge About Mutual Fund

 Table 4.02

Advertisement Peer Groups Banks Financial Advisor

71% 7% 12% 10%

10%

12%

7%

71%

Advertisement Peer Group Banks Financial advisor

Fig 4.02

In today’s world, advertisement is the best medium to contact people and it passes
through people rapidly. Due to this, highest number of people around 71% of them
came to know about Mutual Fund from advertisement only. Very less number people
around 7% came to know from peer groups such as office cliques, family groups, etc.
Banks are also initiating to make people aware about Mutual Funds, 12% people came
to know from banks and others from financial advisors.
 Investment Preference

Table 4.03

Savings Insurance Mutual Funds Real Estate

32% 13% 38% 17%

17%

32%

38%
13%

Savings Insurance Mutual Funds Real Estate

Fig 4.03

Still the traditional way of investment way of investment in savings is same as mutual
fund. But mutual funds are highly getting promoted and its percentage of usage is also
getting higher. As per traditional way of investment 32% of people prefer in savings,
compared to it mutual funds preference is more. 38% of people give preference to
mutual funds. 13% of people prefer insurance and rest 17% are preferring real estate.
 Preference While Investing

Table 4.04

Low Return High Risk Liquidity Trust

8% 7% 33% 52%

8%; 8%

7%; 7%

52%; 52%

33%; 33%

Low Return High Risk Liquidity Trust

Fig 4.04

Trust is the most important factor in everyone’s personal as well as social and
business life too. In today’s world each and everything depends upon trust, so
maximum number of people prefer trust while investing. Liquidity is also given well
importance as such at trust as it is easy converting of securities into cash. Nearly 33%
of people have voted for liquidity. 8% people prefer low return and other remaining
7% prefer high risk.
 Mode of Investment

Table 4.05
Long Term Short Term

66% 34%

34%

66%

Long Term Short Term

Fig 4.05

There are two modes of investment, one is long term mode and other is short term. As
per the survey more of the people are interested in long term investment. Either it
would be due to liquidity, trust, or high return. Around 66% of the people from the
sample size have preferred long term investment. And the other 34% prefer short term
mode of investment. Both the investment terms differ, according to the scheme.
 Channel Preferred by The Investors

Table 4.06
Banks Private Institutions Other Financial
Institutions
77% 10% 13%

13%

10%

77%

Banks Private Institutions Other Financial Institutions

Fig 4.06

More than 50% of the people have trusted banks as an investment source. In-spite of
having private institutions and other financial institutions which are specifically for
such investment, more preference is towards banks. 77% of respondents choose banks
over private institutions and other financial institutions. 10% of them trusted private
institutions and other 13% towards other financial institutions.
 Which Investment Is More Profitable

Table 4.07
Fixed Deposits Mutual Funds Equities Others
32% 44% 11% 13%

13%; 13%

32%; 32%
11%; 11%

44%; 44%

Fixed Deposits Mutual Funds Equities Others

Fig 4.07

Around 44% of the people think mutual fund investment is more profitable. 32% of
them think fixed deposits as profitable investment, other 11% think equities as a
profitable investment and rest 13% prefer other investment such National Pension
System (NPS), Public Provident Fund (PPF), RBI Taxable Bond, Gold, Real Estate,
etc. as a profitable investment source.
 Amount Preferred for Investment

Table 4.08

> Rs.10,000 Rs.10,000 to Rs.20,000 to < Rs.30,000

20,000 30,000
50% 36% 7% 7%

7%

7%

50%

36%

> Rs.10,000 Rs.10,000-20,000 Rs.20,000-30,000 < Rs.30,000

Fig 4.08

Most of the people are salaried class, so it is impossible for them to prefer higher
amount of investment. 49.5% of people are likely to in amount less than Rs.10,000.
36.4% of people are like towards investment amount of Rs.10,000-20,000. 7.1% of
them are able to invest between Rs.20,000-30,000. And very a smaller number of
people such 7% are able to invest more Rs.30,000.
 Do Bank Extend Necessary Help While Investing?

Table 4.09

YES No

75% 25%

25%

75%

YES NO

Fig 4.09

It is necessary from the banks side to help and guide the investor’s while investing
into various schemes through them. 75% of the people says that their banks extend
necessary help in investing from their side for well-being of their customers. Rest
25% are not been helped by their banks in investing.
 Is Your Bank Proactive In Solving Queries

Table 4.10

YES NO

86% 14%

14%

86%

YES NO

Fig 4.10

From the above chart we come to know that around 86% of the people said that their
banks are proactive in solving their queries, they do necessary help in solving their
problems. The rest 14% of the people say that they are not guided and their banks are
not proactive in solving their queries.
 Do Your Banks Force You to Purchase Mutual Funds?

Table 4.11
YES NO
15% 85%

15%

85%

YES NO

Fig 4.11

Around 85% of people said that their banks don’t force them to purchase mutual fund.
But its not like that their banks don’t provide them information or not please to buy
mutual funds. Rest of the respondents said their banks force and please them on
regular interval to take interest and buy mutual fund.
 CHAPTER V

FINDINGS AND CONCLUSION

5.1) FINDINGS:

Most of the investors are preferring Mutual Funds over other investment options. Its
ratio is more than the traditional way of investment called Savings.

Advertisements are playing vital role in creating awareness and knowledge about
mutual funds.

In the study, it was found that more than 50% people were of age 18-30 years, who
have full/ partial knowledge and awareness about mutual funds.

Mutual Fund investment is getting equal importance as the traditional investment

method called savings.

Many investors preferred long term investment mode, may be because of high returns
or from future point of view.

According to the study maximum investors preferred banks as an investment channel.

Nearby 75% people choose banks for investment. The reasons may be trust or security
provided by banks.

Investors also choose the amount they can invest is less than Rs. 10,000, due to lack
of knowledge, salaried class people or may have fear of losing money.

The findings show that mutual funds as an investment option have displayed
tremendous growth potential when the markets are optimistic and when wise choices
are made. They have performed much better than traditional investment options in the
long term.

The mutual fund investors consider the liquidity and trust of fund schemes as also an
important factor for investment in such.
5.2) SUGGESTIONS:

Since the investors need for trust and liquidity is found to be high, I would suggest
that more of the new scheme’s opening for subscription be open-ended.

As advertisements are playing vital role, banks should also take some more initiative
in making investors and non-investors aware about various mutual fund schemes,
provide them a brief knowledge.

Banks should also inform their customers having different accounts in their branches
about mutual funds, so that they are willing to take interest in such.

Investors should keep their investment for long time keeping in mind the level of risk
involved.

Once the investors invested in mutual funds, they need returns and if it is not giving
proper returns to them again it is affecting the interest of the investors in mutual
funds.
5.3) CONCLUSION:

Mutual Fund industry has still to struggle to gain more investors. The objectives of
study towards mutual fund as per the sample size and method which is applied to the
study found that the investors and non-investors too are choosing in investing in
mutual fund because of the benefits available than other investment options. The
awareness level of mutual fund among the investors are neither very low nor very
high, as some of them are having the partial knowledge about the mutual fund which
also prevent them to Invest in mutual fund to avoid risk bearing factor and fear of
losing money. The objective of study is to know about the perception of common
investor about mutual funds provided by banks.

After analyzing the entire study using structured questionnaire, it is seen that
Investors are willing to invest in mutual fund through banks.

The analysis of the feedback from the respondents to the questionnaire and survey has
helped to analyze the perception of investors towards mutual funds by banks. The
analysis studies that majority of people prefer to invest in mutual funds through
banks. More than 50% of the people have trusted banks as an investment source. In-
spite of having private institutions and other financial institutions which are
specifically for such investment, more preference is towards banks. Banks are more
trustable institutions who also provide guaranteed securities to their customers.
 BIBLIOGRAPHY

Websites:

http://www.thesij.com/papers/IFBM/2016/February/IFBM-04020060202.pdf

https://www.scribd.com/doc/100667269/INVESTOR-S-PERCEPTION-TOWARDS-
MUTUAL-FUNDS-project-report

https://www.moneycontrol.com/news/business/mutual-funds/-1326381.html

https://shodhgangotri.inflibnet.ac.in/bitstream/123456789/3579/3/03_literature
%20review.pdf

https://www.omicsonline.org/open-access/a-study-of-investors-perception-towards-
mutual-funds-in-the-city-of-delhi-and-meerut-2167-0234-1000306-96654.html

https://www.investopedia.com/university/mutualfunds/mutualfunds1.asp

https://www.slideshare.net/mobile/hemanthcrpatna/a-project-report-on-comparative-
study-of-mutual-funds-in-india

Books:

Financial Services Management, Rishabh Publication, written by- Saira Banoo Shaikh
& Vaishali Pandya Trivedi, Page no. 61-84.
 APPENDIX

Questionnaire for study analysis of Insurance Planning

Instructions:

For most answers check the box(es) applicable to you. This research is being done for
academic purpose only. Data filled in questionnaire will not be disclosed to anyone.

 NAME: ________________________________________________
(optional)

 AGE
 18-30
 31-50
 50-70

 Qualification
 Under-Graduation
 Graduation
 Post-Graduation
 Other

 Occupation
 Government
 Private
 Business
 Other
 Monthly Family Income 
 Less than Rs 10000
 Rs 10000 - 20000
 Rs20001 – 30000
 More than Rs 30000

1. Do you have any idea about Mutual Funds? 

 Yes
 No

2. From where did you come to know about Mutual Funds? 

 Advertisement
 Peer Group
 Banks
 Financial Advisors

3. Where will you prefer to invest?

 Savings
 Insurance
 Mutual Funds
 Real Estate

4. Which is your preference while investing?

 Low Return
 High Risk
 Liquidity
 Trust
5. Which mode of investment will you prefer?
 Long Term
 Short Term

6. From where will you prefer to invest in Mutual Funds?

 Banks
 Private Institutions
 Other Financial Institutions

7. Which investment do you feel is more profitable?

 Fixed Deposits
 Mutual Funds
 Equities
 Others

8. What would be the amount that you will invest in Mutual Funds through
your bank?
 Less than Rs 10000
 Rs 10000 - 20000
 Rs 20000 – 30000
 More than Rs 30000

9. Does your bank extend necessary help in investing in Mutual Funds?

 Yes
 No
10. Is your bank proactive in solving queries related to Mutual Funds?
 Yes
 No

11. Does your bank force you to purchase Mutual Funds?

 Yes
 No