TITLE

TO STUDY THE GROWTH OF MUTUAL FUNDS REGARDING

SALARIED INDIVIDUALS

Submitted By
Name: Ritesh Bang
Student Number: 77221307591

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 ACKNOWLEDGEMENT

I would like to take the opportunity to express my sincere gratitude to all the
people who have helped me with sound advice and able guidance. Above all,
I express my external gratitude to the Lord Almighty under whose divine
guidance; I have been able to complete this report successfully.

I would like to express my sincere obligation to Miss Anuja Shukla, for

providing knowledge, guidance and support throughout which helped me to
complete this work successful.

Lastly, I would like to express my gratitude to my family and friends for their
unwavering encouragement and understanding throughout this journey. Their
support provided the necessary motivation to persevere and excel.

Thank you everyone for your invaluable contribution.

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 Table of Content

Sl. No. Title Page No.

1. Acknowledgement 2

2. Introduction 4-27

3. Objective of the Study 27-28

4. Scope of the Study 29-30

5. Executive Summary 31-33

6. Literature Review 33-36

7. Advantages & Disadvantages 37-38

8. Research Methodology 39-43

9. Data Analysis and Interpretation 44-56

10. Suggestions and Recommendations 57-59

11. Conclusion 60-61

12. Bibliography 62

13. Appendix 63-65

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 INTRODUCTION

Mutual funds are a type of investment. These funds, which pool money
from numerous individuals to invest in stocks, bonds, short-term money
market instruments, and other securities, and then distribute the profits
as dividends, are collective investments. In India, portfolio managers—
also known as fund managers—manage the mutual funds. Indian mutual
funds are governed by the Securities Exchange Board of India. Net asset
value per share (NAV) is the term used to describe the unit price of
mutual funds in India. By dividing the entire value of Indian mutual
funds by the daily number of issued and outstanding units, the NAV is
determined. Mutual funds don't invest in a particular stock, in contrast to
stock investments. The investor receives the highest returns by investing
in mutual funds across a variety of investment vehicles. The stocks to be
purchased for investment do not have to be chosen by the investor. The
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best-performing equities with the highest-potential returns are chosen by
the fund management.

For Example:
Consider a package of 12 oranges that costs Rs. 40. There are four pals
who want to purchase this box but only have Rs. 10 between them. They
decide to pool their resources to purchase the box. They are each eligible
to receive three oranges based on their respective contributions. Try to
compare this example to mutual funds now. Simply dividing the total
investment amount by the total number of shares or securities yields the
cost per unit. Each investor has a stake in the fund, and together they
control the entire pot of money.

Definition:
A mutual fund functions similarly to a trust in that it collects money
from numerous individuals who have similar investing goals. A qualified
fund manager is in charge of overseeing this trust. The manager invests
these assets in equities, stocks, and various money market instruments,
which contribute to wealth accumulation. After deducting certain costs,
the income from this collective investment is subsequently
proportionally split to all of the investors.

History:
The Unit Trust of India was the first business to offer mutual funds. It
was established in 1963 as a joint venture between the Indian
government and Reserve Bank of India. The UTI's goal was to help
small, uneducated investors who sought to purchase stock and other
financial goods from bigger companies. Back then, the UTI had a

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monopoly. The Unit Scheme 1964 was a mutual fund product it offered
for a number of years.

The mutual fund industry in India has undergone at least 4 phases. Let us
now look at each phase in brief:

Phase of Inception (1964-87):

The UTI's establishment signaled the beginning of the period. Although
the RBI and Indian government worked together, the latter was quickly
cut off from the Unit Trust of India's daily activities. The business was
the sole provider of mutual funds in India during this time. The Unit
Linked Insurance Plan, or ULIP, was introduced in 1971 by the UTI.
UTI launched a number of plans between that year and 1986, during
which time it significantly contributed to the introduction of the mutual
fund concept in India. When UTI was founded a number of years ago,
the intention was to establish a corpus for nation-building in addition to
introducing the mutual fund concept to India. Therefore, the government
included a number of income-tax rebates in the UTI programs to entice
small Indian investors. The investible capital of UTI increased
significantly from 600 crores in 1984 to 6,700 crores in 1988, which is
not surprising. It was obvious that it was time for the Indian mutual
business to enter its next stage.

Entry of Public Sector (1987-1993):

The mutual fund business had developed its own character by the end of
1988. Many public sector banks started urging the government to create
their own mutual fund divisions as early as 1987. The State Bank of
India established the first non-UTI Asset Management Fund in
November 1987. The establishment of more AMCs by institutions

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including Canara Bank, Indian Bank, Life Insurance Corporation,
General Insurance Corporation, and Punjab National Bank came swiftly
after this one. The expected outcomes were achieved through the mutual
fund industry's opening up. The total corpus of all AMCs increased to a
staggering Rs. 44,000 crores in 1993. According to industry watchers,
the sector's base grew during the second phase, and it also encouraged
individuals to invest a larger proportion of their resources in mutual
funds. It was clear that India's mutual fund market was primed for more
expansion.

Entry of Private Sector Phase (1993-1996):

The Indian government came to understand the value of economic
liberalisation in the years between 1991 and 1996. Reforms in the
financial industry were urgently needed. India's economy requires
private sector involvement to recover. In light of this, the government
allowed private entities to participate in the mutual fund sector. This
action was well received by the foreign competitors, who flooded the
Indian market. 11 private players launched their asset management funds
during this time, working with overseas entities.
Some of the top AMCs in the private sector were:
 ICICI Prudential AMC- This Company is a joint venture between
ICICI Bank of India and Prudential Plc of UK. It manages a corpus
of INR 2, 93,000 crores and has an inventory of more than 1400
schemes.
 HDFC Mutual Fund- Launched in the 1990s, the HDFC Mutual
Fund manages more than 900 different kinds of funds.
 Kotak Mahindra Mutual Fund- This AMC has an asset base of
more than Rs. 1,19,000 crores. It is a joint venture of Kotak
Financial Services and the Mahindra Group.

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SEBI Interventions and Growth, And AMFI:
In the 1990s, when the mutual fund sector grew even more, the AMCs
government decided that it was time for regulation and some form of
supervision. A equal playing field needed to be established, and
investors needed to be protected. A few years ago, bank scams caused a
lot of harm to the Indian economy, and there was a genuine risk that
investors may lose their money once more. As a result, the government
passed the SEBI Regulation Act in 1996, which established a set of
impartial and open guidelines for all parties involved. The Indian
government announced in 1999 that all dividends from mutual funds
would be tax-free. This choice was made with the intention of promoting
continued expansion of the mutual fund sector. In the meantime, the
mutual fund sector acknowledged the value of self-regulation. As a
result, it established the Association of Mutual Funds of India (AMFI), a
trade organization. Investor education is one of this organization's
objectives.

Phase of Consolidation (February 2003 – April 2014):

Following the revocation of the original UTI Act of 1963, the Unit Trust
of India was divided into two distinct companies in February 2003. The
UTI Mutual Fund (which is subject to SEBI regulations for MFs) and
the Specified Undertaking of the Unit Trust of India (SUUTI) were the
two different companies. The mutual fund business moved closer to the
phase of consolidation after this division of the old UTI and the
occurrence of multiple mergers among various private sector firms. The
financial markets were at an all-time low following the 2009 global
economic recession, and the Indian market was no exception. The
majority of investors who invested during the market's zenith
experienced significant losses. This seriously undermined investors'
confidence in MF products. Over the following two years, the Indian
mutual fund industry battled to bounce back and reinvent itself. With
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SEBI eliminating the entry load and the long-lasting effects of the global
economic crisis, the situation became even more challenging. The
gradual increase in the Indian MF industry's total AUM makes this
picture clear.

Phase of Steady Development and Growth (Since May 2014):

Since mutual funds are not widely used in India, particularly in tier II
and tier III towns, SEBI initiated a number of progressive initiatives in
September 2012. These initiatives were intended to increase security and
transparency for the benefit of all parties. This was SEBI's idea to're-
energize' the Indian MF Industry and increase the penetration of mutual
funds in India as a whole. The actions were successful in reversing the
downward trend that the global financial crisis had started in due time.
After the center's new government took office, things significantly got
better. Since May 2014, both the total amount of investor accounts
(portfolio) and the entire AUM have increased steadily in the Indian MF
sector. Currently, the assets under management by all Indian asset
management firms are over Rs. 23 lac crore. Even if this number seems
promising, we still have a long way to go before we can compete with
the west. Indians are thought to save between 20 and 30 lakh crore
rupees yearly. If Indians began to invest a larger portion of their savings
in mutual funds, the mutual fund sector in India could expand
significantly. Indians, according to observers, have started moving some
of their wealth away from tangible assets like gold and property and
towards financial products like bonds and silver. However, the AMFI
and the government need to promote mutual fund investments among
Indians much more.

CHARACTERISTICS

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A diverse portfolio of successful mutual funds can offer an investor a
great means of wealth accumulation. However, choosing the right funds
to invest in can be a daunting undertaking with so many options
available. Fortunately, there are several traits that the top-performing
funds appear to have in common.
The work of choosing a fund can be made significantly easier by using a
list of fundamental qualities to filter, or pare down, the enormous list of
all potential funds that are available for consideration, as well as
enhance the likelihood that an investor's decisions would be lucrative.

1. Low Fees or Expenses:

Low expense ratio mutual funds are often preferred, and they can
perform well despite having low costs. In reality, it frequently happens
that the top-performing funds in a certain category are among those with
expense ratios that are below the industry standard. Some funds impose
fees that are noticeably higher than typical and defend these higher fees
with the fund's performance. But in reality, there isn't much justification
for any mutual fund to have an expense ratio that's much higher than
1%. Investors in mutual funds occasionally fail to realise the significant
impact that a very small percentage rise in fund fees may have on their
overall profitability. An investor who invests $10,000 in a fund with a
1% cost ratio is charged $100 annually. That $100 fee eliminates a
whopping 25% of the investor's profits if the fund has a 4% annual
profit. If the expense ratio is 2%, the profits are reduced by 50%.
However, a 0.25 % expense ratio only deducts 6% of the investor's
overall return. Investors in mutual funds should be careful in looking for
products with low expense ratios because expenditures are crucially
important. The fundamental operational costs that all funds charge also
include a "load," or a sales fee, which can be as high as 6% to 8%. Some
funds also charge 12b-1 fees, which are used to pay for the fund's
advertising and promotion costs. Since there are many excellent funds
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available that are "no-load" funds that do not charge any 12b-1 fees,
mutual fund investors will never be required to pay these additional
costs.

2. Consistently Good Performance:

The majority of investors include mutual fund investing in their
retirement planning. Because of this, investors should choose a fund
based on its overall performance rather than just one particularly
successful year. A fund's manager, or managers', consistent performance
over an extended period of time suggests that an investor will probably
benefit from it in the long run. More significant than a fund's
performance during a one- or three-year period is its average return on
investment (ROI) over a 20-year time frame. The best funds may not
always yield the biggest returns, but they do so over the long term in a
steady manner. A fund's longevity is advantageous since it allows
investors to observe how well it performs throughout periods of bear
market. During challenging economic times or cyclical business
downturns, the best funds are able to reduce losses. Having a strong fund
manager is crucial to achieving consistent good performance. When
assessing a fund as a whole, investors should consider the background,
prior work history, and performance of the fund management. Neither
good investment managers nor bad investment managers typically turn
into overachievers overnight.

3. Sticking to a Solid Strategy:

The best-performing funds succeed because a sound investing strategy is
in charge of them. Investors should be fully informed about the investing
objective of the fund as well as the method the fund manager employs to
accomplish that goal. Avoid what is referred to as "portfolio drift." This
happens when the fund management veers significantly away from the
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fund's declared investment goals and strategy, changing the fund's
portfolio's composition from its initial objectives. For instance, it might
change from being a fund that mostly invests in small-cap firms with
negligible to no payouts to one that primarily invests in large-cap stocks
with above-average yields. If an investment strategy for a fund changes,
the fund management must explain the change and its justification to the
fund's owners.

4. Trustworthy, With Solid Reputations:

The top mutual fund companies, including Fidelity, T. Rowe Price, and
the Vanguard Group, consistently create the industry's top funds.
Investors are well encouraged to only work with companies they have
the highest faith in to be honest and fiscally responsible in light of all the
unpleasant investment scandals over the previous 20 years. The greatest
mutual funds are always provided by businesses that are open and honest
about their costs and business practises, and they never try to withhold
information from or otherwise deceive prospective investors.

5. Plenty of Assets, but Not Too Much Money:

The best-performing funds are typically ones that have a large number of
investors but don't have the largest overall assets. Funds are able to
increase their investment asset base and draw in new participants when
they perform successfully. A fund's total assets under management
(AUM) eventually reach a size where managing them becomes difficult
and time-consuming. When investing billions, a fund manager finds it
more challenging to buy and sell stocks without the volume of their
transaction affecting the market price. As a result, it costs more than they
would prefer to pay to acquire a significant number of a certain stock.
This may be especially true for investment funds that look for
inexpensive, unpopular stocks. If a fund decides to purchase $50 million
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worth of a stock that is not typically very actively traded, the demand
pressure the fund's purchase will create in the market may cause the
stock to trade at a significant premium to its current price. This would
reduce the stock's value from what it seemed to be when the fund
management decided to add it to the portfolio.

BEST MUTUAL FUNDS INVESTMENT OPTION FOR

SALARIED INDIVIDUALS

1. Equity Mutual Fund:

A minimum of 65% of the corpus of equity mutual funds must be
allocated to equity investments. These funds give investors who lack the
necessary knowledge or time to invest in stocks the opportunity to take
advantage of the enormous growth potential of equities. In addition,
because equities outperformed fixed income investments and inflation
over the long term by a significant margin, they are the best option for
building corpuses to meet long-term financial objectives.
Listed below are equity schemes where you can consider investing:

Multi-cap Fund: Multi-cap funds invest across all market

capitalizations, segments, and themes without subjecting themselves to
any SEBI-imposed restrictions. This fund's fund managers are free to
adjust their exposure to various market capitalizations and market
segments in accordance with shifting market conditions. At least 65% of
the total assets must be allocated by these funds to equities and equity-
linked products.
Large cap Fund: Large cap funds invest largely in large cap businesses.
According to SEBI regulations, the top 100 companies by market
capitalization are categorised as large cap corporations. According to
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SEBI regulations, large cap funds must invest at least 80% of their total
assets in large cap businesses' equities and equity-linked securities.
Equity Linked Savings Scheme (ELSS): ELSS, also referred to as tax-
saving mutual funds, are equity-oriented plans that are eligible for a
Section 80C tax deduction of up to Rs 1.5 lakh per fiscal year. The
shortest lock term of all investment alternatives offered under Section
80C is 3 years, which these programs have. These funds, which are
invested in stocks, have the best long-term wealth development potential
of all the Section 80C tax-saving investment options.
Mid-cap Fund: Mid-cap funds generally invest in the stock and
securities of midcap corporations. Mid cap funds are required by SEBI
regulations to invest a minimum of 65% of their total assets in midcap
companies. Companies classified as midcaps are those with full market
capitalization rankings between 101 and 250.
Focused Fund: Focused funds are ones that can only invest in a
maximum of thirty stocks, in accordance with SEBI regulations. These
funds are required to allocate at least 65% of their total assets to equities
and securities that are related to equity.
Sectoral/Thematic Fund: Sectoral and thematic funds invest primarily
in equities that are tied to a specific subject or set of sectors, such as the
pharmaceutical, banking, technology, energy, and real estate industries.
Themes for investments include things like commodities, defense, rural
and urban consumption, etc. In accordance with SEBI regulations,
sectoral or topic-specific funds must invest at least 80% of their total
assets in equities and equity-linked instruments in the particular sector or
subject.

Dividend Yield Fund: Funds that focus primarily on dividend-paying

stocks are known as dividend yield funds. Dividend yield funds are

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required by SEBI regulations to invest at least 65% of their total assets
in dividend-paying equities.

2. Debt Mutual Funds:

Debt funds primarily invest in fixed income securities such government
bonds, corporate bonds, money market instruments, and others. Debt
mutual funds are also generally less volatile than most equity and hybrid
fund types, just as market-linked fixed income instruments are less
volatile than equities. Debt funds often produce larger returns than
savings and fixed deposits since they invest in market-linked fixed
income products.

Listed below are debt funds where you can consider investing:
Overnight Fund: Debt funds that invest in assets or securities with a
one-day residual maturity are known as overnight funds.
Liquid Fund: Only debt and money market instruments with a maturity
of up to 91 days may be purchased with liquid cash.
Ultra Short Duration Fund: The construction of portfolios with a
Macaulay duration of three to six months is accomplished by ultra short
duration funds, which invest predominantly in debt and money market
assets.
Low Duration Fund: Low duration funds are debt funds that make
investments in debt and money market securities with a portfolio
duration of six to twelve months or less.
Money Market Fund: Debt funds known as "money market funds"
invest in securities with a maximum maturity of one year.

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Short Duration Fund: Short duration funds are debt funds that invest in
money and debt market instruments so that their portfolios have a term
of between one and three years.
Medium Duration Fund: The term "medium duration funds" refers to
debt funds that invest in money and debt market securities with a
portfolio duration of three to four years or less. In the event of
foreseeable adverse circumstances, these funds have the flexibility to
retain a tenure of 1 to 4 years.
Medium to Long Duration Fund: "Medium to long duration" funds are
those that make investments in money and debt market instruments so
that the portfolio's duration falls between 4 and 7 years. In the event of
unanticipated negative circumstances, these funds offer the flexibility to
retain a lifespan of 1 to 7 years.
Long Duration Fund: The term "long duration funds" refers to debt
funds that invest in money and debt market instruments for a period of
time greater than seven years.
Dynamic Bond Fund: Depending on the interest rate environment,
credit quality, and other market circumstances, dynamic bond funds are
open-ended dynamic debt instruments that are free to participate in
money market and debt securities across duration.
Credit Risk Fund: Credit risk funds are those that place at least 65% of
their total assets in corporate bonds with ratings below AA (excluding
AA+) and AA-rated papers.

3. Hybrid Mutual Funds:

To produce greater risk-adjusted returns, hybrid mutual funds invest in
various asset classes, including debt, equities, and other. These funds are
perfect for investors who want their asset allocation plan to be followed
by their mutual fund managers.

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Here a list of hybrid mutual funds where you can consider investing in:
Conservative Hybrid Fund: With some exposure to equities,
conservative hybrid funds mostly invest in debt instruments. According
to SEBI regulations, conservative hybrid funds must allocate between
75% and 90% of their total assets to debt instruments and between 10%
and 25% of their total assets to equity and equity-linked securities.
Balanced Hybrid Fund: According to SEBI regulations, balanced funds
must invest between 40% and 60% of their total assets in debt securities
and between 40% and 60% of their total assets in equity and equity-
linked products. The use of arbitrage possibilities is prohibited in these
schemes.
Aggressive Hybrid Fund: Aggressive hybrid funds invest mostly in
securities that are related to equities. These funds must invest between
65% and 80% of their total assets in equities and equity-linked securities
and between 20% and 35% of their total assets in debt instruments in
accordance with SEBI standards.
Dynamic Asset Allocation/Balanced Advantage Fund: Balanced
advantage funds, also known as dynamic asset allocation funds, are
allowed to dynamically manage their exposure to debt and equity
instruments in accordance with market conditions and without any
minimum or maximum exposure restrictions.
Multi Asset Allocation Fund: Funds with a multi asset allocation
strategy invest in three or more asset classes. Multi-asset allocation
funds are required by SEBI regulations to keep at least 10% of their total
assets in each of the three asset classes that have been chosen in advance
by the respective fund companies.
Arbitrage Fund: Funds that invest in arbitrage possibilities are known
as arbitrage funds. Following their arbitrage strategy, arbitrage funds are
required by SEBI regulations to invest at least 65% of their total assets
in equities and equity-linked securities.
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 Equity Savings Fund: Stock savings funds invest in stock, debt, and
arbitrage opportunities in an effort to produce capital appreciation and
income distribution. According to SEBI regulations, equity savings
funds must invest a minimum of 10% of their total assets in debt funds
and a minimum of 65% of their total assets in equities and equity-linked
instruments. In their Scheme Information Document (SID), these funds
are required to report both their minimum hedged and unhedged
exposure.

Comparing mutual funds with other investment options

The majority of Indians favor conventional options like fixed deposits
(FDs), the Public Provident Fund (PPF), or gold when it comes to saving
or investing money. These options are widely renowned for maintaining
capital and providing steady returns. Mutual funds, on the other hand,
are a good substitute for both short- and long-term returns.

Mutual Funds vs. Fixed Deposits

Mutual Funds Fixed Deposits

Mutual Funds offers similar benefit to 2 reasons for investing in FD’s are:
investors as fixed deposit. 1. Capital Preservation
2. Good Returns

Returns can vary but they help to beat Constant Returns

inflation.
Highly Liquid: You can exit a mutual Less Liquid: You cannot exit an FD at
fund any time you wish. any time you wish.

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The two main reasons why individuals invest in FDs are capital
preservation and dependable returns. Debt mutual funds provide
investors with similar advantages. They are seen as generally safe
investments, for instance. Even while the returns may differ, they can
still help you beat inflation. Mutual funds are additionally more liquid
than FDs. A fund can be closed at any time. You cannot get that facility
from FDs.

Mutual Funds vs Bank Deposits

Parameters Mutual Funds Bank Deposits

Returns aren’t fixed. Returns are assured but

However, returns are higher quite low. Of late, they
Returns compared to bank deposits have plummeted, and
in the long run. there are chances of them
going down further.

Performance of mutual funds They are latent to market

is subject to various risks and the vagaries of
Risks systematic and unsystematic the stock market.
risks

You can easily redeem your If you have invested in a

mutual fund and the money tax-saving bank deposit,
Liquidity is credited into your bank you can’t withdraw
account the next day. before the tenure ends.
For regular deposits, you
can withdraw after
paying a certain penalty.

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The bulk of investors have always viewed bank deposits as a secure
form of investment. We've analysed bank deposits and mutual funds
based on factors like returns, risks, and liquidity, among others, to make
sure you can make an educated decision.

Mutual funds vs Gold

Gold Gold ETF’s

Pricing is not uniform. It varies Pricing and transaction of gold

from one jeweler to another. ETFs are completely transparent.
Making charges (20-30%) form a Brokerage charges (around 0.5%)
significant expense. and expense ratio (1%) are much
lower.
Safety issues: Loss or theft of No danger of theft since they are
physical gold is possible. traded in demat form.
Tough to liquidate physical gold Easy to sell gold ETFs when
for cash in short time. required.

Indians have been enthralled by the attraction of gold for millennia.

Every family purchases and invests in gold coins and jewellery, which is
the golden metal. ETFs that invest in gold are an excellent substitute for
genuine gold, though.
While the majority of Indians still favor conventional investment
strategies, this is slowly changing. The mutual fund sector has grown in
popularity across the nation in recent years. The answer is
straightforward: You can achieve your financial objectives by choosing
from among the many mutual funds available on the market.

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 Parameters Mutual Funds Real Estate

Quite easy. Once you are The emergence of

KYC-compliant, you can property portals has made
invest in mutual funds of investments in real estate
Ease of Investment your choice. easy. However, there are
many legal nitty-gritties
that you need to take care
of.
Highly liquid. You can A non-liquid asset.
easily redeem when Money invested in real
Liquidity required. estate can’t be easily
converted into cash.

Investments in mutual You need to ensure that

funds are subject to market the builder has followed
risks. Returns vary all the compliance and
Risks depending on the type of the papers are in place. If
fund and market not, there could be legal
performance. trouble.
Returns are not fixed and Though returns are not
depend on various internal fixed, investment in a
and external factors. property well-researched
Returns However, in the long run, with all the amenities
returns are positive and can generally fetches good
even be in double digits. returns in the long term.

Mutual Funds vs Real Estate

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One of the most hotly contested topics in the world of personal finance
is the comparison of mutual funds and real estate. Although mutual
funds have recently acquired popularity, real estate has long been
thought of as a reliable and wise investment choice. To assist you in
making the best decision, we have compared them based on factors
including ease of investing, liquidity, risks, and returns, among others.

structure of mutual funds

The three-tier structure of mutual funds in India includes a few more
essential elements. There are other entities engaged in the construction
of mutual funds in addition to the many banks or AMCs that develop or
launch various mutual fund schemes. The Securities Exchange Board of
India (or "SEBI"), with whom each entity must be registered, is the main
watchdog in all of these transactions. The SEBI (Mutual Funds)
Regulations, which went into effect in 1996, completely changed the
way mutual funds were organised, and all organisations are now
governed by them. A Sponsor, Mutual Fund Trustee, Asset Management
Company, Custodian & Registrar, and Transfer Agent are the current
five essential players in mutual funds.

The hierarchy looks like this-

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1. Sponsor:
Any person or organization that is able to put up a mutual fund plan to
make money through fund management is a sponsor. The first tier of the
three-tier Indian mutual fund structure can be thought of as the sponsor.
A mutual fund scheme must be approved by SEBI, which must be
contacted by the sponsor. The sponsor can't complete the task by
themselves. It must establish a Public Trust in accordance with the
Indian Trust Act of 1882 and register it with SEBI. As soon as the trust is
established, the Trustee is registered with SEBI and designated as the
fund's trustee in order to protect unit holders' interests and comply with
SEBI Mutual Fund requirements. In order to handle the funds, the
Sponsor subsequently establishes an Asset Management Company under
the Companies Act of 1956. There are specific requirements for
becoming a Sponsor, as outlined in:
a) The Sponsor must have profit in 3 of the last 5 years including
immediately preceding year.
b) The Sponsor must have a minimum of 5 years of experience in
financial services.
c) The net worth of the Sponsor must be positive for all the preceding
five years.
d) Out of the total net worth of the AMC, 40% must be participated
by the Sponsor.

As was mentioned earlier, a Sponsor's role is vital, and they should have
a high level of trustworthiness. Strict standards demonstrate that the
sponsor must possess sufficient liquidity and loyalty to restore an
innocent investor's money in the event of a financial disaster.

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2. Trust and Trustees:
The second layer of a mutual fund's structure is made up of trust and
trustees. Trustees, who work for the fund sponsor, are also referred to as
the fund's guardians. As their name implies, they play a crucial part in
upholding investors' confidence and managing the fund's expansion. The
trustees are required by SEBI to submit a report on the fund and the
operation of the AMC every six months. Trustees may be established as
either a Trust Company or a Board of Trustees. The Trustees oversee the
AMC's overall management and control how the mutual fund schemes
are run. To avoid any potential conflict of interest between the Sponsor
and the AMC, the SEBI has tightened the transparency regulation. An
AMC is not permitted to launch a new mutual fund scheme without the
Trust's consent and endorsement. The Trustees must exercise
independence and take appropriate action to protect the investors' hard-
earned cash. The Trustees must also register with SEBI, and SEBI
further controls their registration by suspending or revoking it if any
conditions are discovered to have been broken.

3. Asset Management Company:

The third functioning layer in the mutual fund hierarchy is an AMC.
According to the demands of investors and the market's dynamics, an
AMC launches a variety of mutual fund schemes. Together with the
trustee and sponsor, they design mutual funds, after which they manage
their growth. They enter into agreements with bankers, brokers, RTAs
auditors, and others while developing the scheme. AMCs are businesses
created under the Companies Act that require SEBI registration. An
AMC must make sure there are no conflicts of interest between them,
the sponsor, and the trustees, just like the Trustees do.

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Other Participants in The Structure of Mutual Funds are:
A) Custodian: An organization in charge of keeping the securities
secure is known as a custodian. Custodians are in charge of the delivery
and transfer of units and securities and are registered with SEBI.
Custodians also help investors keep track of their investments and
update their holdings at a specific point in time. In addition to their
primary responsibility for safety, custodians are also in charge of
collecting company perks including dividends, interest, and incentive
payments.

B) Registrar And Transfer Agents: RTAs serve as a crucial conduit

between investors and fund managers. They provide investors with the
fund's benefits while also serving the needs of both fund managers and
investors. RTAs are SEBI-registered organizations that handle and send
periodic statements of investments, assist with investor KYC, process
investor inquiries, process applications for mutual funds, and update
investor records. Some of the well-known RTAs in India include Link-in
time, KARVY, etc. They give the AMC the necessary operational
support when it comes to mutual fund activities.

C) Other Participants: Brokers, auditors, and bankers are a few other

actors in the mutual fund framework. The brokers are in charge of luring
in investors and assisting with fund distribution. Brokers offer their
invaluable counsel and assist investors in buying and selling real estate.
Brokers also research market trends and forecast how the market will
evolve in the future. AMC, Trustee, and Sponsor financial statements are
audited by auditors, who act as an independent internal watchdog and
deliver a report. Bankers, who operate as collection agents on behalf of
the fund managers, are another significant stakeholder.

25 | P a g e
List of mutual funds in India
Some of the most popular mutual funds among salaried individuals
include:
 Equity Linked Savings Schemes (ELSS): ELSS funds offer tax
benefits under Section 80C of the Income Tax Act. Some popular
ELSS funds include:
o Axis Long Term Equity Fund
o HDFC Top 100 Fund
o Mirae Asset Tax Saver Fund
 Large-cap Funds: Large-cap funds invest in large, well-
established companies. Some popular large-cap funds include:
o SBI Blue-chip Fund
o HDFC Top 100 Fund
o ICICI Prudential Nifty Index Fund
 Multi-cap Funds: Multi-cap funds invest across a range of market
capitalizations, from large-caps to small-caps. Some popular multi-
cap funds include:
o Parag Parikh Flexi Cap Fund
o Axis Growth Opportunities Fund
o HDFC Equity Opportunities Fund
How to invest in mutual funds
To invest in mutual funds, salaried individuals can follow these steps:
1. Choose a mutual fund distributor. A mutual fund distributor is a
financial intermediary that sells mutual funds.
2. Select a mutual fund scheme. There are a variety of mutual fund
schemes available, so it is important to choose one that is suitable
for your investment goals and risk tolerance.

26 | P a g e
 3. Select a mutual fund scheme. There are a variety of mutual fund
schemes available, so it is important to choose one that is suitable
for your investment goals and risk tolerance.
4. Select a mutual fund scheme. There are a variety of mutual fund
schemes available, so it is important to choose one that is suitable
for your investment goals and risk tolerance.

Objectives of the Study:

This study paper's main goal is to thoroughly examine the growth
trajectory of mutual funds within the population of wage earners. The
study seeks to accomplish the following particular goals:
1. Examine Historical Growth Patterns: Examine the historical
performance and growth patterns of mutual funds among paid people
over the past ten years, noting significant turning points and influencing
variables.
2. Identify Demographic and Socioeconomic Factors: Analyse the
impact of socioeconomic and demographic factors on the uptake and
growth of mutual funds among salaried people. Socioeconomic
determinants include employment stability, disposable income, risk
tolerance, and age, income level, and education.
3. Assess Investment Preferences and Behavior: Investigate the
investing preferences, risk tolerance, and behaviour of salaried people in
relation to alternative investment options (such as equities, bonds, and
real estate), while also examining the underlying drivers and thought
processes.
4. Analyze Regulatory and Industry Developments: Examine how
industry innovations, policy shifts, and regulatory changes have affected
the expansion of mutual funds among the paid population, paying

27 | P a g e
particular attention to taxation, fund management costs, and
technological developments.

5. Evaluate Performance and Risk-Adjusted Returns: Perform a

detailed performance analysis of the mutual funds that salaried people
choose, taking into account several measures like return on investment,
standard deviation, alpha, beta, and Sharpe ratio to determine how
appealing and profitable these investments are.
6. Assess Awareness and Education Initiatives: Examine how well-
informed and knowledgeable salaried people are about mutual funds, as
well as how well-received educational programmes are at increasing
knowledge and promoting involvement in mutual fund investments.
7. Examine the Role of Financial Advisors and Platforms: Examine
how salaried people are influenced by financial advisors, internet
platforms, and robo-advisors to invest in mutual funds and determine
how these intermediaries affect investing decisions and results.
8. Predict Future Growth Trajectory: Create a prediction model to
anticipate the future development trajectory of mutual funds within the
salaried population, taking into account prospective economic,
regulatory, and sociological changes, based on the data obtained and
analysis.
9. Provide Recommendations for Stakeholders: Offer practical
suggestions based on the findings for different stakeholders, such as
mutual fund managers, financial advisors, policymakers, and educational
institutions, to improve the availability, comprehension, and allure of
mutual funds for salaried people.

By achieving these goals, this research aims to contribute to a deeper

understanding of investment behaviour and facilitate informed decision-

28 | P a g e
making for both individuals and industry stakeholders by offering
insightful information about the dynamics of mutual fund adoption and
growth within the salaried demographic.
Scope of the Study
The scope of this study is a thorough investigation into the development
of mutual funds with a special emphasis on wage earners. The study will
explore a range of topics relating to mutual funds' uptake and
performance among this group of people. The following significant areas
will be covered:
1. Geographic Focus: The study will largely concentrate on a particular
geographic area or nation, taking into account the regulatory and
economic environment that affects the growth of mutual funds among
salaried people.
2. Time Frame: In order to identify major trends, developments, and
inflection points in the growth of mutual funds within the salaried
segment, the research will analyse data over a specified time period,
often spanning the past ten years.
3. Demographic Variables: The study will take into account
demographic parameters including age, income level, education,
employment position, and other pertinent elements that may influence
the likelihood that salaried people will invest in mutual funds.
4. Socioeconomic Factors: The study will look at socioeconomic factors
that influence the expansion of mutual funds, such as disposable income,
financial literacy, risk tolerance, and saving habits among salaried
people.
5. Types of Mutual Funds: To give a complete picture of the
preferences and actions of salaried investors, the survey will cover a
range of mutual fund types, including equity, debt, hybrid, and other
specialised funds.

29 | P a g e
6. Performance Metrics: According to pertinent measures including
return on investment, risk-adjusted returns, standard deviation, alpha,
beta, and Sharpe ratio, the research will assess the performance of
particular mutual funds.
7. Regulatory Environment: The study will take into account the
regulatory aspects of mutual fund investments, such as tax ramifications,
fund management costs, and any most recent legislative changes that
might have an effect on salaried investors' choices.
8. Awareness and Education Initiatives: The study will measure how
well-informed and knowledgeable salaried people are about mutual
funds and analyse the success of educational programmes in
encouraging comprehension and involvement in mutual fund
investments.
9. Role of Intermediaries: The study will look into how salaried people
are guided towards investing in mutual funds by financial advisors,
internet platforms, and robo-advisors and analyse how this affects
investment decisions and results.
10. Forecasting and Recommendations: The study will create a
forecast model to project the future growth trajectory of mutual funds
within the salaried demographic based on the data collected and
analysis. Additionally, it will give stakeholders like mutual fund
managers, financial advisors, legislators, and educational institutions
useful recommendations.

This study's objective is to provide a comprehensive and in-depth

understanding of the rise of mutual funds among salaried people,
providing information that can be helpful to individual investors,
financial professionals, regulators, and other financial industry players.

30 | P a g e
 Executive Summary
The goal of this research article is to thoroughly examine the growth
trajectory of mutual funds within the population of wage earners. The
report makes suggestions for industry stakeholders by analyzing
historical trends, identifying driving forces, evaluating investment
behaviour, and so on.

Key Findings:
1. Historical Growth Patterns: Mutual fund investments among
salaried people have maintained a continuous upward trend over the past
ten years, as seen by a notable increase in assets under management and
rising participation in mutual fund schemes.
2. Demographic and Socioeconomic Factors: Age, income level,
education, and employment stability stand out as important variables
affecting the adoption of mutual funds. Younger earners with secure jobs
and better incomes typically exhibit a stronger tendency for mutual fund
investments.
3. Investment Preferences and Behavior: Mutual funds are
increasingly preferred by people who make a living wage due to
advantages of diversification, expert management, and accessibility.
Additionally important factors in determining investing selections are
risk tolerance and investment horizon.
4. Regulatory and Industry Impact: The expansion of mutual funds
among salaried individuals has been significantly impacted by
regulatory changes, particularly those relating to taxation and fee
structures. The development of internet platforms and technological
improvements have made accessibility even easier.
5. Performance and Risk Analysis: The mutual funds that salaried
people like exhibit competitive performance across a range of criteria
31 | P a g e
and provide alluring risk-adjusted returns. These funds have risk profiles
that are proportionate to the target group's tolerance for risk.
6. Awareness and Education Efforts: While there is a noticeable level
of mutual fund awareness among those who earn a living, there is
always space for development. Effective educational programmes have
been found to be essential for improving comprehension and promoting
participation.

Recommendations:
1. Tailored Product Offerings: Mutual fund managers ought to think
about creating products that are precisely tailored to the tastes and risk
tolerances of wage earners, offering varied options to satisfy a range of
investing objectives.
2. Enhanced Educational Initiatives: Investing in strong educational
programmes can be crucial in equipping salaried people with the
information and self-assurance they need to make wise mutual fund
investments.
3. Technological Integration: The process of investing can be
streamlined by combining user-friendly digital platforms and robo-
advisory services, making it more comfortable and available to salaried
investors.
4. Regulatory Advocacy: Supporting fee structures that are open and
tax laws that favour long-term investing strategies can further promote
the use of mutual funds among salaried people.

This study provides a thorough overview of mutual fund growth among

salaried individuals. The findings offer insightful information for
financial counsellors, educational institutions, policymakers, and
managers of mutual funds, all of whom can help make mutual funds
32 | P a g e
more appealing to and accessible to salaried people. The mutual fund
sector can continue to thrive in this significant market area by
coordinating product offers, educational initiatives, and regulatory rules.

Literature Review
A thorough review of the literature is crucial for providing the
knowledge and perspective needed to create a wide conceptual
framework in which a specific issue can be investigated. It aids in the
development of a specific problem, helps the investigator get familiar
with what is already known about the subject under consideration, and
also gives a basis for evaluating the viability of the research. Since there
are critical summaries of what is previously known about a certain issue,
it is crucial for a scholar to review the literature in order to understand
what has been established and documented. A survey of the literature is
therefore helpful in connecting the current study to earlier ones in the
same topic.

1. The Investor's Guide to Fidelity Funds - Winning Strategies for

Mutual Fund Investing by Martin P. and McCann B. (1998) provides
excellent guidance for investors on matters pertaining to mutual fund
investing. In order to outperform the market averages, they have
encouraged investors to concentrate on areas of the global economy that
offer the highest potential for profit. Combining this strategy with the
security offered by the inherent diversity of mutual funds, mutual funds
are transformed into an investing vehicle with all the benefits of trading
individual securities and none of the drawbacks. Create a plan for
choosing which funds to buy and sell, and when, just like with any other
investment. These choices shouldn't be made just on feelings or luck.

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2. Gremillion L. (2005) provided comprehensive information regarding
the operation of the mutual fund industry in his book "Mutual Fund
Industry Handbook - A Comprehensive Guide for Investment
Professionals." It has also discussed the numerous difficulties that
different industry professionals have to deal with. Everybody who has a
sincere interest in the sector can benefit from the book's wide-ranging
and thorough presentation of information and knowledge.
3. Tyson E. (2007) offers straightforward and successful mutual fund
investing strategies that investors can use right away and for many years
to come in his book "Mutual Funds for DUMMIES" (5th edition).
Investors can find good schemes by making a wise choice, in which fund
managers buy stocks that correspond to investors' financial objectives.
Those who are investors can devote their time to the pursuits they excel
at and like. Investors' social lives and investment earnings should both
be enhanced by mutual funds. The book shows readers how to steer clear
of common errors while investing in mutual funds and increase their
chances of success. Any time an investor wishes to purchase or sell a
mutual fund, the choice must meet his overall financial goals and
specific circumstances.
4. Mutual fund investors chase past performance, despite the fact that
performance is not consistent over time, according to Jank S. (2010) in
his Discussion Paper on "Are there disadvantaged clients in mutual
funds?" In other words, investors purchase mutual funds that have
historically produced strong returns. Investors are hesitant to take their
money out of the worst performing funds, on the other hand. The
irrationality of mutual fund investors is frequently blamed for this
behaviour. Because strong historical success is an indicator of
managerial skill, sophisticated investors logically pursue it. The investor
makeup of the funds with the worst performance did not significantly
differ from that of the funds with average performance.

34 | P a g e
5. The International Journal of Research in Management published an
article by Singh B K (2012) titled "A study on investors' attitude towards
mutual funds as an investment option" that reiterates the importance of
educating the general public about mutual funds. People must be made
aware of the special characteristics of investing in mutual funds. The
advantages offered by mutual funds, such as return potential and
liquidity, have been seen by existing investors as being the most alluring,
followed by flexibility, transparency, and affordability.
6. The International Journal of Marketing and Technology published an
article by Divya K. (2012) titled "A Comparative study on evaluation of
Selected Mutual Funds in India" in which she made the recommendation
that investment managers whose performance falls short of the
benchmark index should review their asset allocation and investment
strategy. For better results, investing strategies should be revised in
accordance with market ups and downswings. The regulator should
establish uniform benchmark standards that will be useful to asset
management organizations in order to boost the effectiveness and appeal
of mutual funds.
7. Out of five private sector balanced category mutual funds (under
study), two generated returns that were higher than the average returns,
according to Vanaja V. and Karrupasamy R.'s (2013) article "A study on
the performance of select Private Sector Balanced Category Mutual
Fund Schemes in India" in the International Journal of Management
Sciences and Business Research. Two of them have had losses. The
Sharpe ratios of all the private sector balanced category funds chosen for
the study are all positive. Per unit of total risk, the range of excess
returns over risk-free returns is substantial. The Treynor ratio for each of
the funds chosen for the study is positive. Positive Jensen's alpha values
for each of the funds chosen for the study indicate superior performance.

35 | P a g e
8. In their article "Performance Evaluation of Equity Mutual Funds(on
selected Equity Large Cap Funds)" from the International Journal of
Business and Management Invention from 2013, Narayanasamy R. and
Rathnamani V. noted that all funds fared well during the study period
despite market volatility. The performance of all chosen mutual funds
was impacted by the decline in NIFTY during the 2011 calendar year.
Investors should take into account statistical factors like alpha, beta, and
standard deviation in addition to NAV and total return to guarantee that
mutual funds perform consistently.
9. According to Santhi N.S. and Gurunathan K. (2013) in their article
"The growth of Mutual Funds and Regulatory Challenges" from the
Indian Journal of Applied Research, regulators are closely monitoring
any potential effects of mutual fund products on financial stability and
market volatility because the mutual fund industry has experienced rapid
growth in recent years. New products and servicing techniques have
been developed in tandem with the expansion of mutual funds.
Regulators will need to strike a balance between properly controlling
risks and refraining from enacting pointless regulations.
10. In an article titled "Analysis of the Risk and Return relationship of
Equity based Mutual Fund in India" from the International Journal of
Advancements in Research & Technology, Sharma N. and Ravikumar R.
(2013) mention that their study used the Capital Asset Pricing Model
(CAPM) to analyse the performance of Equity based mutual fund
schemes. Mutual funds for the public and private sectors have shown
strong performance throughout time. However, when performance over
the previous 15 years was compared, it was shown that private sector
mutual funds outperformed public sector mutual funds. In addition to
outperforming public sector mutual fund schemes, private sector mutual
fund schemes were also determined to be less risky.

36 | P a g e
Advantages and Disadvantages to invest in mutual funds for
salaried individuals
For those with salaries, mutual fund investing can be a good choice,
however there are benefits and drawbacks. When choosing to invest, it's
crucial to take a number of aspects into account. The following are some
salient benefits and drawbacks:
Benefits

1. Professional management: Professionals with experience managing

mutual funds possess the knowledge and assets necessary to investigate
and purchase a wide range of securities. For those on salaries who might
not have the time or expertise to handle their own finances, this can be a
big benefit.
2. Diversification: Investors can diversify their portfolios across a range
of asset classes and industries by using mutual funds. This can lower risk
and increase total profits.
3. Liquidity: The majority of mutual funds are quite liquid, allowing
investors to redeem their shares whenever they choose. For salaried
people, who might need to swiftly access their money in an emergency,
this can be crucial.
4. Convenience: Investing with mutual funds is quite convenient. Shares
can be purchased and sold by investors using a number of methods, such
as the internet, the phone, or a financial advisor.
5. Tax benefits: Among the many tax advantages provided by mutual
funds are the opportunity to postpone paying taxes on capital gains and
the ability to balance losses with other sources of income.

37 | P a g e
Drawbacks

1. Fees and Expenses: Mutual funds generally impose charges,

including loads (sales charges) and management fees. Over time, these
expenses may reduce returns, particularly if the investor makes frequent
purchases and sales of assets.
2. Market Risk: Mutual funds are vulnerable to market risks, and the
state of the market may have an impact on the investment's value.
Returns are not guaranteed, and investors can suffer losses.
3. Limited Control: Mutual fund investors have little power over any
one of the individual stocks in the portfolio. They are forced to depend
on the judgements made by the fund manager, which could not coincide
with their own investing inclinations.
4. Tax Implications: Tax ramifications may arise from mutual fund
capital gains distributions. Even if they did not sell their fund shares,
investors may still need to pay taxes on their capital gains.
5. Over-Diversification: Diversification has its benefits, but too much
of it might result in an excessive amount of concentration in one or more
areas of the economy, which could reduce the possibility of excessive
returns.

Overall, mutual funds can be a good investment option for salaried

individuals. They offer a number of advantages, such as professional
management, diversification, liquidity, convenience, and tax benefits.
However, it is important to be aware of the fees and risks involved
before investing.

38 | P a g e
 Research Methodology

To study the growth of mutual funds regarding salaried individuals, the

following research methodology can be adopted:
Research Design
Descriptive research will be the method employed for this investigation.
This kind of research is used to describe a population's or phenomenon's
characteristics. The population of interest in this instance is made up of
wage earners, and the phenomenon of interest is the expansion of mutual
funds.

Data Collection
Both primary and secondary data collection techniques will be used to
acquire the data for this project. A sample of salaried people will be
given a questionnaire to complete in order to get primary data. The
following variables will be covered by the questionnaire:
 Demographic information (age, gender, income, etc.).
 Investment knowledge and experience.
 Investment preferences and risk appetite.
 Investment in mutual funds (amount invested, type of mutual
funds, etc.).

Secondary data will be collected from various sources, such as mutual

fund websites, industry reports, and government publications. Secondary
data will be used to provide context and background information on the
growth of mutual funds and the investment behavior of salaried
individuals.

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Sampling
The sample for this study will be selected using a convenience sampling
method. Convenience sampling is a non-probability sampling method in
which the researcher selects the sample from the population that is most
easily accessible. In this case, the sample will be drawn from salaried
individuals who are known to the researcher or who are willing to
participate in the study. The sample size will be 30 respondents.

Data Analysis
The data collected from the questionnaire will be analyzed using
descriptive statistics, such as means, medians, and percentages. The data
will also be analyzed using cross-tabulation and correlation analysis to
identify any relationships between the variables. The secondary data will
be used to provide context and background information on the growth of
mutual funds and the investment behavior of salaried individuals.

The research methodology outlined above will be used to study the

growth of mutual funds regarding salaried individuals. The study will
collect data from a sample of salaried individuals to identify their
investment knowledge, experience, preferences, and risk appetite. The
study will also collect secondary data on the growth of mutual funds and
the investment behavior of salaried individuals. The data will be
analyzed using descriptive statistics, cross-tabulation, and correlation
analysis. The findings of the study will be used to provide
recommendations for how to improve the growth of mutual funds among
salaried individuals.

40 | P a g e
tools and techniques to invest in mutual funds for salaried
individuals
1. Credit Rating (Debt schemes only):
What it indicates: Agencies grade each debt instrument that the fund
invests in based on its risk profile. The riskiness of corporate papers
ranges from AAA (best safety) to D (default), whereas government
securities are completely risk-free.
How is it calculated: To rate a fund, agencies employ their own
methodology. The fund's fact sheet typically includes the ratings.
Implications for Investors: A high rating means that there is less credit
risk being assumed by the fund. Investors should steer clear of schemes
with an excessive number of papers of poor quality because debt
investments are made to lower risk.

2. Sharpe Ratio:
What it indicates: This ratio shows the return per unit of the total risk
taken by the scheme.
How is it calculated: (Return – risk free return) ÷ standard deviation
Implications for Investors: Just compare between categories. superior
to the category average the fund manager was able to produce a better
return per unit of total risk, according to the Sharpe ratio.

3. Average Maturity or Maturity Profile (Debt schemes only):

What it indicates: Debt funds make investments in bonds of various
maturities. The average maturity of all the debt instruments in a fund is
shown by the maturity profile.
How is it calculated: This is usually given in the fund’s fact sheet.

41 | P a g e
Implications for Investors: Long-duration paper market prices are
more responsive to changes in interest rates. Investors should steer clear
of long-term investments if interest rates are expected to increase. Such
plans can produce bigger profits if interest rates are projected to decline.

4. Expense Ratio:
What it indicates: The annual expense the fund will charge the investor
is shown by this ratio. For fixed maturity plans, it runs from 0.1% to
3.25%, while for small-sized equity funds, it is 0.1% to 3.25%.
How is it calculated: Total expenses charged by the fund/average assets
under management of the fund.
Implications for Investors: The better it is for the investor if the
expense ratio is lower. Due to the similar gross returns that the majority
of debt funds produce, expenditure ratio becomes increasingly
significant for debt funds. Lower expense ratios are found in direct
plans.

5. Portfolio Concentration Ratio:

What it indicates: This ratio shows where and how much has the fund
invested.
How is it calculated: This is usually a percentage of the fund’s top five
stocks or sectors
Implications for Investors: For diversified funds, the typical range is
30%–40% for the top five equities and 30%–60% for the top five
sectors. Mutual funds are used by investors to diversify their portfolios;
any excessive concentration in the portfolio violates this purpose.

42 | P a g e
6. Standard Deviation:
What it indicates: This is an indicator of portfolio risk because it
quantifies the return volatility of a fund.
How is it calculated: First, figure out the daily returns' average. Square
the difference after deducting this average from each daily result. To
calculate the variance, multiply the sum of all these squared values by
the number of days. The standard deviation is the square root of the
variance.
Implications for Investors: The less deviation, the better. However, it
should only be compared within groups. For liquid funds, the range can
be under 1%, while for equities funds, it can be between 20% and 40%.

43 | P a g e
 Data Analysis and Interpretation
Table no 1: Do you invest in mutual fund?
Particulars No. of Respondents Percentage
Yes 30 60%
No 20 40%
Total 50 100%

Analysis:
As per the above table it is clear that while 60% of respondents are
investing in mutual funds, 40% of respondents are not investing in
mutual funds.

Invest in Mutual Funds

40%

60%

Yes No

Graph no 1: Graph is showing no of respondents who is invest in mutual

funds
Interpretation: As per the above graph it can be interpreted that most
respondents are investing in mutual funds, that is 60%. This still
indicates that mutual fund products are to be used by a large pool of
investors.

Table no 2: The age group under you belong to?

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 Age Group No. of Investors Percentage
21-30 4 13%
31-40 10 34%
41-50 9 30%
51-60 7 23%
Total 30 100%

Analysis:
According to the above table, 34% of the total respondents fall within
the age range of 31 to 40 years old. The age range of 41 to 50 years old
accounts for 30% of all investors, followed by the age group of 51 to 60
years old with 23%, and the age group of 21 to 30 years old with 13% of
all investors. It is a range of ages.

Age Group

13%
23% 21-30
31-40
41-50
51-60

34%

30%

Graph no 2: Graph showing age group of the respondents.

45 | P a g e
Interpretation: According to the above graph, the majority of
respondents fall into the 31–40 age range, while the least number of
investors are in the 21–30 age range. It implies that working-class
people are more drawn to investing than are younger people.

Table no 3: Occupation of the investors:

Occupation No. of Investors Percentage
Business 7 23%
Professionals 13 44%
Salaried 10 33%
Total 30 100%

Analysis: As can be seen from the above table, of the 30 respondents,

44% of investors are professionals such as doctors, chartered
accountants, and others. 23% of investors are businesspeople, while 33%
of investors are salaried individuals.

Percentage
Business
23%
Salaried
33%

Professionals
44%

Graph no 3: Graph showing occupation of investors.

46 | P a g e
Interpretation: It is clear from the accompanying graph that experts
like physicians, CPAs, and consultants have a tendency to invest in
mutual funds. Individuals with salaries come next.

Table no 4: Why do you invest in mutual funds?

Purpose to Invest No. of Respondents Percentage
Safety 9 30%
Good Returns 7 23%
Tax Benefits 4 13%
Capital Appreciation 2 7%
Risk Diversification 8 27%
Total 30 100%

Analysis: According to the above table, it can be seen that 27% of

respondents invest in mutual funds for risk diversification, 7% do so for
capital appreciation, 23% do so for good returns, 13% do so for tax
benefits, and 30% want safety when investing.

Purpose of Investment
27% 30%

7%

13% 23%

Safety Good returns Tax benefits

Capital Apprecation Risk diversification

47 | P a g e
Graph no 4: Graph showing purpose of investment
Interpretation: It is clear from the following graph that safety and risk
diversification are important factors to take into account when making
mutual fund investments. Investment decisions are shown to give the
least thought to capital appreciation.

Table no 5: What is your income?

Income Level (Rs.) No. of Respondents Percentage
1 Lakh 8 27%
2-4 Lakhs 11 36%
4-6 Lakhs 6 20%
More than 6 Lakhs 5 17%
Total 30 100%

Analysis: According to the analysis of the above table, 27% of investors

make less than Rs. 1 lakh, 36% of respondents make between Rs. 2-4
lakhs, 20% make between Rs. 4-6 lakhs, and 17% make more than Rs. 6
lakhs.

Income Level of Investors

17%
27% 1 Lakh
2-4 Lakhs
4-6 Lakhs
> 6 lakhs
20%

36%

48 | P a g e
Graph no 5: Graph showing Income level of investors.
Interpretation: It is clear from the following graph that the majority of
respondents had incomes between 2 and 4 lakhs. Since investing in
mutual funds is their main financial objective, these investors are
interested in them.

Table no 6: What is duration of your investment?

Duration No. of Investors Percentage
0-1 Year 10 33%
1-2 Years 13 43%
2-4 Years 5 17%
More than 4 Years 2 7%
Total 30 100%

Analysis: According to the above table, analysis shows that 33% of

respondents are interested in investing for a period of 0–1 year, 43% are
interested in investing for a period of 1-2 years, 17% are interested in
investing for a period of 2-4 years, and 7% are interested in investing for
a period of more than 5 years.

Duration of Investment

7%
17% 33% 0-1 Year
1-2 Years
2-4 Years
More than 4 years

43%

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Graph no 6: Graph showing duration of investment.
Interpretation: According to the following graph, the majority of
respondents are short-term investors who anticipate making large returns
in the near future. These respondents have been investing for one to two
years.

Table no 7: How much amount do you invest?

Amount of Investment (Rs.) No. of Investors Percentage
Less than 50000 14 47%
Between 50000 and 100000 10 33%
More than 100000 6 20%
Total 30 100%

Analysis: According to the above table, analysis reveals that 47% of

respondents invest less than Rs. 50,000 in mutual funds, 33% are
interested in investing between Rs. 50,000 and Rs. 100,000, and 20% are
interested in investing more than Rs. 100,000.

Amount of Investment

20%
< Rs. 50000
Rs. 50000 - Rs. 100000
47% > Rs. 100000

33%

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Graph no 7: Graph showing Amount of Investment.
Interpretation: According to the following graph, the majority of
respondents are interested in investing between Rs. 50000-Rs. 100000
and are willing to take on risk, whilst the majority of persons who invest
less than Rs. 50000 do not want to take on risk.

Table no 8: What type of scheme do you prefer?

Schemes No. of Investors Percentage
Equity 9 30%
Debt 3 10%
Balanced 11 37%
Fixed Maturity Plan 7 23%
Total 30 100%

Analysis: According to the above data, the most preferred scheme

among investors is the balanced scheme, which has 37% of the total. The
second most preferred scheme is the equity scheme, which has 30% of
the total, followed by the fixed maturity plan, which has 23%, and the
least preferred scheme is the debt, which has 10% of the total.

Preferred Scheme

23%
30% Equity
Debt
Balanced
Fixed Maturity Plan

10%
37%

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Graph no 8: Graph showing preferred scheme of respondents.
Interpretation: It is quite possible that there is a balanced fund in the
market, as the graph above illustrates. Investors are not made aware of
this due to its low knowledge and complexity.

Table no 9: From which sources you came to know about mutual funds?
Sources No. of Respondents Percentage
Friends Suggestions 6 20%
Self-Decision 12 40%
Advertisements 4 13%
Agent/Broker 8 27%
Total 30 100%

Analysis: Based on the aforementioned table, analysis reveals that 27%

of participants learned about mutual funds from agents, 20% did so
through recommendations from friends, 40% made their own decisions,
and 13% learned about them from advertisements.

Sources

20%
27% Friends Suggestions
Self-Decision
Advertisements
Agent/Broker
13%
40%

Graph no 9: Graph showing from which source respondents have heard

about mutual funds.
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Interpretation: It is clear from the above graph that the majority of
respondents will decide for themselves when it comes to beginning a
mutual fund investment. Few responders assisted TV in choosing
investments. Consequently, AMC and SBI have discovered that
additional data is required in order to offer the finest resources, advice,
and materials in order to support investors' further investments.

Table no 10: What is risk preference?

Risk Preference No. of Respondents Percentage
Innovator 10 33%
Moderator 15 50%
Risk Adverse 5 17%
Total 30 100%

Analysis: According to the above table, 33% of respondents are

innovators who invest larger sums of money and are willing to take any
risk; 50% of respondents will consider all the factors before making an
investment if they determine that they can bear the risk to a moderate
degree; and 17% of respondents never feel like they're ready to take
risks.

Risk Preference

17%

33% Innovator
Moderator
Risk Adverse

50%

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Graph no 10: Graph showing Risk Preference.
Interpretation: According to the above graph, most investors are
willing to take on a medium degree of risk when they invest in mutual
funds, although some respondents fit the description of "high risk and
high return" investors. In this context, investors might be thought of
being fundamentally medium risk takers.

Table no 11: What type of scheme do you prefer?

Scheme Type No. of Respondents Percentage
Open Ended Method 15 50%
Close Ended Method 10 33%
Interval Method 5 17%
Total 30 100%

Analysis: According to the above table, it can be determined that 33% of

respondents favour closed-ended schemes, 17% prefer interval schemes,
and 50% choose open-ended methods.

Scheme Type

17%

Open Ended Method

Close Ended Method
Interval Method
50%

33%

Graph no 11: Graph showing scheme types that respondents prefer.

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Interpretation: According to the aforementioned graph, the majority of
individual investors favour "open-end schemes" primarily for
redemption, investment, strong returns, and liquidity flexibility. It's
interpretable. The interval approach is disliked by investors. In actuality,
interval-based names have been confused by some individual investors.

Table no 12: Attitude toward risk of salaried individuals

Attitude Towards Risk No. of Respondents Percentage
Most Important 5 17%
Important 11 37%
Neutral 8 26%
Less Important 3 10%
Not Important 3 10%
Total 30 100%

Analysis: According to the analysis of the above table, 17% of

respondents said that their attitude towards risk is most important, 37%
said that it has importance, 26% said that it is neutral, 10% said that it is
less important, and 10% said that it is not essential at all.

Attitude Towards Risk

10% Most Important

17%
Important
10%
Neutral
Less Important
Not Important
26%
37%

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Graph no 12: Graph showing ranking of attitude towards risk.
Interpretation: It is evident from the accompanying graph that 17% of
the respondents are ranked. The most crucial factor is attitude towards
risk; 36% of respondents said it was important, and those who said it
was important and most important were prepared to take chances.

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 suggestions and recommendations
Financial objectives are determined by a number of variables, such as
the investor's age, lifestyle, degree of financial independence,
commitment to their family, and income and spending patterns. As a
result, it is essential for investment trust organisations to evaluate
customer needs. Their goals are investment-related, such as a steady
income, a house purchase, funding for a child's wedding or education, or
a mix of all of these. Your demands are determined by your willingness
to take on risk, the level of risk you can tolerate, and your cash flow
requirements. Therefore, here are some suggestions and
recommendations based on studying the growth of mutual funds among
salaried individuals:
1. Tailored Investment Products: Provide and market mutual fund
solutions that address the unique requirements and risk tolerances of
salaried people. This could comprise funds with varying risk tolerance,
income levels, and age ranges allocated to them.

2. Enhanced Financial Literacy Programs: Develop comprehensive

educational programmes targeted at raising salaried people's level of
financial literacy. Workshops, internet sites, and seminars with a
particular focus on mutual funds might be held to discuss the
advantages, dangers, and long-term possibilities for wealth
accumulation.

3. Accessible Investment Platforms: By improving digital platforms,

you can increase accessibility to investments in mutual funds. More
salaried investors may become involved in the investment process if
user-friendly interfaces, mobile applications, and internet tools are made
available.

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4. Transparent Fee Structures: Make sure the fee structures for
investing in mutual funds are transparent. Building trust and
encouraging more people to choose mutual funds as investment options
can be achieved through providing transparent and easily
comprehensible breakdowns of costs and charges.

5. Regulatory Support for Long-Term Investments: Promote

legislative measures that provide tax breaks to people who maintain
mutual fund investments for a predetermined period of time, or other
measures that encourage long-term investments. This may incentivize
paid workers to adopt a longer-term investing strategy.

6. Personalized Financial Advice: Give salaried people thinking about

investing in mutual funds customised financial advice and direction.
Financial advisors can help match investing objectives with appropriate
mutual fund choices according to unique situations.

7. Diversified Fund Options: Increase the selection of mutual fund

options to accommodate a variety of investing goals. A wider spectrum
of salaried investors may be drawn in by providing diversified funds
with an emphasis on specialist markets, thematic funds, or sustainable
investing.

8. Collaboration with Employers: Encourage mutual fund investing as

a component of employee benefit packages by working with companies.
Participation may be encouraged via educational programmes or
employer-matched contributions to mutual fund investments.

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9. Performance Transparency: Maintain open and understandable
disclosure of performance information on mutual funds. Making
performance data freely available can help with decision-making and
inspire trust in prospective investors.

10. Continuous Monitoring and Adaptation: Keep an eye on changing

investor choices, demographic trends, and market conditions. To stay
relevant and appealing to salaried persons, mutual fund offers and
strategies should be adjusted properly.
Through addressing accessibility, education, transparency, and alignment
with the requirements and preferences of individual investors, these
suggestions and recommendations seek to encourage the expansion of
mutual funds among paid individuals.

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 Conclusion
Financial decisions are shaped by a dynamic environment where
socioeconomic considerations, market trends, and investment
preferences interact, as revealed by a study on the expansion of mutual
funds among paid workers. The research highlights a number of
important points that should be understood by everyone involved in the
mutual fund sector, legislators, financial advisors, and those looking to
increase their wealth through investments.

1. Positive Trajectory: The study shows that during the previous ten
years, salaried persons have adopted mutual funds on a positive
development trajectory. A few of the driving forces behind this
expansion are growing knowledge, the advantages of diversification, and
expert money management.
2. Influence of Demographics: Age, education, and income level are
three demographic variables that have a big impact on how likely
salaried people are to invest in mutual funds. Younger, wealthier people
with steady jobs are more likely to be inclined towards investing in
mutual funds.
3. Educational Imperative: The study highlights how important
financial education is in creating an atmosphere that is favourable to
investing in mutual funds. It emphasises how important it is to keep
working to improve salaried people's financial literacy so they can make
wise investing decisions.
4. Regulatory Impact: Policies and regulatory frameworks have a big
influence on how mutual funds expand. Catalysts for expanded
involvement include transparent fee structures, tax incentives for long-
term investments, and regulatory support for investor protection.

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5. Technological Integration: One of the most important factors in
improving accessibility and convenience and creating a more welcoming
atmosphere for salaried individuals to participate in mutual funds is the
combination of user-friendly digital platforms and robo-advisory
services.
6. Recommendations for Future Growth: According to the findings,
customised investment products, improved financial education
programmes, clear charge schedules, and laws that encourage long-term
savings are all necessary. Growth can also be further stimulated by
varied fund selections and customised financial counsel.

The study's result points to a changing environment in which mutual

funds are a viable way for salaried people to build wealth. It will take a
multipronged approach incorporating product-based, regulatory, and
instructional efforts to maintain and accelerate this expansion.
Stakeholders may create an atmosphere that permits salaried workers to
actively participate in mutual fund investments and pave the way for
their long-term financial well-being by addressing these aspects.

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 Bibliography
WEBILOGRAPHY
 https://www.crisil.com/en/home/what-we-do/financial-products/
mf-ranking.html
 https://www.mutualfundindia.com/Error/Trouble?aspxerrorpath=/
fund_fact_view.asp
 https://www.jagoinvestor.com/2007/11/advantages-and-
disadvantages-of-mutual_313.html
 https://kalyan-city.blogspot.com/2012/02/what-are-disadvantages-
of-mutual-funds.html
 https://www.iloveindia.com/finance/mutual-funds/equity-mutual-
funds.html
 https://www.valueresearchonline.com/funds/
 https://www.investopedia.com/ask/answers/
04/032604.asp#ixzz20g7Jf
 https://science.blurtit.com/23704/what-is-research-methodology-
 http://www.onemint.com/2011/03/30/best-balanced-mutual-funds-
in-india/
 https://www.thebalancemoney.com/how-do-i-invest-in-mutual-
funds-357942

BOOK REFERANCE
Indian mutual funds handbook.
Mutual funds in India.
Mutual funds the money multiplier.
Mutual fund industry hand book.

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 Appendix
1. Do you invest in mutual funds?
a) YES
b) NO

2. The age group under which you belong.

a) 21-30
b) 31-40
c) 41-50
d) 51-60

3. Occupation.
a) Salaried
b) Business
c) Professional
d) Retired

4. Why are you investing in mutual fund.

a) Safety
b) Good Returns
c) Tax Benefits
d) Capital Appreciation
e) Risk Diversification

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5. What is your income?
a) 1 lakh
b) 2-4 lakhs
c) 4-6 lakhs
d) More than 6 lakhs

6. What is Duration of your Investment?

a) 0-1 Year
b) 1-2 Years
c) 2-4 Years
d) More than 4 Years

7. How much amount do you invest?

a) Less than Rs. 50000
b) Between Rs. 50000 and Rs. 100000
c) More than Rs. 100000

8. What type of scheme do you prefer?

a) Equity
b) Debt
c) Balanced
d) Fixed Maturity Plan

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9. From which sources did you know about mutual funds?
a) Friends’ suggestion
b) Self-decision
c) Advertisements
d) Agent/Brokers

10. What is Risk Preference?

a) Innovator
b) Moderator
c) Risk Adverse

11. Which scheme type do you like?

a) Open ended method
b) Close ended method
c) Interval method

12. Attitude toward risk of salaried individuals?

a) Most Important
b) Important
c) Neutral
d) Less Important
e) Not Important

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