Chapter 1 PPT Edited

“A STUDY ON INVESTMENT PATTERN
AND PREFERENCE OF RETAIL

INVESTORS TOWARDS MUTUAL
FUNDS”
by
K . KAVYA
(Enrollment No. 17N01E0041)
Under the guidance of

M . MALAVIKA
Introduction
There are a lot of investment avenues available today in
the financial market for an investor with an investable
surplus. He can invest in Bank Deposits, Corporate
Debentures, and Bonds where there is low risk but low
return .He may invest in Stock of companies where the
risk is high and the returns are also proportionately
high. The recent trends in the Stock Market have shown
that an average retail investor always lost with periodic
bearish tends.
People began opting for portfolio managers with expertise
in stock markets who would invest on their behalf. Thus
we had wealth management services provided by many
institutions. However they proved too costly for a small
investor. These investors have found a good shelter with
the mutual funds.
A mutual fund is an investment vehicle where a person
or group of persons, called mutual fund managers,
choose a group of stocks and sell them in one
package. Mutual Funds are generally lower risk
investment for a beginner or intermediate investor
because;
 The managers are experts.
 Having a large number and variety of stocks is less

risky than owning one stock
 If the prices per share of some stocks go down,

others can go up, possibly keeping the price (NET
ASSET VALUE), of the mutual fund stable or going
up.
 Literature review
Dr. Bimal Anjum and Ramandeep Saini 2011 Chandigarh a

study on retail Investors preference towards mutual funds
The study analyses the mutual fund investments in relation
to investor’s behavior. Investors’ opinion and perception
has been studied relating to various issues like type of
mutual fund scheme, main objective behind investing in
mutual fund scheme, level of satisfaction, role of financial
advisors and brokers, investors’ opinion relating to factors
that attract them to invest in mutual funds, sources of
information, deficiencies in the services provided by the
mutual fund managers, challenges before the Indian
mutual fund industry etc.
 Need of study
o To study about the mutual funds and the retail

investors preference towards mutual funds.
o To understand the investment pattern and

improve knowledge in mutual funds.
o To analyse the awareness about mutual funds in

public.
Scope of study
 The scope of project is limited to

understanding various mutual funds
schemes.
 Statement of the problem
 It is well known that mutual funds offer their investors

benefits difficult to obtain through other investment
vehicles.
 Benefits such as diversification, access to equity and
debt markets at low transaction costs and liquidity are
some such advantages. Given these benefits, one would
imagine that Indian households, characterized with gross
domestic savings of close to 28% of the total GDP
(World Bank, 2012), one of the highest in the world,
would flock to invest their savings in mutual funds.
However, a recent report (PWC, 2013) points out that
the distribution of assets under management (AUM)
across cities is highly skewed in favor of the top fifteen
(T-15) cities of India.
 Objectives
1. To study about investment pattern in mutual funds.
2.To learn about returns of the fund which one is beneficial.
3. To know investors preference towards investment

in mutual funds.
4.To study about types of mutual funds and its significance.

 Theoritical frame work
 The global financial market has witnessed several

dynamic developments in the past three decades. One
of such developments has been, the phenomenal
growth of the capital market- both domestic and
international resulting in the advent of ‘equity cult’
among the household sector. This has accelerated the
process of disintermediation whereby industrial
security are directly issued by corporate borrowers to
end investors bypassing the banking systems .
 However, the household sector, being more averse to

risks, necessitates the creation of institutional shields
which may act as intermediaries. One of the most
significant and popular financial intermediary has
been the “mutual funds”
Mutual funds flow pattern
 A mutual fund scheme is “a collective
investment scheme designed to provide
benefits of diversified investment portfolio and
expert management advice and management to
a large number of investors, through
institutionalized risky pooling mechanism”.
 It endeavors to offer high yields than available

on alternative investment instruments and
provide relatively higher degree ofsafety both
for yield as well as return of capital. A very
common aspect of mutual funds is its capacity
to offer different suitable schemes of
investment to satisfy the diverse income needs
of investors.

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“A STUDY ON INVESTMENT PATTERN

AND PREFERENCE OF RETAIL

Under the guidance of

 Having a large number and variety of stocks is less

 If the prices per share of some stocks go down,

Dr. Bimal Anjum and Ramandeep Saini 2011 Chandigarh a

o To study about the mutual funds and the retail

o To understand the investment pattern and

o To analyse the awareness about mutual funds in

 The scope of project is limited to

 It is well known that mutual funds offer their investors

1. To study about investment pattern in mutual funds.

2.To learn about returns of the fund which one is beneficial.

3. To know investors preference towards investment

4.To study about types of mutual funds and its significance.

 The global financial market has witnessed several

 However, the household sector, being more averse to

 It endeavors to offer high yields than available

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