Project On Investor Preference in Mutual Funds

A study on investor preference in mutual fund
Gsss center for PG studies and Research Page 1

CHAPTER 1
INTRODUCTION
A mutual fund is a professionally managed collective investment scheme that pools
money from many investors. This money is then invested in Stocks, bonds, shortterm
money market instruments, and/or other securities.
Mutual fund is an investment vehicle that is made up of funds collected from many
investors, for the purpose of investing in many securities such as stocks, bonds, money
market instrument 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
funds investors. A mutual funds portfolio structured and maintains to match Investment
objectives.
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them. The term risk has a variety of
meanings in business and everyday life. At its most general level, risk is used to describe
any situation where there is uncertainty about what outcome will occur. Life is obviously
very risky. Even the short term future is often highly uncertain. In probability and
statistics, financial management and investment management, risk is often used in more
specific sense to indicate possible variability of outcomes around some expected value
The security and exchange board of India(Mutual fund) Regulation,1993 define a mutual
fund a fund establish in the form of a trust by a sponsor, to raise funds by the trustees
through the sale of unit to the public, under one or more schemes, for investing in
securities in accordance with these regulation.
According to Weston.J.Fred and Brigham, Eugene, Unit trust are corporations which
accept dollars from savers and the use these dollars to buy stock, bonds, short term debt
instruments issued by business or government units; these operation pools funds and thus
reduce risk by diversification.

TOPIC CHOOSEN TO STUDY
The project deals with the customer preference in Mutual funds in India. The Indian
mutual fund is in radical transformation in the industry over the years. The competition is
intense in the current scenario as there are a variety of players in all types of fund
schemes. The industry has witnesses enormous growth in terms of size, operations,
investor base and variety of schemes. It is further expanding to the needs of investors and
market pressures. At this point, there is a need for mutual fund investors. Past
performance is taken as reference by many investors though it may not be a true indicator
of future performance. In this project, I made attempt to know the customers preference
in mutual funds by using different measure. The result of various measures is given to get
a comprehensive picture of the preference of selected mutual funds.
NEED FOR THE STUDY
The Indian Equity Market has grown significantly during the last three years; Mutual
Funds are not left far behind. Both the avenues have created wealth for the investors. But
for the creation of wealth through this avenue a proper understanding of the Mutual
Funds is must.
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them.
In general, investments in Funds are risky, because they are exposed to economic forces
or factors, which the future is uncertain. By its very nature, risk concerns the uncertain
future. If investors know what happened to a Funds returns in the past, they can predict
the likely range of Funds returns in future. The greater is this range, the more risky are
Funds prospects. Thus, investors and their advisors need more information to help them
assess the risks and to analyses the performance of Mutual Fund in various schemes.
Investors must ultimately be responsible for understanding or making predictions about
the performance and risks associated with the major market sectors, as well as the extent
to which sectors are likely to move with one another. Much of this information is

common to many Funds and can be most efficiently provided to investors by third parties,
such as financial planners and database providers. But, most of the investors are not
aware of the investment opportunities in mutual funds in India. Hence, it is necessary to
find out how the companies are providing information about the investments to the
investors, whether that information is sufficient to educate the investors regarding the
performance of mutual Funds, and how the investors are benefited.
OBJECTIVE OF THE STUDY
To study about the mutual fund industry.
To find out the Preferences of the investors.
To measure the satisfaction level of investors regarding mutual funds
To study the difference between various investment options offered Aditya birla sunlife.
SCOPE OF THE STUDY
The study is limited to Mysore city.
In general it confines to measure the performance.
It include comparative study on equity mutual funds
It focuses on the preference in people about different investment opportunities in mutual
fund.
RESEARCH METHODOLOGY
Definitions of the population
Since the study is mainly related to know the investment patterns of the investors on
different products of company. Their potentiality of earning income and reducing risk of
the investment community on the products, where each security in the market has to be
analyzed through their earnings over the others.
Type of research
This is a descriptive research where survey method is adopted to collect primary
information from the investors using different scales as required and the required
secondary information for the analysis.

Primary Data
A questionnaire schedule was prepared and the primary data was collected through
survey method.
Secondary Data
Company website
Books
Related information from net
Customer database
Sample Size
The population being large the survey was carried among the clients of Aditya Birla
sunlife. They will be considered adequate to represent the characteristics of the entire
population.
Sampling Procedure
The sampling procedure followed in this study is non-probability convenient sampling.
Simple random procedures are used to select the respondent from the available database.
The Investment pattern of Investors on different products research work will be carried
on the basis of structured questionnaire. The study is restricted to the investors of Mysore.
Techniques for data analysis
The analysis of data collection is completed and presented systematically with the use of
Microsoft Excel and MS-Word. The various tools which were used for presentation are:
Bar graphs.
Pie charts.
Column graphs.


LITERATURE REVIEW
Investment is the sacrifice of certain present value for the uncertain future reward. It
entails arriving at numerous decisions such as type, mix, amount, timing, grade etc of
investment and disinvestments. Further such decisions making has not only to be
continuous but rational too. Instead of keeping the savings idle you may like to use
savings in order to get return on it in the future, which is known as 'investment'. There
are various investment avenues such as Equity, Bonds, Insurance, and Bank Deposit
etc. A Portfolio is a combination of different investment assets mixed and matched for
the purpose of achieving an investoes goal. There are various factors which affects
investors' portfolio such as annual income, government policy, natural calamities,
economical changes etc.
Bansal says, Investors increasing allocation of cash is not because their ability to bear
that risk has been impacted
Preeti Sigh says, Investment is the employment of fund with the aim of achieving
additional income or growth in value. The essential quality of investment is that it
involves waiting for reward. The term investment does not appear to be simple as it has
been define. Investment is the allocation of monetary resources to asset that are expected
to yield or positive return over a given period of time
Miglani (2007) in his study made an attempt to understand the Mutual Fund industry and
its implications on the common investors on one hand and its returns and performance on
the other. An analysis was made on the perceptual views of investors in Investment
Decision Making.
An empirical study of perceptual View of Investors by Yesh Pal Davar and Suveera Gill
(2007). The results of this study suggest that investors preferences are supposedly
related to the actual performance of investments and the same is taken into account while
forming an opinion about making future investment decision.
In their study entitled A study on Investors perception towards Mutual Fund
investments, S. Sudalaimuthu and P. Senthil Kumar (2008) was concentrated on
highlighting the investor awareness and preference in Mutual Fund schemes, factor that
influences the investor in selecting Mutual Fund scheme, the level of satisfaction on the

investment of Mutual Fund, problems faced by Mutual Fund investors and the investment
objectives, preference among Fund types (balanced, growth, dividend etc.).
An Empirical Study of Indian Individual Investors Behaviour
by Syed. Tabassum Sultana (2010) was an attempt to know the profile of the investors
and also to know their characteristics so as to know their preference with respect to their
investments. The study also tried to unravel the influence of demographic factors like
gender and age on risk tolerance level of the investors.
Mr. M. Jaidev in his book has Investment policy and performance of Mutual Fund has
studied the Indian Public Sector Mutual Funds. In this book he has covered risk, rate of
return. Investment policy and pricing of mutual funds. In this book he has done an
empirical study covering all aspects of mutual fund investment along with the regulatory
framework.
NaliniPrava Tripathy in her book Mutual Funds in India. Emerging Issues provides a
detailed evaluation of investment management which is not only helpful for influencing
marketing operations but also for securities selection, investment research and timing and
resource allocation
LIMITATIONS
The investment pattern analysis has been limited to few investors.
This study is conducted to analyze their pattern not all those factors that really matter
while investing.
It is conducted in Mysore city.
An interpretation of this study is based on the assumption that the respondents have
given correct information.
The economy and industry are so wide and comprehensive that it is difficult to
encompass all the likely factors influencing the investors' investment pattern in the
given period of time.
Besides the study has the limitation of time, place and resources.


CHAPTER 2
INDUSTRY PROFILE
In recent years, India has evolved as one of the fastest growing markets for mutual funds,
posting a compounded annual growth rate (CAGR) of around 17.6% during the five year
period of 2004-08 as against the global average of 4% during the same period. The
Mutual fund industry in mature markets like US, France and UK, on the other hand, have
witnessed a comparatively lower rate of growth. The rapid growth of the Mutual fund
industry in India can largely be attributed to the rising personal income, growing risk
appetite of investors and increasing reach of Asset Management Companies (AMCs) &
distributors. Today, mutual fund has become one of the preferred forms of investment for
the common man as it offers an opportunity to invest in a diversified professionally
managed basket of securities at a relatively low cost. Further, the buoyancy in the
domestic stock markets in recent years has fueled growth in the Indian Mutual fund
industry.
The industry witnessed evolution of many private sector mutual funds with new fund
offerings in the last few years. Today, there are over 40 private sector mutual funds (as on
March 31, 2008) with the total number of schemes amounting to 1002 as of Dec-08. The
major private sector mutual funds include Prudential ICICI Mutual Fund, Birla Sun Life
Mutual Fund, HDFC Mutual Fund, Tata Mutual Fund, Reliance Mutual Fund and
Sundaram BNP Paribas Mutual Fund to name a few. Moreover, the industry has also
endeavoured to tap overseas markets, offering a slew of products to overseas Indian
investors.
Nonetheless, despite emerging as one of the fastest growing markets for mutual funds, the
share of Indian Mutual fund industry in the global Mutual fund industry has remained
low. It accounts for just 0.3% of the total net assets of the global Mutual fund industry,
which is lesser than other emerging countries such as China (1.5%) and Brazil (2.5%).
The Indian mutual fund industry which grew at a rapid pace in the last few years,
witnessed significant moderation in growth during FY09. The liquidity crunch world-
over consequent to the turmoil in the global financial markets had adverse impact on the
resource mobilisation of the industry. Moreover, given the uncertain conditions prevailing

in the domestic stock markets, the domestic mutual funds witnessed severe redemption
pressures from the domestic corporate sector, which in turn called for the intervention by
the RBI.
HISTORY (WORLD WIDE)
The origin of pooled investing concept dates back to the late 1700s in Europe, when a
Dutch merchant and broker invited subscriptions from investors to form a trust to provide
an opportunity to diversify for small investors with limited means. The emergence of
investment pooling in England in the 1800s brought the concept closer to the US shores.
The enactment of two British laws, the Joint Stock Companies Acts of 1862 and 1867,
permitted investors to share in the profits of an investment enterprise and limited investor
liability to the amount of investment capital devoted to the enterprise. Shortly thereafter,
in 1868, the Foreign and Colonial Government Trust was formed in London.
It resembled the United State fund model in basic structure, providing the investor of
moderate means the same advantages as the large capitalists by spreading the investment
over a number of different stocks.
The Scottish American Investment Trust, formed in February 1873, by fund pioneer
Robert Fleming, invested in the economic potential of the united state, chiefly through
American railroad bonds. Many other trusts followed them, who not only targeted
investment in America, but led to the introduction of the fund investing concept on the
United States shores in the late 1800s and the early 1900s.


Company Profile
Company information
Incorporation year : 1994
Registered office : Birla Sun Life Asset Management Company Ltd
One India Bulls Center, Tower 1, 17
th
floor
Jupiter mill compound, 841, SenapathiBapat
Marg, Elphinstone Road, Mumbai-400013
Telephone number : 022-66928000
Branch office : Birla Sun Life Asset Management Company Ltd
No, 442-443, Laxman Plaza, Chamaraja Double
Road, Near Ramaswamy circle, Mysore-570024
Ph-0821-424400/1/2
E-mail ID : www.birlasunlife.com
Industry : Financial Services
Chairman : Mr. Donald Stewart
Chief Executive officer : Balasubramanian
Company secretary : Rajiv Joshi
Auditor : Haribhakti& Co
Registrar : Computer Age Management Services Pvt. Ltd.

Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment manager of
Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the
Sun Life Financial Inc. of Canada. The joint venture brings together the Aditya Birla
Group's experience in the Indian market and Sun Life's global experience.
Established in 1994, Birla Sun Life Mutual fund has emerged as one of India's leading
flagships of Mutual Funds business managing assets of a large investor base. Our
solutions offer a range of investment options, including diversified and sector specific

equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of
debt and treasury products and offshore funds.
Birla Sun Life Asset Management Company has one of the largest team of research
analysts in the industry, dedicated to tracking down the best companies to invest in.
BSLAMC strives to provide transparent, ethical and research-based investments and
wealth management services.
The Aditya Birla Group
The Aditya Birla Group is one of India's largest business houses. Global in vision, rooted
in Indian values, the Group is driven by a performance ethic pegged on value creation for
its multiple stakeholders.
The Group operates in 26 countries India, UK, Germany, Hungary, Brazil, Italy,
France, Luxembourg, Switzerland, Australia, USA, Canada, Egypt, China, Thailand,
Laos, Indonesia, Philippines, UAE, Singapore, Myanmar, Bangladesh, Vietnam,
Malaysia, Bahrain and Korea.
A US $29 billion corporation in the League of Fortune 500, the Aditya Birla Group is
anchored by an extraordinary work force of 130,000 employees, belonging to 40 different
nationalities. Over 60 per cent of its revenues flow from its operations across the world.
The Aditya Birla Group is a dominant player in all its areas of operations viz;
Aluminium, Copper, Cement, Viscose Staple Fibre, Carbon Black, Viscose Filament
Yarn, Fertilisers, Insulators, Sponge Iron, Chemicals, Branded Apparels, Insurance,
Mutual Funds, Software and Telecom. The Group has strategic joint ventures with global
majors such as Sun Life (Canada), AT&T (USA), the Tata Group and NGK Insulators
(Japan), and has ventured into the BPO sector with the acquisition of TransWorks, a
leading ITES/BPO company.
Sun Life Financial
Sun Life Financial Inc is a leading international financial services organization providing
a diverse range of wealth accumulation and protection products and services to
individuals and corporate customers. Chartered in 1865, Sun Life Financial Inc and its
partners today have operations in key markets worldwide, including Canada, the United

States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China
and Bermuda.
Birla Sun Life Asset Management Company follows a long-term, fundamental research
based approach to investment. The approach is to identify companies, which have
excellent growth prospects and strong fundamentals. The fundamentals include the
quality of the companys management, sustainability of its business model and its
competitive position, amongst other factors.
Vision
To be a leader and role model in a broad based and integrated financial services
business.
Mission
To consistently pursue investor's wealth optimization by:
Achieving superior and consistent investment results.
Creating a conducive environment to hone and retain talent.
Providing customer delight.
Institutionalizing system-approach in all aspects of functioning.
Upholding highest standards of ethical values at all times.
Values
Integrity
Commitment
Passion
Seamlessness
Speed
Products & Services
With Aditya Birla Money by your side, you will always have access to the most viable
wealth management products and solutions. As your partners, we help you build a lasting
legacy for yourself and your loved ones.

Our Products:
Mutual Funds
Mutual Funds give you access to Indian equity and debt securities. We offer you advice
on the entire universe of mutual funds:
Equity funds growth or capital appreciation
Debt funds capital preservation
Choose from an array of more than 15 fund houses with various schemes.
PMS
Portfolio Management System is a unique way to build a customized portfolio of Indian
equities. At Aditya Birla Money, we act as authorized distributors for various PMS
providers to meet the growing needs of investors and expand a portfolio beyond equities
and bonds.
Direct Equity
Aditya Birla Money offers you convenient, simple and efficient trading in Indian equities.
We provide you with a seamless platform to invest in the Indian secondary markets. Your
Wealth Management advisor will provide you valuable advice based on our in-house
research.
Structured Products
ABM brings you customized investment solutions, giving you access to various asset
classes. Unlike most other structures, returns can be linked to a variety of asset types such
as equity indices, basket of stocks, and commodities.
Alternate Asset Products
Even if your interests lie beyond the stock market, Aditya Birla Money has a solution for
you. Through our distribution tie-ups, we offer a wide range of Private Equity Fund
(which invest in unlisted securities) to give you the opportunity of investing in the
growing Indian economy. With these products and investment strategy, you can preserve
your capital, ensure risk protection, leverage and diversify.

Real Estate
If your interests lie in real estate, we offer niche property investment services. We bring
in a combination of in-depth market knowledge and real estate industry expertise to offer
a range of specialized real estate investment services. We provide expert advice and
innovate real estate solutions tailor made to your needs and objectives
Loan against Securities and Mutual Funds
Our tie-up with Aditya Birla Finance lets you use your share investments as security
against borrowing. This way, you are able to investment more, and increase the size of
your overall portfolio.
Gold
A healthy portfolio is about diversification and risk management. To this end, we offer
multiple avenues of investing in gold. Holding gold in a portfolio can provide distinct
benefits, as it is not correlated with most other assets.
Life Insurance
While offering solutions for building and preserving capital, your Relationship Manager
will offer you comprehensive advice on how best to provide for financial protection to
loved ones and cover risks and uncertainties.
Our affiliation with Birla Sun Life Insurance provides the opportunity to obtain even
more favorable offers, which can result in lower costs and greater benefits. Our Policy
Analyst ensures that the planning youve previously done remains current and
competitive.
Our Services:
Research
Our quality research provides clients with the information they need to make informed
investment decisions. The Aditya Birla Money research team is dedicated to keeping you
updated with access to the latest publications and a wide range of industry happenings
including: market depth, breaking commentary, long-term forecasts, detailed daily
updates and the latest financial news.

Highly proactive services
Our service includes Daily Market Update, Weekly update on mutual Funds and Event
Based SMS to keep you completely informed on the markets.
Online Portfolio Access
Wherever you are, our network works for you. The online portfolio ensures every detail
of your investments is at your fingertips. You can constantly monitor the composition of
your portfolio, so you always know if your long term objectives are being met.
Financial planning
We offer a comprehensive financial planning session to help devise your investment
strategy. This is followed by complimentary personalized report outlining specific
recommendations on the step-by-step actions you need to take to achieve your financial
goals.
Regular Portfolio Reviews
Your portfolio undergoes regular reviews to ensure your money is constantly working in
your best interest, keeping your personal financial goals in sight.and towards your
personal financial goal.
AREA OF OPERATION
Today, BSLAMC is present in 111 locations, including 105 branches across India.
National level head s of the department will look after all major activities of the company
and further functions maintained by the Zonal offices and regional branch offices. There
is some targets are given for the branches office managers and executives.
OWNERSHIP PATTERN
Birla Sun Life AMC where Aditya Birla Financial Services (ABFS) and Canada-based
Sun Life (India) AMC Investment have almost 50:50 ownership. The last stake change
took place in March 2010 when Aditya Birla Novo transferred its 50percent stake to
ABFS.


DIRECTORS OF BIRLA SUNLIFE ASSET MANAGEMENT COMPANY
Mr. Kumar Mangalam Birla Associate Director
Mr.AjaySrinvasan Associate Director
Mr. Donald Stewart Associate Director and Chairman
Mr.S.S.Raman Independent Director
Mr.N.NJambusaria Independent Director
Mr.N.CSinghal Independent director
Mr. Bobby Parikh Independent Director
Mr.R.Vaidyanathan Independent Director
Mr.PankajRazdanAssociated Director
Mr.Kevin Strain Additional Director
Mr.Bharat Patel Independent Director
INFRASTRUCTURE FACILITIES
Birla Sun outlets are designed to be place where retail investors can come in touch with
investment opportunities in an atmosphere of convince and comfort. The look and feel of
the offices across India projects a consistent branch image for the company. The features
that enable a unique facility for retailing financial service include among other.
In Mysore branch office building was constructed in the year 2007.This const on average
45lakh rupees and building was constructed in 1000sq.ft.of land. And the interior
equipment like computers, photo copy machine, lightings, furniture, ventilation system,
etc costs of 15lakh rupees.
ACHIEVENT/AWARD
Birla Sun Life Asset Management Company is the investment manager of Birla Sun Life
Mutual fund. Birla Sun Life Mutual Fund not only offers a spectrum of savings and
investment products for individual, corporate and institutional investors, but also manages
two offshore funds. It offers portfolio advisory services for high net worth investors. It is
also setting up offshore real estate fund. The fund house is currently ranked among the

top five asset management companies in the country, enjoying the trust of 25 lakh
investors and managing average assets of over Rs.65000 crore including offshore
funds.(as on 31March 2010).
Having registered strong growth for consecutive years. BSLAMC today has 104 own
branches and it offers a wide range of investment solutions across asset classes for
investors. Birla Sun Life Mutual Fund has been recognized for its strong growth
momentum and demonstrative fund performance not just in India but also internationally.
BSLAMC has received recognitions from various institutes of international repute such
as Lipper, Outlook Money and The Asset magazine, Hong Kong.
2008
The companys Tax Fund as the third best performing equity fund in the world and the
best in India, over a 10-year time frame.
The fund house was also named the debt Fund House of The year and received three
prestigious awards, a cross investment classes for the year 2008 at the same ceremony.
2009
Star Fund house of the year-Debt by the fund house at the ICRA Mutual Fund Award
2009
The fund house was the winner of Best Fund House award for 2009.
The fund house was awarded the Best Group- Mixed Asset Category by Lipper.
The Asian Investor, a Hong Kong based magazine named it the best Onshore Fund
House-India at the investment performance awards 2009 placing it alongside the best
fund houses across Asia.
2010
Birla Sun Life Mutual Fund was recognized as The Mutual Fund House of the year by
CNBCTV18-CRISIL,
Best Fund House at the Outlook Money Awards 2010.
BSLAMC was also adjudged the runner up for the Best Fund House award for the year
2010.

It was adjudged the best, Asset Management Company in India, by the Asset magazine,
Hong Kong, as part of their Triple A investment performance awards 2010.
2011
Birla Sun Life Asset Management Company Adjudged the Best Debt Fund house17
th

January 2011,
2012
Birla Sun Life Asset Management Company Received Debt Mutual Fund House of the
year CNBC-TV18-CRISIL.
COMPETITORS INFORMATION
Reliance Mutual Fund
Reliance Mutual Funds (RMF) was established as trust under Indian Trust act, 1982.The
sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is
the Trustee. It was registered on June 30,1995 as Reliance Capital Mutual Fund which
was changed on March 11 2004.Reliance Mutual Fund was formed for launching of
various schemes under which units are issued to the public with a view to contribute to
the capital market and to provide investors the opportunities to make investments in
diversified securities. Reliance has earned an approximate net profit of INR276 crore
while in 2011 the same figure had stood at INR261 crore.
UNIT TRUST OF INDIA MUTUAL FUND
UTI Asset Management Company private limited, established in Jan 14, 2003, and
manages the UTI Mutual Fund with the support of UTI Trustee Company Private
Limited. UTI Asset Management Company presently manages a cuprous of over
Rs.20000 Crore. The sponsorers of UTI Mutual Fund are Bank of Baroda(BOB),Punjab
National Bank (PNP),State Bank of India(SBI)and Life Insurance Corporation of
India(LIC).The schemes of UTI Mutual Fund are liquid Funds, Income Funds, Aseet
Management Funds, Index Funds, equity Funds and Balance Funds.


HSBC MUTUAL FUND
HSBC Mutual Fund was set up on May 27, 2002 with HSBC Securities and Capital
Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund
acts as the Trustee Company of HSBC Mutual Fund.
ING Vysya Mutual Fund
ING Vysya Mutual Fund was set up on February 11, 1999 with the same named Trustee
Company. It is a joint venture of Vysya and ING. The AMC, ING investment
Management (India) Pvt.Ltd was incorporated on April 6, 1998.
STATE BANK OF INDIA MURUAL FUND
State Bank of India Mutual Fund is the first bank sponsored Mutual Fund to launch
offshore fund, the India Magnum Fund with a corpus of Rs.225 crore approximately.
Today it is the largest Bank sponsored Mutual Fund in India. They have already launched
35schemes out of which 15 have already yielded handsome returns to investors. State
Bank of India has more than Rs.5500Crores as AUM. Now it has an investor base of over
8lakh spread over 18schemes.
HDFC MUTUAL FUND
HDFC Mutual Fund was set up on June 30, 2000 with two sponsors Housing
Development Finance Corporation Limited and Standard life investments Limited. HDFC
Mutual Fund has been the biggest performer in 2011-2012 fiscal, replacing Reliance
Mutual Fund. In 2012, this represents a growth of 5.6 percent on a year-on-year basis. In
the same period HDFC Mutual Fund, which is the biggest of its kind in India, has gone
up from INR 242 crore to INR 269 crore
However, Birla Sun Life AMC (Asset Management Company) saw a 30percent dip in its
profits in 2012.


SWOT ANALYSIS
SWOT analysis is a strategic planning tool to evaluate the Strengths, Weaknesses,
opportunities, and Threats involved in a project or in a business venture. It involves
specifying the Objectives of the business Venture or project and identifying the internal
and external factors that are favorable and unfavorable in achieving that objective.
The aim of any SWOT analysis is to identify the key internal and external factors that are
important in achieving the objective. SWOT analysis groups key pieces of information
into two main categories.
Internal Factors-The strengths and weaknesses internal to the organization
External factors-The opportunities and threats presented by the external
environment.
STRENGHS: WEAKNESS:
Brand Reach
Brand image
Efficient sale staff
Prompt services provider
Image of an ethical player
Good relationship with distributors
Fair understanding of market and
competition.
In ability to fully cover the outstation market.
Rural population undiscovered since there is low
awareness and higher focus on urban market and
distributor
OPPORTUNITIES: THREATS:
Unexplored/outstation market
Target export segment aggressively
Substitutes products like Bank FDs, RDs, etc
Mis-selling of Insurance as Mutual funds
The company is facing strong competition from
since there is present of 34 mutual fund companies.


FUTURE GROWTH AND PROSPECTS
Over the past year, Birla Sun Life Mutual Fund has scaled up efforts to connect with new
investors and markets. BSLAMC initiatives to create understanding about systematic
Investment Planning and Financial discipline in markets with low investor education,
helped expand our reach in smaller markets alongside our significant presence in large
markets.
Currently Birla Sun lifes asset under management (AUM) was reached over
80000cr.And end of the financial year 2012-2013 Birla Sun Life is focusing as the 3
rd

largest AMC in India. And its main aim to reach the first position in Indian mutual fund
industry.
FUTURE AND GROWTH OF MUTUAL FUND IN INDIA
According to report of Business maps of India, Important aspects related to the future of
mutual funds in India are:-
There is a huge scope in the future for the expansion of the mutual funds
industry.
A number of foreign based assets management companies are venturing into
Indian market
The Securities Exchange Board of India has allowed the introduction of
commodity mutual funds.
The emphasis is being given on the effective corporate governance of Mutual
Funds.
The Mutual funds in India has the scope of penetrating into the rural and semi
urban areas
Financial planners are introduced into the market, which would provide the
people with better financial planning.
According to RNCOS research report titled Current and Future outlook of
Mutual Fund Industry, key finding are:-
The Indian mutual funds retail market, growing at a Compounded Annual
Growth Rate (CAGR) of about 30%, is forecasted to reach US$ 300 Billion by
2015.

Income and growth schemes made up for majority of Assets Under Management
(AUM) in the country.
At about 84% (as on March 31, 2008), private sector Asset Management
Companies account for majority of mutual fund sales in India.
Individual investors make up for 96.86% of the total number of investor accounts
and contribute 36.9% of the net assets under management.
Based on KPMG report titled Indian Mutual Fund Industry The Future in a Dynamic
Environment Outlook for 2015 key results are:-
KPMG in India is of the view that the industry AUM is likely to continue to grow in the
range of 15 to 25 percent from the period 2010 to 2015 based on the pace of economic
growth. In the event of a quick economic revival and positive reinforcement of growth
drivers identified, KPMG in India is of the view that the Indian mutual fund industry may
grow at the rate of 22 to 25 percent in the period from 2010 to 2015, resulting in AUM of
INR 16,000 to 18,000 billion in 2015. In the event of a relatively slower economic revival
resulting in the identified growth drivers not reaching their full potential, KPMG in India
is of the view that the Indian mutual fund industry may grow in the range of 15 to 18
percent in the period from 2010 to 2015, resulting in AUM of INR 15,000 to 17,000
billion in 2015. Industry profitability may reduce further as revenues shrink and
operating costs escalate. Product innovation is expected to be limited. Market deepening
and widening is expected with the objective of increased retail penetration and
participation in mutual funds. The regulatory and compliance framework for mutual
funds is likely to get aligned with the other frameworks across the financial services
sectors.


ANALYSIS OF FINANCIAL STATEMENT
Statement of Profit and loss account for the year ended March 31, 2013

Particulars 31-03-2013 31-03-2012
INCOME
Revenue from operation
Other incomes
TOTAL INCOME

EXPENSES
Employee benefit expenses
Administrative and other expenses
Distribution and scheme expenses
Finance cost
Depreciation and Amortization expenses
TOTAL EXPENSES
PROFIT BEFORE TAX
Tax expenses
Current tax
Deferred tax
(Excess)/short provision for tax of earlier years
PROFIT AFTER TAX

3,963,895,760
386,631,338
4,350,527,098

971,760,267
620,681,076
1,433,705,536
6,494,674
104,188,446
3,136,829,999
1,213,697,099

340,500,000
574,307
(465,645)
873,088,437

3,073,508,398
419,763,769
3,493,272,167

808,295,801
614,914,168
882,146,263
1,881,997
124,308,056
2,431,546,285
1,061,725,882

322,000,000
(17,450,192)
(5,922,733)
763,098,807

Balance sheet as at March 31, 2013
PARTICULARS Year ended
31-03-2013
Year ended
31-03-2012
(A)Share holders fund
Share capital
Reserve and surplus

(B)Non- current Liabilities
Other long term liabilities
Long term provisions

(C) Current liabilities
Trade payables
Other short term liabilities
Short term provisions

TOTAL(A+B+C)
(D)FIXED ASSETS
Tangible asset
Intangible asset
Non -current investment
Deferred tax asset(net)
Long term loans and advances

(E)CURRENT ASSETS
Current investment
Trade receivables
Cash and Cash equivalent
Short-term loans and advances
Other Current Assets

TOTAL OF (D+E)

180,000,000
3,706,880,856
3,886,880,856

10,634,082
4,207,007
14,841,089

578269675
73314768
426586400
1,078,170,843
4,979,892,788

78,610,963
138,919,231
426,171,454
28,685,245
397,480,072
1,069,866,965

2,128,681,542
139,463,646
40,658,542
1,147,162,807
454,059,286
3,910,025,823
4,979,892,788

180,000,000
2,833,792,419
3,013,792,419

62,566,548
43,406,941
105,973,489

472453592
34715748
287621276
794,790,616
3,914,556,524

95,690,775
193,086,240
573,480,063
29,259,552
1,046,762,304
1,938,278,934

1133269161
76801213
45465733
370394251
350347232
1,976,277,590
3,914,556,524

CHAPTER 3
THEORETICAL BACKGROUND OF THE STUDY
In this section introduce the theoretical foundations of the analysis step by step. First, we
introduce what a mutual fund is. A mutual fund is a trust that pools the savings of a
number of investors who share a common financial goal. The money thus collected is
invested in capital market instruments such as shares, debentures, and other securities.
The income earned through these investments is shared by its unit holders in proportion
to the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost. The objectives of
mutual fund are to maximize the return to the investor who participates in equity
indirectly through mutual fund.
Mutual Funds
Mutual funds are being thought of as a vehicle for investors to pool their money in and
have it jointly managed by an assumingly professional manager A fund is divided into
units and holders are entitled to a proportionate fund share. A mutual fund is ready to buy
back its shares at their current net asset value; in turn, the shareholders are only entitled to
sell their shares back to the fund. The disclosure of information for the potential unit
holder of the fund is ensured by the government and requires it to be provided in the
fund prospectus. Funds invest in securities indicated in their prospectus and what are
according to legal regulation varying from country to country.
There are several types of mutual funds traded at the Helsinki Stock Exchange, which
differ by the assets they invest in:
Asset Allocation Funds apportion their investments across a mixture of asset classes,
namely stocks, bonds, and cash and equivalents. The main purpose is to optimize the
return given the associated level of risk by pursuing the finest mix of stocks, bonds, and
cash and equivalents. Asset Allocation Funds are generally distinguished by the way they
allot their investments among these asset classes. Conservative and aggressive asset
allocation funds differ by the portion of their investments in asset classes with historically

different risk/return potential (more risk/higher return for aggressive and less risk/lower
return for conservative).
Bond Funds invest primarily in bonds. These funds diversify by investing in an array of
bonds. Bond Funds are usually classified by the types of bonds they invest in, e.g.
government Bond Funds, corporate Bond Funds, international Bond Funds, and
municipal Bond Funds. Similar to individual bonds, the share price of Bond Funds
normally falls when interest rates go up, and rises when interest rates decline.
Equity Funds invest mainly in common stocks. Diversification is achieved by
investments across a number of different companies or industries in compliance with the
fund's investment objectives stated in their prospectus. Equity funds are usually
categorized by the types of stocks they invest in.
Hedge Funds are extremely flexible in their investment options because they use financial
instruments generally beyond the reach of other mutual funds, due to stricter regulation
and disclosure requirements. Hedge Funds are allowed to use short-selling, leverage,
concentrated investments and derivatives. This flexibility, which includes use of hedging
strategies to protect downside risk, gives hedge funds the ability to best manage
investment risks.
Money Market Funds are composed of short-term debt instruments, including
commercial paper, negotiable certificates of deposit, bankers' acceptances, Treasury bills,
and discount notes of various organizations. These funds seek to preserve capital while
providing income and liquidity.
Mutual funds are also classified by their investment strategies:
Yield Funds objective is to achieve a high level of current income by buying government
and corporate bonds as well as high yielding common and preferred stocks. They are not
designed to provide major capital gains.
Growth Funds main investment objective is capital growth. Funds exploiting the growth
strategy commonly invest in companies whose earnings are expected to grow at a faster
rate than the average earnings growth of the market index. Funds utilizing the value
strategy generally invest in companies whose stock is either trading at a price that is

relatively low compared to its historical trading range, or compared to prices of
companies in similar industries.
We consider mutual funds performance as the best proxy for professional investors
skills, because lenders trust their money to mutual fund managers, who are thought of as
able to make better investment decisions.
In sum, in this part we described what a mutual fund is and what the main differences
between various kinds of mutual funds are. We also explained why we believe a mutual
funds performance is an appropriate proxy for professional investors skills.
Mutual Fund investment Instrument
Mutual funds are invested in 3 types of funds
Stocks
Bonds
Money market instrument
Stocks:-Stocks represent ownership or equity in a company popularly known as shares.
Bonds:-These represent debt from companies, financial institution or government
agencies.
Money Market instrument:-includes short term-debts such as treasury bills, certificate
of deposits, and interbank call money
STRUCTURE OF MUTUAL FUND
The structure of the mutual fund in India is governed by SEBI (MUTUAL FUND)
Regulations,1996.This regulations make it mandatory for the mutual funds to have a
three-tier structure of Sponsor-Trustee-Asset Management Company(AMC).
SEBI REGULATIONS
In India, the mutual fund industry is highly regulated with a view to imparting operational
transparency and protecting the investor's interest. The structure of a mutual fund is
determined by SEBI regulations. These regulations require a fund to be established in the

form of a trust under the Indian Trust Act, 1882. A mutual fund is typically externally
managed. It is now an operating company with employees in the traditional sense.
Instead, a fund relies upon third parties that are either affiliated organizations or
independent contractors to carry out its business activities such as investing in securities.
A mutual fund operates through a four-tier structure. The four parties that are required to
be involved are a sponsor, Board of Trustees, an asset management company and a
custodian.
TYPES OF MUTUAL FUNDS
Open ended schemes
The open ended schemes do don have a fixed maturity and are open for subscription the
whole year. One can buy and sell units at the NAV related prices to the Mutual funds.
These schemes are normally not listed on the stock changes and can be redeemed to the
mutual fund.
Closed-ended Funds
A close end fund has a stipulated maturity period which generally ranging from 3 to 15
years. The fund is open for subscription only during a specified period. Investor can
invest in the scheme at the time of the initial public issue and thereafter they can buy or
sell the units of the schemes on the stock exchanges where they are listed. In order to
provide an exit route to the investors, some close-ended funds give an option of selling
back the units to the mutual fund through periodic repurchase at NAV related prices.
SEBI Regulations stipulate that at least one of the two exit routes is provided to the
investor.
Interval Funds
Interval funds combine the features of open ended and close ended schemes. They are
open for sale or redemption during pre-determined intervals at NAV related prices.


INVESTMENT OBJECTIVES
Equity Fund Dividend
The aim of equity fund dividend is to provide fund appreciation over the medium to long
-term. Such schemes normally invest a majority of their corpus in equities. It has been
proven that returns from stocks, have outperformed most other kind of investment held
over the long term.
Equity Fund Growth
The aim of equity fund growth is to provide capital appreciation over the medium to
long-term. Such schemes normally invest a majority of their corpus in equities. It has
been proven that from stocks, have outperformed most other kind of investment held over
the long term.
Balanced Fund Dividend
The aim of balance funds dividend is to provide both dividend and regular income. Such
schemes periodically distribute a part of their earnings and invest both in equities and
fixed income securities in proportion indicated in their offer document
Balance Funds Growth
The aim of balance funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income
securities in proportion indicated in their offer document.
OTHER SCHEMES
Tax saving schemes
This schemes offer tax rebates to the investors under specific provisions of the Indian
Income Tax Laws as the Government offers tax incentives for investment in specified
avenues. Investment made in equity Linked Savings Schemes (ELSS)and Pension
Schemes are allowed as deduction u/s88 of the Income Tax act,1961.


SPECIAL SCHEMES:
Industry Specific Schemes
Industry Specific Schemes invest only in industries specified in the offer document. The
investment of these funds is limited to specific industries like Info Tech, FMCG, and
Pharmaceutical etc.
Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50.
Spectral Schemes
Spectral Funds are those, which invest exclusive in a specified industry or a group of
industries or various segments such as A Group shares or initial public offering.
TAX-BENEFITS
No tax on dividends in the hands of the investor (only a 12.61% dividend
distribution tax paid by the fund before distribution of dividend.
No dividend distribution tax for equity mutual funds (completely tax free
dividends)
Tax liability when the investment is redeemed /withdrawn (not every year)
Long term capital gains tax benefits
Benefit for indexation for investments held over a year
Opportunities of Mutual Funds are tremendous specially when investment is concerned.
For any individual who intends to allocate his assets into proper forms of investment and
want to diversify his Investment Portfolio as well as the risks, Mutual Funds can be
proved as the biggest opportunity.
Investors get a lot of advantages with the Mutual Fund Investment. Firstly, they are not
required to carry on intensive research and detailed analysis on Stock Market and Bond
Market. This work is done by the Fund Mangers of the Investment Management
Company on behalf of the investors. In fact, the professional Fund Managers who handle
the mutual funds of any particular company are able to speculate the market trend more

correctly than any common individual. Good Speculation about the trends of stock prices
and bond prices leads to right allocation of funds in the right stocks and bonds resulting in
good Rate of Returns.
Investors also get the advantage of high Liquidity of the mutual funds. This means the
investors can enjoy easy access to the funds invested in the mutual funds whenever they
require the money. When the investors invest in any mutual fund, they are given some
equity position in that fund. The investors can any time sell their mutual fund shares to
get back the money invested in mutual funds. The only thing is that the Rate of Return
that they will get may not be favorable as the return depends on the present market
condition.
The greatest opportunity that the mutual funds offer is the opportunity of diversifying
their investments. Investment Diversification actually diversifies the Risk associated with
investment. This is because, if at a time, if prices of some stocks are declining, deceasing
the Value of Investment, prices of some other stocks and bonds may tend to rise and in
this way the loss of the mutual fund is offset by the strength of the stocks whose prices
are rising. As all the mutual funds diversify their investments in various common stocks,
preferred stocks and different bonds, the risk to be borne by the investors are well
diversified and in other terms lowered.
Mutual funds are managed by experts. This is one big advantage of mutual funds. The
way experts research and selects assets makes mutual funds ideal for beginners. As
mutual fund invests in variety of assets it provides excellent diversification. Due to
diversified portfolio, risk of investing reduces to great extent. Assets of different sectors
are held in portfolio. Due to this bad performance of one sector is balanced by good
performance of other sector. Like stocks, mutual funds are also available in smaller units.
This makes mutual fund very affordable. At times mutual fund NAV can be as low as
$1/unit. No matter if one would like to make one time purchase or systematic monthly
purchases (SIP), mutual funds are affordable. Mutual funds have been specifically
designed to accommodate small investors. There is another price requirement of small
investors. We do not like our funds locked helplessly for too long. Liquidity of mutual
funds makes it ideal for beginners. Any time we want, we can sell our mutual fund units.
Mutual fund redemption forms are available online. One shall just download the form, fill

few details, and units can be redeemed. From the date of filling the form, mutual funds
can be redeemed in matter of 3/4 days.
Mutual Funds for Beginners has its Disadvantages also
Mutual funds are moody and unpredictable like stocks. One cannot be sure if the returns
will be positive or negative. It will not be wrong to say that mutual funds are as risky as
stocks. This is one reason why one can make losses in short term in mutual fund
investing. But regardless of whether the fund is giving positive or negative returns, fees
will be charged. Mutual funds never guarantee returns but they will charge fees for sure.
We cannot even question mutual fund manager on his work. Basically we have no
control on how fund is managed. Not only this, even mutual fund NAVs are like a
puzzle. A common man can never know how accurately the NAV is calculated. If you are
paying $1/unit for a mutual fund, one cannot do its price valuation.
Are Mutual Funds of Only One Type?
No, mutual funds are of mainly four types. Depending on the type of goal, one can select
a suitable fund. Generally people buy mutual funds of open ended type. The variety that
is offered by open ended funds covers all needs. In case people are interested in capital
protection and assured returns option, the same is also offered by closed ended funds.

How to Buy Mutual Fund
The easiest way to buy mutual funds is using online trading platforms. The online
trading platforms allow purchase of mutual fund units as well. This facility is not
provided with standard share trading platforms. You must contact your broker by email or

toll free number. Tell them that you would like to trade mutual fund units. They will
include mutual fund buying-selling facility with some extra fees. One can also buy
mutual fund units directly from fund house website. Mutual fund can be bought form
websites by making payments using online banking.
How can a mutual fund make money for its Investors?
There are many ways to make money from mutual funds. Basically we can make money
in 3 ways from mutual fund investment. When Mutual funds earn dividends from its
share holdings it distributes them among investors. The interest earned from holding debt
linked options is also distributed as dividend income. The most common way of making
money from mutual funds is capital gain. When price of shares increases mutual funds
sell them to book profits. The practice of selling units for capital gains continues through
the year. At the end of the year, net capital gain is distributed proportionally among unit
holders. It may happen that Net Asset Value (NAV) of fund appreciates over a period of
time. This can happen due to decrease in expenses or liabilities of mutual fund.
The increase in NAV can be encased by selling units. Dividend and capital gain
distribution is done by cheque, or funds are re-invested to buy more units. Profit booking
due to NAV appreciation shall be done directly by investors by selling units.

Expense Ratio of Mutual Funds must be looked at
There are several expenses that need to be managed to operate mutual fund. But who pays
for this expense? We investors have to bear this cost. In mutual fund brochures all
expense are categorized. One type of funds expense is called management expense. The
fees paid to people like fund manager are categorized as management expense. Mutual

fund companies also market their products. The expense of marketing and selling are
funded from funds asset. This also includes printing leaflets and brochures. This expense
is called as distribution expense. Fund houses use brokers who sell units directly to
investors. The compensation paid to brokers is also categorized as distribution expense.
All other expense which cannot be categorized as management and distribution expense
are called other expense. Expense ratio will be total of all expense divided by funds net
asset value. Suppose a funds net asset value is 1.5%. It means for $1000 asset, $15 is
used to manage funds expense. Generally, bigger will be the fund lower will be
the expense ratio. Ideally a mutual fund shall delivery best results with minimum
expense.
Tools used for data analysis and interpretation:
This report is based on primary as well secondary data, however primary data collection
was given more importance since it is overhearing factor in attitude studies. One of the
most important users of research methodology is that it helps in identifying the problem,
collecting, analyzing the required information data and providing an alternative solution
to the problem .It also helps in collecting the vital information that is required by the top
management to assist them for the better decision making both day to day decision and
critical ones.
My research project has a specified framework for collecting the data in an effective
manner. Such framework is called RESEARCH DESIGN. The research process which
was followed by me consisted following steps.
A. PROBLEM:
The problem at hand was to study the preference of mutual funds by people regarding
mutual funds in the city.
B. DEVELOPING THE RESEARCH PLAN:
The development of Research Plan has the following Steps:
1. DATA SOURCES: Two types of data were taken into consideration i.e.
Secondary data & primary data. My major emphasis was on gathering the primary data.
The secondary data has been used to make things more clear.

(i) Primary Data: Direct collection of data from the source of information,
technology including personal interviewing, survey etc.
(ii) Secondary Data: Indirect collection of data from sources containing past or
recent past information like Banks Brochures, Annual publications, Books, Fact sheets
of mutual funds, Newspaper & Magazines etc.
2. RESEARCH INSTRUMENT
A close friend questionnaire was constructed for my survey. Questionnaire consisting of a
set of questions made to be filled by various respondents.
3. SAMPLING PLAN
The sampling plan calls for three decisions.
a) Sampling Unit: I have completed my survey in Mysore.
b) Sample Size: The sample consisted of 60 respondents. The sample was drawn
from walk in customers of Aditya Birla sunlife mutual funds. The selection of the
respondents was done on the basis of simple random sampling.
c) Contact Methods
I have contacted the respondents through personal interviews.
C. COLLECTING THE INFORMATION
After this, I have collected the information from the respondents with the help of
questionnaire
D. ANALYZE THE INFORMATION
The next step is to extract the pertinent findings from the collected data. I have tabulated
the collected data & developed frequency distributions. Thus the whole data was grouped
aspect wise and was presented in tabular form. Thus, frequencies & percentages were
prepared to render impact of the study.
E. PRESENTATIONS OF FINDINGS
This was the last step of the survey.

CHAPTER 4:
DATA ANALYSIS AND INTERPREATION
Table no 4.1
Approximate income status of the respondents:
Sl no. Income status No. Of respondents percentage
1 Up to 10000 3 5
2 10001-15000 8 13
3 15001-20000 16 27
4 20001-30000 18 30
5 30001 and above 15 25
Total 60 100
Graph no 4.1

Interpretation: among the respondents majority of them have their income levels in
between 20001 to 30000 i.e. 30% which is high when compared to other income level
group which comes up to 27% in 15001 to 20000 and 25% in 30001 and above, This
clearly states that we can expect more investment.
3
8
16
18
15
60
5
13
27
30
25
100
Up to 10000 10001-15000 15001-20000 20001-30000 30001 and
above
Total
Chart Title
No. Of respondents percentage

Table no 4.2
Features of mutual funds that impressed the respondents:
Sl no. Features No. Of respondents Percentage
1 Diversification 12 20
2 Better return and safety 28 47
3 Reduction in risk and
transaction cost
6 10
4 Regular income 9 15
5 Tax benefit 5 8
Total 60 100

Graph no 4.2

Interpretation: the above graph states that the respondents liked the feature better return
and safety than any other which was preferred by 47% of the respondents. It shows that
majority of the respondents are not risk takers.

0
20
40
60
80
100
Chart Title
No. Of respondents
Percentage

Table no 4.3
Awareness of mutual fund to respondents:
Sl no. Sources No. Of respondents Percentage
1 Advertisement 15 25
2 Peer group 14 23
3 Banks 10 17
4 Financial advisor 21 35
Total 60 100

Chart no 4.3

Interpretation: from the above inference it is clear that majority of the respondents know
about mutual funds through financial advisors with 35% followed by advertising with
25%.

15
14
10
21
60
25
23
17
35
100
0
20
40
60
80
100
120
Advertisement Peer group Banks Financial advisor Total
1 2 3 4
No. Of respondents Percentage

Table no 4.4
Schemes preferred by the respondents:
Sl no. Schemes No of respondents Percentage
1 Open ended 24 40
2 Close ended 6 10
3 Liquid fund 0 0
4 Mid cap 6 10
5 Growth fund 7 12
6 Regular income fund 17 28
7 Long cap 0 0
8 Sector fund 0 0
Total 60 100

CHART NO 4.4

Interpretation: from the above interference the majority of the respondents i.e. 40% prefer
open ended scheme of mutual fund, it may be because there is no fixed maturity and are
open for subscription the whole year. One can buy and sell units at the NAV related
prices to the Mutual funds. No respondents prefer long cap ,sector fund ,etc.
24
6
0
6
7
17
0 0
60
40
10
0
10
12
28
0 0
100
0
20
40
60
80
100
120
Open
ended
Close
ended
Liquid
fund
Mid cap Growth
fund
Regular
income
fund
Long cap Sector
fund
Total
No of respondents Percentage

Table no 4.5
The need for investment by the respondents:
SL NO. Investment needs No of
respondents
Percentage
1 To build a corpus for retirement 0 0
2 To save for children
education/marriage
13 22
3 To provide for medical
emergency
6 10
4 To provide family financial
security
5 8
5 To create wealth 29 48
6 All of the above 7 12
Total 60 100
Chart no 4.5

Interpretation: from the above chart we see that majority of the respondents having 29%
prefer to invest to create wealth followed by to build corpus for retirement with 13%and
more.
0
13
6
5
29
7
60
No of respondents
To build a corpus for retirement
To save for children
education/marriage
To provide for medical
emergency
To provide family financial
security
To create wealth
All of the above

Table no 4.6
Investors investment on mutual fund:
Sl no. Investment option No. Of respondents Percentage
1 Aditya birla sun life mutual
fund
46 77
2 Tata mutual funds 0 0
3 Franklin Templeton 0 0
4 Reliance 3 5
5 ICICI prudential 5 8
6 SBI 6 10
7 Others 0 0
Total 60 100
Chart no 4.6

Interpretation: Here the preference of the respondents towards different options which are
available for the respondents it clearly shows that Aditya Birla sun life mutual funds is
preferred more with 46% of the respondents choosing it. We can also see that none of the
respondents choose Franklin Templeton.
Aditya
birla
sun life
mutual
fund
Tata
mutual
funds
Franclin
templet
on
Reliance
Icici
prudent
ial
Sbi Others Total
1 2 3 4 5 6 7
No. Of respondents 46 0 0 3 5 6 0 60
Percentage 77 0 0 5 8 10 0 100
0
20
40
60
80
100
120
A
x
i
s

T
i
t
l
e

Chart Title

Table no 4.7
Satisfaction level of the respondents in the service offered by Aditya Birla sun life
mutual funds:
Sl. no Satisfaction level No of respondents Percentage
1 Extremely satisfied 31 52
2 Satisfied to the lesser extent 24 40
3 Dissatisfied to lesser extent 3 5
4 Extremely dissatisfied 2 3
Total 60 100

Chart no 4.7

Interpretation: when it comes satisfaction of the services rendered by Aditya Birla sun life
mutual funds, Most of the respondents choose to be extremely satisfied with 52% and
40% of the respondents choose to have been satisfied to the lesser extent and the
remaining, that is 3 and 2 were dissatisfied to lesser extent and extremely dissatisfied
respectively.

0
10
20
30
40
50
60
70
80
90
100
Extremely
satisfied
Satisfied to
the lesser
extent
Dissatisfied to
lesser extent
Extremely
dissatisfied
Total
31
24
3
2
60
52
40
5
3
100
No of respondents Percentage

Table no 4.8
Plans preferred by respondents:
Sl. no Plans No. Of respondents Percentage
1 SIP(systematic investment
plan)
19 32
2 Lump sum 25 42
3 Depends upon the financial
condition
16 26
Total 60 100

Chart no 4.8

Interpretation: majority of the respondents with 42% of them have choose to invest in
lumpsum followed by SIP with 32%.the reason to invest lumpsum may be because we
have seen that the income level of the major respondents is between 20001 to 30000.

SIP(systematic
investment
plan)
Lump sum
Depends upon
the financial
condition
Total
No. Of respondents 19 25 16 60
Percentage 32 42 26 100
0
20
40
60
80
100
120
A
x
i
s

T
i
t
l
e

Chart Title

Table no 4.9
Preferable channels to invest in mutual fund:
Sl no. Channel No. Of respondents Percentage
1 Financial advisor 14 24
2 Bank 21 35
3 AMC 5 8
4 Aditya birla sun life mutual
funds
20 33
Total 60 100

Chart no 4. 9

Interpretation: In the above chart it shows that majority of the respondents prefer to invest
in banks as they think that banks are safer to invest and have a perception that banks are
more trustworthy.

14
21
5
20
60
Financial advisor
Bank
AMC
Aditya birla sun life mutual
funds
Total

Table no 4.10
Respondents perception towards mutual funds:
Sl no. Perception about mutual fund No. Of
respondents
Percentage
1 A vehicle of pool money from investor
in a basket of securities by a
professional manager
7 12
2 Invest the money by a mutually co
operative group
23 38
3 High returns with moderate brisk 17 28
4 Safe vehicle for investment purpose 13 22
Total 60 100
Chart no 4.10

Interpretation: The perception of mutual funds by the respondents who preferred
investing in mutual funds varied from one option to another but most of the respondents
invested in mutual funds because it was a way to invest through mutually co operative
group.

0
20
40
60
80
100
120
A vehicle of pool money from investor in a basket of securities by
a professional manager
Invest the money by a mutually co operative group High returns with moderate brisk Safe vehicle for investment purpose Total
A
x
i
s

T
i
t
l
e

Axis Title
No. Of respondents
Percentage

Table no 4.11
Types of mutual chosen by the respondents:
Sl no. Types of funds No. of respondents Percentage
1 Having a debt portfolio 8 13
2 Having a debt and equity
portfolio
40 67
3 Only equity port folio 12 20
Total 60 100

Chart no 4.11

Interpretation: Most of the respondents showed interest in investing in debt and equity
portfolio. When it comes to percentage debt and equity portfolio leads with 67%.the
combination debt and equity fund is known to give a better profit with low risk.

0
10
20
30
40
50
60
70
80
90
100
Having a debt
portfolio
Having a debt
and equity
portfolio
Only equity
port folio
Total
A
x
i
s

T
i
t
l
e

Axis Title
No.of respondents
Percentage

Table no 4.12
Preferred channel of returns every year:
Sl no. Returns No. Of respondents Percentage
1 Dividend payout 19 32
2 Dividend re investment 21 35
3 Growth in NAV 20 33
Total 60 100

Chart no 4.12

Interpretation: the respondents results were very close when it came to deciding on how
they wanted to receive their returns every year, the options chosen by the respondents
came to 32% choose dividend payout, 35% choose dividend re-invest and 33% choose
growth in NAV.

0
20
40
60
80
100
Dividend
payout
Dividend re
investment
Growth in
NAV
Total
A
x
i
s

T
i
t
l
e

Axis Title
Chart Title
No. Of respondents
Percentage

Table no 4. 13
Schemes opted by respondents in Aditya Birla sun life mutual funds:
Sl no. Aditya birla mutual fund
scheme
No . of respondents Percentage
1 BSL frontline equity 14 23
2 BSL banking and finance 37 62
3 Short term opportunity 9 15
total 60 100

Chart no 4.13

Interpretation: the schemes opted by the respondents in Aditya Birla sun life mutual funds
resulted in 62% in BSL banking and finance, 23% in BSL frontline equity and 15% in
short term opportunity.

0
20
40
60
80
100
120
BSL frontline equity BSL banking and finance Short term opportunity total
Chart Title
No . of respondents Percentage

Table no 4. 14
Different sectors invested by respondents:
Sl no. Sector No. Of respondents Percentage
1 General 0 0
2 Oil and petroleum 10 17
3 Gold fund 14 23
4 Diversified equity fund 16 27
5 Power sector 0 0
6 Debt fund 14 23
7 Banking fund 6 10
8 Real estate fund 0 0
60 100
Chart no 4.14

Interpretation: From the above chart we can see that major respondents have choose
diversified equity fund than any other fund like gold fund and more, with a percentage of
27% .preference of diversified equity funds might be because the risk level is diversified
and when it comes to gold there is a perception always that gold market never falls.
1 2 3 4 5 6 7 8 9
Sector 0 0 0 0 0 0 0 0
No. Of respondents 0 10 14 16 0 14 6 0 60
Percentage 0 17 23 27 0 23 10 0 100
0
20
40
60
80
100
120
A
x
i
s

T
i
t
l
e

Chart Title

Table no 4.15
Percentage of returns expected by the respondents:
Sl no. Expectation No. Of respondents Percentage
1 5-10% 6 10
2 10-15% 14 23
3 15-20% 26 44
4 Above 20% 14 23
Total 60 100

Chart no 4.15

Interpretation: The return on investment choose by the respondents seems to be average
return, this shows that the respondents are not high risk takers instead they prefer having
an average return with average investment.

0
20
40
60
80
100
120
5-10% 10-15% 15-20% Above 20% Total
Chart Title
No. Of respondents Percentage

CHAPTER 5
SUMMARY OF FINDING S
First and foremost we find out that the majority of the investors falls into the
income bracket of Rs 20001 to 30000.
By many investors mutual fund is preferred because of its better return and
safety feature.
Financial advisors have played an important role in educating people about
mutual funds when compared to any other channel.
Most of the people who have opted to invest have invested in the intension to
create wealth.
It is found that investors in Mysore have opted Aditya Birla sun life mutual funds
The investors in Mysore usually prefer investing at once i.e. lump sum than SIP.
Mysoreans feel that being safe is the right way and have chosen banks to be the
safe place to invest.
The perception on mutual funds in the people of Mysore is that it is investing in a
mutually co operative group.
Investors are not into risk taking hence they have choose both debt and equity
portfolio.
We find out that when it comes to receiving the returns on investment everyone
invested chooses to save or gain more money.
Diversified equity fund, gold fund, and more are preferred.
Mostly Respondents preferred High Return while investment, the second most
preferred Low Risk then liquidity and the least preferred Trust.


Suggestion/recommendation:
1. Awareness on mutual funds is very much required in Mysore.
2. Proper practice of viewing the market is needed to be shown to many of the new
investors.
3. More attractive schemes introduced in the market to the people would be very
beneficial.
4. The most vital problem spotted is of ignorance. Investors should be made aware
of the benefits. Nobody will invest until and unless he is fully convinced.
Investors should be made to realize that ignorance is no longer bliss and what they
are losing by not investing.
5. Mutual Fund Company needs to give the training of the Individual Financial
Advisors about the Fund/Scheme and its objective, because they are the main
source to influence the investors.
6. Younger people aged under 35 will be a key new customer group into the future,
so making greater efforts with younger customers who show some interest in
investing should pay off.
7. Customers with graduate level education are easier to sell to and there is a large
untapped market there. To succeed however, advisors must provide sound advice
and high quality.
8. Systematic Investment Plan (SIP) is one the innovative products launched by
Assets Management companies very recently in the industry. SIP is easy for
monthly salaried person as it provides the facility of do the investment in EMI.
Though most of the prospects and potential investors are not aware about the SIP.
There is a large scope for the companies to tap the salaried persons.


Conclusion:
Running a successful Mutual Fund requires complete understanding of the peculiarities of
the Indian Stock Market and also the psyche of the small investors. This study has made
an attempt to understand the financial behavior of Mutual Fund investors in connection
with the preferences of Brand (AMC), Products, and Channels etc. I observed that many
of people have fear of Mutual Fund. They think their money will not be secure in Mutual
Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do
not have invested in mutual fund due to lack of awareness although they have money to
invest. As the awareness and income is growing the number of mutual fund investors are
also growing.
Brand plays important role for the investment. People invest in those Companies where
they have faith or they are well known with them. There are many AMCs in Mysore but
only some are performing well due to Brand awareness. Some AMCs are not performing
well although some of the schemes of them are giving good return because of not
awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc. they are well
known Brand, they are performing well and their Assets Under Management is larger
than others whose Brand name are not well known like Principle, Sunderam, etc.

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A study on investor preference in mutual fund

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