6A

Project Report on
A STUDY OFINVESTERS BEHAVIOUR AND PREFERENCES
IN
BIRLA SUN LIFE MUTUAL FUND

By

Durgesh Sharma
Roll No: 24
Under the Guidence of
Prof. Priyanka Pawar (ICEM-MBA)
&
Mr. Gulshan Gokhlani, Relationship Manager-BSLAMC
Submitted to
Savitribai Phule Pune University
In partial fulfilment of the requirement for the award of the degree of
Master of Business Administrative (MBA) for the year 2014-16

Indira College of Engineering and Management, Pune

(2014-16)

ACKNOWLEDGEMENT
It is my great pleasure to present this report of Internship at Birla Sun life AssetManagement
Company (BSLAMC), in partial fulfilment of MBA programme, Master of Business
Administrator, University of Pune.
I am extremely grateful to BSLAMC which has provided me with an opportunity to undergo
my Summer Internship for the period 18th May 2015 18th July, 2015.
The project is the important part of my study and gives me a real practical exposure to the
corporate world and it is almost impossible to do the same without the guidance of several
people.At the outset, I would like to express my immense gratitude to my training guide for
guiding me right from the inception till the successful completion of the training, Mr.Gulshan
Goklani and Prof.. Priyanka Pawar (ICEM-MBA) Management, Pune who steered my course
of two months to perfect learning.I also wish to thank all the clients who patiently attended to
my survey.
The topic of my project isA STUDY OFINVESTORS BEHAVIOUR

ANDPREFERENCE. It has been my privilege to have a team of project guide who

have assisted me from the commencement of this project. The success of this project is a
result of sheer hard work, and determination put in by me with the help of my project guide.
The project is dedicated to all those people, who helped me while doing this project.

DURGESH SHIVMANI SHARMA

Table of Content

Chapter No.

Title

Page No.

1.

Executive Summary

4-6

2.

Organization Profile

7-19

3.

Objectives of the Study

20-23

4.

Research Methodology
Literature Review

24-29

5.

Data Analysis & Interpretation

30-45

6.

Findings&Suggestion

46-48

7.

Questionnaire

49-50

8.

Reference

54-54

Executive Summary

A Mutual fund is a type of professionally managed collective investment scheme that pools money
from many investors to purchase securities.[1] While there is no legal definition of the term mutual
fund, it is most commonly applied only to those collective investment vehicles that are regulated and
sold to the general public. They are sometimes referred to as "investment companies" or "registered
investment companies". Most mutual funds are open-ended, meaning stockholders can buy or sell
shares of the fund at any time by redeeming them from the fund itself, rather than on an exchange.
Hedge funds are not considered a type of mutual fund, primarily because they are not sold publicly.
In the United States, mutual funds must be registered with the Securities and Exchange Commission,
overseen by a board of directors (or board of trustees if organized as a trust rather than a corporation
or partnership) and managed by a registered investment adviser. Mutual funds, like other registered
investment companies, are also subject to an extensive and detailed regulatory regime set forth in the
Investment Company Act of 1940. Mutual funds are not taxed on their income and profits if they
comply with certain requirements under the U.S. Internal Revenue Code.
Mutual funds have both advantages and disadvantages compared to direct investing in individual
securities. They have a long history in the United States. Today they play an important role in
household finances, most notably in retirement planning.

The research tries to develop an understanding on the following aspects too. Which on the
whole will help us in understanding the consumer behavior for a mutual fund in a holistic
view?
The general awareness level of mutual funds.
What are the advantages and disadvantages of mutual funds?
The consumer behavior in mutual funds and decision making process.
What are the things that a consumer needs to look for in a mutual funds before
deciding to purchase it.

1. PROJECT TITLE
A Study ofInvestment Behaviour and Preference
2. Company Name
Birla Sun life Asset Management Company Ltd.
3. Place
Bhandarkar Road, Pune.
4. Introduction:
The purpose of this training was to have practical experience of working within the
organization in the business world.
This project gives knowledge of Asset Management Company in the business world. Mutual
Fund Industry plays an important role in capital market. A vast number of companies are
working as Mutual Fund Company.
This project gives detailed idea of the investor preference in mutual funds, whether
they should invest in SIP or lump sum, which are the two ways to invest in mutual fund. This
project gives overall study of investment preference in mutual funds , how they perform, how
they give good return, how they are risky, what will be the maturity period, what will be
process of understanding these things &selecting good way to invest and know respective
fund performance. This project also tells about overview of Mutual funds i.e. what are
Mutual funds and history of Mutual Funds.

Industry Overview:
This project also shown the growth of overall AMC in India till 2014.What are the types,
advantage and disadvantage of mutual funds, how SEBI regulates the Assets Management
Company is also mentioned in this project. This project also had shown total assets (in Cr) of
different Mutual Funds Company. Through questionnaire I was able to know how many
customers are interested in Mutual funds and in other financial instruments.

ORGANIZATION PROFILE

INTRODUCTION OF MUTUAL FUNDS

Different investment avenues are available to investors. Mutual funds also offer good
investment opportunities to the investors. Like all investments, they also carry certain risks.
The investors should compare the risks and expected yields after adjustment of tax on various
instruments while taking investment decisions. The investors may seek advice from experts
and consultants including agents and distributors of mutual funds schemes while making
investment decisions.
With an objective to make the investors aware of functioning of mutual funds, an attempt has
been made to provide information in question-answer format which may help the investors in
taking investment decisions.

CONCEPT OF MUTUAL FUND:

A mutual fund is a common pool of money into which investors place their contributions that
are to be invested in accordance with a stated objective. The ownership of the fund is thus
joint or mutual; the fund belongs to all investors. A single investors ownership of the fund
is in the same proportion as the amount of the contribution made by him or her. Mutual Funds
are trusts, which accept savings from investors and invest the same in diversified financial
instruments in terms of objectives set out in the Trusts deed with the view to reduce the risk
and maximize the income and capital appreciation for distribution to the members. A Mutual
Fund is a corporation and the fund managers interest is to professionally manage the funds
provided by the investors and provide a return on them after deducting reasonable
management fees.
The objective sought to be achieved by Mutual Fund is to provide an opportunity for lower
income groups to acquire without much difficulty financial assets. They cater mainly to the
needs of the individual investor whose means are small and to manage investors portfolio in a
manner that provides a regular income, growth, safety, liquidity and diversification
opportunities.

Introduction of Company

Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers of
Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the Sun
Life Financial Services 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.

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.
BSLAMC is the 5th largest asset management company in India with domestic average assets
under management of Rs 79,761 Crores for the quarter, March-June 2013. An impressive mix
of reach through 103 branches, wide range of product offerings across equity, debt, balanced
as well as structured asset classes and strong investment performance has helped the
company garner over 2.4 million investor scheme accounts. Known for its consistent
investment performance across asset classes, BSLAMC has received recognitions from
various institutes of international repute such as Lipper.

Mission, Vision and Values

Our Vision

To be a premium global conglomerate, with a clear focus on each of the businesses.

To be the most trusted name in investment and wealth

management.
To be the
Preferred employer in the industry
To be a catalyst for growth and
Excellence of the asset management business in India.

Our Mission

10

To deliver superior value to our customers, shareholders, employees and society at

large.
To consistently pursue investor's wealth optimization by
Achieving superior and consistent investment results
Creating a conductive 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

Our Values
Integrity: Acting and taking decisions in a manner that is fair and honest. Following the
highest standards of professionalism and being recognised for doing so.
Commitment: On the foundation of Integrity, doing all that is needed to deliver value to all
stakeholders.
Passion:An energetic, intuitive zeal that arises from emotional engagement with the
organisation that makes work joyful and inspires each one to give his or her best.
A mutual fund is a pool of money from many investors that's invested in securities and
managed by professionals.
Of course, for just about any benefit, there's a cost involved. For example, fees and costs are
involved in owning mutual funds, and there's no government insurance or other protection to
help investors if the price of the fund drops. Investors can lose some or all of their money in
the funds, and they must bear this market risk all by themselves.
Pros of investing in Mutual Funds
1. Professional Management - The basic advantage of funds is that, they are
professionally managed, by well qualified professional. Investors purchase funds
because they do not have the time or the expertise to manage their own portfolio. A
mutual fund is considered to be relatively less expensive way to make and monitor
their investments.
2. Diversification - Purchasing units in a mutual fund instead of buying individual
stocks or bonds, the investors risk is spread out and minimized up to certain extent.
The idea behind diversification is to invest in a large number of assets so that a loss in
any particular investment is minimized by gains in others.
3. Economies of Scale - Mutual fund buy and sell large amounts of securities at a time,
thus help in reducing transaction costs, and help to bring down the average cost of the
unit for their investors.
4. Liquidity - Just like an individual stock, mutual fund also allows investors to
liquidate their holdings as and when they want.

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5. Simplicity - Investments in mutual fund is considered to be easy, compared to other

available instruments in the market, and the minimum investment is small. Most AMC
also have automatic purchase plans whereby as little as Rs. 2000 can be invested. SIP
start with just Rs.50 per month basis.

TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position,
risk tolerance and return expectations etc. thus mutual funds have variety of flavours. Being a
collection of many stocks, an investors can go for picking a mutual fund.There are over
hundreds of mutual funds scheme to choose from. It is easier to think of mutual funds in
categories, mentioned below:

A). BY STRUCTURE
1. Open - Ended Schemes:
An open-end fund is one that is available for subscription all through the year. These do not
have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value
("NAV") related prices. The key feature of open-end schemes is liquidity.
2. Close - Ended Schemes:

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Closed-end fund has a stipulated maturity period which generally is ranging from 3 to 15
years. The fund is open for subscription only during a specified period. Investors can invest
in the scheme at the time of the initial public issue and thereafter they can buy or sell the
units of the scheme 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.
3. Interval Schemes:
Interval Scheme is that scheme, which combines the features of open-ended and close- ended
schemes. The units may be traded on the stock exchange or may be open for sale or
redemption during pre-determined intervals at NAV related prices.

B). BY NATURE
1. Equity Fund:
These funds invest a maximum part of their corpus into equities holdings. The structure of the
fund may vary for different schemes and the fund managers outlook on different stocks. The
Equity Funds are sub-classified depending upon their investment objective, as follows:
Diversified Equity Funds
Mid-Cap Funds
Sector Specific Funds
Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the
risk-return matrix.
2. Debt Funds:
The objective of these Funds is to invest in debt papers. Government authorities, private
companies, banks and financial institutions are some of the major issuers of debt papers. By
investing in debt instruments, these funds ensure low risk and provide stable income to the
investors. Debt funds are further classified as:

13

 Gilt Funds: Invest their corpus in securities issued by Government, popularly known as
Government of India debt papers. These Funds carry zero Default risk but are associated with
Interest Rate risk. These schemes are safer as they invest in papers backed by Government.
Income Funds: Invest a major portion into various debt instruments such as bonds,
corporate debentures and Government securities.
MIPs: Invests maximum of their total corpus in debt instruments while they take minimum
exposure in equities. It gets benefit of both equity and debt market. These scheme ranks
slightly high on the risk-return matrix when compared with other debt schemes.
Short Term Plans (STPs):
Meant for investment horizon for three to six months. These funds primarily invest in short
term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion
of the corpus is also invested in corporate debentures.
Liquid Funds:
Also known as Money Market Schemes, These funds provides easy liquidity and
preservation of capital. These schemes invest in short-term instruments like Treasury Bills,
inter-bank call money market, CPs and CDs. These funds are meant for short-term cash
management of corporate houses and are meant for an investment horizon of 1day to 3
months. These schemes rank low on risk-return matrix and are considered to be the safest
amongst all categories of mutual funds.
3. Balanced Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in both
equities and fixed income securities, which are in line with pre-defined investment objective
of the scheme. These schemes aim to provide investors with the best of both the worlds.
Equity part provides growth and the debt part provides stability in returns.

C). BY INVESTMENT OBJECTIVE:

Growth Schemes:
Growth Schemes are also known as equity schemes. The aim of these schemes is to provide
capital appreciation over medium to long term. These schemes normally invest a major part

14

of their fund in equities and are willing to bear short-term decline in value for possible future
appreciation.
Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to provide
regular and steady income to investors. These schemes generally invest in fixed income
securities such as bonds and corporate debentures. Capital appreciation in such schemes may
be limited.
Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically distributing a part
of the income and capital gains they earn. These schemes invest in both shares and fixed
income securities, in the proportion indicated in their offer documents (normally 50:50).
Money Market Schemes:
Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate
income. These schemes generally invest in safer, short-term instruments, such as treasury
bills, certificates of deposit, commercial paper and inter-bank call money.
Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or
sell units in the fund, a commission will be payable. Typically entry and exit loads range from
1% to 2%. It could be worth paying the load, if the fund has a good performance history.
No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no
commission is payable on purchase or sale of units in the fund. The advantage of a no load
fund is that the entire corpus is put to work.

OTHER SCHEMES:
Tax Saving Schemes:

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Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to
time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings
Scheme (ELSS) are eligible for rebate.
Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that
constitute the index. The percentage of each stock to the total holding will be identical to the
stocks index weight age. And hence, the returns from such schemes would be more or less
equivalent to those of the Index.
Sector Specific Schemes:
These are the funds/schemes which invest in the securities of only those sectors or industries
as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer
Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the
performance of the respective sectors/industries. While these funds may give higher returns,
they are more risky compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time.

NET ASSET VALUE (NAV)

Since each owner is a part owner of a mutual fund, it is necessary to establish the value of his
part. In other words, each share or unit that an investor holds needs to be assigned a value.
Since the units held by investor evidence the ownership of the funds assets, the value of the
Total assets of the fund when divided by the total number of units issued by the mutual fund
gives us the value of one unit. This is generally called the Net Asset Value (NAV) of one unit
or one share. The value of an investors part ownership is thus determined by the NAV of the
number of units held.
Calculation of NAV:
Let us see an example. If the value of a funds assets stands at Rs. 100 and it has 10 investors
who have bought 10 units each, the total numbers of units issued are 100, and the value of
one unit is Rs. 10.00 (1000/100). If a single investor in fact owns 3 units, the value of his
ownership of the fund will be Rs. 30.00(1000/100*3). Note that the value of the funds
16

investments will keep fluctuating with the market-price movements, causing the Net Asset
Value also to fluctuate. For example, if the value of our funds asset increased from Rs. 1000
to 1200, the value of our investors holding of 3 units will now be (1200/100*3) Rs. 36. The
investment value can go up or down, depending on the markets value of the funds assets.

2.3 Product profile

PRODUCTS AND SCHEMES OF BIRLA SUNLIFE MUTUAL FUND

On Equity Basis
Frontline Equity

Dividend Yield

Equity Fund

Infrastructure Fund

MNC Fund

Advantage Fund

Index fund

Top 100 fund

India GenNext Fund

Cash Manager

Cash Plus

Dynamic Bond Fund

G-Sec Fund

Ultra Short Term

Savings Fund

Floating Fund-STP

Floating Fund-LTP

Medium Term Plan

Long term advantage

fund
On the Basis of Debt

On Balanced Scheme
BSL 95 Fund
RISK FACTORS OF MUTUAL FUNDS:
1. Market Risk:

17

Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting
the market in general lead to this. This is true, may it be big corporations or smaller mid-sized
companies. This is known as Market Risk
Credit Risk:
The debt servicing ability (may it be interest payments or repayment of principal) of a
company through its cash flows determines the Credit Risk faced by you. This credit risk is
measured by independent rating agencies like CRISIL who rate companies and their paper. A
AAA rating is considered the safest whereas a D rating is considered poor credit quality.
Inflation Risk:
Things you hear people talk about:
"Rs.100 today is worth more than Rs100 tomorrow.""Remember the time when a bus ride
coasted 50 paisa?"
"MehangaiKaJamanaHai."
A well-diversified portfolio with some investment in equities might help mitigate this risk.
2. Interest Rate Risk:
In a free market economy interest rates are difficult if not impossible to predict. Changes in
interest rates affect the prices of bonds as well as equities. If interest rates rise the prices of
bonds fall and vice versa. Equity might be negatively affected as well in a rising interest rate
environment. A well-diversified portfolio might help mitigate this risk.
3. External Political / Government Policy Risk:
Changes in government policy and political decision can change the investment Environment.
They can create a favourable environment for investment or vice versa.

Schemes Offered by Birla Sun life Mutual Fund

Equity Schemes
Investments in equities are made with a long-term objective in mind This makes equities the
bestInstruments for long-term growth of capital. Investing in a diversified equity portfolio
can help minimize risk as the portfolio gets exposure across various sectors, while enabling
18

Investors to capitalize on the fundamental upsides presented by these sectors. The various
Equity schemes are:

Birla Frontline Equity Fund

Birla Dividend Yield Plus
Birla Equity Fund
Birla Index Fund

Debt Schemes

Birla Income Plus

Birla Gilt Plus
Birla MIP
Birla MIP-II

Other Schemes

19

Birla Gold fund.

OBJECTIVE & SCOPE

20

Objectives:

1. Conceptualized the various investment in the new investors mind for investing
according the need identified.
2. Identifying the ideal preferences of investors in todays Market scenario with
discovering funds having less risk and more returns.
3. Analyzing the diversified mutual fund with respect to investors preference.
(Diversified risk and Non-Diversified risk).
4. Examining the market potentiality of Mutual Fund amongst the different investors
around a specific location within the boundaries.
5. Mapping the perception and consideration of investors with respective of finding
Birla Sun Life as a good investment in form of ROI (Return on investment).

Finding:

1. Majority respondent are from the group age of 25 to 50 with not considering the annual
income of all the respondents.
2. Considering the fact of investors who are investing in Birla Sunlife Mutual Fund are
mostly belong to service sector.
3. The Annual incomes of the investors recommends that the majority of the value chain is
of under 2-6 lacks.
4. In large number of Bank & Financial Advisors play a key role in making investors
educated about mutual fund. Around 55% of the respondents choose Banks for
guidance.
5. Among the sample of interviewer 35% of them were familiar with the distribution
chain of Birla Sunlife Mutual fund and the diversified fund which have good returns.
6. SIP (Systematic Investment Planning) is more favorable in compare to Lump-Sum.

Suggestions:
21

1. Birla Sun Life AMC to keep up the good work such as innovating and creating
competitive products. Small towns, villages are still untapped and can also acts as a
2.

business area of very huge potential because literacy rate is increasing day by days.
Birla Sun Life has to invest in firms, which are having good offers & high growth
opportunities such debt fund & group A companies i.e. investment should be done in

Govt. Bonds, securities, in Blue Chip company.

3. The awareness of mutual fund & its various schemes should be increased among the
people by proper advertising, promotion and conducting investors meets.
4. The middle chain is the strongest part for the BSL which gives the best boost to the
company & banks are the middle man for them. So the company should give some
new schemes for the banks benefit. Which will motivate the bankers to do work more
effectively and work for both soul.
5. The advertisement is less from the BSL in compare to other comparatives Mutual
fund companies. The company should start the advertisement in media more as the
media has the power of success.

SCOPE:
A small investor is the one who is able to correctly plan & decide in which
Profitable& safe instrument to invest. To lock up ones hard earned money in a savings
banks account is not enough to counter the monster of inflation. Using simple concepts of
diversification, power of compound interest, stable returns & limited exposure to equity
investment, one can maximize his returns on investments & multiply ones savings.
Investment is a serious proposition one has to look into various factors before deciding on the
instruments in which to invest. To save is not enough. One must invest wisely& get
maximum returns. One must plan investment in such a way that hisinvestment objectives are
satisfied. A sound investment is one which gives the investorreasonable returns with a proper
profitable management. This report gives the details about various investment objectives
desired by an Investor, details about the concept & working of mutual fund. This report also
covers thedifferent players in Mutual Funds and different avenues of investment & in detail
aboutBIRLA SUN LIFE MUTUAL FUNDS.

STATEMENT OF PROBLEM:-

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Mutual Funds are financial intermediaries concern with the mobilizing savings of surplus
income &channelization of these savings in those avenues where there is demand of funds.
The main purpose behind this study of investment preferences in Mutual Funds is to see that
how the investors are employing their resources in a manner to afford, combine benefits to
low risks, steady or consistent returns, high liquidity & capital appreciation through
diversification & Expert Management.
Therefore the activities of mutual funds have both short & long term impact on the savings
& capital market & the national economy. Mutual Funds, thus, assist the process of financial
depending & intermediation.

23

LITERATURE REVIEW
&
RESEARCH
METHODOLOGY

Literature Review:-

24

The present study deals with the review of literature on A STUDY OF INVESTERS

BEHAVIOUR AND PREFERENCES. A number of studies on evaluating the

performance of Birla Mutual Fund Schemes have been conducted in India. Review of the
same of the studies is presented in the following discussion:In India, one of the earliest attempts was made by National Council of Applied Economics
Research (NCAER) in 1964 when a survey of households was undertaken to understand the
attitude towards and motivation for savings of individuals. Another NCAER study in 1996
analyzed the structure of the capital market and presented the views and attitudes of
individual shareholders. SEBI NCAER Survey (2000) was carried out to estimate the
number of households and the population of individual investors, their economic and
demographic profile, portfolio size, and investment preference for equity as well as other
savings instruments.
Gupta (1994) made a household investor survey with the objective toprovide data on the
investor preferences on Mutual Funds and otherfinancial assets. The findings of the study
were more appropriate, at thattime, to the policy makers and mutual funds to design the
financialproducts for the future.
Sujit Sikidar and Amrit Pal Singh (1996) carried out a survey with anobjective to understand
the behavioral aspects of the investors of theNorth Eastern region towards equity and mutual
funds investmentportfolio. The survey revealed that the salaried and self-employedformed the
major investors in mutual fund primarily due to taxconcessions. UTI and SBI schemes were
popular in that part of thecountry then and other funds had not proved to be a big hit during
thetime when survey was done.
Block, Stanley B. and French, Dan W. (2000) conducted a study onPortfolios of equity
mutual funds .They proposed two-index modelusing both the value-weighted and an equally
weighted index. Estimatedmodels using a sample of 506 mutual funds show that the twoindexmodel provides a better fit than the single-index model and identifies alarger set of
funds with abnormal performance.

Theoretical Background:
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This project has been undertaken with the objective to compare the perception of Mutual
Fund Investor and Non Investor towards Mutual Fund as a Tool for Financial Planning.
Investor as well as non-investors who invest in various avenues with the aim of achieving
long term objectives such as Child Education, Child Marriage, Retirement Planning, etc.
The data was collected through the structured questionnaire and analysed for covering the
topic Mutual as a Tool for Financial Planning at Birla Sun life Mutual Fund. Analysis
reveals that investor as well as non-investor preferred Balance as well as income oriented
fund for making investments. As these funds have low risk as compared to other funds. The
other finding was that the investors prefer SIP as a mode of Investment for financial planning
where as non-Investors prefer both SIP and Lump Sum for financial planning.
The study got findings for the mangers that Investors apart from Mutual Fund prefers Bank
Saving & Stock Market for financial planning whereas non Investor prefers Real Estate &
Bank Saving for financial planning. While the other major findings were that the expectation
from investment was high from investors as well as non-investors which were a big deal
during recession period. For converting non-investor into an investor was also a challenge for
managers in todays scenario.

Research Methodology:-

Introduction
The research was conducted to find general awareness and existing customers satisfaction
about Birla Sun life Mutual Funds. There by secondary objectives were to find out most and
to know about investors patterns in Mutual Funds. For this research primary data has been
collected by conducting a market survey with the help of a questionnaire which was
personally administered.
Research methodology is used to search answer of research questions. As attempt has been
made to describe the nature of people of Pune, selected for the study of samples, data
collection and technology used to analyse and present the data required.
Methodology in common parlance refers to a search for knowledge. The advanced learners
dictionary of current English lays down the meaning of research as a careful investigation or
inquiry especially through search for new facts in any branch of knowledge. Some people
26

consider research as movement, movement from known to the unknown. It is actually a

voyage of discovery. We all possess the vital instinct of inquisitiveness for, when the
unknown confronts us, we wonder and our inquisitiveness makes us probe and attain full and
fuller understanding of the unknown. This inquisitiveness is the mother of the knowledge and
the method, which man employs for obtaining the knowledge of whatever the unknown, can
be termed as research.
Methodology is way to systematically solve the research problem. It may be understood as a
science of studying how research is done scientifically. Learning more about marketing is the
heart of research methodology. The research methodology has many dimensions and research
methods do constitute a part of the research methodology.

Sources of data collection:Two sources of collecting data has been employed i.e. primary data and secondary data

Primary data:

A questionnaire is used as a tool for the systematic collection of relevant information.

A well questionnaire consisting of simple questions has been prepared & directed to
the respondents. (Questionnaire is attached at the end of the projects)
The questionnaire prepared consists of closed-ended questions which includes
Multiple choice, rating scale. The questionnaire also consists of open-ended questions.The
first section of questionnaire is prepared mainly for collecting the personal information about
the respondents.
The second section contains multiple choice questions. It is prepared to collect the
information about customer perception.
The close- ended questions are very easy to answer from the questionnaire responded by the
respondents.

Secondary Data:
Secondary data is collected from the companys websites, fact sheet etc.

Sampling Procedure:
Sample size: 100

Type of research:
Qualitative Research: - This approach is one of the most popular approaches these days. In
this approach, a problem is described by the researcher using questionnaire or schedule.

27

This approach enables a researcher to explore new areas of investigation. With the help of
past and previous data. In this approach the data is known to the researcher as well as the
respondent.

Descriptive approach:
This approach is one of the most popular approaches these days. In this approach, a problem
is described by the researcher using questionnaire or schedule.
This approach enables a researcher to explore new areas of investigation.

Research instrument:
Questionnaire
Which is used to collect the primary data by personnel interview.

28

ANALYSIS
&
INTERPRETATION OF
DATA

1. Please tick the option that falls in your annual income range?

29

Income
>50,000
50,001 2,00,000
2,00,001 4,00,000
4,00,001 6,00,000
Above 6,00,001

50%
40%
30%
20%
10%
0%

36%

No. of respondent
1
36
47
12
4

Percentage
1%
36%
47%
12%
4%

47%

1%
12%
Sales

4%

Interpretation: According to survey respondent is of different income group. In the above

table its shows that only 1 of 100 is coming under >50,000 which is 1%. From 50,001 to
2,00,000 36 people comes which is 36%. From 2,00,000 to 4,00,000 47 people comes out of
100 which is 47%. Only 12 people comes under 4,00,001 6,00,000 which 12%. And above
6,00,001 only 4% people comes. Thus it is being seen that almost half of respondent do earn
between 2 lacs to 4 lacs, which again shows the possibility of converting these population as
potential customer for fund market.
2. What kind of investment you prefer most?

Mode of Investment
30

No. of respondent

%age

Saving Account
Gold
Shares
Real Estate
Fixed Deposits
Mutual Fund
Post Office

9
27
9
10
29
14
2

9%
27%
9%
10%
29%
14%
2%

29%

27%

14%
9%

9%

10%
2%

Interpretation: According to survey respondent do investment in different financial

instrument. From the above table we can say that 9 out of 100 people put money in saving
account which 9%. In gold 27 people are preferred to invest which is 27%. 9 out of 100
people want to do investment in share market. 10 % of people do investment in real estate.
Most of the people invest in fixed deposits which 29 out of 100. In Mutual fund only 14
people do investment. And last but not the least only 2% of people make investment in post
office.As per the survey it shows the status of mutual fund as an option to invest. It also
reveal that investment in mutual fund is at infancy stage and potential is huge.

3. While investing your money which factor you prefer most?

Factor
Liquidity
Low Risk
High Return
31

No. of respondent
29
28
30

Percentage
29%
28%
30%

Company Reputation

13

13%

30%

29%

28%

30%
25%
20%
13%
15%
10%
5%
0%

Liquidity

Low Risk

High Return

Company Reputation

Sales

Interpretation : According to survey respondent shows some factor while investing money.
From the above table it shows that out of 100, 29 people wants liquidity of money which is
29%. 28 out of 100 people require low risk for money which they invest. But most of the
people want high return for money which they want to invest which is 30%. Some of the
people want to go on company reputation which 13 out of 100 i.e 13%.

4. Have you ever invested your money in Mutual Funds?

Investments
Yes
No

32

No. of respondent
69
31

Percentage
69%
31%

31%

69%

Interpretation: According to survey it shows that how many respondents invested in mutual
fund. From the above table it shows that 69 people out of 100 invested in mutual funds and
31 out of 100 people not invested or not interested to invest. So it shows that awareness about
mutual fund is quite satisfactory among respondent and only partly among the respondent is
not investing in it.

5. If, yes
a. Where do you find yourself as a Mutual Funds Investor?
Reason
Total Ignorant
Partial Knowledge
Fully Aware
Aware only some specific scheme

33

No. of respondent
4
23
22
20

Percentage
11%
29%
22%
38%

Sales

35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

33.33%
5.97%

31.88%
28.98%

Interpretation: According to survey it shows that how many respondent know about mutual
funds. From above table it shows that 4 out of 69 people i.e. 6% are totally ignorant. But 23
out 69 i.e. 33% people having partial knowledge about mutual funds. 22 people fully aware
about mutual funds i.e. 32%. And some of the people aware only about some specific scheme
i.e. 20 out of 69 i.e-29%. Company should do more campaigning show and increase more
intermediaries channel for distribution of mutual funds.

b. In which kind of mutual funds you would like to invest?

Types of investment
Public
private

34

No. of respondent
37
32

Percentage
54%
46%

55%
50%
Sales

45%
40%
Public
private

Interpretation: According to survey respondent shows that in which fund they want to
invest. From the above table it shows that 54% i.e. 37 out of 69 people want to invest in
public kind of mutual fund and 46% i.e. 32 out of 69 people like to invest in private kind of
mutual fund. People who are investing in any financial instrument they look for low risk and
high return. So, people prefer to invest in public fund which is having well past performance
of fund and having less risk.

c. How do you come to know about Mutual Funds?

Medium
Advertisement
Banks
Friends
Financial Advisor

35

No. of respondent
13
45
17
25

Percentage
13%
45%
17%
25%

13%

25%
17%

45%

Interpretation: According to survey respondent know about mutual fund through different
medium. From the above graph & table it shows that 9 out of 69 people know mutual fund
scheme through advertisement i.e. 13%. Most of the people know about mutual funds through
medium of bank i.e. 31 out of 69. Some of the people come to know through their friends i.e.
17% and 25% i.e. 17 out of 69 people take the help of financial advisor.

d. Which Mutual Fund Scheme have you used?

Type of fund
Open ended
Close ended

36

No. of respondent
42
27

Percentage
61%
39%

70%

61%

60%
50%
40%

39%

Sales

30%
20%
10%
0%
Open ended
Close ended

Interpretation: According to survey respondent shows in type of fund they do invest. 42 out
of 69 i.e. 61% people like to invest in open ended funds and 17 out of 69 i.e. 39 % people like
to invest in close ended funds. People prefer to invest in open ended fund because it dont
have any lock in period and but in close ended fund there is maturity period is present.

6. If No,
If not invested in Mutual Funds then Why?

Reason
Not aware of Mutual Funds
37

No. of respondent
7

Percentage
26%

Higher risk
Not any specific reason

60%
50%
40%
30%
20%
10%
0%

15
9

52%
22%

52%
26%
22%

Interpretation: According to survey some of the respondent not interested to investment in

mutual funds. From above table it shows that 8 out of 31 people are not aware about mutual
funds i.e. 26%. Some people say that mutual funds are of high risk i.e. 16 out of 31. And
some of them not mention the reason why they are not investing their money in mutual funds
figure is 7 out of 31 i.e.22%.As per the survey Mutual fund is subject to market risk & our
people would take some time to get risk oriented to match this portfolio.

7. Which feature of the Mutual Funds attract you most?

Feature
Diversification
38

No. of respondent
16

Percentage
23%

Regular Income
Better return
Tax Benefit

8
28
17

12%
40%
25%

40%

40%
35%
30%
25%

23%
25%

20%
15%

12%

10%
5%
0%
Diversification

Regular Income

Better return

Tax Benefit

Interpretation: According to survey respondent shows some features why they investing in
mutual funds. From the above table 16 out of 69 i.e. 23% of people need their money to be
diversified. Some investor want that their money gave him regular income i.e. 8 out of 69
which is 12%. People who wants better return on there is 28 out of 69 i.e. 40%. And some
people do investment for getting tax relief no. is 17 out of 69 i.e.25%.

8. In which Mutual Funds you have invested?

Company Name
Birla Sun Life Mutual Fund
39

No. of respondent
30

Percentage
43%

HDFC Mutual Fund

SBI Mutual Fund
Reliance Mutual Fund
Axis Bank Mutual Fund

7
16
8
8

10%
23%
12%
12%

12%
12%

43%

23%
10%

Interpretation: According to survey respondent told about the company where they had
done their investment. From the above data 43% i.e. 30 out of 69 people do investment in
Birla Sun Life Mutual Fund. 10 % of people do investment in HDFC. After Birla Sun Life,
SBI is on second position which public prefer to invest in it i.e.23%. In Reliance Mutual
Fund only 12% people doing investment. And 12% of people do investment in Axis Bank
Mutual Fund. A per the survey the competitive advantage of Birla Sunlife in terms of no. of
executives solving the queries of the respondent, considerable return rate during recent years
and the brand value of the company. So, large section of people preferred to do invest in Birla
Sunlife.

9. Which mode of investment will you prefer?

40

Mode of investment

No. of respondent

One time investment

SIP

23
46

Percentage
33%
67%

80%
67%

70%
60%
50%
40%

33%

30%
20%
10%
0%

One time investment

SIP
Sales

Interpretation: According to survey respondent shows different mode of investment. From

the above data it shows that 23 out of 69 people prefer to do investment in lump sum and 46
out of 69 people want to do investment in SIP i.e. 67% of total. Most of the people are service
person so they prefer to invest through SIP which is easy for them.

10. From where you invest in Mutual funds?

No. of respondent
41

Percentage

Directly from AMC

Broker
Other Sources
Sub-Broker

21
14
25
9

36%

40%
35%

30%
20%
36%
14%

30%

30%
20%

25%
20%

14%

15%
10%
5%
0%

Directly from AMC

Broker

Other Sources

Sub-Broker

Interpretation: According to survey respondent shows that from where they do investment.
From the above table 30% of people do investment through AMC and some of the people do
investment through broker i.e. 20%. Through other sources i.e. bank people do investment
through bank i.e. 36% and there are some people who do investment through sub broker i.e.
14%. It shows the preferred channel for investment in mutual funds.

11. Which AMC will you prefer to invest?

42

Name of Company

No. of respondent

Percentage

Birla Sun Life

Reliance
SBI
HDFC
Kotak Mahindra
Axis Bank

22
6
20
9
4
8

32%
9%
29%
13%
6%
11%

13%

6%

11%

29%

32%
9%

Interpretation: According to survey respondent shows some AMC where they like to invest
in future. From the graph it shows that 32% of people would like to invest in Birla Sun Life,
9% of people like invest in Reliance and 29 % of people like to invest in SBI mutual fund. In
HDFC only 13% people shown interest and In Kotak Mahindra only 6% people interested. In
Axis Bank approx 11% of people want do investment in future. People choose AMC by
seeing annual report of Mutual Fund Company which shapes their propensity to invest.

43

12. In which Fund you are investing?

Name of Fund

No. of respondent

Percentage

General Funds
Gold Funds
Debt Funds
Equity Funds

13
20
16
20

19%
29%
23%
29%

Sales

30%
25%
20%

29%
19%

23%

29%

15%
10%
5%
0%
General Funds
Gold Funds
Debt Funds
Equity Funds

Interpretation: According to Survey respondent told about fund in which they do

investment. From the above graph & table it show that 13 out of 69 i.e. 19% of people do
investment in general fund and 20out of 69 i.e. 29% of people do investment in gold fund.
Some people do investment in Debt fund i.e. 16 out 69 comes to 23%. And In equity fund
20out of 69 people invest it. Most people need high return on their investment so they prefer
to invest in gold fund and in equity funds. These funds having moderate and high risk but
return is good than other financial instrument.

44

13. How would you like to receive the return every year?

Mode of returns

No. of respondent

Dividend Payout
Dividend Re-investment
Growth in NAV

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Percentage

23
13
33

33%
19%
48%

48%
33%

19%

Interpretation: According to survey respondent wants their return in different way. From the
above table it shows that 23 out of 69 people want their money in dividend i.e. 33% and 19 %
of people want their dividend to be re-invested in some other fund. And 48% people want
growth in NAV through which they earn more profit. As per the survey most of the
respondent are interested in growth of NAV because of sentimental decision making &
dividend pay-out comes second because they can easily realise the return on the investment.

45

FINDINGS,
CONCLUSION
&
SUGGESTIONS

46

FINDINGS
1. Majority respondent are from the group age of 25 to 50 with not considering the
annual income of all the respondents.
2. Considering the fact of investors who are investing in Birla Sunlife Mutual Fund are
mostly belong to service sector.
3. The Annual incomes of the investors recommends that the majority of the value chain is
of under 2-6 lacks.
4. In large number of Bank & Financial Advisors play a key role in making investors
educated about mutual fund. Around 55% of the respondents choose Banks for
guidance.
5. Among the sample of interviewer 35% of them were familiar with the distribution
chain of Birla Sunlife Mutual fund and the diversified fund which have good returns.
6. SIP (Systematic Investment Planning) is more favorable in compare to Lump-Sum.

CONCLUSION
1. On the basis of research we can say that people are still unaware about the asset
management companies and their advantages and disadvantages, also investors usually
thinks that shares and mutual funds are same.
2. It can be concluded that as the investment in mutual funds carry lots of risk but ensures
considerable amount of return in long term. So, it is needed to create awareness among
the youth about the potential of long term investment in it and associated value like tax
benefit, rupee cost averaging, and systematic transfer plan, rebalancing etc.
3. Birla Sun Life needs to design marketing and investment strategy to embolden the trust
among its investors by giving consistent competitive return through investment in firms
having good offers and high growth opportunities such as such debt fund & group A
companies i.e. investment should be done in Govt. Bonds, securities, in Blue Chip
company.

4. Fund managers are needed to be professional and competitive enough to manage investor
funds. Company should come with new product portfolio to attract the customers by
excelling their perceived expectation by them.

Suggestions:
47

1. Birla Sun Life AMC to keep up the good work such as innovating and creating
competitive products. Small towns, villages are still untapped and can also acts as a
2.

business area of very huge potential because literacy rate is increasing day by days.
Birla Sun Life has to invest in firms, which are having good offers & high growth
opportunities such debt fund & group A companies i.e. investment should be done in

Govt. Bonds, securities, in Blue Chip company.

3. The awareness of mutual fund & its various schemes should be increased among the
people by proper advertising, promotion and conducting investors meets.
4. The middle chain is the strongest part for the BSL which gives the best boost to the
company & banks are the middle man for them. So the company should give some
new schemes for the banks benefit. Which will motivate the bankers to do work more
effectively and work for both soul.
5. The advertisement is less from the BSL in compare to other comparatives Mutual
fund companies. The company should start the advertisement in media more as the
media has the power of success.

QUESTIONNAIRE
Personal Detail:
48

Name: -...........................................................
Address:......................................................................................................................................
Age:-...............................................................
Qualification:-................................................

Occupation:-..................................................
Contact No.:-.................................................

1. Please tick the option that falls in your annual income range?
<Rs.50, 000
50,000-2, 00,000
2, 00,000-4, 00,000
4, 00,000-6, 00,000
Above 6, 00,000
2. What kind of investment you prefer most?
Saving Account
Shares
Fixed Deposits
Post Office

Gold
Real Estate
Mutual Fund

3. While investing your money which factor you prefer most?

Liquidity
Low risk
High Return
Company reputation
4. Have you ever invested your money in Mutual fund?
Yes
No
5. If, Yes
a. Where do you find yourself as a Mutual fund Investor?
Total Ignorant
Partial Knowledge
Fully aware
Aware only some specific scheme
b. In which kind of mutual fund you would like to invest?
Public
Private
c. How do you come to know about Mutual fund?
Advertisement
Banks
Friends
Financial Advisor
d. Which Mutual fund Scheme have you used?
Open Ended

Close ended

6. If, No
a. If not invested in Mutual fund then why
Not aware of Mutual fund
Higher Risk
Not any specific reason
7. Which feature of the Mutual fund attracts you most?
Diversification
49

Regular Income

Better Return

Tax Benefit

8. In which Mutual fund you have invested?

Birla Sun life Mutual fund
SBI Mutual fund
Axis Bank Mutual fund

HDFC Mutual fund

Reliance Mutual fund

9. When you invest in Mutual fund which mode of investment will you prefer?
One time investment
SIP (Systematic Investment Plan)
10. From where you invest in Mutual fund?
Directly from Asset Management Company
Broker
Other Sources
Sub-Broker
11. Which AMC will you prefer to invest?
Birla Sun Life
SBI
Kotak Mahindra

Reliance
HDFC
Axis Bank

12. In which fund you are investing?

General Fund
Debt Fund

Gold Fund
Equity Fund

13. How would you like to receive the return every year?
Dividend Payout
Dividend Re-investment
Growth in NAV

BIBLIOGRAPHY
Websites:

50

http://www.google.com/
http://www.onlinevaluesearch.com/
http://www.birlasunlife.com/
http://www.googlescholars.com/

http://www.amfiindia.com/
http://www.mutualfundsindia.com/
http://www.moneycontrol.com/

Newspaper:
1. The Economic Times Wealth.

51