“A STUDY ON INVESTORS PREFERENCES TOWARDS MUTUAL FUNDS”

(With Reference to – KOTAK, KOTAK SECURITIES at Vijayawada)

Proposal for Management Thesis

Submitted to
K L University Business School

Submitted by
D A Prasad Maremalla
Reg No: 09101976

Under the Guidance of

Mr. Maruti Ram Prasad
Associate Professor, KLUBS,
KL University,
Vaddeswaram, GUNTUR Dist.
 “A STUDY ON INVESTORS PREFERENCES TOWARDS MUTUAL FUNDS”

(With Reference to – KOTAK, KOTAK SECURITIES at Vijayawada)

Proposal for Management Thesis

Submitted to

K L University Business School

Submitted on: Evaluated by:

Signature of the Student Signature of Faculty Supervisor

Marks Allotted: Attested by HOD. KLUBS

 Title and Proposal Approval Form

The MBA Program (The Class of 2009 - 2011)

Part – A

Enrolment No. 0 9 1 0 1 9 7 6

Name of the Student D A PRASAD MAREMALLA

Semester II Semester III

 SECURITY ANALYSIS  BRAND

AND PORTFOLIO
MANAGEMENT(MKT)
MANAGEMENT
 INTERNATIONAL
 FINANCIAL SERVICES
AND MARKETS MARKETING(MKT)
 CONSUMER BEHAVIOR  INTERNATIONAL
Elective courses selected
 SALES AND FINANCIAL
DISTRIBUTION
MANAGEMENT(FINANCE
MANAGEMENT
)
 FINANCIAL
DERIVATIVES(FINANCE)

Sectoral Elective Course OVER VIEW OF BANKING,BANKING

SERVICES OPERATIONS

Sector: FINANCE Company Name: DESTIMONEY SECURITIES PVT LTD

SIP Title: SELLING OF 10DEMAT ACCOUNTS WORTH RS 890 EACH IN 42 DAYS IN

SIP Details GUNTUR

Product/Function :DEMAT ACCOUNT

Target Achievement: SELLING OF 10DEMAT ACCOUNTS.

Name of the Faculty MR. M. RAM PRASAD

Supervisor
 Functional Area of the FINANCE
Supervisor

PART-B

A STUDY ON INVESTORS PREFERENCES TOWARDS MUTUAL FUNDS (WITH

Title of Management Thesis
REF TO- KOTAK)

Relevant Functional Area FINANCE

Date: 12-10-2010 Signature of the Student

(For Office Use Only)

Review by Faculty Supervisor (Detailed comments of Faculty Supervisor on the Proposal and the title are
documented here.) (Enclose separate sheets if necessary)

Faculty Supervisor Head of the Department Director

Date: Date: Date:
Title: -

“A STUDY ON INVESTORS PREFERENCES TOWARDS MUTUAL FUNDS”

(With Reference to – KOTAK, KOTAK SECURITIES at Vijayawada)

Introduction:-

A mutual fund is a professionally managed type of collective investment scheme that pools
money from many investors and invests it in stocks, bonds, short-term money market
instruments, and/or other securities. ...

Mutual fund is a pool of funds which is divided into units of equal value and sold to
investing public and the funds so collected are utilized for collective investments in various
capitals and money market instrument. In today’s market people invest money to gain
more. So when they take into account, they mostly look out for Investment Company where
they can get more income.

Investment companies can be classified into closed-end and open-end investment

companies. Closed-end is when it is readily transferable in the market. Open-end funds sell
their own shares to investors and ready to buy back their old shares. If we talk about the
investment options today, in India we have so many investment companies like UTI, LIC
etc, all have their own special ways of servicing the customers. The investors also feel that
they are worth to be the part of that company. These days’ people mainly look for avoiding
tax so normally they look out for some investments which can help them in doing so. When
it comes to this point of view, people mainly look out for mutual fund.

Mutual fund is a trust at law; it is a special type of managed, pooled portfolio financial
company or financial service organization that sells shares/units/stocks in itself, to the
public to obtain its resources and it invests the savings so mobilized or pooled in a large,
diversified, & sound portfolio of equity shares, bonds, money market instruments etc.,
Redeemable trust certificates are sold to investors at net asset value (NAV) plus a small

Commission. All interest/dividend and principal repayments are distributed to the holders
of the certificates.

Definitions

Different persons in different words have defined mutual fund.

The SEBI (MF) Regulations, 1993 defines mutual fund as “A fund established in the form of
a trust by a sponsor to raise money by the trustees through the sale of units to the public
under one or more schemes for investing in securities in accordance with these
regulations.”

Kotak securities limited

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and
distribution arm of the Kotak Mahindra Group. The company was set up in 1994. Kotak
Securities is a corporate member of both The Bombay Stock Exchange and The National
Stock Exchange of India Limited. Its operations include stock broking and distribution of
various financial products - including private and secondary placement of debt and equity
and mutual funds. Currently, Kotak Securities is one of the largest broking houses in India
with wide geographical reach. The company has four main areas of business: (1)
Institutional Equities, (2) Retail (equities and other financial products), (3) Portfolio
Management and (4) Depository Services.

 Institutional Business 

This division primarily covers secondary market broking. It caters to the needs of
foreign and Indian institutional investors in Indian equities (both local shares and
GDRs). The division also incorporates a comprehensive research cell with sectoral
analysts who cover all the major areas of the Indian economy.
  Client Money Management 

This division provides professional portfolio management services to high net-

worth individuals and corporates. Its expertise in research and stock broking gives
the company the right perspective from which to provide its clients with investment
advisory services.

 Retail distribution of financial products 

Kotak Securities has a comprehensive retail distribution network, comprising 870

offices (own and franchisees) across 309 cities and towns, servicing 590,000
customers. This network is used for the distribution and placement of a range of
financial products that includes company fixed deposits, mutual funds, Initial Public
Offerings, secondary debt and equity and small savings schemes.

 Depository Services 

Kotak Securities is a depository participant with the National Securities Depository

Limited and Central Depository Services (India) Limited for trading and settlement
of dematerialized shares. Since it is also in the broking business, investors who use
its depository services get a dual benefit. They are able to use its brokerage services
to execute transactions and its depository services to settle these.

Kotak Securities' width, volume and quality of offerings regularly earn it accolades
from industry monitors. In recent times, these have included:

 Asia money Brokers Poll: Best Local Brokerage (2009, 2008, 2007 & 2006)
 Asia money Brokers Poll: Best Analyst in India - Sanjeev Prasad (2009, 2008, 2007,
2006 & 2005)
 Finance Asia: Best Broker in India (2010 & 2009)

Objectives of the study:-

  To track investor’s attitude, performance and behavior with respect to
financial products (mutual funds) in kotak securities.

 To find new and more effective ways of ensuring investor satisfaction and
to find investor preferences towards investments.

 To conduct the study with references to Kotak Mahindra products and the
competitive scenario in which Kotak Mahindra operates.

 To study the structure of investment opportunities.

Description of problem:-

The study on investors preferences towards mutual funds gives lot of

solutions to the kotak securities in the view of how the customers are choosing their
financial products, how they are differentiating their products with other company
products, what is the position of kotak products in the customer minds, where they are in
the market, and satisfaction levels of their customers.

Justification and significance of study:-

This study helps firms and organizations to improve the standards of their financial products like
mutual funds. The psychology of how consumers think, feels, reason, and select between
different alternatives

 The behaviour of investors while selecting the financial products;

 Limitations in investors knowledge ;
 How investors is willing to take risk;
 To see whether investors invest for tax deduction ;
 Investment preferences of investments
 Reasons of investment preferences of investors
RESEARCH METHODOLOGY:-

Primary Analytical Research Method was used for the study. Questionnaire was prepared
and used for collecting the data about individual investors’ preference towards various
investment avenues, their portfolio behaviors. The research required primary and
secondary source of data. The primary data is obtained through structured questionnaires
which were collected from Investors Secondary Data’s are the one which is collected from
web site of Kotak Mahindra, investors and company records.

Specification of the target population:-

All customers who are interested to invest in the mutual funds ,A financial product category is
selected based on the observation made from the company, and who are showing interest to buy
mutual funds those will be selected as the target population for this study.

Sample Size:-

A sample size of 100 people was selected for the study. The sample for data collection was
within the geographical boundaries of Vijayawada.

Sampling Design/methods:-

The Sampling technique used in this research is Convenient Judgment Sampling Method.
Judgment Random Sampling, which by using the available information, concerning the
population, attempts to design a more efficient sample. The study includes investors,
financial institutions, investors who are interested in Kotak Mahindra Asset Management
Company’s mutual fund and also the individuals who are interested in the investment on
the mutual fund. The individuals without investment are also included in the study.
Data collection:-

Description of the data or information: The primary data are those which are collected
afresh and for the first time, and thus happen to be original in character. The secondary
data, on the other hand, are those which have already been collected by someone else and
which have already been passed through the statistical process.

Data collection methods:-

Primary data was collected by

 Observation method

 Interview method

 questionnaire

Observation method:
Observation becomes a scientific tool and the method of data collection for the researcher,
when it serves a formulated research purpose, is systematically planned and recorded and
is subjected to checks and controls on validity and reliability. Under the observation
method, the information is sought by way of investigator’s own direct observation without
asking from the respondent.
Interview Method:
The interview method of collecting data involves presentation of oral-verbal stimuli and
reply in terms of oral-verbal responses. This method can be used through personal
interviews and, if possible, through telephone interviews.
Filling up of Questionnaire:
This method of data collection is quite popular, particularly in case of big enquiries. It is
being adopted by private individuals, research workers, private and public organisations
and even by governments. In this method a questionnaire is sent (usually by post) to the
persons concerned with a request to answer the questions and return the questionnaire. A
questionnaire consists of a number of questions printed or typed in a definite order on a
form or set of forms. The respondents have to answer the questions on their own.

Secondary data was collected from

 Fact Sheets of the Company

 Websites, newspapers and journals.

Data analysis:-

Analysis, particularly in case of survey or experimental data, involves

estimating the values of unknown parameters of the population and testing of
hypothesis for drawing references. Here this type of analysis is known as inferential
analysis (inferential analysis is often known as statistical analysis).

Inferential analysis is concerned with the various tests of significance for testing
hypothesis in order to determine with what validity data can be said to indicate
some conclusions .it also concerned with the estimation of population values. It is
mainly on the basis of inferential analysis that the task of interpretation (i.e. the task
of drawing inferences and conclusions) is done.

Choice of statistical procedures:-

The important parametric tests like z-test,

t-test,

Chi-square test.

Research Plan:-

Project Schedule: Scheduled for a period of 8 weeks from October to December.

Major Phases Involved:
 Phase-1

 Title and Proposal submission -14 Oct

 Evaluation -18, 19, 20 Oct
 Review of Literature , submission of articles -18 Oct
 Results -20 Oct

Phase-2

 Submission of Interim -8 Nov

 Interim presentation -15, 16 Nov
 Evaluation of Interim thesis -18 Nov

Phase-3

 Submission of Final Thesis -29 Nov

 Final presentation -1, 2, 3, 4 Dec
 Evaluation of Final Thesis -8 Dec
 Final Result -9 Dec.

REFERENCES:-

Books

Author Book

 V K Bhalla Investment Management

 Khan &jain Financial Management

 Gordon E & Natarajan K Financial services and Markets

Journals and Newspapers

 Business World
 Business line

 Economic times

Websites

 www.kotakmutual.com

 www.google.com

 www.sebi.com

 www.mutualfundsindia.com

 www.amfiindia.com

 www.wikipedia.org