Sujit

WINTER INTERNSHIP
REPORT
Consumer preference towards various Investment Sectors
done at
5nance.com
by
C.B Sujeeth Bharadwaj
DM18C13
under the guidance of
Mr. Anil Chandani
National Sales Head

Winter Internship Report, Pune Institute of Business Management, Pune
ACKNOWLEDGMENT
Several people have been extremely helpful in completing this project “Investor’s Perception
Regarding Various Investment Avenues Available at Financial Market.” It gives me great
pleasure to express my sincere gratitude towards all the individuals who have directly or
indirectly helped me in completing the project. First of all I am extremely grateful to Mr. Anil
Chandani (National Sales Head), 5nance.com Consultants, for providing me opportunity to
work with such an esteemed organization and for his valuable guidance and inputs which
helped a lot for the completion of project in a true sense.
I particularly want to acknowledge Mr. Manoj Gadre, Faculty Guide, PIBM, Pune for
providing me with the techniques and precautions to be taken in the project. I am thankful
to him for his timely guidance, support, advice and co-operation. It was his invaluable
guidance in the project that made the work happen according to the needed format. I also
want to thank Dr. Poorna Chandra Prasad, Batch In charge, and other staff members of PIBM
for their valuable suggestions in the execution of project work. Finally, I am grateful to all my
friends for their kind co-operation and support. I am also thankful to all the respondents
who helped me by providing the information & giving their valuable time.
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COMPANY CERTIFICATE
3
Pune Institute of Business Management

(Approved by AICTE, Affiliated to University of Pune)
CERTIFICATE
This is to certify that, the report entitled “__________________________________
______________________________Topic________________________________________
____________________________” being submitted to Pune Institute of Business
Management, Pune by ____________Stu. Name___________________ bearing Roll. No.
_____________ for partial fulfilment of Post Graduate Diploma in Management/Master
of Business Administration under the guidance and supervision of ________________
Internal Mentor____________________.
This report work is original and has not been submitted to any other University or Institution
either in part or in full for the award of any Degree.
Mentor
Mentor Name
Designation
Pune Institute of Business Management,
Pune.
Date:
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Contents
ACKNOWLEDGMENT..................................................................................................................2
COMPANY CERTIFICATE..............................................................................................................3
1. PROJECT SYNOPSIS.................................................................................................................7
EXECUTIVE SUMMARY...............................................................................................................8
1.1 The Concept of Mutual Fund:..........................................................................................9
1.2 Definition of Mutual Fund:.............................................................................................10
1.3 History of Mutual Fund:.................................................................................................10
1.4 Originated Mutual Fund in India:...................................................................................11
1.4.1 First Phase: 1964 – 87.............................................................................................12
1.4.2 Second Phase: 1987-1993 (Entry of Public Sector Funds)......................................12
1.4.3 Third Phase: 1993-2003 (Entry of Private Sector Funds)........................................12
1.4.4 Fourth Phase: Since February 2003........................................................................13
1.5 Type of Mutual Fund in India:........................................................................................14
1.5.1 According to type of Investments:..........................................................................14
1.5.2 According to the time of closure of the scheme:....................................................15
1.5.3 According to tax incentives Schemes:.....................................................................15
1.5.4 According to the time of payout:............................................................................16
1.6 Mutual Fund Investing vs. Investing through banks:.....................................................16
About the Company.................................................................................................................18
About 5nance.com...............................................................................................................18
Packaged Offerings and their Products................................................................................19
Tax-max...........................................................................................................................19
Goal Planning...................................................................................................................20
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SIP-Systematic Investment Plan.......................................................................................21
Retirement Plan................................................................................................................22
Equity...............................................................................................................................24
3. Review of Literature.............................................................................................................28
3.2 Theoretical framework / Background Theory:...............................................................30
4. Objectives and Scope of the study.......................................................................................34
4.1 Research Aim:.................................................................................................................34
4.2 Research Objective:........................................................................................................34
4.3 Scope of the Research:...................................................................................................34
4.4 Hypotheses.....................................................................................................................35
Research Methodology of Study..............................................................................................36
5.1 Data Source:...................................................................................................................36
5.2 Duration of Study:..........................................................................................................36
5.3 Sampling procedure:......................................................................................................36
5.4 Sample size:....................................................................................................................36
5.5 Sample design:...............................................................................................................37
6 Data Analysis, Results and Interpretation........................................................................38
6.1 Profile of Sample:...........................................................................................................38
6.2 Data Analysis, Interpretation and Results......................................................................43
8 Conclusion........................................................................................................................53
Recommendations and Suggestions........................................................................................54
11 Bibliography.........................................................................................................................55
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1. PROJECT SYNOPSIS
Project Title
Company Name
Student Name
Student Roll No
Project Guide Name
Project Guide Designation
Confidential Report (Yes/No)
Duration of project
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EXECUTIVE SUMMARY
Mutual Funds have gained popularity as an investment vehicle over the past two years.
Though technically, must have been in India since 1964 through Unit Trust of India , the
industry has gained importance only recently after new private sector funds and funds
backed by global investment houses set up shop in India.
Mutual Funds have often been associated with equity markets. While that is industry, the
debt or fixed income side has also gained prominence in the recent past. In fact, now mutual
funds offer instruments schemes for all types of investors from the risk averse to high-risk
takers.
The project lays a great stress on investor education. The primary objective is to explain in
clear and simple language, the benefits and pitfalls of investing in mutual funds. There is a
gap in the market about quality information on Mutual Funds. Most of the information is
either inadequate or biased towards a scheme/fund or a category. This project attempts to
look at the subject from the point of view of an ordinary investor who has little time or
inclination to get into the technical details of Mutual Funds.
This Project gave me a great learning experience and at the same time it gave me enough
scope to implement my analytical ability. The analysis and advice presented in this Project
Report is based on market research on the saving and investment practices of the investors
and preferences of the investors for investment in Mutual Funds. This Report will help to
know about the investors‟ Preferences in Mutual Fund means Are they prefer any particular
Asset Management Company (AMC), Which type of Product they prefer, Which Option
(Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic
Investment Plan or One-time Plan). This Project can be divided into two parts.
The first part of the project explains the basics of a Mutual Fund including the history and
evolution of the history. Then it highlights the types of Mutual Funds and the recent trends
in the industry.
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The second portion deals with doubts and questions that arise in investors' mind about
Mutual Funds. The data collected has been well organised and presented. Hope the research
findings and conclusions will be helpful in understanding the perception and attitude of
Indian Investors towards Mutual Fund which may reveal some interesting insights and
directions for future research.
investment-grade corporate bonds), type of issuers (e.g., government agencies,

corporations, or municipalities), or maturity of the bonds (short- or long-term). Both stock
and bond funds can invest in primarily U.S. securities (domestic funds), both U.S. and foreign
securities (global funds), or primarily foreign securities (international funds). Most mutual
funds' investment portfolios are continually adjusted under the supervision of a professional
manager, who forecasts the future performance of investments appropriate for the fund and
chooses those which he or she believes will most closely match the fund's stated investment
objective. A mutual fund is administered through a parent management company, which
may hire or fire fund managers. Mutual funds are liable to a special set of regulatory,
accounting, and tax rules. Unlike most other types of business entities, they are not taxed on
their income as long as they distribute substantially all of it to their shareholders. Also, the
type of income they earn is often unchanged as it passes through to the shareholders.
Mutual fund distributions of tax-free municipal bond income are also tax-free to the
shareholder. Taxable distributions can be either ordinary income or capital gains, depending
on how the fund earned those distributions.
1.1 The Concept of Mutual Fund:
Investors have a basic choice, they can invest directly in individual securities, or they can
invest indirectly through a financial intermediary. Financial intermediaries gather savings
from investors and invest these monies in portfolio of financial assets.
A mutual fund is a type of financial intermediary that pools the funds of investors who seek
the same general investment objectives and invests them in a number of different types of
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financial claims (e.g. equity shares, bonds, money market instruments). These pooled funds
provide thousands of investors with proportional ownership of diversified portfolios
managed by professional investment managers. The term „mutual‟ is used in the sense that
all its returns, minus expenses, are shared by the fund‟s unit holders.
1.2 Definition of Mutual Fund:
An investment vehicle that is made up of a pool of funds collected from many investors for
the purpose of investing in securities such as stocks, bonds, money market instruments and
similar assets. Mutual funds are operated by money managers, who invest the fund's capital
and attempt to produce capital gains and income for the fund's investors. A mutual fund's
portfolio is structured and maintained to match the investment objectives stated in its
prospectus.
A mutual fund is a company that brings together money from many people and invests it in
stocks, bonds or other assets. The combined holdings of stocks, bonds or other assets the
fund owns are known as its portfolio. Each investor in the fund owns shares, which represent
a part of these holdings.
1.3 History of Mutual Fund:
th
The history of mutual funds dates support to 19 century when it was introduced in Europe,
in particular, Great Britain. Robert Fleming set up in 1868 the first investment trust called
Foreign and colonial investment trust which promised to manage the finances of the
moneyed classes of Scotland by scattering the investment over a number of different stocks.
This investment trust and other investment trusts which were afterward set up in Britain and
the U.S., resembled today‟s close – ended mutual funds. The first mutual fund in the U.S.,
Massachusetts investor‟s trust, was set up in March 1924. This was the open – ended
mutual fund.
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The stock market crash in 1929, the Great Depression, and the outbreak of the Second
World War slackened the pace of growth of the mutual fund industry. Innovations in
products and services increased the popularity of mutual funds in the 1950s and 1960s. The
first international stock mutual fund was introduced in the US in 1940. In 1976, the first tax
exempt municipal bond funds emerged and in 1979, the first money market mutual funds
were created. The latest additions are the international bond fund in 1986 arm funds in
1990. This industry witnessed substantial growth in the eighties and nineties when there
was a significant increase in the number of mutual funds, schemes, assets, and
shareholders. In the US the mutual fund industry registered s ten – fold growth the eighties.
Since 1996, mutual fund assets have exceeds bank deposits. The mutual fund industry and
the banking industry virtually rival each other in size.
1.4 Originated Mutual Fund in India:

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at
the initiative of the Government of India and Reserve Bank of India. The history of mutual
funds in India can be broadly divided into four distinct phases:
Rs in Different Phase in MF
Years Crores Industry
Mar-65 to
Feb-87 25 First Phase
Mar-87 to
Feb-93 4564 Second Phase
Mar-93 to
Feb-03 47000 Third Phase
Mar-03 121805
Mar-04 139616
Mar-05 149554
Mar-06 231862
Mar-07 326388
Fourth Phase
Mar-08 505152
Mar-09 417300
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Mar-10 613979
Mar-11 592250
1.4.1 First Phase: 1964 – 87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by
the Reserve Bank of India and functioned under the Regulatory and administrative control of
the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control in
place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988
UTI had Rs.6, 700 crores of assets under management.
1.4.2 Second Phase: 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed
by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC
established its mutual fund in June 1989 while GIC had set up its mutual fund in December
1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47,004
crores
1.4.3 Third Phase: 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year
in which the first Mutual Fund Regulations came into being, under which all mutual funds,
except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged
with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
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The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI
(Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of
Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under
management was way ahead of other mutual funds.
1.4.4 Fourth Phase: Since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29,835 crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes.
The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of
the Mutual Fund Regulations.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with
SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile
UTI which had in March 2000 more than Rs.76,000 crores of assets under management and
with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations,
and with recent mergers taking place among different private sector funds, the mutual fund
industry has entered its current phase of consolidation and growth.
The graph indicates the growth of assets over the years

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Mutual Fund Schemes Asset under Management

25000
20000
15000
AUM
10000
5000
0
2009-2010 2010-20112011-2012 2012-2013 2013-20142014-2015 2015-2016 2016-2017 2017-2018
Y-o-Y
1.5 Type of Mutual Fund in India:

A common man is so much confused about the various kinds of Mutual Funds that he is
afraid of investing in these funds as he cannot differentiate between various types of Mutual
Funds with fancy names. Mutual Funds can be classified into various categories under the
following heads:
1.5.1 According to type of Investments: While launching a new scheme,

every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which
it will make investments of the funds collected under that scheme. Thus, the various kinds of
Mutual Fund schemes as categorized according to the type of investments are as follows:
1. Equity Funds
2. Debt Funds (also called Income Funds)
3. Diversified Funds (Also called Balanced Funds)
(a) Gilt Funds

(e) Money Market Funds
(f) Sector Specific Funds
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(g) Index Funds
1.5.2 According to the time of closure of the scheme: While

launching new schemes, Mutual Funds also declare whether this will be an open
ended scheme (i.e. there is no specific date when the scheme will be closed) or there
is a closing date when finally the scheme will be wind up. Thus, according to the time
of closure schemes are classified as follows:
(a) Open Ended Schemes
(b) Close Ended Schemes
Open ended funds are allowed to issue and redeem units any time during the life of the
scheme, but close ended funds cannot issue new units except in case of bonus or rights
issue. Therefore, unit capital of open ended funds can fluctuate on daily basis (as new
investors may purchase fresh units), but that is not the case for close ended schemes. In
other words we can say that new investors can join the scheme by directly applying to the
mutual fund at applicable net asset value related prices in case of open ended schemes but
not in case of close ended schemes. In case of close ended schemes, new investors can buy
the units only from secondary markets.
1.5.3 According to tax incentives Schemes: Mutual Funds are

also allowed to float some tax saving schemes. Therefore, sometimes the schemes
are classified according to this also:
(a) Tax Savings Funds
(b) Non Tax Savings Funds
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1.5.4 According to the time of payout: Sometimes Mutual Fund schemes are
classified according to the periodicity of the pay outs (i.e. dividend etc.). The categories are
as follows:
(a) Dividend Paying Schemes
(b) Reinvestment Schemes
The mutual fund schemes come with variouscombinations of the above

categories.
Therefore, we can have an Equity Fund which is open ended and is dividend paying plan.
Before you invest, you must find out what kind of the scheme you are being asked to invest.
You should choose a scheme as per your risk capacity and the regularity at which you wish to
have the dividends from such schemes
1.6 Mutual Fund Investing vs. Investing through banks:
Mutual funds are only one kind of financial intermediary. Bank is the largest intermediary in
the financial system. Thousands of depositors pool their savings in a bank. However,
investments in banks entitle the depositors to different financial claims than the generated
by the mutual funds.
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Mutual
Factors Bank Fund
Returns Low Better
Administrativ
e Exp. High Low
Risk Low Moderate
Investment
Options Less More
Low but
Network High Penetration Improving
Liquidity At a cost Better
Quality of
Assets Not transparent Transparent
Interest Minimum balance between

Calculation 10th Everyday
& 30th of Every month
Guarantee None
Maximum Rs. 1,00,000 on
deposits
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About the Company

Innovage Fintech Private Limited is a Private company incorporated on 24 July 2010. It is
classified as Non-Government Company and is registered at Registrar of Companies,
Mumbai. Its authorized share capital is Rs. 5,000,000 and its paid up capital is Rs.
2,254,530. It is involved in Activities auxiliary to financial intermediation, except insurance
and pension funding. [This Group includes activities involved in or closely related to financial
inter-mediation other than insurance and pension funding but not themselves involving
financial inter-mediation].
Innovage Fintech Pvt. Ltd. owns and operates an online financial planning and management
platform. Its services include financial planning calculator, wealth management services,
financial planning services and solutions, financial planning advisory services, financial
planning analysis, financial reporting analysis, investment portfolio management services,
mutual funds investment, and short term investment plans. The company has already raised
$3 million in angel funding from a clutch of HNIs in Dubai and PF Funds in Europe.
About 5nance.com
Financial tech start-up Innovage Fintech Pvt. Ltd, launched a B2C platform www.5nance.com
which is one of the first Robo advisory platforms in the country to offer all its services,
including asset allocation, exit and profit booking advisory services, for free to its customers.
The SEBI and AMFI registered portal enables consumers to plan and achieve their financial
and money management needs over their entire lifecycle.
Since its launch, the portal has attracted 5,000 registered users, of which 10 per cent are
senior citizens.
It is a consumer aligned business model and not a product aligned one. While other portals
push just one or two products like mutual funds, insurance or equities at customers, it
provides a one-stop, product agnostic portal with different classes of products, which
consumers can choose from.
The platform has 38 principle partners that provide all asset and liability products offerings
for consumers including mutual funds, corporate deposits, physical gold, bonds, loans, credit
cards, direct equities, insurance and tax filing.
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Today, 5nance.com targets consumers in the annual income bracket of ₹5 lakhs to ₹50 lakhs.
Plans are on to target consumers in the annual income bracket of ₹50 lakhs to ₹2 crores who
will be offered investment options in global asset classes as well.
Management Team: -
Mr. Dinesh Rohira-Founder and Chief Executive Officer
Mr. Ajay Arjit Singh-Founder and Chief Business Architect
Mr. Smruti Kanta Mohanty-Co-Founder and Chief Technology Officer
Mr. Vivek Ghokhale-Co-Founder and Chief Operating Officer
Mr. Joseph Pulikkottil-Assistant Vice President of Product Engineering
Mr. Chintan Vora- Assistant Vice President of Product Engineering.
Packaged Offerings and their Products

Tax-max
Tax - max helps you to plan your tax and optimize the savings with integrated capabilities of
different aspects of personal financial management at free of cost. It provides you with the
platform to invest in mutual funds and opt for health and life insurance plans. Apart from
this, tax-max assists in maintaining the documents on the digital platform and reminds you
of the missing ones, which can be uploaded while filing, returns in a click. This is a
comprehensive online platform which offers you the convenience of the real time
monitoring of your investments along with the financial hand-holding at every required step.
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Goal Planning
A goal is the first step that sets you on a path. It should be inspirational and based on your
own values and interests. What matters most to you? What are you willing to sacrifice in
order to make it happen sooner? What can help you stay the course?
5nance provides a platform that would assist you to achieve your life goals. 5nance helps
you to set realistic goals and makes them more:
Achievable. Use your current and future income to set your goals for the future.
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 Specific. "To get richer" is not a specific or clear goal, but "to pay for 50% of
child's education for higher studies" is.
 Measurable. Set a deadline for your goal, such as the age at which you want
to retire, or the timeline for buying a new house.
SIP-Systematic Investment Plan
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We all have various financial obligations. Some of them like daily needs, school fees, etc.
involve the major outgo of your cash. Others like trip for your family or buying a fancy gizmo
entails a onetime payments for which money can be relatively easily collected. But for long
term goals like retirement or purchasing a home require you to save and invest for many
years. Yet irrespective of the amount involved and the time horizon, planning and investing
money systematically and regularly enables you to sail through these obligations. A SIP could
prove to be a simple and effective solution toward achieving these goals.
A SIP is a method of investing in mutual funds, by investing a fixed sum at a regular

frequency, to buy units of a mutual fund schemes. It is quite similar to a recurring deposit of
a bank or post office. For the convenience, an investor could start a SIP with as low as Rs
500; however, this amount may differ from one fund house to other.
Retirement Plan
5nance provides innovative investment plans offer you financial security and retirement
savings for a happy post-retirement life without you compromising on your standard of
living. With the rise in inflation & higher cost of living retirement planning in India has
become an important aspect of financial planning. We are among the best retirement
planning companies who provide bespoke services. Our plans give you options to choose the
retirement age and to control your investments to meet your retirement needs.
We understand how important it is to live independently after retirement, and keeping this
in mind we offer premium services to the clients. Our retirement services are unique and
can be customized according to your needs and requirements. We offer various retirement
plan services that will meet your demands to live better after retirement.
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Lump sum Investments
A Lump Sum Investment means a once off premium / payment into an investment fund
which is designed to provide you with a return in growth. This type of investment can make
your money work harder for you.
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A Lump Sum Bond is a hassle-free product, with no investment transaction charges or cash
accounts to worry about. It’s focused on individuals, companies and trustees with moderate
amounts to invest, who want to start small but still reap the potential growth offered
through a dedicated range of leading funds.
5nance.com assists you in gauging your own attitude to risk early in the Lifetime Financial
Planning process, while also giving its own expert advice on the type of funds that would
best suit you.
First time Investments
Questions which sounds easy, but difficult to answer. 5nance.com clears all related to first
time investment. The platform suggests you on how to get your finances in order, set your
aspirations, assess the risk that an individual can take, understand the products you are
comfortable with to invest, check out the cost of investments, review your investments at a
periodic basis, pick and choose the products you want to invest based on the inputs you
receive from your trusted broker and identify the place you can purchase such investment
such as a broker or an advisor.5nance also assists you in deciding the right time for
investment because it believes time is one thing you would never get once it is lost, so start
early to achieve early. The who should invest part tells that anyone who is concerned about
maintaining the same lifestyle after the income stops is the right person to be investing.
Equity
5nance.com is a “One Stop Shop” because it provides a comprehensive platform to buy and
manage all your equity and mutual fund investments, and insurance and loans. It helps you
to achieve your financial goals by taking smart, informed and appropriate decisions. They
hand hold you to make wise decisions based on your individual requirements and their
expert research recommendations.
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The products offered in line with Equity are:
•Access to invest in exchange traded funds
•BSE, NSE Cash with in-house depository services and dedicated relationship
manager for personalized services.
•Securities Lending & Borrowing Scheme (SLBS)
Loans
Loans are a little tricky subject in the financial world. In an unplanned emergency, yes! one
has to take a loan. So it would be nice to understand what should be considered and when
one should look out for availing a loan. One should consider taking a loan when there is a life
goal requirement.
All the loans that are taken, have to be paid back. Hence the monthly installments as part of
the EMI should always fall within your repayment capabilities. One should judiciously budget
for the monthly income and expenses before zeroing down on the amount of loan.
If one has some investments that are not making adequate returns, it is wiser to exit such
investments and use for the emergency rather than availing a loan. Thus the interest
payments should be better than the investment returns.
You can avail a loan when you know that the money is coming soon, but you haven’t
received it yet. If you are in an emergency to purchase, you can take out a loan and repay it
as soon as the money comes to you.
5nance.com helps you to save money with right loans @ right rates. Search, evaluate and
identify the best suitable loan for you from the wide range of available products.
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Health Insurance
5nance provides protection to your family from medical contingencies with comprehensive
Health Insurance. Opting for health insurance during early ages ensure the coverage of age-
related health complications, which turns out to be beneficial, when you need it most.
Health insurance plans act as a shield for your medical contingencies by maintaining your
financial equilibrium. This ensures you get the best Cashless treatment from leading network
hospitals in your nearby vicinity. Lifelong Renewability allows you to enjoy lifelong renewals
of policy irrespective of claim history.
•Value for money hospitalization insurance for 1st time buyers
•No pre-policy Medical check-up
•Lifelong Renewability Guaranteed
•Cashless and hassle-free direct claim settlement at 4900+ leading hospitals in

India.
Term Insurance
With 5nance you break - free yourself from the complicated process of documentation. You
just need to upload your documents online while applying for the plans. The fully automated
platform ensures convenience, easiness, transparency, and authenticity. The one - stop
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platform ensures that all your financial and insurance requirements can be managed,
monitored and tracked seamlessly.
•Life cover at nominal cost with flexibility while choosing the plan options
•Increase Life covers @ Key Milestones of your life without medicals*
•Hassle Free Online Buying Process
•Tax benefit as per prevailing tax laws
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3. Review of Literature
The published work relating to the topic is reviewed. The relevant literature is reviewed on
the basis of Books, Periodicals, News Papers and Websites. The detailed review is given
below:
Dr. Shantanu Mehta (September 2012) in his research paper “Preference of Investors for
Indian Mutual Funds and its Performance Evaluation”, published in Pacific Business Review
International Vol. 5 concluded that, Mutual funds have opened new vistas to millions of
small investors by virtually taking investment to their doorstep. In India, a small investor
generally goes for such kind of information, which do not provide hedge against inflation and
often have negative real returns. However Mutual funds have come, as a much needed help
to these investors.
Dr. Ravi Vyas (July 2012) in his article “Mutual Fund Investor’s Behaviour and Perception”,
published in International Refereed Research Journal Vol. – III concluded that, Mutual fund
companies should come forward with full support for the investors in terms of advisory
services, ensure full disclosure of related information to investor, proper consultancy should
be given by mutual fund companies to the investors in understanding terms mutual fund
information should be published in investor friendly language and style, proper system to
educate investors should be developed by mutual fund companies to analyse risk in
investments made by them, etc.
Dr. Binod Kumar Singh (March 2012) in his article “Investors attitude towards Mutual
Funds”, published in the International Journal of Research in Management pointed out
that, most of the investors having lack of awareness about the various function of mutual
funds. Moreover, as far as the demographic factors are concerned, gender, income and level
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of education have significantly influence the investors‟ attitude towards mutual funds. On
the other hand the other two demographic factors like age and occupation have not been
found influencing the attitude of investors‟ towards mutual funds.
Mr. Sarish (2012) in his research paper “A Study of Opportunities and Challenges for
Mutual Fund in India: Vision 2020”, published in VSRD International Journal of Business &
Management Research Vol. 2 draw a conclusion that, Mutual funds are among the most
preferred investment instruments. For middle income individuals, investing in mutual funds
yields higher interest and comes with good principal amount at the end of the maturity
period of the mutual fund investment. Another important fact which he concluded is that
mutual funds are safe, with close to zero risk, offering an optimized return on earnings and
protecting the interest of investors.
Mr. B. K. Singh and Mr. A. K. Jha (2009) in his study, “An Empirical study on awareness &
acceptability of Mutual Fund”, published in Regional Student’s Conference, ICWAI pointed out
that investors basically prefer mutual fund due to return potential, liquidity and safety and they
were not totally aware about the systematic investment plan. The invertors‟ will also consider
various factors before investing in mutual fund.
Ramamurthy and Reddy (2005) conducted a study, “Recent Trends in Mutual Fund
Industry” published in SCMS Journal of Indian Management to analyze recent trends in the
mutual fund industry and draw a conclusion that the main benefits for small investors‟ due
to efficient management, diversification of investment, easy administration, nice return
potential, liquidity, transparency, flexibility, affordability, wide range of choices and a proper
regulation governed by SEBI. The study also analyzed about recent trends in mutual fund
industry like various exit and entry policies of mutual fund companies, various schemes
29
related to real estate, commodity, bullion and precious metals, entering of banking sector in
mutual fund, buying and selling of mutual funds through online.
3.2 Theoretical framework / Background Theory:
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 the capital appreciation realised are 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 flow chart below
describes broadly the working of a mutual fund:
30
Sponsors:
They are the individuals who think of starting a mutual fund. The Sponsor approaches SEBI,
the market regulator and also the regulator for mutual funds. Not everyone can start a
mutual fund. SEBI will grant a permission to start a mutual fund only to a person of integrity,
with significant experience in the financial sector and a certain minimum net worth. These
are just some of the factors that come into play.
Trustee:
31
Once SEBI is satisfied with the credentials and eligibility of the proposed Sponsors, the
Sponsors then establish a Trust under the Indian Trust Act 1882. Trusts have no legal identity
in India and thus cannot enter into contracts. Hence the Trustees are the individuals
authorized to act on behalf of the Trust. Contracts are entered into in the name of the
Trustees. Once the Trust is created, it is registered with SEBI, after which point, this Trust is
known as the mutual fund.
Asset Management Company:
Asset Management Company is the one which will manage the asset (money collected to
invest on company shares) of its customers by appointing a manager under several schemes.
Every scheme will have a specific objective, which is framed at the time of introducing the
scheme. A manager is to be appointed under the scheme to keep up the objectives framed.
He should take care that the investment on specific scheme should not affect the customer's
asset. The schemes being introduced by the Asset Management Companies is known as
Mutual Fund Scheme. As per the Mutual Fund definition, the Asset is the money received
towards a collective investment plan. This will help the small investors to increase their asset
with the help of Asset Management Companies.
Anyhow an investor cannot blame AMC, for its under performance. We need to have a quick
review on the performance of the fund in which we invest, at least once in 3 months. The
AMC will help in providing the various investment plans. We should select the suitable plan
from it which can meet our requirement. So risks are based on our decisions.
Requirement of Asset Management Company:
Recent days are said to be the days of competition. Every day and every minute everyone is
running to achieve something in their career. Achieving some goal is not that much easier
nowadays, not only the hard work but also fastness in the work will help in achieving their
32
goal to earn money. So, many of us do not have time to think about the future financial
requirement and planning. Many of us are not having time to watch the market status and
invest the money in it. That is the only source, through which we can grow our money
drastic in a long run. However that needs some follow up of market, to change the
investments periodically in order to fetch high returns. The above are all the reasons for
which the Asset Management Companies are required. By paying the fund manager a little
percentage we are making him to take care of our assets by investing in the shares which will
meet the declared financial objectives
Top 10 Asset Management Companies in India:
As it is very tough to find the best one AMC among the list, with the past performance and
the returns of the schemes they have, many are suggesting the following the 10 AMC as top
among the 44. It is not in order from the first to last, all may have same importance.
 ICICI Prudential Mutual Fund.

 HDFC Mutual Fund.
 Reliance Mutual Fund.
 Aditya Birla Sun Life Mutual Fund.
 SBI Mutual Fund.
 UTI Mutual Fund.
 Kotak Mahindra Mutual Fund.
 Franklin Templeton Mutual Fund
 DSP MUTUAL Fund
 IDFC Mutual Fund
33
4. Objectives and Scope of the study

4.1 Research Aim:
The aim of this research is to empirically investigate the investors‟ attitude toward mutual
fund
4.2 Research Objective:
Objective 1: To study and analyze the impact of various demographic factors on investors‟
attitude towards mutual fund.
Objective 2: To study about the factors responsible for the selection of mutual funds as an
investment option.
Objective 3: To study the people in which age and income group prefer mutual funds over
other investment options
4.3 Scope of the Research:
Over the past few decades, much research has already been done over legal requirements of
a mutual fund, SEBI Norms and role of AMFI. The main reason for choosing this topic is
based on the fact that so far no study has been conducted in order to understand the
attitude of Investors‟ towards mutual fund as an investment tool.
Academically, this research project will be helpful in understanding the perception and
attitude of Indian Investors towards mutual fund which may reveal some interesting insights
and directions for future research.
34
It is observed that the level of income also influences the investment decisions. As far as the
demographic factors are concerned, gender, income and level of education have significantly
influence the investors‟ attitude towards mutual funds.
Later after reading and studying various literatures, I came to know about various problems
regarding mutual fund industry and its complex procedure. Additionally, we believe that
conducting this research project will enhance the valuable personal knowledge about the
subject and experience for future career applications.
4.4 Hypotheses
The main purpose of this study is to find out what is the attitude of investors towards mutual
fund as an investment option. To be able to fulfill the purpose of this research we find it
appropriate to test the perception of investors towards mutual fund. This led into generating
the following hypotheses to test accordingly:
Hypothesis 1:
The demographic factors like gender, income and level of education have significantly
influence the investors‟ attitude towards mutual funds.
Hypothesis 2:
The individual investors having lack of knowledge about mutual fund and hence they are not
considering mutual fund as an investment option.
35
Research Methodology of Study
5.1 Data Source:
This report is based on primary as well as secondary data. The study aims at finding out the
attitude of the investors towards Mutual fund in Mumbai and Suburb. This study was based
mainly on primary sources. The primary data was collected from the investors of mutual
funds with help of the questionnaire which are supplied among the investors of Mumbai
City. The secondary data were collected from the books, records and journals. The essential
data were collected with the help of questionnaire.
5.2 Duration of Study:
th th
The study was carried out for a period of one month, from 5 June 2013 to 4 July, 2013.
5.3 Sampling procedure:
By adopting convenience sampling, approximately 100 respondents were selected for this
study. The essential data were collected with the help of questionnaire. It was collected
through filling up the questionnaire prepared. The data has been analyzed by using
Statistical tool.
5.4 Sample size:
The sample size of our project is limited to 100 people only. Out of which only 72 people had
invested in various mutual fund schemes. Other 28 people had not invested in any of the
mutual fund schemes
36
5.5 Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.
37
6 Data Analysis, Results and Interpretation
This chapter provides results obtained from the survey, which have been examined and
evaluated through data analysis techniques. Findings are subjected to hypotheses testing.
This chapter evaluates investors‟ attitude towards mutual fund:
6.1 Profile of Sample:
Here we have mentioned profile of sample like age, gender, Income etc. The sample size of
our project is limited to 100 people only.
Gender
Female
Male
Classification as Gender
38
Data Interpretation:
Total number of respondents is 100 out of which 93% are male and 7% are female
respondents. Hence we can say that the majority of our respondents are male and due to
this reason NO further analysis of the impact of gender as a dependant (demographic) factor
on other independent factors is
Classification as per Age

70
60
50
40
30
20
10
0
Les s than 30 31 to 40 41 to 50 50 and above
39
This shows that majority of the respondents are young and they have just started their
career. It might be possible that these respondents do not have complete knowledge of
mutual fund and they might be investing in various avenues according to the advices given
by their brokers and agents.
Qualification Distribution
6.00%
19.00%
SSC/HSC
Graduation
Post Graduation
46.00% Profes s i onal
29.00%
Classification as per Qualification
40
A minor portion of 6% of the respondents are high school pass out while maximum of them
i.e. 46% are graduates while 29% and 19% of the respondents hold Postgraduate and
Professional qualification respectively.
Occupation distribution
4.00% 12.00%
Profes s i onal
Bus i nes s
Sal ari ed
51.00% 33.00% Retired
Figure 7: Classification as per Occupation
41
51% of the respondents are salaried employees which forms a majority. 33% are business
persons 12% are practicing professionals (like Chartered Accountants, Architects, Lawyers
etc.) while a minor portion of 4% of them are retired employees
Distribution on the basis of Income
1.00%
6.00%
3 to 5 l ac
5 to 15 l ac
34.00% 15 to 25 l ac
59.00% Above 25 l a c
Figure 8: Profile of Investors on the basis of Income
Income Data Interpretation:
Majority of the respondents i.e. 59% lie in the slab of annual income between Rs. 3-5 lakhs.
34% of the respondents have an income ranging from Rs. 5-15 lakhs, while a minor portion
of 6% and 1% of the respondents have an annual income of Rs. 15-25 lakhs and above Rs. 25
lakhs respectively.
42
6.2 Data Analysis, Interpretation and Results
Preferred Avenue for Investment by Investors

60
50
40
30
20
10
0
nt F.D ce .Fs ce es
r te
u
an ffi ur l ve sta
co ur
M
tO
t Si lE
Ac s s en d a
g s In Po e b an Re
in /D ol
d
S av re
s
G
a
Sh
Figure 9: Investors’ preference for investing money
This chart mainly talks about the respondents‟ preference to Investment Avenue. As per our
survey it is seen that investors give second preference to mutual fund investment after
savings A/c. It shows that mutual fund has gained popularity among the investors and they
also prefer it as investment tool.
43
Sales
12.12%
21.21%
Li quidi ty
Low Ri s k
25.25% Hi gh returns
Company reputation
41.41%
Figure 12: Reason for not investing in MF
Figure 12 is clearly shows that 53% of people who don‟t invest in mutual fund are due to
lack of awareness and knowledge. And second most important reason is risk factor it is seen
that 25% people think that mutual fund is a risky investment. Also 11% people think that it is
difficult to understand and same no. of people also don‟t give specific reason for not
investing in mutual fund.
44
Question 3: Where do you find yourself as a mutual fund Investor?
Level of awareness in Mutual Fund

Investors
Aware onl y about any s peci fic

s cheme i n whi ch you i nvested
0.58%
22.09% Tota ll y i gnora nt
26.83%
Partial Knowl edge of MF

Ful l y Aware
50.50%
45
This chart mainly talks about level of awareness among the mutual fund investors. It is seen
that only 17% people are fully aware about mutual fund, where as 14% people are fully
ignorant and it seems that they invest their money in mutual fund as per their advice of their
financial advisor. Around 37% people are aware only about specific scheme in which they
have invested their money and 32% are having partial knowledge about mutual fund.
46
Question 4: How do you come to know about various mutual funds scheme?
SoI
10.00%
Fi nanci al Advi s ory

25.00% Peer Groups
51.00% Banks
Fi nanci al Advi s ors
14.00%
Figure 14: Source of information for investors
Figure 14 mainly talks about the source of information for mutual fund investors. It is clearly
seen that the financial advisors stands first as the main source of information that is 51% of
sample size followed by banks (that is 25% of sample) peer groups (that is 14% of sample)
and advertisement (that is 10% of sample). The point to be noted is that most of the people
prefer advice of their financial advisor before investing in mutual fund.
Question 6: When you invest in mutual fund which mode of investment will
you prefer?
47
Mode of Investment
2.18% Systematic Investment Pl a n
(SIP)
Lumps um
97.82%
Figure 16: Preferable mode of investment in Mutual Fund
Figure 16 shows the respondents‟ mode of investment in mutual fund and it is seen that
69% of people prefer systematic investment plan and 31% people prefer one time
investment in mutual fund.
48
Question 7: Where do you go to invest your money in mutual funds?
Intermediaries in MF
3.00% 15.00%
Di rect i n AMCs
Fi nanci a l Advi s or
38.00% Di stri butor/Broker
Other Source
44.00%
Figure 17: Intermediaries in Mutual Fund
Figure 17 talks about who are the most effective intermediaries in mutual fund. It is clearly
seen that the financial advisors stands first as the main intermediaries that is 44% of sample
size followed by distributor/broker (that is 38% of sample) direct AMCs (that is 15% of
sample) and other source (that is 3% of sample).
49
Question 8: How would you like to receive returns every year?
Preferred mode to receive returns
29.00% Di vi dend Payout

Di vi dend re-i nvestment
Growth i n NAV
56.00%
15.00%
Figure 18: Mode of receive returns
Figure 18 mainly talks about the preferred mode to receive returns. It is found that most of
the investors are preferred returns in terms of growth in NAV. Their number stands to be at
56% followed by 29% people would like to receive returns in form dividend payout and 15%
people would like to re invest their returns in mutual fund or other investment avenue.
50
Question 9: Which AMC would you like to prefer to invest your money?
Name of AMC No. Of Respondents Rank
ICICI Prudential 38 1
HDFC 32 2
AXIS 28 3
Birla Sun Life 27 4
24
SBI MF 5
Reliance 20 6
Kotak Mahindra 19 7
Other 10 8
Table 3: Ranking of AMCs as per Investor
Series 1
40
35
30
25
20
15
10
0
FC e I is l r k
nc SB Ax
a i fe he ta
HD nti L
Ot Ko
lia de S un
Re ru
IP rl a
I C Bi
IC
51
Figure 19: Most preferred AMCs as per
Investors Data Interpretation:
Table 3 shows reliance is most preferred AMCs among mutual fund investors followed by
ICICI Prudential, HDFC, SBI MF, Axis, Reliance and Kotak Mahindra.
7 Limitations of the Project
 Some of the persons were not so responsive. Respondents may not be prepared to
contribute to the research due to lack of time and resources required.
 Possibility of error in data collection because many of investors may have not given
actual answers of questionnaire.
 Sample size is limited to 100 investors.
 Some respondents were reluctant to divulge personal information, which can affect
the validity of all responses.
 The research is confined only to the city Pune
52
8 Conclusion
Even though the first mutual fund was introduced in year 1963, the awareness about mutual
fund is comparatively low among the Indian investors. Most of the Indians are unaware of a
financial option called mutual funds. Till now, the major part of saving goes into bank
deposits, postal deposits and insurance. In the competitive business environment good
performance of scheme of a particular mutual fund company plays a vital role in the minds
of the existing investors will deciding to invest than the brand name of the AMC.
Further this study shows that most of respondents are still confused about the mutual funds
and have not formed any attitude towards the mutual fund for investment purpose. It has
been observed that most of the respondents having lack of awareness about the various
function of mutual funds. Moreover, as far as the demographic factors are concerned,
gender, income and level of education have significantly influence the investors‟ attitude
towards mutual funds. As far as the benefits provided by mutual funds are concerned,
return potential and liquidity have been perceived to be most attractive by the investors
followed by flexibility, transparency and affordability. Apart from the above, in India there is
a lot of scope for the growth of mutual fund.
53
Recommendations and Suggestions
 There is need to build awareness of the new funds among the investors
with constantly being in contact with them.
 Proper training should be given to the advisor so that they will solve the
question of the customer mind.
 Some of investors have asked for periodical market report about stock
market so that they can get the knowledge properly.
 AMC‟s should go for increasing more awareness about different facilities

of investment such as SIP & MIP among investors.
 The AMC should advertise their tax saving plan more so that they can gain
more customers.
 The promotional activities play a vital role. So it should be given

importance for creating more awareness among the people.
54
11 Bibliography
Ramamurthy and Reddy (2005), “Recent Trends in Mutual Fund Industry” published in SCMS
Journal of Indian Management
Mr. B. K. Singh and Mr. A. K. Jha (2009), “An Empirical study on awareness & acceptability of
Mutual Fund”, published in Regional Student‟s Conference, ICWAI
Mr. Sarish (2012) “A Study of Opportunities and Challenges for Mutual Fund in India: Vision
2020”, published in VSRD International Journal of Business &
Management Research Vol. 2
Dr. Binod Kumar Singh (March 2012), “Investors attitude towards Mutual Funds”, published
in the International Journal of Research in Management
Dr. Ravi Vyas (July 2012), “Mutual Fund Investor‟s Behaviour and Perception”, published in
International Refereed Research Journal Vol. – I
Dr. Shantanu Mehta (September 2012), “Preference of Investors for Indian Mutual Funds and
its Performance Evaluation”, published in Pacific Business Review International Vol. 5
55
Website:
www.amfiindia.com
www.moneycontrol.com
www.njgroup.in
www.investopedia.com
www.investor.sebi.gov.in
www.bseindia.com
www.nseindia.com
56

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Consumer preference towards various Investment Sectors

C.B Sujeeth Bharadwaj

under the guidance of

Mr. Anil Chandani

National Sales Head

Pune Institute of Business Management

1.1 The Concept of Mutual Fund:..........................................................................................9

1.2 Definition of Mutual Fund:.............................................................................................10

1.3 History of Mutual Fund:.................................................................................................10

1.4 Originated Mutual Fund in India:...................................................................................11

1.4.1 First Phase: 1964 – 87.............................................................................................12

1.4.2 Second Phase: 1987-1993 (Entry of Public Sector Funds)......................................12

1.4.3 Third Phase: 1993-2003 (Entry of Private Sector Funds)........................................12

1.4.4 Fourth Phase: Since February 2003........................................................................13

1.5 Type of Mutual Fund in India:........................................................................................14

1.5.1 According to type of Investments:..........................................................................14

1.5.2 According to the time of closure of the scheme:....................................................15

1.5.3 According to tax incentives Schemes:.....................................................................15

1.5.4 According to the time of payout:............................................................................16

1.6 Mutual Fund Investing vs. Investing through banks:.....................................................16

About the Company.................................................................................................................18

Packaged Offerings and their Products................................................................................19

SIP-Systematic Investment Plan.......................................................................................21

3.2 Theoretical framework / Background Theory:...............................................................30

4. Objectives and Scope of the study.......................................................................................34

4.1 Research Aim:.................................................................................................................34

4.2 Research Objective:........................................................................................................34

4.3 Scope of the Research:...................................................................................................34

Research Methodology of Study..............................................................................................36

5.1 Data Source:...................................................................................................................36

5.2 Duration of Study:..........................................................................................................36

5.3 Sampling procedure:......................................................................................................36

5.4 Sample size:....................................................................................................................36

5.5 Sample design:...............................................................................................................37

6 Data Analysis, Results and Interpretation........................................................................38

6.1 Profile of Sample:...........................................................................................................38

6.2 Data Analysis, Interpretation and Results......................................................................43

Recommendations and Suggestions........................................................................................54

Project Guide Name

Project Guide Designation

Confidential Report (Yes/No)

investment-grade corporate bonds), type of issuers (e.g., government agencies,

1.1 The Concept of Mutual Fund:

1.2 Definition of Mutual Fund:

1.3 History of Mutual Fund:

1.4 Originated Mutual Fund in India:

1.4.1 First Phase: 1964 – 87

1.4.2 Second Phase: 1987-1993 (Entry of Public Sector Funds)

1.4.3 Third Phase: 1993-2003 (Entry of Private Sector Funds)

1.4.4 Fourth Phase: Since February 2003

The graph indicates the growth of assets over the years

Mutual Fund Schemes Asset under Management

1.5 Type of Mutual Fund in India:

1.5.1 According to type of Investments: While launching a new scheme,

(a) Gilt Funds

(f) Sector Specific Funds

(g) Index Funds

1.5.2 According to the time of closure of the scheme: While

(a) Open Ended Schemes

(b) Close Ended Schemes

1.5.3 According to tax incentives Schemes: Mutual Funds are

(a) Tax Savings Funds