JAI HIND COLLEGE

BASANTSING INSTITUTE OF SCIENCE &

J.T. LALVANI COLLEGE OF COMMERCE

23-24, BACKBAY RECLAMATION, “A” ROAD,

CHURCHGATE, MUMBAI – 400 020

BACHELOR OF MANAGEMENT STUDIES

PROJECT REPORT ON
 “THE STUDY ON THE ATTITUDE OF THE

WORKING CLASS TOWARDS MUTUAL FUNDS”

STUDENT NAME: MUSKAAN KHILNANI

SEAT NUMBER: TBMS1858F

YEAR: 2018-2019

PROJECT GUIDE: MS. MERLIN MATHEW

1
 JAI HIND COLLEGE


BASANTSING INSTITUTE OF SCIENCE &


J. T. LALVANI COLLEGE OF COMMERCE

(AUTONOMOUS)


23-24, Backbay Reclamation, “A” Road,

Churchgate, Mumbai – 400020

BACHELOR OF MANAGEMENT STUDIES

THE STUDY ON THE ATTITUDE OF THE WORKING CLASS

TOWARDS MUTUAL FUNDS

Name of the Student: Muskaan Khilnani

Seat No.: TBMS1858F

Name of the Guide: Ms. Merlin Matthew

Date: April 22, 2019

2
 ACKNOWLEDGEMENT

I, Muskaan Khilnani hereby acknowledge the value assistance provided

by Jai Hind College during my three-year degree course in B.M.S.

I would like to specially thank Ms. Merlin Mathew, the Assistant Co-
Ordinator of the B.M.S. Department for being my Project Guide and
steering me in the right direction while preparing this project. Her
knowledge and guidance has been invaluable and has greatly assisted
me in completing this report successfully.

My family and friends were a great source of inspiration throughout my

project, their support is deeply acknowledged.

3
 DECLARATION

I, Muskaan Khilnani of Jai Hind College of T.Y.B.M.S. (Semester VI)

hereby declare that I have completed this project on April 22, 2019 in
the Academic year 2018-2019. The information submitted is true and
original to the best of my knowledge.

(Signature of the Student)

4
 CERTIFICATE

I, ___________________________, hereby certify that Muskaan

Khilnani of Jai Hind College of T.Y.B.M.S. (Semester VI) has
completed the project on April 22, 2019 in the Academic year 2018-
2019. The information submitted is true and original to the best of my
knowledge.

(Signature of the Project Guide) (Signature of the Principal)

(Signature of HOD) (Signature of External Examiner)

5
 INDEX

Chapter No. Particulars Page No.

1. Introduction 8

2. Review of literature 19

3. Research Methodology 23

4. Data analysis and interpretation 27

5. Findings 46

6. Recommendation and suggestion 48

7. Conclusion 50

8. Bibliography 51

9. Annexure 52

6
 ABSTRACT

Mutual funds pool money from the investing public and use that money to buy other
securities, usually stocks and bonds. The value of the mutual fund company
depends on the performance of the securities it decides to buy. It is a type of
investment vehicle consisting of a portfolio of stocks, bonds or other
securities. Mutual funds give small or individual investors access to diversified,
professionally managed portfolios at a low price. In this study, I have considered a
few questions about mutual funds and it’s awareness so as to decipher what kind of
impact they have on the working class. This study has been limited to Mumbai and
the main respondents are working professionals and businessmen along with
students. A sample size of 151 has been chosen which includes both male and
female respondents ranging from the age of 18 - 60. The present study basically
attempts to understand the awareness level of the working class with respect to
investment in mutual funds and provides recommendations and suggestions which
can be used for knowing the preferences of the working class.

7
 CHAPTER 1

INTRODUCTION TO MUTUAL FUNDS IN INDIA

Investment is a type of activity that is engaged in by the people who have to do

savings i.e. Investments are made from their savings, or in other words it is the
people invest their savings. A variety of different investment options are available
that are bank, Gold, Real-estate, post services, mutual funds & so on much more.
Investors are always investing their money with the different types of purpose and
objectives such as profit, security, appreciation and income stability.

A mutual fund is an investment vehicle made of a pool of money collected from

many investors for the purpose of investing in securities such as stocks,
debentures, bonds, money market instruments and other assets. Mutual funds
are operated by professional money managers, who allocate the fund's
investments and attempt to make capital gains and/or income for the fund's
investors from the securities. A mutual fund's portfolio is structured and
maintained to match the investment objectives stated in its prospectus.

Definition: “The SEBI (Mutual Funds) Regulations 1993 define a mutual

fund (MF) as a fund established in the form of a trust by a sponsor to raise
monies 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”

Primary structures of mutual funds include open-end funds, unit investment

trusts, and closed-end funds. Exchange-traded funds (ETFs) are open-end funds
or unit investment trusts that trade on an exchange. Mutual funds are also
classified by their principal investments as money market funds, bond or fixed
income funds, stock or equity funds, hybrid funds or other.

8
Funds may also be categorized as index funds, which are passively managed
funds that match the performance of an index, or actively managed funds. Hedge
funds are not mutual funds; hedge funds cannot be sold to the general public and
are subject to different government regulations. The income earned through
these investments and the capital appreciations realized are shared by its unit
holders in proportion 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 pool of securities at a relatively
lower cost.

9
 Structure of Mutual Funds :

In India, the mutual fund industry is highly regulated with a view to imparting
operational transparency and protecting the investor's interest. The structure of a
mutual fund is determined by SEBI regulations. These regulations require a fund to be
established in the form of a trust under the Indian Trust Act, 1882. A mutual fund is
typically externally managed. It is now an operating company with employees in the
traditional sense. Instead, a fund relies upon third parties that are either affiliated
organizations or independent contractors to carry out its business activities such as
investing in securities. A mutual fund operates through a four-tier structure. The four
parties that are required to be involved are a sponsor, Board of Trustees, an asset
management company and a custodian.

 Sponsor:
A sponsor is a body corporate who establishes a mutual fund. It may be one
person acting alone or together with another corporate body. Additionally, the
sponsor is expected to contribute at least 40% to the net worth of the AMC.
However, if any person holds 40% or more of the net worth of an AMC, he shall
be deemed to be a sponsor and will be required to fulfil the eligibility criteria
specified in the mutual fund regulations.

 Board of Trustees:
A mutual fund house must have an independent Board of Trustees, where two-
thirds of the trustees are independent persons who are not associated with the
sponsor in any manner. The Board of Trustees of the trustee company holds
the property of the mutual fund in trust for the benefit of the unit-holders. They
are responsible for protecting the unit-holder's interest.

 Asset Management Company:

The role of an AMC is highly significant in the mutual fund operation. They are
the fund managers i.e. they invest investors' money in various securities
(equity, debt and money market instruments) after proper research of market
conditions and the financial performance of individual companies and specific
securities in the effort to meet or beat average market return and analysis.

10
 Custodian:
The mutual fund is required by law to protect their portfolio securities by placing
them with a custodian. Nearly all mutual funds use qualified bank custodians.
Only a registered custodian under the SEBI regulation can act as a custodian
to a mutual fund.

 Registrar and Transfer Agent (RTA):

It maintains and updates all the investor’s records. The primary function is
investor servicing through its office and many other branches. Its functions
involve processing of investor application, purchase and redemption
transaction history by investors in different fund schemes and plans.

11
 Working of Mutual Funds :

It is an investment tool that allows small investors an access to a well-diversified

portfolio of equities, debentures bonds and other securities. Each shareholder
participates in the gain or loss of the fund. Units are issued and can be redeemed
as needed by the investors. The fund’s Net Asset value (NAV) is determined
every day. Investments in securities are spread across a wide cross-section of
industries and sectors and thus the risk is reduced to a great level. Diversification
reduces the risk because all stocks may not move in the same direction in the
same proportion at the same time. Hence it is called the safest mode of
investment. Mutual fund issues units to the investors in accordance with
quantum of money invested by them. Investors who invest in mutual funds are
known as unit holders. Mutual funds are virtual companies that buy pools of
stocks or bonds as recommended by an investment advisor or a fund manager.
The fund manager is hired by a board of directors and is legally obligated to work
in the best interest of mutual fund shareholders or the investors. Most fund
managers are also owners of the fund. There are very few other employees in a
mutual fund company. The investment advisor or fund manager may employ
some analysts to help pick investments or perform market research. A fund
accountant is kept on staff to calculate the fund's net asset value (NAV)
everyday, or the daily value of the mutual fund that determines if share prices go
up or down.

They need to have a compliance officer or two, and probably an attorney, to see
and to keep up with government regulations by SEBI. A Mutual Fund is a
collection of stocks, bonds, or other securities owned by a group of Investors and
managed by a professional investment company. The investors first invest or
gives the money to an AMC or fund house from there the fund manager invest
the investors’ money into different securities like bonds debentures shares. A
portfolio of these securities is made. After some time, these securities generate
income/ returns the fund manager can give these returns to the investor which is
called dividend pay-out or the investor may direct the fund manager to re-invest
the dividend into these funds and thus the process is continued in the same way.

12
 Types Of Mutual Funds

1. Mutual Fund Types Based on Asset Class

a. Equity Funds:
Primarily investing in stocks, they also go by the name stocks. They invest
the money which is collected from investors from diverse backgrounds into
shares of different companies. The returns or losses are determined by how
these shares perform (price-hikes or price-drops) in the markets. As equity
funds come with a quick growth, the risk of losing money is comparatively
higher than expected.

b. Debt Funds:
Debt funds invest in fixed-income securities like bonds debentures,
securities and treasury bills, Fixed Maturity Plans (FMPs), Gilt Fund, Liquid
Funds, Short Term Plans, Long Term Bonds and Monthly Income Plans and
others with fixed interest rate and maturity date.

c. Money Market Funds:

Just as some investors trade stocks in the stock market, some trade money
in the money market, it is also known as capital market or cash market. It’s
usually running by the government, banks or corporations by issuing money
market securities like bonds, Treasury bills, dated securities and certificate
of deposits among others. The fund manager invests your money and
distributes regular dividends to you in return. If you opt for a short-term plan
(13 months max), the risk is relatively less.

d. Hybrid Funds:
As the name implies, Hybrid Funds (also called by the name of Balanced
Funds) is an optimum mix of bonds and stocks, thereby bridging the gap
between equity funds and debt funds. The ratio can be variable or fixed. It
takes the best of two mutual funds by distributing, in a particular ratio of
assets in stocks and the rest in bonds or vice versa.

13
2. Mutual Fund Types Based on Structure

a. Open-Ended Funds:
These funds don’t have any constraints with the time period or number of units
an investor can trade funds at their convenience and exit when they like at the
current NAV (Net Asset Value). This is why its unit capital changes constantly
with new entries and exits. An open-ended fund may also decide to stop taking
in new investors if they do not want to (or cannot manage large funds).

b. Closed-Ended Funds:
Here, the unit capital to invest is fixed beforehand, and hence they cannot sell
a more than a pre-agreed number of units. Some funds also come with an NFO
period, wherein there is a deadline to buy units. It has a specific maturity tenure
and fund managers are open to any fund size, however large. SEBI mandates
investors to be given either repurchase option or listing on stock exchanges to
exit the scheme.

c. Interval Funds:
This has traits of both open-ended and closed-ended funds. Interval funds can
be purchased or exited only at specific intervals (decided by the fund house)
and are closed the rest of the time. No transactions will be permitted for at least
2 years. This is suitable for those who want to save a lump sum for an
immediate goal (3-12 months).

14
3. Mutual Fund Types Based on Investment Goals

a. Growth Funds:
Growth funds usually put a huge portion into shares and growth sectors,
suitable for investors who have a surplus of idle money to be distributed in
riskier plans with higher returns or are positive about the scheme.

b. Income Funds:
This belongs to the family of debt mutual funds that distribute their money in a
mix of bonds, certificate of deposits and securities. Skilled fund managers who
keep the portfolio in tandem with the rate fluctuations without compromising on
the portfolio’s creditworthiness, Income Funds have historically earned
investors better returns than any other deposits and are best suited for risk
averse individuals from a 2-3 years of perspective.

c. Liquid Funds:
Like Income Funds, these too belongs to the debt fund category as they invest
in debt instruments and money market with a tenure up to 91 days. The
maximum sum allowed to invest is Rs 10 lakhs. One feature that differentiates
Liquid Funds from other debt funds is that how the Net Asset Value is calculated
– NAV of liquid funds are calculated for 365 days (including Sundays) while for
others, only business days are calculated.

d. Tax-Saving Funds:
ELSS or Equity Linked Saving Scheme is gaining popularity in recent times as
it serves investors the double benefit of building wealth as well as saves on
taxes all in the lowest lock-in period of only 3 years. Investing initially in equity
(and related products), has been known to earn non-taxed returns from 14%-
16%. This is best suited for long-term and salaried investors.

15
e. Aggressive Growth Funds:
Slightly on the riskier side, when choosing where to invest in, Aggressive
Growth Fund is actually designed to make steep or huge monetary gains.
Though susceptible to market volatility, people may choose one as per the beta
(the tool to gauge the fund’s movement in comparison with the market).
Example, if the market shows a beta of 1, an aggressive growth fund will reflect
a higher beta, example 1.10 or above.

f. Capital Protection Funds:

If protecting your principal is the major priority, Capital Protection Funds will
serve the purpose while earning relatively smaller returns (12% maximum). The
fund manager invests a portion of your money in bonds or Cash Deposits and
the rest in equities. You will not incur any kind of loss. However, you need at
least 3 years (closed-ended) to safeguard your money but the returns are
taxable.

g. Fixed Maturity Funds:

Investors choose as the FMP ends to take advantage of triple indexation,
thereby bringing down the tax burden. If a person is uncomfortable with the debt
market trends and related risks, Fixed Maturity Plans (FMP) – investing in
bonds or securities, money market etc. have a great opportunity. As a close-
ended plan, FMP functions on a fixed maturity period, which could range from
about 1 month to 5 years (like FDs). The Fund Manager makes sure to put the
money in an investment with the same tenure, to reap accrual interest at the
time of FMP maturity.

h. Pension Funds:
Putting away a portion of your income in a chosen Pension Fund to accrue over
a long period to secure you and your family’s financial future after retiring from
the regular employment it can take care of most contingencies (like a medical
emergency or children’s wedding). Relying solely on savings to get through
your old age years is not recommended as savings get used up. EPF is an
example, but there are many lucrative schemes offered by banks, insurance
firms etc.
16
4. Mutual Fund Types Based on Risks

a. Very Low-Risk Funds:

Liquid Funds and Ultra Short-term Funds (1 month to 1 year) are not risky at
all, and understandably their returns are low (6% at best). Investors choose this
to fulfil their short-term financial goals and to keep their money safe until then.

b. Low-Risk Funds:
In the event of rupee depreciation or unexpected national crisis, investors are
unsure about investing in riskier funds. In such cases, fund managers
recommend putting money in either one or a combination of liquid, ultra-short-
term or arbitrage funds. Returns could be 6-8%, but the investors are free to
switch when valuations become more stable.

c. Medium-risk Funds:
Here, the risk factor is of medium level as the fund manager invests a portion
in debt and the rest in equity funds. The NAV is not that volatile, and the average
returns could be 9-12%.

d. High-risk Funds:
Suitable for investors with no risk aversion and aiming for huge returns in the
form of interest and dividends, High-risk Mutual Funds need active fund
management. Regular performance reviews are mandatory as they are
susceptible market volatility. You can expect 15% returns, though most high-
risk funds generally provide 20% returns (and up to 30% at best).

17
Types Of Mutual Funds In A Flow Chart:

18
 CHAPTER 2

REVIEW OF LITERATURE

S. Anand and V. Murugaiah (2006) in the paper “Analysis of Components of

Investment Performance - An Empirical Study of Mutual Funds in India” examined the
components and sources of investment performance in order to attribute it to specific
activities of Indian fund managers. The author also attempted to identify a part of
observed return which is due to the ability to pick up the best securities at given level
of risk. The study concluded that the influence of market factor was more severe during
negative performance of the funds while the impact selectivity skills of fund managers
was more than the other factors on the fund performance in times of generating
positive return by the funds. It was also observed from the study that selectivity,
expected market risk and market return factors have shown closer correlation with the
fund return.

Rao, D. N. and Rao, S. B. (2009) had done a research on the general perceptions
which commonly had the belief that Indian Investors and Fund Managers are that (A)
Market outperforms Balanced and Income Funds during Bull run of the market (B)
Balanced and Income Funds outperform the stock market during Bear run (C) Market
outperforms Balanced and Income Funds over a long holding period (minimum three
years). The objective of the study was to empirically to investigate whether the above
stated perceptions are valid in the Indian context.

Ms. Nidhi Walia, Dr (Ms) Ravi Kiran (2010) in the paper “Efficient Market Hypothesis,
Price Volatility, and Performance of Mutual Funds” The study states that Mutual fund
organizations have responsibility towards investors to provide them optimal returns
using their abilities to efficiently tap market timings along-with desired diversification.
It can be concluded from the research that the modern investor is a mature and
adequately groomed person. In spite of the phenomenal growth in the security market
and quality Initial Public Offerings (IPOs) in the market, individual investors prefer
investments according to their risk preference.

19
For e.g. Risk adverse chooses life insurance policies, fixed deposits with banks and
post office, PPF and NSC. Occasions of blind investments are scarce, and as a
majority of investors are found to be using some source and reference groups for
taking their decisions. Though they are in the trap of some kind of cognitive illusions
such as overconfidence and narrow framing, they consider multiple factors and seek
diversified information before executing some kind of investment transaction.

Deepak Agrawal (2011) in the study “Measuring Performance of Indian Mutual Funds”
This article provides an overview of mutual fund activity of the emerging markets. It
described about their size and asset allocation. The paper is a process to analyse the
Indian Mutual Fund Industry pricing mechanism with empirical studies on its valuation.
The data is also analysed at both the fund-manager and fund-investor levels. The
study revealed that the performance is affected by the saving and investment habits
of the people and the second side the confidence and loyalty of the fund Manager and
rewards affects the performance of the MF industry in India.

Dr. Sandeep Bansal, Deepak Garg and Sanjeev K Saini (2012), have studied
Impact of Sharpe Ratio & Treynor’s Ratio on Selected Mutual Fund Schemes. This
paper examines the performance of selected mutual fund schemes, that the risk profile
of the aggregate mutual fund universe can be accurately compared by a simple market
index that offers comparative monthly liquidity, returns, systematic & unsystematic risk
and complete fund analysis by using the special reference of Sharpe ratio and
Treynor’s ratio.

Singh B K (2012) in an article “A study on investors’ attitude towards mutual funds as

an investment option” The study concluded that the existing investors point of view the
benefits provided by mutual funds like return potential and liquidity have been
perceived to be most attractive by the invertors’ followed by flexibility, transparency
and affordability.

20
Narayanasamy R. and Rathnamani V (2013) in an article “Performance Evaluation
of Equity Mutual Funds (on selected Equity Large Cap Funds)” From International
Journal of Business and Management Invention have mentioned that all funds
performed well during the period under study despite volatility in the market. The fall
in NIFTY during the year 2011 impacted the performance of all selected mutual funds.

Jani D and Jain R (2013) in an article “Role of Mutual Funds in Indian Financial
System as a Key Resource Mobilizer” from Abhinav Journal (International Monthly
Referred Journal of Research in Management & Technology) have reiterated that
since fundamentals of Indian economy are relatively strong, the economy will be on a
successful path in the coming year. As economy grows, Mutual Funds are going to be
key resource mobilizer for Indian financial system. Indian Mutual Fund industry is
going to observe good growth rate in near Future.

Kesavraj, G. (2013) tried to know the investors perception and awareness level
towards mutual fund. The author took a sample of two hundred & four respondents to
know their investing power & their interest in financial products. It was found that eighty
eight percent respondents agreed that mutual fund could provide a high return & less
risky. Seventy three percent respondents were aware about different tax benefits by
investing in mutual fund and it was also found that eighty percent respondents were
satisfied by investing in mutual fund.

Sachdev R and Ranjan P (2014) in the article “A study on Investor’s perception

towards mutual fund investment” from Scholars Journal of Economics, Business and
Management have mentioned that mostly people are preferring balanced funds and
debt funds. After that people look for Equity diversified and Sector funds. The factors
responsible for investors’ preference for mutual funds as an investment option are
benefits and transparency, returns, redemption period, Liquidity and Institutional
Investor’s activity. For information on mutual funds people are mostly depending on
internet rather than any other media channels.

21
Adhav & Chauhan (2015) assessed & compared the performance of mutual fund
schemes of selected Indian companies by standard deviation & Sharpe’s Ratio. They
found that the selected equity mutual funds performed better than their normal indices.
It was seen from the study that risk for debt fund was much lower than that of the
equity funds. The authors concluded that equity-oriented hybrid funds were performing
better than the other type of hybrid funds and arbitrage fund & conservative debt hybrid
funds showed worst performance.

Wadhwa, B.; Kaur, D. & Vashist, A. (2015) studied the factors responsible for the
selection of mutual fund as an investment option and also analysed the impact of
various demographic variables on investors attitude towards mutual One third
respondents had given positive response and half of them had neutral response
towards mutual fund. The authors found significant association between attitude and
demographic features of respondents such as: age, gender, income & occupation and
level of savings. It was also found that no significant association between education &
attitude towards mutual funds.

Ayaluru, M.P. (2016) worked to evaluate the performance of ten open ended equity
schemes of Reliance Mutual Fund. The study was held in august 2014. The study
highlighted that all the selected funds performed above the selected normal return.
Further, Jensen measure revealed that all the selected schemes showed positive
alpha. According to beta values out of ten schemes, only four schemes showed high
risk. In this study Reliance Pharma Fund had highest value and Reliance Diversified
Power sector had lowest value of Sharpe & Treynor ratio.

22
 CHAPTER 3

RESEARCH METHODOLOGY

3.1 Title of Study

“The Study On The Attitude Of The Working Class Towards Mutual Funds”

3.2. Objectives

 To understand why the working class prefers investing in mutual funds over the
other financial instruments available in the market
 To understand the growth of mutual funds in the recent past.
 To find measures in order to spread awareness about mutual funds.
 To analyse the risk and return ratio of mutual funds from the perspective of a
working class individual.

3.3. Details 


• Date Survey Began: 02/03/19 


• Date Survey Ended: 29/3/19 


• Population: People living in Mumbai

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3.4. Research Design 


 Qualitative Research:
Qualitative research is defined as a market research method that focuses on
obtaining data through open-ended and conversational communication.
 This
method is not only about “what” people think but also “why” they think so.
Therefore, the qualitative research methods allow for in-depth and further
probing and questioning of respondents based on their responses, where the
interviewer/researcher also tries to understand their motivation and feelings.


 Exploratory Research:
Exploratory research, as the name implies, intends merely to explore the
research questions and does not intend to offer final and conclusive solutions
to existing problems. This type of research is usually conducted to study a
problem that has not been clearly defined yet. Exploratory research design
does not aim to provide the final and conclusive answers to the research
questions, but merely explores the research topic with varying levels of depth.

A detailed qualitative and exploratory research framework and survey was created in
order to understand the depth of the study. The structure of the questions was such
that it captured all the key variables and elements required for the perfect qualitative
study. Insights was taken from each response in order to understand the depth of the
study.

3.5. Sampling Size & Techniques

• Sample Size : 151

• Male Respondents : 89
• Female Respondents : 62
• Age Range : 20-60

3.6. Sampling Techniques

• Cluster Sampling

24
 • Geographic Sampling

3.6. DATA COLLECTION TOOLS 


• Primary Data:
Data was collected through questionnaires designed for consumers. The main
reason for using a survey to collect responses was due to the fact that a large
number of responses could be gathered in a short period of time.
 A small
group discussion with 8 individuals was held where participants were made to
fill in the same survey. However, more information was gathered due to face
to face communication.

Number Of Survey Questions Asked: 20 (To ensure an in-depth analysis)

Types Of Survey Questions Asked: Multiple Choice, Checkboxes, Linear

Scale, Short Answer.


Flow Of The Survey: The survey starts by making respondents aware of the
topic and then goes on to analyse their receptiveness and knowledge on the
matter.

• Secondary Data:
Journals, newspaper reports & articles and different internet sources were
referred for collecting secondary data. 


• Statistical Techniques Used:

Pie Charts, Bar Graphs, Averages.

3.8. LIMITATIONS OF RESEARCH

 Biasness may have occurred due to individuals not filling the questionnaire in
an appropriate way.
 There was limited access to data.

25
 The research area was only limited to respondents in Mumbai and the results
may or may 
 not be applicable elsewhere in the world 


 The scarcity of time and resources was a major constraint while conducting this

research .

 The sample size was mainly restricted to college going students and working
professionals.
 Some dimensions like personality and other psychological factors could not be
studied as the size of the questionnaire was to be kept reasonable acceptable

to the respondents. 


 Qualitative Data could not be collected on this topic as research done was
quantitative in nature.

26
 CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

1. Please specify your age.

Upto 18 19-25 26-30 Above 30 Total

3 50 9 89 151

Interpretation :
 According to the chart, the majority of responses collected (58.9%) fall under
the category of above 30 years of age indicating that they are the working class.

 The next highest is 33.1% who come under the category of 19-25 years of age
who are students about to start working.

27
  The remaining 8% was received from individuals between 26-30 years of age.

2. Please specify your gender.

Male Female Total

89 62 151

Interpretation :
 The male responses (58.9%) is slightly higher than the female responses
(41.1%) helping me get an accurate analysis of each gender.

28
 3. Please specify your occupation.

Student Self Employed / Working Total

Business
39 44 68 151

Interpretation:
 The majority of the responses (45%) was from the working class itself.
 This was followed by the businessmen (29.1%).
 The remaining (25.8%) was filled by students.

29
 4. Please specify your salary(per annum).

Upto 4L 4L-12L 13L-24L Above 24L Total

54 46 23 28 151

Interpretation :
 There is a close match between individuals who are earning upto 4 lacs (35.8%)
and those earning between 4-12 lacs(30.5%).
 There is a close match between individuals earning above 24 lacs (18.5%) and
those earning between 13-24 lacs(15.2%) as well.

30
 5. Please specify the percentage of savings from your total income.

<=10% <=25% <=50% >50% Total

53 69 22 7 151

Interpretation :
 Majority of the people save an amount between 5-25% of their income
annually and plan on mobilising those funds.
 There are a few people belonging to the higher group of income who save
and invest (30-70%) in higher risk products to get higher returns.

31
 6. Please specify where do you invest your savings.

Savings Fixed Shares / Mutual Gold / Others

Bank Deposits Debentures Funds Silver

69 54 52 77 31 12

Interpretation :

• Majority of the people prefer investing in Mutual Fund schemes itself (51%).
• The working class also invest in a Savings Bank account & Fixed Deposits
since it is quite safe and provides moderate returns.

32
 • Gold and silver are also a good investment option but not many people are into
it yet.

7. Please specify the securities you invest in fall under which category.

High Risk / High Low Risk / Low Low Risk / High Total
Return Return Return
86 40 25 151

Interpretation:

• It is seen above that more than half of the respondents (57%) look at earning
high returns but at low level of risks.
• This is followed by individuals who prefer investing in those schemes which
give low returns at low risks (26.5%).

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 • There is a very small percentage of individuals (16.6%) who are risk takers for
higher returns.

8. Please specify if you know about Mutual Funds.

Yes No Maybe Total

123 7 21 151

Interpretation :

• Most of the individuals (81.5%) are aware about mutual funds

• Some of them (13.9%) do not have complete knowledge about mutual funds.
• A very small number of people are completely unaware about mutual funds.

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 9. Please specify if you are an investor in Mutual Funds.

Yes No Maybe
96 55 151

Interpretation:

• As seen above, more than half of the individuals (63.6%) are investors in
mutual funds.

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 • There is a small proportion of individuals (36.4%) who do not invest in mutual
funds.

10. If not, please specify why.

Unsatisfactory No Knowledge Related to Others Total

Returns Share Market
16 30 20 7 73

Interpretation :

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 • The main reason why some individuals do not invest in mutual funds is
because they do not have complete knowledge (41.1%) of it.
• Some of them (27.4%) think it is risky since it is related to the share market.
• The others (21.9%) are dissatisfied with the returns.

11. Please specify why do you invest in Mutual Funds.

Better than the Assured & Diversification Simple to Others

share market Consistent of Risk understand
Return
53 36 55 37 10

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Interpretation :

• It is seen that the main reason respondents (42.3%) invest in Mutual Funds is
because it diversifies the risk.
• This is followed by respondents thinking that it is better to invest here rather
than the share market directly (40.8%) since there is low risk.
• Some of the respondents (28.6%) are assured of consistent returns.

12. Please specify your investment pattern.

Monthly Quarterly Half Yearly Yearly Total

85 22 17 27 151

Interpretation :

• Majority of the people (56.3%) invest in a monthly (SIP) plan.

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 • There are small percentages of respondents investing in quarterly (14.6%),
half yearly (11.3%) and yearly(17.9%) plans.

13. Please specify your expected returns.

Low Return Moderate Return High Return Total

12 119 20 151

Interpretation:
• Majority of the individuals (78.8%) expect moderate returns.

39
 • A small amount of individuals (13.2%) and (7.9%) expect high returns and low
returns respectively.

14. Please specify the level of risk of investing in Mutual Funds.

1 2 3 4 5 Total
10 31 84 21 5 151

Interpretation:

40
 • It is seen that more than half of the respondents (55.6%) think that the risk is
neutral.
• Hardly 17% of the respondents think that it is risky.
• It is seen that 26% of the individuals think that it is not at all risky.

15. Please specify the level of confidence of investing in Mutual Funds.

1 2 3 4 5 Total
6 11 67 54 13 151

Interpretation :

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 • It is seen above that 44.4% of the people are neutral about the level of
confidence while 44.8% of them are very confident about investing in mutual
funds.
• There is a very small proportion (12%) of people who are not confident.

16. Please specify in order of importance, the advantages on investing in Mutual

Funds.

Interpretation :

• Safety – There is a good amount of trust that the individuals need before
investing in mutual funds.
• Liquidity – The funds should be liquidated easily if & when required by the
individuals.
• Return Potential – There should be moderate returns with the principal
investment being safe.
• Low Cost – The cost of these mutual fund plans should not be much since it is
a moderate plan for the working class.

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 17. Please specify your source of information of Mutual Funds.

Financial Brokers Internet Newspapers Advertisements Others

Institutions

43
 51 68 65 46 27 16

Interpretation:

• Most of the individuals gain information of mutual funds from the brokers
(45%), internet (43%) and financial institutions (33.8%).
• There is abundant knowledge available from newspapers (30.5%) and
advertisements (17.9%) as well.

18. Please specify how you invest in Mutual Funds.

Direct Brokers Agents Others

45 71 49 9

Interpretation :

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 • The highest percentage (47%) of respondents investing in mutual funds is via
brokers.
• This is followed by agents (32.5%) and direct purchase (29.8%) by the
individuals.

19. Please specify if Mutual Funds are risk free investments.

Yes No Maybe Total

28 70 53 151

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Interpretation :

• As seen above, nearly half of the respondents (46.4%) think that mutual funds
are not risk free investments.
• Around 35.1% of them are not sure whether it is a risky or risk free
investment.
• A bare minimum of 18.5% people think that it is a risk free investment.

CHAPTER 6

FINDINGS

 Mutual Funds were introduced in the Indian financial system with a view to provide
comparatively safer investment at the doorstep of the common investors. In this
study an attempt has been made to study the growth of various types of mutual
funds, performance of mutual fund with special reference to mobilization of
savings, investment pattern.
 In the above research majority of the respondents are above the age of 30.
 In a total of 151 respondents, most of them are the working class and businessmen.
 Many respondents know about mutual funds and invest upto a certain extent since
they do not have complete knowledge about it.
 The working class usually want higher returns at lower risks for profit maximisation
and risk minimisation.
 There are many mutual fund schemes available in the market which the people are
not even aware of unless their broker updates them.
 The factor given the most importance is the safety of the principal investment .

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 In the research carried out it was clearly seen that the respondents were keen on
investing with Systematic investment plan (SIP) rather than one-time investment.
 The average saving of the people for investment activity is usually below 25%
which is a good sign even in these days of inflation.
 It is also found that many of the respondents feel that mutual funds are a better
investment plan rather than other investments (shares, debentures, real estate,
insurance) since this is a pool of money which is given to the AMCs to invest with
their expertise. The formation of the portfolio is diverse with investments in different
types of stocks and debentures, thereby, utilising the investor’s money in the most
optimum way.
 It has been seen that advertisements have played an important role in spreading
awareness among people about mutual funds, as they came to know about it
through advertisement and peer groups.
 A few of the respondents wouldn’t mind investing in highly volatile investments
where the risk is also higher.
 Mutual funds are not risk free investments since they can be volatile in nature.
 The agents and brokers are the means to invest in these plans mainly.

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 CHAPTER 7

RECOMMENDATION AND SUGGESTIONS

 The most important problem noticed is that all of them are not aware of mutual
funds and the various schemes offered so, all the investors should be made aware
of it with the help of financial advisors, banks and advertisements. Not only the
schemes but also the various benefits offered by mutual funds.
 The financial advisors also should be given proper training as to mutual funds as
they are the only main source to the general public
 Young people around 18-25 should be exposed to the markets as they will be the
key investors in few years so, making great efforts with young people who are
interested in investing should pay off.
 Systematic Investment Plan (SIP) is one of the innovative products launched by
the asset management company. SIP monthly plans are very good for the salaried
class people as it provided to do investment on EMI basis. Therefore, there is huge
scope with salaried people

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 The government should also try to encourage people to save more part of their
income towards investing as it provided great opportunity in making money and
learning about the markets.
 Mutual fund companies can also send their magazine showing their annual report
regarding mutual funds to draw the customers attention towards mutual funds
 Proper professional management should be there with all the AMC mutual fund
companies
 Many people do not invest in mutual funds is cause of no trust and the risk of fraud
therefore, the government should make sure that all the mutual fund companies
abide by all the guidelines by SEBI and follow all rules and regulations properly.
 All the mutual fund companies should come up with various new schemes as to
meet the requirement of different investors as all investors do not have the same
expectations and money to give out also the level of risk, they are willing to take.
 Transparency should be maintained by all mutual fund companies and the
manager to the investors which will create good faith amongst them.

 Introduce more Arbitrage funds which can blossom during boom period and can
withstand recession period. SBI Arbitrage Opportunity fund is one of the funds
which have not given a negative return during the period of April 07 to March 09.
Arbitrage funds will provide the hedging opportunities to Mutual Funds.
 Designing schemes tailored to the needs and preferences of rural and semi urban
areas
 Recruitment of agents from rural areas who are conversant with the local
languages.
 Advertising the schemes in media that has access to the rural and semi-urban
investors.
 Setting up of special investment cells in rural and semi-urban areas. vi More tax
incentives be given to investor of mutual fund. For the spurt growth of mutual fund
industry more Equity-Linked Saving Schemes (ELSS) schemes should be
launched which yield high return and better liquidity.

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 CHAPTER 8

CONCLUSION

Mutual funds are funds that pool the money of several investors to invest in equity or
debt markets. It is an investment vehicle made up of a pool of money collected from
many investors for the purpose of investing in securities such as stocks, bonds, money
market instruments and other assets. Mutual funds are operated by professional
money managers, who allocate the fund's investments and attempt to produce capital
gains and/or income for the fund's investors. Mutual Funds could be Equity funds, Debt

funds or balanced funds. There are various types of mutual fund like open ended,

close ended, SIP, guilt funds etc. mutual funds provide tax benefit, a diverse portfolio
which is controlled and regulated by professionals of AMC. Also, it has a lot of cost
incurred while investing in mutual funds. It can be calculated by various methods i.e.
NAV method which is mostly used by AMCs, SIP plans are also calculated with
different formulas.

50
After doing the research it was evident that most of the people invest in mutual funds
but due to lack of knowledge, they aren’t aware about all the schemes. They prefer
investing in long/large cap funds and liquid funds. SIPs are the most preferred
investment pattern by most of them than one-time investment. In general people aren’t
ready to take high level of risk they would like to protect their capital, only a few of
them are ready to take high risk. HDFC, ICICI Prudential funds are the most popular
and most invested type of mutual funds.
Majority of the people think that mutual fund is a better investment option and will help
in economic development in near future because its one of the safest modes of
investment and offers various schemes to meet the needs of the people according to
their risk-taking capacity and money is invested with the professionals of the AMCs
which means the money is used efficiently and with proper guidance.
Proper awareness programmes should be taken up by the government to make people
aware about mutual funds and its benefits.

BIBLIOGRAPHY

• https://www.investopedia.com/university/quality-mutual-fund/chp4-fund-risk-
return/
• https://www.amfiindia.com/investor-corner/knowledge-center/history-of-MF-
india.html#accordion4
• https://cleartax.in/s/advantages-disadvantages-mutual-funds
• https://www.getsmarteraboutmoney.ca/invest/investment-products/mutual-
funds-segregated-funds/how-mutual-funds-work/
• https://economictimes.indiatimes.com/wealth/invest/how-to-calculate-returns-
on-sip-of-mutual-funds/articleshow/53841350.cms
• https://www.fundsindia.com/blog/mf-research/mutual-funds/fundsindia-views-
2019-equity-and-debt-outlook/14654
• https://www.scribd.com/document/213942591/
• http://www.forbesindia.com/article/brand-connect/mutual-funds-what-does-
the-future-hold/51481/1
• http://shodhganga.inflibnet.ac.in/handle/10603/23447

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 • www.bankbazaar.com/mutual-fund/how-to-invest-in-mutual-funds.html
• https://en.wikipedia.org/wiki/Mutual_funds_in_India
• https://www.investopedia.com/terms/m/mutualfund.asp
• http://blog.easylife.in/12-important-mutual-fund-terms-you-must-know-about/
• Www. Realinvestjournal.com
Www.indianmba.com
Www.investopedia.com
• https://www.slideshare.net/PriaVishwakarma/sebimutualfunds
• https://taxguru.in/finance/mutual-funds-better-than-traditional-investment-
options.html
• https://www.moneyfront.in/blog/why-invest-in-mutual-funds-vs-other-
investment-options_34
• https://www.thehindubusinessline.com/markets/huge-growth-potential-for-
mutual-fund-industry-in-india-hdfc-amc/article24462157.ece \

ANNEXURE

1. Age :
 Less than 18
 19-25
 26-30
 Above 30

2. Gender :
 Male
 Female

3. Occupation :
 Student
 Self employed / Business
 Working

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4. Salary Range (per annum) :
• Upto 4L
• 4L-12L
• 13-24L
• Above 24L

5. What is the percentage of savings from your total income?

 <=10%
 <=25%
 <=50%
 >50%

6. Where do you invest your savings?

 Savings Bank
 Fixed Deposit
 Shares / Debentures
 Mutual Funds
 Gold /Silver

7. You invest in the financial instruments / securities which give?

 High Risk / High Return
 Low Risk / Low Return
 Low Risk / High Return

8. Do you know about Mutual Funds?

 Yes
 No
 Maybe

53
9. Are you an investor in Mutual Funds?
 Yes
 No

10. If No, due to which reasons :

 Unsatisfactory returns as compared to other financial instruments
 No knowledge on investing
 It is related to share market, so it is very risky and the returns are not
guaranteed
 Mis-selling of the product

11. You invest in Mutual Fund Schemes because :

 Its better to invest in Mutual Funds rather than investing directly in shares
 They give assured and consistent return
 Mutual funds diversify the risk of the investor by investing in a basket of assets
 Very simple to invest & monitor fund performance on a regular basis
12. How is your investment pattern?
 Monthly (SIP)
 Quarterly
 Half Yearly
 Yearly

13. What are your expected returns in Mutual Funds?

 Low Return
 Moderate Return
 High Return

14. On a scale of 1 to 5, how risky do you think investing in Mutual Funds is?
 1 (Low Risk)
 5 (Very High Risk)

15. On a scale of 1 to 5, what is your level of confidence upon investing in Mutual

Funds?

54
  1 (Not at all Confident)
 5 (Very Confident)

16. Rate in order of importance (1 to 5) the advantages on investing in Mutual Funds:

 Safety
 Liquidity
 Return Potential
 Low Cost
 Choice of Schemes

17. Where do you gather information about the performance of different Mutual Fund
schemes?
 Financial Institutions
 Brokers
 Internet
 Newspapers
 Advertisements

18. How do you invest in Mutual Funds?

 Direct
 Brokers
 Agents

19. Can Mutual Funds be viewed as Risk Free Investments?

 Yes
 No
 Maybe

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