A PROJECT REPORT

ON
“STUDY OF INVESTMENT BEHAVIOUR”
(WITHIN MUTUAL FUND)

SUBMITTED IN
PARTIAL FULFILLMENT FOR
THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

FEBUARY-MARCH 2006

GUIDED BY:
ALPESH SHAH

SUBMITTED BY:
SWETA. M. TRIVEDI
MBA - IV

SHREE H.N.SHUKLA COLLAGE OF MANAGEMENT STUDIES

RAJKOT.
SAURASHTRA UNIVERSITY.

SUBMITTED TO
SAURASHTRA UNIVERSITY

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 STUDENT DECLARATION

I, the undersigned hereby declare that the project title, “Study of Investment
Behaviour (in Mutual Fund ) “ has been executed as per the course requirement for
Masters in Business Administration programme under Saurashtra University.

It was my own personal work and study. It has not been submitted by me or any
other person or University or institution of Degree or diploma.

The above said project is true and complete to my knowledge, under the
guidance of our institute and representatives.

TRIVEDI SWETA
MOHJITKUMAR
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 Acknowledgement

Any work, grate or small, is made successful only by the combination of efforts
and contribution of expertise by many people.

At this point, I would like to take this opportunity to thank of the people whom I
owe a debt of gratitude towards the completion of this project.

This project could not have been successfully completed, were it not for the
ensured and timely guidance of my corporate project guides, Mr,Anil
Nambiya(Manager, Mahindra Finance Services Limited, Baroda) and Mr. Darshit
Nanavaty(territory Manager, Rajkot).

Also, this project would not have been so effective and precise, were it not for
the guidelines given by my project guide, Dr Girish Bhamani.

Finally, I would also like to thank all those who have direct of indirect helps and
supported me for successful completion of this report.

Once again, I thank them all for the guidance, support and attention.

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 .

TRIVEDI SWETA MOHJITKUMAR

CONTENTS
SR. PARTICULARS PAGE
NO NO.
PREFACE
1 INDUSTRY PROFILE 7
2 COMPANY PROFILE 16
3 OBJECTIVE OF PROJECT 18
4 SCOPE OF PROJECT 20
5 HYPOTHESIS AND LIMITATION 22
6 RESEARCH METHODOLGY 24
7 THEORITICAL BACKGROUND 27
8 DATA ANALYSIS AND INTERPRETATION 41
9 FINDINGS 52
10 RECOMMENDATIONS 54
11 CONCLUSION 56
ANNEXURE 58
BIBLOGRAPHY 60

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-5-
 The word, ‘PROJECT’ has a great important in the development of new idea or
technique. The importance of this word becomes more specific for academic purpose
especially with when it comes to financial management. Each character of this word
represent a phase of management.

P = Planning

R = Resources

O = Operation

J = Joint Efforts

E = Effectiveness

C = Collect

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 T = Techniques

Thus PROJECT means planning, resources, operations, joint effort,

effectiveness, collect and techniques. When all these factors are combing properly and
efficiently, one can built up a successful.

Students of Masters of Business Administration learn different concepts in their

curriculum. This provides them with the theoretical knowledge of management. But if
students can not apply it practically. The purpose of commencement of project is to
make student aware of how to implement the theoretical knowledge in practical
problems.

This project provides brief information about awareness regarding financial

Planning and Mutual Fund concept.

INDUSTRY
PROFILE
 History of Mutual Funds In India
• Phase –I: 1964-87 (Unit Trust Of India)
• Phase- II: 1987-93 (Entry of Public Sector Units)

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 • Phase- III: 1993-2003 (Emergence of Private Funds)
• Phase – IV: 2003 Onwards (Current Scenario)

Mutual funds now perhaps the most appropriate investment opportunity for most
investors. As financial markets become more sophisticated and complex, investors need
a financial intermediary who provides the required knowledge and professional expertise
on successful investing. It is no wonder then that in the birthplace of mutual funds – the
U.S.A. – the fund industry has already overtaken the banking industry, more funds being
under mutual fund management than deposited with banks.

HISTORY OF MUTUAL FUNDS IN INDIA

The mutual fund industry in India started in 1963 with the formation of Unit
Trust of India, at the initiative of the Reserve Bank and the Government of India. The
objective then was to attract the small investors and introduce them to market
investments. Since then, the history of mutual funds in India can be broadly divided into
four distinct phases.
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Phase – I: 1964 – 87 (Unit Trust of India)

In 1963, UTI was established by an Act of Parliament and given a monopoly.

Operationally, UTI was set up by the Reserve Bank of India, but was later de-linked
from the RBI. In 1978, Industrial Development Bank of India took over as regulatory
and controlling body. The first scheme launched by UTI was US-64. Over the years,
US-64 attracted, and probably still has, the largest number of investors in any single
investment scheme. It was also at least partially the first open-end scheme in the
country, now moving towards becoming fully open-end.
The mutual fund industry in India not only started with UTI, but also still counts
UTI as its largest player with the largest corpus of investible funds among all mutual
funds (Approximately 36)* currently operating in India.
At the end of Phase One, UTI had grown large as evidenced by the following
statistics:

1964 – 87**
Amount Assets Under
Mobilised Management
(Rs. Crores) (Rs. Crores)
UTI 2,175 6,700
Total 2,175 6,700

Phase – II: 1987 – 93 (Entry of Public Sector Funds)

1987 marked the entry of non-UTI, Public Sector mutual funds, bringing in
competition. With the opening of the economy many public sector banks, and financial
institutions were allowed to establish mutual funds. The State Bank of India established
the first non-UTI mutual fund – SBI mutual fund – in November 1987. This was
followed by CanBank Mutual Fund (launched in December in 1987), LIC Mutual Fund
(1989), and Indian Bank Mutual Fund (1990) followed by Bank of India Mutual Fund,
GIC Mutual Fund and PNB Mutual Fund. These mutual funds helped enlarge the
investor community and the investor funds. In this period, the fund industry expanded
nearly seven times in terms of Assets Under Management, as seen in the following
figures:

1992-1993*
Amount Assets Under
*
Source: AMFI
**
Source: AMFI
*
Source: AMFI
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 Mobilised Management
(Rs. Crores) (Rs. Crores)
UTI 11,057 38,247
Public Sector 1,964 8,757
Total 13,021 47,004

Phase – III: 1993 – 2003 (Emergence of Private Funds)

A new era in the mutual fund industry began with the permission granted for the
entry of private sector funds in 1993, giving the Indian investors a broader choice of
‘fund families’ and increasing competition for the existing public sector funds. Quite
significantly, foreign fund management companies were also allowed to operate mutual
funds, most of them coming into India through their joint ventures with Indian
promoters. These private funds have brought in with them the latest product innovations,
investment management techniques and investor-servicing technology that make the
Indian mutual fund industry today a vibrant and growing financial intermediary.
The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the
first private sector mutual fund registered in July 1993. 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.

Phase – IV: Fourth Phase

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 Ltd, 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
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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. As at the end of October 31, 2003, there were 31 funds, which
manage assets of Rs.126726 crores under 386 schemes.

Mutual Fund Market *

Mutual Fund Data Of April 2004
(Rs. in Crores)

Released on 18th May 2004

Assets Under
Category Sales-All Schemes Redemption
Management
From
From new Total For Total For As on 30th
Existing
schemes the Month the Month Apr 2004
schemes
No. Amount Amount
A) Bank Sponsored
6 337 6311 6648 6957 27306
(4)#
B) Institutions (3) 1 331 2167 2498 1921 7112
C) Private Sector
1 Indian (8) - - 18635 18635 14919 23741
2 Foreign (1) - - 2827 2827 2371 4235
3 Joint
Ventures :
- - 15745 15745 12862 36326
Predominantly
Indian(5)
4 Joint
Ventures :
- - 25807 25807 19307 55304
Predominantly
Foreign (9)
Total (1+2+3+4) - - 63014 63014 49459 119606
Grand Total
7 668 71492 72160 58337 154024
(A+B+C)
*41985 *32932 *89238

Notes:
1. Data is provisional and hence subject to revision.
2. *Figures for corresponding period of last year.
*
Source: AMFI Website
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3. #The number of funds have come down from 5 to 4 on account of take-over of all
schemes of PNB Mutual Fund by Principal Mutual Fund w.e.f. 30th April, 2004.

TOTAL OF ALL SCHEMES (Rs. in Crores)

Open End Close End Total
No. Of No. Of No. Of
Amount Amount Amount
Schemes Schemes Schemes
Income 121 16147 9 810 130 16957
Growth 128 2245 2 - 130 2245
Balanced 33 270 3 - 36 270
Liquid/Money
36 51818 - - 36 51818
Market
Gilt 33 866 - - 33 866
ELSS 20 4 19 - 39 4
Total 371 71350 33 810 404 72160

ASSETS UNDER MANAGEMENT AS ON 30th April, 2004 (Rs. in

Crores)

Open End Close End Total % to Total

Income 66515 1793 68308 44.3
Growth 23175 1404 24579 16.0
Balanced 3425 796 4221 2.7
Liquid/Money
49065 - 49065 31.9
Market
Gilt 6196 - 6196 4.0
ELSS 511 1144 1655 1.1
Total 148887 5137 154024 100.0

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 ASSETS UNDER MANAGEMENT AS ON 30th April, 2004*

Asset Under Management

Sr. No. Name of the Asset Management Company
(Rs. in Crores)
A BANK SPONSORED
BOB Asset Management Co. Ltd. 476
Canbank Investment Management Services Ltd. 1552
SBI Funds Management Ltd. 5430
UTI Asset Management Company Pvt. Ltd. 19848
Total A 27306

B INSTITUTIONS
GIC Asset Management Co. Ltd. 235
IL & FS Asset Management Co. Ltd. 1858
Jeevan Bima Sahayog Asset Management Co. Ltd. 5019
Total B 7112

C1 PRIVATE SECTOR
(i) INDIAN
Benchmark Asset Management Co. Pvt. Ltd. 68
Cholamandalam Asset Management Co. Ltd. 1159
Escorts Asset Management Ltd. 144
J.M.Capital Management Pvt. Ltd. 4269
Kotak Mahindra Asset Management Co. Ltd. 5765
Reliance Capital Asset Management Ltd. 9867
Sahara Asset Management Co. Pvt. Ltd. 381
Sundaram Asset Management Company Ltd. 2088
Total C(i) 23741

C2 (ii) FOREIGN
Principal Asset Management Co. Pvt. Ltd. 4235
Total C(ii) 4235

(iii) JOINT VENTURES- PREDOMINANTLY

C3
INDIAN
Birla Sun Life Asset Management Co. Ltd. 9387

*
Source: AMFI website
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 Credit Capital Asset Management Co. Ltd. 159
DSP Merrill Lynch Fund Managers Ltd. 5813
HDFC Asset Management Co. Ltd. 15901
Tata TD Asset Management Private Ltd. 5066
Total C(iii) 36326

JOINT VENTURES - PREDOMINANTLY

C4
FOREIGN
Alliance Capital Asset Management (India) Pvt.
2381
Ltd.
Deutsche Asset Management (India) Pvt. Ltd. 2601
Franklin Templeton Asset Management (India)
17103
Pvt. Ltd.
HSBC Asset Management (India) Private Ltd. 5585
ING Investment Management (India) Pvt. Ltd. 1892
Morgan Stanley Investment Management Pvt. Ltd. 1303
Prudential ICICI Asset Management Co. Ltd. 15047
Standard Chartered Asset Mgmt Co. Pvt. Ltd. 9204
Sun F & C Asset Management (India) Pvt. Ltd. 188
Total C4(iv) 55304
Total C (i + ii +iii+iv) 119606
Total (A + B + C) 154024

Some Important Graphs

Indian Mutual Fund Industry (As On 30th April, 2004)

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 18%
Bank
5% Sponsored
Institutions

Private Sector

77%

Private Sector Distribution (As On 30th April, 2004)

Indian

20%
Foreign
4%
46%
JV-
Predominan-
tly Indian
30%
JV-
Predominan-
tly Foreign

ASSETS UNDER MANAGEMENT AS ON 30th April 2004

(In % of Total Asset Under Management)
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 Income

1.1 Growth
4

Balanced
31.9 44.3
Liquid/Money
Market
Gilt
2.7 16
ELSS

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COMPANY
PROFILE

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 History

Mahindra & Mahindra Financial Services Limited(MMFSL) is a non banking

financial company from the house of Mahindras established with a view to provide
finance to the prospective buyers of Mahindra range of utility vehicles and
tractors.MMFSL is a leading rural finance company in the organised private sector.

MMFSL was incorporated during the year 1991 with participation mainly from
Mahindra & Mahindra Ltd(M&M),Kotak Mahindra and Mahindra Dealers.MMFSL is a
subsidiary of Mahindra & Mahindra Ltd which holds 97% stake in the company.

Current Position

MMFSL has a wide network of 223 branches spread over mainly in Semi-Urban
and Rural areas across the country covering almost 80% of the districts in India.
MMFSL has also extends finance through Hire Purchase / loan and lease
modes.MMFSL has a subsidiary called Mahindra Insurance Brokers Ltd to undertake
insurance broking business.

Management

• Anand G Mahindra Chairman

• Bharat Doshi Director
• Anjanikumar Choudhari Director
• Uday Y Phadke Director
• Dhananjay Mungale Director
• M G Bhide Director
• Nasser Munjee Director
• Piyush Mankad Additional Director
• Dipak Rudra Director
• Ramesh Iyer Managing Director
• N Shankar Company Secretary
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• Pawan Goenka Director

OBJECTIVES
OF
PROJECT
 Primary Objectives
 Secondary Objectives

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 Primary Objectives
 To study investment behavior of different class of investor.
 To study investment profile of investors and identify different financial
planning options available to investors.
 To study awareness of mutual fund as an investment option available to
the investor.

Secondary Objectives
 To help investors to identify their investment needs and also to help them
identify different financial planning options available to them according to
their risk profile.

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SCOPE

OF

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 PROJECT

Financial planning is need of our life. We have number of investment options

available to us. One needs to select our options according to our investment need.
In India, we have a very low savings rate. The recent study shows that savings
rate in Indian household is below 30%. And within this small level of saving majority of
our investors mainly invest in traditional investment instruments.
This study was conducted to identify behavior of different investors towards
investing in different kind of investment instruments available today. This study also
concentrated on how investment behavior of different investors changes according to
their risk profile. Survey done during this study also tried to identify awareness about
modern investment instrument such as mutual fund among investors and their approach
towards it.
Study will help to identify general investment behavior of different group of
investors and awareness of modern investment instruments among them.

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HYPOTHESIS

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 &

LIMITATIONS

HYPOTHESIS
Financial planning includes the investments made in any financial products. This
includes investment for protection needs such as insurance as well as investment
instrument such as savings account, insurance, mutual funds, fixed deposits, stock
market, and all other financial products. For the purpose of simplification, the scope of
the project is kept limited to the investment instruments. While conducting the survey

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for the project, it is assumed that the respondent has already satisfied his/her needs of
insurance.
LIMITATIONS
Following limitations were observed during the period of project completion.
 A limited number of people were surveyed during this project as time duration
was limited. This may have put some constraints over results of survey.
 Some respondents were not comfortable in answering some of the questions due
to many reasons. Even in some cases bias approach was also observed. This may
have affected the results.
 The time duration for data collection was very limited and during that period
stock market was booming like anything during this phase. Customers were
ready to take high risk. This also may have resulted in some bias answers.
 This survey was conducted within Baroda city, so views expressed by people are
of urban population of India. India is a country where more than 70% of people
leave in villages. Thus the results may defer when views of village investors
included.

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 RESEARCH
METHODOLOGY
 Research Design
 Sources of Data & Data Collection
• Primary Data
• Secondary Data
• Sample Design
• Tools For Analysis

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 RESEARCH METHODOLOGY

Research Design:

First step in any research process is to design the whole process through which
project/ research will get commenced. We can define research design as, “A research
design is the arrangement of conditions for collection and analysis of data in a manner
that aims to combine relevance to the research purpose with economy in procedure.”
Thus, research design is the conceptual structure within which research is conducted.

The study conducted here is a descriptive research study. These types of

researches are concerned with describing the characteristics & narration of facts of a
particular individual or of a group. Here the product “Future Goal Series & Its scope for
improvement” is our research subject.

To complete the research, following steps are followed:

a. Formulation of objectives and scope for study
b. Designing data collection method.
c. Selecting the sample.
d. Data collection
e. Processing and analyzing the data
f. Findings

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 SOURCE OF DATA & DATA COLLECTION

The data collected for the study is of two types.

(1) Primary &,
(2) Secondary.

Primary Data:
The study mainly depends on primary data. Personal interview as well as
questionnaire method was used to collect data. A common questionnaire was used for
both the methods.

Personal Interview: In this method, the customers were interviewed personally and
data was collected.

Questionnaire Method: A questionnaire was distributed to number of investors

belonging to different class of society. They were requested to fill up the form & return
it. Data was collected from these received forms.

Secondary Data:
The secondary data has also been used to assist the primary data, when and
where required. Secondary data was mainly collected from following sources.
1) Different AMC’s websites,
2) Fund house periodicals.

Sample Design

The total samples collected and used for study purpose is 200.

Personal interview Data: Total data collected under this method is 75 samples. Ten
persons per day were interviewed.

Questionnaire Method: Total samples collected through this method are 125 samples.

Tools for Analysis

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 Percentage analysis method was used to make interpretation of analysis easy and
understandable.

THEORETICAL
BACKGROUND
 Financial Planning (The Concept Explained)
 Mutual Funds
• History
• Functional Entities
• Types of Mutual Funds
• Advantages of Mutual Funds
 Financial Planning With Mutual Funds
• Basic Terms Used In Financial Planning
• Financial Planning Process In Practice
• Approaches To Financial Planning
 Life Cycle Stage Approach
 Wealth Cycle Stage Approach

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 According to Maslow’s Need Priority Model, human needs tend to follow a
particular pattern. They are:

A. Basic Physiological Needs: Such as Food, Shelter, Cloth, Sex etc.

B. Security Needs: Such as Life Security, Social Security, Job Security, Future
Provision, etc.
C. Belongingness, Social Or Love Needs: Exchange of feelings, Grievances, etc.
D. Esteem And Status Needs: Such as praise, admiration, public appreciation, etc.
E. Self-Actualisation Needs: Such as Opportunity for creativity, continuous
development etc.

To satisfy all these needs at different stages of life by one or another way one needs
money/ wealth. And this is the main reason why man works hard to achieve these
needs. But only working hard and earning well does not guarantee availability of
money when required. To ensure rightly availability of enough money, one needs
planning/ financial planning.

 Financial Planning 

Each one of us needs “Finance” at various stages of our life, and to ensure that
we have the money available at the right time, when needed. We may need money at the
time of marriage of a daughter or son, or at the time of a medical emergency or at the
time of retirement and we need it then, not later!
Personal Financial Needs are of two types- Protection and Investment. An
earning member providing for his family to have continued income after his death is an
example of a protection need. Providing for the marriage expenses of a daughter is an
example of an investment need.

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Definition: Financial Planning is an exercise aimed at identifying all the financial
needs of an individual, translating needs into monetarily measurable goals at
different times in the future, and planning the financial investments that will allow
the individual to provide for and satisfy his future financial needs and achieve his
life’s goals.
 Why Financial Planning?
It is observed that, “We work hard for our money; but it doesn’t seem to work
as hard for us.”
The main objective of financial planning is to ensure that the right amount of
money is available in the right hands at the right point in the future to achieve an

individual’s financial goals. Successful financial planning makes a considerable

contribution to the sum total of human happiness. Financial Planning is a process that
helps a person work out where he or she is now, what he/she may need in the future and
what he/she must do to reach the defined goals.

Normal Investment Behaviour

Age Availability Of Reason For Not Having Proper

Fund Investment Plan
21-30 Very High to High Plenty of time available, why to hurry
30-45 Moderate With family obligations, how can I
manage to invest?
Above 45 Moderate to Low I need to but… I cannot take risk.

Through proper financial planning one avoid these mistakes and ensure right
time availability of right amount of fund for himself as well as for his family.

 MUTUAL FUND 
A mutual fund is a common pool of money into which investors place their
contributions that are to be invested in accordance with a stated objective.
Thus in simple words it is a pool of money, where the money from investors are
gathered and invested in financial market/ instruments according to the specified
objective in the mutual fund scheme.
The ownership of the fund is thus joint or “Mutual”; the fund belongs to all
investors. A single investor’s ownership of the fund is in the same proportion as the
amount of the contribution made by him or her bears to the total amount of the fund.

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 A mutual fund uses the money collected from investors to buy those assets,
which are specifically permitted by its stated objective. Thus, an equity fund would buy
mainly equity assets- ordinary shares, preference shares, etc. A bond fund would mainly
buy debt instruments such as debentures, bonds, or government securities.
When an investor subscribes to a mutual fund, he or she buys a part of the assets
or the pool of funds that are outstanding at that time. It is no different from buying
“shares” of a joint stock company.

 History: The origin of the modern fund industry can be traced back to 1868, when
the Foreign and Colonial Investment Trust (F&CIT) was formed in London. The
F&CIT, still one of the most successful investment trusts in the UK, introduced the
concept of close-ended funds to the world.
The first open-ended fund, the Massachesetts Investors’ Trust (MIT), was
established in the US in 1924. The fund that operates even today, paved the way for
modern-day open-ended mutual fund.
Though the fund industry began its journey with close-ended funds, it came to
depend increasingly on open-ended mutual funds, which took the world by storm at the

end of the 20th century. Though close-ended funds in the US in the 1920s, ‘the high-
flying fund were ultimately hit hard during the crash of 1929 and subsequent bear
market, damaging their reputation with investors’ (A.J. Fredman and Russ Wiles, 1998).
The open-ended schemes survive and are very fameous today.

 Functional Entities: A mutual fund can be formed as a trust or a company, but

the real ownership lies with the unit-holders who invest in the fund. Ultimately, it is they
who bear the various kinds of risks with investment. The major operational entities can
be grouped as follows.

 Trust or Trustee Company: Trusts or trustee companies form mutual

funds under the existing trust or company acts. The former are managed by
trustees, and the latter by the bard of directors.
 Asset management Company: Such a company, under an agreement
with a trust or trustee company undertakes the administration and investment
activities of the fund.
 Registrar or Transfer Agent: These agents handle sales and
redemption related activities of the fund. They also maintain records of the
shareholders and send the payment cheques to the investors.
 Distributor: In the US and many other countries, there are fund
distributors/ underwriters to handle the sales of units. The underwriters act as
wholesale selling units to the brokers, who, in turn, sell to the retail investors.
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 Types of Mutual Funds: Mutual funds can be classified by different methods.
Mainly they can be classified by following categories (As given in the Chart).

Mutual Funds

Open Ended or Close Tax Exempt or No Tax Load or No Load

Ended
ThisFunds Exempt Fund
is a very broad classification. But any particularMutual
mutualFund
fund is mainly
known by its investment objective, risk profile and liquidity content. There is wide
innovation in the different categories, but we will outline only the most popular types.

Sr Fund Nature Investment Objective Ideal Risk

. Type Investment Profile
No Period
1. Growth Equity Maximum capital gain Long / More High To
through investment in stocks than 3 Years Moderate
2. Index Equity Follows an Index & Provides Long/ More High To
parallel return to equity than 3 years Moderate
index.
3. Sector Equity Investment is done in Long/ More Very High
companies of particular than 3 years to High
sector such as IT/ Pharma etc
4. Lilliput Equity Invests in small companies, Long/ More Very High
(US)/ which are not known and try than 3 years
Small to exploit market
Cap inefficiencies.
(India)
5. Venture Equity Invests in unlisted and Long/ More Very High
Capital unquoted companies & also than 3 years
New companies.
6. Offshore Equity Invest in equities in one or Long/ More High to
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 Funds more foreign companies than 3 years Moderate
7. Equity Equity Provides Tax Benefits and Long/ More High to
Linked (Indian generally invest in than 3 years Moderate
Savings Variant) diversified sectors and have (As Lock in
Scheme some lock in period. period exist)
8. Income Debt Mainly invest in govt. Less Than 3 Moderate
securities, debentures, CDs, years to Low
CPs etc (Debt Instruments)
9. Gilt Fund Debt Mainly in govt. securities of Less Than 3 Low
more than one year maturity years
period.
10 Money Money Invests in Call Money Generally in Low
. Market Market market and instruments days (less
Fund having very short-term than 180
maturity. days)
11 Assured Debt Invest in trusts And other Less Than 3 Very Low
. Return debt instruments years To Low
(Indian
Variant)
12 Monthly Debt Investment in debt Less Than 3 Low
. Income instruments in such a way years
Plan that can provide regular
(MIP) return.
13 Balanced Debt & It maintains equilibrium 1 to 3 Years Moderate
. Equity between equity and debt but can be
investment to give regular more than 3
low risk return year
14 Real Real Invests in land and other real Long Moderate
. Estate Estate estate property. to Low

These are only some of the funds available in India. Many more types are also
present as at least 500 different mutual fund products are available in India. The
difference are in the area of investment objective, risk profile and liquidity.

 Advantages of Mutual Funds: If mutual funds are emerging as the

favourite investment vehicle, it is because, of the many advantages they have over other
forms and avenues of investing, particularly for the investor who has limited resources
available in terms of capital and ability to carry out detailed research and market
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monitoring. The following are the major advantages offered by mutual funds to all
investors:

I. Portfolio Diversification: Mutual funds normally invest in a well-diversified

portfolio or securities. Each investor in a fund is a part owner of all of fund’s
assets. This enables him to hold a diversified investment portfolio even with a
small amount of investment that would otherwise require big capital.
II. Professional Management: Even if an investor has a big amount of capital
available to him, he benefits from the professional management skills brought in
by the fund in the management of the investor’s portfolio. The investment
management skills, along with the needed research into available investment
options, ensure a much better return than what an investor can manage on his
own. Few investors have the skills and resources of their own to succeed in
today’s fast-moving, global and sophisticated markets.
III. Reduction/ Diversification of Risk: An investor in a mutual fund acquires a
diversified portfolio, no matter how small his investment. Diversification
reduces the risk of loss, as compared to investing directly in one or two shares or
debentures or other instruments. When an investor invests directly, all the risk of
potential loss is his own. A fund investor also reduces his risk in another way.
While investing in the pool of funds with other investor, any loss on one or two
securities is also shared with other investors. This risk reduction is one of the
most important benefits of a collective investment vehicle like the mutual fund.
IV. Reduction of Transaction Cost: What is true of risk is also true of the
transaction costs. A direct investor bears all the costs of investing such as
brokerage or custody of securities. When going through a fund, he has the
benefit of economies of scale; the funds pay lesser costs because of larger
volumes, a benefit passed on to its investor.
V. Liquidity: Often, investors hold shares or bonds they cannot directly, easily and
quickly sell. Investment in a mutual fund, on the other hand, is more liquid. An
investor can liquidate the investment, by selling the units to the fund if open-
end, or selling them in the market if the fund is closed-end, and collect funds at
the end of a period specified by the mutual fund or stock market.
VI. Convenience And Flexibility: Mutual fund management companies offer many
investor services that a direct market investor cannot get. Investors can easily
transfer their holdings from one scheme to the other, get updated market
information, and so on. This type of transfer is called ‘Switching’.
VII. Tax- benefits: Mutual funds as well as mutual fund investors all over the world
enjoy certain tax benefits, since mutual funds are exempted from certain taxes.
The investors, too, are exempted from certain taxes and this naturally arguments
the net yield of an investment.

 FINANCIAL PLANNING 
- 35 -
 Of all the investment options available, a mutual fund is the single most
important tool in a financial planner’s armory. Mutual funds can form the core
foundation and building block for any type of financial plan – long-term or short-term,
high or low risk and for any type of client – retail, affluent or institutional.
There is a great variety in mutual fund offerings including diversified equity
funds, sector funds, income funds, gilt funds, money market funds, etc; and these
individually or in combination can tailor for every investor the exact mix of return
potential, risk diversification, liquidity and tax efficiency that they need. Financial
planners and their clients therefore need look no further than mutual funds for their
complete set of investment needs. Barring life and individual property insurance, which
provide protection against unexpected and unforeseeable events, mutual funds provide
easy access to each financial asset class, and are suitable for all types of investors –
young or old, accumulating or retiring, aggressive or conservative.
Thus financial planner as well as his/her client should concentrate on proper
asset allocation, which can provide them a good financial plan.

 Basic Terms Used In Financial Planning:

• Financial Goals And Objectives: Refer to all goals and needs of a client,
which have a monetary aspect to them. These are best defined when the amount
and the timeframe are both clearly stated. In other words, clients should be made
to define their financial goals in terms of how much money they will need and
when they will need it. These include (1) Income for a comfortable retirement,
(2) funding for a child’s wedding or education, (3) money to buy a house, a car
or other material acquisitions, etc.
• Asset Allocation: The allocation of a client’s investments at a broad level
across various asset classes, which include hard assets such as real estate,
jeweler, etc and financial assets. The latter can be categorized into equities or
growth assets, bonds or income assets and money market or liquid assets. There
are also further subdivisions of equities into different sectors, and bonds into
government and corporate bonds of different ratings and maturities.
• Risk Tolerance: The extent of loss in value that a client can tolerate,
psychologically and financially and for how long he can withstand such declines
in value. The level of risk tolerance of a client can accurately be gauged only
after the client is fully aware that the greater the risk he takes on, the greater the
returns he can earn over the time. In other words, he can opt for short-term
stability with lower return or he can choose more volatile investments, which
have potential for better long-term returns.
• Portfolio Rebalancing: The process of making changes to the asset
allocation and specific investments to ensure that the client’s investment strategy

- 36 -
 stays consistent and current with changes in their needs, financial situation and
market conditions.

 FINANCIAL PLANNING PROCESS IN PRACTICE 

The Certified Financial Planner – Board of Standards (USA), first formalized

financial planning process. The process consists of the following six broad steps:
1. Establishing & Defining The Client – Planner Relationship.
2. Gathering Client Date, Defining Client Goals.
3. Analyzing & Evaluating a Client’s Financial Status.
4. Developing & Presenting Financial Planning Recommendations and/or Options.
5. Implementing The Financial Planning Recommendations.
6. Monitoring The Financial Planning Recommendations.

We will see each step in detail.

Step 1: Establish & Define The client – Planner Relationship

The Financial Planner should clearly explain or document the services to be
provided to a client and define both his & his client’s responsibilities. This will cover the
information required from the client, how decisions will be made, and frequency of
portfolio review. The planner should explain fully how he will be paid and by whom.
The client and the planner should agree on how long the professional relationship should
last and on how decisions will be made.

Step 2: Define Client Goals

Get the client to talk about their goals in life and what’s important about money
to them. For each financial need, such as retirement or children’s education or marriage
or purchasing a home, it is necessary to clearly write down what amount will be required
and when they will be required. This is also the phase where trust and confidence starts
to develop, as the client begins to realize that the advisor is not looking to just sell
products but cares deeply about his financial well-being.

Step 3: Analyzing & Evaluating Client’s Financial Status

The financial planner should ask for information about the client’s financial
situation. The client and the planner should mutually define the client’s personal and
financial goals, understand the time frame for results and discuss, if relevant, how a
client feels about risk. The financial planner should gather all the necessary documents
before giving the client the advice the client seeks.
From the data construct a balance sheet showing his assets as well as liabilities.
This helps in determining cash inflows & outflows.

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 For the financial planner to analyze client’s information and determine what the
planner must do to meet the client’s goal, he must also ask for the client’s current
insurance coverage, investments or tax strategies.

Step 4: Developing Financial Planning Recommendations and/or Options

This step actually involves three sub-steps.
1. Determine and shape the Risk Tolerance Level
2. Ascertain Tax Situation
3. Develop & Recommend Investment plan
1. Determine & Shape The Risk Tolerance Level: First of all planner should
decide how much loss the client can withstand or in other words, what is client’s
risk bearing capacity. The risk taking capacity of client varies according to
his/her condition. For Example, young unmarried man can take higher risk as he
has no or very less responsibilities as against a married man has responsibilities
and thus can not afford to take higher risk. Similarly in case of older person, he
has very low-income source as well as he requires regular income, thus he/ she
cannot take higher risk. Thus client’s risk taking capacity keeps changing due to
changing life stage. Even the market condition also affects client’s risk bearing
capacity.

2. Ascertain Tax Situation: Ultimately, what matters to a client is post-tax

returns. Given that clients are in different tax brackets and situations and given
that some investments have tax advantages associated with them, a detailed
analysis of a client’s tax paying pattern is required to ensure that correct
investments are being recommended.

3. Develop & Recommend Investment Plan: After analyzing the

complete situation the financial planner can suggest his client an investment
plan. The planner should go over the recommendations with the client to help
him understand them, so that he can make informed decisions. The planner
should also listen to the client’s concerns and revise the recommendations as
appropriate.
Asset allocation is the critical decision, and the essence of what all-
financial planning comes down to. The purpose of ascertaining the client’s goal,
his resources his risk tolerance and tax situation is simple to recommend the
most appropriate asset allocation and investment strategy for the client.

Step 5: Implementing The Financial Planning Recommendations

After the asset allocation and specific investment have been decided upon, the
client must then execute the plan. Before executing the plan, the client and the planner
should agree on how the recommendations will be carried out. The planner may carry
out the recommendations or serve as the client’s ‘coach’, coordinating the whole process
with the client and other professionals such as lawyers or stockbrokers.
- 38 -
Step 6: Monitoring The Financial Planning Recommendations
Once every 3 or 6 months, the financial planner should meet with the client to
review the process and perform an active, ongoing evaluation of results. During these
meetings, the planner should evaluate whether the investment strategy needs to be
refined, which could happen if:
 The client’s future needs or current resources have changed.
 The investment climate and financial markets have experienced a dramatic
change.
 The client’s personal situation has changed in a significant way, on account
of a personal or financial event.

 APPROACHES TO FINANCIAL PLANNING 

There are mainly two approaches to financial planning.

(1) Life Cycle Stage Approach
(2) Wealth Cycle Stage Approach

I. Life Cycle Stage Approach

The need for financial planning persists throughout the whole life of an
individual. Most people have at least one unsatisfied need at any time. Most people will
have both financial protection and investment needs simultaneously throughout life.
However, the priorities of these financial needs change as people grow older and their
personal circumstances change. To appreciate how these changes come about, financial
planner use the Life Cycle Stage Guide.
The life cycle of any individual can be typically sub-divided into the following
stages:
 Childhood Stage
 Young Unmarried Stage
 Young Married Stage With No Children
 Young Married With Children Stage
 Young Married Stage With Older Children Stage
 Retirement Stage
The age at which each stage of the life cycle stage starts may vary from one
individual to another, but in our society most people would fall into a standard cycle.
Associated with each stage is a certain income level. We earn different amounts of
income at different stages in life. If we superimpose the stages on the typical income
graph of a salaried employee or a self-employed person, it will help in understanding

- 39 -
how financial planning priorities, and the ability to fund them, change with each stage in
the life cycle.
 Childhood Stage: Childhood is a period of dependency that
usually lasts until children finish their full-time education. The children’s financial
needs are met by parents or other relatives. Most of the basic requirements of
children will be met from the income of parents or relatives. However, most people
who want to give their children more privileged opportunities will have to start
investing money for this purpose when their children are still young.
 Young Unmarried Stage: With the end of childhood, most
young people pass through a stage when they depend to an extent on their parents
before full independence. If they are single with no dependents, they have little
need for their life assurance products. Normally, the main protection need of a
young single person in work is to protect his or her earning against disability
resulting from injury or long-term sickness. Young unmarried persons will also
have considerable investment needs. They may wish to invest in equities as they
have a longer time horizon and as result a higher risk appetite. They may also with
to take out a long term saving plan. It is never early to start contributing to a
pension scheme, which will provide an income on retirement; the earlier the
scheme starts the lower the annual cost will be. However, most young people will
have relatively low incomes as well as some short-term needs such as saving up to
marry and establish a home, etc.
 Young Married Stage With No Children: The needs of young
people may change considerably as soon as they marry. Immediately, a young
couple becomes interdependent with shared responsibilities for the achievement of
future goals. Both partners may work and contribute to the family income or only
one may be in paid employment with the other looking after the family. The need
for the insurance cover in both the cases increases as members of family have
increased. Thus the income available for investment gets reduced. At this stage, the
couple has very low short-term money requirements and their long-term
requirement for investments are high.
 Young Married Stage With Young Children: The arrival of
children very quickly changes the financial situation of any young couple. This is a
difficult stage as expenditure is rising at a faster rate than income. This will reduce
the money available to spend on financial planning but the protection needs of the
family will increase greatly. A substantial life assurance on the wage earner’s life
is now absolutely necessary. Precisely how much cover is needed will depend on
the family’s standard of living and the age at which children are expected to
complete their education. Once protection needs are taken care of, the family will
have to make provisions for investments. At this stage of life, investments are done
mainly by considering the long-term as well as short-term goals simultaneously,
and thus the risk taking capacity of an investor gets reduced.
 Young Married Stage With Older Children: By this stage, the
parents are approaching mid-career and their income would have usually
- 40 -
 increased. With improving finances, the family lifestyle will have improved and
become more affluent. The parents’ financial planning priorities would also be
changing from available protection needs to investment needs. These are normally
two reasons for investment considering becoming of paramount importance.
Firstly, the couple may be raising loans or may have raised moans for a house, cars
or children’ education. Plans have to be made to service these loans and repay
capital. Perhaps, most importantly, pension provision to provide an income in
retirement is becoming absolutely crucial by this stage. The term to retirement is
becoming shorter. The adequate contributions do not start now, it may become
impossible to build a sufficient fund to buy a pensions that maintains the family
standard of living.
 Retirement Stage: Most people would like to maintain the same
standard of living as they did when they worked. It is thumb rule that people need
an annual retirement income equal to two-thirds of their final year’s income from
employment. Unfortunately, very few people are able to achieve this target. Most
are able to achieve only 20% or less of their pre-retirement earnings. After
retirement, the value of these incomes is often further reduced by inflation. The
retired person can invest his/ her money according to the availability of fund to
him/her. And they require a regular income, which can fulfill their regular needs.

Income Vs Age Graph Of A Life Cycle

Phase I Phase II Phase III

22 Years 38 Years Over 25 Years

- 41 -
 Birth & Education Earning Years Retirement Age

Where
Different Stages Are Shown By:

= Marriage
= Child’s Birth

= Child’s Education
= Child’s Marriage

II. Wealth Cycle Stage Approach

While the Life Cycle Stage Approach is a useful approach to financial planning,
another somewhat supplementary approach that many experts recommend is that of the
‘Wealth Cycle Stage Approach’. The life cycle approach groups all investors in age
groups, irrespective of their financial condition. In fact, each client is so unique, with a
unique combination of circumstances, resources, attitude and needs, that any attempt at
grouping them by age has its drawbacks, especially if the attempt is to identify the one
investment strategy that works best for the entire group. Nevertheless, it is useful to
categorize clients, because certain investment strategies have tended to work well for
specific types of client needs. In this regard, the “Wealth Cycle” grouping seems to work
best and is more comprehensive and relevant than grouping investors merely by age or
“lifestage”.
The different stages of wealth cycle approach are:
 The Accumulation Stage
 The Transition Stage
 Reaping Stage
 The Intergenerational Transfer Stage
 The Sudden Wealth Stage

 The Accumulation Stage: During this phase, clients are

looking to build wealth because their financial goals are quite some time away and
investments can be made for long-term. Typical client needs such as saving for
retirement, acquiring assets and providing for children loom are distant, and the
client’s primary ail is long-term wealth accumulation.
 The Transition Stage: During this stage, one or more of
the client’s goals are approaching and clearly in sight. For example, a salaried
executive in late fifties who is planning to retire at 60 years of age. He/ she needs
to start preparing in advance by adjusting his/her investments. Likewise, a couple
- 42 -
in their mid 40s who have children approaching the age of higher education or
marriage are in a transition stage.
 The Reaping Stage: This is the cashing out stage, because the
goal and purpose towards which the clients have been investing have arrived. In
essence, this is the time to reap the harvest they have sown. A client who is about
to retire or has just retired is an example. The other example of a client in the
reaping stage is a person whose goals such as buying a home or funding a child’s
education are closure are hand.
 The Intergenerational Transfer Stage: Clients up to their early
50’s may not yet fell the need to take care of the next generation in event of their
own death. However, many older investors need to start thinking about how to
share their wealth, either during their own lifetime, or by bequeathing through their
will after their lifetime. Such transfer of wealth may have to be done in favour of
different categories of beneficiaries such as the client’ children or grandchildren, or
to family or charitable trust or causes. A good financial planner will make himself
well versed in the legal and financial aspects of estate planning and provide
suitable advice on these matters, especially to older clients.
 The Sudden Wealth Stage: Sometimes, significant events such
as a sale of shares or business, inheritance, or winnings from a contest/lottery have
given clients a bonanza in the form of a one-time receipt which multiples their
netwroth, making them suddenly wealthy.

- 43 -
DATA ANALYSIS
&
INTERPRETATION
- 44 -
 Data Analysis & Interpretation

Q.1 What is your profession?

a. Businessman
b. Professional
o Finance
o Medical
o Legal
o Engineering
o Other ________________________
c. Service
o Government
o Non Government
d. Housewife
e. Student
f. Retired
g. Other __________________________________

Table - 1. Table Showing Occupation of respondents

Response a b c d e f g
Option
Percentage 1% 15% 65% 6% 5% 9% Nil
Response

- 45 -
 9 0 1
5 15
a
6 b
c
d
e
f
g

65

Q. 2 Type of Firm/ Company Employed

a. Private Ltd Company
b. Shop
c. Public Ltd Company
d. Government Employee
e. Others

Table: 2 Table Showing Type of Firm/ Company of Respondents

Response a b c d e
Option
Percentage 60% 1% 10% 1% 28%
Response

- 46 -
 28%
a
b
c
1% 60% d
e
10%
1%

Q. 3 Annual Income Slab

a. Rs 50,000 – Rs 1,00,000
b. Rs 1,00,000 – Rs 1,50,000
c. Rs 1,50,000 or more

Table 3 Table Showing Annual Income Slab Of Respondents

Response a b c
Option
Percentage 27% 35% 38%
Response

- 47 -
 27%

38%
a
b
c

35%

Q. 4 Investment Horizon

a. Long Term _______________

b. Medium Term ____________
c. Short Term _______________

Table 4. Table Showing Investment Horizon of Respondents

Response a b c
Option
Percentage 20 % 45 % 35 %
Response

- 48 -
 20%

35%

a
b
c

45%

Inference: Majority of respondents wanted to invest for a medium term to short term
period. Just 20 % of the respondents were interested in investing for long term. During
the interview it was observed from their response that this kind of response was mainly
due to a very flamboyant equity market that prevailed during this period. This made
short term returns more attractive to investors and investments in government securities
less attractive.

Q. 5 Current Preferable Investments

a. Equity Market
b. Fixed Deposits
c. Mutual Fund
d. Precious Metals
e. Real Estate

Table 5 Table Showing Type of Investment Preferred By Respondents

Response a b c d e
Option
- 49 -
Number of 150 200 32 40 10
Response

200
200
180 150
160
140
120
100 Number Of
80 Response
60 32 40
40
10
20
0
a b c d e

Inference: Response from different respondents directly reflects repetition of inference

of previous question. All the respondents unanimously agreed that they would certainly
invest in fixed deposits as they found it the safest option and the traditional option that
they have used for a long time. Higher response of investing in equity market shows
effect of very flamboyant and bullish equity market condition that prevailed during the
period of project. Lower response to mutual fund was mainly due to lesser knowledge
among investors regarding mutual funds. Bullish equity market condition also
encouraged some people to invest directly in equity market and kept them away from
mutual funds. In India, people invest in precious metals only for the reason that at longer
period they are the safest bet. During the interview, it was found that those who wanted
to invest most safely opted for this option. Similar is the reason for low investment
preferred in real estates.

Q. 6 Future Investment Ideas

a. Equity Market
b. Fixed Deposits
c. Mutual Fund
d. Precious Metals
e. Real Estate

- 50 -
 Table 6 Table Showing Future Investment Ideas/Options Preferred By
Respondents

Response a b c d e
Option
Number of 145 200 40 75 4
Response

200
200
180
160 145

140
120
100 Number Of
75
80 Response
60 40

40
20 4
0
a b c d e

Inference: Response for this question was almost similar to previous question except a
significant rise in response for precious metal option. Response for equity market and
fixed deposit option was almost similar to the previous question. Major change was seen
in the option of investing in precious metal. This was mainly due to very bullish
precious market prevailing during the period of project. Both Gold and Silver were
climbing their new life time highs during this period. This attracted number of investors
towards them. Real estate market was passing through bearish faze during this period
and returns from other investment looked more attractive than this market thus fall was
observed in choosing this option.

Q. 7 Risk Profile On Investment

a. High
- 51 -
 b. Medium
c. Low

Table 7 Table Showing Risk Profile of Respondents

Response a b c
Option
Percentage 29 47 24
Response

24%
29%

a
b
c

47%

Inference: Response from the above question suggests that majority of investors are
interested in medium risk. Percentage response from respondents who are interested in
high and medium level risk, if clubbed together shows that investors had a high to
medium risk profile. Higher percentage in high risk was mainly seen due to flamboyant
equity market that prevailed during the period of project. Bullish equity market
encouraged people to take higher risk as they saw higher returns in equity market.

- 52 -
Q. 7 Expected Returns From Investment

a. High
b. Medium
c. Low

Table 7 Table Showing Expected Returns From Investment By Respondents

Response a b c
Option
Percentage 25 53 22
Response

22% 25%

a
b
c

53%

Inference: Response for this question can be directly linked to response from previous
question. As we observed that majority of respondents were interested in medium level
risk, the returns they expected were also medium level. Almost 25 percentage
respondents expected high returns as they were ready to take higher risk.

- 53 -
Q. 8 Knowledge about Mutual Fund

a. Full
b. Average
c. No Knowledge/ Very Less

Table 8 Table Showing Level of Knowledge About Mutual Fund Among

Respondents

Response a b c
Option
Percentage 16 67 17
Response

17% 16%

a
b
c

67%

Inference: Response for this question shows lack of proper knowledge among
respondents. Majority of respondents knew either very little about mutual funds and
their mechanism or they knew nothing. During interviews it was found that main reason
for lower level of investments in mutual fund was lower level of awareness regarding
mutual funds their investment mechanism among respondents. Very few knew about
mutual funds and their mechanism of investment in different markets.
- 54 -
Q. 9 Interested to Knowledge About Mutual Funds

a. Yes
b. No

Table 9 Table Showing Whether Respondents Were Interested To Know About

Mutual Funds

Response Option Yes No

Percentage Response 81 19

19%

Yes
No

81%

Inference: Majority of respondents were keen to know more about concept of mutual
funds and their investment mechanism. This shows potential for growth of mutual fund
industry in India.

- 55 -
FINDINGS

OF

PROJECT

- 56 -
 FINDINGS
 It was observed during the data collection period that people in India still lack
knowledge about concept of mutual funds. Secondary data available from books,
magazines and websites also has similar findings.
 Majority of respondents lack knowledge of mutual fund products and their
benefits.
 It was also observed during some interviews that many of the investors were
investing only because they had money to invest and they invested in mutual
funds as an experimental basis.
 It was also found that people lack knowledge of portfolio management and risk
management.
 The respondents were interested in the different mutual fund schemes but they
were confused how to take benefit of the schemes. Also they were confused
about how to invest and how much to invest in different schemes.

- 57 -
RECOMMENDATIONS

OR
- 58 -
 SUGGESTIONS

Suggestions OR
Recommendations

• It is observed that customers are not investing in the mutual fund schemes for the
reasons such as lack of product knowledge, lack of knowledge of concept of
portfolio management, confusion about how much to invest, when to invest and
where to invest, etc. Thus providing proper guidance regarding investment in
mutual funds and their investment mechanism will help company to encourage
more and more investors to invest in mutual funds
• Findings also suggest that majority of the respondents were keen to know more
about mutual fund investment and mutual fund mechanism. This shows further
potential of growth of mutual fund sector in India.

- 59 -
• During interview, it was also found that majority of respondents believed that
mutual funds only invest in equity. A very small number of investors knew exact
mechanism and types of mutual fund schemes and their investment mechanism.
Improving investors knowledge about mutual fund schemes and their areas of
investment and the concept of portfolio management can help company to
acquire further investments in mutual funds.

CONCLUSION
- 60 -
 CONCLUSION
Food, air, shelter, safety etc. are human needs. Similar is the case with financial
planning. It is also of same importance. Every human does have financial plans for
his/her life. Just he does not know that what he/she is doing is financial planning.

Similar is case for portfolio management. Everyone knows that when risk is split,
it is beneficiary but does now that this concept is known as portfolio management &
financial planning.

After going through the rigorous process of studying the different mutual fund
schemes and their market, we can come to some conclusions, listed below:
- 61 -
 Mutual fund is not a very popular financial product in India, and mutual fund
industry has a very huge market potential lying ahead of them in India in near
future as the popularity of mutual funds is growing day by day.

 From the perspective of the customers, they can benefit from different type of
products as it provides benefits of portfolio management within different mutual
fund schemes.

- 62 -
 ANNEXURE

 Questionnaire Used For Survey

- 63 -
- 64 -
BIBLIOGRAPHY

- 65 -
 BIBLIOGRAPHY

 BOOKS

 C. R. Kothari
“Research Methodology (Methods & Techniques)”
- Wishwa Publication, Second Edition
 D. C. Anjaria & Dhaivat Anjaria,
“AMFI Mutual Fund Testing Programme Workbook”
 H. Sadhak
“Mutual Funds In India (Marketing Strategies & Investment

Practices)”

- Sage Publication,New Delhi, Second Edition

 PERIODICALS & TEMPLATES

 Periodicals & Templates Of Different Schemes

Of The Funds

 URL’s

 www.amfiindia.com
 www.birlasunlife.com
 www.hdfcfund.com
 www.principalindia.com
- 66 -
 Other Mutual Fund Sites.

- 67 -