Mutual Fund Project 2

CUSTOMER PREFERENCES IN MUTUAL FUNDS IN REFERENCE TO UNICON Project report submitted to SRM UNIVERSITY In partial fulfillment of the Requirement
for the award of the degree MASTER OF BUSINESS ADMINISTRATION Report submitted by ASHUTOSH KUMAR SINGH Register No.3510910110 Under the guidance of Professor- T.RAMACHANDRAN DEPARTMENT OF BUSINESS ADMINISTRATION SRM UNIVERSITY KATTANGULATHUR, KANCHEEPURAM DISTRICT, CHENNAI BATCH : 2009-2011
SRM UNIVERSITY,CHENNAI-603203 Page 1
BONAFIDE CERTIFICATE
It is certified that this project report titled CUSTOMER PREFERENCES IN MUTUAL FUNDS IN REFERENCE TO UNICON is an original work done by ASHUTOSH KUMAR SINGH of 4th semester 3510910110
SRM School Of Management , SRM UNIVERSITY,
Kattankulathur during the academic year 2009 , who carried out the research under my supervision . Certified further , that to the best of my knowledge the work reported here in does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other certificate.
T.RAMACHANDRAN
Dr.(Mrs.)JAYSHREE SURESH
Project Guide
Head of the Department
Submitted or viva voice to be held on
SRM UNIVERSITY,CHENNAI-603203
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Internal Examiner
External Examiner
ACKNOWLEDGEMENT
It is difficult to acknowledge a precious debt as that of learning ass it is the only debt that is difficult to repay except through gratitude. First and foremost I wish to express my profound gratitude to the almighty, the merciful & compassionate with whose grace and gracing I have been able to complete this work. It is my profound privilege to express my sincere thanks to the dean Dr Jaysree Suresh(School of management) ,for giving me an opportunity to work on the project and giving me full support in completing this project. I am thankful to my guide Mr. T.Ramachandran (Professor in SRM UNIVERSITY, Kattankulathur) for his full support and guidance in completing this project work. I am obliged to thanks the entire management of UNICON INVESTMENT SOLUTION, for granting me permission and assisting me throughout the project. Last but not the least, I would like to thanks my loving parents and my friend for their full cooperation and continuous support during the course of this assignment.
ASHUTOSH KUMAR SINGH SRM SCHOOL OF MANAGEMENT
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DECLARATION
I ASHUTOSH KUMAR SINGH (Reg. No. 3510910110) hereby declare that the project entitled COSTUMER PREFERENCE IN MUTUAL FUND WITH REFERENCE TO UNICON under the supervision and guidance of Mr. T.Ramachandran (Professor in SRM University, Kattankulathur) department of management studies SRM, Kattankulathur is the result of the original work done by me and to the best of my knowledge, a similar work has not been submitted to any university or any other institution.
Place: Chennai Date:
Name: ASHUTOSH KUMAR SINGH Register No: 3510910110
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CHAPTER 1
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CHAPTER 1
1.1 Introduction:
A Mutual fund basically pools the money of investors, who share some common financial objective. This money is invested in capital market instruments like shares, debentures and other securities and also in other investible avenues such as real estate, commodities etc. income thus earned and the capital appreciation realized, are shared by its unit holders ( investors ) in proportion to the number of units owned by them.
Shortcomings in mutual funds:

1. Investor doesnt have the freedom of getting a desired allocation to specific stocks and sectors as it is decided by the fund manager.
2.
1. 2. 3. 4. 5. 6. 7. 8.
Mutual funds investors have to shell out loads and bear the fund management fee charged by the mutual fund house and the AMC.
Benefits of mutual funds:

Diversification of investments Higher risk-adjusted returns Professional management Low entry barrier Liquidity Time management Less complexity Convenient to the investors profile
Investors are freed from doing all research and stock selection activities. I.e. Previous knowledge of stocks is not required. 10. Transparency 11. Tax-saving
9.
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1.2 INDUSTRY PROFILE

The Evolution The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts of the Government of India and the Reserve Bank of India. So, the origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the initial growth was slow, it accelerated from the year 1987 when non-UTI players entered the industry. The history of mutual fund industry in India can be better understood divided into following phases: Phase1. Establishment and Growth of Unit Trust of India: 1964-1987 Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years. UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors. It launched ULIP in 1971, six more schemes between1981-84, Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Master share (Indias first equity diversified scheme) in 1987 and Monthly Income Schemes (Offering assured returns) during 1990s. By the end of 1987, UTI's assets under management grew ten times to Rs.6700Crores. Phase II. Entry of Public Sector Funds: 1987-1993 The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Can Bank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund
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and PNB Mutual Fund. By 1993, the assets under management of the industry increased seven times to Rs.47004 crores. However, UTI remained to be the leader with about 80% market share.
Phase III. Emergence of Private Sector Funds: 1993-1996 The permission given to private sector funds including foreign fund management companies (most of them entering through joint ventures with Indian promoters) to enter the mutual fund industry in 1993, provided a wide range of choice to investors and more competition in the industry. Private funds introduced innovative products, investment techniques and investor-servicing technology. By 1994-95, about 11 private sector funds had launched their schemes.
Phase IV. Growth and SEBI Regulation: 1996-2004 The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilization of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds. Investors' interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programmes were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry. In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutual fund players on the same level.
Phase V. Growth and Consolidation: 2004 Onwards The industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more international mutual fund players have entered India like Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players.
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There are a lot of investment avenues available today in the financial market for an investor. He can invest in Bank Deposits, Corporate Debentures, and Bonds where there is low risk but low return. He may invest in Stock of companies where the risk is high and the returns are also proportionately high. The recent trends in the Stock Market have shown that an average retail investor always lost with periodic bearish tends. People began opting for portfolio managers with expertise in stock markets who would invest on their behalf. Thus we had wealth management services provided by many institutions. However they proved too costly for a small investor. Mutual fund industry has seen a lot of changes in past few years with multinational companies coming into the country, bringing in their professional expertise in managing funds worldwide. In the past few months there has been a consolidation phase going on in the mutual fund industry in India.
1.3 Company Profile

UNICON SECURITIES PRIVATE LIMITED UNICON is a financial services company which has emerged as a one-stop investment solutions provider. It was founded in 2004 by two visionary and flamboyant entrepreneurs, Mr. Gajendra Nagpal and Mr. Ram M. Gupta, who possess expertise in the field of Finance. The company is headquartered in New Delhi, and has its corporate office in Mumbai with regional offices in Kolkata, Chennai, Hyderabad and Noida. UNICON is a professionally managed company led by a team with outstanding managerial acumen and cumulative experience of more than 400 man years in the financial markets The Company is supported by more than 4500 Uniconians and has a team of over 900 business offices in 235 cities across India. With a customer base of over 200,000 the Unicon Group has an eye for the intricate financial needs of its clients and caters to both their short term and long term SRM UNIVERSITY,CHENNAI-603203 Page 9
financial needs through a comprehensive bouquet of investment services. It has been founded with the aim of providing world class investing experience to the investing community. These services range from offline & online trading in equity, commodities and currency derivatives to debt markets to corporate finance and portfolio management services. The company has a sizable presence in the distribution of 3rd party financial products like mutual funds, insurance products and property broking. It also provides expert Advisory on Life Insurance, General Insurance, Mutual Funds and IPOs. The distribution network is backed by in-house back office support to provide prompt and efficient customer service The Equity broking arm UNICON Securities Pvt. Ltd offers personalized premium services on the NSE, BSE & Derivatives market. The Commodity broking arm Unicon Commodities Pvt. Ltd offers services in Commodity trading on NCDEX and MCX. The UNICON group also has a PCG division providing investments solutions for High Net Worth Individuals. The Corporate Advisory Services arm Unicon Capital Services (P) Ltd offers entire gamut of Investment Banking services to corporates. UNICON can boast of some of the most respected names in the private equity space like Sequoia Capitals, Nexus India Capital and Subhkam Ventures as its shareholders.
MISSION :
To create long term value by empowering individual investors through superior financial services supported by culture based on highest level of teamwork, efficiency and integrity.
VISION :
To provide the most useful and ethical Investment Solutions - guided by values driven approach to growth, client service and employee development.
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GROUP COMPANIES
FIXED INCOME & INVESTMENT BANKING
UNICON CAPTIAL SERVICES Pvt. Ltd.

DISTRIBUTION FINANCE (SHARES & IPO)
UNICON FINCAP Pvt. Ltd.
UNICON INSURANCE ADVISORS Pvt. Ltd. UNICON FINANCIAL INTERMEDIARIE S Pvt. Ltd.
COMMODITIES TRADING
TRADING IN EQUITIES & DERIVATIVES
UNICON SECURITIES Pvt. Ltd.
REAL ESTATES
UNICON COMMODITIE S Pvt. Ltd.
UNICON REAL ESTATES Pvt. Ltd.
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MANAGEMENT TEAM Mr. GAJENDRA NAGPAL Founder & CEO Mr. RAM M GUPTA Co-Founder & President Mr. Y.P. NARANG Head-Fixed Income Group Mr. SANDEEP ARORA Chief Operating Officer Mr. VIKAS MALLAN Chief Financial Officer Mr. SUBHASH NAGPAL Director-Strategic Planning & Implementation Mr. RAJEV B SHARMA Country Head-Wealth Management Mr. VIJAY CHOPRA National Head-Business Alliances Mr. MANMOHAN TIWARI Country Head-Equity Sales Mr. ANURAG NAYAR Chief Technology Officer Ms. ANJALI MUKHIJA Chief Compliance Officer
PRODUCT AND SERVICES

Unicon customers have the advantage of trading in all the market segments together in the same window, as we understand the need of transactions to be executed with high speed and reduced time. At the same time, they have the advantage of having
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all Advisory Services for Life Insurance, General Insurance, Mutual Funds and IPOs also. Unicon is a customer focused financial services organization providing a range of investment solutions to our customers. We work with clients to meet their overall investment objectives and achieve their financial goals. Our clients have the opportunity to get personalized services depending on their investment profiles. Our personalized approach enables clients to achieve their Total Investment Objectives. Our key product offerings are as follows: Equity Commodity Depository Distribution NRI Services Back Office Fixed Income Investment Banking Currency Derivatives Portfolio Management
1. EQUITY:
UniconEasy Browser based trading terminal that can be accessed by a unique ID and password. This facility is available to all our online customers the moment they get registered with us. UniconSwift
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Application based terminal for active traders. It provides better speed, greater analytical features & priority access to Relationship Managers. Greater exposure for trading on the margin available.
2. COMMODITY:
Unicon offers a unique feature of a single screen trading platform in MCX and NCDEX.Unicon offers both Offline & Online trading platforms. Live Market Watch for commodity market (NCDEX, MCX) in one screen. Add any number of scrips in the Market Watch. Tick by tick live updation of Intraday chart. Greater exposure for trading on the margin available Common window for market watch and order execution. Key board driven short cuts for punching orders quickly. Real time updation of exposure and portfolio. Facility to customize any number of portfolios & watchlists. Market depth, i.e. Best 5 bids and offers, updated live for all scripts. Facility to cancel all pending orders with a single click. Instant trade confirmations. Stop-loss feature.
3. DEPOSITORY:
Unicon Depository Services offers dematerialization services as a participant in Central Depository Services Limited (CDSL), through its Depository operations. The company believes in efficient and cost-effective and integrated service support to its brokerage business. Unicon Securities Private Limited, as a depository participant, will offer depository accounts for individual investors as well as corporates which will enable them to transact in the dematerialized segment, without any hassles. SRM UNIVERSITY,CHENNAI-603203 Page 14
Depository offer a safe, convenient way to hold securities as compared to holding securities in paper form. Our service provides an integrated single platform for all our clients ensuring a risk free, efficient and prompt depository process. 4. DISTRIBUTION: Unicon is fast emerging as a leader in the Insurance and Mutual Funds distribution space. Unicon has over 100 branches and a huge number of Business Development Executives who help to source and service the customers throughout the country. Unicon is fast becoming the preferred Vendor Independent distribution houses because of providing efficient service like free pick-up of collection of cheques/DDs, Keeping track of the premiums etc to its customers.
Unicon offers the following distribution products: IPO's Mutual Funds Insurance Properties
5. NRI SERVICES:
With India becoming the epicentre of growth the Global Indian feels the need to be connected to the domestic growth story. Unicon now offers a convenient and hassle-free way of Investing in the Indian Securities Mar
Procedure for NRI operations in Indian Capital Markets:The NRI can deal with only one bank at any point of time. He is allowed to invest only 5% of the paid up capital of a company. The aggregate SRM UNIVERSITY,CHENNAI-603203 Page 15
paid up value of equity of any company purchased by all NRI's and OCBs cannot exceed 10 percent of the paid up capital of the company and in the case of convertible debentures, the aggregate paid up value of each series of debentures purchased by all NRI's and OCBs cannot exceed 10 % of the paid up value of each series of convertible debentures. He can enter only into delivery based trades, all deliveries must only be routed through beneficiary accounts and not directly through the broker. Shares bought by him cannot be sold unless the payout of the same is received from exchange. All purchase and sale transactions have to be reported to the RBI by the designated bank. Original brokers contract notes have to be submitted to the designated Bank branch, within 24 hours of the transaction. He will be required to make bill to bill payments/ settlements. No adjustments of purchase against sale consideration should be done. Shares cannot be bought against the shares sold in the same settlement. All Purchase and Sales will be dealt separately for payments / receipts. Sale proceeds of any transaction not reported/approved by the RBI is allowed to be credited to the NRE/NRO savings/demat account. The transaction will have to be reversed in the account and losses if any will be borne by the client. All tax liabilities arising out of buying and selling of securities will be handled by the designated bank.
6. BACK OFFICE:
Unicon through its online back-office aims to increase the transparency and provides you the link to view the details of your account online anytime and anywhere. Here you have the advantage of viewing the following reports online:
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Sauda Details Financial Ledger Net position for the day Net position Detail (for the complete financial year) E-Contract Note
7. FIXED INCOME:
The Fixed income vertical of UNICON Group deals in Sovereign Paper and Money Market/Fixed Income Instruments Broadly, it undertakes following:
Dealing in all types of money market instruments viz. Commercial paper (Origination & Placement), Certificate of Deposit and Treasury Bills both in Primary and Secondary market.
Dealing in Government securities (including securities of Oil, Fertilizer & Food Bonds) and other PSU/ Corporate bonds with counterparties like Banks, Primary Dealers, Mutual Funds, Insurance Companies, Regional Rural Banks, Cooperative Banks, Central & State PSUs, Housing Finance Companies, NBFCs & Corporates.
Retailing of Central, State Government Securities and Bonds to PF Trusts, Universities Advisory Services to PF Trusts. Arrangers for Private placement of Bonds & placing it with Banks, Mutual funds, Insurance Companies & Corporates.
Securitization of receivable portfolio of Housing Finance Companies, Banks & NBFCs by way of Pass through certificates.
8. INVESTMENT BANKING:
The Investment Banking arm of Unicon Capital Services (P) Ltd. caters to the funding requirements of corporates. Our wide experience and market knowledge as a leading securities firm ensures that clients requirements are met at optimum cost. By SRM UNIVERSITY,CHENNAI-603203 Page 17
constantly improving our knowledge capital and remaining focused on client needs, we aim to create significant value for our clients by helping them execute the right capitalization strategy. We also intend to initiate merchant banking services (Capital Markets Fundraising) in the short term (Merchant Banking License pending) Offerings Private Equity (PE) Syndication We specialize in the syndication of the private equity for the Indian companies in highgrowth markets on their capitalization/re-capitalization strategies, which helps them to achieve their growth targets. Our team of professionals ensures complete confidentiality, strong focus on implementation and quick turnaround time. Access to key decision makers at PE funds gives us an edge in optimal structuring and efficient closure of transactions. We service our clients through various stages of the PE deal namely collateral preparation, investor shortlisting, commercial term sheet, due diligence and final closure.
Mergers & Acquisitions(M&A) Advisory We provide both buy-side and sell-side advisory services as part of our M&A advisory offering. We advise clients during the entire transaction process right from target identification to deal closure. We have an experienced and highly qualified team with more than 40+ man-years of experience which specializes in identification and short listing of potential targets, strategic planning of an acquisition and arranging capital for the transaction, if needed. Debt Syndication Our offerings include:
Project Finance / Term Loans for Expansion - Arranging Long-term loans for setting up new projects from Financial Institutions and Banks External Commercial Borrowings (ECBs) - Arranging LIBOR-linked loans Foreign Currency Convertible Bonds (FCCB)-Arranging FCCB Loans Page 18
Working Capital Facilities - Arranging fund-based and non-fund based limits for clients from Banks at competitive rates Trade Finance - Arrangement of trade finance (Buyer's / Suppliers Credit) Inter-Corporate Deposits Borrowing and Placement
9. CURRENCY DERIVATIVES:
Currency Futures Currently in India, US Dollar Indian Rupee (USD INR) currency futures are traded on the NSE and MCX. Since its introduction in Aug 2008, USD INR futures have seen a 1500% burst in volume growth. Unicon offers clients the opportunity to trade this product, either in online or offline mode as per their needs. The product provides ample liquidity to function both as a speculative tool and as a hedging instrument for exporters and importers. The attractive features of the product are as follows Unlike currency forwards offered by banks, currency futures trading does not have to be backed by an underlying merchant transaction exposure Tight bid ask spreads; usually 0.25 paisa wide Margin requirements less than 5% to take exposure on a lot size of $1000 New asset class for diversification for all resident individuals Commodity traders can hedge against unfavourable movements since gold, crude etc. are quoted in dollars For exporters and importers, no credit line required from their Banker as is the case with forwards Ideal tool for those with smaller exposures, as in the case of travel needs, educational payments etc.
Unicon Advantage
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Online & Offline trading facility on all the bourses Exclusive daily commentary and research reports by our Currency analyst team Regular updates on Dollar INR movement with calls to buy and sell Special consultancy to Exporters, Importers & Corporate for their Forex transactions Receive education on the product through seminars/con-calls organized by Unicon Your Cash Margin with Unicon Securities can be used for either segment Equity, Commodity or Currency. Other awaited products Euro INR is expected to be introduced anytime now SEBI has also recommended introduction of Pound Sterling (GBP) and Japanese Yen (JPY) futures in the near future Currency options are also expected to be added to the basket of products soon.
10. PORTFOLIO MANAGEMENT:

Portfolio Management Services Gone are the days when an investor could directly participate in the capital markets, for they have not only become far more complex in terms of compliances, methodologies, effects and analysis but also need a constant tracking mechanism. As is the case globally, the Indian investor has also realized the advantages of seeking professional advice in order to not only manage but also augment his portfolio. We at Unicon in our constant endeavor to bring to our esteemed clients global methodology have developed a proprietary model that has enabled us to outperform SRM UNIVERSITY,CHENNAI-603203 Page 20
all major indices with a fair degree of consistency, over the longer term. We continue to be positive of both our approach and the Indian capital markets in general and especially so after UPAs landslide mandate to guide the country over the next 5 years. However, we believe that the out-performance is more stock-specific and the major indices only provide a barometer for evaluation. This view is expected to only be enhanced going forward, with larger players entering the markets with globally fine-tuned analytical tools. The Portfolio Management Schemes of the Company offer Discretionary Schemes (Unicon Optimizer & Unicon Growth) for Individuals, Corporate Bodies, Partnership firms, Proprietors, Non Resident Indians etc. The Company is registered with SEBI enabling it to undertake Portfolio Management activities under a specific license. The Schemes, duly approved by SEBI, are managed by a highly competent team comprising of portfolio managers and equity strategists, backed by a team of fundamental, technical and derivatives analysts. The principle objectives are to identify investment opportunities through globally recognized analytical methodologies, given pre-defined risk parameters construct portfolios to incorporate client objectives periodically review of portfolios in order to consistently deliver returns surpassing the benchmarked index and tailor-make portfolios to incorporate a judicious mix of equity, quazi-equity, money market instruments and derivate products. PMS is a very personalized service wherein each portfolio has to be specifically constructed in order to reflect the objective and risk appetite of a particular client. Our qualified managers are constantly evolving methodologies and financial models that provide them with a composite mix of: 1. Medium term comprising of value investing and other fundament tools 2. Short term comprising primarily of technical analysis and tools. 3. Hedging strategies comprising of derivative products. Along with this water tight investment evaluation strategy we have up in place an equally foolproof client servicing and feedback methodology. All Investment advisors SRM UNIVERSITY,CHENNAI-603203 Page 21
are hand picked and trained on a gamut of Wealth product, this ensures that he is in a very good position to deliver a wholesome wealth experience to the client.
UNICON PMS provides following benefits: Strong Research Team Profile based investment solution Professional Fund Management Strict Risk Management Timely performance reporting Periodic reviews & rebalancing Dedicated relationship manager
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CHAPTER 2
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CHAPTER 2
2.1 REVIEW OF LITERETURE S.RAMYA (2007): The Author conducted a survey among Chennai Mutual fund investors. Some felt that they were unable to recover even what was invested after a lock-in-period while other felt that the returns were initially low, Mutual funds pick up very fast. The return on Mutual funds depends mostly on fund managers. For instance, when JM finance introduce contra funds, its manager Sandeep Sabharwal was the ex-manager of SBI Magnum contra fund which was a success. A case for low support for NFOs is the minimum outlay of Rs.5000 which is considered high. SHRUTI KOHLI (2007): The Author deal with the customer mindset when they investing funds in financial products. In this products She deal with the type of customer which include short term profit making customer and long term investment customer. The mindset of the customer will vary according to the expectation of the customer if the customers want to earn more profit then investing in blue chip companies is highly preferred by the customer and if the customer wants to earn profit within short term then they will invest according to market value of the companies. At last the Author conclude that many people will like to earn money within very short period of time for that they will invest money according to market value of the companies and still people are also there for investment point of view but their percentage is less compare than short profit making customer. A.SRILAKSHMI (2008): About Mutual funds schemes for the children said that these were a good option for investors who had kids that had three to ten years to attain majority. The main attraction of these schemes for Mutual funds is that the amount mobilized stays with the fund usually till the child reaches maturity, earning the AMC a neat management fee. Agents too are interested in marketing these schemes as agents earn a trail commission based on the amount of time the investor stay with the schemes. Thus agents usually end up earning this commission for anywhere between three to ten years on an average for mobilizations under such schemes.
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2.2 OBJECTIVES PRIMARY OBJECTIVES The main objective of the study was to analyze the customers investment allocation in mutual funds. The main motive of this study was to know the proportion of investment in mutual fund from their total income.
SECONDARY OBJECTIVES To know the various reasons for investing in mutual funds and reasons for investing more or less in the same. To identify the various factors considered important by the customers while investing in mutual funds To evaluate the customers opinion regarding other investment areas. To understand the influencing factors for preferring investment in mutual funds. To know the demographic characteristics of customers in the mutual funds.
2.3 SCOPE OF THE STUDY

This study is converged to Chennai City only. Data collection is though personal informal interview schedule and email. The study can be used to find which kind of people investing more in mutual funds. The total population is segmented area wise into 3 zones. The areas within the zones selected and data collected within the each zone were based on convenience due to the vast population of customers. Selected zones are T.Nagar, Adyar and Perungudi. Information collection from each of these 3 zones to identify respondents investment allocation on mutual fund.
2.4 LIMITATIONS OF THE STUDY

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The research is restricted only to Chennai city due to time factor and cost factor. The research for the future cannot be the same due to change in environment. The respondents may behave or give opinions differently at different times because of their psychological temperament. This will affect the survey. Because of time constraints, the sample size is restricted to 200, which may not reflect the opinion of entire customer group.
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CHAPTER 3
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CHAPTER 3
3.1 RESEARCH METHODOLOGY
RESEARCH PROBLEM A research problem, in general, refers to some difficulty which a researcher experiences in the context of either a theoretical or practical situation and wants to obtain a solution for the same. This research was conducted to determine the customers investment allocation on mutual fund.
RESEARCH DESIGN
A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance purpose with economy in procedure. Descriptive research design was primarily used in this study to identify the demographic and other characteristics of customers.
NATURE AND SOURCE OF DATA

Great care must be taken while collecting the data because it institutes the basic foundation on which the structure of the statistical analysis and the decision to be taken are built. The results obtained by proper analysis of the data are interpreted and the decisions are taken. This study is based on primary and secondary data sources.
SURVEY METHOD
The accuracy of any research process depends on asking the right person, the right question in the right manner at the right time. Therefore the methods of data collections are survey method and observation. For this study survey method was chosen as it is faster and cheaper and factors like respondents sources of information, awareness about the various features, performances etc. come out explicitly through this method.
SAMPLE SIZE AND TECHNIQUE

According to the sampling technique the chosen respondents are considered to be representing the entire population. In this study the sample size was taken to be 200. Area sampling was adopted for customers and the sampling technique used for the survey was convenience sampling where the sampling units are chosen in accordance with the researchers convenience.
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QUESTIONNAIRE CONSTRUCTION
A detailed questionnaire was constructed in a structured from based on the objective of the research. Close-ended and dichotomous questions were used in the questionnaire. Close-ended questions are given more weightage because it enables the respondents to answer more effectively without giving much thought.
TECHNIQUES USED FOR ANALYSIS

The tools of analysis used for this study were: CROSS TABULATION This is most commonly used statistical method of analysis. In this method a dependent variable of importance to the objective of the research was cross tabulated with one or more independent variable which the researchers can help explain the variation observed in the independent variable. CHI-SQUARE ANALYSIS Chi-square is a statistical test commonly used to compare observed data with data we would expect to obtain according to a specific hypothesis. Chi-square is used most frequently to test the statistical significance of results reported in bivariate tables and interpreting bivariate tables is integral to interpreting the results of a chi-square test. Chi-Square Test Method The Chi-square method is the application of testing the significant difference between observed and expected values. Chi-square test ( 2) Degrees of freedom Whereas, O E = = Observed frequency Expected frequency = =
(O E ) 2 E
(R-1) (C-1)
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R C
= =
Number of rows Number of columns
The observed differences in the cross tabulated data could be tested for statistical significance using this method. This Calculated 2 value is then compared with the table value at a given level of significance and a given number of degrees of freedom. If the calculated value was within the table the null hypothesis that the differences observed were not statistically significant is accepted. Null Hypothesis (H0): The hypothesis, or assumption, about a population parameter we wish to test, usually an assumption of the status quo. Alternative Hypothesis (H1): The conclusion we accept when the data fail to support the null hypothesis. PERCENTAGE ANALYSIS METHOD Percentage refers to a specific kind of a ratio used in making comparisons between two or more series and to describe relationships. This method can also be used to compare the relative terms of distribution of two or more series of data. Number of respondents % of respondents = Total respondents X 100
3.2 DATA ANALYSIS AND INTERPRETATION
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1. INVESTMENT NATURE AND GENDER Gender Male Female 555577 22626 757737 12 17 9 11 45 19 3 21 126 74
Investment Nature
Monthly 37 Quarterly Half Yearly Yearly Others
Total 63 29 20 64 24 200
Total Inference
From the above statistical analysis 63% of the respondents are male. Majority 22.5% of them invest in yearly basis, and 37% of the respondents are female; of them 13% invest in monthly basis.
50
40
30
Investment Nature
20 Monthly Quarterly 10 Half Yearly Yearly 0 Male Female Others
Count
Gender
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2. REASON FOR INVESTING IN MF AND GENDER Gender Male Female 27 17 48 26 22 25 4 22 7 2 126 74
Reason for Investing in MF
High Returns Diversificatio n Professional Mgt Tax Savings Others
Total 44 74 47 26 9 200
Total
Inference
From the above statistical analysis24% of the Majority male respondents invest in mutual fund for the purpose of diversification of the respondents are female; of them 13% invest in monthly basis.
60
50
40
30
Reas o n fo r Inv esting

High Retu rn s
20
Diversification Professional M n gt
10
Count
Tax S avin gs 0 M ale Female Oth ers
G ender
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3. FACTORS CONSIDER BEFORE INVESTING AND GENDER Gender Male Female 38 20 65 45 9 23 126 74
Factors consider before investing Total
Past Performance Mkt Condition Portfolio of Scheme
Total 58 110 32 200
INFERENCE
From the above analysis it is inferred that majority of 55% of the respondents Consider market conditions as a main factor for investing in mutual fund and 24% Consider past performance.
140
120
100
80
60
40
Factors consider bef

Portfolio of Scheme
Count
20 0 Male Female
Mrkt Condition Past Performance
Gender
Page 33
4. QUANTUM OF INVESTMENT AND GENDER

Gender Male Quantum of Investment 0 : 100 25 : 75 50 : 50 75 : 25 100 : 0 Others Total 3 Female 21 28 12 2 11 74 Total 3
46 33 30 5 9 126
67 61 42 7 20 200
INFERENCE
The above table shows that 33.5% of the respondents quantum of investments in Mutual fund and others investments is 25:75, 30.5% is 50:50.and 21% is 75:25.
140
120
100
Quantum of Investment
80 Others 60 100 : 0 75 : 25 50 : 50
40
Count
20 0 Male Female
25 : 75 0 : 100
Gender
Page 34
5. REASON FOR MORE INVESTMENT IN MF AND GENDER

Gender Male Reason for More Investment in MF Professional Mgmt Less Risk Variety of Schemes Liquidity Diversification Tax Savings Total 21 23 15 26 28 13 126 Female 17 16 13 7 16 5 74 Total 38 39 28 33 44 18 200
INFERENCE
From the above table it is revealed that 14%of the male respondents are investing more in mutual fund for the purpose of diversification, 13% for liquidity, 11.5% for less risk. and 8.5% of the female respondents for professional management, 8% for diversification and less risk.
140
120
100
Reason for More Inve

80 Tax Savings 60 Diversification Liquidity Variety of Schemes 20
40
Count
Less Risk Professional Mgmt Male Female
Gender
Page 35
6. REASON FOR LESS INVESTMENT IN MF AND GENDER

Gender Male Reason for less Investment in MF Total Returns are Marginal No Speculative trend Tax Benefit on certain MF 36 76 14 126 Female 14 48 12 74 Total 50 124 26 200
INFERENCE
The above table reveals that out of 63%, 36% of the male respondents are Investing less in mutual fund as there is no speculative trend, 18% for marginal returns. And 24% of the female respondents are investing less for no speculative trend.
140
120
100
80
60
Reason for less Inve

Tax Benefit on certa in MF
40
Count
20 0 Male Female
No Speculative trend Returns are Marginal
Gender
Page 36
7. PURPOSE OF INVESTMENT AND AGE

Age Purpose of Investment Retirement Children's Education Buying Vehicle Buying Properties Others Total 0 - 25 Yrs 4 1 13 22 8 48 26 - 35 Yrs 7 21 5 21 10 64 36 - 45 Yrs 3 15 7 8 3 36 Above 45 Yrs 24 16 9 3 52 Total 38 53 25 60 24 200
INFERENCE
From the above analysis it is seen that respondents of below 25 years are making investment for the purpose of buying properties, between 26-35 years for childrens education and buying properties, between 36-45 for childrens education and above 45 years for retirement.
70 60
50
40
Purpose of Investmen
Others Buying Pro perties
30
20 Buying Vehicle
Count
10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Abo 45 Yrs ve
Children's Educatio n Retirem ent
Age
Page 37
8. REASON FOR INVESTING IN MF AND AGE

Age 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Above 45 Yrs 9 9 13 13 19 25 11 19 5 13 16 13 6 5 7 8 1 5 3 48 64 36 52
Reason for Investing in MF
High Returns Diversification Professional Mgt Tax Savings Others
Total 44 74 47 26 9 200
Total
INFERENCE
From the above analysis it is inferred that respondents of below 25 years are investing in mutual fund for the purpose of diversification, between 26-35 years for diversification between 36-45 for high returns and above 45 years for diversification.
70
60
50
40
Reason for Investing

Others Tax Savings
30
20 Professional Mngt
Count
10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Above 45 Yrs
Diversification High Returns
Age
Page 38
9. OTHERS INVESTMENTS AND AGE

Age Others Investments Gold Real Estate both none Total 23 48 23 64 0 - 25 Yrs 22 3 26 - 35 Yrs 30 11 36 - 45 Yrs 10 9 2 15 36 Above 45 Yrs 20 7 3 22 52 Total 82 30 5 83 200
INFERENCE
From the above statistical analysis it is understood that all age group of people are investing in gold and real estate and between 36-45 years are investing more.
70
60
50
40
30
Others Investments
none
20 both
Count
10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Above 45 Yrs
Real Estate Gold
Age
Page 39
10. POST OFFICE INVESTMENT AND AGE

Age Post Office Investment Total Yes No 0 - 25 Yrs 3 45 48 26 - 35 Yrs 8 56 64 36 - 45 Yrs 6 30 36 Above 45 Yrs 18 34 52 Total 35 165 200
INFERENCE
The above table shows that all age group of respondents are investing in post Office schemes and majority of the respondents who are above 45 years invest More.
70
60
50
40
30
20
Post Office Investme

No Yes 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Above 45 Yrs
Count
10 0
Age
Page 40
11. BANK DEPOSITS AND AGE

Age Bank Deposits Total Yes No 0 - 25 Yrs 18 30 48 26 - 35 Yrs 21 43 64 36 - 45 Yrs 8 28 36 Above 45 Yrs 19 33 52 Total 66 134 200
INFERENCE
The above table reveals that all age group of people are depositing in bank And majority of the respondents who are between 26 - 35 years invest more.
70 60
50
40
30
20 10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Abo 45 Yrs ve
Bank Deposits
No Yes
Count
Age
Page 41
12. HAVING INSURANCE POLICIES AND AGE

Age Having Insurance Policies Total Yes No 0 - 25 Yrs 16 32 48 26 - 35 Yrs 19 45 64 36 - 45 Yrs 15 21 36 Above 45 Yrs 10 42 52 Total 60 140 200
INFERENCE
The above table reveals that all age group of people are having insurance Policies.
70
60
50
40
30
20
Having Insurance Po l
Count
10 0
Age
Page 42
13. INVESTED IN SHARE MARKET AND AGE

Age Invested in Share Market Total Yes No 0 - 25 Yrs 9 39 48 26 - 35 Yrs 12 52 64 36 - 45 Yrs 12 24 36 Above 45 Yrs 18 34 52 Total 51 149 200
INFERENCE
The above table shows that all age group of respondents are investing in share market and majority of the respondents who are above 45 years invest more.
70
60
50
40
30
20
Invested in Share Ma
Count
10 0
Age
Page 43
14. QUANTUM OF INVESTMENT AND AGE

Age 0 - 25 Yrs Quantum of Investment 0 : 100 25 : 75 50 : 50 75 : 25 100 : 0 Others Total 20 6 14 8 48 26 - 35 Yrs 1 14 21 15 5 8 64 36 - 45 Yrs 9 15 9 3 36 Above 45 Yrs 2 24 19 4 2 1 52 Total 3
67 61 42 7 20 200
INFERENCE
From the above table it is inferred that respondents of below 25 years investment quantum of mutual fund and other is25:75 , between 26-35 years is 50:50, between 36-45 years is 50:50and above 45 years is 25:75.
70
60
50
40
30
20
Count
10 0
Age
Page 44
15. FACTORS CONSIDER BEFORE INVESTING AND EDUCATION

Education Graduate 12 46 9 67 Post Graduate 25 33 9 67 Professional 15 18 13 46 Non Graduate 6 13 1 20 Total 58 110 32 200
Factors consider before investing Total
Past Performance Mrkt Condition Portfolio of Scheme
INFERENCE
It is known from the above analysis that majority of the respondents irrespective of education level consider market conditions as important factor before investing in mutual fund.
80 70 60 50 40 30 20
Factors consider bef

Portfolio of Scheme Mrkt Condition Past Performance Graduate Professional Post Graduate Non - Graduate
Count
10 0
Education
Page 45
16. OCCUPATION AND REASON FOR INVESTING IN MF

Reason for Investing in MF High Returns 6 25 10 2 1 44 Diversification 10 47 12 4 1 74 Professional Mngt 5 29 4 7 2 47 26 9 Tax Savings 5 16 3 2 Others 1 5 3 Total 27 122 32 15 4 200
Occupation
Govt Private Business Professional Retired
Total
INFERENCE
The above analysis shows that majority of the private employees, government employees and business people are investing in mutual fund for the purpose of diversification.
140
120
100
80
Reason for Investing

Others Tax Savings
60
40 Professional Mngt
Count
20 0 Govt Private Business Professional Retired
Diversification High Returns
Occupation
Page 46
17. INVESTMENT NATURE AND MONTHLY INCOME

Monthly Income 0 - 10000 3 1 3 4 11 10000 20000 43 13 15 26 18 115 20000 30000 12 9 4 23 1 49 Above 30000 5 6 1 12 1 25 Total 63 29 20 64 24 200
Investment Nature
Monthly Quaterly Half Yearly Yearly Others
Total
INFERENCE
The above table reveals that 21.5% of the respondents are in the monthly income group which ranges between Rs.10001-20000 and they invest on a monthly basis, 11.5% between Rs.2000130000 are investing on a yearly basis.
140
120
100
80
Investment Nature
Others Yearly
60
40 Half Yearly
Count
20 0 0 - 10000 20000 - 30000 10000 - 20000 Above 30000
Quaterly Monthly
Monthly Income
Page 47
18. OTHERS INVESTMENTS AND MONTHLY INCOME

Monthly Income 0 - 10000 6 1 4 11 10000 20000 49 19 2 45 115 20000 30000 18 6 1 24 49 Above 30000 9 4 2 10 25 Total 82 30 5 83 200
Others Investments
Gold Real Estate both none
Total
INFERENCE
From the above table it is inferred that all income group of respondents are investing in gold and real estate, and out of these groups majority of the respondents are in the income group of between Rs.10001-20000.
140
120
100
80
60
Others Investments
none
40 both
Count
20 0 0 - 10000 20000 - 30000 10000 - 20000 Above 30000
Real Estate Gold
Monthly Income
Page 48
19. POST OFFICE INVESTMENT AND MONTHLY INCOME
Post Office Investment Total
Yes No
0 - 10000 7 4 11
Monthly Income 10000 20000 20000 30000 11 11 104 38 115 49
Above 30000 6 19 25
Total 35 165 200
INFERENCE
The above table revels that respondents of the entire income group are investing in post office and most of the respondents are in the income group which falls between Rs.10001-20000 and Rs.20001-30000.
140
120
100
80
60
40
Post Office Investme

No Yes 0 - 10000 20000 - 30000 10000 - 20000 Above 30000
Count
20 0
Monthly Income
Page 49
20. BANK DEPOSITS AND MONTHLY INCOME

Monthly Income 0 - 10000 1 10 11 10000 20000 35 80 115 20000 30000 20 29 49 Above 30000 10 15 25 Total 66 134 200
Bank Deposits Total
Yes No
INFERENCE
The above table reveals that respondents of the entire income group are depositing in banks and most of the respondents come under the income group which ranges between Rs.10001 -20000 and Rs.20001 -30000.
140 120
100
80
60
40
Bank Deposits
No Yes 0 - 10000 20000 - 30000 10000 - 20000 Above 30000
Count
20 0
Monthly Income
Page 50
21. Having Insurance Policies and Monthly
Income
Monthly Income 0 - 10000 3 8 11 10000 20000 39 76 115 20000 30000 11 38 49 Above 30000 7 18 25 Total 60 140 200
Having Insurance Policies Total
Yes No
INFERENCE
From the above analysis it is seen that respondents of the entire income group are having insurance policies, and out of the groups majority of the respondents income falls between Rs.1000120000.
140
120
100
80
60
40 20 0 0 - 10000 20000 - 30000 Above 30000 10000 - 20000
Having Insurance Pol

No Yes
Count
Monthly Income
Page 51
22. INVESTED IN SHARE MARKET AND MONTHLY INCOME

Monthly Income 0 - 10000 3 8 11 10000 20000 35 80 115 20000 30000 Above 30000 8 17 25 Total 51 149 200
Invested in Share Market Total
Yes No
44 49
INFERENCE
The above analysis reveals that respondents of the entire income group are investing in share market and most of the respondents falls in the income group which ranges between Rs.10001 20000(17.5%),
140
120
100
8 0
60
40
No Yes 0 - 10000 20000 - 30000 10000 - 20000 Abo 30000 ve
Count
20 0
Monthly Income
Page 52
23. MARITAL STATUS AND INVESTMENT NATURE
Investment nature Quaterly HalfYearly Yearly Monthly 2 2 9 7 Marital Single 3 5 2 1 4 3 Status Married 8 0 3 1 Total 6 2 2 4
Others 6 1 8 2
Total
7 13 0 0 20
INFERENCE
The above analysis shows that most of the married respondents invest on a yearly basis, and unmarried respondents invest on a monthly basis.
140
120
100
80
Investment Nature
Others Yearly Half Yearly
60
40
Count
20 0 Single Married
Quaterly Monthly
Marital Status
Page 53
24. MARITAL STATUS AND PURPOSE OF INVESTMENT Purpose of Investment Children's Buying Buying Retirement Education Vehicle Properties 6 1 17 33 8 32 52 27 38 53 25 60
Marital Single Status Married Total
Others 13 11 24
Total 70 130 200
INFERENCE
The above analysis shows that most of the married respondents are investing in mutual fund for the purpose of childrens education and unmarried respondents are investing for the purpose of buying properties.
140
120
100
80
Purpose of Investmen
Others Buying Properties Buying Vehicle
60
40
Count
20 0 Single Married
Children's Education Retirement
Marital Status
Page 54
25. MARITAL STATUS AND QUANTUM OF INVESTMENT
0 : 100 Marital Single Status Married Total 3 3
25 : 75 27 40 67
Quantum of Investment 50 : 50 75 : 25 100 : 0 3 14 17 4 47 25 7 61 42
Others 9 11 20
Total 70 130 200
INFERENCE
It is known from the above analysis that most of the married respondents quantum of investment in mutual fund and other investment is 50:50 and unmarried quantum is 25:75.
140
120
100
Quantum of Investmen
8 0 Others 60 100 : 0 75 : 25 50 : 50
40
Count
20 0 Single Married
25 : 75 0 : 100
M arital Status
Page 55
GENDER Frequency 12 6 7 20 Percent 63 37 100. Table 1.1 Valid Percent Cumulative Percent 63 63 37 100 100
Male Female Total
INFERENCE From the above percentage analysis it is seen that majority 63% of the respondents are male and rest 37% of the respondents are female.
OCCUPATION
Valid Percent Valid Frequency Percent Govt 27 13.5 Private 122 61.0 Business 32 16.0 Professional 15 7.5 4 Retired 2.0 Total 200 100.0 13.5 61.0 16.0 7.5 2.0 100.0
Cumulative Percent 13.5 74.5 90.5 98.0 100.0
Table 1.2
Page 56
INFERENCE
From the above percentage analysis it is seen that majority 61% are working in private organizations, 16% of the respondents are doing their own business, 13% are government employees, 7.5% are professionals and remaining 2% are retired.
MARITAL STATUS Cumulative Percent 35.0 100.0
Single Married Total
Frequency 70 130 200
Percent 35.0 65.0 100.0 Table 1.3
Valid Percent 35.0 65.0 100.0
INFERENCE
Above analysis shows that the majority 65% are married respondents and 35% are unmarried.
Page 57
MONTHLY INCOME Cumulative Valid Percent Percent 5.5 5.5 57.5 63.0 24.5 87.5 12.5 100.0 100.0
0 - 10000 10000-20000 20000-30000 Above 30000 Total
Frequency 11 115 49 25 200
Percent 5.5 57.5 24.5 12.5 100.0 Table 1.4
INFERENCE:
Above analysis shows that the majority 57.5% of the respondents are between the income group of Rs10001-20000. The next 24.5% are between Rs 20001-30000, 12.5% are above 30000, 5.5% are below 10000.
REASON FOR INVESTING IN MF Cumulative Percent 22.0 59.0 82.5 95.5 100.0
High Returns Diversificatio n Professional Mgt Tax Savings Others Total
Frequency 44 74 47 26 9 200
Percent 22.0 37.0 23.5 13.0 4.5 100.0
Valid Percent 22.0 37.0 23.5 13.0 4.5 100.0
Table 1.5
Page 58
INFERENCE
Above analysis reveals that the 37% of the respondents are investing in mutual funds for the purpose of diversification, 23.5% for professional management, 22% for high returns and 13% for tax saving purpose.
OTHERS INVESTMENTS Cumulative Percent 41.0 56.0 58.5 100.0
Gold Real Estate both none Total
Frequency 82 30 5 83 200
Percent 41.0 15.0 2.5 41.5 100.0 Table 1.6
Valid Percent 41.0 15.0 2.5 41.5 100.0
INFERENCE
From the above percentage analysis it is know that 41% of the respondents are investing in gold. 15% are investing in real estate, 2.5% are investing in both real estate and gold.
Page 59
POST OFFICE INVESTMENT

Frequency 35 165 200 Percent 17.5 82.5 100.0 Valid Percent 17.5 82.5 100.0 Cumulative Percent 17.5 100.0
Yes No Total
Table 1.7
INFERENCE
Above analysis reveals that the 17.5% of the respondents are investing in post office saving schemes.
BANK DEPOSITS
Cumulative Percent 33.0 100.0
Yes No Total
Percent 33.0 67.0 100.0
Table 1.8
INFERENCE
Above analysis reveals that the 33% of the respondents are investing in bank deposits.
Page 60
HAVING INSURANCE POLICIES

Frequency 60 140 200 Percent 30.0 70.0 100.0 Valid Percent 30.0 70.0 100.0 Cumulative Percent 30.0 100.0
Yes No Total
Table 1.9
INFERENCE:
Above analysis shows that the 30% of the respondents are having insurance policies.
INVESTED IN SHARE MARKET Cumulative Percent 25.5 100.0
Yes No Total
Percent 25.5 74.5 100.0
Table 1.10
INFERENCE:
Above analysis shows that the 25.5% of the respondents are investing in share market.
Page 61
QUANTUM OF INVESTMENT Frequency 3 67 61 42 7 20 200 Percent 1.5 33.5 30.5 21.0 3.5 10.0 100.0 Table 1.11 Valid Percent 1.5 33.5 30.5 21.0 3.5 10.0 100.0 Cumulative Percent 1.5 35.0 65.5 86.5 90.0 100.0
0:100 25:75 50:50 75:25 100:0 Others Total
INFERENCE:
From the above percentage analysis 33.5% of the respondents proportion in Mutual funds and other investments is 25:75, 30% of the respondents proportion is 50:50 and 21% is 75:25.
REASON FOR MORE INVESTMENT IN MF Cumulative Percent 19.0 38.5 52.5 69.0 91.0 100.0
Frequency Professional Mgmt 38 Less Risk 39 Variety of Schemes 28 Liquidity 33 Diversificatio 44 n Tax Savings 18 Total 200
Percent 19.0 19.5 14.0 16.5 22.0 9.0 100.0
Valid Percent 19.0 19.5 14.0 16.5 22.0 9.0 100.0
Table 1.12
Page 62
INFERENCE:
Above analysis reveals that the 22% of the respondents are investing more in Mutual funds for the purpose of diversification, 19.5% for less risk, 19% for Professional management,16.5% for liquidity and 14% for variety of schemes.
STATISTICAL ANALYSIS
AGE AND PURPOSE OF INVESTMENT CROSS TABULATION

Purpose of Investment Retirement 4 7 3 24 38 Children's Education 1 21 15 16 53 25 Buying Vehicle 13 5 7 Buying Properties 22 21 8 9 60 Others 8 10 3 3 24 Total 48 64 36 52 200
Age
0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Above 45 Yrs
Total
CHI-SQUARE TESTS
Value a 71.179 Asymp. Sig. df (2-sided) 12 .000
Pearson Chi-Square
N of Valid Cases
200
a. 2 cells (10.0%) have expected count less than 5. The minimum expected count is 4.32.
Hypothesis
Null hypothesis: Ho There is no significant relationship between age and purpose of investment. Alternative hypothesis: H1 - There is significant relationship between age and purpose of investment. SRM UNIVERSITY,CHENNAI-603203 Page 63
INFERENCE Since the significant is less than 0.05 the null hypothesis is rejected. Therefore there is significance relationship between age and purpose of investment. GENDER AND REASON FOR INVESTING IN MF CROSS TABULATION
Reason for Investing in MF High Returns 27 17 44 Diversification 48 26 74 Professional Mngt 22 25 47 Tax Savings 22 4 26 Others 7 2 9 Total 126 74 200
Gender Total
Male Female
CHI-SQUARE TESTS
Pearson Chi-Square Value a 11.502 df 4 Asymp. Sig. (2-sided) .021
N of Valid Cases
200
Hypothesis
Null hypothesis: Ho There is no significant relationship between gender and reason for investing in mutual fund. Alternative hypothesis: H1 - There is significant relationship between gender and reason for investing in mutual fund. INFERENCE Since the significant is less than 0.05 the null hypothesis is rejected. Therefore there is significant relationship between gender and reason for investing in Mutual fund. SRM UNIVERSITY,CHENNAI-603203 Page 64
MONTHLY INCOME AND OTHERS INVESTMENTS CROSS TABULATION

Others Investments Gold Monthly Income 0 - 10000 10000 - 20000 20000 - 30000 Above 30000 Total 6 Real Estate 1 19 6 4 30 both 2 1 2 5 None 4 Total 11 115 49 25 200
49 18 9 82
45 24 10 83
CHI-SQUARE TESTS
Value a 6.140 df Asymp. Sig. (2-sided) .726
Pearson Chi-Square
N of Valid Cases
200
a. 8 cells (50.0%) have expected count less than 5. The minimum expected count is .28.
Hypothesis
Null hypothesis: Ho There is no significant relationship between monthly income and other Investments. Alternative hypothesis: H1 - There is significant relationship between monthly income and other Investments INFERENCE Since the significant is greater than 0.05 the null hypothesis is accepted. Therefore there is no significant relationship between monthly income and Other investment.
Page 65
MONTHLY INCOME AND POST OFFICE INVESTMENT CROSS TABULATION
Monthly Income
0 - 10000 10000 - 20000 20000 - 30000 Above 30000
Post Office Investment Yes No 7 4 11 11 6 35 104 38 19 165
Total
Total 11 115 49 25 200
CHI-SQUARE TESTS
Value a 22.796 df Asymp. Sig. (2-sided) .000
Pearson Chi-Square
N of Valid Cases
200
Hypothesis
Null hypothesis: Ho There is no significant relationship between monthly income and post office Investments. Alternative hypothesis: H1 - There is significant relationship between monthly income and post office Investments. INFERENCE Since the significant is less than 0.05 the null hypothesis is rejected. Therefore there is significant relationship between monthly income and post office investment.
Page 66
MONTHLY INCOME AND BANK DEPOSITS CROSS TABULATION Bank Deposits Yes No 1 35 20 10 66
Monthly Income
0 - 10000 10000 - 20000 20000 - 30000 Above 30000
Total 10 80 29 15 134 11 115 49 25 200
Total
CHI-SQUARE TESTS
N of Valid Cases
200
Hypothesis
Null hypothesis: Ho There is no significant relationship between monthly income and bank Deposits. Alternative hypothesis: H1 - There is significant relationship between monthly income and Bank deposits. INFERENCE Since the significant is greater than 0.05 the null hypothesis is accepted. therefore there is no significant relationship between monthly income and bank deposits.
Page 67
MONTHLY INCOME AND HAVING INSURANCE POLICIES CROSS TABULATION

Having Insurance Policies Yes No 3 39 11 7 60
Monthly Income
0 - 10000 10000 - 20000 20000 - 30000 Above 30000
8 76 38 18 140
Total 11 115 49 25 200
Total
CHI-SQUARE TESTS
Asymp. Sig. (2-sided) .521
Pearson Chi-Square
Value a 2.256
df
N of Valid Cases
200
Hypothesis
Null hypothesis: Ho There is no significant relationship between monthly income and insurance. Alternative hypothesis: H1 - There is significant relationship between monthly income and insurance. INFERENCE Since the significant is greater than 0.05 the null hypothesis is accepted. therefore there is no significant relationship between monthly income and insurance.
Page 68
MONTHLY INCOME AND INVESTED IN SHARE MARKET Invested in Share Market Yes No 3 35 5 8 51
Monthly Income
0 - 10000 10000 - 20000 20000 - 30000 Above 30000
8 80 44 17 149
Total 11 115 49 25 200
Total
CHI-SQUARE TESTS Value a Pearson Chi-Square 8.083 df 3 Asymp. Sig. (2-sided) .044
N of Valid Cases 200 a. 1 cells (12.5%) have expected count less than 5. The minimum expected count is 2.81.
Hypothesis
Null hypothesis: Ho There is no significant relationship between monthly income and share market investment. Alternative hypothesis: H1 - There is significant relationship between monthly income and share market investment INFERENCE Since the significant is less than 0.05 the null hypothesis is rejected. Therefore there is significant relationship between monthly income and share market investment. SRM UNIVERSITY,CHENNAI-603203 Page 69
TYPE OF SCHEME AND REASON FOR INVESTING IN MF CROSS TABULATION

Reason for Investing in MF High Returns 27 17 44 Diversification 43 28 3 74 Professional Mngt 27 18 2 47 Tax Savings 4 19 3 26 Others 4 5 9 Total 105 87 8 200
Type of Scheme Total
Open Ended Close Ended both
CHI-SQUARE TESTS
N of Valid Cases
200
a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is .36.
Hypothesis
Null hypothesis: Ho There is no significant relationship between type of schemes and reason for investing in mutual fund. Alternative hypothesis: H1 - There is significant relationship between type of schemes and reason for investing in mutual fund. INFERENCE Since the significant is less than 0.05 the null hypothesis is rejected. Therefore there is significant relationship between type of schemes and reason for investing in mutual fund. SRM UNIVERSITY,CHENNAI-603203 Page 70
CHAPTER 4
CHAPTER 4
4.1 FINDINGS
1. Majority 63% of the respondents are male, remaining 37% are female. 2. 32% of the respondents are in the age group of 26-35 years, 24% are below 25 years, 18% are 36-45 years, 26% are above 45 years. SRM UNIVERSITY,CHENNAI-603203 Page 71
3. Majority 65% of the respondents are married, remaining 35% are unmarried. 4. 33.5% of the respondents are graduate and post graduate, 23% are professionals, 10% are non-graduate. 5. Majority 61% are working in the private organization, 16% of the respondents are doing their own business, 13.5% are government employees, 7.5% are professionals and remaining 2% are retired. 6. Majority 57.5% of the respondents are between the income group of Rs.10001-20000. The next 24.5% are between Rs.20001-30000, 12.5% are above 30000, 5.5% are below 10000. 7. 30% of the respondents are investing for the purpose of buying properties, 26.5% for childrens education, 19% for retirement and 12.5% for buying vehicle. 8. 42.5% of the respondents are investing for long term, 37% for medium term and 20.5% for short term. 9. 37% of the respondents are investing in mutual funds for the purpose of diversification, 23.5% for professional management, 22% for high returns and 13% for tax saving purpose. 10. Majority 72% of the respondents portfolio decision is equity oriented, 10.5% is debt oriented and 17% is balanced. 11. 41% of the respondents are investing in gold. 15% are investing in real estate, 2.5% are investing in both real estate and gold. 12. 17.5% of the respondents are investing in post office saving. 13. 33% of the respondents are depositing in bank. 14. 30% of the respondents are having insurance policies. 15. 25.5% of the respondents are investing in share market 16. 55% of the respondents considered as important factor before investing is marketing conditions, 29% are past performance and 16% are portfolio of the scheme. 17. Majority 52.5% of the respondents preferring open ended schemes, 43.5% are close ended schemes. 18. 33.5% of the respondents proportion in mutual fund and other investments is 25:75, 30% of the respondents proportion is 50:50 and 21% is 75:25. 19. 22% of the respondents are investing more in mutual funds for the purpose of diversification, 19.5% for less risk, 19% for professional management, 16.5% for liquidity and 14% for variety of schemes. 20. Majority 62% of the respondents are investing less in mutual funds for No speculative trend, 25% for returns are marginal and 13% for tax benefits only on certain mutual fund.
Page 72
21. 46.5% of the respondents option preferred in mutual fund is dividend payout, 36% are growth and 17.5% are dividend reinvestment.
4.2 SUGGESTIONS AND RECOMMENDATIONS

The demographical factors influence the customers investment allocation on mutual fund so the company should analyze these factors and should plan their policies and practices to attract more number of customers. The company must take all necessary steps to create awareness among the people about the mutual fund and its utility. Many customers suggested that new schemes must be introduced wherein there is a guaranteed return. Hence 55% of respondents said that they chose the funds based on marketing conditions all companies has to market its funds on effective media like TV,Hordings and some other innovative methods From the analysis we came to know only 37% of investors are female so we should improve the awareness among females.
CHAPETR 5
5.1 CONCLUSION
UNICON INVESTMENT SOLUTION is professionally managed and lead by a team of dedicated managers and staff members. The Company is moving in right direction, scaling new heights year by year with the targets getting tougher and tougher with each passing day with new players emerging in the market day by day. SRM UNIVERSITY,CHENNAI-603203 Page 73
During my project I was exposed to various investment zones. The project mainly focuses on mutual fund as it is the latest trend among investment. The main aim of my project is to study on customer investment allocation on mutual fund. The size of the sample used for this study is 200.Out of these 200 respondents 170 respondents are investing in mutual fund. Out of these 170 respondents 67 respondents proportion of investment in mutual fund and other investments is 25:75, 61 is 50:50 and 42 respondents is 75:25.Most of the respondents invest in mutual fund for the purpose of liquidity and for diversification. Main factor for investing more in mutual fund is tax saving and liquidity and there is less investment in mutual fund as there is no speculative trend, risk is more as compared with bank deposits, moderate return and the main reason is less awareness about mutual fund.
5.2 BIBLIOGRAPHY BOOKS

C.R KOTHARI, Research Methodology, New age international publishers DR.D.D.SHARMA, Marketing Research, Sultan Chand and Sons, New Delhi V.K.BHALLA, Investment Management, Sultan Chand and Sons, New Delhi Dr. S.N.MAHESHWARI, Financial Management, Sultan Chand and Sons V.A.AVADHANI, Security Analysis and Portfolio Management, Himalaya Publishing Hose PUNITHAVATHY PANDIAN, Security Analysis and Portfolio Management, Vikas Publication Pvt. Ltd.
WEBSITES
www.iepindia.com www.amfiindia.com www.google.com www.valueresearch.com www.nseindia.com
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www.indiainfoline.com
5.3 ANNEXURES
CUSTOMER PREFERENCES IN MUTUAL FUNDS 1) Gender [ ] Male 2) Age [ ] Below 25 3) Marital Status [ ] Single 4) Education [ ] Graduate 5) Occupation [ ] Govt., [ ] Private [ ] Business [ ] Professional [ ] Retired [ ] P.G [ ] Professional [ ] Non- graduate [ ] Married [ ] 26-35 [ ] 36- 45 [ ] 45 Above [ ] Female
6) Monthly Income [ ] Below 10000 [ ] 10001-200000 [ ] 20001-30000 [ ] 30000 Above
7) Investment nature [ ] Monthly [ ] Quarterly [ ] Half Yearly [ ] Yearly [ ] others
8) Purpose for which you are investing [ ] Retirement [ ] Childrens education [ ] Buying a vehicle
[ ] Buying properties
[ ] others (Please specify)
9) Time span of investment [ ] Short term [ ] Medium term [ ] Long term
10) Reason for preferring investment in mutual fund [ ] High return [ ] Diversification [ ] Professional management Page 75
[ ] Tax savings 11) Portfolio decision [ ] Equity oriented 12) Other investment [ ] Gold
[ ] others (please specify)
[ ] Debt oriented
[ ] Balanced scheme
[ ] Real estate
[ ] Both
13) Do you invest in post office? [ ] Yes [ ] No
14) Do you deposit in Banks? [ ] Yes [ ] No
15) Do you have insurance policy? [ ] Yes [ ] No 16) Do you invest in share market? [ ] Yes [ ] No
17) Important factor considered before investing [ ] Past performance [ ] Market conditions [ ] Portfolio of the schemes
18) Type of scheme preferred [ ] Open ended scheme [ ] Close ended scheme [ ] Both
19) Quantum of investment in mutual fund vis--vis investment in others [ ] 0:100 [ ] 75:25 [ ] 25:75 [ ] 100:0 [ ] 50:50 [ ] Others
20) Reason for investing more in Mutual fund [ ] Professional management [ ] Variety of schemes [ ] Diversification (OR) 21) Reason for investing less in Mutual fund [ ] Returns are marginal SRM UNIVERSITY,CHENNAI-603203 [ ] No speculative trend Page 76 [ ] Less risk [ ] Liquidity [ ] Tax savings
[ ] Tax benefits only on certain Mutual fund
22) Options preferred in Mutual fund [ ] Growth [ ] Dividend payout [ ] Dividend re investment
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Mutual Fund Project 2

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Mutual Fund Project 2

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CUSTOMER PREFERENCES IN MUTUAL FUNDS IN REFERENCE TO UNICON Project report submitted to SRM UNIVERSITY In partial fulfillment of the Requirement

SRM School Of Management , SRM UNIVERSITY,

Head of the Department

Submitted or viva voice to be held on

ASHUTOSH KUMAR SINGH SRM SCHOOL OF MANAGEMENT

Place: Chennai Date:

Name: ASHUTOSH KUMAR SINGH Register No: 3510910110

Shortcomings in mutual funds:

Benefits of mutual funds:

1.2 INDUSTRY PROFILE

1.3 Company Profile

FIXED INCOME & INVESTMENT BANKING

UNICON CAPTIAL SERVICES Pvt. Ltd.

UNICON FINCAP Pvt. Ltd.

TRADING IN EQUITIES & DERIVATIVES

UNICON SECURITIES Pvt. Ltd.

UNICON COMMODITIE S Pvt. Ltd.

UNICON REAL ESTATES Pvt. Ltd.

PRODUCT AND SERVICES

10. PORTFOLIO MANAGEMENT:

2.3 SCOPE OF THE STUDY

2.4 LIMITATIONS OF THE STUDY

3.1 RESEARCH METHODOLOGY

NATURE AND SOURCE OF DATA

SAMPLE SIZE AND TECHNIQUE

TECHNIQUES USED FOR ANALYSIS

Number of rows Number of columns

3.2 DATA ANALYSIS AND INTERPRETATION

Monthly 37 Quarterly Half Yearly Yearly Others

2. REASON FOR INVESTING IN MF AND GENDER Gender Male Female 27 17 48 26 22 25 4 22 7 2 126 74

Reason for Investing in MF

High Returns Diversificatio n Professional Mgt Tax Savings Others

Reas o n fo r Inv esting

Tax S avin gs 0 M ale Female Oth ers

Factors consider before investing Total

Past Performance Mkt Condition Portfolio of Scheme

Total 58 110 32 200

Factors consider bef

Mrkt Condition Past Performance

4. QUANTUM OF INVESTMENT AND GENDER

5. REASON FOR MORE INVESTMENT IN MF AND GENDER

Reason for More Inve

Less Risk Professional Mgmt Male Female

6. REASON FOR LESS INVESTMENT IN MF AND GENDER

Reason for less Inve

No Speculative trend Returns are Marginal

7. PURPOSE OF INVESTMENT AND AGE

10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Abo 45 Yrs ve

Children's Educatio n Retirem ent

8. REASON FOR INVESTING IN MF AND AGE

Reason for Investing in MF

High Returns Diversification Professional Mgt Tax Savings Others

Reason for Investing

10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Above 45 Yrs

Diversification High Returns

9. OTHERS INVESTMENTS AND AGE

10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Above 45 Yrs

Real Estate Gold

10. POST OFFICE INVESTMENT AND AGE

Post Office Investme

11. BANK DEPOSITS AND AGE

20 10 0 0 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs Abo 45 Yrs ve

12. HAVING INSURANCE POLICIES AND AGE

13. INVESTED IN SHARE MARKET AND AGE