Page |1

EXECUTIVE SUMMARY
Role of financial system is to enthusiast economic development. As investors are getting more educated, aware and prudent they look for innovative investment instruments so that they are able to reduce investment risk, minimize transaction costs, and maximize returns along with certain level of convenience as a result there has been as advent of numerous innovative financial instrument such as bonds, company deposits, insurance, and mutual finds. All of which could be matched with individuals investment needs. Mutual funds score over all other investment options in terms of safety, liquidity, returns, and are as transparent, convenient as it can get. Goal of a mutual fund is to provide an efficient way to make money .In India there are 36 mutual funds with different Investment strategies and goals to choose from .different mutual funds have different risks, which differ because of funds goals, funds manager, and investment styles. A mutual fund is an investment company that collects money from many people and invests it in a variety of securities .the company then manages the money on an ongoing basis for individuals and businesses. Mutual funds are an efficient way to invest in stocks, bonds, and other securities for three reasons:

a) The securities purchased are managed by professional managers. b) Risk is spread out or diversified, because you have a collection of different stocks and bonds. c) Costs usually are lower than what you would pay on your own, since the funds buy in large quantities.

Page |2

INTRODUCTION
In few years Mutual Fund has emerged as a tool for ensuring ones financial well being. Mutual Funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. As more people get aware regarding mutual fund, they are enjoying the benefits of investing in mutual funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds exist. But once people are aware of mutual fund investment opportunities, the number who decide to invest in mutual funds increases to as many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual funds and to use the right arguments in the sales process that customers will accept as important . As investors are getting more educated, aware and prudent they look for innovative investment instruments so that they are able to reduce investment risk, minimize transaction costs, and maximize returns along with certain level of convenience as a result there has been as advent of numerous innovative financial instrument such as bonds, company deposits, insurance, and mutual finds. All of which could be matched with individuals investment needs. Mutual funds score over all other investment options in terms of safety, liquidity, returns, and are as transparent, convenient as it can get. Goal of a mutual fund is to provide an efficient way to make money: d) The securities purchased are managed by professional managers. e) Risk is spread out or diversified, because you have a collection of different stocks and bonds. f) Costs usually are lower than what you would pay on your own, since the funds buy in large quantities This Project gave me a great learning experience and at the same time it gave me enough scope to implement my analytical ability. The analysis and advice presented in this Project Report is based on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. This Report will help to know about the investors Preferences in Mutual Fund means it proves as a boon or bane?

What is a Mutual fund?

Mutual fund is an investment tool that pools money from shareholders and invests in a variety of securities, such as stocks, bonds and money market instruments. Most open-end Mutual funds stand ready to buy back (redeem) its shares at their current net asset value, which depends on the total market value of the fund's investment portfolio at the time of redemption. Most open-end Mutual funds continuously offer new shares to investors. Also known as an open-end investment

Page |3

company, to differentiate it from a closed-end investment company. The joint ownership of the fund is thus Mutual, i.e. the fund belongs to all investors.

In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost the. right arguments in the sales process that customers will accept as important .

Page |4

Objectives of the study

The study has been undertaken with the following objectives. To study the level of awareness of mutual funds

To analyse the perception of investors towards mutual funds.

To study the factors considered by the investors and those which ultimately influence him while investing.

To determine the type of mutual fund investor prefers the most.

Need of the Study

The mutual funds industry has grown by leaps and bounds in last couple of years. Following the strengthening of regulatory framework there is now greater transparency and credibility in the functioning of mutual funds and has been successful in regaining investors faith. But to sustain the momentum it should start focusing on the areas where greater accountability and transparency could propel the industry towards a new growth trajectory. As of now big challenge for the mutual fund industry is to mount on investor awareness and to spread further to the semi-urban and rural areas. In this context, the need of study has been aroused in order to see the preference, awareness and the investors perception regarding the mutual funds in public and private sectors.

Page |5

PERCEPTIONS OF INVESTORS ON MUTUAL F UNDS

Mutual funds are recognized as a mechanism of pooling together the investment of unsophisticated investors and turn in the hands of professionally managed fund managers for consistent return along-with capital appreciation. Money collected in this process is then invested in capital market instrument such as shares, debentures and other securities. Finally, unit holders in proportion of units owned by them share the income earned through these investments and capital appreciation. Mutual funds put forward a way out to investors to approach most schemes and get well-diversified portfolio because investors with small savings neither have sufficient expertise nor have access to required diversification.

Indian Mutual Fund (MF) industry provides reasonable options for an ordinary man to invest in the share market. The plethora of schemes provides variety of options to suit the individual objectives whatever their age, financial position, risk tolerance and return expectations. In the past few years, we had seen a dramatic growth of the Indian MF industry with many private players bringing global expertise to the Indian MF industry. Investment in mutual funds is effected by the perception of the investors. Financial markets are constantly becoming more efficient by providing more promising solutions to the investors. Being a part of financial markets although mutual funds industry is responding very fast by understanding the dynamics of investors perception towards rewards, still they are continuously following this race in their endeavor to differentiate their products responding to sudden changes in the economy. Therefore a need is there to study investors perception regarding the mutual funds. The study at first tests whether there is any relation between demographic profile of the investor and selection of mutual fund alternative from among public sector and private sector. Money market instruments: These include short-term debt instruments such as treasury bills, certificate of deposits and inter-bank call money. A mutual funds business is to invest the funds thus collected, according to the wishes of the investors who created the pool. In many markets these wishes are articulated as investment mandates.

Page |6

Analysis of The perception towards these mutual funds is done here in this project. Even what factors the investors look before investing can also be observed. Economic success and sound financial system is intertwined in both literature and practice. The rapid growth of economy and globalization of financial Emarkets is perhaps one of the most significant developments at the international level in the financial market operations. Today, Indias financial system is considered to be sound and stable as compared to many other Asian countries. With the reforms of the industrial policy, reforms of public sector and financial sector, new economic policies of liberalization, deregulation, and restructuring the Indian capital market has been growing tremendously and has become an important portal for the small investors. As a result, the Indian economy has opened up and many developments have been taking place in the financial markets which foster savings and channels them to their most efficient use. One such financial intermediary who has played a significant role in the development and growth of capital markets is mutual fund. A mutual fund is a body corporate that pools money from the individuals/corporate investors and invests the same in a variety of different financial instruments or securities such as equity shares, government securities, bonds, debentures, etc. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. Mutual fund units are issued and redeemed by the Asset Management Company based on the funds net asset value, which is determined at the end of each trading session. Mutual funds have opened new vistas to millions of small investors by virtually taking investment to their doorstep. In India, a small investor generally goes for bank deposits, which do not provide hedge against inflation and often have negative real returns. He has limited access to price sensitive information and if available, may not be able to comprehend publicly available information couched in technical and legal jargons. Mutual funds are looked upon by individual investors as

financial intermediaries/portfolio managers who process information, identify investment opportunities, formulate investment strategies,

Page |7

invest funds and monitor progress at a very low cost. Thus the success of mutual funds is essentially the result of the combined efforts of competent fund managers and alert investors. A competent fund manager should analyze investor behavior and understand their needs and expectations, to gear up the performance to meet investor requirements

Page |8

COMPANY PROFILE Mutual Fund Companies in India

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987 marked the existance of only one mutual fund company in India with Rs. 67bn assets under management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund companies in India took their position in mutual fund market. The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund. The succeeding decade showed a new horizon in indian mutual fund industry. By the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds started penetrating the fund families. In the same year the first Mutual Fund Regulations came into existance with re-registering all mutual funds except UTI. Kothari Pioneer was the first private sector mutual fund company in India which has now merged with Franklin Templeton. Just after ten years with private sector players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund companies in India.

SEBI REGISTERED MUTUAL FUNDS

1. FORTIS Mutual fund 2. Alliance Capital Mutual fund, 3. AIG Global Investment Group Mutual fund 4. Benchmark Mutual fund, 5. Baroda Pioneer Mutual fund 6. Birla Mutual fund 7. Bharti AXA Mutual fund 8. Canara Robeco Mutual fund 9. CRB Mutual fund (Suspended) 10. DBS Chola Mutual fund, 11. Deutsche Mutual fund 12. DSP Blackrock Mutual fund, 13. Edelweiss Mutual fund 14. Escorts Mutual fund, 15. Franklin Templeton Mutual fund 16. Fidelity Mutual fund 17. Goldman Sachs Mutual fund 18. HDFC Mutual fund, 19. HSBC Mutual fund,

Page |9

20. ICICI Securities Fund, 21. IL & FS Mutual fund, 22. ING Mutual fund, 23. ICICI Prudential Mutual fund 24. IDFC Mutual fund, 25. JM Financial Mutual fund 26. JP Morgan Mutual fund 27. Kotak Mahindra Mutual fund, 29. LIC Mutual fund 31. Morgan Stanley Mutual fund 32. Mirae Asset Mutual fund 33. Principal Mutual fund 34. Quantum Mutual fund, 35. Reliance Mutual fund 36. Religare AEGON Mutual fund 37. Sahara Mutual fund, 38. SBI Mutual fund 39. Shriram Mutual fund 40. Sundaram BNP Paribas Mutual fund, 41. Taurus Mutual fund 42. Tata Mutual fund, 43. UTI Mutual fund

If the complaints remain unresolved, the investors may approach SEBI for facilitating redressal of their complaints. On receipt of complaints, SEBI takes up the matter with the concerned Mutual fund and follows up with it regularly. Investors may send their complaints to SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) OFFICE OF INVESTOR ASSISTANCE AND EDUCATION (OIAE) EXCHANGE PLAZA, G BLOCK, 4TH FLOOR, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. PHONE: 26598510-13

P a g e | 10

Major Mutual Fund Companies in India ABN AMRO Mutual Fund

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN AMRO Mutual Fund.

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life Financial is a golbal organisation evolved in 1871 and is being represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores.

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the caretaker.

HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers nemely Housing Development Finance Corporation Limited and Standard Life Investments Limited .

HSBC Mutual Fund

HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management (India) Pvt. Ltd. was incorporated on April 6, 1998.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of

P a g e | 11

October, 1993 with two sponsorers, Prudential Plc. and ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of June, 1993.

State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshor fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs spread over 18 schemes.

Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. 7,703 crores (as on April 30, 2010) of AUM.

Kotak Mahindra Mutual Fund

Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having more than 1,99,818 investors in its various schemes. KMAMC started its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk - return profiles. It was the first company to launch dedicated gilt scheme investing only in government securities.

Unit Trust of India Mutual Fund

UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual Fund with the support of UTI Trustee Company Privete Limited. UTI Asset Management Company presently manages a corpus of over Rs.20000 Crore. The sponsorers of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, Equity Funds and Balance Funds.

Reliance Mutual Fund

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which was changed on March 11, 2004

LIC Mutual Fund

P a g e | 12

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. . The Company started its business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund.

ADVANTAGES OF MUTUAL FUNDS

Professional Management. The major advantage of investing in a mutual fund is that you get a professional money manager to manage your investments for a small fee. You can leave the investment decisions to him and only have to monitor the performance of the fund at regular intervals. Diversification. Considered the essential tool in risk management, mutual funds make it possible for even small investors to diversify their portfolio. A mutual fund can effectively diversify its portfolio because of the large corpus. However, a small investor cannot have a welldiversified portfolio because it calls for large investment. Convenient Administration. Investors do not have to worry about investment decisions, they do not have to deal with brokerage or depository, etc. for buying or selling of securities. Mutual funds also offer specialized schemes like retirement plans, childrens plans, industry specific schemes, etc. to suit personal preference of investors. These schemes also help small investors with asset allocation of their corpus. It also saves a lot of paper work.

P a g e | 13

Costs Effectiveness A small investor will find that the mutual fund route is a cost-effective method and it also saves a lot of transaction cost as mutual funds get concession from brokerages. Also, the investor gets the service of a financial professional for a very small fee. If he were to seek a financial advisor's help directly, he will end up paying significantly more for investment advice. Liquidity. You can liquidate your investments within 3 to 5 working days Transparency. Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on a regular basis. They send quarterly newsletters, which give details of the portfolio, performance of schemes against various benchmarks, etc. They are also well regulated and Sebi monitors their actions closely. Tax benefits. You do not have to pay any taxes on dividends issued by mutual funds. You also have the advantage of capital gains taxation. Affordability Mutual funds allow you to invest small sums. For instance, if you want to buy a portfolio of blue chips of modest size, you should at least have a few lakhs of rupees. A mutual fund gives you the same portfolio for meager investment of Rs.1,000-5,000. A mutual fund can do that because it collects money from many people and it has a large corpus. Portfolio Diversification Flexibility & Convenience Safety of regulated environment Choice of schemes

DISADVANTAGE OF MUTUAL FUND

No control over Cost in the Hands of an Investor No tailor-made Portfolios Managing a Portfolio Funds Difficulty in selecting a Suitable Fund Scheme Costs - Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The Mutual fund industry is masterful at buying costs under layers of jargon. These costs are so complicated that in this tutorial we have devoted an entire section to the subject. Dilution - It's possible to have too much diversification Because funds have small holdings in so many different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big.

P a g e | 14

When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money. Taxes - When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale .

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the Industry. In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the AUM was Rs67 billion. The private sector entry to the fund family raised the Aum to Rs. 470 billion in March 1993 and till April 2010; it reached the height if Rs. 1650 billion. First Phase 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds)

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

P a g e | 15

Third Phase 1993-2003 (Entry of Private Sector Funds) 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.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. As at the end of January 2011, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.

Fourth Phase since February 2011 In February 2011, 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 2011, representing broadly, the assets of US 64 scheme, assured return and certain other schemes

Association of Mutual Funds in India (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organisation. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which supports the guidelines of its Board of Directors. The objectives are as follows:

This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry.

P a g e | 16

It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds. At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

STUCTURE OF THE INDIAN MUTUAL FUNDINDUSTRY:

Structure wise mutual fund industry can be classified into three categories; Unit trust of India The Indian mutual fund industry is dominated by the unit trust of India, which has a total corpus of 51000 crore collected from over 20 million investors. The UTI has many fund/ schemes in all categories in equity, balanced, debt, money market etc. With some being open ended and some being closed ended. The unit scheme 1964 commonly referred to as US64,which is a balanced fund, is the biggest scheme with a corpus of about 10000 crore.

Public sector mutual fund

The second largest categories of mutual funds are the ones floated by nationalized banks .can bank asset management floated by canara bank and sbi funds management floated by state bank of india are the largest of these. Gic amc floated by general insurance corporation. On line trading is a great idea to reduce management expenses from the current 2%of total assets to about 0.75%of the total asset.

P a g e | 17

72% of the crore-customer base of mutual fund in the top 50-broking firms in theus is expected to trade on line by 2003

Private Sector Mutual fund

The third largest categories of mutual funds are the ones floated by the private sector domestic mutual funds and the private sector foreign mutual funds. The largest of these in private sector domestic mutual funds are Reliance mutual fund, JM capital management company ltd. Tata mutual, Axis mutual fund, Birla sun life asset management pvt. Ltd. and in private foreign mutual funds these are alliance capital asset management private ltd, Franklin Templeton Investments, Sun F&C asset management private ltd, Lurich asset management company pvt ltd. The aggregate corpus of the assets managed by this category of amcs is about 42000 cr. Future of Mutual Funds in India Financial experts believe that the future of Mutual Funds in India will be very bright. AUM of 41 mutual fund houses in India rose to Rs 681,708 crore at the end of March, 2012 and Rs.664,824 crore in 2013, according to AMFI data. In the coming 10 years the annual composite growth rate is expected to go up by 13.4%. Since the last 5 years, the growth rate was recorded as 9% annually. Based on the current rate of growth, it can be forecasted that the mutual fund assets will be double by 2015.

CATEGORIES OF MUTUAL FUND:

P a g e | 18

Mutual funds can be classified as follow :

Open-ended funds: Investors can buy and sell the units from the fund, at any
point of time.

Close-ended funds: These funds raise money from investors only once.
Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of closeended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity.

Based on their investment objective: Equity funds: These funds invest in equities and equity related instruments.
With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can be further classified as: i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. ii) Equity diversified funds- 100% of the capital is invested in equities spreading across different sectors and stocks. iii|) Dividend yield funds- it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme. e.g. -An infrastructure fund invests in power, construction, cements sectors etc. v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will invest in banking stocks. vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

P a g e | 19

Balanced fund:

Their investment portfolio includes both debt and equity. As a result, on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities. ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund: They invest only in debt instruments, and are a good option for
investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs. i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in call money market. ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills. iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate. iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities. v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term debt papers. vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities.

P a g e | 20

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.

INVESTMENT OBJECTIVE
These schemes combine the features of open-ended and closed-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during predetermined intervals at NAV based prices. GROWTH SCHEMES These schemes, also commonly called Equity Schemes, seek to invest a majority of their funds in equities and a small portion in money market instruments. Such schemes have the potential to deliver superior returns over the long term. However, because they invest in equities, these schemes are exposed to fluctuations in value especially in the short term. INCOME SCHEMES These schemes, also commonly called Debt Schemes, invest in debt securities such as corporate bonds, debentures and government securities. The prices of these schemes tend to be more stable compared with equity schemes and most of the returns to the investors are generated through dividends or steady capital appreciation. These schemes are ideal for conservative investors or those not in a position to take higher equity risks, such as retired individuals. However, as compared to the money market schemes they do have a higher price fluctuation risk and compared to a Gilt fund they have a higher credit risk. BALANCED SCHEMES These schemes are commonly known as Hybrid schemes. These schemes invest in both equities as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of income and moderate capital appreciation and are ideal for investors with a conservative, long-term orientation. TAX SAVING SCHEMES Investors are being encouraged to invest in equity markets through Equity Linked Savings Scheme (ELSS) by offering them a tax rebate. Units purchased cannot be assigned / transferred/ pledged / redeemed / switched out until completion of 3 years from the date of allotment of the respective Units. The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations, 1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs), Government of India regarding ELSS. Subject to such conditions and limitations, as prescribed under Section 88 of the Incometax Act, 1961. INDEX SCHEMES

P a g e | 21

The primary purpose of an Index is to serve as a measure of the performance of the market as a whole, or a specific sector of the market. An Index also serves as a relevant benchmark to evaluate the performance of mutual funds. Some investors are interested in investing in the market in general rather than investing in any specific fund. Such investors are happy to receive the returns posted by the markets. As it is not practical to invest in each and every stock in the market in proportion to its size, these investors are comfortable investing in a fund that they believe is a good representative of the entire market. Index Funds are launched and managed for such investors. SECTOR SPECIFIC SCHEMES. Sector Specific Schemes generally invests money in some specified sectors for example: Real Estate Specialized real estate funds would invest in real estates directly, or may fund real estate developers or lend to them directly or buy shares of housing finance companies or may even buy their securitized assets

BY NATURE
Under this the mutual fund is categorized on the basis of Investment Objective. By nature the mutual fund is categorized as follow:

P a g e | 22

P a g e | 23

INVESTMENT STRATEGIES
1. Systematic Investment Plan: Under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities 2. Systematic Transfer Plan:Under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund. 3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month

RISK V/S. RETURN:

Main Objective
The objective of the research is to study and analyze the awareness level of investors of mutual funds.

Sub Objectives
To measure the satisfaction level of investors regarding mutual funds. An attempt has been made to measure various variables playing in the minds of investors in terms of safety, liquidity, service, returns, and tax saving.

P a g e | 24

To get insight knowledge about mutual funds Understanding the different ratios & portfolios so as to tell the distributors about these terms, by this, managing the relationship with the distributors To know the mutual funds performance levels in the present market To analyze the comparative study between other leading mutual funds in the present market. To know the awareness of mutual funds among different groups of investors.

P a g e | 25

METHODOLOGY OF THE PROJECT

This report is based on primary as well secondary data, however primary data collection was given more importance. One of the most important users of research methodology is that it helps in identifying the problem, collecting, analyzing the required information data and providing an alternative solution to the problem .It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones.

Data sources:
Research is totally based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various journals and websites.

Sampling:
Sampling procedure:

The sample was selected from respondents irrespective of them being investors or not or availing the services or not. It was also collected through personal visits to persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool. Sample size:

The sample size of my project is limited to 50 people only. Sample design:

Data has been presented with the help of bar graph, pie charts, line graphs etc.

Research Design :
My research project has a specified framework for collecting the data in an effective manner. Such framework is called RESEARCH DESIGN. The research process which was followed by me consisted following steps. A. PROBLEM: The problem at hand was to study and measure that mutual fund are proved as boon or bane in the city

P a g e | 26

B. DEVELOPING THE RESEARCH PLAN : The development of Research Plan has the following Steps: 1. DATA SOURCES: Two types of data were taken into consideration i.e. Secondary data & primary data. My major emphasis was on gathering the primary data. The secondary data has been used to make things more clear. (i) Primary Data: Direct collection of data from the source of information, technology including personal interviewing, survey etc. (ii) Secondary Data: Indirect collection of data from sources containing past or recent past information like Banks Brochures, Annual publications, Books, Fact sheets of mutual funds, Newspaper & Magazines etc. 2. RESEARCH INSTRUMENT A close friend questionnaire was constructed for my survey. Questionnaire consisting of a set of questions made to be filled by various respondents. 3. SAMPLING PLAN The sampling plan calls for three decisions. a) Sampling Unit: I have completed my survey in Sitapur. b) Sample Size: The sample consisted of 60 respondents. c) Contact Methods I have contacted the respondents through personal interviews. C. COLLECTING THE INFORMATION After this, I have collected the information from the respondents with the help of questionnaire D. ANALYZE THE INFORMATION The next step is to extract the pertinent findings from the collected data. I have tabulated the collected data & developed frequency distributions. Thus the whole data was grouped aspect wise and was presented in tabular form. Thus, frequencies & percentages were prepared to render impact of the study. E. PRESENTATIONS OF FINDINGS This was the last step of the survey.

P a g e | 27

Pointers to Measure Mutual Fund Performance

MEASURES STANDARD DEVIATION DESCRIPTION Standard Deviation allows to evaluate the volatility of the fund. The standard deviation of a fund measures this risk by measuring the degree to which the fund fluctuates in relation to its mean return. Beta is a fairly commonly used measure of risk. It basically indicates the level of volatility associated with the fund as compared to the benchmark. R- square measures the correlation of a funds movement to that of an index. R-squared describes the level of association between the fund's volatility and market risk. Alpha is the difference between the returns one would expect from a fund, given its beta, and the return it actually produces. It also measures the unsystematic risk . IDEAL RANGE Should be near to its mean return.

BETA

R-SQUARE

ALPHA

SHARPE RATIO

Beta > 1 = high risky Beta = 1 = Avg Beta <1 = Low Risky R-squared values range between 0 and 1, where 0 represents no correlation and 1 represents full correlation. Alpha is positive = returns of stock are better then market returns. Alpha is negative = returns of stock are worst then market. Alpha is zero = returns are same as market. Sharpe Ratio= Fund return in excess of risk free The higher the Sharpe ratio, return/ Standard deviation of Fund. Sharpe ratios the better a funds returns are ideal for comparing funds that have a mixed relative to the amount of risk asset classes. taken.

Tax Rules For Mutual Fund Investors*

Equity schemes Short Term Capit al Gains Long Term Capit al Gain Other schemes Divide nd income All Schem es Dividend distribution tax

Short Term Capital Gains

Long Term Capital Gain

TDS

Equit Liquid y Schemes Sche mes

Other Schemes

P a g e | 28

Residen t Individ ual / HUF Partner ship Firms

10%

NIL

10%

NIL

AOP/B OI

10%

NIL

Domesti 10% c Compa nies NRIs 10%

NIL

NIL

AS PER 10% SLAB (20% with indexatio n) 30% 10% (20% with indexatio n) AS PER 10% SLAB (20% with indexatio n) 30% 10% (20% with indexatio n) AS PER 10% SLAB (20% with indexatio n)

NIL

TAX FREE

NIL

NIL

TAX FREE

NIL

NIL

TAX FREE

NIL

NIL

TAX FREE

NIL

STCG30%LTC G-20%

TAX FREE

NIL

28.32% (25%+10 %surchar ge+educati on cess) 28.32% (25%+10 %surchar ge+educati on cess) 28.32% (25%+10 %surchar ge+educati on cess) 28.32% (25%+10 %surchar ge+educati on cess) 28.32% (25%+10 %surchar ge+educati on cess)

14.16% (12.5%+10 %surcharge +3%educati on cess) 22.66% (20%+10% surcharge+3 % education cess) 22.66% (20%+10% surcharge+3 % education cess) 22.66% (20%+10% surcharge+3 % education cess) 14.16% (12.5%+10 %surcharge +3%educati on cess)

GLOBAL SCENARIO OF MUTUAL FUND:

The money market mutual fund segment has a total corpus of 1.48 trillion in theU.S. Out of the top 10 mutual fund worldwide, eight are worldwide sponsored. Only fidelity and capital are non-bank mutual funds in this group. In the U.S. the total numbers of schemes is higher than that of the listed companies Internationally, mutual funds are allowed to go short. In India fund managers do nothave such leeway. In the U.S. about 9.7 million households will manage their assets online by the year2003, such a facility is not yet of avail in India and jeevan bima sahayog amc floated bythe LIC are some of the other prominent ones. The aggregate corpus of the fundsmanaged by this category of amcs is around 8300 cr.

P a g e | 29

WHAT IS THE PROCEDURE TO REGISTERED WITH SEBI?

An applicant proposing to sponsor a Mutual fund in India must submit an application in Form A along with a fee of Rs.25, 000. The application is examined and once the sponsor satisfies certain conditions such as being in the financial services business and possessing positive net worth for the last five years, having net profit in three out of the last five years and possessing the general reputation of fairness and integrity in all business transactions, it is required to complete the remaining formalities for setting up a Mutual fund. These include inter alia, executing the trust deed and investment management agreement, setting up a trustee company/board of trustees comprising two- thirds independent trustees, incorporating the asset management company (AMC), contributing to at least 40% of the net worth of the AMC and appointing a custodian. Upon satisfying these conditions, the registration certificate is issued subject to the payment of registration fees of Rs.25.00 lacs for details; see the SEBI (Mutual funds) Regulations, 1996. Documents required (PAN mandatory): Proof of identity : 1. Photo PAN card 2. In case of non-photo PAN card in addition to copy of PAN card any one of the following: driving license/passport copy/ voter id/ bank photo pass book. Proof of address (any of the following ) :latest telephone bill, latest electricity bill, Passport, latest bank passbook/bank account statement, latest Demat account statement, voter id, driving license, ration card, rent agreement. Offer document: An offer document is issued when the AMCs make New Fund Offer(NFO). Its advisable to every investor to ask for the offer document and read it before investing. An offer document consists of the following: Standard Offer Document for Mutual Funds (SEBI Format) Summary Information Glossary of Defined Terms Risk Disclosures Legal and Regulatory Compliance Expenses Condensed Financial Information of Schemes Constitution of the Mutual Fund Investment Objectives and Policies Management of the Fund Offer Related Information. Key Information Memorandum: a key information memorandum, popularly known as KIM, is attached along with the mutual fund form. And thus every investor get to read it. Its contents are:

P a g e | 30

1 Name of the fund. 2. Iestment objective 3. Aset allocation pattern of the scheme. 4. Risk profile of the scheme 5. Plans & options 6. Minimum application amount/ no. of units 7. Benchmark index 8. Dividend policy 9. Name of the fund manager(s) 10 . Expenses of the scheme: load structure, recurring expenses 11. Performance of the scheme (scheme return v/s. benchmark return) 12. Year- wise return for the last 5 financial year.

Distribution channels:
Mutual funds posses a very strong distribution channel so that the ultimate customers doesnt face any difficulty in the final procurement. The various parties involved in distribution of mutual funds are: 1. Direct marketing by the AMCs: the forms could be obtained from the AMCs directly. The investors can approach to the AMCs for the forms. some of the top AMCs of India are; Reliance ,Birla Sunlife, Tata, SBI magnum, Kotak Mahindra, HDFC, Sundaram, ICICI, Mirae Assets, Canara Robeco, Lotus India, LIC, UTI etc. whereas foreign AMCs include: Standard Chartered, Franklin Templeton, Fidelity, JP Morgan, HSBC, DSP Merill Lynch, etc. 2 .Broker/ sub broker arrangements: the AMCs can simultaneously go for broker/sub-broker to popularize their funds. AMCs can enjoy the advantage of large network of these brokers and sub brokers.eg: SBI being the top financial intermediary of India has the greatest network. So the AMCs dealing through SBI has access to most of the investors. 3. Individual agents, Banks, NBFC: investors can procure the funds through individual agents, independent brokers, banks and several non- banking financial corporations too, whichever he finds convenient for him.

Costs associated:
Expenses: AMCs charge an annual fee, or expense ratio that covers administrative expenses, salaries, advertising expenses, brokerage fee, etc. A 1.5% expense ratio means the AMC charges Rs1.50 for every Rs100 in assets under management. A fund's expense ratio is typically to the size of the

P a g e | 31

funds under management and not to the returns earned. Normally, the costs of running a fund grow slower than the growth in the fund size - so, the more assets in the fund, the lower should be its expense ratio Loads: Entry Load/Front-End Load (0-2.25%)- its the commission charged at the time of buying the fund to cover the cost of selling, processing etc. Exit Load/Back- End Load (0.25-2.25%)- it is the commission or charged paid when an investor exits from a mutual fund, it is imposed to discourage withdrawals. It may reduce to zero with increase in holding period.

Measuring and evaluating mutual funds performance:

Every investor investing in the mutual funds is driven by the motto of either wealth creation or wealth increment or both. Therefore its very necessary to continuously evaluate the funds performance with the help of factsheets and newsletters, websites, newspapers and professional advisors like SBI mutual fund services. If the investors ignore the evaluation of funds performance then he can loose hold of it any time. In this ever-changing industry, he can face any of the following problems: 1. Variation in the funds performance due to change in its management/ objective. 2. The funds performance can slip in comparison to similar funds. 3. There may be an increase in the various costs associated with the fund. 4 .Beta, a technical measure of the risk associated may also surge. 5. The funds ratings may go down in the various lists published by independent rating agencies. 6 .It can merge into another fund or could be acquired by another fund house.

Performance measures:
Equity funds: the performance of equity funds can be measured on the basis of: NAV Growth, Total Return; Total Return with Reinvestment at NAV, Annualized Returns and Distributions, Computing Total Return (Per Share Income and Expenses, Per Share Capital Changes, Ratios, Shares Outstanding), the Expense Ratio, Portfolio Turnover Rate, Fund Size, Transaction Costs, Cash Flow, Leverage.

P a g e | 32

Debt fund: likewise the performance of debt funds can be measured on the basis of: Peer Group Comparisons, The Income Ratio, Industry Exposures and Concentrations, NPAs, besides NAV Growth, Total Return and Expense Ratio. Liquid funds: the performance of the highly volatile liquid funds can be measured on the basis of: Fund Yield, besides NAV Growth, Total Return and Expense Ratio. Concept of benchmarking for performance evaluation: Every fund sets its benchmark according to its investment objective. The funds performance is measured in comparison with the benchmark. If the fund generates a greater return than the benchmark then it is said that the fund has outperformed benchmark , if it is equal to benchmark then the correlation between them is exactly 1. And if in case the return is lower than the benchmark then the fund is said to be underperformed.

Some of the benchmarks are :

1. Equity funds: market indices such as S&P CNX nifty, BSE100, BSE200, BSE-PSU, BSE 500 index, BSE bankex, and other sectoral indices. 2. Debt funds: Interest Rates on Alternative Investments as Benchmarks, I-Bex Total Return Index, JPM T-Bill Index Post-Tax Returns on Bank Deposits versus Debt Funds. 3. Liquid funds: Short Term Government Instruments Interest Rates as Benchmarks, JPM TBill Index

To measure the funds performance, the comparisons are usually done with: I)with a market index. ii) Funds from the same peer group. iii) Other similar products in which investors invest their funds.

How do investors choose between funds?

When the market is flooded with mutual funds, its a very tough job for the investors to choose the best fund for them. Whenever an investor thinks of investing in mutual funds, he must look at the investment objective of the fund. Then the investors sort out the funds whose investment objective matches with that of the investors. Now the tough task for investors start, they may carry on the further process themselves or can go for advisors like SBI . Of course the investors can save their money by going the direct route i.e. through the AMCs directly but it will only save 1-2.25% (entry load) but could cost the investors in terms of returns if the investor is not an expert. So it is always advisable to go for MF advisors. The mf advisors thoughts go beyond just investment objectives and rate of return. Some of the basic tools which an investor may ignore but an mf advisor will always look for are as follow:

P a g e | 33

1. Rupee cost averaging: The investors going for Systematic Investment Plans(SIP) and Systematic Transfer Plans(STP) may enjoy the benefits of RCA (Rupee Cost Averaging). Rupee cost averaging allows an investor to bring down the average cost of buying a scheme by making a fixed investment periodically, like Rs 5,000 a month and nowadays even as low as Rs. 500 or Rs. 100. In this case, the investor is always at a profit, even if the market falls. In case if the NAV of fund falls, the investors can get more number of units and vice-versa. This results in the average cost per unit for the investor being lower than the average price per unit over time. The investor needs to decide on the investment amount and the frequency. More frequent the investment interval, greater the chances of benefiting from lower prices. Investors can also benefit by increasing the SIP amount during market downturns, which will result in reducing the average cost and enhancing returns. Whereas STP allows investors who have lump sums to park the funds in a low-risk fund like liquid funds and make periodic transfers to another fund to take advantage of rupee cost averaging. 2. Rebalancing: Rebalancing involves booking profit in the fund class that has gone up and investing in the asset class that is down. Trigger and switching are tools that can be used to rebalance a portfolio. Trigger facilities allow automatic redemption or switch if a specified event occurs. The trigger could be the value of the investment, the net asset value of the scheme, level of capital appreciation, level of the market indices or even a date. The funds redeemed can be switched to other specified schemes within the same fund house. Some fund houses allow such switches without charging an entry load. To use the trigger and switch facility, the investor needs to specify the event, the amount or the number of units to be redeemed and the scheme into which the switch has to be made. This ensures that the investor books some profits and maintains the asset allocation in the portfolio.

3. Diversification: Diversification involves investing the amount into different options. In case of mutual funds, the investor may enjoy it afterwards also through dividend transfer option. Under this, the dividend is reinvested not into the same scheme but into another scheme of the investor's choice. For example, the dividends from debt funds may be transferred to equity schemes. This gives the investor a small exposure to a new asset class without risk to the principal amount. Such transfers may be done with or without entry loads, depending on the MF's policy.

P a g e | 34

4. Tax efficiency: Tax factor acts as the x-factor for mutual funds. Tax efficiency affects the final decision of any investor before investing. The investors gain through either dividends or capital appreciation but if they havent considered the tax factor then they may end loosing. Debt funds have to pay a dividend distribution tax of 12.50 per cent (plus surcharge and education cess) on dividends paid out. Investors who need a regular stream of income have to choose between the dividend option and a systematic withdrawal plan that allows them to redeem units periodically. SWP implies capital gains for the investor. If it is short-term, then the SWP is suitable only for investors in the 10-per-cent-tax bracket. Investors in higher tax brackets will end up paying a higher rate as short-term capital gains and should choose the dividend option. If the capital gain is long-term (where the investment has been held for more than one year), the growth option is more tax efficient for all investors. This is because investors can redeem units using the SWP where they will have to pay 10 per cent as long-term capital gains tax against the 12.50 per cent DDT paid by the MF on dividends. All the tools discussed over here are used by all the advisors and have helped investors in reducing risk, simplicity and affordability. Even then an investor needs to examine costs, tax implications and minimum applicable investment amounts before committing to a service.

P a g e | 35

Working of a Mutual fund:

The entire mutual fund industry operates in a very organized way. The investors, known as unit holders,handover their savings to the AMCs under various schemes. The objective of the investment should match with the objective of the fund to best suit the investors needs. The AMCs further invest the funds into various securities according to the investment objective. The return generated from the investments is passed on to the investors or reinvested as mentioned in the offer document. What are the most lucrative sectors for mutual fund managers? This is a question of utmost interest for all the investors even for those who dont invest in mutual funds. Because the investments done by the MFs acts as trendsetters. The investments made by the fund managers are used for prediction. Huge investments assure liquidity and reflects appositive picture whereas tight investment policy reflects crunch and investors may look forward for a gloomy picture. Their investments show that which sector is hot? And will set the market trends. The expert management of the funds will always look for profitable and high paying sectors. So we can have a look at most lucrative sectors to know about the recent trends:

P a g e | 36

sector name automotive banking & financial services cement & construction consumer durables conglomerates chemicals consumer non durables engineering & capital goods food & beverages information technology media & entertainment Manufacturing metals& mining Miscellaneous oil & gas Pharmaceuticals Services Telecom Tobacco Utility

No. of MFs betting on it 255 196 237 51 218 259 146 317 175 284 218 259 275 250 290 250 200 264 150 225

From the above data collected we can say that engineering & capital goods sector has emerged as the hottest as most of the funds are betting on it. We can say that this sector is on boom and presents a bright picture. Other than it other sectors on height are oil & gas, telecom, metals & mining and information technology. Sectors performing average are automotive, cement & construction, chemicals, media & entertainment, manufacturing, miscellaneous, pharmaceuticals and utility. The sectors which are not so favourite are banking & financial services, conglomerates, consumer non- durables, food & beverages, services and tobacco. And the sector which failed to attract the fund managers is consumer durables with just 51 funds betting on it. Thus this analysis not only gives a picture of the mindset of fund managers rather it also reflects the liquidity existing in each of the sectors. It is not only useful for investors of mutual funds rather the investors of equity and debt too could take a hint from it. Asset allocation by fund managers are based on several researches carried on so, it is always advisable for other investors too take a look on it. It can be further presented in the form of a graph as follow:

P a g e | 37

350 300 250 Axis Title 200 150 100 50 0 conglomerates chemicals services metals& mining automotive

engineering & capital goods

food & beverages

oil & gas

banking & financial services

media & entertainment

cement & construction

consumer non durables

information technology

INVESTORS FINANCIAL PLANNING AND ITS RESULT

Planning for long term objectives Many people get overwhelmed by the thought of retirement and they think how they will ever save the huge money that is required to lead a peaceful and happy retired life. However, the fact is that if we save and invest regularly over a period of time, even a small sum of money can be adequate. It is a proven fact that the real power of compounding comes with time. Albert Einstein called compounding "the eighth wonder of the world" because of its amazing abilities. Essentially, compounding is the idea that one can make money on the money one has already earned. That's why, the earlier one starts saving, the more time money gets to grow. Through Mutual funds, one can set up an investment programme to build capital for retirement years. Besides, it is an ideal vehicle to practice asset allocation and rebalancing thereby maintaining the right level of risk at all times.

consumer durables

pharmaceuticals

manufacturing

miscellaneous

telecom

tobacco

utility

P a g e | 38

It is important to know that determination and maintaining the right level of risk tolerance can go a long way in ensuring the success of an investment plan. Besides, it helps in customizing fund category allocations and suitable fund selections. There are certain broad guidelines to determine the risk tolerance. These are: Be realistic with regard to volatility. One needs to seriously consider the effect of potential downside loss as well as potential upside gain. Determine a "comfort level" i.e. If one is not confident with a particular level of risk tolerance, and then select a different level. Regardless of the level of risk tolerance, one should adhere to the principles of effective diversification i.e. The allocation of investment assets among different fund categories to achieve a variety of distinct risk/reward objectives and a reduction in overall portfolio risk. It helps to reassess risk tolerance every year. The risk tolerance may change due to either major adjustment in return objectives or to a realization that an existing risk tolerance is inappropriate for one's current situation. Market cap of a company signifies its market value, which is equal to the total number of shares outstanding multiplied by the current stock price. The market cap has a role to play in the kind of returns the stock might deliver and the risk or volatility that one may have to encounter while achieving those returns.For example, large companies are usually more stable during the turbulent periods and the mid cap and small cap companies are more vulnerable. As regards the allocation to each segment, there cannot be a standard combination applicable to all kinds of investors. Each one of us has different risk profile, time horizon and investment objectives. Besides, while deciding on the allocation, one has to keep in mind the fact whether the allocation is being done for an existing investor or for a new investor. While for an existing investor, the allocation that already exists has to be considered, for a new investor the right way to begin is by considering funds that invest predominantly in large cap stocks. The exposure to mid and small caps can be enhanced over a period of time. It is always advisable to take help of professionals to decide the allocation as well as select the appropriate funds. However, investors themselves have an important role to play in this process. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund

P a g e | 39

ALL AWARD WINNING FUNDS MAY NOT BE SUITABLE FOR

EVERYONE
Many investors feel that a simple way to invest in Mutual funds is to just keep investing in award winning funds. First of all, it is important to understand that more than the awards; it is the methodology to choose winners that is more relevant. A rating firm generally elaborates on the criteria for deciding the winners i.e. consistent performance, risk adjusted returns, total returns and protection of capital. Each of these factors is very important and has its significance for different categories of funds. Besides, each of these factors has varying degree of significance for different kinds of investors. For example, consistent return really focuses on risk. If someone is afraid of negative returns, consistency will be a more important measure than total return i.e. Growth in NAV as well as dividend received. A fund can have very impressive total returns overtime, but can be very volatile and tough for a risk adverse investor. Therefore, all the award winning funds in different categories may not be suitable for everyone. Typically, when one has to select funds, the first step should be to consider personal goals and objectives. Investors need to decide which element they value the most and then prioritize the other criteria. Once one knows what one is looking for, one should go about selecting the funds according to the asset allocation. Most investors need just a few funds, carefully picked, watched and managed over period of time.

P a g e | 40

INVESTMENT TIPS TO IMPROVE YOUR RETURNS

1. Know your risk profile Before you take a decision to invest in equity funds, it is important to assess your risk tolerance. Risk tolerance depends on certain factors like emotional temperament, attitude and investment experience. Remember, Vwhile ascertaining the risk tolerance, it is crucial to consider one's desire to assume risk as the capacity to assume the risk. It helps to understand different categories of overall risk tolerance, i.e. Conservative, moderate or aggressive. While a conservative investor will accept lower returns to minimise price volatility, a moderate investor would be all right with greater price volatility than conservative risk tolerances to pursue higher returns. An aggressive investor wouldn't mind large swings in the NAVs to seek the highest returns. Though identifying the desire for risk is a tough job, it can be made easy by defining one's comfort zone. 2. Don't have too many schemes in your portfolio While it is true that diversification helps in earning better returns with a lower level of fluctuations, it becomes counterproductive when one has too many funds in the portfolio. For example, if you have 15 funds in your portfolio, it does not necessarily mean that your portfolio is adequately diversified. To determine the right level of diversification, one has to consider factors like size of the portfolio, type of funds and allocation to different asset classes. Therefore, it is possible that a portfolio having 5 schemes may be adequately diversified whereas another one with 10 schemes may have very little diversification. Remember, to have a well-balanced equity portfolio, it is important to have the right level of exposure to different segments of the equity market like large cap, mid-cap and small cap. In addition, for a decent portfolio size, it is all right to have some exposure in the sector and specialty funds. 3. Longer time horizon provides protection from volatility As an equity fund investor, you need to understand that volatility is an integral part of the stock market. However, if you remain focused on the long-term objectives and follow a disciplined approach to investing, you can not only handle volatility properly but also turn it to your advantage.

P a g e | 41

4. Understand and analyze 'Good Performance' 'Good performance' is a subjective thing. Ideally, to analyze performance, one should consider returns as well as the risk taken to achieve those returns. Besides, consistency in terms of performance as well as portfolio selection is another factor that should play an important part while analyzing the performance. Therefore, if an investment in a Mutual fund scheme takes you past your risk tolerance while providing you decent returns; it cannot always be termed as good performance. In fact, at times to ensure that your investment remains within the parameters defined in the investment plan, you may to be forced to exit from that scheme. In other words, you need to assess as to how much risk did the fund manger subject you to, and did he give you an adequate reward for taking that risk. Besides, you also need to consider whether own risk profile allows you to accept the revised level of risk 5. Sell your fund, if you need to There is no standard formula to determine the right time to sell an investment in Mutual fund or for that matter any investment. However, you can definitely benefit by following certain guidelines while deciding to sell an investment in a Mutual fund scheme. Here are some of them: You may consider selling a fund when your investment plan calls for a sale rather than doing so for emotional reasons. You need to hold a fund long enough to evaluate its performance over a complete market cycle, i.e. around three years or so. Many of us make the mistake of either holding on to funds for too long or exit in a hurry. It is important to do a thorough analysis before taking a decision to sell. In other words, if you take a wrong decision, there is always a risk of missing out on good rallies in the market or getting out too early thus missing out on potential gains. You should consider coming out of a fund if its performance has consistently lagged its peers for a period of one year or so. It doesn't make sense to hold a fund when it no longer meets your needs. If you have made a proper selection, you would generally be required to make changes only if the fund changes its objective or investment style, or if your needs change. 6. Diversified vs. Concentrated Portfolio The choice between funds that have a diversified and a concentrated portfolio largely depends upon your risk profile. As discussed earlier, a well - diversified portfolio helps in spreading the investments across different sectors and segments of the market. The idea is that if one or more stocks do badly, the portfolio won't be affected as much. At the same time, if one stock does very well, the portfolio won't reap all the benefits. A diversified fund, therefore, is an ideal choice for someone who is looking for steady returns over the longer term. A concentrated portfolio works exactly in the opposite manner. While a fund with a concentrated portfolio has a better chance of providing higher returns, it also increases your chances of underperforming or losing a large

P a g e | 42

portion of your portfolio in a market downturn. Thus, a concentrated portfolio is ideally suited for those investors who have the capacity to shoulder higher risk in order to improve the chances of getting better returns. 7. Review your portfolio periodically It is always a good idea to review your portfolio periodically. For example, you may begin reviewing your portfolio on a half-yearly basis. Besides, you may be required to review your portfolio in greater detail when your investments goals or financial circumstances change.

HOW TO REDUCE RISK WHILE INVESTING:

Any kind of investment we make is subject to risk. In fact we get return on our investment purely and solely because at the very beginning we take the risk of parting with our funds, for getting higher value back at a later date. Partition itself is a risk.

Well known economist and Nobel Prize recipient William Sharpe tried to segregate the total risk faced in any kind of investment into two parts - systematic (Systemic) risk and unsystematic (Unsystemic) risk. Systematic risk is that risk which exists in the system. Some of the biggest examples of systematic risk are inflation, recession, war, political situation etc.

Inflation erodes returns generated from all investments e.g. If return from fixed deposit is 8 per cent and if inflation is 6 per cent then real rate of return from fixed deposit is reduced by 6 per cent. Similarly if returns generated from equity market is 18 per cent and inflation is still 6 per cent then equity returns will be lesser by the rate of inflation. Since inflation exists in the system there is no way one can stay away from the risk of inflation.

Economic cycles, war and political situations have effects on all forms of investments. Also these exist in the system and there is no way to stay away from them. It is like learning to walk. Anyone who wants to learn to walk has to first fall; you cannot learn to walk without falling. Similarly anyone who wants to invest has to first face systematic risk; there can never make any kind of investment without systematic risk.

P a g e | 43

Another form of risk is unsystematic risk. This risk does not exist in the system and hence is not applicable to all forms of investment. Unsystematic risk is associated with particular form of investment.

Suppose we invest in stock market and the market falls, then only our investment in equity gets affected OR if we have placed a fixed deposit in particular bank and bank goes bankrupt, than we only lose money placed in that bank.

While there is no way to keep away from risk, we can always reduce the impact of risk. Diversification helps in reducing the impact of unsystematic risk. If our investment is distributed across various asset classes the impact of unsystematic risk is reduced.

If we have placed fixed deposit in several banks, then even if one of the banks goes bankrupt our entire fixed deposit investment is not lost.

Similarly if our equity investment is in Tata Motors, HLL, Infosys, adverse news about Infosys will only impact investment in Infosys, all other stocks will not have any impact.

To reduce the impact of systematic risk, we should invest regularly. By investing regularly we average out the impact of risk.

Mutual fund, as an investment vehicle gives us benefit of both diversification and averaging.

Portfolio of mutual funds consists of multiple securities and hence adverse news about single security will have nominal impact on overall portfolio.

By systematically investing in mutual fund we get benefit of rupee cost averaging.

Mutual fund as an investment vehicle helps reduce, both, systematic as well as unsystematic risk.

P a g e | 44

PRIMARY DATA FOR THE PROJECT:

For the customized needs o the project, primary data was collected through a survey in the twin cities of Hyderabad & Secunderabad. A Random sample of 100 investors were surveyed. They were all asked to answer a questionnaire true to their knowledge. The feedback obtained from the customer was instrumental, gauging the perception of the investors towards mutual funds. It also throws light on the factors, which influence them to make decisions while investing. Further the interaction with few of the investors goes a long way in understanding the inlaid reasons for their decisions.

SECONDARY DATA:
The main sources of secondary data are the web sites of various mutual fund houses like cholamandalam mutual fund, Franklintempletonindia, ICICI, BIRLA SUNLIFE, KOTAK and more such houses. Many references were collected from different libraries to gain an insight on mutual funds. Previous studies conducted in this field provided valuable help. In addition to the above sources, Working with Karvy associates and interaction with their personnel provided a pragmatic edge to my theoretical concepts.

Survey Details

Total Sample Size

100

Economic Status Criterion

Tax payees & Non tax payees

Age groups Martial Status Criterion

23 years and above Married, Married with children & Unmarried

P a g e | 45

FACTORS CONSIDERED BY INVESTORS WHILE INVESTING

Every investor considers several factors while investing in any of the products as it deals with the most important need of life money.

The five main factors that were considered are: 1. Safety & security 2. Tax exemption 3. Liquidity 4. Profitability 5. Return pattern

Factors considered by investors While investing

17% 14% 12% Safety & security Liquidity Return pattern 31%

26% Tax exemption Profitability

SAMPLE SIZE ECONOMIC STATUS

100 TAX PAYEES AND NON-TAX PAYEES

P a g e | 46

The above graph shows that 31% people consider safety & security as the main factor while investing, 26% goes for Tax exemption, 17% considered return pattern in the investment, 14% went with profitability and 12% showed interest in liquidity.
ANALYSIS OF THE ABOVE GRAPH:

In a developing country like India most of the people fall in the lower middle class and middle class sectors. The attitude of the investors is of primary concern. As more and more options that warrant high returns are available in the market, investor tends to be more skeptical. So, while investing in any avenue, their first priority is safety and security. Even the age of the investor plays a major role in the decision-making. For example, if the investor is in the age of 50 and above, he usually looks for low or no risks while investing. Therefore, 31% of investors surveyed preferred safety & security. Next is the tax exemption; as there is tremendous boom in the corporate sector and the remuneration system for a particular sector has changed. This created a change in income levels and thereby affected the expenditure patterns. In the past, it took employee years of time to reach a five-figured salary. But, gradually the system has changed. Even the employee in the lower level or the middle level of the corporate ladder is receiving a handsome emolument. So, they are opting for the exemption of tax. Therefore, the next preference is for tax exemption that is 26% of the total. Besides investors going for Safety & security, there are investors who opt for return on investments they made. They are mainly in the age group of 23 and 35. Because these investors are likely to think that, at this age they are mentally more stable and feel that they can cope with financial risks. Any profits made would further bolster their financial stability. And so, 17% went with return pattern of their investment. In the same way, 14% of the investors look for profitability, especially those who are already doing business, i.e. those who are already accustomed to taking risks.Out of the total, 12% of investors preferred liquidity. The main reason for this could be that, that making the

P a g e | 47

invested money liquefied as and when required is important, and this is not possible if the investments are made in any insurance, Bank deposits, etc. Though there are numerous factors that can be attributed to an investors psyche, by large, we can conclude that maximum number of investors is investing in those sectors where there is safety & security for their principal. The other factors antecede safety.

P a g e | 48

INVESTMENT PATTERN:

Investment pattern
7% 5% 4% 2% 9% 42%

31% Bank deposits bonds none insurance shares mutual fund Equity

Sample size Economic status

100 Tax payees & non-tax payees

From the above graph, it is clear that 42% opted for an investment in bank deposits, 31% for insurance, 7% for shares, 9% for mutual fund, 2% for bonds, 5% for equity and remaining 4% have invested in some other investments such as real estates etc.

ANALYSIS OF THE ABOVE GRAPH:

The investment pattern of an investor is also very important because this shows the avenues where the people are really interested. Here, 42% have invested in bank deposits as it is very safe and risk free. Out of the sample of 100,it is observed that those who opted for an investment in banks in the form of deposits are found to be in the age group of 40 and above and are in government services.

P a g e | 49

The next preference, as observed in the pie chart for investment pattern is Insurance. People generally opt for life insurance because it promotes a sense of safety & security for the dependents on the person and even his belongings. So, the next priority is insurance. 7% of the investors went for an investment in shares as it brings quick returns, although shares are prone to high risks. As shown 9% of the investors opted for an investment in mutual funds. From this we can infer that the market of mutual fund is picking up slowly. According to the survey, the people who have invested in the mutual funds belong to high-income range and they want an exemption from tax and a mere 2% opted for bonds, 5% for investment in equity and 4% have invested in other investments such as Real estate to make quick returns on their investments.

AWARENESS TOWARDS MUTUAL FUNDS:

Awareness towards mutual funds

13%

87% Aware of mutual fund Not aware of mutual fund

P a g e | 50

In the above pie chart, we can observe that nearly 90% of investors are aware of mutual funds and only 13% people are not aware of it. This shows that most of the investors know about mutual funds in one or the other way.
ANALYSIS OF THE ABOVE GRAPH:

Of the sample surveyed, almost all of the people are aware of mutual funds. They are aware of the term mutual fund. Though the questionnaire cannot identify the extent of the awareness. Through the interaction it is found that they are not actually aware of the advantages in investing mutual funds, various types of mutual funds and different schemes offered in it. It is found that People often have an inhibition that investments in mutual funds can be done only by those who have surplus amount of money with them and want to avail tax redemption.
MUTUAL FUND INVESTMENTS:

Mutual funds are medium risk investments. Though Investing in mutual fund doesnt assure a fixed amount of returns, nevertheless, they are not low. The awareness about mutual funds is the primary criterion.

Mutual fund investments

19% 6% 75%

Equity funds

Debt funds

Liquid funds

P a g e | 51

Sample size Criterion

16 Mutual fund investors in the survey

From the graph, it is clear that only 16 out of 100 invested in mutual funds. From those 16, 12 have invested in Equity funds, 3 in liquid funds and the remaining 1 in debt funds. ANALYSIS OF THE ABOVE GRAPH: Only 16 out of 100 invested in mutual funds this can be mainly attributed to the low level of awareness, various inhibitions and a not so clear idea about the mutual funds. It is very important to have a clear perception of mutual funds, how they work and how the money is invested in different portfolios according to the investors choice. Investors who opted for equity funds are 12 of 16 percent. Equity funds being the majority preference can be reasoned as they want their investments to be put in various sectors i.e. DIVERSIFIED FUNDS so that they can make profits out of it easily. Even some went for INDEX FUNDS as the investments are made in Bench Nark Index Stock like BSE, NSE. A few (3%of 16%) investors made investments in liquid funds as they want a Short term investments where the investor need not wait for much time for the return. These are also called as Money Markets for short term. Only a single investor went for debt funds where investments are in various debt products like Certificate of Deposits (CDs), Commercial papers and call money as the investor want a secured investment, which he can avail in Debt Funds.

P a g e | 52

FINDINGS
Many of the investors are aware of mutual funds but most of their perception towards them is not positive. Investors are mainly concerned with the risk factors of mutual funds and are not directing towards them. The investors who have invested in mutual funds mainly go for it because of the Liquidity matter and Tax exemption. Most of the people dont know the advantages of mutual funds and the various types of mutual funds. There are nearly 1173 schemes of mutual funds offered by various mutual fund houses, which an ordinary person is not aware. A common investor basically looks for the Tax exemption and Safety & security while investing. Investors often feel that those people, who have surplus amount with them and invest to avail Tax exemption, can do investing in mutual funds.

P a g e | 53

CONCLUSION

Mutual funds are still and would continue to be the unique financial tool in the country. One has to appreciate the fact that every aspect of life as its periods of high and lows. This has been the case with the stock markets. Why not apply the same logic to mutual funds? Mutual funds have not failed in any country where they worked with regulatory frame work. Their future is bright. The poor performance of many mutual funds schemes may be mostly attributed to the quality of personal involved and their matter of fund management.

P a g e | 54

LIMITATIONS OF THE STUDY:

The major constraint faced by me in making the project was time. The time was not enough to know in detail about the factors, to major the performance of all mutual funds companies in the industry and to what extent each factor is responsible for the same. Also in some cases the respondents, were not willing to provide adequate information about the Mutual funds schemes they like , this constraint led to inability to cover the whole data. Which could give us clearer picture of the subject. Most of the data about the companies are collected from the concerned Companies Website or directly through the Concerned Companies, which can be manipulated or exaggerated by the company (Window dressing). However, inspite of all these limitations and constraint, a humble attempt to present useful information and format with an analytical picture of the study with suggestions has been made.

P a g e | 55

Suggestions and Recommendations

The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors. Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration. Younger people aged under 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off. Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality. Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI.

P a g e | 56

BIBLIOGRAPHY
Books
David F, Swensen. 2005. Unconventional Success. A fundamental Approach to Personal Investment Free Press 416 D.C. Anjaria. Dhaivat Anjaria. 2001 AMFIs Mutual Fund Testing Programme .

MAGAZINES:
1. Business standard 2. Economic times

Websites
WWW.GOOGLE.COM WWW.YAHOO.COM WWW.INDIAINFOLINE.COM WWW.AMFIINDIA.COM WWW.MONEYCONTROL.COM WWW.5PAISA.COM WWW.SHAREMARKETBASICS.COM WWW.SHAREMARKET.COM

P a g e | 57

P a g e | 58

Investors perception towards Mutual Funds

PERSONAL INFORMATION A) Name: B) Type of Business: C) Address: D) Telephone: E) Fax: F) Annual Income: Mobile: Email:

ANNEXURE

1.In which part of these modes have you made your major part of investment? [] Shares [] Equity [] Mutual Fund [] Insurance

[] Bank Deposit

[] Bonds

[] Others Specify--------------------------------2.Why do you prefer the above option? [] Return Pattern [] Liquidity [] Profitability [] Tax Exemption [] Safety & Security [] Guaranteed Return

[] Others Specify----------------------------------3.How long would you like to invest? [] Short term (below 1yr) [] Long term (above 3yrs) [] Medium term (up to 2yrs)

4.Have you seen any advertisements for Mutual Funds?

P a g e | 59

[] Yes

[] No

5.If yes, what are the advertisement have you seen for? [] Birla sunlife mutual funds [] Chola mutual funds [] Reliance mutual fund [] Standard charted mutual funds

[] Franklin Templeton mutual fund [] Sundaram mutual fund [] HDFC mutual fund [] ING VYSA mutual fund [] Prudential ICICI mutual fund 6. Rank the following services preferred by you from a financial Advisory Institution? Services 1. Telephone services 2. Online services 3. Mobile services 4. Personal services 7. Mention the names of mutual funds you have invested? --------------------------------------------------------------------8. In which scheme of mutual funds have you invested? [] Debt [] Liquidity [] Equity [] Mixed (Debt & Equity) Rank [] UTI mutual fund [] Any other specify--------------------

[] Others specify--------------------------9. What was the approximate return you got on your investment? [] Debt [] Liquidity [] Equity [] Mixed

[] Others specify--------------------------10. Which factors you consider the most while, investing in mutual funds? [] Return patterns [] Services [] Performance [] Risk factors

P a g e | 60

[] Quality of portfolio [] Wealth creation

[] Professional management

11. Which period of dividend income you prefer the most? [] Monthly [] Half yearly [] Quarterly [] Annual

12. How often you need reminders (recall) about mutual fund? [] Monthly [] Half yearly [] Quarterly [] Annual

13. If you need so, which mode you would prefer? [] Account statements [] Television & Internet [] Remainder letters [] News papers & Magazines

14. Please rank your expectations from a mutual funds Advisory concern Expectations 1. Right Advice 2. Speed of transaction 3. Research inputs 4. Reputations 5. Reliability 6. Investor facilitation 7. Advertisements 8. Easy procedure 15. Are you willing to invest in mutual funds? [] Yes [] No Rank

If no, specify the reason-----------------------------------------If yes, do you need further assistance from Wealth Management Executives from Karvy Consultants Ltd? [] Yes [] No

P a g e | 61

16. As investors please specify your needs, expectations and recommendations to Develop the mutual funds.