A

Project Report

On

“Investor’s Perception Towards Mutual

Funds Investment”
At
“NARNOLIA FINANCIAL ADVISORS LIMITED”

Submitted in the partial fulfillment of the degree of

Master of Business Administration

At

School of Commerce and Management

ARKA JAIN University

Corporate Guide: Faculty Guide:

Name MR.RAJESH SINGH Name: Dr. Arun Tiwary

Designation Branch Manager

Organization NARNOLIA FINANCIAL ADVISORS LIMITED

Submitted by:

NAME: AKASH KUMAR

Roll No: AJU/180285

 ACKNOWLEDGEMT

It is my great pleasure to take this opportunity to acknowledge the contribution of number

of people who helped me in completing this project.

The internship opportunity I had with NARNOLIA FINANCIAL ADVISORS LIMITED was a great
chance for learning and professional development.

Therefore I consider myself as a very lucky individual as I was provided with an opportunity
to be a part of it. I am using this opportunity to express my deepest gratitude and special
thanks to MR. RAJESH SINGH (BRANCH MANAGER OF NARNOLIA FINANCIAL ADVISORS
LIMITED, JAMSHEDPUR BRANCH) who in spite of being busy with his duties, took time out to
hear, guide and keep me on the correct path and allowed me to carry my project at his
esteemed organization .

I wish to acknowledge my sincere gratitude and indebtedness to my project guide Dr. Arun
Tiwary of ARKA JAIN UNIVERSITY, Jamshedpur for his valuable guidance and constructive
suggestions in the preparation of project report.

On the outset of this report, I would like to extend my sincere & heartfelt obligation towards
all the persons who helped me in this endeavor and without their active guidance, help,
cooperation & encouragement, I would not have headway in the project.
 ARKA JAIN UNIVERSITY

Declaration by the Student

I, AKASH KUMAR, hereby declare that the Project titled, “INVESTOR’S PERCEPTION
TOWARDS MUTUAL FUND INVESTMENT” has been carried out by me during my
‘Summer Internship Project Training’ at NARNOLIA FINANCIAL ADVISORS LIMITED,
JAMSHEDPUR during MAY 17,2019 TO JULY 26,2019. and is hereby submitted for the
partial fulfillment of the requirement for the award of degree of Master of Business
Administration. To the best of my knowledge, the project undertaken, has been carried out by
me, and is my own work. The contents of this report are original and this report has been
submitted to the said organization and to the ‘Arka Jain University’, Jamshedpur and it has
not been submitted elsewhere, for the award of any Certificate/Diploma/Degree etc.

AKASH KUMAR

Roll No AJU/180285

M.B.A. Batch 2018-20

 Table of Contents:
Chapter No. Chapter Name Page No.(s)

1 Introduction

Objective of study
1.1
1.2 Scope of study

1.3 Limitation of study

2 Company profile
2.1 Introduction
2.2 Vision and Mission
2.3 Core purpose
2.4 Quality policy
3. History
3.1 Awards and Recognitions
4. Mutual funds
4.1 The concept of mutual
funds
4.2 Advantage of mutual
funds
 4.3 Mode of Investment in M.F
5. Systematic Investment plan
6. Structure of mutual fund
6.1 Mutual Fund investing vs
Investing through bank
7. Share Market Overview
7.1 Why investing in Share Market
7.2 History of Stock Market
7.3 Difference between primary and
secondary market
7.4 Role of stock of exchange
8. Research Methodology
8.1 Sampling
8.2 Data collection Analysis
9. Findings
9.1 Conclusions
10 Recommendation & suggestion

11. Bibliography

12. Appendix

I
 1. INTRODUCTION

The developing countries like India face the enormous task of finding sufficient capital in
their development efforts. Most of these countries find it difficult to get out of the vicious
circle of poverty of low income, low saving, low investment, low employment etc. With high
capital output ratio, India needs very high rates of investments to make leap forward in her
efforts of attaining high levels of growth. Since the beginning of planning, the emphasis was
on investment as the primary instruments of economic growth and increase in national
income. In order to have production as per target, investment was considered the crucial
determinant and capital formation had to be supported by appropriate volume of saving.
Investment is the sacrifice of certain present value for the uncertain future reward.
Investments are always interesting, challenging and rewarding. Generally where there is a
high risk, more rate of return is assured.

Risk and reward go together. The major features of an investment are safety of principal
amount, liquidity, income stability, appreciation and easy transferability. A variety of
investment avenues are available such as shares, bank, companies, gold and silver, real
estate, life insurance, postal savings and so on. All the investors invest their surplus money
in the above mentioned avenues based on their risk taking attitude.

Salaried Investors: The respondents of research study consist of only those people who are
earning fixed Income as salary. The Investment pattern of the salaried employees is
different from professionals and business man due to safety, regular flow of income, tax
saving benefits, security and retirement benefits.

Investment Option Available: In India there are lots of Investment avenues available to
salaried

1. Fixed Deposits: Fixed Deposits with Banks are also referred to as term deposits.
Minimum investment period for bank FDs is 30 days. Deposits in banks are very safe
because of the regulations of RBI and the guarantee provided by the deposit insurance
corporation. The interest rate on fixed deposits
2. varies with term of the deposits Bank deposits enjoy exceptionally high liquidity. Loans
can rise against bank deposits
 3. 2. Post office savings: Post Office Monthly Income Scheme is a low risk saving
instrument, which can be availed through any Post Office. The interest rate on deposits
is slightly higher than banks. The interest is calculated half yearly and paid yearly.
4. 3. Life Insurance Policies: Insurance companies offer many investment schemes to
investors. These schemes promote saving and additionally provide insurance cover.
L1C is the largest life insurance company in India. Insurance policies, while catering to
the risk compensation to be faced in the future by investor, also have returns.
5. 4. Public Provident Fund: A PPF account can be opened through a nationalized bank at
anytime during the year and is open all through the year for depositing money. Tax
benefits can be availed for the amount invested and interest accrued is tax-free. A
withdrawal is permissible every year from the seventh financial year of the date of
opening of the account.

5. Bonds: Bonds are fixed income instruments which are issued for the purpose of raising
capital. Both private entities, such as companies, financial institutions, and the central or
state government and other government institutions use this instrument as a means of
garnering funds. Bonds issued by the Government carry the lowest level of risk but could
deliver fair returns.

6. Real estate: With the ever-increasing cost of land, real estate has come up as a profitable
investment proposition.

7. Gold: The 'yellow metal' is a preferred investment option, particularly when markets are
volatile. Today, beyond physical gold, a number of products which derive their value from
the price of gold are available for investment. These include gold futures and gold exchange
traded funds.

8. Equity: Equity is an investment avenue which is able to offer the highest possible returns
but is very risky as there are huge probabilities of investors even losing some part of the
invested capital too. This can offer returns in range of 15- 50 percentage annually in good
times and negative returns of 5-15 percentages
1.1OBJECTIVE OF THE STUDY

 To understand customer’s psychology towards mutual fund and share market

 To study about the factors responsible for the selection of mutual funds and share
market as an investment option.
 To give a brief idea about the benefits available from Mutual Fund investment and
stock market investment.
 To give an idea of the types of schemes available.
 To discuss about the market trends of Mutual Fund investment and share market.
 To study some of the model fund schemes of Narnolia Financial Advisors Limited.

1.2 SCOPE OF THE STUDY

Over the past few decades, much research has already been done over legal requirements
of a mutual fund, stock market, SEBI Norms and role of AMFI. The main reason for choosing
this topic is based on the fact that so far no study has been conducted in order to
understand the attitude of Investors towards mutual fund as an investment tool.

Academically, this research project will be helpful in understanding the perception and
attitude of Indian Investors towards mutual fund and stock market which may reveal some
interesting insights and directions for future research.

It is observed that the level of income also influences the investment decisions. As far as the
demographic factors are concerned, gender, income and level of education have
significantly influence the investor’s attitude towards mutual funds and share market.

Later after reading and studying various literatures, I came to know about various problems
regarding mutual fund industry and its complex

procedure. Additionally, we believe that conducting this research project will enhance the
valuable personal knowledge about the subject and experience for future career
applications.
1.3 LIMITATION OF THE STUDY

 Much interaction has not been possible with the customer due to
 Indifference or no interest of the customer to interact with me.
 Different perceptions about the investment options.
 The non- availability of time to them.
 2. COMPANY PROFILE

The history of the company dates back to 1993. The brilliant academic track record and a
deep understanding of capital market of its founder CMD Mr. Krishna N Narnolia helped him
to lay the solid foundation of Narnolia with well-defined philosophies and core values.

2.1 INTRODUCTION

Narnolia Financial Advisors Limited is a Non-govt company, incorporated on 14 Jul, 1995. It's
a public unlisted company and is classified as 'company limited by shares'.

Company's authorized capital stands at Rs 400.0 lakhs and has 86.08902% paid-up capital
which is Rs 344.36 lakhs. Narnolia Financial Advisors Limited last annual general meet (AGM)
happened on 07 Aug, 2017. The company last updated its financials on 31 Mar, 2017 as per
Ministry of Corporate Affairs (MCA).

Narnolia Financial Advisors Limited is majorly in Trading business from last 24 years and
currently, company operations are active. Current board members & directors are RAVI
KANT SHARMA, BANWARI LAL MITTAL, PARIMAL KUMAR CHATTARAJ, PANKAJ HARLALKA,
SANDIP AGARWAL, VIKASH RANJAN SAHAY and VIKRAM VILAS WADEKAR .

Company is registered in Kolkata (West Bengal) Registrar Office. Narnolia Financial Advisors
Limited registered address is 201, 2nd Floor, Marble Arch 236B A.J.C. Bose Road, Kolkata
Kolkata WB 700020 IN.
2.2 VISION and MISSION

Vision- Narnolia Financial Advisors Limited will be the most trusted, most knowledgeable,
most understanding and most concerned provider of value added and customer centric
financial services in our strategically chosen class and also mass market.

Mission-We commit ourselves both in thought and action to raise ourselves in the eyes of
our true boss - the investors from being a mere transaction broker to a true family financial
doctor and help them to protect and improve their financial health.

We further resolve not to sell daru (gambling) in the bottle of dawa (investment) and will
dare to tell them the difference between the two even if it results into low revenue in the
short term. We shall invest most of our time, energy and resources to reduce gaps at each
touch points with our existing investors, and shall see our growth in their growth. Let us
believe that quantity follows quality.
3. HISTORY

1997 : The firm was corporatized. Mr. Shailendra Kumar (B.E., M.Tech, IIT Delhi) joined the
company as one of the co-founding director who brought with him his experience of fund
management and advisory.

1999 : Strategic decision was taken to spread out. Became the first company in the area to
open self-managed branches and franchisee outlets with both NSE & BSE terminals.

2004 : Tied up with Birla Sunlife as the exclusive distributor of its life insurance products.

2005 : Strategic tie up with Value Research headed by Dhirendra Kumar for exclusive
advisory to the investors of narnolia. Published jointly monthly magazine Narnolia Mutual.

2006 : Launched Narnolia Premier Club for its premium clients.

2007 : The company was converted into Public Ltd Co. Corporatized the research wing in the
name of Eastwind based on global best practices of research.

2008 : Got ISO-9001:2000 certification for Quality Management. Got upgraded to ISO-
9001:2008 in the year 2010.

Series of investment and corporate benchmarks (E/W INDEX) were launched including the
All Share Index which represents 99.5% of market capitalization.

Launched “Knowledge Capital” to impart basic and advance knowledge & training to
investors. World famous Islamic Index was launched in New-Delhi by Smt. Sheila Dikshit
(CM, Delhi), Mohd. Ashraf Fatmi (MOS, Govt. of India), Mr. A. M. Ahmadi (Former Chief
Justice of India) in the presence of representatives of various Governments and institutions.

It got national and international accolades and is still most widely tracked index to identify
Shari’ah Complaint Indian stocks.

2009 : The launch of Model Eagle Fund on 1st October 2009

2010 : Published ‘Narnolia Finedge’ magazine with digital fundamental research based
Superior Performance. Ranking (SPR) on 1641 stocks & 150 Mutual Fund schemes.
Eastwind emerged as pioneer in quantitative equity research which drew interests of the
leading names in the financial industry including Merryl Lynch, Blackrock, JP Morgan, Ernst
& Young LLP, Goldman Sachs, HSBC Banking & Financial Services, Barclays Capital, First
Quadrant, PNC Bank, UTI etc.

‘Wealth Creation-the Narnolia edge’ Model was launched with superior return generating
products & services.

SAFE services launched to work as Secretary, Advisor, Friend Expert of client through
inhouse software ‘SPECTRUM’. Research Lab founded which prepares the SDR (Screening,
Diagnosis and Recommendations) report to find the potential of investor’s holding to beat
the index in the long run and take full advantage of India growth story. This has
revolutionized the whole concept of wealth creation in the country.

2011: Opening of Central Strategy Desk for premier club members.

2012 : Launch of Narnolia India 3T Fund on 27tyh of March

2012: Monthly Magazine “Narnolia Market Twitter” was launched by Ramesh Damani with
technical & fundamental research updates from our own research lab. Became the first LLP
of India to apply for AIF Hedge Fund Category under SEBI (Alternative Investment Fund)
Regulations 2012.
3.1. Award and Recognitions

 Best Investment Advisor for East - Nominated By CNBC TV18 2008

 Prestigious GD Birla Award - Contribution to the state of Jharkhand
 Best Channel Distributor of the Country - Best Channel Distributor of the Country
 Best Distribution House in East - Franklin Templeton (No. Of Applications) Later part
of Case Study in US HQ.
 Leader in IPO Distribution - As high as 84% in select issues
 Jharkhand Gaurav Sanman - Prabhat Khabar - 2014
 Best Franchisee Network of the Country - 2004, 2006, 2007, 2008
 Champion of the Champions Trophy - 2004, 2006, 2007, 2008
 Financial Advisor Forum Award - UTI - 2015 - 16
 Business Leadership Award for Industrial Development - Indian
 Economic Development & Research Association (IEDRA)
 Leader in Go Green Initiative (Winner) - NSDL Star Performer Award 2016
 Top Performer in Active Accounts Top DPs - 2nd Position - NSDL
 Star Performer Award 2016
 India 3T emerging as No.1 - in the country in its category in 2015-16 & 2016-17
 Emerging Portfolio Manager of the Country - By BSE Tefla’s CEO Award 2017,India
 India’s Most Promising Brand (Broking and Securities) - By WCRC in Thailand
 Most Consistent Portfolio Manager of the Country 2018 - By BSE Tefla’s, India
 Inspirational Leader of the Country 2018 - By WCRC, London
4. MUTUAL FUNDS

A mutual fund is a type of financial vehicle made up of a pool of money collected from many
investors to invest in securities such as stocks, bonds, money market instruments, and other
assets. Mutual funds are operated by professional money managers, who allocate the fund's
assets and attempt to produce capital gains or income for the fund's investors. A mutual
fund's portfolio is structured and maintained to match the investment objectives stated in
its prospectus.

Mutual funds give small or individual investors access to professionally managed portfolios
of equities, bonds and other securities. Each shareholder, therefore, participates
proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of
securities, and performance is usually tracked as the change in the total market cap of the
fund—derived by the aggregating performance of the underlying investments.

4.1 The Concept of Mutual Fund:

Investors have a basic choice, they can invest directly in individual securities, or they can
invest indirectly through a financial intermediary. Financial intermediaries gather savings
from investors and invest these monies in portfolio of financial assets. A mutual fund is a
type of financial intermediary that pools the funds of investors who seek the same general
investment objectives and invests them in a number of different types of financial claims
(e.g. equity shares, bonds, money market instruments). These pooled funds provide
thousands of investors with proportional ownership of diversified portfolios managed by
professional investment managers.
4.2 ADVANTAGES OF MUTUAL FUNDS

Mutual Funds invest in a well-diversified portfolio of securities, which enables investor to

hold a diversified investment portfolio (whether the amount of investment is big or small).

 Professional Management

Fund manager undergoes through various research works and has better investment
management skills, which ensure higher returns to the investor than what he can manage
on his own.

 Less Risk
 Investors acquire a diversified portfolio of securities even with a small investment
in a Mutual Fund. The risk in a diversified portfolio is lesser than investing in
merely 2 or 3 securities
 Low Transaction Costs

Due to the economies of scale (benefits of larger volumes), mutual funds pay lesser
transaction costs.

 Liquidity

An investor may not be able to sell some of the shares held by him very easily and quickly,
whereas units of a mutual fund are far more liquid.

 Choice of Schemes

Mutual funds provide investors with various schemes with different investment objectives.
Investors have the option of investing in a scheme having

a correlation between its investment objectives and their own financial goals. These
schemes further have different plans/options

 Transparency
Funds provide investors with updated information pertaining to the markets and the
schemes. All material facts are disclosed to investors as required by the regulator.

 Flexibility

Investors also benefit from the convenience and flexibility offered by Mutual Funds.
Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa.
Option of systematic (at regular intervals) investment and withdrawal is also offered to the
investors in most open-end schemes.

 Safety

Mutual Fund industry is part of a well-regulated investment environment where the

interests of the investors are protected by the regulator. All funds are registered with SEBI
and complete transparency is forced.

4.3. DISADVANTAGES OF MUTUAL FUNDS

The mutual fund not just advantage of investor but also has disadvantages for the funds.
The fund manager not always made profits but might create loss for not properly managed.
The fund have own strategy for investment to hold, to sell, to purchase unit at particular
time.

 Costs Control Not in the Hands of an Investor

Investor has to pay investment management fees and fund distribution costs as a
percentage of the value of his investments (as long as he holds the units), irrespective of the
performance of the fund

 No Customized Portfolios

The portfolio of securities in which a fund invests is a decision taken by the fund manager.
Investors have no right to interfere in the decision making process of a fund manager, which
some investors find as a constraint in achieving their financial objectives.

 Difficulty in Selecting a Suitable Fund Scheme

Many investors find it difficult to select one option from the plethora of
funds/schemes/plans available. For this, they may have to take advice from financial
planners in order to invest in the right fund to achieve their objectives.

DIFFERENT TYPES OF MUTUAL FUND SCHEMES:

Schemes according to maturity period: Open-ended fund: An open ended fund or

schemes is available for subscription and repurchase on a continuous basis and do not have
a fixed- maturity period.

 Close- ended fund: A close- ended fund has a stipulated maturity period. It is open
for subscription only during a specific period at the time of launch of the scheme.
Schemes according to Investment objectives:
 Growth/Equity Oriented schemes: The aim of these funds is to provide capital
appreciation over the medium to long term. Typically such schemes invest a major
part of their corpus in equities.
 Income/ Debt oriented schemes: The aim of these funds is to provide regular and
steady income to investors. Income funds normally invest in fixed income securities
such as bonds, corporate debentures, government securities and money market
instruments.
 Balanced Funds: The aim of these funds is to provide both growth and regular
income. Balanced funds invest both in equities and fixed

income securities as per the proportion indicated in their offer documents.

 Money market and Liquid Fund: These are also income funds and aim to provide
easy liquidity, preservation of capital and moderate income. These funds invest
exclusively in safer short term instruments such as treasury bills, certificates of
deposit, commercial paper and inter- bank call money, government securities etc.
 Gild Funds: These funds invest exclusively in government securities which have no
default risk. Due to change in interest rate and other economic factors, NAVs of
these schemes also fluctuate.
 Index Funds: These funds replicate the portfolio of a particular index such as the
BSE sensitive SE 50 Index (Nifty) etc. Sectors specific Schemes:
These funds invest in the securities of only those sectors or industries as specified in the
offer documents. The returns depend on the performance of the respective sectors/
industries.

 Tax saving schemes: These schemes offer tax rebates to the investors under specific
provisions of the Income Tax Act, 1961 as the government offers tax incentives for
investment in specified avenues, e.g. Equity Linked Savings Schemes (ELSS). Pension
schemes launched by the mutual funds also offer tax benefits.
 Fund of Fund (FOF) Schemes: It’s a scheme that invests primarily in other schemes
of the same mutual fund or other mutual funds. As the scheme spreads risks across
a greater universe, investors can achieve greater diversification though one
scheme.
 Assured return scheme: These schemes assure a specific return to the unit holders
irrespective of performance of the schemes. A scheme cannot promise returns
unless such returns are fully guaranteed by the sponsor or AMC and this is required
to be disclosed in the offer document. Therefore, it is vital that investor carefully
read the offer document whether return is assured for the entire period of the
scheme or only for a certain period.

4.3 MODE OF INVESTMENT IN MUTUAL FUNDS: Popular Modes of Investing in Mutual

Funds:

While mutual funds offer various modes of investing, one should preferably consider his or
her convenience while investing in mutual funds. Some of the key modes of investment
offered by mutual funds are:

 Lump Sum or One Time Investment (...If you have a big sum of say Rs. 1 lakh in your
bank account and are looking to invest it in mutual funds at one go, then you can
consider investing via lump sum mode. But beware! Investing all your money at one
point, may call for market risk. And so to reduce this risk, there is an option called...)
 Systematic Investment Plan (SIP)
 (...SIP can help you invest your money gradually every month or quarter. Where you
can instruct the mutual fund to buy units of the scheme in your folio, by debiting a
fixed amount from your bank account every month or quarter. But do not forget,
 that the balance money lying in your bank's savings account may continue to earn a
lower rate of return. So what can be a better option, to increase returns on your
money lying idle? Well, mutual funds offer an opportunity to invest regularly while
providing an opportunity to earn better returns on your idle money, through...)

Systematic Transfer Plan (STP) (...STP is a mode of investing, where you initially park your
entire Rs. 1 lakh in a less risky category of mutual fund such as a liquid scheme, and then
systematically transfer money on a regular basis from the liquid scheme to an equity fund or
any other mutual fund scheme of the same fund house. So, while you are able to invest your
money on a regular basis, the liquid scheme provides you an opportunity to earn returns)

Lump Sum or One Time Investment

 Lump Sum Mode helps Invest all your Investible surplus at one go (...Even if you
have a large corpus to invest, you can invest all your money in a mutual fund
through a single transaction. But as we mentioned earlier...)

Lump Sum Investment attracts market risk (...so you need to be careful. You should invest
in lump sum only if you have an appetite for higher risk as chances are high that, you may
see your investments in the negative for some time. Ideally while investing in lump sum, you
should have a longer time horizon. Or, on a cautious note, if you have a short term horizon,
then you should invest your lump sum money in less risky options like liquid funds.)
  Lump Sum Investment can be rewarding only if the long term trend of the economy
is positive (...you see, the impact of near term market volatility may fade over time.)

So we can say that lump-sum investment is more suitable if you are ready to take High Risk
in anticipation of High Return or are willing to compromise on the returns by parking your
entire surplus in Low Risk option such as liquid funds

 Also as there is a single transaction you can make your Investment via a Single
Cheque (...You need not write multiple cheques or fill any additional forms. So if you
have say Rs 1 Lakh to invest, you can make a lump-sum investment by writing a
single cheque of Rs 1 Lakh in favour of the mutual fund scheme and submit it along
with the application form.)

5.Systematic Investment Plan (SIP)

  SIP is a disciplined Mode of Investment .It helps develop disciplined investment
strategy by spreading your investments over a certain time period. Through SIP you
can invest a fixed sum of money on a regular basis, in a mutual fund scheme.)
 You can start SIP with a lower investment amount (...You see, if you make a one-
time investment you may need a minimum amount of Rs. 5,000/-, but opting for the
SIP mode you can start with an amount as low as Rs. 500/- per month.)
 SIP can help you steadily build a corpus over time With the power of compounding
SIPs can be a smart financial planning tool that may help you create wealth in the
long run.)
 SIPs provide you the benefit of Rupee Cost Averaging (...Through SIP, you invest a
fixed amount every month, irrespective of the market movements. As the
investment happens on a regular basis, you get an opportunity to invest at various
market levels. So when the markets fall, you buy more units with the same amount;
while if the market trends higher, you buy less units and simultaneously the value of
your existing units grow. So in the long
 run your cost of buying is averaged out and your Average Cost per Unit may work
out to be lesser than the Average Price per Unit.)
 You can start your SIP with a One-Time Instruction, Along with a cheque for the first
transaction; you need to fill a one-time instruction form called SIP Instruction form
through ECS/Direct Debit, which needs to be submitted only once. Post activation of
your SIP instruction, the money can be deducted on a regular basis from your bank
account and invested in the respective mutual fund scheme.)
 Benefits of SIP are stated below:
 Indicates disciplined Investment:

Being disciplined is the key factor to successful investment. With SIP options you can
commit a certain amount of money to be invested every month. There are host of AMC’s
having SIP option in almost all of its scheme offering.

 . Reach your financial goals:

 Planning to buy a car in a year?? SIPs help you to fulfill your financial goals with
specific, future financial requirement
 Power of Compounding:
It is always advisable to make small regular investments than to make one large investment.
For example: A SIP of Rs 2500/-

Return Rate 5 years 8 years 10 years

12% 2,04174 3,99,818 5,75,097
15% 2,21,436 4,59,103 6,88,043
18% 2,40,537 5,29,301 8,28220
20% 2,54,396 5,83,222 9,40,238
 Advantage of Rupee Cost Averaging:

SIPs allow investors to accumulate stocks at different price levels allowing the benefit of
rupee cost averaging.

 Effortless:

Investing in SIPs hassle- free and convenient. Simply put a decided amount every month. It
is advisable to keep a long –term horizon for your SIPs to reap the best benefits.

6. STRUCTURE OF A MUTUAL FUND:

A mutual fund is a set up in the form of a thrust, which has sponsor, trustees, asset
management company (AMC) and a custodian. The trust is established by a sponsor or more
than one sponsor who is like a promoter of a company. The trustees of the mutual fund hold
its property for the benefit of the unit- holders. The AMC, approved by SEBI, manages the
funds by making investments in various types of securities. The custodian, who is registered
with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are
vested with the general power of superintendence and direction over AMC. They monitor
the performance and compliance of SEBI regulations by the mutual fund.
A typical mutual fund structure in India can be graphically represented .

Over the last couple of months we have been looking at various aspects mutual funds,
whether it is about their portfolio or performance or how to compare them. We however
did not discuss some fundamentals – on how a mutual fund house is structured. Here it
comes, a bit late but hopefully useful for you to understand

the product better. Mutual funds in India are regulated by the Securities and Exchange
Board of India (SEBI). Since running of a mutual fund involves managing of investors’ money,
SEBI prescribes comprehensive set of guidelines in the functioning of a mutual fund through
the “SEBI MF regulations 1996”. These regulations stipulate that a mutual fund must be a
three-tiered structure consisting of A Sponsor A Trustee An asset management
company (AMC)

 Fund Sponsor –

The Sponsor is the main body that establishes the Mutual fund. The Sponsor can be
compared to a promoter of a company. The responsibility of the sponsor includes
appointing the trustees with the approval of SEBI and setting up an AMC under the
Companies act 1956 while getting the trust registered with SEBI. Since the Sponsors play the
most important role in the functioning of a mutual fund, SEBI has a set of strict guidelines
for the eligibility of a sponsor. Some of them are as follows: the sponsor should have a
sound track record of carrying out business in the financial services space for not less than
five years. A Sponsor also needs to have made profits in at least three of the five years
including the latest year. During the same period, it is also important that the sponsor has
had a positive net worth. It should be contributing a minimum of 40 per cent net worth of
the AMC. For example ICICI Bank and Prudential Plc are sponsors for ICICI Mutual Fund. For
Birla Sun Life Mutual Fund, Aditya Birla Financial Services and Sun Life (India) AMC
Investments Inc. are sponsors.

 Trustee –

The main role of a trustee is to ensure that the interest of the unit holders is protected while
making sure that the mutual fund complies with all the regulations of SEBI. Either, the
sponsor should appoint four trustees or establish a trustee company with at least four
independent directors. Additionally, at least

two thirds of the trustees or the directors should be independent not associated with the
sponsor in any way.

Some of the key responsibilities of the trustees include, entering into an investment
management agreement with the AMC to define its functioning. They are also responsible
for ensuring that the AMC has all the required process, procedures and systems in place
while making sure that all the key personnel such as the CEO, CIO, the fund managers and
the analysts are appointed after through due diligence. All the schemes launched by the
AMC have to be approved by the trustees prior to launch.

 Asset Management Company (AMC) –

The AMC is the investment manager of the trust. It takes care of the day today operation of
the mutual fund and managing the investors’ money as well. The AMC is appointed either
by the trustee or the Sponsor after obtaining the approval of SEBI. The AMC consists of the
Chief Investment Officer, the fund managers and analysts, who are together responsible for
managing the various schemes launched. The compliance officer ensures compliance of all
the activities of the AMC in line with SEBIs rules and regulations. For example; HDFC AMC is
the Asset Management Company for HDFC Mutual Fund.
  Custodian –

The custodian has the custody of the all the shares and various other securities bought by
the AMC. The custodian is responsible for the safe keeping of all the securities. The
custodian is liable for keeping the investment account of the mutual fund.

 Registrar and Transfer Agent (RTA) –

The RTA maintains and updates all the investor’s records. The main function is investor
servicing through its office and various other branches. Its functions

include processing of investor application, purchase and redemption transactions by

investors in various schemes and plans.

The auditors are responsible for auditing of the AMC’s accounts while ensuring that the
accounts of schemes are maintained independently from that of AMC. The fund accountants
are responsible for calculating the NAV of the schemes based on the information regarding
the assets and liabilities of each scheme.

Thus we can note that the mutual funds in India are a well-regulated entity with clearly
defined structure comprising of several components whose roles and responsibilities are
properly defined under the preview of SEBI.

The benefit of such a structure, especially the trust form, ensures that nobody, other than
the sponsor or the AMC can mishandle your money. In the event of a fund house closing
down, your money is safely returned to you. In many other cases, where a fund house does
not want to run the business, it sells out to another AMC and investors are given a choice to
exit or to stay with the new AMC. Thus, while your money does undergo market risks, there
is no risk of losing money to the AMCs
8. RESEARCH METHODOLOGY

This study is descriptive in nature based on survey method. The study aims at finding out
the awareness of the investors towards investment in mutual funds and share market in
Jamshedpur city.

SOURCES OF DATA COLLECTION:

Two sources of data has been employed i.e. primary data and secondary data

Primary Data:

Mode of data collection:

Questionnaire- A questionnaire is used as a tool for the systematic collection of relevant

information. An idle questionnaire consists of simple questions. The questionnaire prepared
consists of close ended and open ended questions.

Interview with the respondents- Some questions were asked from the investors regarding
their investments, financial advisors, their knowledge about mutual funds and share market
etc. depending on time and attitude of investors.

Secondary Data:

Secondary data is collected from company’s websites, fact sheets etc.

8.1 SAMPLING:

Our sample size is 120 based on convince non-probability sampling due to time constraints.

LIMITATIONS OF SAMPLING:

 Possibility of error in data collection because many of investors may have not given
actual answers of questionnaire.
 Sample size is limited to 120 investors.
 Research is confined only to the city of Jamshedpur.
 8.2Data Collection and Analysis:

 Number of male and female respondents in the research.

Gender No. Of Percentage

respondents
Male 45 50%
Female 45 50%
Total 90 100%

Out of 90 respondents ,50% of them are male and 50% of them are female.
  Age group of the respondents in the research.

Age group No. Of Percentage

respondents
20-30 18 20%
31-40 27 30%
41-above 45 50%
Total 90 100%

Out of 90 respondents , 20% of them belong to 20-30 years of age group, 30% of them are
between 31-40 years of age and 50% are above 41 years of age.
 Educational qualification of the respondents in the research.

Qualification No. Of Percentage

respondents
Under graduate 21 23%
Graduate 36 40%
Post graduate 18 20%
Others 15 17%
Total 90 100%

Out of 90 respondents, 23% are under graduate, 40% are graduates, 20% are post graduates
and 17% are others.
  Awareness of respondents about different investment: avenues.

Awareness No. Of Percentage

respondents
Yes 65 72%
No 25 28%
Total 90 100%

Out of 90 respondents, 72% are aware about the different investment avenues
available, whereas 28% of them are not aware.
  Testing of Hypothesis: Relation between gender and awareness level
about investments.

Gender Awareness No Total

Awareness
Male 36 9 45
Female 29 16 45
Total 65 25 90

Calculation of chi square value:

O E (O-E) (O-E)2 (O-E)2/E

36 32.5 3.5 12.25 0.376
29 32.5 -3.5 12.25 0.376
9 12.5 -3.5 12.25 1.361
16 12.5 3.5 12.25 1.361
Total 3.474
Chi square value -3.474

Table value for1 degrees of freedom at 5 percentage level of significance is 3.841.The

calculated value 1.587 is less than the table value so, Null hypothesis is accepted.

Conclusion: Hence it is concluded that “There is a relationship between the gender and
the investment awareness level.
 The various factors influencing investment avenues :

Factors No. Of Percentage

respondents
Safety 72 24%
Liquidity 57 19%
Tax saving 54 18%
Diversification 45 15%
Simplicity 30 9%
Affordability 45 15%
Total 300 100%

Note: Since some of the investors have mentioned more than one response, the responses

are outnumbered the respondents .

The above table shows that 24percentages of the respondents are investing their money in
particular investment for the purpose of safety. 18percentages of the respondents invest
their money in tax saving scheme. Another 19 percentages of the respondents invest their
money for liquidity. 15, 15,9 percentages of respondents invests their money in
diversification, affordability, simplicity respectively.

Objectives of the investment :

Objectives No. Of Percentage

respondents
Future security 64 20%
Good returns 80 25%
Liquidity 40 12%
Capital 28 9%
appreciation
Tax savings 44 13%
Children carrier 64 20%
Others 320 100%

more than one response, the responses are outnumbered the respondents

The Note: Since some of the investors have mentioned above table shows that 25
percentages of respondents are investing in different avenues with the objective of good
Returns. 20 percentages of respondents are investing for good return on their investment
followed by 20 percentage respondents for children career and remaining 13,12,9
percentages of respondents are investing for Taliquidity, children career, capital
appreciation respectively.
 Sources of motivation for investment :

Sources No. Of Percentage

respondents
Self awareness 80 40%
Financial 48 24%
advisor
Broker advisor 20 10%
Friends or 28 14%
relatives
Media 24 12%
Total 200 100%

The above table shows that 40percentages of the respondents have their own source of
motivation i.e. self awareness. The second source of motivation of respondents is financial
advisor as the percentage is 24 and the third source of motivation is friends and relatives as
it is 14 percentage.
 Investment preferences of the respondents:

Investment No. Of Percentage

options respondents
Stock Market 45 15%
Bank Deposit 96 32%
Real Estate 60 20%
Mutual Fund 21 7%
Insurance 66 22%
Debt Market 12 4%
Total 300 100%

Note: Since some of the investors have mentioned more than one response, the responses
are outnumbered the respondents.

The Above table shows that 32percentages of investors are investing in Bank deposit as well
as 22percentage investors investing in insurance. Third preference is given by investors to
real estate, followed by stock market and debt market.
9.Findings :

1. In the study the researcher has investigated 90 respondents of Jamshedpur town and it
reveals that 72 percentage of investors are aware about the investment avenues whereas
28 percentage are unaware.

2. There is a relationship between the gender and awareness of the investment. 80

percentages of male respondents are aware and 64 percentages of female respondents are
aware of investment avenues.

3. The researcher used 'Chi-Square' method for hypothesis testing and found that there is
no relationship between the income level and awareness of investment avenues.

4. Safety is the major factor while doing investments as 24 percentages of the respondents
are investing their money due to safety.

5. The main objectives of investors are future security followed by good return on
investments as percentages are 20percentage and 25percentage respectively.

6. The researcher found that self awareness is the main source of investment as percentage
 9.1 Conclusion

The study on preferred investment avenues among salaried people has been undertaken
with the key objectives such as to find preferred investment avenues and also to know the
awareness level of investors. Analysis of the study was undertaken with the help of survey
conducted. After the analysis and interpretation of data it is concluded that Investors are
aware about investment avenues available in India but still investors are preferred to invest
in bank deposit, insurance, tax saving schemes etc. The data analysis reveals that the safety
is important factor while doing investment. Hence the researchers have concluded that
most of the investors prefer secured regular income on investment in the study area.
10. Recommendations & Suggestions

 There is need to build awareness of the new funds among the investors with
constantly being in contact with them.
 There is a knowledge gap between the AMC’s and investors. This is the main reason
due to which many potential investors are not taking their decision and they are
confused.
 Investors want to invest their money for a high return at minimum risk. It is a
challenging task for the companies to attract the investors.
 Some of investors have asked for periodical market report about stock market so that
they can get the knowledge properly.
 The promotional activities play a vital role. So it should be given importance for
creating more awareness among the people.
 It has been identified that some of investors are looking for safe returns along with
low risk.
 11. BIBLIOGRAPHY
 https://www.narnolia.com/
 https://www.equitymaster.com/
 https://www.mutualfundindia.com/
 https://www.moneycontrol.com/
 www.investopedia.com
 12. Appendix
Questionnaire
 The Questionnaire given below is designed to conduct Primary research for
measuring Investors attitude towards Mutual Fund and Share market in the city of
Jamshedpur.
 The Personal information will not be used/disclosed anywhere, It is solely used for
academic purpose only.
Section: I
A) Name : _________________________________________________ B) Age :
_____________________ C) Gender : __________________
D) Qualification o SSC/HSC o Graduate o Post Graduate
E) Occupation o Professional o Student o Business o Salaried o Retired o Others
F) Yearly Income o 3 - 5 lakhs o 5 -15 lakhs o 15-25 lakhs o Above 25 lakhs

Section: II
 What kind of investment do you prefer most? (Kindly tick which are
applicable)
 Saving Account
 Fixed Deposit
 Insurance
 Mutual Fund
 Post Office
 Shares/Debentures
 Gold and Silver
 Real Estate

2. Do you have any existing investment?

 Yes
 No
 If Yes, in which area___________________
3. If you do not invest in mutual fund and share market then why?
  Not aware
 Higher Risk
 Difficult to Understand
 Not any specific Reason
4. Are you interested in investment?
 Yes
 No
6. You want to invest for:
 Children Education
 Marriage
 Retirement
 Home
 Others
7. What is your expected return?
 Less than 10%
 Between 10-15%
 Between 15-20%
 More than 20%
8. How much risk you can take?
 Minimum Risk
 Moderate Risk
 High Risk
9. How long you can invest?
 Less than 1year o Between 1-3year
 More than 3year
10. What is the future of mutual fund it will perform good or not?
 Yes
 No

11. Which is more profitable mutual fund and share marketShare Market Mutual Fund

ANY SUGGESTIONS: ___________________________________