A REPORT ON

(FACTORS EFFECTING CONSUMER BUYING BEHAVIOUR FOR MUTUAL FUNDS)

By NAME- Damita Sharma ENROL.NO..- 09BS000628

NAME OF ORGANIZATION

Reliance Capital Asset Management Company Division- Reliance Mutual Fund (Corporate Sales)

A REPORT ON

FACTORS EFFECTING CONSUMER BUYING BEHAVIOUR FOR MUTUAL FUND

By Damita Sharma 09BS000628

Name of Organization Reliance Capital Asset Management Company Division- Reliance Mutual Fund (Corporate Sales)

A report submitted in partial fulfillment of The requirements of MBA Program of The ICFAI University, Dehradun Date of Submission: 16th April 2010

ABSTRACT OF WORK TILL THE DATE I joined Reliance Capital Asset Management Company for internship program (as a part of MBA) I only had a theoretical knowledge of related financial subjects and products, thanks to my Faculty Guide (Prof. Rajeev Kumar) and my Company Mentor (Mr. Alok Sharma) for giving me an opportunity to implement my theoretical knowledge in practical aspect and thus adding on to my experience. My Company mentor has given me the project to develop new corporate relationship with various organizations related to health industry in Delhi NCR region, updating all the necessary information to them and then finding out various factors affecting their (consumer) buying behavior of mutual funds especially that of Reliance. The new Financial instruments has been developed as an outcome of liberalization in industrial and financial sector. . Growth and development of various mutual fund products in Indian capital market with high level of precision in design and marketing products by banks and other financial institution providing growth, liquidity and return, has made fund manager and fund product designers to combine these all various elements required to make these mutual fund products the best possible alternative for the small investors in Indian market. Also,at the corporate level, investors are unique and are a highly heterogeneous group. Hence, their fund/scheme selection also widely differs. Investors demand inter-temporal wealth shifting as their organization progresses through the business cycle. This creates the necessity for the Asset Management Companies (AMCs) to understand the fund/scheme selection/switching behavior of the investors to design suitable products to meet the changing financial needs of the investors I started this project by understanding the concept & technicalities of Mutual Fund. Analysis of Delhi NCR market through Primary & Secondary data helped me for further strategy. The Primary Data was collected through companys corporate sales team and other sources like Questionnaire and taking interview of corporate director, CEO, CFO etc. on phone and personal interview and secondary data from websites, books, journals, information vouchers and other source to make my analysis more effective. For the analysis of data and studying their contribution in making perception of consumer, I Conducted survey among 50 organizations belonging to health industry in Delhi NCR region to study the factors influencing the fund/scheme selection Behavior of corporate Investors. It helped me to understand more the concept & technicalities of mutual funds & also, gaining more knowledge about investment patterns of various organizations belonging to health industry in this region. It has also helped me to

compare our company with other AMCs because these are the persons who have enough knowledge about the investment market and investor behavior. The Final Report includes, the analysis of the whole data (primary and Secondary). and will also discusses the survey findings. My study also gives an overview of mutual funds definition, types, benefits, risks, limitations, history of mutual funds in India, latest trends, future prospectus.etc. So, it is hoped that it will have some useful managerial implication for the AMCs in their Product designing and marketing.

INTRODUCTION: The reform process has sent signals to a wave of changes in savings and investment behavior adding a new dimension to the growth of financial sector. The Indian financial system in general and the mutual fund industry in particular continue to take turn around from early 1990s. During this period mutual funds have pooled huge investments for the corporate sector. The investment habit of the small investors particularly has undergone a sea change. Increasing number of players from public as well as private sectors has entered in to the market with innovative schemes to cater to the requirements of the investors in India and abroad. For all investors, particularly the small investors, mutual funds have provided a better alternative to obtain benefits of expertise- based equity investments to all types of investors. As Mutual fund is an investment company that pools money from shareholders and invests in a variety of securities, such as stocks, bonds and money market instruments. Many investors are absolutely fascinated about investing in mutual funds. But, in my opinion mere fascination is not enough. Investing wisely and with the right insights helps one to make the right investment decision. If investors do not have the right perspective, mutual fund investing could be a conundrum, and with mis-selling from mutual fund distributors, investors could go down the wrong path, reaching an unwanted destination. Many investors start investing in mutual funds without thinking of the three Ws: why, when and where. These would depend upon the goals of the investor and expectations which plays a vital role. They influence the price of the securities; the volumes traded and determine quite a lot of things in actual practice. These expectations of the investors are influenced By their perception and humans generally relate perception to action. The beliefs and actions of many investors are influenced by the dissonance effect and Endowment effect . The tendency to adjust beliefs to justify past actions is a Psychological phenomenon termed by Festinger (1957) as Cognitive Dissonance. We find ample proof for the wide prevalence of such a psychological state among .Mutual Fund (MF) investors in India. Endowment Effect is explained by Thaler Kahneman and Knetsch (1992) as People are more likely to believe that something they own is better than something they do not own. We have evidence for the influence of this effect also among Indian MF investors, for, how else can we explain the reason for the existence of many poor performing funds without investors staying invested with them?

Therefore, an investment strategy should be such that which should lay down the asset allocation of the investor's funds depending upon his objectives, time frame and risk profile and thus, form the bedrock of any investment plan.

Literature and Theories However, in the financial literature, there are no models which explain the Influence of these perceptions and beliefs on Expectations and Decision Making. Because of our own inability to understand the sources of motivations And the basis of these expectations we tend to ignore it. But, to a certain extent, we can borrow concepts from social psychology where behavioral patterns, rational or irrational, are developed and empirically tested. On the same lines, we can develop certain models to test the financial behavior, to the extent of the availability of the explanatory variables. Such models can help to understand the Why? And How? Aspect of investor behavior, which can have managerial implications for policy makers. So, this project is done in order to contribute to such types of model.

Purpose of report: The purpose of project is to understand the mutual fund industry and identify various factors that affects consumers (i.e. corporate organizations related to health industry in Delhi/NCR region) risk-returns perception, attitude etc. which lead to their expectations from different types of mutual funds available in the market specially of Reliance and generally influences buying behavior of mutual funds . The project study is also done to know the influence of various factors like the asset allocation, entry load, exit load, associated with the mutual funds. Ultimately this would help in understanding the benefits of mutual funds to investors.

Aim of study The report will be aimed at finding, classifying and analyzing of various factors contributing to the purchase decision of Mutual fund. This study tracks the investors preferences and priorities towards different types of mutual fund products and identifies

the key features of a mutual fund for deciphering sustainable marketing variables in the design of a new mutual fund product. Taking a lead from this, an attempt is also made to find out the important mutual fund product attributes that are essential in influencing the purchase decision of the investors.

Scope of report: In this project the scope is limited to some prominent mutual funds products in the mutual fund industry such as Liquid funds and debt funds which is mostly preferred by corporate as it is less riskier than equity schemes .But there is so many other schemes in mutual fund industry like equity with specialized investment (banking, infrastructure, pharmacy) funds, index funds etc.

Objective of study: 1-To study the various factors affecting Perception and attitude towards reliance and other mutual funds from organization point of view. Buying behavior of customers with regard to mutual funds.

2- To identify the features the investors look for in Mutual Fund products 3- To identify the scheme preference of investors the information sources influencing the scheme selection decision. 4- To study the contribution of various factors in decision making of consumer. 5- To discuss about the market trends of Mutual Fund investment 6-Analysing the market research findings for work improvement of Capital Asset 7- Suggesting strategic measures for Management Company. Improvising mutual fund customers state of mind. Increasing and expanding mutual fund industry.

Limitations of the study: Sample of research is limited to corporate of Delhi and NCR region which may not adequately represent the national market.

Various sources of secondary data differ in their conclusions and are subject to manipulations which may affect the analysis made on perception of customers and its consequences while buying mutual funds. This study assumes that the survey used is an effective measurement tool to identify the consumer behavior of all sectors corporate even if it is done in organizations (hospitals & pharmaceutical companies) belong health industry only in Delhi/NCR region. It is also assumed in this research study that, each participant (corporate client) from whom questions is asked, will honestly and thoroughly answer each question. This study has not been conducted over an extended period of time having both market ups and downs. The market state has a significant influence on the buying patterns and preferences of investors. The study has not captured such situations.

Methodology and their sources: 1-Data collection-To study the buying behavior factors data is collected by:(1)Secondary data- Secondary data is collected from websites, books, journals , information vouchers etc. (2)Primary data-It is the data, which is being collected for the first time and it is the original data. In this project the primary data has been taken from Reliance Capital Companys corporate sales team members, guide of the project and some what from the corporate client from whom questionnaire is asked during an interview. 2-Market Research Its aim is to gather information and do its analysis on various large and medium corporate of majorly health industry belonging to Delhi NCR region. During data gathering the choice and design of methods are constantly modified, based on ongoing analysis. This study will also employ qualitative research method because it will try to find out and explain the relationship of one variable with another variable of the particular factor and importance of each factor in terms of their contribution in buying of mutual funds.It is done by: (1)Interview- It will be the major method to collect data and will be a structured interview which shall consist of a list of specific questions and the interviewer (me) will not inject any extra remarks into the interview process. In it interviewee will be encouraged to clarify vague statements or to further elaborate on brief comments. The structured

interview is mostly a "question and answer" session and it does not include interviewer (mine) own beliefs and opinions. It will be done by following ways:I-Personal interview-It is done by personally meeting corporate CFOs, CEOs etc. and discussing their companys cash management and investment patterns and advising on that. II-Phone interview-These are kind of discussions done on phone with corporate clients. (2) Questionnaire-The respondents shall fill out a self-administered questionnaire. Ideally, the respondents will grade each statement in the survey-questionnaire using a Likert scale, with a nine-response scale wherein respondents will be given five response choices and its weight will vary from very important (9) to not at all important (1). In the study, descriptive research method will be utilized. In this method, it is possible that the study would be cheap and quick. Here, the questionnaires for the corporate sample chosen will be used to collect quantitative data and the interviews will be used to provide qualitative insights into the data collected.

3-Technique used for analysis-When the entire survey questionnaire have been collected, the statistical tool will be used to interpret the findings and will be assisted by the Statistical Package for the Social Sciences (SPSS) in coming up with the statistical analysis for this study. Because of this research design, the results of the data gathered were limited to the determination of factors that affect the consumer buying behavior of mutual funds. Thus, other possible findings in the field of consumer/customer satisfaction and business performance will also be analyzed.

MAIN TEXT:

What is Mutual Fund? SEBI (Mutual Fund) Regulations 1993 defines Mutual Fund as a fund established in the form of a trust by a sponsor to raise money by the trustees through the sale of units to the public under one or more schemes for investing securities in accordance with these regulations A mutual fund is just the connecting bridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds) Hence, professional fund managers, acting on behalf of the Mutual Fund, manage the investments (investors money) for their benefit in return for a management fee. The organization that manages the investment is called the Asset Management Company (AMC). Thus, a Mutual Fund is the most suitable investment for the common person as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. Anybody with an investible surplus of as little as a few thousand rupees can invest in mutual fund .Each mutual fund scheme has defined investment objective and strategy. The rationale behind a mutual fund is that there a large number of investors who lack the time and or the skills to manage their money. Mutual fund is a mechanism for pooling the resources by issuing unit to the investors and investing funds in securities in accordance with the objective as disclosed in offer document. Investment in securities is spread across a wide section of industry and sector and the risk is reduced. Diversification reduces the risk because all stock may or may not move in the same direction in the same proportion to their proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are called unit holders. The profit or losses are shared by the investors in proportion to their investment. The mutual fund usually comes out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with the SEBI, which regulates securities markets before it can collect fund from the public. In India, SEBI (Mutual Fund) Regulations, 1996 regulates the structure of mutual funds. Mutual funds in India are constituted in the form of a Public Trust created under The Indian Trusts Act, 1882.

Role of SEBI in mutual fund In the year 1992 SEBI act was passed. The objectives of SEBI are to protect the interest of Investors in securities, to promote the development of, and to regulate the securities market. As far as mutual fund are concerned, SEBI formulates policies and regulation for the mutual fund to protect the interest of the investors. SEBI notified regulation for mutual funds in 1993. Thereafter mutual fund sponsored by private sector entities were allowed to enter the capital market. The regulations were fully revised in 1996 and been amended. Therefore, from time to time SEBI has also issued guidelines to the mutual fund from time to time to protect the interest of the investors. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of regulation. There is no distinction in regulatory requirement of the mutual fund and all are subject to monitoring and inspecting by SEBI. The risks associated with the scheme launched by mutual funds sponsored by these entities are of similar type. The Indian mutual fund industry follows a 3-tier structure as shown below: 1. Sponsors They are the individuals who think of starting a mutual fund. The Sponsor approaches SEBI, the market regulator and also the regulator for mutual funds to start fund house. 2. Trust Once SEBI is satisfied with the credentials and eligibility of the proposed Sponsors, the Sponsors then establish a Trust under the Indian Trust Act 1882. 3. Asset Management Company (AMC) The Trustees appoint the AMC, which is established as a legal entity, to manage the investors (unit holders) money. In return for this money management on behalf of the mutual fund, the AMC is paid a fee for the services provided

History of mutual funds The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the 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 dramatic improvements, both quality wise as well as quantity wise. The mutual fund industry in India started in 1963 with the formation of unit Trust of India, at the initiative of the government if India and reserve bank.

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 In the year 1987, public sector mutual funds setup by public sector banks, life insurance Corporation of India and general insurance of India are came in to existence 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 2003, there were 33 mutual funds with total assets of Rs. 1,21, 805 crores.

Type of Mutual Funds Wide variety of mutual fund schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The details given below, gives an overview into the existing types of schemes in the industry. By structure Open-Ended schemes- A type of mutual fund where there are no restrictions on the amount of shares the fund will issue as it depends on its demand. These funds are generally managed actively and are priced according to their net assets value (NAV). Close-Ended schemes- Under this scheme the corpus of the fund, no. of units and its duration are prefixed. Close end schemes are usually more liquid as compared to open-end schemes and hence trade at a discount to the NAV. Interval schemes- These schemes combine the features of open ended schemes.

By investment objectives Growth/Equity schemes -It seek to invest a majority of their funds in equities and a small portion in money market instruments. Because they invest in equities, these schemes are exposed to fluctuations in value especially in the short term. General purpose- They thus have a diversified portfolio of companies across a large spectrum of industries. As compared to the money market schemes they do have a higher price fluctuations risk and compared to gilt fund they a higher credit risk. Money market-These schemes invest in short term instruments such as commercial papers, certificates of deposits (CDS), treasury bills (T-bill) etc. and

are least volatile. Guilt funds- In it primarily invest is done in government debts and is generally credit risk free. Balanced schemes -These schemes invest in both equities as well as debt. It attain the objective of income and moderate capital appreciation

Other schemes Tax saving schemes -Investors are being encouraged to invest in mutual fund through equity linked savings scheme (ELSS) and debt schemes by offering them a tax rebate. Subject to such conditions and limitations, as prescribed under section 88 of the income tax act, 1961. Sector specific schemes-These are schemes restrict the investing to one or more pre defined sectors according to their performance. Index schemes- An index is used as a measure of performance of the market as a whole, or a specific sector of the market .It also serves as a relevant benchmark to evaluate the performance of mutual funds.

According to investment 1. Equity fund These funds invest a maximum part of their corpus into equities holdings. Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix. 2. Debt funds The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers Debt funds are further classified as: Gilt Funds, Income Funds, MIPs, Short Term Plans (STPs), Liquid Funds etc ( its details will be given in final report.)

3. Balanced funds: As the name suggest they, are a mix of both equity and debt funds. Equity part provides growth and the debt part provides stability in returns.

Major PlayersBank Sponsored Joint Ventures Predominantly Indian SBI Funds Management Private Ltd. Others BOB Asset Management Co. Ltd. Can bank Investment Management Services Ltd. UTI Asset Management Co. Private Ltd. Institutions Jeevan Bima Sahayog Asset Management Co. Ltd. Private Sector Indian Benchmark Asset Management Co. Private Ltd. Cholamandalam Asset Management Co. Ltd. Credit Capital Asset Management Co. Ltd. Escorts Asset Management Ltd. J. M. Financial Asset Management Private Ltd. Kotak Mahindra Asset Management Co. Ltd. Reliance Capital Asset Management Ltd. Sahara Asset Management Co. Private Ltd Sundaram Asset Management Co. Ltd. Tata Asset Management Ltd. Joint Ventures Predominantly Indian Birla Sun Life Asset Management Co. Ltd. DSP Merrill Lynch Fund Managers Ltd.

HDFC Asset Management Co. Ltd. Prudential ICICI Asset Management Co. Ltd. Joint Ventures Predominantly Foreign ABN AMRO Asset Management (India) Ltd. Deutsche Asset Management (India) Private Ltd. Fidelity Fund Management Private Ltd. Franklin Templeton Asset Management (India) Private Ltd. HSBC Asset Management (India) Private Ltd. ING Investment Management (India) Private Ltd. Morgan Stanley Investment Management Private Ltd. Principal Pnb Asset Management Co. Private Ltd. Standard Chartered Asset Management Co. Private Ltd

Advantages of investing in a Mutual Fund are: Diversification-When a portfolio is balanced in such a way, that the value of the portfolio should gradually increase over time, even if some securities lose value. Professional Management: Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell. Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud. Liquidity: Its easy to get your money out of a mutual fund. Write a check, make a call, and youve got the cash. Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet. Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. And expenses for Index Funds are far less than that. Transparency: mutual fund provide information on each scheme about the specific investment made there-under and so on Flexibility: currently most funds have regular investment plans, regular withdrawal plans and dividend reinvestment scheme. A great deal of flexibility is assured in the process. Choice of schemes: mutual funds offer a variety of schemes to suit varying needs of investors. Tax benefits: Tax Benefit under 80C which can be categorized as

dividend distribution tax, taxation with indexation etc. Well regulated: The funds are registered with the Securities and Exchange Board of India and their operations are continuously monitored.

Mutual funds have their drawbacks and may not be for everyone: No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Fees and commissions: All funds charge administrative fees to cover their dayto-day expenses. Some funds also charge sales commissions or loads to compensate brokers, financial consultants, Management risk: When you invest in a mutual fund,If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected.

Structure of the Indian mutual fund industry The Indian mutual fund industry is dominated by the Unit Trust of India (UTI) and which has a total corpus of Rs 700bn collected from more than 20 million investors .The UTI has many fund schemes in all categories, The United Scheme 1964 commonly referred to as US64, which is a balanced fund, is the biggest scheme with a corpus of about Rs 200bn URI was floated by financial institution and is governed by a special act of the parliament. Most of its investors believe that the UTI is government owned and controlled, which, while legally incorrect, is true for all practical purposes. 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 the State Bank of India are the largest of these. GIC AMC floated by General Insurance Corporation and Jeevan Bima Sahayog AMC floated by the LIC are some of the prominent ones. The aggregate corpus of funds managed by this category of AMCs is about Rs 150 billion The third largest categories of the mutual funds are the once floated by the private sector and by the foreign asset management companies. The largest of these are Prudential AMC, Reliance Capital AMC and Birla SUN LIFE AMC. The aggregate corpus of the asset managed by this category of AMCs is in excess of Rs 250bn.

Recent trends in the mutual fund industry The most important in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by the nationalized bank and smaller private sector players. Many nationalized banks got into the mutual fund business in the early nineties and go off to a good start due to the stock market boom prevailing then They offer some schemes with guaranteed returns and their patent organization had to bail out these AMCs by paying large amount of money the difference between the guaranteed and actual returns. The service level was also bad. The experience of some of the AMCs floated by private sector Indian companies was also very similar. They quickly realized that the AMCs business is a business, which makes money in the long term and requires deep pocketed support in the intermediate years. Some have sold out to foreign owned companies, some have merged with the others and there is general restructuring going on. The foreign owned companies have deep pockets and have come in here with the expectation of a long haul. They can be credited with introducing many new practices such as new product innovation, sharp improvement in the service standards and disclosure, usage of technology, broker education etc. In fact, they have forced the industry to upgrade itself and service levels of the organization like UTI have improved dramatically in the last few years in response to the competition provided by these. Today, in March 2010, the Indian mutual fund industry has 40 players. The number of public sector players has reduced from 11 to 5. The public sector has gradually receded into the background, passing on a large chunk of market share to private sector players.

Future scenario The asset base will continue to grow at an annual rate of about 30 to 35% over the next few years as investors shift their asset from banks and other traditional avenues. Some of the older public and private sector players will either close or be taken over. Out of ten public sectors players five will sell out, close down or merge with strong players in three to four years. In the private sector this trend has already started with two mergers and one takeover. But this does not mean there is no room for other players. The market will witness a flurry of new players entering the area. There will be a large number of offers from

various asset management companies in times to come. Some big names like Fidelity, Principal and Old Mutual etc. are looking at Indian market seriously. The mutual fund industry is awaiting the derivation in India as this would enable it to hedge its risk and this in turn would be reflected in its Net Asset Value (NAV). SEBI is working out the norms for enabling the existing mutual fund scheme to trade in derivatives. Importantly, many market players have called on the Regulator to initiate the process immediately, so that the mutual funds can implement the changes that are required to trade in derivates. However, the challenges will come from maintaining the interest of the all the participants in the market. Increasing Assets Under Management (AUM) will also be a major challenge, since there is no incentive for the distributors to promote mutual funds. Also after April 1, 2011, when the Direct Tax Code (DTC), come into effect, mutual fund companies and investors would be very watchful on the tax implications of various mutual funds.

Customer prospective The Endeavour of mutual fund investments is to leverage professional and prudent fund management techniques and there by maximize returns for the investors while minimizing risk. while mutual fund are often are preferred avenue for investment over direct investments over capital markets by risk averse investors, customers have had widely varying experiences with purchase of mutual funds. Thus it is critical for the industry to understand the prospective of Indian investors so as to use their inputs for further enhance customer experience with mutual funds. So to understand the need of Indian customers specifically cooperates I have collected the primary information from reliance capital asset management company and conducted the survey for the organizations of health industry across Delhi NCR region. As a part of this survey I conducted interview of sample of population of specific sector chosen with diverse background and different scale varying from small to large to understand their preference and prospective on investment in mutual funds.

Research Work Done Till Date Data collected till date by personal or telephonic interviews has revealed that while a significant portion of customers are aware of and also invest in mutual funds while few had never thinked of investing in mutual fund. There was a diverse set of views

obtained, both negative and positive about investment in mutual fund. The survey has highlighted several reasons that Respondents have cited for making their perception for buying mutual funds. So, initially considering drivers for investment in the mutual funds buying behavior, around twenty seven variables were considered like features, rating, lock in period, entry & exit load, liquidity, safety, regular income, emergency need fulfillment, reputation, agency network, fridge benefits, corpus, associated clients etc. But based on theory, past research, and judgment of the researcher, after brain storming twelve variables under four different factors were finalized to prepare a questionnaire. And then to understand the savings avenue preference, scheme preference and objectives for investment in MFs, and to identify the information sources influencing scheme selection, and the preferred mode of communication, the respondents were asked to rank their preferences on a nine point ranking scale varying 1-exteremly unimportant to 5-neutral and then to 9-extremly important. As sample size is taken as fifty corporate clients in Delhi NCR region belonging to health industry, till now about 30 has filled the questionnaire and rest work will be completed in next ten days which will be followed by its analysis to know the percentage contribution of that particular factor in Driving the Investment in Mutual Funds. All the findings and remarks with analysis will be given in final report. (The details of corporate clients approached till date is mentioned in annexure-2)

Variables Considered The variables considered in the questionnaire, that can incentivize potential customers to commence and gradually increase their investment in Mutual funds are discussed below with their details in brief: (The factors and variables in the form of questionnaire with the ranking scale is given in annexure-1) Factor-1(Core product) Variables 1-FeaturesThe various features like long term short term, equity or debt investment etc. offered by any specific mutual fund product influence the buying of mutual fund as it is according to the requirement of client.

2-Lock in periodIt is important for long term investment as there is no lock in period in liquid funds. 3-Entry and exit loadIt is the load of amount which client have to pay when he/she enters any mutual fund product or redeem the investment before the completion of lock in period. Now a days it is only applicable to a certain products. Factor-2(Investor expectations) Variables 1-PerformanceThe past performance of a fund is important in analysing a mutual fund.. if the fund has a well-established track record, the likelihood of it performing well in the future is higher than a fund which has not performed well 2-SafetyThere is currency risk, political risk,legal risk, benefit shortfall risk etc .But, however, most people think of risk they think about the risk of losing their principal in the investment made through mutual fund. 3-LiqudityIt is easy and any time availability of money which is invested. Their is separate products under liquid schemes which provide such facility to customer. 4-Tax benefitInvestment in Mutual Funds is attractive to customers owing to tax benefits .The tax benefits associated with investment in mutual funds is the key drivers for customers 5-Expense ratioAnnual expenses involved in running the mutual fund include administrative costs, management salary, overheads etc. Expense Ratio is the percentage of assets that go towards these expenses.It is also considered while making an investment in mutual fund.

Factor-3(AMC) Variables: 1-Brand nameConsistency in fund performance and brand equity both are important factors that always influence customers to make relevant selection of mutual fund schemes. 2-Expertise in managing moneyIts important that the team managing the fund should have considerable experience in dealing with market ups and downs.It is important factor to build and maintain the trust of customers to build up mutual fund AMC. 3-Associated clientsTo create good image in the eyes of new clients association with big coorporates plays its role. It is important while influencing for any coorporate first time investment in any AMC.

Factor-4(Investor service) Variables: 1-Delivery schedule transparencyServices offered by mutual funds (MFs) may vary across funds. Some MFs are more investor friendly than others, and offer information at regular intervals

Conclusion Running a successful MF requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investor. This study has made an attempt to understand the financial behaviour of MF investors in connection with the scheme preference and selection. The post survey developments are likely to have an influence on the findings. Nevertheless, it is hoped that the survey findings will have some useful managerial implication for the AMCs in their product designing and marketing.

References: 1-Websites: www.reliancemutual.com www.mutualfundindia.com www.amfiindia.com www.bseindia.com

2-Books, Magazine and Newspapers: Marketing Management-Philips Kotler Business Research Methodology-Naresh K.Malhotra Investment Management-V K Bhalla The Economic Times

3-Others: Agarwal, G.D., 1992, Mutual Funds and Investors Interest, Chartered Secretary, Vol.22, No.1, 23-24. Atmaramani, 1996, Restoring Investor Confidence, The Hindu Survey of Indian Industry, 435-437 Subramanyam, P.S. 1999, The Changing Dynamics, The Hindu Survey of Indian Industry, 109-111. James H. Myers & Mark Alpert, Determinant buying attitudes: meaning and measurement, Journal of Marketing 32 (October), 65-68, 1968.

ANNEXURE-1 Sample QuestionnaireTick the following:Variables How much important is features of mutual fund to you? How does lock in period matter? How does you analyze entry & exit load ? How much you consider previous performance while investing? Where you rank safety while doing buying mutual funds? What is the requirement of liquidity during investment? How much important is tax benefit for your organization? Extremely Very Somewhat Imp.6 Neutral- Unimp.4 Somewhat Very Extremely imp.-9 imp.8 imp.7 5 unimp.3 unimp.2 unimp.1

How do you consider expense ratio?

How much important is brand name for you to invest in mutual funds? Rank the importance of AMC for expertise in handling your money How important is associated clients of particular mutual funds for you? Where do you rank delivery schedule transparency?

ANNEXURE-2 Corporate Clients visited till dateCorporate Name Concerned Person Designation Address Phone no. 25752056, 45099994 9811075604 9999899308

Kolmet hospital Mr.S.R .Nanda Orchid hospital R.G.Urological reseach institute Center for sight Dr. O.P. Gupta Mr. Sandeep Aggarwal

finance head 7-b,pusa road, karol bagh, Delhi Director Finance Analyst c-3/91-92,janakpuri,Delhi F-12,East of kailash, Delhi

Mr. Simrat Chadda Dr. R.K. Jain Dr. P.R. Aryan Mr.Mathur

CFO

A-23,Green Park Main,Delhi

26513723, 9910167170 2324581 2330945, 2330645

Jain hospital Aryan hospital pvt.ltd. Aashlok hospital

M.S. Director

Sec-14-1, Gurgaon Old Railway Road, Gurgaon

Finance Head

25-A,Community Center, Safderjang Enclave, Delhi #1,Facinity Center-1,Sheikh Sarai Institutional Area, Delhi

9810010234

Mr. Gunadhar Venu eye Maity institute and research center North point hospital pvt ltd Primus international hospital City hospital Mr.R.S. Sharma Mr.Amrinder

Senior Acc. Head

9911712179

Finance Head

S-357,Pansheel Park, Delhi

9910112789

Senior Manager Accounts Corporate Finance Advicer Finanace Head Executive Director

Chanderagupta Marg, Chanakyapuri, Delhi

9873588115

Mr.Yogesh Wadhwa Mr.Deshraj Mr.Sourabh Gupta

B-1/1, Pusa Road, Karol Bagh, Delhi

9811285602

Vimhans Allied chemicals & pharma pvt.ltd.

#1,Institutional area, Nehru Nagar, Delhi 8734, Rajnigandha Complex, Desh Bandhu Gupt Road, Paharganj,Delhi

29849027 23681000

M.K.W. hospital Chikitsa hospital National heart institute Umkal hospital Life care innovations pvt.ltd. Rockland hospital Indian spinal injuries Promed exports pvt.ltd.

Mr.Akhelesh

Acc.Head

J-12,Community Center,Janakpuri, Delhi B-4,opp.gyan bharati school,Saket,Delhi #49,Community Center,East of Kailash,Delhi DLF,Gurgaon B-589,Sushant lok-1, Gurgaon

9810056875

Dr.Mukul Jain

Director

26850033

Mr.S.K.Shaley Finance Advicer Mr. Nand Kishor Kalra Mr.S.K.Vajpa yee CFO Vice president

9810269404

9873588782 9313880425

Mr.Mukesh Mittal Mr.Devesh

CFO

B-33-34,Qutab institutional area,Delhi Sec-8, vasant kunj,Delhi

9650044606

CFO

42255225

Mr.Krishan Khanna

Depty Manager

207,Ashirwaad Commercial Complex, Green Park, Delhi

26531408

Ozone pharmaceutical s ltd. Vision eye center Skin hospital Steva biotech pvt.ltd. Visitech eye center Holy family hospital Medirose ltd. Algen health care pvt.ltd.

Mr.Neeraj Aggarwal

CFO

#1,block-A3, Janakpuri, Delhi

9717997188

Mr.R.K.Gupta

Medical Supridendent Director CEO

27/12, West Patel Nagar,Delhi

9810909817

Dr.Shirisha Mr.Sourabh Aggarwal Mr.Abhijeet Majumdar Mr.O.P.Ahuja

C-47,South Extension-2,Delhi P-29,South Extension-2,Delhi

9810568669 205733150

Financial Analyst CFO

R-13, Greater Kailash-1, Delhi

9871465770

Jamia Nagar, Okhla Road,Delhi

9716832323

Mr.Veriender Singel Mr.Virender Vilani

Director Director

487/61, National Market, Perragarhi, Delhi 487/65,National Market, Peeragarhi, Delhi

25267507 25287625

Kantoor hospital S.A.S.Pharmac euticals ltd.

Mr.Ashok Kantoor Mr.Suresh Garg

CA Finance Head

3659/2, Gurudwara Road,Karol Bagh,Delhi C-55/1,Okhla industrial area-2, Delhi

9810007872 9313297471