DR.

VS KRISHNA GOVERNMENT DEGREE AND PG COLLEGE

(A) (A NAAC REACCREDITED BY GRADE INSTITUTION)
MADDILAPALEM, VISAKHAPATNAM
(2018-2021)

A STUDY ON
“MUTUAL FUNDS”

with Reference to
SBI MUTUAL FUNDS

Under the Guidance of

MR.S.ESWARA RAO, M.COM,(M.phil),APSET

Asst. Professor
Submitted to
DEPARTMENT OF COMMERCE

Submitted by

PAMPANA. MOHAN
Regd. No. E18331040
 CERTIFICATE

This is to certify that the project title “A STUDY ON MUTUAL FUNDS” with

reference to "SBI MUTUAL FUNDS” a bonafide work by PAMPANA. MOHAN,

Regd. No. E18331040 student of Final Year B.Com, Programme in 2018-2021

under my guidance and submitted to the Department of UG Studies, DR. VS

KRISHNA GOVT. DEGREE & PG COLLEGE (A) in partial fulfillment of the

requirements for the award of the Bachelor of Commerce.

Sri. R.RAMARAO MR.S.ESWARAO

Head of the Department Project Guide
 DECLARATION

I, PAMPANA MOHAN here by declare that this project reportentitled

“A STUDY ON MUTUAL FUNDS with reference to “SBI MUTUAL FUNDS”

submitted by us to DR. VS KRISHNA GOVT. DEGREE & PG COLLEGE (A),

Visakhapatnam (affiliated to ANDHRA UNIVERSITY) in partial fulfillment for the

award of the Degree of Bachelor of Commerce.This is bonafide workd one by us under

the guidance of Mr.s. Eswar rao , Asst. Professor, DR. VS KRISHNA GOVT.

DEGREE & PG COLLEGE (A) and has not been submitted to any other University

or Institute publish edearlier.

DATE: PAMPANA MOHAN

PLACE: Visakhapatnam (Reg.No:E1831040)

 ACKNOWLEDGEMENT

I here to take the opportunity to express my sincere gratitude to the following

eminent personalities, without whose aid advice, the successful completion of my

project work would have remained adream.

I would like express my since regratitude to the Principal Dr. Sravan kumar,

M.Sc., Ph.D., for giving permission to do our project work. We are deeply obliged the

Head of the Department, Sri.R.RAMARAO, M.com, M.A.(litt), M.phil., B.Ed.

Lecturer in commerce., my Project Guide MR.R.ESWARAO Asst. Professor,

Dr.VS. Krishna Govt. Degree and PG(A)College, for his valuable guidance and

encouragement throughout my project work.

I would like to express our sincere gratitude to the management and staff of

SBI MUTUAL FUNDS for giving their permission to do my project work in their

organization and helping our meticulously in all of my project.

PAMPANA.MOHAN

Regd. No. E18331040

Table of Contents

CHAPTER-1
COMPANY- INTRODUCTION
1.1 INTRODUCTION
1.2 NEED FOR THE STUDY
1.3 OBJECTIVES OF THE STUDY
1.4 METHODOLOGY OF STUDY
1.5 LIMITATIONS
`

CHAPTER -2
COMPANY - PROFILE

CHAPTER -3
THERORITICAL FRAME WORK

CHAPTER – 4
DATA ANALYSIS AND INTERPRETATION

CHPATER - 5
SUMMARY AND FINDING
5.1 SUMMARY
5.2 FINDING
5.3 SUGGESTIONS
5.4 CONCLUSION
 1

CHAPTER–1
INTRODUCTION
 2

Contents :

 Meaning
 Definition
 Aspects of Mutual Funds
 Objective of the study
 Advantages
 Disadvantages
 Scope Of The Study
 Need For The Study
 3

WHAT IS MUTUAL FUND?

Meaning Of Mutual Fund:

An open-ended fund operated by an investment company

which raises money from shareholders and invests in a group of

assets, in accordance with a stated set of objectives.

Mutual Fund Definition:

‘‘A mutual fund is an investment security type that enables

investors to pool their money together into one professionally managed

investment. Mutual funds can invest in stocks, bonds, cash and/or other

assets. These underlying security types, called holdings combine to form

one mutual fund, also called a Portfolio.’’

Mutual Fund is Subject to Market Risk:

This is the standard disclosure of the Mutual Fund. Which means

Mutual Fund is totally based on the current market position. The Mutual

Fund Investors invests money in the mutual fund at market risk.

 4

INTRODUCTION TO MUTUAL FUND AND

ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of

investors who share a common financial goal. This pool of money is

invested in accordance with a stated objective. The joint ownership of the

fund is thus “Mutual”, i.e. the fund belongs to all investors. The money

thus collected is then invested in capital market instruments such as

shares, debentures and other securities. The income earned through these

investments and capital the capital appreciations realized are shared by its

unit holders in proportion 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. A Mutual Fund is an

investment tool that allows small investors access to a well-diversified

portfolio of equities, bonds and other securities. Each shareholder

participates in the gain or loss of the fund. Units are issued and can be

redeemed as needed. The Net Asset Value (NAV) of Funds is determined

each day. Investments in the securities are spread across a wide cross-

section of industries and sectors and thus the risk ids reduced.

Diversification reduces the risk because all stocks may not move in the

same direction in the same proportion at the same time.

 5

OBJECTIVES OF THE STUDY

1) To find out the preferences of the investors for Asset

Management Company.

2) To know the preferences for the portfolios.

3) To know why one has invested or not invested in SBI

Mutual fund.

4) To find out the most preferred channel.

5) To find out what should do to boost Mutual Fund Industry.

SCOPE OF THE STUDY

A big boom has been with needed in mutual fund industry in

recent times. A large number of new players have entered the market and

trying to gain market share in this rapidly improving market.

 6

ADVANTAGES OF MUTUAL FUND

1. Portfolio Diversification

2. Professional Management

3. Reduction / Diversification of Risk

4. Liquidity

5. Flexibility &Convenience

6. Reduction in Transaction Cost

7. Safety of regulated environment

8. Choice of schemes

9. Transparency

DISADVANTAGES OF MUTUAL FUND

1. No control over Cost in the Hands of Investor

2. No tailor-made Portfolios
 7

3. Managing a Portfolio Funds Difficulty in selecting a suitable

fund schem
 8

RESEARCH METHODOLOGY

This report is based on primary as well secondary data, however

primary data collection was given more important since it is overhearing

factor in attitude studies. One of the most important users of research

methodology is that it helps in identifying the problem, collection,

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 asset 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 secondary data.

Primary data:

primary data has been collected by interacting with various people.

Secondary date:

The secondary data has been collected through journals and

websites.
 9

NEED OF THE STUDAY

While selection the investment avenues, we have to consider the

need like available risk willing to take and expected return from the

security. But he cannot select his own portfolio and manage on his

own. So he needs a protfolio manager his invest able funds. The

mutual funds provide the service of portfolio manager, so we can

select the mutual fund for investment. To know which fund is best

for his needs, I have chosen the comparative performance of selectd

mutual fund scheme with special reference to SBI Mutual Fund

scheme and ICICI prudential.

 10

CHAPTER-2
COMPANY PROFILE
 11

Contents :

 Introduction
 Products
 Competitors
 12

INTRODUCTION TO SBI MUTUAL FUND

SBI Funds Management Pvt. Ltd. Is one of the leading fund houses

in the country with an investor base of over 4.6 million and over 20 years

of rich experience in fund management consistently value to its investors.

SBI Funds Management Pvt. Ltd. Is a joint venture between ‘The State

Bank Of India’ one of India’s largest banking enterprises, and Societe

Generale Asset Management (France), one of the world’s leading fund

management companies that manage over US$ 500 Billion worldwide.

Today the fund house manages over Rs.28,500 crores of assets and

has a diverse profile of investors actively parking their investments

across 36 active schemes. In 20 years of operation, the fund has launched

38 schemes and successfully redeemed 15 of them, and in the process,

has rewarded our investors with consistent returns. Schemes of the

Mutual Fund have time after time outperformed benchmark indices,

honored us with15awards of performance and have emerged as the

preferred investment for millions of investors. The trust reposed on us by

over 4.6 million investors is a genuine tribute to our expertise in fund

management. SBI Funds Management Pvt. Ltd.

 13

PRODUCTS OF SBI MUTUAL FUND

1. Equity Schemes:-

The investments of these schemes will predominantly

be in the stock markets and endeavor will be to provide

investors the opportunity to benefit from the higher returns

which stock markets can provide. Equity funds include

diversified Equity Funds, Sectoral Funds and Index Funds.

 Magnum COMMA Fund

 Magnum Equity Fund

 Magnum Global Fund

 Magnum Index Fund

 Magnum Midcap Fund

 Magnum Multicap Fund

 Magnum Multiplier Fund plus1993

 Magnum Sectoral Funds Umbrella

 MSFU - Emerging Business Fund

 MSFU - IT Fund

 MSFU – Pharma Fund

 MSFU – Contra Fund

 MSFU- FMCG Fund

 14

# SBI Arbitrage Opportunities Fund

# SBI Blue Chip Fund

# SBI Infrastructure Fund – Series 1

# SBI Magnum Taxgain Scheme 1993

# SBI One India Fund

# SBI Tax Advantage fund – Series 1

2. Debt Schemes:-

Debt Funds invest only in debt instruments such as

corporate bonds, Government Securities and Money Market

instruments either completely avoiding any investments in

stock markets as in Income Funds or Gilt Funds or having a

small exposure to equities as in monthly Income Plans or

Children’s plan. Hence, they are safer than equity funds. At

the same time the expected returns from debt funds would be

lower. Such investments are advisable for the risk-averse

investor and as a part of the investment portfolio for other

investors.

 Magnum Children’s Benefit Plan

 Magnum Gilt Fund

 Magnum Income Fund

 15

 Magnum Insta Cash Fund

 Magnum Income Fund –Floating Rate Plan

 Magnum Income Plus Fund

 Magnum Insta Cash Fund –Liquid Floater Plan

 Magnum Monthly Income Plan

 Magnum MIP –Floater

 Magnum NRI Investment Fund

 SBI Premier Liquid Fund

3. Balanced Schemes:-

Magnum Balanced Fund invests in a mix of equity and

debt investments. Hence, they are less risky than equity funds,

but at the same time provide commensurately lower returns.

They provide a good investment opportunity to investors who

do not wish to be completely exposed to equity markets, but is

looking for higher returns than those provided BT debt funds.

 16

COMPETITORS OF SBI MUTUAL FUND

Some of the main competitors of SBI Mutual Fund in Nakodar&

Jalandhar, PUNJAB are as follows:

i. ICICI Mutual Fund

ii. Reliance Mutual Fund

iii. Birla Mutual Fund

iv. Kotak Mutual Fund

v. HDFC Mutual Fund

vi. LIC Mutual Fund

 17

CHAPTER– 3
THERORITICAL FRAME WORK
 18

Mutual Fund

A mutual fund is a common pool of money in to which

investors with common investment objective place their
contributions that are to be invested in accordance with the
stated investment objective of the scheme. The investment
manager would invest the money collected from the
investor in to assets that are defined/ permitted by the stated
objective of the scheme. For example, an equity fund would
invest equity and equity related instruments and a debt fund
would invest in bonds, debentures, gilts etc.

A Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal. The money thus
collected is then invested in capital market instruments such as
shares, debentures and other securities. The income earned
through these investments and the capital appreciation realised
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. The flow chart below
describes broadly the working of a mutual fund.
 19

Mutual Fund Operation Flow Chart

A Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal. The money
thus collected is then invested in capital market instruments
such as shares, debentures and other securities. The income
earned through these investments and the capital appreciation
realised 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. The flow chart
below describes broadly the working of a mutual fund.

DRAWBACKS OF MUTUAL FUNDS

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. Investors encounter fewer risks when they invest in
mutual funds than when they buy and sell stocks on their own.
However, anyone who invests through a mutual fund runs the
risk of losing money.

• Fees and commissions: All funds charge administrative

fees to cover their day-to- day expenses. Some funds also
charge sales commissions or "loads" to compensate.
 20

HISTORY OF THE INDIAN MUTUALFUND INDUSTRY

The mutual fund 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 Assets Under

Management (AUM) was Rs.67 billion. The private sector entry tothe

fund family raised the AUM to Rs.470 billion in March 1993 and till

April 2004; it reached the height if Rs.1640billion.

The Mutual Fund Industry is obviously growing at a tremendous

space with the mutual fund industry can be broadly put into four phases

according to the development of the sector.

Each phase is described as under:

 21

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 reserve Bank Of India. In 1978

UTI was de- linked from the RBI and the Industrial Bank Of India (IDBI)

took over the regulatory and administrative control in place of RBI. The

first scheme launched by UTI was Unit Scheme1964. At the end of 1988

UTI had Rs.6,700 crores of assets undermanagement.

Second Phase – 1987-1993 (Entry of Public

Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds

set up by public 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 (June 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 crores.
 22

Third Phase – 1993-2003(Entry of Private

SectorFunds)

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 2003, there were 33 mutual funds with total

assets of Rs.1,21,805 crores.

 23

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust Of India

Act 1963 UTI was bifurcated into two separate entities. One is the

Specified Undertaking Of the Unit Trust Of India with assets under

management of Rs.29,835 crores as at the end of January 2003,

representing broadly, the assets of YS 64 scheme, assured return and

certain other schemes. The second is the UTI Mutual Fund Ltd.,

sponsored by SBI, PNB, BOB, and LIC. It is registered with SEBI and

functions under the Mutual Fund Regulations, consolidation and growth.

As at the end of September, 2004, there was 29 funds, which manage

assets of Rs.15,31,108 crores under 421 schemes.

 24

CATEGORIES OF MUTUAL FUND

BASED ON THEIRSTRUCTURE
MUTUAL FUNDS CAN BE CLASSIFIED AS FOLLOW :

1) Open-ended funds

2) Close-ended funds

OPEN-ENDED FUNDS:-Investment 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.

BASED ON INVESTMENTOBJECTIVES

1) Equity funds

2) Balanced funds

3) Debt funds

1) 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

fluctuation in the market. Generaly smoothens out in the long

term, thereby offering higher returns at relatively lower

 25

volatility.

a) Index funds:- In this case a keystock market index , like BSE

Sensex or Nifty is tracked . Their portfolio mirrors the benchmark

index both in terms of composition and individual stock weight ages.

b) Equity diversified funds:-100% of the capital is invested in

equities spreading across different sectors and stocks.

c) Dividend yield funds:-It is similar to the equity diversified funds

except that they invest in companies offering high dividend yields.

d) Thematic funds:-Invest 100% of the asset in sectors which are

related through some theme .e.g.:-An infrastructure fund invest in

power , construction , cements sectors etc.

e) Sectors funds :-Invest 100%of the capital in a specific sector.

e.g,:- A banking sector fund will invest in banking stocks.

f) ELSS:-Equity Linked Saving Scheme provides tax benefit to the

investors.
 26

2) 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:-

a) Debt-oriented funds:- Investment below 65% inequities.

b) Equity-oriented funds:- Investment at least 65 % in equities,

remaining indebt.

3) DEBT FUND :- They invest only debt instruments, and are a

good option averse to idea taking risk associated with equities.

Therefore, they invest exclusively in fixed- income instruments like

bonds. Debentures. Govt. of India securities; and market instruments

such as certificates of deposits (CD), commercial paper (CP) and call

money. Put your money into any of these debt funds depending on

your investment horizon and needs.

a) liquid funds:- These funds invest 100%in money market

instrument , a large portion being invested in call money market.

b) Gilt funds ST :- They invest 100% of their portfolio in govt.

securities of and T-bills.

 27

c) Floating rate funds:-Invest in short–term debt papers. Floaters

invest in debt instruments which have variable coupon rate.

d) 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 market.

e) Gift funds LT:- They invest 100% of their portfolio in long term

government securities.

f) Income funds LT:-Typically , such funds invest a major portion

of the portfolio in long- term debt papers.

g) MIPs:- Monthly income plans have an exposure of 70%-90% to

debt and an exposure of 10%-30% to equities.

FMPs:-fixed monthly plans invest in debt papers whose maturity is in

line with that of the fund.

 28

INVESTMENT STRATGIES

1) Systematic Investment Plan:-Under this a fixed sun is

invested each month on a fixed date of a month . Payment is

made through postdated cheques of direct debit facilities. The

investor gets units fewer units when the NAV is high and

more units when the NAV is low. This is called as the benefit

of rupee cost averaging (RCA).

2) Systematic Transfer Plan :- Under this an 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.

Systematic Withdrawal Plan:- If someone wishes to

withdrawal from a mutual fund then he can withdraw a fixed

amount each month.

 29

KEY PLAYERS OF MUTUAL FUNDS :-

Mutual Fund is formed by a trust body. The business is set up by

the sponsor, the money invested by the asset management company and

the operations monitored by the trustee. There are five principal

constituents and three market intermediaries in the formation and

functioning of mutual fund. The five constituents are:

1. Sponsor: A company established under the Companies Act forms a

mutual fund.

2. Asset Management Company: An entity registered under the

Companies Act to manage the money invested in the mutual fund

and to operate the schemes of the mutual fund as per regulations. It

carries the responsibility of investing and managing the investors’

money.

3. Trustee: The trust is headed by Board of Trustees. The trustee

holds the property of the mutual fund in trust for the benefit of unit

holders and looks into the legal requirements of operating and

functioning of the mutual fund. The trustee may also form a limited

company under the Companies Act in some situations.

 30

4. Unit Holder: A person/entity holding an undivided share in the

assets of a mutual fund scheme.

5. Mutual Fund: A mutual fund established under the Indian Trust

Act to raise money through, the sale of units to the public for

investing in the capital market. The funds thus collected are passed

on to the Asset Management Company for investment. The mutual

fund has to be registered with SEBI. The three market intermediaries

are: (l) Custodian (2) Transfer Agents (3) Depository.

a) Custodian: A custodian is a person who has been granted a

Certificate of Registration to conduct the business of custodial

services under the SEBI (Custodian of Securities) Regulations

1996. Custodial services include safeguarding clients’

securities along with incidental services provided.

Maintenance of accounts of clients’ securities together with

the collection of benefits / rights accruing to a client falls

within the purview of custodial service. Mutual funds require

custodians so that AMC can concentrate on areas such as

investment and management of money.

 31

b) Transfer Agents : A transfer agent is a person who has been

granted a Certificate of Registration to conduct the business of

transfer agent under SEBI (Registrars to an Issue and Share

Transfer Agents) Regulations Act 1993. Transfer agents’ services

include issue and redemption of mutual fund units, preparation of

transfer documents and maintenance of updated investment

records. They also record transfer of units between investors

where depository does not function.

c) Depository : Under the Depositories 1996, a depository is body

corporate who carries out the transfer of units to the unit holder in

dematerialized form and maintain records thereof

 32

Sampling:

Sampling Procedure:

The sample was selected of them who are the customers / visitors

of State Bank Of India, Nakodar (Jalandhar Road) Branch, 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.

Sampling Size:

The sample size of my project is limited to 35 people only. Out of

which only 21 people had invested in Mutual Fund.Other 14 people did

not have invested in Mutual Fund.

Sampling design:

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

etc.
 33

LIMITATION:

i) Some of the persons were not so respective.

ii) Possibility of error in data collection because many of investors

may have not given actual answers of my questionnaire.

iii) Sample size is limited to 80 visitors of SBI Nakodar Main

Branch, of these only 30had invested in Mutual Fund. The

sample size may not adequately represent the whole market.

iv) Some respondents were reluctant to divulge personal information

which can affect the validity of all responses.

v) The research is confined to a certain part of Nakodar

 34

CHAPTER - 4
DATA ANALYSIS
AND
INTERPRETATION
 35

ANALYSIS &INETRPRETATION OF THE

DATA

(a) Age distribution ofthe Investors ofNakodar

Age Groups < = 30 31- 35 36 - 40 41- 45 46 - 50 > 50

No. of Investors 5 7 3 2 1 2

According to this collected data out of 50 Mutual Fund

investors of Nakodar the most are in the age group of 31-35 yrs. i.e.,

7%, the second most investors are in the age group of below 30 yrs. i.e.,

5% and the least investors are in the age of 46-50 yrs.

(b) Educational qualification of investors of Nakodar

Educational qualification No. of investors

Graduate / post graduate 11
Under graduate 6
Others 3
Total 20

Interpretation:
Outof20 Mutual Fund investors 55% of the Nakodar are Graduate /

PostGraduate,30% are Under Graduate and 15% are others

(c) Occupation of the investors of Nakodar

 36

Occupation No. of investors

Govt. service 11

Pvt. service 7

Business 2

Agriculture 0

Others 1

Interpretation:

Out of 20 Mutual Fund investors 11 are of Govt. sector in service,

7 are inPvt. Service, 2 in Business and 1 in others.

(d) Monthly Family Income of the Investors of Nakodar

Income Group No. of Investors

 37

10,000 – 20,000 1

20,000 – 30,000 3

30,000 – 40,000 4

40,000 – 50,000 7

More than 50,000 5

Interpretation:

Most and more 35% of investorswho invested in Mutual Fund are

the income group of 40,000 - 50,000; secondonei.e.,20% investors are in

the monthly income group of more than 50,000 and minimum investors

5% are inthe monthly income group of 10,000 - 20,000.

 38

Table 1: Investment in Mutual Funds

response Frequency Percentage
Yes 19 62%
No 31 38%
Total 50 100

Interpretation:
From the above table out of the 100%, 62% of the people invest
in mutual funds Remaining 38% of people they haven’t interest
invest in mutual funds.

(observed (observed (observed-

Options Frequency
expected expected)² expected)²/e
Advertisement
22 9.5 90.25 7.22
s
Agents 12 -.5 .25 .02
Seminar 7 -5.5 30.25 2.42
Workshop 9 -3.5 12.25 .98
Total 50 133 10.64
Table 2

Expected frequency= 50/4= 12.5

Chi square= ∑ │observed-expected│² = 10.64
Expected at 3 degree of freedom, df (3) =7.815, thus the calculated value
is greater than the table value. Hence, He is rejected.

Interpretation:
From the following above table it is clear that all the modes of
information are not the same. Advertisement is more popular.
 39

Table 3: Sector Preferred to Invest the Money

Options Frequency Percentages
Government sector 27 54
Private sector 23 46
Total 50 100

Chi square= ∑ │observed-expected│² = 0.32 Expected at df (1), the table

value is 3.841 which is greater than the calculated value. Hence, He is
accepted.

Interpretation:
The following above table 54% of people prefer to government sector,
46% of people prefer to private sector.

Table 4: Investment Rate Preferred to Grow

Options Frequency Percentages
Steadily 17 34
At an average rate 13 26
Fast 20 40
Total 50 100

Interpretation:
From the above table clear that 40% of the respondents want investments
to grow fastly, 26% of the respondents want their investment to grow at an
average rate, and 34% of people respondents to grow steadily.
 40

Table 5: Sector Preferred to Invest the Money

(observed (observed (observed-

Options Frequency
expected expected)² expected)²/e
Advertisement
22 9.5 90.25 7.22
s
Agents 12 -.5 .25 .02
Seminar 7 -5.5 30.25 2.42
Workshop 9 -3.5 12.25 .98
Total 50 133 10.64

Chi square= ∑ │observed-expected│² = 0.32 Expected at df (1), the table

value is 3.841 which is greater than the calculated value. Hence, He is
accepted

Interpretation:
The following above table 54% of people prefer to government sector,
46% of people prefer to private sector.

Table 6: Investment Rate Preferred to Grow

Options Frequency Percentages

Steadily 17 34
At an average rate 13 26
Fast 20 40
Total 50 100

Interpretation:
From the above table clear that 40% of the respondents want their
investments to grow fastly, 26% of the respondents want their investment
to grow at an average rate, and 34% of people respondents to grow
steadily
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Table 7: Other Investment/Insurance Policy

Options Frequency Percentages
Yes 34 68
No 16 32
Total 50 100

Interpretation:
From the following above table 68 % of the people had bought other
investment policies, and 32% of people they hadn’t interest bought other
investment policies.

Table 8: Comfort Level in Making Investment Decisions

Options frequency Percentages
Low 14 32
Moderate 18 41
High 12 27
Total 50 100

Interpretation:
From the above table it is clear that 41% of the respondents are moderately
comfortable in making investment decisions, 32% of respondents are low in
marketing decisions, and 27% of respondents are high comfortable in marketing
investment decisions.
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Table 9: Decisions Taken When Stock Market Drops

Options Frequency
Withdraw your money 16
Wait and watch 52
Invest more in it 32

Interpretation:
From the above table 52% of the respondents will wait and watch even if
the share market drops, 32% of people invest more in it if share market
drops, and 16% 0f people with draw money if the share market drops.
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CHAPTER- 5
SUMMARY AND FINDING
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Contents :

 Summary

 Suggestions

 Finding

 Conclusion
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EXECUTIVE SUMMARY

Today‟s mutual fund industry is characterized by cut throat competition, so it is

very important for a company, which offers a basket of offerings, to design clear

cut strategies.

The project that I had worked upon in my training provided a lot of scope to learn,

right from the basics, about the investment opportunities available in mutual funds

in India, various factors involved in selecting an investment option. It further

included a market research where I interacted with different people, to gain more

knowledge about the different investment opportunities in India.

The research work contains a comprehensive study of the Mutual Funds in India

and how it emerged as one of the most rapidly growing investment avenue. The

project also involve some practical learning of working in the bank as well. It

involves interaction with the customers that walk in to the bank to understand

their needs to invest in which fund and market, and to draw out the information

which is necessary. I tried to introduce different marketing strategies and put up

new ideas to attract more customers that helped SBI MUTUAL FUND the sales

process and to generate leads.

Finally, it included a market research using questionnaires to find out awareness

of mutual funds among people as compared to other investment avenues. I also

need to find out the various investment avenues of people.

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Suggestions:
To regulate entry and exit loads effectively as it creates a lot of

confusion during actual settlement of costs and bills.

To better operations management so as to reduce the time lag and

improve customer feedback.

To improve market penetration by targeting not only metros but mini-

metros and smaller towns more effectively.

To come up with more innovative schemes and products so as to

expand over the largest customer base as possible.

The most vital problem spotted is of ignorance. Investors should be

made 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.

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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.
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FINDINGS

1) In Nakodar in the age group of 36- 40 years were more in

numbers. The second most investors were in the age group of 41-

45 years and the least were in the age group of below 30years.

2) In Nakodar most of the investors were graduate or post graduate

and below HSC there were very few in numbers.

3) Most of the investors had invested in reliance of UTI Mutual

Fund, ICICI Prudential has also good brand position among

investors, SBI MF places after ICICI Prudential according to the

respondents.

4) Out of 55 investors of SBI MF64% have invested due to its

associated with the brand SBI, 27%invested because of Advisor’s

Advice and 9%due to better return.

5) Most of the investor who did not invested in SBI MF due to not

aware of SBI MF, the second most due to Agent’s advice and rest

due to less return.

6) For future investment the maximum respondents preferred

Reliance Mutual Fund, the second most preferred ICICI

Prudential, SBI MF has been preferred after them.

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CONCLUSION

Running a successful Mutual Fund requires complete

understanding of the peculiarities of the Indian Stock Market and also the

psyche of the small investors. This study has made an attempt to

understand the financial behavior mutual fund investors in connection

with preference of Brand (AMC), Products, Channels etc. I observed that

many of people have fear of mutual fund. They think their money will

not be secure in mutual fund. They need the knowledge of mutual fund

due to lack of awareness although they have money to invest. As the

awareness and income is growing the number of mutual fund investors

are also growing.

“Brand” plays important role for the investment. People invest in

those companies where they have faith or they are well known with them.

There are many AMCs in Nakodar but only some are performing well

due to Brand awareness. Some AMCs are not performing well although

some of the schemes of them are giving good return because of not

awareness about Brand.

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Reliance, UTI, SBI MF, ICICI Prudential etc. they are well known

Brand they are performing well and their assets. Under Management is

larger than others whose Brand are not well known like Principle,

Sunderem, etc.

Distribution channels are also important for the investment in

mutual fund. Financial advisors are the most preferred channel for the

investment in mutual fund. They can investors mind from one investment

option others. Many of investors directly invest their money through

AMC because they do not have to pay entry load. Only those people invest

directly who know well about mutual fund and its operations and those

have time.
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BIBLIOGRAPHY

 NEWSPAPERS
 TELEVISION CHANNELS(CNBC AAWAJ)
 MUTUAL FUND HANDBOOK
 FACT SHEET ANDSTATEMENT
 WWW.SBIMF.COM
 WWW.MONEYCONTROL.COM
 WWW.ONLINERESEARCHONLINE.COM
 WWW.MUTUALFINDSINDIA.COM
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