Beruflich Dokumente
Kultur Dokumente
Submitted for the partial fulfillment of the requirement for the award
Of
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY
TANYA QMAR
ROLL NO. : 1582970029
Department of management
DECLARATION
We the students of MBA
Report
BEHAVIOUR
titled
AND
A IMPACT OF CONSUMER
PERCEPTION
TOWARDS
ABSTRACT
The first and most objective of our study is IMPACT OF
CONSUMER
BEHAVIOUR
AND
PERCEPTION
ACKNOWLEDGEMGNT
This Project Report is the fruit of our intense hard work and
dedication during our project work. We wish to express our
sincere
gratitude
to
our
project
supervisor
Mr.
TABLE OF CONTENT
S.No.
TABLE OF CONTENT
CHAPTER-1
INTRODUCTION
OBJECTIVES
RESEARCH METHODOLOGY
LIMITATIONS
II
31-38
39-46
CHAPTER-4
DATA ANALYSIS & INTERPRETATION
FINDINGS
72-74
75-76
CHAPTER- 6
BIBLIOGRAPHY
VI
47-70
71
CHAPTER-5
SUMMARY& CONCLUSIONS
SUGGESTIONS
VI
12-30
CHAPTER-3
INDUSTRY PROFILE
COMPANY PROFILE
IV
5-8
9
10
11
CHAPTER-2
REVIEW OF LITERATURE
III
PAGE NO.
77-78
CHAPTER- 7
ANNEXURE
79-82
INTRODUCTION
INTRODUCTION
INTRODUCTION
As a consumer we are all unique and this uniqueness is reflected in the
consumption pattern and process purchase. The study of consumer behavior
provides us with reasons why consumers differ from one another in buying
using products and services. We receive stimuli from the environment and the
specifics of the marketing strategies of different products and services, and
responds to these stimuli in terms of either buying or not buying product. In
between the stage of receiving the stimuli and responding to it, the consumer
goes through the process of making his decision.
Chinese food
Indian food
burger king
by
warranties,
after
sales
communication
etc.
After eating an Indian meal, may think that really you wanted a Chinese
meal instead.
Types of Consumer Buying Behavior
Types of consumer buying behavior are determined by:
Personal risk
Social risk
Economic risk
deciding.
The purchase of the same product does not always elicit the same Buying
Behavior. Product can shift from one category to the next.
For example:
Going out for dinner for one person may be extensive decision making
(for someone that does not go out often at all), but limited decision
making for someone else. The reason for the dinner, whether it is an
anniversary celebration, or a meal with a couple of friends will also
determine the extent of the decision making.
Factors Effecting the Consumer Buying Decision Process
A consumer, making a purchase decision will be affected by the following three
factors:
1. Cultural and sub culture Factor
2. Social Factor
3. Personal Factor
Culture and Sub-culture-Culture refers to the set of values, ideas, and attitudes that are accepted
by a homogenous group of people and transmitted to the next
generation.
Culture also determines what is acceptable with product advertising.
Culture determines what people wear, eat, reside and travel. Cultural
values in the US are good health, education, individualism and freedom.
In American culture time scarcity is a growing problem that is change in
meals. Big impact on international marketing.
Culture can be divided into subcultures:
o
geographic regions
Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders,
person's family, reference groups, social class and culture.
Roles and Family Influences-Role...things you should do based on the expectations of you from your
position
within
group.
People
have
many
roles.
family roles and preferences are the model for children's future
family (can reject/alter/etc)
The Family life cycle: families go through stages; each stage creates
different consumer demands:
Reference Groups--
10
Individual identifies with the group to the extent that he takes on many
of the values, attitudes or behaviors of the group members.
Families, friends, sororities, civic and professional organizations. Any
group that has a positive or negative influence on a persons attitude and
behavior.
Membership groups (belong to)
Affinity marketing is focused on the desires of consumers that belong to
reference groups. Marketers get the groups to approve the product and
communicate that approval to its members. Credit Cards etc.!!
Aspiration groups (want to belong to)Disassociate groups (do not want
to belong to) Honda, tries to disassociate from the "biker" group. The
degree to which a reference group will affect a purchase decision
depends on an individuals susceptibility to reference group influence
and the strength of his/her involvement with the group.
Social Class
An open group of individuals who have similar social rank. US is not a
classless society. US criteria; occupation, education, income, wealth,
race, ethnic groups and possessions.
Social class influences many aspects of our lives. i.e; upper middle class
Americans prefer luxury cars Mercedes.
o
11
Middle class, 32%, average pay white collar workers and blue
collar friends
Social class determines to some extent, the types, quality, and quantity
of products that a person buys or uses.
Lower class people tend to stay close to home when shopping; do not
engage
in
much
pre-purchase
information
gathering.
Psychological factors
Psychological factors include:
12
Physiological
Safety
Esteem
Self Actualization
of
this
target
market.
Perception
Perception is the process of selecting, organizing and interpreting
information inputs to produce meaning. IE we chose what info we pay
attention
to,
organize
it
and
interpret
it.
13
don't.
who
have
knowledge
of
product.
Non-alcoholic Beer example: consumers chose the most expensive sixpack, because they assume that the greater price indicates greater
quality.
14
or
Personality--
All the internal traits and behaviors that make a person unique,
15
Work holism
Compulsiveness
Self confidence
Friendliness
Adaptability
Ambitiousness
Dogmatism
Authoritarianism
Introversion
Extroversion
Aggressiveness
Competitiveness.
Traits affect the way people behave. Marketers try to match the store
image to the perceived image of their customers.
There is a weak association between personality and Buying Behavior;
this may be due to unreliable measures. Nike ads. Consumers buy
products that are consistent with their self concept.
16
1.1
What is Marketing?
Marketing on the one hand is a business philosophy and on the other an action
oriented process. The philosophy - also termed as marketing concept - has its
roots in market economy. There are four critical ideas that form the foundation
of such an economy:
Individuals pursue their self-interest to seek rewarding experience
Their choices determine as to what would constitute such experience, the
choices themselves being shaped by personal (taste) and external (cultural)
influences.
Consumers enjoy the freedom to choose; they are sovereign.
This freedom ensures free and competitive exchange between buyers and
sellers. Marketing in turn is based on these four principles.
Thus Marketing can be defined as a
Process that aims at satisfying individual and organizational needs by
creating, offering and exchanging competitively made products that
provide value to the buyers
Today our focus is on customer. Objectives liken revenue, profit, market share,
etc. Re important, but they will flow only by acquiring customer competence.
In our country particularly the customer, even as late as in 1980s, was bereft of
alternatives; he would uncomplainingly buy whatever the seller dished out. Not
any more. Todays choice empowered customer, supported by a competitive
environment, global quality, and new economic realities, decides the fate of the
marketer.
17
18
19
20
21
A mutual funds business is to invest the funds thus collected, according to the
wishes of the investors who created the pool. In many markets these wishes are
articulated as investment mandates.
Analysis of The perception towards these mutual funds is done
here in this project. Even what factors the investors look before investing can
also be observed.
22
OBJECTIVES
To study the level of awareness of mutual funds
To analyses the perception of investors towards mutual funds.
To study the factors considered by the investors and those which
ultimately influence him while investing.
To determine the type of mutual fund investor prefers the most.
23
RESEARCH METHODOLOGY
24
LIMITATIONS
Geographic Scope: The sample used for the study has been taken from the
investors of the city Lucknow.
Frame work: Sampling frame (i.e the list of population members) from which
the sample units are selected was incomplete as it takes into consideration only
those (target investors) who have made their investments during March and
April 2006.
Although adequate care was taken to elicit the accurate information from the
respondents, some of them have felt difficulty in crystallizing their feelings into
words. Apart from the problem faced in articulating, it is the validity of the
feedback can be speculated.
Despite the above limitations the study is useful in that it does point out the
trends and helps to identify the dimensions for improving the scope of mutual
funds.
25
RIVIEW OF
LITERATURE
26
MUTUAL FUNDS
THEORITICAL BACKGROUND
Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as
disclosed in offer document.
A mutual fund is an investment vehicle for investors who pool their savings for
investing in diversified portfolio of securities with the aim of attractive yields
and appreciation in their value.
Investments in securities are spread across a wide cross-section of industries
and sectors and thus the risk is reduced .Mutual funds issues units to the
investors in accordance with quantum of money invested by them. Investors of
mutual funds are known as unit-holders. The profit or losses are shared by the
investors in proportion to their investments. The mutual funds normally come
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
securities and exchange board of India.
A mutual fund is setup in the form of a trust, which has
1. Sponsor
2. Trustees
3. Asset Management Company and
4. Custodian.
The trust is established by a sponsor or more than one sponsor who is like
promoter of a company. The trustees of mutual fund hold its property for the
benefit of the unit-holders. Asset management company (AMC) approved by
SEBI manages the funds by making investments in various types of securities.
27
DEFINITIONS
The concept of mutual fund has been defined in various ways.
The mutual fund as an important vehicle for bringing wealth holders and
deficit units together indirectly
...Mr. James pierce
Mutual fund as financial intermediaries which being a wide variety of
securities with in the reach of the most modest of investors.
Frank Relicy
According to SEBI mutual fund regulations 1993, Mutual fund means a fund
28
The flow chart below describes broadly the working of a mutual fund:
29
SPONSOR:
Any person who, acting alone or in combination with another body
corporate, establishes a mutual fund.
Asset Management Company
A firm that invests the pooled funds of retail investors in securities in line
with the stated investment objectives. For a fee, the investment company
provides more than diversification, liquidity, and professional management
service than is normally available to individual investors.
Trustee
The Board of Trustees or the Trustee company who hold the property of the
Mutual Fund in trust for the benefit of the unit holders.
Mutual Fund
30
A fund established in the form of a trust to raise money through the sale of
units to the public or a section of the public under one or more schemes for
investing in securities, including money market instruments.
Transfer Agent
A transfer agent is employed by a mutual fund to maintain records of
shareholder accounts calculate and disburse dividends and prepare and mail
shareholder account statements, federal income tax information and other
shareholder notices.
Custodian
Mutual funds are required by law to protect their portfolio securities by
placing them with a custodian. Nearly all mutual funds use qualified bank
custodians.
Unit Holder
A person who is holding units in a scheme of a mutual fund.
CLASSIFICATION OF SCHEMES
By Structure
Open-ended
A scheme where investors can buy and redeem their units on any business day.
Its units are not listed on any stock exchange but are bought from and sold to
the mutual fund.
Close-ended
A mutual fund scheme that offers a limited number of units, which have a lockin period, usually of three to five years. The units of closed-end funds are often
31
listed on one of the major stock exchanges and traded like securities at prices,
which may be higher or lower than its NAV.In India 90% of the schemes is
open-ended fund and the rest 10% is close-ended funds. There are 1062 openended funds and 119 close-ended funds.
By Objective
A scheme can also be classified as growth scheme, income scheme, or balanced
scheme considering its investment objective. Such schemes may be open-ended
or close-ended schemes as described earlier. Such schemes may be classified
mainly as follows:
Growth / Equity Oriented Scheme
The aim of growth funds is to provide capital appreciation over the medium to
long- term. Such schemes normally invest a major part of their corpus in
equities. Such funds have comparatively high risks. These schemes provide
different options to the investors like dividend option, capital appreciation, etc.
and the investors may choose an option depending on their preferences. The
32
investors must indicate the option in the application form. The mutual funds
also allow the investors to change the options at a later date. Growth schemes
are good for investors having a long-term outlook seeking appreciation over a
period of time.
Income / Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds,
corporate debentures, Government securities and money market instruments.
Such funds are less risky compared to equity schemes. These funds are not
affected because of fluctuations in equity markets. However, opportunities of
capital appreciation are also limited in such funds. The NAVs of such funds are
affected because of change in interest rates in the country. If the interest rates
fall, NAVs of such funds are likely to increase in the short run and vice versa.
However, long-term investors may not bother about these fluctuations.
Balanced Fund
The aim of balanced funds is to provide both growth and regular income as
such schemes invest both in equities and fixed income securities in the
proportion indicated in their offer documents. These are appropriate for
investors looking for moderate growth. They generally invest 40-60% in equity
and debt instruments. These funds are also affected because of fluctuations in
share prices in the stock markets. However, NAVs of such funds are likely to be
less volatile compared to pure equity funds.
Money Market or Liquid Fund
These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income. These schemes invest exclusively
in safer short-term instruments such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money, government securities, etc.
33
Returns on these schemes fluctuate much less compared to other funds. These
funds are appropriate for corporate and individual investors as a means to park
their surplus funds for short periods.
Gilt Fund
These funds invest exclusively in government securities. Government securities
have no default risk. NAVs of these schemes also fluctuate due to change in
interest rates and other economic factors as, is the case with income or debt
oriented schemes.
Index Funds
Index Funds replicate the portfolio of a particular index such as the BSE
Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the
securities in the same weightage comprising of an index. NAVs of such
schemes would rise or fall in accordance with the rise or fall in the index,
though not exactly by the same percentage due to some factors known as
"tracking error" in technical terms. Necessary disclosures in this regard are
made in the offer document of the mutual fund scheme.
There are also exchange traded index funds launched by the mutual funds that
are traded on the stock exchanges.
AVENUES OF INVESTMENTS
Savings form an important part of the economy of any nation. With the savings
invested in various options available to the people, the money acts as the driver
for growth of the country. Indian financial scene too presents a plethora of
avenues to the investors.
Banks:
34
Considered as the safest of all options, banks have been the roots of the
financial system in India. For an ordinary person though, they have acted as the
safest investment avenue wherein a person deposits money and earns interest
on it. One and all have effectively used the two main modes of investment in
banks, savings accounts and fixed deposits. However, today the interest rate
structure in the country is headed southwards, keeping in line with global
trends. With the banks offering little above 7% in their fixed deposits for one
year, the yields have come down substantially in recent times. Add to this, the
inflationary pressures in economy and you have a position where the savings
are not earning. The inflation is creeping up, to almost 8% at times, and this
means that the value of money saved goes down instead of going up. This
effectively mars any change f gaining from the investments in banks.
Post office Schemes
Among all saving options, post office schemes have been offering the highest
rates. Added to it is that the investments are safe with the department being a
government of India entity. So the two basic and most sought for features,
those of return safety and quantum of returns were being handsomely taken
care of Public Provident Funds act as options to save for the post retirement
period for most people and have been considered good option largely due to the
fact that returns were higher than most other options and also helped people
gain from tax benefits under various sections. The following are the post office
savings schemes available for the investors:
Monthly Income scheme:
This scheme offers an interest of 8%p.a, payable monthly and a bonus of
10% payable at maturity after 6 years. There is no tax deductible at source
(TDS) applicable on investments made in this scheme.
National Savings Scheme:
35
36
8% Taxable Bonds:
These bonds do not have any TDS charged on them. There is no maximum
limit of investment in these bonds but there should be a minimum investment
of Rs.1, 000. The maturity period is 6 years. The investor has the option of
interest payable half yearly or cumulative. The investors can also avail tax
benefit under section 80L of income Tax Act, up to Rs. 15,000.
Company Fixed Deposits:
Companies have used fixed deposit schemes as a means of mobilizing funds
for their operations and have paid interest on them. The safer a company is
rated, the lesser the return offered has been the thumb rule. However, there are
several potential roadblocks in these.
The danger of financial position of the company not being understood by the
investor lurks.
1. Liquidity is a major problem with the amount being received monthly
after the due dates.
2. The safety of principal amount has been found lacking.
Stock markets:
Stock markets provide an option to invest in a high risk, high return game.
While the potential return is much more than 10-11% any of the options
37
discussed above can generally generate, the risk is undoubtedly of the highest
order. However, as it might appear, people generally are clueless as to how the
stock market functions and in the process can endanger the hard-earned money.
For those who are not adept at understanding the stock market, the task
of generating superior returns at similar levels of risk is arduous to say the
least. This is where mutual funds come into picture.
COMPARISION OF OTHER AVENUES WITH MUTUAL FUNDS
The mutual fund sector operates under stricter regulations as compared
to most other investment avenues. Apart from offering investors tax efficiency
and legal comfort, how do mutual funds compare with other products?
Company Fixed Deposits versus Mutual Funds
Fixed deposits are unsecured borrowings by the company accepting the
deposit. Credit rating of the fixed deposit program is an indication of the
inherent default risk in t he investment. The money of investors in a mutual
fund scheme are invested by the AMC in specified investments under that
scheme. These investments are held and managed in-trust for the benefit of the
schemes investors. On the other hand, there is no such direct correlation
between a companys fixed deposit mobilization, and the avenues where it
deploys these resources.
There can be no certainty of yield, unless a named guarantor assures a
return or to a lesser extent, if the investment is in a serial gilt scheme. O the
other hand, the return under a fixed deposit is certain, subject only to the
default risk of the borrower.
The basic value at which fixed deposits are encashable is not subject to
market risk. However, the value at which units of a scheme are redeemed
entirely depends on the market. If securities have gained value during the
38
period, then the investor can even earn that is higher than what she anticipated
when she invested. Conversely, she could also end up with a loss.
Early encashment of fixed deposits is always subject to a penalty
charged by the company that accepted the fixed deposit. Mutual fund schemes
also have the option of charging a penalty on early redemption of units (by
way of an exit load).
39
While an investor may have an early encashment option from the issuer ( for
instance through a put option), liquidity is generally through a listing in the
market, implications of this are:
The value that the investor would realize in an early exit is subject to
market risk. The investor could have a capital gain or a loss. This aspect is
similar to a mutual fund scheme.
A hypothecation or mortgage of identified fixed and / or current assets
could back debt securities, e.g secured bonds or debentures. In such a case, if
there is a default, the identified assets become available for meeting redemption
requirements.
An unsecured bond or debenture is for all practical purposes like a fixed
deposit, as far as access to assets is concerned.
A custodian for the benefit of investors in the scheme holds the investment
of a mutual fund scheme.
Equity versus Mutual fund
Investment in both equity and mutual funds are subject to market risk.
Investment in an open-end mutual fund eliminates this direct risk of not being
able to dell the investment in the market. An indirect risk remains, because the
scheme has to realize its investments to pay investors. The AMC is however in
a better position to handle the situation. Further, on account of various SEBI
regulations, such as illiquid securities are likely to be only a part of the
schemes portfolio.
Another benefit of equity mutual fund scheme is that they give investors the
benefit of portfolio diversification through a small investment.
RISK AND RETURN GRID:
40
Low
Administrativ
e expenses
Risk
High
Investment
options
Network
Less
BONDS AND
DEBENTURE
S
Low
to Low
to
Moderate moderate
Moderate Moderate
to
to High
high
Low
to Low
to
Moderate moderate
Few
Few
High
penetratio
n
At a cost
Low
penetratio
n
Low
of Not
transparen
t
Guarantee
Maximum
Rs 1 lakh
Not
transparen
t
Liquidity
Quality
Assets
Low
FIXED
DEPOSIT
Low
penetration
EQUITY
MARKET
Low
but Low
but
improving fast
improving
Moderate
high
Low
Moderate
High
Many
Low
to Moderate
moderate
High
Not
Transparent
transparent
MUTUAL
FUND
to Better
to Low
Moderate
More
to Better
Transparent
None
Pricing
The net asset value of the fund is the cumulative market value of the asset fund
net of its liabilities. In other words, if the fund is dissolved or liquidated, by
selling off all the assets in the fund, this is the amount that the shareholders
would collectively own. This gives rise to the concept of the net asset value per
unit, which is the value, represented by the ownership of one unit in the fund. It
is calculated simply by dividing the net asset value of the fund by the number
of units. However, most people refer loosely to the NAV per unit as NAV,
ignoring the per unit. We also abide by the same convention.
41
Calculation of NAV
The most important part of the calculation is the valuation of the assets
owned by the fund. Once it is calculated, the NAV is simply the net value of
assets divided by the number of units outstanding. The detailed methodology
for the calculation of the asset value is given below.
Asset value = (Value of investments+ receivables+ accrued income+ other
current assets- liabilities- accrued expenses) /Number of units outstanding.
ADVANTAGES OF INVESTING IN MUTUAL FUND:
Number of options available
Mutual funds invest according to the underlying investment objective
as specified at the time of launching a scheme. Mutual fund have equity funds,
debt funds, gilt funds and many others that cater to the different needs of the
investor. While equity funds can be as risky as the stock markets themselves,
debt funds offer the kind of security that is aimed for at the time making
investments. The only pertinent factor here is that the fund has to be selected
keeping the risk profile of the investor in mind because the products listed
above have different risks associated with them.
Diversification
Diversification reduces the risk because all stocks dont move in the same
direction at the same time. One can achieve this diversification through a
Mutual Fund with far less money that one can on his own.
Professional Management
42
Mutual Funds employ the services of the skilled professionals who have
years of experience to back them up. They use intensive research techniques to
analyze each investment option for the potential of returns along with their risk
levels to come up with the figures for the performance that determine the
suitability of any potential investment.
Potential of returns
Returns in the mutual are generally better than any option in any other
avenue over a reasonable period of time. People can pick their investment
horizon and stay put in the chosen fund for the duration.
Liquidity
The investors can withdraw or redeem money at the Net Asset Value
related prices in the open-end schemes. In the Closed-end Schemes, the units
can be transacted at the prevailing market price on a stock exchange. Mutual
Funds also provide the facility of direct repurchase at NAV related prices.
Well Regulated
The Mutual Fund industry is very well regulated. All investment has to
be accounted for, decisions judiciously taken. SEBI acts as a true watch dog in
this case and can impose penalties on the AMCs at fault. The regulations
designed to protect the investors interests are implemented effectively.
Transparency
Being under a regulatory frame work, Mutual Funds have to disclose
their holdings, investment pattern and all the information that can be
considered as material, before all investors. This means that investment
strategy, outlooks of the markets and scheme related details are disclosed with
reasonable frequency to ensure that transparency exists in the system.
43
44
45
46
The debt markets have witnessed a rally for over 2 years and now
seem to be stabilizing. The measures to deepen and widen the debt markets
continued throughout the year. A key step in developing the markets was the
launch of Negotiated Dealing System (NDS). NDS allows electronic bidding in
primary markets, thereby bringing about transparency in trading, electronic
settlement of trades and better monitoring and controls. Issuances of a 30-year
paper, floaters ranging from 5 to 15 years and securities with call and put
options by the government will also go a long way in deepening the markets. In
a bid to increase the retail participation, non-competitive bidding is being
encouraged by the RBI.
INDUSTRY STRUCTURE
Global Scenario
At the end of 2006:Q3, mutual fund assets worldwide were $ 17.28 trillion,
having increased 18 percent over the year 2005:Q3.
Worldwide mutual fund assets (trillions of US dollars)
47
48
Composition of world Wide mutual fund assets by the types of fund 2006 Q4
Source: Ici.org
The end of 2006:Q3, mutual fund assets were split into 44% Equity, 18%
Money market, 20% Bonds, 9% Balanced / Mixed and remaining 8%
unclassified.
49
At the end of 2006:Q3 by region, 55% of the global assets was in America,
34% in Europe and the remaining 11% in Africa and Asia / Pacific.
World wide mutual funds by the type of fund 2006;Q2
At the end of the fourth quarter of 2006, the number of mutual funds
worldwide stood at 54,986. By type of fund, 41 percent were equity funds, 24
percent were bond funds, 20 percent were balanced/mixed funds, and 6 percent
were money market funds.
50
2000
All Reporting Countries1 52,746
2005
2006
2001
2002
2003
2004
Q4
Q1
Q2
Q3
51,692
52,849
54,110
54,569
54,984
55,095
55,919
56,095
Equity
22,453
20,381
22,348
22,974
22,688
22,364
22,796
23,043
23,050
Bond
15,474
13,128
12,183
11,619
11,886
13,309
13,127
13,213
13,225
Money Market
6,745
4,692
4,277
4,394
4,974
3,623
3,618
3,598
3,569
Balanced/Mixed
6,375
11,110
11,155
11,228
11,465
11,603
11,111
11,291
11,181
Other
612
1,000
1,195
1,310
1,578
1,997
2,364
2,659
3,017
39,367
41,620
42,393
41,689
42,356
42,093
42,529
42,377
Countries Reporting in
Every Period2
35,962
Equity
15,656
18,637
20,630
20,808
20,018
19,920
19,971
20,052
19,952
Bond
10,867
10,176
9,830
9,946
9,847
9,961
10,004
10,026
10,076
Money Market
2,701
2,786
2,727
2,674
2,652
2,899
2,901
2,867
2,831
Balanced/Mixed
6,149
6,926
7,500
7,723
7,857
8,095
7,674
7,966
7,850
Other
589
842
933
1,242
1,315
1,481
1,543
1,618
1,668
51
As far as mutual funds are concerned, SEBI formulates policies and regulates
the mutual funds to protect the interest of the investors. SEBI notified
regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored
by private sector entities were allowed to enter the capital market. The
regulations were fully revised in 1996 and have been amended thereafter from
time to time. SEBI has also issued guidelines to the mutual funds from time to
time to protect the interests of 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
Regulations. There is no distinction in regulatory requirements for these mutual
funds and all are subject to monitoring and inspections by SEBI. The risks
associated with the schemes launched by the mutual funds sponsored by these
entities are of similar type. It may be mentioned here that Unit Trust of India
(UTI) is not registered with SEBI as a mutual fund (as on January 15, 2002).
In February 2003, following the repeal of Unit Trust of India act 1963; UTI
was bifurcated into two separate entities. One is the specified undertaking of
UTI with assets under the management of Rs.29, 835 crores as at the end of
January 2003; representing broadly, the assets of US 64 scheme, assured return
and certain other schemes. The specified undertaking administrator & under
rules framed by Government of India and does not come under the purview of
mutual fund regulation.
The second is the UTI mutual fund Ltd sponsored by SBI, BOB & LIC.
It is registered with SEBI & functions under the mutual fund regulations. With
the bifurcation of the erstwhile UTI which had in March 2000, more than Rs
76,000 crores of assets under management and with setting up of a UTI mutual
fund, conforming to the SEBI, mutual fund regulation and with recent mergers
taking place among different private sector funds, the mutual fund industry has
entered its current phase of consolidation and growth.
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53
COMPANY
PROFILE
54
55
COMPANIES VISION:
" To be reckoned as the Best Recruitment and Training Company in the
field of Banking and Financial Services and Retail Industry in the hindi
speaking belt of the country.
COMPANY MISSION:
"Our Mission is to provide fast and cost efficient Recruitment and
Training Solutions to our clients by delivering the highest quality service
whereby enabling them to maximize their time and resources to focus on
growing their business."
ABOUT FOUNDER:
The founder of Redwood Consulting is Mr. Virag Jain. He is having vast
experience of more than 16 years in Banking and Financial service
Industry (BFSI). During his 16 years of corporate career he has worked
with reputed brands like ICICI Bank Ltd, Kotak Bank Ltd and Reliance
Mutual Fund in the capacity of Regional Head and Regional Sales
Manager.
He has worked throughout his career in the hindi speaking belt of the
country and has a in-depth understanding of market dynamics and skills
and aptitude required at different level of recruitment in this belt.
Mr. Virag Jain was associated with BLP (Branch leadership Programe ) of
ICICI bank for three Years. During the tenure he was involved in training
of newly inducted Branch Manager and Branch Operations Manager. He
56
57
58
DATA ANALYSYS
.INVESTMENT AVENUE YOU PREFER ? (IF ALL THE APPLICABLE) .1
S.No.
Instruments
Respondent(%)
FIXED DEPOSIT
BANK DEPOSIT
40
MUTUAL FUND
16
POST OFFICE
36
16
16
32
LIFE INSURANCE
32
DEBENTURE
20
10
BOND
28
59
S.No.
Topic
Percentage (%)
LIQUIDITY
LOW RISK
HIGH RETURN
68
TAX BENEFIT
32
60
Topic
Percentage (%)
CHILDREN EDUCATION
20
RETIREMENT
20
HOME PURCHASE
20
CHILDREN MARRIAGE
40
HEALTH CARE
61
B. (48%)
S.No.
C. FAST (52%)
Topic
Percentage (%)
STEADILY
AT AN AVERAGE RATE
48
FAST
52
62
S.No.
Topic
Percentage (%)
DAILY
MONTHLY
64
OCCASIONALLY
36
63
Topic
Percentage (%)
SHORT-TERM (0-1YEAR)
MEDIUM-TERM (1-5YEARS)
44
56
64
S.No.
Topic
Percentage (%)
>10%
11% - 25%
68
26% - 50%
28
MORE THAN 50 %
65
S.No.
Topic
Percentage (%)
YES
NO
96
66
S.No.
Topic
Percentage (%)
NEWSPAPER
16
NEWS CHANNELS
56
FAMILY OR FRIENDS
16
MAGAZINES
12
INTERNET
67
FINDINGS
Many of the investors are aware of mutual funds but most of their
perception towards them is not positive.
Investors are mainly concerned with the risk factors of mutual funds and
are not directing towards them.
The investors who have invested in mutual funds mainly go for it
because of the Liquidity matter and Tax exemption.
Most of the people dont know the advantages of mutual funds and the
various types of mutual funds.
There are nearly 1173 schemes of mutual funds offered by various
mutual fund houses, which an ordinary person is not aware.
A common investor basically looks for the Tax exemption and Safety &
security while investing.
Investors often feel that those people, who have surplus amount with
them and invest to avail Tax exemption, can do investing in mutual
funds.
68
69
SUMMARY
This report is an attempt to provide an analysis of the perception of an investor
towards mutual funds. However, what has been reported is only the tip of
iceberg in terms of data that are available.
However, my examinations suggests that employees are interested to
invest in mutual funds provided sufficiently educated and a know-how is
provided on its working. Though the self-employed are investing in mutual
funds and insurance, they are investing small amounts in them because they do
not want to take high risks.
Rewood Consulting should educate the people about the various
advantages of investing in mutual funds and create an awareness regarding
various investment options.
In conclusion, it is important to remember that the main purpose for
initiating the project is to analyze the perception of an ordinary investor
towards the mutual funds and the aspects that guide him to make investment
decisions. The study does not aim to advocate investments in mutual funds.
70
CONCLUSION
Mutual funds are still and would continue to be the unique financial tool in
the country. One has to appreciate the fact that every aspect of life as its periods
of high and lows. This has been the case with the stock markets. Why not apply
the same logic to mutual funds? Mutual funds have not failed in any country
where they worked with regulatory frame work. Their future is bright. The poor
performance of many mutual funds schemes may be mostly attributed to the
quality of personal involved and their matter of fund management.
71
SUGGESTIONS
Make people aware of mutual funds by:
Arranging free seminars in different organizations about mutual fund
investments.
Arranging stalls in Public places is a good publicity.
More advertisements need to come to explain the various advantages of
mutual funds and even the various schemes offered by them.
What to expect from a financial advisor
The key for mutual fund investors is to define and recognize the value of
professional financial services, and then insist on getting that value. When
you pay a sales charge or a fee, what can you expect a professional to do for
you? Your advisor should at least:
Help the investor develop realistic expectations by discussing the risks and
reward so reach investment. Every investment choice has its strengths and
weaknesses, and investor should never feel less than fully informed. When
investor ask questions, or have doubts,
72
Investor should expect your financial advisor to answer honestly, and help
him develop a strategy that is both realistic and comfortable for him.
One of the most valuable services your advisor can provide is to help you
"stay on course" with your investment program. But "staying on course"
long term does not necessarily mean staying put. Expect your financial
advisor to work with you to adjust your portfolio in response to any
significant change in your lifestyle, priorities, assets or responsibilities.
These are the basic services that investors should expect from their financial
advisors. Beyond the basics, many investors could use even more
specialized assistance, like advice on retirement plan distribution options,
setting up and servicing retirement plans for small businesses and selfemployed individuals, developing tax-advantaged strategies for children's
college education, insurance, estate, and trust planning; and year-end
mutual fund tax advice. If you need specialized services, there are many
financial advisors who can help you obtain the right investment mode.
73
BIBLIOGRAPHY
S.No. Name of the Author
Publisher
74
Page Nos.
Punithavathi
Pandyan
V.A.Avadhani
1
2
MAGAZINES:
1. Business standard
2. Economic times
Marketing dictionary A. IVONAVIC
S.NO
WEBSITES
MONTH OF SEARCH
http:// www.karvy.com
May 2007
http:// www.amfiindia.com
May 2007
http:// www.ici.org
May2007
http:// www.google.com
May 2007
http:// www.moneycontrol.com
June 2007
http:// www.franklintempletonindia.com
June 2007
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QUESTIONNAIRE
PERSONAL INFORMATION
A) Name:
B) Type of Business:
C) Address:
D) Telephone:
Mobile:
E) Fax:
Email:
OCCUPATION .1
( )A. SERVICE( )
B. BUSINESS( )
C. RETIRE
E. STUDENT
-INCOME .2
( ) A. LESS THEN 2.5 LAKH( )
( )C. 5 LAKH 10 LAKH( )
B. BANK( )
C. MUTUAL FUNDS
( )H.GOLD &SILVER( )
( )J. DEBENTURE( )
I. LIFE INSURANCE
K. BOND
B. LOW RISK( )
E. INCOME & GROWTH
......................................ANY OTHER
77
C. HIGH RETURN
B. RETIREMENT
C. HOMEPUCHASE
D. CHILDREN MARRIAGE
OTHERS
B. AT AN AVERAGE RATE( )
C. FAST
B. MONTHLY( )
C. OCCASIONALLY
B. MEDIUM-TERM (1-5YEARS)
B. 11% - 25%( )
C. 26% - 50%
( )% D. MORE THAN 50
B. NO
B. NEWS CHANNELS
E. MAGAZINES
78
C. FAMILY OR FRIENDS
F. INTERNET
79