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Project report on Risk & Return Analysis in

Mutual Fund Industry


Prudent investing requires information of key financial concepts and an
understanding of your investment profile and how these works together to affect
investing decisions and results. "Saving" and "investing" are often used
interchangeably. However, there are differences between the two. Preservation of
the principal and liquidity of the funds (ease of converting to cash) are essential
aspects of savings. Consequently, savings generally yield a low rate of return and
do not maintain purchasing power. Investing, on the other hand, focuses on
increasing net worth and achieving long-term financial goals. Investing involves risk
(of loss of principal) and is to be considered only after you have adequate savings
and have done proper risk management. In short, investing is more concerned on
the return of investment, while savings is on the return of capital.
The main objective of the study is to give investors a basic idea of investing into the
Mutual Funds and encourage them to invest in those areas where they can
maximize the return on their capital. The research provided an interesting insight
into awareness about the mutual funds, differences in age groups, occupation,
income levels, risk taking ability of individuals, investment options preferred etc.

It is bound to adapt the rich books, journals, periodicals, reports, etc. to measure
with quantity of collections. Lots of books, national and international level
magazines, websites are referred for the study. The previous research studies are
also be used as a guideline in preparing and designing the research work. Dr. N. K.
Sathya Pal Sharma in his Research Article titled ANALYSIS OF THE RISK AND
RETURN RELATIONSHIP OF EQUITY BASED MUTUAL FUND IN INDIA published in the
International Journal of Advancements in Research & Technology, Volume 2, Issue 8,
and August-2013. Using CAPM one can calculate the expected rate of return for a
portfolio, given its risk. The objective of the study is to bring out a comparison
between the performance of equity based mutual funds of public and private
sectors in India. So, in this paper the first task is to calculate the risk associated with
a mutual fund. This is denoted by beta in CAPM. The research article found few
things like; the overall analysis finds that Reliance and UTI have been the best
performers, Kotak an average performer and SBI the worst performer which gave
below-expected returns on the risk-return relationship. It is concluded with the point
that, though the stock market is subjected to high risk, by using derivatives the loss
can be minimized to an extent.

Project report on Risk & Return Analysis in


Mutual Fund Industry
This research was conducted during my Summer Internship Program; the location
chosen was SIP Head Office i.e. SILK CITY SECURITIES as it provides an easy
platform for investors, as my SILK CITY SECURITIES Head Office was a Sub-Broker
connected to all 44 AMCs in ODISHA. Research was undertaken under by me and
also with the help of my manager at our office with a sample size of 50(male 27,
and female 23) in the form of general & expert opinion. General opinion was taken
as investor on risk appetite of the mutual fund industry and there analysis with the
help of a brief questionnaire asking some of the details regarding the mutual funds.
The research provided an interesting insight into awareness about the mutual funds,
differences in age groups, occupation, income levels, risk taking ability of
individuals, investment options preferred etc. Research plan: To analyze investor
preferences for mutual fund investments. By knowing there:

Occupation
Age group
Period of investment preferences
Investment option( through risks)
Their expected returns.

DATA SOURCES The present study is totally based on the primary data. Secondary
data only used for the reference. The data has been collected by interacting with
various people i.e. the sources of information were collected from the investors of
age group of 18-60 above (people both with and without knowledge about mutual
funds) and also collecting feedbacks against a well-designed questionnaire.
SAMPLING
SAMPLING PROCEDURE: The sample is selected in a random way, irrespective of
them being investor or not or availing the services or not. It was collected through
personal visits to the known persons, by formal and informal talks and through
filling up the questionnaire prepared. The data has been analyzed by using the CHISQUARE test and CAPM method. The group has been selected and the analysis has
been done on the basis statistical tools available.
SAMPLE SIZE: The sample size of my report was limited to 75 respondents only. Out
of which only 50 respondents have invested in mutual fund. Other 20 have no
inclinations towards mutual fund.
SAMPLE DESIGN: Data has been presented with the help of various graphs and
table values required for doing CHI-SQUARE TEST.
LIMITATIONS OF THE STUDY

Project report on Risk & Return Analysis in


Mutual Fund Industry
Some of the persons were not so responsive.
Possibility of error in data collection because many of investors may have not given
actual answers of my questionnaire.
Sample size is limited to 75 investors of Silk City Securities, Berhampur, Odisha out
of these only 50 had invested in Mutual Fund. The sample size may not adequately
represent the whole market.
Some respondents were reluctant to divulge personal information which can affect
the validity of all responses.
The research is confined to a certain part of Odisha.