CHAPTER I

INTRODUCTION
1.1 OUTLINE OF THE PROJET
Mutual funds are a financial intermediate that collects the savings of
investors and invest them in a large and well- diversified portfolio of
securities such as money market instruments corporate and Government
bonds and equity shares of joint stock companies.

A mutual is a professionally managed investment company that

combines the money of many people, who have no contact with each other.
Mutual funds are conceived as institution for providing small investors with
the avenues of investment in the capital market. They generate returns from
them and pass it back to the investment in the form of dividends, capital
appreciation or a combination of both.
SET UP OF MUTUAL FUND
In Indian context, there are mainly three parties of Mutual Funds- the
Sponsor, the Asset Management Company (AMC) the Trustees, and the
Custodian. The Sponsor is the company, which sets up the Mutual Fund as
per the provisions laid down by the Securities and Exchange Board of India
(SEBI) SEBI mainly fixes the criteria of sufficient experience, net worth,
and past track record in terms of fair dealings and integrity. Only those who
qualify in terms of those criteria are permitted by SEBI to set up a Mutual
Fund. The Asset Management Company (AMC) approved by SEBI manages
the funds by making investments in various types of securities. The trustees
of the mutual fund hold its property for the benefit of the unit holders. The
Custodian, who is registered with SEBI, holds the securities of various
schemes of the fund in its custody.
MUTUAL FUND STRUCTURE

SEBI
Sponsor

Truste
e AMC
Marketing
Operation Fund

Marketing
Mutual Fund
Distribution
Schemes

Investor
Sponsor
Sponsor is the person who acting alone or in combination with
another body corporate establishes a mutual fund. Sponsor must contribute
at least 40%of the net worth of the Investment Managed and meet the
eligibility criteria prescribed under the Securities and Exchange Board of
India (Mutual fund) Regulations, 1996. The sponsor is not responsible or
liable for any loss or shortfall resulting from the operation of the schemes
beyond the initial contribution made by it towards setting up Mutual Fund.
1.1.1 Need importance of the study
Standard chartered Mutual Fund, one of the leading mutual fund
companies in the private sector, has been successfully in the industry by
providing a wide range of products to suit a variety of investors needs.
Formulation of alternative schemes by various mutual fund companies has
become important to fight the battle and to secure a sound position in the
industry.
The study was undertaken with the objective of helping the company
design new schemes to suit the requirements of the retail investors.
1.1.2 Scope of the study

The study covers the mutual fund investors of Chennai.

The research gives an understanding of the investors perceptions on

mutual fund scheme.

The study will help in generating a new scheme according to the

expectation of the investors.

The study will help Standard Chartered to reach the investors in a

better way.
1.1.3 Objectives of the study
Primary Objectives
1. To study the investors preference in mutual fund schemes.
2. To study the factor that influences the investors choice of mutual fund
schemes.
Secondary Objectives
1. To study the mutual fund investment objective among investors.
2. To study the investors expectation from the scheme.
3. To study the investors preferred way of investing in mutual fund.
4. The investor expectant from the advisors
1.1.4. Research Methodology
Research in common parlance refers to a search for knowledge. One
can also define research as a scientific and systematic search for pertinent
information on a specific Topic. In fact research is an act of scientific
investigation.

Research is a process of systemic study.

Research is in depth study about the particular problem.

Research is for any particular topic.

Research is a search of knowledge

Research is a movement from known to unknown.

Research is an area of investigation, which includes collection,

analysis, and interpretation of data.

Research can be called as voyage of discovery.

 Research has to proceed systematically in the already planned direction
with the help of a number of steps I sequence. To make the research
systemized the researcher has to adopt certain methods. The methods
adopted by the researcher for completing the project are called Research
Methodology.
Data becomes information only when a proper methodology is adopted.
Thus we say methodology is a tool, which process the data to reliable
information the present chapter attempt to highlight the Research
Methodology adopted in this project.
Definition
According to D.Slesinger and M.Stephenson in the encyclopaedia of
social Sciences define research as The manipulation of things, concepts or
symbols for the purpose of generalizing to extent, correct or verify
knowledge is in construction of theory or in the practice of an art.
1.1.4.1 Research Design
The formidable problem that follows the task of defining the research
problem is the preparation of the design of the research project, popularly
known as the Research design. A Research design is the arrangement of
conditions for collection and analysis of data in a manner that aims to
combine relevance to the research purpose with economy in procedure. A
Research is purely and simply the framework and plan for the study that
guides the collection and analysis of data. It is a blue print that is followed
in completing a study.
Types of Research Design
1. Exploratory research design.
2. Descriptive research design
3. Experimental research design.
Descriptive and Diagnostic Research Design
The researcher has to decide which type of data is useful for the study
and accordingly has to select any one or both the method for data
collection.
Descriptive research design is concerned with the research studies
with a focus on the characteristics of a particular individual, or group
whereas diagnostic research designs determine the frequency with which
something occurs or its associated are examples of Diagnostic.
1.1.4.2 Sources of data
Data Collection Method
Data refers to information or facts. It is not only refers numerical
figures but also includes descriptive facts. The method of data collection
includes two types for the study, such as primary data and secondary
data.
Primary Data Collection
Primary data is the data that is collected for the time by the researcher.
The primary data are collected with specific set of objective to assess the
current status of any variable studied. Primary data is useful only for
particular period.
Methods Of Primary Data Collection
The Main four methods used in primary data collection are:
a. Questionnaire b. Schedule
c. Interview d. Observation
In this study questionnaire method have been used
Questionnaire
In this method, per printed list of questions arrange in a sequence,
which is used by the researcher for collecting data. The respondents fill
the questionnaire. The questionnaire is considered as the heart of the
survey.
Sampling Design
A Sample design is a definite plan for obtaining a sample from a
given population. It refers to the technique or the procedure that the
researcher would adopt in selecting items for the sample. Sample design
may as well lay down the number of items to be including in the sample.
I.e., the size of the sample designs from which a researcher can choose.
Some designs are relatively more precise and easier to apply than others.
Researcher must select/prepare a sample design that should be reliable
and appropriate for his research study.
1.1.4.3 Population and Sample
Universe
All the items under consideration in any field of enquiry constitute a
universe or population the term universe refers to the total items
through which information can be gathered from the population. In this
the population is infinity. It is pivotal point of research.
Sample Frame
The sample frame is the list of all sample units. It is the study of the
research to frame the sample for easy and best data collection. In this the
sample is 200, size are mainly decided on the basis of the selection of the
statistical tools. The selection of the appropriate samples size can be
done by statistical tool.
Sample Procedure
Sampling is a procedure by which the respondents are selected. There
are basically two types of sampling methods are;
1. Probability sampling methods.
2. Non-Probability sampling methods
In this study area sampling method was adopted (Probability Sampling)
the required number of customers were not selected according to are
sampling procedure but the required number of sample (sample size 200)
were selected.
1.1.4.4 Hypothesis
To Test Independence Of Two Attributes
This test enables to explain whether two attributes are associated or
not. In this null hypothesis, the two attributes that are independent,
which means that, one does not have any associates with each other.
In this case if the calculated value is less than its table value, then the
hypothesis, which means the two attributes, is independent or not
associated. It is vice-versa when the calculated value is greater than the
tabulated value. The attributes are associated.
1.1.4.5 Tools and Techniques
Sampling Technique
In this we have used probability sampling. The term probability refers
to the samples having an equal chance of being selected. In this we have
used area Sampling. The area sampling refers to the population being
divided into various areas and sample are collected from Statistical Tools
By statistics we mean aggregates of facts to a market extend by
multiplicity of causes, numerically expressed, enumerated according to
reasonable standard of accuracy, collected in a systematic manner for a
predetermined purpose and place in relation to each other.
In this study the researcher is going to apply with percentage analysis,
chi-square, bar diagram and pie charts and ANOVA.
Percentage Method
In this position of an individual observation in a distribution is
described. The most convention for describing the position of an
individual score in distribution of scores is a percentile method.
PERCENTAGE N=100* (CUMULATIVE fi/n)
Chi-Square
Chi-square applied in statistics to test the goodness of fit to verify the
distribution ob observed data with assured theoretical distribution.
Therefore it is a measure to study whether two characters are dependent
or independent. Thus chi-square test describes the discrepancy between
actual data and expected frequencies.
Assumption
1. The two sets of data must be based on the same sample size.
2. There must be two observed set of data or expected set of data in rows
and columns.
3. Each cell in the data contains an observed or expected count of five or
larger.
X^2= (Oi-Ei) ^2/Ei
Application Of Chi-Square
To Test The Goodness Of Fit
If the calculated value is less than the tabulated value at a certain level
of significance, the fit considered being good and hence the hypothesis is
accepted. But when it is vice-versa, when the calculated value is greater
than the tabulated value, then it is not considered being the goodness of
fit.
Weighted Average:
Weighted average is a number standing for the reactive important of
the items. Weighted average can be defined as an average whose
component items are multiplied by certain value and the aggregate of the
products are divided by total of weight. It is being used to analyze
Likerts rating scale.

X = XW / W
Analysis Of Variances- (ANOVA): -
The analysis of variance is a method, which separates the variation
ascribable to one set of causes from the variation ascribable to other set. The
first object of the analysis of variance is to obtain a measure of the total
variation within the series and the second object is to find a measure of
variation between or among the components. Then the test of significance
of difference between the variation in two series or more may be measured.
Thus we can also test the hypothesis that the means of all the components
constituting a population are equal to the mean of the population or that the
samples have come from the same population. It is used to test whether the
means of a number of populations are equal. In the manifold classification
we consider two or more characteristic or attributes. The analysis in that
case will get extended to include the sum of squares between rows. This
type of classification is also called as a two way ANOVA.
Trust
The mutual fund is constituted as a trust in accordance with the
provisions of the Indian Trusts Act, 1882 by the sponsor. The trust deed is
registered under the Indian Regulation Act, 1908.
Trustee is usually a company (corporate body) or a Board of Trustee
(body of individuals). The main responsibility of Trustee is to safeguard the
interest of the unit holders and inter alia ensure that the AMC functions in
the interest of investors and in accordance with the Securities and Exchange
Board of India (Mutual Fund) Regulations, 1996, the provisions of the Trust
Deed and the Offer Document of the respective Schemas. At least 2/3 rd
directors of the trustee are independent directors who are not associated with
the Sponsor in any manner.
Asset Management Company (AMC)
The Trustee as an Investment Manager of Mutual fund appoints the
AMC. The AMC is to be approved by the Securities and Exchange Board of
India (SEBI) to act as an asset management company of the mutual fund. At
least 50% of the directors of the AMC must have a net worth of at least 10
Crores at all times.
Register and Transfer Agent
The AMC if so authorized by the trust Deed appoints the Registrar
and Transfer Agent to the Mutual Fund. The Registrar processes the
application form redemption requests and dispatches account statements to
the unit holders. The registrar and Transfer agent handles communications
with investors and updates investors records.
1.1.5 Limitations Of The Study

The study has been conducted in a short span of three months, which
was a limitation to the project.

The sample size was restricted to 200 keeping in account the various
constraints such as time, cost and availability of respondents.
The respondents were reluctant to disclose their personal decisions on
investments.
1.1.6 Chapterisation
Chapter 1 includes the Introduction of the study, Need of the study,
then Scope of the study, Objective of study, then regarding Research
Methodology, then about the limitations of the study, then the theory
perspective of the study.
Chapter 2 includes Data Analysis and interpretation, in which analysis
about the study is being made with the help of tables, bar diagrams, and pie
diagrams and statistical tools such as Chi-square, ANOVA and weighted
average is being used.
Chapter 3 includes the finding of the study, suggestions and
conclusions of they study, appendices questionnaire and references.
1.2 Review Of Literature
1.2.1. Company Profile

Standard Chartered mutual Fund launched its first scheme Grind lays
Super Saver Income Fund in the year July 2000. Since then it focused on
debt for 5 years and launched several innovative products that went to
become bourgeoning categories in the Indian mutual fund industry. The
Sponsor of standard Chartered mutual fund is Standard Chartered Bank, a
Multinational banking and financial services group with a unique
international network. Standard Chartered is the world leading emerging
markets bank. It employs over 28,000 People in over 500 Offices in more
than 50 countries in the Asia pacific, South Asia, the Middle East, Africa,
UK and the Americas managing assets over USS 100 Billion. With nearly
152 Years in the emerging markets the bank has unmatched knowledge and
understanding of its customers in its markets.

With the experience in the debt markets in the last five years we stand as the
second highest in terms of Dept AUM. We have also launched our maiden
equity fund Standard Chartered Classic Equity fund and garnered Rs.1023
Crores in the NFO ended July 14, 2005

In its five years of experience, the fund has carved a niche for itself, with a
quite a few notable achievements:

.4 Successful product innovations, the short Terms Fund, Dynamic

Bond Fund, Medium Term Fund and the Recent product innovation
being Standard Chartered all Season Bond Fund (Fund of Fund)

Impeccable service standards were the first house to introduce T+!

(24 hr) redemption cycles across all products. This has since been
 bettered by the introduction of a T+ O redemption cycle on the Cash
Fund And Floating Rate Fund.

Two of the Standard Chartered Schemes (GCF and GFRT-St) has been
rated AAAF by CRICIL. The Rating means that the Schemes
portfolio holding provide a Very Strong Protection against losses
from credit default.

Standard Chartered Mutual Fund is currently present in 14 Cities

across the country. Standard Chartered Mutual Fund is one of the
Indias leading Mutual Funds specialized in dept schemes and now
entering into equity schemes managing over 9500 Crores of assets
under management.

Importance Of Mutual Fund

Small investors face a lot of problems in the share market, Limited

resources, lack of professional advice etc. Mutual funds have come, as much
needed help to these investors. It is a special type of institutional device or
an investment vehicle through which the investor pool their savings which
are at be invested under the guidance of a team of experts in wide variety of
portfolio of corporate securities in such a way, so as to minimize risk, while
ensuring safety and steady return on investment. It forms an important part
of the capital market, providing the benefit of diversified portfolio and
expert fund management to a large number, particularly small investors.
Now days mutual fund is gaining its popularity due to the following
reasons:

With the emphasis on increase in domestic savings and improvement

in deployment of investment through markets, the need and scope for
 mutual fund operation has increased tremendously. The basic purpose
of reforms in financial sector was to enhance the generation of
domestic resources by reducing the dependence on outside funds. This
calls for a market-, based institution, which can tap the vase potential
of domestic savings and canalize them for profitable investments.
Mutual funds are not only best suited for this purpose but also capable
of meeting this challenge.

An ordinary investor who applies for share in a public issue of any

company is not assured of any firm allotment. But mutual funds that
subscribe to the capital issue made by companies get firm allotment of
shares. Mutual fund later sells these shares in the same market and to
the promoters of the company at a much higher price. Hence mutual
fund creates the investors confidence.

The Mutual funds, being set up in the public sector, have given the
impression of being as safe a conduct for investment as bank deposit.

As professional manage mutual funds, they are considered to have a

better knowledge of market behaviors. Besides they bring a certain
competence to their job. They also maximize gains by proper selection
and timing of investment.

Another important thing is that the dividends and capital gains are
reinvested automatically in mutual funds and hence are not fretted
away. The automatic reinvestment feature of a mutual fund is a form
of forced saving and can make a big difference in the long run.

As mutual funds create awareness among urban and rural middle

class people about the benefit of investment in capital market, through
 profitable and safe avenues, mutual fund could be able to make up a
large amount of surplus funds available with these people.

The Mutual fund attracts foreign capital flow in the country and
secures profitable investment avenues abroad for domestic savings
through the opening of off shore funds in various foreign investors.
Lastly another notable thing is that mutual funds are considered safe.
Due to all these reasons the importance of mutual fund has been
increasing.

Functions Of Mutual Fund

The functions of mutual fund can be highlighted as:

Mutual fund collects nominees from small investors or unit holders.

The nominees so collected are invested in buying shares of

companies. Thus mutual fund provides fund provides funds to
companies for business purpose.

They act as indicators between investors and companies

By buying shares or units in a mutual fund, the individual investors

become a part of the institution.

Mutual funds are organized, operated and managed by companies that

do the practical administrative things that allow the mutual fund to
function and,

They select the fund strategy, hire managers, market the shares to
potential investors and do the paper work.
Types Of Fund

There are wide varsities of Mutual Fund schemes that cater to

investors needs whatever the age, financial position, risk tolerance and
return expected. The mutual fund schemes can be classified according to
both their investment objective (Like income, growth, tax saving) as well as
the number of units (If these are unlimited then the fund is an open ended
one while if they are limited units then the fund is close ended.
 Classification Based On Capitalization

1. Open Ended Scheme

Close-ended ones on several Counts some of these are listed below these
funds are sold at the NAV based price, generally calculated on every
business day.

These funds seek to provide growth of capital with secondary

emphasis on dividend. They invest in shares with a potential for growth and
capital appreciation. Such Schemes invest in well established companies
where the company itself and the industry in which it operates have good
long-term growth potential. It has been proven that returns from stock, have
outperformed most other kind of investment held over the long-term.

These funds may invest in a broad range of industries or concentrate

on one or more industry sector. Growth schemes are ideals for investors
having a long-term outlook and seeking growth over a period of time. They
are not suitable for investors who must conserve their principal or who must
maximize current income.

II) Growth and Income Funds

Growth and income funds seek long-term growth of capital as well as

current income. The investment strategies used to reach these goals vary
among funds. Some invest in a dual portfolio consisting of growth stocks
and income stocks, or a combination of growth stocks, stocks paying higher
dividends, preferred stocks, convertibles securities or fixed income securities
such as corporate bonds and money market investments.

Growth and income funds have low to moderate stability of principle

and moderate potential for current income and growth. They are suitable for
investors who can assume risk to achieve growth of capital but whom also
wand to maintain a moderate level of current income.

III) Fixed income funds

The goal of fixed income funds is to provide current income consisted

with the preservation of capital.

These funds invest in corporate bonds or government backed

mortgage securities that have a fixed rate of return. Within the fixed income
category, funds vary greatly in their have a fixed rate of return. Within the
fixed income category, funds vary greatly in their Stability of principal and
in their dividend yields. High yields funds, which seek to maximize yield by
investing in lower rated bonds of longer maturities, entail Less stability of
Principal than fixed income funds that invest in higher rated but lower
yielding securities.

Some fixed income funds seek to minimize risk by investing

exclusively in securities that timely make payment of interest and principal
is backed by the full faith and credit of the Indian Government. Fixed
income funds are suitable for investors who wand to maximize current
income and who can assume a degree of capital risk in order to do so.

IV) Balanced Fund

The balanced fund aims to provide both growth and income. These
funds invest in both shares and fixed income securities in the proportion
indicated in their offer document these are ideal for investors looking for a
combination of income and moderate growth.
V) Money Market Mutual Funds

The aim of money market mutual fund is to provide easy liquidity,

very high stability of principal while seeking a moderate to high current
income. They invest in highly liquid, risk free. Short term debt securities of
agencies of the India Government, banks and corporation and treasury bills.
Money market mutual fund offers several advantages money can be
withdrawn any time without penalty. Although not insured, money market
funds invest only in highly liquids, short term, top rated money market
instruments. Money market mutual funds are suitable for investors who
wand high stability of principal and current income with immediate liquidity.

VI) Specialty/Sector Funds

These funds invest in securities of a specific industry or sector of the

economy such as healthy care, technology, leisure, or precious metals. The
funds enable investors to diversity holding among many companies within
an industry, a more conservative approach than investing directly in one
particular company.

Sector funds restrict holding to a particular industry, other specialty

funds such index fund give investors a broadly diversified portfolio and
attempt to mirror the performance of various market averages

Index funds generally buy shares in all the companies composing the
BSE nifty or other broad stock market indices. They are not suitable for
investors who must Conserve their principal or maximize current income.

Benefits Of Mutual Fund

I) Risk Spreading

Diversification is almost universally acclaimed by the investment

advisers and academic researchers who have found that there is virtually no
value added by holding only a limited number of stocks when a person
invest in mutual fund, he appreciates in a large basket of shares of different
companies and industries which are included in the funds portfolio. Fund
diversification also reduces and spreads the risk factor of investors. The
fluctuation of the stock market has less impact over the mutual funds.

II) Skill Management

Through Mutual funds, the investors get the expertise of professional

money managers. Professional managers can easily tackle the purchase and
sale without giving pain of paperwork to the individual investors. The
trained, Skillful, professional management of Mutual funds can successfully
select a stock portfolio and change as per changed circumstances. The stock
market is a very technical area that lures average investors but inexperienced
hands may soon burn their fingers The MFs provides the benefit of skilled
portfolio management to the small investors who otherwise cannot afford
such expertise or knowledge.

III) Automatic Re-investment

In mutual funds it is possible to reinvest the dividends and capital

gain, while is difficult for the individual investors to reinvest the dividend
and capital gains. This Revolving type of investment makes possible forced
saving for the investors, which can make a big, difference in long run.

IV) Flexibility
 Mutual Funds have generally but back arrangement after a stipulated
period, so that the expiry of this period the investors can easily change
his portfolio by selling particular units. In this way, he can reinvest the
money where the finds lucrative returns and less return.
V) Liquidity
Mutual Funds are required by the SEBI to provide liquidity to
investors. They are ready to buy the units the investors at the NAV on a
day after the expiry of the initial lock-in- period. They announce through
daily newspapers their re-purchase price of units under the various
schemes after regular intervals Some Mutual Funds are also listed in
various stock exchanges and be sold off by the individual investors at the
prevailing market price.
VI) Tax Shelter
Income tax exemption has been ensured for Mutual Funds, while
originally only such Mutual Fondas as are set up by public sector bans or
a public financial institution were exempt from tax. Now the benefit of
tax exemption has been extended to all Mutual Funds. Investors are
eligible for deduction under Section 80L of the Income Tax Act in respect
of the dividends from or share of Mutual Funds and under Section 88 in
respect of contributions made by investors to unit lined insurance plan of
UTI and GIC mutual funds.
VII) Other Advantages
Investing in securities through Mutual Funds has many advantages lie
option to reinvest dividends, strong possibility of capital appreciation,
regular returns etc. mutual funds are also relevant in national interest
Apart from providing the above advantages, Mutual Funds also provide
the following additional advantages
 Stable return,
Botheration Free Investment,
Developing saving habit, habit, and
Safely because of Government regulations.
Many of the mutual funds abroad offers series of monthly investment
plans
Monthly weekly withdrawal plan to another, Mutual funds Provide a
convenient and effective link between saving and investment
Disadvantages Of Mutual Funds
Mutual funds are emerged all over the world as a fact of economic
life, but they are not free from limitations following are the notable
disadvantages of mutual funds
High Management Cost
Mutual funds have to incur substantial expenses to manage the invest
able funds garnered from investors These include the salaries of the
professional experts employed by the fund to manage its portfolio The
management costs of the fund are deducted among the investors This
reduces the retunes that would have otherwise been available to the investors
hand they managed portfolio themselves
High Promotional Expenses
Cut throat competition among the various mutual funds o mobilize the
savings of the masses necessitates heavy promotional expenses A lot of
money is spent on promotion of every scheme launched by the mutual funds
in India These expenses are likely to magnify with the entry of more players
in the mutual fund industry, as the increase in competition would lead to
heavier promotional expenses This will further reduce the net returns, which
would be available for distribution among the mutual fund investors
Flexibility
Because of a fund holds many stocks, it may be difficult for it to
unload its shares when the market goes down Thus, by keeping money in a
fund, the investors may have to ride the market down On the hand, there is
no reason why his or her individual shares in the fund cannot be redeemed at
any time The shares size of some funds reduces the flexibility to buy and sell
as frequently and in as large volumes as the fund managers may prefer
Redemption Costs
Through he buy back offered by mutual funds dose import liquidity to
the investors portfolio, the price at which the shares are redeemed is net of
redemption costs Therefore, the consideration that the investors gets in
reduced on account of the redemption costs which is deducted, making
investment in mutual funds disadvantages.
1.2.2 INDUSTRY PROFILE

The mutual fund industry in India started in 1963 with the formation
of UTI of India. At the initiative of the Government of India and Reserve
Bank. The history of mutual funds in India can be broadly divided into four
distinct phases:

FIRST PHASE 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of

parliament. It was set up by the Reserve Bank of India and functioned under
the Regulatory and administrative control of the Reserve Bank of India and
the Industrial Development Bank of the India (IDBI) took over the
regulatory and administrative control in phase of Reserve bank of India. The
first scheme launched by Unit Trust of India was Unit scheme 1964. At the
end of 1988 Unit Truest of India had Rs. 7600 corers of assets under
management.

SECOND PHASE 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS)

1987 market the entry of non- UTI, Public sector mutual funds set up
by public sector banks and life insurance Corporation of India (LIC) and
General Insurance corporation of India (GIC). State Bank of India 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), India Bank mutual fund (Nov 89), Bank of India its mutual fund in June
90) Bank of Baroda mutual fund (Oct 92) Life insurance Corporation
established its mutual fund in June 1989, while General Insurance
Corporation had set up its mutual fund industry in Dec 1990.

At the end of 1993, the mutual fund industry and assets under
management of Rs. 47004 Crores.

THIRD PHASE 1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS)

With the entry of private sector funds in 1993, a new era started in the
Indian mutual fund industry, giving the Indian investors a wider choice of
fund families. Also 1993 was year in which the first Mutual Fund
Regulations came into being, under which all mutual funds except Unit Trust
of India were to be registered and governed. The Kothari Pioneer was the
private sector mutual fund registered in July 1993 the 1993.

SEBL (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. The number
of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several merges
and acquisition. As at the end of January 2003, there were 33 mutual funds
with total assets of Rs. 121805 crores. The unit Trust of India with Rs. 44541
crores of assets under management was way ahead of other mutual funds.

FOURTH PHASE

In Feb 2003, following the repeal of the Unit Trust of India Act UTI
was bifurcated into two separate entities. One is the specified undertaking of
the Unit Trust of India with assets under Management of Rs. 29835 crores as
at the end of Jan 2003, representing broadly, the assets of US64 Scheme,
assured return and certain other schemes. The Specified undertaking of UTI
of India, Functioning under an administrator and under the rules framed by
Government of India and does not come the purview of the mutual Fund
regulations.
GROWTH IN ASSETS UNDER MANAGEMENT

The second is the Unit Trust of India Mutual Fund Limited Sponsored
by sbi, PNB, BOB and LIC. It is registered with SEBI and functions under
the Mutual fund regulation with the bifurcation of the erstwhile UTI which
had in March 2000 more then Rs. 76000 crores of assets under management
and with the 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. As at the end of September 2004, there
were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.

RECENT TRENDS IN MUTUAL FUND INDUSTRY

The most important trend in the mutual fund industry is the aggressive
expansion of the foreign owned mutual fund companies and the decline of
the companies floated by nationalized banks and smaller private sector
players
 Many nationalized banks got into the mutual fund business in the
early nineties and got off to a good stared due to the stock market boom
prevailing then. These banks did not really understand the mutual fund
business and they just viewed it as another kind of banking activity. Few
hired specialized staff and generally chose to transfer staff from the parent
organization. The performance of most of the schemes Jolted by these
parents funds was not. Good. Some Schemes had offered guaranteed returns
and their parent organizations had to bail out these AMCs by paying large
amounts of money as the difference between the guaranteed and actual
returns. The service levels were also very bad. Most of these AMCs have not
been able to retain staff, float new schemes etc. and it is doubtful whether,
barring a few exceptions, they have serious plans of continuing the activity
in a major way.

The experience of some of the AMCs Floated by private sector India

companies was also very similar. They quickly realized that the AMC
business is a business is a business, which makes money in the long term
and requires deep pocketed support in the intermediates years Some have
sold out to foreign owned companies, some have merged with others and
there id general Restructure in going on.
The foreign owned companies have deep pocked and have come in
here with the expectation of long haul. They can be credited with
introducing many new practices such as new product innovation, sharp
improvement in service standards and disclosure, usage of technology,
broker education and support etc. IN fact they have forced the industry top
upgrade itself and service levels of organization like UTI have improved
dramatically in the last few years in response to the competition provided by
these.

The total asset under management of the Mutual Fund industry

increases by 4.56% (Mar 6, 2006)
The Total assets under management of the mutual fund industry increased by
4.56% form Rs 205982 crore as on January and 217471 crore as on February
end. Diversified equity fund category had assets worth Rs. 38994 crore as on
February end which went down by Rs. 27512 crore compared to pervious
month. The total assets

Under management of Balanced Fund too saw decrease of 70.76% from Rs

11661 crore as on January end to Rs 3409 crore as on February end.
However Income funds marginally added assets of Rs. 89 Crore with assets
under management at Rs. 10405 crore as on February end .Liquid funds
reported a downfall of Rs, 14910 crore past one month.

ROLE OF SEBI IN MUTUAL FUND INDUSTRY

Unit Trust of India was the first mutual fund set up in India in the year
1963. In early 1990s Government allowed public sector banks and
institutions to set mutual funds.
In the year 1992, securities and Exchange Board of India (SEBI) Act
was passed. The Objective of SEBI was to protect the interest of investors
in securities and promote the development of and to regulate the securities
market.
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 vat 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 mutual
funds time to time to protect the interest 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 regulation 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 fund.
Sponsored by these entities are similar types.

CHAPTER 2

DATE ANALYSIS AND INTEREPRETATION

TABLE NO 2.1.1
GANDER
Respondents
Occupation
Number Percentage
MALE 117 78
FEMALE 33 22
TOTAL 150 100
INFERENCE
From the above table it is inferred that 78% of the respondents belong to
Male category and 22% of the respondents belong to Female group.
 TABLE NO 2.1.2
AGE PROFILE OF THE RESPONDENTS
Respondents
Age
Number Percentage
Below 25
20 13
years
25-35 years 50 33
35-45 years 34 23
Above 45
46 31
Years
Total 150 100

CHART NO.2.1.2
AGE PROFILE OF THE RESPONDENTS

INFERENCE
From the above table it is inferred that 33of the respondents are between the
age group 25-35 years, 31% of the respondents fall above the age group of
45 years, 23% of the respondents are between the age group 35-45 years,
and 13% of the respondents are below the age group of 25 years.
 TABLE NO 2.1.3
OCCUPATION PROFILE OF THE RESPONDENTS
Respondents
OCCUPATION
Number Percentage
Business 50 33
Retired 33 22
Salaried 67 45
Total 150 199

CHART No.2.1.3
OCCUPATION PROFILE OF THE RESPONDENTS

INFERENCE
From the above table it is inferred that 45% of the respondents belong to
salaried category. 33% of the respondents belong to business group and
22% of the respondents come under the retired category.
 TABLE NO 2.1.4
ANNUAL INCOME PROFILE OF THE RESPONDENTS
Respondents
Annual Income
Number Percentage
Below Rs.60000 20 13
Rs.60000 Rs.150000 36 24
Rs.150000-Rs.300000 54 36
Rs.300000 and above 40 27
Total 150 100

CHART NO.2.1.4
ANNUAL INCOME PROFILE OF THE RESPONDENTS

INFERENCE
From the above table it is inferred that 36% of the respondents annual
income is between Rs.1,50,000 /- Rs.3,00,000, 27% of the respondents
annual income is above Rs.3,00,000 lakhs, 24% of the respondents annual
income is between Rs.60,000-Rs.1,50,000 lakhs and the remaining 13% of
the respondents income is below Rs.60,000
 TABLE NO 2.1.5
PERCENTAGE OF INVESTORS GROSS SAVINGS CURRENTLY
INVESTED IN MUTUAL FUND
Percentage of Saving Respondents
Invested in MF Number Percentage
Below 10% 37 25
10%-20% 52 35
20%-30% 39 26
Above 30% 22 14
Total 150 100

CHART No.2.1.5
PERCENTAGE OF INVESTORS GROSS SAVINGS CURRENTLY
INVESTED IN MUTUALFUND

INFERENCE
From the above table it is inferred that 35% of the investors have invested
10% -20% of their gross savings in mutual fund schemes, 26% of them have
invested 20%-30% of their savings in mutual fund and only 14% of them
have invested above 30% of their gross savings in mutual funds.
 TABLE NO 2.1.6
FACTORS RESPONSIBLE FOR DECISION MAKING DURING
INVESTMENT IN MUTUAL FUND SCHEMES
Respondents
Factors
Number Percentage
Monthly Income 43 29
Annual Income 35 23
Total Tax 22 15
Return on investment 50 33
Total 150 100

CHART No.2.1.6
FACTORS RESPONSIBLE FOR DECISION MAKING DURING
INVESTMENT IN MUTUAL FUND SCHEME

INFERENCE
From the above table it is inferred that during investment in mutual fund
schemes 33% of the respondents primary decision making responsibility
depends on the return from the investment, 29% of the respondents decision
making criteria depends on the monthly income of the respondents, 23% of
the respondents primary decision making depend on their annual income and
only 15% of the respondents depend on the total tax factor during decision
making.
 TABLE NO 2.1.7
FROM THE MUTUAL FUND PREFERED
Respondents
From
Number Percentage
Open ended 108 72
Close ended 42 28
Total 150 100

CHART No.2.1.7
TYPE OF MUTUAL FUND PREFFERED

INFERENCE
From the above table it is inferred that 72% of the respondents prefer open-
ended type of fund and 28% of the respondents prefer close ended type of
fund.
 TABLE NO 2.1.8
OPTION PREFERED BY THE RESPONDENTS
Respondents
Option
Number Percentage
Growth 51 34
Dividend Payout 86 57
Dividend Re-
13 9
investment
Total 150 100

CHART No.2.1.8
OPTION PREFEERED BY THE RESPONDENTS

INFERENCE
From the above table it is inferred that 57% of the respondents prefer
dividend payout option 34% of them prefer growth option and 9% of the
respondents prefer dividend Re-investment option in mutual fund
investment.
 TABLE NO 2.1.9
MUTUAL FUND INVESTMENTS LEAD TO ABNORMAL RETURS
Respondents
Option
Number Percentage
YES 78 52
NO 72 48
Total 150 100

CHART NO.2.1.9
MUTUAL FUND INVESTMENTS LEAD TO ABNORMAL RETURS

INFERENCE
From the above table it is inferred that 52% of the respondents say yes and
48% of the respondents say no.
 TABLE NO 2.1.10
RESPONDENTS PREFERENCE ON THE WAY DIVIDENDS ARE
DECLARED
Respondents
Option
Number Percentage
Monthly 28 19
Quarterly 51 34
Half Yearly 48 32
Annually 23 15
Total 150 100

CHART No.2.1.10
RESPONDENTS PREFERENCE ON THE WAY DIVIDENDS ARE
DECLARED

INFERENCE
From the above table it is inferred that 34% of the respondents want the
dividends to be declared quarterly, 32% of them prefer the dividends to be
declared half yearly, 19% of the respondents want the dividends to be
declared monthly and only 15% of the respondents want the dividends to be
declared annually.
 TABLE NO 2.1.11
NORMAL RATE OF RETURN EXPECTED FROM THE SCHEME
Respondents
Option
Number Percentage
Below 10% 10 7
10%-20% 48 32
20%-30% 70 47
Above 30% 22 14
Total 150 100

CHART NO.2.1.11
NORMAL RATE OF RETUNR EXPECTED FROM THE SCHEME

INFERENCE
From the above table it is inferred that 47% of the respondents expected
20%-30% rate of return 32% of them expect a return of 10%-20%, 14% of
them expect a return of 10% -20% , 14% of them expect a return above 30%
and 7% of the respondents expect a return below 10%
 TABLE NO 2.1.12
PREFERENCE OF RESPONDENTS TO MAKE AN INVESTMENT
DURING AN NEW FUND OFFER
Respondents
Option
Number Percentage
YES 117 78
NO 33 22
Total 150 100

CHART NO.2.1.12
PREFERENCE OF RESPONDENTS TO MAKE AN INVESTMENT
DURING AN NEW FUND OFFER

INFERENCE
From the above table it is inferred that 78% of the respondents prefer to
make an investment during the new fund offer and 22% of them do not
prefer to make an investment during new fund offer.
 TABLE NO 2.13
TIME FREME PREFERRED BY THE INVESTOR WHILE
INVETING IN
MUTUAL FUND
Respondents
Option
Number Percentage
Less Than 1 Years 25 17
1-2 years 51 34
2-3 Years 45 30
More than 3 Years 29 19
Total 150 100

CHART NO.2.1.13
TIME FREME PREFERRED BY THE INVESTOR WHILE
INVETING IN
MUTUAL FUND

INFERENCE:
From the above table it is inferred that 34% of the respondents prefer
investing in mutual fund for a duration of 1-2 years, 20% of them prefer a
time frame of 2-3 years, 19% of the respondents prefer investing in mutual
fund for a duration of more then 3 years, and a time frame of less than 1 year
is preferred only by 17% of the respondents.

TABLE NO 2.1.14
TYPE OF FUND PREFERRED BY THE REXSPONDENTS
Respondents
Preference of Fund
Number Percentage
Equity 74 49
Debt 45 30
Balanced 29 19
Total 150 100

TABLE NO 2.1.14
TYPE OF FUND PREFERRED BY THE RESPONDENTS

INFERENCE:
From the above table it is inferred that 49% of the respondents prefer to
invest in equity fund 30% of them prefer to invest in debt fund and only
19% of the respondents prefer to make their investment in balanced fund.

TABLE NO 2.1.15
SATIFACTION LEVEL OF THE CURRENTLY INVESTED SCHEME
Respondents
Satisfaction Level;
Number Percentage
Highly Satisfied 28 19
Satisfied 80 53
Not Very Satisfied 23 15
Dissatisfied 19 13
Total 150 100

CHART2.1.15
SATISFACTION LEVEL ON THE CURRENTLY INVESTED
SCHEME

INFERENCE:
From the above table it is inferred that 53% of the respondents are satisfied
with their current investment, 19% of them are highly satisfied, 15% of them
are not very satisfied with their investment and 13% of the respondents are
dissatisfied with their investment in mutual fund.

TABLE NO 2.1.16
RESPONDENTS SOURCE OF INFORMATION REGARDING
MUTUAL FUND
Respondents
Source of information
Number Percentage
Newspaper 49 32
Magazine 13 9
Television 36 24
Agents 35 23
Friends & Relatives 10 7
Others 7 5
Total 150 100

CHART 2.1.16
RESPONDENTS SOURCE OF INFORMATION REGARDING
MUTUAL FUND
INFERENCE:
From the above table it is inferred that 32% of the respondents source of
information regarding mutual fund scheme is through newspaper, 24% of the
respondents source of information regarding mutual fund scheme is through
television, 23% of the respondents get information regarding mutual fund
through agents and 7% of them get information through their friends and
relatives.

TABLE NO 2.1.17
INTERMEDIARIES THROUGH WHICH RESPONDENTS MAKE
THEIR INVESRSTMENT

Respondents
Investment through
Number Percentage
Brokers 53 35
Bank 58 39
Agent 39 26
Total 150 100

TABLE NO 2.1.17
 INTERMEDIARIES THROUGH WHICH RESPONDENTS MAKE
THEIR INVESRSTMENT

INFERENCE
From the above table it is inferred that 39% of the respondents have made
their investment through a bank, 35% of the respondents have invested
through brokers and the respondents who have invested through an agent is
26%
 TABLE NO 2.1.18
RESPONDENTS SARISFACTION LEVEL WITH SERVICES
PROVIDED BY THE INTERMADIARIES

Respondents
Satisfaction Level
Number Percentage
Very Satisfied 56 37
Satisfied 47 47
Not Satisfied 23 15
Total 150 100

TABLE NO 2.1.18
RESPONDENTS SARISFACTION LEVEL WITH SERVICES
PROVIDED BY THE INTERMADIARIES

INFERENCE
From the above table it is inferred that 47% of the respondents are satisfied
with the services provided by the intermediaries, 37% of the respondents are
very satisfied with services, and 15% of the respondents are not satisfied
with the services of the intermediaries
 2.2 STATISTICAL TOOL
2.21.a WEIGHTED AVERAGE RESPONDENTS RANKING OF THE
VARIOUS OBJECTIVES OF MUTUAL FUND SCHEMES
TABLE NO.2.2.1.a

Rank 5 4 3 2 1 Wx WX
Factor X
Return 750 750 5
Tax 150 432 12 6 600 4
exemption
Capital 192 324 516 3.44
Appreciatio
n
Liquidity 90 264 198 552 3.68
Professiona 24 90 216 6 336 2.24
l
Manageme
nt
Safety 120 268 159 12 559 3.73
Value 24 240 3 267 1.78
Addition
Convenien 18 144 162 1.08
ce
INFERENCE

Objects Ranks
Return 1
Tax Exemption 2
Safety 3
Risk Diversification 4
Liquidity 5
Capital Appreciation 6
Professional Management 7
Value Addition Convenience 8
Convenience 9

Label1

RESPONDENTS RANKING OF THE VARIOUS MUTUAL FUND

COMPANIES
TABLE NO.2.2.1.B
Rank 10 9 8 7 6 5 4 3 2 1 W
Wx X
Factor X

UTI 150 18 288 84 108 195 40 0 0 0 1045 6.96

CAN BANK210 108 144 216 36 45 104 78 0 0 941 6.27
HDFC 100 108 120 113 288 100 120 0 0 0 949 6.35
Standard 250 15 464 105 102 90 0 0 0 0 1164 7.76
Chartered 3
ICICI 180 90 56 434 138 25 40 24 14 0 1001 6.67
Franklin 530 33 144 189 90 0 0 0 0 0 128 8.57
Templeto 3 6
n
Fidelity 130 90 56 175 192 65 140 24 0 0 872 5.81
Sunduram 380 46 120 210 90 0 0 0 14 0 127 8.45
8 2
Kotak 80 63 160 217 0 0 48 18 96 18 700 4.66
Tata 0 0 0 126 168 50 40 36 40 52 512 3.14

INFERENCE

Objects Ranks
UTI 4
CAN BANK 7
HDFC 6
Standard Chartered 3
ICICI 5
Franklin Templeton 1
Fidelity 8
Sunduram 2
Kotak 9
Tata 10
 2.2.2 CHI- SQUARE
TABLE NO.2.2.2.a
Annual Percentage of Savings Invested in Mutual Fund
Income
10% 10%20% 20%-30% >30% Total
Below Rs. 11 8 1 0 20
6000
Rs. 6000- 12 16 5 3 36
Rs. 150000
Rs. 150000- 6 18 7 9 40
Rs 300000
Rs. 300000 8 10 26 10 54
and Above
Total 37 52 39 22 150
HYPOTHESIS
Ho : There is no Significant relationship between investors annual Income
and the percentage of Savings invested in mutual fund
H1 There is Signification relationship between investors annual income
and the percentage of saving invested in mutual fund.
O E (O- E) (O-E) 2 (O-E) 2/E
11 5 6 36 7.2
12 9 3 9 1
6 10 4 16 1.6
8 13 5 25 1.9
8 7 1 1 0.14
16 12 4 16 1.33
18 14 4 16 1.14
11 24 -13 169 7.14
5 9 -4 16 1.78
7 10 -3 9 0.9
26 17 9 81 4.76
12 11 1 1 0.09
10 8 2 4 0.5
Total 16.31 29.39

Degree of Freedom = (4-1)* (4-1)-3=6

The table value for 6 degree of freedom @ 5% level of significance is 5.348.

Since the calculated value 29.39 is greater than the table value the null
hypothesis is rejected.

Conclusion: There is significant relationship between investors annual

income and the percentage of savings invested in mutual fund.
 CHI-SQUARE
TABLE NO.2.2.2.B
Annual Income Fund Option
Growt Dividend Dividend Total
h Payouts reinvestment
Below Rs.60,000 3 15 2 20
Rs.60000 Rs.150000 8 25 3 36
Rs.150000-Rs.30000 11 26 3 40
Rs.300000 and Above 29 20 5 54
Total 51 86 13 15

Ho: There is not significant relationship between investors annual income

and the fund option preferred.
H1: There is significant relationship between investors annual income and
the fund option preferred.
O E (O-E) (O-E)2 2


11 19 -8 64 3.36
19 22 -3 6 0.27
29 18 11 121 6.72
15 29 20 5 5415
25 51 86 13 15

Degree of freedom= (4-1)*(3-1)-3

=6-3
=3
The table value for 3 degree of freedom @5% level of significance is 2.366
Since the calculated value 16.31 is greater than the table value the null
hypothesis is rejected.
Conclusion:
There is a significant relationship between investors annual income and the
fund option preferred by them
 2.2.3. ANOVA
1. BASED ON FUNDS & THEIR SATISFACTION
TABLE 2.2.3

FUNDS EQUITY DEBT BALANC TOTAL

ED
SATISFACTION
SATISFIED 36 32 14 82
NOT SATISFIED 20 18 30 68
TOTAL 56 50 44 150

HYPOTHESIS:
HO : There is no relationship in funds
H 1O : There is no relationship in their level of satisfaction
H1 : There is relationship in funds
H11 : There is relationship in their level of satisfaction.
1.
Correction factor (CF) = T2 /N2
= 1502 / 6 = 3750
2.
x ij2 = 4140
3.
Tj2 / n = 11348/3 = 3783
4.
Tj2 / k = 7572/2 -= 3786
5.
Total sum of square (TSS) = 4140 3750 =390
6.
Sum of Square between Row (SSR) = 3783 3750 =33
7.
Sum of Square between Column (SSC) = 3786 3750 =36
8.
Error Sum of Square (ESS) = TSS SSR SSC
= 390 33-36
= 321
 9.
Mean sum of Square :
MSF = SSR / K 1
= 33/1=33
MSC = SSC /n-1
= 36 / 2 =18
MSE = ESS / (k-1) (n-1)
= 321 / (1) (2)
= 160.5
9. FR = MSR / MSE
= 33/160.5
= 0.205
FC = MSC/MSE
= 18/160.5
= 0.112
FR= (K-1, (N-1) (K-1)) = (1, 2) = 18.5
FC= (N-1, (N-1) (K-1)) = (1, 2) = 18.5
Therefore Accept H0&H10
Conclusion:
HO : There is no relationship in funds
H1O : There is no relationship in their level of satisfaction .

CHAPTER 3
 FINDINGS
It is observed that 78% of the respondents belong to Male category
and 2% of thee respondents belong to Female group.

It is observed that 335 of the respondents are between the age group
25 35 years, 31% of the respondents fall above the age group of 45
years, 23% of the respondents is between the age group 35 45 years,
and 13% of the respondents are below the age group of 25 years
It is observed that 45% of the respondents belong to salaried category,
33% of the respondents belong to0 business group and 22% of the
respondents come under the retired category.

It is observed that 36% of the respondents annual income is between

Rs.1,50,000- Rs 3,00,000,27% of the respondents annual income is
above Rs 3,00,000 lakhs, 24% of the respondents annual income is
between Rs.60,000-Rs.1,50,000 lakhs and the remaining 13% of the
respondents income is below Rs.60,000

It is observed that 25% of the investors have invested 10%-20% of

their gross saving in mutual find schemes, 26% of them have invested
20%-30% of their savings in mutual fund and only 14% of them have
invested above 30% of their gross saving in mutual funds.

It is observed that during investment in mutual fund schemes 33% of

the respondents primary decision making responsibility depends on
the return form the investment, 29% of the respondents decision
 making criteria depends on the monthly income of the respondents,
23% of the respondents primary decision making depend on their
annual income and only 15% of the respondents depend on the total
tax factor during decision making.

It is observed that 72% of the respondents prefer open ended type of

fund and 28% of the respondents prefer close ended type of fund.

It is observed that 52% of the respondents say Yes and 48% of the
respondents say no

It is observed that 34% of the respondents want the dividends to be

declared quarterly, 32% of them prefer the dividends to be declared half
yearly, 19% of the respondents want the dividends to be declared monthly
and only 15% of the respondents want the dividends to be declared
annually

o It is observed that 47% of the respondents expect 20% - 30%

rate of return, 32% of them expect a return of 10%- 20% , 14% of them
expect a return above 30% and 7% of the respondents expect a return
below 10%.

It is observed that 78% of the respondents prefer to make an

investment during the new fund offer and 22% of them do not prefer to
make an investment during new fund offer.
o It is observed that 34% of the respondents prefer investing in
mutual fund for a duration of 1-2 years, 30% of them prefer a time frame
of 2-3 Years 19% of the respondents prefer investing in mutual fund for a
duration of more than 3 years, and a time frame of less than 1 year is
preferred only by 17% of the respondents

It is observes that 49% of the respondents prefer to invest in equity fund,

30% of them prefer to invest in dept fund and only 19% of the
respondents prefer to make their investment in balanced fund.

It is observed that 53% of the respondents are satisfied with their current
investment 19% of them are highly satisfied, 15% of them are not very
satisfied with their investments and 13% of the respondents are
dissatisfied with their investment in mutual fund.

It is observed that 32% of the respondents source of information

regarding mutual fund scheme is through newspaper, 24% of the
respondents source of information regarding mutual fund scheme is
through television, 23% of the respondents get information regarding
mutual fund though agents and 7% of them get information through their
friends and relieves.

It is observed that 39% of the respondents have made their investment

through bank, 35 of the respondents have invested through brokers
and the respondents who have invested though an agent is 26%
It is observed that 47% of the respondents are satisfied with the services
provided by the intermediaries, 37% of the respondents are very satisfied
with services, and 15% of the respondents are not satisfied with the services
of the intermediaries.

3.2. SUGGESTION
Dividends can be declared regularly, preferably on a quarterly basis
Investment can be made in IT, FMCG or Banking industry in case of sect
oral fund.
Advertisement through Newspapers and Television can be made to
increase the level of a awareness about the schemes.
Regular updates/ Feedback about the various schemes can be provided to
the investors.
In case of any new scheme have been introduced it must be made known
to customers at any cost
They should also have to concentrate on individual
Some educational programs should be conducted
 3.3. CONCLUSION

From the study one gathers that the mutual find investments seem to
be a popular investment option. In the last few years, there has been a
fundamental change in the household saving, and the share investment, as a
percentage of the savings has gone up substantially. The number of
investors has increased to a great extent and the mutual fund industry is
becoming extremely responsive by launching different products to cater to
the diverse need of the investors. Investors have a lot of options in the
mutual fund schemes. Majority of the investors prefer to invest in open-
ended schemes and the satisfaction level of the investors is also high. The
investors also prefer to invest during the new fund offer. From this study the
investors preferences are known, which will help the company in launching
new products to the investors.
A STUDY ON THE INVESTORS PREFERENCE WITH REGARD TO
MUTUAL FUNDSCHEMES WITH REFERENCE TO SCMF ASSETS
MANAGEMENT COMPANY

Dear Respondent,

I introduce myself as MURUGAN.P, MBA student of R.M.K

Engineering College, Kavarapettai, affiliated to Anna University, Chennai. I
have intended to make a study about Investors Preference with regard to
Mutual Fund Schemes with special reference to Standard Chartered Asset
Management Company.

So as an investor you are asked to select the answer from following

question.

1. Name :

2. Gender : Male Female

3. Age : <25 25-35 35-45 45 & above

4. Profession : Business Retired Salaried

5. Annual Income : below Rs.60, 000 Rs.1, 50,000-3, 00,000

Rs.60, 000-1, 50,000 Rs.3, 00,000 and

above

6. What percentage of your gross savings is currently invested in mutual

Fund Schemes?

below 10%-20% 20%-30% 30% and above

7. What factor do you consider before making a decision to invest?

Monthly Income Annual Income Total Tax

 Return on investment

8. Objective of investing in mutual fund.

5-Very Important, 1-Not at all Important

Factors 5 4 3 2 1
Return on investment
Tax exemption
Capital appreciation
Liquidity
Risk diversification
Profession management
Safety
Value addition
Convenience

9. Which form of mutual fund to you prefer?

Open ended fund Close ended fund

10. What option do you prefer while investing in mutual fund?

Growth option Dividend payout

Dividend re-investment Scheme

11. Do you believe that mutual fund investments lead to abnormal

returns?

Yes No

12. Do you prefer to make an investment during the new Fund Offer?
 Yes No

13. If you prefer a dividend option how would you like your dividends to
be declared?

Monthly Quarterly Half-Yearly Annually

14. What is the Normal Rate of Return do you expect from the Scheme?

Below 10% 10%-20% 20%-30% above

30%

15. What is the time frame you would prefer while investing in mutual
fund?

Less than 1 Yr. 1-2 Yrs. 2-3 Yrs. More than 3 Yrs.

16. Preference of investment in mutual fund?

Equity fund Debt fund Balanced Fund

17. What is your Satisfaction level on the currently invested mutual fund
scheme in Standard Chartered?

Highly Satisfied Satisfied Not Satisfied Dissatisfied

18. What is the source of information regarding mutual funds?

Newspaper Magazine Television Agents Friends and

Relatives

19. How have you made your investments so far?

Through brokers through a bank through an agent others

20. Are you satisfied with the services provided by a broker, bank, or an
agent?
 Very Satisfied Satisfied Not Satisfied

21.Rank the most preferred mutual fund companies in your opinion.

S.No Companies Ranks

.
1 UTI
2 Can Bank
3 HDFC
4 Standard Chartered
5 ICICI
6 Franklin Templeton
7 Fidelity
8 Sunduram
9 Kotak
10 Tata
BIBLIOGRAPHY

RESEARCH METHODOLOGY, KOTHARI.C.R. WILEY

EASTERN PUBLICATION, 6TH EDITION

MARKETING RESEARCH, HARPEL W BOYDYR, RALPL,

WESTFALL, STANELY, F.SLESH; RICHARD IRAW AN INC
PUBLICATION;7TH EDITION

STAISFTICAL METHODS, S.P. GUPTA, SULTAN PUBLICATION

9TH EDITION

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