“A STUDY ON INVESTORS’ PERCEPTION OF MUTUAL FUNDS”

Introduction
Mutual funds are financial intermediaries, which collect the savings of investors & invest them
in a large & well diversified portfolio of securities such as money market instruments, corporate
& government bonds & equity shares of joint stock companies. A Mutual fund is a pool of
common funds invested by different investors, who have no contact with each other. Mutual
funds are conceived as institutions for providing small investors with avenues of investments in
the capital market. Since small investors generally do not have adequate time knowledge,
experience & resources for directly accessing the capital market, they have to rely on an
intermediary which undertakes informed investment decisions & provides consequential benefits
of professional expertise. The advantages for the investors are reduction in risk, expert
professional management, diversified portfolios, & liquidity of investment & tax benefits. By
pooling their assets through mutual funds, investors achieve economies of scale. The interests of
the investors are protected by the SEBI, Which acts as a watchdog. Mutual funds are governed
by the SEBI (Mutual funds) regulations, 1993.

From its inception the growth of mutual funds is very slow and it took really long years to evolve
the modern day mutual funds. Mutual Funds emerged for the first time in Netherlands in the18th
century and then got introduced to Switzerland, Scotland and then to United States in the 19th
century. The main motive behind mutual fund investments is to deliver a form of diversified
investment solution. Over the years the idea developed and people received more and more
choices of diversified investment portfolio through the mutual funds. In India, the mutual fund
concept emerged in 1960. The credit goes to UTI for introducing the first mutual fund in India.
Monetary Funds benefited a lot from the mutual funds. Earlier investors used to invest directly in
the stock market and many times suffered from loss due to wrong speculation. But with the
coming up of mutual funds, which were handled by efficient fund managers, the investment risks
were lowered by a great extent.
 Statement of the problem
Mutual funds are the avenues for common investors to reap the benefits of share market
performance. Investing in equity directly by investors is fraught with highest level of risk &
uncertainty Retail investors do not actively participate in share market but inflation edged
investment return demands the exploitation of the equity market as an investment avenue
Therefore there is a necessity to create awareness of the utility of investing in mutual funds
schemes to enjoy a return which will be inflation adjusted real returns Therefore this project is
taken on to assess the investors perception of mutual fund investment. This project will evaluate
the financial performance of mutual fund schemes.

Scope of research

From the various mutual funds operated in India Three mutual funds organizations has been
identified based on convenient sampling. Selected equity funds of these organizations are taken
up for research .The financial details reflecting performance of mutual funds for the financial
year 2012-13 is considered as an academic project. It is executed during a period of one month ,
conclusions arrived at are influenced by economic and business environment of the year 2012-
13.
The research is based on different investment & saving schemes so there is lots of opportunities
to choose an investment schemes which is beneficial to investor as well as the companies in the
market. Choosing a right research technique lead to better profits & investment decisions.

Research objectives
a) To examine the penetration of mutual funds among Indian investors.
b) To examine the various mutual fund investments available to investors in India.
c) Finally to assess the perception of investors towards mutual funds schemes.
 Research methodology
Sources of data

Introduction:

This report is based on secondary data. All the data required for this analytical study has been
obtained mainly from secondary sources. The secondary data has been collected through various
journals & websites. Secondary data is based on information gleaned from studies previously
performed by various journals.

The objectives of the study are as following:

 Awareness of mutual funds in Indian market.

 To identify the investor behavior while selecting a fund.

 To identify the investor‘s perception about mutual funds.

Research Design

Research design is the roadmap for carrying out the research activity in the project. In the project of
‗Investor perception of mutual fund‖

Research part includes that investor make among the funds selected for arriving at investment decision

Axis equity fund

The scheme is ranked 2 in Large Cap category by Crisil (for quarter ended Mar 2014) rank unchanged
from last quarter. If you are already invested in this scheme, you may continue to stay invested. But, do
keep a check on its performance. Its fund class is under large cap.

Benchmark index is S & P CNX Nifty.

Scheme details
Fund Type Open-Ended
Investment Plan Dividend
Launch date Dec 08, 2009
Benchmark CNX NIFTY
Asset Size (Rs cr) 644.27 (Mar-31-2014)
Minimum Investment Rs.5000
Fund Manager Chandresh Nigam
Axis mid cap fund (D) Dividend

The scheme is ranked 3 in Small & Mid Cap category by Crisil (for quarter ended Mar 2014). If you are
already invested in this scheme, you may consider switching to a better performing scheme.

Benchmark index is BSE-Midcap

To achieve long term capital appreciation by investing predominantly in equity & equity related
instruments of mid-size companies. The focus of the fund would be to invest in relatively larger
companies within this category.

Scheme details
Fund Type Open-Ended
Investment Plan Dividend
Launch date Feb 14, 2011
Benchmark S&P BSE MIDCAP
Asset Size (Rs in cr) 255.45 (Mar-31-2014)
Minimum Investment Rs.5000
Fund Manager Pankaj Murarka

Axis focused 25 D (Dividend)

this scheme is not ranked by CRISIL (for quarter ended Mar 2014) since it does not fulfill
certain eligibility criteria of CRISIL. To generate long term capital appreciation by investing in a
concentrated portfolio of equity & equity related instruments of up to 25 companies.

Scheme details
Fund Type Open-Ended
Investment Plan Dividend
Launch date Jun 25, 2012
Benchmark CNX NIFTY
Asset Size (Rs cr) 109.13 (Mar-31-2014)
Minimum Investment Rs.5000
Fund Manager Pankaj Murarka
Axis Gold ETF

This scheme is not ranked by CRISIL (for quarter ended Mar 2014) since it does not fulfill
certain eligibility criteria of CRISIL The investment objective of the Scheme is to generate
returns that are in line with the performance of gold.

Scheme details
Fund Type Open-Ended
Investment Plan Dividend
Launch date Nov 03, 2010
Benchmark Price of Gold
Asset Size (Rs cr) 365.77 (Mar-31-2014)
Minimum Investment Rs.5000
Fund Manager Anurag Mittal

Axis focused 25 G (Growth)

This scheme is not ranked by CRISIL (for quarter ended Mar 2014) since it does not fulfill
certain eligibility criteria of CRISIL. To generate long term capital appreciation by investing in a
concentrated portfolio of equity & equity related instruments of up to 25 companies.

Scheme details
Fund Type Open-Ended
Investment Plan Growth
Launch date Jun 25, 2012
Benchmark CNX NIFTY
Asset Size (Rs. In cr) 109.13 (Mar-31-2014)
Minimum Investment Rs.5000
Fund Manager Pankaj Murarka
 Research is divided in two parts:
 Research methods
 Collection of data

Sample Design

Type of Research:

The survey followed descriptive research design based on study. The survey attempts to find out
the perception of investors while investing in mutual funds.

Descriptive research design because time & cost constraints permitted the drawing of only one
sample from the population & information could be obtained from the sample only once.

Collection of data:

Primary data: Since the study require a systematic gathering of information, a survey research (using a
structured questionnaire) was selected

Secondary data:

Here in this research project the secondary data is used data which are taken from published
sources of Bombay stock exchange, Money control, value research online, National stock
exchange & Mutual fund India.

Sampling design:
Population definition: the population consists of total customer based at Bangalore.Extent
customer in Bangalore

Convenient Sampling method

A convenience sample is made up of people who are easy to reach.

Consider the following example pollster interviews shoppers at a local mall. If the mall was
chosen because it was a convenient site from which to solicit survey participants and/or because
it was close to the pollster‘s home or business, this would be a convenience sample.

Here in the research project a sample of ―10 Equity growth mutual funds‖ on the basis of
convenient sampling

Sample size:
Sample size =50
 Limitation of the study
Apart from Details about mutual funds it has some limitations due to that all the details could not
be published & displayed. It has been done on the basis of secondary sources like Journals,
Websites & like resources.

Limitations of the study can be pointed out as follows

 Time constraints: - Due to shortage or less availability of time it may be possible that all the
related & concerned aspects may not be covered in the project.
 Analysis done is limited to the availability of data.
 It is very difficult to evaluate the accuracy of secondary data. Before using secondary data.
 The quality of internal secondary data may be exaggerated or biased
 Mismatch between purpose collected and purpose used.
 Desired information may be unavailable or out-of-date.
 The conclusions derived from the report cannot be generalized.
 DATA ANALYSIS

Que.1 Age of the investors

18-24

24-30

30 & Above

age of investors
age of investors

26

14

10

18-24 24-30 30&above

Age Respondents
18-24 10
24-30 26
30 & above 14

Interpretation : Out of 50 respondents 26 belong to age of 24-30 while 14 belong to 30 & above & 10
respondents belong to 18-24.
Que.2 Mention your annual income?

Below 100000

100000-300000

300000-500000

500000& above

Income level

26

11
8
5

below 100000 100000-300000 300000-500000 500000&above

Income level Respondents

Below 100000 5
100000-300000 26
300000-500000 11
500000 & above 8

Interpretation: Income of the 5 respondents is below 100000 & for 26 respondents it is 100000-300000,
for 11 respondents it is 300000-50000, & for 8 respondents it is 500000 & above
Que.3 Do you invest in mutual funds?

Yes

No

YES NO

28%

72%

Investment in mutual fund Respondents

Yes 36
No 14

Interpretation: Out of 50 investors 36 investors invest in Mutual funds rest 14 investors don‘t invest in
mutual funds.
Que.4 Most preferred asset Management Company

SB Axis Mutual fund

HDFC Mutual fund

Birla sun life Mutual fund

ICICI Mutual fund

UTI Mutual fund

Do not invest

Most preferred asset Management Company

Axis mutual fund HDFC Mutual fund Birla sun life Mutual fund
ICICI Mutual fund UTI Mutual fund Do not invest

22% 16%

14% 15%

9% 16%

Company name Respondents

Axis mutual fund 8
HDFC Mutual fund 5
Birla sun life Mutual fund 6
ICICI Mutual fund 4
UTI Mutual fund 5
Others 8

Interpretation : Out of 36 investors 8 prefer Axis mutual fund, 5 prefer HDFC mutual fund,6 prefer Birla
sun life mutual fund,4prefer ICICI Mutual fund, and 5 prefer UTI mutual fund & 8 do not invest in any of
these.
Que.5 Which among these are the safest investment options?

Mutual funds

Stock Markets

Bank deposits

Others

Which among these are the safest

investment options?

15
9
5 6

Mutual funds Stock markets Bank Deposits Others

Interpretation : Out of 36 respondent 18 investors invest in Mutual funds,8 investor invest in Stock
markets, 10 investors invest in Bank deposits,& 10 investors invest through other investment ways.

Investment option Respondents

Mutual funds 15
Stock markets 9
Bank deposits 5
Others 6
Que.6 Which factors prevent you from investing you in Mutual funds?

Bitter past experience

Lack of knowledge

Inefficient investment advisors

Others

Bitter past experience Lack of knowledge Inefficient investment advisors others

6%
10% 24%

60%

Interpretation: - Out of 36 respondents 30% investors have bitter past experience in Mutual funds,40%
of them have lack of knowledge,16% investors feel like inefficient investment advisors & 14% investors
have other reason for the same.

Factors Respondents
Bitter past experience 12
Lack of knowledge 24
Inefficient investment advisors 6
Others 3
Que. 7 While investing your money, how these factors affect your decision?

Liquidity

High return

Professional management

Brand management

Others

Liquidity High return Professional management Brand management Others

11%

6% 25%

14%

44%

Factors affecting Respondents

Liquidity 9
High return 16
Professional management 5
Brand management 2
Others 4

Interpretation: - Out of 36 respondents 9 investors says liquidity affects the decision, 22 says high
returns are the reasons for their investment, 10 investors says Professional management of their money is
required, 5 says brand management as an important factor & 4 says other factors .
Que.8 Which scheme do you feel is acceptable?

Open

ended

scheme

Close

ended

scheme

23

13

Open ended scheme Close ended scheme

Type of scheme Respondents

Open ended scheme 23
Closed ended scheme 13

Interpretation : Out of 36 investors 23says open ended scheme is better as entry and exit is
easy, while 13 says close ended scheme is better.