Demand Analysis of Mutual Funds in India

By:
GroupAnkish Kedia 57(C) Chirag Modi 42(C) Naveen Lathar 63(C) Shibumi 22(C) Silky Gori Vaibhav Agarwal 21(C)

FLOW OF PRESENTATION
INTRODUCTION HISTORY OF INDUSTRY TYPES OF FUNDS MARKETSHARE OF DIFFERENT FUNDS METHODOLOGY OF SURVEY OBJECTIVE FINDINGS COMPANY ANALYSIS

What is mutual fund?

A mutual fund is a pool of money collected from investors and is invested according to stated investment objectives. Mutual fund investors are like shareholders and they own the fund.

What it means?
Investors
Receive Contribute money dividend/capital appreciation

Trust (pool of money)

Invest in markets Receive interest, dividend or capital growth

Markets (volatile, has fluctuation)

History of Mutual Funds

Birthplace of Mutual Funds USA History in India:
1964-1987 (Phase I) Growth of Unit Trust of India 1987-1993 (Phase II) Entry of Public Sector Funds 1993-2003 (Phase III) Emergence of Private Funds 2004 onwards (Phase IV) Consolidation and Growth.

Types of Funds
Open-ended (OEF) Close-ended (CEF) Equity, Debt and Balance Tax-exempt & Non tax-exempt Commodity fund Real Estate fund Exchange-traded fund

Advantages of Mutual Fund

Professional Management Diversification Convenient Administration Return Potential Low Costs Flexibility Choice of schemes Tax benefits Well regulated

Market Share of Different MF Companies

Other Funds 23% Reliance 15%

ICICI Prudential 10% LIC 3% Kotak Mahindra 4% DSP Merrill Lynch 4% Tata 4% Franklin Templeton 5% UTI 9% Birla Sun Life 7% HDFC 10%

SBI 6%

MF offerings of top players

ICICI MF
ICICI Pru Infrastructure

HDFC MF
HDFC Balanced Fund

RELIANCE MF
RELIANCE RSF-Equity

ICICI Pru Dynamic Plan

HDFC Long Term Advantage HDFC Cash Mgmt Fund

RELIANCE MIP

ICICI Pru Tax Plan

RELIANCE Power Diversified

ICICI Pru Flexible Income

HDFC Liquid Fund

RELIANCE Natural Resource Fund

Growth in Assets Under Management in recent years

Methodology of Survey
Sampling Technique: Judgmental sampling and convenient sampling techniques were used during survey (Delhi region). Sample Size: A total sample size of over 70 comprises of individuals from working class.

Sample Description: The questionnaire were administered to the individuals.

Objective
To study the investor preference about different mutual fund schemes. To undertake a generic analysis of some players in the Indian scenario on the basis of their performance.

Purpose of Investment
28% 11%

Tax Saving Retirement Planning Growth of Investment Insurance

14%

18% 29%

Others

Broker consultation?

No 42% Yes 58%

Type of MF investment

Closed Ended 42% Open Ended 58%

Lock-in Period
74%

<1 1 to 3 3 to 5 >5

4% 9%

13%

Risk taking capability

Medium risk Medium Return 70%

Low risk - Low Return 17%

High risk - High Return 13%

Types of MFs
Equity Gold ETFS Liquid Debt

61%

13% 9%

17%

Findings
Awareness about MF as an investment option is low. Most of the people were reluctant in investing in MF due to current market scenario. Youngsters were more enthusiastic in investing directly in the equity market.

Change in NAVs of Equity Based MFs

180 160 140 120 100 80 60 40 20 0 179.7 160.6

2008 2009 43 46.9 20.522.4 9.911.3

HDFC Equity Fund (G)

12 12.8
Tata Contra Fund (G) SBI Magnum Contra Fund (G)

Reliance Regular UTI Contra Fund Saving Fund (G)

Demand Forecasting of SBI

Standard Deviation Method

YEAR 2004 2005 2006 2007 2008 Standard Deviation 2009 AUM (In Lacs) 616448 718622 1407860.78 2587846.81 2915111.74 1057637.354 3972749.094

SOURCE: http://www.sbimf.com

Standard Deviation Method contd..

4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2004

2005

2006

2007

2008

2009

Demand Forecasting of Birla Sun Life

Time Series Method

70 60 50 40 30 20 10 0 2004 -10 -20 -30 -40

2005

2006

2007

2008

2009

SOURCE:Moneycontrol.com

Comparison of SBI CF with Sensex

Limitations
There was difficulty in gathering data as information on income and investments are of confidential nature. The sample size may not be a representation of the entire population.

References
Secondary Data was taken from following Websites: http://www.sbimf.com http://www.amfiindia.com http://www.sebi.com http://www.myiris.com http://www.mutialfunfindia.com http://www.moneycontrol.com

Thank you!