A comprehensive study on

National Institute of Science & Technology

benefits of mutual fund schemes

to the individual investors
Presented by,
Swetaleena Mishra
Roll no.200660707
Branch MBA

[1]
 Objectives of study
National Institute of Science & Technology

 To analyse the Superiority of mutual fund in compare

to other investment objectives.
 The awareness of mutual funds.
 Its scope for potential investors
 To find the facts which discourage an individual to
invest in mutual funds.
 Why or why not mutual funds are preferred to other
investment schemes?
 Investment pattern of the people of Berhampur.

[2]
 Mutual fund
National Institute of Science & Technology

 Mutual funds are financial intermediaries which pool

the saving of numerous individuals and invest the
money thus raised in a diversified portfolio of
securities, including equity, bonds, debentures and
other instruments, thus spreading and reducing risk.

[3]
 Investment schemes of mutual
funds in India
National Institute of Science & Technology

 By structure
 Open-End schemes
 Closed-End schemes

 Interval Schemes

[4]
 Investment schemes of mutual
funds in India
National Institute of Science & Technology

 By Investment Objective
Growth Schemes
Income Schemes
Balanced Schemes
Money Market Schemes
Industry-specific schemes
Tax-saving schemes
Special purpose schemes

[5]
 Asset under management of mutual funds (Rs. in crores)
National Institute of Science & Technology

Year Public sector %in total Private sector % in total Total

As on

March 1999 61,325 90.00 6,727 10.00 68,193

March 2000 82,777 76.60 25,167 23.40 1,07,946

March 2001 64,857 71.60 25,730 28.40 90,587

March 2002 59,638 59.20 40,956 40.80 1,00,594

March 2003 52,718 48.20 56,580 51.80 1,09,299

March 2004 40,491 29.10 99,125 70.90 1,39,616

March 2005 42,875 28.70 106,725 71.30 1,49,600

[6]
 Role of KARVY Stock broking Ltd.
National Institute of Science & Technology

in dealing with mutual funds

 KARVY Stock Broking Limited is a
Depository Participant.
Functions of KARVY
Stock Broking Services
Depository Participant Services
Financial Products Distribution Services
Advisory Services
Private Client Group Services
[7]
 Data and methodology
National Institute of Science & Technology

 The information used in this study have been taken

from primary source (face to face talk with some
individual mutual fund investors and non investors)
and
 Secondary source (financial web sites and books).
Limitations
 With the limited time, it is not possible to study all
the facts of mutual funds deeply. The figures obtained
from survey is not be applicable throughout India

[8]
 1.Are you aware of mutual funds?
National Institute of Science & Technology

2, 4%
5, 10%
1, 2% aware but not
investing
not aware

investing but do not

understand
had invested but
now not investing
42, 84%

This is, undoubtedly, an unhealthy sign of success of

a financial and economic status of Indian capital
market in general and of the national economy in
particular.
[9]
 2.Have you invested in mutual funds?
National Institute of Science & Technology

no of people investing in mutual funds

4, 44% not investing

5, 56% investing

Investors are still reluctant to get entered into the

investment in Mutual Funds with fear ness of risk
factors.
[10]
 3.In which mutual fund you are investing?
National Institute of Science & Technology

1, 25% 1, 25%

reliance mutual fund

UTI mutual funds
SBI mutual funds

2, 50%

Others mutual funds have failed to create awareness,

perhaps, in the minds of the investors in Berhampur
City.

[11]
 4.Why do you prefer mutual funds to other investment
schemes?
National Institute of Science & Technology

0, 0%
1, 25%

convenience
liquidity
profitable
tax benefits
3, 75%

The prime objective is laid down on the area of

tax benefit
[12]
 5. What are the other alternatives in which you are
investing? (More than one option can be selected).
National Institute of Science & Technology

bank deposites

5, 10%

bank deposites
others

45, 90%

[13]
National Institute of Science & Technology

postal schemes

13, 26%
postal
schemes
others

37, 74%

[14]
 National Institute of Science & Technology

47, 94%
3, 6%
gold

gold
others

[15]
National Institute of Science & Technology

stock and shares

2, 4%

stock and
shares
others

48, 96%

[16]
National Institute of Science & Technology

real estste

24, 48% real estate

26, 52% others

[17]
National Institute of Science & Technology

90% of the total sample have categorized bank deposit as

the safest way of investment for easy assured income.

It is really remarkable that a poor response has come in

favors of investment in stock and shares.

[18]
 6. Reasons for not investing in mutual funds?
National Institute of Science & Technology

1, 13%
2, 25% unfavourable market
conditions
not easily accessable

highly risky
1, 13%
do not have faith
4, 49%

[19]
 7.Will you invest in mutual funds in near future?
National Institute of Science & Technology

19, 38%
not interested
interested
31, 62%

This attitude of investors is certainly an alarm to the

policy makers for a deep study on the area of
awareness and attracting more people to get entered
into.
[20]
 Findings
National Institute of Science & Technology

 Mutual funds are not popular

 Many investors had invested, but not satisfied
 Most of the investors want least risk schemes
 Investments in real estate is found to be very
lucrative as it provides very high rate of return and
risk like unfavorable market condition, uncertainty ,
etc. are very low.
 Lastly, it is also observed that the perspective
investors have shown their timely interest and
enthusiasm towards participating in the emerging
investment avenues in the capital market.
[21]
 suggestions
National Institute of Science & Technology

 The investor must be very cautious while

taking decision to invest in mutual funds.
 Investors should checkout whether the
fund is giving market rate of returns.
 For starters, the promoters as well as the
fund manager’s track records need to be
checked out.

[22]
 Conclusion
National Institute of Science & Technology

 There has been huge potentiality of domestic

investment associated with 10% GDP growth in
addition to that FDI are waiting in large quantum via
“P” note issues by registered FIIs. So this flow of
fund will provide larger avenue for mutual fund
players. Hence future prospect of mutual fund seems
to be brighter.

[23]