Mutual Funds Data Analysis and Interpratation

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CHAPTER-1
INTRODUCTION

1.1 GLOBAL SCENARIO OF THE MUTUAL FUND INDUSTRY:

Structural changes in the global economic environment have, over the year; led to the emerged of
a strong market economy and facilitated the growth of the mutual fund industry, particularly
since the 1980s. A market economy depends more on growth led by the stock market than by
bank finance. Since the mutual fund industry is a strong pillar of the stock market system, it got a
boost with the emergence of a strong market economy. Mutual funds found increasing
acceptance also because they have the capacity to absorb the instability and uncertainties that
characterize the stock market system. The rise in inflation, reduction in real interest and growing
complexities in the market provide tremendous opportunities to mutual funds. For these reasons,
mutual fund industry began to thrive well particularly during the 1990s in not only the
developed countries, but the newly industrialized and developing countries as well. The
immediate boom to mutual fund, however, was provided by the prolonged economic boom in the
US, which fuelled dynamic growth in the stock market, and consequently in the mutual fund
industry. In India too, the growth of the stock market in the early 1990s, gave rise to
unprecedented growth in the mutual fund industry. Growth was unprecedented in the 1990s, with
the total increasing from US$4156451 million in 1993 to US$7651618 million in 1998. While
the assets of the U.S. and non-U.S. mutual funds were 49.8% and 51.2%, respectively, in 1993
they amounted to 63.9% and 36.1% respectively.
During the same period, the assets of open ended mutual funds worldwide grew by 17% p.a. The
growth of asset of non US mutualfunds, however was much lower. In terms of the open ended
mutual fund investment companies worldwide, with an unprecedented rise from 24474 in 1993
to 35424 in 1996. However the number decline marginally to 31570 in 1998.The rising trend
continued in the US though, with the number increasing from 4537 in 1993 to 6254 in 1996 and
to 7248 in 1998. Commensurately, the share of US increased from 18.5% to 77%. The top five
countries in terms of the open ended mutual funds in 1998 US, France, Japan, Spain, and UK.

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1.2 INDIAN SCENARIO OF THE MUTUAL FUND INDUSTRY:
The Indian Mutual fund industry has witnessed considerable growth since its inception in 1963.
The assets under management (AUM) have surged to Rs 4,173 bn in Mar-09 from just Rs 250
mn in Mar-65. In a span of 10 years (from 1999 to 2009), the industry has registered a CAGR of
22.3%, albeit encompassing some shortfalls in AUM due to business cycles. The impressive
growth in the Indian Mutual fund industry in recent years can largely be attributed to various
factors such as rising household savings, comprehensive regulatory framework, favorable tax
policies, and introduction of several new products, investor education campaign and role of
distributors.
In the last few years, households income levels have grown significantly, leading to
commensurate increase in households savings. Household financial savings (at current prices)
registered growth rate of around 17.4% on an average during the period FY04-FY08 as against
11.8% on an average during the period FY99-FY03. The considerable rise in households
financial savings, point towards the huge market potential of the Mutual fund industry in India.
Besides, SEBI has introduced various regulatory measures in order to protect the interest of
small investors that augurs well for the long term growth of the industry. The tax benefits
allowed on mutual fund schemes (for example investment made in Equity Linked Saving
Scheme (ELSS) is qualified for tax deductions under section 80C of the Income Tax Act) also
have helped mutual funds to evolve as the preferred form of investment among the salaried
income earners. Besides, the Indian Mutual fund industry that started with traditional products
like equity fund, debt fund and balanced fund has significantly expanded its product portfolio.
Today, the industry has introduced an array of products such as liquid/money market funds,
sector-specific funds, index funds, gilt funds, capital protection oriented schemes, special
category funds, insurance linked funds, exchange traded funds, etc. It also has introduced Gold
ETF fund in 2007 with an aim to allow mutual funds to invest in gold or gold related
instruments. Further, the industry has launched special schemes to invest in foreign securities.
The wide variety of schemes offered by the Indian Mutual fund industry provides multiple
options of investment to common man.
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PERFORMANCE OF MUTUAL FUND IN INDIA:-

Let us start the discussion of the performance of mutual funds in India from the day the concept
of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or
rather to those who believed in savings, to park their money in UTI Mutual Fund. For 30 years it
goaled without a single second player. Though the 1988 year saw some new mutual fund
companies, but UTI remained in a monopoly position. The performance of mutual funds in India
in the initial phase was not even closer to satisfactory level. People rarely understood, and of
course investing was out of question. But yes, some 24 million shareholders were accustomed
with guaranteed high returns by the beginning of liberalization of the industry in 1992. This good
record of UTI became marketing tool for new entrants. The expectations of investors touched the
sky in profitability factor. However, people were miles away from the preparedness of risks
factor after the liberalization. The Assets Under Management of UTI was Rs. 67bn. by the end of
1987. Let me concentrate about the performance of mutual funds in India through figures. From
Rs. 67bn. the Assets Under Management rose to Rs. 470 bn. In March 1993 and the figure had a
three times higher performance by April 2004. It rose as high as Rs. 1,540bn. The net asset value
(NAV) of mutual funds in India declined when stock prices started falling in the year 1992.
Those days, the market regulations did not allow portfolio shifts into alternative investments.
There was rather no choice apart from holding the cash or to further continue investing in shares.
One more thing to be noted, since only closed-end funds were floated in the market, the investors
disinvested by selling at a loss in the secondary market. The performance of mutual funds in
India suffered qualitatively. The 1992 stock market scandal, the losses by disinvestments and of
course the lack of transparent rules in the SEBI.

PHASES OF MUTUAL FUNDS:

FIRST PHASE 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was setup by
the Reserve Bank of India and functioned under the Regulatory and administrative control of
the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
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Development Bank of India (IDBI) took over the regulatory and administrative control in place
of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had
Rs.6,700crores of assets under management.

SECOND PHASE 1987-93(ENTRY OF PUBLIC SECTOR FUNDS)

1987 marked 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). SBI 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),
Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct
92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in
December 1990. At the end of 1993, the mutual fund industry had assets under management of
Rs.47,004crores.

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 the year
in which the first Mutual Fund Regulations came into being, under which all mutual funds,
except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged
with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The
1993 SEBI (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 mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs.
1,21,805crores. The Unit Trust of India with Rs.44,541crores of assets under management was
way ahead of other mutual funds.

FOURTH PHASE SINCE FEBRUARY 2003
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In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29,835crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified
Undertaking of Unit Trust of India, functioning under an administrator and under the rules
framed by Government of India and does not come under the purview of the Mutual Fund
Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.
It is registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000crores of
assets under management and with the setting up of a UTI Mutual Fund, conforming to the
SEBI Mutual Fund Regulations, 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 March 2009, there were 35 mutual funds, which managed assets of
Rs. 4, 17,300crores under 1,001 schemes. This fast growing industry is regulated by the
Securities and Exchange Board of India (SEBI).
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29,835crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified
Undertaking of Unit Trust of India, functioning under an administrator and under the rules
framed by Government of India and does not come under the purview of the Mutual Fund
Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.It is
registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation
of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of assets under
management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, 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 March 2009, there were 35 mutual funds, which managed assets of Rs. 4, 17,300crores
under 1,001 schemes.
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1.3 COMPANY PROFILE:
ABOUT PRUDENT

Incorporated in year 2000 with a clear vision of providing financial services to individuals and
corporates to help them achieve their financial goals. It has created a niche segment over a
period to time with an excellent quality client base. Over the past few years Prudent Corporate
Advisory Services has created in-house capabilities of analyzing funds on various parameters
before suggesting them to clients.
The team approach worked wonders and in the short-span of just one decade, the Prudent
Group has emerged as a well-diversified financial services firm offering a wide range of
financial products and services such as Mutual Funds, Equities, Commodity & Derivatives,
Fixed Income Products, Life/General Insurance and Real Estate through various companies
listed below.
PRUDENT CORPORATE ADVISORY SERVICES LTD :
As the flagship company, Prudent Corporate Advisory Services remains the primary arm of
the Prudent Group. It offers financial services to individuals and corporates to help them
achieve their financial goals through Mutual Funds, Debt and Third party products.
Besides having a large pool of their own clients, the company also manages its
geographically-spread business operations through a unique platform for Channel
Partners/Business Associates which helps them to grow and expand their services & support
through sales and marketing, technology, operations, back- office support, training &
consultation.
The journey of Prudent CAS started from Ahmedabad and in a span of 13 years we are
present in 37 cities in 10 states with 47 branches.
PRUDENT BROKING SERVICES PVT. LTD.
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Incorporated in 2004, Prudent Broking Services Pvt. Ltd is a Stock Broking and Depository
Participant service provider. Company is a member with Bombay Stock Exchange (BSE) &
National Stock exchange (NSE) & Central Depository Services (India) Limited (CDSL).
Company is in the process of creating its national presence by opening offices in various parts
of the country.
PRUDENT PROPERTIES
The Property sector is an important part of the asset class, but the effort and paperwork
involved in purchasing the same can be intimidating. Prudent Property provides real estate
solutions not only in creating an asset class but is also helping the customers in buying their
dream realty, whether it be homes or offices.
TEAM PRUDENT
Team Prudent is uniquely positioned to be a part of the client's inner trust-circle and consult
them to arrive at independent decisions related to their financial goals.
The team Prudent consists of certified professionals and Industry experts. This includes top
notch financial experts, research teams and client servicing teams. Our all branches are self-
sufficient and fully equipped to service their clients. Our professionals are trained rigorously
to our exacting standards, to understand an investors needs and accordingly make suggestions
to them.
OUR BACK BONE - IT, RESEARCH AND WEB
We have harnessed the potential of information technology for excellent research and
portfolio management through specialized software which works on real-time market
information and generates error-free reports.
For IT-savvy investors, we possess a secured user-friendly website that contains excellent
research and portfolio management tools to help client to access their portfolios round the
clock. The research team and the website are backed by a team of veteran IT professionals,
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developers, designers, programmers and high-end Servers. The entire focus is on security of
information, integrity of data, and accuracy of real-time reports.
RESEARCH TEAM
We constantly endeavor to achieve optimum client & partner satisfaction and confidence
building by providing various tailor-made reports according to client needs. We possess
dedicated qualified team that research and analyze the various financial products available in
the marketplace. Apart from our own reports, we make available reports of leading research
houses on various subjects. We also provide regular reports to our clients on stock analysis
and overall market analysis with recommendations and stocks to watch.

1.4 PRODUCT PROFILE :
Prudent Channel since its inception has a strong hold in the market through its Direct Force. It
also has strong hold on the corporate channel - it now wants to have a greater reach to its
clients which it has already developed through its 2000+ certified brokers just the beginning
of the force that will grow in leaps and bounds. Know more than how much money you need
to retire - or how much you should save for your future expenses. It is about determining
short-term and long-term objectives. Prudent CAS Ltd serves you with array of financial
products and services. If financial models were food, then we could cook up anything
nourishing on the menu, from soup to steak to nuts. If financial models were clothing, we
could help produce any outfit, from making original sketches to stitching together skirts to
inventorying racks of gowns. Of course, financial models are neither food, nor clothing. For
the more technical, in a typical assignment, the Group might do any or all of the following:
Mutual Funds
Investment Consultancy
Equity and Derivatives broking
RBI Relief funds and Infrastructure Bonds
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CHAPTER-2
OBJECTIVE OF STUDY:
2.1 NEED FOR STUDY:
To understand the perception of government employees about the mutual fund
Investment. To analyze the factors which are considered by government employees
before investing in Mutual Funds. To understand the Investment Avenues of
Government Employees. To know about their awareness level of Mutual fund
Investment.
2.2 OBJECTIVE OF STUDY:
To study the government employees behavior and attitude towards
Investing in mutual funds.
To know about their risk taking willingness and to know the limits of
Their risk taking.
To study the awareness among government employees with respect to
Investing in mutual funds.
To get a clear picture about the investing pattern that is seen among
The government employees.
To know about their preferences and their expectation that they take in
To consideration while investing.
2.3 SCOPE OF THE STUDY:-
The study covers various aspects of Mutual Fund like Types of Investment, preferable period
of Investment, preference of schemes, Awareness of Tax benefits, Demat Account, Risk
bearing capacity of government employees, Ranking method followed for Investment
decision, Profitable Investment etc. This survey will bring in more awareness of Mutual fund
among the government employees .New distribution and marketing strategies can be
evaluated based on the awareness of the government employees. Through this survey, the
mutual fund companies can identify the factors that restrict the government employees in
investing in mutual fund and it will give them wider source of information to attract more
potential government employees by meeting the expectations of the government employees.
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CHAPTER-3

3.1THEORETICAL CONCEPTS OF MUTUAL FUND :

Mutual fund is a trust that pools money from a group of investors (sharing common financial
goals) and invest the money thus collected into asset classes that match the stated
investment objectives of the scheme. Since the stated investment objectives of a mutual fund
scheme generally form the basis for an investor's decision to contribute money to the pool, a
mutual fund can not deviate from its stated objectivesatanypointoftime.

Every Mutual Fund is managed by a fund manager, who using his investment management
skills and necessary research works ensures much better return than what an investor can
manage on his own. The capital appreciation and other incomes earned from these
investments are passed on to the investors (also known as unit holders) in proportion of the
number of units they own.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the
assets of the fund in the same proportion as his contribution amount put up with the corpus
(the total amount of the fund). Mutual Fund investor is also known as a mutual fund
shareholder or a unit holder. Any change in the value of the investments made into capital
market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV)
of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of
its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets
by the total number of units issued to the investors.

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For example:

A. If the market value of the assets of a fund is Rs. 100,000
B. The total number of units issued to the investors is equal to 10,000.
C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00
D. Now if an investor 'X' owns 5 units of this scheme
E. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied by
the NAV of the scheme)

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ADVANTAGES OF MUTUAL FUND:

S.NO ADVANTAGE PARTICULARS
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Portfolio Diversification Mutual Funds invest in a well-
diversified portfolio of
securities which enables
investor to hold a diversified
investment portfolio (whether
the amount of investment is big
or small).
2
Professional Management Fund manager undergoes
through various research works
and has better investment
management skills which
ensure higher returns to the
investor than what he can
manage on his own.
3
Less Risk

Investors acquire a diversified
portfolio of securities even with
a small investment in a Mutual
Fund. The risk in a diversified
portfolio is lesser than investing
in merely 2 or 3 securities.
4
Low Transaction Costs Due to the economies of scale
(benefits of larger volumes),
mutual funds pay lesser
transaction costs. These
benefits are passed on to the
investors.
5
Liquidity An investor may not be able to
sell some of the shares held by
him very easily and quickly,
whereas units of a mutual fund
are far more liquid
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Choice of Schemes Mutual funds provide investors
with various schemes with
different investment objectives.
Investors have the option of
investing in a scheme having a
correlation between its
investment objectives and their
own financial goals. These
schemes further have different
plans/options
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Transparency Funds provide investors with
updated information pertaining
to the markets and the schemes.
All material facts are disclosed
to investors as required by the
regulator.
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Flexibility Investors also benefit from the
convenience and flexibility
offered by Mutual Funds.
Investors can switch their
holdings from a debt scheme to
an equity scheme and vice-
versa. Option of systematic (at
regular intervals) investment
and withdrawal is also offered
to the investors in most open-
end schemes.
Table 3.1 Advantages of Mutual Fund

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DISADVANTAGES OF MUTUAL FUND:

S.NO DISADVANTAGE PARTICULARS

1

Costs Control Not in the
Hands of an Investor
Investor has to pay investment
management fees and fund
distribution costs as a
percentage of the value of his
investments (as long as he
holds the units), irrespective
of the performance of the
fund.

2

No Customized Portfolios
The portfolio of securities in
which a fund invests is a
decision taken by the fund
manager. Investors have no
right to interfere in the
decision making process of a
fund manager, which some
investors find as a constraint
in achieving their financial
objectives.

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Difficulty in Selecting a
Suitable Fund Scheme
Many investors find it difficult
to select one option from the
plethora of
funds/schemes/plans available.
For this, they may have to take
advice from financial planners
in order to invest in the right
fund to achieve their
objectives.
Table 3.2 Disadvantages of Mutual Fund

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3.2TYPES OF MUTUAL FUND:

Mutual Fund schemes can be classified into different categories and subcategories based on their
investment objectives or their maturity periods.

CLASSIFICATION BASED ON MATURITY PERIOD:

Mutual Fund schemes can be classified into three categories based on their maturity periods.

OPEN-ENDED SCHEMES
These are mutual fund schemes which offer units for purchase and redemption subscription on a
continuous basis. In other words, the units of these schemes can be purchased or redeemed at any
point of time at Net Asset Value (NAV) based prices. Also, these schemes do not have a fixed
maturity period and an investor can redeem his units anytime.

CLOSE-ENDED SCHEMES

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These are mutual fund schemes which have a defined maturity period e.g. 1 year / 5 years etc.
The units of close ended scheme can be bought only during a specified period at the time of
initial launch. SEBI stipulates that all close-ended schemes should provide for a liquidity
window to its investors. These schemes are either required to be listed on a recognized stock
exchange or provide periodic repurchase facility to investors.
INTERVAL SCHEMES
These schemes are a cross between an open-ended and a close-ended structure. These schemes
are open for both purchase and redemption during pre-specified intervals (viz. monthly,
quarterly, annually etc.) at the prevailing NAV based prices. Interval funds are very similar to
close-ended funds, but differ on the following points.

They are not required to be listed on the stock exchanges, as they have an in-built
redemption window.
They can make fresh issue of units during the specified interval period, at the prevailing
NAV based prices.
Maturity period is not defined.
CLASSIFICATION BASED ON INVESTMENT OBJECTIVE
Apart from the above classification, mutual fund schemes can also be classified based on
their investment objectives:
EQUITY ORIENTED SCHEMES
Growth/ Equity oriented schemes are those schemes which predominantly invest in equity
and equity related instruments. The objective of such schemes is to provide capital
appreciation over the medium to long term. These types of schemes are generally meant for
investors with a long-term outlook and with a higher risk appetite.
DEBT ORIENTED SCHEMES
The main objective of debt-oriented funds is to provide regular and steady income to
investors. These schemes mainly invest in fixed income securities such as Bonds, Money
Market Instruments, Corporate Debentures, Government Securities (Gilts) etc. Debt-
oriented schemes are suitable for investors whose main objective is safety of capital along
with modest growth. These funds are not affected because of fluctuations in equity markets.
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However, the NAV of such funds is affected because of change in the interest rate in the
country.
BALANCED FUND
Balanced Funds provide the best of both worlds i.e. equity and debt. The aim of the
balanced funds is to provide both capital appreciation and stability of income in the long
run. The proportion of investment made into equities and fixed income securities is pre-
defined and mentioned in the offer document of the scheme. This type of scheme is a good
alternative for pure equity-oriented products and provides an effective asset allocation tool.
These schemes are suitable for investors looking for moderate growth. NAVs of such funds
are generally less volatile in nature compared to pure equity funds.
GILT FUNDS
These Funds invest exclusively in the dated securities issued by the government. These
funds carry a very minimal risk because they are free of any default or credit risk. However,
they do carry an interest rate risk as is the case with other debt products.
MONEY MARKET/ LIQUID FUNDS
These are predominantly debt-oriented schemes, whose main objective is preservation of
capital, easy liquidity and moderate income. To achieve this objective, liquid funds invest
predominantly in safer short-term instruments like Commercial Papers, Certificate of
Deposits, Treasury Bills, G-Secs etc..
These schemes are used mainly by institutions and individuals to park their surplus funds
for short periods of time. These funds are more or less insulated from changes in the interest
rate in the economy and capture the current yields prevailing in the market.
FUND OF FUNDS
Fund of Funds (FoF) as the name suggests are schemes which invest in other mutual fund
schemes. The concept is popular in markets where there are number of mutual fund
offerings and choosing a suitable scheme according to ones objective is tough. Just as a
mutual fund scheme invests in a portfolio of securities such as equity, debt etc, the
underlying investments for a FoF is the units of other mutual fund schemes, either from the
same fund family or from other fund houses
.
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NEW PRODUCT CATEGORIES
CAPITAL PROTECTION ORIENTED SCHEMES
The term capital protection oriented scheme means a mutual fund scheme which is
designated as such and which endeavours to protect the capital invested therein through
suitable orientation of its portfolio structure. The orientation towards protection of capital
originates from the portfolio structure of the scheme and not from any bank guarantee,
insurance cover etc. SEBI stipulations require these type of schemes to be close-ended in
nature, listed on the stock exchange and the intended portfolio structure would have to be
mandatory rated by a credit rating agency. A typical portfolio structure could be to set aside
major portion of the assets for capital safety and could be invested in highly rated debt
instruments. The remaining portion would be invested in equity or equity related
instruments to provide capital appreciation. Capital Protection Oriented schemes are a
recent entrant in the Indian capital markets and should not be confused with capital
guaranteed schemes.
GOLD FUNDS
The objective of these funds is to track the performance of Gold. The units represent the
value of gold or gold related instruments held in the scheme. Gold Funds which are
generally in the form of an Exchange Traded Fund (ETF) are listed on the stock exchange
and offers investors an opportunity to participate in the bullion market without having to
take physical delivery of gold.
QUANTITATIVE FUNDS
A quantitative fund is an investment fund that selects securities based on quantitative
analysis. The managers of such funds build computer based models to determine whether or
not an investment is attractive. In a pure "quant shop" the final decision to buy or sell is
made by the model. However, there is a middle ground where the fund manager will use
human judgment in addition to a quantitative model. The first Quant based Mutual Fund
Scheme in India, Lotus Agile Fund opened for subscription on October 25, 2007.

FUNDS INVESTING ABROAD
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With the opening up of the Indian economy, Mutual Funds have been permitted to invest in
foreign securities/ American Depository Receipts (ADRs) / Global Depository Receipts
(GDRs). Some of such schemes are dedicated funds for investment abroad while others
invest partly in foreign securities and partly in domestic securities. While most such
schemes invest in securities across the world there are also schemes which are country
specific in their investment approach.
REAL ESTATE MUTUAL FUNDS
Real Estate Mutual Funds or realty funds as they are popularly known are the latest addition
to the mutual fund offerings in India. SEBI recently paved way for the launch of such
products, by making amendments to its existing Regulations. However, real estate mutual
funds are yet to be introduced in India by any asset management company. These schemes
invest in real estate properties and earn income in the form of rentals, capital appreciation
from developed properties. Also some part of the fund corpus is invested in equity shares or
debentures of companies engaged in real estate assets or developing real estate development
projects. REMFs are required to be close-ended in nature and listed on a stock exchange.

INVESTMENT OPTIONS AVAILABLE TO INVESTORS
GROWTH OPTION
Under growth option, dividends are not paid out to the unit holders.Incomeattributable to
the Unit holders continues to remain invested in the Scheme and is reflected in the NAV of
units under this option. Investors can realize capital appreciation by way of an increase in
NAV of their units by redeeming them.
DIVIDEND PAYOUT OPTION
Dividends are paid out to the unit holders under this option. However, the NAV of the units
falls to the extent of the dividend paid out and applicable statutory levies.
DIVIDEND RE-INVESTMENT OPTION
The dividend that accrues on units under option is re-invested back into the scheme at ex-
dividend NAV. Hence investors receive additional units on their investments in lieu
dividends.

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CHAPTER-4
RESEARCH METHODOLOGY
Research is a systematic method of finding solutions to problems. It is essentially an
investigation, a recording and an analysis of evidence for the purpose of gaining knowledge.
According to Clifford woody, research comprises of defining and redefining problem,
formulating hypothesis or suggested solutions, collecting, organizing and evaluating data,
reaching conclusions, testing conclusions to determine whether they fit the formulated
hypothesis.
4.1 RESEARCH DESIGN:

A research design is not just a work plan. A work plan details what has to be done to complete
the project but the work plan will flow from the project's research design. The function of a
research design is to ensure that the evidence obtained enables us to answer the initial question as
unambiguously as possible. Obtaining relevant evidence entails specifying the type of evidence
needed to answer the research question, to test a theory, to evaluate a programme or to accurately
describe some phenomenon. In other words, when designing research we need to ask: given this
research question (or theory), what type of Evidence is needed to answer the question (or test the
theory) in a convincing way?
This project is a descriptive research as it explains about what is going on in the mutual fund
industry.

4.2 SAMPLING DESIGN:

Si n c e i t i s n o t p o s s i b l e t o s t u d y wh o l e p o p u l a t i o n , i t i s n e c e s s a r y t o
o b t a i n representative samples from the population to understand its characteristics.
Sampling Area: Chennai
Sampling Unit: Individual respondents for studying Awareness of Mutual Fund
among Government Employees are taken from different parts of Chennai.
Sampling technique Convenience sampling
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Research instrument: Structured Questionnaire
Contact method: Direct Interview

4.3 SAMPLE SIZE:
The sample size was 250 and the survey was taken through questionnaire from different parts of
Chennai district government offices.
4.4 SOURCES OF DATA:
The datas were collected through primary sources and secondary sources.
4.4.1 PRIMARY DATA:
Primary data are in the form of raw material to which statistical methods are applied
for the purpose of analysis and interpretations. The primary sources are collected through
questionnaire.
4.4.2 SECONDARY DATA:
Secondary datas are in the form of finished products as they have already been treated
statistically in some form or other. The secondary data mainly consists of data and
information collected from records, company websites and also discussion with the
management of the organization. Secondary data was also collected from journals,
magazines and books.

22

4.5 DATA INSTRUMENTS:
GENERAL INFORMATION:
1. Gender
a) Male b) Female
2. Age
a) Below 25 b) 25-35 c) 35-45 d) Above 45
3. Annual Income
a)Below 2 lakhs b)2 to 5 lakhs c)5 to 10 lakhs d)Above 10 lakhs
4. Educational qualification
a) Graduate b) post Graduate c) others

RESEARCH QUESTIONS:
5. Are you aware about Mutual Fund?
a) Yes b) No
6. From which source you come to know about Mutual Fund?
a)Advisors b)Friends/Relatives c)TV/Newspaper d)Others
7. Have you ever invested in mutual fund of any company?
a) Yes b) No
8. Do you have a Demat Account?
a) Yes b) No

23

9. Do you Operate Demat Account on your own or underany advice?
If it is so, underwhoseadvice? a) Advisors b) Friends c) Relatives
10. Are you aware about the different ways of investing into mutual fund?
a) Yes b) No
11. If yes, which way do you like the most?
a) Lumpsum b) Systematic Investment Plan
12. What kind of Mutual Fund Schemes Would you Prefer?
a)Open Ended Fundb)Close Ended Fund c)Both
13. What kind of Mutual Fund attracts you most?
Growth Fund
Debt Fund
Balanced Fund
Liquid Fund
Blue chip Fund
14. What would be your preferable period of investment?
a)Short term b)Medium term c)Long term
15. What is your Anticipating Risk bearing capacity?
a)High b)Medium c)Low
16. What are the factors you look into before making an investment plan?
a)Safety b)Growth c)Return d) Liquidity

24

17. Do you think mutual fund investment is a risky investment?
a) Yes b) No
18. Are you aware of the tax benefits of mutual funds?
a) Yes b) No
19. Given below are a few Asset Management Company. Rank the companies based on your
awareness.
ICICI Asset Management Company
Birla Sun Life Asset Management Company
HDFC Asset Management Company
Tata Asset Management Company
Reliance Capital Asset Management Company

20. Rank Top 5 Mutual Funds according to your choice
HDFC Top 200 Fund
Reliance Growth Fund
Tata Ethical Fund
SBI Pharma
ICICI PrudentialFocusedBlue chip Fund

25

21. Investing in Mutual Funds has given me
Extremely
Satisfied
Satisfied Neutral Dissatisfied Extremely
Dissatisfied
Steady
Income

Growth
Prospects

Professionally
managed

Quick
Returns

Easy Exit
Option

Less Risk
Convenience
Flexibility
Customer
Service

22. Which investment you feel profitable?
a) Bank/post office deposit b) Insurance c) Mutual fund d) Others
23. Do you follow the ranking available for Investment decision?
a) Yes b) No
24. Why do you think Mutual Funds are best all time?
a) High Returns b) High Growth Prospects c) Less Risk d) Transparency

26

25. What is the reason for not investing in Mutual fund?
a)No Guaranteed Returns
b)Risky Investment
c)No Investment Knowledge
d)Less liquidity

27

4.6 STATISTICAL TOOLS USED:
TOOL 1: CHI-SQUARE TEST
A fundamental problem is genetics is determining whether the experimentally determined
data fits the results expected from theory (i.e. Mendels laws as expressed in the Punnett
square).
Goodness of Fit:Mendel has no way of solving this problem. Shortly after the
rediscovery of his work in 1900, Karl Pearson and R.A. Fisher developed the chi-
square test for this purpose.
The chi-square test is a goodness of fit and Independence of Attribute test: it answers
the question of how well do experimental data fit expectations.

First determine the number of each phenotype that have been observed and how many
would be expected given basic genetic theory.
Then calculate the chi-square statistic using this formula.
The is the Greek letter chi; the is a sigma; it means to sum the following terms
for all phenotypes. obs is the number of individuals of the given phenotype observed;
exp is the number of that phenotype expected from the null hypothesis.
DEGREES OF FREEDOM:
A critical factor in using the chi-square test is the degrees of freedom, which is
essentially the number of independent random variables involved.
Degree of freedom is simply the number of classes of offspring minus 1.

exp
exp) (
2
2
obs
28

For our example, there are 2 classes of offspring: purple and white. Thus, degrees of
freedom (d.f.) = 2 -1 = 1.
CRITICAL CHI-SQUARE:
Critical values for chi-square are found on tables, sorted by degrees of freedom and
probability levels. Be sure to use p = 0.05.
If your calculated chi-square value is greater than the critical value from the table, you
reject the null hypothesis.
If your chi-square value is less than the critical value, you fail to reject the null
hypothesis (that is, you accept that your genetic theory about the expected ratio is
correct).

TOOL 2:SIMPLE CORRELATION

The term correlation refers to a measure of the strength of association between two
variables.
If the two variables increase or decrease together, they have a positive correlation.
If, increases in one variable are associated with decreases in the other, they have a
negative correlation.
Linear Correlation (r):
For two quantitative variables X and Y, for which n pairs of measurements (x
i
, y
i
) are
available, Pearsons correlation coefficient (r) gives a measure of the linear association
between X and The formula is given below for reference.

LINEAR CORRELATION (R):

29

If X and Y are perfectly positively correlated, r = 1.
If there is absolutely no association, r = 0.
If X and Y are perfectly positively correlated, r = -1
Thus -1 < r < +1
The closer r is to +1 or -1, the greater is the strength of the association.
Correlation Coefficient:
The population correlation coefficient (rho) measures the strength of the association
between the variables. The sample correlation coefficient r is an estimate of and is
used to measure the strength of the linear relationship in the sample observations
Range between -1 and 1.
The closer to -1, the stronger the negative linear relationship
The closer to 1, the stronger the positive linear relationship. The closer to 0, the weaker
the linear relationship.
SPEARMAN'S CORRELATION METHOD:
A nonparametric (distribution-free) rank statistic proposed by Spearman in 1904 as a
measure of the strength of the associations between two variables (Lehmann and
D'Abrera 1998). The Spearman rank correlation coefficient can be used to give an R-
estimate, and is a measure of monotone association that is used when the distribution of
the data make Pearson's correlation coefficient undesirable or misleading.
The Spearman rank correlation coefficient is defined by

(1)
whered is the difference in statistical rank of corresponding variables, and is an
approximation to the exact correlation coefficient .
TOOL 3: ANOVAS TEST (ONE-WAY ANOVA):

30

The one-way analysis of variance is used to test the claim that three or more
population means are equal
This is an extension of the two independent samples t-test
The response variable is the variable youre comparing
The factor variable is the categorical variable being used to define the groups
We will assume k samples (groups)
The one-way is because each value is classified in exactly one way
Examples include comparisons by gender, race, political party, color,etc.

CONDITIONS OR ASSUMPTIONS:

The data are randomly sampled
The variances of each sample are assumed equal
The residuals are normally distributed.
The null hypothesis is that the means are all equal
The alternative hypothesis is that at least one of the means is different
Think about the Sesame Street game where three of these things
are kind of the same, but one of these things is not like the other.
They dont all have to be different, just one of them.
The ANOVA doesnt test that one mean is less than another, only whether
theyre all equal or at least one is different.
H0 :1 = 2 = 3 = k
VARIATION:
Variation is the sum of the squares of the deviations between a value
and the mean of the value
Sum of Squares is abbreviated by SS and often followed by a variable
in parentheses such as SS(B) or SS(W) so we know which sum of
squares were talking about

There are two sources of variation:

31

The variation between the groups, SS(B), or the variation due to the
factor
The variation within the groups, SS(W), or the variation that cant be
explained by the factor so its called the error variation.

GRAND MEAN:

The grand mean is the average of all the values when the factor is ignored.
It is a weighted average of the individual sample means

DEGREES OF FREEDOM, DF :
A degree of freedom occurs for each value that can vary before the rest of the values are
predetermined.
VARIANCES:

The variances are also called the Mean of the Squares and abbreviated by MS, often with an
accompanying variable MS(B) or MS(W)
They are an average squared deviation from the mean and are found
by dividing the variation by the degrees of freedom
MS = SS / df
SPECIAL VARIANCES:

The MS (Within) is also known as the pooled estimate of the variance
Since it is a weighted average of the individual variances
sometimes abbreviated
The MS (Total) is the variance of the response variable.
F-TEST STATISTIC:
An F test statistic is the ratio of two sample variances
The MS(B) and MS(W) are two sample variances and thats what we
divide to find F.
F = MS(B) / MS(W)

32

CHAPTER-5
DATA ANALYSIS AND INTERPRETATION
5.1 DATA ANALYSIS:
Table 5.1: GENDER ANALYSIS

GENDER NO OF RESPONDENTS PERCENTAGE

MALE 155 62.0
FEMALE 95 38.0
TOTAL 250 100.0
Source: Computed for primary Data

Fig.5.1 Gender Analysis
INFERENCE:
This shows that Majority of the Respondents is Male (62%) and only 38% of the Respondents
are Female (38%).
MALE
62%
FEMALE
38%
GENDER ANALYSIS
33

Table5.2: AGE ANALYSIS:

AGE NO OF RESPONDENTS PERCENTAGE

BELOW 25 10 4.0
25-35 87 34.8
35-45 76 30.4
ABOVE 45 77 30.8
TOTAL 250 100.0
Source: Computed for Primary Data

Fig.5.2 Age Analysis
INFERENCE:
This shows that Majority of the Respondents (35%) are from the Age group of 25-35 years and
31%,30% and 4% of the Respondents are from the Age group of Above 45,35-45 and Below 25
years.

BELOW 25
4%
25-35
35%
35-45
30%
ABOVE 45
31%
AGE ANALYSIS
34

Table 5.3: ANNUAL INCOME

ANNUAL INCOME NO OF
RESPONDENTS
PERCENTAGE

BELOW 2 LAKHS 62 24.8
2 TO 5LAKHS 149 59.6
5 TO 10 LAKHS 37 14.8
ABOVE 10 LAKHS 2 .8
TOTAL 250 100.0

Fig.5.3 Annual Income Analysis
INFERENCE:
This shows that Majority of the Respondents (59%) are in the Income group of 2 to 5 Lakhs and
25%, 15% and 1% of the Respondents are in the Income group of Below 2 lakhs, 5 to 10 lakhs
and Above 10 lakhs respectively.

BELOW
2LAKHS
25%
2 TO 5LAKHS
59%
5 TO 10
LAKHS
15%
ABOVE 10
LAKHS
1%
ANNUAL INCOME ANALYSIS
35

Table5.4: EDUCATIONAL QUALIFICATION

EDUCATIONAL QUALIFICATION NO OF
RESPONDENTS
PERCENTAGE

GRADUATE 129 51.6
POST GRADUATE 90 36.0
OTHERS 31 12.4
TOTAL 250 100.0

Fig.5.4 Educational Qualification
INFERENCE:
This shows that Majority of the Respondents (52%) are Graduates, 36% and 12% of the
Respondents are Post Graduate and Others respectively.

GRADUATE
52%
POST
GRADUATE
36%
OTHERS
12%
EDUCATIONAL QUALIFICATION
36

Table5.5: AWARENESS OF MUTUAL FUND

AWARENESS OF MUTUAL
FUND
NO OF RESPONDENTS PERCENTAGE

YES 180 72.0
NO 70 28.0
TOTAL 250 100.0

Fig.5.5 Awareness of Mutual Fund

INFERENCE:
This shows that Majority of the Respondents (72%) are Aware about the Mutual Fund and only
28% of the respondents are not aware about the Mutual Fund.

YES
72%
NO
28%
AWARENESS OF MUTUAL FUND
37

Table 5.6: SOURCE OF AWARENESS OF MUTUAL FUND

SOURCE OF AWARENESS OF
MUTUAL FUND
NO OF
RESPONDENTS
PERCENTAGE

ADVISORS 4 2.4
FRIENDS/RELATIVES 12 6.6
TV/NEWSPAPER 157 87.2
OTHERS 7 3.8
TOTAL 180 100.0

Fig.5.6 Source of Awareness of Mutual Fund
INFERENCE:
This shows that Majority of the Respondents (87%) are aware of Mutual Fund only through
TV/Newspaper and 7%,4% and 2% of the Respondents are aware through Friends/Relatives,
Others and Advisors respectively.

ADVISORS
2%
FRIENDS/RELAT
IVES
7%
TV/NEWSPAPER
87%
OTHERS
4%
38

Table 5.7: INVESTED IN MUTUAL FUND

INVESTED IN MUTUAL
FUND
NO OF
RESPONDENTS
PERCENTAGE

YES 22 8.8
NO 228 91.2
TOTAL 250 100.0

Fig.5.7 Invested in Mutual Fund
INFERENCE:
This shows that Majority of the Respondents (91%) are not invested in Mutual fund and only 9%
of the Respondents are invested in Mutual Fund.

YES
9%
NO
91%
INVESTED IN MUTUAL FUND
39

Table 5.8: DEMAT ACCOUNT

HOLDING DEMAT ACCOUNT NO OF RESPONDENTS PERCENTAGE

YES 5 2.0
NO 245 98.0
TOTAL 250 100.0

Fig.5.8 Demat Account
INFERENCE:
This shows that Majority of the Respondents (98%) are not having Demat Account and only 2%
of the Respondents are holding Demat Account.

YES
2%
NO
98%
HOLDING DEMAT ACCOUNT
40

Table 5.9: HOLDING DEMAT ACCOUNT UNDER ADVICE

HOLDING DEMAT ACCOUNT
UNDER ADVICE
NO OF
RESPONDENTS
PERCENTAGE

ADVISORS 2 40
FRIENDS 3 60
TOTAL 5 100.0

Fig.5.9 Holding Demat Account Under Advice
INFERENCE:
This shows that Majority of the Respondents (60%) are holding Demat Account under the
Advice of Friends and 40% of the Respondents are holding Demat under the Advice of Advisors.

ADVISORS
40%
FRIENDS
60%
HOLDING DEMAT UNDER ADVICE
41

Table 5.10: AWARENESS OF DIFFERENT WAYS OF INVESTING IN MUTUAL FUND

AWARENESS OF
DIFFERENT WAYS OF
INVESTING IN MUTUAL
FUND
NO OF
RESPONDENTS
PERCENTAGE

YES 65 26.0
NO 185 74.0
TOTAL 250 100.0

Fig.5.10 Awareness of different ways of investing in Mutual Fund
INFERENCE:
This shows that Majority of the Respondents(74%) are not aware about the different ways of
investing in Mutual Fund and only 26% of the Respondents are aware about the different ways of
investment in Mutual Fund such as Lump sum and Systematic Investment Plan.

YES
26%
NO
74%
AWARENESS OF DIFFERENT WAYS OF
INVESTING IN MUTUAL FUND
42

Table5. 11: PREFERENCE OF INVESTING IN MUTUAL FUND

PREFERENCE OF INVESTING IN MUTUAL
FUND
NO OF
RESPONDENTS
PERCENTAGE

LUMPSUM 43 66.2
SYSTEMATIC INVESTMENT PLAN 22 33.8
TOTAL 65 100.0

Fig.5.11 Preference of investing in Mutual Fund
INFERENCE:
This shows that Majority of the Respondents(66%) prefers Lump sum Investment and only 34%
of the Respondents prefers Systematic Investment Plan as they feel that the One-time Investment
is better than Systematic Investment Plan as they were not aware about the benefits of
systematic Investment Plan Investment.

LUMP SUM
66%
SYSTEMATIC
INVESTMENT
PLAN
34%
PREFERENCE TYPE OF INVESTMENT
43

Table 5.12: PREFERENCE OF MUTUAL FUND SCHEME

PREFERENCE OF MUTUAL FUND
SCHEME
NO OF
RESPONDENTS
PERCENTAGE

OPEN ENDED FUND 231 92.4
CLOSE ENDED FUND 14 5.6
BOTH 5 2.0
TOTAL 250 100.0

Fig.5.12 Preference of mutual fund scheme
INFERENCE:
This shows that Majority of the Respondents(92%) prefers Open ended fund the most as it
provides liquidity to the Investors and only 6% and 2% of the Respondents prefers close ended
fund and Both respectively.

OPEN ENDED
FUND
92%
CLOSE ENDED
FUND
6%
BOTH
2%
PREFERENCE OF SCHEME
44

Table5. 13: PREFERENCE OF FUND

PREFERENCE OF FUND NO OF
RESPONDENTS
PERCENTAGE

GROWTH FUND 30 12.0
DEBT FUND 176 70.4
BALANCED FUND 37 14.8
BLUE CHIP FUND 7 2.8
TOTAL 250 100.0

Fig.5.13 Preference of Fund
INFERENCE:
This shows that Majority of the Respondents (70%) prefers Debt fund the most as it involves less
risk compared to other funds and 15%, 12% and 3% of the Respondents prefers Balanced fund,
Growth fund and Blue chip fund respectively.

GROWTH FUND
12%
DEBT FUND
70%
BALANCED
FUND
15%
BLUECHIP
FUND
3%
PREFERENCE OF FUND
45

Table 5.14: PREFERABLE PERIOD OF INVESTMENT

PREFERABLE PERIOD OF
INVESTMENT
NO OF
RESPONDENTS
PERCENTAGE

SHORT TERM 135 54.0
MEDIUM TERM 25 10.0
LONG TERM 90 36.0
TOTAL 250 100.0

Fig.5.14 Preferable period of investment
INFERENCE:
This shows that Majority of the Respondents (54%) prefers Short term Investment the most as
most of them were not interested in long term savings due to their insufficient Income, 36% and
10% of the Respondents prefers Long term and Medium term Investment respectively.

SHORT TERM
54%
MEDIUM TERM
10%
LONG TERM
36%
PREFERABLE PERIOD OF INVESTMENT
46

Table5. 15: RISK BEARING CAPACITY

RISK BEARING CAPACITY NO OF
RESPONDENTS
PERCENTAGE

HIGH 10 4.0
MEDIUM 49 19.6
LOW 191 76.4
TOTAL 250 100.0

Fig.5.15 Risk bearing capacity
INFERENCE:
This shows that Majority of the Respondents (76%) have very low Risk Bearing Capacity as
most of them are not willing to take risk in Investments as they were not ready to face loss ,20%
and 4% of the Respondents have Medium and Low Risk Bearing Capacity respectively.

HIGH
4%
MEDIUM
20%
LOW
76%
RISK BEARING CAPACITY
47

Table5. 16: FACTORS CONSIDERED BEFORE INVESTMENT

FACTORS CONSIDERED
BEFORE INVESTMENT
NO OF
RESPONDENTS
PERCENTAGE

SAFETY 166 66.4
GROWTH 49 19.6
RETURN 30 12.0
LIQUIDITY 5 2.0
TOTAL 250 100.0

Fig.5.16 Factors considered before investment
INFERENCE:
This shows that Majority of the Respondents (66%) prefers safety of the capital the most when
they considered during Investment,20%,12% and 2% of the Respondents prefers Growth, Return
and Liquidity respectively.

SAFETY
66%
GROWTH
20%
RETURN
12%
LIQUIDITY
2%
FACTORS CONSIDERED DURING
INVESTMENT
48

Table 5.17: IS MUTUAL FUND IS A RISKY INVESTMENT

IS MUTUAL FUND IS A
RISKY INVESTMENT
NO OF
RESPONDENTS
PERCENTAGE

YES 201 80.4
NO 49 19.6
TOTAL 250 100.0

Fig.5.17 Is mutual fund is a risky investment
INFERENCE:
This shows that Majority of the Respondents (80%) considers Mutual Fund as the Risky
Investment because of the reason that it is mainly related to share market and Risk involved in it
and 20% of the Respondents dont consider Mutual Fund as the Risky Investment.

YES
80%
NO
20%
IS MUTUAL FUND IS A RISKY
INVESTMENT
49

Table 5.18: AWARENESS OF TAX BENEFITS

AWARENESS OF TAX
BENEFITS
NO OF
RESPONDENTS
PERCENTAGE

YES 27 10.8
NO 223 89.2
TOTAL 250 100.0

Fig.5.18 Awareness of Tax benefits
INFERENCE:
This shows that Majority of the Respondents (89%) was not aware of the Tax Benefits in Mutual
fund and only 11% of the Respondents were aware about the Tax Benefits.

YES
11%
NO
89%
AWARENESS OF TAX BENEFITS
50

Table5. 19: RANKING OF ICICI ASSET MANAGEMENT COMPANY BASED ON THE
AWARENESS OF RESPONDENTS
RANKING OF ICICI ASSET
MANAGEMENT COMPANY
BY RESPONDENTS

NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 136 54.4
2ND RANK 81 32.4
3RD RANK 21 8.4
4TH RANK 5 2.0
5TH RANK 7 2.8
TOTAL 250 100.0

Fig.5.19 Ranking of ICICI Asset Management Company based on the awareness of respondents
INFERENCE:
This shows that Majority of the Respondents(55%) gives 1
st
rank to the ICICI Asset
Management company based on their awareness and it is because of the advertisement in the
media it reached well in the minds of people,32%,8%,3% and 2% of the respondents gives 2
nd

rank,3
rd
rank,5
th
rank and 4
th
rank respectively.
1ST RANK
54%
2ND RANK
33%
3RD RANK
8%
4TH
RANK
2%
5TH RANK
3%
RANKING OF ICICI ASSET
MANAGEMENT COMPANY BY
RESPONDENTS
51

Table5. 20: RANKING OF BIRLA SUNLIFE ASSET MANAGEMENT COMPANY BASED
ON THE AWARENESS OF RESPONDENTS
RANKING OF BIRLA
SUNLIFE ASSET
MANAGEMENT COMPANY
BY RESPONDENTS

NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 10 4.0
2ND RANK 19 7.6
3RD RANK 101 40.4
4TH RANK 36 14.4
5TH RANK 84 33.6
TOTAL 250 100.0

Fig.5.20 Ranking of Birla sun life Asset Management Company based on the awareness of
respondents
INFERENCE: This shows that Majority of the Respondents (40%) gives Birla Sun life asset
Management Company the third rank,34%,14%,8% and 4% of the Respondents gives 5
th

rank,4
th
rank,2
nd
rank and 1
st
rank respectively.
1ST RANK
4%
2ND RANK
8%
3RD RANK
40%
4TH RANK
14%
5TH RANK
34%
RANKING OF BIRLA SUNLIFE ASSET
RESPONDENTS
52

Table5. 21: RANKING OF HDFC ASSET MANAGEMENT COMPANY BASED ON THE
RANKING OF HDFC ASSET
MANAGEMENT COMPANY
BY RESPONDENTS
NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 84 33.6
2ND RANK 130 52.0
3RD RANK 26 10.4
4TH RANK 7 2.8
5TH RANK 3 1.2
TOTAL 250 100.0

Fig.5.21 Ranking of HDFC Asset Management Company based on the awareness of respondents
INFERENCE:
This shows that Majority of the Respondents (52%) gives HDFC Asset Management company
the 2
nd
rank because of its most trusted brand,34%,10%,3% and 1% gives 1
st
rank,3
rd
rank,4
th

rank and 5
th
rank respectively.

1ST RANK
34%
2ND RANK
52%
3RD RANK
10%
4TH
RANK
3%
5TH RANK
1%
RANKING OF HDFC ASSET
RESPONDENTS
53

Table 5.22: RANKING OF TATA ASSET MANAGEMENT COMPANY BASED ON THE
RANKING OF TATA ASSET
MANAGEMENT COMPANY
BY RESPONDENTS
NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 7 2.8
2ND RANK 10 4.0
3RD RANK 59 23.6
4TH RANK 154 61.6
5TH RANK 20 8.0
TOTAL 250 100.0

Fig.5.22 Ranking of Tata Asset Management Company based on the awareness of respondents
INFERENCE:
This shows that Majority of the Respondents(62%) gives 4
th
rank for the Tata Asset Management
company ,23%,8%,4% and 3% of the Respondents gives 3
rd
rank,5
th
rank,2
nd
rank and 1
st
rank
respectively for Tata Asset Management Company.

1ST RANK
3%
2ND RANK
4%
3RD
RANK
23%
4TH RANK
62%
5TH
RANK
8%
RANKING OF TATA ASSET
RESPONDENTS
54

Table5. 23: RANKING OF RELIANCE CAPITAL ASSET MANAGEMENT COMPANY
BASED ON THE AWARENESS OF RESPONDENTS
RANKING OF RELIANCE
CAPITAL ASSET
MANAGEMENT
COMPANY BY
RESPONDENTS
NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 13 5.2
2ND RANK 10 4.0
3RD RANK 44 17.6
4TH RANK 48 19.2
5TH RANK 135 54.0
TOTAL 250 100.0

Fig.5.23 Ranking of Reliance capital Asset Management Company based on the awareness of
respondents
INFERENCE: This shows that Majority of the Respondents (54%) gives the last rank to the
Reliance Capital Asset Management Company as they were not satisfied with the profit and
service of that company,19%,18%,5% and 4% of the Respondents gives 4
th
rank,3
rd
rank,1
st
rank
and 2
nd
rank respectively.
1ST RANK
5%
2ND RANK
4%
3RD RANK
18%
4TH RANK
19%
5TH RANK
54%
RANKING OF RELIANCE ASSET
RESPONDENTS
55

Table5. 24: RANKING OF HDFC TOP 200 FUND ACCORDING TO THE RESPONDENTS
RANKING OF TOP 200
FUND BY
RESPONDENTS
NO OF
RESPONDENTS

PERCENTAGE

1ST RANK 31 12.4
2ND RANK 65 26.0
3RD RANK 95 38.0
4TH RANK 46 18.4
5TH RANK 13 5.2
TOTAL 250 100.0

Fig.5.24 Ranking of HDFC top 200 fund according to the respondents
INFERENCE:
This shows that Majority of the Respondents (38%) gives HDFC Top 200 fund the 3
rd
rank
because of its future growth prospects, 26%, 18%, 13% and 5% of the Respondents gives 2
nd

rank, 4th rank, 1st rank and 5
th
rank respectively.

1ST RANK
12%
2ND RANK
26%
3RD RANK
38%
4TH
RANK
19%
5TH RANK
5%
RANKING OF HDFC TOP 200 FUND BY
RESPONDENTS
56

Table5. 25: RANKING OF RELIANCE GROWTH FUND ACCORDING TO THE
RESPONDENTS
RANKING OF RELIANCE
GROWTH FUND BY
RESPONDENTS
NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 11 4.4
2ND RANK 24 9.6
3RD RANK 55 22.0
4TH RANK 88 35.2
5TH RANK 72 28.8
TOTAL 250 100.0

Fig.5.25 Ranking of Reliance growth fund according to the respondents
INFERENCE:
This shows that Majority of the Respondents (35%) gives Reliance Growth Fund the 4
th
rank,
29%, 22%, 10% and 4% of the Respondents gives 5
th
rank, 3rd rank, 2nd rank and 1
st
rank
respectively.

1ST RANK
4%
2ND RANK
10%
3RD RANK
22%
4TH RANK
35%
5TH RANK
29%
RANKING OF RELIANCE GROWTH
FUND BY RESPONDENTS
57

Table5. 26: RANKING OF TATA ETHICAL FUND ACCORDING TO THE RESPONDENTS
RANKING OF TATA
ETHICAL FUND BY
RESPONDENTS
NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 13 5.2
2ND RANK 103 41.2
3RD RANK 39 15.6
4TH RANK 65 26.0
5TH RANK 30 12.0
TOTAL 250 100.0

Fig.5.26: Ranking of Tata ethical fund according to the respondents
INFERENCE:
This shows that Majority of the Respondents (41%) gives 2nd rank for the Tata Ethical Fund due
to its good return and growth prospects in the Multicap sector,26%,16%,12% and 5% of the
respondents gives 4
th
rank,3
rd
rank,5
th
rank and 1
st
rank respectively.

1ST RANK
5%
2ND RANK
41%
3RD
RANK
16%
4TH RANK
26%
5TH RANK
12%
RANKING OF TATA ETHICAL FUND BY
RESPONDENTS
58

Table5. 27: RANKING OF SBI PHARMA ACCORDING TO THE RESPONDENTS
RANKING OF SBI
PHARMA BY
RESPONDENTS
NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 190 76.0
2ND RANK 32 12.8
3RD RANK 12 4.8
4TH RANK 16 6.4
TOTAL 250 100.0

Fig.5.27 Ranking of sbi pharma according to the respondents
INFERENCE:
This shows that Majority of the Respondents (76%) gives 1
st
rank to the SBI Pharma fund due to
its most trusted brand, good return and good growth prospects, 13%, 6% and 5% gives 2
nd
rank,
4th rank and 3
rd
rank respectively.

1ST RANK
76%
2ND RANK
13%
3RD RANK
5%
4TH RANK
6%
RANKING OF SBI PHARMA FUND BY
RESPONDENTS
59

Table5. 28: RANKING OF ICICI PRUDENTIAL FOCUSED BLUECHIP FUND
ACCORDING TO THE RESPONDENTS
RANKING OF ICICI
PRUDENTIAL FOCUSED
BLUECHIP FUND BY
RESPONDENTS
NO OF
RESPONDENTS
PERCENTAGE

1ST RANK 5 2.0
2ND RANK 26 10.4
3RD RANK 49 19.6
4TH RANK 36 14.4
5TH RANK 134 53.6
TOTAL 250 100.0

Fig.5.28 Ranking of ICICI prudential focused blue chip fund according to the respondents
INFERENCE:
This shows that Majority of the Respondents(54%) gives last rank to the ICICI prudential
focused blue chip fund when compared to the other top performing funds,20%,14%,10% and 2%
of the Respondents gives 3
rd
rank,4
th
rank,2
nd
rank and 1
st
rank respectively.

1ST RANK
2%
2ND RANK
10%
3RD RANK
20%
4TH RANK
14%
5TH RANK
54%
RANKING OF ICICI PRUDENTIAL
FOCUSED BLUECHIP FUND BY
RESPONDENTS
60

Table5. 29: STEADY INCOME

STEADY INCOME NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 6 27
NEUTRAL 12 55
DISSATISFIED 3 13.5
EXTREMELY DISSATISFIED 1 4.5
TOTAL 22 100.0

Fig.5.29 Steady income
INFERENCE:
This shows that Majority of the Respondents (55%) are Neutral with the steady Income they earn
when invested in Mutual fund, 27%, 13.5% and 4.5% of the Respondents are satisfied,
Dissatisfied and Extremely Dissatisfied with the steady Income they got when invested in
Mutual Fund.

SATISFIED
27%
NEUTRAL
55%
DISSATISFIED
13%
EXTREMELY
DISSATISFIED
5%
STEADY INCOME
61

Table 5.30: GROWTH PROSPECTS

GROWTH PROSPECTS NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 5 23
NEUTRAL 12 54.5
DISSATISFIED 4 18
TOTAL 22 100.0

Fig.5.30 Growth prospects
INFERENCE:
This shows that Majority of the Respondents (55%) are Neutral with the Growth
prospects,23%,18% and 4% of the Respondents are Satisfied, Dissatisfied and Extremely
Dissatisfied with the Growth Prospects of Mutual Fund.

SATISFIED
23%
NEUTRAL
55%
DISSATISFIED
18%
EXTREMELY
DISSATISFIED
5%
GROWTH PROSPECTS
62

Table5. 31: PROFESSIONALLY MANAGED

PROFESSIONALLY MANAGED NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 8 36.5
NEUTRAL 11 50
DISSATISFIED 2 9
TOTAL 250 100.0

Fig.5.31 Professionally managed
INFERENCE:
This shows that Majority of the Respondents (50%) are Neutral with the fund professionally
managed by a fund manager,36%,9% and 5% of the Respondents are Satisfied, Dissatisfied and
Extremely Dissatisfied with the professional managed of the Mutual Fund.

SATISFIED
37%
NEUTRAL
50%
DISSATISFIED
9%
EXTREMELY
DISSATISFIED
4%
PROFESSIONALLY MANAGED
63

Table5. 32: QUICK RETURNS

QUICK RETURNS NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 8 36.5
NEUTRAL 7 32
DISSATISFIED 6 27
TOTAL 22 100.0

Fig.5.32 Quick Returns
INFERENCE:
This shows that Majority of the Respondents (36%) are satisfied with the quick returns provided
by the Mutual Funds,32%,27% and 5% of the respondents are Neutral, Dissatisfied and
Extremely Dissatisfied with the quick returns earned when invested in Mutual Fund .

SATISFIED
37%
NEUTRAL
32%
DISSATISFIED
27%
EXTREMELY
DISSATISFIED
6%
QUICK RETURNS
64

Table 5.33: EASY EXIT OPTION

EASY EXIT OPTION NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 16 73
NEUTRAL 3 13.5
DISSATISFIED 2 9
TOTAL 22 100.0

Fig.5.33 Easy exit option
INFERENCE:
This shows that Majority of the Respondents(73%) are Satisfied with the Easy exit option
provided by the Mutual fund companies as they feel it is comfortable to quit from
investments,13%,9% and 5% of the Respondents are Neutral, Dissatisfied and Extremely
Dissatisfied with the Easy Exit Option provided by Mutual fund companies.

SATISFIED
73%
NEUTRAL
14%
DISSATISFIED
9%
EXTREMELY
DISSATISFIED
6%
EASY EXIT OPTION
65

Table5. 34: LESS RISK

LESS RISK NO OF
RESPONDENTS
PERCENTAGE

SATISFIED
6 27
NEUTRAL
4 18
DISSATISFIED
11 50
EXTREMELY DISSATISFIED
1 5
TOTAL
22 100.0

Fig.5.34 Less risk
INFERENCE:
This shows that Majority of the Respondents(50%) are Dissatisfied with the risk involved in
Mutual fund and they dont believe that Mutual Fund has very less risk involved in it,27%,18%
and 5% of the Respondents are Satisfied, Neutral and Extremely Dissatisfied with the risk
involved in Mutual Fund.

SATISFIED
27%
NEUTRAL
18%
DISSATISFIED
50%
EXTREMELY
DISSATISFIED
5%
LESS RISK
66

Table5. 35: CONVENIENCE

CONVENIENCE NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 12 54.5
NEUTRAL 7 32
DISSATISFIED 2 9
TOTAL 22 100.0

Fig.5.35 Convenience
INFERENCE:
This shows that Majority of the Respondents (55%) are Satisfied with the Convenience provided
by Mutual fund companies, 32% respondents are Neutral, 9% and 4% of the Respondents are
Dissatisfied and Extremely Dissatisfied with the convenience of Mutual Funds.

SATISFIED
55%
NEUTRAL
32%
DISSATISFIED
9%
EXTREMELY
DISSATISFIED
6%
CONVENIENCE
67

Table 5.36: FLEXIBILITY

FLEXIBILITY NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 15 68.5
NEUTRAL 4 18
DISSATISFIED 2 9
TOTAL 22 100.0

Fig.5.36 Flexibility
INFERENCE:
This shows that Majority of the Respondents (68%) are satisfied with the flexibility of Mutual
fund, 18%, 9% and 5% of the Respondents are Neutral, Dissatisfied and Extremely Dissatisfied
with the flexibility provided by the Mutual fund Company.

SATISFIED
69%
NEUTRAL
18%
DISSATISFIED
9%
EXTREMELY
DISSATISFIED
5%
FLEXIBILITY
68

Table 5.37: CUSTOMER SERVICE

CUSTOMER SERVICE NO OF
RESPONDENTS
PERCENTAGE

SATISFIED 18 82
NEUTRAL 3 13.5
TOTAL 22 100.0

Fig.5.37 Customer service
INFERENCE:
This shows that Majority of the Respondents (82%) are satisfied with the customer service of a
Mutual fund company, 13% and 5% of the Respondents are neutral and Extremely Dissatisfied
with the customer service of the Mutual Fund Company.

SATISFIED
82%
NEUTRAL
14%
EXTREMELY
DISSATISFIED
6%
CUSTOMER SERVICE
69

Table 5.38: PROFITABLE INVESTMENT

PROFITABLE INVESTMENT NO OF
RESPONDENTS
PERCENTAGE

BANK/POST OFFICE DEPOSIT 118 47.2
INSURANCE 34 13.6
MUTUAL FUND 10 4.0
OTHERS 88 35.2
TOTAL 250 100.0

Fig.5.38 Profitable investment
INFERENCE:
This shows that Majority of the Respondents(47%) prefers Bank/post office deposit as the
profitable investment as they feel that there is no risk involved in it with the guaranteed rate of
return,35% felt profitable investment as Gold, Share Market and Real Estate ,14% and 4%
prefers Insurance and Mutual Fund respectively.
BANK/POST
OFFICE
DEPOSIT
47%
INSURANCE
14%
MUTUAL FUND
4%
OTHERS
35%
PROFITABLE INVESTMENT
70

Table 5.39: DO YOU FOLLOW THE RANKING AVAILABLE FOR INVESTMENT
DECISION

FOLLOW THE RANKING
AVAILABLE FOR
INVESTMENT DECISION
NO OF
RESPONDENTS
PERCENTAGE

YES 29 11.6
NO 221 88.4
TOTAL 250 100.0

Fig.5.39 Do you follow the ranking available for investment decision
INFERENCE:
This shows that Majority of the Respondents (88%) were not aware of the ranking available for
investment decision of Investors and only 12% of the respondents follows the ranking available
for investment decision.

YES
12%
NO
88%
FOLLOW RANKING AVAILABLE FOR
INVESTMENT DECISION
71

Table 5.40: MUTUAL FUNDS ARE BEST ALLTIME

MUTUAL FUNDS ARE BEST ALLTIME NO OF
RESPONDENTS
PERCENTAGE

HIGH RETURNS 179 71.6
HIGH GROWTH PROSPECTS 56 22.4
LESS RISK 10 4.0
TRANSPARENCY 5 2.0
TOTAL 250 100.0

Fig.5.40 Mutual Funds are best all time
INFERENCE:
This shows that Majority of the Respondents (72%) considers Mutual Fund as the best all time
due to its high returns over the long run, 22%, 4% and 2% of the Respondents considers mutual
fund as best all time due to its high growth prospects, less risk and Transparency respectively.

HIGH RETURNS
72%
HIGH
GROWTH
PROSPECTS
22%
LESS RISK
4%
TRANSPARENCY
2%
MUTUAL FUND BEST ALL TIME
72

Table 5.41: Reason for not investing in Mutual Fund
REASON FOR NOT
INVESTING IN MUTUAL
FUND
NO OF RESPONDENTS PERCENTAGE
NO GUARANTEED
RETURNS
RISKY INVESTMENT
NO INVESTMENT
KNOWLEDGE
LESS LIQUIDITY
22

148
50

8
10

65

22
3

Fig.5.41 Reason for not investing in mutual fund
INFERENCE:
This shows that Majority of the Respondents (65%) reason for not investing in Mutual fund is
they feel mutual fund as risky investment, 22%,10% and 3% of the respondents told the main
reason as No investment Knowledge, No Guaranteed Returns and Less liquidity respectively.

NO
GUARANTEED
RETURNS
10%
RISKY
INVESTMENT
65%
NO
INVESTMENT
KNOWLEDGE
22%
LESS
LIQUIDITY
3%
REASON FOR NOT INVESTING IN
MUTUAL FUND
73

5.2 STATISTICAL ANALYSIS:
CORRELATION TEST
Table 5.42 AGE VS RESPONDENTS AWARENESS OF MUTUAL FUND
RESPONDENTS AWARENESS OF MUTUAL FUND
AGE YES NO Total
BELOW 25
25-35
35-45
Above 45
Total
7
58
52
63
180
3
29
24
14
70
10
87
76
77
250

Fig.5.42 Age vs Respondents Awareness of Mutual Fund
0
10
20
30
40
50
60
70
BELOW 25 25-35 35-45 ABOVE45
AGE VS AWARENESS OF MUTUAL
FUND
YES NO
74

Spearman rank correlation coefficient is given by,

AGE VS AWARENESS OF MUTUAL FUND

Symmetric Measures
Value Asymp. Std.
Error
a

Approx.
T
b

Approx.
Sig.
Interval by
Interval
Pearson's R -.125 .060 -1.990 .048
c

Ordinal by
Ordinal
Spearman
Correlation
-.128 .060 -2.029 .043
c

N of Valid Cases 250

R = -.128

INFERENCE:

Since we get a negative correlation there is no direct influence on Age and Awareness of
Mutual Fund.

75

Table 5.43 ANNUAL INCOME VS AWARENESS OF TAX BENEFITS
RESPONDENTS AWARENESS OF TAX BENEFITS
ANNUAL INCOME YES NO TOTAL
BELOW 2LAKHS
2 TO 5LAKHS
5 TO 10LAKHS
ABOVE 10LAKHS
TOTAL
1
11
14
1
27
61
138
23
1
223
62
149
37
2
250

Fig.5.43 Annual income vs Awareness of tax benefits
Spearman rank correlation coefficient is given by

0
50
100
150
BELOW 2LAKHS 2 TO 5LAKHS 5 TO 10 LAKHS ABOVE 10 LAKHS
ANNUAL INCOME VS AWARENESS OF
TAXBENEFITS
YES NO
76

ANNUAL INCOME VS AWARENESS OF TAX BENEFITS

Symmetric Measures
Value Asymp. Std.
Error
a

Approx.
T
b

Approx.
Sig.
Interval by
Interval
Pearson's R -.343 .062 -5.750 .000
c

Ordinal by
Ordinal
Spearman
Correlation
-.330 .058 -5.498 .000
c


R = -.330

INFERENCE:
Since we get a negative correlation there is no direct influence on Annual Income and Awareness
of Tax benefits.

77

Table 5.44 AGE VS RESPONDENTS INVESTED
AGE YES NO TOTAL
BELOW 25
25-35
35-45
ABOVE 45
TOTAL
1
3
6
12
22
9
84
70
65
228
10
87
76
77
250

Fig.5.44AgevsRespondentsinvested


0
10
20
30
40
50
60
70
80
90
BELOW 25 25-35 35-45 ABOVE 45
INVESTED IN MUTUAL FUND NOT INVESTED IN MUTUAL FUND
78

AGE VS RESPONDENTS INVESTED

Symmetric Measures
Value Asymp. Std.
Error
a

Approx.
T
b

Approx.
Sig.
Interval by
Interval
Pearson's R -.152 .063 -2.422 .016
c

Ordinal by
Ordinal
Spearman
Correlation
-.157 .062 -2.510 .013
c


.
R = -.157

INFERENCE:
Since we get a negative correlation there is no direct influence on Age and Respondents
Invested.

79

Table 5.45: AGE VS TYPE OF MUTUAL FUND INVESTMENT
AGE LUMPSUM SYSTEMATIC
INVESTMENT
PLAN
TOTAL
BELOW 25
25-35
35-45
ABOVE 45
TOTAL
1
10
15
17
43
0
10
4
8
22
1
20
19
25
65

Fig.5.45 Age vs Type of mutual fund investment

0
5
10
15
20
BELOW 25 25-35 35-45 ABOVE 45
AGE VS TYPE OF MUTUAL FUND
INVESTMENT
LUMPSUM SYSTEMATIC INVESTMENT PLAN
80

AGE VS TYPE OF MUTUAL FUND INVESTMENT

Symmetric Measures
Value Asymp. Std.
Error
a

Approx.
T
b

Approx.
Sig.
Interval by
Interval
Pearson's R -.113 .127 -.903 .370
c

Ordinal by
Ordinal
Spearman
Correlation
-.116 .128 -.925 .358
c

N of Valid Cases 65

R = -.116
INFERENCE:
Since we get a negative correlation there is no direct influence on Age and Type of Mutual Fund
Investment.

81

CHI SQUARE TEST
Table 5.46 AGEVS MODE OF INVESTMENT
AGE BANK/POST
OFFICE
DEPOSIT
INSURANCE MUTUALFUND OTHERS TOTAL
BELOW 25
25-35
35-45
ABOVE 45
TOTAL
6
46
28
38
118
1
6
15
12
34
1
5
2
2
10
2
30
31
25
88
10
87
76
77
250

Fig.5.46 Age vs Mode of investment

Let h0 be the hypothesis that denotes Age and Mode of Investment are independent of each
other.
Let h1 be the hypothesis that denotes Age and Mode of Investment are dependent on each other.

0
10
20
30
40
50
BELOW 25 25-35 35-45 ABOVE 45
AGE VS MODE OF INVESTMENT
BANK/POST OFFICE INSURANCE MUTUAL FUND OTHERS
82

Oi Ei (Oi Ei)2 X 2
= (Oi Ei)2/Ei
6
1
1
2
46
6
5
30
28
15
2
31
38
12
2
25
4.72
1.36
0.4
3.52
41.064
11.382
3.48
30.624
35.872
10.336
3.04
26.752
36.344
10.472
3.08
27.104
3.24
0.1296
0.36
2.3104
24.364
34.012
2.310
0.389
61.968
21.752
1.082
18.046
2.742
2.334
1.166
4.426
0.686
0.095
0.975
0.656
0.593
2.874
0.663
0.012
1.727
2.104
0.356
0.674
0.075
0.222
0.378
0.163
AGE VS MODE OF INVESTMENT

Chi-Square Tests
Value df Asymp. Sig.
(2-sided)
Pearson Chi-
Square
11.846
a
9 .222
Likelihood Ratio 12.168 9 .204

LOS= 5%=0.05, df = (r-1)(c-1) = (3)(3) =9 ,Calculated value= 11.846 and Table value=16.919
INFERENCE: Since the calculated value (11.846) is less than the table value (16.919), accept
the null hypothesis. So, the variables Age and Mode of Investment are Independent of each
other.
83

Table 5.47 AGE VS RISK BEARING CAPACITY
AGE HIGH MEDIUM LOW TOTAL
BELOW 25
25-35
35-45
ABOVE 45
TOTAL
0
5
0
5
10
2
21
15
11
49
8
61
61
61
191
10
87
76
77
250

Fig.5.47 Age vs Risk bearing capacity

Let h0 be the hypothesis that denotes Age and Risk bearing capacity are independent of each
other.
Let h1 be the hypothesis that denotes Age and Risk bearing capacity are dependent on each
other.

0
10
20
30
40
50
60
70
BELOW 25 25-35 35-45 ABOVE 45
AGE VS RISK BEARING CAPACITY
HIGH MEDIUM LOW
84

WORKING:
Oi Ei (Oi Ei)2 X 2
= (Oi Ei)2/Ei
0
2
8
5
21
61
0
15
61
5
11
61
0.4
1.96
7.64
3.48
17.052
66.468
3.04
14.896
58.064
3.08
15.092
58.828
0.16
0.0016
0.1296
2.3104
15.5827
29.899
9.242
0.0108
8.6200
3.6864
16.744
4.717
0.4
0.0008
0.0169
0.663
0.9140
0.449
3.040
0.0001
0.1484
1.1968
1.1094
0.0801

AGE VS RISK BEARING CAPACITY

Chi-Square Tests
(2-sided)
Pearson Chi-
Square
8.021
a
6 .237

LOS =5%=0.05, df = (r-1)(c-1) =(3)(2)=6 ,Calculated value =8.021 and Table value =12.592
INFERENCE:
Since the Calculated value (8.021) is less than the table value (12.592), accept the null
hypothesis. So, the variables Age and Risk bearing Capacity are Independent of each other.
85

Table 5.48: ANNUAL INCOME VS RISK BEARING CAPACITY
AGE HIGH MEDIUM LOW TOTAL
BELOW 2 LAKHS
2 TO 5 LAKHS
5 TO 10 LAKHS
ABOVE 10 LAKHS
TOTAL
4
3
3
0
10
13
22
12
2
49
45
124
22
0
191
62
149
37
2
250

Fig.5.48 Annual income vs Risk bearing capacity
Let h0 be the hypothesis that denotes Annual Income and Risk bearing capacity are independent
of each other.
Let h1 be the hypothesis that denotes Annual Income and Risk bearing capacity are dependent on
each other.

0
20
40
60
80
100
120
140
BELOW 2 LAKHS 2 TO 5 LAKHS 5 TO 10 LAKHS ABOVE 10 LAKHS
ANNUAL INCOME VS RISK BEARING
CAPACITY
HIGH MEDIUM LOW
86

WORKING:
Oi Ei (Oi Ei)2 X 2
= (Oi Ei)2/Ei
4
13
45
3
22
124
3
12
22
0
2
0
2.48
12.152
47.368
5.96
29.204
113.836
1.48
7.252
28.268
0.08
0.392
1.528
2.3104
0.7191
5.6074
8.7616
51.897
103.306
2.3104
22.543
39.287
0.0064
2.5856
2.3347
0.932
0.059
0.118
1.470
1.777
0.907
1.561
3.108
1.389
0.08
6.595
1.527
ANNUAL INCOME VS RISK BEARING CAPACITY

Chi-Square Tests
(2-sided)
Pearson Chi-
Square
19.527
a
6 .003

LOS=5%=0.05, df =(r-1)(c-1) = (3)(2)=6 ,Calculated value =19.527 and Table value=12.592
INFERENCE:
Since the calculated value (19.527) is more than the Table value (12.592) reject the null
hypothesis. So, the variables Annual Income and Risk bearing capacity are dependent on each
other.
87

Table 5.49: GENDER VS PREFERABLE PERIOD OF INVESTMENT
GENDER SHORT TERM MEDIUM
TERM
LONG TERM TOTAL
MALE
FEMALE
TOTAL
72
63
135
22
3
25
61
29
90
155
95
250

Fig.5.49 Gender vs Preferable period of investment

Let h0 be the hypothesis that denotes Gender and Preferable period of Investment are
independent of each other.
Let h1 be the hypothesis that denotes Gender and Preferable period of Investment are dependent
on each other.

0
20
40
60
80
SHORT TERM MEDIUM TERM LONG TERM
GENDER VS PFEFERABLE PERIOD OF
INVESTMENT
MALE FEMALE
88

WORKING:
Oi Ei (Oi Ei)2 X 2
= (Oi Ei)2/Ei
72
22
61
63
3
29
83.7
15.5
55.8
51.3
9.5
34.2
136.89
42.25
27.04
136.89
42.25
27.04
1.6354
2.7258
0.4845
2.6684
4.4473
0.7906

GENDER VS PERIOD OF INVESTMENT

Chi-Square Tests
(2-sided)
Pearson Chi-
Square
12.752
a
2 .002

.

LOS=5%=0.05, df =2, Calculated value =12.752, Table value=5.991
INFERENCE:
Since the calculated value (12.752) is more than the Table value (5.991) reject the null
hypothesis. So, the variables Gender and Preferable period of Investment are dependent on each
other.

89

ONE WAY ANOVA
Table 5.50: Age vs Period of Investment
AGE SHORT TERM MEDIUM
TERM
LONG TERM TOTAL
BELOW 25
25-35
35-45
ABOVE 45
TOTAL
8
49
35
43
135
0
9
7
9
25
2
29
34
25
90
10
87
76
77
250

Fig.5.50 Age vs Period of investment
Let h0=There is no significant difference between Age and Period of Investment and
h1 = There is a significant difference between Age and Period of Investment

0
10
20
30
40
50
60
BELOW 25 25-35 35-45 ABOVE 45
AGE VS PERIOD OF INVESTMENT
SHORT TERM MEDIUM TERM LONG TERM
90

ANOVA
respondents period of investment
Sum of
Squares
df Mean
Square
F Sig.
Between
Groups
4.319 3 1.440 1.666 .175
Within Groups 212.581 246 .864

Total 216.900 249

At LOS 5% = 0.05
df(3,246)
Calculated value = 1.666 and
The table value is F 0.05(3,246) = 2.60

INFERENCE:
Since calculated value (1.666) is lesser than the table value (2.60), accept H0.so, there is no
significant difference between the Age and the period of investment.

91

CHAPTER-6 FINDINGS AND SUGGESTIONS:
FINDINGS:
Majority of the Respondents is Male (62%) and only 38% of the Respondents are Female
(38%).[Table 5.1]
Majority of the Respondents (35%) are from the Age group of 25-35 years and 31%,30% and
4% of the Respondents are from the Age group of Above 45,35-45 and Below 25 years.[Table
5.2]
Majority of the Respondents (59%) are in the Income group of 2 to 5 Lakhs and 25%, 15% and
1% of the Respondents are in the Income group of Below 2 lakhs, 5 to 10 lakhs and Above 10
lakhs respectively.[Table 5.3]
Majority of the Respondents (52%) are Graduates, 36% and 12% of the Respondents are Post
Graduate and Others respectively.[Table 5.4]
Majority of the Respondents (72%) are Aware about the Mutual Fund and only 28% of the
respondents are not aware about the Mutual Fund.[Table 5.5]
Majority of the Respondents (87%) are aware of Mutual Fund only through TV/Newspaper and
7%,4% and 2% of the Respondents are aware through Friends/Relatives, Others and Advisors
respectively.[Table 5.6]
Majority of the Respondents (91%) are not invested in Mutual fund and only 9% of the
Respondents are invested in Mutual Fund.[Table 5.7]
Majority of the Respondents (98%) are not having Demat Account and only 2% of the
Respondents are holding Demat Account.[Table 5.8]
Majority of the Respondents (60%) are holding Demat Account under the Advice of Friends and
40% of the Respondents are holding Demat under the Advice of Advisors.[Table 5.9]

92

Majority of the Respondents (74%) are not aware about the different ways of investing in Mutual
Fund and only 26% of the Respondents are aware about the different ways of investment in
Mutual Fund such as Lump sum and Systematic Investment Plan.[Table 5.10]
Majority of the Respondents (66%) prefers Lump sum Investment and only 34% of the
Respondents prefer Systematic Investment Plan as they feel that the One-time Investment is
better than Systematic Investment Plan as they were not aware about the benefits of systematic
Investment Plan Investment.[Table 5.11]
Majority of the Respondents (92%) prefers Open ended fund the most as it provides liquidity to
the Investors and only 6% and 2% of the Respondents prefers close ended fund and both
Majority of the Respondents (70%) prefers Debt fund the most as it involves less risk compared
to other funds and 15%, 12% and 3% of the Respondents prefers balanced fund, Growth fund
and Blue chip fund respectively.[Table 5.13]
Majority of the Respondents (54%) prefers Short term Investment the most as most of them were
not interested in long term savings due to their insufficient Income, 36% and 10% of the
Respondents prefers Long term and Medium term Investment respectively.[Table 5.14]
Majority of the Respondents (76%) have very low Risk Bearing Capacity as most of them are
not willing to take risk in Investments as they were not ready to face loss ,20% and 4% of the
Respondents have Medium and Low Risk Bearing Capacity respectively.[Table 5.15]
Majority of the Respondents (66%) prefers safety of the capital the most when they considered
during Investment,20%,12% and 2% of the Respondents prefers Growth, Return and Liquidity
Majority of the Respondents (80%) considers Mutual Fund as the Risky Investment because of
the reason that it is mainly related to share market and Risk involved in it and 20% of the
Respondents dont consider Mutual Fund as the Risky Investment.[Table 5.17]
Majority of the Respondents (89%) was not aware of the Tax Benefits in Mutual fund and only
11% of the Respondents were aware about the Tax Benefits.[Table 5.18]
93

Majority of the Respondents(55%) gives 1
st
rank to the ICICI Asset Management company based
on their awareness and it is because of the advertisement in the media it reached well in the
minds of people,32%,8%,3% and 2% of the respondents gives 2
nd
rank,3
rd
rank,5
th
rank and 4
th

rank respectively.[Table 5.19]
Majority of the Respondents (40%) gives Birla Sun life asset Management Company the third
rank,34%,14%,8% and 4% of the Respondents gives 5
th
rank,4
th
rank,2
nd
rank and 1
st
rank
Majority of the Respondents (52%) gives HDFC Asset Management company the 2
nd
rank
because of its most trusted brand,34%,10%,3% and 1% gives 1
st
rank,3
rd
rank,4
th
rank and 5
th

Majority of the Respondents(62%) gives 4
th
rank for the Tata Asset Management company
,23%,8%,4% and 3% of the Respondents gives 3
rd
rank,5
th
rank,2
nd
rank and 1
st
rank
respectively for Tata Asset Management Company.[Table 5.22]
Majority of the Respondents (54%) gives the last rank to the Reliance Capital Asset Management
Company as they were not satisfied with the profit and service of that company,19%,18%,5%
and 4% of the Respondents gives 4
th
rank,3
rd
rank,1
st
rank and 2
nd
Majority of the Respondents (38%) gives HDFC Top 200 fund the 3
rd
rank because of its future
growth prospects, 26%, 18%, 13% and 5% of the Respondents gives 2
nd
rank, 4th rank, 1st rank
and 5
th
Majority of the Respondents (35%) gives Reliance Growth Fund the 4
th
rank, 29%, 22%, 10%
and 4% of the Respondents gives 5
th
rank, 3rd rank, 2nd rank and 1
st
rank respectively. .[Table
5.25]
Majority of the Respondents (41%) gives 2nd rank for the Tata Ethical Fund due to its good
return and growth prospects in the Multicap sector,26%,16%,12% and 5% of the respondents
gives 4
th
rank,3
rd
rank,5
th
rank and 1
st

94

Majority of the Respondents (76%) gives 1
st
rank to the SBI Pharma fund due to its most trusted
brand, good return and good growth prospects, 13%, 6% and 5% gives 2
nd
rank, 4th rank and 3
rd

Majority of the Respondents(54%) gives last rank to the ICICI prudential focused blue chip fund
when compared to the other top performing funds,20%,14%,10% and 2% of the Respondents
gives 3
rd
rank,4
th
rank,2
nd
rank and 1
st
Majority of the Respondents (55%) are Neutral with the steady Income they earn when invested
in Mutual fund, 27%, 13.5% and 4.5% of the Respondents are satisfied, Dissatisfied and
Extremely Dissatisfied with the steady Income they got when invested in Mutual Fund.[Table
5.29]
Majority of the Respondents (55%) are Neutral with the Growth prospects,23%,18% and 4% of
the Respondents are Satisfied, Dissatisfied and Extremely Dissatisfied with the Growth Prospects
of Mutual Fund.[Table 5.30]
Majority of the Respondents (50%) are Neutral with the fund professionally managed by a fund
manager, 36%, 9% and 5% of the Respondents are Satisfied, Dissatisfied and Extremely
Dissatisfied with the professional managed of the Mutual Fund.[Table 5.31]
Majority of the Respondents (36%) are satisfied with the quick returns provided by the Mutual
Funds, 32%, 27% and 5% of the respondents are Neutral, Dissatisfied and Extremely Dissatisfied
with the quick returns earned when invested in Mutual Fund.[Table 5.32]
Majority of the Respondents(73%) are Satisfied with the Easy exit option provided by the
Mutual fund companies as they feel it is comfortable to quit from investments,13%,9% and 5%
of the Respondents are Neutral, Dissatisfied and Extremely Dissatisfied with the Easy Exit
Option provided by Mutual fund companies.[Table 5.33]
Majority of the Respondents (50%) are Dissatisfied with the risk involved in Mutual fund and
they dont believe that Mutual Fund has very less risk involved in it, 27%, 18% and 5% of the
Respondents are Satisfied, Neutral and Extremely Dissatisfied with the risk involved in Mutual
Fund.[Table 5.34]
95

Majority of the Respondents (55%) are Satisfied with the Convenience provided by Mutual fund
companies, 32% respondents are Neutral, 9% and 4% of the Respondents are Dissatisfied and
Extremely Dissatisfied with the convenience of Mutual Funds.[Table 5.35]
Majority of the Respondents (68%) are satisfied with the flexibility of Mutual fund, 18%, 9%
and 5% of the Respondents are Neutral, Dissatisfied and Extremely Dissatisfied with the
flexibility provided by the Mutual fund Company.[Table 5.36]
Majority of the Respondents (82%) are satisfied with the customer service of a Mutual fund
company, 13% and 5% of the Respondents are neutral and Extremely Dissatisfied with the
customer service of the Mutual Fund Company.[Table 5.37]
Majority of the Respondents(47%) prefers Bank/post office deposit as the profitable investment
as they feel that there is no risk involved in it with the guaranteed rate of return,35% felt
profitable investment as Gold, Share Market and Real Estate ,14% and 4% prefers Insurance and
Mutual Fund respectively.[Table 5.38]
Majority of the Respondents (88%) were not aware of the ranking available for investment
decision of Investors and only 12% of the respondents follows the ranking available for
investment decision.[Table 5.39]
Majority of the Respondents (72%) considers Mutual Fund as the best all time due to its high
returns over the long run, 22%, 4% and 2% of the Respondents considers mutual fund as best all
time due to its high growth prospects, less risk and Transparency respectively.[Table 5.40]
Majority of the Respondents (65%) reason for not investing in Mutual fund is they feel mutual
fund as risky investment, 22%,10% and 3% of the respondents told the main reason as No
investment Knowledge, No Guaranteed Returns and Less liquidity respectively.[Table 5.41]

96

SUGGESTIONS:
Mostly the investors are more interested in those schemes that can easily provide them
safety for capital invested. The suggestion makers have emphasized that the fund
managers should invest the investors money in secure income related Schemes so that
safety for capital invested must be ensured.
Generally the offer documents and reports of various mutual fund Companies are not free
from technicalities. So the investors opinioned that the Information contained in the offer
documents should be simple and free of Technicalities so that a lay investor can easily
understand them.
The periodical statements of mutual fund companies are considered as a very important
source of information to the investors. So it is very essential that these periodical
statements should contain all the relevant information in a compiled form and managers
must ensure that these statements should reach the investors in time.
Mostly a lay person doesnt have enough knowledge to invest in mutual funds. So they
depend on the fund managers who are experts in managing efficient portfolios. The fund
managers should be the person of integrity and financial experts. They should have clear
cut knowledge of when to invest and in which securities to invest .They should mobilize
the investors savings in such a way that they can get maximum benefits out of them.
Winning the investors confidence and protecting their rights is the common objective of
all the mutual fund companies. In this context the AMFI and SEBI should make strict
rules and regulations for safeguarding the interests of the common investors. If these
rules are not being followed properly, a provision of Punishment should be made who
violates the same.
Steps should be taken to boost the confidence and morale of the investors. This can be
done through appropriate communication and by educating investors to invest in mutual
funds. Timely and right information should be provided to them by different
communication modes so that they come to know about the latest trends in the market.

97

CONCLUSION:
Today a lot of investment opportunities are available to the investors in the Financial markets.
Investors can invest in corporate bonds, debentures, and bank Deposits, post office schemes etc.
Today many institutions are busy in providing Wealth management services to the investors. But
these services are very costly. Thus in order to help the investors mutual funds provide a
protective shed to the small and big investors, The present study analyses the mutual fund
investments in Relation to investors behavior. All this will lead to the overall growth and
Development of the mutual fund industry by better understanding of one of the most important
segment, the government employees .Most of the Government employees are would like to
invest in various Investments for the Tax benefits. Most of the government employees are not
aware of Tax Benefits in Mutual fund, so the Mutual fund companies should target the
government employees by making them aware of tax benefits and should provide them a good
customer service with descent rate of return.
This report will give Prudent Corporate Advisory Services Limited a better edge over other firm
in getting more government employees as their customers and to maintain a better client
organization relationship.

98

BIBLIOGRAPHY:
Darren George and Paul Mallery, 2011, Indian Edition Published by Dorling Kindersley
Publishing, Tenth Edition,SPSS for Windows Step by Step.
Deepak Chawla and Neena Sondhi, 2011, Vikas Publishing House Pvt Ltd, First Edition,
Research Methodology Concepts and Cases.
Mohanarao, 2013, Kanishka Publishers, Distributors, Second Edition, Working of Mutual Fund
Organizations in India.
Philip Kotler and Kevin Lane Keller, 2013, Indian Edition Published by Dorling Kindersley
India Pvt Ltd, Fourth Edition, A Framework for Marketing Management.
Prasanna Chandra, 2013, Published by McGraw Hill Education Private Limited, Fourth Edition,
Investment Analysis and Portfolio Management.
TN Srivastava and Shailaja Rego, 2012, Published by McGraw Hill Education Private Limited,
Second Edition, Statistics for Management.

REFERENCES:

www.prudentcorporate.com
www.slideshare.net
www.moneycontrol.com
www.sharemarket.in
www.amfiindia.com
www.manimoney.com

99

APPENDIX:
AWARENESS OF MUTUAL FUND AMONG GOVERNMENT EMPLOYEES
GENERAL INFORMATION:
1. Gender
a) Male b) Female
2. Age
a) Below 25 b) 25-35 c) 35-45 d) Above 45
3. Annual Income
a)Below 2 lakhs b)2 to 5 lakhs c)5 to 10 lakhs d)Above 10 lakhs
4. Educational qualification
a) Graduate b) post Graduate c) others

RESEARCH QUESTIONS:
5. Are you aware about Mutual Fund?
a) Yes b) No
6. From which source you come to know about Mutual Fund?
a)Advisors b)Friends/Relatives c)TV/Newspaper d)Others
7. Have you ever invested in mutual fund of any company?
a) Yes b) No
8. Do you have a Demat Account?
a) Yes b) No
100

9. Do you Operate Demat Account on your own or under any advice?
If it is so, under whose advice?a)Advisors b) Friends c)Relatives
10. Are you aware about the different ways of investing into mutual fund?
a) Yes b) No
11. If yes, which way do you like the most?
a) Lump sum b) Systematic Investment Plan
12. What kind of Mutual Fund Schemes Would you Prefer?
a)Open Ended Fund b)Close Ended Fund c)Both
13. What kind of Mutual Fund attracts you most?
Growth Fund
Debt Fund
Balanced Fund
Liquid Fund
Blue chip Fund
14. What would be your preferable period of investment?
a)Short term b)Medium term c)Long term
15. What is your Anticipating Risk bearing capacity?
a)High b)Medium c)Low
16. What are the factors you look into before making an investment plan?
a)Safety b)Growth c)Return d) Liquidity

101

17. Do you think mutual fund investment is a risky investment?
a) Yes b) No
18. Are you aware of the tax benefits of mutual funds?
a) Yes b) No
19. Given below are a few Asset Management Company. Rank the companies based on your
awareness.
ICICI Asset Management Company
Birla Sun Life Asset Management Company
HDFC Asset Management Company
Tata Asset Management Company
Reliance Capital Asset Management Company
20. Rank Top 5 Mutual Funds according to your choice
HDFC Top 200 Fund
Reliance Growth Fund
Tata Ethical Fund
SBI Pharma
ICICI Prudential Focused Blue chip Fund

102

21. Investing in Mutual Funds has given me
Extremely
Satisfied
Satisfied Neutral Dissatisfied Extremely
Dissatisfied
Steady
Income

Growth
Prospects

Professionally
managed

Quick
Returns

Easy Exit
Option

Less Risk
Convenience
Flexibility
Customer
Service

22. Which investment you feel profitable?
a) Bank/post office deposit b) Insurance c) Mutual fund d) Others
23. Do you follow the ranking available for Investment decision? a) Yes b) No
24. Why do you think Mutual Funds are best all time?
a) High Returns b) High Growth Prospects c) Less Risk d) Transparency

103

25. What is the reason for not investing in Mutual fund?
a)No Guaranteed Returns
b)Risky Investment
c)No Investment Knowledge
d)Less liquidity

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