A COMPARATIVE ANALYSIS OF THE INVESTMENT PATTERN OF

THE PEOPLE IN THE SEA-VIEW WARD, ALAPPUZHA

Project Report submitted to University of Kerala in partial
fulfillment of the requirement for the award of the degree of Bachelor of
Commerce.
ubmitted by
Name of student Candidate code
1 .Irine Treesa Francis
2. Angel Mary K.J
3. Susmy Francis
. Jyot!is!a Jose"!
#. $rincy %.J
!"amination Code#
ubject Code #
Under the guidance of

Name of t!e College

Mont! and &ear
[1]
A COMPARATIVE ANALYSIS OF THE INVESTMENT PATTERN OF
THE PEOPLE IN THE SEA-VIEW WARD, ALAPPUZHA
2012-2013
DECLARATION
[2]
'e( Irine Treesa Francis( Angel Mary K.J( Susmy Francis( Jyot!is!a Jose"!( $rincy %.J(
declare t!at t!e "ro)ect re"ort entitled A com"arati*e analysis on t!e in*estment "attern of t!e
"eo"le in t!e sea *ie+ +ard in Ala""u,!a su-mitted to t!e uni*ersity of Kerala for t!e a+ard
of t!e -ac!elor degree of commerce is a -onafide record of t!e researc! +or. done -y as
under t!e su"er*ision of graduate de"artment of commerce( st/ )ose"!0s college for +omen(
Ala""u,!a and it !as "re*iously formed t!e -asis for a+ard of any degree or di"loma or
ot!er similar title to any candidate of any uni*ersity.

$lace/ Ala""u,!a Irine Treesa Francis
1ate/ Angel Mary K.J
Susmy Francis
Jyot!is!a Jose"!
$rincy %.J

CERTIFICATE
[3]
Certified t!at t!is $ro)ect 2e"ort entitled 3A C4M$A2ITI%5 ANA6&SIS 4F T75
IN%5STM5NT $ATT52N 4F $54$65 IN T75 S5A %I5' 'A21 A6A$$897A: is a
-onafide +or. carried out -y( Irine Treesa Francis( Angel Mary K.J( Susmy Francis(
Jyot!is!a Jose"!( $rincy %.J( +e and su-mitted to t!e 8ni*ersity of Kerala in "artial
fulfillment of t!e re;uirement for t!e a+ard of t!e 1egree of <ac!elor of Commerce under
my guidance and su"er*ision.
Sr. 8s!a Antony
Assistant $rofessor
1e"artment of Commerce
St.Jose"!=s College for 'omen(
Ala""u,!a.
Ala""u,!a
...................


Counter Signed
1r. 2ita 6at!a 1=Couto(
7ead of t!e 1e"artment of Commerce
St.Jose"!=s College for 'omen(
Ala""u,!a
Ala""u,!a
...................
ACKNOWLEDGEMENT
[4]
1uring t!e course of t!is study( I !a*e recei*ed a lot of encouragement( su""ort ad*ice(
suggestion( and assistance from many sources. I +ould li.e to ta.e t!is o""ortunity to t!an.
eac! and e*ery one of t!em.
First and foremost( I t!an. >od Almig!ty +!o !as -lessed me +it! courage and
determination to com"lete t!is "ro)ect successfully. I e?"ress my +!ole !earted gratitude to
my su"er*ising guide Sr. 8s!a Antony( Assistant $rofessor in Commerce( St. Jose"!0s
College for 'omen Ala""u,!a for !er e?"ert guidance and constant su""ort for com"leting
t!is "ro)ect +or. in time.
I ac.no+ledge my sincere t!an.s to all my teac!ers es"ecially to $rof. 1r 2ita 6at!a
10couto( t!e 7ead of t!e 1e"artment of Commerce for !er *alua-le suggestions during t!e
course of t!e study.
6ast -ut not t!e least I +ould li.e to e?"ress my gratitude to my "arents and friends for t!eir
ins"iration and "rayers and t!eir constant su""ort.
$lace/ Ala""u,!a
1ate/ Name/

CONTENTS
6IST 4F TA<65S
[5]
6IST 4F >2A$7S
PAGES
C7A$T52 1. INT2418CTI4N @A1B
C7A$T52 2. T75425TICA6 <ACK>2481 1CA31
C7A$T52 3 D . 1ATA ANA6&SIS AN1 INT52$25TATI4N 32ABE
C7A$T52 #. FIN1IN>S AN1 25C4MM5N1ATI4N B1 AB3
C4NC68SI4N B
<I<6I4>2A$7& B#ABC
A$$5N1IF I. BGAC2

LIST OF TABLES
[6]
Ta!" N#$ Ta!" Na%" Pa&" N#$
3.1.1 Classification on t!e -asis of occu"ation 3
3.1.2 Classification on t!e -asis of annual income 3B
3.1.3 Classification on t!e -asis of annual sa*ings 3C
3.2.1 In*estment "reference of A$6 and <$6 !ouse!olds 3G
3.2.2 T!e factors influencing t!e "reference of study grou" E
3.2.3 7ouse!olds in*ested in Mutual Fund 1
3.2. Ty"es of Mutual Fund in*estment "roffered -y study grou" 2
3.2.# Kind of Mutual Fund Sc!emes accessed -y t!e in*estors 3
3.3.1 A+areness le*el of t!e study grou" a-out t!e Mutual Fund
3.3.2 Sources of information a-out Mutual Fund #
3.3.3 2easons for not in*esting in Mutual Fund BAC
3.3. Features of Mutual Fund t!at a""reciated -y t!e Study >rou" G
3..1 $reference of t!e Mutual Fund Institutions/ @
3..2 Mode of Ma.ing In*estment Mutual Fund -y t!e Study >rou" #E
3..3 2ole of Intermediaries in $urc!asing Mutual fund/ #1
3.. In*estors "reference to recei*e t!e mode of return #2
3.#.1 7ouse!olds a*ailing -an.ing ser*ice. #3
3.#.2 Mem-ers of !ouse!olds !a*ing -an. account and ser*ices. ##
3.#.3 $ur"ose for o""ening -an. account. #B
3.#. A+areness a-out mo-ile -an.ing ser*ice. #C
3.#.# A*ailing mo-ile -an.ing facility among t!e !ouse!olds #G
3.#.B A+areness a-out electronic -an.ing HeA-an.ingI. #@
3.#.C Satisfaction of !ouse!olds in t!eir in*estment "lan. BE
LIST OF GRAPHS
Fig No. Figure name $age. no
3.1.1 Classification on t!e -asis of occu"ation 3#
3.1.2 Classification on t!e -asis of annual income 3B
3.1.3 Classification on t!e -asis of annual sa*ings 3C
3.2.1 In*estment "refer most 3@
3.2.2 T!e factor "referring mostly -y in*estors E
3.2.3 7ouse!olds in*ested in Mutual Fund 1
3.2. Kind of in*estment "refer 2
3.2.# Mutual Fund sc!emes accessed -y in*estors 3
3.3.1 6e*el of a+areness
3.3.2 In*estors come to .no+ a-out Mutual Fund B
[7]
3.3.3 2easons for not in*esting in Mutual Fund C
3.3. Features attracts mostly @
3..1 Mutual Fund in*ested #E
3..2 Mutual Fund "referred -y in*estors #1
3..3 Mutual Fund "urc!ased #2
3.. In*estors "references for t!eir return #3
3.#.1 7ouse!olds a*ailing -an.ing ser*ices #
3.#.2 <an. account and sa*ings ##
3.#.3 $ur"ose for o"ening -an. account #B
3.#. A+areness a-out mo-ile -an.ing #C
3.#.# 7ouse!olds a*ailing mo-ile -an.ing ser*ices #G
3.#.B A+areness a-out eA-an.ing #@
3.#.C Satisfaction of t!e !ouse!olds in t!eir in*estment "lan BE

CHAPTER 1
INTRODUCTION
[8]
INTRODUCTION
Mutual fund is a financial intermediary t!at "ools t!e sa*ings of in*estors for collecti*e
in*estment in a di*ersified "ortfolio of securities. Funds in Jmutual0 as all of its returns(
minus its e?"ense( are s!ared -y t!e fund0s in*estors. Mutual Funds are financial
intermediaries +!ic! collect t!e sa*ings of in*estors and in*ert t!em in a large and +ell
di*ersified "ortfolio of securities suc! as money mar.et instruments( cor"orate and
go*ernment -onds and e;uity s!ares of )oint stoc. .A mutual fund is a "ool of commingle
funds in*ested -y different in*estors( +!o !a*e no contact +it! eac! ot!er. Mutual funds are
concei*ed as institutions for "ro*iding small in*estors +it! a*enues of in*estment in ca"ital
mar.et.
T!e Securities e?c!ange -oard of India Hmutual fundsI 2egulation( 1@@B defines a mutual
fund as Ja fund esta-lis!ed in t!e form of a trust to raise money t!roug! t!e sale of units to
t!e "u-lic or a section of t!e "u-lic under one or more sc!emes for in*esting in securities
including money mar.et instruments or gold or gold related instruments or real estate assets0.
According to t!e a-o*e definition a mutual fund in India can raise resources to sale of units
to t!e "u-lic. It can -e set u" in t!e form of a Trust under t!e Indian Trust Act. T!e definition
[9]
!as -een furt!er e?tended -y allo+ing mutual funds to di*ersify t!eir acti*ities in t!e
follo+ing areas/
$ortfolio management ser*ices
Management of offs!ore funds
$ro*iding ad*ice to offs!ore funds
Management of "ension or "ro*ident funds
Management of *enture ca"ital funds
Management of money mar.et funds
Management of real estate funds
A mutual fund ser*es as a lin. -et+een t!e in*estor and t!e securities mar.et -y mo-ili,ing
sa*ings from t!e in*estors and in*esting t!em in t!e securities mar.et to generate returns.
T!us( a mutual fund is a.in to "ortfolio management ser*ices H$MSI.
Conce"t of sa*ing an in*estment !el" analyse some im"ortant as"ects of macroAeconomics
suc! as fluctuations in economic acti*ity -et+een "ros"erity and recession( t!e "rocess of
economic gro+t!( and t!e met!od of financing >ross 1omestic Ca"ital Formation. C!anges
or fluctuations in economic acti*ity may occur +!en in*estment s"ending is greater or
smaller t!an t!e sa*ings at a gi*en le*el of income. Moreo*er( t!e resources going into t!e
"roducti*e "rocess( i.e.( ca"ital formation( may !a*e a direct relations!i" +it! economic
gro+t!. In ot!er +ords( gro+t! in economic acti*ity may result eit!er from +idening t!e
a""lication of ca"ital Hca"ital +ideningI or intensifying its userA utili,ing more ca"ital "er
unit of la-our and out"ut Hca"ital dee"eningI. 6astly( all economic acti*itiesA agricultural(
industrial( or ser*icesA de"end on t!e a*aila-ility of financial resources. T!ese resources
needed for economic gro+t! must -e generated. T!e amount of financial resources and t!e
*olume of ca"ital formation de"end on t!e intensity and efficiency +it! +!ic! sa*ings are
encouraged( gat!ered and directed to+ards in*estments. An institutional mec!anismA t!e
financial systemA "erforms t!ese roles to aid economic gro+t!. As more sa*ing mo*es
t!roug! t!e financial system( financial de"t! increases.
5stimates of sa*ings are "re"ared -y t!e Centre Statistics 4rgani,ation. T!e organi,ation
defines sa*ings as t!e e?cess of current income o*er current e?"enditure. It is t!e -alancing
item on t!e income and outlay accounts of "roducing enter"rises and !ouse!olds(
[10]
go*ernment administration and ot!er final consumers. For t!e "ur"ose of estimating t!e
domestic sa*ing( t!e economy !as -een di*ided into t!ree -road institutional sectors/
!ouse!old( "ri*ate cor"orate and "u-lic.
T!e !ouse!old sector com"rises !eterogeneous entities suc! as indi*iduals unincor"orated
-usiness enter"rises Hsole "ro"rietors!i"s and "artners!i" concernsI( farm "roduction units
and a num-er of nonA"rofit institutions. 7ouse!old sa*ing e;uals income of !ouse!olds not
allocated to current e?"enditure.
T!e sa*ing of t!e !ouse!old sector is measured as t!e total of financial sa*ing and sa*ing in
t!e form of "!ysical assets. Financial sa*ings in*ol*e "ossession of currency( net de"osits(
in*estment in s!ares and de-entures( net claims on go*ernment in t!e form of central and
state go*ernment securities and small sa*ings( net increase in t!e claims of life insurance(
and "ro*ident funds. $!ysical assets include construction mac!inery and e;ui"ment and
stoc.s !eld -y indi*iduals( firms( and ot!er institutions constituting t!e !ouse!old sector.
Mutual funds !a*e o"ened ne+ *istas to millions of small in*estors -y *irtually ta.ing
in*estment to t!eir doorste". In India( a small in*estor generally goes for -an. de"osits(
+!ic! do not "ro*ide !edge against inflation and often !a*e negati*e real returns. 7e !as
limited access to "rice sensiti*e information and if a*aila-le( may not -e a-le to com"re!end
"u-licly a*aila-le information couc!ed in tec!nical and legal )argons. 7e finds !imself to -e
an odd man out in t!e in*estment game. Mutual funds !a*e come( as a muc! needed !el" to
t!ese in*estors. MFs are loo.ed u"on -y indi*idual in*estors as financial intermediariesK
"ortfolio managers +!o "rocess information( identify in*estment o""ortunities( formulate
in*estment strategies( in*est funds and monitor "rogress at a *ery lo+ cost.
LITERATURE REVIEW
T!e e?isting 3<e!a*ioural Finance: studies are *ery fe+ and *ery little information is
a*aila-le a-out in*estor "erce"tions( "references( attitudes and -e!a*ior. All efforts in t!is
direction are fragmented.
[11]
H2I Says t!at funds or sc!eme selection -y in*estors is -ased on "ast "erformance of t!e
funds and money flo+ into +inning funds more ra"idly t!an t!ey flo+ out of losing funds.
HNI States t!at t!ere is e*idence t!at in*estor "syc!ology affects fundKsc!eme selection and
s+itc!ing.
HMI In India one of t!e earliest attem"ts +as made -y NCA52 in 1@B +!en a sur*ey of
!ouse!olds +as underta.en to understand t!e attitude to+ards and moti*ation for sa*ing of
indi*iduals.
Anot!er NCA52 study in 1@@B analyses t!e structure of t!e ca"ital mar.et and "resented t!e
*ie+s and attitudes of indi*idual s!are !olders. S5<IANCA52 sur*ey H2EEEI +as carried out
to estimate t!e num-er of !ouse!olds and t!e "o"ulation of indi*idual in*estors( t!eir
economic and demogra"!ic "rofile( "ortfolio si,e( and in*estment "reference for e;uity as
+ell as ot!er sa*ings instruments. T!is is a uni;ue and com"re!ensi*e study of Indian
in*estors( for data +as collected from 3EEEEEE geogra"!ically dis"ersed rural and ur-an
!ouse!olds. Some of t!e rele*ant findings of t!e sur*ey are/A 7ouse!old0s "reference for
instruments matc!es t!eir ris. "erce"tionL -an. de"osit !as an a""eal across all income
classesL 3M of t!e non in*estor !ouse!olds e;ui*alent to around BE million !ouse!olds
HestimatedI a""arently lac. a+areness a-out stoc. mar.etsL and com"ared +it! lo+ income
grou"s( t!e !ig!er income grou"s !a*e !ig!er s!are of in*estment in Mutual Funds HMFsI
signifying t!at MFs !a*e still not -ecome truly t!e in*estment *e!icle for small in*estors.
Ne*ert!eless t!e study "redicts t!at in t!e ne?t t+o years t!e in*estment of !ouse!olds in
MFs is li.ely to increase. 'e !a*e to +ait and +atc! t!e in*estors reaction to t!e( great fall
of t!e <ig <rot!er( 8TI.
HS. 2I conducted a sur*ey of 2E1 indi*idual in*estors to study t!e information sources of
in*estors( t!eir "erce"tions of *arious in*estment strategy dimensions and t!e factors
moti*ating s!are in*estment decisions and re"orts t!at among t!e *arious factors(
"syc!ological and sociological factor dominated t!e economic factors in s!are in*estment
decisions.
HSi.indar and Sing!I carried out a sur*ey +it! an o-)ecti*e to understand t!e -e!a*ioural
as"ect of t!e Nort! 5astern 2egion to+ards e;uity and Mutual Funds In*estment "ortfolio.
[12]
T!e sur*ey re*ealed t!at t!e salaried and self em"loyed from t!e ma)or in*estors in Mutual
Funds are "rimarily due to 'a( "("%)'*#+,. 8TI and S<I sc!emes +ere "o"ular in t!at "art
of t!e country t!en and ot!er funds !ad not "ro*ided to -e -ig !it during t!e time +!en
sur*ey +as done.
H$%I conducted a sur*ey to get an insig!t into t!e mutual fund o"erations of "ri*ate
institutions +it! s"ecial reference to Kot!ari $oineer. T!e sur*ey re*ealed t!at a+areness
a-out mutual fund conce"t +as "oor during t!e time in small cities li.e *is!a.a"atanam.
Agents "lay a *ital role in s"reading t!e mutual fund cultureL o"enAend sc!emes are muc!
"referred t!en Lage and income are t+o im"ortant determinants in t!e selection of t!e fund
sc!emeL -rand image and return are "rime considerations +!ile in*esting in a Mutual Fund.
HC!a.ra-art!i and 2ugt!aI stressed t!e im"ortance of -rand effect determining t!e
com"etiti*e "osition of t!e AMCs. T!eir study re*eals t!at -rand image factor( t!oug! cannot
-e easily ca"tured -y com"uta-le "erformance measures( influences t!e in*estor0s "erce"tion
and !ence !is fund or sc!eme selection.
H%arad!ara)anI -an.s "erform a *ery critical function of financial intermediation
i.e(acce"ting de"osits from t!e sa*ers and lending to t!e -orro+ers and in "rocess(facilitate
efficient allocation of funds.
-M*,./a0 SEBI .a, a++#1+2"3 '.a' 41+&**!*'5 #4 T#'a! E()"+," Ra'*#-TER0 4#/ '."
M1'1a! F1+3 ,2."%" 6*!! " a!!#6"3 4/#% #2' 1$ T." /"&1!a'#/, #a/3 *+ *', %""'*+& #+
A1&1,' 17 3"2*3"3 '# a!!#6 41+&**!*'5 #4 TER '# a22#/3 4!"(**!*'5 a+3 /*+& a#1' 2#,'
"44"2'*8"+",,$
-K/*,.+a+0 ,a5, '.a' #+ 1
,'
9a+1a/5 a!! %1'1a! 41+3 .#1/, /#!!"3 #1' a +"6 )!a+ 1+3"/
a!! #4 '." "(*,'*+& )/#312' : T." D*/"2' P!a+
Targeted at in*estors +!o do not ma.e t!eir mutual fund in*estment t!roug! distri-uters
t!eir "lans future a lo+er e?"ense ratio t!an e?isting "lan. T!is means t!at you as an in*ester
+ill get an o""ortunity to earn slig!tly !ig!er return from your Mutual Fund des"ite it !a*ing
t!e same "ortfolio. T!is c!ange !as come a-out due to a S5<I cercular in se"tem-er 2E12
+!ic! mandated t!at all fund !ours s!ould !a*e a se"rate "lan for t!e in*estor +!o do not
[13]
use t!e ser*ice of a distri-uter. Fund !ouses +ere already -arred from c!arging an u"front
commission from in*estors +ay -ac. in 2EE@. No+ t!ese 1irect $lans +ill not c!ange annual
recuring commissions eit!er. T!us t!e direct "lans +ill carry lo+er annual c!arges and
e*entually a different H!ig!erI NA%.
STATEMENT OF THE PRO;ECT
T!e role of Mutual Funds in "romoting sa*ings continues to -e insignificant in India. 1es"ite
a long !istory( assets of Mutual Funds in India constitute less t!an 1E "er cent of >1$. A
crossAcountry com"arison suggests t!at Mutual Funds are *ery "o"ular all o*er t!e +orld.
7o+e*er( assets under t!em in India are relati*ely lo+ as com"ared +it! ot!er emerging
mar.et economies. 4ne of t!e ma)or reasons for relati*ely lo+ acti*ity of Mutual Funds in
India is t!at "enetration( es"ecially in t!e rural areas remains small. 7ence t!is study is a
"ee" into t!e e?tent "enetration mutual fund among t!e "eo"le of sea *ie+ +ard in
Ala""u,!a.
NEED AND SIGNIFICANCE OF THIS STUDY
In "resent scenario( one of t!e u"coming o"tions for in*estments in t!e financial mar.et is
Mutual Fund. Mutual Fund !as so many s"ecial features t!at include trans"arency.
In*estors +!o "art ta.e in mutual fund s!ould understand t!e in*estment o-)ecti*es( t!e ris.
and t!e e?"enses of a fund *ery cautiously -efore in*esting in stoc.. In*estors +ill usually
-uy s!ares in small ;uantities t!roug! a -ro.er at a discount to t!e net asset *alue or at a
small "remium. In*estors +!o use a ta? ad*antaged account can a*oid "aying ta?es on
mutual fund distri-utions +!en in*esting in a mutual fund. In*estors li.e to see t!e rate of
return on in*estment for a mutual fund( and .no+ !o+ t!at fund com"ares to li.e funds.
[14]
Mutual Fund in*estment is -etter t!an ot!er raising funds and in t!e coming year it +ill
"ro*e to -e t!e -est source of in*estors. <ot! t!e "u-lic mutual fund and "ri*ate mutual
funds are "erforming -etter. T!e result is mo*ing in an u"+ard cur*e of t!e financial mar.et.
It is o-*ious t!at mutual funds offer t!e in*estors large c!oice of *arious sc!emes +it!
s"ecial features in*estors can c!oose t!e ty"e of funds -est suited to t!eir in*estment li.ing
and e?"ectations.
OB;ECTIVES
To identify t!e e?tend of use of t!e Mutual Fund among t!e targeted grou" for t!e
sa*ing "ur"ose.
To access t!e "enetration and understanding le*el of Mutual Funds.
To com"are -an.ing ser*ice +it! Mutual Funds.

RESEARCH METHODOLOGY<
T!is study is descri"ti*e and analytical in nature. To carry out t!e study( "rimary and
secondary data are used. T!e "rimary data is collected from !ouse!olds in sea *ie+ +ard( in
Ala""u,!a. 2andom sam"ling is ado"ted for selecting t!e !ouse!olds. For t!e collection of
t!e data( structured inter*ie+ sc!edule is de*elo"ed and fine tuned in discussion +it! t!e
"ro)ect Mutual Fund institutions. Secondary data for t!e study +as collected from *arious
sources li.e )ournals( -oo.sL official +e-sites etc For t!e analysis and inter"retation of t!e
data common statistical tools li.e ratios( "ercentages( gra"!s etc are used to ma.e it more
meaningful and "ur"oseful.
Sa%)!" 4/a%"<
Sea %ie+ 'ard( in Ala""u,!a consists of 1#EE !ouse!olds. 4ut of t!ose 3E !ouse!olds from
A$6 and3E !ouse!olds from <$6 +ere randomly selected for t!e study.
L*%*'a'*#+,
[15]
o T!e sur*ey is limited to BE "eo"le of Sea %ie+ 'ard only.
o T!e time constraint +as t!e one of t!e main "ro-lems.
o As all t!e information is gi*en -y t!e +ard mem-ers it is -iased.
o Most of t!e "eo"le +ere not ready to re*eal t!e data a-out t!eir income and
in*estment.
o Most of t!e "eo"le +ere una+are of t!ese o"tions t!at t!ey didn0t res"ond +ell.

CHAPTER 2$
THEORETICAL BACKGROUD
[16]
DEFINITION OF MUTUAL FUNDS
A mutual fund is a trust t!at "ools t!e sa*ings of a num-er of in*estors +!o s!are a common
financial goal and are called s!are !olders or unit !olders of t!e fund. T!e money t!us
collected is t!en in*ested in ca"ital mar.et instruments suc! as s!are de-entures and ot!er
securities. T!e income earned t!roug! t!ese in*estments and t!e ca"ital a""reciation reali,ed
is s!ared -y its unit !olders in "ro"ortion to t!e num-er of units o+ned -y t!em
ADVANTAGES OF MUTUAL FUND
Mutual fund increases t!e mo-ili,ation of in*esti-le funds of t!e community -y
"ooling t!e resources of a large num-er of small sa*ers for cor"orate in*estment. Mutual
fund reduces t!e ris. of s!are!olding for t!e !older( -y e*ol*ing sc!emes( suita-le to t!e
"references of t!e sa*er loo.ing for eit!er income or ca"ital gains. T!e mutual funds de*elo"
t!e e?"ertise -y setting u" a "rofessionally managed structure +!ic! +ould loo. after t!e
needs of t!e in*esting "u-lic for gainful and lo+Aris. in*estment.
Some mutual funds are also area s"ecific or "ur"ose s"ecific( e.g. Ja"an fund( India fund etc(
+!ic! necessarily "ro*ide access to foreign in*estors into domestic securities of "articular
economies. T!e mutual funds can "romote t!e in*estment !a-it of t!e rural and semiAur-an
areas and increase t!e "ro"ortion of in*esting "u-lic and of t!e s!are!olding "o"ulation in
India.
BENEFIT OF MUTUAL FUND
Ta? s!elter is t!e most im"ortant ad*antage( t!e mutual fund industry en)oys in India. A
mutual fund( set u" -y a "u-lic sector -an. or a financial institution or one t!at is aut!ori,ed
[17]
-y S5<I is e?em"ted from ta?( under section 1EH231I of IT Act( "ro*ided it distri-utes @E
"er cent of its "rofit.
T!e union -udget for 1@@@A2EEE granted ta? e?em"tion for a "eriod of t!ree years for
8S B sc!eme and for all o"enAended e;uity oriented sc!emes of 8IT and ot!er mutual fund
+it! more t!an #E "er cent in*estment in e;uity. It also announced t!e e?em"tion from
income ta? of all income from 8IT and ot!er mutual fund recei*ed in t!e !and of in*estors.
T!e -udget for 2EEEAE1 !o+e*er raised t!e ta? rate of income distri-uted -y de-tAoriented
mutual fund and 8TIfrom1EM to 2EM.
As com"ared to direct in*estment( mutual fund offer firstly( reduced ris. and di*ersified
in*estment. Mutual fund !el" small in*estors in reducing ris. -y di*ersification( economies
of scale in transaction cost and "rofessional "ortfolio management. Secondly( mutual funds
offer re*ol*ing ty"e of in*estment( automatic rein*estment of di*idends and ca"ital gains
"ro*ide ta? relief to t!e mem-ers. T!irdly( section and timing of in*estment are underta.en
-y mutual fund. T!e fund as an organi,ation( su""lies e?"ertise in stoc. selection and timing
"urc!ase and sale of securities to in*estors on t!e in*ested funds to generate !ig!er returns to
t!em. Finally( mutual funds assure li;uidity and in*estment care. T!e units of mutual funds
could -e con*erted to cas! +it!out any loss of time( relie*ing in*estors from *arious rules
and regulations( +!ic! t!ey !a*e to com"ly +it! indirect in*estments.
TYPES OF MUTUAL FUND SCHEMES
FUNCTIONAL CLASSIFICATION OF MUTUAL FUNDS
4$5NA5N151 SC75M5S A in case of o"enAended sc!emes( t!e mutual fund continuously
offers to sell and re"urc!ase its units at NA% or NA% related "rices .8nli.e close Nended
sc!emes( o"enAended ones do not !a*e to -e listed on t!e stoc. e?c!ange and can also offer
re"urc!ase soon after allotment.
[18]
In*estors can enter and e?it t!e sc!eme any time during t!e life of fund. 4"enAended
sc!emes do not !a*e a fi?ed cor"us. T!e cor"us of fund increases or decreases( de"ending on
t!e "urc!ase or redem"tion of units -y in*estors.
C64S5A5N151 SC75M5S N Close ended sc!emes !a*e a fi?ed cor"us and a sti"ulated
maturity "eriod ranging -et+een t+o to fi*e years. In*estors can in*est in t!e sc!eme +!en it
is launc!ed. T!e sc!eme remains o"en for a "eriod not e?ceeding # days. In*estors in close
ended sc!emes can -uy units only from t!e mar.etL once initial su-scri"tions are o*er and
t!ereafter t!e units are listed on t!e stoc. e?c!anges +!ere t!ey can -oug!t and sold. T!e
fund !as no interaction +it! in*estors till redem"tion e?ce"t for "aying di*idendK-onus. In
order to "ro*ide and alternate e?it route to t!e in*estors( some closeAended funds gi*e an
o"tion of selling -ac. t!e units to t!e mutual fund t!roug! "eriodic re"urc!ase at NA%A
related "rices.
INT52%A6 SC75M5A Inter*al sc!eme com-ines t!e features of o"enAended and closeA
ended sc!emes. T!ey are o"en for sale or redem"tion during "redetermined inter*als at NA%A
related "rices.
PORTFOLIO CLASSIFICATION
7ere( classification is on t!e -asis of nature and ty"es of securities and o-)ecti*e of
in*estment.
INC4M5 F8N1S NT!e aim of income funds is to "ro*ide safety of in*estment and regular
income to in*estors. Suc! sc!emes in*estments and regular income to in*estors. Suc!
sc!emes in*est "redominantly in incomeA-earing instrument li.e -onds( de-entures(
go*ernment securities( and commercial "a"er. T!e returns as +ell as t!e ris. are lo+er in
income funds as com"ared to gro+t! funds.
>24'T7 F8N1SA T!e main o-)ecti*e of t!e gro+t! fund is ca"ital a""reciation o*er t!e
mediumAto long term. T!ey in*est most of t!e cor"us in e;uity s!ares +it! significant gro+t!
[19]
"otential and t!ey offer !ig!er return to in*estors in t!e long term. T!ey assume t!e ris.
associated +it! e;uity in*estment.
T!ere is no guarantee or assurance of returns. T!ese sc!emes are usually closeAended and
listed on stoc. e?c!anges.
<A6ANC51 F8N1S<- T!e aim of -alanced sc!eme is to "ro*ide -ot! ca"ital a""reciation
and regular income. T!ey di*ide t!eir in*estment -et+een e;uity s!ares and fi?ed interestA
-earing instruments in suc! a "ro"ortion t!at t!e "ortfolio is -alanced. T!e "ortfolio of suc!
fund usually com"rises com"anies +it! good "rofit and di*idend is -alanced trac. records.
T!eir e?"osure to ris. is moderate and t!ey offer a reasona-le rate of return. T!e NA%s of
suc! funds are li.ely to -e less *olatile com"ared to "ure e;uity funds. An e?am"le of
-alanced fund is 71FC "rudence( an e;uityAoriented !y-rid H-alancedI funds( +it! an asset
si,e of 2s.32EE crore. It is t!e largest and t!e most "o"ular sc!eme in t!e category of
-alanced funds.
4T752SA T!e ot!er mutual funds are load funds( e?c!ange traded funds( "riceAearnings
ratio fund( fundAofAfund( and real estate mutual funds.
INVESTMENT CLASSIFICATION
7ere( t!e funds can -e classified on t!e -asis of t!e asset class Hty"es if securitiesI in +!ic!
t!ey are in*ested.
1. 5O8IT& F8N1/ If funds of a "articular sc!eme are in*ested in e;uity s!ares( t!en it
is an e;uity fund. 5;uity funds are ris.ier com"ared to de-t funds and t!ey can -e
furt!er classified on t!e -asis of t!eir in*estment strategy as di*ersified fund(
aggressi*e( gro+t!( *alue( and sector funds. 5?am"le of e;uity funds are inde? funds(
di*ersified funds( ar-itrage fund( largeAca" funds( smallAca" funds( midAca" funds(
sector funds( and e;uityAlin.ed sa*ing sc!emes.
2. 15<T F8N1/ If funds of a "articular sc!eme are in*ested in de-t instruments( t!en it
is a de-t fund. 1e-t funds are c!aracteri,ed -y lo+Aris. !ig! li;uidity in*estment.
1e-t funds in*est in go*ernment securities( money mar.et instruments( cor"orate
de-t instruments including floating rate -onds and nonAcon*erti-le de-entures( $S8
[20]
-onds( securiti,ed de-t including assetA-ac.ed securities( and mortgagedA-ac.
securities and -an. fi?ed de"osits. 5?am"les of de-t funds are li;uidKmoney mar.et
funds( income funds( gilt funds( fi?ed maturity "lans( and floating rate funds.
3. 7&<2I1 F8N1S/ In order to "ro*ide t!e -enefit of e;uity and de-t in*estment to
t!e in*estors( some funds in*est in -ot! t!e asset classes and t!ey are .no+n as
!y-rid funds. 7y-rid may -e furt!er categori,ed into e;uityA oriented fund and de-tA
oriented fund.
aI 5;uityA oriented funds are defined as t!ose sc!emes +!ere t!e e;uity !olding
of t!e fund in domestic com"anies is more t!an B# "er cent.
-I 1e-tA oriented funds are t!ose +!ere t!e in*estment in de-t securities e?ceed
B# "er cent. 5?am"les of de-tAoriented funds are ca"ital "rotection sc!emes(
mont!ly income "lans( and c!ildren0s in*estment funds.
cI <alanced funds are t!ose +ere #EM is in*ested un e;uity instruments and #EM
in de-t instruments.
GROWTH OF MUTUAL FUNDS IN INDIA
T!e mutual fund industry in India started in 1@B3 +it! t!e formation of 8TI at t!e initiati*e
of t!e go*ernment of India and 2<I. T!e !istory of mutual fund in India can -e -roadly
di*ided into four distinct "!ases.
F*/,' ).a," -1=7>-?@0
T!e mutual fund conce"t +as introduced in India +it! t!e setting u" 8IT in 1@B3. T!e 8nit
Trust of India H8TII +as t!e first mutual fund set u" under 8TI act( 1@B3( a s"ecial act of t!e
"arliament. It -ecomes o"erational in 1@B +it! a ma)or o-)ecti*e of mo-ili,ing sa*ings
t!roug! t!e sale of units and in*esting t!em in cor"orate securities for ma?imi,ing yield and
ca"ital a""reciation. T!is "!ase commenced +it! t!e lunc! of t!e unit sc!eme 1@BH8SABI(
t!e first o"enAended and t!e most "o"ular sc!eme .8 T I0s in*isi-le funds( at mar.et
*alueHand including t!e -oo. *alue of fi?ed assetIgre+ from 2s.@ core in 1@B# to 2s.21@
core in 1@CEAC1 to rs.112B core in 1@GEAG1 and furt!er to 2s.#EBG core -y June 1@GC. Its
[21]
in*estor0s -ase !ad also gro+n to a-out t+o million in*estors. It launc!ed inno*ati*e
sc!emes during t!e "!ase. Its fund family included fi*e incomeAoriented( o"enAended
sc!emes( +!ic! +ere sold largely t!roug! its agent +or.s -uild u" o*er t!e years. Master
s!are( t!e e;uity gro+t! fund launc!ed in1@GB( "ro*ed to -e a grand mar.eting success.
Master s!are +as t!e first real closeAended sc!eme floated -y 8TI. It launc!ed t!e India
Fund in 1@GBA t!e first Indian offs!ore fund for o*erseas in*estors( +!ic! +as listed on t!e
6ondon Stoc. 5?c!ange H6S5I. 8TI maintained its mono"oly and e?"erienced a constant
gro+t! till 1@GC.
S"2#+3 ).a," -1=?@-1==30 -"+'/5 #4 )1!*2 ,"2'#/ 41+3,0
T!e second "!ase +itnessed t!e entry of mutual fund com"anies s"onsored -y nationali,ed
-an.s and insurance com"anies. In 1@GC( <SI Mutual Fund and Can-an. Mutual Fund +ere
set u" as trusts under t!e Indian Trust Act( 1GG2. In1@GG( 8TI floated anot!er offs!ore fund(
namely( T!e India >ro+t! Fund +!ic! +as listed on t!e Ne+ &or. Stoc. 5?c!ange HN&S5I.
<y 1@@E( t!e t+o nationali,ed insurance giants( 6IC and >IC( and nationali,ed -an.s(
namely Indian <an.( <an. of India( and $un)a- National <an. !ad started t!e o"erations of
+!olly o+ned mutual fund su-sidiaries. T!e assured return ty"es of sc!eme floated -y t!e
mutual funds during t!e "!ase +ere "ercei*ed to -e anot!er -an.ing "roduct offered -y t!e
arms of s"onsor -an.s. In 4cto-er 1@G@( t!e first regulati*e guidelines +ere issued -y 2<I(
-ut t!ey +ere a""lica-le only to t!e Mutual Funds offered -y t!e -an.s. Su-se;uently(
>o*ernment of India issued com"re!ensi*e guidelines in June 1@@E co*ering all mutual
funds. T!ese guidelines em"!asi,ed com"ulsory registration +it! t!e S5<I and an arms
lengt! relations!i" -e maintained -et+een t!e s"onsor and asset management com"any
HAMCI. 'it! t!e entry of "u-lic sector funds( t!ere +as a tremendous gro+t! in t!e si,e of
mutual fund industry +it! t!e in*esti-le funds( at mar.et *alue( increasing to 2s.#3B2
crores and t!e num-er of in*estors increasing to o*er 23 million. T!e -uoyant e;uity mar.ets
in 1@@1A@2 and ta? -enefit under e;uityNlin. sa*ing sc!emes en!anced t!e attracti*eness of
e;uity funds.
[22]
T.*/3 ).a," -1==3-20030 -"+'/5 #4 )/*8a'" ,"2'#/ 41+3,0
'it! t!e entry of "ri*ate sector fund in1@@3( a ne+ era started in t!e Indian Mutual Fund
Industry( gi*ing t!e Indian in*estors a +ider c!oice of fund families. Also 1@@3 +as t!e year
in +!ic! t!e first mutual fund regulation came into -eing under +!ic! all Mutual Funds
e?ce"t 8TI +ere to -e registered and go*erned. T!e erst+!ile Kot!ari $ioneer Hno+ merged
+it! Fran.lin Tem"letonI +as t!e first "ri*ate fund mutual registered in July 1@@3. T!e 1@@3
S5<I HMutual FundI regulation +ere su-mitted -y a more com"re!ensi*e and re*ised Mutual
Fund 2egulations in 1@@B.t!e industry no+ functions under S5<I HMutual FundI
2egulations1@@B. T!e num-er of Mutual Fund !ouses +ere +ent on increasing( +it! many
foreign Mutual Funds setting u" funds in India and also t!e industry !as +itnessed se*eral
mergers and ac;uisitions. As at t!e end of t!e January 2EE3( t!ere +ere 33 Mutual Funds
+it! total assets of 2s.121GE# crores. T!e 8TI +it! 2s.#1 crores of assets under
management +as +ay a!ead of our mutual funds.
F#1/'. ).a," -,*+2" F"/1a/5 20030
In Fe-ruary 2EE3( follo+ing t!e re"eal of t!e 8IT Act 1@B3 8TI +as -ifurcated into t+o
se"arate entities. 4ne is t!e s"ecified underta.ing of 8TI +it! assets under management of
2s. 2@G3# crores as at t!e end of t!e January 2EE3re"resenting -roadly( t!e assets of us B
sc!eme( assured return and certain ot!er sc!eme. T!e s"ecified underta.ing of 8nit Trust of
India( functioning under an administrator and under t!e rules framed -y go*ernment of India
and does not come under t!e "ur*ie+ of Mutual Fund 2egulations. T!e second is t!e 8TI
Mutual Fund 6td( S"onsored -y S<I( $N<( <4< and 6IC. It is registered +it! S5<I and
functions under t!e Mutual Fund 2egulation. 'it! t!e -ifurcation of t!e erst+!ile 8TI +!ic!
!ad in Marc! 2EEE more t!an 2s.CB( EEE crores of assets under management and +it! t!e
setting u" of a 8TI Mutual Fund( conforming to t!e S5<I Mutual Fund 2egulations( and
+it! recent mergers ta.ing "lace among different "ri*ate sector funds( t!e Mutual fund
industry !as entered its current "!ase of consolidation and gro+t!. As at t!e end of
Se"tem-er( 2EE( t!ere +ere 2@ funds( +!ic! manage assets of 2s.1#31EG crores under 21
sc!emes.
[23]
PERFORMANCE OF MUTUAL FUND IN INDIA
T!e "erformance of mutual fund in India from t!e day t!e conce"t of mutual fund too. -irt!
in India. T!e year +as 1@B3. 8nit Trust of India in*ited in*estors or rat!er to t!ose +!o
-elie*ed in saying to "ar. t!eir money in 8TI Mutual Fund for 3E years. It ran. to" +it!out
a single second "layer t!roug! t!e 1@GG year sa+ some ne+ mutual fund com"anies( -ut 8TI
remained in a mono"oly "osition. T!e "erformance of mutual fund in India in t!e initial face
+as not e*en closer to satisfactory le*el. <ut yes( some 2 million s!are!olders +as
accustomed +it! guaranteed !ig! returns t!e -eginning of li-erali,ation of t!e industry in
1@@2. T!ese good records of 8TI -ecome mar.eting tool for ne+ entrance. T!e e?"ectation
of in*estors touc!ed t!e s.y in "ro-a-ility factor. 7o+e*er "eo"le +ere miles a+ay from t!e
"re"aredness of ris.s factor after li-erali,ation.
T!e assets under management of 8TI +ere 2s.BC-n.-y t!e end of 1@GC. 6et me concentrate
a-out t!e "erformance of Mutual Fund in India t!roug! figures 2sBC-n. T!e asset under
management rose as !ig! as 2s 1#-n. t!e Net Asset %alue HNA%I of mutual fund in India
declined +!en stoc. "rices started falling in t!e year1@@2. T!ose days t!e mar.et regulations
did not allo+ "ortfolio s!ift into attracti*e in*estments. T!ere +ere rat!er t+o c!oices a"art
from !olding t!e cas! or to furt!er continue in*esting in s!ares. 4ne more t!ing to -e noted(
since only closedAend funds +ere floated in mar.et. T!e in*estors disin*ested -y selling at a
loss in t!e secondary mar.et.
T!e "erformance of mutual fund in India is suffered ;ualitati*ely. T!e 1@@2 stoc. mar.et
scandal t!e losers -y disin*estment and of course t!e lac. of trans"arent rules in t!e
+!erea-outs roc.ed confidence among t!e in*estors. $arty o+ing to relati*ely +ea. stoc.
mar.et "erformances. Mutual funds !a*e not yet re*o.ed +it! funds leading at an a*erage
discount of 1E2EM t!eir Net Asset %alue.
T!e su"er*isory aut!ority ado"ted a set of measures to create a trans"arent and com"etiti*e
en*ironment in mutual fund. Some of t!em +ere li.e rela?ing in*estment restrictions in to
t!e mar.et. Introduction of o"en ended funds and "a*ing t!e gate+ay for mutual funds to
launc! "ension sc!emes.
[24]
T!e measure +as ta.en to mutual fund t!e .ey instrument for long term sa*ings. T!e more
t!e *ariety offered t!e ;uantitati*e +ill -e t!e in*estors. At last to mention as long as mutual
fund com"anies are "erforming +it! lo+er ris. and !ig!er "rofita-ility +it!in a s!ort s"an of
time( more and more "eo"le +ill -e inclined to in*est until and unless t!ey are fully educated
+it! t!e dos and don0ts of mutual fund.
REGULATION OF MUTUAL FUND
6ea*ing aside 8TI( +!ic! !as -een e?isting since 1@B( to financial institutions( namely( 6IC
and >IC !as set u" t!eir mutual funds in 1@G@ and 1@@E res"ecti*ely. Since 1@GC( starting
+it! S<I( a num-er of "u-lic sector -an. !a*e set u" mutual fund( +!ic! !a*e -een
regulated -y t!e 2<I( t!e mutual funds of 6IC and >IC +ere regulated -y t!e In*estment
1i*ision of Ministry of Finance.
After S5<I got legal status in 1@@2( all mutual funds !a*e -een -roug!t under its
su"er*ision( e?ce"t t!e Money Mar.et Mutual Funds and offs!ore mutual funds( +!ic! are
also -ound -y t!e guidelines of 2<I( and ministry of finance. Nearly 2s.BE( EEE crores +ere
collected -y 8TI and an estimated 2s.3E( EEE crores -y *arious mutual funds set u" since
1@GC( as contri-utions of sa*ings from in*estors. T!e mutual funds mo*ements !as got a
startling momentum -y 1@@EA1@@1 -ut t!ere +as a set-ac. to t!is in1@@2( follo+ing t!e
securities scam in +!ic! a num-er of -an.s and mutual funds +ere in*ol*ed in financial
irregularities. Since t!en( t!e S5<I !as tig!tened its regulations.
T!e ne+ guidelines +ere laid do+n in res"ect of mutual funds for aut!ori,ation and licensing
of all mutual funds and eac! of t!eir indi*idual sc!emes. As *isuali,ed -y t!e go*ernment
"olicy( not only "u-lic sector( -ut "ri*ate sector and )oint sector mutual funds are no+
"ermitted and licensed -y t!e S5<I.
ORGANISATION OF A MUTUAL FUND
[25]
S$4NS52/ T!e s"onsor of a mutual fund "erforms t!e same functions as t!e
"romoter of a com"any and may -e a -an.( an FI or a financial ser*ices com"any.
T!e s"onsor is res"onsi-le for setting u" and esta-lis!ing a mutual fund and setting
t!e mutual fund trust. In order to -e a-le to "erform all t!ese functions t!e s"onsor
!as to o-tain a license from S5<I for +!ic! it !as to satisfy certain conditions related
to ca"ital( "rofits( trac. records( default free dealings etc. For 5?am"le t!e s"onsors
of ICICI "rudential mutual fund are "rudential "lc. And ICICI -an.
M8T8A6 F8N1 T28ST/ T!e mutual fund is setAu" as a trust under Indian Trusts
act( 1GG1( and is registered +it! S5<I. T!is trust enters into contract in t!e name of
its trustees +!o may -e indi*iduals or a cor"orate. T!e in*estors of t!e fund are
-eneficiaries of t!is trust. For e?am"les ICICI "rudential mutual fund !as -een set N
u" as a trust named "rudential ICICI mutual fund trust. T!is trust !olds t!e units of
!olders in t!e fund an enters into agreement +it! S5<I and ensures com"liance. T!e
trustees a""oint a monitor t!e asset management com"any +!ic! in turn are
res"onsi-le for fund0s financial regularity( secure necessary com"liance and !old t!e
"ro"erties of *arious sc!emes in t!e interest of in*estors.
ASS5T MANA>5M5NT C4M$AN&/ T!e asset management com"any( a""ointed
-y t!e trustees( "erforms t!e function of in*estment -an.er for a fund. It designs t!e
mutual fund sc!emes( floats t!em and manages t!em as "er S5<I guide lines .In
return for t!ese ser*ices t!e AMC recei*es an annual in*estment management and
ad*isory fee lin.ed to t!e si,e of t!e sc!eme.
C8ST41IAN/ 4ften an inde"endent organi,ation( it ta.es custody of securities and
ot!er assets of a mutual fund. Among "u-lic sector mutual funds( t!e s"onsor or
trustee generally also acts as t!e custodian. A custodian0s res"onsi-ilities include
recei"t and deli*ery of securities( collecting income( distri-uting di*idends(
safe.ee"ing of units and segregating assets and settlements -et+een sc!emes.
25>IST2A2 AN1 T2ANSF52 A>5NTS/ 2egistrar and transfer agent !andles
communications +it! in*estors( "erforms data entry ser*ices( maintains in*estor data
and dis"atc!es accounts statements reflecting t!e !olding and transaction of t!e
[26]
in*estors. For e?am"le( t!e 2TA of ICICI "rudential mutual fund is ICICI InfoTec!
ser*ices 6imited.
MUTUAL FUND PERFORMANCE
Mutual funds are re;uired to com"ute and "u-lici,e t!eir net asset *alues daily. <ecause t!eir
income and t!eir ca"ital gain distri-utions are also "u-lici,ed( t!ey are ideal candidates for
studies of t!e "erformance of "rofessionally managed "ort folios. T!us it is !ardly
su"er*ising t!at mutual funds !a*e fre;uently -eing t!e su-)ect of e?tensi*e study.
CA6C86ATIN> 25T82NS
In studies of "erformance( t!e rate of return on a mutual fund for "eriod. It is calculated -y
adding t!e c!ange in net asset *alue to t!e amount of income and t!e ca"ital gains
distri-utions made during t!e "eriod( denoted -y 1t and >t res"ecti*ely( and di*iding t!is
total -y t!e net asset *alue at t!e -eginning of t!e "eriod.
2ISK C4NT246
4ne of t!e functions t!at a mutual fund can "erform for its in*estors is t!e maintenance of a
"articulars ris. "osture. Formal statements of o-)ecti*es "ro*ide some idea of a fund0s
intended "osture( -ut often t!e +ording is *ague. Ne*ert!eless( t!ere a""ears to -e a general
relations!i" -et+een "ortfolio ris. and stated o-)ecti*es.
1I%52SIFICATI4N
An im"ortant tas. for any in*estment manager is t!e "ro*ision of an a""ro"riate degree of
"ortfolio di*ersification. T!e correct amount de"ends on t!e "ro"ortion of client0s funds
managed and on t!e li.eli!ood t!at su"erior a-normal returns can -e o-tained -y sacrificing
di*ersifications. A most mutual funds are intended to -e ma)or com"onent of a s!are!olders
"ortfolio( it is reasona-le to e?"ect t!em to -e su-stantially di*ersified.
A%52A>5 2AT5 4F 25T82N
[27]
Some organi,ations !a*e esta-lis!ed t+o .inds of indices -ased on t!e net asset *alues of
mutual funds t!at !a*e similar in*estment o-)ecti*es. 4ne .ind of inde? is -ased on nearly
all of t!e 8S -ased mutual funds( +!ereas t!e second .ind is -ased on a muc! smaller
sam"le.
5F$5NC5S
Funds ty"ically incur t+o .inds of e?"enses management fees administration e?"enses and
ot!er o"erating e?"enses are direct generally re"orted. 7o+e*er transactions cost are only
"artly measura-le in t!at -ro.erage commission are re"orted( -ut im"licit costs suc! as -idA
as. s"reads and t!e "rice im"orts of trading are often not e*en estimated.
MA2K5T TIMIN>
To ac!ie*e su"erior "ortfolio "erformance and in*estors must eit!er select securities t!at
out"erform ot!er of com"ara-le ris. or s+itc! from ris. classes to ris. class at a""ro"riate
times. T!e letter strategy is often called mar.et timing or asset allocation. T!e idea is to !old
a !ig! -eta "ortfolio "rior to mar.et declines. T!is is ty"ically done -y altering t!e relati*e
"ro"ortions t!at t!e find !as in*ested in t!e stoc.( -onds and cas! e;ui"ments. Ty"ically t!e
more a fund !as in*ested in stoc.( t!e !ig!er its -eta.
<4N1 M8T8A6 F8N1S
Cell of t!e result re"orted so far focus on mutual funds t!at !a*e at least a large "art of t!eir
asset in*ested in common stoc.. T!is lea*es o"en t!e ;uestion of -ond mutual funds. Is t!eir
"erformance similar to t!at stoc. fund/ one study loo.ed at a sam"le of 1 -onds o*er t!e
"eriod from1@C@ t!roug! 1@GG.
$52SIST5NC5 4F $52F42MANC5
5*en if t!e a*erage mutual fund dis"lays no a-ility at selecting under "riced securities or
timing t!e mar.et( it is still "ossi-le t!at a fe+ of t!e funds do !a*e suc! a-ilities. If so t!ey
s!ould continuously generate !ig!er returns and ran. at or near t!e to" of t!eir "eer grou"s
o*er consecuti*e 7ano*er la""ing e*aluation "eriod.
[28]
BANKING
<an.ing means t!e acce"ting t!e de"osit from t!e customers for lending to t!e needy and
e?tending t!e ot!er sources as to issue of 11( mt etc. no+ a days after introduction of "ri*ate
sector -an.s. T!e -an.s !a*e -ecome a "rofit center and t!e functions -ecome c!anged and
no+ -an.s are doing t!e insurance and mutual fund also. <ut nationali,ed -an.s are still
ser*ice oriented in e?tending loans for 5ducation loan( s!g( s)sry( and rural de*elo"ment
acti*ities.

MOBILE BANKING
It is also called 3Account t!at tra*els +it! a "erson. 'it!( mo-ile -an.ing a "erson can -an.
from any+!ere( at anytime and in any condition or any !o+:. T!e system is eit!er t!roug!
SMS or t!roug! 'A$. T!e "ercentage of mo-ile -an.ing !as increased t!ree times
com"ared to de-it or credit card. 8sing 7TM6 D 'A$ tec!nologies
<ill "ayments
Fund transfers
C!ec. -alances

NET BANKING
It is conducting -an.ing online t!roug! a com"uter and a net connection follo+ed -y
immediate u"dating of t!e system automatically after e*ery transaction. T!e follo+ing are
t!e features of net -an.ing/
[29]
<an.s offer only rele*ant information a-out t!eir "roducts and ser*ices to t!e
masses.
Fe+ <an.s "ro*ide interaction facility -et+een t!eir -an.s and its customers.
<an.s are coming u" +it! arrangements of utility "ayments li.e tele"!one -ills(
electricity -ills etc.( +!ic! can -e done t!roug! net -an.ing.
Net -an.ing !el"s t!e customers in t!e follo+ing +ay/
It remo*es traditional geogra"!ic -arriers as it# can reac! out to customers of
different countries.
It !as !el"ed in sa*ing customer0s time and -an.0s cost.

[30]
CHAPTER 3 A >
DATA ANALYSIS AND INTERPRITATION
ANALYSIS AND INTERPRETATION OF DATA
ANALYSIS
Analysis of data is considered to -e !ig!ly s.illed and tec!nical )o- +!ic! s!ould -e
carried out only -y t!e researc!er !imself or under !is close su"er*ision. It is t!roug!
systematic analysis t!at t!e underlying features of t!e data are re*ealed and *alid
generali,ation is arri*ed at. Analysis of data t!erefore means critical e?amination of t!e data
for studying t!e c!aracteristics of t!e o-)ect under study and for determining t!e "atterns of
relations!i"s among t!e *aria-les relating to it using -ot! ;uantitati*e and ;ualitati*e
met!ods.

INTERPRETATION
[31]
Inter"retation refers to t!e tec!ni;ue of dra+ing inference from t!e collected facts and
e?"laining t!e significance of t!ose inferences after an analytical and e?"erimental study. It
is a searc! for -roader and a-stract means of t!e researc! findings. Inter"retation analysis t!e
a-stract relations in more concrete terms and tries to unfold t!e reasons for e?isting ty"e of
relations or findings. It relates t!e em"irical findings +it! t!eoretical "rinci"les and !el"s to
dra+ a num-er of useful inferences from t!e study.
T!e data o-tained from t!e res"ondents are analy,ed and inter"reted +it! t!e !el" of *arious
ta-les and c!arts are as on ne?t "age/
3$1$ E2#+#%*2 Ba2B&/#1+3 #4 '." S'135 G/#1)<
Ta!" 3$ 1$1C!a,,*4*2a'*#+ #+ '." a,*, #4 #221)a'*#+
O221)a'*#+ APL BPL
$rofession 0 E
Salaried G #
<usiness @ 3
2etired B 3
4t!ers C 1@
Total 3E 3E

4ut of t!e BE res"ondents 3E res"ondents are A$6 !ose!olds and 3E are <$6 !ose!olds.
Among t!e A$6 !ose!olds 2B.BB M are salaried grou"( 3EM are -usiness grou"s and 2EM
are retired and 23.33M are ot!ers. And among t!e <$6 !ose!olds 1B.BBM are salaried(
[32]
1EMare -usiness( 1EM are retired and B3.33M are from ot!ers. In -ot! A$6 and <$6
!ose!olds t!ere are no one "rofessionaly occu"ied.



F*& +#$ 3$ 1$1
[33]
Ta!" 3$1$2 C!a,,*4*2a'*#+ #+ '." a,*, #4 A++1a! I+2#%"
[34]
Annual Income <elo+ 2EEEE 2EEEEA#EEE1 #EEEEA1EEEEE 1EEEE1 a-o*e
A$6 C 3 # 1#
<$6 1# 1 1 E
Total 22 1C B 1#
$ercentage 3B.BB 2G.33 1E 2#
F*& +#$ 3$1$2
In t!e a-o*e ta-le among t!e 3E res"ondents in A$6 !ose!olds 23.33M are from
-elo+ 2EEEE( 1EM from 2EEE1A#EEEE( 1B.BBM from #EEE1A1EEEEE and #EM from
1EEEE1 a-o*e. And among t!e 3E res"ondents in <$6 !ose!olds #EM are from -elo+
2EEEE( B.BBM from 2EEE1A#EEEE( 3.33M from #EEE1A1EEEE1 and none of t!e
!ose!olds !as annual income a-o*e 1EEEEE.
[35]
3$1$3 C!a,*4*2a'*#+ #+ '." a,*, #4 A++1a! Sa8*+&,$
Ta!" 3$1$3
Annual sa*ings <elo+ 1EEEE 1EEE1A2EEEE 2EEE1A#EEEE A-o*e #EEE1
A$6 12 B # C
<$6 21 G 1 E
Total 33 1 B C
F*& +# 3$1$3
From t!e a-o*e analysis (3E !ouse!olds from EM A$6 category sa*e less t!an
1EEEE( 2EM A$6 !ouse!olds sa*e -et+een 1EEE1A2EEEE(1B.BBM !ouse!olds sa*e
-et+een 2EEE1A#EEEE( 23.33M could sa*e a-o*e#EEEE.And among 3E !ouse!olds
from <$6 categories CEM sa*e -elo+1EEEE( 2B.BBM !ouse!old sa*e 1EEE1A2EEEE(
3.33M could sa*e 2EEE1A#EEEE and none of t!e !ose!olds can sa*e a-o*e #EEEE.
3$2 L"8"! #4 P"+"'/a'*#+ #4 M1'1a! F1+3 a%#+& '." S'135
G/#1)<
[36]
3$2$1 I+8",'%"+' )/"4"/"+2" #4 '." APL a+3 BPL .#,".#!3,<
Ta!" 3$2$1
T5)" #4 *+8",'%"+' APL BPL T#'a!
Sa*ings account 1B 11 2C
Fi?ed de"osit 2 B
Insurance 12 1# 2C
Mutual fund # E #
$ost officeANSC B 1G 2
S!aresK de-entures # E #
>oldK sil*er 1 E 1
2eal estate E E E
$$F E E E
$F 2 E 2
T!e a-o*e ta-le s!o+s t!e in*estment "references among A$6 and <$6 !ose!olds. 7ere(
among A$6 !ose!olds( most of t!em "refer <an. Sa*ings Account H31.3CMI as in*estment
follo+ed -y Insurance H23.#2MI and H11.CBMI of t!em "refer to in*est in $ost 4ffice
Sa*ings and H@.GMI of t!em e;ually "refer Mutual Fund and S!ares. Some of t!em also
"refer Fi?ed 1e"osit HC.GMI( 3.@2M "refer $F and 1.@BM "refer gold and sil*er. And in <$6
!ose!olds( t!ey "refer mostly $ost 4fficeANSC H3@.13MI follo+ed -y Insurance H32.BEMI(
<an. Sa*ings Account H23.@1MI and Fi?ed 1e"osit H.3MI.
F*& +# 3$2$1
[37]
3$2$2 T." 4a2'#/, *+4!1"+2*+& '." )/"4"/"+2" #4 S'135 G/#1)
Ta!" 3$2$2
Factors Influencing
In*estors
6i;uidity 6o+ ris. 7ig! return Com"any
re"utation
[38]
A$6 1B 12 1 1
<$6 1B 13 1 E
Total 32 2# 2 1

F*& +# 3$2$2
In t!e a-o*e c!art -ot! t!e A$6 and t!e <$6 !ose!olds "refer li;uidity +!ile in*esting t!eir
money. T!at #3.33M of -ot! A$6 and <$6 !ose!olds "refer li;uidity +!ile in*esting t!eir
money. T!ey also ssss"refer lo+ ris. in*estments( t!at is EM of A$6 !ose!olds and 3.33M
of <$6 !ose!olds "refer lo+ ris. in*estment. 7ere 3.33M of -ot! A$6 and <$6 !ose!olds
"refer !ig! ris. in*estments. And 3.33M of A$6 !ose!olds consider t!e com"any re"utation
+!ile in*esting t!eir money.
3$2$3 H#1,".#!3, *+8",'"3 *+ %1'1a! 41+3
[39]
Ta!" 3$2$3
I+8",'%"+' A$6 <$6 Total
&es 1E E 1E
No 2E 3E #E
F*& +#$ 3$2$3
In t!e a-o*e c!art 1E families from A$6 families alone !a*e in*ested in Mutual Fund. And
2E families from A$6 and 3E families from <$6 !a*e not yet in*ested in Mutual Fund.
3$2$> T5)" #4 M1'1a! F1+3 *+8",'%"+' P/"4"//"3 5 '." S'135 G/#1) <
Ta!" 3$2$>
Ty"e of Mutual Fund Nos.
$u-lic
$ri*ate B
Total in*estors 1E
[40]
F*& +#$ 3$2$>
In t!e a-o*e c!art it s!o+s t!at from t!e 1E in*estors BE "ercentage of t!e in*estors in*est in
"u-li-c and E "ercentage in*estors in*est in "ri*ate.
3$2$C K*+3 #4 M1'1a! 41+3 ,2."%, a22",,"3 5 '." *+8",'#/,$
Ta!" 3$2$C
Kind of Sc!emes N#,$
4"en ended B
Close ended 1
6i;uid fund E
>ro+t! fund
[41]
ot!ers E

F*& +#$ 3$2$C
In t!e a-o*e c!art( among 1E in*estors( ##M of t!em "refer o"en ended funds( 3BM of t!em
"refer li;uid funds and @M of t!em "refer close ended.
3$3 P"/2")'*#+ #4 '." S'135 G/#1) a#1' M1'1a! F1+3<
3$3$1 A6a/"+",, L"8"! #4 '." S'135 G/#1) a#1' M1'1a! F1+3<
Ta!" 3$3$1
L"8"! #4 A6a/"+",, N#,$
aI Totally ignorent of mutual fund o"ertunity 1
-I $artial .n+oledge of mutual fund #
cI Fully a+are of t!e -enefits of mutual fund 3
dI A+are of t!e -enefits mutual fund o*er -an. account 1
[42]
Total in*estors 1E

F*& +#$ 3$3$1

T!e c!art s!o+s a+areness le*el of t!e grou" +!o made in*estment Mutual Fund .
Among t!e 1E in*estors #EM of t!em are !a*ing only "artial .no+ledge of mutual fund
and 3EM of t!em are fully a+are of t!e ris. and re+ards of t!eir in*estment. 1EM of
t!em are a+are of t!e -enefits of mutual fund o*er t!e -an. account and 1EM of t!em are
totally ignorant of mutual fund as an in*estment o""ortunity
3$3$2 S#1/2" I+4#/%a'*#+ a#1' M1'1a! F1+3<
Ta!" 3$3$2
Source of Information Nos.
aI Ad*ertisement 2
-I $eer grou" B
[43]
cI <an. 2
dI Financial ad*isor E
eI <ro.ing firms E
fI Ne+s "a"er E
Total in*estors 1E

F*& +# 3$3$2
[44]
T!e a-o*e c!art s!o+s (among 1E in*estors BE "ercentage of in*estors came to .no+ a-out
mutual fund from "eer grou". 2EM of t!em came to .no+ a-out mutual fund t!roug!
ad*ertisement and 2EM from -an..
3$3$3 R"a,#+, 4#/ NOT *+8",'*+& *+ M1'1a! F1+3<
Ta!" 3$3$3
I'"%, APL BPL )"/2"+'a&"
aI Totally ignorant of MF as
in*estment o""ortunity
C 12 13$@=
-I 6ots of formalities are in*ol*ed in
in*esting t!e MF
3 3 10$3
cI Not any s"ecific reason of MF 2 ? 1?$?
dI $artial .no+ledge of MF
in*estment
3 > 12
eI A+are of -an. transaction are easy
in com"arison to MF
2 2 7$?
fI Fully a+are of t!e -enefits of MF 1 0 1$@
gI 'e !a*e no relia-le information
a-out MF
0 2 3$>
!I 2eturn is not attracti*e 1 0 1$@
iI 7ig! ris. is in*ol*ed 7 1 12
)I 6ot of "eo"le met +it! !ea*y loss 2 0 3$>
.I Tec!nical .no+ledge is re;uired 1 0 1$@

F*& +#$ 3$3$3
[45]
T!e a-o*e c!art gi*es t!e reasons of 2E A$6 !ouse!olds and 3E <$6 !ouse!olds as to +!y
!a*e not in*ested in mutual funds. 7ere 13.C@ in*estors are totally ignorant of mutual funds(
1E.3 says t!at it in*ol*es lot of formalities( 1G.G M !ouse!olds !a*e no s"ecific reason( 12 M
of t!em !a*e "artial .no+ledge of mutual fund( B.GM of t!em says t!at -an. transactions are
more easy t!an mutual fund( 1.C M of t!em are fully a+are of mutual fund -ut still not
interested( 3.M !ouse!olds !a*e no relia-le information a-out mutual fund( 1.CM says t!at
t!e return of mutual fund is not attracti*e( 12M says t!at mutual fund in*ol*es !ig! ris.(
3.M says t!at lot of "eo"le met !ea*y loss in earlier "eriod and 1.CM of !ouse!olds say t!at
more tec!nical .no+ledge is re;uired.
3$3$> F"a'1/", #4 M1'1a! F1+3 '.a' a))/"2*a'"3 5 '." S'135 G/#1)<
Ta!" 3$3$>
A''/a2'*8" F"a'1/", N#,$
aI 1i*ersification 3
-I Ta? -enefit #
[46]
cI 2egular income E
dI 2eduction in ris. and transaction cost 2
eI<etter return and safety E
In t!e a-o*e #E M of in*estors are attracted -y t!e ta? -enefit offered to
t!e mutual fund in*estors( 3EM of t!em li.es di*ersification and 2E M of t!em are attracted
-y reduction in ris. and transaction cost.

F*& +#$ 3$3$>
3$> A22",, #4 M1'1a! 41+3 5 '." S'135 G/#1)<
3$>$1 P/"4"/"+2" #4 '." M1'1a! F1+3 I+,'*'1'*#+,<
Ta!" 3$>$1
M1'1a! F1+3 I+,'*'1'*#+, N#,$
[47]
S<IMF @
8TI 3
71FC 2
2eliance 0
ICICI $rudential fund 0
JM mutual fund 0
4t!ers >
F*& +#$ 3$>$1
T!e c!art a-o*e s!o+s #G.3M of t!e in*estors are in*ested in S<IMF( 2# M of t!em in 8TI
mutual fund( 1B.BM of t!em in 71FC and 33.33M of t!em c!osed ot!er in*estment li.e Tata
Infra( religare etc. Among t!e 1E in*estors no one selected reliance and ICICI.
3$>$2 M#3" #4 MaB*+& I+8",'%"+' M1'1a! F1+3 5 '." S'135 G/#1)
Ta!" 3$>$2
M#3" #4 I+8",'%"+' N#,$
4n time in*estment C
[48]
Systematic in*estment "lan 3
Total in*estors 1E


F*& +#$ 3$>$2
T!e a-o*e c!art s!o+s CE M of in*estors "refer to in*est in one time in*estment "lan and
3EM of t!em "refer systematic in*estment "lan.
3$>$3 R#!" #4 I+'"/%"3*a/*", *+ P1/2.a,*+& M1'1a! 41+3<
Ta!" 3$>$3
A22",, '# M1'1a! F1+3 N#,$
aI 1irectors from t!e AMC0s C
-I <ro.ers only 2
[49]
cI <ro.ersK su- -ro.ers E
dI 4t!ers 1

F*& +# 3$>$3
T!is c!art s!o+s CEM of t!e in*estors "urc!ase mutual funds from directors from t!e
AMC0s( 2EM from -ro.ers only and 1EM of t!em from ot!er sources.
3$>$> I+8",'#/, )/"4"/"+2" '# /"2"*8" '." %#3" #4 /"'1/+<
Ta!" 3$>$>
P/"4"/"+2" #4 R"'1/+ N#,$
aI di*idend "ay out 1
-I di*idend reAin*estment
CI gro+t! in NA% #
Total 1E
[50]
F*& +#$ 3$>$>
T!is c!art s!o+s 1EM of t!em "refer di*ident "ay out met!od( EM of t!em "refer di*ident
reAin*estement and #EM of t!em "refer gro+t! in NA%.
3$C A22",, #4 a+B*+& ,"/8*2", 5 '." S'135 G/#1)<
3$C$1 H#1,".#!3, a8a*!*+& a+B*+& ,"/8*2".
Ta!" 3$13
A$6 <$6 Total
&es 3E 3E BE
No E E E

[51]
F*& +# 3$C$1
1EEM of A$6 and <$6 families !a*ing -an. accounts.
[52]
3$C$2$ M"%"/, #4 .#1,".#!3, .a8*+& a+B a22#1+' a+3 ,"/8*2",.
Ta!" 3$C$2
Mem-ers Sa*ings aKc Fi?ed aKc Current aKc
A$6 CG B3 23
<$6 B B 1 E
T4TA6 12 12C 2
F*& +#$ 3$C$2
T!e a-o*e c!art s!o+s CG mem-ers from A$6 !ouse!old and B mem-ers from <$6
!ouse!old !a*e -an. account( and among t!em B3 mem-ers from A$6 and B mem-er from
<$6 !a*e sa*ings account( 23 mem-ers from A$6 and 1 mem-er from <$6 !a*e fi?ed
account and mem-ers from A$6 !a*e current account. No mem-ers from <$6 !a*e current
account.
[53]
3$C$3$ P1/)#," 4#/ #))"+*+& a+B a22#1+'$
Ta!" 3$C$3
$ur"ose A$6 <$6 Total
aI To start de"osit sa*ings 2E 2E E
-I For occu"ation "ur"ose B # 11
cI To a*ail loan from -an.s 1E 11 21
dI To a*ail ot!er ser*ices of -an.ing 2 1 3
F*& +# 3$C$3
T!e a-o*e c!art de"icts #3.3M of !ouse!olds from -ot! A$6 and <$6 families !a*e o"en
-an. accounts to start de"osit sa*ings( 1.BM of !ouse!olds from -ot! A$6 and <$6 families
!a*e o"ened -an. account for occu"ation "ur"ose( 2G M of !ouse!olds from -ot! A$6 and
<$6 families !a*e o"ened -an. account to a*ail -an. loan and M of t!em !a*e o"ened
-an. account to a*ail ot!er ser*ices of -an.ing.
3$C$>$ A6a/"+",, a#1' %#*!" a+B*+& ,"/8*2"$
[54]
Ta!" 3$C$>
A$6 <$6 Total
&es 1@ 11 3E
No B 2 3E
F*& +# 3$C$>
T!e a-o*e c!art s!o+s t!at #G.3M of "eo"le from -ot! A$6 and <$6 families are a+are of
t!e mo-ile -an.ing and B.BM of t!em are not a+are.
3$C$C$ a8a*!*+& #4 %#*!" a+B*+& 4a2*!*'5 a%#+& '." .#1,".#!3,$
Ta!" 3$C$C
[55]
A$6 <$6 Total
&es C 23 3E
No E 3E 3E
F*& +#$ 3$C$C

T!e a-o*e c!art s!o+s C mem-ers from t!e A$6 families only are using mo-ile -an.ing
ser*ices. Just 23M of t!em are using mo-ile -an.ing ser*ices among -ot! A$6 and <$6
families and GG.3M of t!em !a*e not yet started using it$
3$C$7$ A6a/"+",, a#1' "!"2'/#+*2 a+B*+& -"-a+B*+&0$
Ta!" 3$C$7
[56]
A$6 <$6 Total
&es 13 1C 3E
No # 2# 3E
F*& +#$ 3$C$7

T!e a-o*e c!art !ig!lig!ts (3E M of !ose!olds from -ot! A$6 and <$6 are a+are of eA
-an.ing(among t!ese 3.3M from A$6 and1B.BM from <$6. 2est of t!em are not a+are of
it.
3$C$@$ Sa'*,4a2'*#+ #4 '." .#1,".#!3, *+ '."*/ *+8",'%"+' )!a+
Ta!" 3$C$@
[57]
A$6 <$6 Total
&es 3E 3E BE
No E E E
F*& +#$3$C$@

T!e a-o*e c!art s!o+s @#M of !ouse!olds in -ot! A$6 and <$6 families are satisfied +it!
t!eir in*estment "lan and #M of t!em are not satisfied .
[58]


C7A$T52 #
FIN1IN>S AN1 25C4MM5N1ATI4N
FINDINGS
1I In t!is study +e find t!at among t!e BE !ouse!olds in Sea %ie+ 'ard( 1E !ouse!olds
-elonging to A$6 families !a*e Mutual Fund in*estments. And among t!ose( only 3 of t!em
are fully a+are of t!e mutual fund -enefits. And rests are a+are a-out mutual funds -ut t!ey
[59]
are not interested to in*est in mutual funds due to *arious reasons li.e !ig! ris.( lo+ return
etc. <$6 families under study are not a+are of Mutual Fund and its -enefits.
2I T!e study s!o+s t!at <$6 families are +ell a+are of -an.ing ser*ices and "roducts. All of
t!em !a*e -an. accounts.
3I A fe+ among t!e <$6 families are a+are of mo-ile -an.ing and electronic -an.ing and
not yet started using t!em.
I T!e study re*eals t!at t!e ma)or "ortion of t!e A$6 families -elonging to t!e !ig!
income category and !ence t!e in*estments made -y t!em are !ig!er as com"ared to <$6
families.
#I T!e a+areness le*el a-out in*estment o""ortunities among A$6 families s!o+s an
increasing rate as com"ared to <$6 families.
BI T!e factors t!at influence t!e c!oice of in*estment of -ot! A$6 families and <$6 families
are li;uidity and lo+ ris.. And most of t!e <$6 families "refer "ost office sa*ings as t!eir
in*estment o""ortunity.
CI T!e study s!o+s t!at only 33M of t!e A$6 families !a*e in*ested in Mutual Fund. And
from <$6 families none of t!em !a*e in*ested in mutual fund. Among t!ose in*ested
only 3EM of t!em are fully a+are of t!e -enefits of mutual fund and t!e rest of t!em !a*e
only "artial .no+ledge.
GI T!e study also re*eals t!at most of t!em !a*e in*ested in "ri*ate sector also. T!is study
s!o+s most of t!e <$6 families are totally ignorant a-out mutual fund o""ortunities and still
t!ey are in t!e -elief t!at ot!er in*estments are -etter t!an mutual fund
.
SUGGSETION
T!e study recommends t!at t!ere is an urgent need to create a+areness a-out
t!e financial ser*ices( t!e ris. and re+ard of eac! in*estment o""ortunities
among t!e <$6 category families( and also .a-out t!e different "attern of
in*estment a*aila-le to t!em -y t!e concerned aut!orities.
It is recommended t!at t!e mutual fund "ro*iders could li-erali,e t!eir
"olicies and "rocedures and t!ey also could create a+areness a-out t!eir ne+
in*estment o""ortunities and sim"ler "rocedures H 1irect $lan I in dealing
'it! Mutual Fund.
[60]
It is recommended t!at t!e $u-lic Mutual Funds o"erators could "ro*ide
attracti*e returns( more customer friendly and need -ased sc!emes and ser*ices for
t!e society to im"ro*e t!e in*estment "attern among "u-lic sector.
T!e mutual fund "ro*iders and dealers could ta.e initiati*e to ado"t certain
strategies to "ro*ide financial literacy to t!e <$6 families concerning Mutual
Funds.
Finally +!en +e com"are mutual fund +it! -an.ing ser*ices 1EEM of t!e
families !a*e a*ailed t!e -an.ing ser*ice. 7ere t!e "eo"le find t!at -an.ing
ser*ice is muc! -etter( easier (safer. So it is recommended t!at -an.er can
"ro*ide relia-le .no+ledge a-out mutual fund and its ris.s and a+ards.
CONCLUSION
T!e study concludes t!at t!e in*estment "attern of !ouse!olds in SeaA%ie+ +ard in mutual
fund is relati*ely lo+ com"ared to -an. sa*ing. T!is study !el"s to .no+ t!e in*estment
"attern of t!e "eo"le in t!at "articular +ard. It is o-ser*ed t!at most of t!e in*estors are
satisfied in t!eir "resent sa*ing "attern.
T!e study +as conducted in t!e seaA*ie+ +ard( Ala""u,!a among BE !ouse!old among
+!ic! 3E from A$6 !ouse!olds and 3E from <$6 !ouse!olds. Information +as collected
t!roug! t!e structured ;uestionnaires( "ersonal inter*ie+s( )ournals -oo.s etc. t!e study
"ro*ides +it! findings +!ic! related to in*estment "attern and financial literacy of t!e
"eo"le a-out Mutual Fund in t!at +ard.
[61]
T!roug! t!is study +e can conclude t!at t!e A$6 !ouse!olds !a*e more literacy a-out
Mutual Fund and most of t!em .no+ its -enefits e*en if t!ey are not in*ested in Mutual
Fund. <ut <$6 !ouse!olds are not +ell a+are a-out it. <ut full of t!em utili,e t!e -enefits of
-an.ing ser*ices.
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Agar+al( 7.c. Indian Financial System and Commercial <an.ing. Agra/ S+an
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Antony( $rof. Aru)a. Money Financial Institution and Mar.et. c!anganaserry/ $re.as!
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A*d!ani( % A. In*estment Mnanagement. <om-ay/ 7imalaya $u-lis!ing 7ouse.(
1@@B.
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>u"t!a( N K and Monica C!o"ra. Financial mar.ets( institutions and ser*ices. ne+
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>i-son( Nigel. Finance. $rofile <oo.s 6td( 2EE.
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1el!i / Ane -oo.s( india( 2E1E.
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2EE3.
$at!a.( <!arati %. T!e Indian financial system. ne+ del!i/ 1orling Kindersley HIndiaI
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Natara)an( >ordon. Financial Mar.ets and Ser*ices. Mum-ay/ 7imalaya $u-lis!ing
7ouse $*t 6td( 2E11.
2( S!anmugam. Pfactors infuencing t!e in*estment decisions.P Indian ca"ital mar.et
trends and diamensions. Ne+ 1el!i/ Tata MC >ra+ 7ill $u-lis!ing Com"any 6td(
2EEE.
Si.indar( Su)it and Amrit $al Sing!. PFinancial ser*ices/ In*estment in e;uity and
Mutual Funds A a -e!a*ioural study.P < S( <!atia and <atra > S. Managament of
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;#1/+a!,
C!a.ra-art!i( An)an and 7ars! 2ugt!a. PP Mutual Fund industry in India/ An inde"t!
loo. into t!e "ro-lems of credi-ility( ris. and -rand.P T!e ICFAI )ournal of a""lied
finance H2EEEI/ 2CA#.
Kris!nan( Aarati. Pgoing direct +it! your mutual fund in*estments.P <usiness 6ine(
T!e 7indu B )anuary 2E13/ 13.
[63]
M( Kart!i.eyan. PAn em"irical study on factors influencing t!e mutual fundKsc!eme
selection -y retail in*estors in India.P .egees )ournal of social science H2E13I/ #2A##.
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financial researc! 2E H1@@CI/ 1#A1#G.
$%( Syama Sundar. >ro+t! "erce"tion of Mutual Finds and In*estor "erce"tion +it!
s"ecial refrence to.ot!ari "ioneer Mutual Fund . "ro)ect re"ort. andra uni*ersity/ Sri
Sreeni*as( 1@@G.
2( I""olito. Pcustomer reaction to measures of "oor ;uality/ e*idence for mutual
funds.P )ournal of la+ and economics H1@@2I/ 3#( #ACE.
Si.indar( Su)it and Amrit $al Sing!. PFinancial ser*ices/ In*estment in e;uity and
Mutual Funds A a -e!a*ioural study.P < S( <!atia and <atra > S. Managament of
financial ser*ice. Ne+ 1el!i/ 1ee" and 1ee" $u-lication( 1@@B. 13BA1#.
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1@@B/ 12.
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$adma)a %( A study on le*el of customer satisfaction of ser*ice "ro*ided -y 6IC(
August 2E12
[64]

APPENDID I
EUESTIONNARIE
1. Name/
2. Category/ A$6 <$6
3. 4ccu"ation/ "rofessional salaried -usiness
2etired ot!ers
[65]
. Annual income/ HScaleI
<elo+ 2EEEE 2EEE1A#EEEE
#EEE1A1EEEEE 1EEEE1 a-o*e
#. 7o+ muc! does u sa*e annuallyQ HScaleI
6ess t!an 1EEEE 1EEE1A2EEEE
2EEE1A#EEEE #EEE1 a-o*e
B. '!at .ind of in*estment you "refer mostQ
a. sa*ings account -. fi?ed de"osit c. insurance
d. mutual fund f. "ost officeA NSC f. s!aresKde-enture
g. goldKsil*er !. real estate i. $$F
). $F
C. '!ile in*esting your money +!ic! factor you refer mostQ Any one.
6i;uidity 6o+ ris.
7ig! return Com"any re"utation
G. 7a*e you e*er in*ested your money in Mutual FundQ
&es No
If yes(
'!ere do you find yourself as a Mutual Fund in*estorQ
Totally ignorant of MF as a in*estment o""ortunity
$artial .no+ledge of Mutual Fund
Fully a+are of t!e -enefits of mutual fund
A+are of t!e -enefits MF o*er -an. account
aI In +!ic! .ind of Mutual Fund you +ould li.e to in*estQ
$u-lic $ri*ate
[66]
-I 7o+ do you come to .no+ a-out Mutual FundQ
a. Ad*ertisement c. <an. e. <ro.ing firms
- $eer grou" d. Financial ad*isors f. ne+s "a"er
cI'!ic! Mutual fund sc!emes !a*e you usedQ
4"en ended
Close ended
6i;uid fund
>ro+t! fund
4t!ers( s"ecify
If no(
aI If not in*ested in mutual fund t!en +!yQ To +!at e?tend +ould you agree +it! t!e
follo+ing statements( on a scale of 1A#L 1 denoting *ery lo+ agreement and #
denoting *ery !ig! agreement.
Items
1 Totally ignorant of MF as a in*estment o""ortunity
2 6ots of formalities are in*ol*ed in in*esting t!e MF
3 Not any s"ecific reason of MF
$artial .no+ledge of Mutual Fund in*estment
# A+are of -an. transaction are easy in com"arison to MF
B Fully a+are of t!e -enefits of MF
C 'e !a*e no relia-le information a-out MF
G 2eturn is not so attracti*e
@ 7ig! ris. is in*ol*ed
1E 6ot of "eo"le met +it! !ea*y loss
11 Tec!nical .no+ledge is re;uired
[67]
@. '!ic! feature of t!e mutual fund attracts you mostQ
1. 1i*ersification 2. Ta? -enefit 3. 2egular income
. 2eduction in ris. and transaction cost . <etter return and safety
1E. In +!ic! mutual fund you !a*e in*estedQ
S<IMF
8TI
71FC
2eliance
ICICI "rudential fund
JM Mutual Fund
4t!ers s"ecify
11. '!en you in*ested in mutual fund +!ic! mode of in*estment +ill you "referQ
a. 4ne time in*estment -. Systematic In*estment $lan
12. From +!ere did you "urc!ase mutual fundQ 2an. it
1irectly from t!e AMCs
<ro.ers only
<ro.ersK su- -ro.ers
4t!er source
13. '!ic! AMC +ill you "refer to in*estQ
S<IMF
8TI
2eliance
71FC
Kota.
ICICI
JM Finance
4t!ers s"ecify(
1#. 7o+ +ould li.e to recei*e t!e returns e*ery yearQ
[68]
a. di*idend "ay out -. di*idend reAin*estment c. gro+t! in NA%
1B. 1o you a*ail t!e -an.ing ser*icesQ
&es No
1C. <an. account and ser*ices.
Mem-ers Sa*ing
aKc
Fi?ed aKc Current aKc Name of -an.
1G. For +!ic! "ur"ose you o"ened -an. accountQ
Sa*ings 4ccu"ation 6oan
1@. '!at is t!e distance to your -an.Q
1. 'it!in 1 .m 2. <et+een 2A .m 3. <et+een AG .m
#. A-o*e G .m
2E. 1o you a+are a-out mo-ile -an.ing ser*iceQ
&es No
21. 7a*e you e*er used itQ
&es No
22. Are you satisfied +it! your in*estment "lanQ
[69]
&es No

[70]

[71]