A Report

On
CUSTOMER PERCEPTION TOWARDS
MUTUAL FUND

By
Pallavi Singh
Enrolment No: 14BSP0938
Reliance Money Solutions Pvt. Ltd.

A Report
On
CUSTOMER PERCEPTION TOWARDS
MUTUAL FUND
By
Pallavi Singh
Enrolment No: 14BSP0938
Reliance Money Solution Pvt. Ltd.
A report submitted in partial fulfilment of the
requirements of PGPM Program of
IBS Mumbai
Distribution List
Company guide
Mr. Nilesh M. Aras

Faculty guide
Mr. Hemant Purandare

Date of Submission 21st April 2015

TABLE OF CONTENTS

ABSTRACT
As a part of the PGPM curriculum I am doing my internship at
Reliance Money Solutions Pvt. Ltd, Mumbai.Thereportbelowis
presentlymyexperienceinthecompanyfortheperiodof50days.
DuringthisperiodmyworkwastounderstandPortfolio
Managementandmyrolewastofixclientmeetsthrough
telecalling.
Next initiative was taken to select a project which entitled
A study on customer perception towards mutual fund. The primary
objective of the study is to find the perception of the people towards
mutual fund and their investment pattern. It was mainly carried out to
assess the awareness the mutual fund amongst other investment
avenues.
The descriptive research is used by the researcher. The primary data
was collected from the respondents. The respondents were directly
interviewed and their responses are recorded.
The collected data was analyzed Percentage analysis was the main
tools used for the analysis. This study brought to the surface various
insights. The study showed that those who invested in mutual fund it
were the best avenue. The people invested in mutual funds mainly in
order to cater to their future needs. The satisfaction level regarding the
performance of mutual fund was moderate amongst the respondent.

INTRODUCTION
Mutual Funds: An overview
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus
collected is invested by the fund manager in different types of
securities depending upon the objective of the scheme. These could
range from shares to debentures to money market instruments. The
income earned through these investments and the capital appreciations
realized by the scheme are shared by its unit holders in proportion to
the number of units owned by them (pro rata). Thus a Mutual Fund is
the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed
portfolio at a relatively low cost. Anybody with an investible surplus
of as little as a few thousand rupees can invest in Mutual Funds.
Each Mutual Fund scheme has a defined investment objective and
strategy.
CONCEPT OF MUTUAL FUND

RETURNS

INVESTO
RS

SECURITI
ES

FUND
MANAGE
R

Types of Mutual Funds

Mutual fund schemes may be classified on the basis of its structure
and its investment objective.
By Structure:
Open-ended Funds
An open-end fund is one that is available for subscription all through
the year. These do not have a fixed maturity. Investors can
conveniently buy and sell units at Net Asset Value ("NAV") related
prices. The key feature of open-end schemes is liquidity.
Closed-ended Funds
A closed-end fund has a stipulated maturity period which generally
ranging from 3 to 15 years. The fund is open for subscription only
during a specified period.
Interval Funds

Interval funds combine the features of open-ended and close-ended

schemes. They are open for sale or redemption during pre-determined
intervals at NAV related prices.
By Investment Objective: Growth Funds
The aim of growth funds is to provide capital appreciation over the
medium to long- term. Such schemes normally invest a majority of
their corpus in equities
Income Funds
The aim of income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities
such as bonds, corporate debentures and Government securities.
Income Funds are ideal for capital stability and regular income.
Balanced Funds
The aim of balanced funds is to provide both growth and regular
income. Such schemes periodically distribute a part of their earning
and invest both in equities and fixed income securities in the
proportion indicated in their offer documents. In a rising stock market,
Money Market Funds
The aim of money market funds is to provide easy liquidity,
preservation of capital and moderate income. These schemes
generally invest in safer short-term instruments such as treasury bills,
certificates of deposit, commercial paper and inter-bank call money
Load Funds
A Load Fund is one that charges a commission for entry or exit.
That is, each time you buy or sell units in the fund, a commission
will be payable. Typically entry and exit loads range from 1% to

2%. It could be worth paying the load, if the fund has a good
performance history
Mutual Funds provide the services of experienced and skilled
professionals, backed by a dedicated investment research team that
analyses the performance and prospects of companies and selects
suitable investments to achieve the objectives of the scheme.
Convenient Administration:
Investing in a Mutual Fund reduces paperwork and helps you avoid
many problems such as bad deliveries, delayed payments and follow
up with brokers and companies. Mutual Funds save your time and
make investing easy and convenient

Benefits of Mutual Fund investment

Low Costs:
Mutual Funds are a relatively less expensive way to invest compared
to directly investing in the capital markets because the benefits of
scale in brokerage, custodial and other fees translate into lower costs
for investors.
Liquidity:
In open-end schemes, the investor gets the money back promptly at
net asset value related prices from the Mutual Fund
Flexibility:
Through features such as regular investment plans, regular
withdrawal plans and dividend reinvestment plans, one can
systematically invest or withdraw funds according to your needs and
convenience.

 No Control over Cost:

An Investor in mutual fund has no control over the overall costs of
investing. He pays an investment management fee (which is a
percentage of his investments) as long as he remains invested in fund,
whether the fund value is rising or declining. He also has
to pay fund distribution costs, which he would not incur in direct
investing.
No Tailor-Made Portfolios:
Investing through mutual funds means delegation of the decision of
portfolio composition to the fund managers. The very high net worth
individuals or large corporate investors may find this to be a
constraint in achieving their objectives.

Limitations of mutual fund investment

Managing A Portfolio Of Funds:
Availability of large no. of funds can actually mean too much choice
for the investors. He may again need advice on how to select a fund to
achieve his objectives.
Taxes:
During a typical year, most actively managed mutual funds sell
anywhere from 20 to 70 percent of the securities in their portfolios.
If your fund makes a profit on its sales, you will pay taxes on the
income you receive, even if you reinvest the money you made.
Cost of Churn
The portfolio of fund does not remain constant. The extent to which
the portfolio changes is a function of the style of the
individual fund manager i.e. whether he is a buy and hold type of
manager or one who aggressively churns the fund.

MAIN TEXT
The Indian mutual funds industry is witnessing a rapid growth as a
result of infrastructural development, increase in personal financial
assets, and rise in foreign participation. With the growing risk
appetite, rising income, and increasing awareness, mutual funds in
India are becoming a preferred investment option compared to other
investment vehicles like Fixed Deposits (FDs) and postal savings that
are considered safe but give comparatively low returns, according to
Indian Mutual Fund Industry.
This report provides a detailed analysis along with current and future
outlook of the Indian mutual fund industry and explores the market
development and potential. The forecasts and estimations given in this
report are not based on a complex economic model, but are intended
as a rough guide to the direction in which the industry is likely to
move.
Currently there are more than 600 schemes with varied objectives and
Asset Management Companies compete against one another by
launching the new products or repositioning the old ones. In the
future, mutual fund industry has to face competition not only from
within the industry but also from other financial products that may
provide many of the same economic function as Mutual Funds but not
are strictly Mutual Funds.
In India, Retail investor behaviour has traditionally focused on the
higher income customers in vertical financial market segments. Equal
attention is needed regarding the cross market financial behaviour of
the millions of households at the middle and lower end of the income
distribution. Keeping all these in background an attempt is made in
this Research to study the Perception of customers towards Mutual
Funds.

OBJECTIVE OF THE STUDY

1. Evaluate Perception towards risk involved in mutual funds in
comparison to other financial avenues.
2. To study the Mutual Fund as financial instruments with comparison
to its other financial instruments available in the market.
3. To study the pattern of consumer behaviour within the available
investment options and to test awareness among the consumer about
the various mutual funds houses.

Assumption
1. The sample selected represents the population fully.
2 .The sample selected has thorough knowledge of the object.
3 .The data has been collected by administering an open and
close ended questionnaire to sample of end investors with the
assumption that primary data collected is true and reflects the
actual preferences of the investors.

RESEARCH METHODOLOGY:
Research Design: Descriptive Research
Research Instrument: Structured
Sample Method: Non-Probability Sampling
Sampling Design: Convenience Sampling
Sources of Data
Primary Data: Structured Non-Disguised Questionnaire
Secondary Data: Reference from distributors & banks.
The whole study is based upon primary and secondary data.
Therefore, information has been collected from interacting with
different investors and from various magazines, journals, websites,
and bulletins.
LIST OF INFORMATION REQUIRED
Primary Data: Primary data are generated when a particular problem
is investigated by the researcher employing questionnaire, telephone
survey, personal interviews, and observations.

LIMITATION
The research is confined to a certain part of Mumbai.
Some respondents were reluctant to divulge personal
information which can affect the validity of all responses.
The sample size may not adequately represent the whole market.
Possibility of error in data collection because many of investors
may have not given actual answers of my questionnaire.
Some of the persons were not so responsive.

QUESTIONNAIRE
Name of customer:
Address
City
Telephone no:
Mobile no:
E mail address
1

Occupation
employee

Government
New

employee
Businessmen
Retired
2

Age group
20-40

years
40-60 years
Above 60years
3

Annual household income

Less

than 1.5lakhs
Between 1.5-3lakhs
Between 3-5lakhs
Above 5lakhs

4.Are you interested in investment?

Yes

No

Do you have any existing investment?

Yes
No

Where do you make investment?

Fixed deposit
Property
Mutual funds
Insurance
Shares

you want investment for?

Children education
Retirement
House
Vacation abroad
Any other

for which companys mutual funds you are interested

Reliance
mutual fund
kotak mutual fund
Sbi mutual fund
ICICI prudential
Mutual fund

Other mention here

7

what is your expected return

less than 10%
Between 10% to 30%
Above 30%

how much risk you can take

Minimum risk
Moderate risk
High risk

how much you can invest

5000
5000-25000
Above 25000

10 how long you can invest

Less than 1 year
Between 1 to 3 year
More than 3 year
11 What is the future of mutual fund?
Excellent
Good
Bad
Poor
12 Which is more profitable FD or mutual fund?
FD
Mutual fund