1

EXECUTIVE SUMMARY
INTRODUCTION

Any product that can be used for commerce or an article of commerce which
is traded on an authorized Mutual funds exchange is known as Mutual funds.
The article should be movable of value, something which is bought or sold and
which is produced or used as the subject or barter or sale.

In order to be a successful trader, we must understand the true realities of the

markets. We must learn how the professionals make money and what is
possible. Most traders come into Mutual funds, lose a substantial portion of
their capital and then leave trading without ever having a correct perception of
what good trading is all about.

When talking about Mutual funds futures, it is very easy for people to
associate it with risks. Yes, a Mutual funds future trading involves greater
risks than buying stocks. However, we would like to inform you that we will
experience a Mutual funds market in the next decade or so.

Mutual funds prices in the coming years will be influenced by two the forces
of deflation and inflation. If deflationary forces dominate, commodity prices
will tend to decrease; if inflationary forces dominate, commodity prices will
tend to increase. However, this is not always and necessarily the case.

The job of the person who wants to trade Mutual funds rationally and
prudently is to ignore the promises of those promoting pie-in-the-sky
prediction mechanisms and concentrate on finding and in futures contracts are
similar to Options. Both represent actions that occur in future. But Options are
contract on the underlying futures contract where as futures are either to
accept or deliver the actual physical commodity. To make a decision between
using a futures contract or an options contract, producers need to evaluate both
alternatives.

2
Aims and Objective

To know the organization

Know the importance of Mutual funds
Know the various Mutual funds
To analysis the various trading transactions

Methodology:
Methodology is the systematic method or an activity, which is used to
collect the information required to complete this project work.
The data is collected by 2 methods:
1. Primary data
2. Secondary data.

Primary data
Is collected through personal interaction with franchise owner of
Kotak mutual funds and office staff, opinion collected from traders in
Bangalore city
Secondary data,
This is secondary in nature i.e. already, collected information. This
secondary data is collected through-

Magazines.
Internet.

Limitations of the study

1. The study is limited to only Kotak Mutual funds

2. The study is limited to opinion of branch officer and respondent

3
Analysis
1. Most of customers are not aware of the mutual funds
2. Form the analysis we found that most of the individual traders they
know the advantages of commodities and are aware of risk of trading
in commodity.
3. Every contract generally ends on the 20th of month
4. Most of the traders are satisfied with the services offered by Kotak
Mutual fund Ltd.
5. Some of the traders expect some more services form Kotak
6. From the analysis we came to know that most of the individual traders
are merchants
7. Agriculture products only trade in seasonal wise
8. Commodity services remain isolated to the traders

Conclusion
1. Traders are aware about the risk involved in commodity feature
contract
2. Heavy risk involved in mutual fund feature contract
3. Agriculture products only trade in seasonal wise
4. Contracts are only one month validity

Recommendation
1. Advertising should be done
2. Kotak commodity should take step to educate traders about the
profitability and liquidity of the commodity
3. Network development is most essential of this type of organization.
4. If company is seeking to grow their profits , they have to spend
considerable time and resources
5. Day today trading activities should be implemented.
6. Kotak should advertise their services regularly
7. The company should maintain a good relationship in reality and
improve quick services.

4
Our Corporate Identity

5
1.1 GENERAL INTRODUCTION

In todays market people invest money to gain more. So when they

take into account, they mostly look out for Investment Company where they
can get more income.

Investment companies can be classified into closed-end and open-end

investment companies. Closed-end is when it is readily transferable in the
market. Open-end funds sell their own shares to investors and ready to buy
back their old shares.

If we talk about the investment options today, in India we have so

many investment companies like UTI, LIC etc, all have their own special ways
of servicing the customers. The investors also feel that they are worth to be the
part of that company. These days people mainly look for avoiding tax so
normally they look out for some investments which can help them in doing so.
When it comes to this point of view, people mainly look out for mutual fund.

Mutual fund is a pool of funds which is divided into units of equal

value and sold to investing public and the funds so collected are utilized for
collective investments in various capitals and money market instrument.

The project Investment Options for Investors in Mutual Funds was

undertaken in Kotak Mahindra Asset Management Co Ltd (KMAMCL). This
is one of the leading players in the Mutual Fund market with different
schemes. This company was established as a trust under the Indian Trust Act,
1882.

6
1.2 THEORETICAL BACKGROUND

MUTUAL FUND

The Indian MF industry is at a point of strategic inflection. It was

founded with the establishment of UTI in 1964. The private sector MF entered
the Scene in early 1990 s and introduced better service standards and wider
product choices. The Indian MF industry has not performed up to the mark in
gaining investor confidence. The assets have been garnered based on
performance rather than confidence of investor.

CONCEPT AND ORIGIN OF MF

Personnel investing involve a clear understanding of the investment

environment; Investing means the committing of money for the purchase of
assets, based on a careful analysis of risks and rewards anticipated over a
period of time. Depending upon the characteristics of individuals there exists a
broad spectrum of purposes for Investors seeking monetary returns. Investors
have a wide variety of opportunity to commit funds various types of saving
plans involving bonds, preferred stocks and common stocks and other types of
portfolio are available.
In contrast to the large investors who can engage experienced
investment Advisors in the selection and supervision of there funds, the small
investors, by there nature and other limitations cannot construct and
successfully manage investment Portfolio. They lack the proper technical
knowledge of the capital market and the share market transactions and
consequently may suffer heavy losses.
The basic principles of investment trusts are diversifying the securities
purchased for the trust and expert management. It reduces the risks of capital
depreciations and poor dividends. At the same time the investors are given the
benefit of expert management through trained experienced and specialized
personnel, which are the ordinary investors usually lacks.

7
 There are two main types of investment companies. The first group is
variously called Management investment trust or a closed end companies in
U.S.A And Japan. The second is the unit trust type and by far the more
important one. These Are referred to as open end investment companies or as
mutual funds as they are Usually called. These may be either fixed or flexible.

MEANING OF MUTUAL FUNDS

Mutual fund is a pool of funds which is divided into units of equal

value and sold to investing public and the funds so collected are utilized for
collective investment in various capital and money market instrument

DEFINITIONS
Different persons in different words have defined mutual fund.
The SEBI (MF) Regulations, 1993 defines mutual fund as A fund
established in the form of a trust by a sponsor to raise monies by the trustees
through the sale of units to the public under one or more schemes for investing
in securities in accordance with these regulations.

CHARACTERISTICS OF MF

a) A mutual fund actually belongs to the investors who have pooled their
funds. The ownership of the MF is in the hands of the investors.
b) A MF is managed by investment professionals and other service
providers, who earn a fee for their services from the fund.
c) The pool of funds is invested in a portfolio of marketable investment.
The value of the portfolio is updated every day.
d) The investors share in the fund is denominated by units. The value of
the units changes with change in the portfolios value, every day. The
value of one unit of investment is called as the net assets value or
NAV.
e) The investment portfolio of the Mutual fund is vested according to the
slated Investment objectives of the fund

8
Meaning of Investment

The use of money for the purpose of making more money, to gain
income, increase capital or both.

Definition of Investment

Physical investment is the current product set aside during a given

period to be used for future production.

Investment Company

A company or trust that uses its capital to invest in other companies.

There are two principal types closed-ended and the open-ended. Shares in
closed-ended investment companies, some of which are listed on the New
York Stock Exchange are readily transferable in the open market and are
bought and sold like other shares. Capitalization of these companies remains
the same unless action is taken to change, which is seldom.

An open-ended fund sells their own shares to investors; stands ready to

buy back their old shares and are not listed. These funds are so called because
their capitalization is not fixed; they issue more shares as people want them.

Financial Institutions

Indian financial system is dominated by state sponsored financial

institutions. Recognizing the role of state in the planned development of the
economy, government of India has established specialized financial
institutions, often called as Development Banks or Term lending
institutions. These financial institutions are expected to mobilize medium and
long term savings from the public and arrange for extending term loans for
industry, commerce and trade. The financial institutions can be broadly
classified as

Investment companies, who mobilize small savings from surplus units

and Loan companies, who extend variety of financial assistance to different
enterprises.

9
Investment Options

The different investment options in the market include Equity,

Financial Institution bond, Co-operate debenture, Company fixed deposit,
LIC, Public Provident Fund, Gold, Real Estate, Mutual Fund, Bank Deposits
etc.

A comparison of different investment options with respect to their

Performance is as shown in the following table.

Options Returns Safety Volatilit Liquidity Convenience

y
Equity High Low High High/Low Moderate
FI Bond Moderate High Moderate Moderate High
Cooperate Moderate Moderate Moderate Low Low
Debenture
Company Moderate Low Low Low Moderate
FD
PPF Moderate High Low Moderate High
LIC Low High Low Low Moderate
Gold Moderate High Moderate Moderate Low
Real High Moderate High Low Low
Estate
Mutual High High Moderate High High
Fund
Bank Low Low Low High High
Deposit

10
STRUCTURE OF THE INDIAN MUTUAL FUND INDUSTRY
Structure wise Mutual fund Industry can be classified in to three categories:

Unit Trust of India

The Indian Mutual Fund industry is dominated by the Unit Trust of

India, which has a total corpus of Rs.51,100 crore collected from over 20
million investors. The UTI has many funds/ schemes in all categories i.e.
Equity, Balanced, Debt, Money Market etc. With some being open ended and
some being closed ended. The Unit scheme 1964 commonly referred to as US
64, which is a balanced fund, is the biggest scheme with a corpus of about
10,000 crore.

Public Sector Mutual Funds

The second largest categories of mutual funds are the ones floated by
nationalized banks. Can bank asset management floated by Canara Bank and
SBI Funds Management floated by State Bank of India are the largest of these.
GIC AMC floated by General Insurance Corporation and Jeevan Bima
Sahayog AMC floated by the LIC are some of the other prominent ones. The
aggregate corpus of the funds managed by this category of AMCs is around
Rs. 8,300 crore.

Private Sector Mutual fund

The third largest categories of mutual funds are the ones floated by the
Private Sector Domestic Mutual funds and the Private Sector Foreign Mutual
Funds. The largest of these in Private Sector Domestic Mutual funds are
Cholamandalam Asset Management Co.Ltd., J.M Capital Management Co.
Ltd., Escort Asset Management Ltd., Birla Sun Life Asset Management
Pvt.Ltd., and in Private Sector Foreign Mutual Funds these are Alliance
Capital Asset Management Pvt.Ltd., Prudential ICICI Management Co. Ltd.,
Sun F&C Asset Management Pvt.Ltd., and Zurich Asset Management
Co.Pvt.Ltd. The aggregate corpus of the assets managed by this category of
AMCs is about Rs. 42,200 crore.

11
CONSTITUENTS OF MUTUAL FUND
There are many entities involved and the diagram below illustrates the constitu
tion of a mutual fund:

Organization of a Mutual Fund

All mutual funds comprise four constituents Sponsors, Trustees,

Asset Management Company (AMC) and Custodians.

Sponsors:

The sponsors initiate the idea to set up a mutual fund. It could be a

registered company, scheduled bank or financial institution. A sponsor has to
satisfy certain conditions, such as capital, record (at least five years operation
in financial services), de-fault free dealings and general reputation of fairness.
The sponsors appoint the Trustee, AMC and Custodian. Once the AMC is
formed, the sponsor is just a stakeholder.

12
Trust/ Board of Trustees:

Trustees hold a fiduciary responsibility towards unit holders by

protecting their interests. Trustees float and market schemes, and secure
necessary approvals. They check if the AMCs investments are within well-
defined limits, whether the funds assets are protected, and also ensure that
unit holders get their due returns. They also review any due diligence by the
AMC. For major decisions concerning the fund, they have to take the unit
holders consent. They submit reports every six months to SEBI; investors get
an annual report. Trustees are paid annually out of the funds assets 0.5
percent of the weekly net asset value.

Fund Managers/ AMC:

They are the ones who manage money of the investors. An AMC takes
decisions, compensates investors through dividends, maintains proper
accounting and information for pricing of units, calculates the NAV, and
provides information on listed schemes. It also exercises due diligence on
investments, and submits quarterly reports to the trustees. A funds AMC can
neither act for any other fund nor undertake any business other than asset
management. Its net worth should not fall below Rs. 10 crore. And, its fee
should not exceed 1.25 percent if collections are below Rs. 100 crore and 1
percent if collections are above Rs. 100 crore. SEBI can pull up an AMC if it
deviates from its prescribed role.

Custodian:

Often an independent organization, it takes custody of securities and

other assets of mutual fund. Its responsibilities include receipt and delivery of
securities, collecting income-distributing dividends, safekeeping of the units
and segregating assets and settlements between schemes. Their charges range
between 0.15-0.2 percent of the net value of the holding. Custodians can
service more than one fund.

13
Product Classification Profile Of Mutual Fund Industry

0 In all, investors have a choice of 397 funds to choose from covering

the gamut of financial offerings. Types include income, growth, balanced,
liquid or money market, gilt and equity linked tax savings schemes.
1
2 Income funds constitute the largest category with assets under
management of Rs 52,300 crore or 54 per cent. Balanced schemes account for
Rs 19,500 crore or 20 per cent, and growth funds Rs 13,800 crore or 14 per
cent.
3
4 Liquid or money market funds account for 6 per cent or Rs 6,000
crore; gilt funds have AUM of Rs 2,900 crore or 3 per cent and equity-linked
tax savings funds account for Rs 2,300 crore or 2.4 per cent of the industry's
assets.

Growth of Mutual Funds Industry in India

The Indian Mutual fund Industry has passed through three phases. The
first phase was between 1964 and 1987 and the only player was the Unit Trust
of India, which had a total asset of Rs. 6,700/- crores at the end of 1988. The
second phase is between 1987 and 1993 during which period 8 funds were
established (6 by banks and one each by LIC and GIC). The total assets under
management had grown to Rs. 61,028/- crores at the end of 1994 and the
numbers of schemes were 167.

The third phase began with the entry of private and foreign sectors in
the Mutual fund industry in 1993. Kothari Pioneer Mutual fund was the first
fund to be established by the private sector in association with a foreign fund.
As at the end of financial year 2006 (31st March) 32 funds were functioning
with Rs. 1, 13,005 crore as total assets under management. As on August end
2000, there were 33 funds with 391 schemes and assets under management
with Rs. 1,02,849 crore and on 31st December 2006, it was 1,01,600 crore.
Asset under management has been because, declining because

14
of US-64 scam, which is the one of the balanced scheme under Unit Trust of
India held a large amount of Asset Under Management.

Several private sector Mutual Funds were launched in 1993 and 1994.
The share of the private players has risen rapidly since then.

Currently there are 36 Mutual Fund organizations in India managing

over Rs. 1, 02,000/- crore.

Competition in the Mutual Fund Industry

Mutual Fund is the industry which is facing severe competition from

the other financial Products. The four Types of competition in the Mutual
Fund Industry are as follows:

Inter-industry Competition

Intra-industry Competition

Competition between the different Mutual fund schemes

Competition between the different Assent Management Company.

0
Global Scenario Of Mutual Fund Industry.
The money market mutual fund segment has a total corpus of $ 1.48
trillion in the U.S.
Out of the top 10 mutual funds worldwide, eight are bank-
sponsored. Only Fidelity and Capital are non-bank mutual funds in
this group.
In the U.S. the total number of schemes is higher than that of the
listed companies.
Internationally, mutual funds are allowed to go short. In India fund
managers do not have such leeway.
In the U.S. about 9.7 million households will manage their assets on-
line by the year 2005, such a facility is not yet of avail in India.

15
 On- line trading is a great idea to reduce management expenses from
the current 2 % of total assets to about 0.75 % of the total assets.

72% of the core customer base of mutual funds in the top 50-broking
firms in the U.S. is expected to trade on-line by 2005.

ADVANTAGES OF MUTUAL FUNDS: -

If mutual funds are emerging as the favorite investment vehicle, it is

because of the many advantages they have over other forms and avenues of
investing, particularly for the investor who has limited resources available in
terms of capital and ability to carry out detailed research and market
monitoring. The following are the major advantages offered by mutual funds
to all investors:

Portfolio diversification:

Mutual Funds normally invest in a well-diversified portfolio or

securities. Each investor in a fund is a part owner of all of the funds assets.
This enables him to hold a diversified investment portfolio even with a small
amount of investment that would otherwise require big capital.

Professional Management:

Even if and investor has a big amount of capital available to him, he

benefits from the professional management skills brought in the management
of the investors portfolio. The investment management skills, along with the
needed research into available investment options, ensure a much better return
than what an investor can manage on his own. Few investors have the skills
and resources of their own to succeed in todays fast moving, global and
sophisticated markets.

16
Reduction/Diversification of Risk:

An investor in a mutual fund acquires a diversified portfolio, no matter

how small his investment. Diversification reduces the risk of loss, as
compared to investing directly in one or two shares or debentures or other
instruments. When and investor invests directly, all in the pool of funds with
other investors, any loss on one or two securities is also shared with other
investors. This risk reduction is one of the most important benefits of a
collective investment vehicle like the mutual fund.

Reduction of transaction cost:

What is true of risk is also true of the transaction costs. A direct

investor bears all the costs of investing such as brokerage or custody of
securities. When going through a fund. He has the benefit of economies of
scale; the funds pay lesser costs because of larger volumes, a benefit passed on
to its investors.
0
1
Liquidity:
2
3 Often, investors hold shares or bonds they cannot directly, easily and
quickly sell. Investment in a mutual fund, on the other hand, is more liquid.
An investor can liquidate the investment, by selling the units to the fund if
open-end or selling them in the market if the fund is closed-end, and collect
funds at the end of a period specified by the mutual fund or the stock market.

Convenience and Flexibility:

17
 Mutual Fund management companies offer many investor services that
a direct market investor cannot get. Investors can easily transfer their holdings
from one scheme to the other; get updated market information, and so on.

RISK FACTORS ASSCIATED WITH MUTUAL FU NDS

1. Mutual funds & securities investments are subject to market risks and there
is no assurance or guarantee that the objectives of the Scheme will
be achieved.
2. Past performance of the Sponsor or that of existing Schemes of the Fund
does not indicate the future performance of the Schemes.
3. As with any securities investment, the NAV of the Units issued under the
scheme can go up or down depending on the factors and forces affecting
the capital and money market.
4 .Tax laws may change, affecting the return on investment in Units.

1.3 TYPES OF MUTUAL FUND SCHEMES

Schemes according to Maturity Period:

A mutual fund scheme can be classified into open-ended scheme or
close-ended scheme depending on its maturity period.

Open-ended Fund/ Scheme

An open-ended fund or scheme is one that is available for subscription
and repurchase on a continuous basis. These schemes do not have a fixed
maturity period. Investors can conveniently buy and sell units at Net Asset
Value (NAV) related prices which are declared on a daily basis. The key
feature of open-end schemes is liquidity.

Close-ended Fund/ Scheme

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7
years. The fund is open for subscription only during a specified period at the

18
time of launch of the scheme. Investors can invest in the scheme at the time of
the initial public issue and thereafter they can buy or sell the units of the
scheme on the stock exchanges where the units are listed.
In order to provide an exit route to the investors, some close-ended
funds give an option of selling back the units to the mutual funds NAV related
prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor i.e. either repurchase facility or through listing on
stock exchanges. These mutual funds schemes disclose NAV generally on
weekly basis.

Schemes according to Investment Objective:

A scheme can also be classified as growth scheme, income scheme, or
balanced scheme considering its investment objective. Such schemes may be
open-ended or close-ended schemes as described earlier. Such schemes may
be classified mainly as follows:

Growth / Equity Oriented Scheme

The aim of Growth funds is to provide capital appreciation over the
medium to long-term. Such schemes normally invest a major part of their
corpus in equities. Such funds have comparatively high risks. These schemes
provide different options to the investors like dividend option, capital
appreciation, etc. and the investors may choose an option depending on their
preferences. The investors must indicate the option in the application form.
The mutual funds also allow the investors to change the options at a later date.
Growth schemes are good for investors having a long-term outlook seeking
appreciation over a period of time.

Income / Debt Oriented Scheme

The aim of the income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such as
bonds, corporate debentures, Government securities and money market
instruments. Such funds are less risky compared to equity schemes. These
funds are not affected because of fluctuations in equity markets.

19
 However, opportunities of capital appreciation are also limited in such
funds. The NAVs of such funds are affected because of change in interest rates
in the country. If the interest rates fall, NAVs of such funds are likely to
increase in the short run and vice versa. However, long-term investors may not
bother about these fluctuations.

Balance Fund
The aim of balance funds is to provide both growth and regular income
as such schemes invest both in equities and fixed income securities in the
proportion indicated in their offer documents. These are appropriate for
investors looking for moderate growth. They generally invest 40-60% in
equity and debt instruments. These funds are also affected because of
fluctuations in share prices in the stock markets. However, NAVs of such
funds are likely to be less volatile compared to pure equity funds.

Gilt Fund
These funds invest exclusively in government securities. Government
securities have no default risk. NAVs of these schemes also fluctuate due to
change in interest rates and other economic factors as are the case with income
or debt oriented schemes.

Index Funds
Index Funds replicate the portfolio of a particular index such as the
BSE Sensitive index, S&P NSE 50 index (Nifty), etc. These schemes invest in
the securities in the same weight age comprising of an index. NAVs of such
schemes would rise or fall in accordance with the rise or fall in the index,
though not exactly by the same percentage due to some factors known as
tracking error in technical terms.
Necessary disclosures in this regard are made in the offer document of
the mutual fund scheme.

20
 There are also exchange traded index funds launched by the mutual
funds, which are traded on the stock exchanges.

21
2.1 OBJECTIVES OF THE STUDY
1. To track investors attitude, performance and behavior with respect to
financial institutions and financial products.

2. To find new and more effective ways of ensuring customer satisfaction

and to find efficient ways of communicating it.

3. To conduct the study with references to Kotak Mahindra products and

the competitive scenario in which Kotak Mahindra operates.

2.2 SCOPE OF THE STUDY

The study includes investors, financial institutions, investors who are

interested in Kotak Mahindra Asset Management Companys mutual fund and
also the individuals who are interested in the investment on the mutual fund.
Mainly this study was conducted in two districts of Kerala, Ernakulam and
Kottayam. The individuals without investment are also included in the scope
of the study.

2.3 STATEMENT OF THE PROBLEM

The investment objective of Kotak Mahindra Asset Management Co is

to generate capital appreciation from a diversified portfolio of
predominantly equity and equity related securities or securities issued by
central and state government. Despite this objective, the reasons like
mutual fund investments are subject to market risk, there is no assurance or
guarantee that the objective of the scheme can be achieved and also the Net

22
Asset Value (NAV) of the units can go up or down depending on factors
affecting the capital and money market, many of the investors tend not to
invest in the mutual fund investment.

2.4 OPERATIONAL DEFINITIONS OF CONCEPTS

NET ASSET VALUE (NAV): -

Net Asset Value (NAV) denotes the performance of particular scheme

of a mutual fund Mutual Funds invest he money collected from the investors
in securities markets. In simple words, Net Asset Value is the market value of
the securities held by the scheme. Since market value of securities changes
every day, NAV of a scheme also varies on day-to-day basis. The NAV per
unit is market value of securities of scheme divided by the total number of
units of the scheme on any particular date.

Formula of the calculation of Net Asset Value:

Market Value of Investments

Net Asset Value = ------------------------------------------
No. of units Outstanding

However, most people refer loosely to the NAV per unit as NAV,
ignoring the "per unit".

2.5 REVIEW OF LITERATURE

The research required primary and secondary source of data. The
primary data is obtained through structured questionnaires designed Secondary
Datas are the one which is collected from web site of Kotak Mahindra,
investors and company records.

It also includes

23
 Albert J Fredman, How Mutual Funds Work, Eastern Economy
Edition, Prentice Hall of India Pvt Ltd, New Delhi

0 Week 15/01/2007 (Regarding Mutual Fund Investment)

1 Financial Chartered Analyst 01/09/2006

2.6 RESEARCH METHODOLOGY

Research Problem

A pilot study was conducted to make the definition of the problem and
an understanding of the environment. This helped to concentrate on important
areas of the problem of various factors that affect consumer behavior.

Research Design

A research design calls for developing the most efficient plan for
gathering the needed information. The design of research study is based on the
purpose of the study.

A research design is the specification of methods and procedures for

acquiring the information needed. Its overall and operational pattern or
framework of the project that stipulates what information is to be collected
from which source by what procedures.

TYPES OF RESEARCH

1. Exploratory Research

2. Descriptive Research

3. Casual Research

Exploratory Study

24
 It is done to generate new ideas. Respondents should be given
sufficient freedom to express themselves. Sometimes group of respondents is
brought together and focuses group interview is held.

An exploratory study is generally based on the secondary data that are

readily available. It does not have a formal and rigid design as to change focus
or direction, depending on the availability of new ideas and relationships
among variables. This study is in nature of preliminary investigation wherein
the researcher himself is not sufficiently knowledgeable and is, therefore
unable to frame detail research questions.

Descriptive Study

It is undertaken in many circumstances. When the researcher is

interested in knowledge, the characteristics of certain groups such as age, sex,
educational level, occupation or income, interested in knowing the proportion
of in a given population who have behaved in particular manner, making the
projections of certain things, or determining the relationships between two or
more variables, descriptive study may be necessary. Descriptive data are
commonly used as directed bases of marketing decisions. These studies are
well structured.

Design in such studies that must be rigid and not flexible and must
focus attention on the following.

What the study is about and why is it made?

What techniques of gathering data will be adopted?

How much material will be needed?

Where can be the required data found?

Processing and analyzing of data?

25
 Reporting the findings?

Descriptive study has been followed with the help of qualitative

research design.

QUANTITATIVE RESEARCH DESIGN

If descriptive information is needed, then a quantitative study is likely

to be needed. The choice of data collection methods for this study includes

Observation

By watching people, observational researches gain a better

understanding of what product symbolizes to a customer, and greater insight
into the bond between people and products that is essence of brand loyalty.

Experimentation

It is possible to test the relative sales appeal of many types of such

variables such as package, prices, promotional offers or copy themes-through
experiments designed to identify causes and effect.

Surveys

If researchers wish to ask consumers about their purchase preferences

they do if through survey, which are of three types

- Personal interview : through correspondence

- Telephone surveys : through telephone

- Mail surveys : through posts

The research design adopted in this study is descriptive research in

order to produce descriptive information such as awareness about various

26
attributes attached to Kotak. The survey has been conducted personal
interview through structured questionnaire

Casual Research Design

It aims to determine cause and affect relationship between variables.

The aim is to understand why things happen, and thereby to control what
happens. For example, find factors, which cause customers to buy that
particular product.

2.7 SAMPLING METHOD

Sample Profile

Simple Random Sampling method has been adopted for the study
consisting of 100 samples. The respondents were selected from all the
categories.

Sample Size

The sample size was fixed at 100 respondents.

2.8 DATA ANALYSIS TOOL

Primary data collected through questionnaire was tabulated and

analyzed using statistical techniques such as factor analysis; analysis of
variance etc and using standard analytical tools such as mean score analysis,
percentage analysis etc.

27
2.9 OVERVIEW OF THE REPORT

In Chapter 1 this report bring out the General Introduction

and explains the theoretical background of the organization

Chapter 2 includes the Design of the study. It covers the

objectives, scope, statement of the problem, Review of literature,
operational definitions, Research Methodology, statement of
hypothesis, sampling methods, Data Analysis tool, overview of the
Report and the limitations.

Chapter 3 includes the profile of the organization, profile of the

study unit, organizational chart and functional department of the
organization.

Chapter 4 includes the analysis. It covers the Analysis &

Interpretation

Chapter 5 includes the summary, which covers findings,

contribution of the study, Suggestions, Conclusion, Questionnaire
and Bibliography.

28
2.10 LIMITATIONS OF THE STUDY

1. A descriptive research was undertaken for the purpose of project. But

descriptive research has its own limitations regarding the selection of
sample size of sample unit.

2. Some of the data gathered from the mutual fund holders may not be reliable.

3. Time limit was also a constraint while conducting the study. So, the study
does not give a picture of the whole market.

29
3.1 PROFILE OF THE ORGANISATION

30
 Kotak Mahindra Mutual Fund (KMMF) has been established as a Trust
under the Indian Trusts Acts, 1882. the trust Deed establishing KMMF and the
Deed of Amendment have been registered under the Registration Act, 1908 by
the office of the Sub-Registrar of Assurances at Mumbai. KMMF has been
registered with SEBI vide registration number MF/038/98/1 dated 23rd June
1998.

The sponsor company, Kotak Mahindra Finance Limited (KMFL), was

converted into Kotak Mahindra Bank Limited (Kotak Bank) in March 2003
DER BEING GRANTED A BANKING LICENSE BY THE reserve Bank of
India. KMFL promoted by Mr. Uday S Kotak, Mr. S.A.A.Pinto and Kotak &
Co., was incorporated on November 21, 1985, under the name Kotak Capital
Management Finance Limited. In early 1986, the promoters were joined by
Late Mr.Harish Mahindra and Mr. Anand G Mahindra and the Companys
name was changed to Kotak Mahindra Finance Limited.

Kotak & Co is a highly respected trading company of Mumbai, with

international business. KMFL started with a capital base of Rs.30.88 lakhs.
The sponsor and its subsidiaries/associates offer wide ranging financial
services such as loans, lease and hire purchase, consumer finance, commercial
vehicles and car finance, investment banking, stock broking, primary market
distribution of equity and debt products and life insurance.

The group has offices in over 50 Indian cities as also in Dubai,

Mauritius, London and New York. Kotak Mahindra (UK) Ltd, an ultimate
subsidiary of Kotak bank, is the first company owned from India to be
registered with the securities and futures authority in London. Kotak Mahindra
Capital Company Limited and Kotak Securities Limited are joint ventures
between Kotak Bank and Goldman Sachs, the latter being one of he largest
global investment banks. Kotak Mahindra Primus Limited and Ford edit Kotak
Mahindra Limited are joint ventures between Kotak Bank and Ford Credit
International, the global car-financing arm of Ford Motor Company. OM
Kotak Mahindra Life Insurance

31
 Company Limited is a joint venture between Kotak Bank and Old
Mutual Plc based in the UK and with large presence in the South African
insurance market. Some of the other subsidiaries of Kotak bank are Kotak
Mahindra Securities Limited, Kotak Mahindra International Limited, Kotak
Mahindra Private-Equity Trustee Limited, Kotak Mahindra Investments
Limited, Kotak Mahindra Inc, and Kotak Forex Brokerage Limited.

The Sponsor has been a consistently profitable and dividend paying

company since inception. All group companies are professionally run
companies, employing over 1800 professionals including CAs, MBAs and
engineers.

32
3.2 PROFILE OF THE STUDY UNIT

Kotak Mahindra Asset Management Company Limited, a company

registered under the Companies Act, 1956, has been appointed to act as the
investment Manager of Kotak Mahindra Mutual Fund vide investment
Management Agreement dated 20th May, 1996, as amended up to date. It is
wholly owned subsidiary of the Sponsor, Kotak Mahindra Bank Limited.

An approval has been granted to the Company by the Division of

Funds, Investment Management Department of SEBI for undertaking Portfolio
Management Service under the SEBI (Portfolio Manager) Regulations, 1993.
However the company has not begun such activity.

Scheme details about Kotak Mahindra Asset Management

Company

1. KOTAK 30

Objective: - The investment objective is to generate capital appreciation

from a portfolio of predominantly
equity and equity related securities with investment in,
generally not more than 30 stock.

Structure: - Open Ended Equity Growth Scheme

Entry load: - 2% for purchase amounts less than Rs 50 lakhs, Nil for
purchase amounts greater than or equal to Rs 50 lakhs

2% for purchase amounts less than Rs 2 crores, Nil for

purchase amounts greater than or equal to Rs 2 crores

Exit Load: - NIL

Minimum investment: - Rs 5,000

33
2. KOTAK TECH

Objective: - The investment objective is to generate capital appreciation

from a
Predominantly equity and equity related securities issued by
multinational co.

Structure: - Open Ended Equity Growth Scheme.

Entry load:-2% for purchase amounts less than Rs 50 lakhs, Nil for
purchase amounts greater than or equal to Rs 50 lakhs.
2% for purchase amounts less than Rs 2 crores, Nil for
purchase amounts greater than or equal to Rs 2 crores

Exit Load: - NIL

Minimum investment: - Rs 5,000

3. KOTAK MNC

Objective: - The investment objective is to generate capital appreciation

from a portfolio of predominantly equity and equity related
securities issued by multinational companies.

Structure: - Open Ended Equity Growth Scheme

Entry load:- 2% for purchase amounts less than Rs 50 lakhs , Nil for
purchase amounts greater than or equal to Rs 50 lakhs
2% for purchase amounts less than Rs 2 crores, Nil for
purchase amounts greater than or equal to Rs 2 crores

Exit Load: - NIL

Minimum investment: - Rs 5,000

34
4. KOTAK BALANCE

Objective: - The investment objective is to achieve growth by investing

in Equity and equity related instruments, balanced with income
generation by Investing in debt and money market instruments

Structure: - Open Ended Balanced Scheme.

Entry load: - 2% for purchase amounts less than Rs 50 lakhs, Nil for
purchase amounts greater than or equal to Rs 50 lakhs

2% for purchase amounts less than Rs 2 crores, Nil for

purchase amounts greater than or equal to Rs 2 crores

Exit Load: - NIL

Minimum investment: - Rs 5,000

5. KOTAK INCOME PLUS

Objective: - To enhance returns over a portfolio of debt instruments with

a moderate exposure in Equity & Equity related instruments

Structure: - Open Ended Income Scheme

Entry load: - NIL

Exit load: - 0.50% for redemptions within 6 months where investment

amount is Less than Rs 25 lakhs. Nil for investment amount
greater than or equal to 25 lakhs

Minimum Investment: - Rs 5,000

35
6. KOTAK GILT

Objective: - To generate risk free returns through investments in

sovereign Securities issued by the central government and / or
a state government and / or reverse repose in such securities

Structure: - Open Ended Dedicated Gilt Scheme

Entry Load: - NIL

Exit Load: - NIL

Minimum Investment: - Savings & investment Plan; Rs 5,000

Serial Plans; Rs 10 lakhs

7. KOTAK BOND

Objective: - To create a portfolio of debt and money market instruments of

different maturities so as to spread the risk across a wide
maturity Horizon & different kinds of issuers in the debt
market Kotak Bond Short Term Plan To provide reasonable
returns and high level of liquidity by investing In debt &
money market instruments of different maturities, So as to
spread the risk across different kinds of issuers in the debt
market.

Structure: - Open Ended Debt Scheme

Entry load: - NIL

Exit Load: - Deposit Plan; 0.50% for exits within 6 months of investment
else no Load Wholesale Plan & Short term plan; No exit load
Wholesale Plan Annual Dividend Option: 0. 75% for exits
Within three months of investment, else no exit load
Wholesale plan Bonus Option; 0.25% for exits within 60
Days of investments Else no exit load

Minimum Investment: - Deposit Plan Rs 5,000

Wholesale Plan: Rs 1 lakh
Short Term Plan: Rs5, 000
Institutional Plan; Rs 1 crore

36
8 KOTAK LIQUID

Objective; - To provide reasonable returns and high level of liquidity by

Investing in debt and money market instruments of different
Maturities so as to spread the risk across different kinds of
Issuers in the debt markets

Structure; - Open Ended Debt Scheme

Entry load; - NIL

Exit load: - NIL

Minimum Investment: - Rs 5,000

Institutional plan: Rs 1 crore
Institutional Premium Plan: Rs 20 crores

9 KOTAK FLOATER

Objective: - To reduce the interest rate risk associated with investments in

fixed rate instruments by investing predominantly in floating
rate securities, money market Instruments and using appropriate
derivatives

Structure: Open Ended Debt Scheme

Entry Load: - NIL

Exit Load: - NIL

Minimum Investment: Rs 5,000.

37
10. KOTAK DYNAMIC INCOME

Objective: To maximize returns through an active management of a portfolio

of debt and securities.

Structure: Open Ended Debt Scheme

Entry Load: - NIL

Exit Load: - NIL

Minimum Investment: Rs 5,000

11. KOTAK GLOBAL INDIA

Objective: To generate capital appreciation from a diversified portfolio of

predominantly equity and equity related securities issued by
globally competitive Indian Companies.

Highlights

Investment in a diversified equity portfolio of Globally Competitive

Indian Companies.

Tax advantage

Recurring Investment Facility available during continuous offer.

Redemption on all Working days.

38
0 3.3 ORGANIZATIONAL CHART
1

Branch Manager

Fixed Income Division

Relationship Manger

Customer Relationship Manger

Equity Division

Assistant Manger Operations Dealer

39
3.4 FUNCTIONAL DEPARTMENTS OF THE
ORGANISATION
2

The entire investment management process is depicted in the following chart

Understanding the Investor Profile

Portfolio Construction

Asset Allocation

Security Selection

Execution

Monitoring & Performance Evaluation

Investment Management Process

Throughout the process, open lines of communication are maintained

to ensure that the portfolio remains structured to continually meet customers

needs. As investor profiles are dynamic i.e. change as an investor progresses

in his lifecycle; it becomes imperative to make suitable adjustments to the

portfolio from time to time.

40
4.1ANALYSIS AND INTERPRETATION

41
 TABLE NO.1 TO SEE THE RESPONDENT IS AN INCOME TAX
ASSESSEE.

Sl. No. Attributes No. of respondents Percentage

1 Yes 76 76
2 No 24 24
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 76% of the
respondents say that they are income tax assesses and the rest 24% say that
they are not.

This is illustrated in the following graph.

GRAPH NO.1 TO SEE THE RESPONDENT IS AN INCOME TAX

ASSESSEE.

42
 80 76

70

60

50
Percentage

40

30
24

20

10

0
Yes No
Attributes

Source: - Table No: 1

TABLE NO 2. TO SEE WHETHER REPONDENTS INVEST FOR TAX

EXEMPTION OR TAX SAVINGS

43
 Sl. No. Attributes No. of respondents Percentage
1 Yes 70 70
2 No 30 30
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 70% of the
respondents say that they invest for tax exemption and the rest 30% say that
they do not.

This is illustrated in the following graph.

GRAPH NO 2. TO SEE WHETHER REPONDENTS INVEST FOR TAX

EXEMPTION OR TAX SAVINGS

44
 80
70
70

60

50
Percentage

40
30
30

20

10

0
Yes No
Attributes

Source: Table No: 2

TABLE NO 3. INVESTMENT PREFERENCE OF RESPONDENTS

45
Sl. No. Attributes No. of respondents Percentage
1 Fixed Deposits 33 33
2 Real Estate 21 21
3 Insurance 27 27
4 Mutual Fund 9 9
5 Gold 9 9
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 33% of the
respondents invest in fixed deposits, 21% invest in Real Estate, 27% in
Insurance, 9% in Mutual Fund and the rest 9% say that they invest in gold.

This is illustrated in the following graph.

GRAPH NO 3. INVESTMENT PREFERENCE OF RESPONDENTS

46
 35 33

30
27
25
21
Percentage

20

15

10 9 9

d
e
e
its

d
un
nc
at

ol
os

G
st

lF
ra
ep

lE

su

ua
D

ea

In

ut
ed

M
x
Fi

Attributes

Source: Table No: 3

TABLE NO 4. REASONS OF INVESTMENT PREFERENCE OF

RESPONDENTS

47
 Sl. No. Attributes No. of respondents Percentage

1 Less Risk 28 28
2 Good Returns 21 21
3 Liquidity 12 12
4 Assured Returns 36 36
5 Other Reasons 3 3
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 28% of the
respondents prefer investment due to less risk, 21% due to good returns, 12%
due to liquidity, 36% due to assured returns and the rest 3% do it due to other
reasons.

This is illustrated in the following graph.

GRAPH NO 4. REASONS OF INVESTMENT PREFERENCE OF

RESPONDENTS

48
 40
36
35

30 28

25
Percentage

21
20

15
12
10

5 3

0
Less Risk Good Liquidity Assured Other
Returns Returns Reasons

Attribute

Source: Table No: 4

49
 TABLE NO 5. CURRENT INVESTMENT PORTFOLIO OF
RESPONDENTS

Sl. No. Attributes No. of respondents Percentage

1 Govt securities and bonds 61 61
2 Mutual funds & company 18 18
FDs
3 Equity Shares 21 21
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 61% of the
respondents invest in Govt securities and bonds, 18% in Mutual funds and
company fixed deposits and the rest 21% in equity shares.

This is illustrated in the following graph:

GRAPH NO 5. CURRENT INVESTMENT PORTFOLIO OF

RESPONDENTS

50
 70
61
60
50
Percentage
40
30
21
18
20
10
0
Govt Mutual funds Equity Shares
securities and & company
bonds FDs
Attributes

Source: Table No: 5

51
 TABLE NO 6. NATURE OF INVESTMENT THAT THE
RESPONDENTS LIKE

Sl. No. Attributes No. of respondents Percentage

1 Steadily 61 61
2 At average rate 27 27
3 Fast 12 12
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 61% of the
respondents like their investment to grow steadily, 27% in an average rate and
the rest 12% in a fast rate.

This is illustrated in the following graph.

GRAPH NO 6. NATURE OF INVESTMENT THAT THE

RESPONDENTS LIKE

52
 70
61
60

50
Percentage

40

30 27

20
12
10

0
Steadily At average Fast
rate
Attributes

Source: Table No:6

TABLE NO 7. DURATION OF INVESTMENT OF RESPONDENTS

53
Sl. No. Attributes No. of respondents Percentage
1 Upto 1 year 6 6
2 1 - 5 years 39 39
3 5 - 10 years and above 55 55
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 6% of the

respondents go for the investment whose duration is upto 1 year, 39% for 1 to
5 years and the rest 5-10 years and above.

This is illustrated in the following graph.

GRAPH NO 7. DURATION OF INVESTMENT OF RESPONDENTS

54
 60
55

50

39
Percentage 40

30

20

10
6

0
Upto 1 year 1 - 5 years 5 - 10 years and
above
Attribute

Source: Table No: 7

TABLE NO 8.. PERCENTAGE OF INCOME THAT THE

RESPONDENTS INVEST

55
Sl. No. Attributes No. of respondents Percentage
1 5% 24 24
2 5% - 10% 37 37
3 More than 10% 39 39
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 24% of the
respondents invest 5% of their total incomes, 37% invest 5-10% and the rest
39% invest more than 10%.

This is illustrated in the following graph.

GRAPH NO 8.. PERCENTAGE OF INCOME THAT THE

RESPONDENTS INVEST

56
 45

40 39
37

35

30
Percentage

25 24

20

15

10

0
5% 5% - 10% More than 10%
Attribute

Source: Table No: 8

TABLE NO 9. TO SEE WHETHER THE RESPONDENT IS AN

INVESTOR OF MUTUAL FUND

Sl. No. Attributes No. of respondents Percentage

1 Yes 27 27

57
 2 No 73 73
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, only 27% of the
respondents are investors of mutual funds and the rest 73% are not.

This is illustrated in the following graph.

GRAPH NO 9. TO SEE WHETHER THE RESPONDENT IS AN

INVESTOR OF MUTUAL FUND

58
 80
73
70

60

50
Percentage

40

30 27

20

10

0
Yes No
Attribute

Source: Table No.9

TABLE NO 10. REASONS FOR NOT INVESTING IN MUTUAL

FUNDS

59
Sl. No. Attributes No. of respondents Percentage
1 Awareness 15 15
2 Risky 58 58
3 Returns not assured 27 27
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 15% of the
respondents do not invest in mutual funds because of lack of awareness, 58%
as it is risky and the rest 27% as the returns are not assured.

This is illustrated in the following graph.

GRAPH NO 10. REASONS FOR NOT INVESTING IN MUTUAL

FUNDS

60
 70

60 58

50
Percentage

40

30 27

20
15

10

0
Awareness Risky Returns not
assured
Attribute

Source: Table No.10

TABLE NO 11. REASONS FOR INVESTING IN MUTUAL FUNDS

Sl. No. Attributes No. of respondents Percentage

1 Less Risky 21 21
2 Liquidity 30 30

61
 3 Professional Mgmt 24 24
4 Fast Appreciation 25 25
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 21% of the
respondents feel that investing in mutual funds are less risky and hence they
invest, 30% invest due to liquidity, 24% due to Professional management and
the rest 25% due to fast appreciation.

This is illustrated in the following graph.

GRAPH NO 11. REASONS FOR INVESTING IN MUTUAL FUNDS

62
 35

30
30

25
25 24

21
20
Percentage

15

10

0
Less Risky Liquidity Professional Fast
Mgmt Appreciation
Attribute

Source: Table No.11

TABLE NO 12. KIND OF MUTUAL FUND THAT THE

RESPONDENTS PREFER

63
 Sl. No. Attributes No. of respondents Percentage
1 Open-ended 57 57
2 Closed-ended 43 43
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 57% of the
respondents prefer open-ended mutual funds and the rest 43% closed-ended
ones.

This is illustrated in the following graph.

GRAPH NO 12. KIND OF MUTUAL FUND THAT THE

RESPONDENTS PREFER

64
 60
57

50

43

Percentage 40

30

20

10

0
Open-ended Closed-ended
Attributes

Source: Table No.12

TABLE NO 13. TYPE OF SCHEME THE RESPONDENTS PREFER

65
Sl. No. Attributes No. of respondents Percentage
1 Equity 49 49
2 Debit 42 42
3 Balance 9 9
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 49% of the
respondents prefer equity type of scheme, 42% prefer debit type of scheme
and the rest 9% due to balance type of scheme.

This is illustrated in the following graph.

GRAPH NO 13. TYPE OF SCHEME THE RESPONDENTS PREFER

66
 60

50 49

42

40
Percentage

30

20

10 9

0
Equity Debit Balance
Attributes

Source: Table No.!3

67
TABLE NO 14. THE PREFERENCE AMONG DIFFERENT MUTUAL
FUNDS

Sl. No. Attributes No. of respondents Percentage

1 UTI 15 15
2 Kotak 15 15
3 HDFC 30 30
4 Templeton 19 19
5 LIC 21 21
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 15% of the
respondents prefer UTI mutual funds, 15% prefer Kotak, 30% prefer HDFC,
19% Templeton and the rest 21% prefer LIC.

This is illustrated in the following graph.

GRAPH NO 14. THE PREFERENCE AMONG DIFFERENT MUTUAL

FUNDS

68
 35
30
30
25
Percentage 19
21
20
15 15
15
10
5
0

on
FC
k
TI

C
ta

LI
U

et
Ko

pl
H

m
Te
Attributes

Source: Table No.14

TABLE NO 15. IMMEDIATE REACTION IN CASE OF DROP DOWN

OF STOCK MARKET

Sl. No. Attributes No. of respondents Percentage

69
 1 Would withdraw the 39 39
investment
2 Would wait and watch 55 55
3 Would invest more in it 6 6
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 39% of the
respondents would withdraw the investment, 55% would wait and watch the
show and the the rest 6% say that they would invest more.

This is illustrated in the following graph.

GRAPH NO 15. IMMEDIATE REACTION IN CASE OF DROP DOWN

OF STOCK MARKET

70
 60
55

50

39
40
Percentage

30

20

10
6

0
Would withdraw Would wait and Would invest
the investment watch more in it
Attributes

Source: Table No.15

71
 TABLE NO 16. TO SEE WHETHER THE RESPONDENT HAS EVER
LOST MONEY IN MUTUAL FUND

Sl. No. Attributes No. of respondents Percentage

1 Yes 36 36
2 No 64 64
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 36% of the
respondents have lost money in mutual fund and the rest 64% havent.

This is illustrated in the following graph.

72
GRAPH NO 16. TO SEE WHETHER THE RESPONDENT HAS EVER
LOST MONEY IN MUTUAL FUND

70
64

60

50

40
Percentage

36

30

20

10

0
Yes No
Attributes

Source: Table No.16

73
 TABLE NO 17. REASONS FOR LOOSING MONEY IN MUTUAL
FUNDS

Sl. No. Attributes No. of respondents Percentage

1 Not aware 12 12
2 Misguidance 37 37
3 Entry at higher level 24 24
4 Poor portfolio mgmt 27 27
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the table that out of 100 respondents, 12% of the
respondents are not aware of the reasons for loosing money in mutual funds,
37% loose it because of misguidance, 24% because of entry at higher level the
rest 27% say that it is because of poor portfolio management.

This is illustrated in the following graph.

74
GRAPH NO 17. REASONS FOR LOOSING MONEY IN MUTUAL
FUNDS

40
37

35

30
27

25 24
Percentage

20

15
12

10

0
Not aware Misguidance Entry at higher Poor portfolio
level mgmt

Attributes

Source: Table No.17

75
 TABLE NO 18. VIEWS ON KOTAK MF AND ITS SCHEMES

Sl. No. Attributes No. of respondents Percentage

1 Good 15 15
2 Moderate 36 36
3 Not aware 49 49
Total 100 100

Source: Primary Data

Interpretation:

It is clear from the tables that out of 100 respondents, 15% of the
respondents view that Kotak MF is good, and 36% feel that it is moderate and
the rest 49% say that they are not aware.

This is illustrated in the following graph.

76
GRAPH NO 18. VIEWS ON KOTAK MF AND ITS SCHEMES

60

50 49

40
36
Percentage

30

20

15

10

0
Good Moderate Not aware
Attributes

Source: Table No.18

77
78
5.1 FINDINGS

1. Majority of the respondents are income tax assesses.

2. Most of the respondents prefer to invest in Fixed Deposits and

Insurance because of less risk and assured returns.

3. The investment portfolio of majority of the respondents is in govt

securities and bonds.

4. Though mutual funds exist in the market, the people who tend to invest
in it are very low compared to other investments. The reason behind is
the high risk factor involved with Mutual Funds.

5. Majority of the people prefer open-ended equity scheme.

6. Many people have lost money in mutual funds.

79
5.2 CONTRIBUTION OF THE STUDY

From this study the financial institutions/Banks can improve in some

of the following fields of services and communications: -

1. Help the financial institutions (KM) to provide goods and services in

private sector and convenience factor offered by the public sector.

2. Help local banks/small institutions to have big market share (i.e. banks or
institutions which are mot easily accessible gets more preference even if it
is a local bank with out much brand image.)

3. Helps the bank and institutions to provide E-banking facility more

effective and accurate towards investors or customers.

4. Help KM to find out, in Kotak Mahindra product perceived as being value

for money.

5. Help KM to find out, is KM users are considering KM as one stop shop

most of the time.

80
5.3 SUGGESTIONS

1. Proper care should be taken to give the correct guidance to the

investors so that they will invest more.

2. Good campaigns can be arranged so that people will know more about
Mutual Funds and will tend to invest in it.

3. Nice advertisements can be entertained so that people will get interest

in Mutual Funds.

4. Kotak can come up with good, attractive schemes for its investors.

81
5.4 CONCLUSION

The study Investment Options for Investors was carried out on

behalf of Mutual Funds of Kotak Mahindra Asset Management Company Ltd.

The data was collected from various sources and also through the tools like

questionnaires and relevant interactions with concerned persons.

The needs were identified in the form of findings and suitable

suggestions were put forth in the form of recommendations to the concerned

authorities for further discussions. A few recommendations have been

considered for implementation.

82
83
6.1 BIBLIOGRAPHY

Albert J Fredman, How Mutual Funds Work, Eastern Economy Edition,

Prentice Hall of India Pvt Ltd, New Delhi

Week 15/01/2005 (Regarding Mutual Fund Investment)

Financial Chartered Analyst 01/09/2006

84
6.2 QUESTIONNAIRE

Please put tick on your answers for the following questions

1. Are you an Income Tax Assesse?

Yes
No No

2. Are you investing for tax exemption or tax savings?

Yes
No

3. What kind of invest options you prefer?

Fixed Deposit
Real Estate
Insurance
Mutual Fund
Gold

4. Why you prefer the above option?

Less Risk
Good Returns
Liquidity
Assured Returns
Other Reasons

5. Your current investment portfolio includes majority of

Govt.securities and Bonds
Mutual funds & company fixed deposits
Equity shares

85
6. You would like your investment to grow
Steadily
At average rate
Fast

7. How long have you been invested?

Up to one year
15 year
510 years

8. What percentage of your income do you invest?

Up to 5 %
5%--- 10%
More than 10%

9. Are you an investor in mutual fund?

Yes
No

10. If answer is No, why you are not investing in mutual fund?
Awareness
Risky
Returns not assured

11. If answer is Yes, why do you prefer mutual fund?

Less risky
Liquidity
Professional mgt.
Fast appreciation

12. What kind of mutual fund you prefer?

Open- ended
Closed-ended

86
13. What type of scheme do you prefer?
Equity
Debt
Balance

14. If you are an investor of MF, which MF you have preferred always?
UTI
Kotak
HDFC
Templeton
LIC

15. Imagine that, the stock market drops immediately after you invest in
Equity scheme?
I would withdraw my money
I would wait & watch
I would invest more in it.

16. Have you any time lost money by investing in MF?

Yes
No

17. Reason for losing?

Not aware of the details of the portfolio investment
Misguidance
Entry at higher level
Poor portfolio mgt.

18. Your views on Kotak mutual fund and its scheme?

Good
Moderate
Not aware

Thank you very much for your valuable time & co-operation.

87
88