Acquiring new customers: Mutual fund

industry
Group 7 section E

Contents
Introduction
Probable
opportunities
Decision statement
Research Objective
Literature review
Hypothesis
Methodology of
research

Introduction
Types of investments
Bonds (long term and short term)
Equity
Alternative investments

Gold
Futures
Options
FOREX
Real state

Mutual fund
An investment programme funded by
shareholders that trades in diversified
holdings and is professionally managed.

Trends in Mutual Fund Industry

Even though the mutual
fund industry is mature,
there is a still a lot of
opportunity to grow
(Outlook DCFS, 2015).
Mutual fund industry is
expected to grow at 5.4 %
CAGR in period 2012-2020
(Mutual fund summit, CII,
2014)

Probable opportunities

Increasing number of
private retail investor
are likely to shift to
mutual fund
investments.

Decision Statement

How can a firm X attract a

major number of new
customer which will invest
in mutual funds?

Research objective
Determine the factors
company X should
identify and work with to
improve customer
acquisition for mutual
fund investments.

Literature review: Opinions of successful investors

Defence is ten times more important than offense. The wealth you have
can be so ephemeral; you have to be very focused on the downside at all
times. If you lose 50%, it takes 100% to get back to where you started
and that takes something you can never get back: time (Paul Tudor
Jones II, Founder, Tudor Investment Corporation).
The goal of the nonprofessional should not be to pick winnersneither he
nor his helpers can do thatbut should rather be to own a cross section
of businesses that in aggregate are bound to do well. A low-cost S&P 500
index fund will achieve this goal (Warren Buffett, CEO, Berkshire
Hathaway).
Were all going to be wrong. So we have to set up a system that protects
us from that. (Ray Dalio, Founder and CoChief Investment Officer)
Most people say, Ready? Aim! Aim! . . . But they never fire. They never
take decisions. (T. Boone Pickens, CEO of BP Capital Management).

Literature review: Opinions of successful investors

The returns reported by mutual funds arent actually earned by
investors. 96% of all mutual funds dont match the market over any
ten-year period. An insider knows that chasing the high flyer
advertised fund is chasing the wind. (John C. Bogle, Founder and
former CEO of the Vanguard Group, the worlds largest mutual fund)
I invest in a lot of individual stocks. But I have the time. I have the
expertise. I have the education. But 98% of people dont focus on
that (Charles Schwab, Chairman of Charles Schwab Corporation).
When everyone else thinks the world was going to end, it is the right
time to invest. When everyone else thinks Oh my God! These are
the greatest times in history!that was when it is time to sell (Sir
John Templeton, Founder of Templeton Mutual Funds).
People have preferred to invest in real estate over equity stocks
because of formers hire returns over past ten years in India and
familiarity with its operating principal (Anonymous, Quora).

Literature review
Shujing Li (2003) proposed that a mutual fund is preferred
over another on factors such as past performance index
and fee of the services. He also stated that performance of
mutual fund is not only dependent on capability of mutual
fund manager but also on noise factors.
Koshy et al. (2013) proposed that in order to make a cut in
the market share of a competitor, the company can
engage in following strategy:

Frontal attack
Flank attack
Encirclement attack
Bypass attack
Guerrilla attack

Research question
RQ1- Identify motivation to investments
RQ2- Identify factors that enables investments
RQ3- Identify factors that hinders investments
RQ4- Identify factors enable investment into mutual funds
RQ5- Identify factors hinder investment into mutual funds
RQ6 -Identify factors enable investment into equity mutual
fund portfolio
RQ7- Identify factors hinder investment into equity mutual
fund portfolio
RQ8- Identify factors which will provide competitive
advantage for an equity
RQ9- What should be proposed plan for customer acquisition

How do these variables relate?

Strategy related variable
Firms attack strategy
Fund related variables
1) Past Performance
Index
2) Service Fee
3) Fund managers
reputation
Customer related variables
1)Knowledge of financial
concepts
2) News update
frequency
3) Risk appetite
4) Horizon of investment
5) Indecisiveness
6) Time to recover loss

Decision
to invest
in Mutual
Fund

Economic related variable

GDP growth rate

Hypothesis
H1: If a customer has low risk appetite then he will
invest in mutual fund over other investment options.
H2: H1: If a customer is a long term investor, then he
will invest in mutual fund over other investment
options.
H3: If a customer understands bond, equity, mutual
funds and alternate investment instrument, then he
will invest in mutual fund over other investment
options.
H4: if the firm has reputed fund manager then he/she
will attract more business.

Methodology of research
Data Collection Method:
Data will be collected from secondary
data resources
Survey of opinion
Data analysis technique
Qualitative content analysis
Hypothesis testing

Sample Design
Sample Design
Target Population

People who earn (Salaried and self

employed)

Sample Frame

Not defined (People belonging to

different professions from
Ghaziabad)

Sample

Stratified sample

Unit

Individual

Element

Individual

Questionnaire
Investment Personality Questionnaire
The DOSPERT Scale
Financial Literacy questionnaire

Investor
Personality Questionnaire

The DOSPERT
Scale

Financial Literacy
Questionnaire

Final survey

Survey
questionnaire

Data Analysis Techniques and

Results
H1, H2, H3 will be tested using multi-variate
analysis.
It will be tested using SPSS.
Both the independent variable and dependent
variable will be scored as per the guidelines of
instruments prior to running the ANOVA.
Results will indicate the coefficient of
correlation between independent variable and
dependent variable's

Thank
you!