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Comparative Study of Mutual Fund with Other Investment Alternatives

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A PROJECT REPORT ON COMPARATIVE STUDY OF MUTUAL FUNDS WITH OTHER INVESTMENT ALTERNATIVES Submitted To Kurukshetra University, Kurukshetra in partial fulfillment for the Degree of “Master of Business Administration” (Session 2008-10) Under the supervision of : Submitted by: Dr. Pawan KumarAnita Faculty MBA Deptt. Roll No. 8005 DIMT Dronacharya Institute of Management &Technology (Kurukshetra University, Kurukshetra) ACKNOWLEDGEMENT Any work of this magnitude requires the inputs, efforts and encouragement of people from all sides.

In this project report I have been fortunate in having got the active co-operation of many people, whom I would like to thank.

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It gives me a great pleasure to express my gratitude to D. I. M. T. faculty members or guiding me through his efforts at each and every step. I humbly submit that without is efforts this project would have not been conceptualized nor materialized. I am highly obliged to Dr . M . L. Bansal Director (DIMT) and Dr. Pawan who provided me necessary heip in the completion of the project.

Their able guidance and support helped me a lot. (ANITA)

DECLARATION I Anita, Roll No. 8005 student of MBA (final) 0f Dronacharya Institute of Management & Technology, Kurukshetra here by, declared that the entire project entitled “Comparative study of mutual funds and investment alternatives”. Also this is the original work under taken by me and though the application of the knowledge. I gain during my research period the entire study is authentic to the best of my knowledge and belief. (ANITA) INDEX PARTICULARS PAGE NO 66 1. Introduction of Mutual Funds…………. …………………………5 2. Investment alternatives……………………………………………24. 3.

Research Methodology………………………………………… 28 4. Data Analysis & Interpretation………………………………… 33 5. Findings…………………………………………………………. 54. 6. Recommendation & Suggestion…………………………………59 7. Bibliography………………………………………………………… 61 a) Questionnaire………………………………………………. b) Annexure………………………………………… INTRODUCTION Mutual Funds in India The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. The history of mutual funds in India can be broadly divided into four distinct phase FIRST PHASE – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets under management. SECOND PHASE – 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS) 987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs. 7,004 crores. THIRD PHASE – 1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS) 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.

As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. FOURTH PHASE – SINCE FEBRUARY 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. 29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.

It is registered with SEBI and functions under the Mutual Fund Regulations. consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs. 153108 crores under 421 schemes. CONCEPT AND ROLE OF MUTUAL FUNDS Mutual Fund Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities, bonds and other securities.

Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The fund’s Net Asset Value (NAV) is determined each day. Mutual Funds are financial intermediaries. They are companies set up to receive your money, and then having received it, make investments with the money Via an AMC. It is an ideal tool for people who want to invest but don’t want to be bothered with deciphering the numbers and deciding whether the stock is a good buy or not. A mutual fund manager proceeds to buy a number of stocks from various markets and industries.

Depending on the amount you invest, you own part of the overall fund. The beauty of mutual funds is that anyone with an investible surplus of a few hundred rupees can invest and reap returns as high as those provided by the equity markets or have a steady and comparatively secure investment as offered by debt instruments. Mutual Funds – Operation chart 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 then invested in capital market instruments such as shares, debentures and other securities.

The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. 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 basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund: Mutual Fund Operation Flow Chart Mutual Funds – Organization There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:

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

NAV of a scheme is calculated by dividing the market value of scheme’s assets by the total number of units issued to the investors. For example: A. If the market value of the assets of a fund is Rs. 100,000 B. The total number of units issued to the investors is equal to 10,000. C. Then the NAV of this scheme = (A)/(B), i. e. 100,000/10,000 or 10. 00 D. Now if an investor ‘X’ owns 5 units of this scheme E. Then his total contribution to the fund is Rs. 50 (i. e. Number of units held multiplied by the NAV of the scheme) Categories of mutual funds: Mutual funds can be classified as follow: ?Based on their structure: Open-ended funds: Investors can buy and sell the units from the fund, at any point of time. •Close-ended funds: These funds raise money from investors only once. Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E. g. , Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity. Based on their investment objective: Equity funds: These funds invest in equities and equity related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years.

It can be further classified as: i)Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. ii) Equity diversified funds- 100% of the capital is invested in equities spreading across different sectors and stocks. iii) Dividend yield funds- it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme. . g. -An infrastructure fund invests in power, construction, cements sectors etc. v) Sector funds- Invest 100% of the capital in a specific sector. e. g. – A banking sector fund will invest in banking stocks. vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors. Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments.

Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities. ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt. Debt fund: They invest only in debt instruments, and are a good option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs. ) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in call money market. ii)Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills. iii)Floating rate funds – Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate. iv)Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities. )Gilt funds LT- They invest 100% of their portfolio in long-term government securities. vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term debt papers. vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. viii)FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the fund. INVESTMENT STRATEGIES: 1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities.

The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA) 2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund. 3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month. Risk v/s. return: Working of a Mutual fund The entire mutual fund industry operates in a very organized way.

The investors, known as unit holders, handover their savings to the AMCs under various schemes. The objective of the investment should match with the objective of the fund to best suit the investors’ needs. The AMCs further invest the funds into various securities according to the investment objective. The return generated from the investments is passed on to the investors or reinvested as mentioned in the offer document. Regulatory Authorities: To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time.

SEBI approved Asset Management Company (AMC) manages the funds by making investments in various types of securities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody. According to SEBI Regulations, two thirds of the directors of Trustee Company or board of trustees must be independent. The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual funds that the mutual funds function within the strict regulatory framework. Its objective is to increase public awareness of the mutual fund industry.

AMFI also is engaged in upgrading professional standards and in promoting best industry practices in diverse areas such as valuation, disclosure, transparency etc. Documents required (PAN mandatory): Proof of identity: 1. photo PAN card In case of non-photo PAN card in addition to copy of PAN card any one of the following: driving license/passport copy/ voter id/ bank photo pass book. Proof of address (any of the following ) :latest telephone bill, latest electricity bill, Passport, latest bank passbook/bank account statement, latest Demat account statement, voter id, driving license, ration card, rent agreement.

Offer document: an offer document is issued when the AMCs make New Fund Offer(NFO). Its advisable to every investor to ask for the offer document and read it before investing. An offer document consists of the following: Standard Offer Document for Mutual Funds (SEBI Format) Summary Information Glossary of Defined Terms Risk Disclosures Legal and Regulatory Compliance Expenses Condensed Financial Information of Schemes Constitution of the Mutual Fund Investment Objectives and Policies Management of the Fund Offer Related Information. Distribution channels:

Mutual funds posses a very strong distribution channel so that the ultimate customers doesn’t face any difficulty in the final procurement. The various parties involved in distribution of mutual funds are: 1. Direct marketing by the AMCs: the forms could be obtained from the AMCs directly. The investors can approach to the AMCs for the forms. some of the top AMCs of India are: Reliance, Birla Sunlife, Tata, SBI magnum, Kotak Mahindra, HDFC, Sundaram, ICICI, Mirae Assets, Canara Robeco, Lotus India, LIC, UTI etc. whereas foreign AMCs include: Standard Chartered, Franklin Templeton, Fidelity, JP Morgan, HSBC, DSP Merill Lynch, etc. . Broker/ sub broker arrangements: the AMCs can simultaneously go for broker/sub-broker to popularize their funds. AMCs can enjoy the advantage of large network of these brokers and sub brokers. eg: HDFC being the top financial intermediary of India has the greatest network. So the AMCs dealing through HDFC has access to most of the investors. 3. Individual agents, Banks, NBFC: investors can procure the funds through individual agents, independent brokers, banks and several non- banking financial corporations too, whichever he finds convenient for him.

Performance measures: Equity funds: the performance of equity funds can be measured on the basis of: NAV Growth, Total Return; Total Return with Reinvestment at NAV, Annualized Returns and Distributions, Computing Total Return (Per Share Income and Expenses, Per Share Capital Changes, Ratios, Shares Outstanding), the Expense Ratio, Portfolio Turnover Rate, Fund Size, Transaction Costs, Cash Flow, Leverage.

Debt fund: likewise the performance of debt funds can be measured on the basis of: Peer Group Comparisons, The Income Ratio, Industry Exposures and Concentrations, NPAs, besides NAV Growth, Total Return and Expense Ratio. Liquid funds: the performance of the highly volatile liquid funds can be measured on the basis of: Fund Yield, besides NAV Growth, Total Return and Expense Ratio. Financial planning for investors( ref. to mutual funds): Investors are required to go for financial planning before making investments in any mutual fund.

The objective of financial planning is to ensure that the right amount of money is available at the right time to the investor to be able to meet his financial goals. INVESTMENT ALTERNATIVES ?BANK DEPOSIT ?INSURANCE ?POST OFFICE SCHEME ?IVPs AND KVPs ?N. S. S. ?N. S. C ?PUBLIC PROVIDENT FUND SCHEME BANK DEPOSITS It is the simple investment avenue open for the investors. He has to open an account and deposit the money. Traditionally the banks offered current account, saving account & fixed deposit account. Current account does not offer any interest rate.

The saving account interest rate is regulated by the reserve bank of India and kept low because of the high cost of servicing them. The saving account is more liquid and convenient to handle. The fixed account carries high interest rate and the money is locked up for a fixed period. With increasing competition among the banks, the banks have bundled the plain saving account with the fixed account to carter to the needs of small savers. INSURANCE Life Insurance is a contract for the payment for the sum of money to the person assured on the happening of event insured against.

Usually the contract provides the payment of an amount on the rate of maturity or at specified dates at periodic intervals or if unfortunate death occurs. Among other things, the contract also provide for the payment of premium periodically to the corporation by the policy holders, Life Insurance eliminates risk. POST OFFICE DEPOSITS Like the banks, post office also offers fixed deposit facility and monthly income scheme. Post office monthly income scheme is a popular scheme for the retired. An interest rate of 13% is paid monthly. The term of the scheme is 6 years, at the end of which a bonus of 10% is paid.

The annualized yield to maturity works to be 15. 01% per annum. After three years, premature closure is allowed without any penalty. If the closure is after one year, a penalty of 5% is charged. I. V. P. AND K. V. P. persons who prefers cash transactions. No income tax concession is available for this type of These are saving certificates issued by the post office with the name Indra Vikas Patra (IVP) and Kisan Vikas Patra (KVP). The IVPs are in the face value of Rs 500,1000 and 5000. The KVPs are in the denominations of Rs. 500, 1,000, 5, 000, and 10,000. The capital is doubled in 5. years with the return of 13. 47%. IVPs are in the bearer bonds, transferable by hand delivery and therefore are attractive to the investments. National saving scheme (NSS) This scheme helps in deferring the tax payment. Individuals and HUF are eligible to open the NSS account in the designated post office. The NSS-87 gives 100% income tax rebate but the interest as well as the capital is fully taxable if withdrawn during their life time. Investments in NSS scheme, with a lock in period of 4 years qualify for a rebate of 20% under section 88 of the income tax act, subject to a maximum of Rs. 12000.

The investment also earns an interest rate of 11% per year covered by sec 80L. Compared to other tax savings’ instruments the return offered by this scheme is lower. NATIONAL SAVING CERTIFICATE (6 YRS. )-III This scheme is offered by the post office. These certificates come in the denominations of Rs. 500, 1,000, 5, 000, and 10,000. The contribution and the interest for the first five years are covered by sec 88. The interest is cumulative at the rate of 12% per annum and payable by annually is by sec 80L. PUBLIC PROVIDENT FUND SCHEME {PPF} PPF earns an interest rate of 12% per year, which is exempted from the income tax under sec 88.

The individuals and Hindu undivided families can participate in this scheme. The maximum limit per annum for the deposit is for the deposit is Ra. 6o. ooo. The interest is accumulated in this deposit. It provides early withdrawal facility from 7th year and every year thereafter, the account holder has an option to withdraw 50% of the balance to his credit 5 years ago or which ever is lower. The facility makes PPF a self sustaining account from 7th years onwards. RESEARCH METHODOLOGY RESEARCH METHODOLOGY Research refers to a search for knowledge.

It is a systematic method of collecting and recording the facts of the numerical data relevant to the formulated problem and arriving at certain conclusion over the problem based on collected data Thus formulation of the problem is the first and foremost step in the research process followed by the collection, recording, tabulation and analysis and drawing the conclusion. The problem formulation starts with defining the problem or a number of problems in the functional area. To detect the functional area and locate the exact problem is most important part of any research as the whole research is based on the problem.

Research can be defined as ”the manipulation of things, concept or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art” Therefore in order to solve a research problem it is necessary to design a research methodology for the easy and accurate solution of the problem. . Objectives of study ?To find out the behavior of investors regarding different investment schemes. ?To know about perception of the investors for Mutual fund schemes. ?To make analysis of risk return association with mutual fund. To identify the various problems related to customer satisfaction in mutual funds. ?To collect information how an investors see the factor to invest in the different alternatives. ?To find out problems faced by investors during investment decision ? To draw conclusions to finding out results and provide possible suggestions. Research design A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. ?Kinds of Research designs: ?Exploratory research design. Descriptive research design. ?Experimental research design. ?Diagnostic research design. This study has been conducted by using the exploratory research design. ?Data collection:- The task of data collection begins after the research problem has been defined and research design chalked out. While deciding the method of data collection to be used for the study, the researcher should keep in mind two types of data viz. Primary and secondary data. ?Primary data: The primary data are those, which are collected afresh and for the first time and thus happen to be original in character.

The primary data were collected through well-designed and structured questionnaires based on the objectives. ?Secondary data: The secondary data are those, which have already been collected by someone else and passed through statistical process. The secondary data required of the research were collected through various newspapers, Journals and Magazines: This study used both types of data primary as well as secondary data. ? Sampling design: A sample is a representative of whole population. Researchers while conducting research have to draw certain sample for study purpose.

A sample design is a definite plan determined before any data are actually collected for obtaining samples for the same study. ? Sampling method: Convenient sampling method has been used for this study. ?Sample size: A sample of hundred was chosen for the purpose of the study. It indicates the number of individual who would be surveyed. Here the sample size is 100 respondents. ?Location: The survey was conducted in Kurukshetra city. ?Analysis of data: Collected data in this study has been interpreted through using statistical tools.

However various techniques may be useful to conduct study, but in this study simple average method has been used along with tabulation and graphs to find out results according to objectives of the study. Limitations of the study: ?Unawareness among people for investment. ?Accuracy of data is depends upon respondents responses. ?Lack of time and fund are the main constraints. ?Area of study is limited up to a city area. DATA ANALYSIS & INTERPRETATION 1. What is your occupation? Table-1 OccupationPercentage Businessman20 % Employee40 % Student30 % Others10 %

As the above chart depicts out of sample of 100 respondents 40% respondent’s occupation is employee, 20%respondents are businessman and 30% respondents are student, with some other occupation. So there is ample opportunity to get the mutual fund investor. 2. What is your annual income? Table-II Annual incomePercentage Less than 2000008. 6 % 200000 to 40000034. 2 % 400000 to 60000042. 9 % Above 60000014. 3 % ` It is clear from the above chart that 8. 6% of the respondents have their annual income is less than 200000, 34. 2% of the respondents have their annual income between 200000 to 400000, 42. % of the respondents have their annual income between 400000 to 600000 and only 14. 3% of the respondents have their annual income more than 600000. 3. Have you invested money? Table-III Option Percentage Yes70 % NO30 % Everybody wants to save money and so instead of wasting money in saving a/c now people are more aware towards the investment opportunity. So 70% of the respondents have invested their money and only 30% of the respondents have not invested their money anywhere may be lack of fund and may be lack of knowledge about the investment opportunity. . Did you know about mutual fund? Table-IV OptionPercentage Yes75 % No25 % It is clear that 75% respondent have knowledge about mutual fund and 25%respondent have no knowledge about mutual. 5. Have you invested in mutual fund? Table-V Option Percentage Yes40 % No 60 % From the above chart it is clear the only 40%% of the respondents are showing their interest in the investment in the mutual fund and 60% are not showing their interest in the investment in the mutual fund. 6. In which alternative of securities you have invested? Table-VI OptionPercentage

Saving a/c13 % Insurance15 % Mutual fund54 % Fixed deposit8. % Others10% This chart shows54% of the respondents are willing to invest their money through mutual fund, 8% of the respondents want invest their money through Fixed deposit because they think this safe way to get some fixed return, 15% of the respondents are willing to invest their money in insurance and 13% of the respondents are willing to choose some other available opportunity in the market. 7. Are you aware of various scheme offered by mutual fund? Table-VII OptionPercentage Yes45 %

No55 % This chart shows that 45%of the respondents are aware about the mutual fund scheme due to providing good return 2 years back and that time lot of people invested their money in the mutual fund and they created lot of awareness about the mutual fund and 55%of the respondents are not aware of the mutual fund. 8. Which mutual fund scheme have been selected by you? Table-VIII SchemesPercentage Private sector mutual fund7. 5% Public sector mutual fund10% Open ended scheme12. 5% Equity fund27. 5% Debt fund32. 5% Interval fund10 This chart shows7. % of the respondents are invest their money in private sector mutual fund, 10% of the respondents invest their money through public sector mutual, 12. 5% of the respondents are invest their money in open ended scheme, 27. 5% of the respondents choose equity fund , 32% respondents are invest in debt fund and 10%other respondents are invest in interval scheme. 9. Which types of benefits would you like to obtain from investment mutual fund? Table-IX Diversification 15% Expert supervision & mgt. 7. 5% Liquidity12. 5% Low risk20% Tax advantage10% Flexibility15%

High return20% From the above chart it is clear that 15% of the respondent wants diversification in their investment, 17. 5% of the respondent want expert supervision &mgt. , 12. 5% of respondent are invest because of liquidity 20% of the respondent wants the reduction in risk, 10:% of respondent are invest because of tax saving,15% of respondent are invest because of flexibility and 20% of the respondent are invest because of high return. 10. How much you want to invest money? Table-X OptionPercentage Below 50,00064. 3% 50,000 to 10000021. 4% 10,0000 to 15,000008. % Above 1500005. 7% On the basis of received data 64%of the respondent are invested less than Rs. 50000, 21% of the respondent are invest between Rs. 50000 to 100000, 8. 6% of the respondents are to invest between Rs. 100000 to Rs. 150000 and only 5. 7%of the respondents are willing to invest more than Rs. 150000. 11. What is frequency of your investment? Table-XI Frequency of respondentPercentage Once a month14. 2% Once in 3 month21. 4% Once in 6 month35. 7% Once in year 28. 7% People are very much conscious while investing their money in the mutual fund.

So on the basis of received data 14. 2% of the respondent are invest once a month , 21. 4% of the respondent are invest once in 3 month , 35. 7% of the respondents are invest once in 6 month and only 28% of the respondents invest 0nce in year. 12. What is expected rate of return from debt investment? Table-XII 4%-5%30. 7% 5%-6%23. 1% 6%-7%38. 5% Above 7%7. 7% This graph is show that 30. 7% respondents are expected rate of return from debt is 4%-5%, 23. 1% respondents are expected rate of return is 5%-6% , 38. 5% respondents are expected rate of return is 6%-7% , 7. % respondents are expected rate of return is above7% 13. What is expected rate of return from equity investment? Table-XIII 5%-10%18. 2% 10%-15%36. 4% 15%-20%27. 2% Above 20%18. 2% From this chart it is clear that 5%-10%are expected rate of return from equity fund respondent is 18. 2% , 10% -15% rate of return from equity fund respondent is 36. 4% ,15%-20% rate of return from equity fund respondent is 27. 2%, above 15% rate of return from equity fund respondent is 18%. 14. Do you feel that mutual fund offers steady return? Table-XIV Yes75% No25%

Most of the respondents are feel that the mutual fund offers steady return ,above this chart 75% respondent are feel that mutual fund offer steady return , only25% respondent are feel that mutual fund do not give steady return. 15. You invest in debt mutual fund because it offers? Table-XV Steady return30. 7% Liquidity15. 3% Less risk23. 1% Others30. 9% From the above chart it is clear that 30. 7% of the respondents are invest in debt because of steady return, 15. 3% of the respondents are invest in debt because of liquidity, 23. 1% the respondents are invest in debt because of lesser risk and 30. % of the respondents are invest in debt because of other reason. 16. You invest in equity mutual fund because it offers? Table-XVI High return 36. 4% Long term capital gain18. 2% Tax benefit27. 2% Others18. 2% From the above chart it is clear that 36. 4% of the respondents are invest in equity because of high return, 18. 2% of the respondents are invest in equity because of long term capital gain , 27. 2% the respondents are invest in equity because of tax saving and 30. 9% of the respondents are invest in debt because of other reason. 17. Which feature of mutual fund would you like?

Table-XVII Diversification20% Professional management17% Reduction in risk51% Helping in achieving in long term goal12% From the above chart it is clear that 20% of the respondent wants diversification in their investment, 17% of the respondent want professional management to be proficient enough to get the good return from the investment, 51% of the respondent wants the reduction in risk and 12%0f respondent want helping in achieving in long term 18. If mutual fund offers you steady return, diversification, lesser risk, would consider it as an investing option in future for you?

Table-XVIII Yes55% No45% This figure show that if above offers will give to customer 55% respondents will invest in mutual fund, 45 % respondents will not invest 19. Would you like to suggest your friend for mutual fund investing? Table-XIX Yes55% No45% Availing the services of personal advisor always differ according to the prevailing business environment and the market condition. So from the graph it is clear that 55% of the respondents are willing to suggest their friend and 45% don’t have any interest to suggest their friend 20.

If yes why you suggest your friend for mutual fund investing? Table-xx Good return30. 7% Less risk23. 1% Tax saving10. 8% Liquidity27. 7% Others7. 7% It is clear that 30. 7% of respondent are suggest their friend about mutual fund because of 23. 1% of respondent are suggest their friend about mutual fund because of Less risk, 10. 8% of respondent are suggest their friend about mutual fund because of tax saving, 27. 7% of respondent are suggest their friend about mutual fund because of liquidity, 7. 70 of respondent are suggest because of others reason

FINDINGS & SUGGESTIONS FINDINGS The market survey is conducted for 100 respondents. Based on the analysis and interpretation, findings have been concluded in this chapter. Findings have shown below:- ? It is clear that 40% respondent’s occupation is employee, 20% respondents are businessmen,30 % respondents are student, 10% occupied with some other occupation. ?We can conclude that 8. 6% of the respondents have their annual income is less than 200000, 34. 2% of the respondents have their annual income between 200000 to 400000, 42. % of the respondents have their annual income between 400000 to 600000 and only 14. 3% of the respondents have their annual income more than 600000. ?It is evident from the received data that 70% of the respondents have invested their money and only 30% of the respondents have not invested their money anywhere may be lack of fund and may be lack of knowledge about the investment opportunity. ?It is seen that 75% of the respondents have knowledge about mutual fund, 25% of the respondents have lake of knowledge about mutual fund. From the study it is clear that 60% respondents have invested in mutual fund and 40% have not invested in mutual fund. ?This study shows54% of the respondents are willing to invest their money through mutual fund, 8% of the respondents want invest their money through Fixed deposit because they think this safe way to get some fixed return, 15% of the respondents are willing to invest their money in insurance and 13% of the respondents are willing to choose some other available opportunity in the market. From the analysis and interpretation, it is concluded that shows that 45%of the respondents are aware about the mutual fund scheme due to providing good return 2 years back and that time lot of people invested their money in the mutual fund and they created lot of awareness about the mutual fund And 55%of the respondents are not aware of the mutual fund. ?An analysis show that7. 5% of the respondents are invest their money in private sector mutual fund, 10% of the respondents invest their money through public sector mutual, 12. 5% of the respondents are invest their money in open ended scheme, 27. % of the respondents choose equity fund, 32. 5% respondents are invest in debt fund and some other respondents are invest in interval scheme. ?From the analysis it is clear that 15% of the respondent wants diversification in their investment, 17. 5% of the respondent want expert supervision &mgt. , 12. 5% of respondent are invest because of liquidity 20% of the respondent wants the reduction in risk, 10:% of respondent are invest because of tax saving, 15% of respondent are invest because of flexibility and 20% of the respondent are invest because of high return. On the basis of received data it is concluded that 64%of the respondent are invested less than Rs. 50000, 21% of the respondent are invest between Rs. 50000 to 100000, 8. 6% of the respondents are to invest between Rs. 100000 to Rs. 150000 and only 5. 7%of the respondents are willing to invest more than Rs. 150000. ?According to analysis and interpretation 14. 2% of the respondent are invest once a month , 21. 4% of the respondent are invest once in 3 month , 35. 7% of the respondents are invest once in 6 month and only 28% of the respondents invest 0nce in year. The study show that 30. 7% respondents are expected rate of return from debt is 4%-5%, 23. 1% respondents are expected rate of return is 5%-6% , 38. 5% respondents are expected rate of return is 6%-7% , 7. 7% respondents are expected rate of return is above7% . ?From this analysis it is clear that 5%-10%are expected rate of return from equity fund respondent is 18. 2%, 10% -15% rate of return from equity fund respondent is 36. 4%, 15%-20% rate of return from equity fund respondent is 27. 2%, and above 15% rate of return from equity fund respondent is 18%. According to study most of the respondents are feel that the mutual fund offers steady return ,above this chart 75% respondent are feel that mutual fund offer steady return , only25% respondent are feel that mutual fund do not give steady return. ?From this study it is clear that 36. 4% of the respondents are invest in equity because of high return, 18. 2% of the respondents are invest in equity because of long term capital gain , 27. 2% the respondents are invest in equity because of tax saving and 18. 2% of the respondents are invest in debt because of other reason. From the study we find that 20% of the respondent wants diversification in their investment, 17. % of the respondent want professional management to be proficient enough to get the good return from the investment, 51% of the respondent wants the reduction in risk and 12%0f respondent want helping in achieving in long term ?We can infer that if above offers will give to customer 55% respondents will invest in mutual fund, 45 % respondents will not invest ?On the basis of data it is received that 55% of the respondents are willing to suggest their friend and 45% don’t have any interest to suggest their friend ?

To study It is clear that 30. 7% of respondent are suggest their friend about mutual fund because of 23. 1% of respondent are suggest their friend about mutual fund because of Less risk, 10. 8% of respondent are suggest their friend about mutual fund because of tax saving,27. 7% of respondent are suggest their friend about mutual fund because of liquidity,7. 70 of respondent are suggest because of others reason RECOMMENDATION & SUGGESTION Recommendations and Suggestions ?Advertisement & publicity ?More interaction with customers ?Better return Division of targets according to official field of expertise ? Covering maximum nearby areas The media which influence the consumers the most are newspapers and magazines, so bank has to continue publicizing in these media channels of mutual fund as it can boost up invest in mutual fun. BIBLIOGRAPHY & ANNEXURE *BIBLIOGRAPHY* 1. DATA ?Data collected is primary and secondary so the data is taken through questionnaire, newspapers, magazines, and from the concerning sites. 2. BOOKS ?Marketing strategies and investment practices (By H. Sadhak) ?Association of Mutual funds in India By D. C. Anjaria) ?Portfolio Management 3. NEWSPAPERS ?The Economic Times ?The Hindustan Times REFRENCES: WEBSITES ?www. amfiindia. com ?www. moneycontrol. com ?www. valusearchonline. com ?www. mutualfundsindia. com ?www. reliancemoney. com Questionnaire Name __________________________________________________ Age __________________________________________________ Address __________________________________________________ __________________________________________________ 1. What is your occupation? (a)Businessmen (b) Employee(c) student (d) others 2. What is your annual income? a) Less than 200000 (b) 200000 to 400000 (c) 400000 to 600000 (d) above 600000 3. Have you invested money anywhere? (a)Yes (b) No 4. Did you know about mutual fund? (a)Yes (b) No 5. Have you invested in mutual funds? (a)Yes (b) No 6. In which market available alternative securities you have invested? (a)Saving a/c (b) Insurance (c) Mutual fund (d)Fixed deposit (e) Other. 7. Are you aware of the various schemes offered by mutual fund? (a)Yes (b) No 8. Which mutual fund schemes have been selected by you? a)Public sector mutual fund (b ) Open ended(c) interval (d)Private sector mutual fund (e) Debt fund (f) equity fund 9. Why you have preferred mutual fund than others investments? (a) Diversification (b) Expert supervision & mgt. (c) Liquidity (d) Low risk (e) Tax saving (f) Flexibility (g ) High return 10. How much you want to invest money? (a) Below 50000 (b) 50000-100000 (c) 100000-150000 (d) Above 150000 11. What is the frequency of your investment? (a)Once a month(b) once in 3 months (c) once in 6 months d)Once in year 12. What is expected rate of return from debt investment? (a)4% -5% (b)5%-6% (c)6%-7% (d) >7% 13. What is expected rate of return from equity investment? (a)5%-10% (b)10%-15% (c) 15%-20% (d) >20% 14. Do you feel that mutual fund offer steady returns? (a) Yes (b) No 15. You invest in debt mutual fund because it offers? (a) Steady return (b) Liquidity (c) Tax benefits (d) Less risk (e) Other 16. You invest in equity mutual fund because it offers? (a)High return (b) Long term capital gain (c)Tax benefits (d) other 7. Which feature of mutual fund would you want? (a) Diversification (b) Professional management (c) Reduction in risk (d) Helping in achieving in long term goals 18. If mutual fund offers you steady return, diversification, lesser risk, would consider it as an investing option in future for you? (a)Yes (b) No 19 Would you like to suggest your friend for mutual fund investment? (a) Yes (b) No 20. If yes why you suggest your friend for mutual fund investment because of? (a)Good return (b) Less risk (e) Tax saving (d) Liquidity (e) Other

Cite this Comparative Study of Mutual Fund with Other Investment Alternatives

Comparative Study of Mutual Fund with Other Investment Alternatives. (2018, Aug 04). Retrieved from https://graduateway.com/comparative-study-of-mutual-fund-with-other-investment-alternatives/

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