A Project on

“Analysis of mutual fund: as a Preferred investment source”

(a study of Karnal District)

Submitted in

The partial fulfillment of the requirement of

Master of Business Administration, Distance Education,
Guru Jambheshwar University of science & Techonology ,Hisar

Research Supervisor: - Submitted by:-

Sanjeev Kumar Reena Jaglan
Faculty GHIM, karnal Enrollment No. 06061104082
Specialisation :- Finance

Session 2006-08
Dorectorate of Distance Education

Guru Jambheshwar University of Science & Technology Hisar(India)

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 PREFACE

Master of Business Administration is a stepping stone to the Management Career . It has

great pleasure in presenting this research project which is essential in partial fulfillment
of MBA programme.

Research project is an integral part of curriculum and its purpose is to provide the
student with the practical exposure of the today’s changing scenario. It helps in the
development of practical skills and analytical thinking process. It provides with basic
skills required to perform the survey and statistical tool needed to analyses the data. Thus
it helps in moulding the students according to the requirement of actual world.

This research project makes the study on “Analysis of Mutual Fund: as a preferred
investment Source”. The objective of this research is to find the preferences given by
people to mutual funds while investment. Also to find out the perception of the investors
regarding different financial instruments and to examine why and where people wish to
invest.
.

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 ACKNOWLEDGEMENT
It is a matter of declaration for me to express my gratitude to my revered guide and true

mentor Mr. Sanjeev Kumar Lecturer, Guru Harkrishan Institute of management &

Technology, who has been very generous and ever willing to help me through out this

research work. He helped me in shaping this research work by his knowledge and

wisdom, penetrating judgment and expertise. His valuable guidance, constructive

criticism and analytical approach and ever-lasting internet taken through out this

investigation in a warm and self-offering academic environment have been a constant

source of inspiration to me.

My grateful acknowledgement is due to Mr. Ravinder Singh, my husband who has

encouraged and inspired me from time to time during the course of my study. I am also

thankful to all staff members of our institute and to the library , for extending me every

help during my research work. I would like to take this opportunity to thank my parents,

my brother pradeep, sister Ritu & other family members, Relatives, friends , near and

dear ones who faced that brunt of this venture gracefully.

(REENA JAGLAN)

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 CONTENTS
Page No.

LIST OF TABLES 5
LIST OF CHARTS 6

CHAPTER –1

INTRODUCTION 7-39

CHAPTER –2

LITRATURE REVIEW 40-54

CHAPTER –3

RESEARCH METHODOLOGY 55-60

CHAPTER –4

ANALYSIS AND INTERPRETATION OF DATA 61-78

CHAPTER –5

FINDINGS AND RECOMMENDATIONS 79-81

CHAPTER –6

BIBLIOGRAPHY 82-84
CHAPTER -7
APPENDIX

 Questionnaire 85-88

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 LIST OF TABLES
Sr.No. Tables Page No.

1. List of various mutual fund 24

with their schemes

2. Bank Vs. Mutual fund 27

3. How to read a mutual fund table 31

4, NAV report of growth scheme 60-64

5, Monthly and yearly performance of top funds 65

6. Dividend in different plans 66

7. AMFI monthly 68-71

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 LIST OF Charts

Sr.No. Name of chart Page No.

1. organization of a mutual fund 8

2. Mutual fund operation flow chart 9

3. Types of Risk 36

4. Growth in assets under management 43

5. Investment options 71

6. Investment awaareness 72

7. Investment in mutual fund 72

8. Investment criteria 72

9. Profitability in mutual funds 73

10. Investment guidance 73

11. Factors considered while investing in MF 74

12. Sources of information 74

13. Scheme preferred 75

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CHAPTER - I

INTRODUCTION

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 MUTUAL FUND

CONCEPT
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realised are 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 small
savings of all the investors are put together to increase the buying power and hire a
professional manager to invest and monitor the money. Anybody with an investible
surplus of as little as a few thousand rupees can invest in Mutual Funds. Mutual fund
scheme has a defined investment objective and strategy.
The Definition

A mutual fund is nothing more than a collection of stocks and bonds. investors can think
of a mutual fund as a company that brings together a group of people and invests their
money in stocks, bonds, and other securities. Each investor owns shares, which represent
a portion of the holdings of the fund.
Investors can make money from a mutual fund in three ways:
1) Income is earned from dividends on stocks and interest on bonds. A fund pays out
nearly all of the income it receives over the year to fund owners in the form of a
distribution.
2) If the fund sells securities that have increased in price, the fund has a capital gain.
Most funds also pass on these gains to investors in a distribution.
3) If fund holdings increase in price but are not sold by the fund manager, the fund's
shares increase in price. investors can then sell your mutual fund shares for a profit.
Funds also usually give investors a choice either to receive a check for distributions or to
reinvest the earnings and get more shares.

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Mutual Fund is a investment company that pools money from shareholders and invests in
a variety of securities, such as stocks, bonds and money market instruments. Most open-
end mutual funds stand ready to buy back (redeem) its shares at their current net asset
value, which depends on the total market value of the fund's investment portfolio at the
time of redemption. Most open-end mutual funds continuously offer new shares to
investors.

A mutual fund is a professionally managed type of collective investment scheme that

pools money from many investors and invests it in stocks, bonds, short-term money
market instruments, and/or other securities.The mutual fund will have a fund manager
that trades the pooled money on a regular basis. Also known as an open-end investment
company, to differentiate it from a closed-end investment company. Mutual funds invest
pooled cash of many investors to meet the fund's stated investment objective. Mutual
funds stand ready to sell and redeem their shares at any time at the fund's current net asset
value: total fund assets divided by shares outstanding.

In Simple Words, 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.

Investments in securities are spread across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not
move in the same direction in the same proportion at the same time. Mutual fund issues
units to the investors in accordance with quantum of money invested by them. Investors
of mutual funds are known as unitholders.

In Short, a mutual fund is a common pool of money in to which investors with common
investment objective place their contributions that are to be invested in accordance with
the stated investment objective of the scheme. The investment manager would invest the
money collected from the investor in to assets that are defined/ permitted by the stated
objective of the scheme. For example, an equity fund would invest equity and equity
related instruments and a debt fund would invest in bonds, debentures, gilts etc. Mutual

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Fund is a 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 profits or losses are shared by the investors in proportion to their investments. The
mutual funds normally come out with a number of schemes with different investment
objectives which are launched from time to time. In India, A mutual fund is required to
be registered with Securities and Exchange Board of India (SEBI) which regulates
securities markets before it can collect funds from the public.Mutual funds can give
investors access to emerging markets

ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the organisational set
up of a mutual fund:

The Association of Mutual Funds in India (AMFI) is dedicated to developing the

Indian Mutual Fund Industry on professional, healthy and ethical lines and to
enhance and maintain standards in all areas with a view to protecting and
promoting the interests of mutual funds and their unit holders.

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 Mutual Fund Operation Flow Chart

INVESTMENT MIX OF MUTUAL FUNDS:

Mutual funds in India invest in three broad kinds of instruments.
• Equity shares and equity related instruments
• Debt instruments
• Money market instruments.

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Types of Mutual Fund

Mutual fund schemes may be classified on the basis of its structure and its investment
objective.
By Structure:

Open-ended Funds

An open-end fund is one that is available for subscription all through the year. These do
not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset
Value ("NAV") related prices. The key feature of open-end schemes is liquidity. It is the
one that is available for subscription all through the year these do not have a fixed
maturity. It is always open to subscribe at any time.

Closed-ended Funds

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15
years. The fund is open for subscription only during a specified period. 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 they 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 Fund through periodic repurchase at NAV related prices.
SEBI Regulations stipulate that at least one of the two exit routes is provided to the
investor.

Interval Funds

Interval funds combine the features of open-ended and close-ended schemes. They are
open for sale or redemption during pre-determined intervals at NAV related prices.

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By Investment Objective:

Growth Funds

The aim of growth funds is to provide capital appreciation over the medium to long-
term. Such schemes normally invest a majority of their corpus in equities. It has been
proven that returns from stocks, have outperformed most other kind of investments held
over the long term. Growth schemes are ideal for investors having a long-term outlook
seeking growth over a period of time.

Income Funds

The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate debentures
and Government securities. Income Funds are ideal for capital stability and regular
income.

Balanced Funds

The aim of balanced funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income
securities in the proportion indicated in their offer documents. In a rising stock market,
the NAV of these schemes may not normally keep pace, or fall equally when the market
falls. These are ideal for investors looking for a combination of income and moderate
growth.

Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer short-term instruments such as
treasury bills, certificates of deposit, commercial paper and inter-bank call money.
Returns on these schemes may fluctuate depending upon the interest rates prevailing in
the market. These are ideal for Corporate and individual investors as a means to park
their surplus funds for short periods.

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Load Funds

A Load Fund is one that charges a commission for entry or exit. That is, each time you
buy or sell units in the fund, a commission will be payable. Typically entry and exit loads
range from 1% to 2%. It could be worth paying the load, if the fund has a good
performance history.

No-Load Funds

A No-Load Fund is one that does not charge a commission for entry or exit. That is, no
commission is payable on purchase or sale of units in the fund. The advantage of a no
load fund is that the entire corpus is put to work.

OTHER SCHEMES:

Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Indian
Income Tax laws as the Government offers tax incentives for investment in specified
avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension
Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961.

Special Schemes

• Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the offer document.
The investment of these funds is limited to specific industries like InfoTech,
FMCG, Pharmaceuticals etc.

• Index Schemes

Index Funds attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50.

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 • Assured Return Scheme

In Mutual Funds, Assured Return Schemes are those schemes that assure a specific return
to the unitholders irrespective of performance of the scheme. A scheme cannot promise
returns unless such returns are fully guaranteed by the sponsor or AMC and this is
required to be disclosed in the offer document.

Investors should carefully read the offer document whether return is assured for the entire
period of the scheme or only for a certain period. Some schemes assure returns one year
at a time and they review and change it at the beginning of the next year.

It's important to understand that each mutual fund has different risks and rewards. In
general, the higher the potential return, the higher the risk of loss. Although some funds
are less risky than others, all funds have some level of risk - it's never possible to
diversify away all the risk.

Each fund has a predetermined investment objective that tailors the fund's assets, regions
of investments and investment strategies. At the fundamental level, there are three
varieties of mutual funds:

1) Equity funds (stocks)

2) 2) Fixed-income funds (bonds)
3) 3) Money market funds

All mutual funds are variations of these three asset classes. For example, while equity
funds that invest in fast-growing companies are known as growth funds, equity funds that
invest only in companies of the same sector or region are known as specialty funds.
Money Market Funds
The money market consists of short-term debt instruments, mostly Treasury bills. This is
a safe place to park investors money. You won't get great returns, but you won't have to
worry about losing your principal. A typical return is twice the amount you would earn in
a regular checking/savings account and a little less than the average certificate of deposit
(CD).

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Bond/Income Funds
Income funds are named appropriately: their purpose is to provide current income on a
steady basis. When referring to mutual funds, the terms "fixed-income," "bond," and
"income" are synonymous. These terms denote funds that invest primarily in government
and corporate debt. While fund holdings may appreciate in value, the primary objective
of these funds is to provide a steady cash flow to investors. As such, the audience for
these funds consists of conservative investors and retirees.
Bond funds are likely to pay higher returns than certificates of deposit and money market
investments, but bond funds aren't without risk. Because there are many different types of
bonds, bond funds can vary dramatically depending on where they invest. For example, a
fund specializing in high-yield junk bonds is much more risky than a fund that invests in
government securities. Furthermore, nearly all bond funds are subject to interest rate risk,
which means that if rates go up the value of the fund goes down.
Balanced Funds
The objective of these funds is to provide a balanced mixture of safety, income and
capital appreciation. The strategy of balanced funds is to invest in a combination of fixed
income and equities. A typical balanced fund might have a weighting of 60% equity and
40% fixed income. The weighting might also be restricted to a specified maximum or
minimum for each asset class.
A similar type of fund is known as an asset allocation fund. Objectives are similar to
those of a balanced fund, but these kinds of funds typically do not have to hold a
specified percentage of any asset class. The portfolio manager is therefore given freedom
to switch the ratio of asset classes as the economy moves through the business cycle.

Equity Funds
Funds that invest in stocks represent the largest category of mutual funds. Generally, the
investment objective of this class of funds is long-term capital growth with some income.
There are, however, many different types of equity funds because there are many
different types of equities.

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Global/International Funds
An international fund (or foreign fund) invests only outside your home country. Global
funds invest anywhere around the world, including your home country.
It's tough to classify these funds as either riskier or safer than domestic investments. They
do tend to be more volatile and have unique country and/or political risks. But, on the flip
side, they can, as part of a well-balanced portfolio, actually reduce risk by increasing
diversification. Although the world's economies are becoming more inter-related, it is
likely that another economy somewhere is outperforming the economy of your home
country.
Specialty Funds
This classification of mutual funds is more of an all-encompassing category that consists
of funds that have proved to be popular but don't necessarily belong to the categories
we've described so far. This type of mutual fund forgoes broad diversification to
concentrate on a certain segment of the economy.
Sector funds are targeted at specific sectors of the economy such as financial,
technology, health, etc. Sector funds are extremely volatile. There is a greater possibility
of big gains, but you have to accept that your sector may tank.
Regional funds make it easier to focus on a specific area of the world. This may mean
focusing on a region or an individual country. An advantage of these funds is that they
make it easier to buy stock in country, which is otherwise difficult and expensive. Just
like for sector funds, you have to accept the high risk of loss, which occurs if the region
goes into a bad recession.
Socially-responsible funds (or ethical funds) invest only in companies that meet the
criteria of certain guidelines or beliefs. Most socially responsible funds don't invest in
industries such as tobacco, alcoholic beverages, weapons or nuclear power. The idea is to
get a competitive performance while still maintaining a healthy conscience.

Index Funds
The last but certainly not the least important are index funds. This type of mutual fund
replicates the performance of a broad market index such as the S&P 500 or Dow Jones
Industrial Average (DJIA). An investor in an index fund figures that most managers can't

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beat the market. An index fund merely replicates the market return and benefits investors
in the form of low fees.
REGULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA
The structure of mutual funds in India is governed by the SEBI (Mutual Fund)
Regulations, 1996 (hereinafter referred to as SEBI Regulations). These regulations make
it mandatory for mutual funds to have a three-tier structure of Sponsor-Trustee-Asset
Management Company (AMC). The sponsor is the promoter of the mutual fund, and
appoints the Trustees. The trustees are responsible to the investors in the mutual fund,
and appoint the AMC for managing the investment portfolio. The AMC is the business
face of the mutual fund, as it manages all the affairs of the mutual fund. The mutual fund
and the AMC have to be registered with SEBI. SEBI regulations also provide for who can
be a sponsor, trustee and AMC, and specify the format of agreements between these
entities. These agreements provide for the rights, duties and obligations of these three
entities.
The UTI is also structured as a trust. The important different through, is that UTI does not
have sponsors or a separate AMC. Financial institutions and banks that contributed to the
initial capital of the UTI have their representatives on UTI’s Board of Trustees, which
overseas the operators of the UTI. The Chairman appointed by the Board, who in turn
employs manages and staff to run its activities, manages UTI.

CONSTITUTION
i) The sponsoring Company, called Sponsor.
ii) The Trustees
iii) The Asset Management Company (AMC).
iv) The Custodians

ADVANTAGES OF MUTUAL FUNDS

• Professional Management - The primary advantage of funds is the professional
management of your money. Investors purchase funds because they do not have the time
or the expertise to manage their own portfolios. A mutual fund is a relatively inexpensive
way for a small investor to get a full-time manager to make and monitor investments.

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• Diversification - By owning shares in a mutual fund instead of owning individual stocks
or bonds, your risk is spread out. The idea behind diversification is to invest in a large
number of assets so that a loss in any particular investment is minimized by gains in
others. In other words, the more stocks and bonds you own, the less any one of them can
hurt you Large mutual funds typically own hundreds of different stocks in many different
industries. It wouldn't be possible for an investor to build this kind of a portfolio with a
small amount of money.

• Economies of Scale - Because a mutual fund buys and sells large amounts of securities
at a time, its transaction costs are lower than what an individual would pay for securities
transactions.

• Liquidity - Just like an individual stock, a mutual fund allows you to request that your
shares be converted into cash at any time.

• Simplicity - Buying a mutual fund is easy! Pretty well any bank has its own line of
mutual funds, and the minimum investment is small. Most companies also have
automatic purchase plans whereby as little as $100 can be invested on a monthly basis.

Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such
as bad deliveries, delayed payments and follow up with brokers and companies. Mutual
Funds save your time and make investing easy and convenient.

Return Potential

Over a medium to long-term, Mutual Funds have the potential to provide a higher return
as they invest in a diversified basket of selected securities.

Low Costs

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Mutual Funds are a relatively less expensive way to invest compared to directly investing
in the capital markets because the benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.

Transparency

Investors get regular information on the value of your investment in addition to

disclosure on the specific investments made by your scheme, the proportion invested in
each class of assets and the fund manager's investment strategy and outlook.

Flexibility

Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, you can systematically invest or withdraw funds according to your
needs and convenience.

Affordability

Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual
fund because of its large corpus allows even a small investor to take the benefit of its
investment strategy.

Choice of Schemes

Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.

Well Regulated

All Mutual Funds are registered with SEBI and they function within the provisions of
strict regulations designed to protect the interests of investors. The operations of Mutual
Funds are regularly monitored by SEBI.

mutual funds have become extremely popular over the last 20 years. What was once just
another obscure financial instrument is now a part of our daily lives. In fact, too many

20
people, investing means buying mutual funds. After all, it's common knowledge that
investing in mutual funds is better than simply letting them cash waste away in a savings
account, but, for most people, that's where the understanding of funds ends. It doesn't
help that mutual fund salespeople speak a strange language that is interspersed with
jargon that many investors don't understand.
A mutual fund is nothing more than a coming together of a group of investors like
investors who contribute different sums of money to make up a large lump sum. The
money collected is invested by the fund manager in stocks, bonds and other securities -
across companies, industries and sectors and in some cases, across countries as well. As
an investor, investors are issued units in proportion to the money invested. Since
investors own units of the fund, it makes them less reliant on the success or failure of any
individual stock, which would have been the case if you had invested directly in the
shares of a single company.

Is it really that simple?

Yes that's the long and short of mutual funds! What's even more heartening to know is
that the analysis and strategic thinking that goes into investing is not investors worry.
That's what a fund manager does for investors.

Ten reasons to invest in mutual funds

Expert on investors side: When investors invest in a mutual fund, you buy into the
experience and skills of a fund manager and an army of professional analysts

Limited risk: Mutual funds are diversification in action and hence do not rely on the
performance of a single entity.

More for less: For the price of one blue chip stock for instance, investors could get
theirrself a number of units across a number of companies and industries when investors
invest in a fund.

Easy investing: investors can invest in a mutual fund with as little as Rs.5,000. Salaried
individuals also have the option of investing in a monthly savings plan.

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Convenience: investors can invest directly with a fund house, or through your bank
or financial adviser, or even over the internet.

Investor protection: A mutual fund in India is registered with SEBI, which also
monitors the operations of the fund to protect your interests.

Quick access to your money: It's good to know that should you need your money at
short notice, you can usually get it in four working days.

Transparency: As an investor, you get updates on the value of your units, information
on specific investments made by the mutual fund and the fund manager's strategy and
outlook.

Low transaction costs: A mutual fund, by sheer scale of its investments is able to carry
out cost-effective brokerage transactions.

Tax benefits: Over the years, tax policies on mutual funds have been favourable to
investors and continue to be so.

Where can an investor look out for information on mutual funds?

Almost all the mutual funds have their own web sites. Investors can also access the
NAVs, half-yearly results and portfolios of all mutual funds at the web site of
Association of mutual funds in India (AMFI) AMFI has also published useful literature
for the investors.

Investors can log on to the web site of SEBI and go to "Mutual Funds" section for
information on SEBI regulations and guidelines, data on mutual funds, draft offer
documents filed by mutual funds, addresses of mutual funds, etc. Also, in the annual
reports of SEBI available on the web site, a lot of information on mutual funds is given.

There are a number of other web sites which give a lot of information of various schemes
of mutual funds including yields over a period of time. Many newspapers also publish

22
useful information on mutual funds on daily and weekly basis. Investors may approach
their agents and distributors to guide them in this regard.

HOW TO INVEST IN MUTUAL FUNDS

Mutual funds normally come out with an advertisement in newspapers publishing the
date of launch of the new schemes. Investors can also contact the agents and distributors
of mutual funds who are spread all over the country for necessary information and
application forms. Forms can be deposited with mutual funds through the agents and
distributors who provide such services. Now a days, the post offices and banks also
distribute the units of mutual funds. However, the investors may please note that the
mutual funds schemes being marketed by banks and post offices should not be taken as
their own schemes and no assurance of returns is given by them. The only role of banks
and post offices is to help in distribution of mutual funds schemes to the investors.

Investors should not be carried away by commission/gifts given by agents/distributors for

investing in a particular scheme. On the other hand they must consider the track record of
the mutual fund and should take objective decisions.

Non-Resident Indians (NRI) can also invest in mutual funds. Normally, necessary details
in this respect are given in the offer documents of the schemes.

STEP 1 - Identify Your Investment Needs – Investor’s financial goals vary, based on
their age, lifestyle, financial independence, family commitment, and level of income and
expenses among many other factors. One can start with defining the investment objective.
STEP 2 – Choose the right mutual funds – Some factors to evaluate before choosing a
particular Mutual fund are the track record of the performance of the fund over the last
few years in relation to the appropriate yardstick and similar funds in the same category.
Others factors can be portfolio allocation, the dividend yield and degree of transparency.
STEP 3 – Select the ideal mix of schemes - Investing in just one mutual fund scheme
may not meet all investment needs. One may consider investing in a combination of
schemes to achieve you specific goals.

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STEP 4 – Invest Regulatory – By investing a fixed sum each month, one can buy fewer
units when the price is higher and more units when the price is low, thus bringing down
the average cost per unit.
STEP 5 – Start Early – It is desirable to start investing early and stick to a regular
investment plan. The power of compounding lets the investor to earn income on income
and their money multiples at a compounded rate of return.

How to fill Mutual Fund Application Form

An investor must mention clearly his name, address, number of units applied for and such
other information as required in the application form. He must give his bank account
number so as to avoid any fraudulent encashment of any cheque/draft issued by the
mutual fund at a later date for the purpose of dividend or repurchase. Any changes in the
address, bank account number, etc at a later date should be informed to the mutual fund
immediately

Mutual Fund can change Schemes

Yes, investors can However, no change in the nature or terms of the scheme, known as
fundamental attributes of the Mutual Fund e.g .structure, investment pattern, etc. can be
carried out unless a written communication is sent to each unitholder and an
advertisement is given in one english daily having nationwide circulation and in a
newspaper published in the language of the region where the head office of the mutual
fund is situated. The unitholders have the right to exit the Mutual Fund at the prevailing
NAV without any exit load if they do not want to continue with the scheme. The mutual
funds are also required to follow similar procedure while converting the scheme form
close-ended to open-ended scheme and in case of change in sponsor.

The mutual funds are required to inform any material changes to their unitholders. Apart
from it, many mutual funds send quarterly newsletters to their investors.

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At present, offer documents are required to be revised and updated at least once in two
years. In the meantime, new investors are informed about the material changes by way of
addendum to the offer document till the time offer document is revised and reprinted.

Mutual Fund Offer Document

An abridged offer document, which contains very useful information, is required to be

given to the prospective investor by the mutual fund. The application form for
subscription to a Mutual Fund is an integral part of the offer document. SEBI has
prescribed minimum disclosures in the offer document. An investor, before investing in a
Mutual Fund scheme, should carefully read the offer document. Due care must be given
to portions relating to main features of the Mutual Fund, risk factors, initial issue
expenses and recurring expenses to be charged to the Mutual Fund entry or exit loads,
sponsor’s track record, educational qualification and work experience of key personnel
including fund managers, performance of other Mutual Fund schemes launched by the
mutual fund in the past, pending litigations and penalties imposed, etc.

TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exist to cater to the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an overview
into the existing types of schemes in the Industry.

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LIST OF VARIOUS FUNDS ALONG WITH THEIR MAJOR SCHEMES:
Fund name
Alliance Capital Mutual Fund
Birla Mutual
Kothari Pioneer Mutual Fund
SBI Mutual Fund
Prudential - ICICI
DSP Merrill Lynch Fund
Morgan Stanley
Tata Mutual Fund
Canbank Mutual Fund
Templeton Asset Management Ltd.
Unit Trust of India
LIC Mutual Fund
Mutual Funds: The Costs
Major Schemes
1)Alliance ’95 Fund
2)Alliance Equity Fund
3) Alliance Liquid Income Fund
1) Birla Advantage Fund
2) Birla Income Plus
1)Kothari Pioneer Prima Plus
2)Kothari Pioneer Blue Chip
1)SBI Magnum Multiplier Scheme’90
2)SBI Magnum Taxgain Scheme 1993
3) SBI Magnum Bond Fund
4) SBI Rising Income Scheme
1) Prudential ICICI Growth Plan
2) ICICI Premier
DSP Merrill Lynch Equity Fund
Morgan Stanley Growth Fund
Tata Balanced Fund
Canganga
Templeton India Income Fund
UTI MIP 94 (III)
LIC Dhanvarsha
26
Costs are the biggest problem with mutual funds. These costs eat into your return, and
they are the main reason why the majority of funds end up with sub-par performance.

What's even more disturbing is the way the fund industry hides costs through a layer
of financial complexity and jargon. Some critics of the industry say that mutual fund
companies get away with the fees they charge only because the average investor does
not understand what he/she is paying for.

Fees can be broken down into two categories:

Ongoing yearly fees to keep you invested in the fund.
2. Transaction fees paid when you buy or sell shares in a fund (loads).

The Expense Ratio

The ongoing expenses of a mutual fund is represented by the expense ratio. This is
sometimes also referred to as the management expense ratio (MER). The expense
ratio is composed of the following:

• The cost of hiring the fund manager(s) - Also known as the management fee, this
cost is between 0.5% and 1% of assets on average. While it sounds small, this fee
ensures that mutual fund managers remain in the country's top echelon of earners.
Think about it for a second: 1% of 250 million (a small mutual fund) is $2.5 million -
fund managers are definitely not going hungry! It's true that paying managers is a
necessary fee, but don't think that a high fee assures superior performance.

• Administrative costs - These include necessities such as postage, record keeping,

customer service, cappuccino machines, etc. Some funds are excellent at minimizing
these costs while others (the ones with the cappuccino machines in the office) are
not.

Mutual Funds: Picking a Mutual Fund

Buying and Selling

Investors can buy some mutual funds (no-load) by contacting the fund companies
directly. Other funds are sold through brokers, banks, financial planners, or insurance
agents. If they buy through a third party there is a good chance they'll hit you with a
sales charge (load).

That being said, more and more funds can be purchased through no-transaction fee
programs that offer funds of many companies. Sometimes referred to as a "fund
supermarket," this service lets you consolidate your holdings and record keeping,
and it still allows you to buy funds without sales charges from many different
companies.

27
A popular example is Fidelity's Funds network. Many large brokerages have similar
offerings. Selling a fund is as easy as purchasing one. All mutual funds will redeem
(buy back) your shares on any business day.

Mutual Funds: Don't Be Fooled By Mutual Fund Ads

All those mutual fund ads that quote their amazingly high one-year rates of return.
Investors first thought is "wow, that mutual fund did great!" Well, yes it did great last
year, but then you look at the three-year performance, which is lower, and the five year,
which is yet even lower. What's the underlying story here? Let's look at a real example.
These figures came from a local paper:

1 year 3 year 5 year

53% 20% 11%

Last year, the fund had excellent performance at 53%. But in the past three years the
average annual return was 20%. What did it do in years 1 and 2 to bring the average
return down to 20%? Some simple math shows us that the fund made an average return of
3.5% over those first two years: 20% = (53% + 3.5% + 3.5%)/3. Because that is only an
average, it is very possible that the fund lost money in one of those years.
It gets worse when we look at the five-year performance. We know that in the last year
the fund returned 53% and in years 2 and 3 we are guessing it returned around 3.5%. So
what happened in years 4 and 5 to bring the average return down to 11%? Again, by
doing some simple calculations we find that the fund must have lost money, an average
of -2.5% each year of those two years: 11% = (53% + 3.5% + 3.5% - 2.5% - 2.5%)/5.
Now the fund's performance doesn't look so good
It should be mentioned that, for the sake of simplicity, this example, besides making
some big assumptions, doesn't include calculating compound interest. Still, the point
wasn't to be technically accurate but to demonstrate how misleading mutual fund ads can
be. A fund that loses money for a few years can bump the average up significantly with
one or two strong years

Disadvantages of Mutual Funds:

28
• Professional Management - Did you notice how we qualified the advantage of
professional management with the word "theoretically"? Many investors debate whether
or not the so-called professionals are any better than you or I at picking stocks.
Management is by no means infallible, and, even if the fund loses money, the manager
still takes his/her cut. We'll talk about this in detail in a later section.

• Costs - Mutual funds don't exist solely to make your life easier - all funds are in it for a
profit. The mutual fund industry is masterful at burying costs under layers of jargon.
These costs are so complicated that in this tutorial we have devoted an entire section to
the subject.

• Dilution - It's possible to have too much diversification. Because funds have small
holdings in so many different companies, high returns from a few investments often don't
make much difference on the overall return. Dilution is also the result of a successful
fund getting too big. When money pours into funds that have had strong success, the
manager often has trouble finding a good investment for all the new money.

• Taxes - When making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gains
tax is triggered, which affects how profitable the individual is from the sale. It might have
been more advantageous for the individual to defer the capital gains liability

BANKS V/S MUTUAL FUNDS

BANKS MUTUAL FUNDS

Returns Low Better
Administrative exp. High Low
Risk Low Moderate
Investment options Less More
Network High penetration Low but improving
Liquidity At a cost Better
Quality of assets Not transparent Transparent
Guarantee Maximum Rs.1 lakh on deposits None

29
 Given the present scenario, bank deposits offer low returns. Chances are
that most of your savings reside in bank deposits. Post income tax and inflation,
it is likely that you will be left with little or no gains. In short, the money you
have worked very hard for has failed to do the same for you. But there's a way to
make your money earn enough to beat inflation while it earns you worthwhile
returns – diversification. And, the simplest way to diversify your investments is
to begin investing in mutual funds.

Importance of Mutual Fund

Small investors face a lot of problems in the sharemarket, limited resources, lack of
professional advice, lack of information etc. Mutual funds have come as a much needed
help to these investors. It is a special type of institutional device or an investment vehicle
through which the investors pool their savings which are to be invested under the
guidance of a team of experts in wide variety of portfolio’s of Corporate securities in
such a way, so as to minimise risk, while ensuring safety and steady return on investment.
It forms an important part of the capital market, providing the benefits of a diversified
portfolio and expert fund management to a large number, particularly small investors.

Now a days, mutual fund is gaining its popularity due to the following reasons :
l. With the emphasis on increase in domestic savings and improvement in deployment of
investment through markets, the need and scope for mutual fund operation has increased
tremendously. The basic purpose of reforms in the financial sector was to enhance the
generation of domestic.
2. An ordinary investor who applies for share in a public issue of any company is not
assured of any firm allotment. But mutual funds who subscribe to the capital issue made
by companies get firm allotment of shares. Mutual fund latter sell these shares in the
same market and to the Promoters of the company at a much higher price. Hence, mutual
fund creates the investors confidence.

30
3. The phyche of the typical Indian investor has been summed up by Mr. S.A. Dave,
Chairman of UTI, in three words; Yield, Liquidity and Security. The mutual funds, being
set up in the public sector, have given
the impression of being as safe a conduit for investment as bank deposits.Besides, the
assured returns promised by them have investors had great appeal for the typical Indian
investor.
4. As mutual funds are managed by professionals, they are considered to have a better
knowledge of market behaviours. Besides, they bring a certain competence to their job.
They also maximise gains by proper selection and timing of investment.
5. Another important thing is that the dividends and capital gains are reinvested
automatically in mutual funds and hence are not fritted away. The automatic reinvestment
feature of a mutual fund is a form of forced saving and can make a big difference in the
long run.
6. The mutual fund operation provides a reasonable protection to investors. Besides,
presently all Schemes of mutual funds provide tax relief under Section 80 L of the
Income Tax Act and in addition, some schemes provide tax relief under Section 88 of the
Income Tax Act lead to the growth of importance of mutual fund in the minds of the
investors.
7. As mutual funds creates awareness among urban and rural middle class people about
the benefits of investment in capital market, through profitable and safe avenues, mutual
fund could be able to make up a large amount of the surplus funds available with these
people.
8. The mutual fund attracts foreign capital flow in the country and secure profitable
investment avenues abroad for domestic savings through the opening of off shore funds
in various foreign investors. Lastly another notable thing is that mutual funds are
controlled and regulated by S E B I and hence are considered safe. Due to all these
benefits the importance of mutual fund has been increasing.
Mutual Funds :conclusion

• A mutual fund brings together a group of people and invests their money in
stocks, bonds, and other securities.

31
 • The advantages of mutuals are professional management, diversification,
economies of scale, simplicity and liquidity.
• The disadvantages of mutuals are high costs, over-diversification, possible tax
consequences, and the inability of management to guarantee a superior return.
• There are many, many types of mutual funds. You can classify funds based on
asset class, investing strategy, region, etc.
• Mutual funds have lots of costs.
• Costs can be broken down into ongoing fees (represented by the expense ratio)
and transaction fees (loads).
• The biggest problems with mutual funds are their costs and fees.
• Mutual funds are easy to buy and sell. You can either buy them directly from the
fund company or through a third party.
• Mutual fund ads can be very deceiving

NET ASSET VALUE

Net asset value (NAV), which is a fund's assets minus liabilities, is the value of a
mutual fund. NAV per share is the value of one share in the mutual fund, and it is the
number that is quoted in newspapers. You can basically just think of NAV per share
as the price of a mutual fund. It fluctuates everyday as fund holdings and shares
outstanding change.
When you buy shares, you pay the current NAV per share plus any sales front-end
load. When you sell your shares, the fund will pay you NAV less any back-end load.

The Term Net Asset Value (NAV) is used by investment companies to measure net
assets. It is calculated by subtracting liabilities from the value of a fund's securities and
other items of value and dividing this by the number of outstanding shares. Net asset
value is popularly used in newspaper mutual fund tables to designate the price per share
for the fund.

The value of a collective investment fund based on the market price of securities held in
its portfolio. Units in open ended funds are valued using this measure. Closed ended

32
investment trusts have a net asset value but have a separate market value. NAV per share
is calculated by dividing this figure by the number of ordinary shares. Investments trusts
can trade at net asset value or their price can be at a premium or discount to NAV.

Value or purchase price of a share of stock in a mutual fund. NAV is calculated each day
by taking the closing market value of all securities owned plus all other assets such as
cash, subtracting all liabilities, then dividing the result (total net assets) by the total
number of shares outstanding.

Calculating NAVs - Calculating mutual fund net asset values is easy. Simply take the
current market value of the fund's net assets (securities held by the fund minus any
liabilities) and divide by the number of shares outstanding. So if a fund had net assets of
Rs.50 lakh and there are one lakh shares of the fund, then the price per share (or NAV) is
Rs.50.00.

Mutual Funds: How To Read A Mutual Fund Table

33
Columns 1 & 2: 52-Week High and Low - These show the highest and lowest prices the
mutual fund has experienced over the previous 52 weeks (one year). This typically does
not include the previous day's price.

Column 3: Fund Name - This column lists the name of the mutual fund. The company
that manages the fund is written above in bold type.

Column 4: Fund Specifics - Different letters and symbols have various meanings. For
example, "N" means no load, "F" is front end load, and "B" means the fund has both front
and back-end fees. For other symbols see the legend in the newspaper in which you found
the table.

Column 5: Dollar Change -This states the dollar change in the price of the mutual fund
from the previous day's trading.

Column 6: % Change - This states the percentage change in the price of the mutual fund
from the previous day's trading.

Column 7: Week High - This is the highest price the fund traded at during the past week.

Column 8: Week Low - This is the lowest price the fund traded at during the past week.

Column 9: Close - The last price at which the fund was traded is shown in this column.

Column 10: Week's Dollar Change - This represents the dollar change in the price of the
mutual fund from the previous week.

Column 11: Week's % Change - This shows the percentage change in the price of the
mutual fund from the previous week.

The mutual funds are required to disclose full portfolios of all of their schemes on half-
yearly basis which are published in the newspapers. Some mutual funds send the
portfolios to their unitholders.
The scheme portfolio shows investment made in each security i.e. equity, debentures,
money market instruments, government securities, etc. and their quantity, market value
and % to NAV. These portfolio statements also required to disclose illiquid securities in
the portfolio, investment made in rated and unrated debt securities, non-performing assets
(NPAs), etc. Some of the mutual funds send newsletters to the unit holders on quarterly
basis which also contain portfolios of the schemes

FREQUENTLY USED TERMS

Net Asset Value (NAV)

The net asset value of the fund is the cumulative market value of the assets fund net of its
liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the

34
assets in the fund, this is the amount that the shareholders would collectively own. This
gives rise to the concept of net asset value per unit, which is the value, represented by the
ownership of one unit in the fund. It is calculated simply by dividing the net asset value
of the fund by the number of units. However, most people refer loosely to the NAV per
unit as NAV, ignoring the "per unit". We also abide by the same convention.

Calculation of NAV

The most important part of the calculation is the valuation of the assets owned by the
fund. Once it is calculated, the NAV is simply the net value of assets divided by the
number of units outstanding. The detailed methodology for the calculation of the asset
value is given below.

Asset value is equal to Sum of market value of shares/debentures+ Liquid assets/cash

held, if any + Dividends/interest accrued + Expenses accrued but not paid+Amount due
on unpaid assets

Sale Price

Is the price investor pay when they invest in a scheme. Also called Offer Price. It may
include a sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and it may include a
back-end load. This is also called Bid Price.

Redemption Price

Is the price at which open-ended schemes repurchase their units and close-ended schemes
redeem their units on maturity. Such prices are NAV related.

Sales Load

35
Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load.
Schemes that do not charge a load are called ‘No Load’ schemes.

RISK TOLERANCE\

Different investment avenues are available to investors. Mutual funds also offer good
investment opportunities to the investors. Like all investments, they also carry certain
risks. The investors should compare the risks and expected yields after adjustment of tax
on various instruments while taking investment decisions. The investors may seek advice
from experts and consultants including agents and distributors of mutual funds schemes
while making investment decisions. With an objective to make the investors aware of
functioning of mutual funds, an attempt has been made to provide information in
question-answer format which may help the investors in taking investment decisions.Risk
is a fact of life for any investor. Stock markets go down, companies may go bankrupt,
inflation rates may soar or the government may not have enough funds to pay back. The
discussion on investment objectives would not be complete without a discussion on the
risks that investing in a mutual fund entails. At the cornerstone of of investing is the
basic principal that the greater the risk you take, the greater the potential reward.
Remember that the value of all financial investments will fluctuate. Typically, risk is
defined as short-term price variability. But on a long-term basis, risk is the possibility that
your accumulated real capital will be insufficient to meet your financial goals. And if
you want to reach your financial goals, you must start with an honest appraisal of your
own personal comfort zone with regard to risk. Individual tolerance for risk varies,
creating a distinct “investment personality” for each investor. Some investors can accept
short-term volatility with easy, others with near panic. So whether one considers one’s
investment temperament to be conservative, moderate or aggressive, one investment
temperament to be conservative, moderate or aggressive, one needs to focus on how
comfortable or uncomfortable he will be as the value of his investment moves up or
down.
Management Risk
Mutual funds offer incredible flexibility in managing investment risk. Diversification and
Automatic Investing (SIP) are two techniques one can use to reduce investment risk
considerably and reach your long-term financial goals.

36
Diversification

When one invests is one mutual fund, he instantly spreads his risk over a number of
different companies. One can also diversify over several different kinds of securities by
investing in different mutual funds, further reducing his potential risk. Diversification is a
basic risk management tool that one will want to use throughout his lifetime as one
rebalance his portfolio to meet his changing needs and goals. Investors, who are willing
to maintain a mix of equity shares, bonds and money market securities have a greater
chance of earning significantly higher returns over time than those who invest in only the
most conservative investments. Additionally, a diversified approach to
investingcombining the growth potential of equities with the higher income of bonds and
the stability of money markets--- helps moderate your risk and enhance your potential
return.
Systematic Investment Plan (SIP)
The unit holders of Scheme can benefit by investing specific Rupee amounts periodically,
for a continuous period. Mutual fund SIP allows the investors to invest a fixed amount of
Rupees every month or quarter for purchasing additional units of the Scheme at NAV
based prices.
TYPES OF RISK

All investments involve some form of risk. Even an insured bank account is subject to the
possibility that inflation will rise faster than your earnings, leaving you with less real
purchasing power than when you started (Rs 1000 gets you less than it got your father
when he was your age). Consider these common types of risk ands evaluate them against
potential rewards when you select an investment.

RISK
Managing Risks

Diversification

SIP

Types of Risk

37
 Market

Inflation

Credit

Interest Rate

Employees

Exchange Rate

Investment

Government Policies

Questionnaire

Market Risk
At times the prices or yields of all the securities in a particular market rise or fall due to
broad outside influences. When this happens, the stock prices of both an outstanding,
highly profitable company and a fledgling corporation may be affected. This change in
price is due to “market risk”.
Inflation Risk
Sometimes referred to as “loss of purchasing power”. Whenever inflation sprints forward
faster than the earnings on your investment, you run the risk that you’ll actually be able
to buy less, not more. Inflation risk also occurs when prices rise faster than your returns.
Credit Risk
In short, how stable is the company or entity to which you lend your money when you
invest ? How certain are you that it will be able to pay the interest you are promised, or
repay your principal when the investment matures?
Inflation Risk

38
Changing interest rates affect both equities and bonds in many ways. Investors are
reminded that “predicting” which way rates will go is rarely successful. A diversified
portfolio can help in offsetting these changes.
Effect of loss of key professionals and inability to adapt.
An industries key asset is often the personnel who run the business i.e. intellectual
properties of the key employees of the respective companies. Given the everchanging
complexion of few industries and the high obsolescence levels, availability of qualified,
trained and motivated personnel is very critical for the success of industries in few
sectors. It is, therefore, necessary to attract key personnel and also to retain them to meet
the changing environment and challenges the sector offers.
Failure or inability to attract/retain such qualified key personnel may impact the prospects
of the companies in the particular sector in which the fund invest.
Exchange Risks
A number of companies generate revenues in foreign currencies and may have
investments or expenses also denominated in foreign currencies. Changes in exchange
rates may, therefore, have a positive or negative impact on companies which in turn
would have an effect on the investment of the fund.

Investment Risk
The sectoral fund schemes, investments will be predominantly in equities of select
companies in the particular sectors. Accordingly, the NAV of the schemes are linked to
the equity performance of such companies and may be more volatile than a more
diversified portfolio equities.
Changes in the Government Policy
Changes in Government policy especially in regard to the tax benefits may impact the
business prospects of the companies leading to an impact on the investments made by the
fund.

39
Chapter-II

Review
Literature
40
 Review of Literature

ISSN Raju (2005) give the view the research on the investment opportunities in the
mutual funds . ISSN Raju takes a sample of of 200 Investors which is invested in the
mutual fund. ISSN Raju see the factors considered before investing safety, Returns, Risk,
Liquidity etc factor are considered ISSN Raju tape a Bank deposit, Post Office, Mutual
Fund, Insurance, and the Gold according to survey in the 200 Investors 16 Respondents
Invest in the mutual fund & percentage of Investment in the Fund 8% and 48 Respondent
Deposit their money and the percentage is 24%. The more percentage in the Gold. In the
insurance 36 Respondent invest it 36%. This is the view of the ISSN Raju.
Urvashi Makkar (2005) give the view on this research on according to Urvashi Makkar
research that 36% Investment in 2005-06 and 2004-05 Investment in 0.4% people
investment in Bank FD’s 46.7%. People are more investment in the Bank FD than the
Mutual Fund.
Meenu Verma (2004) give a view point on that research. Meenu take the 210 investors
across the country. Around 50% of the people found medium risk attached mutual fund
investment 27%, 15% and 8%. People said that according to them the risk attached with
mutual fund investment is high, low and very high respectively. People have a perception
that mutual fund are more Risky than other investment avenues as they do not even offer
guarantee of the capital. 39% people wanted high return & while 28% of respondents

41
wanted safety of their money. The liquidity factors fixed returns were expected by 19%
and 14% respondents respectively. It clearly that people are being influenced by the
returns of the mutual fund & they expect the same to happen in future.

Ajaya Kumar Mohanty (1964) give a view point on that research according to Ajaya
Kumar. Benefits retail Investors as a source of saving with highest return. There is
Flexibility of portfolio diversification MF prepares an offer document wherein essential
information about the scheme is given to enlighten the prospective investors. It presents a
swot analysis and clearly specifies that the post performance are Indicative of future
performance. It contain standard risk factors and schematic disk factor detail. It also
clarifies the investment objective and policies investors, right, dividends distribution
policy as well as accounting policies. The MF’s are marging various schemes for overall
benefits. It can be said that with the consolidation of MF’s the future performance of the
MF’s will be better than those in past.
Shaveta Gupta (2004-05) given a view point on that research. There are a number of
mutual fund schemes that offer a chance to invest in a particular sector but the emergence
of REM’s will give the small investors a chance to invest in real estate and earn the
potential returns. From the real estate market. The setting up of REMF’s can also provide
some support to the cash starved housing sector. RMMF would throught the pooling in of
resources, allow individual with small amounts of cash to also take the advantage from
the real estate market. It can be used as an excellent diversification tool for minimizing
risk and maximizing return.
Russwermers (2005) :- This paper analyzes the performance of portfolio strategies that
invest in no-load open-end U.S. domestic equity mutual funds, incorporating
predictability in (i) manager skills, (ii) fund risk loadings, and
(iii) benchmark returns. Predictability in manager skills is found to be the dominant
source of investment profitability—long-only strategies that incorporate such
predictability considerably outperform prior documented “hot-hands” and “smart money”
strategies, and generate positive and significant performance with respect and significant
performance with respect to the Fama-French and momentum benchmarks. Specifically,
these strategies outperform their benche marks. Specifically, these strategies outperform
their benchmarks by 2-4% per year through their ability to time industries over the

42
business cycle. More ever they choose individual funds that outperform their industry
benchmarks to achieve an additional 3-6% per year. Overall, our findings indicate that
industries are important in locating outperforming mutual funds, and that active
management adds much more value than documented by prior studies.
Keith C. Brown (2002):- While a mutual fund’s investment style influences the returns it
generates, little is known about how a manager’s execution of the style decision might
affect performance. Using multivariate techniques for measuring the consistency of a
portfolio’s investment mandate, we demonstrate that more style-consistent funds tend to
produce higher total and relative returns than less consistent funds, after controlling for
past performance and portfolio turnover. These findings are robust across fund
investment style classification, the return measurement period, and the model used to
calculate expected returns. We document a positive relationship between measures of
fund style consistency and the persistence of its future performance, net of momentum
and past performance effects. We conclude that the decision to maintain a consistent
investment style is an important aspect of the portfolio management process.
Vikram K. Nanda (1997):- this paper provides a model that explains the structure of
mutual funds. Specifically, the paper explains why funds structure as open-or closed-end
funds, and managers generate earn excess returns that on the margin are increasing in
their ability and decreasing in the size of funds under management. Managers capture the
rents from their ability by optimally setting the management fee and attracting funds from
investors. Investors have stochastic liquidity needs that impose a cost on open-end funds
available for investment to deviate from an optimal level. While managers of open end
funds can charge loads to discourage investors with high anticipated liquidity needs, they
need to pay a premium in the form of higher expected returns to attract the relatively
scarce investors with low liquidity needs. Fund managers whose ability is known with
more precision can avoid paying which provide investors liquidity without exposing the
fund to liquidity shocks. Managers whose ability is more uncertain will fund prefer to
form open-end funds, however, since an open-end fund will tend to be closer to an
optimal size as investors respond to new information about management.

HISTORY OF MUTUAL FUNDS

43
History of the Indian Mutual Fund Industry

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. The history of
mutual funds in India can be broadly divided into four distinct phases

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up
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)

1987 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.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 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

44
(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.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets
of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under
management was way ahead of other mutual funds

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 Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
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. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of
assets under management and with the setting up of a UTI Mutual Fund, conforming to
the SEBI Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth.
The graph indicates the growth of assets over the years
GROWTH IN ASSETS UNDER MANAGEMENT

45
 Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified
Undertaking of the Unit Trust of India effective from February 2003. The Assets under
management of the Specified Undertaking of the Unit Trust of India has therefore been
excluded from the total assets of the industry as a whole from February 2003 onwards.

Mutual Funds In India

Mutual Fund is an instrument of investing money. Nowadays, bank rates have fallen
down and are generally below the inflation rate. Therefore, keeping large amounts of
money in bank is not a wise option, as in real terms the value of money decreases over a
period of time.

One of the options is to invest the money in stock market. But a common investor is not
informed and competent enough to understand the intricacies of stock market. This is
where mutual funds come to the rescue.

A mutual fund is a group of investors operating through a fund manager to purchase a

diverse portfolio of stocks or bonds. Mutual funds are highly cost efficient and very easy
to invest in. By pooling money together in a mutual fund, investors can purchase stocks
or bonds with much lower trading costs than if they tried to do it on their own. Also, one

46
doesn't have to figure out which stocks or bonds to buy. But the biggest advantage of
mutual funds is diversification.

Diversification means spreading out money across many different types of investments.
When one investment is down another might be up. Diversification of investment
holdings reduces the risk tremendously.

Mutual Funds in India (1964 - 2000)

The end of millennium marks 36 years of existence of mutual

funds in this country. The ride through these 36 years is not been smooth. Investor
opinion is still divided. While some are for mutual funds others are against it.

UTI commenced its operations from July 1964 .The impetus for establishing a formal
institution came from the desire to increase the propensity of the middle and lower groups
to save and to invest. UTI came into existence during a period marked by great political
and economic uncertainty in India. With war on the borders and economic turmoil that
depressed the financial market, entrepreneurs were hesitant to enter capital market.
The already existing companies found it difficult to raise fresh capital, as investors did
not respond adequately to new issues. Earnest efforts were required to canalize savings of
the community into productive uses in order to speed up the process of industrial growth.
The then Finance Minister, T.T. Krishnamachari set up the idea of a unit trust that would
be "open to any person or institution to purchase the units offered by the trust. However,
this institution as we see it, is intended to cater to the needs of individual investors, and
even among them as far as possible, to those whose means are small."

His ideas took the form of the Unit Trust of India, an intermediary that would help fulfill
the twin objectives of mobilizing retail savings and investing those savings in the capital
market and passing on the benefits so accrued to the small investors.

UTI commenced its operations from July 1964 " with a view to encouraging savings and
investment and participation in the income, profits and gains accruing to the Corporation
from the acquisition, holding, management and disposal of securities." Different
provisions of the UTI Act laid down the structure of management, scope of business,
powers and functions of the Trust as well as accounting, disclosures and regulatory
requirements for the Trust.

47
One thing is certain – the fund industry is here to stay. The industry was one-entity show
till 1986 when the UTI monopoly was broken when SBI and Canbank mutual fund
entered the arena. This was followed by the entry of others like BOI, LIC, GIC, etc.
sponsored by public sector banks. Starting with an asset base of Rs. 25 crore in 1964 the
industry has grown at a compounded average growth rate of 27% to its current size of
Rs.90000 crore.

The period 1986-1993 can be termed as the period of public sector mutual funds (PMFs).
From one player in 1985 the number increased to 8 in 1993. The party did not last long.
When the private sector made its debut in 1993-94, the stock market was booming.

The opening up of the asset management business to private sector in 1993 saw
international players like Morgan Stanley, Jardine Fleming, JP Morgan, George Soros
and Capital International along with the host of domestic players join the party. But for
the equity funds, the period of 1994-96 was one of the worst in the history of Indian
Mutual Funds.

1999—YEAR OF THE FUNDS Mutual funds have been around for a long period of
time to be precise for 36 yrs but the year 1999 saw immense future potential and
developments in this sector. This year signaled the year of resurgence of mutual funds
and the regaining of investor confidence in these MF’s. This time around all the
participants are involved in the revival of the funds ----- the AMC’s, the unit holders, the
other related parties. However the sole factor that gave lifer to the revival of the funds
was the Union Budget. The budget brought about a large number of changes in one
stroke. An insight of the Union Budget on mutual funds taxation benefits is provided
later.

It provided centre stage to the mutual funds, made them more attractive and provides
acceptability among the investors. The Union Budget exempted mutual fund dividend
given out by equity-oriented schemes from tax, both at the hands of the investor as well
as the mutual fund. No longer were the mutual funds interested in selling the concept of
mutual funds they wanted to talk business which would mean to increase asset base, and
to get asset base and investor base they had to be fully armed with a whole lot of schemes

48
for every investor .So new schemes for new IPO’s were inevitable. The quest to attract
investors extended beyond just new schemes. The funds started to regulate themselves
and were all out on winning the trust and confidence of the investors under the aegis of
the Association of Mutual Funds of India (AMFI)

One cam say that the industry is moving from infancy to adolescence, the industry is
maturing and the investors and funds are frankly and openly discussing difficulties
opportunities and compulsions.

Global Scenario

Some basic facts:

 Currently, the worldwide value of all mutual funds totals more than $26 trillion.

 The money market mutual fund segment has a total corpus of $ 1.48 trillion in the
U.S. against a corpus of $ 100 million in India.
 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
while in India we have just 277 schemes
 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 2008, such a facility is not yet of avail in India.
 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. are expected to trade on-line by 2008.

(Source: The Financial Express)

49
Internationally, on-line investing continues its meteoric rise. Many have debated about
the success of e- commerce and its breakthroughs, but it is true that this aspect of
technology could and will change the way financial sectors function. However, mutual
funds cannot be left far behind. They have realized the potential of the Internet and are
equipping themselves to perform better.

In fact in advanced countries like the U.S.A, mutual funds buy- sell transactions have
already begun on the Net, while in India the Net is used as a source of Information.

Such changes could facilitate easy access, lower intermediation costs and better services
for all. A research agency that specializes in internet technology estimates that over the
next four years Mutual Fund Assets traded on- line will grow ten folds from $ 128 billion
to $ 1,227 billion ; whereas equity assets traded on-line will increase during the period
from $ 246 billion to $ 1,561 billion. This will increase the share of mutual funds from
34% to 40% during the period.

(Source: The Financial Express)

Such increases in volumes are expected to bring about large changes in the way Mutual
Funds conduct their business. Some of the basic changes are:

• Lower Costs: Distribution of funds will fall in the online trading regime by 2006.
Mutual funds could bring down their administrative costs to 0.75% if trading is
done on- line. As per SEBI regulations, bond funds can charge a maximum of
2.25% and equity funds can charge 2.5% as administrative fees. Therefore if the
administrative costs are low, the benefits are passed down and hence Mutual
Funds are able to attract mire investors and increase their asset base.

• Better advice: Mutual funds could provide better advice to their investors
through the Net rather than through the traditional investment routes where there
is an additional channel to deal with the Brokers. Direct dealing with the fund
could help the investor with their financial planning.
• In India , brokers could get more Net savvy than investors and could help the
investors with the knowledge through get from the Net.

50
 • New investors would prefer online : Mutual funds can target investors who are
young individuals and who are Net savvy, since servicing them would be easier
on the Net.
• India has around 1.6 million net users who are prime target for these funds and
this could just be the beginning. The Internet users are going to increase
dramatically and mutual funds are going to be the best beneficiary. With smaller
administrative costs more funds would be mobilized .A fund manager must be
ready to tackle the volatility and will have to maintain sufficient amount of
investments which are high liquidity and low yielding investments to honor
redemption.

• Net based advertisements: There will be more sites involved in ads and
promotion of mutual funds. In the U.S. sites like AOL offer detailed research and
financial details about the functioning of different funds and their performance
statistics. a is witnessing a genesis in this area.

Since 1940, there have been three basic types of investment companies in the United
States: open-end funds, also known in the US as mutual funds; unit investment trusts
(UITs); and closed-end funds. Similar funds also operate in Canada. However, in the rest
of the world, mutual fund is used as a generic term for various types of collective
investment vehicles, such as unit trusts, open-ended investment companies (OEICs),
unitized insurance funds, and undertakings for collective investments in transferable
securities (UCITS).

FUTURE SCENARIO:

The asset base will continue to grow at an annual rate of about 30 to 35 % over the next
few years as investor’s shift their assets from banks and other traditional avenues. Some
of the older public and private sector players will either close shop or be taken over.

Out of ten public sector players five will sell out, close down or merge with stronger
players in three to four years. In the private sector this trend has already started with two

51
mergers and one takeover. Here too some of them will down their shutters in the near
future to come.

But this does not mean there is no room for other players. The market will witness a
flurry of new players entering the arena. There will be a large number of offers from
various asset management companies in the time to come. Some big names like Fidelity,
Principal, and Old Mutual etc. are looking at Indian market seriously. One important
reason for it is that most major players already have presence here and hence these big
names would hardly like to get left behind.

In the U.S. most mutual funds concentrate only on financial funds like equity and debt.
Some like real estate funds and commodity funds also take an exposure to physical
assets. The latter type of funds are preferred by corporate’s who want to hedge their
exposure to the commodities they deal with.

For instance, a cable manufacturer who needs 100 tons of Copper in the month of January
could buy an equivalent amount of copper by investing in a copper fund. For Example,
Permanent Portfolio Fund, a conservative U.S. based fund invests a fixed percentage of
it’s corpus in Gold, Silver, Swiss francs, specific stocks on various bourses around the
world, short –term and long-term U.S. treasuries etc.

In U.S.A. apart from bullion funds there are copper funds, precious metal funds and real
estate funds (investing in real estate and other related assets as well.).In India, the Canada
based Dundee mutual fund is planning to launch a gold and a real estate fund before the
year-end.

In developed countries like the U.S.A there are funds to satisfy everybody’s requirement,
but in India only the tip of the iceberg has been explored. In the near future India too will
concentrate on financial as well as physical funds.

The mutual fund industry is awaiting the introduction of DERIVATIVES in the country
as this would enable it to hedge its risk and this in turn would be reflected in it’s Net
Asset Value (NAV).

52
SEBI is working out the norms for enabling the existing mutual fund schemes to trade in
Derivatives. Importantly, many market players have called on the Regulator to initiate the
process immediately, so that the mutual funds can implement the changes that are
required to trade in Derivatives.
OPPORTUNITIES IN MUTUAL FUND
The M .F industry in India has been on a roll as the assets under management continue to
see strong spurt in growth. The assets under management swelled to Rs.167978cr by
May31 2007 from Rs.101565cr in January 2002. This apart, the industry has also seen a
spurt in the number of schemes on offer, which amount to 460 at present, catering to
varied needs of investor.
A booming economy, soaring stock market and a conducive regulatory environment,
amongst a slew of other factors have added to the growth of the industry.
Given the huge opportunity in sub-urban market and rural market , which lies hitherto
untapped and growing income levels in the country, the industry`s future looks bright.
The Indian mutual fund industry is worth around Rs.167978cr at present. It is hope that
it will be rise double till 2010.
What has driven this growth? A slew of factors have contributed to the surge in the
industry growth. First and foremost, a buoyant domestic economy coupled with a
booming stock market has been one of major drivers of growth in recent time,
particularly in the last five year. Another significant factor facilitating this growth
has been a conducive regulatory regime, thanks to increased efforts by SEBI to
improve market surveillance and protect investor`s interests. Further, incentives,
such as making dividends tax free in the hands of investors and removal of long-
term capital gains tax, have also provided strong impetus to the growth. Increased
focus on product and distribution innovations on part of the industry players have
also helped the growth.
The Indian mutual fund industry is worth Rs.167978cr. It is poised to grow by a CAGR
of 8-9%. Saving contribute about 25% of the GDP to mutual fund assets, which is one of
highest in the Asian region. This is mainly attributed to the huge saving tendency among
Indian. In contrast, their investment is lower. Mutual fund players are formulating their
strategies to have a share of the growing market. They are developing their products for
both the mass and niche market, considering clients, financial goals, risk-taking ability

53
and time duration. They are meticulously segmenting and targeting their customers and
positioning their products according to their needs. The segmentation is based on the
customers` psycho- graphic profile, demography, socio-economic conditions. For the
mass-market, AMCs perform psycho-graphic segmentation, which helps in innovating
and developing new products by analyzing customers` expectancy gap, whereas
demographic segmentation helps in launching specialized or niche products.
Small families are being targeted using the growth scheme and balanced scheme, middle-
aged people by pension schemes and retired people by income scheme. Usually,
government-sponsored, risk free products are the preferred option for retail investors. In
contrast, institutional investors prefer to invest in mutual fund scheme because of the
professional management of fund, wider product mix, high liquidity and cost-efficiency.
They are targeted by institutional scheme and money market schemes.

INDUSTRY PROFIE
 Excluding real estate, the financial services sector’s contribution to the gross
domestic product totaled 7.7 percent in 2008, the latest data available.
 The assets of the financial services sector grew 12 percent from $37.9 trillion in 2006
to $42.0 trillion in 2008.
 Banks acquired 54 insurance agencies and 46 securities firms in 2008.
 In 2008, homeowners withdrew $138 billion in cash when they refinanced their
mortgages, compared with $105 billion in 2006.
 U.S. households' financial assets rose 94.3 percent from $15.7 trillion in 2006 to
$30.5 trillion in 2008.
 Household debt rose 10.6 percent and business debt rose 3.7 percent from 2004 to
2008.
 Financial holding companies (FHCs), a structure created by the 1999 Gramm Leach
Bliley Act to expand the financial services activities of bank holding companies
(BHCs), accounted for $8.3 trillion in assets in 2007
 Insurance underwriting assets reported by FHCs rose to $356 billion in 2008 from
$347 billion in 2007. In 2008, these assets amounted to $116 billion.

54
 Securities underwriting/dealing assets of FHCs increased dramatically from
$962billion in 2006 to $1,620 billion in 2008.

Chapter III

RESEARCH MEHODOLOGY

55
Chapter – III

Research Methdology

Introduction

Research comprises of defining and redefining Problems, Formulating Hypothesis

or Suggested Solution, Collecting organizing and evaluating data making deduction and
reaching conclusion. Research, refers to a search for knowledge. In fact, research is an art
of scientific investigation. According, the Advanced Learner’s Dictionary of Current
English. A careful investigation or inquiry specially through search for new facts in any
branch of knowledge.
Dr. Slesinger and m. Stephenson in Encyclopedia of social sciences defined research as
the manipulation of things, concepts or symbols for the purpose of generalizing to extend,
correct or verify knowledge whether that knowledge aids in construction of theory or tin
the practice of an art. In short the search for knowledge through objective and systematic
method of finding solution to a problem is research

OBJECTIVES OF THE STUDY

56
 This research project makes the study on “Analysis of mutual fund: as a preferred investment
source” .The objective of this research is to find the preferences given by people to mutual funds
while investment. Also to find out the perception of the investors regarding different financial
instruments and to examine why and where people wish to invest.
1) This study is aimed at evaluating the performance of mutual funds in market.

2) To find the investment patterns of investors to invest in mutual funds.

3) The project will help the individuals to select right fund according to his/her return
expectations and risk appetite.

4) To study about the different opportunities in mutual fund.

5) To know the factors which are considered by the investors while investing in
mutual fund.
RESEARCH METHODOLOGY:
Research Methodology is the arrangement of condition for collection and analysis of data
in a manner that aims to combine relevance to the research purpose with economy in
procedure. Research methodology is the conceptual structure with in which research is
conducted. Its constitutes the blue print for the collection measurement and analysis of
data. It’s a strategy specifying which approach will be used for gathering and analyzing
the data. Its also includes the time and cost budget, since most studies are done under
these two constraints
RESEARCH DESIGN
Research Design facilities the smooth sailing of the various research operation, thereby
making research as efficient as possible yielding maximal information with minimal
expenditure of effort, time and money. Actually it is the blue print for our research
project.
For the purpose of research, descriptive-cum-diagnostic research design is used.
Descriptive research studies are concerned with describing the characteristics of a
particular individual or of a group. Diagnostic research studies determine the frequency
with which something occurs or its association with something else. The studies,
concerning whether certain variables are associate examples of diagnostic research

57
studies. Studies concerned with specific predictions with narration of facts and
characteristics concerning individuals, group or situations are example of descriptive
research studies.
So research design is a blueprint of planned and structured process of collecting the
sample and conducting the study. Research Design is of three types:

SAMPLE DESIGN
All the items in any field of inquiry constitute a universe or population. A completes
enumeration of all items in the population is known a census inquiry. a sample design is a
definite plan for obtaining a sample from a given population.
The first step in developing any sample design is to clearly define the set of objects,
technically called universe, to be studied. In the present study, the universe is the
investors in KARNAL

SAMPLE SIZE
This refers to the number of items to be selected from the universe to constituent a
sample. This is a major problem for a researcher. An optimum sample is one, which
fulfill the requirements of efficiency, representatives, reliability & flexibility. For the
study, judgement sampling was used and a sample of 100 investors was selected from
Karnal City.

NATURE OF THE RESEARCH

The present study is Descriptive.

SAMPLE DESIGN: For this research we use Random Sampling.

SAMPLE UNIVRSE: KARNAL DISTRICT
SAMPLE SIZE: 100.
COLLECTION OF DATA:
SOURCE OF DATA
For the purpose of research two types of data was required i.e. primary & secondary data
Primary data:

58
The data collected by the researcher from the field, first time through personal interview
or observation is called primary data.It may be described as those data that have been
observed and recorded by the researchers for the first time to their knowledge.
DATA COLLECTION TOOL
• Questionnaire Method
Secondary data:
Secondary data are those which have been collected by someone else and which have
already been through the statistical process.The data taken from various magazines,
websites, books or other printed material is known as secondary data.
For this study sources of secondary data is:
• Internet
• Magazines
• Literatures
• Newspapers

DATA PROCESSING:
1. Tables to be prepared to bring out the main characteristic of the collected data.
2. Interpretation to be derived from the data collected.
STATISTICAL TOOLS USED
I analysis this whole work on the basis of simple tools like bar, graph pie, chart etc.
In the study undertaken the type of research is a Descriptive. The nature of data source is
primary data & secondary.

The approach of research was through survey method. As the best procedure to collect
primary data for a Descriptive research is to undertake a survey and gather first hand
information.

The instrument used for research was Questionnaire. A total of 10 questions were listed.
In the present study both the data were use primary data was collected using close-ended
questionnaire through personal interviews, websites and magazines were the source for

59
secondary data. Most of the listed questions were structured, as to give a balance and
comfort level to the investor.

For sample purpose, Judgment sampling technique has been used so as to choose
according to my requirement only those investors who are investing or dealing in mutual
funds.

The sample size of 100 investors has been taken of this study. Geographically the sample
units are located in Karnal City.
The survey method is through the questionnaire instrument so the contact method was
personal and each and every respondent personally contacted and got the data required.
To analyze the data table were prepared to bring out the characteristic of the collected
data. Secondly, inference was drawn from collected data.
LIMITATIONS

 Limited scope because of restricted availability of time.

 Unavailability of concerned person at the time of survey.
 Time and other factors, which are beyond the human limitations, have also a bearing
on the study.
 Limited number of funds available in study.
 Funds at the disposal of the researcher were limited.

 The study is confirmed only to karnal.

 Unwillingness of the Respondents: - Unwillingness of the respondents was also

barrier, as they thought it was just an ordinary survey.

 Moreover, a few respondents thought that the Questionnaire might leak out their

personal information.

 Window Dressed Data: - Data published for the customers are External data and

this data is being dummified by the companies and we can also say that the

60
available data Is being window dressed by the companies. So, it is the major

limitation of the study.

Chapter-IV

Analysis
&
Interpretation of
61
 Data

Chapter – IV

Analysis and interpretation of Data

In this part of the study analysis and interpretation of data related to mutual fund industry

has been done and also the interpretarion of questionnaire related to mutual funds in

Karnal District is given below.

So first of all to know the financial performance of different mutual funds in the industry

and also to shoe the growth of mutual funds different tables and their interpretation is

given below.Different popular schemes NAV’s with their repurchase and sale price is

shown in the table given below to tell the performance of different mutual funds.

NAV - Category-wise

NAV Report of Growth Schemes

Net Asset Repurchase

Scheme NAV Name Sale Price
Value Price
AIG Global Investment Group Mutual Fund
AIG India Equity Fund-
Institutional Plan- Dividend 5.881 5.852 5.881
Option

62
AIG India Equity Fund-
Institutional Plan- Growth 5.881 5.852 5.881
Option
Birla Sun Life Mutual Fund
Birla Sun Life Buy India Fund-
12.81 12.55 13.10
Plan A(Divivdend)
Birla Sun Life Buy India Fund-
18.24 17.88 18.65
Plan B(Growth)
Birla Sun Life Commodities
Equities Fund Global Agri Plan 0.0000 0.0000 0.0000
-Institutional Dividend
Birla Sun Life Special
5.3595 5.2523 5.4801
Situations Fund - Dividend
Birla Sun Life Special
5.3595 5.2523 5.4801
Situations Fund - Growth
HDFC Mutual Fund
HDFC Capital Builder Fund-
14.726 14.726 15.057
Dividend Plan
HDFC Capital Builder Fund-
46.634 46.634 47.683
Growth Plan
HDFC Equity Fund-Dividend
24.894 24.894 25.454
Plan
HDFC Growth Fund-Dividend
20.806 20.806 21.274
Plan
HDFC Growth Fund-Growth
42.245 42.245 43.196
Plan
HDFC Index Fund-Nifty
26.377 26.1132 26.377
Plan(FV Rs 10.326)
ICICI Prudential Mutual Fund
ICICI Prudential Banking and
Financial Services Fund - Retail 7.80 7.72 7.98
Dividend
ICICI Prudential Banking and
Financial Services Fund - Retail 7.80 7.72 7.98
Growth
ICICI Prudential Blended Plan
10.4096 10.3576 10.4096
A-Dividend Option
ICICI Prudential Blended Plan
13.1930 13.1270 13.1930
A-Growth Option
ICICI Prudential Blended Plan
11.6414 11.5832 11.6414
B-Dividend Option

63
ICICI Prudential Blended Plan
12.9696 12.9048 12.9696
B-Growth Option
ICICI Prudential Discovery
Fund - Institutional Option - I - 7.11 7.11 7.27
Growth
ICICI Prudential Discovery
8.83 8.83 9.03
Fund-DIVIDEND OPTION
ICICI Prudential Discovery
16.34 16.34 16.71
Fund-GROWTH OPTION
ICICI Prudential Dynamic
11.1779 11.1779 11.4294
Plan-Dividend Option
Kotak Mahindra Mutual Fund
Kotak-Mid-Cap-Dividend 8.292 8.292 8.479
Kotak-Mid-Cap-Growth 10.808 10.808 11.051
Kotak 30-(Dividend) 20.511 20.511 20.972
Kotak 30-(Growth) 56.033 56.033 57.294
Kotak Contra Scheme---
9.415 9.415 9.627
Dividend
Kotak Contra Scheme---Growth 10.755 10.755 10.997
LIC Mutual Fund
LIC MF Equity Fund-Dividend 5.7353 5.7353 5.7353
LIC MF Equity Fund-Growth 14.5554 14.5554 14.5554
LICMF Growth Fund -
5.8774 5.8774 5.8774
Dividend Option
LICMF Growth Fund - Growth
6.6269 6.6269 6.6269
Option
Reliance Mutual Fund
Reliance Banking Fund -
Institutional Plan – Bonus 38.8743 38.8743 38.8743
Option
Reliance Banking Fund -
Institutional Plan – Dividend 38.8743 38.8743 38.8743
Option
Reliance Banking Fund -
Institutional Plan – Growth 38.8743 38.8743 38.8743
Option
Reliance Banking Fund-
16.7428 16.5754 17.1195
Dividend Plan-Dividend Option
Reliance Banking Fund-Growth
38.8743 38.4856 39.7490
Plan-Bonus Option

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Reliance Banking Fund-Growth
38.8743 38.4856 39.7490
Plan-Growth Option
Reliance Diversified Power
Sector Fund Institutional Plan 38.8964 38.8964 38.8964
-Dividend Option
Reliance Diversified Power
Sector Fund Institutional Plan 38.8964 38.8964 38.8964
Growth Plan Bonus Option
SBI Mutual Fund
Magnum Equity Fund
18.12 17.94 18.53
-Dividend
Magnum Equity Fund- Growth 20.60 20.39 21.06
SBI Arbitrage Opportunities
11.3253 11.2970 11.3253
Fund - Div
SBI Arbitrage Opportunities
11.9594 11.9295 11.9594
Fund - Gr
SBI BLUE CHIP FUND-
6.58 6.51 6.73
DIVIDEND
SBI BLUE CHIP FUND-
7.55 7.47 7.72
GROWTH
SBI Magnum COMMA Fund -
9.50 9.41 9.71
Dividend
SBI Magnum COMMA Fund -
11.84 11.72 12.11
Growth
UTI Mutual Fund
UTI - Equity Fund-Growth
25.69 25.69 26.27
Option
UTI - Equity Fund-Income
23.61 23.61 24.14
Option
UTI - INDEX SELECT FUND-
25.97 25.97 26.55
Growth Option
UTI Infrastructure Fund-
21.17 21.17 21.65
Growth Option
UTI Infrastructure Fund-
13.04 13.04 13.33
Income Option
UTI Leadership Equity Fund-
8.6 8.6 8.79
Dividend-Dividend Option
UTI Leadership Equity Fund-
8.6 8.6 8.79
Growth-Growth option
UTI Mid Cap Fund-Growth
12.73 12.73 13.02
Option

65
 UTI Mid Cap Fund-Income
10.75 10.75 10.99
Option
UTI Opportunities Fund-
7.84 7.84 8.02
Dividend Option
UTI Opportunities Fund-
12.01 12.01 12.28
Growth Option
UTI Spread Fund - Dividend
11.5055 11.5055 11.5055
Option
UTI Spread Fund - Growth
12.3664 12.3664 12.3664
Option
UTI-Auto Sector Fund-Growth
9.77 9.77 9.99
Option
ICICI Prudential Mutual Fund
ICICI Prudential Fusion Fund -
6.95 0.00 0.00
Institutional Option - I - Growth
ICICI Prudential Fusion Fund-
6.34 0.00 0.00
Dividend Plan
ICICI Prudential Fusion Fund-
6.73 0.00 0.00
Growth Plan

Mutual Funds Performance

The performance of a Mutual Fund is reflected in its net asset value (NAV) which is
disclosed on daily basis in case of open-ended schemes and on weekly basis in case of
close-ended schemes. The NAVs of mutual funds are required to be published in
newspapers. The NAVs are also available on the web sites of mutual funds. All mutual
funds are also required to put their NAVs on the web site of Association of Mutual Funds
in India (AMFI) http://www.amfiindia.com/ and thus the investors can access NAVs of
all mutual funds at one place

Net asset value (NAV), which is a fund's assets minus liabilities, is the value of a mutual
fund. NAV per share is the value of one share in the mutual fund, and it is the number
that is quoted in newspapers. Investors can basically just think of NAV per share as the
price of a mutual fund. It fluctuates everyday as fund holdings and shares outstanding
change. When Investors buy shares, Investors pay the current NAV per share plus any
sales front-end load. When Investors sell your shares, the fund will pay you NAV less
any back-end load.

66
The mutual funds are also required to publish their performance in the form of half-yearly
results which also include their returns/yields over a period of time i.e. last six months, 1
year, 3 years, 5 years and since inception of schemes. Investors can also look into other
details like percentage of expenses of total assets as these have an affect on the yield and
other useful information in the same half-yearly format. The mutual funds are also
required to send annual report or abridged annual report to the unitholders at the end of
the year.

Various studies on mutual fund schemes including yields of different schemes are being
published by the financial newspapers on a weekly basis. Apart from these, many
research agencies also publish research reports on performance of mutual funds including
the ranking of various schemes in terms of their performance. Investors should study
these reports and keep themselves informed about the performance of various schemes of
different mutual funds. Investors can compare the performance of their schemes with
those of other mutual funds under the same category. They can also compare the
performance of equity oriented schemes with the benchmarks like BSE Sensitive Index,
S&P CNX Nifty, etc.

On the basis of performance of the mutual funds, the investors should decide when to
enter or exit from a mutual fund scheme

Montly and yearly performance of top funds

Montly and yearly performance of top funds have been shown in the table given below
with their monthly and yearly NAV’s.

Scheme Name Nature 1M% 6M% 1Y% 3Y%

Benchmark Equity And Der Equity 0.64 3.56 7.77 -
Canara Robeco Income Sch Debt 6.28 23.44 28.45 12.70
Birla Sun Life Balance F Balanced 9.22 -11.99 -25.81 5.53
Birla Sun Life MIP - Sav MIP 8.79 18.87 24.34 12.95
DSP BlackRock Cash Plus Liquid 0.73 4.66 9.06 -

67
Canara Robeco Equity Tax ELSS 15.05 -21.33 -43.11 5.07
UTI Gold ETF ETF 5.50 3.14 25.02 -
ICICI Prudential GFIP - Gilt 13.07 41.15 41.45 18.66
HDFC Index Fund - Sensex Index 8.37 -25.51 -42.60 4.74

DIVIDEND IN DIFFERENT PLANS

ICICI Prudential Growth Plan... 10.00%

Franklin India Taxshield - D... 30.00%
JM Arbitrage Advantage Fund ... 2.20%
Lotus India Arbitrage Fund -... 2.00%
IDFC Arbitrage Fund - Plan A... 0.60%
IDFC Arbitrage Fund - Plan B... 0.60%
IDFC Arbitrage Plus Fund - P... 0.60%
IDFC Arbitrage Plus Fund - P... 0.60%
Templeton India Growth Fund ... 25.00%
UTI Master Value Fund - Divi... 14.00%

Dividend from different schemes in year 2008 has been shown in above table which
shows that some schemes have dividend even more than 10%, such as UTI Master Value
Fund - Divi... 14%,UTI Master Value Fund - Divi...25% etc.

AMFI MONTHLY
Table 1:- MUTUAL FUND DATA FOR THE MONTH - NOVEMBER 2008

Category Sales-All Schemes Redemptions All (Rs. in

Schemes Crore
From new From Total Cumulative For the Cumulative Average
schemes # Existing For the April 2008 Month April 2008 Assets
schemes Month to to Under
November November Manageme
2008 2008 nt for the
month
No. Amount Amount
A) Bank
Sponsored
1 Joint 1 14 30437 30451 211519 27287 204192 26855
Ventures :
Predominantly
Indian (2)

68
2 Joint - - - - 27 3 38 37
Ventures :
Predominantly
Foreign (1)
3 Others (1) - - 26782 26782 238506 22515 238586 38358
Total A 1 14 57219 57233 450052 49805 442816 65250
(1+2+3)
B) Institutions - - 17920 17920 180516 16477 179458 11684
(1)
C) Private
Sector
1 Indian (13) 14 2856 105932 108788 1047519 107578 1068490 126829
2 FOREIGN 2 32 12269 12301 197882 14401 203305 32907
(5)
3 Joint 17 1305 113338 114643 1150880 107711 1150461 136231
Ventures
Predominantly
Indian (5)
4 Joint 2 22 21019 21041 367229 22164 380078 29128
Ventures :
Predominantly
Foreign (7)
Total C 35 4215 252558 256773 2763510 251854 2802334 325095
(1+2+3+4)
Grand Total 36 4229 327697 331926 3394078 318136 3424608 402029
(A+B+C)
Figures for 51 18303 337097 355400 2606393 377698 2471269 547826
corresponding
period of
previous year
Released on 4th Dec 2008

Table 2:- SALES DURING THE MONTH - NOVEMBER 2008 - TYPE AND CATEGORY WISE
Table 2.1 *NEW SCHEMES LAUNCHED (ALLOTMENT COMPLETED)

Open End Close End Interval Fund Total

No. Of No. Of No. Of No. Of
Amount Amount Amount Amount
Schemes Schemes Schemes Schemes
Income 1 9 30 4200 1 **- 32 4209
Equity 4 20 - - - - 4 20
Balanced - - - - - - - -
Liquid/Money
- - - - - - - -
Market
Gilt - - - - - - - -

69
ELSS - EQUITY - - - - - - - -
Gold ETFs - - - - - - - -
Other ETFs - - - - - - - -
Fund of Funds
- - - - - - - -
Investing Overseas
Total 5 29 30 4200 1 - 36 4229
** Less than Rs. 1crore.

Table: - 2.2 EXISTING SCHEMES

Open End Close End Interval Fund Total

No. Of No. Of No. Of No. Of
Amount Amount Amount Amount
Schemes Schemes Schemes Schemes
Income 157 59729 290 ^3072 87 1543 534 64344
Equity 235 1360 49 2 2 4 286 1366
Balanced 30 175 5 - - - 35 175
Liquid/Money
57 259603 - - - - 57 259603
Market
Gilt 32 1905 - - - - 32 1905
ELSS - EQUITY 30 156 11 - - - 41 156
Gold ETF 5 3 - - - - 5 3
Other ETFs 11 122 - - - - 11 122
Fund of Funds
10 23 - - - - 10 23
Investing Overseas

Table:- 2.3 TOTAL OF ALL SCHEMES

Open End Close End Interval Fund Total

No. Of No. Of No. Of No. Of
Amount Amount Amount Amount
Schemes Schemes Schemes Schemes
Income 158 59738 320 7272 88 1543 566 68553
Equity 239 1380 49 2 2 4 290 1386
Balanced 30 175 5 - - - 35 175
Liquid/Money
57 259603 - - - - 57 259603
Market
Gilt 32 1905 - - - - 32 1905
ELSS - EQUITY 30 156 11 - - - 41 156
Gold ETF 5 3 - - - - 5 3
Other ETFs 11 122 - - - - 11 122
Fund of Funds
10 23 - - - - 10 23
Investing Overseas

70
Total 572 323105 385 7274 90 1547 1047 331926

Table 3:- REDEMPTIONS / REPURCHASES DURING THE MONTH (Rs. in Crore)

NOVEMBER 2008
Category & Typewise
Net Inflow /Net Inflow /
Net Inflow/(Outflow) For(Outflow) For
Open Close Interval
Total (Outflow) for thethe Year tothe Year to
End End Fund
Month Date CurrentDate Previous
Year Year
Income 40871 17147 10905 68923 -370 -33295 81787
Equity 1459 47 14 1520 -134 1792 13549
Balanced 149 4 - 153 22 170 3046
Liquid /
Money 244460 - - 244460 15143 -4265 34840
Market
Gilt 2732 - - 2732 -827 1811 -272
ELSS -
19 1 - 20 136 1648 1724
EQUITY
Gold ETF 7 - - 7 -4 160 330
Other
292 - - 292 -170 451 120
ETFs
Fund of
Funds
29 - - 29 -6 998 ++
Investing
Overseas
Total 290018 17199 10919 318136 13790 -30530 135124

Table 4:- ASSETS UNDER MANAGEMENT AS ON 30st NOVEMBER, 2008 (Rs. in Crore)
Category & Typewise
Open End Close End Interval Fund Total % to Total
Income 93771 84801 14266 192838 48

71
Equity 74479 17920 121 92520 23
Balanced 8960 1308 - 10268 3
Liquid/Money
88858 - - 88858 22
Market
Gilt 4890 - - 4890 1
ELSS - EQUITY 8844 1745 - 10589 3
Gold ETF 741 - - 741 @
Other ETFs 2157 - - 2157 @
Fund of Funds
Investing 2251 - - 2251 @
Overseas
Total 284951 105774 14387 405112 100

Table 5:- DATA ON FUND OF FUNDS (DOMESTIC) - NOVEMBER 2008 (Rs.in Crore)
AUM as on
Avg. AUM for
No of Schemes Sales Redemptions 30th November
the month
2008
Fund of Funds 30 8 44 792 806

The table (1to 5)Indicating the no. of schemes launched, Redemptions, total fund
mobilize in different schemes and vrious other informations regarding mutual funds, in
2008 , on the basis of data of monthly table of Nov 2008.
The table 1 and 2.1 shows that 36 new Schemes were launched and sum of Rs 4,229
crore was mobilsed Rs. 20 crore under equity schemes and Rs. 4209 crore under income
schemes .
The table 1 , indicates that total sales from existing and new schemes is 3,54,400 of
which 3,37,057 is of existing schemes and 4,229 is of new schemes.

The table 2.3 shows that total fund mobilized Rs. 3,31,926 crore as against Rs. 3,29,383
crore for the year 2006 representing increase in the total mobilized fund.

The table 3 shows that total Redemption Rs. 3,18,136 crore as against Rs. 3,06,130
crore for the year 2006 representing increase in the total Redeption.

72
On the Net basis inflow of Rs. 13,790 crore during the month nov. 2008.

Data on funds on fund is dipicted in table 4 shows total assets under management
Rs.4,05,112crore Of which Rs,284951 is in open ended , Rs 1,05,774 Close ended,
14387 interval funds are there.

ANALYSIS AND INTERPRETATION

OF QUESTIONNAIRE
Without understanding the nature of investors it is very difficult to customize the product.
So Investors having different profile are studied having different occupation, income,
age and marital status. A questionnaire has been drafted which used to classify the nature
of investor and analysis of data collected is given below :
(1) What comes in your mind first while making an investment ?

Security & Saving High returns Tax benefit

INVESTMENT OBJECTIVE

30
NO. of customers

25
20
15
10
5
0
Security& High Tax Benefit
Saving Returns

INVESTMENT OPTIONS

Interpretation

73
On the basis of above finding. I found that among 50 people, 25 want Security& Saving,
10 want High return, and 15 want Tax benefit. So maximum percentage goes to
Security& Saving.

2) Are you aware of Investments in mutual funds ?

Yes No

INVESTMENT AWARENESS IN
MUTUAL FUNDS

NO
10%

YES
NO
YES
90%

Interpretation

On the basis of above finding, I found out among 50 people, 90% are aware of
Investments in mutual funds.

3) Have you ever invested in mutual funds ?

Yes No
INVESTMENT IN MUTUAL FUNDS
If Yes which one _____________________________
If No than Why NOT 0%
INVESTED
No proper guidance 40% Risky Investment Lack of Knowledge
INVESTED
60%

74
Interpretation

On the basis of above finding, I found that among 50 people, 60% people have already
invested in mutual funds.
4) If Yes then would you prefer equity or debt. Options ?

Equity Balancer Debt

INVESTMENT CRETERIA

6 5
CUSTOMERS

4
NO.OF

4 3
2

0
DEBT EQUITY BALANCER
INVESTMENT OPTIONS

Interpretation

On the basis of above finding, I found that out of 20 people those have not invested in

mutual funds,12 people want to invest in mutual funds. Out of 12 people, 3 want to invest

in Debt, 4 want to invest in Equity & 5 want to invest in balance fund. But 8 people those

have not invested in mutual funds, they do not want to invest in mutual funds because

they think that investments in mutual funds are Risky.

75
5) Did you find it profitable?

Yes No

PRO FIT ABIL IT Y IN M UT UAL F UND S

NOT PROFITABLE

17% 0%

PROFITABLE

83%

Interpretation

On the basis of above finding, I found that 25 people said that investments in mutual
funds are profitable.
6) What do you think who can better guide you for investment making ?

Broker/ Agent Banks Investment Consultants

NO. OF CUSTOMERS

INVETMENTMENT GUIDANCE

30
25
20
15
10
5
INVESTME

CINSULTA
BROKERS

0
BANKS
NTS
NT

INVESTMENMENT GUIDERES

76
Interpretation

On the basis of above finding, I found that 10 people want to invest their money through
banks, 25 want to invest through investment consultancy & 15 want to invest their money
through Brokers.
Through this analysis, I reached to the conclusion that still plenty of rooms left for
growth of mutual funds as the old conventional tools are still ruling the investor.
Factors considered while investing in Mutual Funds

%age of factors consider while investing

Name of Sector to a
Goodwill of Size/Volume which fund Past return of
Institution of Business belongs funds
60%
50%
50%
40%
30%
18% 20%
20% 12%
10%
0%

Interpretation

While investing people consider mainly for the goodwill of the institution then they go

for the past return of Funds. Different sectors of the fund comes next and the size and

volume of the business last.

Source of Information to Investors.

77
 15%
Formal prospectus of
company
Agent
25%
60% Informal (Soundings
new spapers eyc.)

Interpretation

The major source of Information to various Investor comes from newspaper/magazines

25% of information comes from the prospect of company 15% information comes from

the Agent.

Which scheme is preferred most by investors

30%
40%

30% open ended

close ended
other

Interpretation:-

The above graph showing that 40% investors are investing in Open Ended scheme &

30% of investors are investing in close ended Scheme & other 30% are investing other.

78
 Chapter-V

Conclusion
And
Recommendations

79
 Conclusion and Recommendations

After the analysis and interpretation of tables and graphs related to mutual fund Industry,
regarding the financial performance of mutual funds,it has been found that mutual fund
industry is growing at faster pace and there is a a lot of scope for investing more and
more by people and getting benefit out of this.
Different tables related to NAVs, Dividend, Sales, redemptions new schemes launched
and existing schemes along with different assets base have been studied and it have been
found that there is increase in all against the previous years. Besides that the analysis of
quessionaire is also done, which was filled by investors in karnal district.
The study on analysis of mutual fund has several findings on the basis of analysis and
interpretation of data.These findings are given below:

1. Most of the people want security of their money.

2. Most of the people are aware of the mutual fund.
3. Most of the people have invested in mutual fund.
4. People who have not invested in mutual fund they think that it is risky.
5. They want to invest in balance fund.
6. Perception about the mutual fund of the people is that they think that it is
profitable.
Some people which are not aware about mutual fund is related to rural and sub
urban area. They have not proper knowledge about mutual fund. Some people
think it is risky. Some people have the problem of income source. Some people
want to invest in property rather than mutual fund.Whatever, it is, but mutual
fund industry has a bright future India.

80
RECOMMENDATION & SUGGESTION

Now Indian Market growing very fast.So there are lot of scope in the M.F. Industry. So
company should have to follow these recommendations:

 Adverting is the best tool to create awareness among the investor’s for Mutual Fund
and Shares.
 Today customer is the king, more and providing best customer service attracts more
customers.
 Sufficient information should be provided to the staff members of the Firm, so that
they can do their work easily.
 Middle lower income group market should be topped.
 Demat service should be available for investor’s.
 For the Online Trading in Share should be available for the share trading holders.
 Company must have to perpetrate the Sub-Urban area as well as Rural areas.

So, mutual funds are the preferred source of investment by the

people these days and there is also a vast opportunities of further growth.

81
CHAPTER – VI

BIBLIOGRAPHY
82
 BIBLIOGRAPHY

1. Financial Services
Khan and Jain

2. Performance Evaluation of Mutual Funds

B.S. Bodla

3. AMFI Mutual Fund Tests-Workbook

4. Personal Investing -
Making Intelligent Decision
Jawahar Lal

5. Investment Analysis and Portfolio Management -

Parsanna Chandra

6. Portfolio Org.

83
7. Websites:
www.incraonline

www.mutualfundindia.com

www.economictimes.indiatimes.com

www.portfoliocenter.com

www.investmentcompanyinsittute.com

www.ssrn.com

www.google.com
www.yahoo.com
www.way2wealth .com
www.Amfiindia.com
www.Mutualfundindia.com
www.Tatamutualfunds.com
Magazine

Charted Financial Analyst

AMFI India Magazine

Newspapers

Economic Times , New Delhi

84
CHAPTER-VII

85
 APPENDIX

QUESTIONNAIRE

Investment Details:

1. What comes in your mind first while making an investment ?

Security & Saving High returns Tax benefit

2. Are you aware of Investments in mutual funds ?

Yes No

3. Have you ever invested in mutual funds ?

Yes No

If Yes which one _____________________________

If No

No proper guidance Risky Investment Lack of Knowledge

86
 4. If Q. 3 is No then would you like to invest in mutual funds.

Yes No

5. If Yes then would you prefer equity or debt. Options ?

Equity Balancer Debt

6. Did you find it profitable?

Yes No

7. What do you think who can better guide you for investment making ?

Broker/ Agent Banks Investment Consultants

8. Assign the ranks to the following in order of their importance in

imparting information about the investment opportunities.
a) Prospectus ( )
b) Newspapers and Magazines ( )
c) Electronic Media ( )
d) Agents ( )
e) Friends ( )

9.Which of the following factors do you consider while investing in mutual funds.
(please tick).
Factor

87
a) Name of goodwill of institution ( )
b) Size/Volume of business ( )
c) Sector to which a fund belongs (Pvt./Public) ( )
d) Past Return of funds ( )

10.. Which of the schemes do you prefer most ? (Please tick)

i) Open-ended ( ) i) Close-Ended ( )
ii) other ( )

Personal Details:

Name

Occupation and Designation :

____________________________________

Age :

____________________________________

Marital Status :

____________________________________

Spouse status :

____________________________________

88
 Annual household Income :

Less than 1.5 1.5 to 3 3 to 5 Above 5

Children Their age

________________ _________

89