A

Summer internship Project Report

on
A study on Investors Buying Behavior
towards Mutual fund in Surat city
At
NJ India Invest Pvt Ltd
Name: Dabhi Jyoti
Enrollment No : 1575002013

Introduction
Consumer Buying
Behavior

Standard Behavioral
Model

Factors Affecting Consumer

Buying Behavior

Mutual
Funds
A mutual fund is an
investment vehicle that is
made up of a pool of funds
collected from many
investors for the purpose of
investing in securities such
as stocks, bonds, money
market instruments and
similar assets. Mutual funds
are operated by money
managers,, who invest the
fund's capital and attempt to
produce capital gains and
income for the fund's
investors.
R

Types of Mutual Funds and Schemes

By structure
Open ended
Close ended
Interval Funds
By investment objective:
Growth fund
Income fund
Balanced fund
Money Market fund
Load fund
No load fund

Tax saving
schemes
Industry specific
schemes
Index schemes
Sectoral schemes

Merits & Demerits of Mutual

Funds

Merits

Demerits

Transparency
Professional Fund
Management
Diversification
Liquidity
Potential Returns

Dilution
Entry and Exit cost
Fund management
cost
Cost of churn
Wait time before
investment

Industry Profile
Globally:
Strong Market Returns
and Net Sales Have
Driven Asset Growth
Worldwide
A Number of Factors
Influence Fund
Development
Middle Class Growth in
Developing Countries
Represents Growth
Potential

Nationally:
First Phase - 19641987
Second Phase 1987-1993
Third Phase - 19932003
Fourth Phase - since
February 2003

State wise industry profile

In Gujarat gujaratis increased their investments in
mutual fund by Rs9,833 crore.
According to the Association of Mutual Funds of
India (AMFI) as on September 2015 total as (AUM)
from Gujarat stood at Rs46,396 crore compared to
Rs36,582 crore in September 2013
Ahmedabad emerged as the largest investor in
mutual funds from Gujarat. The city has a total
investment of Rs28,755 crore or 62% of total AUM. It
is followed by Vadodara (Rs4,917 crore), Surat
(Rs4,347 crore) and Rajkot (Rs1,996 crore) as on
September 2015.

Pestel Analysis
Political

Economi
cal

Social

Technolo
gical

Enviorn
mental

Regulator
y body
and
processes

Indicates
like the
GDP,
interest
rates etc.

Demogra
phics

Technolog
y
Developm
ent

Ecological
and
environm
ental
aspects

Governm
ent
Policies

General
taxation
issues

Consumer Research
atitude
funding
and
opinion

Trading
Policies

Market
and trade
cycle

Consumer Informatio
buying
n&
pattern
communic

Legal

discrimina
tion law,
consumer
law,
antitrust
law

affect on
Effect on
companie Intermedi
s and
aries
commodit
ies
markets
Impact on
rules,law,
bankruptc

Current trends & Major Players of

Mutual Fund
Current Trends
Institutions v/s
Individuals
Scheme Wise
Composition
Distributors vs
Direct
Individual-Investor
Assets Composition

Major Players
Axis Mutual Fund
Bharti AXA mutual
fund
Birla Sun Life mutual
fund
DSP Black Rock mutual
fund
Edelweiss Mutual Fund
HDFC Mutual Fund,etc

Major Offerings
Financial for various purpose such as housing, automobiles,
agriculture, etc.
Mutual fund services
Debt market services
Investment banking
Depository services
Portfolio management services
Investment advisory services
NRI services
Services for easy subscription to IPOs
Currency, derivatives and equity trading
Life and general insurance services
Research reports to guide investors

Company Profile
NJ India Invest Pvt Ltd
NJ Group is a leading player in Indian financial
service industry known for its strong distribution
capabilities.
It started in year 1994 by two Surat based
aspirants namely Neeraj Choksi and Jignesh
Desai
The vision of the group is to be leaders in
businesses driven by customer satisfaction,
commitment to excellence and passion for
continued value creation for all stakeholders

Company
Profile
NJ Group is a leading player in
Indian financial service industry
known for its strong distribution
capabilities.

It started in year 1994

by two Surat based
aspirants namely Neeraj
Choksi and Jignesh
Desai
The vision of the group is to
be leaders in businesses
driven by customer
satisfaction, commitment to
excellence and passion for
continued value creation for
all stakeholders

NJ India Invest Pvt

Ltd

Division of different Departments &

Organogram
..\Desktop

SWOT Analysis
Strength :
Dominant player in the Indian
Mutual Funds distribution
business
Provide personal websites to its
clients.
16% to 18.5% share of total
Mutual Fund business of Gujarat.
(AUM) more than 950 cores.
Tie up with almost 25 AMC out of
37 operating in the Mutual Fund
industry.

Weakness:
Complaints from advisors side
regarding irregular dispatchment
of commission.
In some cases, cant convince
their clients about the helpfulness
of the services provided by the
company.

Opportunities:
Utilize the dominant position it
has and optimally use the huge
network of its partners.
Use its network of partners in
selling Insurance; even company
can jump in to share trading

Threats:
Facing competition from the new
entrant like Anagram Security,
Karvy Security and many new and
local players.

Market Position
NJ Wealth - Financial Products Distributors Network
is one of India's leading and most successful
network of distributors in the financial services
industry
To its Partners, NJ Wealth provides a full service,
comprehensive business platform with end-to-end
solutions critical for success in financial products
distribution practice.
it has over 21,000+ NJ Wealth Partners, spread
across 94 branches in 21 states in India with over
9,70,000+ investors and over INR 21,500+ crores
+ of mutual fund assets under advice.

Literature Review
Lewellen, Lease and Schlarbaum (cited in Nagy and Obenberger 1994 )
conducted the research on demographic basis i.e. age, gender, income and
education affects investor preferences for overall return, capital gain and dividend
yield. Barnewell (cited in Nagy and Obenberger individual investor behavior can be
predicted by occupation, life style and risk aversion. Warren et al. founded that
individual investment choice based upon life style and demographic attributes
Anjan Chakarabarti and Harsh Rungta (2000) stressed the importance of
brand effect in determining the competitive position of the AMCs. Their study
reveals that brand image factor, though cannot be easily captured by computable
performance measures, influences the investors perception and hence his
fund/scheme selection.
Gupta Amitabh (2000) evaluated the performance of 73 selected schemes with
different investment objectives, both from the public and private sector using
Market Index and Fundex. NAV of both close end and open-end schemes from April
1994 to March 1999 were tested. The sample schemes were not adequately
diversified, risk and return of schemes were not in conformity with their objectives,
and there was no evidence of market timing abilities of mutual fund industry in
India

Continue.
Journal of Behavioral Finance, 2006, noted that financial
markets are affected by the financial behavior of investors. She
observed that consumer behavior from the marketing world and
financial economics had brought together a need to study an
exciting area of behavioral finance. this study was an attempt
to examine the related aspects of the fund selection behavior of
individual investors towards mutual funds in the city of Mumbai.
McKechnie, Salley Examines existing models of buyer
behaviour and evaluates their relevance to financial services in
the light of the specific characteristics of the sector and its
products. Reviews empirical work relating to both personal and
corporate buying behaviour and suggests the IMP framework as
a basis for future conceptual work because of its emphasis on
the relationships and interactions in the buying process.

Research Methodology
Research Objective
To identify the investors behavior towards Mutual
funds
To identify the consumer buying process of mutual
fund
To identify the factors which influence the customers
to purchase mutual fund
Research design
Descriptive research is used to collect information
about Mutual Fund investor. Therefore it is used in
the study to describe the behavior of particular
population in a systematic and accurate way.

Continue..
Samplings:
Sampling size
Population : Investors of Mutual fund of Surat
city
Sample Size : 150 respondents
Sampling Method:
Non Probability convenience sampling method is
used to collect the data from the respondents.
Respondents:
Mutual Funds investors of Surat city

Data Analysis
Age

Occupation

Percent
120
100
80
50.67
60
36.67
40
20 10.67
0

100

Retired; 5% Student; 1%
Housewife; 6%

Salaried; 49%
Self Employed; 39%

Continue
Education Qualification

Annual Family Income

Frequency

Doctorate; 3% Below HSC; 5%

Under
Post Graduate;
53% Graduate; 11%
Graduate; 28%

90
80
70
60
50
40
30
20
10
0

Percentage
80
53.3

7 4.7

34
22.7

29
19.3

Continue.
Total income invest Per
annum

Frequency
100
90
80
70
60
50
40
30
20
10
0

Where do you invest your

money

Percentage

Frequency

89
59.3
40
26.7

0 0

Life Insurance; 14%

22
14

Mutual Funds; 20%

Bank Fixed Deposit; 15%
Share Market; 18%
NC/PPF/Post;Real
7% Estate; 18%
Gold; 8%

continue
Information source consider
before investing in MF

Purpose of investing in MF

Frequency

Online; 15%
Friends / Relatives
; 38%
Broker / Agent / Advisors / Bank
; 35%
TV / Newspaper/Magazine; 12%

Retirement Planning
Wealth Creation
Children Education/ Marriage
Tax Benefit
To add Diversification in
Management
Others
25%
31%
25%
19%

continue
Factors considered important
while selecting MF
Very Important

Type of fund prefer to invest

Frequency

Not Important
4.7
0 4 4.7
1.30.7
5.32.7 7 2 0.7
5448.7
50.750
44.7
40.7
37.3
35.3
32.7
29.3

Debt; 13%
Total; 50%

Balance; 37%

Continue
Time period taken to invest in
MF

Frequency

Percentage

100
54.7

30
45

150
82

15.3
23

Mode of investment prefer

while investing in MF

Frequency
Systematic Investment Plan
(SIP)
One Time Investment/ Lump
Sump
Systematic Transfer Plan ( STP)
35%
65%

Continue
Option to get return
Chart Title
Option To get Return
Dividend Payout
Dividend Reinvestment
Growth
23%
77%

Through whom do invest in

MF

Frequency
Through Agent/Advisor/Broker
Through Bank
Online

48%

42%
10%

Continue..
Influence your decision in MF

How frequently track fund

value of MF after investment

Never; 11% Very Often; 9%

Family/ Friends/ Relatives; 2%
Media Reports; 35%
Broker/ Agent / Advisor/ Bank advice; 47%
Advertisements; 16%

Rarely; 16%

Sometimes; 63%

Kruskal
Wallis Test
H0: There is no
difference in
response across
the categories of
occupation
H1: There is
difference in
response across
the categories of
occupation

Chi Square Test

..\Desktop

Major Findings
59.3 % of respondents invest their income for the
investment
Majority of the respondent considered family/
relatives and agent advisors as a source of
information before purchasing/investing in mutual
funds
Main purpose of investors to invest in mutual fund is
to add diversification
Majority of respondents considered safety and
charges as an important factors and considered other
factors not much important
investors prefer to invest in Balance Fund

Major Findings
It is observe that many respondents prefer
Systematic Investment Plan (SIP) as a mode of
investment while investing in mutual funds.
Majority respondents opt Growth option to get return
while investing in mutual fund
Respondent sometimes track their fund value of
mutual fund after investment
Many respondents prefer Partial withdrawal Planning
while withdrawing money in mutual funds.
Respondents Cant Say that they will prefer to
invest in mutual fund over other investment avenues
in future.

Conclusion
From the above report it is concluded that mutual fund
have become one of the most attractive way for the
average person to invest their savings
A Mutual Fund pools resources from thousands of investors
and then diversifies its investment into many different
holdings such as stocks, bonds or Government securities in
order to provide high relative safety and returns .Also
generate leads of the prospective investors in Mutual Funds
for the asset Management Company ( AMC)

There are Many Improvement Pending in the field and it
has to happen as soon as possible so as to call the Mutual
Fund industry as an Organized and well developed sector.