Project report of axis mutual fund by kamal


Published on

1 Comment
  • please sir send me this report i am in immediate need of it for my project work.send me this
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Project report of axis mutual fund by kamal

  3. 3. ACKNOWLEDGEMENTI put myself in humblest desk in order to give the same measure and recognition to allthose who have instrumental through out the entire process of carrying out this projectreport. I would like to take this opportunity to acknowledge and thanks to Axis AssetManagement Company Ltd. Jaipur for providing me this highly coveted opportunity toassociate my summer internship project with the organisation of national repute.I am very thankful to my faculty guide Ms. AditiGosainfor constant support andencouragement as well as the valuable guidance and direction. She has provided theinformation to complete my project report.My special thanks and heartiest gratitude flows to Mr.Sandeshjoshi (Branch Manager),Mr.DevendraSaini (Regional Head), Mr.Ashish Sharma (Sr. Relationship Manager),Mr.VineetMathur (Sr. Relationship Manager), Ms.Poorva Jain (Investor service)AxisMutual Fund, Jaipur. Their help in various capacities towards making me familiarwith theresearch problem and preparing the report is invaluable. Their knowledge, nature andjudgement along with their experience were an immense source of inspiration incompleting this project.I was indeed an enriching experience for me as a management student for getting a chanceto do a project in an organization of international repute like AXIS AMC. 3
  4. 4. EXECUTIVE SUMMARYIn few years Mutual Fund has emerged as a tool for ensuring one‟s financial well being.Mutual Funds have not only contributed to the India growth story but have also helpedfamilies tap into the success of Indian Industry. As information and awareness is risingmore and more people are enjoying the benefits of investing in mutual funds. The mainreason the number of retail mutual fund investors remains small is that nine in ten peoplewith incomes in India do not know that mutual funds exist. But once people are aware ofmutual fund investment opportunities, the number who decide to invest in mutual fundsincreases to as many as one in five people. The trick for converting a person with noknowledge of mutual funds to a new Mutual Fund customer is to understand which of thepotential investors are more likely to buy mutual funds and to use the right arguments inthe sales process that customers will accept as important and relevant to their decision.This Project gave me a great learning experience and at the same time it gave me enoughscope to implement my analytical ability. The analysis and advice presented in this ProjectReport is based on market research on the saving and investment practices of the investorsand preferences of the investors for investment in Mutual Funds. This Report will help toknow about the investors‟ Preferences in Mutual Fund means Are they prefer anyparticular Asset Management Company (AMC), Which type of Product they prefer, WhichOption (Growth or Dividend) they prefer or Which Investment Strategy they follow(Systematic Investment Plan or One time Plan). This Project as a whole can be divided intotwo parts.The first part gives an insight about Mutual Fund and its various aspects, the CompanyProfile, Objectives of the study, Channel Management and Research Methodology. Onecan have a brief knowledge about Mutual Fund and its basics through the Project.
  5. 5. The second part of the Project consists of data and its analysis collected through surveydone on 200 people. For the collection of Primary data I made a questionnaire andsurveyed of 200 people. I also taken interview of many People those who were comingat the Axis Bank Branch where I done my Project. I visited other AMCs in Jaipur to getsome knowledge related to my topic. I studied about the products and strategies ofother AMCs in Jaipur to know why people prefer to invest in those AMCs. ThisProject covers the topic “Channel Management Of Axis Mutual Fund And AnalysingPreferences Of The Investors For Investment In Mutual Funds” The data collected hasbeen well organized and presented. I hope the research findings and conclusion will beof use. 5
  6. 6. TABLE OF CONTENTSRef No TITLES Page No. iii ACKNOWLEDGEMENT 3 iv EXECUTIVE SUMMARY 4 1. INDUSTRY PROFILE 7 1.1 Mutual Funds Concept 8 1.2 Mutual Fund Industry in India 14 1.3 Association of Mutual Funds in India (AMFI) 19 2. COMPANY PROFILE 22 2.1 Company Overview 23 2.2 SWOT 27 2.3 Schemes of Axis AMC 29 3. OBJECTIVE 36 4. CHANNEL MANAGEMENT OF AXIS AMC 38 4.1 Chart On Channel Management 39 4.2 Work for Axis Channel Management 40 5. RESEARCH METHODOLOGY 41 5.1 Methodology 42 5.2 Sampling 43 6. DATA PRESENTATION AND ANALYSIS 44 7. SUGGESTIONS AND RECOMMENDATIONS 65 8. LIMITATIONS AND SCOPE 68 9. CONCLUSION 71 10. ANNEXURE 75 10.1 Questionnaire 76 10.2 Bibliography 80
  7. 7. Chapter-1Industry Profile MUTUAL FUND CONCEPT 7
  8. 8. A Mutual Fund is a trust that pools the savings of a number of investors who share acommon financial goal. The money thus collected is then invested in capital marketinstruments such as shares, debentures and other securities. The income earned throughthese investments and the capital appreciation realized is shared by its unit holders inproportion to the number of units owned by them. Thus a Mutual Fund is the most suitableinvestment for the common man as it offers an opportunity to invest in a diversified,professionally managed basket of securities at a relatively low cost. The flow chart belowdescribes broadly the working of a mutual fund:The flow chart below describes broadly the working of a mutual fund:A Mutual Fund is a trust that pools the savings of a number of investors who sharecommon financial goal; investments may be in shares, debt securities, money marketsecurities or a combination of these. Those securities are professionally managed on behalfof the unit-holders, and each investor holds a pro-rata share of the portfolio i.e. entitled toany profits when the securities are sold, but subject to any losses in value as well.The income earned through these investments and the capital appreciations realized areshared by its unit holders in proportion to the number of units owned by them. Thus aMutual Fund is the most suitable investment for the common man as it offers anopportunity to invest in a diversified, professionally managed basket of securities at arelatively low cost. Reasons to invest in mutual funds :
  9. 9. Expert on your side: When you 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, you could get yourself a number of units across a number of companies and industries when you invest in a fund! Easy investing: You 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. Convenience: You 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: Its 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 managers 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.Organization of a Mutual Fund 9
  10. 10. Sponsor :Sponsor is the person who acting alone or in combination with another body corporateestablishes a mutual fund. The sponsor of a fund is akin to promoter of a company as hegets the fund registered with SEBI. The sponsor will form a Trust and appoint a Board ofTrustees. The sponsor will also generally appoint as Asset Management Company as fundmanagers. The sponsor, either directly or acting through the Trustees, will also appoint aCustodian to hold the fund asset. All these appointments are made in accordance withSEBI Regulations.Sponsor must contribute at least 40% of the net worth of the Investment Managed andmeet the eligibility criteria prescribed under the Securities and Exchange Board of India(Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any loss orshortfall resulting from the operation of the Schemes beyond the initial contribution madeby it towards setting up of the Mutual Fund.Trust :The Mutual Fund in India is constituted in the form of a public Trust created under theIndian Trustees Act, 1882. The fund sponsor acts as the settler of the trust, contributing toits initial capital, and appoints Trustees to hold the asset of the Trust for the benefit of the
  11. 11. unit holders, who are the beneficiaries of the Trust. The fund then invites investors tocontribute their money in the common pool, by subscribing to „‟Units‟‟ issued by variousschemes established by the trust, units being the evidence of their beneficial interest in thefund.It should be understood that a mutual fund is just „‟ a pass-through‟‟ vehicle. Under theIndian trusts Act, or the fund has no independent legal capacity itself, rather it is theTrustee or Trustees who have the legal capacity and therefore all acts in relation to thetrust are taken on its behalf by the Trustees. The Trustees hold the unit holder‟s money in afiduciary capacity, i.e the money belongs to the unit – holders and is entrusted to the fundfor the purpose of investment. In legal parlance, the investor or the unit-holders are the„‟beneficial owners‟‟ of the investment held by the Trust, even as these investments areheld in the name of the trustees on a day – to - day basis.Being public Trusts, mutual fund can invite any number of investors as beneficial ownersin their investment schemes.Trustee:The trust – the mutual fund – may be a Board of Trustees – a body of individuals, or aTrust company – a corporate body. Most of the funds in India are managed by Board ofTrustees. While the board of Trustees is governed by the provisions of the Indian TrustsAct, where the Trustee is a corporate body, it would also be required to comply with theprovisions of the companies Act, 1956. The Board or the Trustee Company, as anindependent body, act as protector of the unit – holder‟s interests. The Trustee doesn‟tdirectly manage the portfolio of securities. For this specialist function, they appoint anAsset Management Company. They ensure that the fund is managed by the AMC as perthe defined objectives and in accordance with the Trust Deed and SEBI regulations.The trust is created through a document called the Trust Deed that is executed by the fundsponsor in favour of the Trustees. Trust Deed is required to be stamped as registered underthe provisions of the Indian Registration Act and registered with SEBI. Clauses in theTrust Deed, inter alia, deal with the establishment of the Trust, the appointment ofTrustees, their powers and duties, and the obligations of the Trustees towards the unit-holders and AMC. These clauses also specify activities that the fund/ AMC cannot 11
  12. 12. undertake. The third schedule of the SEBI (MF) Regulations, 1996 specifies the contentsof the Trust Deed.The Trustees being the primary guardians of the unit-holders‟ funds and assets, a Trusteehas to be a person of high repute and integrity. SEBI has laid down a set of conditions to befulfilled by the individuals being proposed as trustees of mutual funds – independent andnon - independent. Besides specifying the „‟disqualifications‟‟, SEBI has also set down theRight and obligations of the Trustees. Broadly, the Trustees must ensure that the investors‟interests are safeguarded and that the AMC‟s operations are along professional lines. Theymust also ensure that the management of the fund is in accordance with SEBI Regulations.To ensure the independence of the trustee company, SEBI mandates a minimum of two-third independent directors on the board of the trustee company.Asset Management Company (AMC) :The role of an AMC is to act the investment manager of the Trust. The sponsors or thetrustees, if so authorized by the Trust Deed, appoint the AMC. The AMC so appointed isrequired to be approved by SEBI. Once approved, the AMC functions under thesupervision of its own Board of Directors, and also under the directions of the Trustees andSEBI. The Trustees are empowered to terminate the appointment of the AMC and appointa new AMC with the prior approval of SEBI and unit-holdersThe AMC would, in the name of the Trust, float and then manage the different investment„‟schemes‟‟ as per SEBI Regulations and as per the Investment Management Agreement itsigns with the Trustees. Mutual fund Regulations,1996 describes the issues relevant toappointment, eligibility criteria, and restrictions on business activities and obligations ofthe AMC.The AMC of a mutual fund must have a net worth of at least Rs. 10 crores at all times.Directors of the AMC, both independent and non independent, should have adequateprofessional experience in financial services and should be individuals of high moralstanding, a condition also applicable to other key personnel of the AMC. The AMC cannotact as a trustee of any other mutual fund. Besides its role as the fund manager, it mayundertake specified activities such as advisory services and financial consulting, providedthese activities are run independently of one another and the AMC‟s resources are properly
  13. 13. segregated by activity. The AMC must always act in the interest of the unit-holders andreport to the trustees with respect to its activities. To ensure the independence of the assetmanagement company, SEBI mandates that a minimum of 50% of the directors of theboard of the asset management company should be independent directors.Registrar and Transfer Agent :The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent tothe Mutual Fund. The Registrar processes the application form; redemption requests anddispatches account statements to the unit holders. The Registrar and Transfer agent alsohandles communications with investors and updates investor records.Custodian :Mutual funds are in the business of buying and selling of securities in large volumes.Handling these securities in terms of physical delivery and eventual safekeeping istherefore a specialized activity. The custodian is appointed by the Board of Trustees forsafe keeping of physical securities or participating in any clearing systemthrough approveddepository companies on behalf of mutual fund in case of dematerialized securities. Acustodian must fulfill its responsibilities in accordance with its agreement with the mutualfund. The custodian should be an entity independent of the sponsers and is required to beregistered with SEBI. MUTUAL FUND INDESTRY IN INDIA 13
  14. 14. Origin of mutual fund industry in India is with the introduction of the concept of mutual fund byUTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 whennon-UTI players entered the industry.In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualitieswise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; theAssets under Management (AUM) were Rs. 67bn. The private sector entry to the fund familyraised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of 1,540 bn.Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less thanthe deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian bankingindustry.The main reason of its poor growth is that the mutual fund industry in India is new in the country.Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is theprime responsibility of all mutual fund companies, to market the product correctly abreast ofselling.The Indian mutual funds industry was non – existent till 1960s. in 1963, the govt. of Indiatook the initiative by passing the UTI Act, under which the Unit Trust of India (UTI) wasset –up as a statutory body. The designated role of UTI was to act as a mutual fund. Thiswas expanded in 1985 to make UTI a financial institution as well.UTI‟s first scheme, called the US-64, which was an open –end scheme, was launched in1964. It subsequently launched a number of schemes to suit the differing needs of theinvestors. Till 1987, UTI was the only mutual fund in the market since no one else waslegally allowed to set –up mutual fund. In 1987, other public sector institutions like banks,financial institutions and insurance companies started establishing mutual fund, followingthe government‟s decision to allow them to do so. State Bank of India became the first oneto launch a mutual fund when it launched the SBI Mutual fund in November, 1987. It wasfollowed by the Can bank mutual fund, LIC Mutual fund, etc. In this regulated era, UTI
  15. 15. was acting more as a vehicle for the implementation of the economic policies and thedevelopmental activities of the government, than as an investment vehicle for the investors.Finally in 1992, the government allowed private sector players to set-up mutual funds. Afew of them are, Kothari pioneer MF, ICICI MF, Birla MF, Morgan Stanley MF, TaurasMF, ect. As the number of mutual funds increased giving a choice to the competition in theindustry increased, thus jolting the hitherto complacent public sector mutual fund intoaction. As a result, the investors not only had a wider choice regarding the kind of schemesand the sponsor of the mutual fund, they started getting better service even from the oldplayers. These private sector funds provided an added advantage to the investors. Thesewere generally set-up in partnership with foreign mutual funds, with the letter providingthe technology and the experience in managing funds. The investors could thus derive theconsequent benefits by investing in these funds.As the industry developed, the need was felt to regulate it. From the beginning, UTI wasgoverned by the provisions of the UTI Act 1963.Till 1987, as there were no other playersin the market, the need to come out with specific regulations for investment companies didnot arise. With the government allowing banks, financial institutions and insurancecompanies to set-up mutual funds in 1987, a set of regulations was also needed. However,till 1989, the only regulations in place were those which required banks to obtain RBI‟spermission before setting up a mutual fund.In 1989, RBI came out with comprehensive guidelines applicable to mutual fundspromoted by banks. Following this, the Central Government came out with guidelinesapplicable to all mutual funds in June, 1990. The letter was to be administered by SEBI.SEBI was initially established as an interim body under the Ministry of Finance in April,1988 to regulate and develop the capital markets. It was later converted into a statutorybody under the SEBI Act, 1992 and given wide ranging powers. Mutual funds were one ofthe players SEBI was authorized to regulate.In August, 1990, SEBI ruled that the guidelines would only supplement those issued by theCentral Government. Hence the mutual funds sponsored by banks were required to fulfillobligations under both sets of regulations. After allowing private sectors to enter the 15
  16. 16. industry, the Government came out with a fresh set of comprehensive guidelines for all theplayers in February, 1992. These guidelines superseded the earlier guidelines of thegovernment and RBI. All mutual funds except money market mutual fund (those investingexclusively in the money market) and offshore mutual funds were governed by theseguidelines. While the former were governed by guidelines issued by RBI, the latter weregoverned by the Deportment of Economics Affairs under the Ministry of Finance.Subsequently, SEBI issued even more detailed, comprehensive and stringent Mutual FundsRegulations in 1993, which replaced the guidelines issued by the government in 1992.These were further revised and replaced by Mutual Funds Regulations, 1996. In October, 1999, the administration of Money Market Mutual Funds was handed overby RBI to SEBI. With effect from March 7, 2000, RBI has withdrawn its guidelines onMoney Market Mutual Funds. Accordingly, such money market mutual fund schemes, likeany other mutual fund schemes, would exclusively be governed by the SEBI (MutualFund) Regulations, 1996.The fact that UTI, which is the biggest mutual fund in the country, does not fall under thepurview of SEBI, result in ineffective regulation by the latter. Besides, as compare theperformance of UTI‟s schemes with other mutual funds‟ schemes. To avoid this, SEBItried for a long time to bring UTI under its purview. However, UTI being a statutory body,it was finally ruled that it cannot be regulated by another statutory body. As a result offurther efforts on both sides, finally an arrangement was arrived at between SEBI and UTIwhereby the latter agreed to voluntarily comply with SEBI‟ s regulations for certainschemes.The mutual fund industry grew tremendously during 1998 to 2000. the total net assets ofRs. 97,228 crore managed by 34 mutual funds through their 259 schemes as on march31,1998 increased to 1,02,434.52 crore managed by 39 mutual funds including UTI,through their 550 schemes as on February 28,2001.The year 2001 was a watershed year in the history of the Indian mutual funds industry. InJuly, that year, UTI froze purchase and sale of units of its flagship scheme US-64 for a
  17. 17. period of six months, causing panic among many individual as well as large institutionalinvestors. Shelving its assured returns quality, US-64 became a market – return NAVbased mutual fund in January 2002. Its opening NAV was Rs. 5.81 against the face valueof Rs. 10.In January 2003, the Government of India bifurcate the UTI into UTI I and UTIII. UTI I is now managed by a public administrator, while UTI II was handed over to theState Bank of India, Panjab National Bank, Bank of Baroda and the Life InsuranceCorporation, with each institutions having an equal share in the company. It also cameunder the ambit of regulation by SEBI. UTI II was renamed UTI mutual fund in February2003. As on 31 March 2003, UTI AMC had under its management, 42 SEBI complaintsschemes and 4 offshore funds, aggregating to a corpus of more than Rs. 15,000crore fromabout 10 million investor accounts.As a August, 2004 the mutual fund industry had Rs.155, 845crore wroth of asset under itsmanagement. Of this Rs.20, 256crore were those of UTI, Rs.1, 23,258.04 were those of theprivate sector, and Rs.12, 171.20 were those of the other public sector. More than 75% ofthe total assets under management were managed by the private sector mutual funds.Major Mutual Fund Companies in India: 17
  18. 18.  Axis Asset Management Company AIG Global Investment Group Mutual Fund Birla Sun Life Mutual Fund Bank of Baroda Mutual fund DBS Chola Mutual Fund Fraanklin Templeton India Mutual Fund HDFC Mutual fund ICICI Prudential Mutual fund ING Mutual fund JM Financial Mutual fund JP Morgan Mutual fund Kotak Mahindra Mutual fund LIC Mutual fund Reliance Mutual fund Sahara Mutual fund State Bank of India Mutual fund Standard Charted Mutual fund Sundaram BNP Paribas Mutual fund Tata Mutual fund Unit Trust of India Mutusl fund Association of Mutual Funds in India (AMFI)
  19. 19. With the increase in mutual fund players in India, a need for mutual fund association inIndia was generated to function as a non-profit organisation. Association of Mutual Fundsin India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of allAsset Management Companies (AMC) which has been registered with SEBI. Till date allthe AMCs are that have launched mutual fund schemes are its members. It functions underthe supervision and guidelines of its Board of Directors.Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to aprofessional and healthy market with ethical lines enhancing and maintaining standards. Itfollows the principle of both protecting and promoting the interests of mutual funds as wellas their unit holders.The objectives of Association of Mutual Funds in IndiaThe Association of Mutual Funds of India works with 30 registered AMCs of the country.It has certain defined objectives which supports the guidelines of its Board of Directors.The objectives are as follows: This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. 19
  20. 20. It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programme for investor‟s in order to promote proper understanding of the concept and working of mutual funds. At last but not the least association of mutual fund of India also disseminate information‟s on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.STUCTURE OF THE INDIAN MUTUAL FUNDINDUSTRY:Structure wise mutual fund industry can be classified into three categories; Unit trust of India The Indian mutual fund industry is dominated by the unit trust of India, which has a total corpus of 51000 crore collected from over 20 million investors. The UTI has many fund/ schemes in all categories in equity, balanced, debt, money market etc. With some being open ended and some being closed ended. The unit scheme 1964 commonly referred to as US64,which is a balanced fund, is the biggest scheme with a corpus of about 10000 crore. Public sector mutual fund The second largest categories of mutual funds are the ones floated by nationalized banks .can bank asset management floated by canara bank and sbi funds management floatedby state bank of india are the largest of these. Gicamc floated by general insurancecorporation. 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 asset. 72% of the crore-customer base of mutual fund in the top 50-broking firms in theus is expected to trade on line by 2003 Private Sector Mutual fund The third largest categories of mutual funds are the ones floated by the private sector domestic mutual funds and the private sector foreign mutual funds. The largest of these in private sector domestic mutual funds are Reliance
  21. 21. mutual fund, JM capital management company ltd. Tata mutual, Axis mutual fund, Birla sun life asset managementpvt. Ltd. and in private foreign mutual funds these are alliance capital asset management private ltd, FranklinTempleton Investments, Sun F&C asset management private ltd, Lurich asset management company pvt ltd. Theaggregate corpus of the assets managed by this category of amc‟s is about 42000 cr.Future of Mutual Funds in IndiaFinancial experts believe that the future of Mutual Funds in India will be very bright.AUM of 41 mutual fund houses in India rose to Rs681,708crore at the end of March,2011 and Rs.664,824 crore in 2012, according to AMFI data. In the coming 10 yearsthe annual composite growth rate is expected to go up by 13.4%. Since the last 5 years,the growth rate was recorded as 9% annually. Based on the current rate of growth, it canbe forecasted that the mutual fund assets will be double by 2015.GLOBAL SCENARIO OF MUTUAL FUND: The money market mutual fund segment has a total corpus of 1.48 trillion in theU.S. Out of the top 10 mutual fund worldwide, eight are worldwide sponsored. Only fidelity and capital are non-bank mutual funds in this group. In the U.S. the total numbers of schemes is higher than that of the listed companies Internationally, mutual funds are allowed to go short. In India fund managers do nothave such leeway. In the U.S. about 9.7 million households will manage their assets online by the year2003, such a facility is not yet of avail in India and jeevanbimasahayogamc floated bythe LIC are some of the other prominent ones. The aggregate corpus of the fundsmanaged by this category of amc‟s is around 8300 cr. 21
  22. 22. Chapter-2 Company profile Axis Asset Management CompanyCompany Overview
  23. 23. Axis Asset management Company Limited is a privately owned investment manager. Thefirm manages mutual funds for its clients. It invests in the public equity and fixed incomemarket of india. The firm also invest in gold for some of its funds. It is based in Mumbai,India. Axis Asset Management Company Limited operates as a subsidiary of Axis BankLimited. Name of the Mutual Fund Axis Mutual Fund Date of set up of Mutual Fund September 4, 2009 Name of Sponsor Axis Bank Limited Name of the Asset Management Axis Asset Management Company Limited Company Date of Incorporation of AMC January 13, 2009 Website Registrar and Transfer Agent KarvycomputersharePvt. Ltd. Assets under management 8,815 (Rs.Cr) Board of DirectorsAxis Mutual Fund Trustee Limited:Dr T C Nair, Chairman, Independent DirectorMr. B Gopalakrishnan, Associate DirectorMr.Kedar Desai, Independent DirectorMr.Uday M Chitale, Independent DirectorAxis Asset Management Company Limited:Mr. Rajiv Anand, MD & CEO of Axis AMC, Associate DirectorMr. R. K. Bammi, Associate DirectorMs.Shikha Sharma, Chairperson, Associate Director 23
  24. 24. Mr. T S Narayanasami, Independent DirectorMr.PraneshMisra, Independent DirectorMr. U R Bhat, Independent Director OUR KEY BUSINESS PEOPLEMr.Chandresh Nigam, Head – InvestmentsKaran Datta, National Sales HeadMr.PankajMurarka, Senior Fund Manager – EquityR. Sivakumar, Head – Fixed Income & ProductsPraveen Bhatt, Head – OperationsMitenChawda, Head – Compliance & Company SecretaryJineshGopani, Fund Manager – EquitySudhanshuAsthana, Fund Manager – EquityAshishNaik, Analyst – EquityViresh Joshi, Chief Trader – EquityNinadDeshpande, Fund Manager – Fixed IncomeAnurag Mittal, Credit Analyst – Fixed Income SPONSOR OF AXIS AMCAxis Bank Limited:Axis Bank was the first of the new private banks to have begun operations in 1994, afterthe Government of India allowed new private banks to be established. The Bank was
  25. 25. promoted jointly by the Administrator of the specified undertaking of the Unit Trust ofIndia (UTI - I), Life Insurance Corporation of India (LIC) and General InsuranceCorporation of India (GIC) and other four PSU insurance companies, i.e. NationalInsurance Company Ltd., The New India Assurance Company Ltd., The Oriental InsuranceCompany Ltd. and United India Insurance Company Ltd.The Bank as on 31st March, 2011 is capitalized to the extent of ` 410.54 crores with thepublic holding (other than promoters and GDRs) at 53.60%.The Banks Registered Office is at Ahmedabad and its Central Office is located at Mumbai.The Bank has a very wide network of more than 1281 branches (including 169 ServiceBranches/CPCs as on 31st March, 2011). The Bank has a network of over 6270 ATMs (ason 31st March, 2011) providing 24 hrs a day banking convenience to its customers. This isone of the largest ATM networks in the country.The Bank has strengths in both retail and corporate banking and is committed to adoptingthe best industry practices internationally in order to achieve excellence. VISIONTo be the preffered financial solutions provider excelling in customer delivery throughinsight, empowered employees and smart use of technology. CORE VALUE  Customer Centricity  Ethics  Transparency  Teamwork  Ownership BUSINESS PHILOSOPHYOur business will be built on three pillars. These are: 25
  26. 26. Outside-in View Investor at the heart of every single decision. Communicate in his language, not in ours.Enduring Wealth Creation Play a serious and credible role in investors money basket. Encourage investors to build a long-term perspective of the mutual fund category.Long-term Relationships Leverage the equity of the Axis brand Aim at building relationships rather than being transactional. SWOT Analaysis of Axis AMCSTRENGTHS:
  27. 27. Professional investment management Mutual funds hire full-time, high-level investment professionals. Funds can afford to do so as they manage large pools of money. The managers have real-time access to crucial market information and are able to execute trades on the largest and most cost-effective scale. Diversification Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security.. Low Cost A mutual fund lets you participate in a diversified portfolio for as little as Rs.5,000/-, and sometimes less. And with a no-load fund, you pay little or no sales charges to own them. Convenience and Flexibility You own just one security rather than many, yet enjoy the benefits of a diversified portfolio and a wide range of services. Personal Service One call puts you in touch with a specialist who can provide you with information you can use to make your own investment choices. Liquidity In open-ended schemes, you can get your money back promptly at net asset value related prices from the mutual fund itself. Transparency You get regular information on the value of your investment in addition to disclosure on the specific investmentsWEAKNESSRisk is defined as short-term price variability. But on a long-term basis, risk is thepossibility that your accumulated real capital will be insufficient to meet your financial 27
  28. 28. goals. And if you want to reach your financial goals, you must start with an honestappraisal of your own personal comfort zone with regard to risk.Individual tolerance for risk varies, creating a distinct "investment personality" for eachinvestor. Some investors can accept short-term volatility with ease, others with near panic.So whether you consider your investment temperament to be conservative, moderate oraggressive, you need to focus on how comfortable or uncomfortable you will be as thevalue of your investment moves up or down.OPPORTUNITIESAs per the BLOOM BERG survey Indias total disposable income will increase to 40% by2015,along with total income of an average Indian family will be 450000.As people are getting aware of the fact of investment and want to invest more withspecialized assistant mutual funds have a great opportunities.As the risk is diversified and funds are available as per the different objective people caninvest as per their requirement.Maximum money is invested in equity market and as the GDP is growing studily this is agreat opportunity for the companies to go ahead and invest more in to the market.THREATSA new competitor in your home marketPrice wars with competitorsCompetitor has new innovative product or serviceTaxation Schemes of Axis Mutual Fund  Equity Funds:
  29. 29. Axis Equity Fund Axis Long Term Equity Fund Axis Midcap Fund Axis Focused 25 Fund  Fixed Income Funds: Axis Liquid Fund Axis Treasury Advantage Fund Axis Short Term Fund Axis Dynamic Bond Fund  Hybrid Funds: Axis Triple Advantage Fund Axis Income Saver  Gold Funds: Axis Gold Fund Axis Gold ETFAxis Equity Fund:An Open-ended Growth Scheme 29
  30. 30. To achieve long term capital appreciation by investing in a diversified portfoliopredominantly consisting of equity and equity related securities including derivatives.However, there can be no assurance that the investment objective of the scheme will beachieved.Key Features A diversified equity fund that invests primarily in the Indian equity markets Provides the opportunity to capitalize on Indias high paced growth Supported by a strong investment management team at Axis Mutual Fund Suitable for an investment horizon of 5 years or more With no entry load EasyCall facility availableAxis Long Term Equity Fund:An Open-ended Equity-Linked Saving Scheme with a 3 year lock in.To generate income and long term capital appreciation from a diversified portfolio ofpredominantly equity and equity related securities.Key Features A diversified equity fund that invests in the Indian equity markets Provides the opportunity to capitalize on India‟s high paced growth Also provides tax benefits under section 80C of the Income Tax Act, 1961 Lock-in period of only 3 years is the lowest amongst all section 80C options available today Suitable for an investment horizon of 5 years or more With no entry load Flexibility to invest across market caps in high growth stocks EasyCall facility availableAxis Midcap Fund:An Open-ended Equity Scheme
  31. 31. To achieve long term capital appreciation by investing predominantly in equity and equityrelated instruments of mid size companies. The focus of the fund would be to invest inrelatively larger companies within this category.Key Featurs An equity fund that invests primarily in mid sized companies to capitalise on their fast paced growth Amongst the mid sized companies, it has a preference for the larger ones that carry relatively lower risk It is suitable for an investment horizon of 5 yrs or more It is suitable when you want to plan for a bigger home, better holidays, bigger cars, etc.Axis Focused 25 Fund:An Open-ended Equity SchemeAxis Focused 25 Fund - a fund that attempts to unearth and invests exclusively in just thesequality companies. The reassurance of quality companies who have not just weatheredstorms over time but prospered and bloomed even in adverse times.Key Features Suitable for an investment horizon of 5 years or more Focus in the best ideas at any point of time Nurtures companies over their business cycle without being affected by short term market volatility Professional fund management with established track record With no entry loadAxis Liquid Fund:An open-ended Liquid SchemeTo provide a high level of liquidity with reasonable returns commensurating with low riskthrough a portfolio of money market and debt securities.Key Features 31
  32. 32. An extremely low risk fund suitable for an investment horizon of 1 day – 90 days Returns are calculated for the number of days you remain invested No entry or exit loads High liquidity - Under normal circumstances, we will endeavour to ensure that an investor gets his money back one day after putting in a valid redemption requestAxis Treasury Advantage Fund:An open-ended Debt schemeTo provide optimal returns and liquidity to the investors by investing primarily in a mix ofmoney market and short term debt instruments which results in a portfolio havingmarginaly higher maturity as compared to a liquid fund at the same time maintaining abalance between safety and liquidity.Key Features A low risk fund suitable for an investment horizon of 1 day to 90 days Returns are calculated for the number of days you remain invested No entry or exit loads High liquidity - Under normal circumstances, we will endeavour to ensure that an investor gets his money back one day after putting in a valid redemption request Tax efficient as dividends are tax-free in your hands (post deduction of 14.1625% dividend distribution tax for individual investors - inclusive of cess and surcharge)Axis Short Term Fund:An Open-ended Debt SchemeTo Generate stable returns with a low risk strategy while maintaining liquidity through aportfolio comprising of debt and money market instruments.Key Features A low risk fund suitable for an investment horizon of 6 months or more Aims to provide stable returns by investing in debt and money market instruments
  33. 33. Returns are calculated for the number of days you remain invested EasyCall facility available High liquidity - Under normal circumstances, we will endeavour to ensure that an investor gets his money back one day after putting in a valid redemption request Tax efficient as dividends are tax-free in your hands (post deduction of 14.1625% dividend distribution tax for individual investors - inclusive of cess and surcharge)Axis Dynamic Bond Fund:An Open-ended Debt SchemeTo generate optimal returns while maintaining liquidity through active management of aportfolio of debt and money market instruments.Key Features A low risk fund suitable for an investment horizon of 1 year or more Dynamic asset allocation policy across fixed income assets Seeks to exploit market opportunities & manage risk Able to invest across all segments of fixed income Flexibility to invest only in high conviction ideas Does not track benchmarks, i.e. can be invested in money market during rising rate environmentAxis Triple Advantage Fund:An Open-ended Hybrid FundTo generate long term capital appreciation by investing in adiversified portfolio of equityand equity related instruments, fixed income instruments and gold exchange traded funds.Key Features Suitable for an investment horizon of 3 years or more Provides diversification across three asset classes viz. equity, fixed income and gold thereby leading to reduction in risk 33
  34. 34. Returns potential not compromised even with reduced risk levels Returns more stable than pure equity or gold investments over the long term Offers convenience. Now one single application is sufficient for investment in three asset classes. 20 - 30% of investment in gold. Gold is a good hedge against financial crises.Axis Income Saver:An Open-ended Income FundTo generate regular income through investments in debt and money market instruments,along with capital appreciation through limited exposure to equity and equity relatedinstruments. It also aims to manage risk through active asset allocation.Key Features A low to medium risk fund suitable for an investment horizon of 2 – 4 years Brings stability to your portfolio by investing primarily in fixed income instruments Offers the potential for capital growth through limited exposure to equity instruments Adopts a quantitative asset allocation strategy for risk management Open-ended nature allows you to buy or sell units of the scheme at any point of time subject to applicable loads Scheme managed by an experienced team of fund managersAxis Gold Fund:Key Features Systematically invest in gold each month through SIPs Buy gold in amounts as small as Rs 1000 without having to worry about purity No demat account required Buy/sell units of Axis Gold Fund on any business day at NAV based prices No storage charges , no making charges, no safe-keeping worriesAxis Gold ETF:
  35. 35. Axis Gold ETF offers a simple way of investing in gold. It is a mutual fund scheme thatlets you buy gold without the necessity of taking physical delivery or of the associatedrisks of physical storage or of impurities.Key Features Protects against inflation Allows you to take advantage of Gold as an investment opportunity Investors bear no risk of storage and safekeeping of gold Get 99.5% purity at prevailing market prices without premium charges 35
  36. 36. Chapter-3ObjectiveOBJECTIVES OF THE STUDY
  37. 37. 1. To find out the physiology of investors in India towards investment in mutual funds.2. To know the Preferences for the portfolios.3. To know why one has invested or not invested in Axis Mutual fund4. To find out the most preferred channel.5. To find out what should do to boost Mutual Fund Industry.6. It is to understand the concept of mutual funds as well as to know the scope of various schemes.7. To Study and analyze the Economic impacts of growth of the Mutual Funds industry in India.8. The main objective of this project is concerned with getting the opinion of people regarding mutual funds and what they feel about availing the services of financial advisors.9. I have tried to explore the general opinion about mutual funds. It also covers why/ why not investors are availing the services of financial advisors. 37
  38. 38. Chapter-4Channel Management
  39. 39. CHANNEL MANAGEMENT OF THE AXIS ASSET MANAGEMENT COMPANY AXIS AMC BUSINESS CORPORATION INSTITUTIONAL RETAIL COMPANY PARTNERSHIP HUF BANKS IFA’s1. BUSINESSUnder the category of business there are two sub-divisions. 1.1 INSTITUTIONAL National distributors come under it. They are more viable in nature. Have more business generating capacity. 1.2 RETAIL Under the category of retail mainly Banks and IFA‟s have major role. 1.2.1 BANKS There banks acts as a mediator between investors and asset management companies through that they help in promoting various schemes. On the basis of their business generating capability they got commission. 1.2.2 IFA’s Individual financial agencies are the distributors who work for selling mutual funds directly to the investors. 39
  40. 40. 2. CORPORATION 2.1 COMPANY 2.2 PARTENRSHIP It is a relationship between persons who have agreed to share the profits of a business. 2.3 HINDU UNDIVIDED FAMILY UNDER CHANNEL MANAGEMENT OF AXIS AMC1. Empannelise Distributors (IFA‟s) From Jaipur (Rajasthan) first of all I started withempanelling or adding new distributors from Jaipur according to their AUM in otherAMC‟s. My mentor helped me in collecting this data. I have to prepare database related toit, where I synchronised the data of those distributors according to highest AUM. Aftergetting the data I was supposed to do cold calls to all those distributors and convince themto do business with Axis AMC.2. Retail Business While doing the work of empanelment, I have also started concentratingon existing IFA‟s. I gave presentations in front of many of them and even they appreciatedmy work. The main focus was on SIP as there was an incentive based proposition came forIFA‟s till the limited period.Under Banking channel I mate with relationship managers and convinced them regardingthe schemes and I was in regular contact with them in case of any query.
  41. 41. Chapter-5 ResearchMethodology 41
  42. 42. RESEARCH METHODOLOGYThis report is based on primary as well secondary data, however primary datacollection was given more importance since it is overhearing factor in attitudestudies. One of the most important users of research methodology is that it helps inidentifying the problem, collecting, analyzing the required information data andproviding an alternative solution to the problem. It also helps in collecting the vitalinformation that is required by the top management to assist them for the betterdecision making both day to day decision and critical ones.Data sources:Research is totally based on primary data. Secondary data can be used only for thereference. Research has been done by primary data collection, and primary data hasbeen collected by interacting with various people. The secondary data has beencollected through various journals and websites.Duration of Study:The study was carried out for a period of two months, from 2nd May to 1st July 2012.
  43. 43. Sampling:Sampling procedure:The sample was selected of them who are the customers/visitors of Axis Bank,Malviya Nagar and Vaishali Nagar Branch, irrespective of them being investors ornot or availing the services or not. It was also collected through personal visits topersons, by formal and informal talks and through filling up the questionnaireprepared. The data has been analyzed by using mathematical/Statistical tool.Sample size:The sample size of my project is limited to 200 people only. Out of which only 120people had invested in Mutual Fund. Other 80 people did not have invested inMutual Fund.Sample design:Data has been presented with the help of bar graph, pie charts, line graphs etc.Limitations of the studyThe following are the major limitations of the study. The sample was restricted to specified region only. The sample collected may not represent the entire population and the result may not be a true representation of total universe. 43
  44. 44. Chapter-6Data Presentation and Analysis
  45. 45. ANALYSIS & INTERPRETATION OF THE DATA1. a) Age distribution of the Investors Age Group <= 30 31-35 36-40 41-45 46-50 >50 No. of 12 18 30 24 20 16 Investors Investors invested in Mutual Fund 35 30 25 20 15 30 24 10 18 20 16 5 12 0 <=30 31-35 36-40 41-45 46-50 >50 Age group of the Investors Interpretation: According to this chart out of 120 Mutual Fund investors of Jaipur the most are in the age group of 36-40 yrs. i.e. 25%, the second most investors are in the age group of 41-45yrs i.e. 20% and the least investors are in the age group of below 30 yrs. 45
  46. 46. b). Educational Qualification of investors: Educational Qualification Number of Investors Graduate/ Post Graduate 88 Under Graduate 25 Others 7 Total 120 6% 23% 71% Graduate/Post Graduate Under Graduate OthersInterpretation:Out of 120 Mutual Fund investors 71% of the investors are Graduate/PostGraduate, 23% are Under Graduate and 6% are others (under HSC).c). Occupation of the investors:
  47. 47. Occupation No. of Investors Govt. Service 30 . Pvt. Service 45 Business 35 Agriculture 4 Others 6 50 45 No. of Investors 40 35 30 25 45 20 35 15 30 10 5 6 0 4 Govt. Service Pvt. Service Business Agriculture Others Occupation of the customersInterpretation:In Occupation group out of 120 investors, 38% are Pvt. Employees,25% are Businessman, 29% are Govt. Employees, 3% are inAgriculture and 5% are in others. d). Monthly Family Income of the Investors: 47
  48. 48. Income Group No. of Investors <=10,000 5 10,001-15,000 12 15,001-20,000 28 20,001-30,000 43 >30,000 32 50 45 40 No. of Investors 35 30 25 20 43 15 32 28 10 5 12 5 0 <=10 10-15 15-20 20-30 >30 Income Group of the Investorsn (Rs. in Th.) Interpretation: In the Income Group of the investors, out of 120 investors, 36% investors that is the maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e. 27% investors are in the monthly income group of more than Rs. 30,000 and the minimum investors i.e. 4% are in the monthly income group of below Rs. 10,000e). Percentage (%) of Annual Savings:
  49. 49. 0 9.17 15.83 Less then 10% 10-20% 35 21-30% 31-40% 40 Less than 0% 10-20% 21-30% 31-40% 19 48 42 11InterpretationEverybody saves some proportion of the income looking at the present and future needs.The pie chart shows that major proportion that is 40 % investors have annual savingsranging from 10 -20% whereas 35% investors annual saving ranges from 21-30%.f). Risk-Taking Ability Of Investors: 49
  50. 50. High-Risk Reluctant Low risk Careful 0 10 20 30 40 50 Careful Low risk Reluctant to risk High risk 33 49 24 14InterpretationThere are very few investors who believe in avoiding risk while investing in differentavenues. The major proportion is those of low risk taker here the investors invest theirwealth mainly in mutual funds, fixed deposits etc. (2) Investors invested in different kind of investments:
  51. 51. Kind of Investments No. of Respondents Saving A/C 195 Fixed deposits 148 Insurance 152 Mutual Fund 120 Post office (NSC) 75 Shares/Debentures 50 Gold/Silver 30 Real Estate 65 65 Kinds of Investment 30 50 75 120 152 148 195 0 100 200 300 No.of RespondentsInterpretation:From the above graph it can be inferred that out of 200 people, 97.5% people haveinvested in Saving A/c, 76% in Insurance, 74% in Fixed Deposits, 60% in MutualFund, 37.5% in Post Office, 25% in Shares or Debentures, 15% in Gold/Silver and32.5% in Real Estate. 3. Preference of factors while investing: 51
  52. 52. Factors (a) Liquidity (b) Low (c) High Return (d) Trust Risk No. of 40 60 64 36 Respondents 18% 20% 32% 30% Liquidity Low Risk High Return TrustInterpretation:Out of 200 People, 32% People prefer to invest where there is High Return,30% prefer to invest where there is Low Risk, 20% prefer easy Liquidityand 18% prefer Trust4. Awareness about Mutual Fund and its Operations: Response Yes No
  53. 53. No. of Respondents 135 65 33% 67% Yes NoInterpretation:From the above chart it is inferred that 67% People are aware of MutualFund and its operations and 33% are not aware of Mutual Fund and itsoperations. 5. Source of information for customers about Mutual Fund: 53
  54. 54. Source of information No. of Respondents Advertisement 18 Peer Group 25 Bank 30 Financial Advisors 62 80 60 No. of Respondents 40 62 20 25 30 18 0 Advertisement Peer Group Bank Financial Advisors Source of InformationInterpretation:From the above chart it can be inferred that the Financial Advisor is themost important source of information about Mutual Fund. Out of 135Respondents, 46% know about Mutual fund Through Financial Advisor,22% through Bank, 19% through Peer Group and 13% throughAdvertisement.6. Investors invested in Mutual Fund:
  55. 55. Response No. of Respondents YES 120 NO 80 Total 200 No 40% Yes 60%Interpretation:Out of 200 People, 60% have invested in Mutual Fund and 40% do not haveinvested in Mutual Fund.7.Reason for not invested in Mutual Fund: 55
  56. 56. Reason No. of Respondents Not Aware 65 Higher Risk 5 Not any Specific Reason 10 13% 6% 81% Not Aware Higher Risk Not AnyInterpretation:Out of 80 people, who have not invested in Mutual Fund, 81% are not awareof Mutual Fund, 13% said there is likely to be higher risk and 6% do nothave any specific reason.8. Investors invested in different Assets Management Co. (AMC):
  57. 57. Name of AMC No. of Investors AxisMF 55 UTI 75 HDFC 30 Reliance 75 ICICI Prudential 56 Kotak 45 Others 70 Others 70 HDFC 30Name of AMC Kotak 45 AxisMF 55 ICICI 56 Reliance 75 UTI 75 0 20 40 60 80 No. of Investors Interpretation: Most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120 Investors 62.5% have invested in each of them, only 46% have invested in AxisMF, 47% in ICICI Prudential, 37.5% in Kotak and 25% in HDFC. 9. Reason for invested in AxisMF: 57
  58. 58. Reason No. of Respondents Associated with Axis 35 Better Return 5 Agents Advice 15 27% 9% 64% Associated with AXIS Better Return Agents AdviceInterpretation:Out of 55 investors of AxisMF 64% have invested because of its associationwith Brand AXIS, 27% invested on Agent‟s Advice, 9% invested becauseof better return.10. Reason for not invested in AxisMF
  59. 59. Reason No. of Respondents Not Aware 25 Less Return 18 Agent‟s Advice 22 34% 38% 28% Not Aware Less Return Agents AdviceInterpretation:Out of 65 people who have not invested in AxisMF, 38% were not awarewith AxisMF, 28% do not have invested due to less return and 34% due toAgent‟s Advice.11. Preference of Investors for future investment in Mutual Fund 59
  60. 60. Name of AMC No. of Investors AxisMF 76 UTI 45 HDFC 35 Reliance 82 ICICI Prudential 80 Kotak 60 Others 75 Others 75 Kotak 60 Name of AMC ICICI Prudential 80 Reliance 82 HDFC 35 UTI 45 AxisMF 76 0 20 40 60 80 100 No. of Investors Interpretation: Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential, 63% in AxisMF, 62.5% in Others, 50% in Kotak, 37.5% in UTI and 29% in HDFC Mutual Fund.12. Channel Preferred by the Investors for Mutual Fund Investment
  61. 61. Channel Financial Advisor Bank AMC No. of 72 18 30 Respondents 25% 15% 60% Financial Advisor Bank AMCInterpretation:Out of 120 Investors 60% preferred to invest through Financial Advisors,25% through AMC and 15% through Bank.13. Mode of Investment Preferred by the Investors 61
  62. 62. Mode of Investment One time Investment Systematic Investment Plan (SIP) No. of Respondents 78 42 35% 65% One time Investment SIPInterpretation:Out of 120 Investors 65% preferred One time Investment and 35 %Preferred through Systematic Investment Plan.14. Preferred Portfolios by the Investors
  63. 63. Portfolio No. of Investors Equity 56 Debt 20 Balanced 44 37% 46% 17% Equity Debt BalanceInterpretation:From the above graph 46% preferred Equity Portfolio, 37% preferredBalance and 17% preferred Debt portfolio15. Option for getting Return Preferred by the Investors 63
  64. 64. Option Dividend Payout Dividend Growth Reinvestment No. of Respondents 25 10 85 21% 8% 71% Dividend Payout Dividend Reinvestment GrowthInterpretation:From the above graph 71% preferred Growth Option, 21% preferredDividend Payout and 8% preferred Dividend Reinvestment Option..
  65. 65. Chapter-7Suggestions andRecommendations 65
  66. 66. Suggestions and Recommendations The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors. Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration. Younger people aged under 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off. Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality.
  67. 67. Systematic Investment Plan (SIP) is one the innovative products launched by AssetsManagement companies very recently in the industry. SIP is easy for monthly salariedperson as it provides the facility of do the investment in EMI. Though most of theprospects and potential investors are not aware about the SIP. There is a large scope for thecompanies to tap the salaried persons. 67
  68. 68. Chapter-8Limitations and scope
  69. 69. Limitation:Some of the persons were not so responsive.Possibility of error in data collection because many of investors may have notgiven actual answers of my questionnaire.Sample size is limited to 200 visitors of Axis Bank ,Malviya Nagar andVaishali Nagar out of these only 120 had invested in Mutual Fund. Thesample size may not adequately represent the whole market.Some respondents were reluctant to divulge personal information which canaffect the validity of all responses.The research is confined to a certain part of Jaipur. 69
  70. 70. Scope of the studyA big boom has been witnessed in Mutual Fund Industry in resent times. A largenumber of new players have entered the market and trying to gain market share inthis rapidly improving market.The research was carried on in Jaipur. I had been sent at one of the branch Axis bankwhere I completed my Project work. I surveyed on my Project Topic “ChannelManagement of Axis Mutual Fund and Analysing Preferences of The Investors ForInvestment In Mutual Funds” on the visiting customers of the AxisMalviya Nagarand Vaishali Nagar Branch.The study will help to know the preferences of the customers, which company,portfolio, mode of investment, option for getting return and so on they prefer. Thisproject report may help the company to make further planning and strategy.
  71. 71. Chapter-9Conclusion 71
  72. 72. Findings The Age Group of 36-40 years were more in numbers. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years. Most of the Investors were Graduate or Post Graduate and below HSC there were very few in numbers. In Occupation group most of the Investors were Govt. employees, the second most Investors were Private employees and the least were associated with Agriculture. In family Income group, between Rs. 20,001- 30,000 were more in numbers, the second most were in the Income group of more than Rs.30,000 and the least were in the group of below Rs. 10,000. About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits, Only 60% Respondents invested in Mutual fund. Mostly Respondents preferred High Return while investment, the second most preferred Low Risk then liquidity and the least preferred Trust. Only 67% Respondents were aware about Mutual fund and its operations and 33% were not. Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not have invested in Mutual fund. Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not any specific reason for not invested in Mutual Fund and 6% told there is likely to be higher risk in Mutual Fund. Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI Prudential has also good Brand Position among investors, AxisMF places after ICICI Prudential according to the Respondents. Out of 55 investors of Axis MF 64% have invested due to its association with the Brand Axis, 27% Invested because of Advisor‟s Advice and 9% due to better return.
  73. 73.  Most of the investors who did not invested in Axis MF due to not Aware of Axis MF, the second most due to Agent‟s advice and rest due to Less Return. For Future investment the maximum Respondents preferred Reliance Mutual Fund, the second most preferred ICICI Prudential, Axis MF has been preferred after them. 60% Investors preferred to Invest through Financial Advisors, 25% through AMC (means Direct Investment) and 15% through Bank. 65% preferred One Time Investment and 35% preferred SIP out of both type of Mode of Investment. The most preferred Portfolio was Equity, the second most was Balance (mixture of both equity and debt), and the least preferred Portfolio was Debt portfolio. Maximum Number of Investors Preferred Growth Option for returns, the second most preferred Dividend Payout and then Dividend Reinvestment. 73
  74. 74. ConclusionRunning a successful Mutual Fund requires complete understanding of thepeculiarities of the Indian Stock Market and also the psyche of the small investors.This study has made an attempt to understand the financial behavior of Mutual Fundinvestors in connection with the preferences of Brand (AMC), Products, Channelsetc. I observed that many of people have fear of Mutual Fund. They think theirmoney will not be secure in Mutual Fund. They need the knowledge of Mutual Fundand its related terms. Many of people do not have invested in mutual fund due to lackof awareness although they have money to invest. As the awareness and income isgrowing the number of mutual fund investors are also growing.“Brand” plays important role for the investment. People invest in those Companieswhere they have faith or they are well known with them. There are many AMCs inJaipur but only some are performing well due to Brand awareness. Some AMCs arenot performing well although some of the schemes of them are giving good returnbecause of not awareness about Brand. Reliance, UTI,AxisMF, ICICI Prudential etc.They are well known Brand, they are performing well and their Assets UnderManagement is larger than others whose Brand name are not well known likePrinciple, Sunderam, etc.Distribution channels are also important for the investment in mutual fund. FinancialAdvisors are the most preferred channel for the investment in mutual fund. They canchange investors‟ mind from one investment option to others. Many of investorsdirectly invest their money through AMC because they do not have to pay entry load.Only those people invest directly who know well about mutual fund and itsoperations and those have time.
  75. 75. Chapter-10Annexure 75
  76. 76. QUESTIONNAIRE1. Personal details: (a). Name:- (b). City: - contact no:- (c). Age:-(d). Qualification:- Graduation/pg Under graduate Others (e). Occupation. Pl tick (√) Govt. Ser Pvt.Ser Business Agriculture Others(f). What is your monthly family income approximately? Pl tick (√). Up to Rs. 10,001 to Rs. 15,001 to Rs. 20,001 to Rs. 30,001 rs.10,000 15000 20,000 30,000 and above(g). What much do you think you will be able to save on an annual basis as a % of yourtotal annual income? Less than 10% 10-20% 20-30% More than 30%
  77. 77. (h). How would you honestly describe yourself as a risk-taker? Careful Low risk taking capability Extremely reluctant to risk High risk taking capability2. What kind of investments you have made so far? Pl tick (√). All applicable. A. Saving account B. Fixed deposits C. Insurance D. Mutual fund E. Post office-nsc, etc F. G. Gold/ silver H. Real estate Shares/debentures 3. While investing your money, which factor will you prefer?. (a) liquidity (b) low risk (c) high return (d) trust4. Are you aware about mutual funds and their operations? Pl tick (√). a) yes b) no 5. If yes, how did you know about mutual fund? A. Advertisement B. Peer group C. Banks D. Financial advisors 6. Have you ever invested in mutual fund? Pl tick (√). a) yes b) no 77
  78. 78. 7. If not invested in mutual fund then why? (a) not aware of mf (b) higher risk (c) not any specific reason 8. If yes, in which mutual fund you have invested? Pl. Tick (√).All applicable. A. B. UTI C. D. E. Kotak F. Other specify AxisMF HDFC Reliance 9. If invested in axis mf, you do so because (pl. Tick (√), all applicable). A. Axismf is associated with axis bank B. They have a record of giving good returns year after year. C. Agent‟ advice10. If not invested in axis mf, you do so because (pl. Tick (√) all applicable). A. You are not aware of axis mf. B. Axis mf gives less return compared to the others. C. Agent‟ advice11. When you plan to invest your money in asset managementco. Which AMC will youprefer? Assets management co. A. Axis mf
  79. 79. B. Uti C. Reliance D. Hdfc E. Kotak F. Icici12. Which channel will you prefer while investing in mutual fund? (a) financial advisor (b) bank (c) AMC13. When you invest in mutual funds which mode of investment will you prefer? Pl. Tick(√). A. One time investment B. Systematic investment plan (sip)14. When you want to invest which type of funds would you choose? A. Having only debt B. Having debt & equity C. Only equity portfolio. portfolio portfolio.15. How would you like to receive the returns every year? Pl. Tick (√). A. Dividend payout B. Dividend re- C. Growth in nav investment 79
  80. 80. BIBLIOGRAPHYi. News papersii. Outlook moneyiii. Television channel (cnbcaawaj)iv. Mutual fund hand bookv. Fact sheet and statementvi. www.axismf.comvii. www.moneycontrol.comviii. www.amfiindia.comix. www.onlineresearchonline.comx. www.