A study on analysis of mutual funds in india

1. A
SUMMER TRAINING REPORT
ON
“A STUDY ON ANALYSIS OF MUTUAL FUND IN INDIA”
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION SESSION (MBA)
(2021-2023)
UNDER THE SUPERVISION OF: SUBMITTED BY:
Mr. Vijay Kumar Jaiswal Name: -Birendra Raut
(Branch Manager) Class: - MBA 3rd
Semester
University Roll No: -210163702
DEPARTMENT OF MANAGEMENT STUDIES
GEETA ENGINEERING COLLEGE NAULTHA (PANIPAT)
(Approved by AICTE, Affiliated to Kurukshetra University, Kurukshetra)

2. CERTIFICATE

3. DECLARATION
This is to certify that I, BIRENDRA KUMAR RAUT student of GEETA ENGINEERING
COLLEGE, studying in MBA 3rd
Semester, Roll No 210163702 has prepared a Summer Training
report entitled “A STUDY ON ANALYSIS OF MUTUAL FUND IN INDIA” for the partial
fulfilment of the degree of Master of Business Administration from Kurukshetra University,
Kurukshetra.
I hear by declare that the training report submitted to the Kurukshetra University, Kurukshetra is a
record of an original work done by me under the guidance of MR. LALIT PRASHAD SAH,
ASSISTANT MANAGER OF PIE INFOCOMM PRIVATE LIMITED.
The matter presented in this report work has not been submitted by me for the award of any Degree
or diploma/ associateship/ fellowship and similar degree or any other institution.
Signature of Candidate
Name- Birendra Kumar Raut
University Roll No: 210163702
Date:

4. ACKNOWLEDGEMENT
Perseverance, inspiration & motivation have always played a key role in the success of any venture.
The successful completion of the project would have been far from reality without mentioning the
people who made an indelible impression while making the research project.
I would like to express my deep and sincere gratitude to the following individuals without whom my
research project not has been successful one. I am thankful for tremendous support and guidance
provided to me by Mr. Rajesh (Assistant Professor) of GEC. His expert opinion and effort to direct
my views in the right direction helped in the successful completion of the research project.
Finally, I hereby take the opportunity to express my hearties gratitude to Dr. Ritesh (Head,
Department of Business Studies) and all the faculty member of Geeta Engineering College, Panipat
for extending a lot of support and sparing time to support me in my research work. It has been a very
insightful and fulfilling skill here.
Signature of Candidate
Name- Birendra Kumar Raut
University Roll No: 210163702
Date:

5. EXECUTIVE SUMMERY
A mutual fund is a scheme in which several people invest their money for a common financial cause.
The collected money invests in the capital market and the money, which they earned, is divided
based on the number of units, which they hold.
The mutual fund industry started in India in a small way with the UTI Act creating what was
effectively a small savings division within the RBI. Over a period of 25 years this grew fairly
successfully and gave investors a good return, and therefore in 1989, as the next logical step, public
sector banks and financial institutions were allowed to float mutual funds and their success
emboldened the government to allow the private sector to foray into this area.
The advantages of mutual fund are professional management, diversification, economies of scale,
simplicity, and liquidity. The disadvantages of mutual fund are high costs, over-diversification,
possible tax consequences, and the inability of management to guarantee a superior return.
The biggest problems with mutual funds are their costs and fees it include Purchase fee, Redemption
fee, Exchange fee, Management fee, Account fee & Transaction Costs. There are some loads which
add to the cost of mutual fund. Load is a type of commission depending on thetype of funds.
Mutual funds are easy to buy and sell. You can either buy them directly from the fund company or
through a third party. Before investing in any funds one should consider some factorlike objective,
risk, Fund Manager’s and scheme track record, Cost factor etc.
There are many, many types of mutual funds. You can classify funds based Structure (open-ended
& close-ended), Nature (equity, debt, balanced), Investment objective (growth, income, money
market) etc.
A code of conduct and registration structure for mutual fund intermediaries, which were
subsequently mandated by SEBI. In addition, this year AMFI wasinvolved in a number of
developments and enhancements to the regulatory framework.
The most important trend in the mutual fund industry is the aggressive expansion of the foreign
owned mutual fund companies and the decline of the companies floated by nationalized banks and
smaller private sector players.
Reliance Mutual Fund, UTI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund and

6. Birla Sun Life Mutual Fund are the top five mutual fund company in India.
TABLE OF CONTENT
CHAPTER CONTENT PAGE NO:
A
B
C
D
Certificate
Declaration
Acknowledgement
Executive Summary
Chapter 1 Introduction
1.1 Introduction To Industry
1.2 Introduction To Company
1.3 Introduction To Topic
1-34
1-4
5-7
8-34
Chapter 2 Literature Review 35-39
Chapter 3 Research Methodology
3.1 Meaning Of Research
3.2 Objective Of The Study
3. 3 Sample size
3.4 Scope Of The Study
3.5 Sampling Technique
3.6 Research Design
3.7 Limitation Of The Study
40-43
40
40
40
41
41
42
42-43
Chapter 4 Data Analysis & Interpretation 44-58
Chapter 5 Findings, Suggestion & Conclusion
5.1 Findings
5.2 Suggestion
5.3 Conclusion
59-61
59
60
61
Bibliography

7. Reference

8. CHAPTER-1
INTRODUCTION

9. 1
1.1 INTRODUCTION TO INDUSTRY
A stock market is referred to as a public market that encourages the buying, selling and issuing of
stocks of a publicly held company. It is a platform that facilitates trading in financial instruments by
engaging investors in such transactions. Stocks represent the fractional ownership in a registered
company and therefore, a stock market is a place where one can buy and sell ownership of such assets.
The purpose served by the stock market is bilateral and forms the basis of the regulatory framework
governing the market.
1. The first purpose of the stock market is to realize the capital requirements of the companies.
By raising capital from the general public, the companies can undertake expansion and
development activities. It is a much more viable source of acquiring capital as compared to
borrowing as it avoids incurring debts.
2. Secondly, the stock market provides an opportunity to investors to acquire a share of profits
in public companies. Investors can earn profits by either selling their stocks at an increased
price or by earning regular dividends.
Generally, the said trading is conducted via an electronic trading platform under a defined set of
regulations. The stock market in India is governed majorly by two stock exchanges, the Bombay Stock
Exchange (hereinafter called BSE) and the National Stock Exchange (hereinafter called NSE).
The India capital market still faces many challenges if it is to promote more efficient allocation and
mobilization of capital in the economy. First, market infrastructure has to be improved as it hinders the
efficient flow of information and effective corporate governance. According standards will have to adapt
to internationally accepted accounting practices. The court system and legal mechanism should be

10. 2
enhanced to better protect small shareholders rights and their capacity to monitor corporate activities.
Second, the trading system has to be mode more transparent. Marker information is a crucial public good
that should be disclosed or made available to all participants achieve market efficiency.
SEBI should also monitor more closely cases of insider trading. Third, India may need further integration
of the national capital market through consolidation of stock exchanges. The trend all over the world is
to consolidate and merge existing stock exchanges. Not all of India’s 22 stock exchanges may be able to
justify their existence. There is a pressing need to develop a uniform settlement cycle and common
clearing system that will bring an end to unnecessary speculation based on arbitrage opportunities.
Fourth, the payment system has to be improved to better link the banking and securities industries.
India’s banking system has yet to come up with good Electronic Funds Transfer (EFT) solutions. EFT
is important for problems such as direct payments of dividends through bank accounts, eliminating
counterparty risk, and facilitating foreign institutional investment. The capital market cannot thrive
alone; it has to be integrated with the other segments of the financial system. The global trend is for the
elimination of the traditional wall between banks and the securities market. Securities market
development has to be supported by overall macroeconomic and financial sector environments. Further
liberalization of interest rates, reduced fiscal deficits, fully market-based issuance of Government
securities and a more competitive banking sector will help in the development of a sounder and a more
efficient capital market in India.
1.1.1 BSE (Bombay Stock Exchange)
Established in 1875, BSE (formerly known as Bombay Stock Exchange), is Asia's first & the Fastest
Stock Exchange in world with the speed of 6 micro seconds and one of India's leading exchange groups.

11. 3
Over the past 143 years, BSE has facilitated the growth of the Indian corporate sector by providing it
an efficient capital-raising platform. Popularly known as BSE, the bourse was established as ‘The
Native Share & Stock Brokers' Association’ in 1875. In 2017 BSE become the 1st listed stock exchange
of India.
BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange and is
the leading stock exchange under the ownership of Ministry of Finance, Government of India. It is
located on Dalal Street in Mumbai. Established in 1875 by cotton merchant Premchand Roychand, a
Jain businessman, it is the oldest stock exchange in Asia, and also the tenth oldest in the world. The
BSE is the 8th largest stock exchange with an overall market capitalization in the world with more than
₹276.713 lakh crore, as of January 2022
Unlike countries like the United States where nearly 70% of the country's GDP is derived from large
companies in the corporate sector like Apple and Tesla, the corporate sector in India accounts for only
12–14% of the national GDP (as of October 2016). Of these only 7,400 companies are listed of which
only 4000 trade on the stock exchanges at BSE and NSE. Hence the stocks trading at the BSE and NSE
account for only around 4% of the Indian economy, which derives most of its income-related activity
from the unorganized sector and household spending
Today BSE provides an efficient and transparent market for trading in equity, currencies, debt
instruments, derivatives, mutual funds. BSE SME is India’s largest SME platform which has listed
over 250 companies and continues to grow at a steady pace. BSE STAR MF is India’s largest online
mutual fund platform which process over 27 lakh transactions per month and adds almost 2 lakh new
SIPs ever month. BSE Bond, the transparent and efficient electronic book mechanism process for
private placement of debt securities, is the market leader with more than Rs 2.09 lakh crore of fund
raising from 530 issuances. (F.Y. 2017-2018). Keeping in line with the vision of Shri Narendra Modi,
Hon’ be Prime Minister of India, BSE has launched India INX, India's 1st international exchange,
located at GIFT CITY IFSC in Ahmedabad.
Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central
counterparty to all trades executed on the BSE trading platform and provides full novation,
guaranteeing the settlement of all Bonafied trades executed. BSE Institute Ltd, another fully owned
subsidiary of BSE runs one of the most respected capital market educational institutes in the country.

12. 4
1.1.2 NSE (National Stock Exchange)
NSE Academy Limited, a subsidiary of NSE Investments Limited (formerly known as NSE Strategic
Investment Corporation Limited) was setup in March 12, 2016 to promote financial literacy as a
necessary life skill and provide training and certifications in Banking, Insurance and Financial Markets.
It promotes development of a pool of human resources having right skills and expertise in each segment
of the BFSI industry to provide quality intermediation to market participants.
With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market
trading system on par with the international standards. On the basis of the recommendations of high
powered Pherwani Committee. The National Stock Exchange was incorporated in 1992 by Industrial
Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance
Corporation of India, all Insurance Corporations, selected commercial banks and other
Powered by millions of dreams, hopes and aspirations, India today is brimming with potential. At NSE,
we are driven by this ambition that makes India charge ahead and take a more prominent place on the
global stage.

13. 5
We aim to catalyze India's growth story by creating investment opportunities, enabling access and
empowering our stakeholders. We work harder, smarter and faster to deliver impact across the
investment ecosystem. In a world that changes shape by the second, we constantly reinvent ourselves
to redefine the future.
1.2 INTRODUCTION TO THE COMPANY
Pie Infocomm PVT. LTD. Is a registered software company that has been providing specialized IT
services and Business solution since 2002 to make the Business Operation easier. Our company’s motto
is “Generating ideas” and we implement it to give our clients best in the field of software development,
AutoCAD Designing (construction of Building) as well as preparing blueprints of motor and the spare
parts. We are also in chip Level Designing using matlab technology. We are developing high level
scientific calculation program. In today’s era we are focusing in Digital Marketing and lot technology.
We are having one sublet Department of Share Trading (Stock Trading Department) our organization
established in the year 2002 and is a registered and ISO certified company. Started as a training
Organization, we are proud to have gained trust of more than 25000 student till now.
1.2.1 Mission
Our mission is to deliver skills and knowledge that significantly increase our course participants on-the-
job productivity, thereby enhancing their contributions to the goals of their organization.
1.2.2 Vision

14. 6
In our stride of growth and in exploring new frontiers of technology, we wish to benefit our customers
by organizing their work and optimizing their resource requirements. We also simultaneously provide
project Training to our trainees on these latest technologies only.
1.2.3 Product offer
1. Stock Trading
Trading Equity Securities, Demat
Accounts, Share Trading, Stock Exchange serves are also provided by our YOY Capital Infra Pvt.
Ltd.
2. Digital Marketing
Search engine optimization, social media marketing, affiliate marketing ...etc.
3. Website Development
Web development can range from development a simple single static page of plain test to complex
web-based applications, electronic business, and social network services.
4. Motor Spare Part Designing
The way products are designed and built is changing rapidly. We can provide you with the right tools
and workflows for each step of the product design and development process.
1.2.4 Objective of Company
PIE INFOCOMM is working with a motive to train the candidates in the form of INTERSHIP
PROGRAM to make them more skilled and experienced. The Spirit of PIE INFOCOMM is our Values,
enthusiasm and teamwork. It energizes us and is the touchstone for all that we do and we basically work
on this for our training for the candidates
1) Be Passionate About Success
2) Treat Each Person With Respect
3) Unyielding Integrity in Everything we do .
4) Enhancing Functional area expertise
5) Improving one’s Classroom delivery both as a teacher and trainer

15. 7
6) Enhancing abilities for conduction meaningful research.
We also have a sister branch in Noida ‘YOY Capital Infra Private Limited’ which solely deals in
Finance and Share/Stock Trading.
1.2.5 Director Message
Mr. Vijay Kumar
1.2.6 PIE INFOCOMM TEAM Director
Name Designation
1. Mr. Rishabh Agarwal HR Manager
2. Mr. Piyush Tiwari BDM&HR
3. Miss. Ayushi Sinha BDM&HR
Dear Readers
We, the PIE INFOCOMM Pvt. Ltd., welcome the
fascinating world of technology which brings the world
on the fingertip and in living room if an individual.
In the current era, where technology is rapidly evolving,
training has also taken the support in developing the
software offers convenient ways to help increase the
knowledge, education and easiness to the users. We
provide anywhere easiness to the users. We provide
anywhere, anytime of anytime easy access for
upgradation of knowledge and skills and can deliver the
software, we genuinely provide a platform wherein the
individual gets a customized package related to key
thematic areas, through a self – guided process in
technical field.

16. 8
4. Mr. Rahul Gautam HR Department
5. Miss. Akanksha Sharma Junior HR
6. Mr. Pranav Kumar Sr. AutoCAD Designer (TL)
7. Miss. Aishwarya Saxena Sr. Software Development (TL)
8. Mr. Sagnik Datta Junior Software Development
9. Mr. Himanshu Singh Junior Software Development
1.3. INTRODUCTION TO TOPIC
“ANALYSIS OF MUTUAL FUND IN INDIA”
INTRODUCTION OF MUTUAL FUNDS
Mutual funds have become a very popular way to take some of the risk out of investing in individual
stocks by investors. Mutual funds are a collection of stocks selected by mutual fund seller and sold to
investors as shares in a fund. There are several types of funds that you can invest in. Some of the more
popular types are technology funds, growth funds, security funds, and income funds. Mutual funds are
very popular because they allow you to invest in a number of stocks therefore greatly reducing the risks
associated with putting your money in an individual stock.
Mutual funds have become one of the most attractive ways for the average person to invest their money.
A mutual fund pools resources from thousands of investors and then diversifies its investmentinto many
different holdings such as stocks, bonds, or government securities in order to provide high relative safety
and returns.
Mutual Funds now represents perhaps the most appropriate opportunity for most investors. It is no
wonder that birthplace of mutual funds - the U.S.A.- the fund industry has already overtaken the banking

17. 9
industry. The Indian industry has already started opening up many of the exciting investment
opportunities to Indian investors.
Though not insured like banks, mutual funds generally provide more return than the current one to two
percent obtainable through banks while still being one of the safest ways to grow your money. There are
an endless variety of mutual fund investment choices depending on the degree of risk you feel
comfortable with.
1.3.1.1 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 and started its operations in 1964 with the
issueof units under the scheme US-64. 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 UnitScheme 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 Can bank 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

18. 10
Mutual Fund Regulations came into being, under which all mutual funds, except LTI were to be
registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was
thefirst private sector mutual fund registered in July 1993
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 inMarch 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. As at the
end of October 31, 2003, there were 31 funds, which manage assetsof Rs. 126726 crores under 386
schemes.
Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit Trust
ofIndia 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.
Currently Public Sector Banks like SBI, Canara Bank, Bank of India, institutions like IDBI, GIC, LIC
Foreign Institutions like Alliance, Morgan Stanley, Templeton and Private financial companies like
HDFC, Prudential ICICI, DSP Merrill Lynch, Sundaram, Kotak Mahindra etc. have floated their own
mutual funds.
1.3.2 WHAT IS MUTUAL FUND?
A Mutual Fund is a vehicle for investing in stocks and bonds. It is not an alternative investment option
tostocks and bonds; rather it pools the money of several investors and invests this in stocks, bonds,
moneymarket instruments and other types of securities. Buying a mutual fund is like buying a small
slice of a big pizza. The owner of a mutual fund unit gets a proportional share of the fund's gains,

19. 11
losses, income and expenses.
A Mutual Fund is a body corporate registered with the Securities and Exchange Board of India (SEBI),
that pools up the money from individual/ corporate investors and invests the same on behalf of the
investors /unit holders, in equity shares, Government securities, Bonds, Call money markets etc., and
distributes the profits. In other words, a mutual fund allows an investor to indirectly take a position in
abasket of assets. A mutual fund pools together sums from individual investors and invests it in various
financial instruments. Each mutual fund has its own investment objective.
Mutual funds have become one of the most attractive ways for the average person to invest their money.
A mutual fund pools resources from thousands of investors and then diversifies its investmentinto many
different holdings such as stock, bonds, and securities in order to provide highly relative safety and
returns.
Each Mutual Fund with different type of schemes is managed by respective Asset Management Company
(AMC). An investor can invest his money in one or more schemes of Mutual Fund according tohis choice
and becomes the unit holder of the scheme. The invested money in a particular scheme of a Mutual Fund
is then invested by fund manager in different types of suitable stock and securities, bonds and money
market instruments. Each Mutual Fund is managed by qualified professional man, who use this money
to create a portfolio which includes stock and shares, bonds, gilt, money-market instruments or
combination of all.
1.3.2.1 DISTINGUISHING CHARACTERISTICS OF MUTUAL FUND
The traditional, distinguishing characteristics of the mutual fund may include the following:
1. Investors purchase mutual fund shares from the fund itself (or through a broker for the fund)instead
of from other investors on a secondary market
2. The price that investors pay for mutual fund shares is the fund's per share net asset value (NAV)plus
any shareholder fees that the fund imposes at the time of purchase (such as sales loads).
3. Mutual fund shares are "redeemable," meaning investors can sell their shares back to the fund(or to
a broker acting for the fund).
4. Mutual funds generally create and sell new shares to accommodate new investors. In other words,
they sell their shares on a continuous basis, although some funds stop selling when, for example,they
become too large.
5. The investment portfolios of mutual funds typically are managed by separate entities known as
"investment advisers" that are registered with the SEBI.

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1.3.2.2 MAJOR RIGHTS AS A UNIT HOLDER IN A MUTUAL FUND
Some important rights are mentioned below:
1. Unit holders have a proportionate right in the beneficial ownership of the assets of the scheme and
to the dividend declared.
2. They are entitled to receive dividend warrants within 42 days of the date of declaration of the
dividend.
3. They are entitled to receive redemption cheques within 10 working days from the date ofredemption.
4. 75% of the unit holders with the prior approval of SEBI can terminate AMC of the fund.
1.3.2.3 REGULATORY BODY FOR MUTUAL FUNDS
Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual funds mentioned
above. All the mutual funds must get registered with SEBI. The only exception is the UTI, since it is a
corporation formed under a separate Act of Parliament.
Broad Guidelines Issued by SEBI for a MF: -
SEBI is the regulatory authority of Mutual Funds. SEBI has the following broad guidelines pertaining
tomutual funds:
i. Mutual Funds should be formed as a Trust under Indian Trust Act and should be operatedby Asset
Management Companies (AMCs).
ii. Mutual Funds need to set up a Board of Trustees and Trustee Companies. They should also havetheir
Board of Directors.
iii. The net worth of the AMCs should be at least Rs.5 crore.
iv. AMCs and Trustees of a Mutual Fund should be two separate and distinct legal entities
v. The AMC or any of its companies cannot act as managers for any other fund
vi. AMCs have to get the approval of SEBI for its Articles and Memorandum of Association
vii. All Mutual Funds schemes should be registered with SEBI.
viii. Mutual Funds should distribute minimum of 90% of their profits among the investors
There are other guidelines also that govern investment strategy, disclosure norms and advertising code
for mutual funds.

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1.3.2.4 REGULATIONS OF MUTUAL FUNDS IN INDIA
In India SEBI and RBI act as regulators of mutual fund. SEBI (Mutual Funds)
/ REGULATIONS, 1996
The provisions of this regulations pertaining to AMC are:
1. All the schemes to be launched by the AMC need to be approved by the trustees and copies ofoffer
document of such schemes are to be filed with SEBI.
2. The offer document shall contain adequate disclosure to enables the investor to make informed
decision.
3. Advertisement in respect of schemes should be in conformity with the SEBI prescribed
advertisement code, and discloses the method and periodicity of the valuation of investment sales
The listing of close ended schemes is mandatory and every close ended scheme should be listedon a
recognized stock exchange within six months from the closure of subscription. However, listing is
not mandatory in case the scheme provides for monthly income or caters to the special classes of
persons like senior citizen, women, children, and physically handicapped. If the scheme discloses
detail of repurchase in the offer document: if the schemes open for repurchase within six months of
closure of subscription.
4. Units of a close ended scheme can be opened for sale or redemption at a predetermined fixedinterval
if the minimum and maximum amount of sale, redemption, and periodicity is disclosed in the offer
document.
5. Units of a close ended scheme can also be converted into an open-ended scheme with the consent
of majority of the unit holder and disclosure is made in the offer document about the optionand
period of conversion.
6. Units of a close ended scheme may be rolled over by passing resolution by a majority of the
shareholders.
7. No scheme other than unit linked schemes can be opened for more than 45 days.
8. The AMC must specify in the offer document about the minimum subscription and the extent ofover
subscription, which is intended to be retained. In the case of over subscription, all applicants applying
up to 500 units must be given full allotment subjected to over subscription.
9. The AMC must refund the application money if minimum subscription is not received and alsothe
excess over subscription with in the six weeks of closure of subscription. and repurchase in addition

22. 14
to the investment objectives.
10. Guaranteed returns can be provided in a scheme if such returns are fully guaranteed by the AMC or
sponsor. In such cases, there should be a statement indicating the name of the person, and themanner
in which the guarantee is to be made must be stated in the offer document.
11. A close ended scheme shall be wound up on redemption date, unless it is rolled over, or if 75%of
the unit holders of a scheme pass a resolution of winding up of the scheme: if the trustee on happening
of any event, requires the scheme to be wound up: or if SEBI, so directed in the interest of investors.
Investment objectives and valuation policies: -
The price at which the units may be subscribed or sold and the price at which such units may at any time
repurchase by mutual fund shall be made available to the investor.
General obligation
1. Every asset management company for each scheme shall keep and maintain proper books of account,
records and document, for each scheme so as to explain its transaction and to disclose at any point
of time the financial position of each scheme and in particular give true and fair view of state of
affairs of the fund and intimate to board the place where such books of account, record, and document
are maintained.
2. The financial year for all the schemes shall end as on march 31 of each year. Every mutual fundor
the asset management company shall prepare in respect of scheme and the fund as specific in eleventh
schedule.
3. Every mutual fund shall have the annual statement of account audited by an auditor who is not in
any way associated with the auditor of the asset management company.
Procedure in case of default
On and from the date of suspension of the certificate or the approval as they may be, the mutual fund
trustees or asset management company, shall cease to carry on any activity as a mutual fund, trustee or
asset management company, during the period of suspension, and shall be subjected to the directions of
the board with regard to any records, documents, or securities that may be in its custody or control,
relating to its activities as mutual fund, trustee, or asset management company.
SEBI Guidelines (2001-02) Relating to Mutual Fund: -
1. A common format is prescribed for all mutual fund schemes to disclosed their entire portfolio ofhalf

23. 15
yearly basis so that the investors can get meaningful information on the deployment of funds. Mutual
funds are also required to disclose the investment in various types of instruments and percentage of
in each script to the total NAV illiquid and non-performing assets, investments in derivatives and in
ADRs and GDR’s.
2. To enable the investor to make informed investment decision, mutual funds have been directedto
fully revise and update offer document and memorandum at least once in two years.
Mutual funds are also required to: -
1. Bring uniformity in disclosure of various categories of advertisements, with a view to ensuring
consistency and comparability across schemes of various mutual funds. Reduce initial offer period
from a maximum of 45 days to 30 days. Dispatch statement of account once the minimum
subscription amount specified in offerdocument is received even before the closure of the issue.
2. Invest in mortgaged backed securities of investment grade given by credit rating agency.
3. Identify and make a provision for non-performing asset (NPAs) according to criteria for
classification of n NPAs and treatment of income accrued on NPAs to disclose NPAs in half yearly
portfolio reports.
4. Disclose information in a revised format on unit capital, reserves, performance in terms of dividend
and rise/fall in NAV during the half year period annualized yield over the last 1, 3, 5 years in addition
to percentage of management fee, percentage of recurring expenses to net asset, investmentmade in
associate companies, payment made to associate companies, payment made to associate companies
for their services, and detail of large holding, since their operation.
5. Declare their NAVs and sale/repurchase prices of all schemes updated on regular basis on the AMFI
website by 8.00 PM and declare NAVs of their close ended schemes on every Wednesday.
6. The format for unaudited half yearly results for the mutual funds has been revised by SEBI. These
results are to be published before the expiry of one month from the close of each half-year as against
two-month period provided earlier. These results shall also be put in their websites by mutual fund.
7. All the schemes by mutual fund shall be launched within six months from the date of the letter
containing observation from SEBI on the scheme offer document. Otherwise, a fresh offer document
along with filing fee shall be filled with SEBI.
RBI as supervisor of bank owned Mutual Funds
The first non-UTI mutual funds were started by public sector banks. Banks come under the regulatory

24. 16
TYPES OF MUTUAL
FUNDS
BY STRUCTURE BY NATURE
BY INVESTMENT
OBJECTIVE
OTHER SCHEMES
Open - Ended
Schemes
Equity Fund Growth Schemes
Tax Saving
Schemes
Close - Ended
Schemes
Debt Funds Income Schemes Index Schemes
Interval Schemes Balanced Funds Balanced Schemes
Money Market
Schemes
jurisdiction of RBI. So, Bank owned mutual funds are regulated by RBI, but it has been clarified that
all the mutual funds, being primarily capital market players come under the regulatory framework of
SEBI.Thus, the bank owned fund continues to be under the joint supervision of both RBI and SEBI. It
is generally understood that all market related and investor related activities of the fund are to be
supervised by SEBI, while any issue concerning the ownership of the AMC by bank fall under the
regulatory ambit of RBI. But RBI on bank fund should not conflict with SEBI guidelines.
RBI as supervisor of money market mutual funds
RBI is the only Government agency that is charged with the sole responsibility of overall entities that
operates in money market. So, money market mutual funds were regulated by RBI guidelines till
23.11.1995. Recently it has been decided that money market mutual funds of registered mutual fund
will be regulated by SEBI through the same guidelines issued for other mutual funds, i.e., SEBI (MF)
regulations, 1996. However, RBI does retain the right to decide whether mutual funds will be allowed
toaccess inter-call money market. Accordingly, RBI has placed certain restrictions through latest credit
policy, with the intention of moving toward a pure interbank money market.
1.3.3 Type of Mutual Funds India
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk
tolerance and return expectations etc. thus mutual funds has Variety of flavors, being a collection of
many stocks, an investor can go for picking a mutual fund might be easy. There are over hundreds of
mutual funds scheme to choose from. It is easier to think of mutual funds in categories, such as.

25. 17
A. By Structure
1. Open - Ended Schemes:
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 liquid.
2. Close-Ended Schemes:
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 ofthe 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.

26. 18
3. Interval Scheme:
Interval Schemes are that scheme, which combines the features of open-ended and close- ended schemes.
The units may be traded on the stock exchange or may be open for sale or redemption during pre-
determined intervals at NAV related prices.
B. By Nature
1. Equity Funds:
These funds invest a maximum part of their corpus into equities holdings. The structureof the fund may
vary different for different schemes and the fund manager’s outlook on differentstocks. The Equity Funds
are sub-classified depending upon their investment objective, as follows:
1) Diversified Equity Funds
2) Mid-Cap Funds
3) Sector Specific Funds
2. Debt Funds:
The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks
and financial institutions are some of the major issuers of debt papers. By investing in debt instruments,
these funds ensure low risk and provide stable income to the investors. Debt funds are further classified
as:
1) Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government
of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk.
These schemes are safer as they invest in papers backed by Government.
2) Income Funds: Invest a major portion into various debt instruments such as bonds, corporate
debentures and Government securities.
3) MIPs: Invests maximum of their total corpus in debt instruments while they take minimum exposure
in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on
the risk-return matrix when comparedwith other debt schemes.
4) Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds

27. 19
primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers
(CPs). Some portion of the corpus is also invested in corporate debentures.
5) Liquid Funds: Also known as Money Market Schemes, these funds provide easy liquidity and
preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-
bank call money market, CPs and CDs. These funds are meant for short-term cash management of
corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank
low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds.
3. Balanced of Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed
income securities, which are in line with pre-defined investment objective of the scheme. These schemes
aim to provide investors with the best of both the worlds. Equity partprovides growth and the debt part
provides stability in returns.
Further the mutual funds can be broadly classified on the basis of investment parameter viz, each
category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the
fund. The investor can align his own investment needs with the funds objective and invest accordingly.
C. BY Investment Objective
1. Growth Schemes:
2. Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital
appreciation over medium to long term. These schemes normally invest a major part of their fund in
equities and are willing to bear short-term decline in value for possible future appreciation.
3. Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to provideregular and
steady income to investors. These schemes generally invest in fixed income securities such as bonds
and corporate debentures. Capital appreciation in such schemes may be limited.
4. Balanced Scheme:

28. 20
Balanced Schemes aim to provide both growth and income by periodically distributing a part of the
income and capital gains they earn. These schemes invest in both shares and fixed income securities, in
the proportion indicated in their offer documents (normally 50:50).
4. Money Market Scheme:
Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income.
These schemes generally invest in safer, short-term instruments, such astreasury bills, certificates of
deposit, commercial paper and inter-bank call money.
5. 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.
6. 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.
D. OTHER SCHEMES
1) Tax Saving Schemes:
Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from timeto time. Under
Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are
eligible for rebate.
2) Index Scheme:
Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the
NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The
percentage of each stock to the total holding will be identical to the stocks index weightage. And hence,
the returns from such schemes would be more or less equivalent to those of the Index.
3) Sector Specific Schemes:

29. 21
These are the funds/schemes which invest in the securities of only those sectors or industries as specified
in the offer documents. e.g., Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG),
Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective
sectors/industries. While these funds may give higher returns, they are riskier compared to diversified
funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an
appropriate time.
1.3.4 MUTUAL FUNDS DISTRIBUTION CHANNELS
Investors have varied investment objectives and can be classified as aggressive, moderate and
conservative, depending on their risk profile. For each of these categories, asset management companies
(AMCs) devise different types of fund schemes, and it is important for investors to buy those that match
their investment goals.
Funds are bought and sold through distribution channels, which play a significant role in explaining to
the investors the various schemes available, their investment style, costs andexpenses. There are two
types of distribution channels-direct and indirect. In case of the former, the investors buy units directly
from the fund AMC, whereas indirect channels include the involvement of agents. Let us consider these
distribution channels in detail.
1. Direct channel
This is good for investors who do not need the advisory services of agents and are well-versed with the
fundamentals of the fund industry. The channel provides the benefit of low cost, which significantly
enhances the returns in the long run.
2. Indirect channel
This channel is widely prevalent in the fund industry. It involves the use of agents, who act as
intermediaries between the fund and the investor. These agents are not exclusive for mutual funds and
can deal in multiple financial instruments. They have an in-depth knowledge about thefunctioning of
financial instruments and are in a position to act as financial advisers. Here are some of the players in
the indirect distribution channels.
1) Independent financial advisers (IFA):

30. 22
These are individuals trained by AMCs for selling their products. Some IFAs are professionally qualified
CFPs (certified financial planners). They help investors in choosing the right fund schemes and assist
them in financial planning. IFAs manage their costs through the commissions that they earn by selling
funds.
2) Organized distributors:
They are the backbone of the indirect
distribution channel. They have the infrastructure and resources for managing administrative paperwork,
purchases and redemptions. These distributors cater to the diverse nature of the investor community and
the
vast geographic spread of the country by establishing offices in rural and semi urban locations.
3) Banks:
They use their network to sell mutual funds. Their existing customer base serves as a captive prospective
investor base for marketing funds. Banks also handle wealth management fortheir clients and manage
portfolios where mutual funds are one of the asset classes. The playersin the indirect channel assist
investors in buying and redeeming fund units.
They try to understand the risk profile of investors and suggest fund schemes that best suits their
objectives. The indirect channel should be preferred over the direct channel when investors want to seek
expert advice on the risk-return mix or need help in understanding the features of the financial securities
in which the fund invests as well as other important attributes of mutual funds, such as benchmarking
and tax treatment.
1.3.5 Marketing Strategies for Mutual Funds
1. Business Accounts
The most common sales and marketing strategies for mutual funds is to sign-up companies as a preferred
option for their retirement plans. This provides a simple way tosign-up numerous accounts with one
master contract. To market to these firms, sales people target human resource professionals. Marketing
occurs through traditional business-to-business marketing techniques including conferences, niche
advertising and professional organizations. For business accounts, fund representatives will stress ease
ofuse and compatibility with the company's present systems.

31. 23
2. Consumer Marketing
Consumer marketing of mutual funds is similar to the way other financial products are sold. Marketers
emphasize safety, reliability and performance. In addition, they may provide information on their
diversity of choices, ease of use and low costs. Marketers try to access all segments of the population.
They use broad marketing platforms such astelevision, newspapers and the internet. Marketers especially
focus on financially oriented media such as CNBC television and Business week magazine.
3. Performance
Mutual funds must be very careful about how they market their performance, as this is heavily regulated.
Mutual funds must market their short, medium and long-term average returns to give the prospective
investor a good idea of the actual performance. For example, most funds did very well during the housing
boom. However, if the bear marketthat followed is included, performance looks much more average.
Funds may also have had different managers with different performance records working on the same
funds, making it hard to judge them.
1.3.6 What is Systemic Investment Planning?
Systematic Investment Plan is commonly known as an SIP. In India, SIP plans allow you to invest a
fixed amount in your favorite mutual fund schemes periodically to grow your SIP premium through
compounding interest.
So, here’s what is SIP in a nutshell: It is a smart, or rather hassle-free, mode of investing money in
mutual funds, where you are allowed to contribute a pre-determined sum of money on a weekly,
monthly, or quarterly basis.
SIP mutual funds are flexible in nature; thus, investors can choose to decrease or increase the amount
of investment, or stop investing in the plan whenever they want. SIP is the safest and best choice of
investment for beginners and for those who are not well-versed in the mechanism of the financial
market.
There is a popular saying – drop by drop fills the bucket. A SIP also works on the same principal. It
allows you to invest a fixed amount, which can be as small as Rs 500, on a regular interval in a mutual

32. 24
fund. In fact, you can take a call on how regularly you want to invest – it can be weekly, monthly,
quarterly or even annual. And over a period of time, you will be able to create a great amount of wealth.
Let’s look at this with an example which involves taking a loan. We apply for a loan when we are
planning to buy a home/car, funding a wedding or even as simple as going for a trip etc. This is mainly
because we are unable to save a lump sum amount to make these purchases/payments. But when we take
a loan for making these purchases, we can easily repay it in form of a monthly EMI, which is a reasonably
small amount. But, along with the principal amount, we also have to pay an interest amount for the loan.
Hence, the main difference between a loan and a SIP is, for a taking loan, you have to pay an interest
amount; meanwhile, for investing in SIP, you can generate a high return to save a large amount.
1.3.6.1 Type of SIP
Systematic Investment Plans (SIP) are of 4 types and a short description of each of these is given
below:
1) Top-up SIP: This SIP type allows you to increase your investment amount periodically. This
also means that you can make the most of your SIP mutual fund investment by contributing to
well-performing mutual fund schemes at certain intervals. You can increase your investment
amount when your income increases.
2) Flexible SIP: This SIP type allows you to increase as well as decrease your investment amount
as per the cash flow you have. This way you can skip one or more payments when you face cash
crunch due to any reason. Likewise, you can make a bigger contribution to your SIP account
when you receive a bonus or an additional income.
3) Perpetual SIP: SIP investments are, generally, for a fixed period of 1 year, 3 years, or 5 years.
A SIP mutual fund is referred to as Perpetual SIP if you do not mention the end date in the
mandate date. This SIP types allows you to redeem your funds whenever required or, particularly,
when you have achieved your financial goals. However, it is advisable to set an end date for your
SIP contribution so as to build a disciplined, goal-based investment.

33. 25
4) Trigger SIP: This SIP type is ideal for investors with limited knowledge of the financial market.
You are allowed to set NAV, index level, SIP start date or event, etc. Since this SIP mutual fund
type encourages speculation, it is not desirable or much recommended.
1.3.7 What is SIP Mutual Funds?
A Systematic Investment Plan (SIP), commonly called SIP, is a method of investment offered by
mutual funds to its investors for disciplinary investment. SIP Mutual Fund facility allows its investor
to make investment of a fixed sum at pre-defined and regular intervals in the chosen mutual fund
plan.
A simple definition of what is SIP mutual fund is that it is a professionally managed fund, which
pools investment from a large number of investors to invest in the capital asset. In such mutual funds,
the capital collected by different investors is invested in purchasing companies’ stocks, shares or
bonds. The professional fund managers collectively manage the mutual fund investment with an
objective to create the highest possible returns on investment. SIP aids in growing money via
compounding interest, ensuring higher rates of returns on maturity.
Let’s take a look at what is a SIP mutual fund in a gist.
1) In mutual funds, money is pooled from various investors and is invested in the different market-
linked securities.
2) All mutual funds are regulated by Securities Exchange and Board of India (SEBI).
3) It provides access to large portfolios.
4) SIP Mutual funds offer higher returns as compared to the conventional investing option.
5) It provides an option to invest in a small amount.
Investing in SIP mutual fund is one of the most lucrative ways for wealth creation. However, it is
very important to consider the expertise of the fund manager while choosing the fund.
1.3.7.1 How Does a SIP Work?

34. 26
Through SIPs you can invest in any kind of mutual fund, which helps you create wealth over the long
term. Here, generating returns and creating wealth are not the same thing. Investing in fixed deposits
only helps you in generating returns. But if you want to create wealth, you can invest in SIP mutual
funds. And this amount is automatically deducted from your bank account at the interval at which you
choose to invest.
Let’s suppose, you invest a certain amount in a monthly SIP and have automated your deduction date as
5th of every month. So, this amount will be automatically deducted from your bank account on the 5th
of every month to be invested on the selected mutual fund.
1.3.7.2 Benefits of SIP investing
There are three main benefits of SIPs Investing such as;
1. Rupee Cost Averaging:
Whenever you invest in a SIP, your cost gets averaged out. As you see, the markets move in cycle.
Sometimes it is bearish, then it turns bullish and then again, bearish and then bullish. This is how the
cycle moves.
So, if you are investing a fixed amount on a regular basis in a SIP, in the time when the markets are
bearish, you will be allotted more units for your investments. Meanwhile when the markets go up, the
number of units that will be allotted for your investments will be much lesser. That is, when the markets
are down you are buying more units and when the markets are at the peak, you are buying less. This way
your cost gets averaged out.
Now, when the market cycle changes, for example from bearish to bullish, since your cost has been
averaged out, this becomes an opportunity to earn great returns. Eventually, it will help you to create
great wealth on your investments. So, if you are investing in a SIP, you do not need to think about the
ups and downs of the market cycle, as the cost automatically gets averaged out.
2. Power of Compounding:
Warren Buffet started investing at the age of 14, but his money started to grow exponentially when he
was 50. Power of compounding is often referred to as the eighth wonder of the world. And here, you
must be thinking, what this power of compounding actually means?
Under the power of compounding, you not only get returns on the money which has been invested but
also on the gains. And this way you are able to create a great amount of wealth over a period of time.

35. 27
Let’s suppose, in one year, you have invested Rs 1 lakh in a mutual fund. Its one-year return is 15 percent.
So, by the end of the year, this amount will be Rs 1 lakh 15 thousand. What power of compounding does
is, in the next year (assuming the rate of return if 15 percent), it will provide the return on Rs 1 lakh 15
thousand, instead of your original investment of Rs 1 lakh. So, this way, in the second year, you will be
getting a return on money that you have invested, and also on the gain from the previous year. By the
end of the second year, the amount would be Rs 1 lakh 32 thousand
3. Disciplined investing:
Investing through SIPs brings a discipline in your investment approach. Ace investors often recommend
that your day-to-day financial activities should be fashioned around a simple formula of Earning –
Savings = Expenses.
Let’s suppose you earn Rs X every month, and if you are unable to control your spending, within a given
budget, it might happen that at the end of the month you are left with nothing to save.
But, if you invest in SIP, you will be compelled to follow a disciplined investment regime. If you are
aware of what your expenses are, you will make a habit of spending within the budget. Within that, first
you will save and then spend. If you fashion your financial activities around this, i.e. first save and then
spend, you will never face any financial hardship as you are following a disciplined investment approach.
Maintaining regularity in your investment approach helps you achieve your financial goal or financial
objectives.
1.3.7.3 Seven Mistakes to Avoid when Investing in SIP
Generally, investors pick funds based on their risk profile, investment tenure, and returns offered in
the past 5 to 10 years. Although these aspects must be checked, there are several other aspects that
need to be assessed as well, in order to avoid the loss of the capital in a market crash.
The following are 7 common mistakes investors make when investing in SIP:
1) Choose the Wrong Fund:
This is the first step to start investing in mutual funds, as you need to choose one or more funds to
invest your capital in. Before you make the payment, you must know your investment goal, expected
returns, and risk appetite. It is advisable to conduct a thorough research and analysis before starting
an investment. If you have long-term goals, choose the wrong fund might ruin your financial goals.
2) High Investment Amount:

36. 28
Since SIPs allow you to invest small amounts of money systematically in mutual funds, make sure
you do not choose an amount of money to invest, which you may not be able to continue investing
for the rest of the months of the year. What you need to do is choose an amount that you can easily
invest every month so as to reap the returns that you had aimed at initially.
3) Small Investors’ Thing:
There is a common misconception associated with SIPs that it is only small investors’ thing, as they
cannot contribute lump sum through SIP. Well, this indeed is not the case. For example, if you had
planned to invest Rs. 5,000 per month, SIP is still your thing because you can invest Rs. 50,000 as
a lump sum in SIP. This is mainly because of the principles of SIP – rupee-cost averaging, time
value of money invested, compounding.
4) Short-term Investment:
This is another common mistake made by many SIP investors. The value of an investment is subject
to the time is remains invested and not the investment amount. In other words, the longer the
investment term, the higher will be the investment value.
5) Set Unrealistic Goals:
Immature investors are often seen setting unrealistic investment goals and repenting later. It is
advisable not to expect phenomenal returns from your existing investment. Instead, you should
expect average returns and continue with your regular investment process. Needless to say, expecting
50% to 100% returns instead of 10% to 20% is unrealistic.
6) Choose Dividend over Growth:
Many investors choose the dividend (withdrawal from the corpus) option over the growth (no
dividends are paid) option when they invest in mutual funds through SIP, which runs on the principle
of compounding – interest on the interest. On the other hand, the principle of interest calculation in
case of the dividend is simple interest, which gives considerably low returns. You can anytime switch
between the dividend and growth options to grow your corpus and achieve your financial goal.
7) Not to Boost Your SIP:
There are times when we go through financially lean and high times. When you are financially high,
you have enough funds to contribute a lump sum to your SIP account. There are funds that allow
you to add a lump sum to your SIP account under the same portfolio and boost your investment, as
the combination of regular funds and a lump sum is bounds to get you more return than a regular
SIP.

37. 29
1.3.8 MUTUAL FUND COMPANIES IN INDIA:
The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987
marked the existence of only one mutual fund company in India with Rs. 67bn assets undermanagement
(AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the endof the 80s decade,
few other mutual fund companies in India took their position in mutual fund market.
The new entries of mutual fund companies in India were SBI Mutual Fund, Canara bank Mutual Fund,
Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund.
The succeeding decade showed a new horizon in Indian mutual fund industry. By the endof 1993, the
total AUM of the industry was Rs. 470.04 bn. The private sector funds started penetrating the fund
families. In the same year the first Mutual Fund Regulations came into existence with re-registering all
mutual funds except UTI. The regulations were further given a revised shape in 1996.
The total assets rose up to Rs. 1218.05 bn. Today there are 47 mutual fund companies in India.
Major Mutual Fund Companies in India
1. ABN AMRO Mutual Funds
2. Birla Sun Life Mutual Funds
3. Bank of Baroda Mutual Funds
4. HDFC Mutual Funds
5. HSBC Mutual Funds
6. ING Vysya Mutual Funds
7. Prudential ICICI Mutual Funds
8. State Bank of India Mutual Funds
9. Tata Mutual Funds
10. Unit Trust of India Mutual Funds
11. Reliance Mutual Funds
12. Standard Chartered Mutual funds
13. Franklin Templeton Mutual Fund
14. Morgan Stanley Mutual Funds
15. Escorts Mutual Funds
16. Alliance Capital Mutual Funds
17. Benchmark Mutual Funds
18. Canbank Mutual Funds
19. Chola Mutual Funds
20. LIC Mutual Funds

38. 30
1. RELIANCE MUTUAL FUNDS
Reliance Capital, a constituent of MSCI Global Small Cap Index, is a part of the Reliance Group.It is
amongst India’s leading and most valuable financial services companies in the private sector. Reliance
Capital has interests in asset management and mutual funds; life, general and health insurance;
commercial & home finance; equities and commodities broking; wealth management services;
distribution of financial products; asset reconstruction; proprietary investments and other activities in
financial services.
Reliance Mutual Fund is amongst the top Mutual Funds in India with over six million investor folios.
Reliance Nippon Life Insurance and Reliance General Insurance are amongst the leading private sector
insurers in India. Reliance Securities is one of the India’s leading retail broking houses and distributors
of financial products and services. Reliance Money and Reliance Home Finance are one of the most
rapidly expanding businesses in the lending space. Total assets of Rs.13225.33 crore as on July 30, 2022
0
50000
100000
150000
200000
250000
Market Cap (cr.)
Market Capitalization
1 Rilance Mutual Fund 2 HDFC Mutual Funds
3 Birla Sun Life Mutual Funds 4 ICICI Prudential Mutual Funds
5 Mahindra Mutual Funds 6 UTI Mutual Funds
7 LIC Mutual Funds 8 SBI Mutual Funds
9 IDFC Mutual Funds 10 Franklink templeton Mutual Funds
11 DSP Black Mutual Funds 12 TATA Mutual Fund

39. 31
ABOUT RELIANCE GROUP
Founded by the late Shri Dhirubhai Ambani (1932-2002), the Reliance Group has a leading presence
across telecommunications, power, financial services, infrastructure, media and entertainment, and
health care.
The Reliance Group strongly believes that it has a pivotal role to play in shaping the destiny of our great
nation. Through its various consumer-facing businesses, the Group provides a robust platform to every
Indian to realize his/ her potential through its state-of-the-art products and services.
Through different companies, the Group positively influences the lives of over 250 million customers
i.e., 1 in every 5 aspiring Indians across more than 25,000 cities and towns and 400,000 villages. The
Group enjoys the unparalleled trust, faith and confidence of its customers, and is one of the largest
employers in the country with a young, highly-trained and motivated workforce, with an average age of
35 years.
The Reliance Group is proud to have a family of over 7 million Shareholders the largest in the World
The Reliance Group has created Assets of over Rs. 3,50,000 crores since its inceptionThe Reliance Group
has a Net Worth of over Rs. 90,000 crores
The Reliance Group has an Operating Profit of over Rs. 20,000 crores.
ANIL DHIRUBHAI AMBANICHAIRMAN - RELIANCE GROUP
Anil Dhirubai Ambani, born on 4th June, 1959, in Mumbai.
He is the younger son of the visionary entrepreneur Shri Dhirubhai Ambani and lives with his mother
Kokilaben Dhirubhai Ambani in Mumbai.
Graduated (B.Sc. in Science) from K.C. College, Mumbai University and MBA at Wharton, University
of Pennsylvania
He is married to former actress - Tina Munim and has two sons - Jai Anmol and Jai Anshu
2. ICICI
ICICI Bank Limited (Industrial Credit and Investment Corporation of India) is an Indian
multinational banking and financial services company headquarteredin Mumbai, Maharashtra
with its registered office in Vadodara, Gujarat. As of 2018, ICICI Bank is the second largest bank in

40. 32
India in terms of assets and market capitalization. It offers a wide range of banking products and financial
services for corporate and retail customers through a variety of delivery channels and specialized
subsidiaries in the areas of investment banking, life, non-life insurance, venture capital and asset
management. The bank currently has anetwork of 4867 branches and 14367 ATMs across India and has
a presence in 17 countries including India.
ICICI Bank is one of the Big Four banks of India. The bank has subsidiaries in the United Kingdom and
Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Oman, Dubai
International Finance Centre, China and South Africa; and representative offices in United Arab
Emirates, Bangladesh, Malaysia and Indonesia. The company's UKsubsidiary has also established
branches in Belgium and Germany.
HISTORY
ICICI Bank was established by the Industrial Credit and Investment Corporation of India (ICICI), an
Indian financial institution, as a wholly owned subsidiary in 1994. The parentcompany was formed in
1955 as a joint-venture of the World Bank, India's public-sector banks and public-sector insurance
companies to provide project financing to Indian industry.
ICICI Bank launched internet banking operations in 1998.
ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering of shares in
India in 1998, followed by an equity offering in the form of American Depositary Receipt on the NYSE
in 2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock deal in 2001 and sold
additional stakes to institutional investors during 2001-02.
In the 1990s, ICICI transformed its business from a development financial institution offering only
project finance to a diversified financial services group, offering a wide variety of products and services,
both directly and through a number of subsidiaries and affiliates like ICICI Bank.In 1999, ICICI
become the first Indian company and the first bank or financial institution from non-Japan Asia to be
listed on the NYSE.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICIand
two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI
Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and

41. 33
ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002 and by the
High Court of Judicature at Mumbai and the ReserveBank of India in April 2002.
In 2016, following the 2016 financial crisis, customers rushed to ICICI ATMs and branches in some
locations due to rumors of an adverse financial position of ICICI Bank. The Reserve Bankof India issued
a clarification on the financial strength of ICICI Bank to dispel the rumors.
3. SBI MUTUAL FUND
SBI Mutual Fund is a bank sponsored fund house with its corporate headquarters in Mumbai, India. It is
a joint venture between the State Bank of India, an Indian multinational, Public Sectorbanking and
financial services company and Amundi, a European asset management company.
HISTORY
The mutual fund industry in India originally began in 1963 with the Unit Trust of India (UTI) asa
Government of India and the Reserve Bank of India initiative. Launched in 1987, SBI Mutual Fund
became the first non-UTI mutual fund in India. In July 2004, State Bank of India decided todivest 37 per
cent of its holding in its mutual fund arm, SBI Funds Management Pvt Ltd, to society General Asset
Management, for an amount in excess of $35 million. Post-divestment, State Bank of India's stake in the
mutual fund arm came down to 67%. In May 2011, Amundi picked up 37% stake in SBI Funds
management, that was held by society General Asset Management, as part of a global move to merge its
asset management business with Credit Agriculture.
Key Milestones
1) 1987 - Establishment of SBI Mutual Fund
2) 1991 - Launch of SBI Magnum Equity Fund
3) 1999 - Launch of sector funds, India's first contra fund: SBI Contra Fund
4) 2004 - Joint Venture with society General Asset Management
5) 2006 - Became the first bank-sponsored fund to launch an Offshore fund SBI Resurgent India
Opportunities Fund
6) 2011 - Stake Transfer from SGAM to Amundi Asser Management
7) 2013 - Acquisition of Daiwa Mutual Fund, part of the Tokyo-based Daiwa Securities Group
8) 2013 - Launch of SBI Fund Guru, an investor education initiative

42. 34
9) 2015 – Employee’s Provident Fund Organization decided to invest in the equity marketfor the first
time by investing Rs. 5,000 crore in the Nifty and Sensex ETFs (ExchangeTraded Fund) of SBI
Mutual Fund
10) 2018 - First AMC in India to launch an Environment, Social and Governance (ESG) fund viz
Magnum Equity ESG Fund
11) 2018 - Signatory to the United Nations Principles for Responsible Investment (UN- PRI)
4. IDFC
Headquartered in Mumbai, IDFC Bank is a universal bank, offering financial solutions through its
nationwide branches, internet and mobile. IDFC Bank is one of the leading banks in India thatseeks to
set a new standard in customer experience. IDFC Bank offers basic services in Indialike Savings
Accounts, NRI Accounts, fixed Deposits, Home Loans, Personal Loans among others, using technology
and a service-oriented approach, to make banking simple and accessible, anytime and from anywhere
IDFC was incorporated on 30 January 1997 with its registered office in Chennai and started operations
on 9 June 1997. In 1998 the company registered with the Reserve Bank of India (RBI) as a non-banking
financial company and in 1999 it formally became a Public Financial Institution.

43. CHAPTER 2
REVIEW OF LITERATURE

44. 35
REVIEW OF LITERATURE
A mutual fund is a professionally managed investment fund that pools money from many investors
to purchase securities. These investors may be retail or institutional in nature. Mutual funds have
advantages and disadvantages compared to direct investing in individual securities. The primary
advantages of mutual funds are that they provide economies of scale, a higher level of diversification,
they provide liquidity, and they are managed by professional investors. On the negative side, investors
in a mutual fund must pay various fees and expenses. Literature on mutual fund performance
evaluation is enormous. A few research studies that have influenced the preparation of this paper
substantially are discussed in this section.
Govindappa Mania, Dr. Gajraj Singh Ahirwar (5 April 2021 )
The Indian mutual fund's industry, which started its excursion with the foundation of the Unit Trust of
India in 1964, has seen unobtrusive development lately. There has been developing both regarding
AUM just as the assortment of items advertised. As on December 2015, the investors in India have a
choice to look over in excess of 1,000 of mutual funds plans spread across 44 fund houses with a
complete AUM estimation of '13.46 lakh crores. The passage of unfamiliar players has prompted the
presentation of an assortment of inventive items to suit the developing necessities of Indian investors.
The Indian mutual fund's industry was discovered to be overwhelmed by institutional investors
Prabakaran and Jayabal (2018)
evaluated the performance of mutual fund schemes. The study conducted is on a sample of 23 schemes
which were chosen basing on the priority given by the respondents in Dharmapuri district in a survey
and covers the study from April 2002 to March 2015. The study used the methodology of Sharpe and
Jensen for the performance evaluation of mutual funds. The results of the study found that 13
schemes out of 23 schemes selected had superior performance than the benchmark portfolio in terms
of Sharpe ratio, 13 schemes had superior performance of Treynorratioand14schemeshadsuperior
performance according to Jensen measure.

45. 36
Sondhi and Jain (2018)
examined the market risk and investment performanceof equity mutual funds in India. The study
used a sample of 36 equity fund for a period of 3 years. The study examined whether high beta of
funds have actually produced high returns over the study period. The study also examined that open-
ended or close ended categories, size of fund and the ownership pattern significantly affect risk-
adjusted investment performance of equity fund. The results of the study confirmed with the
empirical evidence produced by fama (1992) that high beta funds (market risks) may not necessarily
produced high returns. The study revealed that the category, size and ownership have been
significantly determined the performance of mutual funds during the study period.
K. Pendaraki et al.
Studied construction of mutual fund portfolios, developed a multi-criteria methodology and applied
it to the Greek market of equity mutual funds. The methodology is Primary structures of mutual funds
include open-end funds, unit investment trusts, and closed- end funds. Exchange-traded funds (ETFs)
are open-end funds or unit investment trusts that trade on an exchange. Mutual funds are also
classified by their principal investments as money market funds, bond or fixed income funds, stock
or equity funds, hybrid funds or other. Funds may also be categorized as index funds, which are
passively managed funds that match the performance ofan index, or actively managed funds. Hedge
funds are not mutual funds; hedge funds cannot be sold to the general public and are subject to
different government regulations.
Debasish (2017)
studied the performance of selected schemes of mutual funds based on risk and return models and
measures. The study covered the period from April 1996 to March 2005 (nine years). The study
revealed that Franklin Templeton and UTI were the best performers and Birla Sun life, HDFC and
LIC mutual funds showed poor performance.
Dwivedi (2016)
The paper plans to consider the impact of 2008 financial emergency on mutual fund investment
market. It uncovered that there are essentially five free causes which influences investors choice with

46. 37
respect to continuation/discontinuance of mutual fund investment, for example, investors' pay, time
viewpoint of investment, risk demeanor of investors, past returns and level and wellspring of data.
Gandhi et al (2016)
The investigation discovered Canara Robeco Equity Tax saver development plans as safer, among
other duty saving plans. The tax reductions offered by various plans draw in numerous investors
towards mutual fund industry. Annuity conspires likewise pull in as it offers charge concessions to
more established individuals. The above plans are additionally found to have high data Ratio which
shows the high productivity of those fund administrators
Dodiya (2015)
The scientist contemplated the different segment factors influencing investment choice in mutual
fund area. The investigation was done in Ahmedabad city of Gujarat. The examination uncovers that
the re-visitation of be a first concern while mutual fund investment and adaptability were having least
need. Furthermore, straightforwardness and reasonableness additionally discovered successful in
investment. Other than age likewise matters for impacting investors on the grounds that the
examination discovered most of investors to be in age until 45 years while over 45 years age
individuals are less mutual fund investors. It shows that as an individual develops more seasoned,
their risk taking mentality decreases and adolescents are more inclined to risk with the impetus of a
better yield. Pay level is additionally significant determinant to affect mutual fund area as the
investigation reports that most extreme investors hold fine pay level while low-pay level people fears
to enter to mutual fund risk because of their less discretionary cash flow.
Chaudhury et al (2014)
The paper read the investors' inclination for mutual funds. Private representatives and Government
workers are discovered to be intrigued while the most un-intrigued investors are from the horticultural
area. Financial balances fund to have mastery over mutual fund investment. Exceptional yield with
okay is the overall supposition of each investor. Yet, trust and certainty over fund supervisor, fund
plan, and resource management organizations additionally influence investment choice. In this sense,
UTI, SBI, ICICI, and Reliance offered mutual funds are liked by the majority of the investors. Value
based funds hold greatest inclination followed by adjusted funds and afterward obligation funds.
Monetary counselors found to have a unique job impacting investors. For the explanation, the

47. 38
specialists educate for the legitimate proper preparing with respect to Individual monetary counsels.
It is likewise recommended to focus on completely fixed salaried individuals as they can put
resources into SIP on customary premise.
Afshan (2013)
The scientist examined the exhibition of mutual fund profit and development plan under the fair class
for the year 2009 - 2012. The investigation found the over execution of funds and even ideal
proficiency of a portion of the plans. Notwithstanding, it has been likewise discovered that a few
funds, which are 100% proficient under BCC (Banker, Chances, Cooper) model are not same under
CCR (Charmes, Cooper, Rhodes) model and SBM (Slacks-Based Measure) model. This shows the
strength of CCR and SBM models for estimating specialized proficiency of a fund. The paper in by
and large demonstrates expanded proficiency for profit and development plan funds after some time.
Prof. Kalpesh P Prajapati and Prof. Mahesh K Patel (Jul 2012)
“Study On Mutual Fund Schemes Of Indian Companies.” In this paper the performance evaluation
of Indian mutual funds is carried out through relative performance index, risk-return analysis,
Treynor's ratio, Sharp's ratio, Sharp's measure, Jensen's measure, and Fama's measure. The data used
is daily closing NAVs. The source of data is website of Association of Mutual Funds in India (AMFI).
The study period is 1st January 2007 to 31st December, 2011. The results of performance measures
suggest that most of the mutual fund have given positive return during 2007 to 2011
Deepak Agrawal (2011)
In the study “Measuring Performance of Indian MutualFunds” touched the development of
Indian capital market and deregulations of the economy in 1992. Since the development of
the Indian Capital Market and deregulations of the economy in 1992 there have been structural
changes in both primary and secondary markets. Mutual funds are key contributors to the
globalization of financial markets and one of the main sources of capital flows toemerging
economies.
Lakshmi N (2010)
In the research paper entitled “performance of the Indian MFindustry a study with special
reference to growth schemes” found out that MF serve those individuals including to invest

48. 39
but lack the newline technical investment expertise. Funds mobilized by the industry had
grown new here by 57 percent and AUM by 14 percent during 1997-2006. Analysis of
performanceof newline seven schemes should that, all the sample schemes outperformed the
newline market in terms of absolute returns without adequate returns to over total newline
risk. All the three risk adjective performance measures showed newline underperformance
of sample schemes. Investors and fund Managers agreed newline that investing in MF were
less risky.
Soumya Guha Deb, Ashok Banerjee and B.B. Chakrabarti (2009)
studied “Return Based Style Analysis (RBSA) to evaluate equity mutual funds in India”
using quadratic optimization of an asset class factor model proposed by William Sharpe and
analysis of the relative performance of thefunds with respect to their style benchmarks. The
study found that the mutual funds generated positive monthly returns on the average, during the
study period of January 2000 through June 2005. The ELSS funds lagged theGrowth funds or
all funds taken together, with respect to returns generated.
Ajay Khorana, Peter Tufano and Lei Wedgein (2007)
in the studynamed “Board structure, mergers, and shareholders wealth. A study of the
mutual fund industry” studied mutual fund mergers between 1999 and 2001 to understand the
role and effectiveness of fund boards. The study found some fund mergers typically across
family mergers benefit target shareholders but are costly to target fund directors.

49. CHAPTER-3
RESEARCH METHODOLO

50. 40
3.1 Meaning of Research
A survey was conducted regarding the view of mutual funds among various individuals from
different sections of society. Students, businessmen, professionals, service people, etc.
participated in the survey and gave their honest and true views regarding all the important
expects of the Indian mutualfund industry. They answered question regarding their investment
preferences,attractive features of mutual fund, returns, risks, etc. The responses are shownwith the
help of graphs and statistics along with interpretation.
This Report is based on primary as well as secondary data, however primary data collection was
given more important since it is overhearing factor in attitude studies.
One of the most important users of Research Methodology is that it helps in identifying the problem,
collecting, analyzing the required information or data and providing an alternative solution to the
problem.
This survey was conducted online with the help of surveymonkey.com. The survey was
forwarded to different individuals through WhatsApp, messages andemails. The title, purpose,
use of this survey was clearly mentioned to all the respondents before taking this survey. The
purpose of this survey is only for educational purpose and research based. Understanding the
mindset of people regarding mutual fund investment was the goal of this survey.
3.2 OBJECTIVES OF THE STUDY
1. To study the Mutual Fund Industry in India
2. To compare the performance of various 5 star rated equity diversified mutual fundschemes over a
period of four years.
3. To compare the schemes with the returns of benchmark for the past four years.
4. To identify the level of risk involved in investing in various equity diversifiedmutual fund
schemes.
3.3 Sample Size:
100 respondents

51. 41
3.4 SCOPE OF THE STUDY
A big boom has been witnessed in mutual fund industry in recent times. A large Number of new players
have entered the market & trying to gain market share in this rapidly improving market. The study will
help to know the preferences of the customers, which company portfolio, mode ofinvestment, option for
getting return & so on they prefer
This paper also provides future of mutual funds industry information as well as awareness levelmutual
funds. Also this project report of the mutual funds gives an outlook to management as tohow mutual
funds are performing in the market situation as a result what may be the future of this industry.
4.5Technique of research
METHOD Here in this research project we have used data which were published on the websites of
Bombay stock exchange, Money control, value research online, National stock exchange and mutual
fund India
1. Data Collection Method: Survey Method
2. Sampling Method: The sample was collected through personal visits, formally and informal
talks and through filling up the Questionnaire prepared. The data has been analyzed by using
mathematical or statistical tools.
3. Data Collection Instrument: Structure Questionnaire
3.6 Research Design:
Descriptive Design
1. Preparation of the research design.
A research design is the arrangement of conditions for collection and analysis of data. Actually, it is the
blueprint of research project.
The research design used for this project is Exploratory Research and AnalyticalResearch.
2. Source of data.
Sound marketing research depends upon the existence of facts or directly related to problem studied. To
fulfill a foresaid objective of study, the information was gathered from secondary sources.

52. 42
1) Sampling Unit: Businessman, Government Servant, Retired Individuals, Students
2) Data Source: primary data
3) Sample Design: Data has been presented with the help of Bar Graph, Pie Chart, and Line Graph
etc.
4) Duration of the study: The study was carried out for a period of one months, from 1st
Aug to
30th
Aug 17.
3.7 LIMITATION OF THE STUDY
Mutual funds are the best available investment tools, but having limitations, too.
1) Lack of portfolio Customization
Some brokerages like IIFL, Motilal Oswal, offer Portfolio Management Schemes (PMS) to large
investors. In a PMS, the investor has better control over what securities are bought and sold on
his behalf. The investor can get acustomized portfolio in case of PMS. On the other hand, a unit-
holder in a mutual fund is just one of several thousand investors in a scheme. Once a unit-holder
has bought into the scheme, investment management is left to the fundmanager (within the broad
parameters of the investment objective). Thus, the unit-holder cannot influence what securities or
investments the scheme would invest into.
2) Choice Overload
Over 2000 mutual fund schemes offered by 47 mutual funds – along with multiple options within
them – makes it a difficult choice for investors. Greater dissemination of scheme information
through various media channels and availability of professional advisors in the market helps
investors to handle thisoverload.
3) No Control Over Costs
All the investor's money is pooled together in a scheme. Costs incurred for managing the scheme
are shared by all the Unit-holders in proportion to theirholding of Units in the scheme. Therefore,
an individual investor has no controlover the costs in a scheme. SEBI has, however, imposed certain

53. 43
limits on the expenses that can be charged to any scheme. These limits, vary with the size of assets
and the nature of the scheme is published by the mutual fundcompany.
4) Size
Some mutual funds are too big to find enough good investments. This is especially true of funds
that focus on small companies, given that there are strict rules about how much of a single
company a fund may own. If a mutual fund has Rs. 5000 crores to invest and is only able to
invest an average of Rs.50 crores in each, then it needs to find at least 100 such companies to
invest in; as a result, the fund might be forced to lower its standards when selecting companies
to invest in.
5) Dilution
Dilution is the direct result of diversification. Since investors have their money spread across
different assets the high returns earned does not make much ofa difference. Thus, when we talk
about diversification as one of the key benefits of MF, over-diversification could be one of the
majordisadvantages/limitation to investing in mutual funds.
6) Comparision
The Sample size is small as compare to the population, so it may not be true representative. Due
to limited time countryside survey was not possible. They were not willing to disclosed their
investment plans.
7) The possibility of respondents beings biased cannot be ruled out.

54. CHAPTER-4
DATA ANALYSIS AND
INTERPRETION

55. 44
4.1 Analyzing to according to Age.
Figure No. 1
Age of Investor %Age of Respondents
>=30 3%
31-35 12%
36-40 35%
41-45 22%
46-50 18%
>50 10%
Table No.1
Interpretation:
Here, it is been found that most of the investors i.e,35% of the investors who invest in
Mutual Fund lies in between the age group of 36-40, they are more reluctant as well as
experienced in this field of Mutual Fund.
Then the Second highest age group lies in between the age group of 41-45 (22%), they are
also aware of the benefits in investing in mutual fund.
The least interested group is the Youth Generations.
Age of
Investors
>=30 31-35 36-40
3%
41-45 46-50 >50
18% 10% 12%
22%
35%

56. 45
4.2 Analyzing according to qualification.
Figure No.2
Interpretation :
From this graph analyzing the Mutual Funds investment which qualification people most prefer to
invest their. Out of my survey of 100 people, 69% of the investors are Graduates and 15% are Post
Graduates, Under Graduates are 9% and Others are around 7%, which may include persons who have
passed their 10th
standard or 12th
standard invests in Mutual Funds.
80%
70%
60%
69%
30%
20%
9% 15%
7%
0%
Under Graduate Graduate Post Graduate Others
Qualification

57. 46
4.3 Analyzing according to Profession
Figure No.3
S.No. Sectors %Age of Response
1. Business 25%
2. Government 21%
3. Private 45%
4. Others 9%
Table No.3
Interpretation :
Here it is amazed to see that around 45% of the investment is been invested by the persons working
in Private sectors, according to them investing in Mutual Funds is more safer as well as more
gainer. Then we find that the businessmen of around 25%gives more preference in investing in
mutual funds, they think that investing in mutual fund is better than investing in shares as well as
Post office. Next we see that the persons working in Government sectors of around 21% only
invests in Mutual Fund.
Business
25%
Goverment
21%
Private
45%
Others
9%
Investor Profession
Business Goverment Private Others

58. 47
4.4Analyzing according to Monthly Family income
Figure No.4
S.No Income of Investor %Age of Response
1. <=10,000 0%
5. 10,001-20,000 18%
6. 20,001-30,000 39%
7. >30,000 43%
Table No.4
Interpretation :
Here from this data our survey is doing 100 sample , we find that investors of around 43%
with the monthly income of More than Rs. >30000 are the most likely to invest in Mutual
fund , 39% with monthly income of Rs. 20,001 to 30,000 than 18% of Rs.10,001 to 20,000
and any other income group. But in the data analysis we find the most people of 43% involved
in Mutual Fund Investment.
Income of Investors
<=1000010001-2000020001-30000
>30000
0%
18%
43%
39%

59. 48
4.5Analyzing data according to mode of investment
Figure No.5
Interpretation :
From this Survey it can be clearly stated from the above Figure that 82% of the investors
like to invest in Mutual Funds on Short term , as the investor feels that they are more
comfortable to save via SIP than the Long term.
While 18% of the investors find long term investment through SIP as very burdensome,
and they are more reluctant to save in Long term investment and good return gives.
Mode of Investment
Long Term
18%
ShortTerm
82%

60. 49
4.6 Analyzing data according to investors choice of investing in different
Mutual Fund Companies.
Figure No.6
S.No. Mutual Funds Company %Age of Respondents
1. Reliance 45%
2. SIB 17%
3. HDFC 15%
4. UTI 10%
5. Others 13%
Table No.6
Interpretation :
From this above Pie Chart it can be clearly stated that 45% , 17%of the people like to invest
in large cap companies where return is comparatively less but risk is low thus they invest in
Reliance, SBI respectively.15%, 10% of the people like to invest in Mutual Fund Companies
like HDFC, UTI, etc. where risk is slightly higher than the above two mentioned companies
as well as return is also slightly high 13% of the investors like to invest in the Small Cap’s
and Mid Cap’s companies
Others 13%
UTI 10%
Reliance
Reliance
45%
HDFC
15%
SBI
HDFC
UTI
Others
SBI 17%
Different Mutual Fund Company

61. 50
4.7 Various options for investing and savings.
Figure No.7
Answer choice Response in percentage No. of respondents
Saving account 19.12% 13
Fixed deposits 11.76% 8
Insurance 2.94% 2
Mutual funds 55.88% 38
Shares/debentures 8.82% 6
Others 1.47% 1
Table No.7
Interpretation:
As per the responses given by people it is seen that the most preferred investment option right now
is mutual funds. Though many people still prefer savings account and fixed deposits as their
investment options. As per the survey as many as 56% people preferred toinvest in mutual funds,
20% and 12% people preferred to invest in savings account and in fixed deposits. Only few people
chose insurance and shares/debentures as investmentoptions.
19.12% 11.76% 2.94% 55.88% 8.82% 1.47%
13
8
2
38
6
1
0.00%
500.00%
1000.00%
1500.00%
2000.00%
2500.00%
3000.00%
3500.00%
4000.00%
Avenue of Investment
Response in percentage No. of respondents

62. 51
4.8 Parameter Considering on the Mutual Fund Investment.
Figure No.8
Answer choice Response in percentage% No. of respondents
Liquidity 8.7 6
Low risk 31.88 22
High returns 28.99 20
Credit ratings 21.74 16
Company’s reputation 7.25 6
Others 1.45 1
Table No.8
Interpretation:
As per the survey, people were asked about their parameter while selecting their mutual fund
investment scheme. As many Indians still prefer low risk, it came true. As many as 32% responses
came in payout of low risk. Though there was a tough competition given by high return, which
shows that people are slowly preferring schemes with high returns with low risk. Nearly 30%
people responded in payout of high returns. Other parameters such as liquidity,credit ratings, and
company’s reputation got few responses like 9%, 22% and7% respectively.
0
5
10
15
20
25
30
35
Liquidity Low risk High returns Credit ratings Company’s
reputation
Others
Parameter of Mutual Fund Investing
Response in percentage% No. of respondents

63. 52
4.9 Most prefer Mutual Fund Scheme.
Figure No.9
Answer choice Response in % No. of respondents
Open ended 20.29 19
Close ended 10.14 10
Growth funds 37.68 35
Liquid funds 15.94 15
Regular income funds 15.94 12
Others 8 9
Table No.9
Interpretation:
People were asked about which type of schemes they prefer as per their investment horizon, risk
profile, financial goals. The responses were somewhat similar for all types of schemes but the
main scheme of growth funds was preferred by about 38% people. Other schemes such as open
ended schemes, liquid funds, regular income funds got the responses of 20%, 16%and 16%
respectively. Close ended schemes was least preferred with only 10% people selecting it.
0
5
10
15
20
25
30
35
40
open ended close ended Growth funds liquid funds regular income
funds
others
Scheem of Mutual Funds
Response in % No. of respondents

64. 53
4.10 Percentage of investor in Mutual Funds.
Figure No.10
Reponses % Age of Response
yes 32.14%
No 67.86%
Table No.10
Interpretation:
From the above data we can concluded that 32.14% have invested their money in Mutual Funds.
32.14%
67.86%
% Age of Rdsponse
yes No

65. 54
4.11 Analyzing data according to awareness about Mutual Fund.
Figure No.11
Interpretation :
From The total lot of 100 people, 96 people are actually aware of the fact of Mutual fund
and are regular investors of Mutual Funds.4 People were there who have just heard the name
or rather are just aware of the fact of existence of the word called Mutual Fund, but doesn’t
know anything else about Mutual Funds.
Responses
120
100
80
60
40
20 Yes
96
No
4

66. 55
4.12 Various factor persuade to invest Mutual Funds.
Figure No.12
Factors %Age of Respondents
Liquid and Flexibility 32%
Tax Benefits 40%
Less Investment Risk 8%
Safety 12%
Fixed And Regular Income 8%
Table No.12
Interpretation:
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Liquid and Flexibility Tax Benefits Less Investment Risk Safety Fixed And Regular
Income
%Age of Resondents

67. 56
From the above data we can conclude that 32% of people are influenced by liquidity and flexibility
factor, 40% by tax benefits, 8% by less investment risk and fixed and regular income both and 12%
by safety factors.
4.13 Dissatisfaction of Mutual Funds.
Figure No. 13
Factors %Age of Respondents
Irregular income 13%
Others alternatives 19%
Poor Services 6%
Risks 49%
Any other reason 13%
Table No. 13
Interpretation:
13%
19%
6%
49%
13%
0%
10%
20%
30%
40%
50%
60%
Irregular income Others alternatives Poor Services Risks Any other reason
%Age of Respondents

68. 57
From the above data we can conclude that 49% of people are not satisfied their investment in Mutual
funds because of risk involved. 19% because of other alternatives available, 6% because of poor
services and 13% because of irregular income and other reason.
4.14 Fear of risk involved in mutual funds.
Figure No.14
Responses %Age of Respondents
Very risky 65.33%
Risky 12%
Neutrals 3.30%
Low Risk 2.60%
No. Response 16.60%
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%
Very risky
Risky
Netural
Low Risk
No. Response
%Age of Respondents

69. 58
Table No.14
Interpretation:
From the above data we can concluded that 65.33% people find Mutual funds very Risky, 12% people
found it risky, 3.30 People found it neutrals, only 2.60% people found it Low risk while 16.60% give
no response.
4.15 Analyzing data according to from where they came to know about Mutual
fund.
Figure No.15
Factors %Age of Responses
Advertisement 36
Peer Group 14
Banks 8
Financial Adviser 42
Table No.15
Interpretation:
36%
14%
8%
42%
Responeses
Advertisement
Peer Group
Banks
Financial Adviser

70. 59
Here from the pie chart it can be clearly stated that around 42% of the investor came to know
the benefits of Mutual funds from Financial Advisors. According to the suggestion given by the
financial advisors, people use to choose Mutual Funds Scheme. Then secondly,36% and 14%
of the people use to know from advertisement and peer groups respectively. Lastly 8% of the
investor do invests after being intimated by the Banks about the benefits of Mutual Fund

71. CHAPTER- 5
FINDING, SUGGESTION AND
CONCLUSION