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Investor's perception about mutual funds

Investor's perception about mutual funds

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Investor's perception about mutual funds

  1. 1. A study on investor’s perception about mutual funds Introduction A mutual fund pools the money of people with certain investment goals. The money invested in various securities depending on the objectives of the mutual fund scheme & the profits (or losses) are distributed among the investors in proportion to their investment. Investments in securities are spread across a wide cross-section of industries & sectors. Diversification reduces the risk because the risk because all stock may not move in the same direction & in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of the mutual funds are known as unit holders. The profits or losses are distributed by the investors in proportion to their investment. A mutual fund is to be registered with securities exchange board of India (SEBI). A Mutual fund is a trust that pools the saving of a number of investors who share a common financial goal. A mutual fund is the ideal investment vehicle for today’s complex and modern financial scenario. Markets for equity shares, bonds and other fixed income instruments, real estate, derivatives and other assets have become mature and information driven.
  2. 2. Statement of the problem The Researcher is interested in finding out the major factors influencing the investor’s perception & its significant impact on the investment instruments. The researcher has identified the following as major factors namely, A) Liquidity, B) Rate of return’s C) Dividends D) Growth in Nav E) Consistency Objectives To study & analyze the impact of various demographic factors on investors attitude toward mutual fund.  To study the level of awareness of mutual funds.  To study the perception of investors towards mutual funds.  To study the factors considered by the investors & those which ultimate influence him while investing.  To determine the type of the mutual fund investor prefers the most.  To know the preference of portfolios.  To find out the most preferred channel  To find out what should do to mutual fund industry 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 of investment, option for getting return & so on they prefer.
  3. 3. This paper also provides future of mutual funds industry information as well as awareness level mutual funds. Also this project report of the mutual funds gives an outlook to management as to how mutual funds are performing in the market situation as a result what may be the future of this industry. Literature review A large number of studies on the growth and financial performance of Mutual funds have been carried out during the past, in the developed and developing countries. Brief reviews of the following research works reveal the wealth of contributions towards the performance evaluation of mutual fund, market timing and stock selection abilities of fund managers. Black et al. 2006 examined customer’s choice of financial services distribution channels. They showed that customer confidence, lifestyle Factors, motivations & emotional responses influence the customer’s choice while product, channel & organizational factors such as image & reputation are also significant. Sharpe (1966) introduced the measure to evaluate the mutual funds’ risk-adjusted performance. The measure was known as reward-to-variability ratio (Currently Sharpe Ratio). With the help of this ratio he evaluated the return of 34 open-end mutual funds in the period 1945-1963. The results showed the capital market was extremely efficient due to which majority of the sample had lower performance as compared to the Dow Jones Index. Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio performance (Jensen’s alpha) that estimates how much a manager’s forecasting ability contributes to fund’s returns. Asindicated by Statman (2000), the e SDAR of a fund portfolio is the excess return of the portfolioover the return of the
  4. 4. benchmark index, where the portfolio is leveraged to have the benchmark index’s standard deviation. Research Methodology This report is based on primary as well secondary data, however secondary data was given more importance. All the data required for this analytical study has been obtained mainly from sources. The secondary data has been collected through various journals & websites. Secondary data is based on information gleaned from studies previously performed by govt. agencies trade association & other organizations. Much kind of this information can be found in libraries or on the web, books & business newspapers. Limitation Apart from Details about mutual funds it has some limitations due to that all the details could not be published & displayed. It has been done on the basis of secondary sources like Journals, Websites & like resources It is very difficult to evaluate the accuracy of secondary data. Before using secondary data. The quality of internal secondary data may be exaggerated or biased Mismatch between purpose collected and purpose used. Desired information may be unavailable or out-of-date.
  5. 5. Industry Profile (Indian financial service sector) The Financial sector of the country has a great impact on the economy with financial services of companies responsible for the robust economic growth. There has to be a direct link between the regulatory institutions & the intermediary institutions while determining the financial system of the country. Financial services provided by finance companies include Insurance, Housing Finance, Mutual Funds, Credit Reporting, Debt Collection, and Stock Broking ETC. India’s Financial service sector is expected enjoy generally strong growth during coming Years, driven by rising personal incomes, corporate restructuring, financial sector growth is of more consumer oriented culture. The Bombay stock exchange & the national stock exchange are the two national stock exchange of India. Both are with fully electronic platforms approximately 9400 broking outfits participating. The National stock exchange includes top 50 companies & the Bombay stock exchange includes top 30 companies which are mostly based on Bombay. In Mutual fund there are many key players Viz. ICICI securities Pvt. Ltd. Share khan India bulls securities Ltd HDFC securities & Mutual funds SBI Mutual funds Reliance Mutual Fun
  6. 6. Conclusion The researcher carried out the study in this area with the objective of finding out various parameters that governs the investor’s perception towards mutual funds. The researcher had identify the following major parameters namely liquidity, rate of return & market share. The researcher is interested in finding out which mutual fund performs better. Follow me https://www.facebook.com/adityakashyap17

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