Project On Mutual Fund

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CHAPTER 1
INTRODUCTION

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INTRODUCTION TO MUTUAL FUND
Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of money is invested in accordance with a stated objective. The joint
ownership of the fund is thus “Mutual”, i.e. the fund belongs to all investors. The money thus
collected is then invested in capital market instruments such as shares, debentures and other
securities.
The income earned through these investments and the capital appreciations realized are shared
by its unit holders in proportion the number of units owned by them. Thus, a Mutual Fund is the
most suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost.
A Mutual Fund is an investment tool that allows small investors access to a well-diversified
portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss
of the fund. Units are issued and can be redeemed as needed.
The fund Net Asset value (NAV) is determined each day. Investments in securities are spread
across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification
reduces the risk because all stocks may not move in the same direction in the same proportion at
the same time. Mutual fund issues units to the investors in accordance with quantum of money
invested by them. Investors of mutual funds are known as unit holders.

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Concept of Mutual Fund
Many investors with common financial objectives pool their
money
Investors, on a proportionate basis, get mutual fund units for
the sum contributed to the pool
The money collected from investors is invested into shares,
debentures and other securities by the fund manager
The fund manager realizes gains or losses, and collects
dividend or interest income
Any capital gains or losses from such investments are passed
on to the investment in proportion of the number of units held
by them

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When an investor subscribes for the units of a mutual fund, he becomes part owner of
the assets of the fund in the same proportion as his contribution amount put up with the
corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual
fund shareholder or a unit holder.
Any change in the value of the investments made into capital market instruments (such
as shares, debentures etc.) is reflected in the Net Asset Value (NAV) of the scheme. NAV
is defined as the market value of the Mutual Fund scheme's assets net of its liabilities.
NAV of a scheme is calculated by dividing the market value of scheme's assets by the
total number of units issued to the investors.

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MUTUAL FUND AND PORTFOLIO MANAGEMNT
All About Mutual Funds
Before we understand what is mutual fund, it‟s very important to know the area in which
mutual funds works, the basic understanding of stocks and bonds.
Stocks: Stocks represent shares of ownership in a public company. Examples of public
companies include Reliance, ONGC and Infosys. Stocks are considered to be the most common
owned investment traded on the market.
Bonds: Bonds are basically the money which you lend to the government or a company, and in
return you can receive interest on your invested amount, which is back over predetermined
amounts of time. Bonds are considered to be the most common lending investment traded on the
market. There are many other types of investments other than stocks and bonds (including
annuities, real estate, and precious metals), but the majority of mutual funds invest in stocks
and/or bonds.
What Is Mutual Fund
A mutual fund is just the connecting bridge or a financial intermediary that allows a group of
investors to pool their money together with a predetermined investment objective. The mutual
fund will have a fund manager who is responsible for investing the gathered money into specific
securities (stocks or bonds). When you invest in a mutual fund, you are buying units or portions
of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund.
Mutual funds are considered as one of the best available investments as compare to others they
are very cost efficient and also easy to invest in, thus by pooling money together in a mutual
fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to
do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing
risk & maximizing returns.
Thus, a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a relatively
low cost.

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Type of Mutual Fund Schemes
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 liquidity.
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 of
the scheme on the stock exchanges where they are listed. In order to provide an exit route to the
investors, some close- ended funds give an option of selling back the units to the Mutual Fund
through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of
the two exit routes is provided to the investor.
Interval Schemes
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 NAVrelated prices.

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BY NATURE
1. Equity fund:
These funds invest a maximum part of their corpus into equities holdings. The structure of
the fund may vary different for different schemes and the fund manager‟s outlook on different
stocks. The Equity Funds are sub-classified depending upon their investment objective, as
follows:
 Diversified Equity Funds
 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the
risk- return matrix.
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:
 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 byGovernment.
 Income Funds: Invest a major portion into various debt instruments such as bonds, corporate
debentures and Government securities.

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 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 compared with other debt schemes.
 Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds
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.
 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 1 day 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 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 part
provide 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.

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BY INVESTMENT OBJECTIVE
 Growth Schemes: 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.
 Income Schemes: Income Schemes are also known as debt schemes. The aim of these schemes
is to provide regular 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.
 Balanced Schemes: 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).
 Money Market Schemes: Money Market Schemes aim to provide easy liquidity, preservation of
capital and moderate income. These schemes generally invest in safer, short-term instruments,
such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.
OTHER SCHEMES
 Tax Saving Schemes: Tax-saving schemes offer tax rebates to the investors under tax laws
prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any
Equity Linked Savings Scheme (ELSS) are eligible for rebate.

 Index Schemes: Index schemes attempt to replicate the performance of a particular indexsuch as
the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks

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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.
 Sector Specific Schemes: 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 more risky compared to diversified funds.
Investors need to keep a watch on the performance of those sectors/industries and must exit
at an appropriate time.
Types of returns
There are three ways, where the total returns provided by mutual funds can be enjoyed by
investors:
 Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all
income it receives over the year to fund owners in the form of a distribution.
 If the fund sells securities that have increased in price, the fund has a capital gain. Most funds
also pass on these gains to investors in a distribution.
 If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase
in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you
a choice either to receive a check for distributions or to reinvest the earnings and get more
shares.

 

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PORTFOLIO MANAGEMENT
People have different investment objective and risk appetite so to get the highest returns asset
allocation through active portfolio management is the key element. Asset allocation is a method
that determines how you divide your portfolio among different investment instruments and
provides you with the proper blend of various asset classes. It is based on the theory that the type
or class of security you own equity, debtor money market- is more important than the particular
security itself. In other words asset allocation is way to control risk in your portfolio.
Different asset class will react differently to market conditions like inflation, rising or falling
interest rates or a market segment coming into or falling out of favor. Asset allocation is different
from simple diversification. Suppose you diversify your equity portfolio by investing in five or
ten equity funds. You really have not done much to control risk in your portfolio if all these
funds come from only one particular segment of the market say large cap stocks or mid cap
stocks.
In case of an adverse reaction for that segment, all the funds will react similarly means they will
go down. If you build your portfolio with various top performing growth funds without really
bothering to analyze their portfolio allocation, you may end up with overexposure to a particular
segment. Another point you need to remember is that growth funds are highly correlated- they
tend to move in the same direction in response to a given market force.
The advantage of asset allocation lies in achieves superior returns when markets are down while
minimizing the exposure of the portfolio to volatility. In fact, asset allocation is based on certain
dimensions that, when combined tend to control the volatility while achieving targeted returns.

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Portfolio Management Process
Portfolio management is a complex activity, which may be broken down into the following
steps:
1.Specification of investment objectives and constraints:
The typical objectives sought by an investor are current income, capital appreciation, safety,
fixed returns on principal investment.
2. Choice of asset mix:
The most important decision in portfolio management is the asset mix decision. This is
concerned with the proportions of “Stock” or “Units” of mutual fund or “Bond” in the portfolio.
The appropriate mix of Stock and Bonds will depend upon the risk tolerance and investment
horizon of the investor.
3. Formulation of portfolio strategy:
Once the certain asset mix has been chosen an appropriate portfolio strategy has to be decided
out. Two broad portfolio choices are available.
An active portfolio management: it strives to earn superior risk adjusted returns by resorting to
market timing, or sector rotation or security selection or some combination of these.
A passive portfolio management involves holding a broadly diversified portfolio and
maintaining a pre-determined level of risk exposure.
4.Designing a model Portfolio:
There are certain objectives that should keep in mind while designing a portfolio these are:
 Higher absolute rate of return and high real rate of return
 Maximization current income
 High post tax returns
 Positive real return
 Preservation of capital
 Growth in capital

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Types of Investor:
1. Cautious Investor:
It‟s kind of investor who is less bothers about high returns. He wants to lower down his risk
profile and demand for fixed income on his investment. His main objective of investment is fixed
returns with less risk.
2. Balanced Investor:
It‟s a kind of investor who is bothers about returns as well as risk. He wants moderate returns
with moderate risk.
3. Aggressive Investor:
It‟s a kind of investor who is ready to take risk. He believes in high risk and high returns. So he
only wants to invest in equity schemes.

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CHAPTER 2
INDUSTRIAL PROFILE

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2.1 Market Size
Average Assets Under Management (AAUM) of Indian Mutual Fund Industry for the month of
July 2019 stood at ₹ 25,81,026 crore.
Assets Under Management (AUM) as on July 31, 2019 stood at ₹24,53,626 crore.
The AUM of the Indian MF Industry has grown from ₹ 7.22 trillion as on 31st July, 2009 to
₹24.54 trillion as on 31st July, 2019, about 3 ½ fold increase in a span of 10 years.
The MF Industry‟s AUM has grown from ₹ 10.06 trillion as on 31st July, 2014 to ₹24.54 trillion
as on 31st July, 2019, about 2 ½ fold increase in a span of 5 years.
The Industry‟s AUM had crossed the milestone of ₹10 Trillion (₹10 Lakh Crore) for the first
time in May 2014 and in a short span of about three years, the AUM size had increased more
than two folds and crossed ₹ 20 trillion (₹20 Lakh Crore) for the first time in August 2017. The
Industry AUM stood at ₹24.54 Trillion (₹ 24.54 Lakh Crore) as on 31st July, 2019.
The total number of accounts (or folios as per mutual fund parlance) as on July 31, 2019 stood at
8.48 crore (84.8 million), while the number of folios under Equity, Hybrid and Solution Oriented
Schemes, wherein the maximum investment is from retail segment stood at 7.62 crore (76.2
million). This is 62nd consecutive month witnessing rise in the no. of folios.
2.2 Government Initiatives
The Government of India has taken several initiatives in various sectors to improve the overall
economic condition in the country. Some of these are:
 In February 2019, the Government of India approved the National Policy on Software Products –
2019, to develop the country as a software hub.
 The National Mineral Policy 2019, National Electronics Policy 2019 and Faster Adoption and
Manufacturing of (Hybrid) and Electric Vehicles (FAME II) have also been approved by the
Government of India in 2019.

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 In November 2018, the Government of India launched a support and outreach programme for the
Micro, Small and Medium Enterprises (MSME) sector. It involves 12 key initiatives which will
help the growth, expansion and facilitation of MSMEs across the country.
 In September 2018, the National Digital Communications Policy (NDCP) has been approved by
Government of India with the objectives of attracting US$ 100 billion in investments, improved
broadband connectivity and generation of four million jobs in the telecom sector.
 Securities and Exchange Board of India (SEBI) doubled the maximum investment by angel
funds in venture capital undertakings to Rs 10 crore (US$ 1.37 million).
 The Government of India has decided to invest Rs 2.1 trillion (US$ 28.8 billion) to recapitalize
public sector banks over the next two years and Rs 7 trillion (US$ 95.9 billion) for construction
of new roads and highways over the next five years.
 India and Japan have joined hands for infrastructure development in India's north-eastern states
and are also setting up an India-Japan Coordination Forum for Development of North East to
undertake strategic infrastructure projects in the northeast.
 Union Ministry of Shipping plans to raise US$ 15.8 billion in dollar equivalents at the interest
rate of three per cent, for developing ships, building ports and improving inland waterways.
 Ministry of environment and forests has granted environment clearance for 35-km coastal road
connecting south and north Mumbai. The coastal road project is part of the US$ 9.52 billion
transport infrastructure projects being undertaken by the state government and is expected to
require an investment of US$ 1.34 billion.
 The Government of India will provide soft loan of US$ 1 billion to sugar mills to help them clear
part of their US$ 3.33 billion dues to farmers. The money shall be directly credited to the
farmer‟s bank accounts through the Pradhan Mantri Jan-Dhan Yojana.

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2.3 Road Ahead
The Association of Mutual Funds in India (AMFI) is targeting nearly five-fold growth in assets
under management (AUM) to Rs 95 lakh crore (US$ 1.30 trillion) and a more than three times
growth in investor accounts to 130 million by 2025.
India‟s GDP is expected to grow 7.5 per cent in 2019-20. This is on account of India‟s attempt to
implement reforms to unlock the country's investment potential to improve the business
environment, liberalized FDI policies, quick solution to the corporate disputes, simplified tax
structure, and a boost in both public and private expenditure.
Exchange Rate Used: INR 1 = US$ 0.0145 as on March 29, 2019

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CHAPTER 3
COMPANY PROFILE

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CRYSTAL VISION WEALTH MANAGERS PVT. LTD
An investment strategy is a crucial element of wealth management. It is a combination of
expertise and perception, complex market dynamics and innate planning. With the variety and
complexity of the investment options available in today‟s marketplace, it is important to have
disciplined, experienced professionals to provide advice at every stage in your life. And this is
where we come in.
Presenting Crystal Vision Wealth Managers Pvt. Ltd (CVWMPL) an independent financial
services company based in Pune dedicated to helping individuals and companies achieve their
financial goals. We offer unique services; so personalized, that you get the best of both the
worlds: our focus and dedication towards the success of our clients and your aspirations
regarding your finances.
CVWMPL is a privately owned and managed company. With a collective team experience of
more than seventeen years in serving as investment consultant for domestic and international
clients, we pride ourselves in delivering high standards in investment services and providing
unbiased guidance and continuous support.
CVWMPL was established to meet the growing need for highly personalized investment
management for individuals in a rapidly growing, increasingly competitive market. The firm was
designed to provide more personal attention by its Directors and greater continuity of personnel
attention than banks and larger investment advisors can offer. We believe in transforming your
dreams into aspirations through a methodical approach to investing. We believe in sound and
ethical approach, with professional dealings, prompt and courteous service, innovative choice of
products and above all unbiased guidance.
That is why, more than a plan, you need a partner with the financial expertise and cutting-edge
tools and processes to maximize your hard-earned wealth. We at CVWMPL work with you to
help ensure your goals are not just met - but exceed your expectations at every step.

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 PRODUCTS OF CRYSTAL VISION WEALTH MANAGERS PVT.
LTD:
 Mutual Funds
 Insurance
o Life Insurance
o General Insurance
 GOI Bonds
 Fixed Deposits
 We work with following AMC’s :
 SBI
 Axis
 Kotak Mahindra
 ICICI
 Reliance
 Franklin
 Indiabulls
 HDFC
 Mirae
 Edelweiss
 Invesco
 Canara Robeco

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CHAPTER 4
LITERATURE REVIEW

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The mutual fund industry in India has undergone at least 4 phases. Let us now look at each phase
in brief:
MUTUAL FUNDS HISTORY: PHASE OF INCEPTION (1964-87)
The first phase was marked by the setting up of the UTI. Though it was a collaboration between
the RBI and the Indian Government, the latter was soon delinked from the day-to-day operations
of the Unit Trust of India. In this phase, the company was the sole operator in the Indian mutual
fund industry. In 1971, the UTI launched the Unit Linked Insurance Plan or the ULIP. From that
year until 1986, UTI introduced several plans and played a very big role in introducing the
concept of mutual funds in India.
When UTI was set up several years ago, the idea was to not just introduce the concept of mutual
funds in India; an associated idea was to set up a corpus for nation-building as well. Therefore, to
encourage the small Indian investor, the government built in several income-tax rebates in the
UTI schemes. Not surprisingly, the investible corpus of UTI swelled from 600 crores in 1984 to
6,700 crores in 1988. Clearly, the time had come for the Indian mutual industry to move into the
next phase.
MUTUAL FUNDS HISTORY: ENTRY OF PUBLIC SECTOR (1987-1993)
By the end of 1988, the mutual fund industry had acquired its own identity. From 1987, many
public sector banks had begun lobbying the government for starting their own mutual fund arms.
In November 1987, the first non-UTI Asset Management Fund was set up by the State Bank of
India. This AMC was quickly followed by the creation of other AMCs by banks like Canara
Bank, Indian Bank, Life Insurance Corporation, General Insurance Corporation, and Punjab
National Bank.

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This opening up of the mutual fund industry delivered the desired results. In 1993, the
cumulative corpus of all the AMCs went up to a whopping Rs. 44,000 crores. Observers of this
industry say that in the second phase, not only the base of the industry increased but also it
encouraged investors to spend a higher percentage of their savings in mutual funds. It was
evident that the mutual fund industry in India was poised for higher growth.
MUTUAL FUND HISTORY: ENTRY PRIVATE SECTOR PHASE (1993-
1996)
In the period 1991-1996, the Government of India had realized the importance of the
liberalization of the Indian economy. Financial sector reforms were the need of the hour. India
needed private sector participation for the rebuilding of the economy.
Keeping this in mind, the government opened up the mutual fund industry for the private players
as well. The foreign players welcomed this move and entered the Indian market in significant
numbers. In this period, 11 private players –in collaboration with foreign entities- launched their
Asset Management Funds.
SOME OF THE TOP AMCS IN THE PRIVATE SECTOR WERE:
• ICICI Prudential AMC- This Company is a joint venture between ICICI Bank of India and
Prudential Plc of UK. It manages a corpus of INR 2, 93,000 crores and has an inventory of more
than 1400 schemes.
• HDFC Mutual Fund- Launched in the 1990s, the HDFC Mutual Fund manages more than 900
different kinds of funds.
• Kotak Mahindra Mutual Fund- This AMC has an asset base of more than Rs. 1,19,000 crores. It
is a joint venture of Kotak Financial Services and the Mahindra Group.

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SEBI INTERVENTIONS AND GROWTH, AND AMFI
As the mutual fund industry grew further in the 1990s, the AMCs and the government felt that it
was time for regulation and some control. Investors had to be protected as well as a level playing
ground had also to be laid down. A few years ago, the Indian industry had suffered a lot because
of bank scams and there was a real threat that investors might lose their monies yet again.
Consequently, the government introduced the SEBI Regulation Act in 1996 which laid down a
set of fair and transparent rules for all the stakeholders. In 1999, the Indian government declared
that all mutual fund dividends would be exempt from income tax. The idea behind this decision
was to spur further growth in the mutual fund industry.
Meanwhile, the mutual fund industry also realized the importance of self-regulation. As a result,
it set up an industry body- the Association of Mutual Funds of India (AMFI). One of the goals of
this body is investor education.
MUTUAL FUNDS HISTORY: PHASE OF CONSOLIDATION
(FEBRUARY 2003 – APRIL 2014)
In February 2003, the Unit Trust of India was split into two separate entities, following the repeal
of the original UTI Act of 1963. The two separated entities were the UTI Mutual Fund (which is
under the SEBI regulations for MFs) and the Specified Undertaking of the Unit Trust of India
(SUUTI). Following this bifurcation of the former UTI and occurrence numerous mergers among
different private sector entities, the mutual fund industry took a step towards the phase of
consolidation.
After the global economic recession of 2009, the financial markets across the globe were at an
all-time low and Indian market was no exception to it. Majority of investors who had put in their
money during the peak time of the market had suffered great losses. This severely shook the faith
of investors in the MF products. The Indian Mutual Fund industry struggled to recover from
these hardships and remodel itself over the next two years. The situation toughened up more with

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SEBI abolishing the entry load and the lasting repercussions of the global economic crisis. This
scenario is evident from the sluggish rise in the overall AUM of the Indian MF industry.
MUTUAL FUNDS HISTORY: PHASE OF STEADY DEVELOPMENT AND
GROWTH (SINCE MAY 2014):
Recognizing the lack of penetration of mutual funds in India, especially in the tier II and tier III
cities, SEBI launched numerous progressive measures in September 2012. The idea behind these
measures was to bring more transparency and security for the interest of the stakeholders. This
was SEBI‟s idea to „re-energize‟ the Indian MF Industry and boost the overall penetration of
mutual funds in India.
The measures bore fruit in the due course by countering the negative trend that was set because
of the global financial crisis. The situation improved considerably after the new government took
charge at the center.
Since May ‟14, the Indian MF industry has experienced a consistent inflow and rise in the
overall AUM as well as the total number of investor accounts (portfolio).
Currently, all the Asset Management Companies in India manage a combined worth of around
Rs. 23 lac crores of assets. Though this number looks attractive, we still have to go a long way in
order to match the west.
It is estimated that Indians save approximately Rs. 20-30 lakh crore annually. The Indian mutual
fund industry can grow immensely if Indians started parking a higher percentage of their savings
in MFs. Observers say that Indians have begun shifting a part of their savings from physical
assets like gold and land to financial instruments like bonds and silver. However, the AMFI and
the government need to encourage Indians even more for investments in mutual funds.
CONCLUSION
The Indian mutual fund industry began way back in 1963 with the setting up of the Unit Trust of
India. Over the years, this industry has evolved from being a UTI-dominated one to one where
there is balanced participation of the public and the private sectors. The Indian mutual fund

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industry is still very small compared to the global standards. With more encouragement from
AMFI and the government, this industry can grow multi-fold.

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CHAPTER 5
OBJECTIVES

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OBJECTIVES:
1. To find out the Preferences of the investors for Asset Management Company.
2. To know the Preferences for the portfolios.
3. To find out what should do to boost Mutual Fund Industry.

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CHAPTER 6
RESEARCH METHODOLOGY

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6.1 RESEARCH
Research means search for facts in order to find answers to certain questions or to find solutions
to certain problems. It is often referred as „Scientific Inquiry‟ or „Scientific Investigation‟ into a
specified problem or situation. Research is a careful and detailed study into a specific problem,
concern, or issue using the scientific method.
RESEARCH METHODOLOGY
The process used to collect information and data for the purpose of making business decisions.
The methodology may include publication research, interviews, surveys and other research
techniques, and could include both present and historical information.
6.2 TYPES OF RESEARCH –
1. Descriptive Research: Descriptive research includes surveys and fact-finding enquiries of
different kinds. The major purpose of descriptive research is description of the state of affairs as
it exists at present. In social science and business research we quite often use the term Ex post
facto research for descriptive research studies. The main characteristic of this method is that the
researcher has no control over the variables; he can only report what has happened or what is
happening.
2. Analytical Research: In analytical research the researcher has to use facts or information
already available, and analyse these to make a critical evaluation of the material.
3. Quantitative Research: Quantitative research is based on the measurement of quantity or
amount. It is applicable to phenomena that can be expressed in terms of quantity.
4. Qualitative Research: Qualitative research is concerned with qualitative phenomena i.e.
phenomena relating to or involving quality or kind. For instance when we are interested in
investigating the reasons for human behaviour (i.e. why people think or do certain things), we
quite often talk of „Motivation Research‟, an important type of qualitative research. This type of
research aims at discovering the underlying motives and desires, using in depth interviews for

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the purpose. Other techniques of such research are word association tests, sentence completion
tests and similar other projective techniques.
This report is based on primary as well secondary data, however primary data
collection was given more importance 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 data and providing an
alternative solution to the problem. It also helps in collecting the vital information that
is required by the top management to assist them for the better decision making both
day to day decision and critical ones.
DATA SOURCES:
Research is totally based on primary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, and primary data has
been collected by interacting with various people. The secondary data has been
collected through various journals and websites.
DURATION OF STUDY:
The study was carried out for a period of two months, from 1st June to 31th July 2019.

32. 32
SAMPLING:
Sampling procedure:
The sample was selected of them who are the customers/visitors of Crystal Vision Wealth
Managers, irrespective of them being investors or not or availing the services or not. It was also
collected through personal visits to persons, by formal and informal talks. The data has been
analyzed by using mathematical/Statistical tool.
SAMPLE SIZE:
The sample size of my project is limited to 60 people only. Out of which only 32
people had invested in Mutual Fund. Other 28 people did not have invested in Mutual
Fund.
SAMPLE DESIGN:
Data has been presented with the help of bar graph, pie charts line graphs etc.

33. 33
CHAPTER 7
DATA ANALYSIS & INTERPRITATION

34. 34
ANALYSIS & INTERPRETATION OF THE DATA
1. (a) Age distribution of the Investors in PUNE
7.1
7.1
0
1
2
3
4
5
6
7
8
9
<= 30 31-35 36-40 41-45 46-50 >50
InvestorInvestedinMutualFund
Age Group of Investor
Age
Group
<= 30 31-35 36-40 41-45 46-50 >50
Investor
invested
in MF
4 6 8 5 5 4

35. 35
Interpretation:
According to this chart out of 32 Mutual Fund investors of Pune the most are in the age group of
36-40 yrs. i.e. 25%, the second most investors are in the age group of 31-35yrs i.e. 20% and the
least investors are in the age group of below 30 years and above 50 years of age.

36. 36
(b). Educational Qualification of Investors in Pune
7.2
7.2
Interpretation:
Out of 32 Mutual Fund investors 66% of the investors in Pune are Graduate/Post Graduate, 25%
are Under Graduate and 9% are others (under HSC).
66%
25%
9%
NUMBER OF INVESTORS
Graduate/ Post Graduate Under Graduate Others
Educational
Qualification
Number of Investors
Graduate/ Post Graduate 21
Under Graduate 8
Others 3
Total 32

37. 37
c). Occupation of the investors of Pune
7.3
7.3
Interpretation:
In Occupation group out of 32 investors, 38% are Pvt. Employees, 31% are Businessman, 22%
are Govt. Employees, 3% are in Agriculture and 6% are in others.
0
2
4
6
8
10
12
14
Govt. Service Pvt. Service Business Agriculture Others
No.ofInvestor
Occupation of Investor
Occupation
No. of
Investors
Govt. Service 7
Pvt. Service 12
Business 10
Agriculture 1
Others 2

38. 38
(d). Monthly Family Income of the Investors in Pune.
Income
Group
No. of
Investors
<=10,000 2
10,001-15,000 4
15,001-20,000 7
20,001-30,000 11
>30,000 8
7.4
7.4
0
2
4
6
8
10
12
<=10,000 10,001-15,000 15,001-20,000 20,001-30,000 >30,000
No.ofInvestor
Income group of Investor
NO. OF INVESTORS

39. 39
Interpretation:
In the Income Group of the investors of Pune, out of 32 investors, 34% investors that is the
maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e.
25% investors are in the monthly income group of more than Rs. 30,000 and the minimum
investors i.e. 6% are in the monthly income group of below Rs. 10,000.

40. 40
2.Preference of factors while investing
7.5
7.5
Interpretation
Out of 32 People, 34% People prefer to invest where there is High Return, 28% prefer to invest
where there is Low Risk, 22% prefer easy Liquidity and 16% prefer Trust.
0
2
4
6
8
10
12
(a) Liquidity (b) Low Risk (c) High Return (d) Trust
No.ofRespondants
Factors
Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust
No. of
Respondents
7 9 11 5

41. 41
2.Awareness about Mutual Fund and its operation
7.6
7.6
Interpretation:
From the above chart it is inferred that 80% People are aware of Mutual Fund and its operations
and 20% are not aware of Mutual Fund and its operations.
80%
20%
NO. OF RESPONDENTS
Yes No
Response Yes No
No. of Respondents 48 12

42. 42
3. Investor Invested in different Assets Management Co.
Name of AMC No. of Investors
SBIMF 7
UTI 2
HDFC 4
Reliance 5
ICICI Prudential 3
Kotak 6
Axis 5
7.7
7.7
Interpretation:
In Pune most of the Investors preferred SBI Mutual Fund and Kotak Mutual Fund. Out of 32,
Investors have invested 22% in SBI & 19% in Kotak, also in Reliance MF investor have invested
16% and investor have only invested 9% in ICICI & 6% in UTI Mutual Fund.
0
1
2
3
4
5
6
7
8
SBIMF UTI HDFC Reliance ICICI
Prudential
Kotak Axis
No.ofInvestor
Name Of AMC

43. 43
4. Mode of Investment Preferred by Investor.
7.8
7.8
Interpretation:
Out of 32 Investors 37% preferred One time Investment and 63 % Preferred through Systematic
Investment Plan.
37%
63%
NO. OF RESPONDENTS
One time Investment Systematic Investment Plan (SIP)
Mode of Investment One time Investment Systematic Investment Plan (SIP)
No. of Respondents 12 20

44. 44
5. Preferred Portfolio by Investor
7.9
7.9
Interpretation
From the above graph 50% preferred Equity Portfolio, 28% preferred Balance and 22% preferred
Debt portfolio.
50%
22%
28%
Equity Debt Balanced
Portfolio No. of Investors
Equity 32
Debt 8
Balanced 13

45. 45
6. Portfolio of Systematic Investment Plan
Interpretation:
This is a dummy portfolio of SIP where Investor has invested in different AMC‟s and in different
sector diversifying risk of portfolio.
7.10
Fund
Name
Sector Rate
Investme
nt - SIP
Total
Investme
nt
FVafter5
Years
Total
Investment
Fv after7 Years
Total
Investment
Fv after10
Years
Total
Investment
Fv after15
Years
Axis Small
Cap Reg
Small 15% 3000 180000 265723.52 252000 441387.12 360000 825651.17 540000 2005520.28
Kotak
Standard
Multicap
Reg
MultiCap 13% 3000 180000 251683.35 252000 407684.58 360000 732110.75 540000 1649177.74
Invesco
India Mid
Cap
Mid Cap 14% 3000 180000 258585.38 252000 424127.49 360000 777206.74 540000 1817358.82
TOTAL 9000 540000 775992.25 756000 1273199.19 1080000 2334968.7 1620000 5472056.84

46. 46
7. Portfolio of One Time Investment Plan
Interpretation:
This is dummy portfolio of One Time Investment where in Investor has invested in two different
sectors and AMC‟s having different rate of return and risk.
7.11
Fund
Name
Sector Rate
Investment -
Lumpsum
FV after 5
Years
Fv after 7
Years
Fv after 10
Years
Fv after 15
Years
Kotak
Balanced
Advantage
Fund Reg
Hybrid 10% 100000 161051 194871.71 259374.25 417724.82
Axis
Multicap
Fund Reg
Multicap 13% 100000 184243.52 235260.55 339456.74 625427.04
TOTAL 200000 345294.52 430132.26 598830.99 1043151.85

47. 47
CHAPTER 8
OBSERVATION & FINDINGS

48. 48
OBSRVATIONS
 In Pune in the Age Group of 36-40 years were more in numbers. The second most Investors were
in the age group of 31-35 years and the least were in the age group of below 30 years.
 In Pune most of the Investors were Graduate or Post Graduate and below HSC there were very
few in numbers.
 In Occupation group most of the Investors were Pvt. employees, the second most Investors were
Businessman and the least were associated with Agriculture.
 In family Income group, between Rs. 20,001- 30,000 were more in numbers, the second most
were in the Income group of more than Rs.30,000 and the least were in the group of below Rs.
10,000.
 Mostly Respondents preferred High Return while investment, the second most preferred Low
Risk then liquidity and the least preferred Trust.
 Only 80% Respondents were aware about Mutual fund and its operations and 20% were not.
 Most of the Investors had invested in SBI or Kotak Mutual Fund, Reliance has also good Brand
Position among investors, UTI places after ICICI Prudential according to the Respondents.
 Maximum Number of Investors Preferred Systematic Investment Plan, and only 37% Preferred
One Time Investment.
 The most preferred Portfolio was Equity, the second most was Balance (mixture of both equity
and debt), and the least preferred Portfolio was Debt portfolio.

49. 49
CHAPTER 9
SUGGESTIONS

50. 50
SUGGESTIONS
 The most vital problem spotted is of ignorance. Investors should be made aware of the benefits.
Nobody will invest until and unless he is fully convinced. Investors should be made to realize
that ignorance is no longer bliss and what they are losing by not investing.
 Mutual funds offer a lot of benefit which no other single option could offer. But most of the
people are not even aware of what actually a mutual fund is? They only see it as just another
investment option. So, the advisors should try to change their mindsets. The advisors should
target for more and more young investors. Young investors as well as persons at the height of
their career would like to go for advisors due to lack of expertise and time.
 Mutual Fund Company needs to give the training of the Individual Financial Advisors about the
Fund/Scheme and its objective, because they are the main source to influence the investors.
 Before making any investment Financial Advisors should first enquire about the risk tolerance of
the investors/customers, their need and time (how long they want to invest). By considering these
three things they can take the customers into consideration.
 Younger people aged under 35 will be a key new customer group into the future, so making
greater efforts with younger customers who show some interest in investing should pay off.
 Customers with graduate level education are easier to sell to and there is a large untapped market
there. To succeed however, advisors must provide sound advice and high quality.
 Systematic Investment Plan (SIP) is one the innovative products launched by Assets
Management companies. SIP is easy for monthly salaried person as it provides the facility of do
the investment in EMI. Though most of the prospects and potential investors are not aware about
the SIP. There is a large scope for the companies to tap the salaried persons.

51. 51
CHAPTER 10
CONCLUSION

52. 52
CONCLUSION
Running a successful Mutual Fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the psyche of the small investors. This study has made an attempt
to understand the financial behavior of Mutual Fund investors in connection with the preferences
of Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual
Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of
Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to
lack of awareness although they have money to invest. As the awareness and income is growing
the number of mutual fund investors are also growing.
“Brand” plays important role for the investment. People invest in those Companies where they
have faith or they are well known with them. There are many AMCs in Pune but only some are
performing well due to Brand awareness. Some AMCs are not performing well although some of
the schemes of them are giving good return because of not awareness about Brand. Reliance,
SBIMF, Kotak etc. they are well known Brand, they are performing well and their Assets Under
Management is larger than others whose Brand name are not well known like ICICI, UTI, etc.
Distribution channels are also important for the investment in mutual fund. Financial Advisors
are the most preferred channel for the investment in mutual fund. They can change investors‟
mind from one investment option to others. Many of investors directly invest their money
through AMC because they do not have to pay entry load. Only those people invest directly who
know well about mutual fund and its operations and those have time.

53. 53
BIBLIOGRAPHY :
 www.nseindia.com
 www.amfiindia.com
 www.bankbazar.com
 www.ibef.org
 www.moneycontrol.com
 www.bnpparibasmf.in
 www.hdfcfund.com
BOOKS:
 “Research Methodology” by- C.R. KOTHARI
 NISM -series -V-A: Mutual Fund Distributors Certification Examination
 Marketing Management by Philip Kotler