This document is a comprehensive project report submitted to Gujarat Technological University in partial fulfillment of an MBA degree. It examines investment avenues and perceptions about mutual funds in India. The report was prepared by two students, Vishal Virani and Kishan Mangukiya, under the guidance of their professor Mamta Brahmbhatt. It includes sections on the history and types of mutual funds, an overview of the world and Indian mutual fund markets, major companies in the industry, the research methodology used, data analysis and findings, and conclusions and recommendations.

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GTU’S ENROLLMENT NO. 137690592124
GTU’S ENROLLMENT NO. 137690592051
A
Comprehensive project report
On
“INVESTMENT AVENUE AND PERCEPTION ABOUT THE MUTUAL FUND”
Submitted to
Shri Jairambhai Patel Institute of Business Management and Computer Application
In Partial Fulfillment of the requirement of the Award for the Degree of
Master of Business Administration
In
Gujarat Technological University
Under The Guidance of
PROF. (DR.) MAMTA BRAHMBHATT
SUBMITTED BY
VISHAL VIRANI (137690592124)
KISHAN MANGUKIYA (137690592051)
[Batch: 2013-15]
Shri Jairambhai Patel Institute of Business Management and Computer Application
Affiliated to Gujarat Technological University, Ahmedabad
May 2015

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DECLARATION
This Comprehensive Project Titled “ Investment avenue and perception about the Mutual
Fund ” has been prepared by us under the guidance of Prof. (Dr.) Mamta Brahmbhatt for
partial fulfillment for Master of Business Administration (MBA) of Gujarat Technological
University. This study has been undertaken by us and the report has not been submitted in any
University / Academic Institute.
Place:Gandhinagar VISHAL C. VIRANI
Date: KISHAN A. MANGUKIYA

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PREFACE
A Comprehensive Project Report is one of the highly effective means of the learning and
acquiring worldwide knowledge. It generates a concerted effort by students to acquire in depth
knowledge on a subject and present the same in systematic manner.
A Comprehensive Project Report is an integral part of the MBA program. The main objective of
the Comprehensive Project Report is to enhance the skill of researcher and gain the valuable
knowledge of management skills that will be useful in the future career building. Hence,
Comprehensive Project Report is the only way out for the students of management to increase
his analytical skill.
This Comprehensive Project Report is based on Indian mutual fund industries. We have taken
care to deal with the prescribed topics in sufficient depths and in a very lucid language.

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ACKNOWLEDGEMENT
This project is not one person’s solitary effort. It is our duty as well as privilege to express my
deep sense of gratitude to all those who have been associated with me in this summer project.
First of all, we express my deep gratitude towards Dr. S.O Junare, Director & our project
guide Prof. (Dr.) Mamta Brambhatt, Core Faculty, Shri Jairambhai Patel Institute of
Business management and Computer Applications (NICM) who initiated this study and also
helped me by giving their valuable comments at every stage of my project.
We would also like to thank our friends, family for that help and cooperation throughout the
Project.
(Vishal C. Virani )
( Kishan A. Mangukiya )

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EXECUTIVE SUMMARY
The report contains the psychological and qualitative study. The report title is
“Investment Avenue and perception about mutual fund.”
This study was conducted to find out the investor perception about the mutual fund and
the way of thinking toward mutual fund business future opportunity
The methodology adopted for the study was through a questionnaire, which is targeted to
different men in Ahmedabad and Gandhinagar. Based on questionnaire, the survey of urban men
in Ahmedabad and Gandhinagar was undertaken. For this purpose the sample size of 100 was
taken. The data collected from different men was analyzed thoroughly and presented in form of
charts and tables.
The study was a great learning experience resulting in a better understanding of the
Gujarati urban men and their perceptions of investment

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INDEX
NO. Particular Page no.
1. GENERAL INFORMATION 9
Introduction 10
Types of mutual fund 11
Overview of World Market 18
Overview of Indian / Gujarat Market 24
Growth of Mutual Fund Industry 27
2. ABOUT MAJOR COMPANIES IN THE INDUSTRY 30
3. LITERATURE REVIEW 32
4. RESEARCH METHODOLOGY 36
Objective of the Study 37
Problem of the Study 38
Research Design 38
Research Type 39
Data Collection Method 39
Sources of the data
Hypothesis 40
5. DATA ANALYSIS FINDINGS AND INTERPRETATIONS 41
6. CONCLUSION & SUGGESION 57
7. DIRECTION FOR FURTHER RESEARCH 60
8. BIBLIOGRAPHY 61
9. APPENDIX 62

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1. GENERAL
INFORMATION

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INTRODUCTION ABOUT THE MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money collected & invested by the fund manager in different types
of securities depending upon the objective of the scheme. These could range from shares to
debentures to money market instruments. The income earned through these investments and its
unit holders in proportion to the number of units owned by them (pro rata) shares the capital
appreciation realized by the scheme. Thus, a Mutual Fund is the most suitable investment for the
common person as it offers an opportunity to invest in a diversified, professionally managed
portfolio at a relatively low cost. Anybody with an investible surplus of as little as a few
thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment
objective and strategy
A mutual fund is the answer to all these situations. It appoints professionally qualified
and experienced staffs that manage each of these functions on a full time basis. The large pool of
money collected in the fund allows it to hire such staff at a very low cost to each investor. In
effect, the mutual fund vehicle exploits economies of scale in all three areas - research,
investments and transaction processing. While the concept of individuals coming together to
invest money collectively is not new, the mutual fund in its present form is a 20th century
phenomenon. In fact, mutual funds gained popularity only after the Second World War.
Globally, there are thousands of firms offering tens of thousands of mutual funds with different
investment objectives. Today, mutual funds collectively manage almost as much as or more
money as compared to banks.
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. 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 appreciation realized is shared by its unit holders in proportion to the number of

11. 11
units owned by them. Thus, a Mutual Fund is the most suitable investment for the common
person as it offers an opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost. The flow chart below describes broadly the working of a
mutual fund.
Mutual Funds have been a significant source of investment in both government and
corporate securities. It has been for the decades the monopoly of the state with UTI being the key
player with invested funds exceeding Rs. 300 bn. (US $ 10 bn.). The state owned insurance
companies also hold a portfolio of stocks. Presently, numerous mutual funds exist, including
private and foreign companies. Banks - mainly state owned too have established Mutual Funds
(MFs). Foreign participation in mutual funds and asset management companies permitted on a
case-by-case basis.

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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 then. 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 Unit Scheme 1964. At the end of1988 UTI had
Rs.6,700 crores of assets under management.
Second Phase – 1987-1993 (Entry of Public Sector Funds)
In the year 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
ofRs.47,004 crores.11

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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 Mutual Fund Regulations came into being, under which all mutual funds,
except UTI were to be registered and governed. The erstwhile
Kothari Pioneer (now merged with Franklin Templeton) was the first private sector
mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted
by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses
went on increasing, with many foreign mutual funds setting up funds in India and also the
industry has witnessed several mergers and acquisitions. As at the end of January 2003, there
were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with
Rs.44,541 crores of assets under management was way ahead of other mutual funds.
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 in March 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

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mutual fund industry has entered its current phase of consolidation 12 and growth. As at the end
of October 31, 2003, there were 31 funds, which manage assets of Rs.126726 crores under 386
schemes. The graph indicates the growth of assets over the years.

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TYPES OF MUTUAL FUND
The different types of Mutual Funds are as follows -
Equity Funds / Growth Funds
Funds that invest in equity shares are called equity funds. They carry the principal
objective of capital appreciation of the investment over a medium to long-term investment
horizon. Equity Funds are high risk funds and their returns are linked to the stock markets. They
are best suited for investors who are seeking long term growth. There are different types of
equity funds such as Diversified funds, Sector specific funds and Index based funds.
Diversified Funds
These funds provide you the benefit of diversification by investing in companies
spread across sectors and market capitalisation. They are generally meant for investors who seek
exposure across the market and do not want to be restricted to any particular sector.
Sector Funds
These funds invest primarily in equity shares of companies in a particular business
sector or industry. While these funds may give higher returns, they are riskier as compared to
diversified funds. Investors need to keep a watch on the performance of those sectors/industries
and must exit at an appropriate time.

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Index Funds
These funds invest in the same pattern as popular stock market indices like CNX
Nifty Index and S&P BSE Sensex. The value of the index fund varies in proportion to the
benchmark index. NAV of such schemes rise and fall in accordance with the rise and fall in the
index. This would vary as compared with the benchmark owing to a factor known as “tracking
error”.
Tax Saving Funds
These funds offer tax benefits to investors under the Income Tax Act, 2961.
Opportunities provided under this scheme are in the form of tax rebates under section 80 C of the
Income Tax Act, 1961. They are best suited for long investors seeking tax rebate and looking for
long term growth.
Debt Fund / Fixed Income Funds
These Funds invest predominantly in rated debt / fixed income securities like
corporate bonds, debentures, government securities, commercial papers and other money market
instruments. They are best suited for the medium to long-term investors who are averse to risk
and seeking regular and steady income. They are less risky when compared with equity funds.

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Liquid Funds / Money Market Funds
These funds invest in highly liquid money market instruments and provide easy
liquidity. The period of investment in these funds could be as short as a day. They are ideal for
Corporate, institutional investors and business houses who invest their funds for very short
periods.
Gilt Funds
These funds invest in Central and State Government securities and are best suited
for the medium to long-term investors who are averse to risk. Government securities have no
default risk.
Balanced Funds
These funds invest both in equity shares and debt (fixed income) instruments and
strive to provide both growth and regular income. They are ideal for medium- to long-term
investors willing to take moderate risks.

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OVERVIEW OF WORLD MUTUAL FUND MARKET
Over the past few decades, there has been explosion of the mutual fund industry --
and an attendant expansion of academic research on this topic. However, while the fund industry
has grown all around the world, academic studies of mutual funds have remained geographically
narrow. While at the end of 2001, funds originating in the U.S. accounted for only 15 percent of
the number of funds available globally and 60 percent of the world’s fund assets,1 in the last ten
years, almost every article published in the top finance journals relates to the U.S. fund industry.
While there have been isolated and excellent studies of the fund industry in various countries,2
most readers of U.S. journals would probably be surprised that the nation domiciling the second
largest fund industry (measured by fund assets) outside the United States is Luxembourg with
6.5 percent of world mutual fund assets or that France and Korea offer the second largest number
of mutual funds available worldwide (13 percent of the world total for each country). In this
paper, we study the fund industry around the world. We seek to understand why this form of
intermediated asset management has thrived more in some countries than in others. In functional
terms, a nation’s savers can choose to directly invest in primary securities (do-it-yourself), may
invest their money in transparent narrow financial intermediaries (funds), or may prefer more
opaque and typically broader financial intermediaries (banks or insurance firms).3 Under what
circumstances have relatively transparent financial intermediaries been preferred by a nation’s
savers? One set of hypotheses, drawn from the ample literature on law and economics, focuses
on laws and regulations to explain differences in this direction of financial development. Funds
prosper when laws and regulations make this sort of investment attractive relative to others.
“Supply-side” hypotheses focus on competitive dynamics both within the mutual fund industry
and from elsewhere in the financial services sector to explain these differences

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Global Mutual Funds Cover a Lot of Territory
Global funds are often categorized by where they invest. Some of the most common
kinds of funds are:
Global equity and fixed-income funds.
Sometimes called world mutual funds, they typically have the broadest geographic
investment mandates and are usually able to invest anywhere in the world. They may invest a
larger portion of their assets in the United States and the developed markets of Europe and Asia.
Global hybrid funds invest in both equity and fixed-income securities from around the world.
The ability to invest anywhere in the world is one big advantage global funds offer
because they have the greatest number of securities from which to choose. Investing globally,
however, may involve higher risks depending on market conditions, currency exchange rates and
economic, social and political climates of the countries where the fund invests.
International equity and fixed-income funds.
Often called foreign funds, they invest outside the United States. They typically
invest in the developed markets of Europe and Asia. Depending on their investment strategy,
they may also invest in emerging or frontier markets. An international hybrid fund invests in
combinations of equity and fixed-income securities from non-U.S. countries.
By investing outside the United States, these funds can potentially capitalize on
different economic cycles occurring in different countries at different times, thereby
complementing funds that invest primarily in the U.S. Investing abroad, however, may involve

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higher risks depending on market conditions, currency exchange rates and economic, social and
political climates of the countries where the fund invests.
Regional equity funds.
As the name suggests, these funds concentrate in a particular region of the world. For
example, a regional fund may focus on the stocks of Europe, Latin America or Pacific Rim
nations. Such a focus can be rewarding if the region is experiencing high growth rates, as has
been the case in Asia at various times over the last two decades.
However, the limited geographic scope of these funds may increase their volatility as
negative events in one country often spill over into neighboring countries, dragging down the
region as a whole.
Country-specific equity funds.
These funds have very specific investment mandates that restrict the majority of their
investing to a single country. Typically, they focus on a country with a significant stock market
or stock market growth potential. A narrow focus, however, can substantially increase risk.
Emerging and frontier markets funds.
These funds invest principally in the less developed markets of Africa, Latin
America, Asia and Eastern Europe. Typically, these types of regions are undergoing dramatic
economic change, such as transforming from a state-run economy into a free-market-based
economy. Compared with more mature markets, investing in emerging or frontier markets may
offer the potential for sharp growth rates.

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However, investments in foreign securities involve special risks including currency fluctuations,
and economic and political uncertainties. As a result, such funds can experience significant
volatility.
A World of Potential Opportunity
With so much global integration taking place, limiting investments to U.S.-only
mutual funds also means eliminating potential opportunities from around the world.
Foreign markets have expanded substantially over the past 32 years. In 1982, U.S.
stocks represented 56% of the world’s equity market capitalization. By 2012, foreign markets
had become a solid majority of the opportunities, expanding to account for 65% of the world’s
equity investments.1
Understanding the Risks
All investments involve risks, including possible loss of principal. Stock prices
fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies,
particular industries or sectors, or general market conditions. Bond prices generally move in the
opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in
interest rates, the fund’s share price may decline. Special risks are associated with foreign
investing, including currency fluctuations, economic instability and political developments.
Investments in emerging markets, of which frontier markets are a subset, involve heightened
risks related to the same factors, in addition to those associated with these markets’ smaller size,
lesser liquidity and lack of established legal, political, business and social frameworks to support
securities markets. Because these frameworks are typically even less developed in frontier
markets, as well as various factors including the increased potential for extreme price volatility,
illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are
magnified in frontier markets. A fund’s ability to invest in smaller company securities that may

22. 22
have limited liquidity involves additional risks, such as relatively small revenues, limited product
lines and small market share. Historically, these stocks have exhibited greater price volatility
than larger-company stocks, especially over the short term. All investments in a frontier market
fund should be thought of as long-term investments that could experience significant price
volatility in any given year. A frontier market fund is designed for the aggressive portion of a
well-diversified portfolio. These and other risk considerations are discussed in a fund’s
prospectus.

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GLOBAL SCENARIO OF MUTUAL FUNDS
The money market mutual Fund segment has a total corpus of $1.48 million in the
U.S. against a corpus of $100 million in India. Out of the top 10 Mutual Funds world wide,8 are
bank sponsored. Only Fidelity & capital is non-bank Mutual Funds in this group. In U.S. the total
number of schemes is higher than that of the listed companies while in India we have just 277
Schemes.
Internationally, Mutual Funds are allowed to go short. In India fund managers do not
have such leeway. In about 9.7 million households will manage their assets online. By the year
2004, such a facility is not available in India. Online trading is a great idea to reduce
management expenses from the current 2% of total assets to about 0.75% of the total assets.
Around 72% of the core customer base of Mutual Funds in the top 50 broking firms in the U.S. is
expected to trade online.
The Indian Mutual Fund Industry is dominated by the UTI, which has a total corpus
of Rs.700 billion, collected from over 200 million investors. The 2nd largest category of Mutual
Funds is the ones floated by the nationalized banks. Can bank asset management floated by
Canara Bank & S.B.I. Fund Management floated by S.B.I. are the largest of these. The aggregate
corpus of the funds managed by this category of Asset Management Companies is around Rs.150
billion among the private players the largest are Birla Capital Asset Management Company &
Prudential ICICI Asset Management Company. The aggregate corpus of the asset managed by
this category of Asset Management companies is about Rs.60billion.

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OVERVIEW OF INDIAN MUTUAL FUND MARKET
Mutual Fund is an investment vehicle that is made up of a pool of funds collected
from many investors for the purpose of investing in securities such as stocks, bonds, money
market instruments and similar assets. Mutual funds are operated by money managers, who
invest the fund's capital and attempt to produce capital gains and income for the fund's investors.
A mutual fund's portfolio is structured and maintained to match the investment objectives stated
in its prospectus. One of the main advantages of mutual funds is that they give small investors
access to professionally managed, diversified portfolios of equities, bonds and other securities,
which would be quite difficult (if not impossible) to create with a small amount of capital. Each
shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or
shares, are issued and can typically be purchased or redeemed as needed at the fund's current net
asset value (NAV) per share, which is sometimes expressed as NAVPS. Mutual funds as an
intermediation mechanism and products play an important role in India’s financial sector
development. Apart from pooling resources from small investors, they also provide informed
decision making mechanism to them. Thus they contribute to not only financial sector
participation, but also financial inclusion and thereby enhance market efficiency. Additionally
they contribute to financial stability and help in enhancing market transparency

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STRUCTURE OF THE INDIAN MUTUAL FUND INDUSTRY
The Indian mutual fund industry is dominated by the Unit Trust of India, which has a
total corpus of Rs700bn collected from more than 20 million investors. The UTI has many
funds/schemes in all categories i.e. equity, balanced, income etc with some being open-ended
and some being closed-ended. The Unit Scheme 1964 commonly referred to as US 64, which is a
balanced fund, is the biggest scheme with a corpus of about Rs200bn. Most of its investors
believe that the UTI is government owned and controlled, which, while legally incorrect, is true
for all practical purposes.
The second largest category of mutual funds is the ones floated by nationalized
banks. Can bank Asset Management floated by Canara Bank and SBI Funds Management floated
by the State Bank of India are the largest of these. GIC AMC floated by General Insurance
Corporation and Jeevan Bima Sahayog AMC floated by the LIC are some of the other prominent
ones.
SEBI
AMC
Unit holders
Saving
s
Unit
s
Trus
t
Investment
s
Returns
Trust
AMCCustodian
Registrar

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PERFORMANCE OF MUTUAL FUNDS IN INDIA
Let us start the discussion of the performance of mutual funds in India from the
day the concept of mutual fund took birth in India. The year was 1963. Unit Trust of India
invited investors or rather to those who believed in savings, to park their money in UTI Mutual
Fund. The performance of mutual funds in India in the initial phase was not even closer to
satisfactory level. People rarely understood, and of course investing was out of question. But yes,
some 24 million shareholders were accustomed with guaranteed high returns by the beginning of
liberalization of the industry in 1992. This good record of UTI became marketing tool for new
entrants. The expectations of investors touched the sky in profitability factor.
The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me
concentrate about the performance of mutual funds in India through figures. From Rs. 67bn. the
Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times
higher performance by April 2004. It rose as high as Rs. 1,540bn. The net asset value (NAV) of
mutual funds in India declined when stock prices started falling in the year 1992. Those days, the
market regulations did not allow portfolio shifts into alternative investments. There was rather no
choice apart from holding the cash or to further continue investing in shares. One more thing to
be noted, since only closed-end funds were floated in the market
The performance of mutual funds in India suffered qualitatively. The 1992 stock
market scandal, the losses by disinvestments and of course the lack of transparent rules in the
whereabouts rocked confidence among the investors. Partly owing to a relatively weak stock
market performance, mutual funds have not yet recovered, with funds trading at an average
discount of 1020 percent of their net asset value. The measure was taken to make mutual funds
the key instrument for long-term saving. The more the variety offered, the quantitative will be
investors. At last to mention, as long as mutual fund companies are performing with lower risks
and higher profitability within a short span of time, more and more people will be inclined to
invest until and unless they are fully educated with the dos and don'ts of mutual funds.

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GROWTH OF 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. 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 iplace of RBI. The first scheme
launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets
under management. The year 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 Canbank 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. 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 Mutual Fund Regulations came into being,
under which all mutual funds, except UTI were to be registered and governed. The erstwhile
Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund
registered in July 1993.The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under
the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on
increasing, with many foreign mutual funds setting up funds in India and also the industry has
witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual
funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of

28. 28
assets under management was way ahead of other mutual funds. Indian mutual fund industry has
grown at a Compounded Annual Growth Rate (CAGR) of 15 per cent from FY07 to FY13, the
growth performance in the recent years have been rather subdued.
However Assets under Management (AUM) as a per cent of GDP for India is
about 5 to 6 per cent, significantly lower than some other emerging economies, for example, 40
percent for Brazil and around 33 per cent for South Africa. This indicates significant headroom
for growth. However, the industry growth will continue to be characterized by external factors
such as volatility and performance of the capital markets, and macro-economic drivers such as
GDP growth, inflation and interest rates. The Indian mutual fund industry has shown relatively
slow growth in the period FY 10-13 growing at a CAGR of approximately 3.2 per cent. Average
(AUM) stood at INR 8,140 billion as of September 2013.

29. 29
2. ABOUT MAJOR
COMPANIES IN
THE INDUSTRY

30. 30
ABOUT MAJOR COMPANIES IN THE INDUSTRY
Name of the Fund No of Schemes Asset Under
Management
(Rs. core)
ALLIANCE MUTUAL FUND 36 3309.03 36 3309.03
BENCH MARK MUTUAL FUND 1 6.1
BIRLA MUTUAL FUND 35 4436.79
BOB MUTUAL FUND 8 31
CAN BANK MUTUAL FUND 14 692.04
CHOLA MUTUAL FUND 25 812.67
DSPML MUTUAL FUND 13 2154.67
ESCORTS MUTUAL FUND 13 83.91
FIRST INDIA MUTUAL FUND 5 0.7
DUNDEE MUTUAL FUND 19 20.72
FRANKLIN TEMPELTION MUTUAL
FUND
25 3919.52
GIC MUTUAL FUND 13 333.29
HDFC MUTUAL FUND 22 4707.32
IDBI-PRINCIPAL MUTUAL FUND 33 1346.61
IL & FS MUTUAL FUND 18 537.72
ING MUTUAL FUND 15 396.31
JF MUTUAL FUND 3 201.8

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KOTAK MUTUAL FUND 30 1199.36
JM MUTUAL FUND 21 1199.35
MORGAN STANLEY MUTUAL FUND 1 793.21
PIONEER ITI MUTUAL FUND 62 3517.77 62 3457.77
PNB MUTUAL FUND 8 149.76
PRU ICICI MUTUAL FUND 52 7006.72
RELIANCE CAPITAL MUTUAL FUND 15 2913.25
SBI MUTUAL FUND 42 3294.63
STANDARD CHARTERED MUTUAL
FUND
30 3294.63
SUN F& C MUTUAL FUND 26 413.11 26 413.11
SUNDARAM MUTUAL FUND 11 702.25
TATA MUTUAL FUND 20 893
TAURUS MUTUAL FUND 11 59.76
UTI MUTUAL FUND 103 508.83
ZURICH INDIA MUTUAL FUND 39 255.11
LIC MUTUAL FUND 27 2340.3

32. 32
3. LITERATURE
REVIEW

33. 33
LITERATURE REVIEW
Chang and Lewellen (1984) used the method processed by Henryksson Merton and studied 67
mutual funds between 1971 and 1979. They divided data into up and down market components
and computed two separate slope coefficient b1 and b2. Of the 67 mutual fund studied, only 28in
5 cases, data displayed statistically significant difference between b1 and b2. Majority of them
were in the negative direction, suggesting poor market timings and they concluded that neither
skillful market timing nor clever security selection abilities are evident in abundance in the
observed mutual fund return data
Ramesh Chander (2000) examined 34 mutual fund schemes with reference to the three fund
characteristics with 91-days treasury bills rated as risk-free investment from January 1994 to
December 1997. Returns based on NAV of many sample schemes were superior and highly
volatile compared to BSE SENSEX. Open-end schemes outperformed close-end schemes in term
of return. Income funds outsmarted growth and balanced funds. Banks and UTI sponsored
schemes performed fairly well in relation to sponsorship. Average annual return of sample
schemes was 7.34 percent due to diversification and 4.1 percent due to stock selectivity. The
study revealed the poor market timing ability of mutual fund investment. The researcher also
identified that 12 factors explained majority of total variance in portfolio management practices.
Borensztein, E. and Gelos, G. (2001) explores the behavior of emerging market mutual funds
using a novel database covering the holdings of individual funds over the period January 1996 to
March 1999. An examination of individual crises shows that, on an average, funds withdrew
money one month prior to the events. The degree of herding among funds is statistically
significant, but moderate. Herding is more widespread among open-ended funds than among
closed-end funds, but 31not more prevalent during crisis than during tranquil times. Funds tend
to follow momentum strategies, selling past losers and buying past winners, but their overall
behavior is more complex than often suggested.

34. 34
Gavin Quill (2001) examined the evidence that investor behavior is frequently detrimental to the
achievement of investors’ long-term goals. The picture that emerges from this analysis is one of
investors who have lost a good portion of their potential returns because of the excessive
frequency and poor timing of their trading activities. They established that investors trade much
more than they realize and much more than is conducive to the achievement of their financial
plans. Investors think long-term in theory, but act according to short-term influences in practice.
This excessive turnover, combined with a propensity to buy relatively over-valued investments
and ignore relatively under-valued ones, has caused the average mutual fund investor to
underperform substantially over the past decade.
Gupta Amitabh (2001) evaluated the performance of 73 selected schemes with different
investment objectives, both from the public and private sector using Market Index and Fundex.
NAV of both close-end and open-end schemes from April 1994 to March 1999 were tested. They
found that sample schemes were not adequately diversified, risk and return of schemes were not
in conformity with their objectives, and there was no evidence of market timing abilities of
mutual fund industry in India.
Karthikeyan (2001) conducted research on Small Investors Perception on Post office Saving
Schemes and found that there was significant difference among the four age groups, in the level
of awareness for Scheme for Retired Employees (DSRE). The Overall Score confirmed 32that
the level of awareness among investors in the old age group was higher than in those of young
age group. No differences were observed among male and female investors.
Narasimhan M S and Vijayalakshmi S (2001) analyzed the top holding of 76 mutual fund
schemes from January 1998 to March 1999. The study showed that, 62 stocks were held in
portfolio of several schemes, of which only 26 companies provided positive gains. The top
holdings represented more than 90 percent of the total corpus in the case of 11 funds. The top
holdings showed higher risk levels compared to the return. The correlation between portfolio
stocks and diversification benefits was significant at one percent level for 30 pairs and at five
percent level for 53 pairs.

35. 35
Kum Martin (October 2007) in his article, “Basics about Mutual Funds” discussed about
different types of mutual funds .He stated that the equity funds involve just common stock
investments. They are extremely risky but can end up earning a lot of money. He concluded that
the low risk in investment will not earn a lot of returns. Mutual fund managers have to use
various investment styles depending upon investor’s requirement. 35Most of the empirical
evidences showed that mutual fund investor’s purchase decision is influenced by past
performance.

36. 36
4. RESEARCH
METHODOLOGY

37. 37
OBJECTIVE OF THE STUDY
Primary Objectives:
 To know future opportunities in mutual fund advisory business in India and perception
about mutual fund.
Secondary Objectives:
 To study the perception of Retail investors.
 To know future opportunity in mutual fund advisory business and find new scope for
financial business in India.
 To study the views about different type of services distributer and problem faces by them
for doing this business.
PROBLEM OF THE STUDY
To assess the of Perception of Retail investors to know future opportunities in mutual fund
business in India and the perception about mutual fund.
This is analytical research. What is the Perception of Retail investor to know future opportunities
in mutual fund advisory business in India. Can be finding out after doing the study of
independent financial investors.

38. 38
RESEARCH DESIGN
Research design is the plan, structure & strategy of investigation conceived so as to obtain
answers to questions & to control variance. The definition consists of three important terms plan,
structure & strategy. The plan is an outline of the research scheme on which the research is to
work. The structure of the research is a more specific outline or the scheme and the strategy
shows how the research will be carried out specifying the methods to be used in the collection
and analysis of data.
RESEARCH TYPE
In the Research type there are three type of research
1. Exploratory research
2. Descriptive research
3. Causative research
Here Researchers uses the Descriptive research design. A descriptive study adopted because
detailed information is required for the study.
DATA COLLECTION METHOD
There are two types Of Data Collection Method:-
 Primary Method
 Secondary Method

39. 39
Researchers are using secondary data collection method for this research.
The Secondary Data
Secondary data are already someone fined early time and from that data new researcher ready to
refer that secondary data after they continue with their study and find out something new from
that data. Which is very useful to present conditions of company, company can sometime
implement better solution which is fined by researcher.
1. Annual report of the companies.
2. Published Journals and Books
3. Internet and other secondary sources
On the context of the topic researchers have use secondary data and done the Z score model.
SOURCES OF DATA
-Annual reports of the selected sugar industries.
- Magazines and Journal
-Websites of related companies
-Books
Population: - All he person who associate with Mutual fund in India.
Sampling:
For the report customer perception towards mutual fund at selected to do market research.
100% coverage is difficult within the limited period of time. Hence sampling survey
method is adopted for the purpose of the study.
Sampling frame: Investors in Ahmedabad and Gandhinagar city.
Sampling size: 100

40. 40
HYPOTHESIS OF THE RESEARCH
The following are the hypothesis of the research to assess the association between investors awareness of
Mutual Funds & different investment instruments like Savings bank A/c, Fixed Deposit A/c, Shares, Real
Estate, Postal Savings & Gold/Silver.
H 1: There is no significant association between awareness of mutual fund and Savings bank as an
investment instrument.
H 2: There is no significant association between awareness of mutual fund and Fixed deposit as an
investment instrument
H 3: There is no significant association between awareness of mutual fund and Shares as an investment
instrument
H 4: There is no significant association between awareness of mutual fund and Gold/silver as an
investment instrument
H 5: There is no significant association between awareness of mutual fund and Postal savings as an
investment instrument
H 6: There is no significant association between awareness of mutual fund and Real estate as an
investment instrument
H 7: There is no significant association between awareness of mutual fund and Insurance as an
investment instrument

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5. DATA ANALYSIS
AND
INTERPRETATION

42. 42
1. Gender
[TABLE 1.1: GENDER]
[FIGURE 1.1: GENDER]
Interpretation:-
In above chart and table shows that 63% of male are interested to invest in mutual fund
and rest of 37% of female are interested in mutual fund. So overall male member invest
more in mutual fund compare to female.
63%
37%
Gender
male female
Options Respondent percentage
Male 63 63%
Female 37 37%

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1. Age
Options Respondent percentage
18 to 29 30 30%
30 to 39 33 33%
40 to 49 20 20%
50 to above 17 17%
[TABLE 1.1: GENDER]
[FIGURE 1.1: GENDER]
Interpretation:-
The above data convey that there is more no. of people of age from 30 to 39 who invest money in
mutual fund. And people whose age is 50 and above is less interested to invest in mutual fund.
30%
33%
20%
17%
AGE
18-29 30-39 40-49 50 and above

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2. What investment opportunities you prefer to invest your saving?
Options Respondent percentage
Bank Deposit 0 0%
Mutual fund 100 100%
Debentures 0 0%
Insurance 0 0%
[TABLE 1.2: INVESTMENT OPPORTUNITIES]
[FIGURE 1.2: INVESTMENT OPPORTUNITIES]
Interpretation:-
Above research shows that all 100 people are invest in mutual fund.
0%
100%
0%0%
IOPIS
Bank Deposit Mutual fund Debentures Insurance

45. 45
3. How much amount do you save yearly?
Options Respond
ent
Percentage
0 to 50000 47 47%
50000 to 100000 43 43%
100000 to 150000 10 10%
150000 to above 0 0%
[TABLE 1.3:]
[FIGURE 1.3:]
Interpretation:-
Above research shows that highest 47% of people saves up to Rs.50000 yearly.
47%
43%
10%
0%
ASY
0-50000
50000-100000
100000-150000
150000 and above

46. 46
4. Do you invest in mutual fund?
Options Respondent Percentage
Yes 100 100%
No 0 0%
[TABLE 1.4: INVEST IN MUTUAL FUND]
[FIGURE 1.4: INVEST IN MUTUAL FUND]
Interpretation:-
All 30 respondents are investing in mutual fund.
100%
0%
IMF
Yes No

47. 47
5. What criteria you keep in your mind while selecting any investment opportunity?
Options Respondent Percentage
Security 40 40
Liquidity 30 30
Maturity 20 20
Tax benefit 10 10
[TABLE 1.5:]
[FIGURE 1.5:]
Interpretation:-
Above graph shows that 40% of people are investing in mutual fund for security. And 10% of
people who are for investing in mutual fund for tax benefit.
40%
30%
20%
10%
CSIO
Security Liquidity Maturity Tax Benefit

48. 48
6. Which type of fund would you like to invest?
Options Respondent percentage
Equity fund 70 70%
Debt fund 30 30%
Hybrid fund 0 0%
[TABLE 1.6: TYPE OF FUND]
[FIGURE 1.6: TYPE OF FUND]
Interpretation:-
Above graph shows that out of 100 respondent 70 are invest in equity fund and rest of 30 people
are invest in debt fund and no one invest in hybrid fund.
70%
30%
0%
TFI
Equity Fund Debt fund Hybrid fund

49. 49
7. Which structure of scheme do you prefer in mutual fund?
Options Respondent Percentage
Open Ended 70 70%
Close Ended 30 30%
[TABLE 1.7: MUTUAL FUND SCHEME]
[FIGURE 1.7: MUTUAL FUND SCHEME]
Interpretation:-
Above chart shows that 70 responded are use open ended structure scheme. And rest of use close
ended structure scheme.
47%
53%
SSMF
Open ended Close ended

50. 50
8. When you invest in mutual fund which mode of investment will you prefer?
Options Respondent percentage
Lump sum investment 13 13%
Systematic investment plan 87 87%
[TABLE 1.8: MODE OF INVESTMENT]
[FIGURE 1.8: MODE OF INVESTMENT]
Interpretation:-
Above chart shows that 87% people are use systematic investment plan. And rest 13% people
use lump sum investment.
13%
87%
IMFI
Lump sum investment Systematic investment plan

51. 51
9. How long would you like to hold your mutual fund investment?
Options Respondent percentage
Less than 1 year 6 6%
1 to 3 year 77 77%
4 to 6 year 17 17%
7 to above 0 0%
[TABLE 1.9: TIME]
[FIGURE 1.9: TIME]
Interpretation:-
Above chart shows that 77% of people who invest their mutual for 1 to 3 year 17% people are
invest for 4 to 6 year and 6% of people are invest for less than 1 year.
6%
77%
17%
0%
HMFI
Less than 1 year 1 to 3 year 4 to 6 year 7 to above

52. 52
10. How would you rate the risk associated with mutual fund?
Options Respondent percentage
Low 50 50%
Moderate 43 43%
High 7 7%
[TABLE 1.10: RISK]
[FIGURE 1.10: RISK]
Interpretation:-
Above chart shows that50% people says that there are low risk in mutual fund and 7% are says
that there are less risk in mutual fund.
50%
43%
7%
RRAMF
Low Moderate High

53. 53
11. How would you rate mutual fund on the basis of return?
Options Respondent percentage
Highly satisfied 23 23%
Satisfied 60 60%
Average 17 17%
Dissatisfied 0 0%
[TABLE 1.11: RETURN]
[FIGURE 1.11: RETURN]
Interpretation:-
Above chart shows that 60% of people are highly satisfied in term of return in mutual fund and 17% are
average in term of mutual fund.
23%
60%
17%
0%
RMFR
Highly satisfied satisfied Average Dissatisfactory

54. 54
12. Which option would you prefer in mutual fund?
Options Respondent percentage
Dividend payout 60 60%
Dividend reinvestment 10 10%
Growth 30 30%
[TABLE 1.12]
[FIGURE 1.12]
Interpretation:-
Above chart shows that 60% of people who preferred dividend payout in mutual fund and 30%
of people are preferred growth in M.F. and rest of 10% are preferred dividend reinvestment in
mutual fund.
60%
10%
30%
OPMF
Dividend payout Dividend reinvestment Growth

55. 55
13. Your overall experience with mutual fund investing?
Options Respondent percentage
Highly satisfied 33 33%
Satisfied 60 60%
Average 7 7%
Dissatisfied 0 0%
[TABLE 1.13: EXPERIENCE WITH MUTUAL FUND]
[FIGURE 1.13: EXPERIENCE WITH MUTUAL FUND]
Interpretation:-
All research shows that 60% of people are satisfied in investing in mutual fund. 33% of people
are highly satisfied. And 7% of people are who says that it is average.
33%
60%
7%
0%
EXEMFI
Highly satisfied satisfied Average Dissatisfactory

56. 56
FINDINGS
 63% of male are interested to invest in mutual fund and rest of 37% of female are
interested in mutual fund. So overall male member invest more in mutual fund compare
to female.
 People who age from 30 to 39 compare to 50 and above are higher investing in mutual
fund.
 Liquidity fund customers are satisfied with the mutual fund investment because they can
easily change the funds.
 Growth fund customers are satisfied with the mutual fund investment because mutual
fund gives the time to time growth for that investment.
 Regular fund customers are not satisfied with mutual fund investment because they don’t
receive the regular return for that particular investment.

57. 57
6. CONCLUSION
AND
SUGGESTION

58. 58
CONCLUSION
Mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. Market for equity shares, bonds and other fixed income instruments have become
matured and information driven. Prices changes in these assets are driven by global event
occurring in faraway places. The typical individual is unlikely to have skills, knowledge,
inclination and time to keep track of events, understand their implication and act speedily.
A mutual fund is answer to these entire situation it appoints professionally qualified and
experienced staff manages each of these function on a full time basis. Mutual fund provides
varieties of schemes for different kind of customer to suit their goals. Mutual fund have
open-ended and close-ended schemes, children’s plan, diversified equity fund, balanced fund,
liquid plan, income fund, short term fund, sector fund and pension plan. So the future of
mutual fund in India is bright, because it meets investor’s confidence.
1. The majority of respondents were of the age group below 29 & above 60.
2. Major part of the respondents belong to service sector.
3. Annual income of the respondents between 1-2 lacks prefers more of investments.
4. Investor’s preference when going for an investment in primarily for security.

59. 59
SUGGESTIONS
Indian mutual fund industry has completed 48 years till 2012. In spite of such a
long experience and huge establishment, most of the mutual fund schemes have been performing
inefficiently. Mutual fund companies, AMFI and governing bodies as SEBI should take
corrective measures for this. For achieving the efficiency level, all the inefficient schemes might
follow their respective peer efficient schemes in the proportion of their target values or virtual
inputs. Load fee and expense ratio have been found as the major cause of inefficiency in mutual
fund schemes and hence mutual fund companies might focus on reducing these.
Most of the mutual fund companies are not getting benefited in performance
efficiency frothier experience. Therefore, older mutual fund schemes must be either wind up or a
thorough review of strategy is needed i.e., these must be restructured. Also, large mutual fund
schemes with high assets are not performing efficiently. Therefore, mutual fund companies
should either improve their management or must occupy limited funds.
Investors consider the Indian mutual fund industry as a non performing one. During
April, 2006 to March, 2012, more than half of the mutual fund schemes have risk adjusted
performance (Sharpe ratio) below than the industry average risk adjusted return. Therefore,
companies should take corrective measures to improve their performance. Also policy makers
and governing bodies might abolish the schemes giving poor performance since a long period.
Investors consider mutual funds as risky as shares. Its liquidity is perceived as high
but tax benefits and procedural understanding are low for this investment avenue. Therefore,
there is need to educate investors about the advantages of mutual fund schemes. The AMFI with
the help of SEBI should arrange more and more awareness programmers to promote proper
understanding of the concept and working of mutual funds.
To conclude the researcher can say that Investors judge mutual fund schemes for
investment on the basis of their structure, size, performance, status and professional

60. 60
expertise. Therefore, mutual fund companies should emphasize strong points of their schemes
regarding these characteristics. Further, investors expect strong grievance mechanism,
regulations and expert advice from mutual fund companies. Most of the investors have been
investing in growth, income and balanced mutual fund schemes. They must be made aware about
the benefits of other type of schemes also as ELSS, index, fund of funds, international funds, and
lifestyle funds and so on

61. 61
BIBLIOGRAPHY
www.irda.org.com
www.nseindia.com
www.moneycontrol.com
http://www.ehow.com
http://www.amfiindia.com
http://www.economictimesindiatimes.com
http://www.businessstandards.com
http://faculty.ed.umuc.edu/.../A%20Chi%20Square%20Test%20for%20Goodness%20of%20
Fit
www.mutual funds india.com

62. 62
QUESTIONNAIRE
Respected Madam/Sir,
We are pursuing Master of Business Administration from National Institute of
Cooperative Management. We are doing our research report on “A Study on Investment
Avenue and perception about Mutual fund.” as a part of our course curriculum. We
will be more obliged if you could respond to the below mentioned questionnaire. The
information provided by you will be kept confidential and used for academic purpose
only.
Name of person:
_________________________________________________________
Gender:  Male  Female
Age:  18 to 29  30 to 39  40 to 49  50 to above
Address:
__________________________________________________________
__________________________________________________________
1) What investment opportunities you prefer to invest your saving?
 Bank Deposit  Mutual fund
 Debentures  Insurance
2) How much amount do you save yearly?
 0 to 50000  50000 to 100000
 100000 to 150000  150000 to above

63. 63
3) Do you invest in mutual fund?
 Yes  No
4) What criteria you keep in your mind while selecting any investment opportunity?
 Security  Liquidity
 Maturity  Tax benefit
5) Which type of fund would you like to invest?
 Equity fund  Debt fund  Hybrid fund
6) Which structure of scheme do you prefer in mutual fund?
 Open Ended  Close Ended
7) When you invest in mutual fund which mode of investment will you prefer?
 Lump sum investment  Systematic investment plan
8) How long would you like to hold your mutual fund investment?
 Less than 1 year  1 to 3 year
 4 to 6 year  7 to above
9) How would you rate the risk associated with mutual fund?
 Low  Moderate  High
10) How would you rate mutual fund on the basis of return?
 Highly satisfied  satisfied
 Average  Dissatisfactory

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11) Which option would you prefer in mutual fund?
 Dividend payout  Dividend reinvestment  Growth
12) Your overall experience with mutual fund investing?
 Highly satisfied  satisfied
 Average  Dissatisfactory