comparative study of investment avenue

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A COMPARATIVE STUDY ON VARIOUS INVESTMENT AVENUES IN THEMARKET

FOR WAY2WEALTH

BY

B.JAGADEESAN

REG NO: 35103102

OfS.R.M Engineering College

A PROJECT REPORTSubmitted To The

School Of Management

In Partial Fulfillment of the RequirementFor The Award of the Degree

Of

MASTER OF BUSINESS ADMINESTRATION

S.R.M INSTITUTE OF SCIENCE AND TECHNOLOGY(Deemed University)June, 2005


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BONAFIDE CERTIFICATE

Certified that this project report titledA Comparative Study on Various Investment Avenues In

The Marketis the bonafide work of

Mr B. JAGADEESANwho carried out the research under

my supervision. Certified further, that too the best of my knowledge the work reported herein does

not form part of any other projects report are dissertation on the basis of which a degree or award

was conferred on an earlier occasion on this or any other candidate .

Signature of the guide Signature of the H.O D

(Name of the Guide)

ACKNOWLEDGEMENT

I take this opportunity to express my deep sense of gratitude to the S.R M School of

Management Studies for providing me an opportunity to do this project work and my sincere thanks

to our principal Prof.VENKATARAMANI, B.E.,M.Tech.,F.I.E and Dr.JAYASHREE

SURESH, Head of the Department of Management Studies, for allowing me to do the project

work in the area of Finance.

Words at my command are not adequate to convey the depth of my feeling of gratitude to

my esteemed facultyMr. T. P.NAGESH, Professor, Department of Management Studies, for


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his excellent and encouraging guidance. Last but not least I wish to express my deep feeling of

gratitude to all my Family Members and Friends for their kind help extended to complete this

project work successfully.

My profound thanks to the Management ofWAY2WEALTH SECURITIES PVT Ltd,

for permitting me to do the project in their organization. I would like to thank Mr. SELVA

KUMAR[Regional Sales Manager], for his encouragement during my project work I would also like

to thank Mr. SUBBURAMAN, Mr. VARADHARAJAN and Mr. SADAGOPAN [Business

development Manager]for their guidance and help during the entire period of my project work.

CONTENTS

I INTRODUCTION ` 1

1.1VARIOUS RISK INVOLVED WHILE INVESTING 3

1.2TYPES OF POLICIES 5

1.3CONCEPT OF MUTAL FUND 6

1.4DIFFERENT TYPES OF MUTUAL FUND SCHEMES 7

1.5FEATURES/ROLE/BENEFITS 10

1.6EQUITY MARKET 12

1.7ABSTRACT 14

II RESEARCH DESIGN 15


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2.1 STATEMENT OF PROBLEM 16

2.2 OBJECTIVE OF STUDY 17

2.3 REVIEW OF LITERATURE 18

2.4 SCOPE OF THE STUDY 20

2.5 SAMPLING DESIGN 20

2.6 TYPE OF SAMPLING 21

2.7 SOURCES OF DATA 22

2.8 TOOLS AND TECHNIQUES USED FOR ANALYSIS 23

2.9 LIMITATIONS OF STUDY 26

III COMPANY PROFILE 28

IV DATA ANALYSIS AND INTERPRETATION 31

V FINDINGS & SUGGESTIONS 76BIBLIOGRAPHY

APPENDICES

LIST OF TABLES

T.

NoTITLE Page No

4.1.1 Age of Respondents 32

4.1.2 Educational Qualification 34

4.1.3 Salary of the Respondent 36

4.1.4 Investment Factors 38

4.1.5 Perception About Insurance Plan 40

4.1.6 Accumulation Products Opted in Insurance Plan 42

4.1.7 Knowledge Level Of Investors In Mutual Funds 44

4.1.8 Mutual Factors 46

4.1.9 Risk and Return in Avenues 48

4.2.1 Chi-Square Test 50

4.2.2 ANOVA I 53

4.2.3 ANOVA II 56


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4.2.4 Rank Correlation 59

4.2.5 IRR Table 62

4.2.6 Return From Equity Plan 64

4.2.7 Balanced Fund Return 65

4.2.8 Risk in Equity Fund 66

4.2.9 Risk in Balanced Fund 67

4.3.1 Sensex Movements 04-05 68

4.3.2 Nifty Movements 04-05 69

4.3.3 Calculation of Return ( Sensex) 70

4.3.4 Calculation of Return (Nifty) 70

4.3.5 Total Risk and Total Return 70

4.3.6 Over all Risk and Return of Various Avenues 72

4.3.7 Customer Preference towards Investment avenues 72

LIST OF GRAPHS

C.

NoTITLE Page No

4.1.1 Age of Respondents 33

4.1.2 Educational Qualification 35

4.1.3 Salary of the Respondent 37

4.1.4 Investment Factors 39

4.1.5 Perception About Insurance Plan 41

4.1.6 Accumulation Products Opted in Insurance Plan 43

4.1.7 Knowledge Level Of Investors In Mutual Funds 45

4.1.8 Mutual Factors 47


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4.1.9 Risk and Return in Avenues 49

4.2.5 IRR Table 62

4.2.6 Return From Equity Plan 64

4.2.7 Balanced Fund Return 65

4.2.8 Risk in Equity Fund 66

4.2.9 Risk in Balanced Fund 67

4.3.1 Sensex Movements 04-05 68

4.3.2 Nifty Movements 04-05 69

4.3.5 Total Risk and Total Return 71

4.3.7 Customer Preference towards Investment avenues 73

ABSTRACT

This study analysis the investment portfolio of the individual and the various Risks

and Returns calculation are made for the various avenues in order to suggest the suitable portfolio

for the individual based on the risk appetite of the person. The methodology used is descriptive and

exploratory research. The data were collected from 200 respondents using questionnaires. Most of

the respondents were qualified and income group people.

It is shown from the analysis that the majority of the respondents feels that the risk and the

return are more important factor in the investment and also in the insurance plan they prefer,

accumulation plan, and in the case of mutual find they prefer Regular & Capital appreciation.

Statistical test shows that the occupation of the respondents have directly influence in the

choice of the investment avenues and the ANOVA proves the risk and return are most important

factor and the rank co-relation show that the investment Porto folio doesnt suit the scientific

portfolio


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Finally it has been suggested a that insurance should be viewed has a risk cover not an

investment avenues,50 % should be in guaranteed addition, 30 % in mutual fund and 20% in stocks

CHAPTER I

INTRODUCTION

INTRODUCTION

An investment is a sacrifice of current money or other resources for futurebenefits. A sacrifice takes place now and it is certain but the benefits is expected in the future andtends to be uncertain. In the investment the risk elements and the time elements places a major role

Investment avenues are classified as show in the chart:


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Almost every one has a portfolio of investments; the portfolio is likely to comprise financial assets

and real assets. This project will be mainly focused on the financial assets such as insurance, stock,

mutual fund, bonds etc.

1.1 VARIOUS RISK INVOLVED WHILE INVESTING

THE RISK-RE TURN TR ADE-OFF:

Non-Marketable

Financial Assets

Bonds

Mutual Funds

Real Estates Precious Objects

Life Insurance Policies

Money Market

Instruments

Equity Shares

Investments

Avenues

Financial Derivatives


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The most important relationship to understand is the risk-return trade-off. Higher the risk greater

the returns/loss and lower the risk lesser the returns/loss. Hence it is upto the investor to decide

how much risk does he is willing to take- up. In order to

take an in investment decision one should be aware about the various risk involved in it.

MARKET RISK:

Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting

the market in general lead to this. This is true, may it be big corporations or smaller mid-sized

companies. This is known as Market Risk. A Systematic Investment Plan-SIP that works on the

concept of Rupee Cost Averaging might help mitigates this risk.

CREDIT RISK:The debt servicing ability (may it be interest payments or repayment of principal) of a

company through its cash flows determines the Credit Risk faced by you. This credit risk is

measured by independent rating agencies like CRISIL who rate companies and their paper. A AAA

rating is considered the safest whereas a D rating is considered poor credit quality. A well-

diversified portfolio may help to mitigate this risk.

INFLATION RISK:

The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times people

make conservative investment decisions to protect their capital but end up with a sum of money that

can buy less than what the principal could at the time of the investment. This happens when

inflation grows faster than the return on your investment. A well-diversified portfolio with some

investment in equities might help mitigate this risk.

INTEREST RATE RISK:

In a free market economy interest rates are difficult if not impossible to predict. Changes ininterest rates affect the prices of bonds as well as equities. If interest rates rise the prices of bonds

fall and vice versa. Equity might be negatively affected as well in a rising interest rate environment.

A well-diversified portfolio might help mitigate this risk.

POLITICAL/GOVERNMENT POLICY RISK:


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Changes in government policy and political decision can change the investment

environment. They can create a favorable environment for investment or vice vers

Can insurance be an investment avenue?

Life is uncertain. But the perils faced by human life are certain. Death may take away a individual but

disability is the worst. The scientific principles upon which life insurance is based upon are as

follows:

1.Shared Risk

2.Law of Large Numbers

3.Predictable Mortality

4.Invested Assets

5.Fair and accurate Risk selection.

The concept of Life Insurance has evolved over a period of time to meet the different needs of the

customers. The two basic needs that are common for any individual are (a) Risk Coverage and (b)

Future savings. Risk here means Death. The main types of insurance are:

1.Term Insurance

2.Endowment Insuranc

1.2 TYPES OF POLICIES

Term Insurance:

This type of policy covers the risk i.e., death. The person gets the Sum Assured only if deathoccurs and the money is paid to his nominee. Generally the period of coverage varies from 1,5,10,15or 20 years. The advantage in this type of insurance is the low cost involved. The insured can renewthe policy after expiry if such a n option is available in the policy. The policy can also be converted

into a savings policy if that option is also available. Generally the companies do not insist on amedical test for renewal


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ENDOWMENT INSURANCE:

In this type of insurance the insured can enjoy the sum assured even if he survives

the policy term. It covers the family on the death of the insured. It is a sound plan for all type of

customers. It can be utilized to accumulate a fund so that future events can be managed. The

endowment plans have the choice of participating in the profits of the company for which a higher

premium is charged. Another endowment plan variation is Money Back Policy which is also

popular among parents who have children, as they get the money at regular intervals. Another

version of this policy is Joint Life policy where both the husband and wifes life is covered.

Another version is Unit Linked Insurance Plan where the premium paid consists of two parts (a)

Risk premium and (b) Investment premium. The risk premium takes care of providing security to

the family and the second part is invested in three different modes based on the choice of the

insured as follows:

FUND

NAME

EQUITY DEBT LIQUID

Secured Fund Not less than 10% Not less

than 80%

Not less than 20%

Balanced Fund Not less than 30% Not less

than 80%

Not less than 20%

Risk Fund Not less than 50% Not less

than 75%

Not less than 25%

Another type of life insurance product is the Whole Life Insurance. There are two

variations to this policy. The first one is Pure whole Life where the premiums are continuously

payable under the throughout the life of the insured till death. The second one is the Limited

Payment Whole Life Insurance where premiums are payable for a limited and shorter period at the

option of the insured or till death, whichever is earlier. The advantage of this policy is that the risk

coverage is there till the end of the policy.

1.3 CONCEPT OF MUTUAL FUND


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Mutual fund is a mechanism for pooling the resources by issuing units to the investors and

investing funds in securities in accordance with objectives as disclosed in offer document.

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.

The profits or losses are shared by the investors in proportion to their investments. The mutual

funds normally come out with a number of schemes with different investment objectives, which are

launched from time to time. A mutual fund is required to be registered with Securities and Exchange

Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

1.4 DIFFERENT TYPES OF MUTUAL FUND SCHEMES

SCHEMES ACCORDING TO MATURITY PERIOD:

A mutual fund scheme can be classified into open-ended scheme or close-ended scheme

depending on its maturity period.

OPEN-ENDED FUND/ SCHEME :

An open-ended fund or scheme is one that is available for subscription and repurchase on a

continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently

buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The

key feature of open-end schemes is liquidity.

CLOSE-ENDED FUND/ SCHEME:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open

for subscription only during a specified period at the time of launch of the scheme. 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 the units 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


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the two exit routes is provided to the investor i.e. either repurchase facility or through listing on

stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

SCHEMES ACCORDING TO INVESTMENT OBJECTIVE:

A scheme can also be classified as growth scheme, income scheme, or balanced scheme

considering its investment objective. Such schemes may be open-ended or close-ended schemes as

described earlier. Such schemes may be classified mainly as follows:

GROWTH / EQUITY ORIENTED SCHEME:

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such

schemes normally invest a major part of their corpus in equities. Such funds have comparatively

high risks. These schemes provide different options to the investors like dividend option, capital

appreciation, etc. and the investors may choose an option depending on their preferences. Theinvestors must indicate the option in the application form. The mutual funds also allow the investors

to change the options at a later date. Growth schemes are good for investors having a long-term

outlook seeking appreciation over a period of time.

INCOME / DEBT ORIENTED SCHEME:

The aim of income funds is to provide regular and steady income to investors. Such schemes

generally invest in fixed income securities such as bonds, corporate debentures, Government

securities and money market instruments. Such funds are less risky compared to equity schemes.

These funds are not affected because of fluctuations in equity markets. However, opportunities of

capital appreciation are also limited in such funds. The NAVs of such funds are affected because of

change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to

increase in the short run and vice versa. However, long term investors may not bother about these

fluctuations.

BALANCED FUND:

The aim of balanced funds is to provide both growth and regular income as such schemes invest

both in equities and fixed income securities in the proportion indicated in their offer documents.

These are appropriate for investors looking for moderate growth. They generally invest 40-60% in

equity and debt instruments. These funds are also affected because of fluctuations in share prices in

the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure

equity funds.


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INVESTMENT AVENUE

One of the basic characteristics of a mutual fund is that it provides as Ideal Avenue for

investment for persons of small means, and enables them to earn a reasonable return with the

advantages of relatively

An investment is a sacrifice of current money or other resources for future benefits. Numerous

avenues of investments are available today. The two key aspects of any investment are time and risk.

Mutual funds also offer good investment opportunities to the investors. Like all investments, they

also carry certain risks. The investors should compare the risks and expected yields after adjustment

of tax on various instruments while taking investment decisions. The investors may seek advice from

experts and consultants including agents and distributors of mutual funds schemes while making

investment decisions.

PROFESSIONAL MANAGEMENT:

It is possible for the small investors to have the benefit of professional and expert management

of their funds. Mutual funds employ professional experts who manage the investment portfolios

efficiently and profitably. Investors are relieved of the emotional stress involved in buying or selling

securities since mutual take care of this function. With their professional knowledge and experience,

they act scientifically with the right timing to buy and sell for their clients. Moreover, automatic

reinvestment of dividends and capital gains provides relief to the members of mutual funds.

Expertise in stock selection and timing is made available to investors so that the invested funds

generate returns.

DIVERSIFIED INVESTMENT:

Mutual funds have the advantage of diversified investment of funds in various industry segments

spread across the country. This is advantageous to small investors who cannot afford having the

shares of highly established corporate because of high market price. Thus, mutual funds allow

millions of investors to have investment in a variety of securities of many different companies. Small

investors therefore share the benefits of an efficiently managed portfolio and are free of the problem

of keeping track of share certificates etc of various companies, tax rules, etc.


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BETTER LIQUIDITY:

Mutual funds have the distinct advantage of offering to its investors the benefit of better liquidity

of investment. There is always a ready market available for the mutual funds units. In addition, there

is also an obligation imposed by SEBI guidelines. For instance, in the case of open- ended mutual

fund units, it is possible for the investor to divest holdings any time during the year at the Net Asset

Value.

REDUCED RISKS:

There is only a minimum risk attached to the principal amount and return for the investments

made in mutual fund schemes. This is usually made possible by expert supervision, diversification

and liquidity of units. Mutual funds provide small investors the access to a reduced investment risk

resulting from diversification, economies of scale in transaction cost and professional finance

management.

INVESTMENT PROTECTION:

Mutual funds in India are largely regulated by guidelines and legislative provisions put in place by

regulatory agencies such as the SEBI. The Securities Exchange Commission (SEC) in the USA

allows for the provision of safety of investments. In order to protect the investor interest, it isincumbent on the part of mutual funds to broadly follow the provisions laid down in this regard.

SWITCHING FACILITY:

Mutual funds provide investors with flexible investment opportunities, whereby it is possible to

switch from one scheme to another. This flexibility enables investors to shift from income scheme

to growth schemes, or vice versa, or from a close-ended scheme to an open-ended scheme, all at

will.

1.6 EQUITY MARKET:

When we look the security market as an avenue we have thesealternatives:


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EQUITY SHARES

Equity Share represents ownership capital. As a Equity share holder, you have a ownership stake in

the company. This Essentially means that you have a residual interest in income and wealth. The

Share movements are reflected in the various index points

o Bombay Stock Exchanges Sensitive Index

o S&P Nifty Index

BOMBAY STOCK EXCHANGES SENSITIVE INDEX:

Perhaps most widely followed stock market index in

India, Bombay Stock Exchange Index, Popularly called sensex reflects the movements of 30

sensitive share from specified and non specified groups.

Derivatives

Market

Debt MarketEquity Market

Government

Securities

Market

Corporate Debt

Market

Money Market Options

Market

Futures Market

Securities

Market


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S&P Nifty Index:

Arguably the most rigorously constructed stock market index in India, the nifty

index reflects the price movements of 50 stocks selected on the bases of market capitalization and

liquidity

CHAPTER II

RESEARCH DESIGN

2.1 STATEMENT OF PROBLEM:

Based on the definition of problem, it is clearly understandable that a problem does

not necessarily mean that something is seriously wrong with a current situation that needs to be

rectified immediately. But a Problem could simply indicate an interest in an issue where findings

the right answers might help to improve an existing situation.

In this scenario the investment portfolio should be mainly focused on availability of right amount of

money at the right time to the right person can be called as an efficient portfolio.

Here the problem of the study is mainly focused on finding out efficient portfolio of the

individuals based on the risk appetite of the person

2.2 OBJECTIVE OF STUDY

PRIMARY OBJECTIVE

To find out the various parameters that an investor look from an investment.

To find out what a investor look from an insurance plan.

To Find out the investors level of knowledge in Mutual Fund and the various factors that

they look from the Mutual Funds

To find out which Investment Avenue gives high return from the investor point of view.

To Find out which Investment avenue gains more Risks from the investor point of view


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SECONDARY OBJECTIVE:

To calculate the Risk and Return for Insurance plan, Mutual Funds Schemes and Stocks.

To correlate the ranks and suggest the Portfolio.

To the organization it is to get to know that which avenue attacks more number of investors

in the type of portfolio they follow

2.3 REVIEW OF LITERATURE

Security and constant search for security have been the unending endeavors of human race since thebeginning of the civilization. Right from the stone-age man to the modern IT personality, this search

for security has brought out innovative ideas.

HISTORY OF INSURANCE:

The roots of insurance might be traced to Babylonia were traders were encouraged to

assume the risks of the caravan trade through loans that were repaid only after the goods had arrived

safely. This practice resembled bottomry and given legal force in the Code of Hammurabi

With the growth of towns and trade in Europe, the medieval guilds undertook to protecttheir members from loss by fire and shipwreck, and to provide decent burial and support in sickness

and poverty. By the middle of the 14th century, as evidenced by the earliest known insurance

contract, marine insurance was practically universal among the maritime nations of Europe. In

London Lloyds coffee house was a place where merchants, ship owners, and underwriters met to

transact business. By the end of the 18th century, Lloyd had progressed into one of the first modern

insurance companies. In 1693, the astronomer Edmond Halley constructed the first mortality table,

based on the statistical laws of mortality and compound interest. The table was corrected in the year

1756 by Joseph Dodson, and made it possible too scale the premium rate to age; previously the rate

had been the same for all ages.

Insurance developed rapidly with the growth of British commerce in the 17 and the 18th

century. Prior to the formation of corporations devote solely to the business of writing insurance,

policies were signed by a number of individuals, each of whom wrote his name and the amount of


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risk he was assuming underneath the insurance proposal, hence the term underwriter. The first stock

insurance company was chartered in England in 1720. Fire Insurance corporations were formed in

the year 1787. In the year 1830s the practice of classifying risks began.

The New York Fire of 1835 called attention to the need for adequate reserves to meet unexpectedly

large losses. The business of life insurance in India in its existing form started in the year 1818 with

the establishment of Oriental Life Insurance Company in Calcutta.

HISTORY OF INSURANCE IN INDIA

Some oftheimportantmilestones

inthelifeinsurance

business in India are:

Year Details

1912 The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business

1928 The Indian Insurance Companies Act enacted to enable the government to

collect statistical information about both life and non-life insurance business

1938 Earlier legislation consolidated and amended to by the insurance act with the

objective of protecting the interests of the insuring people

1956 245 Indian and Foreign insurers and provident societies taken over by the

central government and nationalized. LIC formed by an act of parliament.

2.4 SCOPE OF THE STUDY:

The Scope of the study is to probe among the investor of Chennai. The study was conducted for the

period of three months carrying various places in Chennai.

Primary data was collected from the investors and Secondary data was collected from the Journals,

Magazines and Web Site

YEAR DETAILS

1818 Europeans started the Oriental Life Insurance Co in

Calcutta

1870 The first Indian Insurance Company Bombay

Mutual Life Insurance

1870 The British Govt. enacted The Insurance Act1912 First Indian Insurance Act was passed with an

Enactment in 1938.


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2.5 SAMPLING DESIGN:

While Developing a Sampling Design. The Researcher must pay attention to the following points.

Sampling units

Sampling Frame

Type of Sampling

Size of Sample

SAMPLING UNITS:

The Samples are derived from the list of Clients of WAY2WEALTH.

SAMPLING FRAME:

Sampling Frame is Representation of elements of target population that consist of a list or

set of direction for identifying the target population. This study done under the consideration of

WAY2WEALTH clients. These lists of Clients are taken to the sampling frame.

2.6 TYPE OF SAMPLING:

PROBABILITY SAMPLING:

Under this Sampling procedure, every item of the universe has an equal chance of inclusion in the

sample. The Suitable method for this study is probability sampling, In probability sampling

technique, Simple Random Technique has been followed for this Study.

DETERMINATION OF SAMPLE SIZE:

The Sample survey was conducted with 10 clients of which 8 of them having the knowledge of

products and 2 of them havent turn to be knowledgably.

So, Sample Size Determination = p q / n

P = 0.8,Q= 0.2


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= 0.8 0.2 / 10

= 0.1265

As Normal Distribution, The Researcher prefer to limit the error of estimate to 2% as 95%

confidence level (Z = 1.96).

Z = error / SD / n

N = [Z / error SD]

N= [1.96 /.02 .1265]

N= 153

For Better understanding Sample was rounded off to 200 samples

Research Design:

The research design chosen for the project has been descriptive in nature.

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. The questionnaires are used for collecting responses from the respondents.

2.7 Sources of Data:

There are two different methods for collection of data to conduct this Descriptive Research

study.

1. Primary Data Collection Method

2. Secondary Data Collection Method


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In this study the primary data collection method have been used to collect data

Primary Data Collection:

Primary data are those which are collected a fresh and for the first time and thus happen to

be original in character

Primary data collection is nothing but the data that is directly collected from the people by

the researcher himself. Primary data may pertain to demographic / socio economic characteristics or

the customers, altitudes and opinions of people, their awareness and knowledge and other similar

aspects

In this study Primary Data collection method has helped the researcher to a great extent in

arriving at the results

METHODS OF PRIMARY DATA COLLECTION:

The method used for collecting Primary data is

Survey

SURVEY METHOD:

Survey method is the systematic gathering of data from the respondents survey is the most

commonly used method of primary data this is widely used because of its

Extreme Flexibility Reliability

Easy Understandability

The main purpose of survey is facilitate understanding or enable prediction of some aspects of the

population being surveyed

SURVEY TECHNIQUE:

The technique used for conducting the survey is called Survey Technique.

There are three techniques to conduct the survey Viz.

1. Personal Interview

2. Telephone Interview

3. Mail Survey


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DATA COLLECTION METHOD:

The instrument used to collect data for the study was the structured and non-disguised questionnaire

through open ended and close ended questions

2.8 Tools and Techniques Used for Analysis:

The statistical tools used for the study are as follows,

Rank Correlation

Risk & return Calculation

One Way ANOVA Table

Chi-Square

CHI SQUARE TEST:

The chi square test is an important test amongst the several test of significance developed

by statisticians. Chi square (Pronounced as Ki-square), is a statistical measure used in the context

of sampling analysis for comparing a variance to a theoretical variance. As a non-parametric test, itcan be used to determine if categorical data shows dependency or the two classifications are

independent. Thus, the chi square test is applicable in large number of problems.

The formula used for chi square is,

2 = (O E) 2/ E

Where,

O Observed frequency,

E Expected frequency,


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ANALYSIS OF VARIANCE (ANOVA):

Analysis of variance (abbreviated as ANOVA) is an extremely useful when multiple sample

cases are involved. Using this technique, one can draw inferences about whether the samples have

been drawn from populations having the same mean. Variance is an important statistical measure

and is described as the mean of the squares of deviations taken from the mean of the given series of

data. It is frequently used measure of variation.

RANK CORRELATION:

Correlation studies the joint variation of two or more variables for determining the amount

of correlation between two or more variables.

FORMULA:

6(d)R s = 1 -

n(n 1)

2.9 LIMITATIONS OF STUDY:

This study mainly depends on the current market perception, But the market perception is

changing time to time so the recommendation and suggestions are subject to revises based

on the market changes

This study required more data for knowledge about the market. The data collection, Data

recording and data analysis are very difficulty to work in this study

Short Time Period was Inadequate for conducting detailed Study among the investors\

The study was Limited to the Capabilities and willingness of the respondents to

appropriately and filling the questions.


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CHAPTER III

COMPANY PROFILE

COMPANY PROFILE

INTRODUCTION:

Way2Wealth is a premier Investment Consultancy Firm that has been

launched with the aim of making investing simpler, moreunderstandable and profitable for the investors.

Way2Wealth brings a wide range of product offerings from Fixed Income Securities, Life

Insurance and Mutual Funds to Equity and Derivatives (on the National Stock Exchange) for

the convenience and benefit of it customers. Way2Wealth has over 40 easily accessible Investment

Outlets spread across 20 major towns and cities in the country.

Mission:

Way2Wealth is a premier Investment Consultancy Firm, launched with the mission to be the pre-

eminent destination for personalized financial solutions helping individuals creates wealth.

PHILOSOPHY:

The company believes that our knowledge combined with our investors trust and

involvement will lead to the growth of wealth and make it an exciting experience.


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HERITAGE:

9 Sivan Securities started in 1984, has a long and illustrious

track record of being amongst the premier Financial

Intermediaries in the country as well as being an incubator

for IT start-up firms.

9 The Venture Capital division came to be known as Global Technology Ventures (GTV has

provided venture capital to companies such as Kshema Technologies, Mind Tree, Ivega etc.)

and the Financial Intermediary Division was spun off as Way2Wealth in the year 2000.

9 Way2Wealth is promoted by Sivan Securities and Global Technology Ventures Ltd.

Prudential ICICI AMC provides further strength to Way2Wealth as strategic equity partner.

9 Over the years, Sivan has developed a strong reputation for navigating its investors through

all the ups and downs in the market. Way2Wealth has inherited these same values in addition

to a base of 75,000 individual customers, over 300 corporate/institutional clients.

9 Other companies in the group include Amalgamated Bean Coffee Trading Company Ltd.

(one of the largest Coffee Exporters in India) and Caf Coffee Day, a chain of youth

hangout coffee parlors.

Way2Wealth has a very credible management team, who has well over 100 man-years of experience

amongst themselves

Way2Wealth Investment outlets are designed to be places where retail investors can come in touch

with Investment opportunities in an atmosphere of convenience and comfort. The look and feel of

the offices across India projects a consistent branch image for the company. The features that

enable a unique facility for retailing financial services include among others:

Easily visible branches set up in the commercial spaces of potential investment zones ranging

between 750sft to 1000sft.

Most branches are located in the ground floor sporting huge glass frontage promoting easy

accessibility and reflecting our attitude of complete transparency.


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CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS AND INTERPERTATION

TABLE 4.1.1

AGE OF THE RESPONDENTS

AGE No. Of Respondents Percentage

20 25 years40 20

25 35 years 44 22

35 45years 60 30

45 55 years 40 20

Above 55 years 16 8

TOTAL 200 100

(SOURCE: PRIMARY DATA)

INFERENCE:

From the above table it can be inferred that 30% of the respondents belongs to age between 35-45

years of age. Very few belong to the age group of above 55 years.


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CHART 4.1.1

AGE OF THE RESPONDENTS

20

22

30

20

8

0

10

20

30

40

20- 25 25-35 35-45 45-55 Above 55

AGE IN YEARS

%O

FRESPONDENT


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TABLE 4.1.2

EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

QUALIFICATION No. Of Respondents Percentage

UG74 37

PG 56 28

Professional 46 23

Others 24 12

Total 200 100


INFERENCE:

From the above table it can infer that 37% of the respondents possess UG qualifications. 10% are

however professionals

CHART 4.1.2

EDUCATIONAL QUALIFICATION OF THE RESPONDENTS


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0

5

10

15

20

25

30

35

40

UG PG Professional Others

EDUCATION QUALIFICATION

%O

FRESPONDENT

TABLE 4.1.3

SALARY OF RESPONDENTS:


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(SO

UR

CE:

PRI

MA

RY

DATA)

INFERENCE:

From the above table it can be inferred that 56%of the respondents belongs to50,000 1,00,000Salary Slab. Very few (i.e.) 16 % belong to the Salary Slab 3,00,000 & above

CHART 4.1.3

SALARY OF RESPONDENTS

SALARY SLAB No. Of Respondent Percentage

50,000 1,00,000 112 56

1,00,000 3,00,000 56 28

3,00,000 & Above 32 16

TOTAL 200 100


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0

10

20

30

40

50

60

50,000 1,00,000 1,00,000 3,00,000 Above 3,00,000

SALARY SLAB

TABLE: 4.1.4

INVESTMENT FACTORS (As per Investors choice):


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0

10

20

30

40

50

60

70

80

90

100

RETURN RISK SAFETY SAVINGS TAX BENEFITS

HIGHLY IMPORTANT

IMPORTANT

NEITHER IMPORTANT OR NOT IMPORTANT

NOT IMPORTANT

HIGHLY NOT IMPORTANT

TABLE : 4.1.5


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PERCEPTION ABOUT INSURANCE PLAN

FACTORS No. Of Respondent Percentage

TAX BENEFITS 32 16PROTECTION 48 24ACCUMULATION 120 60TOTAL 200 100(SOURCE: PRIMARY DATA)

INFERENCE

From the above table it can be inferred that 60% of the respondents look for Accumulation, 24%

and 16% look for protection and Tax benefits from insurance

CHART : 4.1.5

PERCEPTION ABOUT INSURANCE


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(% Of respondent)AVENUES BUDGET 04-05

ENDOWMENT 25

MONEY BACK 23

ULIP 17

WHOLE LIFE 15

RERTIRMENT 20


INFERENCE:

From the above table it can be seen that there is a more important given to Endowment and Money

Back policies in the case of Accumulation

CHART : 4.1.6


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0

5

10

15

20

25

%O

F

RESPONDEN

ENDOWMENT MONEY BACK ULIP WHOLE LIFE RETIRMENT

INVESTOR PREFERENCE IN INSURANCE POLICY

TYPE OF POLICY

.

TABLE : 4.1.7


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KNOWLEDGE LEVEL IN MUTUAL FUNDS

AVENUE SOMEKNOWLEDGE

SUFFICENTKNOWLEDGE

MOREKNOWLEDGE

MUTUAL FUND 36 43 21(SOURCE: PRIMARY DATA)

INFERENCE:

From the above chart it is clearly stated that the knowledge level of the investor in

Mutual Fund is considerably low, since it is a recent avenue.

CHART : 4.1.7

KNOWLEDGE LEVEL IN MUTUAL FUNDS


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FACTORS HIGHLYIMPORTA

NT

IMPORTANT

NEITHERIMPORTA

NT ORNOT

IMPORTANT

NOTIMPORTA

NT

HIGHLYNOT

IMPORTANT

REGULAR

INCOME

78 80 10 19 13

CAPITALAPPRECIATTION

86 74 27 6 7

SAFETY 29 18 78 60 15SAVINGS 0 13 62 45 80TAX BENEFITS 7 15 23 70 85


INFERENCE:

From the above table that the risk and the return are considered to be the most

important factor for an investment about 43% have said that returns are important and around 45%

says that low risk in investment places a major role. Safety, Savings and Tax benefits are also taken in

to consideration for making an investment decision.

CHART : 4.1.8


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MUTUAL FUND FACTORS

0

10

20

30

40

50

60

70

80

90

REGULAR

INCOME

SAFETY TAX BENEFITS

HIGHLY IMPORTANT

IMPORTANT

NEITHER IMPORTANT OR NOT IMPORTANT

NOT IMPORTANT

HIGHLY NOT IMPORTANT

TABLE 4.1.9


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1 1

3 3

2 2

4

55

4

0

1

2

3

4

5

6

RISK RETURN

STOCKS INSURANCE MUTUAL FUNDS

GOVT SECURITIES FIXED DEPOSITS

STATISTICAL ANALYSIS

4.2.1CHI-SQUARE TEST:

PURPOSE:


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It is to know whether the choices of the investments are made according to the

income of the individual.

CROSS TABULATION BETWEEN INCOME OF THE INDIVIDUAL

AND CHOICE OF INVESTMENT AVENUE

TABLE 4.2.1

SALARY SLABAVENUES

50,000-1,00,000 1,00,000-

3,00,000

Above

3,00,000Total

INSURANCE6 2 12 20

STOCKS 0 8 12 20

MUTUAL

FUNDS

40 4 16 60

GOVT

BONDS

4 16 0 20

REAL

ESTATES

0 0 14 14

GOLD 4 6 0 10

FIXED

DEPOSITS

40 8 8 56

Total 112 56 32 200

HYPOTHESIS:Ho: There is no significant relationship between the Income of the Individual and the choice of

Investment Avenues.

H1: There is significant relationship between the Income of the Individual and the choice of

Investment Avenues.

Oi Ei {(Oj Eij) 0.5}2 {(Oj Ej ) 0.5}2/ Ej


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INFERENCE:

There is significant relationship between the income of the individual and the choice of investment

Avenues

4.2.2 ONE-WAY ANOVA:

PURPOSE:

It is in order to find whether the ranks given by the respondent with respect to Risk for theinvestment have any significant difference or not.

HYPOTHISES:

Ho: There is no significant difference between the ranks of the Respondent regarding theRisk for the investment

H1: There is significant difference between the ranks of the Respondent regarding the Riskfor the investment

TABLE 4.2.2

RANKS

AVENUES

1 2 3 4 5

STOCKS 82 78 40 0 0

INSURANCE 40 22 57 20 61

MUTUALFUNDS

78 82 40 0 0

GOVTSECURITIES

0 18 42 100 40

FIXEDDEPOSITS

0 0 21 80 99


N (Total No of Responses) = 25,


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We Shift the origin to 100

RANKS

AVENUES

1 2 3 4 5

MUTUALFUNDS

-18 -22 -60 0 0

STOCKS -60 -28 -53 -80 -39

INSURANCE -22 -18 -60 0 0

FIXEDDEPOSISTS

0 -72 -58 0 -60

GOVTSECURITIES

0 0 -79 -20 -1

SUB TOTAL -100 -190 -310 -100 -100

TOTAL -800

T ( Total of All Observations )= -800

CF( Correction Factor) = T / N

= (-800) / 25 = 25600

SST (Sum of Square of Table ) = (-18) + (-22) + (-60) +(-1)

= 47736 25600

= 22136


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SSC (Sum of Square of Column) = [(-100) + (-190) + (-310) + (-100) + (-100) ] / 5

= 32440 25600

= 6840

SSE (Sum of Square of Errors) = 22136 6840

= 15296

SOURCE OF

VARIATION

SUM OF

SQUARE

DEGREE OF

FREEDOM

MEAN SUM

OF SQUARE

RATIO (F

TEST)

Between the

Ranks

Within the

Ranks

6840

15296

4

20

6840 / 4

= 1710

15296/20

=764.8

= 1710 / 764.8

= 2.235

Total 24

From the table at 0.05 for (20, 4) of the critical value is 5.80

Calculated value of F is Less than Critical value of F ,

We Cannot Reject the Null Hypothesis.

INFERENCE:

There is no significant difference between the ranks of the individuals with respect to Risk

for Investment


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4.2.3 ONE-WAY ANOVA:

PURPOSE:

It is in order to find whether the ranks given by the respondent with respect to Return in theinvestment have any significant difference or not.

HYPOTHISES:

Ho: There is no significant difference between the ranks of the Respondent regarding theReturns from the investment

H1: There is significant difference between the ranks of the Respondent regarding theReturns from the investment

TABLE 4.2.3

RANKS

AVENUES

1 2 3 4 5

MUTUALFUNDS

78 82 40 0 0

INSURANCE 42 20 54 23 61

STOCKS 80 79 41 0 0

FIXEDDEPOSISTS

0 19 40 97 44

GOVTSECURITIES

0 0 25 80 95


N = 25,

We Shift the origin to 95


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RANKS

AVENUES

1 2 3 4 5

MUTUALFUNDS

-17 -13 -55 0 0

STOCKS -53 -75 -41 -72 -34

INSURANCE -15 -16 -54 0 0

FIXEDDEPOSISTS

0 -76 -55 2 -51

GOVTSECURITIES

0 0 -70 -15 0

SUB TOTAL -85 -180 -275 -85 -85

TOTAL -710

T (Total of All Observations )= -710

CF ( Correction Factor) = T / N

= (-710) / 25 = 20164

SST (Sum of Square of Table ) = (-17) + (-13) + (-55) +(-85)

= 39866 20160

= 19702

SSC (Sum of Square of Column) = [(-85) + (-180) + (-275) + (-85) + (-85) ] / 5


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= 25940 - 20164

= 5776

SOURCE OF

VARIATION

SUM OF

SQUARE

DEGREE OF

FREEDOM

MEAN SUM

OF SQUARE

RATIO (F

TEST)

Between the

Ranks

Within the

Ranks

5776

19702

4

20

5776 / 4

= 1444

19702/20

=985.1

= 1444 / 985.1

= 1.465

Total 24

From the table at 0.05 for (20, 4) of the critical value is 5.80

Calculated value of F is Less than Critical value of F ,

We Cannot Reject the Null Hypothesis.

INFERENCE:

There is no significant difference between the ranks of the individuals with respect to Return

for Investment

4.2.4 RANK CORELATION:

PURPOSE:It is to find whether the Rank based on findings and rank based on survery are

correlate each other


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RISK AND RETURN CALCULATION:

RISK:

Risk refers to the possibility that the actual out come of an investment will differ from the

expected out come, to put differently risk refers to the variability or dispersion if an assets return

has no variability, it is risk less.

Suppose you are analyzing the total return of an equity stock over a period of time. Apart from

knowing the mean return, you would also like to know about the variability in returns.

The most commonly used measure of risk in finance is variance or its square root. Standarddeviation. The standard deviation of the historical return series are defined as follows

EQUATIONS FOR CALCULATING THE ERROR AMOUNT (STANDARDDEVIATION):

Where:

s = series number

i = point number in series s

m = number of series for point y in chart

n = number of points in each series

= data value of series s and the ith point

= total number of data values in all series

M = arithmetic mean


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STANDARD ERROR

RETURN:

Investment decisions are influenced by various motives; Mostly investors are largely guidedby the pecuniary motive of earning a return on their investment.

INSURANCE RETURNS CALCULATION (IRR):TABLE 4.2.5

PLANS RETURNSENDOWMENT 12%MONEY BACK 8%

ULIP 10%RETIREMENT 10%


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CHART 4.2.5

0

2

4

6

8

10

12

14

ENDOWMENT MONEY BACK ULIP RETIRMENT

ENDOWMENT

MONEY BACK

ULIP

RETIRMENT

INFERENCE:

From the above table we can able to see that all Insurance Products generates anaverage return of ranging from 8 % 12%, When the Tax Benefits are taken in to account it mayextend to 14%.

RISK:

Since the Insurance products are not based on speculation, The risk attached towards are

normal risk which are explained above.

MUTUAL FUND

As a participant in a mutual fund scheme we should understand thefollowing:

Net Asset Value

Rate of Return


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NET ASSET VALUE:

Net asset value is the actual value of a share /or unit on any business day. It

is computed as follows:

Market Value of the funds investments + Receivables + Accrued incomes -

N A V = Liabilities Accrued Expenses

No. Of Shares or units out standings

RATE OF RETURN:

Periodic rate of return on a mutual fund scheme is calculated as follows:

Rate of Return for the NAV at the end NAV Beginning of Dividend paid

Period = of the period - the period + during the period

NAV at the beginning of the period

RETURNS FOR EQUITY PLAN:TABLE 4.2.6

YEAR HDFC (%) FRANKLIN(%) RELIANCE(%) TATA (%)2003 -1.05 -4.57 NIL -13.972004 95.07 95.22 96.73 104.112005 21.64 13.25 30.23 26.29

CHART 4.2.6


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MUTUAL FUND EQUITY PLAN

-20

0

20

40

60

80

100

120

HDFC

EQUITY

FRANKLIN

INDIA

BLUE CHIP

RELIANCE

VISION

TATA

PURE

EQUITY

AMC

RETURN

S

20032004

2005

(SOURCE: FACT SHEET)

INFERENCE:From the above table it can be seen that in the year 2003 their was negative

returns,2004 it raised up to 95% (avg) in the year 2005 it was ranging between 25% - 30%.

BALANCED FUND RETURNS:TABLE 4.2.7

YEAR HDFC TEMPLETON SUNDARAM2003 11.98 11.37 12.102004 8.64 8.11 8.232005 0.12 -0.99 -1.06

CHART 4.2.7


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-2

0

2

4

6

8

10

12

14

HDFC TEMPLETON SUNDARAM

2003

2004

2005


INFERENCE:From the above table it can be seen that in the year 2003 the returns are ranging

between 11% - 12% ,2004 it was up to 9% (avg) in the year 2005 it was negative returns.

RISK IN EQUITY FUND (%):TABLE 4.2.8

YEAR HDFC FRANKLIN RELIANCE TATA2003 10.86 11.36 NIL 12.152004 16.77 16.56 22.95 19.552005 15.83 14.07 15.37 15.60

CHART 4.2.8


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RISK INBALANCED FUND

0

0.5

1

1.5

2

2.5

3

3.5

4

HDFC TEMPLETON SUNDARAM

AMCs

RISK

2003

2004

2005


INFERENCE:From the above table it can be seen that the risk for all period are ranging between

1% - 3%.

4.3STOCKS RETURNS INDEX :( 2004-2005)

TABLE 4.3.1

1-Apr 5599.12

1-May 5645.86

1-Jun 4792.01

1-Jul 4813.76

1-Aug 5193.251-Sep 5202.16

1-Oct 5587.46

1-Nov 5678.65

1-Dec 6259.28

1-Jan 6626.49

1-Feb 6565.21


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1-Mar 6492.82

CHART 4.3.1

SENSEX OF 04-05

0

1000

2000

3000

4000

5000

6000

7000

Apr-04

May-04

Jun-04

Jul-04

Aug-04

Sep-04

Oct-04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

PERIOD

INDEX

Series1

(SOURCE:BSE INDIA .COM)

INFERENCE:From the above table it is clear that the index has increased by 893.7 points

NIFTY MOVEMENTS :( 2004-2005)

TABLE 4.3.2


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CHART 4.3.2

NIFTY MOVEMENTS 04-05

0

500

1000

1500

2000

2500

Apr-04

May-04

Jun-04

Jul-04

Aug-04

Sep-04

Oct-04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

PERIODS

INDEX

Series1

(SOURCE:NSE INDIA .COM)

INFERENCE:From the above table it is clear that the index has increased by 223.05 points

YEAR INDEX

1-Apr-04 1771.45

2-May-04 1796.1

3-Jun-04 1483.9

4-Jul-04 1506.65

1-Aug-04 1631.55

3-Sep-04 1631.7

3-Oct-04 1744.4

01-Nov-04 1787.301-Dec-04 1960.75

01-Jan-05 2080

01-Feb-05 2057.75

01-Mar-05 1994.5


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CALCULATION OF RETURN (Based on the Sensex Movements from 00-05):

TABLE 4.3.3

YEAR OPENING CLOSING % IN RETURNS

2000-2001 5070.5 4288.33 -15.42

2001-2002 3491 3551.56 1.73

2002-2003 3482.94 3330.16 -4.38

2003-2004 3037.59 5649.3 85.98

2004-2005 5599.12 6492.82 15.96

CALCULATION OF RETURNS (Based on the Nifty Movements from 00 05)

TABLE 4.3.4

YEAR OPENING CLOSING % IN RETURNS

2000-2001 1528.7 1195.05 -21.8

2001-2002 1148.1 1123.6 -2.13

2002-2003 1129.85 1000.6 -9.84

2003-2004 977.4 1744.6 78.49

2004-2005 1771.45 2043.6 15.36

TOTA RISK AND TOTAL RETURN (PERCENTAGE):

TABLE 4.3.5

CHART 4.3.3

INDEX RISK RETURN

SENSEX 39 28

NIFTY 40 34


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TOTA RISK AND TOTAL RETURN (PERCENTAGE)

0

5

10

15

20

25

30

35

40

SENSEX NIFTY

RISK

RETURN

OVER ALL RISK & RETURNS OF VARIOUS AVENUES:

TABLE 4.3.6


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AVENUES RISK RETURNS RANK(based on

calculation)INSURANCE NIL 8 15 1

MUTUAL FUNDS 10 25 26 35 4

STOCK 30 40 35 50 5

FIXED DEPOSITS NIL 3 6.5 2.5

GOVT SECURITIES NIL 6 - 7 2.5

CUSTOMERS PREFERENCE TOWARDS INVESTMENT AVENUES:

TABLE 4.3.7

AVENUES RANKINGS

MUTUAL FUNDS 2

STOCKS 1

INSURANCE 4

FIXED DEPOSITS 3

GOVT SECURITIES & OTHERS 5

CHART 4.3.4

CUSTOMERS PREFERENCE TOWARDS INVESTMENT AVENUES:


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0

5

10

15

20

25

30

35

40

45

MUTUAL

FUND

STOCKS INSURANCE FIXED

DEPOSITS

GOVT

BONDS &

OTHERS

preference of investors

INFERENCE:

From the above mutual funds and stocks are mostly preferred by the investors


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CHAPTER V

SUMMARY OF FINDINGS AND SUGGESTIONS

FINDINGS

From the above calculation we can able to inference that:

9 Most of the respondent belongs to the age of 35 and 45 and very few belong to the age

group of above 55 years. (Table- 4.1.1)

9 Many of the respondents possess UG qualification and very few are belong to Professional

qualification. (Table- 4.1.2)

9 The Salary of the respondent are between 50,000 1,00,000 and very few are above

3,00,000. ( Table- 4.1.3)

9 To first and fore most findings is that the investor is looking Risk and Return as foremost

factors in investment(Table-4.1.4)

9 In Insurance Accumulation is considered to be the most important factor(Table- 4.1.5)

9 It is found out that the investment pattern is followed by the income of the individual(Table-

4.2.1)


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9 In mutual fund the Regular income and Capital Appreciation is considered to be

important(Table-4.1.8)

9 From the ANOVA table we can infer that Stock and Mutual fund ranks first both on Risk

and Return(Table-4.2.2)

9 The Rank co relation shows that portfolio of the individual is based on their own risk

appetite (Table-4.2.3)

9 The insurance sector gives around 15% of returns where all the tax benefits are taken to

consideration, when we consider the inflation factor, which is accleratring at 6%, makes the

returns to be much lower. But the risk concern for the insurance avenue is nil. Since there

are lot of guarantee products and also investment patterns for life insurance companies are

guide by IRDA.

9 The mutual fund industry, which is considered to be flourishing avenue, has got lot of

products, which produce regular returns as well as capital appreciation. From our

calculations we can see the returns from mutual fund are not so consistent and having wide

fluctuations since it is based on the movements of markets. The returns are varying from

26% to 35% and also the risk attached is 10% to 25% for 3 years. Considering the inflation

factor the returns are fair enough. In the new budget the tax benefit under section 80c are

also available to mutual fund.

9 When we take stock market into consideration, the knowledge plays a vital role. The stock

markets give around 30% to 50% of returns where the risk attached is also vary from 30% to

40%. But when we take inflation factor into account this avenue will generate more return

than any other avenue

9 The bank fd and government securities will consistently give 3% to 6.5% and the risk

attached is nil, (expect interest rate risk which is external)


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9 The third step is to invest in products which generates more returns, here the investor must

be ready to take risk and look for capital appreciation (mutual funds)

9 The next step is to invest in stock markets where the investor will gain some knowledge by

dealing with mutual funds. We can invest in those scripts, which is performing well.

For the company

9 It is necessary to concentrate on these products, which the investor likes to

invest more such as mutual funds and stocks.

QUESTIONNAIRE

1. Name:

2. Age : 25-35 36-45 46 55 Above 55

3. Educational Qualification: Graduate Post Graduate Others

4. Designation:5. Your Gross Annual Income Will Be? (p.a)

50,000 1,00,000 1,00,000 3,00,000 3,00,000 & Above

6. What do you expect from an Investment?FACTORS HIGHLY

IMPORTANTIMPORTANT NEITHER

IMPORTANT

OR NOTIMPORTANT

NOTIMPORTANT

HIGHLYNOT

IMPORTANT

RETURNLOW RISKSAFETYSAVINGSTAXBENEFITS


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7. Till now, Your Investment made in?

Fixed Deposits-

Mutual Funds- -

Stocks -

Insurance-

Others -

8. How do you see an insurance plan ?

Essential Not essentialProtectionAccumulation:Tax Benefits:

9. Incase if you invest in Insurance, Which would you opt for Accumulation?

Endowment Money Back ULIP

Whole Life Plan Retirement Plan

10. Do you have the Knowledge about the Mutual Fund Market?

O Some Knowledge O Sufficient Knowledge O More Knowledge

11. What Do you look in from a Mutual Fund ?

FACTORS HIGHLYIMPORTA

NT

IMPORTANT

NEITHERIMPORTA

NT ORNOT

IMPORTANT

NOTIMPORTA

NT

HIGHLYNOT

IMPORTANT

REGULARINCOME


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CAPITALAPPRECIATTION

SAFETYSAVINGSTAX BENEFITS

12. Do you think Stock Market Knowledge is necessary for Trading? Essential Not essential Brokers Knowledge is enough

13. Convey your idea about nature of Return in the following investment Avenues(Rank 1 = High Returns)

RankMutual FundStockInsuranceFixed DepositsGovernment Securities

14. Convey your idea about nature of Risk in the following investment Avenues(Rank 1 = High Risk)

RankMutual FundStockInsurance

Fixed DepositsGovernment Securities

15. Where would you advice to your friend to invest?

________________________________________________________________________


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________________________________________________________________________

BIBLIOGRAPHY:

For Calculation of Risk and Return in MUTUAL FUND:INVESTMENT MANAGEMENT Prasana Chandra

For Calculation of Risk and Return in STOCKS:

INVESTMENT MANAGEMENT S M Maheshwari

For Statistical Analysis:

STATISTICAL METHOD S.P.Gupta

For Research Design:

RESEARCH METHODOLOGY C.R.KOTHARI

Documents

comparative study of investment avenue