Investment Decision in Share Market

8/8/2019 Investment Decision in Share Market

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SUMMER TRAINING REPORT

ON

Comparison between Mutual Fund &

Stock Market InvestmentSUBMITTED TO UTTRAKHAND TECHNICAL UNIVERSITY

IN PARTIAL FULFILMENT OF

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

JITENDRA SINGH

M.B.A (III SEMESTER)

(2009-2011)

EXTERNAL GUIDE INTERNAL GUIDE

Mr. Rajesh manaktala Mr. NITIN GOGIA

(cluster Manager) (Lecturer MBA)

reliance mutual fund AGRA


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TULAS INSTITUTE OF ENGINEERING & MANAGEMENT

(Approved by AICTE, HRD Ministry)

CERTIFICATE

This is certify that the project work done on MUTUAL FUND AS A

Comparison between Mutual Fund & Stock Market Investment

submitted to Tulas Institute Dehradun By JITENDRA SINGH in

partial fulfillment of the requirement for the award of M.B.AProgramme is a bonafide work carried out by him under my

supervision and guidance. This work has not been submitted anywhere

else for any other degree.

Mr. NITTIN GOGIA

(Faculty: MBA)


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ACKNOWLEDGEMENT

No task is a single person effort. Same is with this project. Thus I

would like to extend my sincere thanks to all those people who helped me in

accomplishing my project.

I would like to thank to my project guide Mr. Rajesh Manaktala

who was really proved to be a philosopher & guide in true sense without

whose efforts and guidance it would have been impossible to complete this

report.

I would also to my relationship manager Mr. Brijesh Kumar

Dwivedi whose efforts and guidance it would have been impossible to

complete this report.

At last I owe my project success to my faculty members, my seniors,

friends, family and last but not the least special thanks to all those persons,

who gave their valuable time in helping me complete the project.


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(JitendraSing

h)

DECLARATIONS

I, Jitendra Singh a Bonafide Student of M.B.A., Tula's Institute

The Engineering & Management College, Dehradun here by declare that

the project entitled Comparison between Mutual Fund & Stock Market

Investment, submitted in partial fulfillment of requirement of Master

Business Administration is my original work.

Date :.

Time : (Jitendra

Singh)


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CONTENTS

Certificate from company

Certificate from internal guide

ACKNOWLEDGEMENT

DECLARATION

Chapter - 1 INTRODUCTION

Chapter - 2 COMPANY PROFILE

Chapter - 3 OBJECTIVES AND TYPE

Chapter-4 INVESTMENT IN STOCK MARKET

Chapter - 5 RESEARCH METHODOLOGY


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Chapter - 6 DATA ANALYSIS AND INTERPRETATION

Chapter - 7 FINDINGS AND CONCLUSIONS

Chapter - 8 SUGGESTIONS & RECOMMENDATIONS

ANNEXURE BIBLIOGRAPHY QUESTIONNAIRE

INTRODUCTION

About Reliance Capital Asset Management Ltd.

Reliance Capital Asset Management Ltd.(RCAM) is an unlisted Public

Limited Company incorporated under the Companies Act, 1956 on

February 24, 1995, having its registered office at "Reliance House",

Near. Mardia Plaza, Off. C.G. Road, Ahmedabad, 380 006 and its

Corporate Office at One Indiabulls Centre, Tower 1, Jupiter Mills

Compound , 841, Senapati Bapat Marg, Elphinstone Road, Mumbai -

400 013. RCAM has been appointed as the Asset Management

Company of Reliance Mutual Fund by The Trustee vide Investment

Management Agreement (IMA) dated May 12, 1995 and executed

between Reliance Capital Trustee Co. Limited and Reliance Capital

Asset Management Ltd. and amended on August 12, 1997 and January

20, 2004 in line with SEBI (Mutual Funds) Regulations, 1996).


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Pursuant to this IMA, RCAM is authorised to act as Investment

Manager of the Mutual Fund. The networth of the Asset Management

Company based on audited accounts as on March 31, 2009 is Rs.

841.32 Crore.

Reliance Mutual Fund Profile

Reliance Mutual Fund (RMF) has been established as a trust under the

Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the

Settlor/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as

the Trustee.

RMF has been registered with the Securities & Exchange Board of India

(SEBI) vide registration number MF/022/95/1 dated June 30, 1995.

The name of Reliance Capital Mutual Fund has been changed to

Reliance Mutual Fund effective 11th March 2004 vide SEBI's letter no.

IMD/PSP/4958/2004 date 11th March 2004. Reliance Mutual Fund was

formed to launch various schemes under which units are issued to the

Public with a view to contribute to the capital market and to provide

investors the opportunities to make investments in diversified

securities.


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Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai

Ambani Group, is one of the fastest growing mutual funds in the

country. RMF offers investors a well-rounded portfolio of products to

meet varying investor requirements and has presence in 159 cities

across the country. Reliance Mutual Fund constantly endeavors to

launch innovative products and customer service initiatives to increase

value to investors. "Reliance Mutual Fund schemes are managed by

Reliance Capital Asset Management Limited., a subsidiary of Reliance

Capital Limited, which holds 93.37% of the paid-up capital of RCAM,

the balance paid up capital being held by minority shareholders."

Reliance Capital Ltd. is one of Indias leading and fastest growing

private sector financial services companies, and ranks among the top 3

private sector financial services and banking companies, in terms of

net worth. Reliance Capital Ltd. has interests in asset management,

life and general insurance, private equity and proprietary investments,

stock broking and other financial services.

Sponsor: Reliance Capital Limited

Trustee: Reliance Capital Trustee Co. Limited

Investment Manager: Reliance Capital Asset Management Limited

Statutory Details: The Sponsor, the Trustee and the Investment

Manager are incorporated under the Companies Act 1956.


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Risk Factors: Mutual Funds and securities investments are

subject to market risks and there is no assurance or guarantee

that the objectives of the Scheme will be achieved. As with any

investment in securities, the NAV of the Units issued under the

Scheme can go up or down depending on the factors and forces

affecting the capital markets. Past performance of the

Sponsor/AMC/Mutual Fund is not indicative of the future performance

of the Scheme. The Sponsor is not responsible or liable for any loss

resulting from the operation of the Scheme beyond their initial

contribution of Rs.1 lakh towards the setting up of the Mutual Fund

and such other accretions and additions to the corpus. The NAV of the

Scheme may be affected, interalia, by changes in the market

conditions, interest rates, trading volumes, settlement periods and

transfer procedures. The Mutual Fund is not assuring that it will make

periodical dividend distributions, though it has every intention of doing

so. All dividend distributions are subject to the availability of

distributable surplus in the Scheme. For details of scheme features and

for scheme specific risk factors, please refer to the Scheme

Information Document. Please read the Statement of Additional

Information and Scheme Information Document carefully

before investing.

Vision & Mission Statement


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Vision Statement

To be a globally respected wealth creator with an emphasis on

customer care and a culture of good corporate governance.

Mission Statement

To create and nurture a world-class, high performance environment

aimed at delighting our customers.

Corporate Governance

Our Corporate Governance Policy :

Reliance Capital Asset Management Ltd. has a vision of being a leading

player in the Mutual Fund business and has achieved significant

success and visibility in the market.

However, an imperative part of growth and visibility is adherence to

Good Conduct in the marketplace. At Reliance Capital Asset

Management Ltd., the implementation and observance of ethical

processes and policies has helped us in standing up to the scrutiny of

our domestic and international investors.

Management :

The management at Reliance Capital Asset Management Ltd. is

committed to good Corporate Governance, which includes

transparency and timely dissemination of information to its investors

and unit holders. The Board of Directors of RCAM is a professional

body, including well-experienced and knowledgeable Independent


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Members. Regular Audit Committee meetings are conducted to review

the operations and performance of the company.

Employees :

Reliance Capital Asset Management Ltd. has at present, a code of

conduct for all its officers. It has a clearly defined prohibition on insider

trading policy and regulations. The management believes in the

principles of propriety and utmost care is taken while handling public

money, making proper and adequate disclosures.

All personnel at Reliance Capital Asset Management Ltd are made

aware of their rights, obligations and duties as part of the Dealing

Policy laid down in terms of SEBI guidelines. They are taken through a

well-designed HR program, conducted to impart work ethics, the Code

of Conduct, information security, Internet and e-mail usage and a host

of other issues.

One of the core objectives of Reliance Capital Asset Management Ltd.

is to identify issues considered sensitive by global corporate standards,

and implement policies/guidelines in conformity with the best practices

as an ongoing process.

Reliance Capital Asset Management Ltd. gives top priority to

compliance in true letter and spirit, fully understanding its fiduciary

responsibilities.

Sponsors


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Reliance Capital Limited :

Corporate & Registered Office :

Reliance Capital Ltd. H Block, 1st Floor, Dhirubhai Ambani Knowledge

City, Koparkhairne, Navi Mumbai - 400 710.Tel. 022 30327000, Fax.

022 30327202

Reliance Mutual Fund schemes are managed by Reliance Capital

Asset Management Limited., a subsidiary of Reliance Capital Limited,

which holds 93.37% of the paid-up capital of RCAM, the balance paid

up capital being held by minority shareholders. Reliance Mutual Fund

(RMF) has been sponsored by Reliance Capital Ltd (RCL). The

promoter of RCL is AAA Enterprises Private Limited. Reliance Capital

Limited is a Non Banking Finance Company. Reliance Capital Limited is

one of the Indias leading and fastest growing financial services

companies, and ranks among the top three private sector financial

services and banking companies, in terms of networth.

Reliance Capital has interests in asset management and mutual funds,

life and non-life insurance, private equity and proprietary investments,

stock broking and other activities in the financial services sector. The

net worth of RCL is Rs. 6086 crore as on March 31, 2008. Given below

is a summary of RCLs financials:

Particulars 2007-08 2006-07 2005-06


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(Rs.in crores)

Total Income 2079.79 883.86 652.02

Profit Before Tax 1171.45 733.18 550.61

Profit After Tax 1025.45 646.18 537.61

Reserves & Surplus 5779.06 4915.07 3849.58Net Worth 5927.50 5161.23 4122.46

Earnings per Share

(Rs.)

41.75

(Basic +

Diluted)

28.39

(Basic +

Diluted)

29.74

(Basic +

Diluted)

Dividend (%) 55% 35% 30%

Paid up Equity

Capital

246.16 246.16 223.40

Reliance Capital Ltd. has contributed Rupees One Lac as the initial

contribution to the corpus for the setting up of the Mutual Fund.

Reliance Capital Ltd. is responsible for discharging its functions and

responsibilities towards the Fund in accordance with the Securities and

Exchange Board of India (SEBI) Regulations.

The Sponsor is not responsible or liable for any loss resulting from the

operation of the Scheme beyond the contribution of an amount of

Rupees one Lac made by them towards the initial corpus for setting up

the Fund and such other accretions and additions to the corpus.

Main objectives of the Trust are :


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To carry on the activity of a Mutual Fund as may be permitted at

law and formulate and devise various collective Schemes of

savings and investments for people in India and abroad and also

ensure liquidity of investments for the Unit holders;

To deploy Funds thus raised so as to help the Unit holders earn

reasonable returns on their savings and

To take such steps as may be necessary from time to time to

realise the effects without any limitation.

TYPE OF MUTUAL FUND

The Mutual Fund has launched Forty Seven Schemes till date, namely:

Reliance Growth Fund (September 1995)

Reliance Income Fund (December 1997)

Reliance Medium Term Fund (August 2000)

Reliance Fixed Term Scheme (March 2003)

Reliance Gilt Securities Fund (July 2003)

Reliance Monthly Income Plan (December 2003)

Reliance Pharma Fund ( May 2004)

Reliance Media & Entertainment Fund (September 2004)

Reliance NRI Income Fund (October 2004)

Reliance Equity Opportunities Fund (February 2005)

Reliance Fixed Maturity Fund Series II (April 2005)


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Reliance Liquidity Fund (June 2005)

Reliance Fixed Tenor Fund (November 2005)

Reliance Fixed Horizon Fund I (August 2006)

Reliance Fixed Horizon Fund III (March 2007)

Reliance Interval Fund (March 2007)

Reliance Equity Advantage Fund (June 2007)

Reliance Fixed Horizon Fund V (September 2007)

Reliance Equity Linked Saving Fund - Series I (December 2007)

Reliance Natural Resources Fund (January 2008)

Reliance Fixed Horizon Fund VIII (March 2008)

Reliance Banking Exchange Traded Fund (May 2008)

Reliance Fixed Horizon Fund XI (October 2008)

Reliance Vision Fund (September 1995)

Reliance Liquid Fund (March 1998)

Reliance Short Term Fund (December 2002)

Reliance Banking Fund (May 2003)

Reliance Diversified Power Sector Fund (March 2004)

Reliance Floating Rate Fund (August 2004)

Reliance NRI Equity Fund (October 2004)

Reliance Index Fund (February 2005)*

Reliance Fixed Maturity Fund Series I (March 2005)

Reliance Regular Savings Fund (May 2005)


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Reliance Tax Saver (ELSS) Fund (July 2005)

Reliance Equity Fund (February 2006)

Reliance Fixed Horizon Fund (April 2006)

Reliance Fixed Horizon Fund II ( November 2006)

Reliance Long Term Equity Fund (November 2006)

Reliance Mutual Fund Manager Fund (March 2007)

Reliance Fixed Horizon Fund IV (August 2007)

Reliance Gold Exchange Traded Fund (October 2007)

The Management Team


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Board of Directors

Mr. Soumen Ghosh

Mr. Kanu Doshi

Mr. Manu Chadha

Mr. Sushil Tripathi

Management Team

CEO

Mr. Sundeep Sikka

Head Equity Investments

Mr. Madhusudan Kela

Head Fixed Income

Mr. Amitabh Mohanty

Equity Fund Managers

Mr. Sunil B. Singhania Mr. Ashwani Kumar

Mr. Shailesh Raj Bhan Mr. Shiv Chanani

Mr. Krishan Daga Mr. Govind Agrawal

Mr. Omprakash S. Kuckian

Debt Fund Managers

Mr. Amit Tripathi Ms. Anju Chhajer

Mr. Prashant Pimple Mr. Arpit Malaviya

Commodities

Fund Manager Mr. Hiren Chandaria

Head Of Departments

Infrastructure & Admin Mr. Pradeep Andrade

Finance and Accounts Mr. Milind Gandhi

Human Resource Development Mr. Rajesh Derhgawen
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Information Technology Mr. Vinay Nigudkar

Service Delivery & Operations

Excellence

Mr. Bhalchandra Joshi

Operations & Settlement Ms. Geeta Chandran

R&T Operations & Investor Relations Mr. Milind Nesarikar

Head - Sales & Distribution,

Product Management, Customer

Service

Mr. Himanshu Vyapak

Compliance Mr. Suresh

Viswanathan

Legal & Secretarial Mr. Muneesh Sud

Zonal Heads

Northern Zone Head Mr. Gurbir Chopra

Western Zone Head Mr. Aashwin Dugal

Southern Zone Head Mr. Gopal Khaitan

Eastern Zone Head Mr. Vikas Rathie

Awards and Achievements

Reliance Mutual Fund - At a Glance

Reliance Mutual Fund is one of Indias leading Mutual Funds, with

Average Assets Under Management (AAUM) of Rs. 1,01,320
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Crores (AAUM as of June 2010 ) (source: www.amfiindia.com)

and an investor count of over 74 Lakh folios.

*(75 lakh investor folios is calculated on the basis of live folios

as on February, 2010 and includes investors across all the

schemes of Reliance Mutual Fund and Presence in over 400

locations includes the Designated Investor Service Centres

(DISCs) of RCAM and Registrar & Transfer Agents , Offices and

Resident Representatives of RCAM as on December 31, 2009)

Reliance Mutual Fund has over 14 years of extensive market

experience, 35 schemes (as on January 31, 2010) combined with

a strong performance track record.

Reliance Capital Asset Management Limited

Reliance Capital Asset Management Limited has won the

prestigious US based, 2010 CIO 100 award. The 2010 CIO 100

Awards is presented by the CIO magazine & honors 100

companies worldwide that are creating new business value by

innovating with technology.

Vinay Nigudkar, CTO, Reliance Caital Asset Management

Limitedhas been awarded this honor for implementation of

the CRMnext Systemthat integrates sales force automation,
http://www.amfiindia.com/http://www.amfiindia.com/


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lead management, customer service and other sales and analysis

applications.

To know more about the this award, you can click

herehttp://www.cio.com/cio100/detail/2079.

What makes this award more special is that Reliance Capital

Asset Management Limited is the only Indian Company to

receive 2010 CIO 100 award.

Reliance Capital Asset Management Limited has been awarded

Asset Manager for the year 2009 i.e. from July 2008 to July

2009 at Asia Risk Awards 2009 by Incisive Media Publishing

Limited. The participation was open for all the Asset Managers

across Asia Pacific. Twelve Asset Managers participated for the

award exercise. The Asia Risk Annual Award is renowned for

recognizing and rewarding institutions for the best risk

management practices adopted by them. The judging panel

comprise of the editorial team of Incisive Media Publishing

Limited. The panel identifies asset managers that have

demonstrated a responsible approach to risk management over

the year and/or launched innovative products. Key factors

determining the awards include significant improvements in

internal risk management practices, risk systems, corporate
http://www.cio.com/cio100/detail/2079http://www.cio.com/cio100/detail/2079


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governance and utilization of derivatives in a prudent and

responsible manner. Past Performance may or may not be

sustained in future. Source: Asia Risk Magazine

and www.asiarisk.com.hk.

Please read the Scheme Information Document and Statement

of Additional Information carefully before investing.

Our Service Providers

Registrar to the schemes of Reliance Capital Asset Managment :

Karvy Computershare Pvt. Ltd

Custodians to the schemes of Reliance Capital Asset

Managment

Deutsche Bank AG

Auditors to the Schemes of Reliance Capital Asset Management

Bankers to the Schemes of Reliance Capital Asset Management

ABN Amro Bank

Axis Bank

Citibank N. A.

Deutsche Bank AG

Development Bank of Singapore - only for online investors

HDFC Bank Limited

HSBC Bank
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ICICI Bank Limited

IDBI Bank

Ing Vysya Bank

Kotak Mahindra Bank

2. INTRODUCTION ABOUT INVESTMENT

Definition:-

The investment is the employment of funds with the aim of achieving additional

income or growth in value. The essential quality of an investment is that involves waiting

for reward. It involves the commitment of resources which, have been saved or put away

from current consumption in hope that some benefits will accrue in the future.

According to F. Amling, Investment may be defined as the purchase by an

individual or institutional investor of a financial or real asset that produces a return

proportional to the risk assumed over some future investment period.

Introduction:-

Investment management is a subject of growing an importance and interest.

Investment is the sacrifice for the future reward. Investment decision is trade off between

risk and return. The entire globe is based on risk and return. Investing is an activity that is

of interest to many individuals regardless of occupation or income level.

The term investment refers to funds invested in various securities, consisting of

government and semi government securities, loans, debentures, of local authorities, such

as port trusts, municipal corporations and debentures and shares of companies,

investments represent legal claims of various securities, such as bonds, shares, debentures

etc., and are asset of special nature. There are various forms of investments available with

their relative merits and demerits. Investments are available with their relative merits and

demerits. Investments are freely bought and sold in the stock exchange through banks and

bankers, who charge a small amount of commission for their services. Investment means
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the use of money to earn more by way of interest, dividend or money to earn more by

way of interest, dividend or capital appreciation. Well planned investment alone can

ensure regular income, capital appreciation and can be used to meet financial

requirements of the investors. The dynamics of economic growth provide various

opportunities for investors to invest their money in different types of securities.

Ch. 4. Investment Decision

It is important to save, but it is more important to invest money effectively.

Inflation is the deadly eroding your wealth. The power of compounding over time is

really magical. Lastly, by hording cash, youre actually losing money. Not to mention the

cost of opportunities foregone.

Step for Investment in Share Market

1. Plan and know before you invest

Similarly, its most essential to determine your unique investor profile that will

help you in successfully reaching your goals. What kind of investor are you? Are you one

of those go getters, willing to take the risk or are you those easy go, play safe? Or are you

one of those whose hypertension level mimics the stock market index?

o Before embarking on your investment journey, decide the rate of return you expect.

o Determine what kind of an investor you are.

2. Understanding the essence of asset allocation

Folks! The essence of asset allocation lies in the fact that, over time, it can

determine up to 90%, mark this, 90% of your portfolios return. For this reason, the right

asset mix is one of the most important financial decisions you have to make.

o There arethree basic classes i.e. equity, debt, and cash.

o Optimum asset allocation can determine up to 90% of your portfolios return.

3. Select your assets carefully


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However as a basic strategy, the right investment in any asset is a balance of three

things: liquidity, safety and return. By liquidity we mean how accessible your money is,

by safety, the extent of risk involved and by return, what you can expect to get back on

your investment.

Spectrum of assets across classes

Equity Stocks Equity Mutual Funds

Debt Debt Mutual FundsGovt. Bonds, Corp. Debts/FDs Banks

& FI Bonds/FDs

CashLiquid / Money Market

Funds

Bank Savings, BLESS/ALBM,

CPs/CDs

o

An optimal asset allocation plan is complete only when you invest the proportions ofeach asset class in assets that suit your investor profile.

o As a basic strategy, the right investment in any asset is a balance of three things like

liquidity, safety and return.

4. Design your investment strategy

There are two fundamental approaches in asset selection Passive & Active.

A Passive approach, as the name suggests, is one that is followed by those

investors who do not wish to disturb themselves with the all important decision of

picking the right assets. These investors select assets either through random selection or

indexing.

An Active approach, on the other hand, has more to do with picking within each

asset class, individual assets that are likely to out perform the rest of the asset class: that

is, buying undervalued assets and selling overvalued ones. Active investor has one clear

objective that of beating the market, i.e. earning returns in excess of that from the index.

o The two fundamental approaches of asset selection are passive and active.

o While a passive investor is concerned with keeping with the market, an active

investor seeks every opportunity to beat it.

5. Portfolio execution penultimate step

There are basically three dimensions of portfolio execution: transaction cost,

trading speed and management of risk.


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Transaction costs can make the difference between a portfolio that beats the

market and one that does not. They explain why strategies that work on paper and in

simulations do not always earn investors excess returns in practice. This is because true

cost involves far more than the brokerage fees and actually has three components. The

first is bid ask spread, which leads investors to buy at a high price and sell at a lower

price. The second is price impact of a trade. Investors push the price up as they buy and

push it down as they sell. In illiquid markets, this cost can be substantial, essentially for

large trades. The last component and most important is the tax impact associated with

trading. Remember, the ultimate objective of investing is maximization of after tax

return?

The second dimension to portfolio execution is trading speed. Generally speaking,

the need to trade fast and the desire to keep transactions costs low will come into conflict.

Investors who are willing accept trades spread out over longer periods will generally

incur much lower trading costs than investors who need to trade quickly.

The final dimension to portfolio execution is the ongoing management of risk in

the portfolio. Once portfolios are created, the risk characteristics do change over time, as

do investor profiles creating a need for a concurrent change in the portfolio.

o Transaction costs are an integral part of any investment portfolio. They can make

the difference between a portfolio that beats the market and one that does not.

o Trading speed and portfolio risk are the other important dimensions of portfolio

execution.

6. Regular evaluate your portfolios performance

The final leg of investment, and often the most painful one for individual

investors and professional money managers alike, is performance evaluation. The crucial

test of your investment management ability is how well you have performed. Thus, while

evaluating investment performance, it becomes essential to examine the excess returns on

the portfolio being evaluated after taxes. Always keep in mind - the success or failure of

an investment portfolio will be based on the whether it makes the investor wealthier on

an after-tax basis and not a pre-tax basis.


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o The crucial test of your investment management ability is how well you have

performed.

o The success or failure of an investment portfolio will be based on whether it

makes the investor wealthier on an after-tax basis and not a pre-tax basis.

Planning for investment

1. Invest in few Scripps

In order to get the best returns on investment with spread of risk, investors need to

invest in multiple companies. So, investors have number of companies in their portfolio.

If numbers of companies are single digit, spread of risk is not minimum, and various

sectors cannot be properly represented. On the other hand, if such number is too large,

say 50-100; it is difficult to monitor such a size of portfolio. As a result, some of the

investment gets devalued without coming to the notice of investors. Ideally, number of

Scripps in a portfolio should be about 15-20. We always advise to choose from high

market capitalization companies.

2. Selection of Scripps

In selection of Scripps, investors should apply two criterions: Sector and

Company. Higher weightage should be assigned to sunrise industries followed by growth

industries. Low growth sectors should be ignored in formation of a portfolio. Once

proportion of investment in particular industry is decided, one should look for good

companies within that segment. Selection of Scripps is not a one-time decision. It is a

continuous process of selection and review regularly. Numbers and title of the companies

should be reviewed and reshuffled from time to time.

3. Purchase in phases

It has become a practice of many persons to invest whenever they funds in their

hands, ignoring the timings; and sell whenever funds are required. Purchases should bemade gradually, once broad parameters of portfolio are considered. Whenever there is a

bearish trend, likely to be reversed, investor should take position in steps. Purchases

should be made when there is a decline in the market. Those who have earned maximum

have purchased at the time of panic sale situations. This is a systematic and regular

exercise.


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4. Sell in stages

Many investors have good judgment for entering the market, but do not make sale

decisions at appropriate time. They feel that one should sell only when funds are

required, and just hold them for long time. In fact, for earning good returns, it is equally

necessary that one make sale decisions also regularly. When there is increase in the prices

by 15-20%, one should unload the shares in steps. When one is selling shares, it is not

because the company is not good or he is in need of funds. Sale decisions on one hand

helps the investors to capitalize gains, and provide opportunity on the other hand; to

cover them up at level at the time of correction in trends. With better sale decisions, the

returns can be maximized.

5. Regular monitoringOnce a portfolio is formed, it requires regular monitoring. This can be done in two

ways. By keeping separate files of companies in the portfolio. Investor should prepare

company wise files, and file annual reports, quarterly results, and other relevant headings

in the file. This will help to develop vital insight into the companies, whose shares are

held.

By keeping tab on prices, investors should note down prices of various index and

shares at regular interval, say weekly of fortnightly; in a notebook or a diary. Now there

are number of web sites available like www.walletwatch.com, www.indiainvest.com

where such details can be placed.
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Investment Degree of Risk Annual Return

(Reward)

Treasury Bill Smallest degree of the risk. Only the

government has the power to print money.

The return is usually just enough to offset

inflation.

2.5-3.5%

Government

Bond

There are High degrees of safety in

government bond. Adjusted for inflation, the

return is modest.

3.0-4.0

Savings Account Greater risk than government bonds,

although funds are insured by the

government. This makes little protection

against higher rates of inflation.

3.5-4.5%

Corporate Bond More risk than a savings account. Priority

over common stock if there is a business

failure. Adjusted for inflation, the return is

modest.

4.0-5.0%

Share of stock There are highest degrees of risk in share,

due to possible business failure. The returnincludes about 4% from dividends. Some

protection from inflation is made in share

stock.

7.0-9.0%


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Ch.4. Returns from Investment

Introduction of Return

Return is reward and motivating force behind every investment. Return is always

haunted by investment. Return is the amount or rate of gain, profit which accrues to an

investment. The return represents the benefits derived by a business firm from its

operations. The rate of return required by a firm to a great extent depends upon the risk

involved, higher the risk, greater is the return expected by the firm. Return on investment

has two components, regular income in the form of interest or dividend and capital

appreciation. The total return on investment can be defined as Income plus (minus) price

appreciation (depreciation).

Definition of return

The return on asset / investment for a given period, say a year, is the annual

income received plus any change in market price, usually expressed as a percent of

opening market price.

Type of Return

The following are various kinds of return that are discussed in detail follows.

1. Internal Rate of Return

This is also known as yield rate. It is the rate which discounts the cash flows to

zero. Internal rate of return is that rate at which the sum discounted cash inflows equals

the sum of discounted cash outflows. The marginal IRR is the rate of discount which

makes the present value of the marginal revenue from the additional investment equal to

unity.

2. Coupon Rate / Bond Rate

Coupon rate means, the interest rate received on the face value or the par value of

the bond. If a company or Government issues a 10 year bond with Rs. 100 as face value

and 14 percent rate of interest, it would be described as 14% bond or debenture and may

be said to have, a coupon rate of 14%.

3. Expected Return / Realized Return


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Return is not guaranteed. It is mostly expected and it may or may not be realized.

Therefore the expected return is an anticipated or predicted, desired return by the investor

which is subject to uncertainty. Realized return means actually earned and received.

4. Holding Period Yield / Return

Holding period yield (HPY) measures the total return from an investment during a

given or designated time period in which the asset is held by the investor. It is to be noted

that HPY does not mean that the security is actually sold and the gain or loss is actually

realized by the investor. The concept of HPY is applicable whether one is measuring the

realized return or estimating the future / expected return. It can be calculated as follows:

HPY= Any cash payments received + Price change over the holding period

Price at which the asset is purchased

5. Basic Yield

Basic yield is associated with high grade bonds. It is the lowest yield actually

attained the market. Basic yield can be understood by noting concept of pure rate of

interest, which is unique and absolutely risk less; it implies absolute safety and certainty

of principal and income and also freedom from losses through changes in commodity

prices, interest rates and taxes. The basic yield, however, does not imply either risk less

or uniqueness.

6. Current Yield

Current yield is also known as the market yield / income yield /running yield.

Bonds are offered to the public with coupon rate. Current yield is the ratio of interest per

year to the current market price of the bond. It does not take into account the return

earned by the investor because of appreciation in the value of bond.

7. Yield to maturity

It is known as redemption yield. It is the promised rate of return an investor will

receive from a bond purchased at the current market price and held till maturity.

YTM = Annual interest + (Appreciation / Depreciation of the Asset)

Redemption value or face value


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8. Dividend Yield

Dividend yield is the ratio of per share expected dividends, gross of tax to the

current market price of the share

9. Earnings YieldIt is the ratio of expected EPS of the firm to the current market price of the share.

There is no difference between dividend yield and earnings yield, if the firms

dividend payout ratio is 100%.

10.Nominal and Real Return

Nominal return is the return in nominal rupees, the real return is equal to the

nominal return adjusted for inflation.

11. Gross and Net Yield

The yield realized by the investor before paying taxes, is called as gross yield.

The net yield is gross yield less income tax paid.

Net yield = gross yield [1- Tax rate]

12. Required Rate of Return

Required rate of return is an important factor to be considered for buying security.

The RRR is defined as the minimum expected rate of return needed to an investor to

purchase the security, given its risk. The RRR has two components viz. The risk free rate

of return or the time value of money. The second component of RRR is the risk premium.

It is the return that an investor must get for facing the risk by investing his money in all

those risk generating investments.

RRR = The time value of money + inflation premium + risk premium

Or

RRR = Risk free rate of return + risk premium.


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BASIC RISKS INVOVLED IN TRADING ON THE STOCK

EXCHANGE (EQUITY AND OTHER INSTRUMENTS)

1. Risk of Higher Volatility:

Volatility refers to the dynamic changes in price that securities undergo when

trading activity continues on the Stock Exchange. Generally, higher the volatility of a

security, greater is its price swings. There may be normally greater volatility in thinly

traded securities than in active securities. As a result of volatility, your order may only be

partially executed or not executed at all, or the price at which your order got executed

may be substantially different from the last traded price or change substantially

thereafter, resulting in notional or real losses.

2. Risk of Lower Liquidity:

Liquidity refers to the ability of market participants to buy and sell securities

expeditiously at a competitive price and with minimal price difference. Generally, it is

assumed that more the numbers of orders available in a market, greater is the liquidity.

Liquidity is important because with greater liquidity, it is easier for investors to buy or

sell securities swiftly and with minimal price difference, and as a result, investors are

more likely to pay or receive a competitive price for securities purchased or sold. There

may be a risk of lower liquidity in some securities as compared to active securities. As a

result, your order may only be partially executed, or may be executed with relatively

greater price difference or may not be executed at all.

Buying/selling without intention of giving and/or taking delivery of a security, as

part of a day trading strategy, may also result into losses, because in such a situation,

stocks may have to be sold/purchased at a low/high prices, compared to the expected

price levels, so as not to have any obligation to deliver/receive a security.

3. Risk of Wider Spreads:

Spread refers to the difference in best buy price and best sell price. It represents


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the differential between the price of buying a security and immediately selling it or vice

versa. Lower liquidity and higher volatility may result in wider than normal spreads for

less liquid or illiquid securities. This in turn will hamper better price formation.

4. Risk-reducing orders:

Most Exchanges have a facility for investors to place "limit orders, "stop loss

orders" etc". The placing of such orders (e.g., "stop loss orders, or "limit" orders) which

are intended to limit losses to certain amounts may not be effective many a time because

rapid movement in market conditions may make it impossible to execute such orders.

A "market" order will be executed fully and promptly without regard to price and

that, while the customer may receive a prompt execution of a "market" order, the

execution may be at available prices of outstanding orders, which satisfy the order

quantity, on price time priority. It may be understood that these prices may be

significantly different from the last traded price or the best price in that security.

A "limit" order will be executed only at the "limit" price specified for the order or

a better price. However, while the customer receives price protection, there is a

possibility that the order may not be executed at all.

A stop loss order is generally placed "away" from the current price of a stock, and

such order gets activated if and when the stock reaches, or trades through, the stop price.

Sell stop orders are entered ordinarily below the current price, and buy stop orders are

entered ordinarily above the current price. When the stock reaches the pre-determined

price, or trades through such price, the stop loss order converts to a market/limit order

and is executed at the limit or better. There is no assurance therefore that the limit order

will be executable since a stock might penetrate the pre-determined price, in which case,

the risk of such order not getting executed arises, just as with a regular limit order.

5. Risk of News Announcements:

Issuers make news announcements that may impact the price of their securities.

These announcements may occur during trading, and when combined with lower liquidity

and higher volatility, may suddenly cause an unexpected positive or negative movement

in the price of the security.


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6. Risk of Rumours:

Rumours about companies at times float in the market through word of mouth,

financial newspapers, websites or news agencies, etc. The investors should be wary of

and should desist from acting on rumours.

7. System Risk:

High volume trading will frequently occur at the market opening and before

market close. Such high volumes may also occur at any point in the day. These may

cause delays in order execution or confirmation.

During periods of volatility, on account of market participants continuously

modifying their order quantity or prices or placing fresh orders, there may be delays in

order execution and its confirmations.

Under certain market conditions, it may be difficult or impossible to liquidate a

position in the market at a reasonable price or at all, when there are no outstanding orders

either on the buy side or the sell side, or if trading is halted in a security due to any action

on account of unusual trading activity or stock hitting circuit filters or for any other

reason.

8. System/Network Congestion:

Trading on NSE is in electronic mode, based on satellite/leased line based

communications, combination of technologies and computer systems to place and route

orders. Thus, there exists a possibility of communication failure or system problems or

slow or delayed response from system or trading halt, or any such other problem/glitch

whereby not being able to establish access to the trading system/network, which may be

beyond the control of and may result in delay in processing or not processing buy or sell

orders either in part or in full. You are cautioned to note that although these problems

may be temporary in nature, but when you have outstanding open positions or unexecuted

orders, these represent a risk because of your obligations to settle all executed

transactions.


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GUIDELINES FOR LONG TERM INVESTORS:-

The investor should know how to analyze the share prices of the company & pickup

the undervalued shares.

He should follow the principle of contrariness. This means that if everyone buying thescript, he should avoid that script buy such a script which although is deserted but has

a good potential in future.

Before investing he should undertake a deep study on the Net sales, net profit in

relation to equity capital employed and should attempt to forecast for the coming

years.

He should not rely on tips form friends, family, brokers or they buy and sell merely

on bunches this is usually one of the fastest ways to lose a bundle in the market.

If they follow the market trends connately then they can deliver excellent returns.

He should not invest his money in one or two company because if the companies

prices decline, he will have to bear a huge loss.

He set his target of minimum profit before starting his operation in the field of stock

market.

GUIDELINES FOR SPECULATORS

Plan your trade and trade your plan.

Avoid getting in or out of the market too often.

Losses make the speculator studious not profits. Take advantage of every loss to

improve your knowledge of market action.

The most profitable trading tool is a simply following the trend.

The most difficult task in speculation is not predication but self control successful

trading is difficult and frustrating. You are the most important element in the success

equation.

When a markets gotten away and youve missed the first leg. You should still

consider jumping even if it is dangerous and difficult.

Commodities are never high to being buying or too low to begin selling. But after the

initial transaction, avoid make a second unless the first shows a profit.


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The clearest and easiest way to determine a trend is from previous highs and lows.

Higher highs and higher lows make a down trend.

LIMITATIONS

1. Financial statement does not represent the complete picture of the business but

merely a collection of facts, which can be expressed in monetary terms. They may not

refer ton other factors, which affect performance.

2. Comparison of different company was based on ratios derived from the

balance sheet and profit and loss account available in grouping and sub grouping of

various items and necessary adjustments to make for statement uniform has been

done.

3. Insufficient time because of this limit period I have chosen only top company

for the sector, so that could not find out form the overall point of view best

investment opportunity in sector as there are many other company which are best for

investment purpose and best companies for the speculators point of view.

4. I dont have expertise knowledge in this filled so ranking given by me may

not considerable that appropriate.

5. Indian stock market is not stable it keep on fluctuating so ratio derived today

may not consider as useful tool of valuation tomorrow.

6. Ratios are calculated from the financial statements which are affected by thefinancial basis and policies adopted on such matter.

7. The ranking given cannot be taken as a full proof decision due to lack of

professionalism.

8. Due to insufficient data given in the financial statements some financial ratios

could not be found out.

FINDINGS AND ANALYSIS:

This is final and most important stage in the entire process. The objective of my

project is end in this step. This will indicate the investors, creditors and shareholders each

of the companies overall operating efficiency and performance that will help them to

make more efficient investment decision. This project has yielded me following result.

Scripts, which are under priced and good for, buy order


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Scripts, which are over priced and good for sell with the necessary margin of profit or

capital appreciation

Scripts, which are becoming sick and have to be disposed off immediately.

Scripts, which are uncertain trend and have to be held with neither buy or sell.

EQUITY OVERVIEW

Equity shares are usually regarded as corner stone of corporate financial

resources. The ordinary shares provide a cushion of safety against temporary unfavorable

developments as the payment of dividends is not compulsory and is depend on the

discretion of management.

The reason for wide public interest in these securities is the possibility of trading

in stock exchange, free transferability, and marketability. Equity shares constitute the

ownership capital of a company and the equity holders have the right of voting and

sharing in profits and assets in proportion to his holding in the total net assets of the

company. He is entitled to all rights and obligations as an owner and to residual profits.

The dividend distributed to them may be uncertain, variable and fluctuating. The equity

holder gets his return in the form of dividends distributed plus capital appreciation on his

shares. The dividends distributed depend upon the net earnings of the company after

meeting all expenses. This would influence the share price in the market, which may lead

to fluctuations in the prices either upward or downward and in turn capital appreciation or

depreciation.

Definition of Share:

According tosection 2 (46) of the Indian Companies Act a share can be defined

as The capital of a company and includes stock except where a distinction between stock

and share is expressed or implied.

Farewell says that The interest of a shareholder in the company is measured by a sum of

money, for the purpose of liability in the first place and of interest in the second but alsoconsisting of a series of mutual convenient entered into by all the shareholders interest.

MERIT OF EQUITY SHARES


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(i) Financing through equity shares does not impose any burden on the company,

since payment of dividend on these shares depends on the availability of profits and

the discretion of the directors.

(ii) Capital raised through equity shares is perpetual source for the company since it is

not repayable during the life time of the company. It is repayable only in the event

of companys winding up and that too only after the claims of preference

shareholders have been met in full.

(iii) Equity shares do not carry any charge against the assets of the company hence the

capacity of the company to raise additional funds through borrowing on the security

of its assets is in no way diminished.

(iv) Financing through equity shares also provides the company with sufficient

flexibility in the utilization of its profits and funds, since neither the payment of

dividend is compulsory nor any provision is to be made for repayment of capital.

DEMERIT OF EQUITY SHARES

(i) Financing through equity shares is costly as compared to financing through

preference shares or debentures; on account of greater risk expectation of the equity

shareholders is also high as compared to preference shares or debentures. Moreover,

the dividend on equity shares is not deductible as an expense out of profits for

taxation purpose.

(ii) The control of the company can be easily manipulated through converting of

shares by a group of shareholders for their personal advantage at the cost of

companys interest.

(iii) Conservative management often avoids issue of addition equity shares to raise

additional funds. Since the new shareholders are entitled to vote at par with the

existing shareholders, this increases the possibility of transferring of control form

the existing holder to new holders of equity shares.

(iv) Excessive reliance on financing through equity shares reduces the capacity of

the company to trading on equity. This may ultimately result in over capitalization

of the company.

(C) RESEARCH METHODOLOGY


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1. RESEARCH PROBLEM:

To know investors behavior regarding mutual fund as an investment avenue.

2. RESEARCH OBJECTIVES (PRIMARY) :

To know investors behavior regarding mutual fund as an investment avenue.

RESEARCH OBJECTIVES (SECONDARY)

o To identify the objectives of the investors for investing in a mutual fund.

o To identify the investment patterns of investors.

o To find out which scheme is better according to investors.

o To study investors perceptions about level of satisfaction while investing

in mutual funds.

3. RESEARCH PLAN :

DATA SOURCE

We have used primary data source to collect the data regarding investors behavior for

mutual fund as an investment avenue. The survey was conducted across SANJAY

PALACE (AGRA)

RESEARCH APPROACH

Survey approach was under taken to know the behavior of investor regarding mutual

fund as an investment avenue.

RESEARCH INSTRUMENT

Questionnaire was the instrument of collecting data

SAMPLING PLAN


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Sample unit:

All the investors who are occasionally or regularly investing in financial assets and non-

financial assets

Sample size:

Survey population comprises of the total reputed businessman, Professionals, and

individual investor was approx 70.

Sampling method:

In this study as suggested by the company a sample of reputed Businessman,

Professionals, and individual investors was selected and it was selected through non-

probability, convenience sampling method. Because all the Businessman,

Professionals, and individual investors could not be interviewed as per our requirement

but according to their availability and accessibility we meet them.

Contact method

The total sample size for survey was 70 investors by personal interview

4. SURVEY ANALYSIS AND INTERPRETATION :

GENDER


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There are 19 females and 51males as respondents

Male 51

Female 19

Survey shows only 27 % of the female are interested in investments due to their workingbackgrounds or high incomes from other resources etc.

Q1. what is your age?

AGE

PARTICULARS NO.

20-30 39

30-40 10


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40-50 7

50-60 9

60-ABOVE 5

TOTAL 70

From the above table we can say that awareness for investment in youngster has

been increased & thats why out of 100, 46% are youngster who do investment

and they come in the age group of 20-30, then comes age group of 30-40 from

which 16% people do investment and other age group are 40-50 where they do

investment of 13%, 14%belongs to age group of 50-60 they do the investment,

and 11%belongs to the age group of60-above they do their investment. We can

say that youngsters are more careful for their investment.

Q2 .what is your profession?

PROFESSIONPARTICULARS NO.

BUSINESS 5

JOB IN PRIVATE SECTOR 45

JOB IN PUBLIC SECTOR 17

OTHERS 18

TOTAL 70


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Now 70 people doing investment out of which 51% people are from private sector, 21%

are from public sector, 9% are having their business and 19% are others which include

retired people, housewives and student. Reason for investment by all people was to

secure the future and reason given by people doing the job in private was their higher

salary and unsecured job.

Q3 Do you invest in mutual fund or share Trading ?

PARTICULARSYES 65 60

NO 5 10

TOTAL 70 70


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From70people62% of them are doing investment in mutual fund and 38% of them are not

investing in mutual fund but they do investment in other sectors for which information is

given in the next question.

People who were not investing in mutual fund they do invest in sectors like

insurance, equity market, government schemes (includes banks, bonds &other


45/80

scheme ), real estate, commodities even people those who do invest in mutual

fund they also invest in different sectors. Out of 70%, 44% people do invest in

equity market, 37% invest in insurance, 8% in government scheme, 7% do invest

in real estate and 4% do invest in commodities. People do invest in equity market

due to higher returns available in it.

Q5. Rank the company according to your preference from top (1) to bottom (11)?

RANK THE MF FROM TOP 1 TO BOTTOM 11?

PARTICULARS NO

RELIANCE 30

BIRLA 3

TATA 5

LOTUS 2

SBI 5

HDFC 5

ICICI 2

FRANKLIN TEMP. 3

SUNDARAM 2

UTI 2

BENCHMARK 1

NOT INVESTED 10

TOTAL 70

People who were investing in mutual fund had given the rank to different mutual fund

companies on the basis of what they think about that particular company and had givenranks to different companies. Here in this data 38% people had given reliance as 1 st rank

and the second highest is HDFC where 10% people has given it as 1st rank and the

reasons behind giving 1st rank were their return, good credit in market and tax saving

benefit.

Q7. If you are investing in mutual fund then you invest in?

INVEST IN MF SCHEME WISE

PARTICULARS NO.

OPEN ENDED SCHEME 30CLOSE ENDED SCHEME 20

BOTH 5

NOT INVESTED 15

TOTAL 70


46/80

There are two scheme in mutual fund 1 is open ended and another is close ended scheme,

in open ended scheme after some time an investor can withdraw money at any time,

while in close ended scheme the investor can withdraw after a fixed period of time. Here

42% people invest in open ended scheme while 28% people invest in close ended scheme

and 7% do invest in both open ended and close ended scheme.

Q8 .Do you take any reference while investing in mutual fund schemes if yes then

from whom?

1.FINANCIAL ADVISOR

PARTICULARS

EXT. IMPORTANT 30

IMPORTANT 20

NEUTRAL 1

UNIMPORTANT 0

EXT.UNIMPORTANT 1

NOT. RESPONDED 18

TOTAL 70


47/80

In this question it was asked that do you take any reference before investing or duringmake any changes in your investment, then 1st option was that how important is for you

to take reference from financial advisor then 43% says that it is ext important to take

reference from financial advisor, 29% says its important to take advice from the

financial advisor. People take reference from the financial advisor because he had studied

different schemes and he knows where to invest and not to invest.

1) BROKER

PARTICULARS

EXT. IMPORTANT 15

IMPORTANT 15

NEUTRAL 3

UNIMPORTANT 0

EXT.UNIMPORTANT 2

NOT. RESPONDED 35

TOTAL 70


48/80

11% people says its ext important to take advice from a broker because he knows about

all the scheme which are there in the market,11% says that its important to take advice

from the broker, 2% are neutral about it.

2) RELATIVES OR FRIEND

PARTICULARS

EXT. IMPORTANT 25

IMPORTANT 15NEUTRAL 6

UNIMPORTANT 1

EXT.UNIMPORTANT 3

NOT. RESPONDED 20

TOTAL 70


49/80

Some people do take reference from their friends and relatives there are 50% people who

say its ext important to take reference from your friends and relatives, 18% thinks its

important to take reference and 6% are neutral and 1% says unimportant and 5% says ext

unimportant to take any reference.

3) NEWSPAPER & MAGAZINE

PARTICULARSEXT. IMPORTANT 20

IMPORTANT 10

NEUTRAL 4

UNIMPORTANT 1

EXT.UNIMPORTANT 10

NOT. RESPONDED 25


50/80

TOTAL 70

There are many people who take reference from news paper and magazines while

investing in mutual fund 26% people who take reference from newspaper and magazines

and consider it ext important, while 26% says its important to take reference, while 21%

are neutral and 11% and 11% are people who says its unimportant and ext unimportant

respectively to take reference.

4) CO. WEBSITE

PARTICULARS

EXT. IMPORTANT 3

IMPORTANT 10

NEUTRAL 2

UNIMPORTANT 5

EXT.UNIMPORTANT 10

NOT. RESPONDED 40

TOTAL 70


51/80

Here 7% people says they take the reference of respective cos website while investing in

mutual fund and consider it as ext important and 7% say its important to take reference

from co website and 50% people are not responding to it.

5) AMFI WEBSITE

PARTICULARS

EXT. IMPORTANT 1

IMPORTANT 3

NEUTRAL 3

UNIMPORTANT 3

EXT.UNIMPORTANT 10

NOT. RESPONDED 50

TOTAL 70


52/80

1% people says that its ext important to take reference of AMFI website before investing

in mutual fund, 2% say its important to take reference, 7% people says its ext

unimportant and 50% people are not responding.

Q9. Do you compare the returns or other benefits of mf schemes before investing?

ANNUAL REPORT CHECKING

PARTICULARS

YES 45NO 5

NOT RESPONDED 20

TOTAL 70


53/80

It is necessary to compare the returns and other benefits because people do invest in for

higher returns so they compare with other companies also. Here 75% people compare the

returns and other benefits of mutual fund scheme before as well as after investing to see

how their investment is spread over in different segments.

Q10. which factors do you consider while investing in mutual fund?

1. SAFETY

PARTICULARS NO

EXT. IMP. 36

IMPORTANT 10

NEUTRAL 3

UNIMPORTANT 1

EXT. UNIMP 0

NOT RESPONDED 20

TOTAL 70


54/80

Investors consider different factors before investment and for many reasons they invest in

different scheme of mutual fund. Here reason for investment is safety of their

money and safety of their future so 50% people consider it ext important, while

26% people says its important for their investment.


55/80

Many people consider very important to invest in mutual fund to save tax or to

take tax benefit. Therefore 25% people consider it as ext important to invest in tax

saving scheme while 23% people consider it as important for investment,4%

people are neutral about it, 0% and 1% consider it as unimportant and ext

unimportant. While 37% people are not responding to it. Most probably every

companies who are in mutual fund business have schemes for saving tax in these

schemes generally companies do invest in govt bonds and othersgovt.sschemes.

2. RETURN EARNINGS

PARTICULARS NO

EXT. IMP. 40

IMPORTANT 9

NEUTRAL 1

UNIMPORTANT 0EXT. UNIMP 0

NOT RESPONDED 20

TOTAL 70


56/80

Generally people invest in mutual fund companies for higher returns with less risk as

compare equity market and could able to earn good returns.57% people agree that they do

invest in mutual fund for higher returns and consider it as ext important, 13% investors

are considering it as important while 29% people are not responding to it.

3. LIQUIDITY

PARTICULARS NO

EXT. IMP. 40

IMPORTANT 10

NEUTRAL 3

UNIMPORTANT 0

EXT. UNIMP 0

NOT RESPONDED 17

TOTAL 70


57/80

Above graph reveals that majority of the investors means 57% are giving liquidity more

emphasis because by the way of open ended scheme they can any time liquid their

position, 24% investors had given no response about it while 15% of the investors are

giving them least importance as compare to 57% investors.

Q11. How do you monitor the following.

1. NAV

PARTICULARS NO

MONTHLY 29

QUARTELY 3

HALF YEARLY 6

YEARLY 5

NEVER 2

NOT RESPONDED 25

TOTAL 70


58/80

NAV is the net asset value of your investment in units that comes of every week by this

you can come to know how much of your investment has been increased so it becomes

necessary to monitor but period of monitoring depends on investor. Here 41% of investor

do monitor monthly, 3% of investors monitors quarterly, 7% monitor half yearly, 9%

monitor yearly,3% never monitor.

2. RISK FACTOR

PARTICULARS NO

MONTHLY 13

QUARTELY 5

HALF YEARLY 8


59/80

YEARLY 26

NEVER 0

NOT RESPONDED 18

TOTAL 70

Risk factor is necessary to be monitor at certain time period though there is not much risk

in investing in mutual fund as compare to equity investment but monitoring is necessary

to check the returns and see that the managed properly. Here 13% of investors monitor it

monthly, 6% of investors monitor it quarterly, 9% do half early yearly and 50% do

monitor yearly. Risk factor is monitored before investment also to check the scheme and

to see its performance.

3. PORTFOLIO OF

SECURITIES

PARTICULARS NOMONTHLY 5

QUARTELY 2

HALF YEARLY 5

YEARLY 35

NEVER 5

NOT RESPONDED 18


60/80

TOTAL 70

Portfolio for securities means where the co invest in different sectors as it is decided in

advance so after making decision the AMC invest accordingly and it is been monitored

proper time period as required, 3% of investor do monitor monthly, 2% of investor

monitor quarterly, 4% do half yearly, most probably 50% of investors monitor it yearly

and 4% never monitor. Investor check out portfolio to see where their money is being

invested.

4. PROFILE OF FUND

MANAGER

PARTICULARS NO.

MONTHLY 3


61/80

QUARTELY 0

HALF YEARLY 5

YEARLY 12

NEVER 20

NOT RESPONDED 30

TOTAL 70

Fund manager is the person who manage the fund of investor who had invested their

money in their company it is necessary that the fund manager should be qualified enough

to manager the fund of the investor because if he fails to manage the fund the investors

money is not secure. So 2% investors monitor profile,14% do yearly and 21% never

monitor the profile. Generally investors monitors the profile before investing.

Q12. Are the following information relevant to analyze the performance of your

investment.

1.MONTHLY RESULT

PARTICULARS NO

EXT. RELEVANT 10

RELEVANT 5

NEUTRAL 8

IRREVENT 11

EXT.IRRELEVANT 6


62/80

NOT RESPONDED 30

TOTAL 70

Results are showing the performance of that particular scheme and it is necessary to

monitor the performance of the scheme by this we can analyze the position of our

investment. For that investor do the monitoring 8% of investor consider monthly result

ext relevant to monitor the performance of scheme, 6% consider it relevant, 6% areneutral, 4% consider it as irrelevant and 4% consider it as ext irrelevant.

2.QUARTELY RESULT

PARTICULARS NO.

EXT. RELEVANT 8

RELEVANT 8

NEUTRAL 10

IRREVENT 9

EXT.IRRELEVANT 8

NOT RESPONDED 27

TOTAL 70


63/80

For that investor do the monitoring 6% of investor consider quarterly result ext relevant

to monitor the performance of scheme, 6% consider it relevant, 19% are neutral, 7%

consider it as irrelevant and 6% consider it as ext irrelevant.

3.HALF YEARLY

PARTICULARS NO.

EXT. RELEVANT 7

RELEVANT 9

NEUTRAL 21

IRREVENT 3

EXT.IRRELEVANT 3

NOT RESPONDED 27

TOTAL 70


64/80

For that investor do the monitoring 7% of investor consider half yearly result ext relevant

to monitor the performance of scheme,15% consider it relevant, 19% are neutral, 2%

consider it as irrelevant and 2% consider it as ext irrelevant.

4.ANNUALY

PARTICULARS NO

EXT. RELEVANT 40

RELEVANT 3

NEUTRAL 4

IRREVENT 3

EXT.IRRELEVANT 0

NOT RESPONDED 20

TOTAL 70


65/80

For that investor do the monitoring 50% of investor consider annually result ext relevant

to monitor the performance of scheme, 2% consider it relevant, 3% are neutral, 2%

consider it as irrelevant and 0% consider it as ext irrelevant. Because annual result

contains each and every information regarding the performance of the AMC the

investments and the portfolio of where the co has invested so all the investors monitors

the annual report.

5.NEWSPAPER

PARTICULARS NO.

EXT. RELEVANT 33

RELEVANT 7

NEUTRAL 6

IRREVENT 0


66/80

EXT.IRRELEVANT 2

NOT RESPONDED 22

TOTAL 70

For that investor do the monitoring 50% of investor consider newspaper ext relevant to

monitor the performance of scheme,16% consider it relevant, 5% are neutral, 0%

considers it as irrelevant and 4% consider it as ext irrelevant. Some investors consider

newspaper more relevant to get the information of several reports.

6.AMFI WEBSITE

PARTICULARS NO

EXT. RELEVANT 4

RELEVANT 20

NEUTRAL 6

IRREVENT 2EXT.IRRELEVANT 9

NOT RESPONDED 30

TOTAL 70


67/80

For that investor do the monitoring 4% of investor consider AMFI website ext relevant to

monitor the performance of scheme, 21% consider it relevant, 6% are neutral, 14%

considers it as irrelevant and 2% consider it as ext irrelevant. Some investors consider

AMFI website relevant to get the information of several reports and the position of that

particular AMC and that particular scheme.

7.CO. WEBSITE

PARTICULARS NO.EXT. RELEVANT 4

RELEVANT 25

NEUTRAL 5

IRREVENT 2

EXT.IRRELEVANT 4

NOT RESPONDED 30

TOTAL 70


68/80

For that investor do the monitoring 3% of investor consider co. website ext relevant to

monitor the performance of scheme, 21% consider it relevant, 18% are neutral, 1%

considers it as irrelevant and 3% consider it as ext irrelevant. Some investors consider co.

website relevant to get the information of several reports and the position of that

particular AMC and that particular scheme.

Q13. Do you check out the annual reports of your scheme to evaluate the

performance of your scheme?

ANNUAL REPORT CHECKING

PARTICULARS

YES 45

NO 10

NOT RESPONDED 15

TOTAL 70


69/80

In the annual report of the scheme all the information of that particular scheme are given

information about the performance of the scheme, position of the scheme in the market,

portfolio of the scheme that where the investment has been done under this scheme,

profile of the fund manager is also given by this the investors can come to know the

position and qualification of the fund manager. So most of the investors are monitoring

the annual report.64% of the investor do monitor the annual report of the scheme, 22% do

not monitor the annual report.

Q14. Objectives for investment in mutual fund schemes (rank them from 1mostpreferred to 4 least preferred).

OBJECTIVE FOR INVESTMENT

PARTICUL

ARS

RANK 1 RANK 2 RANK 3 RANK 5 TOTAL


70/80

RETURN

/DIVIDEND

40 20 15 5 80

APRICIATI

ON

34 32 8 6 80

TAX 5 16 34 25 80

LIQUIDITY 1 12 23 44 80

TOTAL 80 80 80 80

Here in this question the investors have ranked the factors on the basis of their objectives

that for what reason they had invested in that particular scheme. 44% of investors had

given return/dividend 1st rank because every investor want benefits for the risk they had

taken by investing in that scheme, 30% of investors had given appreciation 1 st rank

because they want something more including their invested amount.5% of investor has

given tax saving as 1st rank because while investing in some particular scheme their

amount invested is appreciated as well as they get the tax benefit,1% has given 1

st

rank toliquidity because they can withdraw their investment at any time in open ended scheme.

Q15 .In which MF schemes are you interested to invest or investing?

SCHEME INTEREST TO INVEST

PARTICULARS

LARGE CAP 39


71/80


72/80

LIMITATION OF THE STUDY:

Every research has its own limitation and present research work is no exception to this

general rule the inherent limitation of the study are as under:

Interview method, which was followed in the present research work, is relatively more

time consuming. In addition to this it is very expensive method, especially when spread

geographic sample is taken. Questionnaire method can be used only when

respondents are literate and co-operative. Sample size was 100 that are not enough to

study the awareness of Independent individuals. As sampling techniques is convenient

sampling so it may result in personal bias. Even respondent give bias answers. Time is

main constraint of the research as we have been given project as well as study

simultaneously.


73/80

FINDINGS AND RECOMMENDATIONS :

From the above analysis, I found that even though certainly not the best or deepest of

markets in the world, it has ignited the growth rate in mutual fund industry to provide

reasonable options for an ordinary man to invest his savings.

With the help of

Give more importance to safety and return attributes because Independent Financial

Advisors are more concern about safety and of giving more benefit of the investments to

their clients.

Independent Financial Advisors who are not suggesting their clients to invest in mutual

funds due to their lack of knowledge of mutual funds. So, NJ India Invest should arrange

mutual fund awareness Program of their and other independent Financial Advisors on

regular basis.

By providing better service NJ India Invest should try to attract the Independent Financial

Advisors to join with them.

NJ India Invest should arrange special mutual fund awareness program for general

public. So they can directly work with NJ India Invest as direct client.

Majority of the Government employees take into consideration tax benefits before

making any investment. So NJ India Invest should highlight tax benefits in mutual funds.

NJ India Invest should launch its brand awareness campaign to be successful in Mutual

fund advisory service provider

o NJ India invest should also concentrate on youngster who are interested in savings

so make them aware about different schemes for investment and arrange seminars

for college going students, by this company gets more customers connected for

long period.o Put hoardings outside the colleges making NJ INDIA known to them and try to

attract them.

Key Findings: -


74/80

Around 50% of the investors invest to maximize their returns and

they are ready to take moderate risks in their investment portfolio.

Most of the investors give importance to the fact that their

investment should grow in value over a

period of time.

Growth scheme is the most preferred for investment

Knowledge about mutual funds and their various schemes is

moderate among investors.

It is necessary to make Mutual Fund more popular in the eyes of

investors as well as distributors and also cater t

Documents

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