Mahesh Shinde Pgdfs Project Report

8/12/2019 Mahesh Shinde Pgdfs Project Report.

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CERTIFICATE

TO WHOMSOEVER THIS MAY CONCERN

This is to certify that the project report title HDFC MUTUAL FUND is prepared

by MAHESH PARASHRAM SHINDE, student of Post Graduate Diploma in

Financial Services (PGDFS), (Academic year 2013-14) has satisfactorily &

successfully carried out the project work.

The project is submitted in partial fulfillment of PGDFS course in the academic

year 2013-14.

DIRECTOR PROJECT GUIDE

DR. Ashok Joshi (PROF.MrShamWagh)

Place : Pune

Date :


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CERTIFICATE

TO WHOMSOEVER THIS MAY CONCERN

This is to certify that MAHESH PARASHRAM SHINDE a student of Post

Graduate Diploma in Financial Services (PGDFS) At IndSearch Institute, Pune,

has visited our Company to carry out the project work titled A STUDY OF

HDFC MUTUAL FUND The student has taken sincere efforts to collect the

information and prepare the report on the subject.

Seal: Mr Nagesh Sherigar

Assistant Manager

Place : PuneDate :


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A PROJECT REPORT ON

A STUDY OF HDFC MUTUAL FUND

SUBMITTED TO

INDSEARCH

BY

MAHESH PARASHRAM SHINDE

STUDENT OF

POST GRADUATE DIPLOMA IN FINANCIAL SERVICES

(PGDFS)

UNDER THE GUIDANCE OF

Mr Sham Wagh

INDIAN INSTITUTE OF COST & MANAGEMENT STUDIES & RESEARCH, PUNE411004.

(2013-14)


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DECLARATION

I, Mahesh P Shinde of Indian Institute of Cost and Management Studies andResearch

hereby declare that I have completed this project on A STUDY OF HDFCMUTUAL FUND

in the Academic Year 2013-2014. The information submitted is true andoriginal to the best of my knowledge.

Signature of the Student

(MAHESH P SHINDE)


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AACCKKNNOOWWLLEEDDGGEEMMEENNTT

This project was a great learning experience for me. During this project I have interacted with

many people to whom I should be always obliged, and thankful. Though this project bears our

name we would like to say that it was a joint efforts all the people who we are acknowledging.

This project bears the imprints of these hard to forget people.

First of all I would like to acknowledge Mr Assistant Manager Mr Nagesh Shrigar who has beena helping hand for us while making it. Who guided us in every possible aspect and also a specialthanks to HDFC MUTUAL FUND TEAM for giving us the opportunity to undergo this summertraining in such a prestigious and professional organization and also for their immense contributiontowards execution and completion of this project.

Secondly I would like to appreciate my college, for giving me an opportunity to make a project

on such a wonderful topic, which added a lot to my knowledge and also a special thanks to ourProject Mentor Mr Sham Wagh Sir.

Next I would like to mention and appreciate our parents for co-operating with us while making

this project.

My overriding debt continues to be my lovely friends who provided me with the time, support,

and inspiration needed to prepare this project

Date MAHESH SHINDE

Place: Pune PGDFS


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INDEX OF THE PROJECT

CHAPTER TOPICS PG. NO.Chapter - 1 INTRODUCTION

Chapter - 2 SYSTAMATICINVESTMENT PLAN

Chapter - 3 COMPANY PROFILE

Chapter- 4 OBJECTIVES ANDSCOPE

Chapter-5 QUESTIONAIRE ANDANALYSIS

Chapter- 6 ANALYSIS OF DATA

Chapter - 7 RESEARCH REPORT

Chapter - 8 FINDINGS ANDCONCLUSIONS

Chapter - 9 SUGGESTIONS &RECOMMENDATION

Chapter-10 BIBLIOGRAPHY


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INTRODUCTION OF THE PROJECT


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INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of investors

who share a common financial goal. This pool of money is invested in

accordance with a stated objective. The joint ownership of the fund is

thus Mutual, i.e. the fund belongs to all i nvestors. The money thus

collected is then invested in capital market instruments such as

shares, debentures and other securities. The income earned through

these investments and the capital appreciations realized are shared

by its unit holders in proportion the number of units owned by them.

Thus a Mutual Fund is the most suitable investment for the common

man as it offers an opportunity to invest in a diversified,

professionally managed basket of securities at a relatively low cost. A

Mutual Fund is an investment tool that allows small investors access

to a well-diversified portfolio of equities, bonds and other securities.

Each shareholder participates in the gain or loss of the fund. Units are

issued and can be redeemed as needed. The funds Net Asset value

(NAV) is determined each day.


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When an investor subscribes for the units of a mutual fund, he becomes part

owner of the assets of the fund in the same proportion as his contribution

amount put up with the corpus (the total amount of the fund).


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ADVANTAGES OF MUTUAL FUND

Professional Management

The idea behind a mutual fund is that individual investors generally lack the time,the inclination or the skills to manage their own investment. Thus mutual fundshire professional managers to manage the investments for the benefit of theirinvestors in return for a management fee.

Diversification

The best mutual funds design their portfolios so individual investments will reactdifferently to the same economic conditions. For example, economic conditionslike a rise in interest rates may cause certain securities in a diversified portfolio todecrease in value. Other securities in the portfolio will respond to the sameeconomic conditions by increasing in value. When a portfolio is balanced in thisway, the value of the overall portfolio should gradually increase over time, even ifsome securities lose value.

Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you avoid manyproblems such as bad deliveries, delayed payments and follow up with brokersand companies. Mutual Funds save your time and make investing easy andconvenient.

Low cost

Mutual fund expenses are often no more than 1.5 percent of your investment.Expenses for Index Funds are less than that, because index funds are not activelymanaged. Instead, they automatically buy stock in companies that are listed on aspecific index.


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Choice of Schemes

A mutual fund can, and typically does have several schemes to cater to differentinvestors preferences. The individual could choose to hire a professional managerto manage his money as per his investment and risk preferences. Such personaltreatment often referred to as Portfolio Management Scheme (PMS).

Legal Framework

Since the investors are often not so well qualified to invest, the mutual fundbusiness is highly regulated. Broadly the existing regulations are:

1. Pre-requisitions to start a mutual fund;2. Permissible schemes and investments;3. Control over marketing process;4. Checks and balances in the legal structure;5. Valuation of securities;6. Level of operational flexibility to the professional investors.

Tax Benefits

Dividend income from mutual fund units will be exempt from income tax with

effect from July 1, 1999. Further, investors can get rebate from tax under section88 of Income Tax Act, 1961 by investing in Equity Linked Saving Schemes ofmutual funds. Further benefits are also available under section 54EA and 54EBwith regard to relief from long term capital gains tax in certain specified schemes.

Return Potential

Mutual funds allow you to allocate investments assets across different fundcategories to achieve a variety of risk/reward objectives thereby reducing overall

portfolio risk. In other words, the right way to benefit from Mutual funds is tobalance the risk as well as the potential to earn.


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Liquidity

Open-end schemes offer liquidity through on-going sale and re-purchase facility.Thus, the investor does not have to worry about finding a buyer for hisinvestment a risk normally associated with direct investment in the securities

market.

Transparency

You get regular information on the value of your investment in addition todisclosure on the specific investments made by your scheme, the proportioninvested in each class of assets and the fund manager's investment strategy andoutlook.

Flexibility

Through features such as regular investment plans, regular withdrawal plans anddividend reinvestment plans, you can systematically invest or withdraw fundsaccording to your needs and convenience.


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LIMITATIONS OF MUTUAL FUNDS

No Guarantees

No investment is risk free. If the entire stock market declines in value, the value ofmutual fund shares will go down as well, no matter how balanced the portfolio.Investors encounter fewer risks when they invest in mutual funds than when theybuy and sell stocks on their own. However, anyone who invests through a mutualfund runs the risk of losing money.

Fees and commissions

All funds charge administrative fees to cover their day-to-day expenses. Some

funds also charge sales commissions or "loads" to compensate brokers, financialconsultants, or financial planners. Even if you don't use a broker or other financialadviser, you will pay a sales commission if you buy shares in a Load Fund.

Taxes

During a typical year, most actively managed mutual funds sell anywhere from 20

to 70 percent of the securities in their portfolios. If your fund makes a profit on itssales, you will pay taxes on the income you receive, even if you reinvest themoney you made.

Management risk

When you invest in a mutual fund, you depend on the fund's manager to makethe right decisions regarding the fund's portfolio. If the manager does notperform as well as you had hoped, you might not make as much money on yourinvestment as you expected. Of course, if you invest in Index Funds, you foregomanagement risk, because these funds do not employ managers


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Dilution

It's possible to have too much diversification. Because funds have small holdingsin so many different companies, high returns from a few investments often don'tmake much difference on the overall return. Dilution is also the result of a

successful fund getting too big. When money pours into funds that have hadstrong success, the manager often has trouble finding a good investment for allthe new money.


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HISTORY OF THE INDIAN MUTUAL FUND

INDUSTRY

A little history

The mutual fund industry started in India in a small way with the UTI Act creatingwhat was effectively a small savings division within the RBI. Over period of 25years this grew fairly successfully and gave investors a good return, and thereforein 1989, as the next logical step, public sector banks and financial institutionswere allowed to float mutual funds and their success emboldened thegovernment to allow the private sector to foray into this area. The initial years ofthe industry also saw the emerging years of the Indian equity market, when a

number of mistakes were made and hence the mutual fund schemes, whichinvested in lesser-known stocks and at very high levels, became loss leaders forretail investors. From those days to today the retail investor, for whom themutual fund is actually intended, has not yet returned to the industry in a bigway. But to be fair, the industry too has focused on brining in the large investor,so that it can create a significant base corpus, which can make the retail investorfeel more secure.


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HISTORY OF MUTUAL FUND

The Evolution

The formation of Unit Trust of India marked the evolution of the Indian mutualfund industry in the year 1963. The primary objective at that time was to attractthe small investors and it was made possible through the collective efforts of theGovernment of India and the Reserve Bank of India. The history of mutual fundindustry in India can be better understood divided into following phases:

Phase 1. Establishment and Growth of Unit Trust of India -1964-87:

Unit Trust of India enjoyed complete monopoly when it was established in theyear 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India

and it continued to operate under the regulatory control of the RBI until the twowere de-linked in 1978 and the entire control was transferred in the hands ofIndustrial Development Bank of India (IDBI). UTI launched its first scheme in 1964,named as Unit Scheme 1964 (US-64), which attracted the largest number ofinvestors in any single scheme over the years..

Phase II. Entry of Public Sector Funds - 1987-1993

The Indian mutual fund industry witnessed a number of public sector playersentering the market in the year 1987. In November 1987, SBI Mutual Fund
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From the State Bank of India became the first non-UTI mutual fund in India. SBIMutual Fund was later followed by Canbank Mutual Fund, LIC Mutual Fund,Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNBMutual Fund. By 1993, the assets under management of the industry increasedseven times to Rs. 47,004 crores. However, UTI remained to be the leader withabout 80% market share.

.

Phase III. Emergence of Private Sector Funds - 1993-96

The permission given to private sector funds including foreign fund management

1992-93 AmountMobilizedAssets UnderManagement

Mobilization as% of grossDomesticSavings

UTI 11,057 38,247 5.2%

PublicSector 1,964 8,757 0.9%

Total 13,021 47,004 6.1%
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companies (most of them entering through joint ventures with Indian promoters)to enter the mutual fund industry in 1993, provided a wide range of choice toinvestors and more competition in the industry. Private funds introducedinnovative products, investment techniques and investor-servicing technology. By1994-95, about 11 private sector funds had launched their schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004

The mutual fund industry witnessed robust growth and stricter regulation fromthe SEBI after the year 1996. The mobilization of funds and the number of playersoperating in the industry reached new heights as investors started showing moreinterest in mutual funds.

Inventors' interests were safeguarded by SEBI and the Government offered taxbenefits to the investors in order to encourage them. SEBI (Mutual Funds)Regulations, 1996 was introduced by SEBI that set uniform standards for allmutual funds in India. The Union Budget in 1999 exempted all dividend incomesin the hands of investors from income tax. Various Investor AwarenessProgrammes were launched during this phase, both by SEBI and AMFI, with anobjective to educate investors and make them informed about the mutual fundindustry.

In February 2003, the UTI Act was repealed and UTI was stripped of its Speciallegal status as a trust formed by an Act of Parliament. The primary objectivebehind this was to bring all mutual fund players on the same level. UTI was re-organized into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund

GROSS FUND MOBILISATION (RS. CRORES)
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ASSETS UNDER MANAGEMENT (RS. CRORES)

AS ON UTI PUBLIC SECTOR PRIVATE SECTOR TOTAL

31-March-99 53,320 8,292 6,860 68,472

FROM TO UTI PUBLIC

SECTOR

PRIVATE

SECTOR TOTAL

01-April-98 31-March-99 11,679 1,732 7,966 21,377

01-April-99 31-March-00 13,536 4,039 42,173 59,748

01-April-00 31-March-01 12,413 6,192 74,352 92,957

01-April-01 31-March-02 4,643 13,613 1,46,267 1,64,523

01-April-02 31-Jan-03 5,505 22,923 2,20,551 2,48,979

01-Feb.-03 31-March-03 * 7,259* 58,435 65,694

01-April-03 31-March-04 - 68,558 5,21,632 5,90,190

01-April-04 31-March-05 - 1,03,246 7,36,416 8,39,662

01-April-05 31-March-06 - 1,83,446 9,14,712 10,98,158


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CATEGORIES OF MUTUAL FUND:


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Mutual funds can be classified as follow :

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund,

at any point of time.

Close-ended funds : These funds raise money from investors only once.

Therefore, after the offer period, fresh investments can not be made

into the fund. If the fund is listed on a stocks exchange the units can

be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently,

most of the New Fund Offers of close-ended funds provided liquidity

window on a periodic basis such as monthly or weekly. Redemption of

units can be made during specified intervals. Therefore, such funds

have relatively low liquidity.

Based on their investment objective:

Equity funds : These funds invest in equities and equity related

instruments. With fluctuating share prices, such funds show volatile

performance, even losses. However, short term fluctuations in the

market, generally smoothens out in the long term, thereby offering

higher returns at relatively lower volatility. At the same time, such

funds can yield great capital appreciation as, historically, equities have


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outperformed all asset classes in the long term. Hence, investment in

equity funds should be considered for a period of at least 3-5 years. It

can be further classified as:

INVESTMENT STRATEGIES

1. Systematic Investment Plan: under this a fixed sum is invested

each month on a fixed date of a month. Payment is made through

post dated cheques or direct debit facilities. The investor gets fewer

units when the NAV is high and more units when the NAV is low. This

is called as the benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt

oriented fund and give instructions to transfer a fixed sum, at a fixed

interval, to an equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from

a mutual fund then he can withdraw a fixed amount each month.


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RISK V/S. RETURN:


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What is a Systematic Investment Plan (SIP)?

SIP is an investment option that is presently available only with mutual funds. Theother investment option comparable to SIPs is the recurring deposit schemes fromPost office and banks. Basically, under an SIP option an investor commits makinga regular (monthly) investment in a particular mutual fund/deposit.

SIP is a method of investing a fixed sum, regularly, in a mutual fund. It is verysimilar to regular saving schemes like a recurring deposit.

An SIP allows you to buy units on a given date each month, so that you canimplement an investment / saving plan for yourself. Once you have decided on theamount you want to invest every month and the mutual fund scheme in which youwant to invest, you can either give post-dated cheques or ECS instruction, and theinvestment will be made regularly. SIPs generally start at minimum amounts of Rs1,000 per month and the upper limit for using an ECS is Rs 25000 per instruction.Therefore, if you wish to invest Rs 100,000 per month, you may need to do it on 4different dates.

A specific amount should be invested for a continuous period at regularintervals under this plan.

SIP is similar to a regular saving scheme like a recurring deposit. It is amethod of investing a fixed sum regularly in a mutual fund.

SIP allows the investor to buy units on a given date every month. The

investor decides the amount and also the mutual fund scheme.


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Benefit 1Become A Disciplined Invester

Being disciplined - Its the key to investing success. With the HDFC MF SystematicInvestment Plan you commit an amount of your choice (minimum of Rs. 1000 and

in multiples of Rs. 100 thereof*) to be invested every month in one of ourschemes.

Think of each SIP payment as laying a brick. One by one, youll see themtransform into a building. Youll see your investments accrue month after month.Its as simple as giving at least 6 postdated monthly cheques to us for a fixedamount in a scheme of your choi ce. Its the perfect solution for irregularinvestors.

Benefit 2Reach Your Financial Goal

Imagine you want to buy a car a year from now, but you dont know where thedown-payment will come from. HDFC MF SIP is a perfect tool for people who havea specific, future financial requirement. By investing an amount of your choiceevery month, you can plan for and meet financial goals, like funds for a childseducation, a marriage in the family or a comfortable postretirement life. The tablebelow illustrates how a little every month can go a long way.

Monthly Savings - What your savings may generate

Savings per month(for 15 years)

Total amount invested(Rs. in Lacs)

Rate of return

6.0% 8.0% 10.0%

(rupees in lacs, 15 years later)*

5000 9.0 14.6 17.4 20.9

4000 7.2 11.7 13.9 16.7


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3000 5.4 8.8 10.4 12.5

2000 3.6 5.8 7.0 8.3

1000 1.8 2.9 3.5 4.2

*Monthly instalments, compounded monthly, for a 15-year period.

At the end of the 12 months, Suresh has more units than Rajesh, even thoughthey invested the same amount. Thats because the average cost of Sureshs unitsis much lower than that of Rajesh. Rajesh made only one investment and that toowhen the per-unit price was high.

3) Company Profile


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MAN WITH A MISSION

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and

Chairman-Emeritus, of HDFC Group who left this earthly abode on November 18,

1994. Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his

financial career at Harkisandass Lukhmidass a leading stock broking firm. The

firm closed down in the late seventies, but, long before that, he went on to

become a towering figure on the Indian financial scene.

In 1956 he began his lifelong financial affair with the economic world, as General

Manager of the newly-formed Industrial Credit and Investment Corporation of

India (ICICI). He rose to become Chairman and continued so till his retirement in

1972.

At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more

illustrious than his first. His vision for mortgage finance for housing gave birth to

the Housing Development Finance Corporation it was a trend-setter for housing

finance in the whole Asian continent.


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ABOUT COMPANY HDFC

VISION

To be a dominant player in the Indian mutual

fund space, recognized for its high levels of

ethical and professional conduct and a

commitment towards enhancing investor interests.

ORGANIZATION AND MANAGEMENT

HDFC is a professionally managed organization with a board of directors

consisting of eminent persons who represent various fields including finance,

taxation, construction and urban policy & development. The board primarily

focuses on strategy formulation, policy and control, designed to deliver increasing

value to shareholders.

Masters degree in economics from Delhi University. She has been employed with

the Corporation since 1978 and was appointed as the Executive Director of the

Corporation in 2000. She is responsible for overseeing all aspects of lending

operations of HDFC.New Delhi.


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BOARD OF DIRECTORS

Mr. D S Parekh - Chairman Mr. D N Ghosh

Mr. Keshub Mahindra - Vice Chairman Dr. S A Dave

Ms. Renu S. Karnad - Executive Director Mr. S Venkitaramanan

Mr. K M Mistry - Managing Director Dr. Ram S Tarneja

Mr. Shirish B Patel Mr. N M Munjee

Mr. B S Mehta Mr. D M Satwalekar

HDFC ASSET MANAGEMENT COMPANY LIMITED

(AMC)

AMC was incorporated under the Companies Act, 1956, on December 10, 1999,

and was approved to act as an AMC for the Mutual Fund by SEBI on July 30, 2000.

The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T.

Parekh Marg, 169, Back bay Reclamation, Church gate, Mumbai - 400 020.

In terms of the Investment Management Agreement, the Trustee has appointed

HDFC Asset Management Company Limited to manage the Mutual Fund:


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Balanced Funds

HDFC Children's Gift Fund Investment Plan

HDFC Children's Gift Fund Savings Plan

HDFC Balanced Fund

HDFC Prudence Fund

Debt Funds

HDFC Income Fund

HDFC Liquid Fund

HDFC Gilt Fund Short Term Plan

HDFC Gilt Fund Long Term Plan

HDFC Short Term Plan

HDFC Floating Rate Income Fund Short Term Plan

HDFC Floating Rate Income Fund Long Term Plan

HDFC Liquid Fund - PREMIUM PLAN

HDFC Liquid Fund - PREMIUM PLUS PLAN


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OBJECTIVES OF THE STUDY

1. To find out the Preferences of the investors for Asset

Management Company.

2. To know the Preferences for the portfolios.

3. To know why one has invested or not invested in SBI Mutual fund

4. To find out the most preferred channel.

5. To find out what should do to boost Mutual Fund Industry.

Scope of the study

A big boom has been witnessed in Mutual Fund Industry in resent

times. A large number of new players have entered the market and

trying to gain market share in this rapidly improving market.

The research was carried on in I had been sent at one of the branch

of State Bank of India where PUNE. I completed my Project work. I

surveyed on my Project Topic A study of preferences of the

Investors for investment in Mutual Fund on the visiting customers of

the SBI DECCAN PUNE Branch.

The study will help to know the preferences of the customers, which

company, portfolio, mode of investment, option for getting return


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and so on they prefer. This project report may help the company to

make further planning and strategy.

4) QUESTIONAIRE

AND

ANALYSIS


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QUESTIONAIRE

A study of preferences of the investors for

investment in mutual funds.

1. Personal Details:

(a). Name:-

(b). Add: - Phone:-

(c). Age:-

(d). Qualification:-

(e). Occupation. Pl tick ()

Govt. Ser Pvt. Ser Business Agriculture Others

Graduation/PG Under Graduate Others


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(g). What is your monthly family income approximately? Pl tick ().

Up toRs.10,000

Rs. 10,001 to15000

Rs. 15,001 to20,000

Rs. 20,001 to30,000

Rs. 30,001and above

2. What kind of investments you have made so far? Pl tick (). All applicable.

a. Saving account b. Fixed deposits c. Insurance d. Mutual Fund

e. Post Office-

NSC, etc

f.

Shares/Debentures

g. Gold/ Silver h. Real Estate

3. While investing your money, which factor will you prefer?

.

(a) Liquidity (b) Low Risk (c) High

Return

(d) Trust

4. Are you aware about Mutual Funds and their operations? Pl tick (). YesNo

5. If yes, how did you know about Mutual Fund?


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a.

Advertisement

b. Peer

Group

c. Banks d. Financial

Advisors

6. Have you ever invested in Mutual Fund? Pl tick (). Yes No

7. If not invested in Mutual Fund then why?

(a) Not aware of MF (b) Higher risk (c) Not any specific reason

5) ANALYSIS & INTERPRETATION OF THE DATA

1. (a) Age distribution of the Investors of Pune

Age Group 50

No. ofInvestors

12 18 30 24 20 16


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Interpretation:

According to this chart out of 120 Mutual Fund investors of Lucknow

the most are in the age group of 36-40 yrs. i.e. 25%, the second most

investors are in the age group of 41-45yrs i.e. 20% and the least

investors are in the age group of below 30 yrs.

1218

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2016

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10

15

20

25

30

35

50

I n v e s

t o r s

i n v e s

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Age group of the Investors


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(b). Educational Qualification of investors of PUNE

Educational Qualification Number of Investors

Graduate/ Post Graduate 88

Under Graduate 25

Others 7

Total 120

71%

23%

6%

Graduate/Post Graduate Under Graduate Others


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Interpretation:

Out of 120 Mutual Fund investors 71% of the investors in Pune are Graduate/Post

Graduate, 23% are Under Graduate and 6% are others (under HSC).

c). Occupation of the investors of Pune

Occupation of customer No. of investors

Govt. service 35

Pvt. Service 45

Business 30

Agriculture 04

Others 06

3545

30

4 60510

1520253035404550

Govt.Service

Pvt. Service Business Agriculture Others

N o

. o

f I n v e s

t o r s

Occupation of the customers


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Interpretation:

In Occupation group out of 120 investors, 38% are Pvt.

Employees, 25% are Businessman, 29% are Govt. Employees,

3% are in Agriculture and 5% are in others.

(d). Monthly Family Income of the Investors of Pune

Income Group No. of Investors

30,000 32

512

28

43

32

0

51015202530354045

50

30

N o .

o f I n v e s

t o r s

Income Group of the Investorsn (Rs. in Th.)


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Interpretation:

In the Income Group of the investors of lucknow, out of 120

investors, 36% investors that is the maximum investors are in

the monthly income group Rs. 20,001 to Rs. 30,000, Second

one i.e. 27% investors are in the monthly income group of

more than Rs. 30,000 and the minimum investors i.e. 4% are

in the monthly income group of below Rs. 10,000

(2) Investors invested in different kind of investments.

Kind of Investments No. of RespondentsSaving A/C 195Fixed deposits 148Insurance 152Mutual Fund 120

Post office (NSC) 75Shares/Debentures 50Gold/Silver 30

Real Estate 65


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Interpretation: From the above graph it can be inferred that out of

200 people, 97.5% people have invested in Saving A/c, 76% in

Insurance, 74% in Fixed Deposits, 60% in Mutual Fund, 37.5% in Post

Office, 25% in Shares or Debentures, 15% in Gold/Silver and 32.5% in

Real Estate.

3. Preference of factors while investing

Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of

Respondents

40 60 64 36

195

148

152120

75

50

30

65

0 100 200 300

No.of Respondents

K i n

d s o f I n v e s t m e n t


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Interpretation:

Out of 200 People, 32% People prefer to invest where there is High

Return, 30% prefer to invest where there is Low Risk, 20% prefer easy

Liquidity and 18% prefer Trust

From the above chart it is inferred that 67% People are aware of

Mutual Fund and its operations and 33% are not aware of Mutual

Fund and its operations.

20%

30%32%

18%

Liquidity Low Risk High Return Trust


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7) Research report

Objective of research;

The main objective of this project is concerned with getting the opinion of

people regarding mutual funds and what they feel about availing the

services of financial advisors.

I have tried to explore the general opinion about mutual funds. It also

covers why/ why not investors are availing the services of financial advisors.

Along with it a brief introduction to Indias largest financial interme diary,

HDFC has been given and it is shown that how they operate in mutual fund

depts.

Scope of the study:

The research was carried on in the Northern Region of India. It is restricted to

PUNE I have visited people randomly nearby my locality, different shopping malls,

small retailers etc.

Data sources:

Research is totally based on primary data. Secondary data can be used only for

the reference. Research has been done by primary data collection, and primary

data has been collected by interacting with various people. The secondary data


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has been collected through various journals and websites and some special

publications of HDFC.

Sampling:

Sampling procedure:

The sample is selected in a random way, irrespective of them being investor

or not or availing the services or not. It was collected through mails and

personal visits to the known persons, by formal and informal talks and

through filling up the questionnaire prepared. The data has been analyzed

by using the measures of central tendencies like mean, median, mode. The

group has been selected and the analysis has been done on the basis

statistical tools available.

Sample size:

The sample size of my project is limited to 200 only. Out of which only 135

people attempted all the questions. Other 65 not investing in MFs

attempted only 2 questions.


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Limitation:

Time limitation.

Research has been done only at PUNE.

Some of the persons were not so responsive.

Possibility of error in data collection.

Possibility of error in analysis of data due to small sample size.

Data analysis:

Have you ever invested/ interested to invest in mutual funds?

YES 135

NO 65

YES67%

NO33%

No. of persons= 200


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.what is the most important reason for not investing in mutual funds?(onl y for above 65 participants)

Lack of knowledge about mutual

funds

25

Enjoys investing in other options 10

8)Findings and Conclusion

Findings:

In PUNE in the Age Group of 36-40 years were more in numbers. The

second most Investors were in the age group of 41-45 years and the least

were in the age group of below 30 years.

In PUNE most of the Investors were Graduate or Post Graduate and below

HSC there were very few in numbers.

In Occupation group most of the Investors were Govt. employees, the

second most Investors were Private employees and the least were

associated with Agriculture.

In family Income group, between Rs. 20,001- 30,000 were more in

numbers, the second most were in the Income group of more than

Rs.30,000 and the least were in the group of below Rs. 10,000.


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Only 67% Respondents were aware about Mutual fund and its operations

and 33% were not.

Among 200 Respondents only 60% had invested in Mutual Fund and 40%

did not have invested in Mutual fund.

Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told

there is not any specific reason for not invested in Mutual Fund and 6%

told there is likely to be higher risk in Mutual Fund.


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Conclusion

Running a successful Mutual Fund requires complete understanding of the

peculiarities of the Indian Stock Market and also the psyche of the small

investors. This study has made an attempt to understand the financial

behavior of Mutual Fund investors in connection with the preferences of

Brand (AMC), Products, Channels etc. I observed that many of people

have fear of Mutual Fund. They think their money will not be secure in

Mutual Fund. They need the knowledge of Mutual Fund and its related

terms. Many of people do not have invested in mutual fund due to lack of

awareness although they have money to invest. As the awareness and

income is growing the number of mutual fund investors are also growing.

Brand plays important role for the investment. People inv est in those

Companies where they have faith or they are well known with them. There

are many AMCs in LUCKNOW but only some are performing well due to

Brand awareness. Some AMCs are not performing well although some of

the schemes of them are giving good return because of not awareness

about Brand. HDFC, Reliance, UTI, SBIMF, ICICI Prudential etc. they are

well known Brand, they are performing well and their Assets Under

Management is larger than others whose Brand name are not well known

like Principle, Sunderam, etc.


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9) Suggestions and Recommendations

The most vital problem spotted is of ignorance. Investors

should be made aware of the benefits. Nobody will invest until

and unless he is fully convinced. Investors should be made to

realize that ignorance is no longer bliss and what they are

losing by not investing.

Mutual funds offer a lot of benefit which no other single

option could offer. But most of the people are not even aware

of what actually a mutual fund is? They only see it as just

another investment option. So the advisors should try to

change their mindsets. The advisors should target for more

and more young investors. Young investors as well as persons

at the height of their career would like to go for advisors due

to lack of expertise and time.

Before making any investment Financial Advisors should first

enquire about the risk tolerance of the investors/customers,

their need and time (how long they want to invest). By

considering these three things they can take the customers into

consideration.


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10) BIBLIOGRAPHY

NEWS PAPERS

OUTLOOK MONEY

TELEVISION CHANNEL (CNBC AAWAJ)

MUTUAL FUND HAND BOOK

FACT SHEET AND STATEMENT

WWW.HDFCMF.COM

WWW.MONEYCONTROL.COM

WWW.AMFIINDIA.COM

WWW.ONLINERESEARCHONLINE.COM

WWW. MUTUALFUNDSINDIA.COM
http://www.hdfcmf.com/http://www.hdfcmf.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.amfiindia.com/http://www.amfiindia.com/http://www.onlineresearch.com/http://www.onlineresearch.com/http://www.onlineresearch.com/http://www.amfiindia.com/http://www.moneycontrol.com/http://www.hdfcmf.com/

Documents

Mahesh Shinde Pgdfs Project Report