Mutual Fund Awareness

A StudyOn

Investment Pattern Of General Public in Mutual Fund(Focus on Mutual Fund)

Name :

Company :

Designation :

Contact No. :

JAY VYAS

Administrative Management College,Bangalore – 83.

Department of Management Studies. Administrative Management College.

1. Does your company invest'? [ ] Yes [ ] No

2. Which are the investment tools your company invests in?[ ] Bank Fixed Deposit [ ] RBI Bonds [ ] Mutual Funds[ ] Equities [ ] others (Please specify)

3. Your company primarily invest for (Rank according to your preference) [ ] Tax Benefits[ ] Returns [ ] Liquidity [ ] Savings[ ] Any other (Please specify)

4. Rank the investments options according to your company's preference of investment

[ ] Bank Fixed Deposit[ ] RBI Bonds[ ] Mutual Funds[ ] Equities .[ ] Any other (Please specify)

5. What is the frequency of your company's investments?[ ] Once in 15 Days [ ] Once in 3 Months[ ] Once a Month [ ] Once in 6 Months[ ] Once a Year [ ] Weekend Parking

6. What is average tenure of investment?Short-Term Long-Term

7. What is expected rate of return of your company from debt investments?[ ] 4%-5% [ ] 5%-6% [ ] 6%-7% [ ] >7%

8. What is expected rate of return of your company from equity investments?[ ] 5%-10% [ ] 10%-15% [ ] 15%-20% [ ] >20%

9. Does your company invest in Mutual Funds?[ ] Yes [ ] No

10. If the answer to question 9 is "Yes"

a. Are you aware of the various schemes offered by Mutual Funds?[ ] Yes [ ] No [ ] Few

b. Do you know that Mutual Funds offers Liquidity to your funds?[ ] Yes [ ] No [ ] Not Sure


c. Do you know that Mutual Funds offers steady returns?[ ] Yes [ ] No [ ] Not Sure

d. Do you know that you can get Tax Advantages by investing in Mutual Funds?[ ] Yes [ ] No [ ] Not Sure

e. On whose external advice do you invest?[ ] Bank [ ] Distributor [ ] Agents [ ] Direct investments [ ] C.A.

f. Mutual Fund investment is what % of your company's total investment portfolio?

g. Which types of Mutual Fund does your company invest in?[ ] Debt [ ] Equities [ ] Balanced

h. Your company invests in Debt Mutual Fund because it offers,[ ] Steady Returns [ ] Liquidity [ ] Tax Benefits[ ] Less risk [ ] Any other (Please specify)

i. Your company invests in Equities Mutual Funds because it offers,[ ] Higher Returns [ ] Long Term Capital Gains [ ] Return > Inflation[ ] Wealth Creation [ ] Tax Advantage [ ] Any other (Please

specify)

j. Your company invests in Balanced Mutual Funds because it offers,[ ] Higher Returns than debt funds [ ] Return > Inflation [ ] Tax

Advantage [ ] Any other (Please specify)

11. If the answer to question 9 is "No"

a. Your company does not invest in Mutual Fund because ofi. Bitter past experience [ ] Yes [ ] No [ ] May beii. Lack of Knowledge [ ] Yes [ ] No [ ] Maybeiii. Lack of confidence in service being provided [ ] Yes [ ] No [ ] Maybeiv. Difficulty in selection of schemes [ ] Yes [ ] No [ ] Maybev. In-efficient investment advisors [ ] Yes [ ] No [ ] May be

b. Would you invest in Mutual Funds for your company if it offered

i. Greater Tax Benefits V/S others.1 2 3 4 5

Strongly Disagree Disagree Neutral Agree Strongly Agree

ii. Greater liquidity V/S others.1 2 3 4 5


iii. Investment for a shorter duration, even for one day. -1 2 3 4 5



iv. Steady Returns.1 2 3 4 5


v. Net returns better than a Bank Fixed Deposit with high liquidity.1 2 3 4 5


vi. Diversification of portfolio.1 2 3 4 5


vii. Minimization of risks.1 2 3 4


12. Are you aware that current account surpluses can also earn interest by parking in Mutual Funds even for one day? [ ] Yes [ ] No [ ] Maybe

13. If Mutual Fund offer you Steady Returns, Tax Benefits, Liquidity, Diversification of

Portfolio, Lesser Risk would consider it as an investment option in the future for your

company? [ ] Yes [ ] No [ ] May be

14. Would you be interested to know more about Mutual Funds?

[ ] Yes [ ] No.


Analysis of Study

HOW MANY PEOPLE INVESTS?

This is very important to know that how many people do investments among all

respondents. Some people not in position to do investment because of some reason, like

they re-invest in their own unit, working on expansion plans, or they do not have enough

surpluses for investment.

Table showing how many people invests

No. of respondents Percentage

Invest 158 75.24

Does not Invest 52 24.76

Total 210 100

The following pie chart shows the pictorial view of the above statistical data:

Chart showing how many people invests

Invset75%

Do not Invest25%

Here we can find that, maximum No. of respondents do investments (Approx

75%).


And the people who do not invest have some reason. Let’s see what the reasons

for what they do not invest are.

WHY PEOPLE DO NOT INVEST?

People are not able to make investments because they working on their expansion

plans, some of them re-invest their surplus in their own unit and some do not have

enough surpluses to make investment. Following table shows that for what reason

people do not invest.

Table showing why people do not invest?

Reasons No of Respondents % Of the Respondents

Working on Expansion

Plan

16 30.77

Re-invest in their own

unit

16 30.77

Do not have enough

surpluses to make an

investment.

20 38.46

Total 52 100


Chart showing why People do not invests?


Working on Expansion

Plan31%

Re-invest in their own unit31%

Do not have enough surplus

38%

From the above figure, we can say that 30.77% of the respondents are working on

expansion plans.

From the above figure, we can say that 30.77% of the respondents are re-

investing their surpluses in their own unit.

From the above figure, we can say that 38.46% of the respondents do not have

enough surplus to make an investment/

SHARE OF DIFFERENT INVESTMENT TOOLS

We have several investment tools. Here we see that in which investment tools people

like to invest more. Here I took one option i.e. others which includes LIC, Other

insurance, Post saving schemes etc. Following table shows preference of people for

particular investment tool.

Table showing share of different Investment tools.

Investment Tool No. Of Investors

(who invest)

% of Investors1 % Of Investors

(Out Of 158)21 Here we calculate % on the basis of total i.e. total of investor who invest in different tool eg. Bank FD has 123 investors so we calculate % 123/389. Department of Management Studies. Administrative Management College.

Bank Fixed

Deposits123 31.62 77.85

RBI Bonds 76 19.54 48.10

Mutual Fund 40 10.28 25.32

Equities 118 30.33 74.68

Other3 32 08.23 20.25

2 Here we have 158 respondents who invest at present.3 Consist of LIC, other insurance, Post saving schemes etc. Department of Management Studies. Administrative Management College.


Chart showing Share of different Investment tools

Bank Fixed Deposite

32%

RBI Bonds20%

Mutual Fund10%

Equities30%

Others8%

Majority of the respondents invest their money in Bank Fixed Deposits.

Following Bank Fixed Deposits 2nd is Equities in which people prefer to invest.

RBI Bonds has average part in total.

Small No. of investors invests in Mutual fund.

FACTORS CONSIDERED BY INVESTORS WHILE INVESTING

Once the motive of the investor is clear, he will consider certain factors before making an

investment. We have tried to cover most of the factors in our questionnaire, which the

investor takes into account while making an investment.

Here I used ranking for different factors. Respondent asked to give rank as per his/her

choice i.e. 1st rank to which factor he/she consider most important and like this go further

in ranking.


Table showing Factors Considered by the Investor for Investment

Rank given

Factor

considered

for

investment

12 3 4

Tax Benefit 68 68 22 0

Return 66 30 50 12

Liquidity 14 29 30 70

Saving 10 31 50 61

The following chart shows the pictorial view of the above statistical data:

Chart showing Factors Considered by the Investor for Investment

12

34

0 10 20 30 40 50 60 70 80

68

68

22

0

66

30

50

12

14

29

30

70

10

31

50

61

Saving

Liquidity

Return

Tax Benefits

No. of Respondents

Ran

k

More of the people consider tax benefit as most important criteria for investment.

As we can see that 68 people has ranked it as 1st and another 68 ranked it as 2nd.

People while making an investment also take return into account. But return has

relatively less important as compared to Tax Benefit.

A SME person is also considered about liquidity. But here we see that liquidity is not given more importance.



RANKING FOR INVESTMENT OPTIONS

Here I asked the respondents to give rank to different investments options as per their

preference. It is totally based on a person’s point of thinking and ability to take risk and

investing money in the market. Here we see the result in following table.

Table showing ranking for investments options

Investments Options Ranks

1 2 3 4 5

Bank FDs 81 36 18 12 0

RBI Bonds 15 35 54 12 2

Mutual Funds

4 6 28 56 2

Equities 52 59 21 6 2


Chart showing ranking for investments options

1

2

3

4

5

0 10 20 30 40 50 60 70 80 90

81

36

18

12

0

15

35

54

12

2

4

6

28

56

2

52

59

21

6

2

Equities

Mutual Funds

RBI Bonds

Bank FDs

No. of Respondents

Ran

k


HOW MANY INVESTORS INVESTS IN MUTUAL FUND?

In this research we have 158 people who do investments. Out of that some invests in

Mutual Funds and some do not invests in Mutual Fund. Following table shows us the no

of people who invests in Mutual Fund out of 158 people.

Table showing how many Investors Invests in Mutual Fund

Invests in Mutual

Fund?

No. Of Investors % Of Respondents

Knowing the Scheme

Yes 42 26.58

No 116 73.42


Chart showing how many Investors Invests in Mutual Fund.

Yes27%

No73%


REASON FOR NOT INVESTING IN MUTUAL FUND

I asked to investors about the reasons for not investing in Mutual Fund. I given them

some reason and asked them to give their opinion about those reasons. Following table

shows us data related to this. There are 258 respondents because a person has more

than one reason for not to invest in Mutual Fund.

Table showing reasons for not investing in Mutual Funds.

Reasons No. of

Respondent

% of Respondent

Bitter Past Experience 02 00.78

Lack of Knowledge 98 37.98

Lack of Confidence 70 27.13

Difficult Scheme Selection 45 17.44

In-efficient Adviser 43 16.67

Total 258 100


Chart showing reasons for not investing in Mutual Funds.

1%

38%

27%

17%

17%

Bitter Past Experience Lack of Knowledge Lack of Confidence Difficult Scheme Selection

In-efficient Adviser


Mostly people not investing in Mutual Funds because of lake of knowledge

(37.98%) and lack of confidence (27.13%).

Some investors have difficulty in selection of schemes.

Some of them are not getting proper guidance from their advisers.

Few no. of investors has bitter past experience so they decided that they do not invest in

Mutual Funds in future.

AWARENESS OF SCHEMES OF MUTUAL FUND

People may have basic idea about Mutual Funds. But they may or may not know the

different schemes available in Mutual Funds. Here we see that how many people know

all the schemes, some of the schemes or none of the schemes.

Table showing awareness of Different Schemes of Mutual Funds

Aware about

schemes.

No. Of Investors % Of Respondents

Knowing the Scheme

Yes 14 33.33

No 02 04.76

Few 26 61.91


Chart showing awareness of Different Schemes of Mutual Funds

33.33

4.76

61.91

Yes No Few


Majority of the respondents were aware of few Mutual Fund Schemes (61.91%).

But there are respondents who know all schemes of Mutual Funds (33.33%).

WILL MUTUAL FUND BE AN OPTION FOR INVESTMENT IN

FUTURE FOR INVESTORS?

Now a days Mutual funds are becoming an investment option for people. When I told

about benefits of Mutual Fund to respondents and ask them will they consider Mutual

Fund as an investment option in future? Following table shows result of that question.

Table showing will Mutual Fund be an Investment option for Investors in future?

Benefits from

Mutual Fund

Opinion of respondents

Highly

Disagree

Disagree Neither

Disagree

nor

Agree

Agree Highly Agree

Greater Tax Benefits 00 06 40 68 02

Greater Liquidity 00 06 41 63 06

Investment for

Shorter Duration (for

1 day)

00 11 67 32 06

Steady Returns 00 02 35 59 20

Net Return > Bank

FD

02 08 49 51 06

Diversification of

Portfolio

00 03 16 62 35

Minimization of Risk 00 00 16 51 49



Chart showing will Mutual Fund be an Investment option for Investors in

future?

Highly Disagree

Disagree Neither Disagree nor Agree

Agree Highly Agree0

10

20

30

40

50

60

70

80

Greater Tax Benefits Greater Liquidity

Investment-Shorter Duration Steady Returns

Net Return > Bank FD Diversification of Portfolio

Minimisation of Risk


RESEARCH METHODOLOGY

MAIN OBJECTIVE

To study Investment pattern of general public in Mutual Funds.

SUB OBJECTIVES

To find out in which investment tool people invests most. To study the general investment criteria of people. To find out the awareness of Mutual Funds and it’s various schemes. To study the interest of people for further investment in Mutual Funds.

RESEARCH DESIGN

A research design is the master plan or model for the conduct of formal investigation and survey. It is a specification of methods and procedures for acquiring the information needs for solving the problem. It decides the source of information and methods for gathering the data. A questionnaire and other forms are tested to use the collection of data. A sampling design is to be selected.

Good research design ensures that the information obtained is relevant to the research question and that it was collected by objectives. Since research design is simply the framework of plan for a study, it should be used as a guide in collecting and analyzing the data. It is a blueprint that is followed in completing the research study.

Our approach to research is descriptive. The major objective of the descriptive research is to describe something – usually market features or functions. It requires a clear specification of the who, what, when, where, why, & the way (the 6 Ws) of the research. Our 6 Ws are:

a) Who: Who should be considered for the research?

All categories of people are considered for research.

b) What: What information should be obtained from the respondent?

What is the investment pattern of the respondent?

c) When: When should the information be obtained from the respondent?


First of all direct approach to respondent and if they are busy then take appointment.

d) Where: Where should the respondents be contacted to obtain the required information?

1. At the business place of the respondent. 2. At the residence of the respondent.

e) Why: Why are we obtaining the information from the respondents?

To know Investment Pattern of respondent and check Awareness of Mutual Fund among them.

f) Way: In what way we are going to obtain the information from the respondents?

Personal Interview Method.

DATA COLLECTION METHOD

In this research, I have used two types of data.

Primary Data.

Secondary Data.

Primary Data are the first hand data collected by us by filling the questionnaire from the respondents. It is more reliable, fresh and accurate.

Secondary Data are the data collected for some purpose other than the problem at hand. I have collected secondary data from magazines, newspapers, periodicals and Internet. It is less reliable and secured data as compared to primary data.

SAMPLING

i. Sample size-210 ii. Elements- General Public.iii. Sampling Units- Business place.iv. Extent- Bangalore Cityv. Research Instrument-Questionnaire


RESPONSE RATE

The response rate was average. As we had a questionnaire asking for the financial information of the respondent, most of the people hesitated to provide the required information. Also the questionnaire contained some financial terms that were technical in nature, which resulted into reduced response rate. I have visited nearly 280 potential respondents, out of which only 200 gave proper response. Hence,

Response Rate = 200/280 = 71.43%


Documents

Mutual Fund Awareness