Research on Mutual Fund

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Mutual Fund behaviour of different demographic

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I ns nsti titute tute Of M anag nagement, Ni Nir ma Uni niv ver sity M BA-FT -F T (20 (2012-1 -14 4) Research arch Me M ethodo thodollogy ogy

I NVES NV ESTORS TORS`` BEHAV BEHAV IOR TOWA TOWA RDS RDS MUTUA UTUAL FUNDS. Subm Submitte tted to: to:-Prof. rof. Trip ripura J osh oshi Subm Submitted tted by:- Group No:o:-17 121317-Debojyoti Hati 121319-Harshit Desai 121320121320- Hemant Na Nathani thani Section C

E XE CU T I V E SUM M A R Y  This  Th is research wa was con conducted to to study the inv investor preferences an and pe perceptio ion n to towards mutual funds. Mutua Mutuall funds are general rallly not though thought of as long term investmen investments ts but are are rather rather thought of as retirem retiremen entt plan plans s and and short term inves nvestm tmen ents. ts. The research was conducted in in A hmeda daba bad d and Navs Navsa ari regio regions ns of Guj Guja arat. The study revealed that mutua mutuall fund ind industry ustry is is rela rel ati tivel vely y new new in in India. India. The T here are are few few peop peoplle who who go for for mutua mutuall fund inves investm tments. The T he peopl ople e who gene ge neral rallly invest invest in in mutual funds funds go for for short short ter term, equity equity type an and d closed closed interval sche schem mes es.. Demogr ograp aphi hic c factor factors s such such as as age age,, gende der, r, occupatio occupation, n, incom i ncome e were found found to affect affect the inves nvestm tmen entt deci de cisi sions ons in in mutual funds schemes es.. Study St udy also reveal revealed tha thatt though the inves nvestor tors s are aware aware of the risks risks invol involved ved in in the mutual funds they do not prefer prefer mutual funds beca because of market ri risks, prof profes essi sional onal managemen ent, t, and other such su ch factors. factors. Al A lso, beca because use of rece recent nt recession and vol vola ati tillity in i n the I ndian stock stock mark rke et, the there are are huge hu ge fluctua fl uctuati tions ons in in the NPV of the mutua utuall fund unds s which which has has furthe furtherr marr rre ed the mutua utuall fund industry. Pro roffess essiional managemen entt is i s also consi considered dered as an im impor portan tantt aspect aspect of mutual funds by the inves nvestors, tors, so with with the FDI FDI in insu insurance rance and pen pensio sion n sector, sector, the com compa pani nies es can can try and attr attra act investors towards mutual funds funds thro through ugh im improved profes professi sional onal managemen entt and innovative innovati ve schemes.

 The  Th e study can be used by the mutual fun fund companie ies s to fin find d out the mutual fun fund preferences and schem sche mes es.. The study can al also be use used d as a secondary source for for impro provi ving ng the study or conducti conducting ng a broade bro ader study.

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 T A BL E OF CON T E N T S

Sr . No.

 T TOPI C

1

I N TRODUC TI ON RESEARCH OB J EC TI V ES L I TE  T  TURE REV I EW  TERA TU RA TI  TI ONA L E H Y PO THESES RESEARCH ME THODOL OG Y BENEFICI ARI ES RESEARCH &FI NDINGS DISCUSSION CONCLUSION REFERENCES ANNEX URE-1 ANNEX URE-2

2 3 4 5 4 5 6 7 8 9 10 11

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PA GE No. 08. 10. 11. 13 14 14. 15 16 18 19 20. 22 37

L I S T OF T TA BL E

 Table no

 T Table T Title

Page No.

1

Frequency requency distri distributi bution on of investm nvestment ent status status

22

2

Frequenc cy Distriibution of I nvestment Options

22

3

Frequenc cy distri butii on of Awareness

23

4

Chi-Square A nalysis of Awarenes ss of Worki ng

24

5

Freque requency ncy Di Distribu stributi tion on of I nvestment ent Prefere Preference nces

24

6

Rank order order Tab Tablle of I nve nvestm stmen entt Preferen Preferences ces

25

7

Frequenc cy distri butii on of i f investors s

25

8

Frequenc cy Distriibution of Current investors

26

9

Responses of M F types

26

10

Ranki ng of M F types

27

11

Freque requency ncy di distribu stributi tion on of MF M F schem schemes

27

12

Ranki king ng of M utu utua al Fun und d Schem Schem

28

13

Fre requ que ency Di Dist stri ribu buti tion on of MF M F Sche Schem mes

28

14

Chi-Square Analysis of Schem

28

15

Frequency Distribution of Perceived benefit

29

16

Frequency Distribution of Risk Awarenes

29

17

Chi-Square Analysis of risk Awarenes

30

18

Frequency Distribution of perceived risk

31

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L I S T OF T TA BL E

 Table no

 T Table T Title

Page No.

19

Frequenc cy Distriibution of Param d arameter eter Considered

31

20

Frequenc cy Distriibution of Gender

32

21

Chi Square A nal ysis of Gender

33

22

Frequenc cy Distriibution of A ge

33

23

Chi Square A nal ysis of A ge

34

24

Frequenc cy Distriibution of O f Occupation

34

25

Chi Square A nal ysis of O f Occupation

35

26

Frequenc cy Distriibution of A f A nnuall I ncomer

35

27

Chi Square A nal ysis of A nnual I ncome

36

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L ist of Figur es

F igur e no

F igur e Name

Page No.

1

Working Worki ng of M utu tua al Fun und ds

09

2

I nves nvestm tmen entt Statu Status s

22

3

Ob j ective of  I nvestment

23

4

Awareness of  f M F(M utua al Fund)

23

5

Responses of Investment

25

6

Responses

26

7

Benef  f it of M f M utual Fund

29

8

Risk awareness

30

9

Perceived Risk i n Frequenc cy

31

10

Parameter of Selecting M F

32

11

Gender (f requencies)

32

12

Age (f requencies)

33

13

Occupation(f requencies)

34

14

Income(f requencies)

35

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I N T RODUC T I ON:A Mutua utuall Fund is a profe professional ssionallly man mana age ged d coll collecti ctive ve inve investm stmen entt scheme tha that pools pools the the savi sa vings ngs of a num numbe berr of of inves nvestor tors s who sha share a common fi finan nanci cial al goal 1. A mutual fund fund is a co com mpan pany y thatt brings tha bri ngs together money fro from m many peopl ople e and and inves invests ts it it in in stocks, stocks, bonds or other asse assets. The T he combi bine ned d holdi holdings ngs of stocks, bonds bonds or other asse assets the fund owns are are known as as its its portfol portfoliio. Each inves nvestor tor in the fund owns owns units, whi which ch represe represent nt a pa part of of these hol oldi dings ngs2. Mutual funds are fina nanci ncial al intermedi dia aries us use ed to mobi obillize the the sa savi vings ngs of ge gene neral publi public c and chann nnel eliizi zing ng the these se savi sa vings ngs where the there re is is dem deman and d for for funds funds.. Mutual M utual fund fund is thus thus an instrum nstrumen entt for for raisi raising ng money from from the publi public c so that the money can can be be invested in various various finan fi nanci cial al instrum nstrumen ents. ts. “M that “Mutu utua al” means that the fund be bellongs to all the inves nvestor tors. s. Mutu utual al fun funds ds we were re sta started rted in I nd ndiia in 19 1963 63 wi with th the the for form mati tion on of Unit Unit Trust T rust of In I ndi dia a (U (UT TI ). I t was a joi oint nt initi nitia ati tive ve of the government of Ind I ndiia and Res ese erve Bank Bank of I nd ndiia (R (RB BI ). Mutu utua al funds were we re started started in in India I ndia to pool the savi savings ngs of general pub publlic who who were were not aware aware of investm tmen ents and and the ne nee ed for sa savi vings ngs.. UT UTI di did d the the wor work k of pooli pool ing thi this s extra extra mone oney y fro from m the peopl ople e in for form m of  mutua utuall fund unds s and and cha chann nnel eliizi zing ng it to the ne nee eded sectors. Pr Pre e-libe beral raliizati zation, on, India I ndia had poor savi savings ngs and the money was most ostlly spent spent on consumpti ption on but post-li post-l ibe beral raliizati zation on in in 1990s 1990s there was a huge surge su rge in in the per ca capi pita ta incom income of the countr country y and the overal overalll vol volum ume of savings savings incre increase sed. d. Re Reali alizi zing ng the shi shiffti ting ng trend in in investm investmen entt habi habits of the peopl people, e, many many new new private private pl playe ayers entered entered the mutual funds market. These pri private vate compan paniies started prov proviidi ding ng innova innovati tive ve schem schemes to attract inves investm tmen ents. ts.  Thu  Th us, this le led d to the growth of mutual fu fun nd in ind dustry in In Ind dia3. Mutua utuall fund compan paniies raise raise money or fund funds s from from ge gene neral publi public c by issu issuiing unit units s of  mutua utuall fund and in in turn inve invest st the fund unds s coll collected into other other fi f ina nanci ncial al ins nstrum trumen ents ts such such as debe de bentures, ntures, shares, shares, bonds bonds,, etc. The inves investm tmen ents ts are profess professiional onallly manage ged d by experience experienced managers hir hired by the mutual fund company. company. The hese se managers are those who have had had prior prior knowled knowl edge ge of inves nvestm tmen ent. t. “NAV” or popularly known as Net Asset Value, is the value of each uni unit of fund that is is cal calcul culate ated on eve verryda yday y basi basis. s. The T he NAV is determined by the everyday ma mark rke et prices prices of the shares and and othe otherr fi financi cial al instrum nstrumen ents ts in in which which the com compan pany y has has investe invested. d. The The NAV transfers trans fers the prof profiit or loss to the the investor investors, s, it it means tha thatt if if the NAV is grea greater than the the per per unit unit investmen entt mad made e by the inves investor the then n he gains the dif differen erence ce whereas whereas if if it is i s the othe otherr way round round then he loses the difference. Thus, an investor can realize his total profit or loss depending on the number of units he sells. Mutua utuall funds are an ide ideal al instrum nstrumen entt for for inve nvestm stmen entt by new new entrants entrants into into capi capital tal markets as they are pro proffess essiional onallly man manag aged ed by experien enced ced fund fund man anag agers. ers. Mutual Mutual funds funds pro provi vide de mor ore e return Page 7 of 37

compared to debt investm investment and are less less risky compa compared to equity equity shares and bonds. The The expert expertiise of the man anage agers helps helps to reduce risks and and increas increase e pro proffit. Thus hus,, mutual funds funds are best best suited suited by by young and and new entrants into into the capi capital tal mark arkets. ets.

WORK WOR K I NG OF THE M UTUAL FUNDS FUNDS I mage Source: - www.mutualfundsindia.com

 The  Th ere are diff iffe erent types of mutual fu funds that exis istt in the market. Th The ese are: - De Debt, Eq Equ uit ity y and Balance. Each has further different subtypes. Equity mutual funds invest most of their funds into equity, i.e. share market. Debt funds invest majority of their funds into debt instruments. Balanced mutual funds are a mix of both, equity and debt. Mutual funds can also be classified on the basi sis s of open ended, cl closed ended and interval interval schemes. Open Open ended schemes are those which which are avai availlab ablle al alll through throughout out the ye yea ar fo forr inve nvestm stmen ent. t. There is is no no fi fixed maturi turity. ty. I nve nvestors stors can can buy and sell al alll thro through ughout out the yea year. Closed en ende ded d schemes are for for a fixed fixed tenure. tenure. The They y can be be bought bought and sol sold d only only afte after the ini niti tial al issu ssue e is is over. I nterval sch schem emes fall fall somewh ewhe ere in in betwee tween n ope open-end n-ende ed schemes and closedclosed-ended ended sch chem emes.

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Mutual fund has many benefits and risks involved with it. The benefits are:-



 The  Th e expertis ise e of ex experienced Fu Fun nd Ma Man nager is an advantage fo forr th the new entrants in intto the capital market.



Diversified Portfolio of the Mutual fund reduces the risk of the investor as compared to the share mark arket. et.



Mutua utuall fund unds s inve invest st in in la large am amount so there are are econom economies of sca scalle which bri brings ngs down the transaction costs.



Som So me schemes al alllow for for sh shor ortt term liqui quid d inves investm tmen ents ts which which is is an advan dvantage tage for the the investors.



I nvestm tmen ents ts in in mutual funds funds are easy and and sim simpl ple e which which hel helps new inves investor tors s to eas asiily trad trade e in mutual funds.

 The  Th e ri ris sks in inv volv lve ed are:

 The  Th ere is market ris isk k in inv volv lve ed sin inc ce most of the mutual fu funds in inv vest in equit ity y market whic ich h caus ca use es the NAV to fl fluctuate with with the sh sha are mark rke et fl fluctuati tions ons..



 The  Th ere are vari rio ous costs in inv volv lve ed wit ith h the entry and exit in intto the fu fun nds.



 The  Th e hig igh h returns on few in inv vestments dilu ilutte the overall re returns because the in inv vestments are made in large large volum volumes.

RE SE A RCH OB J E C T I VE S: The  Th e objectiv ive es of the research are as fo follo llow ws:1.  To study the preferred modes of in inv vestment by different in inv vestors. 2.  To study the factors in inv volv lve ed in the sele lec ctio ion n of the in inv vestment in ins strument. 3.  To study the awareness le lev vel of the mutual fu fun nd types/schemes among the in inv vestors. 4.  To study the impact of vari rio ous demographic factors on mutual fu fun nd in inv vestments. 5.  To study the termand type of scheme preferred by the mutual fu fun nd in inv vestors. 6.  To study the impact of fu fun nd offeri rin ng company’s reputatio ion n on in inv vestment decis isio ion n. 7.  To suggest suit ita able measures to improve the scope and volu lum me of the mutual fu fund in inv vestments in In India dia..

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L I T E RA T URE RE V I E W:W:Numerous researches have been carri carried out to iden identif ti fy the buyi buying ng objecti objectives ves and and the factors actors affecti affecting ng the investor nvestors` s` deci decisi sion on in in mutual fund fund industr ndustry. y. Vyas V yas (2012) conducted research research about about the investor`s nvestor`s preferen preference ce for for dif di fferent fi financi nancial al instrum nstrumen ents in in India I ndia and showed showed that the mutual utual fund ranked 6th among the 9 inves investm tmen entt options options in in the investor nvestor``s preference rankings. rankings. The The first three three were were gol gold, d, fi fixed xed deposi posits, LI L I C polici poli cie es resp respe ective ctivelly. The T hey were were foll followed by post post off office deposits and and PPF at 4th and 5th positi positions respe respecti ctivel vely. y. The T he last ast 3 were: were: - real realty sector, sha share ma marke rket and and curre currency holding at 7th, 8th and 9th positi positions. Occupati Occupation on of the the investor nvestor was also foun found d to infl influen uence the the mode of investm nvestmen ent. t. Equit E quity y mutual funds funds ranked 1st, foll ol lowed by deb debtt funds funds and and the last was bal balan anced ced mutual funds. Pandey (2011) conducted research to iden identif ti fy the reasons reasons for for lack lack of investm nvestment ent in in mutual funds in Indi I ndia a and and showed in his res resea earch rch that that the peopl people e have have a hi high potenti potential al to to inves investt but they they don’ don’t go for for nonnon-periodic riodic investments due due to high risk, ri sk, high vola volatil tility ma market, la lack of knowle knowledge dge and expert expertiise, se, etc and and these these are the majo majorr reasons that that aff affect the inves investm tmen entt decisi decision on of of the investors. The T he study shows shows that that the investor nvestors s have savi saving ng potenti potential al but they do do not indulge indulge in in investi nvesting ng in Mutua Mutuall Fund Funds. s. It It shows shows tha that people ople prefer inves investi ting ng in se securiti curities es, fi fixed deposits, deposits, saving saving accounts accounts but very few few go for for mutual mutual fund inves investm tmen ents. ts. Research by Pariha Parihar, r, Sharma Sharma and et al (2009) re revealed vealed tha that inve i nvestors` stors` in India I ndia have have still stil l not form ormed a concrete concrete attitude attitude towards towards mutua mutuall funds, unds, the prim pri mary rea reason bei being the lack of awareness reness of  the benefits efits and and the worki working ng of mutual funds funds among the investor nvestors. s. The The researchers tried tried to fi find the extent extent of inf inflluence uence the demograph ographiic variables variables li like age, ge, gende gender, r, educati education, on, incom income, occupati occupation on have have on the beha behavi vior or of of investor nvestors s towards inve investi sting ng in mutual funds funds.. The T he research research conclude concluded that that the variables variables age, age, gender der and incom income e inf inflluence uence the investm nvestmen entt decisi decision on of investors whereas whereas the other two variables education and occupation do not significantly influence the attitude of investors. The main benefits of the mutual funds which attracted the investors were “return potential”, “liquidity” followed by “affordability”, “low risk” and “transparency”. A nother nother study conducted conducted by Balam Balamurugan and and Selva Selva (2012) 2012) in i n Thoothukudi of of 80 sam samples ples consisti consisting ng of sal salaried aried peopl people, e, prof professi essionals, onals, busine businessm ssmen and and farm farmers ers sugge suggest that that the inves investm tmen entt behavior of the investors is influenced by pattern of investments, investment level, income level, level evel of satisfacti tisfaction on and and rea reasons for selecting cting the mutual utual fund. Page 10 of 37

Haya ayat (201 (2012) 2) conducted conducted rese research rch in in fi five citi cities of Pa Pakista ki stan n and coll collected ected data from from 150 individuals who had invested in mutual fund companies. According to him investor preferences do not di differ on basis basis of education tion leve level and and occupa occupations tions.. Ma M arital rital status has has rel relationship tionship with with spons sponsor or & investor nvestor rela related qualities ties.. I nvestors` nvestors` city city has rel relations ationshi hip p between the fund rela related qualitie ties and investor behavior. On geographical basis, urban investors` exhibit different investment behavior in terms of overconfidence and risk attitude and their preferences about the fund related qualities also dif differ. A nothe nother re research was conducte conducted by kandavel davel (2011) (2011) in Puduche Puducherry rry had sim similar resul results. Sim Si milarly arl y a research research by Rao Rao (2011) (2011) in i n Vi Visakhapa sakhapatnam and and nearby areas areas conclude concluded d that the majority of the investors in mutual funds were males (85.1%) ranging in the age group of 3150(71.10 50(71.10%). %). A lso it was was found tha that majori ajority of investo nvestors rs were were marri rried indivi individu duals. als. This T his was because the marri arried indi indivi vidua dualls wanted wanted to be more ore secure secure and and invest invest to secure the theiir future or as a security curity for for thei their chi chilldren. dren. A lso, awarene awareness about about equity quity fund fund sche schem mes was found found to be 37.43%. 37.43%. So, this this sugge suggests sts that the awareness reness about about mutual funds funds was stil ti ll low in i n Indi India. a. In I n a research rch conducted conducted by Shah and and Narayan B. (2012) 2012) in Ahm Ahmedabad of 50 samples ples,, age was again found to be a factor infl nfluencing cing selecti selection on of mutual utual fund and and the the minim nimum amount of investm nvestment. ent. It was al also conclude concluded that that dif different erent occupa occupation tion groups groups paid great great attenti attention on to the the sponsor’ or’s brand brand name and and its its past past performance while choosing a fund. Accordi ccording ng to research conducted conducted by Mi Mishra shra and and K umar (201 (2012) 2) in in Jam J ammu & K ashm ashmir of 350 respondents, level of purchase decision involvement significantly impacts information search and inform nformation tion proces processing sing beha behavi vior or of mutual utual fun fund d inve investors. stors. A lso signif significan cant dif difference rence exists xists in the investment ent behavior avior of the two categori ories, es, low purchase purchase deci decisi sion on invol involvem vement ent and high high purc purcha hase se decisio cision n invol involvem vement ent of mutual utual fund investors. nvestors. Low L ow purchas purchase deci decisi sion on of mutual utual fund extensivel nsively y use bank bank as a source source of investment nvestment advi advice. ce. Mutual utual Fund Compani panie es ne need to cle clearly outli outline thei their expectatio expectations ns from rom adverti advertisi sing ng str strate ategy gy when when it is is targeted targeted to low low purchase purchase deci decisi sion on of mutual fund fund investors and and high high purchase purchase deci decisi sion on of mutual mutual fund fund investor nvestors. s. Saha and and Dey Dey (2011) wor work k suggests suggests that that the main ain inten intenti tion on of investm nvestmen entt turns turns out to be “to provide for asset purchase”, which is followed by “planning for contingencies” and “tax reduction”.  The  The study showed that growth, ba balan lance and inc income orie riented schemes were more preferred by the investors. The T he research research al also conclude concluded that inves investm tmen entt deci decisi sions ons were independent dent of gender. gender. Al A lso, investors below 40 and having income level less than Rs. 30,000 were more inclined to invest in mutual funds. Page 11 of 37

Santhi Santhi and Balana Balanaga Gurunathan than (2011) conducted conducted the the research in i n Tam Tamil Nadu, India I ndia of  400 indivi ndividual investors to fi find the factors affe affecting cting the investm nvestment ent deci decisio sion n of inve i nvestor stor towards tax tax savi saving ng mutual utual funds. unds. Accordi A ccording ng to their their findings most of the investors nvestors are averse of mutual utual funds due the volatil volatiliity and they they expe expect ma maxim ximum return out of their investm nvestment but at at low low ri risk. Y oung oung investors are interested interested to inve invest st in in tax tax saving saving mutual funds. funds. To To bridge bridge the gap gap between tween the investors and inves investm tmen ent, t, Asset Man M anagem agement ent Com Compan paniies can organi organize more ore number ber of program programs which which explai explain n the risk, return, return, meri merits, ts, demerits erits and and other other fea features tures of the product and and al also they can restructure restructure their existi existing ng practices practices and innovate innovate more ore new ways to del deliver better better serv serviice.

RATIONALE : The  The problem lems associat iated with ith the mutual fun funds are that the mutual fun funds are thought of as as an option option of investm nvestmen entt for for retir retirem ement, ent, house, shor shortt term liquidi quidity ty investm i nvestment ent by the consumers and and not as as a long ter term high high return return inve investm stment ent option. option. Al A lso, Inve I nvestors prefer to inve i nvest st in in savi savings ngs in bank and other inves investm tmen entt options options rather rather tha than n inves investi ting ng in in mutual funds. Beca Because of these these reasons the investm nvestment ent in i n the the mutual utual fund sector sector is low low and the gro growth wth is is al also slow. slow. So, our re research problem problemis concentr concentra ated on the behavi ehavior or of the inves investor tors s as as to why the inve investors stors are not ready ready to inves investt in in the mutual funds and also study the factors that influence their decision of investing in the mutual fund industry.

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H Y PO T HE SE S: The  Th e hypotheses of the study are as fo follo llow ws:1. H0: Mutual Fund Fund inve nvestors stors are are un una aware of the work workiing of Mutua M utuall Funds Funds. 2. H0: Majority of the investors go for periodic investment options rather than mutual funds. 3. H0: Most M ost of the mutual fund fund investors investors go for for equity equity mutual funds funds rathe ratherr tha than n deb debts ts and balanced bal anced funds. 4. H0: Most M ost of the the mutual fund fund inves investor tors s go go for for tax-sa tax-savi ving ng mutual fund fund Schem Scheme rathe ratherr tha than growth, gro wth, income, index, and money mark arket et mutual fund schem schemes. 5. H1: Most of the the inves nvestor tors s prefer to inves investt in in open-ended mutual fund schem scheme. 6. H0: Most of the inve investors stors are are aware aware of the ri risks sks invol involve ved d with with mutua utuall fund inve investm stments.

7. H1: Mutua M utuall fund investm investmen ents ts vary with with demogr ograph aphiics such as: - ag age, e, gende der, r, occupati occupation, on, annual annual income.

RESEARCH RESEARCH METHOD ME THODL L OGY OGY :-

DA T A SOURCE S: The  Th e sources would be both primary as well as as secondary ry.. Pr Prim imary data would be colle llec cted through surveys in in for form of questi stionnair onnaires es.. The T he se secondary condary data data would be col colllecte ected d from from the publ publiishe shed d arti rticl cle es, re res search pa papers, journ journa als, RB RBII we webs bsite, ite, AM A M FI (A (Ass ssociation ociation of Mutu M utua al Fund Funds s of I ndia) website, etc.

SA M PL I NG PL A N:N: The  The sampling ling un units its fo for the research are the in individ ividu uals wh who inv invest in diffe different fina financial ial instrumen nstruments. ts. The T he sample ple size size was 30 only only becaus because e of the the tim time constraint. constraint. The T he sam sampli pling techni technique que used for research is non-probabilistic and convenience, because probabilistic sampling requires comple plete infor inform mation tion about about the popul population tion which which is is not fe feasi asible ble due due to a tim time constrai constraint. nt. The T he sam sampli pling is is li limited to various various areas reas of Ahm A hmedaba dabad d and and Navsar vsari in Guja Gujarat state of I ndia . Page 13 of 37

 T OOL S OF DA T  TO  TA A COL L E C T  TII ON:N: The  Th e tool of of da data collectio ion n is self admin inis isttered questio ion nnair ire e. Th The e questio ion ns covered all th the objectives objecti ves of the research. The questio stionna nnaires wer were of fixed al alternati tive ve types. The T he resp responde ondents were asked to rank rank the financi cial al instrum nstrumen ents ts accor accordi ding ng to their pref preferen erence ce and indicate indicate the risk and bene be neffits of mutual funds funds in order to study study thei their perception perception towards mutual fund fund inves investm tmen ent. t.

DA T A A NA L Y SI S T TOOL S: The  The data analys lysis tools used are Chi-s Chi-sq quare test, t-te -test, rank order analys lysis and fre frequency distributions.

BE NEF I CI A RI E S: The  The results lts would be beneficia ficiary ry to the mutual fun fund companies ies as it would help them understand the beha behavi vior or of investors towards mutual utual funds. unds. The compan companiies can use use the results results to iden identif ti fy the prospects. prospects. Al A lso, the company pany can find fi nd the the diff different erent factors that that affe affect the attitude ttitude of investment in in mutual funds.

Page 14 of 37

RE SUL T S & F I NDI NGS: The  Th e surv rve ey sh showed th that all all the respondents inv invested in some fo form or ot other. The The surv rve ey revealed that all the 30 responde respondents nts were inves investi ting ng in in various options. options. Thi This s can be se seen en fro rom m the tablle-1a tab 1and nd figure fi gure--2 in in the ann nnexu exure:re:-1. 1. Furthe urther, r, the resp responde ondents were asked asked about thei their objecti objectives ves for sa savi ving ng.. I t was foun found d that that major ajoriity of the resp responde ondents sa save ved d for for their chi chilldren dren’’s educati tion on fol followed by by tax savi vings ngs and retirement plans as their 2nd obj obje ecti ctive ve.. It I t was the then fol followed by savi savings ngs for emergen rgenci cies es as the 3rd comm com mon objecti objective ve for for saving. saving. It I t was found that res responde pondents nts least least preferred preferred to save for purchase of  asse sets. ts. The T he table nono-2 2 and figure-3 fi gure-3 in i n the the an anne nexure: xure:--1 shows these findi ndings. ngs.  The  Th e research shows that majo jori ritty of th the in inv vestors were aware about workin ing g of th the mutual funds unds.. I t was found found that out of of the 30 responde respondents 22 were were aware aware about about the worki working of the mutual fund unds s whil while only 8 were were una unaware ab about out the wor worki king ng.. Tabl ble e no: no:--3 and and figure figure no: no:--4 in in the an anne nexure:xure:1 shows shows the numbe bers rs and the frequency distr distriibutio bution. n. The The Chi hi--Square test test conducted conducted as shown shown in in tablle no: tab no:--4 sugge suggest tha that null hyp hypothe othesi sis s (H0: (H0: Most M ost mutua utuall fund investor investor are una unawa ware re of work workiing of  mutual funds funds.) .) should be rej rejecte ected. d.  The  Th e re respondents we were asked to to rank the va vari rio ous inv investment op optio ion ns on on th the ba basis of of the preferen pref erence ce of the theiir inves nvestm tmen ent. t. A hypothe hypothesi sis s test for for thi this s was conducted and the rank orde orderr and fre fr eque quency ncy tabl table e no: o:--5 and tab tablle no:no:-6 6 shows shows the resu resullts that null null hypoth hypothe esi sis s (H0: (H0: Major M ajoriity of  inves nvestors tors go for for peri riodi odic c inves investm tmen entt options options rathe ratherr than Mutua Mutuall Fund unds) s) should be accep ccepted ted:: It I t was found fo und that the Fixed Deposits was the the most preferred form form of inve nvestm stmen entt fol folllowed by by Li L ife I ns nsuran urance ce,, Gol Gold, d, Shares Shares & bon bonds ds,, Posta Postall sa savi vings ngs,, provi provide dent nt fund, mutua utuall fund unds, s, Rea Reall Esta state, te, chit funds and curren currency. I t was was also found that 22 res responde pondents nts had investe invested in in mutual funds and and remai aini ning ng 8 had not ever invested in in mutual funds f unds.. It I t was also found found that that 16 responden respondents had had curren currentt inve investm stmen ents ts in in mutual funds funds.. Tab T ablle-7 and tabletable-8 8 in in annexure:xure:-1 1 show these these result results. s. Responde pondents nts were asked asked to rank the var various mutual fund types types according according to their preferen pref erences ces.. I t was found that that equity equity was the most preferred preferred type fol followed by bal balan anced ced mutual funds an and d debt debt funds funds were the least preferred preferred as conclude concluded fro from m the rank rank orde orderr anal analysi ysis s shown in in tablle notab no-9 9 and and tabl ble e 10 in in anne annexure:xure:-1. 1. He Hence the null hypoth hypothe esi sis s (H0: (H0: Most M ost of the I nvestors prefer equity equit y mutual funds rather than deb debtt and bal balanced anced funds) was was accepted. Responde pondents nts were al also asked asked to rank the various schem schemes es.. I t was found found that that Tax-savi Tax-saving ng schemes were the most prefer preferrred schemes fol follow owed ed by Grow Growth th scheme and and Income Income schemes as Page 15 of 37

show sh own n in in tabl table e-11 and and tabl ble e no no 12 in the annexure Hence the nul nulll hypothe hypothesi sis s was was accepte accepted d as as per the rank orde order anal alysi ysis s as shown in in tabl table no no 12.  The  Th e study reveale led d that majo jori ritty of th the in inv vestors in inv vested in open ended schemes fo follo llow wed by closed closed ende ended schemes and and inte interv rval al schemes as shown in Table Table no:no:-13 in in the anne nnexure. xure. Here the null hyp hypothe othesi sis s H0: I nve nvestors stors have no no speci ciffic preferen preference for mutua utuall fund scheme was was reje rejected on the basi sis s of the chi – square anal analysi ysis s carri carried out as sh show own n in in tabl table e no 14. L iquidi quidity ty was the the most rated rated be bene neffit fro from m the mutua utuall fund investm investmen ent. It was foll fol lowed by returns, tax benefits and flexibility were rated equally, which were then followed diversification profe prof essional manage gem ment and and low low ri risk. A frequ requen ency plot plot is is shown shown in in the the tabl ble e no:no:-15 15 and figure figure no:-7 in the annexure:-1. A hypothe hypothesi sis s test test was al also conducted to fi find out the risk awareness awareness ab about out the mutual funds in the respond responden ents ts and it it was found found that majo ajori rity ty of of the the respond responden ents ts were awa aware re of the risks invol nvolved ved.. Out of the 30 resp respond onden ents, ts, 23 were were awa aware re of the risks. A frequ requen ency cy plot plot is is shown shown in in the figure no:-8 no:-8 and the table no 17 in in the annexure:xure:-1 1 shows the chi squ square are test test  The  Th e st study als lso o reveale led d that the ma market ris isk k was consid ide ered the most perceiv ive ed risk folllowed by profe fo professional man ana age gem men ent, t, costs costs,, othe others and and dil dilutio ution n was the the le leas astt perceived risk ri sk as shown sh own in in tabl table e no:o:-15 15 and figure figure no:no:-9 9 in in the the ann nnexu exure:re:-1. 1. A mong the param paramete eters rs considered considered for for selecti selecting ng the mutual fund type grow growth th was consi conside dered red 1st by the inves investor tors s fol folllow owed ed by by past past perfor perform man ance ce and prof profes essi sional onal managemen ent, t, inve nvestm stmen entt portffol port oliio and compan pany’ y’s s brand brand nam name were were given given the 3rd pref preferen erence ce as shown in in table table no: no:--16 and figure no:-10 in the annexure:-1.  The  Th e result of th the chi sq square tests showed that demographic factors lik like e age, ge gender, annual incom ncome e had si signi gnifficant im impa pact ct on the mutual fund fund inves investm tmen entt deci decisi sions. ons. However However occupati occupation on has no signi signiffican cantt im impact on the inves nvestm tmen entt preferen preference. ce. The The resul results ts of the tests are shown in in the ann nnexu exure:re:-1.( 1.(pl ple eas ase e ref refer ta table no:-17 no:-17 to table table no:-27, no:-27, and and figure no:o:-11 11 to fi figure no:o:-14) 14)

Page 16 of 37

Discussion:I t can be be said said tha thatt there there are various obje objecti ctive ves s for for savi vings ngs,, the main obj obje ecti ctives ves are tax savi savings ngs,, retirem reti rement plan plans, s, chil children dren‘‘s educa educati tion. on. A lso, peopl people do do have aware warene ness ss abou aboutt the working working of the mutual funds funds but people people bei being risk risk averse choose sa saffer options options for for inves nvestm tmen ents ts such as Fixed deposit posits, s, gol gold, d, Li L ife I ns nsuran urance, ce, Postal deposit deposits, s, etc. etc. The The proporti proportion on of peopl ople e inve nvesti sting ng in mutua utuall fund unds s is is les less. s. Al A lso, the mutua utuall inve nvestors stors are mostl ostly y young males. Mutua Mutuall fund inves investm tmen ents ts by femal ale e are sti stilll les ess. s. The The mutual fund fund investm investmen entt varies varies wi with th demogr ograp aphi hics cs such as gender, age, age, ann nnua uall income, bu butt occupati occupation on is is not foun found d to affect affect signif significan cantl tly y the mutua utuall fund investment decisions. Most mutual fund inves investm tmen ents ts are in in equi quity ty type of fund whereas the inves nvestm tmen ents ts in in bal balan anced ced and and debt de bt funds funds are lower. lower. A lso, growth, growth, taxtax-sa savi vings ngs schem schemes are pref preferred erred mor ore e over over the the other schem schemes es..  This  Th is may be due to the populari ritty of these types of schemes. Als Also o, in inv vestors prefer to in inv vest in open ende ded d schemes es.. Thi his s is is becaus because e of ease of exi exitt from the these se types types of sche schem mes es.. I nte nterv rval al sche schem mes an and d closed cl osed en ende ded d schemes are preferred preferred les less s becaus cause e of the fi fixed tim time period bondage ge.. The be benefi nefits ts of  of  investments in mutual funds are liquidity, tax benefits, returns, flexibility.  The  Th e awareness about the ri ris sks in inv volv lve ed in the mutual fu funds is there and so therefo forre people do not prefer pref er to inves investt in in mutual fund fund investmen investments. ts. Am A mong the risks perc percei eived ved by by the inves nvestor tors s market risk risk is at at the top. top. Thi T his s may be due to the vol volati atillity of the mark rke et in in recent recent tim times es.. Prof rofe essional management is is also also consi considered dered to be a ri risk sk nowada nowadays ys by my peopl ople. e.  The  Th e parameters consid ide ered by the in inv vestors fo forr inv investment de decis isio ion ns are main inly ly growth and past performances.

Page 17 of 37

CONCL USI ON & RECOM M E NDA T I ONS:From the anal analysi ysis s we can conc concllude that that the awareness among the peopl people e about mutual fund investmen ents ts is is les less. s. Though T hough the pe peopl ople e may be awa aware re of mutual funds they they do not not prefer prefer to inve i nvest st in in mutua utuall funds becaus use e of lack of knowl knowle edge, high high risk risk in in mutua utuall funds, etc. etc. The T he ind ndus ustr try y is is sti stilll relati rel ativel vely y new new to the I ndi ndian an markets and and mor ore e awareness is is stil still need eded ed.. Mutua utuall fund compan paniies can can try try to cr crea eate awaren awareness ess among the peopl ople e about about the mutual funds unds.. A lso, compani nies es can tr try y to im impro prove ve management and other other aspect aspects s which which the investor investors s feel as a risk risk towards their inve nvestm stmen ents. ts.

Page 18 of 37

REFERENCES

1) Dicti ctiona onary of Fina nancial ncial Te T erm rms s (200 (2008) 8) L igh ghtbu tbullb Press, Press, Inc I nc.. Re Retri triev eve ed Nov 2,2012 2,2012 fr from om http://financial-dictionary.thefreedictionary.com/Mutual+Fund 2) U.S. Securities and Exchange Commission (2005) Retrieved Nov 2, 2012 from http:// ttp://www.se www.sec.gov/i c.gov/inve nvestor/tools/m stor/tools/mffcc/m cc/mutu utualal-fund fund--help.h p.htm tm 3) A ssociation of Mut Mutua uall Fun Funds ds of In I ndia- AM AM FI (20 (2012 12))

Retrieved Nov 2, 20 2012 12 fro from m

http://www.amfiindia.com/showhtml.aspx?page=mfindustry 4) V ya yas, s, R., R., (201 (2011), 1), “Mutu “M utual al fun fund d inve investor’ stor’s s be beha havi viour our an and percep rcepti tion on in in ind indore ore city”, J ourna ournall of Arts, A rts, Scie Science & Co Com mmerce, E-I E- I SSN 22 2229 29--46 4686 86 ,I ,ISSN SSN 22 2231 31--41 4172 72 5) Pande dey y A., A ., (20 (2011 11), ), “I “Inv nve estors` Beh Beha avior vior:: Mut M utua uall Fund Funds”, s”, SCM SCMS J ourn ourna al of I ndian Manage gem ment, J anu nua ary – Marc rch h iss issue ue.. 6) Pari Parih har, B., B., B., B., S., S., Sharm Sharma a, R., R., Pa Pari rih har, S., S., D., (20 (2009 09), ), “Ana “A nalyzi yzing ng I nv nve est stors’ ors’ Attitud A ttitude e  Tow  To wards Mut Mutual Fu Fun nds as as an an In I nvestment Optio ion n”, Th The e Icfa Icfaia ian n Jo J ournal of Ma Man nagement Research, Vol. 6 4 VIII, No. 7 7) Balamurug urugan an A., and and Raj, V ., M., (20 (2012 12), ), “A Study on Inve Investo stors rs Beha Behavi vior or Towa Towards rds Uti Mutual fund unds”, s”, Sona Sona Globa oball Manag agem ement Re Revi vie ew, V ol olum ume 6 , Iss Issue ue 3 ,Ma ,May. 8) Hay Haya at M., M ., A., (20 (2012 12) “Fact “Factors ors Va V alue lued d By By Inv I nve estors While Whil e Inv Inve esting In In Mutu Mutua al Fund Funds s-A Behavi vioral oral Conte Context” xt”, I ns nsti titute tute of Inte I nterdi rdisci scipl pliinary Business Business Rese sea arch volum volume 4, no 1. 9) K ande deval, val, D., D., (20 (2011 11), ), “A “Atti ttitud tude e of The The I nvestors Towards Mutu utual al Fun Fund d Selection Cri Crite teri rion on I n Puduc Puduche herr rry: y: An A n Empi piri rica call Study Study”, ”, In I nte terna rnati tiona onal Referre eferred d Res Rese earch Journ J ournal, al, ISSN I SSN-- 097509753486. RNI: Rajbil 2009/30097, VOL-III * ISSUE 26, November. 10) Rao, K ., L ., (201 (2011), 1), “A “An nalysi alysis s of inve nvest stors’ ors’ percep rcepti tions ons towa towards rds mutu utua al fund schemes”, I nte terna rnationa tionall J ourn ourna al of Multi ultidisci discipli plina nary Res Rese earch Vol. V ol.1 1 Iss Issue ue 8, Decem December, I SSN 22 2231 31 5780. 11) Shah, A., Dr. Narayan, B., (2012), “Mutual Fund: behavioral finance perspective”, Asia Pacifiic Jou Pacif J ourna rnall of M arke rketi tin ng & Management Re Revi vie ew Vol V ol.1 .1 No. 2, October, I SSN 23 2319 19-2836. 12) Mish shra ra S., and K umar M., M ., (201 (2012), 2), “The “T he I mpact of L eve vell of Purcha Purchase se Deci Decision sion Involvem I nvolvement on the I nvestment Be Beha havi vior or of Mutu utua al Fun und d Inve Investo stors”. rs”. Th T he I UP J ourn ournal al of Behavioral Finance, Vol. IX, No. 1. 13) Sa Sah ha S., De Dey M., M., (20 (2011 11), ), “A “An nalys ysiis of Factors A ff ffe ecti ctin ng Inve Investors’ Perception of Mutu M utua al Fun und d Inve Investment”, The T heI UP J ournal of Man M ana age gem ment Research, Vol V ol.. X, X , No. No. 2.

Page 19 of 37

14) Santhi N., N., S. S.,, and and Guruna Gurunathan ,B ,B., ., K ., (201 (2011) 1) , “A “An n Ana A nalys ysiis of I nv nve est stors ors'' Attitud A ttitude e towa towards rds  Tax  Ta x Savin ing g Mu Muttual Fu Fun nds in In Ind dia ia” ”, Eu Eurropean J ournal of Ec Eco onomic ics s, Fin Fina ance and Admini nistrati strative ve Sci Scien ence ces, s, Iss Issue ue 41 41.. 15) Dr. K ir ira an, R., R., (20 (2010 10), ), “A “An n Ana Analys ysiis of Inve I nvestor’ tor’s s Risk Ri sk Perce Perception ption towa towards rds Mut utua ual Fund Funds”, s”, I nternati tiona onall J ournal of Busine usiness ss and Man Manage gem ment Vol V ol:4, :4, No: No:--5.

Page 20 of 37

A NNEX URE S:-1 S:-1 1.

I nve nvestm stme ents Status:  Tab  Ta ble No No:-1 :-1 Fre Freq quency dis istrib tribu utio tion n of in inv vestment sta tatu tus s Option ption Chose hosen  Y ES NO

F requency quency 30 0 Figure No:-2

2.

Obj bje ecti ctive ves s of I nve nvestm stme ent:  Tab  Ta ble No No:-2 :-2 Fre Freq quency Distrib tribu utio tion n of I nvestment Op Optio tion ns Opti Option Chose hosen Retirem tirement Plans ans Emergencies  Tax  Tax Saving ings Chil Children’ dren’s s Educa ducati tion on Purchase urchase of A sset sset

F requency quency 12 10 12 15 8

Page 21 of 37

Figure No:-3

OBJECTIVE OBJECTIVE OF INVESTMENT 20 15 10 5 0 Retirement Plans

3.

E me rg en encie s

T ax Saving s

Chi ld ldr en’s Education

Purchase of  Asset

Worki Wor king ng of M utua tuall F un und: d:

 Tab  Ta ble No No:-3 :-3 Fre Freq quency dis istrib tribu utio tion n of Aw Awa are ren ness Option ption Chose hosen  Y ES NO

F requency quency 22 8 Figure:-4

H0: H0: Most mutual Fund Fund investors investors are unaware of the the worki working ng of mutual funds funds H1: Most Mutua Mutual Fund investor investors s are aware of the worki working ng of mutual utual Funds unds Page 22 of 37

 Tab  Table No:-4 No:-4 Chi-S Chi-Square Analy Analys sis of Awa Awaren reness of Workin Working g

Risk Awareness wareness A WAR WA RE UNAWA UNA WARE RE  TOTAL  TOTAL

Observed Frequency 21 9 30

Expected Frequency 15 15 30

Chi square Test Results p val value DF Chi Chi square value lue

0.0284 0.028459 5973 737 7 1 4.8

A s the p-value p-value is less ess than 0.05 signif significant leve l evel we reje reject the H0 and and thus thus most mutual fund investors are aware of the working.

4.

Ranki anking ng of of I nvestm tme ents I ns nstr trum ume ents:

H0: Major Majoriity of the inve investors go for peri riodi odic c inves investm tme ent opti options ons rather than mutua utuall funds unds.. H1: Major Majoriity of the the inve nvestors stors go for mutual mutual fund fund inve nvestm stme ents rather than peri riodi odic c inve investm stments.

 Tab  Ta ble No No:-5 :-5 Fre Freq quency Dis istrib tribu utio tion n of I nvestment Pre Prefe fere ren nces

Rank ank 1 2 3 4 5 6 7 8 9 10

Gold 3 6 6 6 5 2 1 1 0 0

FD 14 3 4 5 1 2 0 1 0 0

Sha Sharres 4 3 1 2 3 2 7 4 2 2

Life I ns nsu. u. 4 10 4 5 2 2 1 2 0 0

Postal Savi Savings ngs 1 4 4 2 7 5 3 1 2 1

MF MF 2 2 3 4 1 4 4 7 3 0

Page 23 of 37

Real Estate 0 1 3 5 5 4 7 2 1 2

PF 2 1 5 1 4 8 3 4 2 0

Chit Fund 0 0 0 0 0 1 2 2 11 14

Currency 0 0 0 0 2 0 2 6 9 11

 Ta  T able No No:-6 :-6 Ra Ran nk order Tab Table of I nvestm tme ent Pre Prefe fere ren nces

 Type  Type 1 2 3 4 5 6 7 8 9 10

Ran Rank score 109 77 167 101 151 171 174 162 275 263

Ran Rank orde rder 3 1 6 2 4 7 8 5 10 9

From therank order analysi ysis s we can seethat mutual funds rank 7th in theorde orderr whereas Fi Fixed deposi posits ts is is the most pref preferr rre ed fol folllowed by gold. gold. He Hence weaccept H0 H0 and and rej reject H1.

5.

I nv nve este ted d in in Mutua M utuall F unds unds::  Tab  Ta ble no 7 Fre Freq quency dis istrib tribu utio tion n of in inv vesto tors rs Option pti on Chose hosen  Y ES NO

F requency quency 22 8

Figure no no: 5

RESPONSES OF INVESTMENT

NO

RESPONSES OF INVESTMENT YES

0

5

10

15

20

Page 24 of 37

25

6.

C ur urrr ent Inve I nvestm stme ents nts::

 Tab  Ta ble no 8: Fre Freq quency Dis istrib tribu utio tion n of Current in inv vesto tors rs

Option pti on Chose hosen  Y ES NO

F requency quency 16 14

Figure no no : 6

7.

M utu utua al F un und d Typ T ype es:  Tab  Ta ble no: 9 Re Res sponses of M F ty types Rank the mutual fund types

Equity quity Debt

Balanced alanced

1

12

4

6

2

9

1

12

3

1

17

4

H0: Most M ost of the mutual fund fund inves investor tors s go go for for eq equi uity ty mutual funds rather rather than than debts and bal balan anced ced funds. H1: Most M ost of the mutual fund inves investor tors s go for de debt bt and and balan anced ced mutual fund inves investm tmen ents ts rather than tha n equi quity ty funds f unds..

Page 25 of 37

A rank order analysis shows the result  Tab  Ta ble no :1 :10 0 Ra Ran nkin king g of M F ty types

 Type  Type of M F

Sco Score

Ran Rank

Equity

30

1

Debt

57

3

Balanced

42

2

Equit quity y is is the most preferr preferred ed type fol followed by bal balan anced ced and debt funds funds.. Hen Hence ce the H0 is is accepte accepted. d.

8.

M utual fund schemes:

H0: Most M ost of the the mutual fund fund inves investor tors s go go for for tax-savi tax-saving ng mutual fund fund Scheme rathe ratherr tha than gro rowth, wth, inco ncom me, index, i ndex, and money mark market et mutual fund schemes. H1: Most M ost of the the mutual fund fund inves investor tors s go go for for growt growth, h, incom income, inde index, and money market mutua utuall fund schemes investm investments rather than taxtax-savi saving ng mutual fund schemes.  Tab  Table no : 11 Freq Frequency distrib istribu ution ion of M F sc schemes

Rank mutual F und Schem Schemes

1 2 3 4 5

Growth

8 7 5 2 0

I ncom ncome

T ax-Savings ax-Savings I ndex ndex

2 4 10 5 1

Page 26 of 37

11 6 3 0 2

1 1 1 4 15

M oney-M arke arkett

0 4 3 11 4

 Tab  Ta ble No No:1 :12 2 ra rank nkin ing g of M utu tua al Fu Fun nd Scheme

Rank mutual Fund Schemes Growth Income  Tax  Tax-Sa -Saving ings Index Money-Market

Score

Rank

45

2

65

3

42

1

97

5

81

4

 Tax  Ta x savin ing g is the most preferred type fo follo llow wed by bala lan nced and debt fu fun nds. He Hen nce the H0 is accepted.

9.

Diffferent MF Di M F Sch Sche emes:  Tab  Ta ble No No:-1 :-13 3 Fre Freq quency Dis istrib tribu utio tion n

Scheme Type Close Ended Sche Schem me Open Ended Schem Scheme I nterval Scheme

Frequency requency 5 14 2

H0: Inve I nvestors ha have no no speci ciffic preference preference for Mutu utual al Fund Fund Schemes H1: Major M ajoriity of the investors go for ope open n end nde ed Mutua Mutual Fund sche schem mes.  Tab  Ta ble No No:-1 :-14 4 Ch Chi-S i-Sq quare Ana Analy lys sis Scheme

1 2 3

Observed Values 5 14 2

E xpected xpected Values 10 10 10

p value0.005248

Chi square-10.2 Degrees of  Freedom-2 Page 27 of 37

For confidence interval 0.05, since p is less than 0.05, we reject H0. Hence majority of investors go for periodic investors.

10. Benefits:  Tab  Ta ble No No:-1 :-15 5 Fre Freq quency Distrib tribu utio tion n of Pe Perc rce eiv ive ed benefit fits s Benefits 1 2 3 4 5 6 7 8

Frequency 10 4 4 7 7 7 2 0

Figure No:-7

11. Awar ware ene ness ss::  Tab  Ta ble No No:-1 :-16 6 Fre Freq quency Distrib tribu utio tion n of Ris Risk k Aw Awa are ren ness Risk Awareness  Y es No

F requency quency 23 7

Page 28 of 37

Figure No:-8

H0: Major Majoriity of the the investors are not not aware aware of the the ri risks sks invol involve ved d in in mutua utuall funds. Ha: Major M ajoriity of the the investors are are aware of the the ri risks sks involve invol ved d in in mutua utuall funds.  Tab  Ta ble No No:-1 :-17 7 ChiChi-S Square Ana Analy lys sis of ris risk k Aw Awa are ren ness Risk Awareness Observed Values 23 7

Chi square8.533333 Degrees of  Freedom-1

Expected Values

15 15 p value0.003487

For confi confide dence nce interv rval al 0.05, since since p is is le less tha than 0.05, 0.05, we reject H0. He Hence major ajoriity of inve nvestors stors are aware of the ri risks sks invol involved ved in mutual fund fund inves nvestme tments.

Page 29 of 37

12. Perceived Risks:  Tab  Ta ble No No:-1 :-18 8 Fre Freq quency Distrib tribu utio tion n of perc rce eiv ive ed ris risk k

Option pti on Chose hosen 1 2 3 4 5

F requency quency 18 1 4 3 2

Figure No:-9

13. Par aram ame ete terrs consi conside derred:

 Tab  Ta ble No No:-1 :-19 9 Fre Freq quency Distrib tribu utio ion n of Pa Para ram meter Co Con nsid ide ere red d

Option pti on Chose hosen 1 2 3 4 5

F requency quency 10 5 5 7 5

Page 30 of 37

Figure No:No:-1 10

Gender:  Tab  Table No:-2 No:-20 0 Freq Frequency Dist istribu ribution tion of Gen Gender

M ale Female

22 8

Figure No:No:-1 11

H0: Mutua M utuall fund inves investm tmen ents ts do not vary with with gender. Ha: Mutual fund investmen ents ts var vary with with gender. Page 31 of 37

 Tab  Ta ble No No:-2 :-21 1 ChiChi-S Square Ana Analy lys sis of Ge Gen nder Gender Observed Expected Values Values 14 9.5 5 9.5

Male Female

Chi square4.263158 Degrees of  Freedom-1

p value0.038947

For confi confide dence nce interv rval al 0.05, 0.05, since since p is is le less than 0.05, we reject H0. H0. He Hence we can can say that the the mutual fund inves investm tmen ents ts vary wi with gende gender. r.

Age:  Tab  Table No:-2 No:-22 2 Freq Frequency distrib istribu ution tion of Ag Age e Code 1 2 3 4 5

Frequency 9 13 3 5 0 Figure :-12

Ages (frequency) Above 60 51-60 41-50 Ages (frequency)

31-40 Below30 0

5

10

Page 32 of 37

15

H0: Mutua M utuall fund inves investm tmen ents ts do not vary with with age ge.. Ha: Mutua Mutuall fund inves nvestm tmen ents ts vary with with age age..  Tab  Ta ble No No:-2 :-23 3 ChiChi-S Square Ana Analy lys sis of Ag Age e

Chi square13.94737 Degrees of  Freedom-4

Age Age Observed Expected Values Values 7 3.8 9 3.8 3 3.8 3 3.8 0 3.8 p value0.007465

For confi confide dence nce interv rval al 0.05, 0.05, since since p is is le less than 0.05, we reject H0. H0. He Hence we can can say that that the mutual fund inves investm tmen ents ts vary wi with age.

Occupation:  Tab  Table No:-2 No:-24 4 Freq Frequency Distribu tribution tion of Occ Occupation tion Code Service Business Govt. Govt. PSU Retired

F requency quency 12 11 2 5 Figure:-13

Occupation (Frequency) Service Business P.S.U Retiered

Page 33 of 37

H0: Mutua M utual fund inve investm stments do not not vary with with occupati tion. on. Ha: Mutua M utual fund investm investmen ents ts var vary with with occupati tion. on.  Tab  Ta ble No No:-2 :-25 5 ChiChi-S Square Te Tes st Ana Analy lys sis of Oc Occ cup upa atio tion n Occupation Obser ved ved E xpected xpected Values Values

9 5 2 4

Chi square-5.2 Degrees of  Freedom-3

5 5 5 5 p valu 0.157724

For conf confiidence inte interv rval al 0.05, 0.05, since since p is is mor ore e than 0.05, we we accept H0. Hence we can say that the mutua utuall fund investm investmen ents do not not vary signif signi ficantl tly y with with occupa occupati tion. on.

A nnual nnual I ncom ncome:  Tab  Table No:-2 No:-26 6 Freq Frequency Dist istribu ribution tion Code <100000 100000 100001-300000 100001-300000 300001-500000 300001-500000 >500000 500000

Frequency 9 15 5 1 Figure No:No:-1 14

Annual Income (Frequency) 25 20 15 10 5 0

Annual Income (Frequency)

Page 34 of 37

H0: Mutua M utuall fund inves investm tmen ents ts do not vary with with annua annual incom ncome. e. Ha: Mutual fund investmen ents ts var vary with with annua uall income.  Tab  Ta ble No No:-2 :-27 7 ChiChi-S Square Ana Analy lys sis of I ncome I ncom ncome Observed Expected Values Values 2 7.5 14 7.5 5 7.5 1 7.5

Chi square16.1333 Degrees of  Freedom-3

p value0.001065

For conf confiidence inte interv rval al 0.05, 0.05, since since p is is les less s than 0. 0.05, we rej reject ect H0. Hence we can sa say y that mutual fund inves investm tmen ents ts vary with with annua annuall incom ncome. e.

Page 35 of 37

Annexure:-2 QUESTIONNAIRE: This questionnaire is designed to support academic research conducted to study investors` behavior towards mutual fund investments. The data collected for this research will be kept highly confidential and will be solely used for academic purposes. 1. Do you invest(save):

yes

no

2. What are your objectives for investment/savings(you can select multiple options): Retirement plans

For emergencies

For children’s children’ s education

For tax savings

For purchase of assets

3. Are you aware of the working of the mutual funds:

Yes

No

4. Rank the following in terms of your investment preferences: Gold

Fixed Deposits

Shares & Bonds

Life insurance

Postal savings

Mutual Funds

Real Estate

Provident funds

Chit funds

Currency

5. Have you ever invested in mutual funds:

Yes

No

6. Are you having any current mutual fund investments : (If not then go to question 11)

Yes

No

7. Rank the following mutual fund types according to your investment preference: Equity Debt Balanced 8. Rank the following mutual fund schemes according to your investment preference: Growth Income Tax-savings Index 9.

Pr

Money-Market

What kind of scheme do you Prefer: Closed–ended schemes Open-ended schemes

Interval schemes

10. What benefits do mutual funds offer(you can choose multiple options): Liquidity Diversification Diversificat ion Professional Professio nal management Returns

Tax benefits

Flexibility

Low risk

others. Please specify__________ specify______________________________. ____________________.

11. Are you aware of the risks involved in mutual funds investments:

Page 36 of 37

Yes

No

12. What are the perceived risks in mutual fund investments: Market-risk

Dilution

Professional Professio nal management

Costs

others. Please specify_____________________ specify____ __________________________. _________.

13. What parameters do you consider for selecting mutual fund scheme: Growth Professional Profess ional management Investment Portfolio

Past Performance

Company’s brand name

others. Please specify______________________ specify________ ____________________. ______.

14. Name(optional): 15. Gender:

MALE

FEMALE

16. Age in completed years: 17. Occupation:

BELOW 30

Service

18. Annual income:

< 100000

19. Annual savings:

<50000

31-40

Business

Govt./P.S.U.

100001-300000 50001-100000

41-50

51-60

ABOVE 60.

Retired.

300001-500000

>500000.

> 100000.

20. Contact Number/ E-mail:_____________________________________________________.

THANK YOU

Page 37 of 37

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