LIST OF CONTENTS

CHAPTER
No

TITLE

PAGE NO

LIST OF TABLES
INTRODUCTION
1.1 INTRODUCTION
1.2 SCOPE OF THE STUDY
1.3 OBJECTIVES OF THE STUDY
1.4 RESEARCH METHODOLOGY
1.5 LIMITAIONS OF THE STUDY

II

3-4
4
5
5
6

REVIEW OF LITERATURE

PROFILE OF MUTUAL FUND INDUSTRY

8-13

IV

ANALYSIS AND INTERPRETATION

14-29

FINDING SUGEGESTION
5.1 SUMMARY AND FINDINGS
5.2 SUGGESTIONS
5.3 CONCLUSION

III

VI

30-33
32
33

BIBLIOGRAPHY

34

ANNEXURE

35-38

LIST OF TABLE

SL NO
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Tables
Classification of investors based on the gender.
Age wise classification
Educational classification of the investors
Occupation of investors
Income level of investors
Number of earning Member in the family
Popular mutual fund among the investors
Investment motives
Relationship between age and length of the family
Investment option
Timing of the investment
Income and fund preferred by the investor
Age and scheme preferred by the investor
Expected return
Satisfaction level
Investors opinion about mutual fund.

PAGE NO
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

CHAPTER 1
INTRODUCTION
1.1 INTRODUCTION
The purpose of saving is differing among individuals. All savers are not investors. An
investor is one who invests in his/ her savings. Investment is an activity which is different from
saving. Savings are generated when a person abstain from present consumptions for a future use.
Saving kept as cash are not proffered as they do not earn anything. Hence the saver has to find a
temporary for his savings until they are required to for his future. This results in investment. The
increase in the working population, higher family incomes and consequent savings, availability of
large and attractive investment alternatives and an increase in investment related publicity have
made investment a house hold word and it is popular among people from all walks of life.
Investment involves the employment of money with an aim of achieving additional income or
growth in number.
Investors are the backbone of any capital market. The capital market is the
subsystem of the financial system. It is a market for long term funds such as share, debenture and
bonds. It brings together the supplier and user of the capital and provides funds to industries and
government, to meet their long term requirements. The capital market in India may be classified
into organised and unorganised capital market. The organised sector consist of individuals and
corporate investors on supply side and corporate enterprises, government and semi- government
on the demand side. The unorganised capital market consists of indigenous bankers and money
lenders who provide loan to the individual borrower.
The Indian stock market is one of the fastest growing markets. The sensitive nature
of the market, the high growth objective, the increased demand for funds and limited source open
to the corporation all suggest that both the corporation and the investors should understand the
function of the stock market. The investment climate in India is affected by the event of political,
social and economic factors and these are reflected in the volume of trading and the share price
index of the stock exchanges in India. The changed political thinking in terms of economic
policies and the consequent awareness have largely affected the investment climate.
The reform process has sent signals to a wave of changes in savings and investment
behaviour adding a new dimension to the growth of financial sector. With the increase in
domestic savings and improvement in deployment of investments through markets, the need and
3

scope of mutual funds operation has increased tremendously. Mutual funds are not only best
suited for the purpose but also are capable of meeting this challenge effectively. Professional who
manages are considered to have a better knowledge of market behaviour. Another important
reason is that dividend and capital gains are reinvested automatically in mutual fund and, hence
,are not frittered away. Mutual fund also create awareness among urban and rural middle class
about the benefits of investment in capital market through profitable and safe avenues, and are
able to gather a large amount of surplus fund available with this section. For all investors, mutual
funds have provided a better investment to all types of investors.
With a short span of time mutual fund operation has become an integral part of the
Indian financial scheme and is poised for rapid growth in the nature. The mutual fund has been
remarkably resilient over the last decade in spite of varying economic condition, and increasing
competition. Today various schemes tailored to meet the diversified needs of the saver, are being
offered by many mutual fund institution.
The new mutual fund products launches has been many of the equity based funds in the
market, primarily to attract investors who would like to take risk for greater risk for greater return,
While debt funds also launched during this period. The investors hesitate to invest in
equity funds when the market is down. One is ought to design mutual fund products, which shall
combine an optimal mix of return, risk, liquidity, and safety for the investors for all the category.

1.2 SCOPE OF THE STUDY

The study is useful to understand the investors perception towards investment in mutual
funds in kollam town, and also it helps to know the investors motives satisfaction level.To
conclude that results will be analysed and presented in a detailed way for understanding of the
research the perception of the investment in mutual fund can be analysed with the help of the survey
results,

1.3 OBJECTIVES OF THE STUDY

The main objectives of the study are as follows

To know the investors perception towards investment in mutual fund

To know the investment motives of mutual fund investors.

To study the socio economic profile of the investors

To assess the investment pattern of the investment.

To study the expectations of investors towards Mutual Fund

1.4 RESEARCH METHODOLOGY

RESEARCH DESIGN
The present study adopts a descriptive design which deals about the existing facts and
phenomenon.

POPULATION AND SAMPLE SIZE

The population of the study is infinite, so sample of 125 investors are taken for the
analysis purpose.

SAMPLE DESIGN
Population in statistics means the whole of the information which purview of statistical
investigation. Here the population is the investors of mutual fund in kollam town in keala.

NATURE OF THE DATA

The data is collected through primary and secondary sources. The primary data have been
collected from the respondents through the survey method using the Questionnaire and the
secondary data is collected through books, journals websites.

TOOLS USED FOR ANALYSIS

To arrive at useful conclusions, to understand the behaviour of the people and to make
generalization on the basis of the result the following tools are applied.

1) Percentage Analysis
2) Chi square
3) Weighted average

1.5 LIMITATIONS OF THE STUDY

The sample size is limited to 125 individual investors in the town of kollam. The sample size may
not adequate represent the national market.

Time constrains was the biggest limitation. The project had to completed within 4 months.

Respondents given their data based on the present status of the market, but the market is subject
to change.

CHAPTER II
REVIEW OF LITERATURE

Mutual fund have attracted a lot of attention and kindled the interest of both academic and
practitioner communities. This literature review reveals some of the investors behaviour studies.
Sujith siksander and Amrit sing (1996) carried out a survey with an objective to understand
the behaviour aspect of the investors of the northern region towards equity and mutual fund
investment portfolio. The survey revealed that the salaried and self- employed formed the major
investors in mutual funds primarily due to tax concessions. UTI and SBI schemes were popular in
that part of the country.
Madhusudhan V jambodekar (1996) conducted a study to assess the awareness of mutual
funds among investors, to identify the information sources influencing the buyer decision and
factors influencing the choice of a particular mutual fund.
Shanmugam (2001) conducted a survey of 201 individual investors to study the information
sourcing by investors, their perception of various investment decisions, and reported that
psychological and sociological factors dominated economic factors in share investment decisions.
Rajeshwari T.R and Rama Moorthy (2006) studied the financial behaviour and factors
influencing fund/scheme selection of retail investors by conducting factors analysis using
principal component analysis, to identify the investors fund selection criteria, so as to group them
into specific market segments for designing of the appropriate marketing strategy.
Jaspal singh and subhash singh(2006) conducted a study on perception of investors towards
mutual fund and analysed the reason for withdrawal and/or not investing anymore in mutual
funds.
Review of literature reveals that there is extensive scope for further research in this area of
behavioural finance.

CHAPTER III
PROFLE OF MUTUAL FUND INDUSTRY

3.1 HISTORY OF MUTUAL FUND

The first Indian mutual fund was set up in 1963, when the Government of
India created the Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian
mutual fund market and sold a range of mutual funds through a network of financial
intermediaries. At the end of 1988 UTI had Rs. 6,700 crores of assets under management. In
1987, the Government of India permitted public sector banks and the Life Insurance Corporation
of India (LIC) and General Insurance Corporation of India (GIC) to enter the mutual fund
industry. The State Bank of India's SBI Mutual Fund was the first such mutual fund to be
established in 1987.
Canara Bank set up Canbank Mutual Fund shortly after in the same year, followed by
funds from Punjab National Bank and Indian Bank in 1989, Bank of India in 1990 and Bank of
Baroda in 1992. The LIC established its mutual fund in 1989 and the GIC in 1990. At the end of
1993, the mutual fund industry had assets under management of Rs. 47,004 crores. in 1993, with
the creation of SEBI and better regulation, transparency and liberalisation of capital markets
(which included the creation of the NSE and the NSDL), the private sector was allowed to enter
the mutual fund industry. Kothari Pioneer Mutual Fund (now merged into Franklin Templeton
Investments) was the first private sector mutual fund to be registered in July 1993. In the
following years, international giants in the industry as well as Indian corporate and industrial
families setting up their own mutual funds, purchasing existing fund companies or merging with
them. At the end of January 2003, there were 33 mutual funds with assets totalling Rs.
1,21,805 crores. . The UTI still led the pack with Rs. 44,541 crores. worth of assets. In February
2003, faced with financial mismanagement, opaque bookkeeping and huge, growing liabilities at
the UTI, the Government of India suspended redemptions, guaranteed the assets, unveiled a
comprehensive suite of reforms and repealed the Unit Trust of India Act 1963. The UTI was split
into two parts. One was called the "Specified Undertaking of the Unit Trust of India" with Rs.
29,835 crores. of assets largely belonging to the UTI's Unit 64 fund. The fund was rumoured to
own property, commodities and a whole range of unconventional and often undocumented assets.
The fund would attract millions of investors by promising generous annual dividends that were
8

far in excess of the returns on its actual portfolio. This Specified Undertaking of Unit Trust of
India, functioned under an administrator appointed by Government of India, outside of SEBI's
purview,

until

it

was

eventually

liquidated

in

2008.

The Government asked

the SBI, PNB, BOB and LIC to step in as sponsors of the second part, now called UTI Mutual
Fund (in addition to being sponsors of their own mutual funds) under SEBI's regulation. As of 30
June 2013, the Indian mutual fund industry manages assets worth approximately
Rs.847,000 crores. .

3.2 MEANING AND TYPES OF MUTUAL FUND

An investment vehicle that is made up of a pool of funds collected from many investors for
the purpose of investing in securities such as stocks, bonds, money market instruments and
similar assets.

3.3 ORGANIZATION STRUCTURE OF MUTUAL FUNDS

Mutual funds have organization structure as per the Security Exchange Board of India
guideline; Security Exchange Board of India specified authority and responsibility of Trustee and
Asset Management Companies. The objective is to controlling, to promoted, to regulate, to
protect the investors right and efficient trading of units. Operations of Mutual fund start with
investors save their money on mutual fund, than Mutual Fund manager handling the funds and
strategic investment on scrip. As per the objectives of particular scheme manager selected scrips.
Unit value will become high when fund manager investment policies generate the return on
capital market. Unit return depends on fund return and efficient capital market. Also affects
international capital market, liquidity and at last economic policy. Below the graph indicates how
the process was going on to investors to earn returns. Mutual fund manager having high
responsibility inside of return and how to minimize the risk. When fund provided high return with
high risk, investors attract to invest more fund for same scheme.
The Mutual fund organization as per the SEBI formation and necessary formation is
needed for sooth activities of the companies and achieved the desire objectives. Transfer agent
and custodian play role for dematerialization of the fund and unit holders hold the account
statement, but custody of the unit is on particular Asset Management Company. Custodian holds
all the fund units on dematerialization form. Sponsor had decided the responsibility of custodian

when investor to purchase the fund and to sell the unit. Application forms, transaction slip and
other requests received by transfer agent, middle men between investors and Assts Management
Companies.

3.4 TYPES OF MUTUAL FUND INVESTMENT

I. Open-Ended. - This scheme allows investors to buy or sell units at any point in time. This
does not have a fixed maturity date

1.Debt/ Income - In a debt/income scheme, a major part of the investable fund are channelized
towards debentures, government securities, and other debt instruments. Although capital
appreciation is low (compared to the equity mutual funds), this is a relatively low risk-low return
investment avenue which is ideal for investors seeing a steady income.
2. Money Market/ Liquid - This is ideal for investors looking to utilize their surplus funds in short
term instruments while awaiting better options. These schemes invest in short-term debt instruments
and seek to provide reasonable returns for the investors.

3. Equity/ Growth - Equities are a popular mutual fund category amongst retail investors. Although
it could be a high-risk investment in the short term, investors can expect capital appreciation in the
long run. If you are at your prime earning stage and looking for long-term benefits, growth schemes
could be an ideal investment.

3.i. Index Scheme - Index schemes is a widely popular concept in the west. These follow a
passive investment strategy where your investments replicate the movements of benchmark
indices like Nifty, Sensex, etc.

3.ii. Sectoral Scheme - Sectoral funds are invested in a specific sector like infrastructure, IT,
pharmaceuticals, etc. or segments of the capital market like large caps, mid caps, etc. This scheme
provides a relatively high risk-high return opportunity within the equity space.

3.iii. Tax Saving - As the name suggests, this scheme offers tax benefits to its investors. The funds
10

are invested in equities thereby offering long-term growth opportunities. Tax saving mutual funds
(called Equity Linked Savings Schemes) has a 3-year lock-in period.

4. Balanced - This scheme allows investors to enjoy growth and income at regular intervals.

Funds are invested in both equities and fixed income securities; the proportion is pre-determined
and disclosed in the scheme related offer document. These are ideal for the cautiously aggressive
investors.
II. Closed-Ended - In India, this type of scheme has a stipulated maturity period and investors

can invest only during the initial launch period known as the NFO (New Fund Offer) period.

1. Capital Protection - The primary objective of this scheme is to safeguard the principal amount

while trying to deliver reasonable returns. These invest in high-quality fixed income securities
with marginal exposure to equities and mature along with the maturity period of the scheme.

2. Fixed Maturity Plans (FMPs) - FMPs, as the name suggests, are mutual fund schemes with a

defined maturity period. These schemes normally comprise of debt instruments which mature in
line with the maturity of the scheme, thereby earning through the interest component (also called
coupons) of the securities in the portfolio. FMPs are normally passively managed, i.e. there is no
active trading of debt instruments in the portfolio. The expenses which are charged to the scheme,
are hence, generally lower than actively managed schemes.

III. Interval - Operating as a combination of open and closed ended schemes, it allows investors

to trade units at pre-defined intervals.

3.5 ADVANTAGES MUTUAL FUND

1. Advanced Portfolio Management
you pay a management fee as part of your expense ratio, which is used to hire a professional
portfolio manager who buys and sells stocks, bonds, etc. This is a relatively small price to pay for
help in the management of an investment portfolio.

11

2. Dividend Reinvestment
As dividends and other interest income is declared for the fund, it can be used to purchase
additional shares in the mutual fund, thus helping your investment grow.

3. Risk Reduction (Safety)

A reduced portfolio risk is achieved through the use of diversification, as most mutual funds will
invest in anywhere from 50 to 200 different securities - depending on their focus. Several index
stock mutual funds own 1,000 or more individual stock positions.

4. Convenience and Fair Pricing

Mutual funds are common and easy to buy. They typically have low minimum investments and
they are traded only once per day at the closing net asset value (NAV). This eliminates price
fluctuation throughout the day and various arbitrage opportunities that day traders practice.

3.6 DISADVANTAGES
1. High Expense Ratios and Sales Charges
If you're not paying attention to mutual fund expense ratios and sales charges, they can get out of
hand. Be very cautious when investing in funds with expense ratios higher than 1.20%, as they
will be considered on the higher cost end. Be weary of 12b-1 advertising fees and sales charges in
general. There are several good fund companies out there that have no sales charges. Fees reduce
overall investment returns.

2. Management Abuses
churning, turnover and window dressing may happen if your manager is abusing his or her
authority. This includes unnecessary trading, excessive replacement and selling the losers prior to
quarter-end to fix the books.

3. Tax Inefficiency
Like it or not, investors do not have a choice when it comes to capital gain payouts in mutual funds.
Due to the turnover, redemptions, gains and losses in security holdings throughout the year, investors
typically receive distributions from the fund that are an uncontrollable tax event.

12

4. Poor Trade Execution

If you place your mutual fund trade anytime before the cut-off time for same-day NAV, you'll receive
the same closing price NAV for your buy or sell on the mutual fund. For investors looking for faster
execution times, maybe because of short investment horizons, day trading, or timing the market,
mutual funds provide a weak execution strategy.

13

CHAPTER IV
ANALYSIS AND INTERPRETATION

TABLE 4.1

GENDER OF THE RESPONDENTS

GENDER
MALE
FEMALE
TOTAL
(Source: Primary data)

NO. OF RESPONDENTS
98
27
125

PERCENTAGE
78
22
100

Interpretation:
From the study, the number of male respondents is more in number that is
about 78% & the next position has been occupied by female respondents they are
about 22% of the sample so, mainly men prefer to go for investments.

14

TABLE 4.2
AGE WISE CLASSIFICATION OF RESPONDENTS

Age
No. of Respondents
Below 30
71
Between 30-50
31
Above 50
23
Total
125
(Source: Primary data)

Percentage
56.8
24.8
18.4
100

Interpretation
The above table reveals that the majority of the investors belong to the younger group of age i.e
less than 30. The investors of age 30-50 are 31 in number with 24.8%. The investors of age above
50 are 23 in number with 18.4%.

15

TABLE 4.3
EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

Qualification
Below graduation
Graduation
Post graduation
Other
Total
(Source: Primary data)

No. of Respondents
15
36
62
12
125

Percentage
12
28.8
49.6
9.6
100

Interpretation
The above table reveals that the majority 49.6% of the investors fall under that
category of post graduates followed by 28.8% of the investors fall under graduation
category, and only 12% fall under the category other like Diploma, schooling etc.,

16

TABLE 4.4
OCCUPATION OF THE RESPONDENTS

Occupation
Salaried
Businessman
Professional
House wife
Retired
Total

No. of Respondents
86
22
13
2
2
125

Percentage
68.8
17.6
10.4
1.6
1.6
100

(Source: Primary data)

Interpretation
According to the survey the respondents were of different occupations. Most of respondents
are from salaried category is about 68.8% of the sample. Respondents from the business are
occupying 17.6%, then comes professional with 10.4%, house wife 1.6%, and retired people
occupy 1.6%.

17

TABLE 4.5
INCOME LEVEL OF THE INVESTORS
The income, savings and investment are closely related. Income of the investors is one of
the factors influencing in investment decision. The ability to save and depends upon the income
level of the investors. Hence, the information in respect of the income level of the respondents
have been collected and tabulated as follows.
While classifying the data the respondents who are having income of less than one lakh per
annum are considered as low income group. The people with an income between 1& 3 lakh per
annum are grouped under middle income, group and people with more than 3 lakh per annum are
grouped under high income group.

Total income

Number of Respondents

Percentage

Low income group

62

49

Middle income group

34

28

High income group

29

23

125

100

Total
(Source: Primary data)

Interpretation
The above table reveals that 49% of respondents are belongs to the low income group. 28% of
respondents are belongs to the middle income group and high income group consist of 23% of
respondents.

18

TABLE 4.6
NUMBER OF EARNING MEMBERS IN THE FAMILY

No of earningNo. of Respondents
members
One
30
Two
52
Three
34
Above 3
9
Total
125

Percentage
24
41.6
27.2
7.2
100

(Source: Primary data)

Interpretation
The above table reveals that 76% of the respondents family consist of more than one earning
member. People prefer to invest in mutual fund when their income increases.

19

TABLE 4.7
INVESTORS PREFERENCE FOR VARIOUS MUTUAL FUNDS

Mutual fund
HDFC
UTI
ICICI
SBI
Other
Total
(Source: Primary data)

Number of respondents
39
35
30
8
13
125

Percentage
31.2
28
24
6.4
10.4
100

Interpretation
It is clear that the above table that HDFC and UTI mutual fund enjoys a popular support
from the investors of the people. ICICI gets third place and forth place goes to SBI, and some
other mutual fund companies such as Canara, Axis, Reliance, Tata etc, will comes under the
category of others.

20

TABLE 4.8
INVESTMENT MOTIVES OF THE INVESTOR

INVESTMENT MOTIVES OF THE INVESTOR

RANK
1
2
3
4
5
Motives
40
27
23
20
15
Liquidity
Safety
Profitability
Tax
advantage
Regular
return
Overall

Total Weighted
Average
125
3.45

36
49
37

46
30
35

24
26
27

11
11
17

8
9
9

125
125
125

3.72
4.44
4.23

33

17

35

25

15

125

3.22
3.812

Interpretation
The primary motive of the investment is profitability (4.44), followed by tax advantage
(4.23), safety (3.72) Liquidity (3.45) and regular return (3.22). The mutual funds provide a good
profitability to the investors when compared to direct market investment. This aspect may be high
lightened by the mutual fund in their advertisement campaign in order to attract more number of
new investors.

21

TABLE 4.9
RELATION BETWEEN AGE AND THE LENGH OF THE INVESTMENT

ANALYSIS WITH THE HELP OF CHI SQUARE

AGE

Less than
2 years

Between 2-4 Between Between 6-8 Above 8

years
4-6 years years
years

Total

less than 30
between 30-50
above 50
Total

44
12
5
60

22
9
8
37

71
31
23
125

2
2
6
14

1
2
2
6

H0 -

There is no association between the age and investment.

H1 -

There is an association between the age and investment.

Chi Square value

2
1
2
8

22.94

Table value @ 5% level of significance

15.50

DF

Interpretation
The result of the Chi Square suggests that there is a significant association between age and
length of the investment. So null hypothesis is rejected.
So we can conclude that there is a close association between the age and length of the investment
in mutual fund.
22

TABLE 4.10
INVESTMENT OPTION

Investment Option

No. Of respondents

Percentage

Every month

76

60.8

Quarterly

10

Half yearly

6.4

Annually

23

18.4

Occasionally

6.4

125

100

Total

Interpretation
The above table proves that investors are majority investing every month. This shows
that the investors have realized the importance of saving on regular basis for a longer which
yields a better return.

23

TABLE 4.11
TIMING OF INVESTMENT

Timing of the investment

No. Of Respondents

Percentage

New fund offer

35

28

When market is bullish

11

8.8

When dividend is declared

12

9.6

when funds are available

31

24.8

when market is declining

36

28.8

Total

125

100

Interpretation

The above table exhibits that 29 % investors coming forward to invest when market is
declining stage and 28% when new fund offer, 24% of investors invest when funds are available,.
9.6% are investing when dividend is declared.8.8% of respondents are investing when market is
bullish. In overall shows that investors highly motivated towards investment at the time of market
declining and new fund offer.

24

TABLE 4.12
THE ASSOCIATION BETWEEN INCOME AND FUND PREFERED BY THE INVESTOR

Income
low income group
Middle income group
Higher income group
Total

Types of Fund
Close Ended
Open-Ended Fund Fund
25
37
20
14
16
13
61
64

Total
62
34
29
125

Ho- There is no association between fund preferred by the investor and income
H1- There is an association between fund preferred by the investor and income.

Chi Square value

10.488

Table value @ 5% level of significance

9.488

DF

Interpretation
The result of the Chi Square suggests that there is no significant association between age and
length of the investment. So accept the null hypothesis.
So we can conclude that there is no close association between the age and length of the
investment in mutual fund.

25

TABLE 4.13
THE ASSOCIATION BETWEEN AGE AND TYPE OF SCHEME

Age

Type of Scheme
Equity Debt fund Hybrid Sector Specific Tax Saving Others

Total

Less than 30
Between 30-50
Above 50

14
4
4

14
6
5

16
4
3

12
7
4

10
6
7

5
4
0

71
31
23

22

25

23

23

23

125

H0 -

There is no association between age and type of scheme.

H1 -

There is an association between age and type of scheme.

Chi Square value

11.17

Table value @ 5% level of significance

18.307
10

DF

Interpretation
The result of the Chi Square suggests that there is no significant association between age and
length of the investment. So accept the null hypothesis.
So we can conclude that there is no close association between the age and scheme preferred
.

26

TABLE 4.14
EXPECTED RETURN OF INVESTORS

Return
No. Of Respondents
Equivalent to bank (8%)
6
08%- 10%
13
10%-15%
52
15%-20%
20
Above 20%
34
Total
125

Percentage
4.8
10.4
41.6
16
27.2
100

Interpretation

The above table it is clear that almost all the investors expect a higher return than the bank
rate because of the risk involved. 42 percent of respondents want to earn a return from 10 to 15
percent and 16 percent between15 to 20 percent. And 27 percent of the respondents prefer above
20%.

27

TABLE 4.15
SATISFACTION LEVEL

Satisfaction Level

No. Of Respondents

Percentage

Very much satisfied

14

11.2

Very satisfied

21

16.8

Satisfied

74

59.2

Dissatisfied

6.4

Very much dissatisfied

6.4

Total

125

100

Interpretation
The above table points out that only a 12% of the respondents are dissatisfied with their return
on investment. In other words the majority of investors are satisfied with the return on their
investment in mutual fund.

28

TABLE 4.16
INVESTORS OPINON ABOUT MUTUAL FUND

Factors

SA

Mutual funds are safe investments

NO

DA SDA Total

Weighted
Average

25 53

22

18 7

125

3.56

Mutual fund give regular return

14 61

24

19 7

125

3.44

Investment in mutual fund are more

32 47

26

13 7

125

3.67

49 53

125

4.04

45

15

125

3.98

46

25

11 7

125

3.74

Liquid
Risk of loss is less compare to direct
investment in capital market
Diversified portfolio minimizes the risk of50
loss
Mutual funds are safer investments than 36
other avenues
Overall Weighted Average

4.48

Interpretation
On analysing the table it is clear that great significance has been attached to
the fact that more number of investors are agreeing to the fact that risk is less
compared to less compared to direct investment in capital market(4.04). then
followed by diversified portfolio minimizes the risk of loss(3.98), mutual funds are
safer investments than other avenues(3.74),Investment in mutual fund are more
liquid(3.67), Mutual funds are safe investments(3.56)) Mutual fund give regular return(3.44).

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CHAPTER V
FINDINGS AND SUGGESTIONS

5.1 SUMMARY OF FINDINGS

The forgoing analysis shows that the following in respect of the investors profile

78% of respondents are Male.

52% of investors belongs to the age group of less than 30
49% of investors are post graduates
68% of investors are salaried people
76% of respondents family consist of more than one earning member.

Further in respect of the investment profile of the investors the analysis shows the following

32% of the respondent save between 25000-75000

60% of the respondents are investing every month in mutual fund
40% of respondents are expected to get return more than 10%.
12% of respondents are dissatisfied with their return on investment.
31% of respondents invest in mutual fund ranging from 10000-20000
HDFC Mutual fund is the most popular fund among the investors in this sample.
Majority of investors are coming forward to invest in mutual fund because of its profitability and
tax advantage.
48% of investors have invested in mutual fund for less than 2 year.
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 42% of investors are investors expect 10 % to 15%

There is a close association between income level and length of investment.
29% of investors prefer to invest when the stock market declines, but 28% of the investors invest
when new schemes are offered.
47% of investors expect 10% to 15% return from it.
Investors are satisfied with their return on investment except
73% investors are preferred to invest in open- ended scheme.
There is no significant relation between age and scheme preferred

The following are the perception of investors towards the mutual fund;
Risk is loss in mutual fund is less compared to the direct investment in capital market.
The diversified portfolio of the mutual fund reduces the risk.
Mutual investments are better investments than other avenues.
Investment in mutual fund is more liquid.
Mutual fund gives regular return
Mutual fund is safe investment.

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5.1

SUGGESTIONS

The following suggestions and recommendations are made based on the

recommendations of the study.

The mutual funds should focus their advertisement more on the younger investors.
The mutual fund can high lighten the profitability aspect comparing it with the direct market
investment in their advertisement campaign in order to attract more number of new investors.
The mutual fund can announce new schemes when the stock markets temporarily in boom stage
in order to collect more funds from the public
Mutual fund provide a better in long term, so whenever the market declines, the benefit of the
long term investment explained to the investors , thereby they can collect more funds

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5.3 CONCLUSION

A Mutual fund 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. India
has a bigger class of middle class now estimated around 300 million. A typical Indian middle
class family can have liquid savings ranging from Rs 2 to 10 lacks today. Investments in banks
are liquid safe, but with falling rate of interest offered by bank on deposit, .it is no longer
attractive. India is one of the best market for mutual fund business, so also for insurance
business. This is the reason for that the foreign companies compete with one another for setting
up insurance and mutual fund business in India.
The alternative to mutual fund is direct investment by the investors in equities and bonds
or corporate deposit. An investment whether in share or debenture or deposit involves the risk;
share value fluctuate depending upon the performance of the company , the industry and economy
at the large. Generally, however longer the term, lesser the risk companies may default in
payment of interest/ principal on the roads, debenture or deposit, the rate of interest on investment
may fall short of the rate of inflation reducing the purchasing power. While risk cannot be
eliminated, skill full management can reduce risk. Mutual fund helps to reduce the risk by
professional management and diversification. The experience and expertise of mutual fund
mangers in fundamentally sound securities and timing their purchase and sales help them to build
a diversified portfolio that minimizes risk and maximizes return.

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CHAPTER VI
BIBLIOGRAPHY

BOOKS
a. Rajendra Nurgundkar, Marketing Research Text and cases Second edition Tata McGraw Hill
b. Rajeshwari T R and Rama Moorhty , Perfomance Evaluation of selected Mutual Funds and
investor Behaviour , Phd thesis , Sri Sathay Sai Institute of Higher Learning , Prasanthinilayam.
c. Naresh K Malhothra An Applied Orientation , Pernitice hall International.

JOURNALS AND PERIODICALS

1) Chandra sudhash and Mahajan , Mukesh (1992), Perception of Investors towards mutual fund;
An Empirical Investigation
2) Jaspal Sigh and Subash Chander An Empirical Analysis of perception investors towards mutual
fund.

WEBSITES
1) www.amfyindia.com
2) www.india infoline.com

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A STUDY ON INVESTORS PERCEPTION TOWARDS INVESTMENT IN MUTUAL

FUNDS WITH SPECIAL REFERENCE TO KOLLAM TOWN

1. Name :
2. Age ;

a) Below 30

b)30-40

c)40-50

e) Above 50

3. Educational qualification
a) Below graduation

b) Graduate

C) Post graduate

d) others specify

4.Occupation
a) Salaried

b) Businessman

e)House wife

f) Retired

c) Professional

d) Agriculturalist

5. Number of earnings in the family

a)1

b)2

c)3

d) Above 3

6. Total income of the family

a) Less than 1 Lakh

b) 1-2 Lakh

c) 2-3 Lakh

d) 3-4 Lakh

e) Above 4 Lakh
7. What is the approximate amount of savings in your family
a) Less than 25000
d) 75000- 100000

b) 25000-50000

c) 50000-75000

e) Above 100000

8. What are the various modes of the investment. Please assign rank as 1, 2, 3, so on
a) Bank
b) Government Bonds
c) Post office savings
d) Mutual fund
e) Shares
f) Debenture
g) Gold
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h) Others specify.
9. How much do you invest in mutual fund per annum?
a) Less than 10000

b) 10000-20000

d) 30000-40000

e) Above 40000

c) 20000-30000

10. What are the Mutual funds in which you have invested? Please mention the name of the
mutual fund.
a)
b)
c)
d)
11. Why do prefer to invest in mutual fund? Rank as 1,2,3
a)Liquidity
e) Low risk

b) Safety

c) Profitability

f) Regular return

d) Tax advantage

g) Latest market trend

h) Other avenues are not satisfactory

12. How long have you been investing in mutual fund?
a) Less than 2 year

b) 2- 4 year

c) 4-6 year

e) above 8 year
13.Please tick the investment option you make?
a) Every month
d) Annually

b) Quarterly

c) Half yearly

e) Occasionally

14.How do you choose your investment timing?

a) New fund offer
b) When market is bullish
c) When market is declared by Mutual Fund Company
d) Whenever funds are available
e) When market is declining

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d) 6-8 year

15. What type of Mutual fund you prefer to invest?

a) Open ended

b) Close ended

16. What type of scheme do you prefer to invest?

a) Equity

b) Debt fund

c) Hybrid

d) Sector Specific fund

f) others specify.

e) Tax saving

17. What is your expected return on your investment on mutual fund?

a) Equivalent to bank rate 8%
d) 15% -20%

b) 08%- 10%

c) 10-15%

e) Above 20%

18. Are you satisfied with your return?

a) Very much satisfied

b) Vey satisfied

c) Satisfied

d) Dissatisfied

e) Vey much Dissatisfied

19. Have you ever switched over from one scheme to another scheme in the same mutual fund
company?
a) Yes

b) No

20. Have you ever switched over from one mutual fund company to another company?
a) Yes

b) No

21. Have you ever redeemed or exit from investment from mutual fund?
a) Yes

b) No

If yes please mention the reason

a)When expected return is attained

b) when index reached new high

c) When economic condition have changed

d) To invest in other avenues

e) Others specify
22. Have you suggested others to invest in mutual funds?
A) Yes

b) No

If yes which scheme and Mutual fund company would you recommend?

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If no what are the reason for not recommending? Rank as 1,2,3 so on

a) Not satisfied with the performance
b) High risk
c) No regular return
d) Poor service of agents
e) Others specify.

PLEASE GIVE YOUR OPINION BY PUTTING A TICK MARK

(SA- Strongly Agree; A-Agree; NO- No opinion; DA-Disagree;
SDA- Strongly Disagree.)
1. Mutual funds are safe investments.
2. Mutual Fund give regular returns.
3. Investments in Mutual fund are more liquid.
4. Risk of loss in Mutual funds is low as compared to direct investment in capital market
5. Diversified portfolio minimizes the risk of loss.
6. Mutual fund are better investment than other avenues.

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