A

RESEARCH PROJECT REPORT ON FACTORS TO BE CONSIDERED BY AN INVESTOR WHILE INVESTING IN MUTUAL FUNDS.
Submitted By: MOHIT

BHALLA

Session: 2006-2008

Guided by

Miss. RITIKA SHRIVASTAV

Relational Manager, IndiaInfoline, Pune

DEPARTMENT OF MANAGEMENT

SHRI SHANKARACHARYA INSTITUTE OF MANAGEMENT & TECHNOLOGY

JUNWANI, BHILAI (C.G)

DECLARATION
I MOHIT BHALLA, the student of M.B.A-III semester 2007 at SHRI SHANKARACHARYA INSTITUTE OF MANAGEMENT & TECHNOLOGY here by declare that this Project Report under the title of FACTORS TO BE CONSIDERED BY AN INVESTOR WHILE INVESTING IN MUTUAL FUNDS. is the record of the original work under the guidance of Miss. Ritika Shrivastav Relational Manager, IndiaInfoline, Pune . This report has never been submitted to any where else for award of any degree or diploma.

Place: Pune Date: MOHIT BHALLA

ACKNOWLEDGEMENT
It gives me great pleasure to this report, a written testimony the most fruitful training. I sincerely acknowledge that what ever little achievements I have made through this report would not have been possible without co-operation. I would like to take this opportunity to thank all the people without whom this project would not have been successfully completed. I offered my profound gratitude to the Branch Manager MR. ABHIJEET PATIL and Relationship Manager Miss. RITIKA SHRIVASTAV for giving me the opportunity of amalgamating my theoretical knowledge with practical experience according to interest and allowing me to complete my internship with in the company. I am also thankful to Mr. ANUJ KUMAR VAJPAYEE who helps me in introducing with INDIA INFOLINE.

This training will tenure cherish as memorial experience through out my career, as it was my first opportunity to apply my academics knowledge

MOHIT BHALLA

PREFACE
The practical study through, conducting the survey and doing project work has significant value the theoretical knowledge gained in classroom is not faithful and complete unless and until it is supplemented by the practical work either done in the field or inside the organization.

It always boosts up our knowledge in pursuing the post graduate course in management. It is the internal part of our curriculum to conduct survey and project work which not only augments the managerial skills in us but also boarders our partial prospective.

My duration of project was 6 weeks. In this period I exactly know what market is?

I was completely new in this field. First of all, I look the training and then I came to know that what the services are provided to the customers by India Infoline. I make the questionnaire and on that basis I try to understand the customer interest towards mutual funds. The questionnaire also helped me to understand the poles apart customer expectations regarding investment, diversified risk, returns, tax benefit etc.

DESCRIPTION

i) ii) iii) iv)

Declaration Certificate Acknowledgement Preface

1. Company profile 2. Objectives 3. Introduction 4. Literature review 5. Research methodology 6. Data interpretation 7. Findings 8. Conclusion 9. Recommendation 10.Limitation

Bibliography Annexure

INDIA INFOLINE PROFILE

About company
We are a one-stop financial services shop, most respected for quality of its advice, personalized service and cutting-edge technology.

India Infoline Ltd

India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries, straddles the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites,

www.indiainfoline.com www.5paisa.com .

India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities and Exchange Board of India). It undertakes equities research which is acknowledged by none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities where it is amongst the most read Indian brokers. Its various subsidiaries are in different lines of business and hence are governed by different regulators. The subsidiaries of India Infoline Ltd are:

India Infoline Securities Pvt Ltd

India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the businesses of Equities broking and Portfolio Management Services. It holds memberships of both the leading stock exchanges of India viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to clients. These services are offered to clients as different schemes, which are based on differing investment strategies made to reflect the varied risk-return preferences of clients.

India Infoline Commodities Pvt Ltd

India Infoline Commodities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the business of commodities broking. Our experience in securities broking empowered us with the requisite skills and technologies to allow us offer commodities broking as a contra-cyclical alternative to equities broking. We enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and recently acquired membership of DGCX. We have a multi-channel delivery model, making it among the select few to online as well as offline trading facilities.

India Infoline Distribution Co Ltd (IILD)

India Infoline.com Distribution Co Ltd is a 100% subsidiary of India Infoline Ltd and is engaged in the business of distribution of Mutual Funds, IPOs, Fixed Deposits and other small savings products. It is one of the largest 'vendor-independent' distribution houses and has a wide pan-India footprint of over 232 branches coupled with a huge number of 'feet-on-street', which helps source and service customers across the length and breadth of India. Its unique value proposition of free doorstep expert advice coupled with free pick-up and delivery of cheques has been met with an enthusiastic response from customers and fund houses alike. Our business has expanded to include the online distribution of mutual funds, wherein users can view and compare different product offerings and download application forms which they can later submit to the product provider. Mortgages & Loans IILD has also entered the business ot distribution of mortgages and loan products during the year 2005-2006. The business is still in the investing phase and we plan to roll the business out across its pan-Indian network to provide it with a truly national scale in operations.

India Infoline Insurance Services Ltd

India Infoline Insurance Services Ltd is also a 100% subsidiary of India Infoline Ltd and is a registered Corporate Agent with the Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Ltd, which is India's largest private Life Insurance Company.

India Infoline Investment Services Ltd

India Infoline Investment Service Ltd is also a 100% subsidiary of India Infoline Ltd. It has an NBFC licence from the Reserve Bank of India (RBI) and offers margin-funding facility to the broking customers.

India Infoline Insurance Brokers Ltd

India Infoline Insurance Brokers Ltd is a 100% subsidiary of India Infoline Ltd and is a newly formed subsidiary which will carry out the business of Insurance broking. We have applied to IRDA for the insurance broking licence and the clearance for the same is awaited.

Vision

Our vision is to be the most respected company in the financial services spa

KEY EXECUTIVES

Unlike others, India Infoline has the concept of the Management Team. The Brains behind all the investment strategies and decisions are

Mr.Nirmal Jain Founder, Chairman, India Infoline C.A, Cost Accountant, IIM (A) Mr. R. Venkataraman Co-promoter, E.D., India Infoline B.Tech. IIT Kharagpur, IIM(B)

MILE STONES KEY

1. Incorporated on October 18, 1995 as Probity Research & Services

2.

Launched Internet portal www.indiainfoline.com in May 1999

3.

Commenced distribution of personal financial products like Mutual Funds and RBI Bonds in April 2000

4.

Launched online trading in shares and securities branded as www.5paisa.com in July 2000

5.

Started life insurance agency business in December 2000 as a Corporate Agent

6.

Became a depository participant of NSDL in September 2001

7.

Launched stock messaging service in May 2003

8.

Acquired commodities broking license in March 2004

9.

Launched portfolio management services in August 2004

10.

Listed on NSE and BSE on May 17, 2005

11.

Acquired 75% stake holding in Moneytree Consultancy services in October 2005

12.

Acquired 100% equity of Marchmont Capital Advisors Pvt Ltd in December 2005

SIZE OF BUSINESS & MARKET SHARE

Net worth of INR1900 Mn and a market cap of over INR 8000 Mn. Revenue for India Infoline Group for the FY 2005-06 is INR 2180 Mn and Profit after Tax at INR 489 Mn.

In the last two years it has built up a client base of 100,000 by June'06, about 87% online. It provides broking service in cash as well as in the derivatives segment. Average daily volumes witnessed in FY06 were Rs 4,560mn signifying almost 1.2% of the market. Broking income also includes the brokerage they earn on PMS activity, where the average ticket size is Rs.5 lakhs.

With rising volumes in the market, IIL also witnessed buoyant increase in the average daily turnover, increasing their broking income to Rs 1,427 mn in FY06.

Our top line and bottom line have been registering a CAGR of

more than 150% over 3 years Profit after tax increased by 156% over 3 years. In 2005-06, our

profit after tax was Rs. 489.3 million Our employee strength grew from less than 1,000 to over

10,000 employees in past 3 years (2003-2004 to 2005-2006)

 At present more than 20,000 employees are working with India Infoline.

Our PAN India network of branches increased from less than

100 to over 500 branches in past 3 years We added 300 branches in the first 6 months of 2006 alone

Www. 5paisa.com
5paisa has a synergistic model of investment control, ethical service, real-time convenience and competitive pricing. This online trading arm of India Infoline is today the resource lifeline of millions of equity investors.

With 5paisa, you are armed to the teeth. Low brokerage structure. Evolving news and analysis. A wealth of reports and research. Real-time price quotes and monitoring. Track your favorite counters, be it cash segment or derivatives. Customize watch lists.

Market summaries, top trades, top gainers and losers.

Execute orders faster than you can blink.

Customer strategy
Own customer relationships:
Customer stickiness driven by quality advice and delightful experience. Underpinned by technology supporting low cost and quality service.

All asset classes all vendors:

Unique one stop experience of advised comparison shopping at no extra cost.

Advisory capabilities par excellence:

Research capability build over more than a decade, recognized internationally, ensure nothing less than the best.

Value-for-money to customer:
Cost-conscious organization, driven by Owner mindset making the most of technology to minimize cost allows delivering best Value for Money to the customer.

Business strategy
Core focus:
Focus on financial services. We want to remain focused on core competence which is our understanding of financial services.

Asset light:
All businesses are fee driven Asset heavy businesses to be in separate.

Maximize throughput:
Multiple products sold through widespread branch network for greater share of Wallet from customers.

De-risked business:
Multiple & diverse revenue streams from synergistic yet not correlated businesses, with rising stream of trail and annuity building cushion for downcycle.

OBJECTIVES
1. 2. To study the conceptualization of mutual fund. To diagnose the need of investor in mutual fund.

3. To study the latest trends of mutual fund and analyze its adoption among investors. 4. To gain knowledge in service sector

5. To identify the factors that influences consumer behaviour regarding investment in mutual fund 6. 7. To identify the services provided by the INDIA INFOLINE. To study about the various products of INDIA INFOLINE.

INTRODUCTION
WHAT IS MUTUAL FUND? A mutual fund is a form of collective investments that pools money from many investors and invests their money in stocks, bonds, short-term money market instruments, and/or other securities.[1] In a mutual fund, the fund manager who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding.

An investment vehicle which is comprised of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market securities and similar assets. Mutual funds are operated by money mangers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.

One of the main advantages of a mutual fund is that it gives small investors access to a well-diversified portfolio of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or shares, are issued and can typically be purchased or redeemed as needed at the current net asset value per share (NAVPS).

LITERATURE REVIEW
Mutual fund is simply a financial intermediary that allows a group of investors to pool
their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities (usually stocks or bonds). When you invest in a mutual fund, you are buying shares (or portions) of the mutual fund and become a shareholder of the fund.

Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (you don't have to figure out which stocks or bonds to buy). If you would like to know the history of mutual funds

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. It is essentially a diversified portfolio of financial instruments these could be equities, debentures / bonds or money market instruments. The corpus of the fund is then deployed in investment alternatives that help to meet predefined investment objectives.

The income earned through these investments and the capital appreciation realised are shared y its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is a 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.

You could make money from a mutual fund in three ways: 1) Income is earned from dividends declared by mutual fund schemes from time to time.

2) If the fund sells securities that have increased in price, the fund has a capital gain. This is reflected in the price of each unit. When investors sell these units at prices higher than their purchase price, they stand to make a gain.

3) If fund holdings increase in price but are not sold by the fund manager, the fund's unit price increases. You can then sell your mutual fund units for a profit. This is tantamount to a valuation gain.

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.

Passed Back to

Investor

Pools their money with

Returns

Fund Manager

Generates

Securities

Invests in

Benefits of investing in a mutual fund

Access to professional money managers - Experienced fund managers using advanced quantitative and mathematical techniques manage your money.

Diversification - Mutual funds aim to reduce the volatility of returns through diversification by investing in a number of companies across a broad section of industries and sectors. It prevents an investor from putting "all eggs in one basket". This inherently minimizes risk. Thus with a small investible surplus an investor can achieve diversification which would have otherwise not been possible.

Liquidity - Open-ended mutual funds are priced daily and are always willing to buy back units from investors. This mean that investors can sell their holdings in mutual fund investments anytime without worrying about finding a buyer at the right price. In the case of other investment avenues such as stocks and bonds, buyers are not necessarily available and therefore these investment avenues are less liquid compared to open-ended schemes of mutual funds.

Tax Efficiency - Mutual fund offers variety of tax benefits, please contact your tax advisor for details.

Low transaction costs - Since mutual funds are a pool of money of many investors, the amount of investment made in securities is large. This therefore results in paying lower brokerage due to economies of scale.

Transparency - Prices of open ended mutual funds are declared daily. Regular updates on the value of your investment are available. The portfolio is also disclosed regularly with the fund manager's investment strategy and outlook.

Well-regulated industry - All the mutual funds are registered with SEBI and they function under strict regulations designed to protect the interests of investors.

Convenience of small investments - Under normal circumstances, an individual investor would not be able to diversify his investments (and thus minimize risk) across a wide array of securities due to the small size of his investments and inherently higher transaction costs. A mutual fund on the other hand allows even individual investors to hold a diversified array of securities due to the fact that it invests in a portfolio of stocks. A mutual fund therefore permits risk diversification without an investor having to invest large amounts of money.

Types of Mutual Funds

By Structure
Open-ended Funds
An Open-ended Fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices.

Close-ended Funds
A Close-ended Fund has a stipulated maturity period, which generally ranges from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the Stock Exchanges, if they are listed. The market price at the stock exchange could vary from the scheme's NAV on account of demand and supply situation, unit holders' expectations and other market factors.

By Investment Objective
Growth Funds
The aim of growth funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their corpus in equities. Growth schemes are ideal for investors who have a long-term outlook and are seeking growth over a period of time.

Income Funds
The aim of Income Funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income. Capital appreciation in such funds may be limited, though risks are typically lower than that in a growth fund.

Balanced Funds

The aim of Balanced Funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income

securities in the proportion indicated in their offer documents. This proportion affects the risks and the returns associated with the balanced fund - in case equities are allocated a higher proportion, investors would be exposed to risks similar to that of the equity market. Balanced funds with equal allocation to equities and fixed income securities are ideal for investors looking for a combination of income and moderate growth.

Money Market Funds

The aim of Money Market Funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as Treasury Bills, Certificates of Deposit, Commercial Paper and Inter-Bank Call Money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for corporate and individual investors as a means to park their surplus funds for short periods.

RISK SCALE

GILT DEBT BALANCED EQUITY SECTOR

Other Equity Related Schemes

Tax Saving Schemes
These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws, as the Government offers tax incentives for investment in specified avenues.

Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction under Section 88 of the Indian Income Tax Act, 1961.

Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the

NSE S&P CNX 50. Sectoral Schemes Sectoral Funds are those which invest exclusively in specified sector(s) such as FMCG, Information Technology, Pharmaceuticals, etc. These schemes carry higher risk as compared to general equity schemes as the portfolio is less diversified, i.e. restricted to specific sector(s) / industry (ies).

Different plans that mutual funds offer

Growth Option
Dividend is not paid-out under a Growth Option and the investor realizes only the capital appreciation on the investment (by an increase in NAV).

Dividend Payout Option

Dividends are paid-out to investors under the Dividend Payout Option. However, the NAV of the mutual fund scheme falls to the extent of the dividend payout.

Dividend Re-investment Option

Here the dividend accrued on mutual funds is automatically re-invested in purchasing additional units in open-ended funds. In most cases mutual funds offer the investor an option of collecting dividends or re-investing the same.

Retirement Pension Option

Some schemes are linked with retirement pension. Individuals participate in these options for themselves, and corporate participate for their employees.

Insurance Option
Certain Mutual Funds offer schemes that provide insurance cover to investors as an added benefit.

Systematic Investment Plan (SIP)

Here the investor is given the option of preparing a pre-determined number of post-dated cheques in favour of the fund. The investor is allotted units on a predetermined date specified in the offer document at the applicable NAV.

Systematic Encashment Plan (SEP)

As opposed to the Systematic Investment Plan, the Systematic Encashmentl Plan allows the investor the facility to withdraw a pre-determined amount / units from his fund at a pre-determined interval. The investor's units will be redeemed at the applicable NAV as on that day.

Types of risks
Risk is an inherent aspect of every form of investment. For mutual fund investments, risks would include variability, or period-by-period fluctuations in total return. The value of the scheme's investments may be affected by factors affecting capital markets such as price and volume volatility in the stock markets, interest rates, currency exchange rates, foreign investment, changes in government policy, political, economic or other developments.

Market Risk:
At times the prices or yields of all the securities in a particular market rise or fall due to broad outside influences. When this happens, the stock prices of both an outstanding, highly profitable company and a fledgling corporation may be affected. This change in price is due to "market risk".

Inflation Risk:
Sometimes referred to as "loss of purchasing power." Whenever the rate of inflation exceeds the earnings on your investment, you run the risk that you'll actually be able to buy less, not more.

Credit Risk:
In short, how stable is the company or entity to which you lend your money when you invest? How certain are you that it will be able to pay the interest you are promised, or repay your principal when the investment matures?

Interest Rate Risk:

Changing interest rates affect both equities and bonds in many ways. Bond prices are influenced by movements in the interest rates in the financial system. Generally, when interest rates rise, prices of the securities fall and when interest rates drop, the prices increase. Interest rate movements in the Indian debt markets can be volatile leading to the possibility of large price movements up or down in debt and money market securities and thereby to possibly large movements in the NAV.

Investment Risks:
In the sectoral fund schemes, investments will be predominantly in equities of select companies in the particular sectors. Accordingly, the NAV of the schemes are linked to the equity performance of such companies and may be more volatile than a more diversified portfolio of equities.

Liquidity Risk:
Thinly traded securities carry the danger of not being easily saleable at or near their real values. The fund manager may therefore be unable to quickly sell an illiquid bond and this might affect the price of the fund unfavorably. Liquidity risk is characteristic of the Indian fixed income market.
\

Changes in the Government Policy:

Changes in Government policy especially in regard to the tax benefits may impact the business prospects of the companies leading to an impact on the investments made by the fund.

Are returns from mutual funds guaranteed?

Generally, Mutual Funds do not offer guaranteed returns to investors. Although, SEBI regulations allow Mutual Funds to offer guaranteed returns subject to the Fund meeting certain conditions, most Funds do not offer such guarantees. In case of a guaranteed return scheme, the sponsor or the AMC, guarantees a minimum level of return and makes good the difference if the actual returns are less than the guaranteed minimum.

The name of the guarantor and the manner in which the guarantee shall be met must be disclosed in the offer document by the Mutual Fund. Investments in mutual funds are not

guaranteed by the Government of India, the Reserve Bank of India or any other government body.

Net asset value

The net asset value, or NAV, is the current market value of a fund's holdings, usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day.

Open-end funds sell and redeem their shares at the NAV, and so a process order only after the NAV is determined. Closed-end funds (the shares of which are traded by investors) may trade at a higher or lower price than their NAV; this is known as a premium or discount, respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by the different classes.

Calculation of Net Assets

Market value of investments

Plus current assets and other assets

Plus accrued income

Less current liabilities and other liabilities

Less accrued expenses

NAV = Net assets/Number of units

Load and No load

Sale and repurchase price are NAV-based
Cut-off time for NAV

Load is a charge on the NAV

Entry load is charged on NAV and increases the sale price Exit load is charged on NAV and reduces the repurchase price

Load is defined as a percentage

Loads are subject to SEBI Regulation and vary depending on industry practice

Entry Load: Example

If the entry load (sales load) for a scheme is 1.5% and the NAV of the scheme is Rs. 24.50, the investor who wants to buy the units will not be able to buy at Rs. 24.50. He will pay

= 24.5 + (24.5*1.5/100)

= 24.5 + 0.3675

= 24.8675

Exit Load: Example

If a fund imposes an exit load of 1.25%, the investor who repurchases his units, will get a price that is:

= 24.5 (24.5*1.25/100)

= 24.5 - 0.30625

= 24.19375

RESEARCH METHODOLOGY
COLLECTION OF DATA
What is collection of data?
Collection of data means the methods that are to be employed for obtaining the

requested information from the units under investigation. The method of data collection depends upon nature, object and scope of investigation on the one hand and availability of money and time on the other. It is prime importance to know very apparently the points on which the data is to be collected for the analysis of the problem.

TYPES OF DATA

PRIMARY DATA

SECONDARY DATA

1.

PRIMARY DATA: - Primary data are those data which are obtained for the

first time by the investigator himself. In other words, The data originally obtained in the process of investigation are known as primary data.

By primary data we mean those which are originally, that is, those in which little or no grouping has been made, the instance being recorded or itemized as encountered. They are essentially raw material. Thus, the primary data are original in character. They are in the shape of raw material (often called raw data) to which statistical methods are applied. The source of primary data are called primary source.

1.

SECONDARY DATA: - Secondary data are those data which have already

been collected by some other person for their purpose, that is, the data taken from published or unpublished records like research paper, papers, newspapers, periodicals, journals, office records etc. are known as secondary data. In other words, the data obtained by other persons and are being used now in the investigation are known as secondary data. According to M.M. BLAIR Secondary data are already in existence and which have been collected from some other purpose then answering of the question of hands

METHODS OF DATA COLLECTION

INDIRECT ORAL INVESTIGA -TION

DIRECT PERSONAL INTERVIEW METHOD

METHODS OF DATA COLLECTION

QUESTIONNAIRE

INFORMATION THROUGH LOCAL SOURCES OR CORRESPONDENTS

DIRECT PERSONAL INTERVIEW METHODS:

Under this method the investigator interviews the respondents personally. The investigator establishes personal contact with the respondent (or informants) and conduct on the spot enquiry. He makes and puts direct questions to respondents. The success of this method depends upon the character and efficacy of the investigator. The investigator should be polite and tactful. He must identified himself with the people and must be conversant with local conditions such as customs, languages etc.

INDIRECT ORAL INVESTIGATION:

This method is also called indirect personal investigation or interview. In this method, the investigator contacts the third party capable of supplying the necessary information on the problem under investigation. Such a person is known as witnesses. The investigator may prepare a set of questions and can ask these questions from different persons and records their answers.

INFORMATION THROUGH LOCAL SOURCES:

This method is also known as information through local agents. In this method, information is collected through local agents, sources or correspondents on request. These local agents are well equipped with nature of the investigation. They give reliable information on their way. And do their own liking on specific issues regularly in the investigation.

QUESTIONNAIRE:
In this method a list questions consisting of list of questions pertaining to the investigation is prepared and printed in advance. The questionnaire contains blank space for answers. The questionnaires are also sending through enumerators or through mail service.

If the questionnaires are send by post to the informants who are requested to fill answers in the blank spaces and send back within specific time, then this method is called Mailed Questionnaire Method.

SAMPLE SIZE
Data has been collected through the survey method, while survey (or fieldwork) has been conducted in PUNE. While the project was done in the firm known as INDIA INFOLINE, MAIN BRANCH PUNE

All the data are primary in the nature as they had been collected first hand and personally. We made a survey by questionnaire as prepared by me. I used questionnaire as a tool to collect data for research. Questionnaires has been prepared to get the response of the people as per guided by the organizational guide.

Sample size has been kept to 100- sample unit.

RESEARCH DESIGN:
Considering the importance of the objectives of study and also the importance of decision area it was decided to undertake an explorative survey first. The respondents were observed by the interview held through structured questionnaire along with open ended and close ended question. The main purpose of this survey was to get information about the factors to be considered by investors while investing in mutual funds.

GEOGRAPHICAL AREA COVERED:

The whole field work has been done in four areas: DECCAN WAKAD HINJEWADI KURVAE NAGAR

SAMPLING TECHNIQUE USED:

For the analysis convenience sampling technique has been used. Convenience sampling techniques are used to measure different attitudes and perception of investors towards factors that influence them to invest in mutual funds.

MEDIUM FOR COLLECTING SAMPLE:

Personal interview through structured questionnaire was considered most appropriate means for contracting the investors.

SAMPLE UNIT:
The Investors.

Thus, in short the research methodology of the survey is as under:

Research Design

Structured questionnaire with open ended & close ended questions.

Data collection

Primary data collected through questionnaire Secondary data from books, magazines and Internet. The investors

Sample unit

Sample size

Number of investors = 100

Sampling technique

Convenience technique

Medium of data collection

Personal interview using questionnaires

Field work

DECCAN WAKAD HINJEWADI KURVAE NAGAR

DATA INTERPRETATION
Q1. Have invested in Mutual Fund?
INVESTED IN MUTUAL FUND YES NO TOTAL RESPODENTS (%) 83% 17% 100%

IN V E S T E D IN M U T U AL F U N D

17%

83%

YES NO

Interpretation:
Out of 100 investors, 83 (83%) have invested in mutual fund and rest, .i.e. 17 (17%) does not invested in mutual funds.

Q2. In which type of mutual fund you would like to invest?

TYPE OF MUTUAL FUND LIKE TO INVEST RESPONDENTS (%) 24% 35% 24% 17% 100%

Equity fund ELSS Balanced fund Money market

TOTAL

TYPE OF MUTUAL FUND LIKE TO INVEST

40% 35% 30% 25% 20% 15% 10% 5% 0% ELSS, 35% Equity fund , 24% Balanced fund , 24% Money market , 17%

RESPONDENTS(%) Equity fund ELSS Balanced fund Money market

Interpretation: out of 100 respondents:

24 (24%) for Equity fund 35 (35%) for ELSS 24 (24%) for Balanced fund 17 (17%) for Money market

Q3. What are the factors that you keep in mind while investing in mutual fund?
FACTORS THAT KEEP IN MIND WHILE INVESTING IN MUTUAL FUND RESPONDENTS (%)

Regular returns Diversified risk Tax benefit Liquidity

TOTAL

20% 40% 34% 6%

100%

FAC TOR S TH AT K E E P IN MIN D W H ILE IN V E S TIN G IN MU TU AL FU N D

6% 34%

20%

40%

Regular returns Diversified risk T ax benefit Liquidity

Interpretation: Out of 100 respondents:

20 (20%) for Regular returns 40 (40%) for Diversified risk 34 (34%) for Tax benefit 6 (6%) for Liquidity

Q4. For how long you would like to invest?

TENURE OF INVESTMENT > 1year 1 year 3 years 5 years TOTAL RESPONDENT S (%) 20% 34% 32% 14% 100%

T E NUR E O F M UT UA L F UND
< 1 3 5 1 ye a r ye a r ye a rs ye a rs

R E S P O N D E N TS (% )0 % 2

34%

32% 14%

0% 20% 40% 60% 80% 100%

Interpretation: out of 100 respondents:

20 (20%) for >1 year 34 (34%) for 1 year 32 (32%) for 3 years 14 (14%) for 5 years

Q5. Are you agreeing with the adage HIGHER THE RISK HIGHER WILL BE THE RETURN?
HIGHER THE RISK HIGHER WILL BE THE RETURN YES NO TOTAL RESPONDENTS (%) 97% 3% 100%

H IGH E R T H E R IS K H IGH E R W IL L B E T H E P R OF IT

97%

3% 3%

YES NO

Interpretation:
Out of 100 respondents, 97 (97%) say yes or agree with the adage while 3 (3%) say no.

Q6. Individual analysis of the factors that an investors should keep in mind while investing in mutual funds? (A-D) [I = Influenced] A.)
REGULAR RETURNS I NI TOTAL RESPONDENTS (%) 60% 40% 100%

[NI = Not influenced]

REGU LAR R ETU R N S

70% 60% 50% 40% 30% 20% 10% 0% RESPONDENTS(% ) I NI 60% 40%

Interpretation:
Among 100 respondents, 60 (60%) are influenced and 40 (40%) are not influenced by regular returns.

B.)
DIVERSIFIED RISK I NI TOTAL RESPONDENT S (%) 77% 23% 100%

D IV E R S IF IE D R IS K

23%

77%

NI

Interpretation:
Among 100 respondents, 77 (77%) are influenced and 23 (23%) are not influenced by diversified risk.

C.)
TAX BENEFIT I NI TOTAL RESPONDENT S (%) 90% 10% 100%

T AX B E N E FIT
100% 80% 60% 40% 20% 0% I RESPO NDENT S NI 10%

90%

Interpretation:
Among 100 respondents, 90 (90%) are influenced and 10 (10%) are not influenced by tax benefit.

D)
LIQUIDITY I NI TOTAL RESPONDENT S (%) 34% 66% 100%

LIQUIDITY

100% 80% 60% 40% 20% 0% RESPONDENTS I NI 34% 66%

Interpretation:
Among 100 respondents, 34 (34%) are influenced while 66 (66%) are not influenced by liquidity.

FINDINGS
1. Firstly, I got the positive output as I find that 83% respondents are aware about the

mutual funds.

Diversified risk (40%) and tax benefit (34%) are the two important factors that an investor would like to keep in mind while investing in mutual funds.
2.

INDIAINFOLINE LTD. is maintaining a good relationship with AMCs and other corporate agents.
3.

34% of investors are in favour of ELSS (Equity Linked Saving Scheme) while Equity funds and Balanced funds have equal favour .i.e., 24%.
4. 5.

I also found that INDIAINFOLINE LTD has good market reputation. Only 6% of investors have trust upon liquidity.

6. 7.

I also found that 97% of respondents are aware with the adage Higher the risk higher will be the profit. Investors want long term investment .i.e.; approximately 80% investors would like to invest for 1 year or more.
8.

Apart from mutual funds, INDIAINFOLINE LTD. provides other financial products under roof. Products include insurance, personal loans, portfolio management services, bonds, fixed deposits etc.
9. 10.

PAN card has been mandatory by the govt. in mutual funds.

CONCLUSION

I had concluded after analyzing and interoperating my whole report that INDIA INFOLINE is performing well in the market. INDIA INFOLINE has a basket of major product. So, every investor likes to join them because they get every financial facility under one roof. The output is yieldable as 83% respondents are aware about the mutual funds. INDIAINFOLINE LTD has good market reputation. They are maintaining good relationship with AMCs and other corporate agents.

Diversified risk (40%) and tax benefit (34%) are the two important factors that an investor would like to keep in mind while investing in mutual funds. But the sudden compulsion PAN card has reduced the sale of mutual funds. 97% of respondents agree with the statement Higher the risk higher will be the profit. But still there are many loopholes in mutual fund sector. We have to plug that loopholes to save the interest of investors.

RECOMMENDATIONS

1. INDIA INFOLINE LTD. has to expand its infrastructure because sometimes

consumers (investors) face the trouble in sitting arrangement. 2. Only 6% of investors have trust upon liquidity. 3. Approximately 20% of investors would like to invest for a period of less than 1 year. As the reason for this is volatile market and sudden correction factor in the stock market. 4. Regarding liquidity in an individual analysis only 34% are influenced. So, it should be improved in the credit policy because liquidity is the most important part. 5. The incentives of employees at INDIAINFOLINE have to increase.

LIMITATIONS

There is an infrastructural problem in INDIAINFOLINE LTD. As there is no proper sitting arrangement for customers (investors).
.1

.2 Compulsion of PAN card in mutual finds sector will reduce the sale of mutual funds. .3 Respondents didnt have time to fill questionnaire or they show no interest. So, I confront a lot of troubles in field work.

BIBLOGRAPHY

BOOKS:
C. R. kothari RESEARCH METHODOLOGY Book by AMFI FUNDAMENTALS OF MUTUAL FUNDS

MAGZINE:
BUSINESS STANDARD INVESTORS HAND BOOK (INDIA INFOLINE) BROCHURES

INTERNET:
WWW.MONEYCONTROL.COM WWW.INDIAINFOLINE.COM WWW.VALUERESEARCHONLINE.COM WWW.ECONOMICTIMES.COM

QUESTIONNAIRE

Dear Sir/ Madam, As a part of our academic course, we are conducting a research to gauge the perception of investments in the public domain. Please let us know your unbiased and spontaneous response to the questions given below. I need your help in the study. Kindly, provide me your valuable opinion by filling this questionnaire. The information obtained by this questionnaire will be kept strictly confidential and will be used for academics purpose only.

PART- A
(GENERAL INFORMATION) 1. Have invested in Mutual Fund? NO [ ]

YES [ ]

2. In which type of mutual fund you would like to invest? Equity fund [ ] Money market [ ] ELSS [ ] Balanced fund [ ]

3. What are the factors that you keep in mind while investing in mutual fund? Regular returns [ ] Tax benefit [ ] Diversified risk [ ] Liquidity [ ]

4. how long you would like to invest?

For

> 1 year [ ] 3 years [ ]

1 year [ ] 5 years [ ]

5. Are you agreeing with the adage HIGHER THE RISK HIGHER WILL BE THE RETURN? YES [ ] NO [ ]

6. How much you are influenced with each of the factor that are to be considered while investing in mutual fund? (a-d) [I = Influenced] [NI = Not influenced]

a) Regular returns: b) Diversified risk: c) Tax benefit: d) Liquidity:

I[ ] I[ ] I[ ] I[ ]

NI [ ] NI [ ] NI [ ] NI [ ]

PART- B
(PERSONAL INFORMATION) 1. : __________________________________________________________ Name

2. pation: _____________________________________________________ Student [ ] Businessman [ ] Professional [ ] Service [ ]

Occu

3. e no.: (M)___________________________________________________ (R) ___________________________________________________

Phon

4. Email: __________________________________________________________