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Hanish Dhillon
ISBS – Marketing

q Executive Summary

q Challenges & Issues

q Voice of Customer

q Findings and Conclusion

q Recommendation
q Witnessed significant growth
q Vulnerable to Global Economic turbulence
q Opportune time for the Industry to create a road
map for the Investors
q Adopt Innovative strategies
Executive Summary
q Change in total Investment Scenario

q Offer tailor made products to its customers


q Identify the underlying strengths and weaknesses


q Maintain relationships with the distribution bases

Challenges and Issues
q Low customer awareness levels & financial literacy
q AMC’s have shown limited focus on retail penetration
and building retail AUM
q Limited distribution Channels and Investor servicing
q Mainly product led and not Customer focused
q Limited flexibility in terms of fees & pricing structure
q AMC’s have exhibited limited interest in engagement
with customers post sale
Objectives of the Project
q Understanding the different ratios & portfolios so as to tell
the Banks about these terms, by this, managing the
relationship with the Banks.
q To understand the different investment options provided
by HDFC mutual funds through its mutual fund
q To know the investors’ expectations on mutual funds
offered by & hence to improve upon the same.
q Find out there preference parameters for selling a
particular fund.
Voice of Customer
q Research Methodology
 To understand the voice of Indian Investors, I conducted
an investor survey (100 respondents) across Pune region . As a
part of the survey I facilitated Interviews with a large
representative sample of population from diverse back grounds
to understand their perspective on Investment in mutual funds.
q Data sources
 Research is totally based on Primary Data as collected via
interviews and Secondary data can be used only for referral
purposes as it is collected through journals and web sites.
q Sampling Size
 The sample size of my project is limited to 100 only. All whom
were Investors. However there were few non- investors but have
obtained their views of not doing so.

q Sampling Procedure
 The sample is selected in a random way, irrespective of them
being investor or not or availing the services or not. It was collected
personal visits to the known persons and unknown, by formal and
informal talks and through filling up the questionnaire prepared. The
data has been analyzed by using the measures of central tendencies
like mean, median, mode. The group has been selected and the
analysis has been done on the basis statistical tools available.
q Sample Design
 Data has been presented with the help of bar graph, pie charts,
line graphs etc.

Have you ever invested/ or
interested to invest in Mutual

YES 100

NO 0


 NO

 What is the most important reason for not investing in
mutual funds? (Only for the participants who do not or
are not investing.)
q Lack of Knowledge about Mutual Funds.
q Enjoy Investing in other financial instruments.
q Its benefits are not that lucrative or better than other
q No trust over the schemes.
q No trust over the Fund manager or AMC.
q Current Market scenario.
q Complicated product features.
q KYC mandate over investment of 50,000.

In which type of fund have you
invested your money?

Equity 18
 Debt 23

Balanced 29

Gilt 0

q Respondents in the Current market scenario have Invested
mostly in Balanced schemes which give leverage to
their investments and have switched their investments
to balances or debt schemes in the recession period
because it helps them to accumulate more Units as the
NAV’s are low.
q Respondents who have invested in Tax saving schemes
have a Lock in period of 3 years so they still are
continuing to invest in Recession period as it gives them
leeway in terms of saving Tax over a period of time.
Preferred Investment period?

Less than 1 Year 2

1 to 3 years 42
3 to 5 years 41

More than 5 years 15

q It was found out that most Respondents have either
invested for a time spam of 1 to 3 years or more than 5
years. Investment period purely and solely depends on
the Investment Objective and the Schemes thus chosen.
q Respondents who have invested in Equity diversified funds
have invested for a time spam of 1-3 years and Debt
schemes customer usually invest for a period of 3 to 5
years and ELSS customers have to invest in a lock in
period of 3 years so they opt for 3 year Investment
AMC in which Money is invested?

Kotak 6

Reliance 8
 HDFC 36

SBI 16
DSP Black Rock 5

DSP M Lynch 6
 ICICI 15

Religare 6


q It was found out that Respondents have not invested in a
particular AMC or their Portfolio is managed by single
AMC. They have simultaneously invested in two
AMC’s and the ones which are popular are HDFC and
ICICI and the others have got place in the reckoning.
Which according to you are the
factors important while investing in
Mutual Funds?
Risk factor


 9
Tax savings 9

Performance if the particular Fund

 9
NAV 10

 10


Ratings of a particular fund


Portfolio of the Fund

Profile of the Fund Manager


q Different Investors have different needs for Investment
purposes. However people if Investing in Equity
Instruments would look for better returns in a short
spam of time as it carries equal risk.
q And other factors which are considerate with the
investment purposes would be Performance or Rating of
a Particular Fund and Fund manager also plays a
important role as generally people invest in funds
keeping in mind the profile of the Fund Manager and
for Instance Prashant Jain who is a pass out of IIT and
has done is MBA from IIM having over 14 years of
experience in Equity research market has lot of funds in
his Kitty to manage.
Preferred Channels through
which Investments are

Broker / Sub
BrokerAMC 27

q It was found out that most Investors usually invest through Brokers or
Distributors because they get the advantage of having statements
on timely basis and also switching or redeeming of funds becomes
an ease as they are just a phone call away.
q They can easily review they portfolio and seek Investment
recommendation in order to suffice their short term needs and also
to manage their assets.
q However all of this comes with a charge which is usually known as
Commission charged in the form of Entry Load which is usually
between 0-2.5% for retail customers and there are few who manage
their own portfolio and invest directly through the AMC’s and the
entry load or the commission charge is weaved off for those

Have you invested in the
current Recession period?

NO 38

q It was observed that people are not investing the current market
scenario as it is hard of them to believe that the market is facing a
U shaped recovery mode where in the positivity will be reflected in
the Market over the period of time as per the new Changes and
Amendments bought in by the new UPA Govt.
q However Existing customers have also redeemed or switched their
funds as they lost a lot of money in the year 2008.
q However there are some Investors who are positive about the Market
and have Switched to Balanced funds because that helps them fetch
more units as the NAV is low and have Invested money in the
NFO’s that were out in the market for e.g. Reliance Infrastructure
fund and DSP Black Rock World Energy Fund.

Type of Funds in which
money is invested during the
recession Period?

Tax Saving
Schemes 84

q It is observed that most of the Investors during the recession period
have taken a step back in terms of Investments in Mutual Funds as
the share market saw an Impeccable down fall last year and had
lost a lot of money last year.
q However what is more promising is the confidence amongst these
Investors who are betting on an attitude that shows a sign of
recovery for the market right now and have kept their fingers
crossed in terms of Promises by the Congress.
q So either balanced schemes are the one’s for a safe bet right now or
else tax saving schemes have always given investors a leeway
under Section 80©.

Other Financial Instruments
that are a safe bet right

Bank’ s’ sFD ’ s

q Bank FD’s are one of the means for the different banks to get NTB’s
and helps investors to park their money for a spam of 1-2 years in
attractive FD’s thus offered.
q However after maturity is the main Game Plan through which Banks
anticipate to invest the same in the Equity markets after they take a
respectable position.
q It scores better than equities at all fronts but lags badly in the
parameter of utmost important i.e.; it scores low on returns.
q ULIP schemes have sustainably taken a peek in the recession period
where in they not only provide leverage to one’s investment in debt
and equity market but also insurance for a life time.

Research Findings and
q At the survey conducted upon approx 100 people, most of them are
already mutual fund investors or are interested to invest in future
and the remaining are not interested in it. So there is enough scope
for the advisors to convert those leads into potential investors
through their offerings and services.
q Now, when people were asked about the reason for not investing in
mutual funds, then most of the people held their ignorance
responsible for that. They lacked knowledge and information about
the mutual funds. Whereas just few people enjoyed investing in
other option. For few people, the benefits arousing from these
investments were not enough to drive them for investment in MFs
and few of them expressed no trust over the fund managers’
decision. Again the financial advisors can tap upon these people by
educating them about mutual funds.
Research Findings and
qOut of the people who already have invested in mutual funds/ are interested to
invest, only few have sound knowledge of MFs, and few have a sound
knowledge of the mutual funds and its operations and thereby prefer to
Invest it directly through the AMC’s and maintain their own Portfolio’s.
However it is important to realize that a lot of investors are aware of the
schemes and the operations of the Indian Market but prefer a Financial
Advisor to cater to their Investment Objectives as they are well versed
with the markets and are qualified advisors to recommend them on
Investment strategies with minimal Commission co- responding to the
portfolio managed.
q The other financial instruments that are a lucrative option for the Investors in
the recession are ULIP plans, NSC’s, Bank FD’s however are not in the
same reckoning of Mutual funds in terms of returns.
q While a significant portion of Customers are aware of and
also invest in mutual funds, there was a diverse set of
views obtained, both negative and positive. This
warrants a need to Immediately tackle some of the
negative perceptions And capitalize on the positive
q The most vital problem spotted is of ignorance. Ignorance
is no longer bliss.
q The advisors may try to highlight some of the value added
benefits of MFs such as tax benefit, rupee cost
averaging, and systematic transfer plan, rebalancing etc.
These benefits are not offered by other options single
q Bring about innovations in Distribution channels and
penetrate into tier 2 and tier 3 towns in order to
increase customer base.
q Favorable demographics like urbanization and a relatively
young population having an increased risk appetite, are
likely to save more and seek to invest a higher
proportion of those savings in market-linked
instruments such as mutual funds.
q Market deepening and widening is key factor for growth
with the objective of increased retail penetration and
participation in mutual funds.

Hanish Dhillon
ISBS – Marketing