IOSR Journal of Business and Management (IOSR-JBM)

e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 18, Issue 7 .Ver. IV (July 2016), PP 41-49
www.iosrjournals.org

Factors Influencing Investors In Mutual Funds Selection

Ms. S. Neelima1Dr.D.Surya Chandra Rao2
1
Research Scholar,Krishna University, Machilipatnam
2
Registrar and Professor Department of Business Management Krishna University Machilipatnam, A.P., India-

Abstract:
Executive Summary: In the financial industry, Mutual Funds have happen to be a chosen topic to millions of
people all over the world. A mutual fund is a special type of institution, a trust or an investment company which
acts as an investment intermediary and invests the savings of large number of people to the corporate securities
in such a way that investors get steady returns, capital appreciation and a low risk. At the retail level, investors
are unique and are a highly heterogeneous group. A large number of investment options are available to
investors. Currently there are large numbers of schemes available and asset management companies (AMCs)
compete against one another by launching new products or repositioning old ones. Unless mutual fund schemes
are tailored to the changing needs, and the AMCs understand the fund selection behaviour of the investors,
survival of funds will be difficult in future. With this background a survey was conducted among 302 investors in
Tirupati urban center to study the factors influencing the fund/scheme selection behavior of retail investors by
applying factor analysis tool. This paper is useful for managerial implication for the AMC’s in their product
designing and development.
Key words: Consumer behaviour, Mutual Funds, Service and Key Factors.

I. Introduction
Among the many developments in the Indian financial sector, the growth in mutual fund investments is
justifiably characterized as one of the most significant. The investor behavior was changing tremendously
during and after the recession effect. There are several parameters that an investor will think before investing
like return, flexibility, capital appreciation, safety, liquidity etc., but the markets will face a question mark in
knowing the pulse of an investor. The mutual fund and Asset management companies must always be proactive
to match up the changes that are taking place in the minds of the customer. Understanding the investor
behavior becomes a critical source of competitive advantage to investment houses. From a funds
manager's perspective, it is important to understand why some investors stay with a particular fund and
why some switch to other funds within their fund family. Hence this paper studies the factors which
influence in selection of mutual funds.

II. Literature Review

The existing “Behavioural Finance” studies are very few and very little information is available about
investor perceptions, preferences, attitudes and behaviour. All efforts in this direction are fragmented.
Madhusudhan V Jambodekar (1996) conducted a study to assess the awareness of MFs among investors, to
identify the information sources influencing the buying decision and the factors influencing the choice of a
particular fund. The study revealed that Income Schemes and Open Ended Schemes are more preferred than
Growth Schemes and Close Ended Schemes. Investors look for safety of Principal, Liquidity and Capital
appreciation in the order of importance. Newspapers and Magazines are the first source of information through
which investors get to know about MFs/Schemes. Investor service is a major differentiating factor in the
selection of Mutual Fund Schemes.
Sujit Sikidar and Amrit Pal Singh (1996) carried out a survey with an objective to understand the
behavioural aspects of the investors of the North Eastern region towards equity and mutual funds investment
portfolio. The survey revealed that The salaried and self employed formed the major investors in mutual fund
primarily due to tax concessions. UTI and SBI schemes were popular in that part of the country then and other
funds had not proved to be a big hit.Syama Sunder (1998) conducted a survey to get an insight into the mutual
fund operations of private institutions with special reference to Kothari Pioneer. The survey revealed that
Awareness about Mutual Fund concept was poor in small cities like Visakapatnam. Agents play a vital role in
spreading the Mutual Fund culture. Open-end schemes were much preferred. Age and income are the two
important determinants in the selection of the fund/scheme. Brand image and return are the prime considerations
while investing in any Mutual Fund. Shanmugham (2000) conducted a survey of 201 individual investors to
study the information sourcing by investors, their perceptions of various investment strategy dimensions and the

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 Factors influencing investors in Mutual Funds Selection

factors motivating share investment decisions, and reports that among the various factors, psychological and
sociological factors dominated the economic factors in share investment decisions.
SEBI – NCAER Survey (2000) was carried out to know the portfolio size, investment preference for
equity as well as other savings instruments. Data was collected from 3,00,0000 geographically dispersed rural
and urban households. Some of the relevant findings of the study; Households preference for instruments match
their risk perception; Bank Deposit has an appeal across all income class.43% of the non-investor households
equivalent to around 60 million households (estimated) apparently lack awareness about stock markets; and
Compared with low income groups, the higher income groups have higher share of investments in Mutual Funds
(MFs).Rajeswari and Rama Moorthy (2000) conducted an empirical study to understand investor preferences in
purchasing mutual funds based on data obtained from a judgment sample of 350 educated investors in Urban
and Semi-Urban cities. In the survey, the respondents were asked to rate the importance of the 23 variables on a
5 point scale of importance. The data were factor analyzed using Principal Component Analysis, to extract
selection criteria. The emergent selection criteria are: Product qualities, fund sponsor qualities and investor
services. The survey discovered that the most preferred investment vehicle is Bank Deposits, with MFs ranking
4th in the order. Growth schemes ranked first among MF‟s, the investors look for safety and the selection
decision is taken on their own. Kavitha Ranganathan (2004) conducted a study on investor perceptions. Sample
size is limited to 100 educated individual investors in the city of Mumbai. She found in her study that Savings
Objective of the majority of individual investors is „to provide for Retirement‟, the respondents have good
awareness level of MFs, Shares are favoured „Growth Scheme‟ and „Open- Ended‟ schemes are favoured and
factor analysis is done to analyse the selected factors.Bala Ramaswamy and Mathew.C.H.Yeung (2003),
examined the relative importance of factors considered important in the selection of mutual funds by financial
advisors in emerging markets. The survey focuses on Malaysia. The result of the survey point out to three
important factors which dominate the choice of mutual funds. These are consistent past performance, size of
funds and cost of transaction. Factors which relate to fund managers and investment style are not considered to
be relatively important. Conjoint analysis was selected to study the importance of attributes for mutual fund
selection.

Research Gap
The present study is proposed to study, analyze the factors which influence the behavior of investors in
selection of Mutual fund. Studies on analysis of investor‟s behavior found from time to time. The studies gave
a mixed outcome- sometimes have given positive result and sometimes not. In view of this there is an ample
scope for a new study to analyze and study the investor‟s behavior.The revelations from survey of literature
make it evident that investors are improving in awareness and investment choice making and are looking for
information for rational decision making. A study on this aspect is necessary to update the knowledge.

III. Objectives of the Study

IV. To identify the factors that influence the investor‟s fund/ scheme selection.
V. To find out the savings objective of the investors
VI. To identify the savings methods preference of the investors

Limitations of the Study

1. Sample size is limited to 302 investors in a semi-urban city (Tirupati) and this may not be true
representation to all semi urban towns in India.
2. The personal bias of the respondents might have some influence on the study.
Hypothesis of the Study
 Investor choices are influenced by various fund related factors
 Investor choices are influenced by fund sponsor related qualities
 Investor choices are influenced by investor related services.
 Investors savings objective is to meet contingencies and to purchase assets
 Investors savings method is investing in shares , life insurance and mutual funds.

IV. Methodology of the study

Data collection
For carrying out investors study, the population was defined as residents of semi urban town, who have
Mutual fund / life insurance policy in any company. The data was collected with the help of a questionnaire.

Questionnaire design
The questionnaire consists of three parts – personal details, investor opinion related to fund qualities,
fund sponsor qualities, investor related services and awareness of investors. The questionnaire consists of 30
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 Factors influencing investors in Mutual Funds Selection

questions. The questionnaire is developed based on the questionnaires of Rajeswari and Rama Moorthy (2000)
and Kavitha Ranganathan (2004).

Sample
A sample of investors is obtained by contacting investors. There are about 12 investment consultancy
firms which have good investor base as given in Exhibit No: 1. The firms are contacted for getting lists of
investors. However, all of them refused to provide lists for two reasons: (i) confidentiality and (ii)
inconvenience.

Exhibit No. 1: Investment consultancy Firms

S.No Name and location Existence (Years)
1 Steel city securities limited, Near Vasan Eye care Hospital. 13 years
2 Motilal oswal securities limited, Near Municipal office >8 years
3 Karvy stock broking limited , RC road 9 years
4 Kotak securities , VV Mahal road >7 years
5 Acumen stock broking, Krishna complex >5 years
6 Vertex securities, Tilak road >7 years
7 Way 2 wealth, Korlagunta >3 years
8 Net worth stock broking limited, Tilak road. >6 years
9 Reliance money, near By pass road, Korlagunta. >5 years
10 Bonanza securities ltd, Near Central park >6 years
11 Religare securities, Balaji colony >7 years
12 India infoline, Near Municipal office. >8 years

However, five major firms permitted to contact investors who visit their offices. By contacting more
than 382 investors who have invested in mutual funds, at the time of leaving the office during a 10 day period,
satisfactory and complete responses are obtained from 302 investors.

Data Analysis
The investor data are analysed using Descriptive statistics - Simple percentages, mean and standard deviations
and Factor analysis (for reducing data)
Profile of the Respondents
The study was carried out by collecting responses from respondents (N = 302). The questionnaire
consists of three parts – personal details, investor opinion related to fund qualities, fund sponsor qualities,
investor related services and awareness of investors. The questionnaire consists of 30 questions. The
questionnaire is developed based on the questionnaires of Rajeswari and Rama Moorthy (2000) and Kavitha
Ranganathan (2004). A brief profile of the respondents is reported in table 1. Using the visual binning process
in SPSS, we have categorized the variable age and it shows that majority of the respondents were observed to be
in the age group of 41-50 (38.1%) and then in the age group of 31-40(35.1%). In a similar way, the data
characteristics are reported for the remaining variables like, occupation, education, gender and monthly income.

Table 1: Profile of Respondents

Variable Categories Frequency %
Gender Male 196 64.9
Female 106 35.1
Age 31-40 106 35.1
41-50 115 38.1
Above 50 81 26.8
Marital status Married 212 70.2
Unmarried 88 29.1
Divorced 02 0.7
Education School 24 7.9
Graduate 96 31.8
Post Graduate 109 36.1
Professional degree 73 24.17
Occupation Professional 62 20.5
Businessman 68 22.5
Salaried 159 52.6
Retired 13 4.3
Less than Rs.1,00,000 78 25.8
Rs.1,00,001 – Rs. 3,00,000 124 41.1
Income Rs.3,00,001 – Rs. 5,00,000 48 15.9
Above Rs 5,00,000 52 17.21

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 Factors influencing investors in Mutual Funds Selection

For a comprehensive understanding of the factors that influence the investment decisions relating to
mutual funds, a set of 25 statements, sub grouped into three dimensions Fund related factors- (11 statements),
Sponsor related factors - (6 statements), Investor service related factors- (8 statements) Further, the same
technique has been run to analyze the factors using Principal component analysis as an extraction method
considering Varimax rotation.

V. Results and Discussions

In the survey, the respondents were asked to rate the importance of the 25 specified variables on a 5
point scale ranging from Highly Important (5) to Not at all Important (1). The data for each of the 3 sub-groups
were factor analysed using Principal Component Analysis, with the objective of identifying the factor in the sub-
group which turns out to be significant in the fund/scheme selection.

H1- Investors choices are influenced by Fund Related Factors

The 11 fund related variables were analysed for their importance. The analysis reveals that the investor
considers all the 11 variables as important in his selection of the fund/scheme. The mean value and ranks is
given in Table 2.

Table 2: Fund Related Factors for Factor Analysis

S.No Factors (N=2400) Mean SD Rank
1 Fund performance record 4.52 0.763 1
2 Funds reputation or brand name 4.23 0.870 2
3 Scheme‟ s expense ratio 3.91 1.09 8
4 Scheme‟ s portfolio of investment 3.97 0.945 5
5 Reputation of the Fund Manager/ scheme 4.13 0.981 3
6 Withdrawal facilities 4.00 0.976 4
7 Favourable rating by a rating agency 3.92 0.976 7
8 Innovativeness of the scheme 3.63 1.1234 11
9 Products with tax benefits 3.87 1.143 9
10 Entry & Exit load 3.77 1.105 10
11 Minimum initial investment 3.96 1.156 6
Scale 5- Highly important 1-Not at all important

Hence, to identify the investor‟s underlying fund/scheme selection criteria, so as to group them into
specific market segment to enable the designing of the appropriate marketing strategy, Factor Analysis was done
using Principal Component Analysis.

Table 3: KMO and Bartlett‟s Test

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.823
Bartlett's Test of Sphericity Approx. Chi-Square 721.748
Df 55
Sig. 0.00

Table 4: Total Variance

S.No Initial Eigen values Extraction Sums of
Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 3.622 32.930 32.930 2.694 24.493 24.493
2 1.424 12.950 45.879 2.353 21.387 45.879
3 0.945 8.593 54.473
4 0.907 8.245 62.718
5 0.852 7.746 70.465
6 0.694 6.312 76.776
7 0.631 5.738 82.514
8 0.539 4.904 87.418
9 0.499 4.540 91.958
10 0.458 4.165 96.123
11 0.426 3.877 100
Extraction Method: Principal Component Analysis

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 Factors influencing investors in Mutual Funds Selection

Table 5: Rotated Component Matrix for various qualities Studied in the research
S.No Factors 1 2
1 Fund performance record 0.397 -0.468
2 Funds reputation or brand name 0.662 -0.012
3 Scheme‟ s expense ratio 0.632 0.269
4 Scheme‟ s portfolio of investment 0.671 0.253
5 Reputation of the Fund Manager / Scheme 0.727 0.093
6 Withdrawal facilities 0.540 0.243
7 Favourable rating by a rating agency 0.404 0.534
8 Innovativeness of the scheme 0.099 0.723
9 Products with tax benefits 0.228 0.646
10 Entry & Exit load 0.413 0.410
11 Minimum initial investment 0.188 0.732

To have better understanding of the data, factor analysis is conducted. From the Table 3 it is clear that
the approximate chi-square statistic is 721.748 with 55 degrees of freedom which is significant at 0.05 levels.
The KMO statistic (0.823) is also large (>0.5). Hence factor analysis is considered as an appropriate technique
for further analysis of data. On the basis of Varimax Rotation with Kaiser Normalisation, 2 factors have
emerged. From Table 4 it is found that two factors are explaining about 45.879% of the variance. Each factor is
constituted of all those variables that have factor loadings greater than or equal to 0.5 as shown in Table 5. The
factors are named as given in table 6 has explained below.
Factor – 1 is labeled as “Performance and External Fund qualities”. It comprised four items: Fund‟s
Reputation , Scheme‟s expense ratio, Reputation of the Fund Manager/ scheme and Schemes portfolio of
investment. Factor -2 is called “Internal fund qualities” It consisted of three 3 items, Innovativeness of the
scheme, products with tax benefits and Minimum initial investment. All the two factors are important as they
have items which are rated important with a mean score around 4.

Table 6: Factors and Qualities Mean and Standard Deviations

Factor % variance Qualities Mean SD
1. Performance and Scheme‟ s expense ratio 3.91 1.09
External fund qualities 24.493 Reputation of the Fund Manager/ scheme 4.13 0.981
Funds reputation or brand name 4.23 0.870
Scheme‟s portfolio of investment 3.97 0.945
2.Internal fund qualities 21.387 Products with tax benefits 3.87 1.143
Innovativeness of the scheme 3.63 1.1234
Minimum initial investment 3.96 1.156
Scale 5- Highly important 1-Not at all important

H2- Investors choices are influenced by Fund Sponsor Related Qualities

The six fund sponsor related variables were analysed for their importance. The analysis reveals that the
investor considers all the 6 variables as important in his selection of the fund/scheme. The mean value and
ranks is given in Table 7.

Table 7: Fund Sponsor Related Qualities based on Factor Analysis

S.No FACTORS (N=2400) Mean SD Ranks
1 Reputation of sponsoring firm 4.22 0.904 3
2 Sponsor has a recognized brand name 3.87 1.140 4
3 Sponsor has a well developed agency & network. 4.26 3.076 1
4 Sponsor‟s expertise in managing money. 4.25 0.907 2
5 Sponsor has a well developed research & infrastructure. 3.83 1.085 5
6 Sponsor‟s past performance in terms of risk and return 4.26 0.839 1
Scale 5- Highly important 1-Not at all important

To identify the sponsor related qualities, which influences the investor‟s fund selection, factor analysis
is conducted. Table 8 shows the results of KMO and Bartlett‟s Test.. The KMO statistic (0.499) is also nearest
to (0.5). Hence factor analysis is considered as an appropriate technique for further analysis of data.

Table 8: KMO and Bartlett‟s Test with approximate Chi-Square

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.499
Bartlett's Test of Sphericity Approx. Chi-Square 94.137
Df 15
Sig. 0.00

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 Factors influencing investors in Mutual Funds Selection

Table 9: Total Variance

Extraction Method: Principal Component Analysis

Table 10: Rotated Component Matrix for Various qualities studied under the research
S. Qualities
No 1 2
1 Reputation of sponsoring firm 0.688 -0.064
2 Sponsor has a recognized brand name 0.789 -0.182
3 Sponsor has a well developed agency & network 0.332 0.066
4 Sponsor‟ s expertise in managing money -0.086 0.740
5 Sponsor has a well developed research & infrastructure 0.495 0.340
6 Sponsor‟ s past performance in terms of risk and return 0.083 0.793

Table 9 explains the Total variance explained. Retaining only variables with Eigen Values greater than
1, we can infer that two factors together contribute to 46.656%. On the basis of Varimax Rotation with Kaiser
Normalisation, 2 factors emerged. Factor 1 accounts for 24.430% of variance and factor 2 accounts for 22.226%
of variance and all together they explain 46.656% of variance. The identified factors with the associated
qualities and factor loadings are given in Table 10. Each factor is constituted of all those qualities that have
factor loadings greater than or equal to 0.5. The two factors named as given under are:
1. Expertise - Sponsor‟ s expertise in managing money and Sponsor‟ s past performance in terms of risk and
return
2. Recognition/Image - Sponsor has a recognized brand name and reputation of sponsoring firm As all the
qualities have mean scores around 4 all the factors are important

Table 11: Sponsor Related Factors Selection

Factor % variance Qualities Mean SD
Expertise 22.852 Sponsor‟s expertise in managing money. 4.25 0.907
Sponsor‟s past performance in terms of risk and return 4.26 0.839
Recognition/Image 22.192 Sponsor has a recognized brand name 3.87 1.140
Reputation of sponsoring firm 4.22 0.904
Scale 5- Highly important 1-Not at all important

H3- Investors choices are influenced by Investor Related Services

The 8 fund investor related variables were analysed for their importance. The analysis reveals that the investor
considers all the 8 variables as important in his selection of the fund/scheme. The mean value and ranks is
given in Table 12.

Table 12: Investor Related Services: Factor analysis

S.No Services Mean SD Ranks
1 Disclosure of investment objective in the advertisement. 4.30 0.863 1
2 Disclosure of periodicity of valuation in the advertisement. 4.07 0.836 4
3 Disclosure of the method and the periodicity of the schemes sales and repurchases in 4.29 0.823 2
the offer documents.
4 Disclosure of NAV on every trading day. 4.04 0.844 5
5 Disclosure of deviation of investments from the original pattern 4.11 0.972 3
6 MF‟ s Investor‟ s grievance redressal machinery. 3.97 0.854 7
7 Fringe benefits i.e., free insurance, credit cards ,loans on collateral, tax benefits etc. 3.98 0.996 6
8 Preferred MF to avoid problems, i.e., bad deliveries, and unnecessary follow up with 3.90 0.968 8
brokers and companies.
Scale 5- Highly important 1-Not at all important

To identify the investor services related factor, which influences the investor‟s fund selection, factor
analysis is conducted. Table 13 shows the results of KMO and Bartlett‟s Test.. The KMO statistic (0.575) is
also large (>0.5). Hence factor analysis is considered as an appropriate technique for further analysis of data.
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 Factors influencing investors in Mutual Funds Selection

Table 13: KMO & Barlett‟s Test with approximate Chi-Square

KMO & BARTLETT’S TEST
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.575
Bartlett's Test of Sphericity Approx. Chi-Square 166.275
Df 28
Sig. 0.00

Table 14: Total Variance

S.No Initial Eigen values Extraction Sums of
Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 1.894 23.670 23.670 1.894 23.670 23.670
2 1.157 14.467 38.137 1.157 14.467 38.137
3 1.137 14.208 52.345 1.137 14.208 52.345
4 1.023 12.788 65.132 1.023 12.788 65.132
5 0.859 10.732 75.864
6 0.722 9.024 84.888
7 0.668 8.350 93.238
8 0.541 6.762 100.00
Extraction Method: Principal Component Analysis

Table 15: Rotated Component Matrix for various Services

Rotated Component Matrix
S.No Services Component
1 2 3 4
1 Disclosure of investment objective in the advertisement 0.561 -0.381 0.037
-0.047
2 Disclosure of periodicity of valuation in the advertisement 0.456 -0.002 -0.237
0.703
3 Disclosure of the method and the periodicity of the schemes sales and 0.449 -0.449 0.507
repurchases in the offer documents
0.221
4 Disclosure of NAV on every trading day 0.315 0.685 -0.042 0.408
5 Disclosure of deviation of investments from the -original pattern 0.456 0.260 0.632
-0.151
6 MF‟ s Investor‟ s grievance redressal machinery 0.532 0.436 -0.173 -0.457
7 Fringe benefits i.e., free insurance, credit cards, loans on collateral, tax 0.617 -0.036 -0.078
benefits etc. -0.258
8 Preferred MF to avoid problems, i.e., bad deliveries, and unnecessary 0.443 -0.287 -0.621
follow up with brokers and companies. -0.113

Table 14 explains the Total variance explained. Retaining only variables with Eigen Values greater
than 1, we can infer that four factors together contribute to 65.132%. On the basis of Varimax Rotation with
Kaiser Normalisation, 4 factors emerged. Factor 1 accounts for 23.670% of variance and factor 2 accounts for
14.467% of variance, factor 3 accounts for 14.208% of variance and facto 4 accounts for 12.788%. The
identified factors with the associated qualities and factor loadings are given in Table 15. Each factor is
constituted of all those qualities that have factor loadings greater than or equal to 0.56. The four factors named
as given under are depicted in Table 16.

1. Expectations Disclosure – Disclosure of investment objective in the advertisement , and Fringe benefits
i.e., free insurance, credit cards, loans on collateral, tax benefits etc.
2. NAV disclosure - Disclosure of NAV on every trading day.
3. Deviation Disclosure- Disclosure of deviation of investments from the -original pattern.
4. Performance Disclosure : Disclosure of periodicity of valuation in the advertisement

Table 16: Investor Related Services with Qualities to Standard Deviation

Investor Related Services
Factor % variance Qualities Mean SD
Expectations Disclosure 23.670 Disclosure of investment objective in the advertisement. 4.30 0.863
Fringe benefits i.e., free insurance, credit cards ,loans on 3.98 0.996
collateral, tax benefits etc.
NAV disclosure 14.467
Disclosure of NAV on every trading day. 4.04 0.844
Deviation Disclosure 14.208 Disclosure of deviation of investments from the original 4.11 0.972
pattern.
Performance Disclosure 12.788 Disclosure of periodicity of valuation in the advertisement. 4.07 0.836
Scale 5- Highly important 1-Not at all important
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 Factors influencing investors in Mutual Funds Selection

H4- Majority of the investor’s objective is to purchase assets

The investors savings objective is to meet contingencies (40%) , to provide for retirement (30%)
followed by Purchase of assets (22%) , children‟s education (4.97%) and for tax reduction (3%) . These are the
investors preferred savings objectives. Though purchase of assets is expected to be a major objective, the
survey reveals that they are the minimum preferred objective for investors. The information is given in the table
below.

Table 17: Savings objective of investors

S.No Savings objectives Frequency %
1 To provide for Retirement 91 30
2 To meet contingencies 121 40
3 For purchase of assets 66 22
4 For tax reduction 9 3
5 For children‟s education 15 5

H5- Majority of the investor’s savings method is to invest in shares and mutual funds
The investors preferable savings avenues are Life insurance (62.05%), shares (60.36%), postal savings
(60.07%), currency (55.7%), Real estate (52.45%) , pension and provident fund (50.60%) and Units of UTI &
Mutual funds (40.53%) which is at 8th place of preference. Though the investment in mutual funds is expected
at the highest rank but the preference was given to life insurance and shares.

Table 18: Savings Method of investors

S.No Savings Methods Frequency %
1 Currency 55.70 4
2 Life Insurance 62.05 1
3 Shares 60.36 2
4 Postal savings 60.07 3
5 Real estate 52.45 5
6 Bank deposit 35.43 10
7 Pension and provident fund 50.60 6
8 Units of UTI & Mutual funds 40.53 8
9 Chits 44.50 7
10 Gold 37.91 9

VI. Conclusion
In actuality, the product qualities, fund sponsor qualities and investor services are important should be
borne in mind by fund companies. They should build quality schemes to meet the expectations of the investors.
Companies should develop their image by securing identity, recognition and strengthen relations with investors
through information disclosure approaches. The mutual fund companies should support the investors in
providing advisory services as investors have to invest systematically with proper guidance of the advisor.
Mutual fund companies should allow the investors to participate in giving information regarding the design of
the products and to reveal their attitude, preferences towards the investment. They should educate the investors
as literacy levels in India are low and financial literacy even lower. So, the opportunity lies in not getting more
money from existing customers but to start telling prospective investors about different savings and capital
appreciation products. One more suggestion is that investor has to think for a long-term investment in mutual
funds so as to fetch positive returns as mutual funds are more risk averse and diversified. The various factors
identified in the study provide some valuable input regarding the investor‟s pattern, their preference and
Priorities this will guide the organization in designing financial products for the various segments of investors.

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DOI: 10.9790/487X-1807044149 www.iosrjournals.org 49 | Page