SUMMER RESEARCH PROJECT

ON

SUBMITTED IN PARTIAL FULFILLMENT FOR

THE AWARD OF THE

DEGREE OF POST GRADUATE DIPLOMA IN MANAGEMENT

2019-21

Project Guide By: Submitted By:

Dr.Harsh Pratap Chandni Kumari
Adm. No. : PGDM19034
Roll No : GM19051

GL Bajaj Institute of Management & Research

Approved by A.I.C.T.E., Ministry of HRD, Govt. of India
Plot No. 2, Knowledge Park III, Greater Noida
Email: [email protected]; Website: www.glnimr.org

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 DECLARATION

I hereby declare that the work reported in the Summer Research Project entitled “"

A comparative study of investment avenue with respect to Equity and Mutual

funds” submitted at GL Bajaj Institute of Management and Research, Greater

Noida, is an authentic record of my work carried out under the guidance of Dr.

Harsh Pratap Singh This project is an original piece of work and I have not

submitted this work elsewhere for any other degree or diploma.

(Signature of the Student)

(Chandni Kumari )

GL Bajaj Institute of Management and Research, Greater Noida, India

Date: ………..

2
 CERTIFICATE

This is to certify that the work reported in the Summer research Project entitled " A

comparative study of investment avenue with respect to Equity and Mutual

funds”, submitted by Chandni Kumari at GL Bajaj Institute of Management and

Research, Greater Noida, India, is a bonafide record of his original work carried out

under my supervision. This work has not been submitted elsewhere for any other

degree or diploma.

(Signature of Faculty Guide)

(Dr. Harsh Pratap Singh)

GL Bajaj Institute of Management and Research, Greater Noida, India

Date:

3
 ACKNOWLEDGEMENT

I owe my gratitude to many people who helped and supported me during the 8
weeks of Summer Research Project Program.

I am highly thankful to the Director Dr. Ajay Kumar, GL Bajaj institute of

management and research for his support, motivation and continuous efforts in
providing us the better learning environment and opportunities to groom ourselves
as per the expectations of the corporate world. Without his support, it would not be
possible for us to successfully complete our Summer Research Project.

My sincere thanks to Dr. Harsh Pratap Singh, the Faculty Guide of the project, for
initiating and guiding the project with attention and care. He has always been
available for me to put me on track from time to time to bring the project at its
present form.

*My deep sense of gratitude is due to Maneesah Yadav (Senior Training manager
of INVESTOSURE) for allowing me to carry out the Research Project at the
organization and to be constantly available to me for the period, for guidance. He
also helped me to see the subject of study in its proper perspective. Thanks and
appreciation is also due to the officials, employees and respondents Of
INVESTOSURE

I also thank all faculty members without whom this project would have been a
distant reality.

Signature

(Chandni Kumari)

Place:

Date:

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TABLE OF CONTENT

1. Introduction
a. Introduction of Topic
b. Background & justification of the topic
2. Industry/Company Overview
3. Literature Review
4. Research Objectives and Hypothesis
5. Research Methodology
6. Data Analysis and Interpretation of Findings
7. Conclusions
8. Suggestions and Recommendations

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1.Introduction
a. Introduction of Topic
1. Investment avenues of india

MEANING OF INVESTMENT

Most of the people keep aside a part of their income as savings. On the other end,
Investment is the act of investing the saved money in to financial products with a
view to generate income from future. In short, when a person has more money than
he requires for current consumption, he would be coined as a potential investor.

INVESTMENT is the employment of funds on assets with the aim of earning

income or capital appreciation. In other words, Investment is the commitment of
funds which have been saved from current consumption with the hope that some
benefits will be received in the future. Thus it is a reward for waiting for money.
Saving of the individuals are invested in assets depending on their risk and return
demands, safety money, liquidity, the available avenue for investment, various
financial institutions, etc. For the achievement of above goals appropriate decisions
have to be taken.

DEFINITION OF INVESTMENT

Different thinkers interpret the word ‘Investment’ in their own ways in different
periods. However, the ideology or concept of investment is same in between them.

Some famous definitions of Investment are;

- “Sacrifice of certain present value for some uncertain future value”

WILLIAM F. SHARPE

Purchase of a financial asset that produce a yield that is proportional to the risk
assumed over some future investment period”

CONCEPT OF INVESTMENT

There are two concept relating to Investment

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1.ECONOMIC INVESTMENT

2.FINANCIAL INVESTMENT

 TYPES OF INVESTMENT AVENUES

Investment scenario as a banyan tree which growing day by day, by the way
of introducing new investment avenues with unique features to attract
investors in to the world of investment.Investment avenues are the different
ways that a person can invest his money. It also called investment
alternatives or investment schemes.

There are different methods are available to classify the investment avenues. Some
of the methods are as follows.
Equity
Please note that investments in equity should only be done for the long term
(anything more than 5 years) to earn decent returns. Risk of investing in equities is
high and so the returns are also high. You could dabble in the stock market broadly
in three ways.
Directly by buying and selling shares on the stock exchanges BSE/NSE
Take the plunge via the Mutual Fund route – wherein the options available are :
equity diversified, balanced, tax saving ELSS funds, thematic, exchange traded or
index funds
Investing in ULIPs(insurance plans) via their equity funds.
Debt
Debt investment can be done for the short term and long term as well. Risk here is
very low and so return is low as well. Investing in debt can be done by the following
ways.
Fixed Deposits, POMIS, NSC, PPF, NPS, Bonds, Kisan Vikas Patra, Senior Citizen
Saving Schemes
Debt mutual funds (balanced, floating rate, gilt, liquid and liquid plus) also offer
another way to do so.
Traditional insurance policies (money back, whole life, endowment) and the debt
portions of ULIPs can be a mechanism as well.
Real Estate
This is again for the long term with a high risk and very low liquidity factor.
Liquidity is defined as the ease with which you could sell your investment for cash
quickly. Investing in property can be done by :

Buying apartments and plots in either residential or commercial areas

Or buying Real Estate Mutual Funds.

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 Commodities
For small investors, exposure to gold is the right step to invest into
commodities. The risk is moderate/high in this class of investment and it is
highly volatile as well.

One could buy gold and silver bars/coins or jewellery and

Invest in Gold exchange traded mutual funds.
Art
Investment into Arts is not every small investor’s first dream but having
invested into the first four, one could think of putting their money into art as
well. This should be on less priority as compared to the above four.

These broadly define the options available with investors for investing their
hard earned
money
What is meant by mutual funds?
Definition: A mutual fund is a professionally-managed investment scheme,
usually run by an asset management company that brings together a group of
people and invests their money in stocks, bonds and other securities.
Why do people buy mutual funds?
Mutual funds are a popular choice among investors because they generally
offer the following features:

 Professional Management. The fund managers do the research for you.

They select the securities and monitor the performance.
 Diversification or “Don’t put all your eggs in one basket.” Mutual funds
typically invest in a range of companies and industries. This helps to
lower your risk if one company fails.
 Affordability. Most mutual funds set a relatively low dollar amount for
initial investment and subsequent purchases.
 Liquidity. Mutual fund investors can easily redeem their shares at any
time, for the current net asset value (NAV) plus any redemption fees.
What types of mutual funds are there?
Most mutual funds fall into one of four main categories – money market
funds, bond funds, stock funds, and target date funds. Each type has
different features, risks, and rewards.

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  Money market funds have relatively low risks. By law, they can
invest only in certain high-quality, short-term investments issued by
U.S. corporations, and federal, state and local governments.
 Bond funds have higher risks than money market funds because they
typically aim to produce higher returns. Because there are many
different types of bonds, the risks and rewards of bond funds can vary
dramatically.
 Stock funds invest in corporate stocks. Not all stock funds are the
same. Some examples are:
Growth funds focus on stocks that may not pay a regular dividend
but have potential for above-average financial gains.
Income funds invest in stocks that pay regular dividends.
Index funds track a particular market index such as the Standard &
Poor’s 500 Index.
Sector funds specialize in a particular industry segment.
 Target date funds hold a mix of stocks, bonds, and other
investments. Over time, the mix gradually shifts according to the
fund’s strategy. Target date funds, sometimes known as lifecycle
funds, are designed for individuals with particular retirement dates in
mind.
What are the benefits and risks of mutual funds?
Mutual funds offer professional investment management and
potential diversification. They also offer three ways to earn money:

Dividend Payments. A fund may earn income from dividends on

stock or interest on bonds. The fund then pays the shareholders nearly
all the income, less expenses.
Capital Gains Distributions. The price of the securities in a fund
may increase. When a fund sells a security that has increased in price,
the fund has a capital gain. At the end of the year, the fund distributes
these capital gains, minus any capital losses, to investors.
Increased NAV. If the market value of a fund’s portfolio increases,
after deducting expenses, then the value of the fund and its shares
increases. The higher NAV reflects the higher value of your
investment.
All funds carry some level of risk. With mutual funds, you may lose
some or all of the money you invest because the securities held by a
fund can go down in value. Dividends or interest payments may also
change as market conditions change.

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 A fund’s past performance is not as important as you might think
because past performance does not predict future returns. But past
performance can tell you how volatile or stable a fund has been over
a period of time. The more volatile the fund, the higher the
investment risk.
What are Equity Funds?
The type of Mutual Fund schemes investing their assets into shares/stocks of
different companies across market capitalisation, with an objective of generating
higher returns are called Equity Mutual Funds. As regulated by SEBI, equity
oriented funds invest at least 65% of the corpus into Equity related instruments and a
minimum of 10% into debt. These funds are known for generating better returns as
compared to debt funds but riskier due to the dependency on market conditions.
On the basis of Market Capitalisation
According to the capital of the company, equity schemes are divided into-
 Large-Cap Funds: The investment schemes investing 80% of the
assets into shares/stocks of companies with large capital (the top
100). These companies perform more consistently than mid-cap and
small-cap companies
 Small-Cap Funds: The funds investing 65% of the total assets into
shares/stocks of companies which have a small capital and are listed
at 251st or below according to market capitalisation. These are highly
volatile funds but offer good returns in comparison to large & mid-
cap schemes.
 Mid-Cap Funds: Funds with 65% assets allocated into mid-cap
companies (placed between 101 to 250 in market capitalisation).
These schemes give better returns than large-cap funds but are more
volatile as well.
 Multi-Cap Funds: The schemes investing in large-cap, small-cap and
mid-cap funds in a wavering proportion. It is the responsibility of the
respective fund manager to rebalance and reallocate assets according
to market fluctuations
2. On the basis of Investment Strategy
According to the strategy of investment into Mutual Funds, schemes are further
divided as-
Sectoral Funds: The mutual funds which place the assets into particular sectors such
as Infrastructure, Technology, FMCG, Real Estate etc, are called sectoral funds.
 Thematic Funds: The pattern of investment oriented with an overall theme
with allocation into multiple sectors are called thematic funds. Some

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 examples of thematic funds are- Emerging Businesses Funds, International
Stocks etc.
 Focused Funds: These schemes follow a focused pattern by investing in a
maximum 30 stocks of a particular company
 Contra Equity Fund: These schemes analyse, evaluate and invest in the
stocks which are under-performing with an assumption that these stocks will
regain in the long term
3. On the basis of Tax Benefit
ELSS: Equity Linked Savings Scheme (ELSS) is a tax-saving equity fund with a
lock-in period of 3 years. ELSS works under a mandatory rule of having at least
80% of assets allocated into equities
Advantages of investing in Equity Funds
There are certain benefits tagged along the investments made into equity schemes,
for the investors willing to place their resources into these funds-
 Higher Returns – Equity Mutual Funds are known for accruing higher
returns than debt funds. According to historical returns, the investment
directed towards equities has always delivered inflation beating returns. The
investment value witnesses instant appreciation as and when the price of
stocks rise
 Diversified Portfolio – To minimise the intensity of risk, the investments are
exposed to different sectors across capitalisation. Indulging in a diversified
portfolio is always prudent because during bearish market situations, even if
some stocks undergo depreciation, the stocks outperforming make up for the
losses
 Professional Management – Every Mutual fund scheme is monitored by a
professional manager, with enough knowledge of the functioning of the
market. The fund manager undergoes critical analysis and makes crucial
decisions about asset placement to meet the goals of the scheme
 Tax Saving – There are tax saving and non-tax saving equity funds. Equity
Linked Savings Schemes (ELSS) are tax saving mutual funds offering tax
exemption of up to Rs.1.5 Lakh under Section 80(C) of the Income Tax Act,
1961. The subscribers can also save up to Rs.46,800 in taxes
 Investment costs are low – One can start investing into equity schemes with
a nominal cost of Rs.500 per month via Systematic Investment Plan (SIP).
Moreover, as updated by the Securities & Exchange Board of India (SEBI),
the expense ratio of 2.5% applied on equity funds are going to be reduced in
the near future
 Income from Dividends – Extra income can be earned by the subscribers in
the form of dividends as and when the equity funds deliver the same

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  Liquidity and Convenience – Availability of SIP and Lump sum option
makes the investment process convenient. Moreover, it is very easy to
redeem units of mutual funds in need. The investors are free to redeem their
share of units and the corpus gets credited to the respective bank account
within a week.

2. Industry/Company Overview

COMPANY PROFILE
In 2010 Mr. Ramdhari Hooda an ex govt. official started lending out funds to people
on an interest basis as private fund lender in Sonipat Haryana. In 2012, Mr.Yashvir
Singh who was working in Canada as PMS consultant, came back to India they
started venture together to provide PMS (Portfolio management Services) as they
saw that PMS are available to HNIs(HIGH NETWORTH INDIVIDUALS), so we
entered into Financial Sector, to cater PMS service offering different investments
avenues with motive to provide more financial stability to people who finds it
difficult . Our PMS services are not only available for High income class people but
common people.

DIRECTOR’S MESSAGE
“Our forefathers were used to save more money despite the income was less and the
fact that there were bigger families and expenses were higher as more number of
people were there and earning members were less; we were able to save but our
upcoming generation would not able to do even half of the saving we were able to
do in our lifetime so PMS services are one of the essential needs and we want to
make for not just High Network Individuals but also for common people as we want
everyone to have a better retirement and better life as they can achieve their
financials goals with ease and they should be prepared for the uncertain situation in
life ahead , as life is full of uncertainties so we want common people to be able to
sustain those uncertainties with ease.”

Vision and Mission of the Company

Our Mission
 Our mission is to provide intelligent, low cost, strategic asset allocation
strategies to help secure specific financial goals
Our Vision


We want to become our client’s trusted family financial partner providing
comprehensive financial solutions throughout their career and retirement
Our Culture

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  At Investosure, we believe in Fun at Work and Work – Hard and Party
-Hard.
Core Values
• Team Work
• Innovation
• Integrity

3.Literature Review

REVIEW OF LITERATURE
Jensen (1968) developed own measure known as Jensen’s alpha to examine the risk
portfolio risk adjusted performance and estimate the predictive ability of mutual
fund manager. The measure was based on the theory of the pricing of capital assets.
For this purpose sample of
115 open and mutual fund (for which net assets and dividend information available)
was taken for the period 1995-164. After applying the Jensen measure he concluded
that stock price could not be used to take any advantage. Similarly there is slight
evidence that an individual mutual fund can achieve returns than a portfolio
comprised of randomly selected shares.
McDonald (1973) developed a model to evaluate the investment performance of the
fund holding securities in two countries. For this purpose a sample of eight of the
oldest French mutual fund were taken. The monthly return of the fund were
calculated and analyzed for the period 1964-1969. The result showed that the funds
generally produced superior fund risk adjusts return and that the French market was
inefficient with respect to the completeness and speed of dissemination of
information. McDonald (1973) also found that the funds were generally able to
attain superior returns relative to naïve portfolio strategy.
Grinblatt and Sheridan (1992) conducted a research to analyze whether mutual
fund performance relates to past performance. For this purpose a sample of 279
funds was taken study divided the sample into five year sub periods and calculated
the abnormal returns of each fund for each five year sub period. Therefore study
concluded that the past performance of fund provides useful information for
investors who were considering an investment in mutual funds.
Martin et.al. (1993) to examine the performance of bond mutual fund sample of
bond fund first sample was designed to eliminate survivorship bias and was
comprise of 46 non municipal bond fund for the 10 tear period from beginning of
1979 to the end of 1988. The second sample consisted of all bond funds that existed
at the end of 1991. The result showed that bond funds underperform relevant indexes
post expenses.
Malkiel (1995) conducted a research to analyze the performance of equity mutual
funds for the period 1971 to 1991. For this purpose study involved a data set that

13
included the return from all mutual funds in existence in each year of the period.
Study also examined the fund return in the capital of the assets pricing models.
Miler and Nicholas(1980) conducted a research examine the risk return
relationship in the presence of nonstationarity in order to obtain more precise
estimate of alpha and beta. For this purpose this study applied partition regression
and a partition selection rule for estimating the traditional capm in case of
nonstatinarity. On other hand results solved some weak positive relationships and
some weak positive relationship between betas and alpha. However, no general,
statistical significant relationships of either type were.
Carlson (1971) conducted a research to analyze the predictive valve of past result in
forecasting future performance of mutual fund. For period 1948-1667 the author also
examined the efficiency of the market and identified the factors related to the fund
performance. In order to analyze the performance regression was used .The result
provide empirical support to the return risk postulate of the capital assets pricing
model and concluded that whether mutual fund outperform the market depend on
the selection of both the time period and market proxy and market the author also
concluded past performance showed.
Arditi (1971) criticized the reward to variability criterion proposed by Sharpe
(1966) on the ground that it utilized only the first two movements of the probability
distribution of return. Author proposed that third movement, a measure of direct and
size of the distribution tail, be included in the analysis. Arditti (1970) further argued
that investor preferred positive skewness because positive skewness implied greater
probability of high return. The skewness of the Dow Jones industrial average return
distribution was significantly less than fund skewness.

4.Research Objectives and Hypothesis

Objective of the Research

 To study Investors perception towards Mutual Fund and Equity.
 To provide feasible solutions on the basis of the findings of the study.
 To identify the investor‟s attitude towards mutual fund.
 To study about the factors responsible for the selection of mutual funds as
investment option.
 To study and rank the factor having implication on attitudes of investor
towards mutual fund.

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 5.Research Methodology

Research Matheodlogy
To study the Investors perception towards Mutual Fund and Equity the primary and
secondary data has been collected. The collected data has been analyzed and
interpreted by Fishers Test, Kruskal Walis H Test and graphical representation. The
structured questionnaire was prepared to collect the primary data from the investors.
During the survey the questionnaire was handed over to respondents and they were
asked to return the filled questionnaire after completion. The secondary data were
collected from the books, records, and journals. An aggregate of 90 respondents
responded to the questionnaire in Uttar Pradesh.

SOURCES OF DATA
Primary data:- Primary data are those which are collected a fresh and for the first
time, and thus happen to be original in character . It was collected through
questionnaie and Google forms.

Secondary data:- The secondary data are those which have already been collected
by someone else and which have already been through the statistical process. The
data were collected in the form of company profile and produce profile from the web
sites and news paper. Some of the books were referred for theoretical concepts

15
6.Data Analysis and Interpretation of Findings

Data Analysis and Interpretation

Age-wise Classification

The age is the deciding personal factor that influences the clients towards the
investment decisions. It is a factor that always helps the investors in deciding the
investments avenues, interest in making investments, etc., Hence the classification of
the respondents are made on the basis of their age and presented in the table.
Table 6.1
Age-wise Classification

Percentage
Particulars No. of respondents (n=300)
(100%)
Below 25 yrs 53 17.7
26 to 35 yrs 84 28.0
36 to 45 yrs 107 35.7
46 to 55yrs 53 17.7
Above 55yrs 3 1.0
Source: Primary Data

Inference

Out of the total 300 respondents of Tata Mutual Funds, 53 respondents (17.7 %) are
between the age group of below 25 years; 84

respondents (28 %) are between the age group of 26 to 35 years; 107

respondents (35.7 %) are between the age group of 36 to 45 years; 53

respondents (17.7 %) are between the age group of 46 to 55 years and the rest of 3
respondents (1 %) are at the age group of above 55 years.

It is inferred and concluded from the above that the most of 107

respondents (35.7 %) are at the age group between 36 to 45 years. It is also known
that the middle age group people are interested in making their investments for
future emergence and living.

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 Graph 6.1

Age-wise Classification

Gender-wise classification

Gender wise classification helps significantly in better understanding people’s

awareness and interest towards investment options. Hence, the classification of the
gender of the respondents is made and presented in the table.

Table 6.2
Gender-wise Classification

Percentage
Particulars No. of respondents (n=300)
(100%)
Male 225 75.0

Female 75 25.0
Source: Primary Data

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Inference

It is inferred from the above table that the male respondents are 225 (75 %) among
the total 300 respondents. It is an overwhelming majority that makes up 3/4th of the
total number of respondents. The rest, 75 (25 %) respondents are female and
comprise 1/4th of the total respondents.

It is also inferred that the interest of the respondents is known mostly from the male
respondents. This exhibits their perception towards Tata Mutual Funds and the
benefits that could be derived from their investments with Tata Mutual Funds. It is
concluded that the maximum of 225 respondents (75 %) of the total are male in
gender.

Graph 6.2

Gender-wise Classification

Classification based on Marital Status

The marital status is a limiting and influencing factor of the people towards making
their investments. Due to family constraints and needs the people want to make their
investments. In this regard the classification of the respondents on the basis of their
marital status is presented in the table below.

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 Table 6.3
Marital Status

Percentage
Particulars No. of respondents (n=300)
(100%)
Single 168 56.0

Married 132 44.0

Source: Primary Data

Inference

Among the total 300 respondents 168 respondents (56 %) are unmarried and
bachelors; 132 respondents (44 %) are married and family people. They have known
about the Tata Mutual Funds and the benefits of the investments with Tata fund
managers.

It is inferred and concluded that out of the total 300 respondents,

168 respondents (56 %) are unmarried and bachelors. This shows their personal
interest for the social status and investments with Tata Mutual Funds.

Graph 6.3

Marital Status

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Occupation-wise classification

The occupation of the respondents is the next significant deciding factor for the
investments. In this connection, the respondents are classified on the basis of their
occupation and presented in the table below.

Table 6.4
Occupation wise classification

Particulars No. of respondents (n=300) Percentage

Service 43 14.3
Business 69 23.0
Professional 93 31.0
Retired 59 19.7
House wife 26 8.7
Others 10 3.3
Source: Primary Data

Inference

Among the total 300 respondents, 43 respondents (14.3 %) are doing service works;
69 respondents (23 %) are doing their own business; 93 respondents (31 %) are
professionals in different fields; 59 respondents (19.7 %) are retired people; 26
respondents (8.7 %) are housewives; and 10 respondents (3.3 %) are otherwise
engaged.

It is inferred that the maximum of 93 respondents (31 %) of the total are

professionals and are following professions in different fields.

They are also very much interested in doing their investments at Tata Fund
managers.

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 Graph 6.4 Occupation wise classification

Income wise classification

The income of the people is an essential factor that influences and motivates them
for making their investments. The Tata Mutual Fund investors are classified on the
basis of their income per annum and presented in the table below.

Table 6.5
Income wise classification

No. of respondents
Particulars Percentage
(n=300)
Below 1.5 lakh 89 29.7
1.5 to 5 lakh 93 31.0
5 to 10Lakh 103 34.3
Above 10 lakh 15 5.0
Source: Primary Data

Inference

Out of the total 300 respondents, 89 respondents (29.7 %) are earning below Rs.1.5
lakhs; 93 respondents (31 %) are earning between

Rs.1.5 to Rs.5 lakhs per annum; 103 respondents (34.3 %) are earning Rs.5 to 10
lakhs annually and the rest of 15 respondents (5 %) are earning Rs.10 lakhs and
above annually.

21
It is inferred and concluded that the maximum of 103 respondents (34.3 %) of the
total are earning annually Rs.5 to 10 lakhs. They have also had the investments
proposal for their future in different segments.

Graph 6.5

Income wise classification

Importance of Financial Planning

The respondents are asked about financial planning and its importance for life goals.
They responded towards it both positively and negatively. Their opinions are
presented in the table below.

Table 6.6
Importance of Financial Planning

Particulars No. of respondents (n=300) Percentage

Yes 139 46.3
No 161 53.7
Source: Primary Data

Inference

Among the total 300 respondents of Tata Mutual Funds, 139 respondents (46.3 %)
accepted and said that financial planning is important for their life goals. But the rest
of 161 respondents (53.7 %) did not accept the statement and said that the financial
planning is not at all important for their life goals.

22
From the above, it can be inferred that the maximum of 161 respondents (53.7 %) of
the total said that they are not interested in financial planning for their life goals and
also that they had not yet understood the importance. Even then they do some
investments with Tata Mutual Funds is a surprise and it reflects their perception.

Graph 6.6

Importance of Financial Planning

Plan for Investments

The respondents are required to present their opinion about their plan of investments
in Tata Mutual Funds. Their opinions are drawn and presented in the table for
inferring.

Table 6.7
Plan for Investments

Particulars No. of respondents (n=300) Percentage

Yes 137 45.7

No 163 54.3
Source: Primary Data

Inference

Among the total 300 respondents of Tata Mutual Funds, 137 respondents (45.7 %)
said that they planned for their investments with Tata Mutual Funds in future. But
the rest of 163 respondents (54.3 %) said that they have not planned yet for any

23
investments with Tata Mutual Funds. This shows that it is either non interest or non
awareness of the mutual funds investments.

From the above table, it could be inferred that the maximum of

45.7% (137 respondents) of the respondents have planned for their investments with
Tata Mutual Funds and the rest of them have not yet planned for the same.

Graph 6.7

Plan for Investments

Priority for Investments

The respondent’s awareness on investments with Tata Mutual Funds and their
priority for investments has been drawn and presented in the table. The prioritization
of investments is given significance and opinions are inferred.

Table 6.8
Priority for Investment
Particulars No. of respondents (n=300) Percentage
Returns 84 28.0
Lower risk 70 23.3
Liquidity 94 31.3
Convenience 52 17.3
Source: Primary Data

24
Inference

Out of the total 300 respondents, 84 respondents (28 %) have prioritized the returns,
70 respondents (23.3 %) have prioritized the lower risk; 94 respondents (31.3 %)
have preferred the liquidity as priority; and the rest 52 respondents (17.3 %) have
preferred the convenience as priority for their investments with Tata Mutual Fund

Management.

One could infer from the above that, the priority is given to the liquidity by 94
respondents (31.3 %) of the total. They prefer to have the liquid funds always with
them.

Graph 6.8

Priority for Investment

Importance for Investments

The importance for the investments of the respondents are drawn with reference to
Tata Mutual Funds and presented here for the reference. When the people invest
there will be an importance of social events such that, they may help the investors in
any of the way.

Table 6.9
Importance for Investments
Particulars No. of respondents Percentage
(n=300)
Safety 82 27.3
Tax benefits 69 23.0
Low cost 94 31.3
Professional 55 18.3
management
Source: Primary Data

25
Inference

Out of the total 300 respondents, 82 respondents (27.3%) have signified the safety as
a phenomena for their investments; 69 respondents (23%) have given significance to
the tax benefits, that they could avail with their financial activity; 94 respondents
(31.3%) have given importance to the low cost; high benefit from the investments;
and the rest of 55 respondents (18.3%) of the total have given significance to the
professional management of their investments.

It is inferred from the above table that the most of 94 respondents (31.3%) of the
total have given importance to the low cost; high benefit for their investments. The
next is safety preferred by 82 respondents (27.3%) of the total.

Graph 6.9
Importance for Investments

Preferable investments

The people prefer the investments according to their needs and income. Also they
want to mobilize their funds to the maximum in a short span. Hence, they prefer to
invest in several short term financial activities of Tata Mutual Funds. In this view,
the preference of the respondents towards their investment is presented in the table
below.

Table 6.10

Preferable investments

No. of
Particulars respondents Percentage

26
 (n=300)
An investment offering high growth rate of
139 46.3 return but
not a steady revenue
An investment offering lower return funds
161 53.7 but steady
revenue
Source: Primary Data

Inference

Among the total 300 respondents, 139 respondents (46.3 %) of Tata Mutual Funds
have preferred an investment offering high growth rate of return but not long term;
and the rest of 161 respondents (53.7 %) have preferred an investment offering
lower return funds but steady revenue for the investments.

It is concluded that the maximum of 161 respondents of the total (53.7 %) have
preferred an investment offering lower return funds; the steady revenue providing
funds, etc., due to the consistency and continuity of their requirements.

Graph 6.10

Preferable investments

Feel about the risk of investments

The people always think that the investments are very risky in the capital market and
money market. This is due to the volatility of the market conditions. In this view, the

27
clients and respondents of Tata Mutual Funds are consulted to draw their opinion on
the risk existing.

Table 6.11

Feel About the risk of Investments in Mutual Funds

Particulars No. of respondents (n=300) Percentage
Yes 120 40.0
No 100 33.3
Partly 80 26.7
Source: Primary Data

Inference

Among the total 300 respondents, 120 respondents (40.0 %) have said that the
investments in mutual funds are risky; 100 respondents (33.3 %) have said that the
investments in mutual funds are not risky; and the rest of 80 respondents (26.7 %)
have felt that the investments in mutual funds are partly risky with Tata Mutual
Funds.

It is inferred and concluded that the investments in Tata Mutual Funds are risky. It is
felt by 120 respondents (40 %) of the total and very less felt that it was partly risky.

Graph 6.11

Feel About the risk of Investments in Mutual Funds

Flexibility and convenience for investment in Mutual Funds

The investors would like to invest their funds in mutual funds which offer flexibility
and convenience. This is because of the terms and conditions that the fund managers
offered. Particularly the Tata Mutual Funds offer the flexibility and convenience for
28
the investors. Hence the opinion of the investors are drawn and presented in the
table.

Table 6.12

Flexibility and convenience for investment in Mutual Funds

Particulars No. of respondents (n=300) Percentage
Yes 118 39.3
No 101 33.7
Partly 81 27.0
Source: Primary Data

Inference

Among the total 300 respondents, 118 respondents (39.3 %) have accepted that the
mutual funds offer flexibility and convenience for investments; 101 respondents
(33.7 %) have said that the funds do not offer the flexibility and convenience and the
rest of 81 respondents (27 %) have partly accepted that the funds are offering the
flexibility and convenience.

It is inferred that the majority of respondents of 118 (39.3 %) from the total have
accepted that the funds offer the flexibility and convenience for investments,
particularly the Tata Mutual Funds.

Graph 6.12

Flexibility and convenience for investment in Mutual Funds

29
Benefit associated with Mutual Funds

The investors seek the benefits from the mutual funds. They would determine the
benefits that are closely associated with mutual fund investments. In this regard the
opinions of the sample respondents are extracted and presented in the table below.

Table 6.13

Benefit associated with Mutual Funds

Particulars No. of respondents Percentage
(n=300)
Portfolio diversification 121 40.3
Professional management 99 33.0
Risk reduction 80 26.7
Source: Primary Data

Inference

Among the total 300 sample respondents of tata Mutual funds, 121 respondents
(40.3%) have chosen the mutual funds for portfolio diversification; 99 respondents
(33.0%) have said that the professional management of the fund managers are
closely associated with Tata Mutual Funds and the rest of 80 respondents (26.7%)
have said that the risk reduction as the benefits associated with the mutual fund
investments.

It is inferred that the majority of 121 respondents of (40.3%) the total have said that
the diversification of portfolio is the benefit associated with the mutual funds as an
investment particularly in Tata Mutual Funds.

Graph 6.13

30
 Benefit associated with Mutual Funds

Awareness on Plans

The individual investors would like to know the specific plans of investments of
mutual funds. They would be aware of the plans and how to execute it in minimum
time. In that way, the opinions of the investors are drawn and presented in the table.

Table 6.14
Awareness on Plans
Particulars No. of respondents Percentage
(n=300)
Tax plan 90 30.0
Pension plan 60 20.0
Retirement plan 70 23.3
Children saving plan 80 26.7
Source: Primary Data

Inference

Out of the total respondents of 300 Tata Mutual Fund companies, 90 respondents
(30.0 %) prefer the tax plans; 60 respondents (20.0 %) prefer the pension plans; 70
respondents (23.3 %) prefer the retirement plan and 80 respondents (26.7 %) prefer
children savings plan. The respondents are aware of the above plans according to
their need and comfort.

It is finally inferred and concluded that the majority of 90

respondents (30.0 %) of the total are aware of the tax plan, that render the benefit to
the people at the time of return submission with IT department. The next preference
of the respondents is children’s savings plans (26.7 %).

31
aph 4.Awareness on Plans

32
Annual Savings

The savings is the fundamental financial strength of every individual. How it is

saved is the other part. It is also important in making the money saved at elsewhere,
for that the annual amount of savings is signified. In that way, the respondents are
asked a question regarding their annual savings and presented below.

Table 6.15
Annual savings

No. of respondents
Particulars Percentage
(n=300)
Below Rs.10000 118 39.3

Rs.10000 to 20000 91 30.3

Rs.20000 to 30000 75 25.0

Above Rs.30000 16 5.3

Source: Primary Data

Inference

Among the total 300 respondents, 118 respondents (39.3%) save annually upto
Rs.10000 in investment avenues; 91 respondents (30.3%) save Rs.10000 to
Rs.20000 annually; that too to suit their income; 75 respondents (25.0%) save
33
Rs.20000 to Rs.30000 annually for their future and 16 respondents (5.3%) save
Rs.30000 and above annually.

It is concluded that the majority of 118 respondents of the total (39.3%) save
Rs.10000 and below annually, that shows the poor interest of the respondents in
savings for the future. The next limit of saving amount is Rs.10000 to Rs.20000 by
91 respondents (30.3%)

Graph 6.15
Annual savings

Knowledge on Financial Liberalisation

Financial liberalization is concerned with making funds employed in the

organization attractively for all the activities. This would help the corporate and
others for promotion of business. This may be done with issuance of slips, stocks,
funds, etc. and may be collected from the general public at the minimum cost. This
is a policy, on which the opinions aredrawn from the respondents regarding their
knowledge and presented below.

Table 6.16

34
 Knowledge on Financial Liberalisation
Particulars No. of respondents (n=300) Percentage

High 125 41.7

Moderate 98 32.7

Low 77 25.7
Source: Primary Data

Inference

Out of 300 respondents, 125 respondents (41.7%) had high knowledge about
financial liberalization; 98 respondents (32.7%) possessed a moderate knowledge
and the rest of 77 respondents (25.7%) had acquired a low level knowledge on the
financial liberalization.

Hence, it is concluded that the majority of 125 respondents (41.7%) of the total, had
a high level knowledge on financial liberalization, so that it would help them to
choose the investment avenues. The second stage is moderate knowledge, possessed
by 98 (32.7 %) of the total respondents.

Graph 6.16
Knowledge on Financial Liberalisation

35
Investment as a percentage of income

The income earning capacity of every individual is a direct component to decide

about their savings. The savings of the individuals are rated on their total earnings of
income. In this way, the rate of income towards the investments of Tata Mutual
Fund investors are drawn and presented for analysis as below.

Table 6.17

Investment as a percentage of Income

Particulars No. of respondents (n=300) Percentage
5 to 10% 89 29.7
11 to 15% 59 19.7
16 to 20% 71 23.7
Above 20% 81 27.0
Source: Primary Data

Inference

Out of the total 300 respondents, 89 respondents (29.7%) said that they invest 5% to
10% of their income, 59 respondents (19.7%) have said that they invest 11 to 15% of
their income, 71 respondents

(23.7%)have said that they invest 16 to 20% of their income; and the rest of 81
respondents (27 %) have said that they invest 20% and above of their income.

Hence, it is concluded that the majority of 89 respondents (29.7 %) of the total have
said that they invest 5 to 10% of their income, followed by those who invest above
20% of income represented 81 respondents (27%) of the total.

Graph 6.17
Investment as a percentage of Income

36
Reasons for Investments

The investors and the general public would prefer investment avenues according to
their interest and needs. This may be the reason for their investments and that would
be the basis for investment avenues too. Hence, the researcher has collected the
views of the respondents

regarding the reasons for their investments and presented below.

Table 6.18
Reasons for investments

Particulars No. of respondents Percentage

(n=300)
Capital gains 90 30.0
Safety of investment 84 28.0
Tax benefits 30 10.0
Generate Regular Income 24 8.0
Capital Appreciation & 36 12.0
Bonus
Others 36 12.0
Source: Primary Data

Inference

Out of the total 300 Tata Mutual Fund investors, 90 respondents (30%) have said the
capital gains as the reason for investing; 84 respondents (28%) gave the safety of

37
investments as the reason; 30 respondents (10%) said tax benefits was the reason; 24
respondents

(8%) said they invested in order to generate regular income; 36 respondents (12%)
said the reason was capital appreciation and bonus and the rest of 36 respondents
(12%) said others as reason for their

investment.

Hence, it is inferred that most of 90 respondents (30%) have given the capital gains
as reasons for their investment among the total and the safety of investment as a
reason follows, expressed by 84

respondents (28%) of the total.

Graph 6.18 Reasons for investments

Risk Tolerance Level

The risk is the determination and broad view of the investors to go forward with
their investments by crossing many hurdles, such as association of risk is normally
found with all investment avenues. That may either be taken or not by the investors
according to their individual self. Hence, the opinion of the respondents are drawn
and presented regarding their risk tolerance level.

38
 Table 6.19
Risk Tolerance Level

Particulars No. of respondents (n=300) Percentage

High Risk 90 30.0
Moderate Risk 59 19.7
Low risk 69 23.0
No Risk 82 27.3
Source: Primary Data

Inference

Out of the total 300 respondents, 90 respondents (30%) level of the risk tolerance is
high risk tolerance level; moderate risk tolerance level is with 59 respondents
(19.7%), 69 respondents (23%) would take only low risk tolerance level; and the rest
of 82 respondents (27.3%) of the total came into the no risk level of tolerence.

It is inferred and concluded that the maximum of 90 respondents (30%) of the total
would prefer to take and cross the high risk tolerance level due to their interest in
investments followed by 82 respondents (27.3%) of the total who would not take any
risk, i.e., no risk tolerance level.

Graph 6.19 Risk Tolerance Level

Rate of risk taken as a percentage of investment

The risk taken by the respondents are different. The risk level is also different. The
respondents of Tata Mutual Fund companies say what rate of risk they could take for
their investments in different avenues.

39
Their opinions are presented in the table below.

Table 6.20

Ho: There is no significant association between the marital status of the respondents
and the importance of financial planning for life goals

H1: There is a significant association between the marital status of the

respondents and the importance of financial planning for life goals
Financial planning is important
Sl.n Marital Statistical
for life goals
o status inference
Yes (n=139) No (n=161)
1 Single 78(56.1%) 90(55.9%)  =.001 Df=1
2

2 Married 61(43.9%) 71(44.1%) .970>0.05

Not Significant

Inference

The calculated value of Chi-square is 0.001. The table value for 1 degrees of
freedom at 5% significance level is 0.970. Since the calculated value is less than the
table value, the null hypothesis is accepted. Hence, it is concluded that there is no
significant association between the marital status of the respondents and the
importance of financial planning for life goals. Thus, the marital status does not
determine the investments for life goals.

Ho: There is no significant association between the occupation of the respondents

and the importance of financial planning for life goals

H1: There is a significant association between the occupation of the respondents and
the importance of financial planning for life goals

40
 Financial planning is important
Sl.n Occupation for life goals Statistical
o Yes (n=139) No (n=161) inference
1 Service 28(2.1%) 15(9.3%)
2 Business 22(15.8%) 47(29.2%)
3 Professional 44(31.7%) 49(30.4%) 2=12.342
Df=5
4 Retired 29(20.9%) 30(18.6%) .030<0.05
Significant
5 House wife 11(7.9%) 15(9.3%)
6 Others 5(3.6%) 5(3.1%)

Inference

The calculated value of Chi-square is 12.342. The table value for 5 degrees of
freedom at 5% significance level is 0.30. Since the calculated value is greater than
the table value, the null hypothesis is rejected. Hence, it is concluded that there is a
significant association between the occupation of the respondents and the
importance of financial planning for life goals. Because the occupation alone makes
every individual to invest their earnings in financial and money markets.

Ho: There is no significant association between the income of the respondents and
the importance of financial planning for life goals

H1: There is a significant association between the income of the respondents and the
importance of financial planning for life goals

Financial planning is important Sl.no Income for life goals

Statistical Yes (n=139) No (n=161)
inference
Below 1.5

1 47(33.8%) 42(26.1%) lakh

1.5 to 5 2
=2.204 Df=3 2 40(28.8%) 53(32.9%)  lakh
5 to .531>0.05 3 45(32.4%) 58(36%) Not Significant
10Lakh

Above 10
4 7(5%) 8(5%) lakh

41
Inference

The calculated value of Chi-square is 2.204. The table value for 3 degrees of
freedom at 5% significance level is 0.531. Since the calculated value is greater than
the table value, the null hypothesis is rejected. Hence, it is concluded that there is a
significant association between the income of the respondents and the importance of
financial planning for life goals.

Ho: There is no significant association between the income of the respondents and
the importance for investments in mutual funds

H1: There is a significant association between the income of the respondents and the
importance for investments in mutual funds

Importance of investing
Tax Professional Statistical
Sl.no Income Safety Low cost benefits management
inference
(n=82) (n=94)
(n=69) (n=55)
Below
1 23(28%) 24(34.8%) 24(25.5%) 18(32.7%)
2
1.5 lakh
 =6.335
1.5 to 5
2 27(32.9%) 20(29%) 31(33%) 15(27.3%) Df=9 lakh
5 to .706>0.05
3 28(34.1%) 24(34.8%) 31(33%) 20(36.4%) Not
10Lakh
Significant Above
4 4(4.9%) 1(1.4%) 8(8.5%) 2(3.6%)
10 lakh

Inference

The calculated value of chi square is 0.706 and the table value is 0.05, which is less
than the calculated value. Hence, it is decided that there is no significant association
between the Income of the respondents and the importance for investments in mutual
funds.

42
Ho: There is no significant association between the sources of income of the
respondents and the importance for investments in mutual funds

H1: There is a significant association between the sources of income of the

respondents and the importance for investments in mutual funds

Importance of investing Source

Sl.no of Safety benefitsTax Low cost managementProfessional

Statistical
inference income (n=82) (n=94)

(n=69) (n=55)
1 Salaries 23(28%) 19(27.5%) 25(26.6%) 13(23.6%) 2=1.024
Df=6
2 Business 29(35.4%) 28(40.6%) 38(4.4%) 23(41.8%) .985>0.05
Not
3 Others 30(36.6%) 22(31.9%) 31(33%) 19(34.5%) Significant

Inference

The calculated value of chi square is 0.985 and the table value is 0.05, which is less
than the calculated value. Hence it is concluded that there is no significant
association between the sources of income of the respondents and the importance for
investments in mutual funds.

43
7.Conclusion

Mutual funds are the better option for the investors but the awareness of investors in Belgaum
region of Karnataka state is moderate as for as various mutual fund schemes are concerned. It
has been noticed during the study that there is a huge potential of prospective investors which
has untapped at its fullest. If mutual fund agencies and stock marketers conduct and organizes
more seminars, workshops then the investors come forward to invest in various mutual fund
schemes and equities. The number of broker advisors should be increased in order to create
awareness about their stock brokering services to attract new customers/investors. Investors have
the perception that risk in equity is higher than mutual funds. So the company should publish
monthly chronicle, supply to investor providing detailed information by proving market
updating. To create the awareness about the different products of mutual funds and not about the
generic product. Since investors, investment decision is based on study of different sources of
information SHCIL should start giving advertisement in business newspaper, in media, internet
and also in business magazine.

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1. Arditti (1971), another look at look at mutual fund performance, journal of finance
quantitative analysis, vol.6, pp.909-912.

2. Carlson (1970), aggregate performance of mutual fund, the journal of finance and quantitative
analysis, vol.5, pp.11-32

3. Donald Tull and Hawkins(1984),“Marketing Research” 3rd edition, Macmillan,

ISBN:0024217808

4. Grinblatt and Sheridan (1992), the persistence of mutual fund performance, The journal of
finance vol.47, issue no. 5

5. Jenson (1968), the performance of mutual funds in the period 1945-1964, journal of Finance,
Vol.23, pages 21-36.

6. Malkiel (1995) returns from investing in equity mutual funds 1971 to 199, journal of finance
vol.50, issue no.2, pp.549-572

7. Martin et al. (1993) efficiency with costly information: a reinterpretation of evidence from
managed portfolios, review of financial studies vol.6, issue no.1, pp.1-22.

8. McDonald (1973), Market timing and mutual fund performance: an empirical investigation
the vol.47, issue no. 5.
44
9. Miler and Nicholas(1980): The performance of investment grade corporate bond fund:
Evidence from market, The European journal of finance, vol.15 issue 2, pp.191-209 10.
Punithavathy Pandian “Security analysis and Portfolio management”, Vikas Publishing House,
edition 1, ISBN:8125910840 11. www.shcil.com 12. www.nseindia.com 13. www.bseindia.com
14. www.moneycontrol.com 15. www.mutualfundsindia.com

45