Summer Internship Project Report

on
“A STUDY ON INVESTOR’S PERCEPTION TOWARDS
MUTUAL FUNDS WITH SPECIAL REFERENCE TO
JUNAGADH CITY”

At
MONARCH NETWORTH CAPITAL LTD.

Prepared by:
Vrutisha Bhuva
187380592009
MBA (Semester - III)
Noble Group of Institutions, Junagadh

Guided by:
Prof. Kailash Naghera
FLOW OF THE PRESENTATION
 Introduction to Industry
 Introduction To Company
 Company Profile
 Product & Services
 SWOT Analysis
 Porter’s Five Force Model
 Introduction of Topic
 Review of Literature
 Statement of Problem
 Scope of Study
 Research Methodology
 Data Analysis & Interpretation 2
 Results & Findings

INTRODUCTION OF INDUSTRY
Concept of Mutual Fund
 A mutual fund is a professionally managed
investment fund that pools money from many
investors to purchase securities like stocks, bonds etc.

 A mutual fund is a trust registered with the Securities

and Exchange Board of India (SEBI).

 A mutual fund have a fund manager who invests the

money on behalf of the investors by buying/selling
3
stocks, bonds etc.
Organization structure of Mutual
fund
INVESTORS POOL
THEIR FUNDS

RETURNS ARE
INVEST IN MUTUAL
PASSED BACK TO
FUNDS
INVESTORS

INVESTMENTS MFs INVEST IN

GENERATES SECURITIES /BONDS
RETURNS ETC. 4
 INTRODUCTION OF COMPANY
 Monarch Networth Capital could be a strategic
merger of two leading monetary service suppliers
Monarch Group of Companies and Networth Stock
Broking Ltd.

 The Monarch Networth Capital is an ISO certified

company that has been scaling new heights, only
due to the trust placed on us by our clients and
investors.

 We have always believed in building a knowledge5

bank to bring about a progressive change for all
our customers and stakeholders.
MILESTONES

 Get Merchant Banking License in 2013

 Get Award for Go Green Initiative of NSDL Star

Performer in 2014
 Top Performance in Cash Market NSE 2015-2016

 Launched Super fast on-line trading application

“Moneymaker” in 2017
 Awarded by NSE for best regional Retail Broker

2018
 Network of +1003 Sub-Brokers, more than 690+

employees, 70+ Branches with more than

6
226100 clients across India
 COMPANY PROFILE
Company Name MONARCH NETWORTH CAPITAL LTD.
CIN L65920MH1993PLC075393
ROC Mumbai
Registration No. 75393
Company Category Company Limited by Shares
Company Sub-
Non-Government Company
Category
Class of Company Public
Date of Incorporation 2nd December 1993
Authorized Capital Rs.41,50,00,000
Paid up Capital Rs.30,31,16,000
Date of Last AGM 28th September 2018
7
 PRODUCT & SERVICES
The Products & Services offered and provided by
MNCL are as follows.

 Equity and Derivatives

 Commodities

 IPO

 Mutual Funds

 Bond & FD

 Life Insurance

 General Insurance
8
 Depository Services
SWOT ANALYSIS

Opportunitie
Strength Weakness Threats
s

• Experience • Inefficien • Awareness • Government

• Client t • Paperless Policies
Oriented Manpowe • SEBI
solutions
• Techniques r Regulations
• Best
Methodolog
y
• Financial
Excellence

9
PORTER’S 5 FORCES MODEL
Threat of
New
Entrants
HIGH

Degree of Supplier
Competitio Power
n HIGH LOW
Porter's
5 Forces

Buyer Threat of
Power Substitutio
HIGH n HIGH
10
INTRODUCTION OF TOPIC
 Mutual fund is investment vehicle which pool money
from different investors for diversifies the holdings
and increase buying power of the investors.

 There are four main schemes of mutual funds which

are as follows.
1. Equity fund means it is 100% investing in share
market which is fully risky.
2. Balance fonts are 50% risky and 50% risk free
3. Debt fund are 100% risk free like Bank deposits.
4. Sector funds are like automobile, Pharma and 11
infrastructure funds which are our also 100% risky.
 Advantages:
 Diversification
 Expert Management

 Liquidity

 Convenience

 Re-investment of Income

 Affordability

 Risk Reduction

Disadvantages:
 No control over Portfolio
 Capital Gain

 Fees and Expenses

12
 Over Diversification

 Cash Drag
REVIEW OF LITERATURE
 Vipin K., Preeti B. (2014)

The study concentrated on factors which are

highlights investor's perception towards mutual
funds. It was concluded that investors used to quit
the funds and do not continue more than three years
which are not giving expected result. The investors
not have enough knowledge about mutual funds and
still go for the bank and post office deposits. In
investor's list, the top priorities are equity option and
SIP mode of investment. It also found that the
investor was depended on their broker for their work.
Also found that most of the investors are not analyze
13
their risk in investment.
 Priyanka S., Payal A. (2015)

From the research conclusion is that the Mutual

fund business is not so good. So, some
particular efforts are needed. It is also
concluded that in market mutual funds should
too easy to sell & buy directly or through broker.
There are also some drawbacks like too many
formalities, difficult to select, low awareness
etc. The study reveals that flexibility, liquidity,
service quality, tax saving and transparency
etc. are the factors which create very high
effect perception of investor.
14
 Prithi M. (2016)

The conclusion of the study is that the people are

not ready to go with Mutual fund because of risk
perspective rather people want to go with the
other investment option which are comparatively
less risky like recurring deposits and so on. Also
the level of awareness towards mutual fund in the
investors are very low due to partial knowledge of
mutual funds which prevent them to invest also to
avoid fear of losing money and risk bearing factor
as well. Most of the investors prefer banker we
can say fixed deposit as an investment option
because of less risk and no fear of losing money.
15
 Subbalakshmi A., Balachandar R. (2017)

The researchers focus on the number of factors

which highlight the investor's perception. Also the
reason behind the discontentment for investing in
mutual fund. The study concluded that there is still
lack of awareness in people for mutual fund
investment and schemes related to the mutual
fund. The most important point reflects is the lack
of reliability and confidence about mutual funds.
Because mutual funds are subject to market rates.
Also come to know that banks of India give fixed
return for specified time while it is not possible for
mutual fund as it has direct relationship with
16
market situation.
 Ankit G.

The study concluded that the main reason for

limited growth of mutual fund in India is only less
awareness of benefits of it. Also very large
number of schemes is available in the mutual
fund so that investors are getting confused in
selecting appropriate scheme. At present, the
rate of return in the rate of return in traditional
investment either bank or post office or any other
options are shrinking day by day, so that mutual
fund investments are helping to boome the return
and therefore mutual fund are proved better to
fulfill the financial goal of investment.
17
STATEMENT OF PROBLEM
Research problem:
 The aim of the study is to examine the investor’s
perception and attitude towards mutual funds.

Research Objectives:
 To know the investors view about mutual funds.
 To know the awareness towards mutual funds in
people of Junagadh city.
 To know the factors which affect the investors to
invest in mutual funds.
 To find out the factors affecting selection of mutual
fund as an investment option. 18
SCOPE OF STUDY
 Provides the complete information about all close
competitors in Mutual fund investment.

 Provide key information about the investor’s

preference and perception about mutual funds.

 Provide information about prospective investors.

 Provides the AMC a feedback from customers

regarding their problems and perception about
investing in Mutual Funds. So, they can improve
their services. 19
RESEARCH
METHODOLOGY
Research Design:
 This research is based on descriptive research design. The
intention of the study is to describe the investor’s
perception towards Mutual Funds with special reference to
Junagadh city.

Research Process:
 Formation of Objective
 Literature Review
 Questionnaire Development
 Collection of Data
 Analyzing and Interpretation of data 20

 Conclusion
Sampling Method:

 Sampling Method : Convenient Method (Non-Probability )

 Sample Size : 175
 Sampling Area : Junagadh

Data Collection:

 Primary data:
A well-developed questionnaire is used for primary data.

 Secondary data:
Website of company, literature paper etc. are used for
secondary data.
21
 DATA ANALYSIS &
INTERPRETATION
Monthly Income
Frequency Percent
Below 10,000 25 14.3
10,000 - 25,000 63 36.0
25,000 - 50,000 57 32.6
Above 50,000 30 17.1
Total 175 100.0

Monthly Income

17% 14%

Below 10,000
10,000 -
25,000
25,000 -
50,000
Above 50,000
33% 36%
22
How many % of income you save?
Frequency Percent
0% 14 8.0
Less than 10% 77 44.0
10% to 25% 65 37.1
26% to 50% 19 10.9
Total 175 100.0

% of Saving

11% 8%

0%
Less than 10%
10% to 25%
26% to 50%

37% 44%

23
Where do you invest your money?
Frequency Percent
Bank 111 32.6%
Corporate Fixed Deposit 17 5.0%
Mutual Fund 94 27.6%
Real Estate 22 6.5%
Post Office Scheme 52 15.2%
Other 45 13.2%
Total 341 100.0%

Investment
35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00% 24
Rate your awareness about Mutual funds.
Frequency Percent
Unaware 36 20.6
Aware 70 40.0
Aware with clear Idea 44 25.1
Expert Knowledge 25 14.3
Total 175 100.0

Awareness about Mutual Funds

14%
21%
Unaware

Aware

25% Aware with clear

Idea

Expert Knowledge
40% 25
In Mutual funds which mode will prefer?
Frequency Percent
One time Investment 50 20.4%
Lump-sum 61 24.9%
Systematic Investment Plan 108 44.1%
Systematic Withdrawal Plan 26 10.6%
Total 245 100.0%

Mode of Investment

11%
20% One time
Investment

Lump-sum

Systematic
Investment
Plan
Systematic
44% 25% Withdrawal
Plan
26
 STATISTICAL TESTS
Factors affecting to invest in Mutual fund
Strongly Strongly
Dissatisfie Satisfie
Dissatisfie Neutral Satisfie Weighted
Factors d d Total Rank
d d Mean
W=1 W=2 W=3 W=4 W=5
Savings 29 26 25 49 46 582 38.8 1
Tax
26 32 42 55 20 536 35.73 3
Benefits
Portfolio
Manageme 17 31 72 26 19 494 32.93 6
nt
Balanced
33 38 50 44 10 485 32.33 8
Risk
Safety of
26 44 51 30 24 507 33.8 5
investment
Liquidity 25 53 40 42 15 494 32.93 6

Flexibility 22 44 48 41 20 518 34.53 4

Potential
23 23 57 39 33 561 37.4 2
Return

27
 HYPOTHESIS TESTS
 CHI-SQUARE
Education*Factors affecting to invest in Mutual fund.
Sr. Independent Dependent Significant Significance
>/< Remark
No. Variable Variable Value level
H1
1 Education Savings 0.004 < 0.05
Accepted
H1
2 Education Tax Benefits 0.018 < 0.05
Accepted
Portfolio H0
3 Education 0.087 > 0.05
Management Accepted
H1
4 Education Balanced Risk 0.001 < 0.05
Accepted
Safety of H0
5 Education 0.366 > 0.05
investment Accepted
H0
6 Education Liquidity 0.094 > 0.05
Accepted
H0
7 Education Flexibility 0.740 > 0.05
Accepted
H0
8 Education Potential Return 0.124 > 0.05
Accepted

28
 Monthly Income*Factors affecting to invest in Mutual fund.
Sr. Dependent Significant Significanc
Independent Variable >/< Remark
No. Variable Value e level
H1
1 Monthly Income Savings 0.029 < 0.05
Accepted
H1
2 Monthly Income Tax Benefits 0.028 < 0.05
Accepted
Portfolio H0
3 Monthly Income 0.111 > 0.05
Management Accepted
H0
4 Monthly Income Balanced Risk 0.062 > 0.05
Accepted
Safety of H0
5 Monthly Income 0.143 > 0.05
investment Accepted
H0
6 Monthly Income Liquidity 0.058 > 0.05
Accepted
H0
7 Monthly Income Flexibility 0.532 > 0.05
Accepted
H1
8 Monthly Income Potential Return 0.017 < 0.05
Accepted

29
 ANOVA TEST

Age*Perception about Mutual Fund.

Sr. Independe Significant Significance
Dependent Variable >/< Remark
No. nt Variable Value level
H0
Mutual funds are useful to
1 Age 0.471 > 0.05 Accepte
small investor.
d
Mutual funds have better H0
2 Age professional expertise than 0.477 > 0.05 Accepte
individual investor. d
H1
Mutual funds provide easy
3 Age 0.030 < 0.05 Accepte
withdrawal facilities.
d
NAV of mutual fund is H1
4 Age disclosed on day to day 0.039 < 0.05 Accepte
basis. d
H0
Management cost charged
5 Age 0.237 > 0.05 Accepte
to the funds is reasonable.
d
H0
Mutual funds provide better
6 Age 0.105 > 0.05 Accepte30
tax benefits.
d
RESULTS AND FINDINGS
 The awareness about Mutual Fund investment is
moderated Junagadh City.
 Only 27.6% respondents are now investing in mutual
funds while 32.6% and 15.2% respondents prefer
bank and post office scheme respectively.
 In mutual fund investment, 44.1% respondents prefer
systematic investment plan and 24.9 % respondents
prefer lump sum investment while only 20.4 % and
10.6% respondents preferred one time investment
and systematic withdrawal plan respectively.
 Percentage of savings effect to the perception about
mutual fund investment.
 Most of respondents are investing in mutual fund
because of savings, text benefit and safety of 31

investment.
CONCLUSION
 The awareness towards mutual fund investment
is still at moderate level in Junagadh City. The main reason for
Limited growth of mutual fund industry is lack of awareness of
benefits which can get from mutual funds investment.

 However, from this study it is concluded that

flexibility, liquidity, service quality, tax saving and
transparency have create very high effect on perception of
investors.

 Now-a-days mutual fund investment gave

almost double return as compared to other investment like
banks and post office scheme so that mutual fund are proved
better to fulfill the financial goal of investor. 32