FINAL RESEARCH PROJECT REPORT

On

INVESTERS’ PERCEPTION ON MUTUAL FUNDS

Submitted in partial fulfillment of the requirements of

MASTERS OF BUSINESS ADMINISTRATION (MBA)

at
University Business School
Chandigarh University, Gharuan (Mohali)
Batch – (2018-2020)

Supervised by: Submitted by

Dr. Pradeep Bawa Priyanka Thakur
Professor, USB 18MBA1674

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 Declaration by the student

I Priyanka Thakur having 18MBA1674 a student of MBA 4th Semester, batch

2018-2020 declare that this project titled “INVESTERS’ PERCEPTION ON
MUTUAL FUNDS” has been worked on, drafted and finalized by me. This
project is an original piece of work and not copied or plagiarized from any other
source of literature, review article or published article in this regard. This final
Year Project Report is being submitted in partial fulfillment of the degree of
Master in Business Administration (MBA) from University School of Business,
Chandigarh University and has not been submitted for the reward of any
certificate, diploma, degree, fellowship with any other college, university or
educational institute before this.
In case any part of this work is reported as copied from any another source, I shall
be solely responsible for the same and will be answerable for any action taken in
this regard.

Student’s Signature

Name Priyanka Thakur

UID 18MBA1674

Date 29/04/2020

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 CERTIFICATE BY GUIDE

This is to certify that, Miss Priyanka Thakur, UID 18MBA1674, a student of

MBA, Semester IV (BATCH-2018-2020) with University School of Business,
Chandigarh University, Gharuan, Mohali, Punjab. has successfully completed
his/her Final Research Project from…6/1/2020 to 30/4/2020 .and his/her report
titled “INVESTERS’ PERCEPTION ON MUTUAL FUNDS”. The student has
carried out the work satisfactorily under my supervision.
According to the declaration submitted by the student, the report is an authentic
and original work and may be considered for partial fulfillment towards course
credits.

I wish him success in life.

Signature of Guide
Dr. Pradeep Bawa
Professor, USB
Date

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INTRODUCTION
Mutual funds are financial intermediaries, which collect the savings of investors & invest them
in a large & well diversified portfolio of securities such as money market instruments, corporate
& government bonds & equity shares of joint stock companies. A Mutual fund is a pool of
common funds invested by different investors, who have no contact with each other. Mutual
funds are conceived as institutions for providing small investors with avenues of investments
in the capital market. Since small investors generally do not have adequate time knowledge,
experience & resources for directly accessing the capital market, they have to rely on an
intermediary which undertakes informed investment decisions & provides consequential
benefits of professional expertise. The advantages for the investors are reduction in risk, expert
professional management, diversified portfolios, & liquidity of investment & tax benefits. By
pooling their assets through mutual funds, investors achieve economies of scale. The interests
of the investors are protected by the SEBI, which acts as a watchdog. Mutual funds are
governed by the SEBI (Mutual funds) regulations, 1993. From its inception the growth of
mutual funds is very slow and it took really long years to evolve the modern-day mutual funds.
Mutual Funds emerged for the first time in Netherlands in the18th century and then got
introduced to Switzerland, Scotland and then to United States in the 19th century. The main
motive behind mutual fund investments is to deliver a form of diversified investment solution.
Over the years the idea developed and people received more and more choices of diversified
investment portfolio through the mutual funds. In India, the mutual fund concept emerged in
1960. The credit goes to UTI for introducing the first mutual fund in India. Monetary Funds
benefited a lot from the mutual funds. Earlier investors used to invest directly in the stock
market and many times suffered from loss due to wrong speculation. But with the coming up
of mutual funds, which were handled by efficient fund managers, the investment risks were
lowered by a great extent.
MUTUAL FUND CONCEPT: -
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such as
equities, debentures and other securities. The income earned through these investments and the
capital appreciation realized (after deducting the expenses and profits of mutual fund
managers) is shared by its unit holders in proportion to the number of units owned by them.
Thus, a Mutual Fund strives to meet the investment needs of the common man by offering him
or her opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The small savings of all the investors are put together to increase the buying
power and hire a professional manager to invest and monitor the money. Anybody with a
surplus of as little as a few thousand rupees can invest in Mutual Funds.
Mutual funds play vital role in resource mobilization and their efficient allocation in a
transitional economy like India. Economic transition is usually marked by changes in the
financial mechanism, institutional integration, market regulation, re-allocation of savings and
investments, and changes in the inter-sector relationships. These changes often imply
negativity which shakes investor ‘s confidence in the capital market. Mutual funds perform a
crucial task as efficient alligators of resources in such a transitional period. Throughout the
world, mutual funds have worked as reliable instruments of change in financial intermediation,
development of the capital market, and growth of the corporate sector. The active 23

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involvement of mutual funds in promoting economic development can also be seen in their
dominant presence in the money and capital markets. Mutual funds make a significant
contribution in vibrating both the markets. The spread of equity cult has further increased
reliance of the corporate sector on equity financing. The role of mutual funds in the financing
of corporate has substantially increased after the SEBI allowed the corporate sector to reserve
20% of their public issues for Indian mutual funds. The percentage share of corporate equity
and debentures in the household investors, together with UTI units, have increased from 3.7%
in 1980-81 to 17.2% in 1992-93, while the share of less liquid assets like LIC, PF, and pension
have shown a marginal increase from 25.1% to 27.2% during the same period. Mutual funds
have been the fastest growing institution during this period in the household savings sector.
Growing market complications and investment risk in the stock market with high inflation have
pushed households further towards mutual funds.
WORKING OF MUTUAL FUND: -
A Mutual Fund is a collection of stocks, bonds, or other securities owned by a group of
investors and managed by a professional investment company. For an individual investor to
have a diversified portfolio is difficult. But he can approach to such company and can invest
into shares. Mutual funds have become very popular since they make individual investors to
invest in equity and debt securities easy. When investors invest a particular amount in mutual
funds, he becomes the unit holder of corresponding units. In turn, mutual funds invest unit
holder ‘s money in stocks, bonds or other securities that earn interest or dividend. This money
is distributed to unit holders. If the fund gets money by selling some stocks at higher price the
unit holders also are liable to get capital gains.

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LITERATURE REVIEW
Theories of Mutual funds A large number of studies on the growth and financial performance
of mutual funds have been carried out during the past, in the developed and developing
countries. Brief reviews of the following research works reveal the wealth of contributions
towards the performance evaluation of mutual fund, market timing and stock selection abilities
of fund managers. Sharpe (1966) introduced the measure to evaluate the mutual funds risk-
adjusted performance. The measure was known as reward-to-variability ratio (Currently
Sharpe Ratio). With the help of this ratio he evaluated the return of 34 open-end mutual funds
in the period 1945-1963. The results showed the capital market was extremely efficient due to
which majority of the sample had lower performance as compared to the Dow Jones Index.
Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio performance (Jensens
alpha) that estimates how much a manager‘s forecasting ability contributes to fund‘s returns.
As indicated by Statman (2000), the e SDAR of a fund portfolio is the excess return of the
portfolio over the return of the benchmark index, where the portfolio is leveraged to have the
benchmark index‘s standard deviation. Black (2006) examined customer‘s choice of financial
services distribution channels. They showed that customer confidence, lifestyle factors,
motivations & emotional responses influence the customer‘s choice, while product, Channel &
organizational factors such as image and reputation are also significant. Syama sunder (1998)
conducted a survey to get an insight into the MF operations of private institutions with special
reference to Kothari pioneer. The survey revealed that the awareness about MF concept was
poor during that time in small cities like Vishakhapatnam. Agent play a vital role in spreading
the MF culture; open end schemes were much preferred then; age and income are two important
determinants in the selection of fund /scheme; brand image and return are their prime
considerations. Mishra (2002) measured mutual fund performance using lower partial
moment. In this paper, measures of evaluating portfolio performance based on lower partial
moment are developed. Risk from the lower partial moment is measured by taking into account
only those states in which return is below a pre-specified “target rate” like risk-free rate.
Kshama Fernandes (2003) evaluated index fund implementation in India. In this paper,
tracking error of index funds in India is measured. The consistency and level of tracking errors
obtained by some well-run index fund suggests that it is possible to attain low levels of tracking
error under Indian conditions. At the same time, there do seem to be periods where certain
index funds appear to depart from the discipline of indexation. Treynor (1965) presents a new
way of viewing performance results. He attempted to rate the performance of mutual funds on
a characteristics line graphically. The steeper line, the more systematic risk or volatility a fund
possesses. By incorporating various concepts, he developed a single line index, Tn, called
Treynor index. The systematic risk is risk which is common to all securities of the same class
in the market. His index measures the risk premium of the portfolio, where risk premium equals
the difference between the return of the portfolio and the riskless rate. The risk premium is
related to the amount of systematic risk assumed in the portfolio, the higher the value of Tn,
the better the performance of fund. Jensen (1968) developed own measures known as Jensen’s
alpha to examine the risk portfolios’ risk-adjusted performance and estimate the predictive
ability of mutual fund managers. The measure was based on the theory of the pricing of capital
assets. For this purpose, a sample of 115 open end mutual funds (for which net assets and
dividend information was available) was taken for the period 1955-1964. After applying the
Jensen measure, he concluded that stock prices could not be forecasted accurately with the help
of mutual funds therefore buy and hold strategy could not be used to take advantage. Similarly,

6
there is slight evidence that an individual mutual fund can achieve returns higher than a
portfolio comprised of randomly selected shares. Carlson (1970) conducted a research to
analyze the predictive value of past results in forecasting future performance of mutual funds
for the period 1948-1667. the author also examined the efficiency of market and identified the
factors related to the fund performance. First of all, he constructed indices for three types of
mutual funds (Diversified common stock, Balanced, Income) and compared these indices with
the market indices. In order to analyse the performance regression was used. The results
provide empirical support to the return-risk postulate of the capital asset pricing model and
concluded that whether mutual funds outperform the market depends on the market depends
on the selection of both the time period and market proxy. The author also concluded that past
performance showed little predictive value and that the performance was positively related to
the availability of new cash resources for investment purpose. Arditti (1971) criticized the
reward to variability criterion proposed by Sharpe (1966) on the grounds that it utilized only
the first two moments of the probability distribution of returns. Author proposed that the third
moment, a measure of the direction and size of the distribution’s tail, be included in the
analysis. Arditti (1971) further argued that investors preferred positive skewness because
positive skewness implied greater probability of higher return. Therefore, assets with relatively
low reward to variability ratios would not be inferior investment if ratios also have relatively
high third moments (high positive skewness). Furthermore, author reexamined the Sharpe
(1966) data with this additional requirement and found that average fund performance was not
inferior to Dow jones industrial average (DIJA) performance because the skewness of DIJA
return distribution was significantly less than fund skewness. McDonald (1973) developed a
model to evaluate the investment performance of funds holding securities in two countries. For
this purpose, a sample of eight of the oldest French mutual funds was taken. The monthly
returns of these funds were calculated and analyzed for the period 1964-1969. the results
showed that the funds generally produced superior risk adjusted returns and that the French
market was inefficient with respect to the completeness and speed of dissemination of
information. The author concluded that those funds which invested in the French market in
1964-69 generally achieved lower return at a given level of variance than that reflated in the
U.S. market returns. McDonald (1973) also found that the funds were generally able to attain
superior returns relative to naive portfolio strategy. McDonald (1974) conducted a research to
examine the objective and performance (risk and return) of American mutual funds in the
period 1960-1669. Sample of 123 American mutual funds was analyzed by using Treynor
(1965) and Sharpe (1966) indexes. The results indicated that stated objectives generally
produced better performance. The results indicated that stated objectives were significantly
related to subsequent measures of systematic risk and total variability. Therefore, the funds
with aggressive objectives generally produced better performance. The results also showed that
67 funds perform better than the stock market average in case of Treynor’s (1965) index while
in case of Sharpe’s (1966) index only 39 mutual funds showed higher performance than the
stock market average. The author concluded that average fund return increases with increase
in risk. Miller and Nicholas (1980) conducted a research to examine the risk-return
relationship in the presence of nonstationarity in order to obtain more precise estimates of alpha
and beta. For this purpose, this study applied partition regression selection rule for estimating
the traditional CAPM in case of nonstationarity. Study applied these procedures to price
appreciation data for the market and 28 mutual funds for the period of 1973- 1974. the results
indicated a good deal of nonconsistency in the risk return relationships. The results showed
some weak positive relationships and weak negative relationship between betas and the rate of

7
return for the market. On the other hand, results showed some weak positive relationship and
some weak negative relationship between betas and alphas. However, no general, statically
significant relationships of either type were found.
STATEMENT OF THE PROBLEM
Mutual funds are the avenues for common investors to reap the benefits of share market
performance. Investing in equity directly by investors is fraught with highest level of risk &
uncertainty Retail investors do not actively participate in share market but inflation edged
investment return demands the exploitation of the equity market as an investment avenue
Therefore there is a necessity to create awareness of the utility of investing in mutual funds
schemes to enjoy a return which will be inflation adjusted real returns Therefore this project is
taken on to assess the investors perception of mutual fund investment. This project will evaluate
the financial performance of mutual fund schemes.
OBJECTIVE OF THE STUDY
a) To know the perception of customer towards mutual funds.
b) To know the investors awareness about investment in mutual funds.

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RESEARCH METHODOLOGY
Research methodology is the systematic approach to finding solution to the research problem.
Under this study primary data is collected through questionnaire which is filled by One
Hundred sample respondents. And secondary data are collected from various journals and
books.

Research Design– Descriptive

Sampling Technique – Convenience Sampling

Sample Size – 100
Tools Used
Data collection tool - Questionnaire
Data analysis tool – Percentage and SPSS Analysis
Data presentation tool – Pie chart.
QUESTIONNAIRE
Respected Madam / Sir / Investor, I am doing a research on Mutual Funds. I will be more
obliged if you could respond to the below mentioned questionnaire. Your response can put
more light on my research work and I can come out with realistic findings.
1. Gender
Male
Female

2. You belong to which one of the following categories :

Govt. Employee Pvt. Firm Employee
Self Employed Business Person
Agriculturist Others

3. Your annual income is in the range of:

Below Rs. 1 Lakh Between 1 Lakh to 2 Lakh
Between 2 Lakh to 3 Lakh Between 3 Lakh to 4 Lakh
Between 4 Lakh to 5 Lakh Above Rs. 5 Lakh.

4. Where do you invest your savings?

Savings Bank Fixed Deposit
Shares/Debentures Gold/Silver
Postal savings Real Estate
Mutual Funds Insurance
Others
(Please Mention) ________

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5. What is the percentage of savings from your total income?
<=25 % <= 50 % <= 75 %
others ________

6. What are the factors to which you give priority when you invest?
Safety High Return Liquidity
Less Risk Marketability

7. You invest in the financial instruments / securities which give:

High Risk / High Return Low Risk /Low return

Low Risk/ High Return

8. Do you know about Mutual Funds?

Yes No

9. Are you an investor in Mutual Funds?

Yes No.
( If No, then directly go to question No.21 )

10. How is your invest pattern :

Monthly (SIP) Once in Six Months
Once in a year Very Rare

11. You have invested in which type of Mutual Fund Scheme

Equity fund Debt funds Hybrid Funds

12. If Equity Funds then, in which category

Diversified Equity Funds Mid-Cap Funds
Sector Specific Funds Tax Savings Funds

13. If Debt Funds then, in which category

Gilt Funds Income Funds MIPs
Short Term Plans (STPs) Liquid Funds

14. Are you aware of the fact that Mutual Fund Companies (AMC’s) will invest your money
in Share Market?
Yes No

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15. What advantages do you find when you invest in Mutual Funds?

Professional Management Diversification Return Potential

Low cost Liquidity Transparency Flexibility
Choice of schemes Tax benefits Well regulated
Economies of scale Simplicity

16. What do you look before investing in a particular mutual fund scheme?
Past Performance (NAV) Ratings (by CRISIL, ICRA, Etc.)
Asset Management Companies (AMC) Expert Advise

17. Where do you gather information about the performance of different mutual fund
schemes?
Financial Institutions Brokers Financial Consultants TV
Channels Magazines Internet

18. Since how many years you are investing in Mutual Fund Schemes
One year Two Years Three Years
Four Years Five Years More than five years

19. You invest in Mutual Fund Schemes because:

It is a good investment instrument
It is better to invest in Mutual funds rather than investing directly in shares
They give assured and consistent return
They provide high return with low risk
Less calculation is required before investing when compared to share market.
Very simple to invest & monitor fund performance on a regular basis
Mutual Funds provide the benefit of cheap access to expensive stocks
Mutual funds diversify the risk of the investor by investing in a basket of assets
Professional fund managers manage them with in-depth research inputs from
investment analysts.

20. You have not invested in mutual funds because:

It is not a lucrative investment instrument
No satisfactory return on investment when compared to other investment instruments.
No safety for funds invested Risky investment instrument
No / Less Liquidity
No knowledge about how to invest
No knowledge about where to invest / investment centers
No Mutual Fund investors’ education & service centers
It is related to share market, so it is very risky and the returns are not guaranteed.
****THANKS FOR YOUR RESPONSE****

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DATA ANALYSIS AND FINDING
1. Gender

INTERPRETATION: As we can see in above table there are 49% female and rest are
male.
2. You belong to which one of the following categories :

INTERPRETATION: As we can see in the above table most of the respondents are self
employed and pvt firm employee and least are agriculturist.

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3. Your annual income is in the range of:

INTERPRETATION: As we can see in the above table that 19% respondent’s annual
income is above 5 lakh, 18% respondent’s annual income is in between 2-3 lakh, 17%
respondent’s annual income is in between 4-5 lakh and below 1 lakh and 14%
respondent’s annual income is between 1-2 lakh.

4. Where do you invest your savings?

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 INTERPRETATION: Most of the respondents (21.2%) are interested in investing their
savings in fixed deposits, 14.1% respondents invest their savings in mutual funds and
least (3%) respondents invest their savings in bonds.

5. What is the percentage of savings from your total income?

INTERPRETATION: As we can see in the above graph 57% respondents are saving
<=25% of their income, 25% are saving <=50% of their income and 4% are saving 80%
of the income.

6. What are the factors to which you give priority when you invest

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 INTERPRETATION: As we can see in the above chart that 31% investor gives priority
to high return while investing money,25% investor gives priority to safety while
investing money and 10% investor invest money according to the marketability.

7. You invest in the financial instruments / securities which give:

INTERPRETATION: As we can see in above chart that 44% investor prefer low risk
and high returns where 27% investor prefer high risk and high returns.

8. Do you know about Mutual Funds?

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INTERPRETATION: So, we found out 71 respondents out of 100 who all were aware
about Mutual funds, Rest of 29 were unaware.
9. Are you an investor in Mutual Funds?

INTERPRETATION: Above table shows that 57% (57) respondents were Mutual fund
investors and rest of 43% percent were not interested in investing in Mutual funds.

10.How is your invest pattern :

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INTERPRETATION: So, Out of those who were Mutual fund investors (57) as we found
out in previous chart, 15.3% (8) used to invest once a year in mutual fund where most the
number of investor were those who were quite active in Mutual funds investing that was
‘Monthly’ (33.9%). 5.1% investor were those who invests very rarely.
11. You have invested in which type of Mutual Fund Scheme

INTERPRETATION: Out of all Mutual fund investors 22% favored Debts funds, 39%
were interested in Equity funds, Rest of the 39% people had their interest in investing in
both.

12.If Equity Funds then, in which category

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INTERPRETATION: 39% People who choose Equity fund, Maximum number of them was
into Diversified Equity with 60.9% and least percentage of investors were interested in Tax
savings Funds and Sector specific funds with 8.7% Each.
13. If Debt Funds then, in which category

INTERPRETATION: So, 22% of respondents who were Debt funds investors, most of
them preferred Income funds (61.5%). And Gilt fund was minimum preferred by investors
(15.4%).
14. Are you aware of the fact that Mutual Fund Companies (AMC’s) will invest your money
in Share Market?

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 INTERPRETATION: Above chart shows that maximum respondents (81.4%) are
aware about the fact that Mutual Fund Companies (AMC’s) will invest your money in
Share Market and rest of respondents are not aware.

15. What advantages do you find when you invest in Mutual Funds?

INTERPRETATION: Majority of investors looked to become professional in

Investment market (15.3%), after that low-cost liquidity was secondly preferred by
investors as an advantage. 2 Equal groups of investors found Transparency and Choice
of schemes as an advantage. (11.9% Each). 3.4% was a minority group of investors who
looked to survive on scale of economies.

16. What do you look before investing in a particular mutual fund scheme?

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INTERPRETATION: So maximum number of investors (35.6%) looked the Past
performance of that company before investing whereas least of them (13.6%) were the
amateur investors who took advices from the Investment experts before investing. People
who considered CRISIL Ratings and Asset management before investing was in equal
number of contributions of 25.4% each.

17. Where do you gather information about the performance of different mutual fund
schemes?

INTERPRETATION: 37% investors gather information from financial institutions

,27% respondents gather information from financial consultant and least (3.4%) investors
gather information from internet.

18. Since how many years you are investing in Mutual Fund Schemes

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 INTERPRETATION: 25% respondents are investing in mutual funds from3 years, 23%
investors are new investors and 8.5% respondents manages to survive in market for more
than five years.

19. You invest in Mutual Fund Schemes because:

INTERPRETATION: 57 out of 100 respondents were interested in mutual funds

because 18% respondents invest because they give assured returns, 15% respondents
believe it is a good investment option,13% invest because mutual funds provide the
benefit of cheap access to expensive stocks and least 3% invest because Mutual funds
diversify the risk of the investor by investing in a basket of assets

20. You have not invested in mutual funds because:

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INTERPRETATION: 43 respondents out of 100 respondents who have not invested in
mutual funds because 25% respondent think that it is related to shares, 19% respondent think
that there are not satisfactory returns,16% think that it is not lucrative,13% respondent think it
is not safe and 8% respondent have no knowledge about this.

SPSS ANALYSIS
H0- Is there a significant impact of annual income towards perception people choosing
mutual.
H1- There is no significant impact of annual income towards perception people mutual funds.

What is your Annual income? * Are you a mutual Investor? Crosstabulation

Are you a mutual Investor? Total

Yes No

Count 9 8 17
Below Rs. 1 Lakh
Expected Count 8.7 8.3 17.0

Count 2 12 14
Between 1 Lakh to 2 Lakh
Expected Count 7.1 6.9 14.0

Count 12 6 18
What is your Annual income? Between 2 Lakh to 3 Lakh
Expected Count 9.2 8.8 18.0

Count 7 8 15
Between 3 Lakh to 4 Lakh
Expected Count 7.7 7.4 15.0
Count 14 3 17
Between 4 Lakh to 5 Lakh
Expected Count 8.7 8.3 17.0

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 Count 7 12 19
Above Rs. 5 Lakh
Expected Count 9.7 9.3 19.0
Count 51 49 100
Total
Expected Count 51.0 49.0 100.0

INTERPRETATION

From the table above, we can obtain how people from different income group are distributed
among the statement about having their interest in investing in Mutual funds. Mutual funds
are known to be an open-end professionally managed investment fund. Hence it was
extremely important to find out that what respondents from different income group feel about
their preference towards Mutual funds. The statement is made on Dichotomous Scale.

The results on the table are divided among expected and observed count. If we take the income
group belonging to Below Rs. 1 Lakh, the 1 column says the expected count was 8.7 but
observed count came out 9. Similarly, in 2 column the expected was 8.3 but observed came
just 8. The results were balanced out. If we see the 6th row where income group was Above
Rs. 5 Lakh, the expected count for ‘Yes’ column was 9.7 but observed came 7 whereas not at
all important had zero observed count. Therefore, it can be considered that the results were
quite scattered evenly.

Chi-Square Tests

Value df Asymp. Sig. (2-

sided)

Pearson Chi-Square 17.669a 5 .003

Likelihood Ratio 19.104 5 .002
Linear-by-Linear .540 1 .462
Association
N of Valid Cases 100

a. 0 cells (0.0%) have expected count less than 5. The minimum

expected count is 6.86.

INTERPRETATION

Chi- square test has been carried out to test the significance of the hypothesis. Here the p value
is obtained 0.003 which is less than the p-value of 0.05. Hence the null hypothesis is rejected
and the two variables are significant impact of each other. The alternate hypothesis is accepted
that there is no significant impact of annual income towards perception people choosing mutual
funds

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 Symmetric Measures

Value Approx. Sig.

Phi .420 .003

Nominal by Nominal
Cramer's V .420 .003
N of Valid Cases 100

INTERPRETATION
This shows the strength of the association of the two variables. Here the value is positive
0.420 which is farther to +1 which suggests the model has low predictive ability. This is
taken when we have symmetric data and which can be both independent and dependent
ordinal variables.

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INTERPRETATION:
As the table above depicts, the medieval income group thinks that the preference of the Mutual
funds is an important factor. Then the 5th income group between 4-5 Lakhs think that the
mutual funds are important. Income group between 1 to 2 lakhs were quite neutral about their
perception towards Mutual funds hence it shows this group belongs to college going students
and freshers.

FINDINGS:
• Many of the investors are aware of mutual funds but most of their perception is not positive
due to lack of information about the mutual fund schemes.
• Investors are mainly concerned with the safety and high return factors of mutual funds.
• The investors who have invested in mutual funds mainly go for it because of liquidity & tax
exemption.
• There are numerous schemes of mutual funds about which common man is not aware of.
• Most of the respondents don‘t has proper knowledge about the mutual funds and that is why
probably they don‘t invests in mutual fund.
• Average savings of the people is 25%. This no doubt a good figure to take in account.
• Most of the respondents consider bank deposit as investment vehicle. As it is the safest option
for them and they don‘t has clear cut idea about the difference between the savings and
investment.
• There are respondents from different income groups and above test clearly states that Income
has no impact on choosing whether a person wants to invest or not.
• Most of the investors are interested in low risk and high returns.
• Most of the investor trusts financial institutions and financial consultant in case of any
information about mutual fund schemes.
• Those respondents who have not invested in mutual funds because they are concerned with
the risk factor as it is related to the share market.
• Most of the investors are new to mutual funds and very few are investing more than 5 years.

25
CONCLUSION:
We can infer from the analysis that the concept of mutual fund in India is still in its growing
phase. With the growing importance of mutual fund in other areas in the country, this place is
witnessing the same rate of growth in mutual funds. Apart from these facts the following are
some other important facts which can easily be inferred from the paper.
The study was conducted to see the perception of customer related to mutual funds and whether
they have knowledge about mutual funds or not. From this study it is very much clear that
consumers income status doesn’t affect its investment decision. Most of the investors do know
about mutual funds but they do not have the proper knowledge about its functioning in the
market.
Specialized agents of mutual funds are rarely seen. Financial advisors are not seen there who
can educate the investors. Posters, banners or other promotional activities are rarely seen in
this market. Mutual fund companies do not have aggressive strategies. Insurance products are
and can be the main competitors of mutual funds. Mutual fund investors are confined to the
upper-middle and upper social class in this market. Upper-lower class and lower-upper class
people are still untouched. More than half of the respondents have wrong perception about the
mutual funds. They feel mutual funds are very risky investment alternative. Most of the
respondents are satisfied with their current return from their investment. Most of the
respondents neither do not want to take risk in investing their money in mutual funds.

LIMITATIONS OF THE STUDY:

There are sure constraints of doing this extend particularly including confinements for doing
statistical surveying.
 The lack of information sources for the analysis part.
 Though I tried to collect some primary data but they were too inadequate for the
purposes of the study.
 Time and money are critical factors limiting this study.
 The data provided by the prospects may not be 100% correct as they too have their
limitations.

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RECOMMENDATIONS
After a thorough study and analysis of the data and information, the following are the few
recommendations and suggestions, if implemented , would definitely benefit the financial
market in India, which is in its booming stage, in the short run and in the long run as well.
Recommendations and suggestions are normally given when there are some problems or
difficulties lying in the market. Here in this research report recommendations and suggestions
are totally based on the facts, reactions, attitudes, perceptions, and many other things of the
respondents which were received from them during research work. The recommendation part
of this research work has three parts only, which can push the mutual fund market in India to
a higher level.
• Conference or seminars on mutual funds can be conducted on regular basis. This will no
doubt increase the awareness of mutual fund in the minds of the investors. All the companies
must join hands and work together for this.
• As the awareness of mutual funds is still lacking in this market, companies should give
focus on customer education. For this purpose, again the conference and seminars can be the
best way towards educating the customers. Again, free training programmed to the agents can
be fruitful.
• Government must also work together with the mutual fund companies in promoting the
concept of mutual fund in India.
• People in this city are not confident in investing their money in mutual funds. Hence there
is a need to do something which will build the confidence in the minds of the investors.
• Hence the confidence building activities must be carried out by the mutual fund companies.
Because most of the people in India think that investing in mutual funds is a very risky affair.
In the following ways the confidence can be increased in the minds of the people in India.
• The present performance of the mutual funds is very good compared with other investment.
And the companies should cash in on this opportunity. The performance of the mutual funds
can be published widely. Other newspapers and magazines, journals. This will no doubt
induce the investors towards investing in mutual funds.
• Case study of the investors who have been benefited in investing in mutual funds can be
published in the newspapers, magazines and journals.
• As selling of financial products requires well trained people, the companies must provide
proper training to the agents and financial planners. For this training institute must be opened
in this township.
• Continuous brand building activities must be carried out by the companies. For this
purpose, companies should initiate some sort of promotional activities like, ads in
newspapers, magazines, journals.
• Educational institutes must start some professional courses on mutual funds and other
finance specialized courses. This will create some sort of awareness about the mutual funds.
• Mutual fund companies must tie up with other financial institute like banks, post office for
reaching to the mass people. Because these financial institutes have tremendous reach to the

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mass people in our country. As a result, mutual fund companies can have easy access to the
common people. The companies must go in for this kind of strategic alliance with other
companies as well. Because strategic alliance not only benefit the companies but help in
developing the market also.

BIBLIOGRAPHY
REFERENCES

 www.google.co.in
 http://www.mutualfundsindia.com
 www.utimf.com
 www.moneycontrol.com
 www.indiafund.net
 www.assocham.org
 www.amfindia.com
 www.moneycontrol.com
 Books Mutual fund in India- by H. Sadhak

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