Name : Pawan
Enroll No : 09BSDDU0049
Email id : pawanvintu@[Link]
Mobile No: +919548136013
Management Research Project
Project Proposal
Project Proposed:
“Perception of Investor before investing Into Mutual Funds”
Description Of The Project In Brief:
This project will record the findings and analysis of a survey conducted in order to
assess the perceptions that influence the mutual fund investor. The survey will be conducted in a
systematic manner right from investigating the objective and breaking it down to the various
components of the research to arriving at final conclusions on possible parameters that influence the
perceptions of the mutual fund investor. An attempt will be made to understand the investor in terms
of his/her risk tolerance, the kind of asset classes he/she is interested in, depending
on the profile, i.e. his/her income, saving pattern, demographics such as age,
education level, sex, household size, occupation, etc. The questionnaire will
arrived at bases on an exploratory research and discussions with experienced
investors and experts in the area. The actual data collection will be through a mix of
online and personal surveys of a convenient sample of units. Based on analysis , I will try to develop
a link between the profile of the investor and his/her perception and provided recommendations to the
mutual fund institutions.
The report traces the growth of the Indian mutual fund industry, showcasing India as an attractive
investment destination. India has its roots entrenched in a high savings and investment rate with a
favorable demographic dividend, which has helped the economy weather the economic downturn.
About industry: A mutual fund is a common pool of money into which investors place their
contribution that is to be invested in accordance with the stated objective. The ownership of fund is
thus joint or "mutual"; the fund belongs to all investors. A single investor's ownership of the fund is
in the same proportion as the amount of the contribution made by him or her bears to the total amount
of fund. A mutual fund uses the money collected from investors to buy those assets which are
specifically permitted by its stated investment objective. It is these assets which are owned by the
investors in the same proportion as their contribution bears to the total contribution of all investors
put together. When an investor subscribes to a mutual fund, he or
she buys a part of the assets or the pool of funds that are outstanding at that time. It is of no difference
from buying "shares" of a joint stock company, in which the purchase makes the investor a part
owner of the company and its assets.
Features of mutual funds India-
Affordability: Mutual funds allow you to start with small investments. For example, if you want to
buy a portfolio of blue chips of modest size, you should at least have a few lakhs of rupees. A mutual
fund gives you the same portfolio for meagre investment of Rs 1,000-5,000. A mutual fund can do
that because it collects money from many people and it has a large corpus.
Professional management: The major advantage of investing in a mutual fund is that you get a
professional money manager for a small fee. You can leave the investment decisions to him and only
have to monitor the performance of the fund at regular intervals.
Diversification: Considered the essential tool in risk management, mutual funds makes it possible for
even small investors to diversify their portfolio. A mutual fund can effectively diversify its portfolio
because of the large corpus. However, a small investor cannot have a well-diversified portfolio
because it calls for large investment. For example, a modest portfolio of 10 blue-chip stocks calls for
a few a few thousands.
Convenience: Mutual funds offer tailor-made solutions like systematic investment plans and
systematic withdrawal plans to investors, which is very convenient to investors. Investors also do not
have to worry about the investment decisions or they do not have to deal with their brokerage or
depository, etc. for buying or selling of securities. Mutual funds also offer specialized schemes like
retirement plan, children's plan, industry specific schemes, etc. to suit personal preference of
investors.
Cost effectiveness: A small investor will find that a mutual fund route is a cost effective method.
AMC fee is normally 2.5% and they also save a lot of transaction costs as they get concession from
brokerages. Also, they get the service of a financial professional for a very small fee. If they were to
seek a financial advisor's help directly, they may end up pay more. Also, the size of the corpus should
be large to get the service of investment experts, who offer portfolio management.
Liquidity: You can liquidate your investments anytime you want. Most mutual funds dispatch checks
for redemption proceeds within two or three working days. You also do not have to pay any penal
interest in most cases. However, some schemes charge an exit load.
Tax breaks: You do not have to pay any taxes on dividends issued by mutual funds. You also have
the advantage of capital gains taxation. Tax-saving schemes and pension schemes give you the added
advantage of benefits under Section 88.
Transparency: Mutual funds offer daily NAVs of schemes, which help you to monitor your
investments on a regular basis. They also send quarterly newsletters, which give details of the
portfolio, performance of schemes against various benchmarks, etc. They are also well regulated and
Sebi monitors their actions closely.
Objective of The Project:
To understand mutual fund industry
The primary objective of the research is to understand investors' perception towards investing in
Mutual Funds.
Methodology:
Primary data collection through questionnaire.
Question wise analysis of the survey.
Secondary data collection through internet, journals and magazine.
Schedule:
Project Proposal: 9th August 2010
Interim Report: 6th-8th December 2010
Final Report: 7th-11th March 2011
Limiations of The Study:
o Sample size is limited to 250 educated urban and semi urban population only. The
surveyed sample size may not adequately represent the national market.
o This study will not be conducted over an extended period of time so it may be possible
the results were influence by market (Stock market) rise at the time of survey.
o Due to the lack of funds, economic ways of doing survey will be used .
References:
Books:
“Mutual Funds” by TMH
“Financial Management” by Khan & Jain
“Marketing Research” by Naresh Malhotra
Websites:
o [Link]
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o [Link]
Faculty Guide Name:
[Link] [Link]
Date: 09 AUG 2010 Signature
