SCPL: SCRIMP CAPITAL PRIVATE LIMITED

A PROJECT REPORT ON:-

“A STUDY ON INVESTOR’S PERCEPTION TOWARDS MUTUAL

FUND”
AT
SCPL (SCRIMP CAPITAL PRIVATE LIMITED)
DRIEMS UNIVERSITY,CUTTACK

(SESSION: 2023-2025)
Submitted By: T R a b i K u m a r
Regd. No – 2306010053

INTERNAL GUIDE- EXTERNAL GUIDE-

Dr. Praneeta Sahu Mr. Sanjib K.U Baishakh I,
DRIEMS University, Tangi, Cuttack Senior Manager (Personnel)
SCPL, Cuttack
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 DRIEMS UNIVERSITY
TANGI, CUTTACK

INTERNAL GUIDE CERTIFICATE

This is to certify that the Dissertation report entitled "A STUDY ON

INVESTOR’S PERCEPTION TOWORDS MUTUAL FUNDS. Cuttack"
prepared by T Rabi Kumar under my guidance and supervision for the partial
fulfillment for the requirement of Master of Business Administration in 2 Year
MBA program from DRIEMS. His research work is satisfactory. I wish for his
success in future.

Date: Dr. Praneeta Sahu

Place: T a n g i , Cuttack (Faculty of MBA)

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 EXTERNAL GUIDE CERTIFICATE

Mr. Sanjib Kumar Baishakh

Senior manager

(personnel)

Scrimp capital

Pvt ltd,

Cuttack, Odisha

This is to certify that the Dissertation report entitled " A STUDY ON

INVESTOR’S PERCEPTION TOWARDS MUTUAL FUND "
prepared by T Rabi Kumar under my guidance and supervision for the
partial fulfilment for the requirement of Master in Business
Administration in 2 Year MBA programme from DRIEMS. His research
work is satisfactory. I wish for his success in future.

Date: Mr. Sanjib Kumar Baishakh

Place: Cuttack (External Guide)

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 DECLARATION

I hereby declare that the dissertation report entitled “A STUDY ON

INVESTOR’S PERCEPTION TOWARDS MUTUAL FUND
of SCPL” which is being submitted for MBA programme, is a record of
original work carried out under the guidance and supervision Mr. Sanjib
Kumar Baishakh . Senior Manager (Personnel), SCPL, Link Road.

Date: Name: T Rabi Kumar

Place: Cuttack Roll. No: 2306010053

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 ACKNOWLEDGEMENT

A successful project is the fruitful culmination of efforts of many people, some

directly involved, and others who have quietly encouraged and extended their
support while being in the background. I take this opportunity to extend my deep
sense of gratitude and heartfelt thanks to all those who have helped me directly or
indirectly during my project.
I also express my sincere thanks to my research report guide, MR Sanjib kumar
baisakh (Dy. Manager, SCPL), for guiding me right from the inception till the
successful completion of the project. I sincerely acknowledge him for extending
him valuable guidance, support for literature, critical review of the project and the
report and the above all the moral support he provided me with throughout all state
of report preparation.

T Rabi Kumar

Regd no: 2306010053

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At SCRIMP Capital Private Limited, we adopt a structured and disciplined advisory
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 TABLE OF CONTENTS
CHAPTER NO TITLE PAGE NO
ABSTRACT i
LIST OF TABLES ii
LIST OF CHARTS iii
1 INTRODUCTION 1
1.1 Mutual Fund 1
1.2 Types of mutual fund scheme 3
1.3 Challenges & Facing Mutual Fund 10
1.4 History of Mutual Fund 11
1.5 Advantage of Mutual Fund 13
1.6 limitation of Mutual fund 15
1.7 Scope of the study 17
1.8 Objective of the Study 17
1.9 Need of the Study 17
2 REVIEW OF LITERATURE 19
2.1 Review of Literature 24
3 RESEARCH AND METHODOLGY 25
3.1 Research Design 25
3.2 Sampling Techniques 25
3.3 Sources of Data 25
3.4 Structure of Questionnaires 26
3.5 Sample Size 26
3.6 Period of Study 26
3.7 Analytical Tools 26
4 DATA ANALYSIS AND INTERPRETATION 27-37
4.1 Percentage Analysis 27-37
4.2 Chi Square Analysis 27-37

5 FINDINGS SUGGESTIONS AND CONCLUSION 38-39

5.1 Findings 38
5.2 Suggestions 38
5.3 Conclusions 39
REFERENCES 40-42
APPENDIX-I (Questionnaire) 43-46
APPENDIX-II (Article) 47-60

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 CHAPTER-1

INTRODUCTION

MUTUAL FUND

A mutual fund is an investment vehicle that pools money from multiple investors to
purchase a diversified portfolio of stocks, bonds, or other securities. Each investor
buys shares in the fund, which represents their proportionate ownership of the total
assets.
Mutual funds refer to funds which collect money from investors and put this
money in stocks, bonds and other securities to gain financial profit. Persons whose
money is used by the mutual fund manager to buy stocks, bonds and other securities,
get a percentage of the profit earned by the mutual fund in return of their investments.
In this way , the mutual fund offers benefit to both parties. 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
shares, debentures and other securities. The income earned through these investments
and the capital appreciation realized is shared by its unit holders in proportion to the
number of units owned by them. Thus, a mutual fund is the most suitable
investment for the common man as it offers an opportunityto invest in a diversified,
professionally managed basket of securities at a relatively low cost. The flow chart
below describes broadly the working of a mutual fund.

A mutual fund is a professionally managed type of collective investment scheme that

pools money from many investors and invests it in stocks, bonds, short-term money
market instruments, and/or other securities. The mutual fund will have a fund manager
that trades the pooled money on a regular basis. Currently, the worldwide value of all
mutual funds totals more than 40$ trillion.

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Involves lower risk as the investment is diversified in to different bonds and stocks.
So, if at any time market value of one particular bond or value of the stocks of any
particular company drops, then the loss incurred by the mutual fund can be offset by
the market gain of any other bond or stocks.

Investment is a commitment of funds in real assets or financial assets. Investment

involves risk and gain. In the present dynamic global environment, exploring
investment avenues are of great relevance. Investment skills developed over a period
of time are considerably influenced by experience and spadework carried out to
arrive at conclusions. The success of an investment activity depends on the knowledge
and ability of investors to invest, the right amount, in the right type of investment, at
the right time. Real assets, being tangible material things, are less liquid than financial
assets. Compared to financial assets, returns on real assets are more difficult to
measure accurately due to the absence of broad, ready, and active market.

Financial assets available to individual investors are manifold, having different

concomitant benefits to choose from. All financial investments are risky but the
degree of risk and return differ from each other. An investor has to use his discretion,
which is an art acquired by learning and practical experience. The knowledge of
financial investment and the art of its management are the basic requirements for a
successful investor. Investment also lies in its liquidity, apart from risk and return
on investment. Liquidity through easy marketability of investments demands the
existence of a well organized government regulated financial system.

Financial system comprises of financial institutions, services, markets and

instruments, which are closely related and work in conjunction with each other. The
litany of new financial institutions and instruments developed in recent years, with the
ostensible objective of modernizing the financial sector, is impressively long; mutual
funds, discount and finance house of India, money market mutual funds, certificate of
deposit, commercial paper, factoring and treasury bills.

Financial services through the network of elements (institutions, markets and

instruments) serve the needs of individuals, institutions and companies. It is

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 -through these elements, the functioning of the financial system is facilitated.
Financial services comprise of various functions and services that are provided by
financial institutions. Financial services are offered by both asset management
companies, which include leasing companies, mutual funds, merchant bankers, issue
managers, portfolio managers and liability management companies comprising of bill
discounting houses and acceptance houses. Financial services lend a big hand in
raising the required funds and ensure its efficient deployment. Over the years, the
financial services in India have undergone revolutionary changes and had become
more sophisticated, in response to the varied needs of the economy.

The process of financial sector reforms, economic liberalization and globalization of

Indian capital market had generated and augmented the interest of the investors in
equity. But, due to inadequate knowledge of the capital market and lack of
professional expertise, the common investors are still hesitant to invest their hard
earned money in the corporate securities. The advent of mutual funds has helped in
garnering the investible funds of this category of investors in a significant way. As
professional experts manage mutual funds, investment in them relieves investors from
the emotional stress involved in buying and selling of securities.

Systematic Investment Plan:

Systematic investment plan is an approach to investing within managed investments
which involves investing a set of amount at regular intervals rather than investing a
larger lump sum amount in one shot. By investing this way you are not attempting to
capture the highs and lows of the market but rather the cost of your investment is
averaged over a period of time. The essence of sips is that when the markets fall
investors automatically acquire more units. Likewise they acquire lesser units when
the market rises. This means that you buy less when the price is high whereas you buy
more the price is low. Hence the average cost per unit drops down over a period of
time. Mutual funds that invest in stock market related instruments cannot be termed
risk-free or safe as investment in shares are inherently risky by nature, whereas funds
that invest in fixed-income instruments are relatively safe and

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 -those that invest only in government securities are the safest. Systematic investment
plan (sip) is a smart financial planning tool that helps you to create wealth, by
investing small sums of money every month, over a period of time. Systematic
investment plan (sip) is a planned approach to investments and an investment
technique that allows you to provide for the future by investing small amounts of
money in mutual fund schemes of your choice

Types of mutual fund scheme

Mutual fund schemes can be classified into different categories depends on their
investment goals or their maturity time .mutual fund schemes can be classified into
three categories based on their maturity periods.

Open-ended funds:
An open-ended fund or scheme is one that is available for subscriptions and
redemptions on a continuous basis. Investors can willingly sell and buy units at net
asset value (NAV) related prices which are declared on weekly bases.

Close-ended funds:
A closed-ended fund is a type of mutual fund or investment vehicle that issues a
fixed number of shares, which are then traded on a stock exchange. Unlike open-
ended funds, closed-ended funds do not continuously issue or redeem shares based on
investor demand.

OPPORTUNITY OF MUTUAL FUND

Opportunities of mutual funds are tremendous especially when investment is
concerned. For any individual who intends to allocate his assets into proper forms of
investment and want to diversify his investment portfolio as well as the risks,
mutual funds can be proved as the biggest opportunity. Investors get a lot of
advantages with the mutual fund investment. Firstly, they are not required to
carry on intensive research and detailed analysis on stock market and bond
market. This work is done by the fund managers of the investment management
company on behalf of the investors. In fact, the professional fund managers who
handle the mutual funds of any particular company are able to speculate the
market trend more correctly than any
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 -common individual .good speculation about the trends of stock prices and bond
prices leads to right allocation of funds in the right stocks and bonds resulting in good
rate of returns.

Investors also get the advantage of high liquidity of the mutual funds. This
means the investors can enjoy easy access to the funds invested in the mutual
funds whenever they require the money. When the investors invest in any mutual
fund, they are given some equity position in that fund.The investors can any time
sell their mutual fund shares to get back the money invested in mutual funds. The
only thing is that the rate of return that they will get may not be favorable as the
return depends on the present market condition. The greatest opportunity that the
mutual funds offer is the opportunity of diversifying their investments .investment
diversification actually diversifies the risk associated with investment .this is because,
if at a time, if prices of some stocks are declining, decreasing the value of investment,
prices of some other stocks and bonds may tend to rise and in this way the loss of the
mutual fund is offset by the strength of the stocks whose prices are raising. As all the
mutual funds diversify their investments in various common stocks, preferred stocks
and different bonds, the risk to be borne by the investors are well diversified and in
other terms lowered.

MUTUAL FUND

CONSTITUENTS: Sponsors:

The sponsors initiate the idea to set up a mutual fund. It could be a registered
company, scheduled bank or financial institution. A sponsor has to satisfy certain
conditions, such as capital, record (at least five years’ operation in financial services),
and de-fault free dealings and general reputation of fairness. The sponsors appoint the
trustee, AMC and custodian. Once the AMC is formed, the sponsor is just a
stakeholder.

Trust/ Board of Trustees:

Trustees hold a fiduciary responsibility towards unit holders by protecting their
interests .Trustee floated and market schemes, and secure necessary approvals. They
check if the AMC’s investments are within well-defined limits,

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 -whether the fund’s assets are protected , and also ensure that unit holders get their
due returns. They also review any due diligence by the AMC. For major decisions
concerning the fund, they have to take the unit holder’s consent. They submit reports
every six months to

SEBI: Investors get an annual report. Trustees are paid annually out of the fund’s
assets -0.5 percent of the weekly net asset value.

Fund Managers/ AMC:

They are the ones who manage money of the investors. An AMC takes decisions,
compensates investors through dividends, maintains proper accounting and
information for pricing of units, calculates the NAV, and provides information on
listed schemes. It also exercises due diligence on investments, and submits quarterly
reports to the trustees. A fund’s AMC can neither act for any other fund nor undertake
any business other than asset management. Its net worth should not fall below Rs.
10crore. And, its fee should not exceed 1.25 percent if collections are below Rs.
100crore and 1 percent if collections are above Rs. 100crore. SEBI can pull up an
AMC if it deviates from its prescribed role.

Custodian:
Often an independent organization, it takes custody of securities and other assets of
mutual fund. Its responsibilities include receipt and delivery of securities, collecting
income distributing dividends, safekeeping of the units and segregating assets and
settlements between schemes. Their charges range between 0.15-0.2 percent of the net
value of the holding. Custodians can service more than one fund.

MARKETING STRATEGIES ADOPTED BY THE

MUTUAL FUNDS
The present marketing strategies of mutual funds can be divided into three main
headings:

 Direct marketing

 Selling through intermediaries.

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  Joint Calls

Direct Marketing:
This constitutes 20 percent of the total sales of mutual funds. Some of the important
tools used in this type of selling are:

Personal Selling:
In this case the customer support officer or Relationship Manager of the fund at a
particular branch takes appointment from the potential prospect. Once theappointment
is fixed, the branch officer also called Business Development Associate (BDA) in
some funds then meets the prospect and gives him all details about the various
schemes being offered by his fund. The conversion rate in this mode of selling is in
between 30% - 40%.

Telemarketing:
In this case the emphasis is to inform the people about the fund. The names and phone
numbers of the people are picked at random from telephone directory. Some fund
houses have their database of investors and they cross sell their other products.
Sometimes people belonging to a particular profession are also contacted through
phone and are then informed about the fund. Generally the conversion rate in this
form of marketing is 15% - 20%.

Direct mail:
This one of the most common method followed by all mutual funds . Addresses of
people are picked at random from telephone directory, business directory, professional
directory etc. The customer support officer (CSO) then mails the literature of the
schemes offered by the fund. The follow up starts after 3 to 4 days of mailing the
literature. The CSO calls on the people to whom the literature was mailed. Answers
their queries and is generally successful in taking appointments with those people. It is
then the job of BDA to try his best to convert that prospect into a customer.

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Advertisements in newspapers and magazines:
The funds regularly advertise in business newspapers and magazines besides in
leading national dailies. the purpose to keep investors aware about the schemes
offered by the fund and their performance in recent past. Advertisement in tv/fm
channel: the funds are aggressively giving their advertisements in tv and fm channels
to promote their funds.

Hoardings and Banners:

In this case the hoardings and banners of the fund are put at important locations of the
city where the movement of the people is very high. The hoarding and banner
generally contain information either about one particular scheme or brief information
about all schemes of fund.

Selling through intermediaries:

Intermediaries contribute towards 80% of the total sales of mutual funds. These are
the people/ distributors who are in direct touch with the investors. They perform an
important role in attracting new customers. Most of these intermediaries are also
involved in selling shares and other investment instruments. They do a commendable
job in convincing investors to invest in mutual funds. A lot depends on the after-sale
services offered by the intermediary to the customer. Customers prefer to work with
those intermediaries who give them right information about the fund and keep them
abreast with the latest changes taking place in the market especially if they have any
bearing on the fund in which they have invested.

Regular Meetings with distributors:

Most of the funds conduct monthly/bi-monthly meetings with their distributors. The
objective is to hear their complaints regarding service aspects from funds side and
other queries related to the market situation. Sometimes, special training programmers
are also conducted for the new agents/ distributors. Training involves giving details
about the products of the fund, their present performance in the market, what the
competitors are doing and what they can do to increase the sales of the fund

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Joint Calls:
This is generally done when the prospect seems to be high net worth investor . The
BDA and the agent (who is located close to the residence or area of operation)
together visit the prospect and brief him about the fund. The conversion rate is very
high in this situation, generally, around 60%. Both the fund and the agent provide
even after sale services in this particular case.

The most important trend in the mutual fund industry is the aggressive explosion of
the foreign owned mutual funds companies and the decline of the companies floated
by nationalized banks and small private sector players. Many nationalized banks got
into the mutual funds business in the early nineties and got off to a good start due to
the stock market boom prevailing then.

These banks did not really understand the mutual funds business and they viewed it as
another kind of banking activity. Few hired specialized staff and generally chose to
transfer staff from parent organizations. The performance of most of the schemes
floated by these organizations was not good. Some schemes had offered guaranteed
returns and their parent organizations had to bail out these AMC by paying large
amount of money as the difference between the guaranteed and actual returns. The
service levels were also very bad.

Most of these AMC have not been able to retain staff, float new schemes etc. And it is
doubtful whether, barring a few exceptions, they have serious plansof continuing the
activity in a major way. The experience of some of the AMC floated by the private
sector Indian companies was also very similar. They quickly realized that the AMC
business is a business, which makes money in the long term and requires deep-
pocketed support in the intermediate years. Some have sold out to foreign owned
companies; some have merged with others and there is a general restructuring going
on. The foreign owned companies have deep pockets and have come here with the
expectations of a long haul. They can be credited with the introduction of many new
practices such as new product innovation, sharp improvement in the service standards
and disclosure, usage of technology, broker education and support etc. In

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 -fact, they have forced the industry to upgrade itself and its service level of
organization.

CHALLENGES FACING MUTUAL FUND

People find mutual fund investment so much interesting because they think they can
gain high rate of return by diversifying their investment and risk. But, in reality this
scope of high rate of returns is just one side of the coin. On the other side, there is the
harsh reality of highly Fluctuating Rate of Returns. Though there are other
disadvantages also, this concern of fluctuating returns is most possibly the greatest
challenge faced by the mutual fund.

The Issue of Fluctuating Returns

In spite of being a diversified investment solution, mutual funds investment in no way
guarantees any return. If the market prices of major shares and bonds fall, then the
value of mutual fund shares are sure to go down, no matter how diversified the mutual
fund portfolio be. It can be said that mutual fund investment is somewhat lower risky
than Direct Investment in stocks. But, every time a person invests in mutual fund, he
unavoidably carries the risk of losing money.

Diversification or Over Diversification

In order to diversify the investment, many times the mutual fund companies get
involved in over diversification. The risk of holding a single financial security is
removed by diversification. But, in case of over diversification, investors diversify so
much that many times they end up with investing in funds that are highly related and
thus the benefit of risk diversification is ruled out.

Taxes
Every year, most of the mutual funds sell substantial amount of their holdings. If they
earn profit by this sell, then the investors receive the profit income. For most of the
mutual funds, the investors are bound to pay taxes on these incomes, even if they
reinvest the income.

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Costs
Most of the mutual funds charge shareholder fees and fund operating fees from the
investors. In the year, in which mutual fund fails to make profit and the investors
get no return, these fees only blow up the losses.

HISTORY OF MUTUAL FUND

1. Early Beginnings (1963-1987)

 1963 - Establishment of UTI:

o The Unit Trust of India (UTI) was established as the first mutual
fund in India. It was set up by the Indian government to provide
small investors with an opportunity to invest in the capital market.
o UTI launched its first scheme, the Unit Scheme 1964, which gained
popularity among investors.
 1987 - Launch of Public Schemes:
o UTI launched its first mutual fund scheme for the general public,
marking a significant milestone in making mutual funds accessible
to retail investors.

2. Regulatory Framework (1987-1993)

 1988 - SEBI Formation:
o The Securities and Exchange Board of India (SEBI) was
established to regulate the securities market, including mutual
funds. This was a critical step in creating a structured framework
for the industry.
 1991 - Economic Reforms:
o Economic liberalization in India led to increased participation of
private players in the mutual fund industry. This opened the market
to various private mutual funds and investment schemes.

3. Growth and Expansion (1993-2000)

 1993 - Introduction of Private Mutual Funds:
o SEBI introduced regulations for mutual funds, allowing private
companies to enter the market. This led to a proliferation of mutual
fund schemes and increased competition.
o The first private mutual fund was launched by Kothari Pioneer.
 Late 1990s:

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 o Numerous financial institutions and banks began to establish their
own mutual fund divisions, significantly expanding the product
offerings and marketing strategies.

4. Post-2000 Developments
 2002 - Mutual Fund (Amendment) Act:
o The Act was introduced to enhance regulatory oversight and
transparency in the mutual fund industry. It established guidelines
for fund management and investor protection.
 **2003 - Introduction of the Systematic Investment Plan (SIP):
o SIPs gained popularity, allowing investors to invest a fixed amount
regularly. This approach encouraged disciplined investing and
increased participation from retail investors.

5. Recent Trends (2010-Present)

 2010s - Digital Transformation:
o The rise of technology and online platforms revolutionized the
mutual fund industry. Investors could now invest through mobile
apps and online portals, making it more accessible.
o The introduction of features like instant KYC (Know Your
Customer) further simplified the investment process.
 2017 - Introduction of Direct Plans:
o SEBI allowed mutual funds to offer direct plans, eliminating the
distributor commission and reducing costs for investors. This
increased transparency and allowed investors to save on expenses.
 Growth of SIPs:
o SIPs became increasingly popular, contributing to a substantial
portion of mutual fund inflows. They provided an effective way for
investors to build wealth over time.
 Rise of ESG Funds:
o There was a growing interest in Environmental, Social, and
Governance (ESG) investing, with several mutual funds aligning
their strategies to focus on sustainable practices.

6. Current Landscape
 2021 - Significant AUM Milestone:
o The mutual fund industry in India surpassed ₹30 lakh crore
(approximately $400 billion) in assets under management,
reflecting the growing popularity of mutual funds.
 Investor Education Initiatives:
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 o The industry has placed a strong emphasis on investor education
and awareness, helping new investors understand the benefits and
risks associated with mutual funds.
 Regulatory Changes:
o Continuous updates to regulations focus on enhancing transparency,
promoting ethical practices, and protecting investor interests.

Advantages of Mutual Funds:-

1. Diversification
 Mutual funds invest in a variety of securities, which helps spread risk. This means if
one investment performs poorly, others may perform well, reducing overall volatility.

2. Professional Management
 Fund managers, who are experienced professionals, actively manage the fund’s
portfolio. They make investment decisions based on research and market analysis,
aiming to optimize returns.

3. Liquidity
 Most mutual funds allow investors to buy or sell shares at the net asset value (NAV)
on any business day, providing ease of access to funds.

4. Affordability
 Mutual funds typically have lower minimum investment requirements compared to
direct stock purchases, making them accessible for small investors.

5. Systematic Investment Plans (SIPs)

 Investors can invest a fixed amount regularly through SIPs, encouraging disciplined
saving and investment over time.

6. Variety of Options
 There are various types of mutual funds (equity, debt, hybrid, etc.) catering to different
investment goals, risk appetites, and time horizons.

7. Tax Benefits

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  Certain mutual funds, like Equity Linked Savings Schemes (ELSS), offer tax
deductions under Section 80C of the Income Tax Act in India, making them a tax-
efficient investment option.

8. Transparency
 Mutual funds are required to disclose their portfolios, performance, and fees, allowing
investors to make informed decisions.

9. Regulatory Oversight
 In many countries, mutual funds are regulated by government agencies (like SEBI in
India), providing a level of protection for investors against fraud and mismanagement .

10. Ease of Use

 Investing in mutual funds is straightforward, with many platforms offering user-
friendly interfaces for transactions and portfolio tracking.

11. Potential for Higher Returns

 Over the long term, equity mutual funds, in particular, have the potential to deliver
higher returns compared to traditional savings instruments.

12. Income Generation

 Some mutual funds pay out dividends, providing a source of income for investors,
which can be reinvested or used for expenses.

13. Flexibility
 Investors can switch between funds within the same fund house, depending on
changing investment goals and market conditions.

14. Risk Management

 Fund managers actively monitor and manage risks associated with investments,
making adjustments as needed to align with market conditions .

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DISADVANTAGES OF MUTUAL FUNDS:-

1. Fees and Expenses

 Mutual funds charge management fees, which can reduce overall returns. These may
include expense ratios, sales loads, and redemption fees.

2. Market Risk
 Mutual funds, especially equity funds, are subject to market volatility. The value of
investments can fluctuate based on market conditions, leading to potential losses.

3. Lack of Control
 Investors have no say in individual investment decisions made by fund managers. This
can be a disadvantage for those who prefer to manage their investments actively.

4. Performance Variability
 Not all mutual funds outperform the market. Some may underperform their
benchmarks, making it essential for investors to research and select funds carefully .

5. Tax Implications
 Mutual fund investors may face capital gains taxes when the fund manager sells
securities within the fund. This can lead to unexpected tax liabilities.

6. Dilution of Returns
 While diversification reduces risk, it can also dilute potential returns. A mutual fund
may not perform as well as individual stocks during a market uptrend.

7. Redemption Risks
 In certain market conditions, funds may impose restrictions on redemptions or charge
fees, affecting liquidity for investors.

8. Complexity
 The variety of mutual fund options and investment strategies can be overwhelming,
making it challenging for investors to choose the right fund for their needs .

9. Minimum Investment Requirements

 Some mutual funds have minimum investment thresholds, which might be a barrier for
small investors.

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10. Sales Pressure
 Investors may face pressure from financial advisors to invest in specific funds that may
not align with their best interests due to commission structures.

ADVANTAGES OF INVESTING INTO A MUTUAL FUND: -

Flexibility: mutual fund investments also offer a lot of flexibility with features such
as systematic investment plans, systematic withdrawal plans & dividend reinvestment.

Affordability: they are available in units so this makes it very affordable. Because of
the large corpus, even a small investor can benefit from itsinvestment strategy.

Liquidity: in open-ended schemes, there is an option of withdrawing or redeeming

money.

Diversification: risk is lowered with mutual funds as they invest across different
industries & stocks.

Professional management: expert fund managers of the mutual fund analyze all
options based on experience & research.

Professional management: expert fund managers of the mutual fund analyze all
options based on experience & research.

Potential of return: the fund managers who take care of mutual fund have access to
information and statistics from leading economists and analysts around the world.
Because of this, they are in a better position than individual investors to identify
opportunities for investments to flourish.

Low costs: the benefits of scale in brokerage, custodial and other fees translate into
lower costs for investors. Regulated for investor protection - the mutual funds sector is
regulated to safeguard the investor's interests

16
NEED OF THE STUDY
 The main purpose of this study is to analyses the investors perceptiontowards
mutual fund

 Further, the study also understand problem faced by the investor and
motivating factor to reinvest in mutual fund

SCOPE OF STUDY
 To get a better understanding of how investors feel about mutual funds
 Define and analyze the investor's shaping and motivating factors
 The analysis measure of the investor's experience
 Define and examine the investor's shaping and motivating factors

OBJECTIVES OF THE STUDY

 To study the investor perception towards mutual fund.

 To understand the factor influencing the investor while makingdecision.

 To examine the level of satisfaction of the investor.

 To identify the problem faced by mutual fund investor.

LIMITATION OF THE STUDY

 The analysis of the present study has been carried out based on the
information given by the investor.

 The research was limited to Vellore district and due to time constrictonly 105
numbers of respondents were considered.

 The result fully depends on information given by the investor whichmay

be based.

17
 REVIWE OF
LITERATURE

CHAPTER-2

18
2.1 REVIWE OF LITERATURE
Dr. Nishi Sharma (2012) - The concept of mutual fund emerged in Netherlands in
18th century and introduced in India by unit trust of India in1960s. As the mutual
fund industry provides an option of diversified investment structure with varying
degree of risk, it was supposed to be the most lucrative market for Indian investors. It
was believed that it will surely tap the savings of common man. But in practice it
failed to become a primary choice for investment to Indian investor. During almost six
decades (1965-2011) the value of assets under management of mutual fund industry
experienced great swings. As against the developed countries where almost every
second investor is a mutual unit holder, the product could not get much popularity in
India. In this reference, the present paper attempts to investigate the reasons
responsible for lesser recognition of mutual fund as a prime investment option. It
examines the investor’s perception with reference to distinct features provided by
mutual fund companies to attract them for investing in specific funds/schemes. The
study uses principal component analysis as a tool for factor reduction. The paper
explored three factors named as fund/scheme related attributes, monetary benefits and
sponsor’s related attributes (having respectively six, four and four variables) which
may be offered to investors for securing their patronage. The results are expected to
provide fruitful insight to mutual fund companies for tailoring their offers suitable to
cater the needs andexpectations of Indian investors.

2-Simran Saini; Dr. Bimalanju Anjum (2011) Indian mutual fund has gained a
lot of popularity from the past few years. Earlier only UTI enjoyed the monopoly in
this industry but with the passage of time many new players entered the market, due to
which the UTI monopoly breaks down and the industry faces a severe competition. As
the time passes this industry has become a buzz word in the Indian financial system.
So, it is very important to know the investors’ perception about this industry. The
present study analyses the mutual fund investments in relation to investor’s behavior.
Investors’ opinion and perception has been studied relating to various issues

19
like type of mutual fund scheme, main objective behind investing in mutual fund
scheme, role of financial advisors and brokers, investors’ opinion relating to factors
that attract them to invest in mutual funds, sources of information, deficiencies in the
services provided by the mutual fund managers, challenges before the Indian mutual
fund industry etc.

3- Arathy B,Aswathy A Nair, Anju Sai P ,Pravitha N R (2015) Mutual funds

provide a platform for a common investor to participate in the Indian capital market
with professional fund management irrespective of the amount invested. The Indian
mutual fund industry is growing rapidly and this is reflected in the increase in assets
under management of various fund houses. Mutual fund investment is less risky than
directly investing in stocks and is therefore a safer option for risk adverse investors.
This project aims at finding out the factors affecting investment decision on mutual
funds and its preference over retail investors. This project also aims at finding about
the factors that prevent the people to invest in mutual funds. The findings will help
mutual fund companies to identify the areas required for improvement and can also
improve their marketing strategies. It will help the mf companies to create new and
innovative product according to the orientation of investors

4-Vipin Kumar, Preeti Bansal, India (2014) The mutual fund sectors are one
of the fastest growing sectors in Indian economy and have awesome potential for
sustained future growth. Mutual funds make saving and investing simple,
accessible,and affordable. The advantages of mutual funds include professional
management, diversification, variety, liquidity, affordability, convenience, and ease of
recordkeeping as well as strict government regulation and full disclosure. Financial
markets are becoming more extensive with wide-ranging financial products trying
innovations in designing mutual funds portfolio but these changes need unification in
correspondence with investor’s expectations. Thus, it has become imperative to study
mutual funds from a different angle, which is to focus on investor’s perception and
expectations. This research paper focused attention on number of factors that
highlights investors’ perception about mutual funds. It was found that mutual funds
were not that much known to investors, still investor rely upon bank and post office
deposits, most of the investor used to invest in mutual fund for not

20
more than 3 years and they used to quit from the fund which were not giving desired
results. Equity option and sip mode of investment were on top priority in investors’
list. It was also found that maximum number of investors did not analyze risk in their
investment and they were depending upon their broker and agent for this work.

5-Inderjit Kaur, K.P. Kaushik (2016) Mutual funds in India have not been as
favorable investment alternatives as in developed countries, as assets under
management of mutual funds to gross domestic product in India have been 7- 8 per
cent compared to 37 per cent globally. Further, investor base of mutual funds has been
narrow, as retail investors constitute 98 per cent of folios but contributed only 58 per
cent of investments in September 2014. To broaden the investor base for mutual funds
in India, it remains imperative to understand the determinants of investment behavior
of investors towards mutual funds. This study aims to achieve this objective. The
research provided that investment behavior could be explained with awareness,
perception and socioeconomic characteristics of individual investors. Better awareness
related to various aspects of mutual funds will have a positive effect on
investment in mutual funds. Contrary to belief, risk perception for mutual funds had
no effect on the investment decision. Further, socioeconomic characteristics such as
age, gender, occupation, income and education of investors had an impact on the
awareness about mutual funds.

6-Sharma; Parihar (2013) the mutual fund industry is a fast-growing sector of the
Indian financial markets. They have become major vehicle for mobilization of
savings, especially from the small and household savers for investment in the capital
market. Mutual funds entered the Indian capital market in 1964 with a view to
provide the retail investors the benefit of diversification of risk, assured returns, and
professional management. Every type of investment, including mutual funds, involves
risk. Risk refers to the possibility that investors will lose money (both principal and
any earnings) or fail to make money on an investment.

7-G.Velmurugan, V. Selvam, N. Abdul Nazar (2015) The economic

liberalization and globalization have brought a fervent environment for the

21
common and small investors who are willing to participate in the various investment
avenues available in india. There are large number of small investors, who have the
ability to save and make an investment in share market, gold, real estate, insurance
and post office. In recent years, numerous researches have been conducted on
investors’ perception towards various investments from various perspectives. From a
survey on investment literatures of equity, insurance, and mutual fund perspective,
there are some studies based on the investment on various avenues made by
researchers. However, the investors’ perception towards various investment avenues
in Vellore city, Tamil Nadu and India is yet to be explored.

8-Dr.V.Sridevi (2019) a mutual fund is an investment medium that pools funds from
various investors and invests the funds in stocks, bonds, short-term money-market
instruments, other securities or assets or some combination of these investments. The
primary goal behind investment in mutual fund is to earn goods return with
comparatively low risk. The main objective of the study is to examine the investor’s
behavior towards mutual fund investment. A sample of 150 individual investors has
been selected for this purpose. Statistical tools like percentage analysis, chi-square test
and garret ranking technique were used to analysis the collected data. It can be
concluded that the Indian mutual fund industry is growing at a good pace

Martin Mysa (2020) a mutual fund is an investment instrument that brings funds
from different buyers and facilitates in investing the funds in bonds, short-term
money-market instruments, stocks and other securities or assets are few combinations
of investments. The primary goal behind investment in mutual fund is to earn goods
return with comparatively low risk. The main objective of this research is to identify
buyers’ preference towards mutual fund in secunderabad metropolitan city. By using
in structured questionnaire, description statistical tools like chi-square test have been
used for analyzing the data. The findings from this research are that the most of the
buyers are doubtful to invest the new age investment like mutual funds.

9-Mr.K.Sasikumar, Dr.K.Krishnamurthy (2020) This research aims to study

retail investors’ preferences towards mutual funds. India is one of the fastest

22
growing economies in the world with rising incomes, but also savings and
investments. The main sector of emerging financial markets is investment in mutual
funds. The mutual fund sector plays a key role in the development of financial
markets, business sector and growth of financial intermediaries. The regulatory
measures to develop mutual fund industry and to protect the interests of mf investors
are also important. This study required to examine theoretical aspects of indian mutual
fund industry and retail investor’s preferences towards investment.

10-Dr. Anita Raman, Mrs. N. Sakthi Selvarohin (2020) An efficient financial

sector mobilizes savings and allocates it to those investments which yield the highest
rate of return. Savings are the difference between income and consumption of an
individual. An increase in the volume of real domestic savings means that resources
that would have been used for consumption are released for investment. India has
high level of saving rate because of high level of saving motives of individuals.
Every individual seems to understand the basic principle of investment. Investment
means the purchase made by an individual of a financial or real asset that produces a
return proportion to the risk assumed over some future investment period and for
achieving this investor decides on how and where to deploy his/her saving. Saving
motive is thus, a desire to reserve certain mixture of income for future. The main
objective of investor is to invest in different speculation avenues that deliver expected
returns and help to chance the risk in future. The investor has some motive for
making an investment. The salaried employee category of investor however gives
more importance to create more stand-in savings to meet the risk in future. The
present study aims to determine and identify investor’s preference relating to making
an investment in public and private sector mutual funds. It further analyses the
investor’s satisfaction level of an investment in public and private sector mutual
funds. Hence, the study establishes the responsiveness of the investors towards
investing in mutual funds

11-L. Meena (2016) Mutual funds are the pooling of resources from larger small
investors and then making it a big corpus to invest in stock market by professionals.
In spite of umpteen efforts by regulators (sebi, amfi) and by

23
investment advisory firms, mutual funds have reached merely 5% of indian
population. Since there exist enormous untapped market, this paper brings forth how
rural investors perceive the various marketing strategies devised and implemented
by investment advisory firms. This paper determines the rural investors in Madurai
city towards the three broader marketing strategies by mutual funds viz. Direct selling,
selling through intermediaries and joint calls. It was recommended that a new team of
trained sales personnel need to be deployed to the rural areas and the code of conduct
for them are to be tightened to prevent those misguiding illiterate rural investors for
commission motive.

12-Dr. Meenakshi Bindal, Dr. Bhuwan Gupta, Sweety Dubey (2019) This
examination on investor’s acknowledgment towards and late improvement and
headway of mutual fund premiums in Alwar city goes under the board an area of
organization publicizing. In the wide thought of organization publicizing, it
exclusively centers on the exhibiting of cash related organization specifically basic
resources. Well-ordered Indian budgetary market is getting the chance to be engaged
and the supply of various fiscal instruments ought to be in parity to the premium
perspectives of the monetary authorities. The prime drive of any hypothesis is to
get most extraordinary returned with a base danger and normal resources allow to
the budgetary masters.

24
 CHAPTER-3
RESEARCH METHODOLOGY

RESEARCH DESIGN

A research design is considered as the framework or plan for a study that guides as
well as helps the data collection and analysis of data.

Descriptive Research Design

Descriptive research is a study designed to depict the participants in an accurate way.
More simply put, descriptive research is all about describing people who take part in
the study.

SAMPLING TECHNIQUES
Data collection

The data was collected using questionnaire from professionals/ common man like
those who wants invest in mutual funds and other investment option.

Convenience sampling method

A convenience sample is one of the main types of non-probability sampling methods.
A convenience sample is made up of people who are easy to reach.

SOURCES OF DATA
Primary Data sources:

Primary data are those which are fresh and are collected for the first time, and thus
happen to be original in character. The primary data was collected through direct
personal interviews (open ended and close ended questionnaires)

Secondary Data sources:

Secondary data refers to data that was collected by someone other than the user.
Common sources of secondary data for journal and websites ,data that was originally
collected for other research purposes.
25
 STRUCTURE OF QUESTIONNAIRE:
Direct personal interviews and open-ended and closed-ended questionnaires were
used to collect the primary data.

SAMPLE SIZE:
A total of 105 people were chosen. Investors, neighborhoods, and workplaces were
used to create the study. The respondents were chosen using simple random sampling.

PERIOD OF STUDY:
The period of study is from June 2024 to August 2024 which is four months ofstudy

ANALYTICAL TOOLS:
The analytical tools used are SPSS for testing the hypothesis, Chi Square test in SPSS
tool and ANOVA in SPSS tool.

26
 CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
PERCENTAGE ANALYSIS

Table: 4 .1.1Age group of the Respondents

Age Group No. of Respondents Percentage

Less than 20 0 0

20-30 26 25%

30-40 66 63%

50 and above 13 12%

Total 105 100

Source: Primary data.

12% 0%
25%
Less than 20
20-30
30-40
63% 50 and above

Chart: 4.1.1 Age group of the

Respondents Interpretation

From the above table it is interpreted that the 63% respondents are fall in theage
category of 30-40 years, 25% in 20-30 years and 2% in 50 and above.

Inference
Majority (63%) of the respondents are 30- 40 age group.
27
Table: 4.1.2 Gender of the Respondents

Gender No. of Respondents Percentage

Male 74 70%

Female 31 30%

Total 105 100

Source: Primary data.

30%

MALE
FEMALE
70%

Chart: 4.1.2 Gender of the

Respondents Interpretation

From the above table it is interpreted that the 70% respondents are male and30%
respondents are female

Inference
Majority (70%) of the respondents are male.

28
Table: 4.1.3 Occupation of the Respondents
Occupation No. of Respondents Percentage

Government employee 13 13%

Private employee 36 34%

Business 43 43%

Other (retired, agriculture 13 12%

etc.)
Total 105 100

Source: Primary data.

13%
12%

Government employee

Private employee
41%
Business

34% Other(retired,agricultur
e etc.)

Chart: 4.1.3 Occupation of the

Respondents Interpretation

From the above table it is interpreted that the 41% respondents are says business, 34%
in private employee, 13% in government employee and 12% in other (retried,
agriculture etc.)

Inference
Majority (41%) of the respondents are says business.

29
Table: 4.1.4Monthly income of the Respondents
Monthly Income No. of Respondents Percentage

Less than Rs.50000 51 49%

Rs.50000-Rs.100000 42 40%

More than Rs.1 lakh 12 11%

Total 105 100

Source: Primary data.

11%

49%

40%

Less than Rs.50000 Rs.50000-Rs.100000

More than Rs.1 lakh

Chart: 4.1.4 Monthly income of the

Respondents Interpretation

From the above table it is interpreted that the 49%of the respondents are falls in
monthly income category of less than Rs.50000, 40% in Rs.50000- Rs.100000 and
11% in more than Rs.1 lakh.

Inference
Majority (49%) of the respondents are falls in monthly income category of less than
Rs.50000.

30
Table: 4.1.5 Annual savings of the Respondents
Annual Savings No. of Respondents Percentage

Less than Rs.50000 58 55%

Rs.50000-Rs.100000 36 36%

More than Rs.1 lakh 09 9%

Total 105 100

Source: Primary data.

9%

55%
36%

Less than Rs.50000 Rs.50000-Rs.100000

More than Rs.1 lakh

Chart: 4.1.5 Annual savings of the

Respondents Interpretation

From the above table it is interpreted that the 55%of the respondents are says annual
saving less than rs.50000, 36% in rs.50000-rs.100000 and 9% in morethan rs.1 lakh

Inference
Majority (55%) of the respondents are says annual saying is less than Rs.50000.

31
Table: 4.1.6 Source of awareness of the Respondents
Source of Awareness No. of Respondents Percentage

News paper& magazine 17 18%

Internet 41 43%

Television 16 17%

Relatives and friend 21 22%

Total 105 100

Source: Primary data.

22% News paper&

18%
magazine
Internet

Television
17%

43%

Chart: 4.1.6 Source of awareness of Mutual

Funds Interpretation

From the above table it is interpreted that the 43% of the respondents are aware of the
mutual fund investment through internet, 22% in relatives and friends, 18% in
newspaper& magazine and 17% in television.

Inference
Majority (43%) of the respondents are aware of the mutual fund investments through
internet

32
Table: 4.1.7 Factors influencing investment in Mutual Fund
Influence Most Less Not at all
Important Neutral
Factor Important Important Important Total

High risk 36 46 19 4 0 105

Tax saving 32 45 26 2 0 105

Liquidity of
24 49 29 2 1
fund 105

Safety and
23 52 25 4 1
security 105

Regular
19 52 24 8 2
income 105

Regular
19 49 29 6 2
saving 105

Risk involved 17 52 26 3 7 105

Diversification 17 52 24 12 0 105

Easy payment 20 46 23 12 4 105

Source: Primary data.

33
 10% 17% High risk

8% Tax saving Liquidity

of fund Safety and
8% securityRegular
16% income Regular
saving Risk involved
9%
Diversification
Easy payment
12%
9%
11%

Chart: 4.1.7 Factors influencing investment in

Mutual Fund Interpretation

From the above table it is interpreted that the 17% of the respondents are influencing
for high risk, 16% in Tax saving, 12% in liquidity of fund, 11% in safety and security,
10% in easy payment, 9% in regular saving, 9% in regular income risk, 8% in risk
involved and 8% in diversification.

Inference
Majority (17%) of the respondents are influencing for high risk.

34
Table: 4.1.8 Investor satisfaction levels of various motivating
factors
Influence Highly Satisfied Neutral Dissatisfi Highly Total
factor satisfied ed dissatisfi
ed

High risk 24 36 38 7 0 105

Tax saving 26 48 27 2 2 105

Liquidity of
33 39 25 6 2
fund 105

Safety and
37 35 23 7 3
security 105

Regular
23 42 33 7 0
income 105

Regular
17 48 27 4 9
saving 105

Risk
17 45 38 4 1
involved 105

Diversificati
13 38 46 4 4
on 105

Easy
17 42 39 6 1
payment 105

Source: Primary data.

35
 8% 12%
6% High risk

8% 13% Tax saving

Liquidity of fund
8%
16% Safety and
security Regular
income
11%
Regular saving
18%

Chart: 4.1.8 Investor satisfaction levels of various

motivating factors Interpretation

From the above table it is interpreted that the 18% of the respondents are influencing
factor for safety and security, 16% in liquidity of fund, 13% in tax saving, 12% in
high risk, 11% in regular income, 8% in regular saving.8% in risk involved, 8% in
easy payment and 6% in diversification.

Inference
Majority (18%) of the respondents motivating factor is safety and security.

36
Table: 4.1.9 Method of purchase Mutual Fund unit
Purchase No. of Respondents Percentage

Direct purchase 64 61%

Through brokers 41 39%

Total 105 100

Source: Primary data.

39%

61%
Direct Purchase
Through brokers

Chart: 4.1.9 Method of purchase Mutual

Fund unit Interpretation

From the above table it is interpreted that the 61% of the respondents arepurchase
the mutual fund units directly and 39% in through brokers.

Inference
Majority (61%) respondents are purchase the mutual fund units directly.

37
 CHAPTER-5
FINDING, SUGGESTION AND CONCLUSION
Findings:

 63% of the respondents are fall in the age category of 30- 40 years.
 70%of the respondents are male.
 41% of the respondents say business.
 49% of the respondents are falls in monthly income category of lessthan
rs.50000.
 55% of the respondents are says annual saving is less than 50000.
 43% of the respondents are aware of the mutual fund investment
through internet.
 61% of the respondents are purchase the mutual fund unit directly.
 88%of the respondents are aware of the risk involved in the mutualfund
investment.
 22%of the respondent’s problem is delay on selling unit.
 56% of the respondents are investing in mutual fund systematically.
 52% of the respondents are less than 2 years experience.
 43% of the respondents are duration of investment is up to 1 year to 2
years.
 55% of the respondents are preferred to invest in open endedinvestment.
 72% of the respondents are preferred reinvest in mutual funds.
 39% of the respondents are says good option to invest mutual fund.
 81% of the respondents are preferred friend and relatives to invest in
mutual fund.

Findings of Chi-Square:
 There is no significance difference between the problem faced byinvestor in
mutual fund and good opinion to invest in mutual fund.

38
Conclusion
The minds of the investing public look for investments are safe and that it will earn
good returns. This study conducted was regarding the factors influencing the investor’s
perception towards mutual fund investment. It is highlighted that investors of middle-
income level agrees that regular income and liquidity of the investment plays a
vital role. It can be perceived that high risk leads to high returns in the investment.
The flexibility in the investment would lead to good performance of the funds.
There’s a scope where investors belonging to different age groups seek for many other
factors that can attract them to invest in the mutual fund industry than just the ones
considered for the study. Measures should be taken to increase the confidence and
morale of the investors. This can be done through proper communication and by
educating investors to invest in mutual funds. Sensible and right information should
be given to them by various communication modes so that they get to know
about the latest trends in the market. Mutual funds are still and would carry on to be
the unique financial instrument in the country.

39
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development (ijmperd),M. Karthikeyan , s. Karthik & s. MuthupandiThe
perception and attitude of the mutual fund investors in the chennai city,Issn :
2249-6890; issn : 2249-8001,Vol. 8,6,2018,882.
 International journal of multidisciplinary research, Simran saini;
drbimalanjum; ramandeep saini, Investors 8awareness and perception about
mutual funds, Issn 2231 5780, Vol.1, Issue 1, 2011, 14-26
 International journal of pure and applied mathematics, M.samira, dr. K.
S. Sathyanaraynan, A study on investor’s preference towards mutual

42
 APPENDIX-I (Questionnaire)

1. Name:

2. Age group:

a) Less than 20

b) 20-30

c) 30-40

d) 50 and above

3. Gender:

a) Male

b) Female

4. Occupation:

a) Government employee

b) Private employee

c) Business

d) Student

e) Other (retired, agriculture etc.)

5. Monthly income:

a) Less than rs. 50000

b) Rs.50000-rs.100000

c) More than rs.1 lakh

6. Annual savings

a) Less than rs.50000

b) Rs.50000- rs.100000

c) More than rs.1 lakh

43
7. Source of awareness about mutual fund

a) News paper& magazine

b) Internet

c) Television

d) Relatives and friend

e) Agent

8. Investor opinion about the factors influencing investment in mutual fund

Influence Most Important Neutral Less Not at all

factor important important important

High risk

Tax saving

Liquidity of
fund

Safety and
security

Regular
income

Regular
saving

Risk involved

Diversification

Easy
payment

44
 a) Poor service of broker

b) Poor service of mutual fund company

c) Non availability of branch

9. When you invest in mutual fund which mode of investment will you prefer?

a) One time investment

b) Systemic investment plan

10. Investment experience in mutual fund?

a) Less than 2 years

b) 2 years to 6 years

c) 6 years to 10 years

d) Above 10 years

11. Duration of time preferred by respondent?

a) Up to 1 year to 2 year

b) 1 year to 3 years

c) 3 years to 5 years

d) More than 5 years

12. Which type of schemes do you prefer to invest?

a) Close ended

b) Open ended

13. Do you have plans to reinvest in mutual fund?

a) Yes

b) No

14. Do you think good option to invest in mutual fund?

a) Strongly agree

b) Agree

c) Neural

d) Disagree

45
 e) Strongly disagree

15. Do you prefer friends and relatives to invest in mutual fund?

a) Yes

b) No

46
 APPENDIX-II (Article)

International Research Journal of

Modernization in Engineering
Technology and Science

A STUDY ON INVESTOR’S PERCEPTION TOWARDS MUTUAL

FUND FOCUS ON VELLORE DISTRICT

Roshini Pranjana NV,

Master of business administration, Sathyabama Institute of Science

and Technology, Chennai, Tamil Nadu, India.

Dr. Palani. A

Head, School of Business Administration, Sathyabama Institute of

Science and Technology, Chennai, Tamil Nadu, India

ABSTRACT-Mutual funds are the best investment for the average

person because they allow them to invest in a diversified,
professionally managed basket of securities at a low cost. According to
their age, financial situation, risk tolerance, and return expectations,
diversification of schemes offers a variety of options to suit their
individual goals. Investing in mutual funds is a great way to diversify
your portfolio. Investors' perceptions have an impact. The purpose of
47
this study is to identify investors' perceptions of mutual funds and to
investigate the factors that influence investors' perceptions of mutual
funds. The survey was conducted in the Vellore district, and data was
collected using the convenience sampling method. To analyses the
data, statistical methods such as "Chi-square" and "ANOVA" were
used, The ANOVA test revealed an association between age group and
monthly income, while the chi-square test revealed an association
between the issue faced by mutual fund investors and a good mutual
fund investment option

48
 Keywords: investment, Mutual fund, schemes, problem faced, investor.

I.INTRODUCTION
Mutual Funds refer to funds which collect money from investors and put this money
in stocks, bonds and other securities to gain financial profit. In exchange for their
investments, people whose money is used by the Mutual Fund Manager to buy stocks,
bonds, and other securities receive a percentage of the mutual fund's profit. Both
parties benefit from the mutual fund in this manner. A mutual fund is a trust that pools
the savings of a group of investors with similar financial goals. The money raised is
then put to good use. Shares, debentures, and other securities are capital market
instruments. Unit holders share the revenue and capital appreciation generated by
these investments in proportion to the number of units they own. Thus, a mutual fund
is the best investment for the average person because it allows them to invest in a
diversified, professionally managed portfolio of securities at a low cost. Shares,
debentures, and other securities are examples of capital market instruments. The
income generated by these investments, as well as the capital gains realized, are
distributed to the unit holders in proportion to the number of units they own. A mutual
fund's operation is depicted in the flow chart below. A mutual fund is a type of
professionally managed collective investment scheme that pools money from multiple
investors and invests it in stocks, bonds, short-term money market instruments,
and/or other securities. A fund manager can trade the pooled money on a regular basis
for the mutual fund. At the moment, the global value of the total value of all mutual
funds exceeds $26 trillion. The mutual fund company makes money by investing
other people's money, and the people who invest in the mutual fund make money
without having to go to work. Into intensive Bond and stock valuation and research.
Mutual fund managers are in charge of stock and bond market analysis, market
research, and market speculation. Those who invest in mutual funds are typically
exposed to a variety of risks. Too those who invest directly in bonds and stocks face a
much higher risk. Because mutual funds are invested in a variety of bonds and
stocks, they have a lower risk profile. As a result, if the market value of one bond or
the value of a company's stock

49
 falls at any time, the mutual fund's loss can be offset by the market gain of another
bond or stock.

OBJECTIVES OF THE STUDY

 The purpose of this research is to look at how investors think aboutmutual
funds.

 To understand the factor influencing the investor while makingdecision.

 To examine the level of satisfaction of the investor.

 To identify the problem faced by mutual fund investor.

NEED OF THE STUDY

The primary goal of this primary goal of this research is to look at how investor feels
about mutual funds. The study also identifies the investor’s problem and what
motivates them to reinvest in mutual funds.

RESEARCH DESIGN
A research design is considered as the framework or plan for a study that guides as
well as helps the data collection and analysis of data.

Descriptive Research Design

Descriptive research is a type of study that aims to accurately portray the participants.
Simply put, descriptive research is concerned with identifying the participants in a
study.

SCOPE OF STUDY
 To gain a better understanding of how investors feel about mutualfunds.

 Define and identify the investor's influence and motivating factors.

 The research measure of the experience of the investor

 To understanding the problem faced by the investor

50
SOURCES OF DATA
Primary Data sources:

Primary data are those that are new and were gathered for the first time, and therefore
are unique in nature. Direct personal interviews were used to gather the primary data
(open-ended and close ended questionnaires)

Secondary Data sources

The term "secondary data" refers to information gathered by someone other than the
user. Data that was originally gathered for other research purposes is a common source
of secondary data for journals and websites

SAMPLING TECHNIQUES
Data collection

The data was collected using questionnaire from professionals/ common man like
those who wants to put money into mutual funds and other types of investments.
Method of convenience sampling

Convenience sampling method

A convenience sample is one of the main types of non-probability sampling methods.
A convenience sample is made up of people who are easy to reach.

PERIOD OF STUDY
The period of study is from January 2021 to March 2021 which is three
months of study

LIMITATION OF THE STUDY

The information provided by the investor was used to conduct the current study's
analysis. The study was limited to the Vellore District, and only 105 people were
considered due to time constraints. The outcome is entirely dependent on the
information provided by the investor, which could be based on a variety of sources.

51
TOOLS USED
The analytical tools used are SPSS for testing the hypothesis, Chi Square test in SPSS
tool and ANOVA in SPSS tool.

II. MODELING AND ANALYSIS

Table-1: Age group of the Respondents

Age Group No. of Respondents Percentage

Less than 20 0 0

20-30 26 25%

30-40 66 63%

50 and above 13 12%

Total 105 100

Interpretation
From the above table it is interpreted that the 63% of respondents are fall in the age
category of 30-40 years, 25% in 20-30 years and 2% in 50 andabove.

Inference
Majority (63%) of the respondents are 30- 40 age group.

Table-2: Gender of the Respondents

Gender No. of Respondents Percentage

Male 74 70%

Female 31 30%

52
 Total 105 100

Interpretation
From the above table it is interpreted that the 70% respondents are male and 30%
respondents are female

Inference
Majority (70%) of the respondents are male.

Table-3: Occupation of the Respondents

Occupation No. of Respondents Percentage

Government Employee 13 13%

Private Employee 36 34%

Business 43 43%

Other (retired, agriculture 13 12%

etc.)

Total 105 100

Interpretation
From the above table it is interpreted that the 41% respondents are says business, 34%
in private employee, 13% in government employee and 12% in other (retried,
agriculture etc.)

Inference
Majority (41%) of the respondents are says business.

53
 Table-4: Monthly income of the Respondents

Monthly Income No. of Respondents Percentage

Less Than Rs.50000 51 49%

Rs.50000-Rs.100000 42 40%

More Than Rs.1 Lakh 12 11%

Total 105 100

Interpretation
From the above table it is interpreted that the respondents are falls in monthly income
category of less than Rs.50000, 40% in Rs.50000-Rs.100000 and 11% in more than
Rs.1 lakh.

Inference
Majority (49%) of the respondents are falls in monthly income category of less than
Rs.50000.

Table-5: Annual savings of the Respondents

Annual Savings No. of Respondents Percentage

Less Than Rs.50000 58 55%

Rs.50000-Rs.100000 36 36%

More Than Rs.1 Lakh 09 9%

Total 105 100

54
Interpretation
From the above table it is interpreted that the respondents are says annual saving less
than Rs.50000, 36% in Rs.50000-Rs.100000 and 9% in more thanRs.1 lakh

Inference
Majority (55%) of the respondents are says annual saying is less than Rs.50000.

Table-6: Source of awareness of the Respondents

Source of Awareness No. of Respondents Percentage

Newspapers Magazine 17 18%

Internet 41 43%

Television 16 17%

Relatives and Friend 21 22%

Total 105 100

Interpretation
From the above table it is interpreted that the 43% of the respondents are aware of the
mutual fund investment through internet, 22% in relatives and friends, 18% in
newspaper magazine and 17% in television.

Inference
Majority (43%) of the respondents are aware of the mutual fund investments through
internet

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 Table-7: Factors influencing investment in Mutual Fund

Most Less Not at all

Important Important Important
Influence Factor Important Neutral Total

High Risk 36 46 19 4 0 105

Tax Saving 32 45 26 2 0 105

Liquidity of 24 49 29 2 1 105
Fund

Safety and 23 52 25 4 1 105

Security

Regular Income 19 52 24 8 2 105

Regular Saving 19 49 29 6 2 105

Risk Involved 17 52 26 3 7 105

Diversification 17 52 24 12 0 105

Easy Payment 20 46 23 12 4 105

Interpretation
From the above table it is interpreted that the 17% of the respondents are influencing
for high risk, 16% in tax saving, 12% in liquidity of fund, 11% in safety and security,
10% in easy payment, 9% in regular saving, 9% in regular income risk, 8% in risk
involved and 8% in diversification.

Inference
The Majority (17%) of the respondents are influencing for high risk.

56
 Table-8: Investor satisfaction levels of various motivating factors

Influence Highly Satisfied Neutral Dissatisfi Highly Total

factor satisfied ed dissatisfi
ed

High risk 24 36 38 7 0 105

Tax saving 26 48 27 2 2 105

Liquidity of
33 39 25 6 2
fund 105

Safety and
37 35 23 7 3
security 105

Regular
23 42 33 7 0
income 105

Regular
17 48 27 4 9
saving 105

Risk
17 45 38 4 1
involved 105

Diversificati
13 38 46 4 4
on 105

Easy
17 42 39 6 1
payment 105

Interpretation
From the above table it is interpreted that the 18% of the respondents areinfluencing
factor for safety and security, 16% in liquidity of fund, 13% in tax

57
Conclusion of the Study on Investor Behavior
Toward’s Mutual Funds
The study on investor behavior towards mutual funds highlights
several key insights into the preferences, motivations, and decision-
making processes of investors. These insights can help financial
institutions, fund managers, and policymakers better cater to the needs
of investors. The conclusions drawn from the analysis are as follows:

1. Awareness and Understanding:

Many investors are aware of mutual funds as an investment
option, but their understanding of various mutual fund schemes,
risk levels, and associated returns varies significantly. Enhancing
financial literacy and simplifying mutual fund structures can
bridge this gap.
2. Risk Appetite and Investment Goals:
Investors’ behavior is significantly influenced by their risk
tolerance and financial goals. Risk-averse investors tend to prefer
debt-oriented funds, while those with higher risk appetite lean
towards equity funds. Goal-based investing, such as for
retirement or education, is a major motivator.
3. Influence of External Factors:
External factors like market conditions, past performance of
mutual funds, and peer recommendations play a crucial role in
shaping investor decisions. Additionally, regulatory changes and
tax benefits are notable determinants.
4. Role of Financial Advisors:
Financial advisors and brokers are pivotal in guiding investors.
The study indicates that investors often rely on professional
advice to select mutual funds, underscoring the importance of
trust and transparency in advisory services.
5. Preference for Systematic Investment Plans (SIPs):
There is a growing preference for SIPs as a disciplined and
affordable way to invest in mutual funds. SIPs are particularly
popular among young and middle-income investors who aim to
build wealth over the long term.

58
 6. Challenges Faced by Investors:
Investors face challenges such as lack of clarity in understanding
fund objectives, high fees in some funds, and the complexity of
comparing fund performance. Simplified communication and
user-friendly platforms can alleviate these issues.

Recommendations:
1. Enhance Investor Education: Financial literacy programs and targeted
awareness campaigns should focus on educating investors about the
benefits, risks, and various types of mutual funds.
2. Improve Transparency: Fund houses should ensure clear and consistent
communication regarding fees, risks, and expected returns.
3. Customization of Products: Offering personalized investment options
aligned with individual goals and risk profiles can enhance investor
satisfaction and engagement.
4. Digital Tools and Accessibility: User-friendly online platforms and
mobile apps can simplify the investment process and encourage
participation among tech-savvy investors.

Closing Thoughts:
The mutual fund industry holds immense potential for growth as more
investors recognize its benefits. Addressing the barriers to investment
and focusing on customer-centric approaches will help build trust,
attract a wider investor base, and ensure long-term sustainability in the
mutual fund market.

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