A PROJECT REPORT

A STUDY ON MUTUAL FUND WITH RESPECT TO

SYSTEMATIC INVESTMENT PLAN (SIP)
SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTAL COMPLETION OF
THE DEGREE OF
BACHELOR IN COMMERCE (ACCOUNTING AND FINANCE)
UNDER THE FACULTY OF COMMERCE
BY
MR. AJINKYA CHANDRAKANT MAHADIK
UNDER THE GUIDANCE OF
DR. MANOJ SHIVDAS WAGH

SATISH PRADHAN DNYANASADHANA COLLEGE

THANE OFF EASTERN EXPRESS HIGHWAY,
DNYANASADHAN MARG,
THANE 400604
ACADEMIC YEAR
2022 – 2023.
 SATISH PRADHAN DNYANASADHANA COLLEGE, THANE
(ARTS, SCIENCE AND COMMERCE)
OFF EASTERN EXPRESS HIGHWAY,
DNYANASADHANAMARG, THANE 400604.

CERTIFICATE

This is to certify that Mr. / Ms. __________________________________________

has worked and duly completed her/ his Project Work for the degree of Bachelor in
Commerce (Accounting and Finance) under the faculty of Commerce , entitled, _____
_____________________________________________________________________
_____________________________________________________________________
__________________________________________________ under my supervision.

I further certify that the entire work has been done by the learner under my guidance
and that no part of it has been submitted previously for any Degree or Diploma of any
University.

It is his/her own work and facts reported by her/his personal findings and
investigations.

Internal Guide External Guide

Course Coordinator Principal

i
 DECLARATION BY LEARNER

I the undersigned Mrs. Ajinkya Chandrakant Mahadik his by. Declare that the work
embodied in this project work titled “A PROJECT REPORT A
STUDY ON MUTUAL FUND WITH RESPECT TO SYSTEMATIC INVESTMENT
PLAN (SIP)”. Forms my own contribution to the research work carried out under the
guidance of DR. MANOJ SHIVDAS WAGH is a result of my own research work and
has not been previously submitted to any other university for any other Degree/Diploma
to this or any other University .
Wherever Reference has been made to previous works of others, it has been clearly
indicated as such and include in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of the learner

Ajinkya Chandrakant Mahadik

Certified by:

Name and signature of the Guiding Teacher.

ii
 ACKNOWLEDGEMENT

To list who all have helped me in difficult because they are so numerous and the depth
is so enormous.
I would like to acknowledge the following as being idealistic channels ad fresh
dimensions in the completion of the project.
I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.
I would like to thank my Principal, Dr. Ganesh Ramdas Bhagure for providing the
necessary facilities required for the completion of this project.
I take this opportunity to thank our Coordinator and Vice Principal Dr. Shraddha
Mayuresh Bhome for her moral Support and Guidance.
I would also like to express my sincere gratitude towards my project guide Dr.
Manoj Shivdas Wagh whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference books
and magazine related to my project especially my parents and peers who supported my
throughout my project.

Ajinkya Chandrakant Mahadik.

iii
 TABLE OF THE CONTENT

CHAPTER PAGE
TITLE OF THE CHAPTER
NO. NO.
1. TITLE PAGE.
2. CERTIFICATE. i.
3. DECLARATION BY LEARNER. ii.
4. ACKNOWLEDGMENT. iii.
5. INDEX. iv-v
6. LIST OF TABLES AND DIAGRAM vi
7. LIST OF ABBREVIATION vii
8. ABSTRACT viii
1. INTRODUCTION. 1 - 42
1.1 INTRODUCTION TO MUTUAL FUNDS
1.1.1 History Of Mutual Funds
1.1.2 Primary Structure Of Mutual Funds
1.1.3 Definition Of Key Terms Of Mutual Funds
1.1.4 Benefits Of Investing In Mutual Funds
Advantages To Investors
1.1.5 Drawback Of Investing In Mutual fund
Disadvantages To Investors
1.1.6 Investment Objectives Of Mutual Funds
1.2 Introduction To Systematic Investment Plan
1.2.1 How SIP Works?

1.2.2 Categories Of SIP Mutual Funds

1.2.3 Why Should One Invest In An SIP?

1.2.4 Advantages Of SIP

1.2.5 Disadvantages Of SIP

1.3 Investment

1.4 SIP Through Apps

2. RESEARCH METHODOLOGY 43 - 49
2.1 Introduction

2.2 Objectives

2.3 Scope Of The Subject

iv
 2.4 Sampling

2.5 Tools & Techniques

2.6 Sources Of Data Collection

2.7 Primary Data

2.7.1 Questionnaire

2.7.2 Observation Method

2.8 Secondary Data

2.9 Limitation Of The Study

2.10 Hypothesis
3. REVIEW OF LITERATURE 50 - 57

4. DATA ANALYSIS AND INTERPRETATION 58 -77

5. FINDINGS, CONCLUSION AND SUGGESTION 78 - 87

5.1 Findings

5.2 Suggestion

5.3 Conclusion

BIBLIOGRAPHY 88
89 - 92
ANNEXURE

v
 LIST OF CHARTS AND DIAGRAMS
Sr. No Particular Page no.
1. Table: 4.1 Shows gender of the respondents 59
2. Table: 4.2 Shows age of the respondents 60
3. Table: 4.3 Shows occupation of the respondents 61
4. Table: 4.4 Shows income group of the respondents 62
5. Table: 4.5 Shows percentage of savings 63

6. Table: 4.6 Shows experience about investment in 64

mutual fund
7. Table :4.7 Shows information about SIP investment 65

8. Table: 4.8 Shows information about most 66

preferable factor while doing investment
9. Table:4.9 Shows preference about investment in types 67
of mutual fund
10. Table:4.10 Shows most preferable factor before doing 68
investment
11. Table: 4.11. Shows respondent's satisfaction 69
about his past investments
12. Table: 4.12 Shows time period for doing investment 70
13. Table:4.13 Shows time period preferred of investment 71
14. Table:4.14 Shows usage of app for doing SIP 72

15. Table:4.15 Shows respondents' application preferences 73

for doing investment
16. Table:4.16 Shows rate of respondents for application 74
for investment
17. Table:4.17 Shows opinion about SIP mutual funds 75

18. Table: 4.18 Shows respondents preferences related to 76

Investment applications
19. Table: 4.19 Shows mode of operations preferred by 77
respondents

vi
 LIST OF ABBREVIATIONS
Sr. No Abbreviations Full Form
1. MF Mutual Fund
2. SIP Systematic Investment Plan
3. NAV Net Assets Value
4. KYC Know Your Customer
5. ROI Return On Investment
6. ELSS Equity-Linked Saving Scheme.
7. STP Systematic Transfer Plan.
8. SWP Systematic Withdrawal Plan
9. AMC Asset Management Company
10. SEBI Security Exchange board of India
11. FD Fixed Deposit
12. PPF Public Provident Fund
13. ULIP Unit-Linked Insurance plan.
14. NAVPS Net Asset Value Per Share
15. NSE National stock exchange
16. BSE Bombay stock exchange
19. PAN Permanent Account Number

vii
 Abstract

This project report presents a study of mutual funds, specifically focusing on systematic
investment plans (SIPs). The report begins with an introduction to mutual funds and
SIPs, highlighting their benefits and features. The research methodology is then
explained, including the sample selection process and data collection methods. The
findings of the study are presented, which include the average returns generated by
various mutual fund schemes, the impact of SIPs on investment outcomes, and the
factors that influence investors' decision-making in selecting mutual funds. The report
concludes with recommendations for investors considering mutual fund investments
through SIPs.

Keywords: mutual funds, systematic investment plans, SIPs, returns, investment

outcomes, decision-making.

viii
 CHAPTER: 1
INTRODUCTION

1
 1.1 INTRODUCTION OF MUTUAL FUNDS

A mutual fund is a type of financial vehicle made up of a pool of money

collected frommany investors to invest in securities like stocks, bonds,
money market instruments, and other assets. Mutual funds are operated
by professional money managers, who allocate the fund's assets and
attempt to produce capital gains or income for the fund's investors. A
mutual fund's portfolio is structured and maintained to match the
investment objectives stated in its prospectus.

Mutual funds give small or individual investors access to professionally

managed portfolios of equities, bonds, and other securities. Each
shareholder, therefore, participates proportionally in the gains or losses
of the fund. Mutual funds invest in a vast number of securities, and
performance is usually tracked as the change in the total market cap of
the fund4derived by the aggregating performance of the underlying
investments.

 A mutual fund is a type of investment vehicle consisting of a

portfolio of stocks,bonds, or other securities.
 Mutual funds give small or individual investors access to
diversified, professionally managed portfolios at a low price.
 Mutual funds are divided into several kinds of categories,
representing the kindsof securities they invest in, their investment
objectives, and the type of returns they seek.
 Mutual funds charge annual fees (called expense ratios) and, in
some cases, commissions, which can affect their overall returns.
 The overwhelming majority of money in employer-sponsored
retirement plansgoes into mutual funds.

Mutual funds pool money from the investing public and use that money to buy other

2
securities, usually stocks and bonds. The value of the mutual fund company depends
on the performance of the securities it decides to buy. So, when you buy a unit or share
of a mutual fund, you are buying the performance of its portfolio or, more precisely, a
part of the portfolio's value. Investing in a share of a mutual fund is different from
investing in shares of stock. Unlike stock, mutual fund shares do not give its holders
any voting rights. A share of a mutual fund represents investments in many different
stocks (or other securities) instead of just one holding. That's why the price of a mutual
fund share is referred to as the net asset value (NAV) per share, sometimes expressed
as NAVPS. A fund's NAV is derived by dividing the total value of the securities in the
portfolio by the total amount of shares outstanding. Outstanding shares are those held
by all shareholders, institutional investors, and company officers or insiders. Mutual
fund shares can typically be purchased or redeemed as needed at the fund's current
NAV, which unlike a stock price doesn't fluctuate during market hours, but it is settled
at the end of each trading day.

The average mutual fund holds hundreds of different securities, which means mutual
fund shareholders gain important diversification at a low price. Consider an investor
who buys only Google stock before the company has a bad quarter. He stands to lose
agreat deal of value because all of his dollars are tied to one company. On the other hand,
a different investor may buy shares of a mutual fund that happens to own some Google
stock. When Google has a bad quarter, she loses significantly less because Google is
just a small part of the fund's portfolio

Mutual funds also have inherent traits that follow investment principles such as asset
allocation and diversification. Another commonly faced challenge is the indecision on
investing, which has been addressed by Systematic Investment Plan (SIP) which instills
the discipline to invest regularly and over different market cycles. By opting for our
Smart SIP, you could mix your investments with financial protection by way of life
insurance embedded. This serves the dual purpose of life protection and wealth
creation.

Income tax is yet another challenge faced by investors for which also mutual funds
have optimum solutions. For instance, there is a unique mutual fund category
known as ELSS (equity-linked savings scheme), which not only can work

3
towards wealth creation, butalso act as a tax saver. ELSS fund, qualify for tax
benefits under Section 80C RS.
1.5 lakh in a financial year and come with a three year lock-in. The overall
taxation onmutual fund redemptions is also straightforward, making it easy for
individuals to manage.

1.1.1 History of Mutual Funds

The first modern investment funds (the precursor of today's mutual funds) were
established in the Dutch Republic. In response to the financial crisis of
177231773, Amsterdam-based businessman Abraham (or Adrian) van Ketwich
formed a trust named Eendragt Maakt Magt ("unity creates strength"). His aim
was to provide small investors with an opportunity to diversify.

Mutual funds were introduced to the United States in the 1890s. Early U.S. funds
weregenerally closed-end funds with a fixed number of shares that often traded
at prices above the portfolio net asset value. The first open-end mutual fund with
redeemable shares was established on March 21, 1924 as the Massachusetts
Investors Trust (it is still in existence today and is now managed by MFS
Investment Management).

In the United States, closed-end funds remained more popular than open-end
funds throughout the 1920s. In 1929, open-end funds accounted for only 5% of
the industries $27 billion in total assets.

After the Wall Street Crash of 1929, the United States Congress passed a series
of actsregulating the securities markets in general and mutual funds in particular.

 The Securities Act of 1933 requires that all investments sold to the
public, includingmutual funds, be registered with the SEC and that
they provide prospectiveinvestors with a prospectus that discloses
essential facts about the investment.
 The Securities and Exchange Act of 1934 requires that issuers of
securities, including mutual funds, report regularly to their investors.
This act also created theSecurities and Exchange Commission, which

4
 is the principal regulator of mutual funds.
 The Revenue Act of 1936 established guidelines for the taxation of
mutual funds.

 The Investment Company Act of 1940 established rules specifically

governing mutual funds.

These new regulations encouraged the development of open-end mutual funds (as
opposed to closed-end funds).

Growth in the U.S. mutual fund industry remained limited until the 1950s, when
confidence in the stock market returned. By 1970, there were approximately 360
fundswith $48 billion in assets.

The introduction of money market funds in the high interest rate environment of the
late 1970s boosted industry growth dramatically. The first retail index fund, First
Index Investment Trust, was formed in 1976 by The Vanguard Group, headed by John
Bogle;it is now called the "Vanguard 500 Index Fund" and is one of the world's largest
mutualfunds. Fund industry growth continued into the 1980s and 1990s.

According to Robert Pozen and Theresa Hamacher, growth was the result of
three factors:

1. A bull market for both stocks and bonds,

2. New product introductions (including funds based on municipal

bonds, variousindustry sectors, international funds, and target date
funds) and

3. Wider distribution of fund shares. Among the new distribution channels

were retirement plans. Mutual funds are now the preferred investment
option in certain types of fast-growing retirement plans, specifically in
401(k), other defined contribution plans and in individual retirement
accounts (IRAs), all ofwhich surged in popularity in the 1980s.

In 2003, the mutual fund industry was involved in a scandal involving unequal
treatment of fund shareholders. Some fund management companies allowed favored

5
investors to engage in late trading, which is illegal, or market timing, which is a practice
prohibited by fund policy. The scandal was initially discovered by former New York
Attorney General Eliot Spitzer and led to a significant increase in regulation. In a study
about German mutual funds Gomolka (2007) found statistical evidence of illegal time
zone arbitrage in trading of German mutual funds. Though reported to regulators BaFin
never commented on these results.

6
1.1.2 Primary Structure of Mutual Funds

Primary structures of mutual funds include open-end funds, unit

investment trusts, and closed-end funds. Exchange-traded funds (ETFs)
are open-end funds or unit investmenttrusts that trade on an exchange.
Some close- ended funds also resemble exchange traded funds as they
are traded on stock exchanges to improve their liquidity. Mutual funds
are also classified by their principal investments as money market funds,
bond orfixed income funds, stock or equity funds, hybrid funds or other.
Funds may also be categorized as index funds, which are passively
managed funds that match the performance of an index, or actively
managed funds. Hedge funds are not mutual funds;hedge funds cannot be
sold to the general public as they require huge investments.

A) Types of Mutual Funds based on structure

a. Open-Ended Funds: These are funds in which units are open for
purchase or redemption through the year. All purchases/redemption of
these fund units are doneat prevailing NAVs. Basically these funds will
allow investors to keep invest as longas they want. There are no limits
on how much can be invested in the fund. They alsotend to be actively
managed which means that there is a fund manager who picks theplaces
where investments will be made. These funds also charge a fee which
can be higher than passively managed funds because of the active
management. They are an ideal investment for those who want
investment along with liquidity because they are not bound to any
specific maturity periods. Which means that investors can withdraw
their funds at any time they want thus giving them the liquidity they
need.
b. Close-Ended Funds: These are funds in which units can be purchased
only during the initial offer period. Units can be redeemed at a specified
maturity date. To providefor liquidity, these schemes are often listed for
trade on a stock exchange. Unlike open ended mutual funds, once the

7
 units or stocks are bought, they cannot be sold back to the mutual fund,
instead they need to be sold through the stock market at theprevailing
price of the shares.
c. Interval Funds: These are funds that have the features of open-ended
and close- ended funds in that they are opened for repurchase of shares
at different intervals during the fund tenure. The fund management
company offers to repurchase units from existing unit holders during
these intervals. If unit holders wish to they can offload shares in favor
of the fund.

B) Types of Mutual Funds based on asset class

d. Equity Funds: These are funds that invest in equity stocks/shares of

companies. These are considered high-risk funds but also tend to provide high
returns. Equity funds can include specialty funds like infrastructure, fast
moving consumer goods and banking to name a few.
e. Debt Funds: These are funds that invest in debt instruments e.g. company
debentures, government bonds and other fixed income assets. They are
considered safe investments and provide fixed returns. These funds do not
deduct tax at source so if the earning from the investment is more than RS.
10,000 then the investor is liable to pay the tax on it himself.
f. Money Market Funds: These are funds that invest in liquid instruments e.g.
T-Bills, CPs etc. They are considered safe investments for those looking to
park surplus fundsfor immediate but moderate returns. Money markets are
also referred to as cash markets and come with risks in terms of interest risk,
reinvestment risk and credit risks.
g. Balanced or Hybrid Funds: These are funds that invest in a mix of asset
classes. Insome cases, the proportion of equity is higher than debt while in
others it is the otherway round. Risk and returns are balanced out this way. An
example of a hybrid fund would be Franklin India Balanced Fund-DP (G)
because in this fund, 65% to 80% ofthe investment is made in equities and the
remaining 20% to 35% is invested in the debt market. This is so because the
debt markets offer a lower risk than the equity market.

8
C) Types of Mutual Funds based on investment objective
1. Growth funds: Under these schemes, money is invested primarily in equity
stocks with the purpose of providing capital appreciation. They are
considered to be risky funds ideal for investors with a long-term investment
timeline. Since they are risky funds they are also ideal for those who are
looking for higher returns on their investments.
2. Income funds: Under these schemes, money is invested primarily in fixed-
income instruments e.g. bonds, debentures etc. with the purpose of providing
capital protection and regular income to investors.
3. Liquid funds: Under these schemes, money is invested primarily in short-
term or very short-term instruments e.g. T-Bills, CPs etc. with the purpose of
providing liquidity. They are considered to be low on risk with moderate
returns and are ideal for investors with short-term investment timelines.
4. Tax-Saving Funds (ELSS): These are funds that invest primarily in equity
shares. Investments made in these funds qualify for deductions under the
Income Tax Act. They are considered high on risk but also offer high returns
if the fund performs well.
5. Capital Protection Funds: These are funds where funds are split between
investment in fixed income instruments and equity markets. This is done to
ensure protection of the principal that has been invested.
6. Fixed Maturity Funds: Fixed maturity funds are those in which the assets
are invested in debt and money market instruments where the maturity date
is either thesame as that of the fund or earlier than it.
7. Pension Funds: Pension funds are mutual funds that are invested in with a
really long term goal in mind. They are primarily meant to provide regular
returns around the time that the investor is ready to retire. The investments in
such a fund may be split between equities and debt markets where equities
act as the risky part of the investment providing higher return and debt
markets balance the risk and provide lower but steady returns. The returns
from these funds can be taken in lump sums, asa pension or a combination of
the two.

9
D) Types of Mutual Funds based on specialty

1. Sector Funds: These are funds that invest in a particular sector of

the market e.g. Infrastructure funds invest only in those instruments
or companies that relate to the infrastructure sector. Returns are tied
to the performance of the chosen sector. The risk involved in these
schemes depends on the nature of the sector.
2. Index Funds: These are funds that invest in instruments that
represent a particular index on an exchange so as to mirror the
movement and returns of the index e.g. buying shares
representative of the BSE Sensex
3. Fund of funds: These are funds that invest in other mutual funds
and returns depend on the performance of the target fund. These
funds can also be referred to as multi manager funds. These
investments can be considered relatively safe because the funds that
investors invest in actually hold other funds under them thereby
adjustingfor risk from any one fund.
4. Emerging market funds: These are funds where investments are
made in developing countries that show good prospects for the
future. They do come with higher risks as a result of the dynamic
political and economic situations prevailing inthe country.
5. International funds: These are also known as foreign funds and
offer investments in companies located in other parts of the world.
These companies could also be located in emerging economies. The
only companies that won9t be invested in will be those located in
the investor9s own country.
6. Global funds: These are funds where the investment made by the
fund can be in a company in any part of the world. They are different
from international/foreign funds because in global funds,
investments can be made even the investor's own country.
7. Real estate funds: These are the funds that invest in companies
that operate in the real estate sectors. These funds can invest in

10
 realtors, builders, property management companies and even in
companies providing loans. The investment in the real estatecan be
made at any stage, including projects that are in the planning phase,
partiallycompleted and are actually completed.
8. Commodity focused stock funds: These funds don9t invest
directly in the commodities. They invest in companies that are
working in the commodities market,such as mining companies or
producers of commodities. These funds can, at times, perform the
same way the commodity is as a result of their association with their
production.
9. Market neutral funds: The reason that these funds are called
market neutral is thatthey don’t invest in the markets directly. They
invest in treasury bills, ETFs and securities and try to target a fixed
and steady growth.
10. Inverse/leveraged funds: These are funds that operate unlike
traditional mutual funds. The earnings from these funds happen
when the markets fall and when marketsdo well these funds tend to
go into loss. These are generally meant only for those who are
willing to incur massive losses but at the same time can provide huge
returnsas well, as a result of the higher risk they carry.
11. Asset allocation funds: The asset allocation fund comes in two
variants, the target date fund and the target allocation funds. In
these funds, the portfolio managers can adjust the allocated assets
to achieve results. These funds split the invested amountsand invest
it in various instruments like bonds and equity.
12. Gilt Funds: Gilt funds are mutual funds where the funds are
invested in governmentsecurities for a long term. Since they are
invested in government securities, they arevirtually risk free and
can be the ideal investment to those who don9t want to take risks.
13. Exchange traded funds: These are funds that are a mix of both
open and close ended mutual funds and are traded on the stock
markets. These funds are not actively managed, they are managed
passively and can offer a lot of liquidity. As a result of their being
managed passively, they tend to have lower service charges

11
 (entry/exit load) associated with them

E) Types of Mutual Funds based on risk

1. Low risk: These are the mutual funds where the investments made
are by those whodo not want to take a risk with their money. The
investment in such cases are made in places like the debt market
and tend to be long term investments. As a result of them being low
risk, the returns on these investments is also low. One example of
a low risk fund would be gilt funds where investments are made in
government securities.

2. Medium risk: These are the investments that come with a medium
amount of risk to the investor. They are ideal for those who are
willing to take some risk with the investment and tends to offer
higher returns. These funds can be used as an investment to build
wealth over a longer period of time.

3. High risk: These are those mutual funds that are ideal for those who
are willing to take higher risks with their money and are looking to
build their wealth. One exampleof high risk funds would be inverse
mutual funds. Even though the risks are high with these funds, they
also offer higher returns.

12
1.1.3 Definition of Key Terms of Mutual Fund

 Average annual total return

 Mutual funds in the United States are required to report the average
annual compoundedrates of return for one-, five-and ten year-periods
using the following formula:

 P (1+T) n = ERV

 Where:

 P = a hypothetical initial payment of ₹1,000

 T = average
annual total
returnn =
number of
years
 ERV = ending redeemable value of a hypothetical ₹1,000 payment
made at thebeginning of the one, five, or ten year periods at the end of
the one, five, or ten year periods (or fractional portion).

13
 B. Market capitalization

 Market capitalization equals the number of a company's shares

outstanding multiplied by the market price of the stock. Market
capitalization is an indication of the size of a company. Typical ranges
of market capitalizations are:

 Mega cap - companies worth ₹14000 billion or more

 Big/large cap - companies worth between ₹700 billion and ₹14000 billion

 Mid cap - companies worth between ₹140 billion and ₹700 billion

 Small cap - companies worth between ₹21000 million and ₹140 billion

 Micro cap - companies worth between ₹3500 million and ₹21000 million

 Nano cap - companies worth less than ₹50 million.

C. Net asset value

A fund's net asset value (NAV) equals the current market value of a fund's holdings
minus the fund's liabilities (this figure may also be referred to as the fund's "net
assets").It is usually expressed as a per-share amount, computed by dividing net
assets by the number of fund shares outstanding. Funds must compute their net asset
value accordingto the rules set forth in their prospectuses. Most compute their NAV
at the end of eachbusiness day.

Valuing the securities held in a fund's portfolio is often the most difficult part of
calculating net asset value. The fund's board typically oversees security valuation.

14
D. Share classes

A single mutual fund may give investors a choice of different combinations of

front- end loads, back-end loads and distribution and services fee, by offering
several differenttypes of shares, known as share classes. All of them invest in the
same portfolio of securities, but each has different expenses and, therefore, a
different net asset value anddifferent performance results. Some of these share
classes may be available only to certain types of investors.

Typical share classes for funds sold through brokers or other intermediaries in
the United States are:

 Class A shares usually charge a front-end sales load together with a

small distribution and services fee.
 Class B shares usually do not have a front-end sales load; rather, they have a
high contingent deferred sales charge (CDSC) that gradually declines over
several years, combined with a high 12b−1 fee. Class B shares usually convert
automatically to Class A shares after they have been held for a certain period.
 Class C shares usually have a high distribution and services fee and a modest
contingent deferred sales charge that is discontinued after one or two years.
Class C shares usually do not convert to another class. They are often called "level
load" shares.
 Class I are usually subject to very high minimum investment requirements
andare, therefore, known as "institutional" shares. They are no-load shares.
 Class R are usually for use in retirement plans such as 401(k) plans. They
typically do not charge loads, but do charge a small distribution and services
fee

15
E Portfolio Turnover

Portfolio Turnover is a measure of the volume of a fund's securities trading. It is

expressed as a percentage of average market value of the portfolio's long-term
securities. Turnover is the lesser of a fund's purchases or sales during a given year
divided by average long-term securities market value for the same period. If the period
is less than a year, turnover is generally annualized.

16
1.1.4 Benefits of Investing In Mutual Funds

1. Professional Management: <Portfolio Manager= invests money on

investor9s behalf with the responsibility of growing it and making profits for
unit holders. So investor’s don9t need to be an expert on stock fundamentals
or market technicalities. Portfolio manager performs research to unveil new
profitable stock ideas. He keeps a tab on economic activities in
regions/countries and accordingly decides his investmentexposures.

2. Diversification: A mutual fund provides diversification by investing in a

variety of stocks. Imagine you want to buy a Google stock which will cost
you ~$800 for one stock so it is expensive. Now think of investing $800 in an
MF, that holds Google stock along with many other stocks. This is a very
important advantage in investing through an MF. A typical portfolio holds
between 40-100 stocks depending on the manager9s objective. A manager
invests in stocks of various industries or countries to reduce the risk of losing
the money.

3. Liquidity: Investing in a mutual fund can be considered as closer to holding

cash as investors can sell the units anytime and receive cash. Portfolio
manager always keeps cash handy for redemption requirements. So if you
place a sell order today, you will get cash in next one or two days. The fund
documents generally mention the settlement period e.g. T+2 means 2 days
from a trading day (T). A portfolio manager also invests a portion of money
in stocks which he can easily sell to meetredemption requests.
4. Ease of Investing & Affordability: Investing in an MF has become less painful
over the years with the help of technology. Anyone can buy a fund by simply
visiting the fund or broker website. One can buy and sell an MF and perform tasks
like generating a statement, making incremental investments at a click of a button.

Investing in a mutual fund is not very expensive. To open an account minimum

amountcould be a $1000 or less. For incremental purchases, the minimum amount
is $100. Also, investors have a choice of investing in a fund through options like
systematic investment or withdrawal which could be used for regular saving or to
meet expenses

17
1.1.4 . Advantages to Investors

1. Increased diversification

Mutual funds spread their holdings across a number of different investment

vehicles, which reduces the effect any single security or classof securities will
have on the overall portfolio. Because mutual funds can contain hundreds or
thousands of securities, investors aren’t likely to be fazed if one of the securities
doesn’t do well.

2. Daily liquidity

Mutual funds, unlike some of the individual investments they may hold, can be
traded daily. Though not as liquid as stocks, which can be traded intraday, buy and
sell orders are filled after market close.

3. Professional investment management

Open-and closed-end funds hire portfolio managers to supervise the fund's

investments.

4. Reinvestment of Income

Another benefit of mutual funds is that they allow you to reinvest your dividends
and interest in additional fund shares. In effect, this allows you to take advantage
of the opportunity to grow your portfolio without payingregular transaction fees for
purchasing additional mutual fund shares.

5. Service and convenience

Funds often provide services such as check writing.

6. Government oversight.
Mutual funds are regulated by a governmental body.

18
7. Transparency and ease of comparison

Not All mutual funds are required to report the same information to investors, which
makes them easier to compare to each other.

19
 1.1.5 Drawback of Investing In Mutual Funds

Liquidity, diversification, and professional management all make mutual funds

attractive options for younger, novice, and other individual investors who don't
want toactively manage their money. However, no asset is perfect, and mutual
funds have drawbacks too.

1. Fluctuating Returns

Like many other investments without a guaranteed return, there is always the
possibilitythat the value of your mutual fund will depreciate. Equity mutual funds
experience pricefluctuations, along with the stocks that make up the fund. The
Federal Deposit Insurance Corporation (FDIC) does not back up mutual fund
investments, and there isno guarantee of performance with any fund. Of course,
almost every investment carriesrisk. It is especially important for investors in
money market funds to know that, unliketheir bank counterparts, these will not
be insured by the FDIC.

2. Cash Drag

Mutual funds pool money from thousands of investors, so every day people are
puttingmoney into the fund as well as withdrawing it. To maintain the capacity
to accommodate withdrawals, funds typically have to keep a large portion of
theirportfolios in cash. Having ample cash is excellent for liquidity, but money
that is sittingaround as cash and not working for you is not very advantageous.
Mutual funds requirea significant amount of their portfolios to be held in cash in
order to satisfy share redemptions each day. To maintain liquidity and the
capacity to accommodate withdrawals, funds typically have to keep a larger
portion of their portfolio as cash thana typical investor might. Because cash earns
no return, it is often referred to as a "cashdrag."

20
3. High Costs

Mutual funds provide investors with professional management, but it comes at a

cost4those expense ratios mentioned earlier. These fees reduce the fund's overall
payout, and they're assessed to mutual fund investors regardless of the
performance of the fund. As you can imagine, in years when the fund doesn't
make money, these fees only magnifylosses. Creating, distributing, and running
a mutual fund is an expensive undertaking. Everything from the portfolio
manager's salary to the investors' quarterly statements cost money. Those
expenses are passed on to the investors. Since fees vary widely fromfund to fund,
failing to pay attention to the fees can have negative long-term consequences.
Actively managed funds incur transaction costs that accumulate over each year.
Remember, every dollar spent on fees is a dollar that is not invested to grow over
time

4. Diversification and Dilution

"Diversification"4a play on words4is an investment or portfolio strategy that

implies too much complexity can lead to worse results. Many mutual fund
investors tend to overcomplicate matters. That is, they acquire too many
funds that are highly relatedand, as a result, don't get the risk-reducing benefits
of diversification. These investors may have made their portfolio more exposed.
At the other extreme, just because you own mutual funds doesn't mean you are
automatically diversified. For example, a fundthat invests only in a particular
industry sector or region is still relatively risky.

5. Active Fund Management

Many investors debate whether or not the professionals are any better than you
or I at picking stocks. Management is by no means infallible, and even if the
fund loses money, the manager still gets paid. Actively managed funds incur
higher fees, but increasingly passive index funds have gained popularity. These
funds track an index such as the S&P 500 and are much less costly to hold.
Actively managed funds over several time periods have failed to outperform
their benchmark indices, especially afteraccounting for taxes and fees.

21
6. Lack of Liquidity
A mutual fund allows you to request that your shares be converted into cash at
any time,however, unlike stock that trades throughout the day, many mutual
fund redemptions take place only at the end of each trading day.

7. Taxes
When a fund manager sells a security, a capital-gains tax is triggered. Investors
who are concerned about the impact of taxes need to keep those concerns in
mind when investing in mutual funds. Taxes can be mitigated by investing in
tax-sensitive funds or by holding non-tax sensitive mutual funds in a tax-
deferred account, such as a 401(k)or IRA.

8. Evaluating Funds
Researching and comparing funds can be difficult. Unlike stocks, mutual funds
do notoffer investors the opportunity to juxtapose the price to earnings (P/E)
ratio, sales growth, earnings per share (EPS), or other important data. A mutual
fund's net asset value can offer some basis for comparison, but given the
diversity of portfolios, comparing the proverbial apples to apples can be difficult,
even among funds with similar names or stated objectives. Only index funds
tracking the same markets tend tobe genuinely comparable.

22
1.1.5. A] Disadvantages to Investors

1. No Control Over Portfolio

If you invest in a fund, you give up all control of your portfolio to the
mutual fund money managers who run it.
2. Capital Gains
Anytime you sell stock, you9re taxed on your gains. However, in a
mutual fund, you9re taxed when the fund distributes gains it made from
selling individual holdings 3 even if you haven9t sold your shares.
3. Fees and Expenses
Some mutual funds may assess a sales charge on all purchases, also
known as a <load= 3 this is what it costs to get into the fund. Plus, all
mutual funds charge annual expenses, which are conveniently
expressed as an annual expense ratio 3 this is basically the cost of
doing business.
4. Over-diversification
Although there are many benefits of diversification, there are
pitfalls of being over-diversified. Think of it like a sliding scale:
The more securities you hold, the less likely you are to feel their
individual returns on your overall portfolio.
5. Cash Drag
Mutual funds need to maintain assets in cash to satisfy investor
redemptions and to maintain liquidity for purchases. However,
investors still pay to have funds sitting in cash because annual
expenses are assessed on all fund assets, regardless of whether
they9re invested or not.

23
1.1.6 Investment Objectives Of The Mutual Fund

Kid9s college education or marriage, retirement planning or medical

expenses are some of the things many of us are planning through our
working lives. I would like to list a few investment objectives of Mutual
funds below that may help readers in making an investment decision.

 Goal-Based Investing: This is the top investment objective of

Mutual fund. Asmentioned above, one can plan future expenses
and invest accordingly. Many fund complexes offer <Target Date
Funds= or customized <Fund of Fund= which basically allocates
the assets to equity and bond MF9s. Differencebetween two is
target date funds are non-discretionary i.e. investor can only
invest in one of the available plans and can9t choose the exposure
according tohis/her needs. Fund of Funds could be dynamic and
invests according to target asset mix suitable for investors after
looking at his/her risk profile and liabilitiesetc. However, the mix
will be rebalanced as the holder is approaching the targetdate. The
basic rule is to invest more money in equities and as a holder
grows old; allocate more money to debt mutual fund e.g. at 30
years old investor should invest a 30% in debt and a 70% in
equities (this is a thumb rule).

 Investment Growth: Many mutual funds investment objectives

include Investment Growth model. Investors who are retirement
ready and looking for aggressive returns can do so by taking some
extra risk. Mutual Fund sufficing this objective invests money in
fast-growing companies like small caps or companies with
positive trends in stock price (price momentum) etc.

Tax Savings: Tax Savings is also one of the popular investment

objectives of Mutual fund. Mostly wealthy clients, Institutional

24
 investors, and corporates have an objective to minimize the tax
outlays. Taxes can eat into returns making it negative or trivial.
Citing the importance of after-tax returns, few products can help
investors gaining the 8tax alpha9. These products are built by
combinations of MFs, Index funds or ETF9s and stocks or
bonds. Typically individual account is handled by an investment
manager who knows the long and short-term tax implications.
Buying and selling is driven by tax alpha gains.

Suppose you are holding fund A and Fund B then

 If you have capital gains in both A&B, you will be taxed for both
at applicableincome tax.
 If you have a capital gain in A and loss in B, then you can set off
the losses against the gains of A and thus reduce the tax liability.

Thus by taking appropriate exposures, tax outgo can be optimized to

produce overallgains in an account.

 Marketability/Liquidity: Many of the investments we have

discussed are reasonably illiquid, which means they cannot be
immediately sold and easily converted into cash. Achieving a
degree of liquidity, however, requires the sacrifice of a certain
level of income or potential for capital gains.
 Income: The safest investments are those likely to have the
lowest rate of income return or yield. Investors must inevitably
sacrifice a degree of safety if they want to increase their yields.
As yield increases, so does the risk.
 Fund Types: There are three basic types of mutual funds. Equity
funds invest exclusively in stock. Fixed-income funds invest in
bonds, and money market funds invest in Treasury bills and short-

25
term, liquid, high-quality securities. Allmutual funds are made up
of one or more of these three asset classes. Funds aresometimes
named, ostensibly, for their objective and have catchy names such
as Global, International, Growth and Overseas. Evaluate the
prospectus rather than drawing a conclusion from the fund's title.

26
1.2 INTRODUCTION OF SYSTEMATIC INVESTMENT PLAN (SIP)

Systematic Investment Plan (SIP) is a hassle-free method of investment

that helps youachieve your financial goals by investing small sums of
money on a periodic basis. It allows you to smartly invest in a Mutual
Fund by making smaller periodic investments(monthly or quarterly) in
place of a heavy one-time investment. It is a great alternativeto long term
commitments like PPF or Insurance plans. Starting early and investing
regularly is advisable to minimize the investment amount needed to
achieve your goals.

In SIPs, a fixed amount of money is debited by the investors in bank

accountsperiodically and invested in a specified mutual fund. The investor
is allocated a numberof units according to the current Net asset value.
Every time a sum is invested, more units are added to the investors
account.

The strategy claims to free the investors from speculating in volatile

markets by dollarcost averaging. As the investor is getting more units
when the price is low and fewer units when the price is high, in the long
run, the average cost per unit is supposed to be lower. SIP claims to
encourage disciplined investment. SIPs are flexible; the investors may
stop investing a plan anytime or may choose to increase or decrease the
investmentamount. SIP is usually recommended to retail investors who
do not have the resources to pursue the active investment.

In India, a recurring payment can be set for SIP using Electronic Clearing
Services (ECS). Some mutual funds allow tax benefits under equity-
linked savings schemes. This, however, has a lock-in period of three years.
When it comes to mutual funds there is a general misconception that
investing in mutual funds means investing in stocks. The same is felt
about SIPs. SIP can be made in an equity, debt or hybrid scheme. This
entirely depends on the investment horizon and risk taking capacity of an
individual. SIPs generally work best for equity and equity-oriented hybrid
funds given that these are prone to market fluctuations. However, for

27
investment discipline, one can also invest in debt funds also. With auto-
debit feature, firstly you don9t need to remember the debit dates as the
bank account will get debited automatically on the date which youhave
selected for SIP. However, just in case for whatever reason the funds are
not available in the bank account, you will miss one SIP. There is no
penalty or any fee. Your SIP account remains active even if you miss one
SIP date but after multiple misses, it gets cancelled

28
1.2.1 Sip Works

With UTI SIP, your amount to be invested will be periodically auto-

debited from yourbank account and will be invested into a specific mutual
fund scheme. You will be allocated a particular number of units
accordingly, based on the current market rate (netasset value or NAV in
short) for the day.

You also have the option to choose from direct and regular plans. Direct
plans are bought directly from the mutual fund company, whereas a
Regular plan is bought through an intermediary (advisor, broker or
distributor).

You can calculate the expected returns on your investment using our easy SIP

calculator

29
1.2.2 Categories of Sip Mutual Funds

 Plain vanilla regular SIP

This is the simplest form of SIP investing. You typically set up a date for
contributing to the SIP each month. Set a date when you are confident that
your salary or commission will be credited into your bank account. The SIP
can be of the amount of your choice and technically can be as small asRs500
per month. In case you set 10th as the date for the SIP, then on that date the
amount gets debited and equivalent units of the fund are allotted to you.
The actual date is not too relevant as long as you maintain the discipline.

 Stepped up SIP or Top-up SIP

One of the realities of professional life is that your income tends to grow
over a period of time. So, you cannot be sticking to the old savings year after
year. One way is to review your SIP requirements each year and add new SIPs
based on your surplus. A more automated way is to opt for a Stepped up SIP.
In this SIP, you commit to increase the SIP contribution bya certain amount
each year and then that SIP amount continues for a full year. This step-up can
be fixed in rupee terms or in percentage terms, but the idea is that there is an
automated solution to invest more as you earn more.

 Balloon SIP for interim payments

When you are in a job or a profession, there are two components to your
income; fixed income and variable flows based on performance. How do you
ensure that you do not splurge your bonuses and incentives? The answercould
be a balloon SIP. In a balloon SIP, you build an annual bullet payment around
the time of your bonus. So the SIP continues for the full year and in the month
you get the bonus you structure a lump-sum balloon contribution. Of course,
you can also do this manually, but a balloon structure ensures discipline since
you will only spend the balance amount.

30
 Solution based SIP for planning
Quite a few mutual funds also customize SIPs in such a way that you can have
a SIP solution where the allocation is done by the fund based on your long term
goal requirements. Normally, you define your goals and then structure SIPs
accordingly based on tenure of goal and tag these SIPs to goals. Now if your
equity / debt / cash mix is 60:35:5, then you can have a solution based fund
and structure a SIP on that solution accordingly. The only risk is that such
solution funds are structured as Fund-of-Funds (FOF) and entail higher costs.

 SIPs with in-built withdrawal facility

This facility is very useful to combine the benefits of SIPs both ways.Broadly,
there are two such combinations. Firstly, if you receive a lump-sum, you
can invest the sum in a liquid fund and swipe a fixed sum intoequity funds
each month. The liquid fund gives you better returns than a Bank and the SIP
ensures lower average cost.
The second way is to combine a systematic withdrawal plan (SWP) with an
SIP. You run equity SIP for 15 years and then from the 16th to 20th year
withdraw systematically from this corpus. This withdrawal is done by shifting
the corpus to a liquid fund. The SWP is more tax efficient and also does not
entail exit loads. That is like hitting two birds with one stone. SIPs offer a
really wide platter and the choice is yours to make.

31
 1.2.3 Investment in An Sip

One of the prime reasons why you should invest in an SIP is because it
brings a sense of discipline in your investments and cultivates regular
saving habits. Saving small andregularly is the philosophy that an SIP
revolves around. It enables the investor to buildwealth over a long-term.

h. Rupee Cost Averaging

SIPs can aid in averaging the cost return ratio. The equity market being
volatile in nature will enable the investor to purchase more units when
the price of shares are low and lesser units when the shares are priced
higher.
i. Power of Compounding
According to the principle of compound interest, any small amount of
money when invested for a longer period of time can get compounded
and fetch you good returns. As a result, the investor will be able to
accumulate a large corpus and achieve long- term financial goals by
investing small but at regular intervals.
j. Is not heavy on the wallet
Investment made through an SIP can be as low as Rs.500. Such a low
amount will not burden your budget and over a period of time, this
amount will grow to fetch yousubstantial returns.
k. Automated Payments
Even if you are someone who is regular when it comes to making
investments, youmay sometimes miss out on making the payments. An
SIP eliminates this byautomating the payments which means that every
month, a predetermined amount will automatically be deducted from
your bank account. So, there is no way that you would miss out on
making the payments.
l. Funds can be used for emergencies
An SIP offers a one-click withdrawal option where you can withdraw
the amount anytime you want. This fund can be used to meet any
contingencies such as job loss,accidents, illnesses, etc.

32
m. Eliminates the need for timing the market
Since SIPs are regular investments, you do not have to worry about if the
market is performing good or bad. Over time, even if there have been highs
and lows, the performance of the fund will even out. This will ensure that
irrespective of the marketvolatility, you will be able to enjoy good returns

1.2.4 Advantages of Sip

Systematic Investment Plan (SIP) is a method to invest in mutual funds

through which you invest a fixed sum periodically in a fund. There are
numerous benefits of SIP and in this article we will discuss about them

1. Stress-Free: The investors who choose to enter or deal with

mutual funds through SIP route do not have to worry about
payment or timing the market.A SIP is set in such a way that
the fixed amount and time are set in the beginning and the
process happens automatically. However, the investor should
review the whole process on a periodic basis to stay updated.

2. Discipline: This is the most important advantage of SIP9s.

The investor who plans to redeem a decent gain from the
mutual fund will automatically save his earnings for SIP
monthly payments. This makes it easier for him/herto manage
the fund in long run.

3. Compounding: The major advantage of SIP is its

compounding power. The investor has to pay only a small
amount each month for a fixed period of time. Eventually, the
invested amount keeps on growing each month and the
investor does not feel the pain of paying. It is just like a piggy
bank, in the end, you will have a huge amount invested in the
mutual fund.

33
4. Convenience: Normal mutual funds require huge funds from
the investors,but in SIP the investor has to pay only a feasible
amount each month for a fixed time period according to the
investor9s convenience.

5. Easy to Invest: SIP amounts can be as less as INR 500 per

month. Investingin a SIP is one of the hassle free processes
that automatically deduct the amount from the assigned bank
account. The monthly payments are so less that the investor
will not have a guilt feeling.

34
1.2.5 Disadvantages of Sip
Although they can help an investor maintain a steady savings program,
formal systematic investment plans have several stipulations. While
investors are allowed to quit the plan before the end date, they may incur
a hefty sales charges4sometimes as much as 50% of the initial
investment if within the first year. Missing a payment can lead to plan
termination. Systematic investment plans can also be costly to establish.
A creation and sales charge can run up to half of the first 12 months'
investments.

1. Does not suit people with unpredictable cash flows

SIP route can opt only if the investor is sure that he/she can pay the
fixed amountevery month without fail. If the investor is a person
with unpredictable cash flow, paying the SIP can be messy.
He/she might not be able to pay the SIP monthly.
2. Stopping the payment in between is a nightmare
SIP amounts are automatically deducted from the bank account
assigned. If in case the investor has an emergency and wants to
skip the payment a month SIPdoes not allow such provisions. If
the bank account has the amount, the amountwill be deducted and
the only way to stop it is to cancel the SIP. But, rememberonce you
cancel the SIP you will have to go through a lot of formalities to
restartthe SIP and apart from this to cancel the SIP you will have
to inform the institution 2 weeks in advance.
3. Fixed amount
Once the SIP is started a fixed amount has to be paid each month.
This amount,however, is chosen by the investor in the beginning.
But, the key disadvantageis that the amount fixed in the beginning
should be paid every month without fail and the amount cannot be
changed or modified under any circumstances.

35
 4. Dates and time period are fixed and cannot be changed
Once the date and period is fixed on a SIP payment. The date and
period cannot be changed. The bank account should have the
amount on the date assigned in the beginning without fail.
5. Ups or downs investment is uniform
No matter of ups and downs in the market the investor has to pay
the fixed monthly amounts. He/she cannot change the amount or
periods.

36
1.3 INVESTMENT

 Investment Horizon
Even though SIPs are flexible, it doesn9t mean that the investment
horizon can be shortened. It all depends upon your investment
goals and the type of funds in the SIP portfolio. SIPs with longer
investment horizons generally have betterwealth accumulation.
 Risk Appetite
Before investing in SIP, it is very important to understand your
risk appetite. Itwill be determined based on various factors - age,
liquidity needs, nature of employment, investment horizon and
investment goals. Knowing your risk appetite will help you
choose the right SIP to match your goals.
 Exit Load
In SIP, each installment is taken as a new investment and, hence,
you will be charged an exit load on the NAV, if you withdraw
your investment within the predefined time.
 Volatility
Like all Mutual Funds, SIP is also subject to market risks.
However, it is also one of the best vehicles to counter market
volatility due to rupee cost averaging and long investment
horizons. It is highly advisable to read the offer document
carefully before investing.

37
 There are two ways in which one can invest in mutual funds.

Lump sum payment: It is a one shot investment. If one invests the entire
amount he wishes to invest in a single go, it is known as lump sum investment.

SIP : SIP or systematic investment plan is an arrangement in which a pre-determined

small sums of amount is to be invested at a regular interval say daily, weekly, monthly,
quarterly, etc. it is a more systematic approach to investment. However with the mobile
on hand, many mutual fund AMCs and agents have come upwith mutual fund mobile
apps to ease the process of investing and to make investors feel, <mutual funds sahi hai=.

38
 1.4 SIP THROUGH APPS

To purchase any Mutual Funds unit from any AMC, all you need to do is
to verify yourKYC from any RTA only once. Although you can invest in
any AMC up to Rs.50000/AMC/Year by completing paperless eKYC
(Aadhaar OTP based KYC) fromany mutual fund house. (Updates: After
the recent Supreme Court verdict on Aadhaar, OTP based eKYC for the
opening of new Mutual Fund folios has temporarily been discontinued by
the Fund Houses. As per the latest updates, Government may grant
permission to Private Fintech firms to access the Aadhaar Database for
eKYC.)

1. MyCAMS Mutual Fund App

MyCAMS is a single gateway to invest in multiple Mutual Funds

schemes. The appfacilitates faster, easier and smarter ways to transact
in the direct funds.

There are various features of myCAMS which include mobile PIN &
Pattern login, one view of your MF portfolio, open new folios, purchase,
redeem, switch, and set up SIP and more. Italso helps in scheduling the
transaction option which allows investors to set up future Mutual Fund
transactions.

2. KFinKart- Investor Mutual Funds

The core objective of this app is to simplify the journey of the customer
in mutual funds.It is a one-touch login app that empowers you to invest
across a host of mutual funds and provides a new way of investing your

39
 money. It also emphasizes on a single view of your investments,
manage profile, make decisions and transact instantly without needing
multiple apps offered by different fund houses

3. Zerodha Coin

As per my opinion, Zerodha coin is one of the best apps to invest in direct
mutual funds.They offer investment services in over 3,000 commission-
free direct mutual funds across 34 fund houses. This can help in saving up
to 1-1.5% more per annum comparedto regular mutual funds. With over
1,50,000 investors who have invested over 2500 crores and collectively
saved 30+ crores in commissions, Zerodha Coin has already built a big
brand and customer base. Key features of the app include: Search, filter,
andbuy from over 3,000 commission-free direct mutual funds across 34
AMC9s, a single capital gain statement, P&L visualizations, and
Annualized (XIRR) and absolutereturns, Mutual funds are held in Demat
form, and thus easier to pledge as collateral forloan against securities.

4. ETMONEY Mutual Fund App

ETMONEY was founded by a group of passionate Entrepreneurs,
IITians andDesigners with deep expertise in technology, mobile &
financial services. Associatedwith a big brand of Economic times, this
Mutual Fund app is a one-stop destination forall things investment
which helps to track & manage expenses using expense manager,Invest
in Mutual Funds through SIP or Lump sum, Save tax with SIPs in ELSS
mutualfunds, etc.

40
5. Groww- Mutual Funds App

Groww app is one of the fastest-growing apps in the Indian mutual fund
industry. Andthe credit goes to its clean user-interface. This app helps in
investing in mutual funds free of cost and is pretty simple to use with
minimum paperwork and no hassles. All mutual funds information are
available in just one investment app. Similar to the apps listed above in
this article, Groww app also allows everyone to invest in direct mutual
funds with zero commission and offers an additional saving up to 1.5%+
compared to regular plans. Key features include: Simple design, built
with beginners and experts in mind, Dashboard to track all your
investments, annualized returns, and total returns, Top mutual funds list
for different categories with the latest finance news and insights.

6. Paytm Money Mutual Funds App

Paytm Money, offered by the Paytm group, is turning out to be one of the
most trustedplatforms in India which provide up to 1% higher returns by
investing in Direct Plans of Mutual Fund Schemes with no commissions
or any charges on buying and selling ofdirect mutual fund plans. It offers
many features to the customer which includes fully Transparent Tracking,
Data Privacy & Protection, Switch from Regular to Direct Plans, Track,
Manage & Automate SIP Investments, etc.

41
7. KTrack mobile app by Karvy

The primary objective of KTrack mobile app by Karvy is to manage the

investments of its customer in mutual funds. This app offers new ways
of investing your money. With just one-touch login that powers you to
invest across thousands of mutual funds.It provides a single view of
your manage profile, investments, make decisions and

Transact instantly without needing multiple apps. The app has Enriched
UI and many features like One-touch login or Log In through
Facebook/Google account, Enriched Navigation, provides Portfolio
Dashboard, helps in tracking of your transaction, NAVTracker, etc

List of a few other Mutual Fund Apps for Direct Investment:

 IPRU TOUCH by ICICI Prudential Mutual Fund

 Invest by SBI Mutual Fund

 Fin Go by Aditya Birla Sun Life MF

 HDFC MFMobile app by HDFC MF

 Easy App by Axis Mutual Fund

 Funds India Mobile App

42
 CHAPTER 2:
RESEARCH
METHODOLOGY

43
 2. RESEARCH METHODOLOGY

2.1 INTRODUCTION

A research is a careful investigation or enquiry, especially through search for new

Facts in any branch of knowledge. It is a systemized effort to gain more knowledge. =

<Research Methodology is a way to systematically solve the research

problem. Itincludes not only the research methods, but also the logic behind
using the methods. = The methods of research used in this project were as
follows:-

2.2 OBJECTIVES OF THE STUDY

 To study and understand parameters for investment in Mutual Fund investment.

 To study the fund management process of mutual funds.

 To study about the regulations governing mutual funds.

 To study the factors affecting Mutual fund choice of Investor.

 To analyze and determine the market position of companies for

investmentpurpose.

 To understand and analyze the investment pattern which exists among

investorsin mutual funds from customer perspective.

 To study the characteristics of mutual fund which attracts the investor.

 What an investor should consider for safe investment and better returns.

44
2.3. SCOPE OF THE STUDY

 To make people aware about concept of mutual fund.

 To provide information regarding advantages and demerits of mutual

fund.

 To advice where to invest or not to invest.

 To provide information regarding types of mutual fund this is

beneficial forwhom.

 The survey was conducted on investors/customers having or not

having mutualfund share covering the area of Thane and Mumbai.

2.4. SAMPLING

 Sampling unit: The sampling unit for research is Thane and Mumbai.

 Sample size: The sample size taken for survey is 100 respondents

 Sampling procedure: Random sampling technique is used in the research.

2.5. TOOLS AND TECHNIQUES

Different types of graphs and charts are used to present the data
collected throughquestionnaire

Pie charts: Pie charts display data and statistics in an easy-to-understand

pie slice formatand illustrate numerical proportion.

45
2.6. SOURCES OF DATA COLLECTION

SOURCE OF DATA COLLECTION

PRIMARY DATA SECONDARY DATA

2.7 PRIMARY DATA

Data used in research originally obtained through the direct efforts of the
researcher through surveys, interviews and direct observation. Primary
data is more costly to obtain than secondary data, which is obtained
through published sources, but it is alsomore current and more relevant
to the research project.

1. Structured questionnaire is used as the research instrument and shared to 100

people
2. Observation method is used for collecting primary data.
Observation of marketfluctuation and behavior of investors is used
as a source of collection of data.
3. Respondent characteristics used in this analysis include: name,
gender, age,occupation, investment options, etc.
4. Questionnaire was send through different social Medias.

46
2.7a Questionnaire:

The questionnaire contained questions regarding the general and socio-

economic characteristics of the respondents such as age, educational
qualification, etc. And various questions asking about the Awareness
about mutual fund, SIPs and apps.

On the basis, of responses from respondents some of the Questions were

modified and modified questionnaire was used to responses from 100
respondents. A sample size of100 respondents was used for detailed study
because it is not possible to cover whole city for the collecting responses
from respondents. This is type of questionnaire which is segmented to
collected relevant and accurate information relating to the title of
research.

2.7b Observation Method:

The collection of primary data was also done by Observation of the

investors/customers of mutual fund. Observation Research is of various
types and has various types and hasvarious strengths and weakness. This
type of research is mostly done in social scienceand marketing sector.
This is social research techniques that involve the direct observation of
phenomena

47
2.8. SECONDARY DATA

Secondary data analysis can save time that would otherwise be spent
collecting data and, particularly in the case of quantitative data, can
provide larger and higher-qualitydatabases that would be unfeasible for
any individual researcher to collect on their own. In addition, analysts of
social and economic change consider secondary data essential, since it is
impossible to conduct a new survey that can adequately capture past
change and/or developments. However, secondary data analysis can be
less usefulin marketing research, as data may be outdated or inaccurate.

 Qualitative method : Content analysis, Thematic analysis, Discourse

analysis
 Quantitative method : Sampling method, existing data


















48
2.9 LIMITATIONS OF THE STUDY

 Research cannot be taken for entire population.

 The data collection was strictly confined to secondary
sources. Primarydata was associated with only the survey
conducted on the investors.
 Collecting historical NAV is very difficult.
 Selection of schemes for study is very difficult because lot
of Varieties in equity Schemes
 To get an insight in the process of risk and return and
deployment of funds by fund manager is difficult.
 The project is unable to analyses each and every equity
scheme of mutualfunds to create awareness about risk and
return. The risk and return of mutual fund equity schemes
can change according to the market conditions.
 Questionnaire method which is adopted for collecting data
has its own limitations.
 It may be hard for participants to recall information or to
tell the truth about a controversial question.
 Sample size is also the limited.
 Some of the respondents of the survey were unwilling to
share information.
 Some of the respondents could not answer the questions
due to lack of knowledge.

2.10 HYPOTHESIS
 H0- Investor should consider mutual fund safe for investment

 H1- Investor should consider mutual fund is not safe for investment

49
 CHAPTER 3:
REVIEW OF LITREATURE

50
INTRODUCTION

A large number of studies on the growth and financial performance of

Mutual Fundhave 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 systematic
investment plan.

3.1 Review of Research Papers :

1. Malkiel, B.J. (1995) says in his study utilizes a unique data set
including returns from all equity mutual funds existing each year.
These data enable us more precisely to examine performance and
the extent of survivorship bias. In the aggregate, funds have
underperformed benchmark portfolios both after management
expenses and even gross of expenses. Survivorship bias appears to
be more important than other studies have estimated. Moreover,
while considerable performance persistence existed during the
1970s, there was no consistency in fund returns during the 1980s.

2. Louis, K.C and Lakonishok, C.C. (1999) have discussed <they

provide an exploratory investigation of mutual funds9 investment
styles. Funds9 styles tend to cluster around a broad market
benchmark. When funds deviate from the benchmark they are
more likely to favor growth stocks with good past performance.
There is some consistency in styles, although funds with poor past
performance are more likely to change styles. Some evidence
suggests that growth funds have better style-adjusted performance
than value funds. The results are not sensitive to style
identification procedure, but an approach basedon fund portfolio
characteristics performs better in predicting future fundreturns.

51
 3. Carhart, M.M., Carpenter , J.N. LynchW.A. and Musto.K.D.
(2000) they have estimates of the returns to different mutual fund
portfolios for 3-year, 5- year and 10-year holding period
intervals. Finally explained that how the relation between
performance and fund characteristics can be affected by the use
of a survivor-only sample and show that the magnitudes of the
biases in theslope coefficients are large for fund size, expenses,
turnover and load fees in our sample. Because survivorship
issues are relevant for many data sets used in finance, the
analysis in this paper has potential applications in areas of
financial economics beyond just mutual fund research.

4. Redman, A.L. and Manakyan, H. (2001) have given

information the risk- adjusted returns using Sharpe9s Index,
Treynor9s Index, and Jensen9s. The results show that for 1985
through 1994 the portfolios of international mutual funds
outperformed the U. S. market and the portfolio of U. S. mutual
funds under Sharpe9s and Treynor9s indices. During 1985-1989, the
international fund portfolio outperformed both the U. S. market
and the domestic fund portfolio, while the portfolio of Pacific Rim
funds outperformed both benchmark portfolios. Returns declined
below the stock market and domestic mutual fundsduring 1990-
1994.

5. Bullen. & Busse, J.A. (2004) they have given the information that
investor cash flows can distort inference in mutual fund
performance. The impact of cash flow on performance can be
controlled for using conditional methods, as in Edelen (1999).

6. Sindhu, K.P. & Kumar, S.R (2008) have discussed that <the
stock market provides higher returns than any of the investment
options available in the financial market. A prudent investor can
earn a lot from the stock market operations. But there is a chance

52
 of high risk and uncertainty. As we know, higher the return, higher
will be the risk. Those investors with lack of knowledge and
expertise may lose their money while investing in financial assets,
especially in securities. This is where mutual funds come into
picture. Mutual Fund is the most suitable investment for a
common man as it offers an opportunity to invest in a diversified
professionally managed basket of securities at a relatively low
cost. A mutual fund is an investment company ora trust that pools
the resources of a large number of its9 shareholders and investon
behalf of them in diversified portfolios to attain the objectives of
theinvestors which in return achieve income or growth or both.
Thus mutual funds become a major investment vehicle for
mobilization of savings particularly from small and household
sectors for the investment in security market. At present the
importance of mutual funds in India has been increasing in the
capital market by expanding the investors9 base. At the same
time, investmentin mutual fund is to be considered as a long term
investment. Hence, it is important to know their investment
horizon. The present paper tries to understand the investment
horizon by analyzing their periodical investment plans and
investment duration.=

7. Sharma P. (2010) in this paper they found that Mutual Funds

markets are constantly becoming more efficient by providing
more promising solutions to the investors. Mutual funds industry
is responding at a good pace and understanding the investor9s
perception, still they are continuously following this race in their
attempt to differentiate their products responding to sudden
changes in the economy.

8. Singhal’s. & Goel, M. (July, 2011): The Empirical result

reported that SIP Plans has performed better than the one time
investment.

53
9. Shelly Singhal (2011) have stated that Systematic Investment
Plans (SIP) is among the most successful financial innovations
grown at a fairly rapid pace inemerging markets and India is no
exception to it .

10. Dr. Ravi Visa, (2012) says 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
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 investors9 list. It was also found
that maximum number of investors did not analyze risk in their
investment andthey were depend upon their broker and agent for
this work.

11. Paul .T. (July 2012) have observed Mutual funds have evolved
over the years,in keeping with the changes in the economic and
financial systems, as well as the legal environment of the country.
New products have launched according to the requirements and
changes in the investors‟ perceptions and expectations.
Understanding the investors‟ expectations and meeting those
expectations are the key area of interest of marketing experts.

12. Amarnath , Dr. .Reddy, R.S. & Krishna,K.T (2012), have

observed that if there is broad agreement that appropriately
regulated Mutual Fund activity can play a large part in financial
development in all its dimensions, these barriers can surely be
addressed in a collaborative way between the three stakeholders
3 the investors, the fund managers and the regulators.

13. Tahseen, A.A and Narayana. (2012) have discussed consumer

attitudes towards financial investments have always been a

54
 challenge for the finance companies due to limited risk appetite of
consumers which are largely attributed to both cognitive and
affective components of attitude.

14. Kandpa .V & Kavidayal, P.C. (2013) have given the

information for restriction of mutual fund investment in top cities
or Urban areas is the lack of awareness level in the rural and semi
urban areas. The absence of product diversification and confusion
in the market has been enlarged by the lack of marketing
initiatives for Mutual Funds. The role of mutual fund agents or
distributors is to educate the investor community. Therefore the
spread of Mutual Fund market has been limited.

15. Vyas, R. (2013) have mentioned in his study that mutual fund
companies should come forward with full support for the
investors in terms of advisory services, participation of investor
in portfolio design, ensure full disclosure of related information
to investor, proper consultancy should be given by mutual fund
companies to the investors in understanding terms and conditions
of different mutual fund schemes, such type of fund designing
should be promotedthat will ensure to satisfy needs of investors,
mutual fund information should bepublished in investor friendly
language and style, proper system to educate investors should
be developed by mutual fund companies to analyze risk in
investments made by them, etc.

16. Juwairiya, P.P (2014) says systematic investment plan is the best
option planned for small investors who wish to invest small
amounts regularly to buildwealth over a long period of time.

17. Kumar, S. & Kumar. (2014) in their study it is mention that

<Mutual fund isa kind of investment that uses money from many
investors to invest in stocks, bonds or other types of investment
and the fund manager decides how to investthe money.

55
18. Goswami, A.G.(2014) have observed mutual fund investment is
a diversified portfolio of securities, which can include equity
securities (such as common andpreferred shares), debt securities
(such as bonds and debentures) and other financial instruments
issued by corporation and government, according to the stated
investment objectives of fund. The benefit to investor in buying
shares of mutual fund comes primarily from diversification,
professional money management and capital gain and dividend
reinvestment at relatively low cost.

19. Azzheurova, K.E. & Bessonova, E.A. (2015): says management

of regional investment projects is the analysis and estimation of
their efficiency. It influences the pace of development, as well as
solving regional socio-economic problems. The paper
substantiates the necessity to complement the evaluation
algorithm of regional investment projects with functional units of
analysis of social, innovative, environmental consequences of
projects.

20. Joseph G., Telma, M. & Romeo. A. (Feb 2015): have observed
that Systematic Investment Plan (SIP) will reduce risk when the
market is volatile And SIP works more advantageously only on
bearish market whereas, Lump sum gives high returns in bullish
market .From this study it can be concluded that in order to get
better results from SIP, invest for a minimum period of 5 years is
necessary.

21. Prabhakaran. (Sep 2015) Says stock market is one of the

economic indicators of growth of country9s economic
development. The bullish trend of stock market attracts many
equity investors in the recent past days. Though many investors
trade on their own, they require the experts help as investment tips
totrade. The investors risk taking ability is one of the important

56
 think that must have to know by the fund manager to allocate the
investors fund accordingly.

22. Sharma,R. (2015) In his study he discover the investment

objectives of selected mutual fund investors and to identify the types
of mutual fund schemespreference by elected mutual fund investors.
The results presented that the mainobjective behind to invest in mutual
fund is good return, safety and tax benefit.The research also suggested
that the growth schemes and balanced schemes aremost preferred in
comparison to other schemes. Male and female respondents do not
significantly different across investment experience. Graduate
respondent are less experienced as compare to other academic
qualified respondents. If investment experience is analyzed on the
base of occupation than it is found that servicemen and professionals
are less experienced in compare to other occupational groups.

3.2 Review of Books

"The Mutual Fund Industry Handbook: A Comprehensive Guide for Investment
Professionals" by Lee Gremillion and Andrew S. Clarke. This book offers an in-depth
overview of the mutual fund industry, including different types of funds, portfolio
management strategies, and regulatory issues. It also includes a chapter on systematic
investment plans.

3.3 Review of thesis

Study by Bhattacharya and Sharma (2017) analyzed the factors influencing investors'
decision to invest in mutual funds through SIPs. The study found that factors such as
risk, return, liquidity, and convenience were important determinants of investors'
decisions. The study also found that investors who were more risk-averse tended to
invest in debt-based mutual funds, while those who were more risk-tolerant tended to
invest in equity-based mutual funds.

57
 CHAPTER 4:
ANALYSIS AND
INTERPRETATION OF
DATA

58
1. Gender

4.1:- Shows gender of the respondents

Answers % Count
Male 64% 64
Female 36% 36

Source: - Primary Data

4.1:- Shows gender of the respondents

Interpretation:

According to this among people respondents males are 64% and females are
36%.

59
 2. Age

4.2:- Shows age of the respondents

Answers % Count

Above 18 75% 75

25 years to 40 years 18% 18

41 years to 60 years 6% 6

Above 60 years 1% 1

Source: - Primary Data

4.2:- Shows age of the respondents

Interpretation:
Majority of the people responded is belongs to above 18 years i.e. 75%.
18% peoplee respondents are belongs to 25 years to 40 years, 6% people
respondents are belongsto 41 years to 60 years and 1% belongs to above
60 years category of age group.

60
3. Occupation

4.3:- shows occupation of the respondents

Answers % Units

Salaried 29% 29

Business 8% 8

Student 59% 59

Homemaker 4% 4

Retired 0% 0

Source: - Primary Data

4.3:- shows occupation of the respondents

Interpretation:
According to this diagram among people respondents 29% are Salaried,
8% areBusiness, 59% students, 4% are home maker and 0% are retired.

61
 4. Which income group do you belong (per annum)?

4.4:- shows income group of the respondents

Answers % Units

Below 2 Lakhs 59% 59

2- 10 Lakhs 33% 33

11- 20 Lakhs 6% 6

Above 20 Lakhs 2% 2
Source: - Primary Data

4.4:- shows income group of the respondents

Interpretation:

According to this diagram among people respondents 59% are earning

below2,00,000 , 33% are earning 2,00,000 to 11,00,000 , 6 % are
earning 11,00,000 to
20,00,000 and 2% are earning above 20 lakhs.

62
5. What is the percentage of saving from your total income?

4.5:- shows percentage of savings

Answer % Units
<=25% 82 82
<=50% 13 13
<=75% 5 5
Source: - Primary Data

4.5:- shows percentage of savings

Interpretation

According to this diagram among people respondents 82% are

saving morethan or equal to 25% of their income, 13% are
saving more than or equalto 50 of their income and 5% are
saving more than or equal to 75% of their income.

63
6. Do you invest in mutual funds?

4.6:- shows experience about investment in mutual fund

Answer % Units
Yes 61 61
No 39 39
Source: - Primary Data

4.6:- shows experience about investment in mutual fund

Interpretation:

According to this diagram, among people respondents 61% said yes and
39% said no.

64
7. Do you follow SIP?

4.7:- shows information about SIP investment

Answer % Units
Yes 53 53
No 31 31
Maybe 16 16
Source: - Primary Data

4.7:- shows information about SIP investment

Interpretation

According to this diagram among people respondents 53%

people follow SIP , 31% people do not follow SIP , 16%
people follow it or not.

65
8. While investing your money, which factor do you preferthe
most?

4.8:- shows information about most preferable factor while doing

investment

Answer % Units
Liquidity 31% 31
Company Reputation 37% 37
High Risk 10% 10
Low risk 22% 22
Source: - Primary Data
4.8:- shows information about most preferable factor while doing
investment

Interpretation
According to this diagram among people respondents 31%
people prefer liquidity factor for investing money, 37% people
prefer company reputation factor for investing money, 10%
people prefer high risk factor for investing money,22% people
prefer low risk factor for investing money.

66
9. In which mutual fund would you like to invest?

4.9 = shows preference about investment in types of mutual fund

Answer % Units
Private 54 54
Public 46 46
Source: - Primary Data
4.9 = shows preference about investment in types of mutual fund

Interpretation

According to this diagram among people respondent’s 46%

people prefer public sector for investing money and 54%
people prefer private companyfor investing money.

67
10. Which factor do you consider before investing?
4.10:- shows most preferable factor before doing investment

Answer % Units
Safety of principal 49% 49

Low risk 33% 33

High risk 12% 12
Maturity period 6% 6
Source: - Primary Data

4.10:- shows most preferable factor before doing investment

Interpretation
According to this diagram among people respondents 49% people prefer
safety of principal factor before investing money, 33% people prefer lowrisk
factor before investing money investing money, 12% people prefer highrisk
factor before investing money investing money, 6% people prefer maturity
factor before investing money investing money.

68
11. What is the satisfaction level with your investment made in
stock market?
4.11:- shows respondent's satisfaction about his past investments
Answer % Units
Satisfied 42% 42
Neutral 53% 53
Dissatisfied 5% 5
Source: - Primary Data

4.11:- shows respondent's satisfaction about his past

investments

Interpretation

According to this diagram among people respondents 42% people are

Satisfied with the investment made in stock market, 53%% people are
Neutral with the investment made in stock market and 5% people are
Dissatisfied with the investment made in stock market.

69
12. How often do you invest?

4.12:- Shows time period for doing investment

Answer % Units
Daily 13% 13
Weekly 19% 19
Monthly 32% 32
Occasionally 36% 36
Source: - Primary Data

4.12:- Shows time period for doing investment

Interpretation
According to this diagram among people respondents 13% people invest
daily, 19% people invest weekly, 32% people invest monthly, and 36%
people invest occasionally.

70
13. What is the time period you prefer to invest?

4.13:- Shows time period preferred of investment

Answer % Units
Short term 29% 29
Medium term 39% 39
Long term 32% 32
Source: - Primary Data

4.13:- Shows time period preferred of investment

Interpretation

According to this diagram among people respondents 29% people

invest in short term period, 39% people invest in medium term period
and 32% people invest in long term period.

71
14. Do you use app to invest in SIP?

4.14:- Shows usage of app for doing SIP

Answer % Units
Yes 63% 63
No 37% 37
Source: - Primary Data

4.14:- Shows usage of app for doing SIP

Interpretation

According to this diagram among people respondents 63% peopleuse

app for SIP, 37% people do not use app for SIP.

72
15. Which application do you use?

4.15:- Shows respondents' application preferences for doing investment

Answer % Units
Groww 29% 29
MyCAMS 9% 9
KFinKart 9% 9
PayTM 24% 24
KTrack 2% 2
Other 27% 27
Source: - Primary Data

4.15:- Shows respondents' application preferences for doing investment

Interpretation

According to this diagram among people respondents 29% people use

grow, 9% people use myCAMS, 9% people use KFinKart, 24% people
use Paytm, 2% people use KTrack, 27% use other apps.

73
16. Rate the customer’s services of the apps

4.16:- Shows rate of respondents for application for investment

Answer % Units
Great 32% 32
Good 40% 40
Ok 24% 24
Poor 4% 4
Terrible 0% 0
Source: - Primary Data

4.16:- Shows rate of respondents for application for investment

Interpretation
According to this diagram among people respondents rated the
app service 32% people rated great, 40% people rated good,
24% people rated ok, 4% people rated as poor, 0% people rated
terrible.

74
 17. How would you described SIP Mutual fund

4.17:- Shows opinion about SIP mutual funds

Answer % Units
Fine 47 47
Great 39 39
Life saving 13 13
Worst 1 1
Source: - Primary Data

4.17:- Shows opinion about SIP mutual funds

Interpretation

According to this diagram among people respondents 47% people

described SIP Mutual Funds as Fine, but has some issues, 39% described
SIP Mutual Funds as great, 13% described SIP Mutual Funds as
lifesaving, 1% described SIP Mutual Funds Fine as worst

75
 18. Which 2 features of the Apps are the most valuable to
you?

4.18:- Shows respondents preferences related to Investment

applications
Answer % Units
Customer satisfaction 49 49
Easy market survey 45 45
Best investment option 36 36
Easy access to money 33 33
Paperless transaction 29 29
Time saving 28 28
Source: - Primary Data

4.18:- Shows respondents preferences related to Investment

applications

Interpretation:
According to the above diagram people respondents 49% of people like
feature of customer satisfaction, 45% of respondent like features of easy
market survey, 36% of people respondent like feature of best investment
option, 33% of people likefeature of easy access to money, 29% people
respondents like features of paperlesstransaction, 28% respondent like the
features of time saving.

76
19. Which mode of operation do you prefer?

4.19:- Shows mode of operations preferred by respondents

Answer % Units

Through apps 90% 90

Through agents 10% 10

Source: - Primary Data

4.19:- Shows mode of operations preferred by respondents

Interpretation

According to this diagram among people respondents 10% people’s

mode ofoperation is through agents, 90% people’s mode of operation is
through apps.

77
 CHAPTER 5:
FINDINGS AND CONCLUSIONS

78
5.1 FINDINGS

 64% are male’s respondent and 36% are female respondent.

 75% are above the age 18 respondents, 18% people respondents are belonging
to 25 years to 40 years, 6% people respondents are belonging to 41 years to 60
years and 1% belongs to above 60 years category of age group.

 59% of the respondents belong to the income group of below 2 Lakhs and 33%
of the respondents belong to the income group of2-11 lakhs. The respondents
which belong to 11-20 Lakhs is 6% and 2% of the respondents belong to the
income group of above 20 Lakhs.

 29% of the respondents belong to salaried group, 8% of the respondents belong

to Business, 59% of the respondents belong to student’s category, 4% of the
respondents are home maker and 0% ofthe respondents are Retired personals.

 82% respondent are saving more than or equal to 25% of their income,13%
respondent are saving more than or equal to 50 of their income and 5%
respondent are saving more than or equal to 75% of their income.

 61% respondent invest in mutual funds and 39% respondent do notinvest in

mutual funds.

 53% people follow sip, 31% people do not follow sip, and 16% people may
follow it or not.

 31% people prefer liquidity factor for investing money, 37% people prefer
company reputation factor for investing money, 10% people preferhigh risk
factor for investing money, and 22% people prefer low risk factorfor investing
money.

 46% people prefer public sector for investing money and 54%people prefer
private company for investing money.

 49% people prefer safety of principal factor before investing money, 33%
people prefer low risk factor before investing money investing money, 12%
people prefer high risk factor before investing moneyinvesting money, 6%
people prefer maturity factor before investing money investing money.

79
  42% people are satisfied with the investment made in stock market, 53%
people are Neutral with the investment made in stock market and 5% people
are Dissatisfied with the investment madein stock market.

 13% people invest daily, 19% people invest weekly, 32% peopleinvest
monthly, and 36% people invest occasionally.

 29% people invest in short term period, 39% people invest inmedium term
period and 32% people invest in long term period.

 63% people use app for sip, 37% people do not use app for sip.

 32% people rated great, 40% people rated good, 24% people rated ok, 4%
people rated as poor, 0% people rated terrible.

 29% people use grow,9% people use myCAMS, 9% people use KFinKart,
24% people use Paytm, 2% people use KTrack, 29% use other apps.

 47% people described SIP Mutual Funds as Fine, but has some issues, 39%
described SIP Mutual Funds as great, 13% described SIP Mutual Funds as
lifesaving, and 1% described SIP Mutual Funds Fine as worst.

 49% of people like feature of customer satisfaction, 45% ofrespondent like

features of easy market survey, 36% of peoplerespondent like feature of best
investment option, 33% of people like feature of easy access to money, 29%
people respondents like features of paperless transaction, 28% respondent like
the features oftime saving.

 10% people’s mode of operation is through agents, 90% peoples mode of

operation is through apps.

 

80
5.2 SUGGESTION

 Mutual fund is one of the best securities in the capital market.

 It provides good returns in mutual fund securities.

 Mutual fund is also one of the taxes saving scheme.

 There is lack of awareness among people about mutual funds so

there should bemore advertising and other promotional campaigns
to make them aware.

 People are more interested in investing in equity funds rather than

debt funds because companies are promoting more for equity
funds.

 Companies should equally promote debt funds also as the provide

security to customers.

 Companies should give knowledge to its customer about its

computerized operations to save their time and to make the
operations easier.

 Identify your investment needs. Your financial goals will vary,

based on your age lifestyle, financial independence, family
commitments, level of income andexpenses many other factors.

 There is a need of regular income or need to buy a home or finance

a wedding or educate children or a combination of all these needs.

 How much risk willing to take? Only take a minimum amount of

risk or I am willing to accept the fact that my investment values
may fluctuate or that theremay be a short term loss in order to
achieve a long term potential gain.

81
1. What are my cash flow requirements? There should be a regular
cash flow or Ineed a lump sum amount to meet a specific need
after a certain period or By going through such an exercise,
you will know what you want out of your investment and can
set the foundation for a sound mutual fund investment
strategy.

 Choose the right mutual fund. Once you have clear strategy in
mind, you now have to choose which mutual fund and scheme you
want to invest in. The offerdocument of the scheme tell you its
objectives and provided supplementary details like the track
record of other schemes managed by the same fund manager.

 Select the ideal mix of schemes investing in just one Mutual Fund
scheme may not meet all your investment needs. You may
consider investing in a combination of schemes to achieve your
specific goals. The following charts could prove useful in
selecting a combination of schemes that satisfy your needs.

 Invest regularly this approach that works best is to invest a fixed

amount at specific intervals, say every month. By investing a fixed
sum each month, you buy fewer units when the price is higher and
more units when the price is low, thus bringing down your average
cost per unit. This is called rupee cost averaging and is a
disciplined investment strategy followed by investors all overthe
world. With many open ended schemes offering systematic
investors strategy followed by investors9 plans, this regular
investing habit is made easyfor you.

 Keep your taxes in mind as per the current tax laws,

dividends/ incomedistribution made by mutual fund is exempt
from income tax in the hands of investors. Further, there are other

82
 benefits available for investment in Mutual Fund under the
provisions of prevailing tax laws. An investor therefore should
consult their chartered accountant or tax advisor for specific
advice to achieve maximum tax efficiency by investing in Mutual
Funds.

 Start early it is desirable to start investing early and stick to a

regular investmentplan. If you start now you will make more than
if you wait and invest later. Thepower of compounding lets your
earn income on income and your money multiplies at a
compounded rate of return
 Financial goals vary, based on Investors age, lifestyle, financial
independence, family commitment and level of Income and
expenses among many other factors. Therefore, it is necessary for
Mutual Funds Companies to assess the consumer9s need.

 They should begin by defining their investment objectives and

needs which could be regular income, buying a home or finance a
wedding or education of children or a combination of all these
needs, the quantum of risk, they are willing to take and their cash
flow requirements.

 Mutual Investors should choose the right Mutual Fund Scheme

which suits theirrequirements. The offer document of the Mutual
Fund Scheme should be thoroughly read and scrutinized. Some
factors to evaluate before choosing a particular Mutual Fund are
the track record of the performance of the fund overthe last few
years in relation to the appropriate yard stick and similar funds in
the same category.

 Other factors could be the portfolio allocation, the dividend yield

and the degree of transparency as reflected in the frequency and
quality of their communications. Investing in one Mutual Fund
scheme may not meet all the investment needs of an investor.

83
 They should consider investing in a combination of schemes to
achieve their specific goals.

 It is suggested that the investors should not consider only one or

two factors forinvesting in mutual fund but they should consider
other factors such as higher return, degree of transparency,
efficient service, fund management and Reputation of mutual
fund in selection of mutual funds. The best approach for an
investor is to invest a fixed amount at specific intervals, say every
month. Byinvesting a fixed sum each month, they can buy fewer
units when the price is higher and more units when the price is
low, thus bringing down the average cost per unit. This is called
rupee cost averaging.

 Systematic investment plan facility is one such plan,

incorporating these features. It is desirable to start investing early
and stick to a regular investmentplan. The power of compounding
lets one earn income on income and also the money multiplies at
a compounded rate of return. A Mutual fund investor should be
aware of his rights. The agents or financial advisors should make
investors aware of their rights as per the SEBI (Mutual Funds)
Regulations & RegardingAMFI.

 A unit holder in a Mutual Fund scheme governed by the SEBI

(Mutual Funds)Regulations is entitled to:

a) Receive unit certificates of statements of accounts confirming the

title within 6weeks from the date of closure of the subscription or
within 6 weeks from the date of request for a unit certificate is
received by the Mutual Fund.
b) Receive information about the investment policies,
investment objectives,financial position and general affairs

84
 of the scheme.
c) Receive dividend within 42 days of their declaration
and receive the redemption or repurchase proceeds
within 10 days from the date of redemption or
repurchase.
d) Vote in accordance with the Regulations to:
i. Approve or disapprove any change in the fundamental
investment policies of the scheme, which are likely to modify
the scheme or affect the interest of theunit holder.
ii. The dissenting unit holder has a right to redeem the investment.
iii. Change the Asset Management Company.
iv. Wind up the schemes.
e) Inspect the documents of the Mutual Funds specified in the scheme9s
offer
Document.



 

85
5.3 CONCLUSION

On the basis of this study, I can conclude that Mutual Fund SIP is a
monthly based investment plan through which an investor could invest a
fixed sum into mutual funds every month at pre-decided dates. This
hedges the investor from market instability andderives maximum benefit
as the investment is done at regular basis irrespective of market
conditions. SIP is a feature especially designed for investors who wish to
investsmall amounts on a regular basis to build wealth over a long term. It
inculcates the habitof regular savings and does not encourage timing and
speculation in the markets. The study would be helpful for the small
investors by entering into capital market by using the Systematic
investment plan. Like every investment avenue, SIP also suffers from
various disadvantages but it still seems to be one of the best investment
option available to a long term investor especially First-time investors,
Salaried people etc.

Mutual Fund is good concept of investment which collects the savings

and invests in different sector and different market in such a way that
investment get highest return. This return will be paid back to Unit holder.
The perception of Independent Financial Advisor is that insurance is a best
investment option for life cover and safety from futurethreats and Mutual
Funds are for investment purpose. Most Advisors are now suggesting
mutual fund.

Today Advisors are keeping full of knowledge of all investment

instruments. And theirresearches allow them to suggest Mutual Fund as
Investment Avenue. Still some advisers have not suggested the Mutual
funds as investment instrument. The basic reason behind that is, lack of
knowledge about mutual funds, which is followed by high risk and
unasserted returns. Safety is at the peak of all attributes list of investment
products in the mindset of Advisors, which is followed by tax benefit,
returns, maturity and liquidity. Advisors are highly providing pre-
investment advisory services and doorstep collection services. Some of the

86
Advisers follow their clients and provide post- investment advisory
services too. Sharing of brokerage and online valuation report providing
is very less in a practice.

All investments whether in shares, debentures or deposits involve risk;

share value may go down depending upon the performance of the
company, the industry, state of capital markets and the economy;
generally, however, longer the term, lessen the risk; companies may
default in payment of interest /principal on their
debentures/bonds/deposits; the rate of interest on an investment may fall
short of the rate of inflation reducing the purchasing power.

While risk cannot be eliminated, skilful management can minimize risk.

Mutual Fundshelp to reduce risk through diversification and professional
management. The experience and expertise of Mutual Fund managers in
selecting fundamentally sound securities and timing their purchases and
sales help them to build a diversified portfolio that minimizes risk and
maximizes returns. In case of selecting between SIP and lump sum, it’s
better to conclude that people should consider before investing money in
mutual fund and invest in good AMC. It does not matter that SIP or lump
sum will givebetter return. It all depends on fund managers and AMC.

According to survey, more than 50% people say that they will choose
SIP to invest inMutual fund. So trends say that SIP is good investment
alternative in mutual fund. Butapart from that people also depend on the
market value and they take advice from someexperts of this field.

87
 BIBLIOGRAPHY

1. Joseph, G., Telma, M., and Romeo, A. (2015): “A study of sip

& lip of selected large cap stocks listed in NSE=. International
Journal of Management Research & Review,Vol.5, No.2,
Art.No8,pp117-136
2. Juwairiya, P.P. (2014): <Systematic investment plan-the way to
invest in mutual funds=. Sai Om Journal of Commerce &
Management, Vol.9, No1, pp. 2347-7563 3. Paul, T. (2012).
3. Sharma, S.(2015): <ELSS Mutual Funds in India: Investor Perception
and
Satisfaction=, International Journal of Finance and Accounting, 4(2):
131-139
4. Sindhu, K.P.,& Kumar, S. R.(2014): <Investment horizon of
mutual fund investors=, Geinternational journal of management
research,Vol.2, No.8
5. Soni, P., Khan, I. (2012) : <Systematic investment plan v/s other
investment avenues in individual portfolio management 3 A
comparative study=, International Journal in Multidisciplinary and
Academic Research, Vol. 1, No.3.
6. Vyas, R. (2013) : <Factors influencing investment decision in
mutual funds= ZENITH International Journal of Business
Economics & Management Research, Vol.3, No.7. pp-2249- 8826
7. Zenti, R. (2014) : <Are lump sum investments riskier than
systematic investmentplans? =
8. www.amfiindia.com
9. www.indianresearchjournals.com
10. www.wikipedia.com
11. www.investopedia.com

88
 ANNEXURE

Q.1 Name

Q.2 Gender
o Male
o Female
o Prefer not to say

Q.3 Age
o Below 18
o 25 to 40
o 40 to 60
o Above 60

Q.4 Occupation:
o Salaried
o Businessman
o Student
o Homemaker
o Retired

Q.5 Which Income Group do you belong to (Per Annum)

o Below 2 lakhs

o 2 to 10 lakhs

o 11 to 20 lakhs

o Above 20 lakhs

Q.6 Do you invested in mutual funds?

o Yes

o No

Q.7 what is the percentage of saving from your total income?

o < = 25%

89
 o <=50%

o <=75%

Q.8 Do you follow SIP?

o Yes

o No

o Maybe

Q.9 while investing your money, which factor do you prefer the most?

o Liquidity

o Company reputation

o High risk

o Low risk

Q.10 In which mutual fund would you like to invest

o Private

o Public

Q.11 which factor do you consider before investing

o Safety of principal

o Low risk

o High risk

o Maturity period

Q.12 what is the satisfaction with your investment made in stock market

o Satisfied

o Neutral

90
 o Dissatisfied

Q.13 how often do you invest?

o Daily

o Weekly

o Monthly

o Occasionally

Q.14 what is the period you prefer to invest?

o Short term

o Medium term

o Long term

Q.15 Do you use apps to invest in SIP

o Yes

o No

Q.16 which application do you Use?

o Groww

o MYcams

o KFinkart

o Paytm

o KTract

o Others

Q.17 Rate the customer service of the Apps

o Great

o Good

91
 o Ok

o Poor

o Terrible

Q.18 how would you describe SIP mutual funds

o Fine

o Great

o Life saving

o Worst

Q. 19 which features the Apps are the most valuable to you

o Customer satisfaction

o Easy market survey

o Best investment option

o Easy access to market

o Paperless transaction

o Timesaving

Q.20 which mode of operation do you prefer

o Through apps

o Through agent

92