ANALYSIS OF MUTUAL FUND INDUSTRY IN INDIA

Synopsis

Submitted by Shweta Roll No 1175041

Submitted to Ms. Ritika

in the partial fulfillment for the award of the degree of

Masters of Business Administration Rayat and Bahra Institute of Management,Mohali Punjab Technical University, Kapurthala

INTRODUCTION
There are a lot of investment avenues available today in the financial market for an investor with an investable surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where there is low risk but low return. He may invest in Stock of companies where the risk is high and the returns are also proportionately high. The recent trends in the Stock Market have shown that an average retail investor always lost with periodic bearish tends. People began opting for portfolio managers with expertise in stock markets who would invest on their behalf. Thus we had wealth management services provided by many institutions. However they proved too costly for a small investor. These investors have found a good shelter with the mutual funds.

Mutual fund industry has seen a lot of changes in past few years with multinational companies coming into the country, bringing in their professional expertise in managing funds worldwide. In the past few months there has been a consolidation phase going on in the mutual fund industry in India. Now investors have a wide range of Schemes to choose from depending on their individual profiles. My study gives an overview of mutual funds definition, types, benefits, risks, limitations, history of mutual funds in India, latest trends, global scenarios. I have analyzed a few prominent mutual funds schemes and have given my findings.

REVIEW OF LITERATURE
Studies undertaken by various scholars and researchers reveals that mutual funds is a trust that pools the savings which are further invested into capital market instruments such as shares, debentures and other securities and since most of the capital market instruments, not all , have an element of risk so it very difficult to evaluate the performance of various schemes .Various research papers have been written while considering the performance evaluation criteria into mind which have been discussed in the following paragraphs. According to Bijan Roy & Saikat Sovan Deb when the beta of the fund is conditioned to lagged economic information variables the fund performance does not change appreciably. The findings of the research suggests that the use of conditioning lagged information variables improves the performance of the mutual fund schemes, causing the alphas to shift towards the right and reducing the number of negative timing coefficients. They have also studied the impact of the tech rally in the conditional models by introducing a dummy variable indicating the period of rally in tech stocks. Finally, they found managers' performance as well as timing skill worsens with the inclusion of this dummy. According to G. Sethu & Rachana Baid findings significant contribution to index fund tracking error may arise from factors that are not under index fund manager's control and also tracking error is not neutral to some of the factors. Banikanta Mishra & Mahmud Rahman have developed measures of evaluating portfolioperformance based on LPM (Lower-Partial-Moment). According to them, the three traditional measures by Treynor, Sharpe, and Jensen are based on the Mean-Variance (M-V) rule are valid only when the distribution of asset returns is characterized by spherical symmetry to which class normal and similar distributions belong. From the LPM perspective, risk has been measured by taking into account only those states in which return is below a pre-specified "target rate", like risk-free rate, and capturing the extent to which it is below. Despite of lot of research being done on the mutual funds, there has not been any fixed criteria for evaluating the performance of the mutual funds , there is still lot of research that needs to be done keeping in view changing investment pattern of the investors ,increasing market risk and various other factors linked with the mutual fund industry.

OBJECTIVES OF THE STUDY:

o To analyze investment alternatives through market survey. o To find out investors motive towards investment. o To find out the factor, which influences the investors decisions

HYPOTHESIS
Null Investors prefer Mutual Funds over other investment options. Alternate Investors do not prefer Mutual Funds over other investment options.

SOURCES OF DATA
Primary sources :Secondary data: (a) Questionnaire technique (a) Mutual funds related Organizations website. (b) Journals (c) Newspapers and other magazines. RESEARCH DESIGN- Exploratory Research

DATA COLLECTION Primary Research: The primary study is done on the basis of questionnaire that had got filled up directly from the investors of different age, income and profession. Secondary Research: The study is done on secondary basis. It will be consisting of data collected from various journals, internet, books, magazines etc. Convenience Sampling: In convenience sampling, the selection of units from the population is based on easy availability and/or accessibility.

QUESTIONNAIRE
1. Name: 2. Address: 3. Contact No.: 4. Age group: a. 25-35 c. 50 onwards 5. Income range (Annually) a. Up to 1.5lakhs c. > 5 lakhs 6. At present you invest in: (number 1-10), 1 being lowest and 10 highest. a. b. c. d. Bank FD ____ PF ____ Bonds____ Post Office ____ e. Stock market ____ f. Mutual funds ____ b. 5-3 lakhs b. 35-50

g. Real estates ____ h. Insurance ____ j. Others ____

e. Gold ____

6. Among various investment alternatives you think is best for you and why? _____________________________________________________________________ 7. Objective of your investment is? Rate on scale of 1-5 (1-lowest, 5-highest) a. Rate of return _____ c. Speculation _____ e. Tax Free Return _____ 8. Who influence your investment decision the most? Rate On Scale 1-5 (1-lowest, 5highest) a. Financial experts _____ c. Attractive advertisements _____ e. Financial Advisors _____ b. Friends _____ d. Your own decision _____ b. Security _____ d. Marketability _____

9. Awareness towards mutual fund through: Rate On 1-5, (1-lowest, 5-highest) a. b. c. d. e. T.V & Newspapers Magazines Friends & Relatives Financial Advisor Others _________ _________ _________ _________ _________

11. What is the most preferred period of investment in the mutual fund? Rate 1-5, (1-lowest, 5-highest) a. Below 1 year _________ _________ _________ _________ _________

b. 1-2 year c. 2-3 years d. 3-5 years e. Above 5 year

12. Do you have any future plan for investing in mutual funds? a. Yes 13. IF yes, in which fund you want to invest in future? a. Equity b. Balanced c. Debt b. No

14.

Any

other

information

or

suggestions.

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